NUVEEN Exchange-Traded Funds
MARCH 31, 1999
ANNUAL REPORT
DEPENDABLE, TAX-FREE INCOME TO HELP YOU KEEP MORE OF WHAT YOU EARN.
NXP
NXQ
NXR
NXC
NXN
Select Portfolios
Photo of:
<PAGE>
Highlights
As of March 31, 1999
CONTENTS
1 Dear Shareholder
3 Portfolio Manager Roundtable
5 NXP Performance Overview
6 NXQ Performance Overview
7 NXR Performance Overview
8 NXC Performance Overview
9 NXN Performance Overview
10 Shareholder Meeting Report
11 Portfolio of Investments
27 Statement of Net Assets
28 Statement of Operations
29 Statement of Changes in Net Assets
30 Notes to Financial Statements
34 Financial Highlights
36 Report of Independent Auditors
37 Fund Information
CREDIT QUALITY PERFORMANCE HIGHLIGHTS
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO (NXP)
o Taxable-Equivalent Yield of 7.97%*
o Outperformed the total return performance of its
Lipper Peer Group**
o Stable tax-free dividend for 23 consecutive months
Pie Chart:
AAA/U.S. Guaranteed 57%
AA 11%
A 20%
BBB/NR 12%
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO 2 (NXQ)
o Taxable-Equivalent Yield of 7.94%*
o Outperformed the total return performance of its
Lipper Peer Group**
o Stable tax-free dividend for 13 consecutive months
Pie Chart:
AAA/U.S. Guaranteed 63%
AA 16%
A 10%
BBB/NR 11%
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO 3 (NXR)
o Taxable-Equivalent Yield of 7.75%*
o Outperformed the total return performance of its
Lipper Peer Group**
o Ranked in the upper 15% of its Lipper Peer Group
Pie Chart:
AAA/U.S. Guaranteed 52%
AA 26%
A 10%
BBB/NR 12%
NUVEEN INSURED CALIFORNIA SELECT TAX-FREE INCOME PORTFOLIO (NXC)
o Taxable-Equivalent Yield of 8.05%*
o Paralleled the total return performance of its
Lipper Peer Group**
o Stable tax-free dividend for 13 consecutive months
Pie Chart:
Insured 64%
Insured and U.S. Guaranteed 36%
NUVEEN INSURED NEW YORK SELECT TAX-FREE INCOME PORTFOLIO (NXN)
o Taxable-Equivalent Yield of 8.00%*
o Equaled the total return performance of its
Lipper Peer Group**
o Stable tax-free dividend for 72 consecutive months
Pie Chart:
Insured 57%
Insured and U.S. Guaranteed 39%
AAA/U.S. Guaranteed 4%
* For investors in the 31% federal and applicable state income tax bracket.
See your Fund's Performance Overview for more information.
** The Lipper Peer Group return represents the average annualized return of the
funds in the appropriate Lipper Municipal Debt category. The Lipper total
return assumes reinvestment of dividends and does not reflect any applicable
sales charges.
<PAGE>
Photo of: TIMOTHY R. SCHWERTFEGER
CHAIRMAN OF THE BOARD
sidebar text: Wealth takes a lifetime to build. Once achieved, it should be
preserved.
DEAR SHAREHOLDER
I'm pleased to report that over the past 12 months, the Nuveen Exchange-Traded
Funds covered in this report continued to meet their primary objectives of
providing you with dependable tax-free income and attractive levels of after-tax
total returns. The combination of these two factors demonstrates once again that
Nuveen's municipal bond funds can serve as excellent investment options for
income-oriented investors.
THE YEAR IN REVIEW
The past 12 months saw the U.S. economy continue its pattern of non-inflationary
growth, combined with low interest rates and unemployment levels that remain
among the lowest in more than 30 years. Much of the current economic growth is
propelled by consumer demand, which has helped the U.S. resist the downward pull
of weaker overseas markets. All indications point to a confident consumer who is
comfortable with the current state of the economy, especially the performance of
the housing, stock, and job markets. On the global front, the turmoil of the
past two years appears to be fading somewhat, as international financial markets
have begun sending recovery signals.
At the same time, inflation in the U.S. continued to operate at benign levels,
with an increase of only 1.6% for the 12 months ended March 31, 1999. As Federal
Reserve Chairman Alan Greenspan has recently stated, one of the key factors in
achieving today's peaceful coexistence of economic growth and low inflation has
been increased productivity. Improvements in productivity, spurred by
technological advances, have been responsible for off-setting wage and other
inflationary pressures that we would normally expect to see as part of a growing
economy.
Last fall, the Federal Reserve eased short-term interest rates for the first
time in almost three years. Between the end of September and mid-November 1998,
three successive cuts brought the federal funds rate to 4.75%, averting a
potential domestic credit crunch and restoring some stability to global markets.
Following the success of these preemptive moves, the Federal Reserve seemed to
shift its inflation-fighting approach to a more reactive stance. Barring any
unforeseen developments, expectations are for a stable Fed policy - and a stable
interest rate environment - throughout the remainder of 1999. In the months
ahead, we will continue to watch for indications from the Fed and other factors
that affect the economy's future, including wage and employment statistics,
reports on productivity growth, capital equipment spending, and the progress of
international economic recovery. We believe these key components will influence
the outlook for fixed-income markets well into the new millennium.
MUNICIPAL BONDS:
AN ATTRACTIVE INVESTMENT OPTION
As interest rates declined over the past year, our municipal bond funds
continued to provide bright spots among investment options, offering attractive,
stable income in a market that places a high premium on yield. In 1998,
municipal bonds represented a calm haven in otherwise turbulent markets, with
lower volatility relative to Treasury bonds and other fixed-income investments.
For the first three months of 1999, munis continued to outperform Treasuries
and, in fact, were among the best performing asset classes for the quarter.
The high ratio of tax-exempt municipal yields to Treasury yields sheltered
municipal bonds from the price decline that occurred in the Treasury market
during the first quarter of the year. While interest rates on 30-year Treasury
<PAGE>
bonds rose from 5.10% at the end of December to 5.63% as of March 31, 1999, the
yield on the Bond Buyer Revenue Bond Index, an unmanaged index of long-term
municipal revenue bonds, rose just three basis points - from 5.26% to 5.29%.
Given the inverse relationship between interest rates and bond prices, as rates
went up, prices went down. Though municipal bond prices also decreased, the drop
was not as dramatic as it was for Treasuries. The differential in performance
reflects the fact that Treasuries had become relatively expensive due to
safe-haven buying during the international economic crises of the past year. The
financial turmoil around the globe eventually subsided, and foreign investors
began to shy away from U.S. denominated securities, which caused Treasuries to
drop in price. At the end of March 1999, the ratio between long-term municipal
yields and 30-year Treasury yields stood at 94%, compared with the more typical
range of 86-87%. For investors, this meant that quality long-term municipal
bonds offered almost the same yield as Treasury bonds with comparable maturities
- - even before the tax advantages of municipal bonds are taken into account. On
an after-tax basis in today's market, municipal bonds continue to present an
exceptionally attractive investment option relative to Treasuries.
In 1998, lower interest rates and the strong economy combined to generate high
levels of new municipal issuance and a significant increase in the refinancing
of existing bonds. Municipal issuance in 1998 reached $284 billion, up 29% over
1997. In terms of total municipal issuance, 1998 ranked as the second largest
year on record, next to 1993's $292 billion. In the first quarter of 1999,
however, as the market settled into a stable interest rate environment,
refunding activity dropped off dramatically. As a result, municipal supply
declined 30% from the levels of the first quarter of 1998. This, in turn,
enhanced the attractiveness of the municipal bonds that were brought to market,
as demand - especially from individual investors - remained relatively strong.
The U.S. economy continues to benefit municipal issuers, as higher tax revenues
produced improvements in the fundamental health of many municipalities. In 1998,
for example, state tax revenues rose by an average of 6.9%. This expanded flow
of tax dollars resulted in higher credit ratings for many municipal governments,
as Moody's and Standard & Poor's - the two largest credit rating agencies
upgraded 95 muni-cipal bond issues while downgrading only 47. The healthcare
sector accounted for half of the downgraded issues, as improved projections
regarding Medicare's solvency were countered by medical costs that outpaced
inflation and continued pressure on hospitals from health insurers and the
government.
THE VALUE OF NUVEEN EXPERTISE
The solid track record of a proven investment manager is one key to taking
advantage of the attractive values currently available in the municipal market.
The near-record level of municipal issuance in 1998, for example, highlighted
the value of Nuveen's in-depth knowledge of the municipal market, as our
portfolio management teams carefully analyzed each issue to select those
securities best suited to help the funds achieve their investment objectives.
With the outlook for tighter supply and continued demand in 1999, Nuveen's
established market position ensures that we will have exceptional access to the
bond offerings that have the potential to add value for our shareholders.
As a further enhancement to our management capabilities, Nuveen has assembled a
strong group of investment managers - experts in their particular areas of the
market - to provide investors with the advantage of their experience and
insights. In addition to Nuveen Advisory Services for tax-free investing, you
and your financial adviser can rely on Institutional Capital Corporation for
value-oriented equity investing and Rittenhouse Financial Services, Inc. for
growth-oriented equity investing. We encourage you to talk with your financial
adviser about Nuveen's expanding array of investments and the ways they can help
you establish a diversified portfolio designed to build and sustain long-term
financial security. For more information on our funds, contact your adviser for
a prospectus, or call Nuveen at (800) 621-7227. Please read the prospectus
carefully before you invest or send money.
Thank you for the confidence you have placed in Nuveen. We are committed to
maintaining the trust you have shown in us and look forward to meeting your
investment needs well into the next century.
Sincerely,
TIMOTHY R. SCHWERTFEGER
Chairman of the Board
May 17, 1999
Sidebar text: "The solid track record of a proven investment manager is one key
to taking advantage of the attractive values currently available in the
municipal market."
<PAGE>
NUVEEN SELECT PORTFOLIOS PORTFOLIO MANAGER ROUNDTABLE
PORTFOLIO MANAGERS MIKE DAVERN, STEVE PETERSON, AND TOM SPALDING DISCUSS THE
CURRENT MUNICIPAL MARKET ENVIRONMENT, PORTFOLIO PERFORMANCE, AND THE OUTLOOK FOR
THE NUVEEN SELECT PORTFOLIOS. MIKE, WHO JOINED NUVEEN IN 1991, HAS 16 YEARS OF
EXPERIENCE AS AN INVESTMENT PROFESSIONAL AND HAS MANAGED THE CALIFORNIA SELECT
PORTFOLIO SINCE JULY 1998. STEVE, AN 11-YEAR VETERAN OF NUVEEN WHO MANAGES A
RANGE OF NEW YORK MUNICIPAL BOND FUNDS, ASSUMED MANAGEMENT RESPONSIBILITY FOR
THE NEW YORK SELECT PORTFOLIO IN EARLY 1999. ALSO AT THAT TIME, TOM - WHO HAS 23
YEARS OF INVESTMENT EXPERIENCE AT NUVEEN - TOOK OVER MANAGEMENT OF THE NATIONAL
SELECT PORTFOLIOS.
WHAT FACTORS HAVE AFFECTED THE MUNICIPAL MARKET OVER THE PAST YEAR?
Over the past 12 months, the U.S. economy continued to enjoy strong
non-inflationary growth, low interest rates, and low unemployment. With tax
revenues rising due to the growth in personal income, the national government is
now generating a budget surplus. In this environment, long-term municipal bonds
continued to outperform 30-year Treasury bonds, with yields that rivaled and
even surpassed those offered by Treasuries. Over the past year, this
municipal-to-Treasury ratio ranged as high as 104%, offering investors in
quality long-term municipal bonds yields comparable to those of Treasury bonds,
even before the tax advantage of municipals was taken into account.
The other big story in the municipal market over the past year was the
impressive supply of new issuance. In the fourth quarter of 1998, investors saw
$25-30 billion in new bonds brought to market each month. Demand for municipal
bonds also remained high, due to cash flow from non-traditional investors as
well as from the traditional buyers of mutual and exchange-traded funds, such as
individual investors and insurance companies. In the first quarter of 1999,
however, the stable interest rate environment we have experienced since November
1998 led to fewer refundings and a 30% drop-off in new issue volume from first
quarter 1998 levels. During this period, the continued demand from individual
investors compensated for lower demand from insurance companies, which currently
have fewer assets to invest due to heavy insurance premium price competition. In
California and New York, the issuance of municipal bonds remained very heavy in
1998, while both states experienced tighter supply during the first quarter of
1999, which was in line with national trends. In both states, supply was met
with exceptionally high demand, especially from individual investors who looked
to tax-free municipal bonds for relief from high state taxes.
For the remainder of 1999, if interest rates remain stable, we expect to see
less refinancing volume and a continuation of the tighter supply scenario of the
first quarter. Demand should also remain strong, as individual investors look to
diversify their portfolios by reallocating profits from the equity market into
fixed-income investments. These reallocation efforts will be expanded if the
volatility in equities continues. Even with lower supply and high demand,
Nuveen's position in the municipal market ensures that we will have access to
the best offerings in the marketplace.
HOW DID THE SELECT PORTFOLIOS PERFORM OVER THE PAST YEAR?
For the 12 months ended March 31, 1999, the Nuveen Select Portfolios produced
total returns on net asset value (NAV) ranging from 5.40% to 5.76%, providing
taxable-equivalent returns of 8.09% to 8.85%, as shown in the accompanying
table. For comparison purposes, the total returns for the portfolios' benchmarks
- - the Lehman Brothers Municipal Bond Index and the Lehman California and New
York Insured Municipal Bond indexes - and the averages for the appropriate
Lipper Municipal Debt category are also provided. Over the past year, the Select
Portfolios performed well within the range of what investors should expect from
these portfolios, given their unique structure.
LEHMAN LIPPER
TOTAL RETURN ON NAV TOTAL RETURN1 AVERAGE2
1-YEAR ENDED TAXABLE- 1-YEAR ENDED 1-YEAR ENDED
3/31/99 EQUIVALENT3 3/31/99 3/31/99
- --------------------------------------------------------------------------------
NXP 5.43% 8.09% 6.20% 5.15%
- --------------------------------------------------------------------------------
NXQ 5.63% 8.23% 6.20% 5.15%
- --------------------------------------------------------------------------------
NXR 5.76% 8.29% 6.20% 5.15%
- --------------------------------------------------------------------------------
NXC 5.65% 8.85% 6.98% 5.81%
- --------------------------------------------------------------------------------
NXN 5.40% 8.35% 6.51% 5.39%
- --------------------------------------------------------------------------------
HOW WERE THE PORTFOLIOS' DIVIDENDS AND SHARE PRICES AFFECTED?
In the low interest rate environment of the past twelve months, good call
protection helped support the dividends of NXP, NXQ, NXC, and NXN and shield the
income of these portfolios from erosion. As of March 31, 1999, NXN had provided
shareholders with 72 consecutive months of steady or increasing income, NXP had
produced steady or increasing dividends for 23 consecutive months, and both NXC
and NXQ had steady dividends for 13 months. During the past year, lower interest
rates also led to an increase in the number of bond calls, as issuers sought to
reduce debt financing costs. In addition, declining rates meant that proceeds
from prepaid or matured bonds had to be reinvested in issues paying relatively
lower current rates. Both of these situations contributed to a reduction in the
income level of NXR and necessitated a dividend cut in November 1998.
Even with this single dividend adjustment, all of the portfolios continued to
provide attractive market yields that ranged from 5.03% to 5.50% as of March 31,
1999, providing taxable-equivalent yields of 7.29% to 7.97% for investors in the
31% federal income tax bracket. The addition of state taxes in California
(combined rate of 37.5%) and New York (35.5%) boosted the taxable-equivalent
yields to 8.05% and 8.00%, respectively, for shareholders in the state
portfolios.
1 The three national Select Portfolios - NXP, NXQ, and NXR - are compared with
the Lehman Brothers Municipal Bond Index, an unleveraged index comprising a
broad range of investment-grade municipal bonds. The two state-specific
portfolios, NXC and NXN, are compared with the Lehman Insured Municipal Bond
indexes for California and New York, respectively. These are unleveraged
indexes covering a broad range of insured municipal bonds within each of these
states. Results for Lehman indexes do not reflect any initial or ongoing
expenses.
2 The Lipper Peer Group returns represent the average annualized returns of the
funds in the Lipper Municipal Debt category. The three national portfolios are
compared with a peer group of unlev-eraged insured funds. Returns assume
reinvestment of dividends and do not reflect any applicable sales charges. NXC
is compared with other unleveraged insured California funds in the Lipper data
base, while NXN is compared with unleveraged insured New York funds.
3 The taxable-equivalent total returns for the three national portfolios are
based on a federal income tax rate of 31.0%, while returns for the California
and New York portfolios are based on combined federal and state income tax
rates of 37.5% and 35.5%, respectively.
<PAGE>
As interest rates declined over the past year, active demand for the Nuveen
Select Portfolios - spurred by their outstanding dividend records - resulted in
solid share price performance. At the same time, improvements in the portfolios'
NAVs were somewhat constrained by the potential impact of upcoming bond calls.
As a result, over the year, both NXQ and NXR moved from discounts (share price
below NAV) to premiums (share price above NAV), while the other three portfolios
saw their premiums widen.
<TABLE>
<CAPTION>
SHARE PREMIUM/ TOTAL RETURN
PRICE ($) NAV($) DISCOUNT TO NAV4 ON SHARE PRICE
- ------------------------------------------------------------------------------------------------------------
1-YEAR
ENDED TAXABLE-
3/31/98 3/31/99 3/31/98 3/31/99 3/31/98 3/31/99 3/31/99 EQUIVALENT3
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NXP 15.875 16.375 15.62 15.55 1.63% 5.31% 9.02% 11.63%
- ------------------------------------------------------------------------------------------------------------
NXQ 15.3125 15.875 15.43 15.41 -0.76% 3.02% 9.51% 12.13%
- ------------------------------------------------------------------------------------------------------------
NXR 14.9375 15.25 14.96 14.98 -0.15% 1.80% 7.78% 10.31%
- ------------------------------------------------------------------------------------------------------------
NXC 15.3125 15.75 15.21 15.26 0.67% 3.21% 8.22% 11.40%
- ------------------------------------------------------------------------------------------------------------
NXN 15.00 15.125 14.91 14.92 0.60% 1.37% 6.14% 9.07%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
For additional information, see the individual Performance Overview for your
portfolio in this report.
WHAT KEY STRATEGIES WERE USED TO MANAGE THE SELECT PORTFOLIOS DURING THE PAST
YEAR?
Established in 1992, the Select Portfolios are a uniquely structured group of
investments designed 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 five portfolios the ideal choice for
investors who want the income and maturity of individual bonds enhanced by the
ongoing surveillance and diversification provided by Nuveen. The focus of our
management strategies over the past year continued to be on supporting stable
tax-exempt dividends at the highest levels consistent with the portfolios'
objectives. Buying and selling in these portfolios is carried out only when
opportunities to enhance income, credit quality, or portfolio structure arise.
During the past 12 months, the portfolios continued to meet the objectives set
out at inception, so few adjustments were needed. In addition, the low interest
rate environment of the past six months presented few opportunities to enhance
the portfolios. Over the past year, the portfolios' short durations - ranging
from 3.27 to 3.67 years - provided excellent protection from price volatility.
During 1998, declining interest rates led to an increased number of
pre-refundings. In a pre-refunding, a bond issue is essentially refunded prior
to its first call or maturity and becomes secured by direct 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, resulting in price appreciation. Each of the Select Portfolios has a
high percentage of pre-refunded bonds (denoted as U.S. guaranteed bonds in the
portfolios' individual Portfolio Overviews) - 36% in NXC, 43% in NXN, and an
average of 44% across the national portfolios - which should further enhance
price stability and help maintain high credit quality.
With virtually no scheduled bond calls in 1999 and 2000, the Select Portfolios
currently offer outstanding call protection, which should provide additional
stability for their dividends over the next two years. Beginning in 2001 and
2002, however, the portfolios - like most bonds issued in 1992 - will enter the
normal part of the bond cycle in which bond calls are more likely to occur. This
may require making some adjustments to the portfolios as we reinvest call
proceeds in the most advantageous manner possible. To minimize the impact of
these calls, we are already working on strategies for managing through this
period.
Overall, the credit quality of the national Select Portfolios remained high,
with the portion of the portfolios invested in bonds rated AAA and AA ranging
between 68% and 79%, as of March 31, 1999. Credit quality is not a major issue
in the California and New York portfolios, which are 100% invested in insured or
U.S. Guaranteed bonds.
WHAT IS NUVEEN'S OUTLOOK FOR THE FUTURE?
As we look ahead for the Select Portfolios, the most important thing to note is
that these portfolios have performed exactly as they were designed to perform.
The bonds that were originally selected in 1992 have achieved - and continue to
achieve - their objectives. As a result, we do not anticipate making changes to
the portfolios until the need arises to reinvest the proceeds of any bond calls.
At that time, we plan to replace called bonds with securities that support the
portfolios' goals through their liquidation date of 2017 in terms of maturity
and call protection. Selecting the bonds that help the portfolios continue to
meet their goals is an area where Nuveen's expertise - as an experienced
investment manager knowledgeable about the unique aspects of the municipal
market - can result in added value for our investors.
In our opinion, municipal bonds are currently one of the most compelling values
in the fixed-income investment marketplace. Over the past 12 months, the value
of these quality investments has been enhanced by excellent
municipal-to-Treasury ratios as well as a market environment characterized by
low interest rates and benign inflation. With continued volatility in the equity
markets and investors' increasing awareness of the need for asset allocation
rebalancing, the demand for municipal bond funds is expected to grow. We believe
that investors who take advantage of current opportunities in the municipal
market should be rewarded with healthy returns and attractive yields in the
months ahead.
3 The taxable-equivalent total returns for the three national portfolios are
based on a federal income tax rate of 31.0%, while returns for the California
and New York portfolios are based on combined federal and state income tax
rates of 37.5% and 35.5%, respectively.
4 A fund's premium or discount represents the ratio of the fund's share price to
its NAV.
<PAGE>
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO
PERFORMANCE OVERVIEW
AS OF MARCH 31, 1999
NXP
PORTFOLIO STATISTICS
Inception Date 3/92
Share Price $16 3/8
Net Asset Value $15.55
Market Yield 5.50%
Taxable-Equivalent Yield(1) 7.97%
Fund Net Assets ($000) $254,635
Effective Maturity (Years) 11.45
Modified Duration (Years) 3.63
ANNUALIZED TOTAL RETURN
ON SHARE PRICE ON NAV
1-Year 9.02% 5.43%
5-Year 9.13% 7.54%
Since Inception 7.52% 7.55%
TAXABLE-EQUIVALENT TOTAL RETURN(2)
ON SHARE PRICE ON NAV
1-Year 11.63% 8.09%
5-Year 11.98% 10.37%
Since Inception 10.31% 10.36%
TOP FIVE SECTORS (AS A % OF TOTAL INVESTMENTS)
U.S. Guaranteed 44%
Tax Obligation/Limited 10%
Healthcare 9%
Housing/Multifamily 8%
Transportation 8%
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen fund on an after-tax basis. It is
based on the current market yield and a federal income tax rate of 31%.
2 Taxable-equivalent total return is based on the annualized total return and a
federal income tax rate of 31%. It represents the return on a taxable
investment necessary to equal the return of the Nuveen fund on an after-tax
basis.
Bar Chart:
1998-1999 MONTHLY TAX-FREE DIVIDENDS PER SHARE
4/98 0.075
5/98 0.075
6/98 0.075
7/98 0.075
8/98 0.075
9/98 0.075
10/98 0.075
11/98 0.075
12/98 0.075
1/99 0.075
2/99 0.075
3/99 0.075
Line Chart:
SHARE PRICE PERFORMANCE
4/3/98 15.938
15.938
16.125
15.875
15.625
15.5
15.438
15.563
15.688
15.563
15.75
15.75
16
16.188
16.125
16
16
15.938
16
16.063
16.125
16.25
16.25
16.25
16.25
16.875
16.563
16.563
16.31
17
16.38
16.5
16.63
16.81
16.81
16.75
16.69
16.44
15.63
15.75
15.81
16.25
16.31
16.44
16.38
16.44
16.31
16.25
3/31/99 16.375
Weekly Closing Price
Past performance is not predictive of future results.
<PAGE>
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO 2
PERFORMANCE OVERVIEW
AS OF MARCH 31, 1999
NXQ
PORTFOLIO STATISTICS
Inception Date 5/92
Share Price $15 7/8
Net Asset Value $15.41
Market Yield 5.48%
Taxable-Equivalent Yield(1) 7.94%
Fund Net Assets ($000) $271,240
Effective Maturity (Years) 10.44
Modified Duration (Years) 3.27
ANNUALIZED TOTAL RETURN
ON SHARE PRICE ON NAV
1-Year 9.51% 5.63%
5-Year 9.30% 7.35%
Since Inception 6.93% 7.31%
TAXABLE-EQUIVALENT TOTAL RETURN(2)
ON SHARE PRICE ON NAV
1-Year 12.13% 8.23%
5-Year 12.17% 10.12%
Since Inception 9.70% 10.03%
TOP FIVE SECTORS (AS A % OF TOTAL INVESTMENTS)
U.S. Guaranteed 48%
Housing/Multifamily 9%
Healthcare 8%
Tax Obligation/Limited 7%
Housing /Single Family 7%
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen fund on an after-tax basis. It is
based on the current market yield and a federal income tax rate of 31%.
2 Taxable-equivalent total return is based on the annualized total return and a
federal income tax rate of 31%. It represents the return on a taxable
investment necessary to equal the return of the Nuveen fund on an after-tax
basis.
Bar Chart:
1998-1999 MONTHLY TAX-FREE DIVIDENDS PER SHARE
4/98 0.0725
5/98 0.0725
6/98 0.0725
7/98 0.0725
8/98 0.0725
9/98 0.0725
10/98 0.0725
11/98 0.0725
12/98 0.0725
1/99 0.0725
2/99 0.0725
3/99 0.0725
Line Chart:
SHARE PRICE PERFORMANCE
4/3/98 15.938
15.938
16.125
15.875
15.625
15.5
15.438
15.563
15.688
15.563
15.75
15.75
16
16.188
16.125
16
16
15.938
16
16.063
16.125
16.25
16.25
16.25
16.25
16.875
16.563
16.563
16.31
17
16.38
16.5
16.63
16.81
16.81
16.75
16.69
16.44
15.63
15.75
15.81
16.25
16.31
16.44
16.38
16.44
16.31
16.25
3/31/99 16.375
Weekly Closing Price
Past performance is not predictive of future results.
<PAGE>
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO 3
PERFORMANCE OVERVIEW
AS OF MARCH 31, 1999
NXR
PORTFOLIO STATISTICS
Inception Date 7/92
Share Price $15 1/4
Net Asset Value $14.98
Market Yield 5.35%
Taxable-Equivalent Yield(1) 7.75%
Fund Net Assets ($000) $194,165
Effective Maturity (Years) 12.36
Modified Duration (Years) 3.64
ANNUALIZED TOTAL RETURN
ON SHARE PRICE ON NAV
1-Year 7.78% 5.76%
5-Year 8.74% 7.65%
Since Inception 6.21% 6.70%
TAXABLE-EQUIVALENT TOTAL RETURN(2)
ON SHARE PRICE ON NAV
1-Year 10.31% 8.29%
5-Year 11.57% 10.35%
Since Inception 8.92% 9.34%
TOP FIVE SECTORS (AS A % OF TOTAL INVESTMENTS)
U.S. Guaranteed 39%
Transportation 11%
Utilities 11%
Housing/Multifamily 10%
Healthcare 9%
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen fund on an after-tax basis. It is
based on the current market yield and a federal income tax rate of 31%.
2 Taxable-equivalent total return is based on the annualized total return and a
federal income tax rate of 31%. It represents the return on a taxable
investment necessary to equal the return of the Nuveen fund on an after-tax
basis.
Bar Chart:
1998-1999 MONTHLY TAX-FREE DIVIDENDS PER SHARE
4/98 0.069
5/98 0.069
6/98 0.069
7/98 0.069
8/98 0.069
9/98 0.069
10/98 0.069
11/98 0.068
12/98 0.068
1/99 0.068
2/99 0.068
3/99 0.068
Line Chart:
SHARE PRICE PERFORMANCE
4/3/98 15.063
14.75
14.75
14.688
14.75
14.313
14.5
14.438
14.688
14.75
14.563
14.563
14.813
15.375
15.063
15.063
15.188
15.188
15.063
15.125
15.063
15.125
15.125
15.188
15.375
16
15.375
15.563
15.56
15.63
15.63
15.63
15.25
15.31
15.44
15.5
15.56
15.19
14.69
14.75
14.81
15.38
15.31
15.19
15.25
15.56
15.44
15.06
3/31/99 15.25
Weekly Closing Price
Past performance is not predictive of future results.
<PAGE>
NUVEEN INSURED CALIFORNIA SELECT TAX-FREE INCOME PORTFOLIO
PERFORMANCE OVERVIEW
AS OF MARCH 31, 1999
NXC
PORTFOLIO STATISTICS
Inception Date 6/92
Share Price $15 3/4
Net Asset Value $15.26
Market Yield 5.03%
Taxable-Equivalent Yield (Federal Only)(1) 7.29%
Taxable-Equivalent Yield (Federal and State)(1)8.05%
Fund Net Assets ($000) $95,501
Effective Maturity (Years) 12.24
Modified Duration (Years) 3.67
ANNUALIZED TOTAL RETURN
ON SHARE PRICE ON NAV
1-Year 8.22% 5.65%
5-Year 8.29% 7.61%
Since Inception 6.32% 6.69%
TAXABLE-EQUIVALENT TOTAL RETURN(2)
ON SHARE PRICE ON NAV
1-Year 11.40% 8.85%
5-Year 11.79% 11.04%
Since Inception 9.68% 10.04%
TOP FIVE SECTORS (AS A % OF TOTAL INVESTMENTS)
U.S. Guaranteed 36%
Tax Obligation/Limited 18%
Transportation 12%
Utilities 11%
Healthcare 8%
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen fund on an after-tax basis. The
FEDERAL ONLY rate is based on the current market yield and a federal income
tax rate of 31%. The rate shown for FEDERAL AND STATE highlights the added
value of owning shares that are also exempt from state income taxes. It is
based on a combined federal and state income tax rate of 37.50%.
2 Taxable-equivalent total return is based on the annualized total return and a
combined federal and state income tax rate of 37.50%. It represents the return
on a taxable investment necessary to equal the return of the Nuveen fund on an
after-tax basis.
Bar Chart:
1998-1999 MONTHLY TAX-FREE DIVIDENDS PER SHARE
4/98 0.066
5/98 0.066
6/98 0.066
7/98 0.066
8/98 0.066
9/98 0.066
10/98 0.066
11/98 0.066
12/98 0.066
1/99 0.066
2/99 0.066
3/99 0.066
Line Chart:
SHARE PRICE PERFORMANCE
4/3/98 15.25
15.438
15.063
15
15.188
15.063
14.875
15.063
15.125
15.25
14.938
15.125
15.125
15.125
15.063
15.063
15.063
15.063
15
15.438
15.563
15.563
15.5
15.5
15.875
15.938
15.813
16.063
15.75
15.81
15.63
15.94
15.88
15.88
15.88
16
15.94
15.69
15.25
15.13
15.19
15.38
15.5
15.44
15.5
15.75
15.81
15.69
3/31/99 15.75
Weekly Closing Price
Past performance is not predictive of future results.
<PAGE>
NUVEEN INSURED NEW YORK SELECT TAX-FREE INCOME PORTFOLIO
PERFORMANCE OVERVIEW
AS OF MARCH 31, 1999
NXN
PORTFOLIO STATISTICS
Inception Date 6/92
Share Price $15 1/8
Net Asset Value $14.92
Market Yield 5.16%
Taxable-Equivalent Yield (Federal Only)(1) 7.48%
Taxable-Equivalent Yield (Federal and State)(1) 8.00%
Fund Net Assets ($000) $58,303
Effective Maturity (Years) 11.37
Modified Duration (Years) 3.53
ANNUALIZED TOTAL RETURN
ON SHARE PRICE ON NAV
1-Year 6.14% 5.40%
5-Year 8.19% 7.11%
Since Inception 5.68% 6.22%
TAXABLE-EQUIVALENT TOTAL RETURN(2)
ON SHARE PRICE ON NAV
1-Year 9.07% 8.35%
5-Year 11.41% 10.20%
Since Inception 8.75% 9.23%
TOP FIVE SECTORS (AS A % OF TOTAL INVESTMENTS)
U.S. Guaranteed 43%
Education and Civic Organizations 21%
Water and Sewer 10%
Housing/Multifamily 5%
Transportation 5%
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen fund on an after-tax basis. The
FEDERAL ONLY rate is based on the current market yield and a federal income
tax rate of 31%. The rate shown for FEDERAL AND STATE highlights the added
value of owning shares that are also exempt from state income taxes. It is
based on a combined federal and state income tax rate of 35.50%.
2 Taxable-equivalent total return is based on the annualized total return and a
combined federal and state income tax rate of 35.50%. It represents the return
on a taxable investment necessary to equal the return of the Nuveen fund on an
after-tax basis.
Bar Chart:
1998-1999 MONTHLY TAX-FREE DIVIDENDS PER SHARE
4/98 0.065
5/98 0.065
6/98 0.065
7/98 0.065
8/98 0.065
9/98 0.065
10/98 0.065
11/98 0.065
12/98 0.065
1/99 0.065
2/99 0.065
3/99 0.065
Line Chart:
SHARE PRICE PERFORMANCE
4/3/98 15.063
15.188
14.813
14.875
14.75
14.688
14.625
14.813
14.875
14.75
14.5
14.563
14.688
14.875
14.75
14.813
15
15.063
15.25
15.313
15
15.063
14.938
14.813
15.125
15.75
15.5
15.875
15.56
15.56
15.19
15.13
15.25
15.44
15.38
15.56
15.63
15.13
14.88
14.94
14.69
15.13
15.13
15.19
15
15.06
15.06
14.88
3/31/99 15.125
Weekly Closing Price
Past performance is not predictive of future results.
<PAGE>
SHAREHOLDER MEETING REPORT
<TABLE>
<CAPTION>
NXP NXQ NXR NXC NXN
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
APPROVAL OF THE TRUSTEE WAS REACHED AS FOLLOWS:
Common Common Common Common Common
Shares Shares Shares Shares Shares
- ----------------------------------------------------------------------------------------------------------------------------------
James E. Bacon
For 14,761,936 16,038,146 11,819,995 5,660,597 3,605,082
Withhold 124,809 91,953 69,512 23,034 26,450
- ----------------------------------------------------------------------------------------------------------------------------------
Total 14,886,745 16,130,099 11,889,507 5,683,631 3,631,532
- ----------------------------------------------------------------------------------------------------------------------------------
Anthony T. Dean
For 14,768,473 16,040,001 11,824,356 5,665,189 3,605,782
Withhold 118,272 90,098 65,151 18,442 25,750
- ----------------------------------------------------------------------------------------------------------------------------------
Total 14,886,745 16,130,099 11,889,507 5,683,631 3,631,532
- ----------------------------------------------------------------------------------------------------------------------------------
William L. Kissick
For 14,766,833 16,037,446 11,820,390 5,660,597 3,604,782
Withhold 119,912 92,653 69,117 23,034 26,750
- ----------------------------------------------------------------------------------------------------------------------------------
Total 14,886,745 16,130,099 11,889,507 5,683,631 3,631,532
- ----------------------------------------------------------------------------------------------------------------------------------
Thomas E. Leafstrand
For 14,766,635 16,038,520 11,821,865 5,663,776 3,604,782
Withhold 120,110 91,579 67,642 19,855 26,750
- ----------------------------------------------------------------------------------------------------------------------------------
Total 14,886,745 16,130,099 11,889,507 5,683,631 3,631,532
- ----------------------------------------------------------------------------------------------------------------------------------
Timothy R. Schwertfeger
For 14,766,181 16,033,616 11,819,826 5,663,951 3,605,782
Withhold 120,564 96,483 69,681 19,680 25,750
- ----------------------------------------------------------------------------------------------------------------------------------
Total 14,886,745 16,130,099 11,889,507 5,683,631 3,631,532
- ----------------------------------------------------------------------------------------------------------------------------------
Sheila W. Wellington
For 14,760,434 16,032,418 11,822,290 5,664,538 3,604,482
Withhold 126,311 97,681 67,217 19,093 27,050
- ----------------------------------------------------------------------------------------------------------------------------------
Total 14,886,745 16,130,099 11,889,507 5,683,631 3,631,532
- ----------------------------------------------------------------------------------------------------------------------------------
RATIFICATION OF AUDITORS WAS REACHED AS FOLLOWS:
For 14,724,344 16,033,616 11,771,756 5,641,889 3,597,976
Against 33,357 21,985 30,071 4,010 6,656
Abstain 129,044 74,498 87,680 37,732 26,900
- ----------------------------------------------------------------------------------------------------------------------------------
Total 14,886,745 16,130,099 11,889,507 5,683,631 3,631,532
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
PORTFOLIO OF INVESTMENTS
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO (NXP)
MARCH 31, 1999
<TABLE>
<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 4/04 at 102 Aaa $ 575,553
Bonds (Collateralized Home Mortgage Revenue Bond Program),
1994 Series A-1 Bonds, 6.550%, 10/01/14
- ----------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 1.1%
2,500,000 Little Rock Health Facilities Board (Arkansas), Refunding Revenue Bonds 4/02 at 102 A 2,699,375
(Baptist Medical Center/Parkway Village Project),
Series 1992, 7.000%, 10/01/17
- ----------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 6.5%
4,750,000 State Public Works Board of the State of California, Lease Revenue 3/04 at 102 Aaa 5,531,423
Bonds (California Community Colleges - Various Community College
Projects), 1994 Series B, 7.000%, 3/01/14 (Pre-refunded to 3/01/04)
3,000,000 State Public Works Board of the State of California, Lease Revenue 11/04 at 102 Aaa 3,527,790
Bonds (Department of Corrections, California State Prison - Monterey
County (Soledad II)), 1994 Series A, 6.875%, 11/01/14
(Pre-refunded to 11/01/04)
4,905,000 California Statewide Communities Development Authority, Revenue 8/02 at 102 A1 5,396,481
Certificates of Participation (Cedars-Sinai Medical Center),
6.500%, 8/01/15
2,000,000 Los Angeles County Metropolitan Transportation Authority (California), 7/03 at 102 AAA 2,088,580
Proposition A, Sales Tax Revenue Refunding Bonds, Series 1993-A,
5.625%, 7/01/18
- ----------------------------------------------------------------------------------------------------------------------------------
COLORADO - 7.2%
Colorado Housing Finance Authority, Single Family Program Senior
Revenue Bonds, Series 1992A-1:
3,480,000 6.800%, 11/01/12 5/02 at 102 AA+ 3,688,800
975,000 6.875%, 11/01/16 5/02 at 102 AA+ 1,032,691
10,750,000 City and County of Denver, Colorado, Airport System Revenue Bonds, No Opt. Call BBB+ 13,532,100
Series 1991D, 7.750%, 11/15/13 (Alternative Minimum Tax)
- ----------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 0.4%
1,000,000 District of Columbia, Hospital Revenue and Refunding Bonds 8/06 at 102 AAA 1,094,780
(Medlantic Healthcare Group, Inc. Issue), Series 1996A,
5.750%, 8/15/16
- ----------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 3.1%
250,000 Escambia County, Florida, Pollution Control Revenue Bonds 12/03 at 102 Baa1 254,455
(Champion International Project), Series 1993, 5.875%, 6/01/22
(Alternative Minimum Tax)
7,000,000 State Board of Education of Florida, Public Education Capital 6/02 at 101 Aaa 7,676,130
Outlay Bonds, Series 1991-C, 6.625%, 6/01/22
(Pre-refunded to 6/01/02)
- ----------------------------------------------------------------------------------------------------------------------------------
HAWAII - 0.5%
1,330,000 State of Hawaii, Certificates of Participation (Kapolei State Office 11/08 at 101 AAA 1,315,131
Building), 1998 Series A, 5.000%, 5/01/17
- ----------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 12.2%
City of Chicago Heights, Illinois, General Obligation Corporate Purpose
Bonds, Series 1993:
3,820,000 5.650%, 12/01/15 12/08 at 100 AAA 4,052,409
2,600,000 5.650%, 12/01/17 12/08 at 100 AAA 2,747,498
7,000,000 The County of Cook, Illinois, General Obligation Bonds, Series 1992A, 11/02 at 102 AAA 7,805,770
6.600%, 11/15/22 (Pre-refunded to 11/15/02)
1,260,000 Illinois Educational Facilities Authority, Revenue Refunding Bonds, 7/01 at 102 A1*** 1,377,029
Loyola University of Chicago, Series 1991-A, 7.125%, 7/01/11
(Pre-refunded to 7/01/01)
3,000,000 Illinois Educational Facilities Authority, Revenue Refunding Bonds, 7/03 at 102 A+*** 3,308,760
Loyola University of Chicago, Series 1989-A, 6.100%, 7/01/15
(Pre-refunded to 7/01/03)
<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 Refunding Bonds, No Opt. Call N/R $2,652,797
Series 1992B (Evangelical Hospitals Corporation), 6.500%, 4/15/09
3,850,000 Illinois Health Facilities Authority, Revenue Bonds (Sarah Bush Lincoln 5/02 at 102 Aaa 4,311,269
Health Center), Series 1992, 7.250%, 5/15/22 (Pre-refunded to 5/15/02)
2,000,000 State of Illinois, General Obligation Bonds, Series of August 1994, 8/04 at 102 AA 2,180,960
5.875%, 8/01/14
2,500,000 Regional Transportation Authority (Cook, DuPage, Kane, Lake, 6/03 at 102 AAA 2,684,675
McHenry and Will Counties in Illinois), General Obligation Bonds,
Series 1993A, 5.800%, 6/01/13
- ----------------------------------------------------------------------------------------------------------------------------------
INDIANA - 2.7%
3,000,000 Indiana Bond Bank, Special Hospital Program (Hendricks Community 4/02 at 102 A+ 3,276,960
Hospital Financing Program), Series 1992A, 7.125%, 4/01/13
Indiana Bond Bank, Special Program Bonds, Series 1992 A:
1,000,000 7.000%, 8/01/12 2/02 at 102 A+ 1,087,130
2,250,000 7.000%, 8/01/18 2/02 at 102 A+ 2,428,470
- ----------------------------------------------------------------------------------------------------------------------------------
IOWA - 1.1%
2,565,000 Woodbury County, Iowa, Hospital Facility Revenue Bonds (St. Lukes 3/01 at 102 AAA 2,762,556
Regional Medical Center Project), Series 1991A, 6.750%, 3/01/21
(Pre-refunded to 3/01/01)
- ----------------------------------------------------------------------------------------------------------------------------------
KANSAS - 3.9%
9,000,000 City of Wichita, Kansas, Revenue Bonds (CSJ Health System of 11/01 at 102 A+ 9,967,140
Wichita, Inc.), Series 1985 XXV (Remarketed), 7.200%, 10/01/15
- ----------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 1.9%
1,100,000 County of Jefferson, Kentucky, Health System Revenue Bonds, 10/08 at 101 AAA 1,100,000
Series 1998 (Alliant Health System, Inc.), 5.125%, 10/01/18
3,230,000 Lexington-Fayette Urban County Government (Kentucky), 11/04 at 102 AAA 3,740,695
Governmental Project Revenue Bonds, Series 1994 (University of
Kentucky Alumni Association, Inc.-Commonwealth Library Project),
6.750%, 11/01/15 (Pre-refunded to 11/01/04)
- ----------------------------------------------------------------------------------------------------------------------------------
MAINE - 2.0%
Maine Educational Loan Authority, Educational Loan Revenue Bonds
(Supplemental Educational Loan Program), Series 1992A-1:
1,725,000 6.800%, 12/01/07 (Alternative Minimum Tax) 12/02 at 102 Aaa 1,835,831
1,955,000 7.000%, 12/01/16 (Alternative Minimum Tax) 12/02 at 102 Aaa 2,072,652
1,080,000 Maine Educational Loan Authority, Educational Loan Revenue 12/02 at 102 A 1,148,440
Bonds (Supplemental Educational Loan Program),
Series 1992A-2, 7.150%, 12/01/16 (Alternative Minimum Tax)
- ----------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 0.9%
2,000,000 Plymouth County (Massachusetts), Certificates of Participation 10/02 at 102 AA- 2,248,940
(Plymouth County Correctional Facility), Series A, 7.000%, 4/01/22
- ----------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 1.6%
3,600,000 Calhoun County (Mississippi), Solid Waste Disposal Revenue 4/07 at 103 A 4,050,288
Bonds (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, Multifamily Housing 7/01 at 102 A1 10,554,200
Revenue Refunding Bonds, 1991 Series 1, 7.050%, 7/01/11
- ----------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 11.7%
7,250,000 Metropolitan Transportation Authority (New York), Commuter 7/01 at 102 BBB+ 7,852,113
Facilities 1987 Service Contract Bonds, Series 5, 7.000%, 7/01/12
3,000,000 Metropolitan Transportation Authority (New York), Transit 7/02 at 100 BBB+ 3,132,570
Facilities Service Contract Bonds, Series N, 6.000%, 7/01/11
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NEW YORK (continued)
The City of New York, New York, General Obligation Bonds, Fiscal
1995 Series A:
$ 300,000 6.250%, 8/01/10 (Pre-refunded to 8/01/04) 8/04 at 101 1/2 A-*** $ 336,909
4,870,000 6.250%, 8/01/10 8/04 at 101 1/2 A- 5,393,379
4,465,000 New York State Dormitory Authority, State University Educational 5/02 at 102 Aaa 5,009,819
Facilities Revenue Bonds, Series 1991A, 7.250%, 5/15/18
(Pre-refunded to 5/15/02)
2,090,000 New York Local Government Assistance Corporation, New York, 4/01 at 100 AAA 2,229,487
Series 1991B, 7.000%, 4/01/21 (Pre-refunded to 4/01/01)
1,365,000 New York Local Government Assistance Corporation (A Public 4/02 at 102 AAA 1,517,703
Benefit Corporation of the State of New York), Series 1991D Bonds,
7.000%, 4/01/18 (Pre-refunded to 4/01/02)
New York State Medical Care Facilities Finance Agency, Mental
Health Services Facilities Improvement Revenue Bonds, 1991
Series A:
180,000 7.500%, 2/15/21 (Pre-refunded to 2/15/01) 2/01 at 102 Aaa 196,094
900,000 7.500%, 2/15/21 2/01 at 102 A3 972,234
New York State 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-*** 1,556,192
1,425,000 7.400%, 2/15/18 2/02 at 102 A- 1,568,897
- ----------------------------------------------------------------------------------------------------------------------------------
OHIO - 1.2%
2,810,000 Ohio Housing Finance Agency, Residential Mortgage Revenue 9/07 at 102 AAA 3,000,097
Bonds, Series 1997A, 6.050%, 9/01/17 (Alternative Minimum Tax)
- ----------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 4.8%
7,235,000 Delaware County Authority (Pennsylvania), First Mortgage Revenue 4/02 at 102 N/R*** 8,220,118
Bonds (The Dunwoody Project), Series 1992, 8.125%, 4/01/17
(Pre-refunded to 4/01/02)
1,290,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 4/02 at 102 AA+ 1,365,659
Revenue Bonds, Series 1992-33, 6.900%, 4/01/17
Pennsylvania Higher Educational Facilities Authority, Revenue
Bonds (Thomas Jefferson University), 1992 Series A:
1,750,000 6.625%, 8/15/09 (Pre-refunded to 8/15/02) 8/02 at 102 A2*** 1,936,113
750,000 6.625%, 8/15/09 8/02 at 102 AAA 825,863
- ----------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 3.8%
5,000,000 South Carolina Housing Finance and Development Authority, 5/02 at 102 Aaa 5,320,300
Multifamily Housing Revenue Bonds, 1992 Series A, 6.875%, 11/15/23
4,060,000 York County (South Carolina), Public Facilities Corporation, 6/01 at 102 Aaa 4,466,122
Certificates of Participation (York County Justice Center Project),
Series 1991, 7.500%, 6/01/11 (Pre-refunded to 6/01/01)
- ----------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 2.4%
5,750,000 Memphis-Shelby County Airport Authority (Tennessee), Airport 7/03 at 102 BBB 6,079,418
Special Facilities and Project Revenue Bonds (Federal Express
Corporation), Series 1993, 6.200%, 7/01/14 (Alternative Minimum Tax)
- ----------------------------------------------------------------------------------------------------------------------------------
TEXAS - 9.6%
9,825,000 Harris County Health Facilities Development Corporation (Texas), 6/02 at 102 A3*** 10,990,343
Hospital Revenue Bonds (Memorial Hospital System Project),
Series 1992, 7.125%, 6/01/15 (Pre-refunded to 6/01/02)
4,000,000 Port of Corpus Christi Authority of Nueces County (Texas), Pollution 4/02 at 102 A+ 4,308,080
Control Revenue Bonds (Hoechst Celanese Corporation),
Series 1992, 6.875%, 4/01/17 (Alternative Minimum Tax)
3,500,000 Red River Authority (Texas), Pollution Control Revenue Bonds 4/02 at 102 A+ 3,769,570
(Hoechst Celanese Corporation), Series 1992, 6.875%, 4/01/17
(Alternative Minimum Tax)
City of San Antonio, Texas, Water System Revenue
Refunding Bonds, Series 1992:
1,450,000 6.000%, 5/15/16 (Pre-refunded to 5/15/02) 5/02 at 100 AAA 1,547,629
465,000 6.000%, 5/15/16 No Opt. Call AAA 520,158
3,085,000 6.000%, 5/15/16 5/02 at 100 AAA 3,257,297
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
VIRGINIA - 2.1%
$ 5,070,000 Virginia Housing Development Authority, Commonwealth Mortgage 1/02 at 102 AA+ $5,285,222
Bonds, 1992 Series A, 7.100%, 1/01/17
- ----------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 8.9%
2,500,000 Public Utility District No. 1 of Snohomish County, Washington, 1/01 at 102 A+ 2,658,600
Electric System Refunding Revenue Bonds, Series 1991 A,
7.000%, 1/01/16
5,700,000 Public Utility District No. 1 of Snohomish County, Washington, 1/02 at 102 Aaa 6,251,759
Generation System Revenue Bonds, Series 1989, 6.750%, 1/01/12
2,750,000 Washington Health Care Facilities Authority, Revenue Bonds, 2/02 at 102 AA- 2,953,417
Series 1992 (Sacred Heart Medical Center, Spokane),
6.875%, 2/15/12
10,000,000 Washington Public Power Supply System, Nuclear Project No. 1, 7/01 at 102 Aaa 10,877,599
Refunding Revenue Bonds, Series 1991A, 6.875%, 7/01/17
(Pre-refunded to 7/01/01)
- ----------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 1.3%
1,885,000 Marshall County, West Virginia, Special Obligation Refunding No Opt. Call AAA 2,176,250
Bonds, Series 1992, 6.500%, 5/15/10
1,000,000 West Virginia Housing Development Fund, Housing Finance Bonds, 5/02 at 103 AAA 1,078,909
1992 Series A, 7.000%, 5/01/24
- ----------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 2.1%
5,000,000 Wisconsin Housing and Economic Development Authority, 4/02 at 102 AA- 5,401,999
Multifamily Housing Revenue Bonds, 1992 Series B,
7.050%, 11/01/22
- ----------------------------------------------------------------------------------------------------------------------------------
WYOMING - 1.3%
3,000,000 Wyoming Community Development Authority, Single Family Mortgage 11/01 at 103 AA 3,188,849
Revenue Bonds (Federally Insured or Guaranteed Mortgage Loans),
Series 1988-G, 7.200%, 6/01/10 (Alternative Minimum Tax)
- ----------------------------------------------------------------------------------------------------------------------------------
$ 228,490,000 Total Investments - (cost $224,268,157) - 98.6% 251,052,526
=============---------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.4% 3,582,149
- ----------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $254,634,675
==================================================================================================================================
* 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>
PORTFOLIO OF INVESTMENTS
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO 2 (NXQ)
MARCH 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CALIFORNIA - 5.3%
$ 3,250,000 State Public Works Board of the State of California, Lease Revenue 3/04 at 102 Aaa $3,784,658
Bonds (California Community Colleges - Various Community
College Projects), 1994 Series B, 7.000%, 3/01/14
(Pre-refunded to 3/01/04)
2,000,000 State Public Works Board of the State of California, Lease Revenue No Opt. Call Aa3 2,173,140
Refunding Bonds (The Regents of the University of California -
Various University of California Projects), 1993 Series A,
5.500%, 6/01/14
5,000,000 State Public Works Board of the State of California, Lease 11/04 at 102 Aaa 5,879,650
Revenue Bonds (Department of Corrections, California State
Prison - Monterey County (Soledad II)), 1994 Series A, 6.875%,
11/01/14 (Pre-refunded to 11/01/04)
500,000 State Public Works Board of the State of California, Lease Revenue 12/08 at 101 A 517,850
Refunding Bonds (California Community Colleges - Various
Community College Projects), 1998 Series A, 5.250%, 12/01/16
500,000 City of Contra Costa, California, Water District, Water Revenue 10/07 at 100 AA- 502,580
Bonds, Refunding Series 1997 H, 5.000%, 10/01/17
500,000 County of Contra Costa, California, Certificates of Participation 11/07 at 102 AAA 520,040
(Merrithew Memorial Hospital Replacement Project), Refunding
Series of 1997, 5.375%, 11/01/17
1,000,000 City of Fresno, California, Health Facility Revenue Bonds 12/03 at 102 AAA 1,050,300
(Holy Cross Health System Corporation), Series 1993B,
5.625%, 12/01/15
- ----------------------------------------------------------------------------------------------------------------------------------
COLORADO - 6.1%
3,535,000 Colorado Housing Finance Authority, Single Family Program 5/02 at 102 AA+ 3,825,860
Senior Bonds, Series 1992A-3, 7.000%, 11/01/24
(Alternative Minimum Tax)
City and County of Denver, Colorado, Airport System Revenue
Bonds, Series 1992B:
2,335,000 7.250%, 11/15/12 (Pre-refunded to 11/15/02) (Alternative Minimum Tax) 11/02 at 102 Aaa 2,646,256
9,130,000 7.250%, 11/15/12 (Alternative Minimum Tax) 11/02 at 102 BBB+ 10,039,531
- ----------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 5.1%
4,600,000 District of Columbia, Hospital Revenue Refunding Bonds 8/02 at 102 A3*** 5,144,226
(Washington Hospital Center), Series 1992-A, 7.125%, 8/15/19
(Pre-refunded to 8/15/02)
500,000 District of Columbia, Hospital Revenue and Refunding Bonds 8/06 at 102 AAA 547,390
(Medlantic Healthcare Group, Inc. Issue), Series 1996A,
5.750%, 8/15/16
7,500,000 District of Columbia, General Obligation Bonds, Series 1992B, 6/02 at 102 AAA 8,190,675
6.300%, 6/01/12 (Pre-refunded to 6/01/02)
- ----------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 3.3%
8,180,000 Hillsborough County (Florida), Environmentally Sensitive Land 7/02 at 102 Aa3*** 8,987,611
Acquisition and Protection Program Bonds, Series 1992,
6.375%, 7/01/11 (Pre-refunded to 7/01/02)
- ----------------------------------------------------------------------------------------------------------------------------------
HAWAII - 0.4%
1,100,000 State of Hawaii, Certificates of Participation (Kapolei State 11/08 at 101 AAA 1,087,702
Office Building), 1998 Series A, 5.000%, 5/01/17
- ----------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 12.1%
8,500,000 Chicago Metropolitan Housing Development Corporation (Illinois), 7/02 at 102 AA 9,266,445
Housing Development Revenue Refunding Bonds (FHA-Insured
Mortgage Loans - Section 8 Assisted Projects), Series 1992A,
6.800%, 7/01/17
8,070,000 The County of Cook, Illinois, General Obligation Bonds, 11/02 at 102 AAA 8,998,938
Series 1992A, 6.600%, 11/15/22 (Pre-refunded to 11/15/02)
2,500,000 Illinois Educational Facilities Authority, Columbia College, 12/03 at 102 BBB 2,575,450
Revenue Bonds, Series 1993, 6.125%,12/01/18
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ILLINOIS (continued)
Illinois Educational Facilities Authority, Revenue Refunding Bonds,
Columbia College, Series 1992:
$ 2,610,000 6.875%, 12/01/17 (Pre-refunded to 12/01/04) 12/04 at 100 N/R*** $2,977,697
1,140,000 6.875%, 12/01/17 12/04 at 100 BBB 1,246,886
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 2,473,238
45,000 6.500%, 6/15/22 6/03 at 102 AA- 49,183
5,000,000 Regional Transportation Authority (Cook, DuPage, Kane, Lake, 6/03 at 102 AAA 5,369,350
McHenry and Will Counties in Illinois), General Obligation Bonds,
Series 1993A, 5.800%, 6/01/13
- ----------------------------------------------------------------------------------------------------------------------------------
INDIANA - 5.8%
2,005,000 Howard County Jail and Juvenile Detention Center Corporation 1/02 at 102 A1*** 2,198,984
(Indiana), First Mortgage Revenue Bonds, Series 1992,
6.850%, 1/01/12 (Pre-refunded to 1/01/02)
10,000,000 Indiana Educational Facilities Authority, Educational Facilities 1/02 at 102 AAA 10,812,400
Refunding Revenue Bonds (Butler University Project), Series 1992A,
6.600%, 1/01/18
2,400,000 Westfield-Washington South School Building Corporation 7/02 at 102 A*** 2,644,344
(Indiana), First Mortgage Revenue Bonds, Series 1992,
6.500%, 7/15/13 (Pre-refunded to 7/15/02)
- ----------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 1.9%
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 4,704,658
370,000 6.700%, 7/01/17 7/02 at 102 AAA 375,739
- ----------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 4.7%
11,425,000 Louisiana Public Facilities Authority, Revenue Bonds, Tulane 11/02 at 102 A+*** 12,704,257
University of Louisiana, 1992 Series, 6.625%, 11/15/21
(Pre-refunded to 11/15/02)
- ----------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 2.7%
Massachusetts State General Obligation Refunding Bonds,
Series 1991-B:
2,045,000 6.500%, 8/01/11 (Pre-refunded to 8/01/01) 8/01 at 102 Aaa 2,215,921
1,585,000 6.500%, 8/01/11 8/01 at 102 AA- 1,708,630
3,000,000 Massachusetts Health and Educational Facilities Revenue 10/02 at 102 BBB+*** 3,345,450
Bonds (Jordan Memorial Hospital Issue), Series 1992C,
6.875%, 10/01/22 (Pre-refunded to 10/01/02)
- ----------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 1.6%
City of Royal Oak (Michigan), Hospital Finance Authority,
Revenue Bonds (Beaumont Properties, Inc.), Series 1992E:
435,000 6.625%, 1/01/19 (Pre-refunded to 1/01/02) 1/02 at 102 AAA 475,512
' 3,565,000 6.625%, 1/01/19 1/02 at 102 AA 3,827,919
- ----------------------------------------------------------------------------------------------------------------------------------
MONTANA - 0.8%
2,065,000 City of Billings, Montana, Tax Increment Urban Renewal 3/02 at 101 Baa 2,217,996
Bonds, Refunding Series 1992, 7.100%, 3/01/08
- ----------------------------------------------------------------------------------------------------------------------------------
NEVADA - 0.2%
500,000 Clark County, Nevada, General Obligation (Limited Tax), 7/06 at 101 AAA 518,915
Las Vegas Convention and Visitors Authority Bonds,
Series September 1, 1996, 5.500%, 7/01/17
- ----------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 10.8%
3,850,000 Metropolitan Transportation Authority (New York), Transit 7/02 at 100 BBB+ 4,020,132
Facilities Service Contract Bonds, Series N, 6.000%, 7/01/11
The City of New York, 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 A-*** 7,762,208
965,000 7.100%, 2/01/11 2/02 at 101 1/2 A- 1,055,614
2,725,000 7.100%, 2/01/12 (Pre-refunded to 2/01/02) 2/02 at 101 1/2 A-*** 3,006,683
425,000 7.100%, 2/01/12 2/02 at 101 1/2 A- 464,729
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NEW YORK (continued)
$ 2,695,000 Dormitory Authority of the State of New York, State University 5/00 at 102 Aaa $2,866,456
Educational Facilities Revenue Bonds, Series 1989B,
7.250%, 5/15/15 (Pre-refunded to 5/15/00)
4,000,000 New York State Medical Care Facilities Finance Agency, 2/05 at 102 AAA 4,634,920
New York Hospital FHA - Insured Mortgage Revenue Bonds,
1994 Series A, 6.750%, 8/15/14 (Pre-refunded to 2/15/05)
5,000,000 Triborough Bridge and Tunnel Authority (New York), Convention No Opt. Call BBB+ 5,877,000
Center Project Bonds, Series E, 7.250%, 1/01/10
- ----------------------------------------------------------------------------------------------------------------------------------
OHIO - 2.4%
2,800,000 County of Cuyahoga, Ohio, Hospital Revenue Bonds (Meridia 8/05 at 102 AAA 3,198,888
Health System), Series 1995, 6.250%, 8/15/14
(Pre-refunded to 8/15/05)
3,000,000 County of Erie, Ohio Hospital Improvement and Refunding 1/02 at 102 A 3,238,170
Revenue Bonds, Series 1992 (Firelands Community Hospital
Project), 6.750%, 1/01/15
- ----------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 2.4%
6,000,000 Oklahoma City, Oklahoma, Water Utilities Trust, Water and Sewer 7/02 at 100 AAA 6,427,680
Revenue Bonds, 6.400%, 7/01/17
- ----------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 2.9%
1,000,000 Dauphin County General Authority (Pennsylvania), Health System 2/09 at 101 AAA 999,940
Revenue Bonds, Series of 1999 (Pinnacle Health System Project),
5.125%, 8/15/17
6,295,000 Pennsylvania Intergovernmental Cooperation Authority, Special 6/02 at 100 Aaa 6,880,309
Tax Revenue Bonds (City of Philadelphia Funding Program),
Series of 1992, 6.800%, 6/15/22 (Pre-refunded to 6/15/02)
- ----------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 2.3%
5,500,000 Rhode Island Depositors Economic Corporation, Special 8/02 at 102 AAA 6,145,095
Obligation Bonds, 1992 Series A, 6.900%, 8/01/13
(Pre-refunded to 8/01/02)
- ----------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 2.8%
7,000,000 Richland County (South Carolina), Solid Waste Disposal Facilities 5/02 at 102 A1 7,605,360
Revenue Bonds (Union Camp Corporation Project), Series 1992-A,
6.750%, 5/01/22 (Alternative Minimum Tax)
- ----------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 5.3%
4,500,000 Memphis-Shelby County Airport Authority (Tennessee), Special 9/01 at 103 BBB 4,963,455
Facilities Revenue Bonds, Series 1984 (Federal Express
Corporation), 7.875%, 9/01/09
8,895,000 Tennessee Housing Development Agency, Homeownership 7/02 at 102 AA 9,404,861
Program Bonds, Issue WR, 6.800%, 7/01/17
- ----------------------------------------------------------------------------------------------------------------------------------
TEXAS - 7.8%
3,275,000 Bexar County (Texas), Health Facilities Development Corporation, 8/04 at 102 AAA 3,792,286
Hospital Revenue Bonds (Baptist Memorial Hospital System
Project), Series 1994, 6.900%, 2/15/14 (Pre-refunded to 8/15/04)
4,755,000 Cleveland Housing Corporation (Texas), Mortgage Revenue 1/01 at 102 AAA 4,977,962
Refunding Bonds, Series 1992-C (FHA Insured-Section 8),
7.375%, 7/01/24
2,500,000 Harris County Health Facilities Development Corporation, Texas 10/05 at 102 AAA 2,586,575
Children's Hospital Project, Series 1995, 5.500%, 10/01/16
7,600,000 Port of Corpus Christi Authority of Nueces County (Texas), 4/02 at 102 A+ 8,185,352
Pollution Control Revenue Bonds (Hoechst Celanese Corporation),
Series 1992, 6.875%, 4/01/17 (Alternative Minimum Tax)
1,460,000 Red River Authority (Texas), Pollution Control Revenue Bonds 4/02 at 102 A+ 1,572,449
(Hoechst Celanese Corporation), Series 1992, 6.875%, 4/01/17
(Alternative Minimum Tax)
- ----------------------------------------------------------------------------------------------------------------------------------
UTAH - 1.0%
1,655,000 Municipal Building Authority of Ogden City School District, 1/02 at 101 A3*** 1,815,221
Weber County, Utah, Lease Revenue Bonds (Central Middle
School Project), Series 1992, 6.700%, 1/01/12
(Pre-refunded to 1/01/02)
745,000 Utah Housing Finance Agency, Single Family Mortgage 7/02 at 102 Aaa 787,927
Purchase Refunding Senior Bonds, Series 1992,
6.800%, 1/01/12
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
VERMONT - 1.4%
$ 3,600,000 Vermont Industrial Development Authority, Industrial Development 9/02 at 102 A $3,863,088
Refunding Revenue Bonds (Stanley Works Project),
Series 1992, 6.750%, 9/01/10
- ----------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 0.8%
2,000,000 Industrial Development Authority of Covington-Alleghany County, 4/02 at 102 N/R*** 2,192,400
Virginia, Hospital Facility Revenue Bonds (Alleghany Regional
Hospital), Series 1992, 6.625%, 4/01/12 (Pre-refunded to 4/01/02)
- ----------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 3.9%
Washington Public Power Supply System, Nuclear Project No. 3,
Refunding Revenue Bonds, Series 1991A:
3,600,000 6.750%, 7/01/11 (Pre-refunded to 7/01/01) 7/01 at 102 Aa1*** 3,911,220
6,160,000 6.500%, 7/01/18 (Pre-refunded to 7/01/01) 7/01 at 102 Aaa 6,659,514
- ----------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 0.7%
1,750,000 West Virginia School Building Authority, Capital Improvement 7/02 at 102 A*** 1,930,932
Revenue Bonds, Series 1992-A, 6.625%, 7/01/22
(Pre-refunded to 7/01/02)
- ----------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 4.0%
10,000,000 Wisconsin Housing and Economic Development Authority, 4/02 at 102 AA- 10,755,099
Multi-Family Housing Revenue Bonds, 1992 Series D,
7.200%, 11/01/13 (Alternative Minimum Tax)
- ----------------------------------------------------------------------------------------------------------------------------------
$ 244,335,000 Total Investments - (cost $241,823,198) - 98.5% 267,186,906
=============---------------------------------------------------------------------------------------------------------------------
TEMPORARY INVESTMENTS IN SHORT-TERM MUNICIPAL SECURITIES - 0.4%
$ 1,000,000 Raleigh-Durham, North Carolina, Airport Authority, Series B, A-1+ 1,000,000
Variable Rate Demand Bonds, 3.200%, 11/01/15+
- ----------------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.1% 3,052,866
- ----------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $271,239,772
==================================================================================================================================
* 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.
N/R Investment is not rated.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
PORTFOLIO OF INVESTMENTS
NUVEEN SELECT TAX-FREE INCOME PORTFOLIO 3 (NXR)
MARCH 31, 1999
<TABLE>
<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 11/04 at 102 Aaa $3,527,790
Bonds (Department of Corrections, California State Prison -
Monterey County (Soledad II)), 1994 Series A, 6.875%, 11/01/14
(Pre-refunded to 11/01/04)
500,000 City of Fresno, California, Health Facility Revenue Refunding 12/03 at 102 AAA 520,510
Bonds (Holy Cross Health System Corporation),
5.625%, 12/01/18
1,490,000 City of Torrance (California), Hospital Revenue Bonds 7/02 at 102 A 1,668,502
(Little Company of Mary Hospital Project),
Series 1992, 6.875%, 7/01/15
- ----------------------------------------------------------------------------------------------------------------------------------
COLORADO - 6.9%
2,500,000 City of Colorado Springs, Colorado, Utilities System Refunding 11/02 at 100 AA 2,664,775
Revenue Bonds, Series 1992A, 6.125%, 11/15/20
1,500,000 City and County of Denver, Colorado, Airport System Revenue No Opt. Call BBB+ 1,888,200
Bonds, Series 1991D, 7.750%, 11/15/13
(Alternative Minimum Tax)
City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1992B:
815,000 7.250%, 11/15/23 (Pre-refunded to 11/15/02)
(Alternative Minimum Tax) 11/02 at 102 Aaa 923,640
3,185,000 7.250%, 11/15/23 (Alternative Minimum Tax) 11/02 at 102 BBB+ 3,504,551
City and County of Denver, Colorado, Airport System Revenue
Bonds, Series 1992C:
470,000 6.750%, 11/15/13 (Pre-refunded to 11/15/02)
(Alternative Minimum Tax) 11/02 at 102 Aaa 525,108
3,530,000 6.750%, 11/15/13 (Alternative Minimum Tax) 11/02 at 102 BBB+ 3,817,413
- ----------------------------------------------------------------------------------------------------------------------------------
CONNECTICUT - 0.1%
250,000 State of Connecticut, Health and Educational Facilities 7/02 at 102 AAA 272,705
Authority, Revenue Bonds, Bridgeport Hospital Issue,
Series A, 6.625%, 7/01/18
- ----------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 3.5%
2,000,000 District of Columbia, Hospital Revenue Refunding Bonds (Washington 8/02 at 102 A3*** 2,236,620
Hospital Center), Series 1992-A, 7.125%, 8/15/19
(Pre-refunded to 8/15/02)
District of Columbia, General Obligation Bonds, Series 1993E:
165,000 6.000%, 6/01/13 (Pre-refunded to 6/01/03) 6/03 at 102 AAA 181,442
4,080,000 6.000%, 6/01/13 6/03 at 102 AAA 4,445,242
- ----------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 2.1%
3,675,000 City of Tampa, Florida, Revenue Bonds (The Florida Aquarium 5/02 at 102 N/R*** 4,129,083
Project), Series 1992, 7.550%, 5/01/12 (Pre-refunded to 5/01/02)
- ----------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 2.4%
Fulco Hospital Authority, Refunding Revenue Anticipation Certificates
(Georgia Baptist Health Care
System Project), Series 1992B:
2,250,000 6.250%, 9/01/13 (Pre-refunded to 9/01/02) 9/02 at 102 Baa1*** 2,465,685
2,000,000 6.375%, 9/01/22 (Pre-refunded to 9/01/02) 9/02 at 102 Baa1*** 2,199,680
- ----------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 14.5%
3,000,000 Village of Bryant, Illinois, Pollution Control Revenue Refunding Bonds 2/02 at 102 Aa2 3,170,640
(Central Illinois Light Company Project), Series 1992,
6.500%, 2/01/18
2,500,000 Chicago Metropolitan Housing Development Corporation (Illinois), 7/02 at 102 AA 2,729,175
Housing Development Revenue Refunding Bonds (FHA - Insured
Mortgage Loans - Section 8 Assisted Projects), Series 1992A,
6.850%, 7/01/22
2,550,000 City of Chicago, Illinois, Mortgage Revenue Bonds, Series 1992 6/02 at 102 AAA 2,694,585
(FHA-Insured Mortgage Loan - Lakeview Towers Project),
6.600%, 12/01/20
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ILLINOIS (continued)
$ 1,700,000 City of Chicago, Chicago - O'Hare International Airport, 1/03 at 102 AAA $1,747,294
General Airport Second Lien Revenue Refunding Bonds,
5.600%, 1/01/18 (Alternative Minimum Tax)
1,500,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1992C No Opt. Call N/R 1,719,735
(Evangelical Hospitals Corporation), 6.250%, 4/15/22
4,000,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1992B 9/06 at 100 AAA 4,624,920
(Franciscan Sisters Health Care Corporation Project),
6.625%, 9/01/13 (Pre-refunded to 9/01/06)
1,000,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1992 10/02 at 102 Baa2 1,108,540
(Mercy Center for Health Care Services), 6.650%, 10/01/22
7,750,000 The Illinois State Toll Highway Authority, Toll Highway Priority 1/03 at 102 AA-*** 8,568,245
Revenue Bonds, 1992 Series A, 6.375%, 1/01/15
(Pre-refunded to 1/01/03)
1,360,000 Board of Regents of Sangamon State University (Illinois), Auxiliary 10/02 at 102 AAA 1,502,569
Facilities System, Revenue Bonds, Series 1992, 6.375%, 10/01/17
(Pre-refunded to 10/01/02)
- ----------------------------------------------------------------------------------------------------------------------------------
INDIANA - 5.5%
1,205,000 Allen County, Indiana, Refunding Certificates of Participation, 5/02 at 101 Aa3 1,295,821
Series 1991, 6.500%, 11/01/17
4,000,000 Indiana State Office Building Commission, Correctional Facilities 12/01 at 102 Aa3*** 4,351,040
Program, Revenue Bonds, Series 1991, 6.375%, 7/01/16
(Pre-refunded to 12/01/01)
2,000,000 School Building Corporation of Warren Township (Marion County, 7/02 at 102 A+*** 2,172,960
Indiana), First Mortgage Bonds, Series 1992A, 6.000%, 7/15/12
(Pre-refunded to 7/15/02)
2,725,000 Warrick County, Indiana, Adjustable Rate Environmental Improvement 5/03 at 102 AA 2,883,977
Revenue Bonds, 1993 Series B (Southern Indiana Gas and Electric
Company Project), 6.000%, 5/01/23 (Alternative Minimum Tax)
- ----------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 2.5%
County of Trimble, Kentucky, Pollution Control Revenue Bonds
(Louisville Gas and Electric Company Project), 1990 Series B:
500,000 6.550%, 11/01/20 (Pre-refunded to 9/16/02)
(Alternative Minimum Tax) 9/02 at 102 Aaa 553,365
4,080,000 6.550%, 11/01/20 (Alternative Minimum Tax) 9/02 at 102 Aa2 4,382,981
- ----------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 2.2%
4,000,000 Louisiana Public Facilities Authority, Revenue Bonds, Series 1992, 2/03 at 101 AA- 4,328,400
Baton Rouge Water Works Company Project, 6.400%, 2/01/10
(Alternative Minimum Tax)
- ----------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 0.7%
1,270,000 Massachusetts Health and Educational Facilities Authority, 11/02 at 102 Aaa 1,410,995
Revenue Bonds, MetroWest Health, Inc. Issue, Series C,
6.500%, 11/15/18 (Pre-refunded to 11/15/02)
- ----------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 6.7%
4,000,000 Michigan State Housing Development Authority, Single Family 6/06 at 102 AA+ 4,204,320
Mortgage Revenue Bonds, 1996 Series C, 5.950%, 12/01/17
8,240,000 Michigan Housing Development Authority, Limited Obligation 9/02 at 103 AAA 8,838,224
Revenue Bonds (Greenwood Villa Project), Series 1992,
6.625%, 9/15/17
- ----------------------------------------------------------------------------------------------------------------------------------
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 2,106,591
980,000 6.250%, 7/01/22 (Pre-refunded to 7/01/02) (Alternative Minimum Tax) 7/02 at 102 AAA 1,071,767
20,000 6.250%, 7/01/22 (Alternative Minimum Tax) 7/02 at 102 A 21,540
- ----------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 10.4%
1,060,000 The City of New York, New York, General Obligation Bonds, 2/02 at 101 1/2 A- 1,154,488
Fiscal 1992 Series B, 7.000%, 2/01/18
The City of New York, New York, General Obligation Bonds, Fiscal
1992 Series C, Subseries C-1:
1,690,000 7.000%, 8/01/17 (Pre-refunded to 8/01/02) 8/02 at 101 1/2 Aaa 1,886,547
60,000 7.000%, 8/01/17 8/02 at 101 1/2 A- 66,082
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NEW YORK (continued)
$ 1,455,000 The City of New York, New York, General Obligation Bonds, 2/02 at 101 1/2 Aaa $1,622,078
Fiscal 1992 Series D, 7.500%, 2/01/18 (Pre-refunded to 2/01/02)
45,000 The City of New York, New York, General Obligation Bonds, 2/02 at 101 1/2 A- 49,607
Fiscal 1991 Series D, 7.500%, 2/01/18
The City of New York, New York, General Obligation Bonds, Fiscal
1991 Series B:
955,000 7.000%, 6/01/12 (Pre-refunded to 6/01/01) 6/01 at 101 1/2 Aaa 1,037,073
45,000 7.000%, 6/01/12 6/01 at 101 1/2 A- 48,561
The City of New York, New York, 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 A-*** 1,947,448
235,000 7.100%, 2/01/11 2/02 at 101 1/2 A- 257,067
2,785,000 New York City Municipal Water Finance Authority (New York), 6/02 at 101 AAA 3,034,146
Water and Sewer System Revenue Bonds, Fixed Rate
Fiscal 1993 Series B, 6.375%, 6/15/22 (Pre-refunded to 6/15/02)
4,000,000 New York City Municipal Water Finance Authority (New York), 6/02 at 101 1/2 A1 4,274,160
Water and Sewer System Revenue Bonds, Fiscal 1993 Series A,
6.000%, 6/15/17
2,130,000 Dormitory Authority of the State of New York, City University No Opt. Call BBB+ 2,568,588
Resolution Revenue Bonds, Series 1990C, 7.500%, 7/01/10
2,000,000 New York State Medical Care Facilities Finance Agency, Hospital 8/02 at 102 AAA 2,132,620
and Nursing Home FHA - Insured Mortgage Revenue Bonds,
1992 Series C (Mount Sinai Hospital), 6.250%, 8/15/12
- ----------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 6.2%
2,500,000 Cambria County Hospital Development Authority (Pennsylvania), 7/02 at 102 AAA 2,739,550
Hospital Revenue Refunding and Improvement Bonds,
Series B of 1992 (Conemaugh Valley Memorial Hospital Project),
6.375%, 7/01/18 (Pre-refunded to 7/01/02)
2,435,000 Dauphin County, Pennsylvania, Industrial Development Authority, No Opt. Call A 2,894,314
Water Development Refunding Revenue Bonds, Series 1992B
(Dauphin Consolidated Water Supply Company), 6.700%, 6/01/17
4,000,000 Pennsylvania Housing Finance Agency, Rental Housing Refunding 7/02 at 102 AAA 4,270,560
Bonds, Issue of 1992 (FNMA Insured Mortgage Loans),
6.500%, 7/01/23
2,000,000 Pennsylvania Higher Educational Facilities Authority, Revenue 5/03 at 102 A- 2,158,860
Bonds (Drexel University), Series 1993, 6.375%, 5/01/17
- ----------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 3.1%
4,000,000 South Carolina Public Service Authority, Revenue Bonds, 7/02 at 102 Aa2 4,335,120
1992 Refunding Series A, 6.375%, 7/01/11
City of Spartanburg, South Carolina, Water System Improvement
Refunding Revenue Bonds, Series 1992:
1,290,000 6.250%, 6/01/17 (Pre-refunded to 6/01/02) 6/02 at 101 AAA 1,399,457
310,000 6.250%, 6/01/17 6/02 at 101 AA- 331,499
- ----------------------------------------------------------------------------------------------------------------------------------
SOUTH DAKOTA - 2.3%
4,000,000 South Dakota Health and Educational Facilities Authority, 9/02 at 102 AAA 4,377,520
Revenue Bonds, Series 1992 (Rapid City Regional Hospital Issue),
6.150%, 9/01/18 (Pre-refunded to 9/01/02)
- ----------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 2.5%
4,420,000 Memphis - Shelby County Airport Authority (Tennessee), Special 9/02 at 102 BBB 4,817,004
Facilities Revenue Refunding Bonds, Series 1992 (Federal Express
Corporation), 6.750%, 9/01/12
- ----------------------------------------------------------------------------------------------------------------------------------
TEXAS - 6.1%
3,755,000 Grand Prairie Industrial Development Authority, Industrial 12/02 at 102 A 4,014,433
Development Revenue Refunding Bonds, Series 1992 (Baxter
International Inc. Project), 6.550%, 12/01/12
2,500,000 Harris County Health Facilities (Texas), Development Corporation 10/04 at 101 AAA 2,817,900
Hospital Revenue Bonds (Hermann Hospital), Series 1994,
6.375%, 10/01/17 (Pre-refunded to 10/01/04)
5,000,000 North Central Texas Health Facilities Development 5/06 at 102 AA 5,023,100
Corporation, Hospital Revenue Refunding Bonds (Baylor
Health Care System Project), Series 1995, 5.250%, 5/15/16
- ----------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 2.1%
4,000,000 Virginia Housing Development Authority, Commonwealth 1/02 at 102 AA+ 4,133,360
Mortgage Bonds, 1992 Series A, 7.100%, 1/01/22
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
WASHINGTON - 9.9%
Port of Seattle, Washington, Revenue Bonds, Series 1992B:
$ 290,000 6.000%, 11/01/17 (Pre-refunded to 11/01/02) (Alternative Minimum Tax) 11/02 at 100 AA-*** $ 311,225
3,710,000 6.000%, 11/01/17 (Alternative Minimum Tax) 11/02 at 100 AA- 3,935,568
5,840,000 State of Washington, Certificates of Participation, Series 1991-A, 4/01 at 102 Aa2 6,121,254
State Office Building Project, 6.000%, 4/01/12
4,000,000 Washington Public Power Supply System, Nuclear Project No. 1, 7/01 at 102 Aaa 4,351,040
Refunding Revenue Bonds, Series 1991A, 6.875%, 7/01/17
(Pre-refunded to 7/01/01)
4,000,000 Washington Public Power Supply System, Nuclear Project No. 1, 7/02 at 102 AAA 4,411,400
Refunding Revenue Bonds, Series 1992A, 6.500%, 7/01/15
(Pre-refunded to 7/01/02)
- ----------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 4.3%
2,500,000 Berkeley County Building Commission (West Virginia), Hospital 11/02 at 102 BBB+ 2,658,300
Revenue Bonds (City Hospital Project), Series 1992,
6.500%, 11/01/09
3,000,000 Mason County, West Virginia, Pollution Control Revenue Bonds 10/02 at 102 BBB+ 3,193,380
(Appalachian Power Company Project), Series 1992J,
6.600%, 10/01/22
West Virginia School Building Authority, Capital Improvement
Revenue Bonds, Series 1992-A:
1,855,000 6.500%, 7/01/12 (Pre-refunded to 7/01/02) 7/02 at 102 A*** 2,039,757
395,000 6.500%, 7/01/12 7/02 at 102 A 427,504
- ----------------------------------------------------------------------------------------------------------------------------------
$ 175,770,000 Total Investments - (cost $174,609,511) - 98.5% 191,299,200
=============---------------------------------------------------------------------------------------------------------------------
TEMPORARY INVESTMENTS IN SHORT-TERM MUNICIPAL SECURITIES - 0.6%
$ 1,200,000 Sweetwater Co. (Pacificorp), Pollution Control, Variable Rate A-1+ 1,200,000
Demand Bonds, 3.050%, 12/01/14+
- ----------------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.9% 1,665,484
- ----------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $194,164,684
==================================================================================================================================
* 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.
N/R Investment is not rated.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
PORTFOLIO OF INVESTMENTS
NUVEEN INSURED CALIFORNIA SELECT TAX-FREE INCOME PORTFOLIO (NXC)
MARCH 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EDUCATION AND CIVIC ORGANIZATIONS - 1.6%
$ 1,410,000 California Educational Facilities Authority, Refunding Revenue 10/01 at 100 AAA $1,484,702
Bonds, Series 1992 (Loyola Marymount University),
6.000%, 10/01/14
- ----------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 8.5%
2,500,000 California Health Facilities Financing Authority, Insured Hospital 10/02 at 102 AAA 2,736,650
Revenue Bonds (Scripps Memorial Hospitals), Series 1992A,
6.400%, 10/01/12
1,000,000 California Health Facilities Financing Authority, Insured Hospital 3/01 at 102 AAA 1,067,450
Revenue Bonds (Adventist Health System/West), 1991 Series B,
6.500%, 3/01/11
4,000,000 California Health Facilities Financing Authority, Insured Hospital 8/02 at 102 AAA 4,357,600
Revenue Bonds (San Diego Hospital Association), Series 1992B,
6.125%, 8/01/11
- ----------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 7.3%
Golden West Schools Financing Authority (California), 1999
Revenue Bonds (School District General Obligation Refunding
Program), Series A:
4,650,000 0.000%, 8/01/16 (WI) No Opt. Call AAA 1,970,577
1,750,000 0.000%, 2/01/17 (WI) No Opt. Call AAA 717,203
4,000,000 City of Oakland, Alameda County, California, General Obligation 6/02 at 102 AAA 4,310,520
Bonds, Series 1992, 6.000%, 6/15/17
- ----------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 17.9%
3,500,000 State Public Works Board of the State of California, Lease No Opt. Call AAA 4,190,725
Revenue Bonds (Department of Corrections),
Series 1991A (State Prisons - Imperial County),
6.500%, 9/01/17
2,430,000 County of Los Angeles, Certificates of Participation 4/02 at 102 AAA 2,606,758
(Edmund D. Edelman Children's Court and Petersen
Museum Projects), 6.000%, 4/01/12
1,500,000 Los Angeles County Metropolitan Transportation Authority 7/03 at 102 AAA 1,566,435
(California), Proposition A, Sales Tax Revenue Refunding Bonds,
Series 1993-A, 5.625%, 7/01/18
4,000,000 San Bernardino County, California, Certificates of Participation 11/02 at 102 AAA 4,328,960
(1992 West Valley Detention Center Refinancing Project),
6.000%, 11/01/18
4,000,000 Walnut Public Financing Authority (Los Angeles County, California), 9/02 at 102 AAA 4,388,120
1992 Tax Allocation Revenue Bonds (Walnut Improvement
Project), 6.500%, 9/01/22
- ----------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 11.7%
3,675,000 Palm Springs Financing Authority, Palm Springs Regional 1/02 at 102 AAA 3,876,427
Airport, Revenue Bonds, Series 1992, 6.000%, 1/01/12
(Alternative Minimum Tax)
3,750,000 Port of Oakland (California), Revenue Bonds, Series 1992-E, 11/02 at 102 AAA 4,092,713
6.500%, 11/01/16 (Alternative Minimum Tax)
2,095,000 Airports Commission of San Francisco City and County, 5/02 at 102 AAA 2,282,628
California, San Francisco International Airport, Second Series
Refunding Revenue Bonds, Issue 1, 6.300%, 5/01/11
820,000 Airports Commission of San Francisco City and County, California, 5/03 at 101 AAA 890,397
San Francisco International Airport, Second Series Refunding
Revenue Bonds, Issue 4, 6.200%, 5/01/20 (Alternative Minimum Tax)
- ----------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 36.7%
2,320,000 Brea Public Financing Authority (Orange County, California), 7/00 at 102 AAA 2,453,586
1991 Lease Revenue Bonds, Series A, 6.250%, 7/01/21
(Pre-refunded to 7/01/00)
640,000 California Educational Facilities Authority, Refunding Revenue 10/01 at 100 AAA 680,115
Bonds, Series 1992 (Loyola Marymount University),
6.000%, 10/01/14 (Pre-refunded to 10/01/01)
4,000,000 The Community Redevelopment Agency of the City of Los Angeles, 7/02 at 102 AAA 4,390,040
California, Hollywood Redevelopment Project,
Tax Allocation Bonds, Series B, 6.100%, 7/01/22
(Pre-refunded to 7/01/02)
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. GUARANTEED (continued)
$ 4,000,000 City of Los Angeles, California, Wastewater System Revenue 6/02 at 102 AAA $4,400,360
Bonds, Series 1992-B, 6.250%, 6/01/12 (Pre-refunded to 6/01/02)
1,500,000 Modesto Irrigation District Financing Authority, Domestic Water 9/02 at 102 AAA 1,651,080
Project Revenue Bonds, Series 1992A, 6.125%, 9/01/19
(Pre-refunded to 9/01/02)
Rio Linda Union School District (California), General Obligation
Bonds, Series 1992A:
475,000 6.250%, 8/01/15 (Pre-refunded to 8/01/02) 8/02 at 102 AAA 524,433
3,310,000 6.375%, 8/01/17 (Pre-refunded to 8/01/02) 8/02 at 102 AAA 3,667,381
3,800,000 Sacramento Municipal Utility District (California), Electric 8/02 at 102 AAA 4,214,010
Revenue Bonds, 1992 Series B, 6.375%, 8/15/22
(Pre-refunded to 8/15/02)
4,000,000 County of San Diego (California), Certificates of Participation 8/04 at 102 AAA 4,654,320
(1994 Inmate Reception Center and Cooling Plant Financing),
6.750%, 8/01/14 (Pre-refunded to 8/01/04)
1,405,000 Airports Commission of San Francisco City and County, 5/02 at 102 AAA 1,544,882
California, San Francisco International Airport, Second Series
Refunding Revenue Bonds, Issue 1, 6.300%, 5/01/11
(Pre-refunded to 5/01/02)
1,330,000 Airports Commission of San Francisco City and County, 5/03 at 102 AAA 1,482,897
California, San Francisco International Airport, Second Series
Refunding Revenue Bonds, Issue 4, 6.200%, 5/01/20
(Pre-refunded to 5/01/03) (Alternative Minimum Tax)
1,000,000 Tulare County, California, Certificates of Participation (1992 11/02 at 102 AAA 1,106,710
Financing Project), Series A, 6.125%, 11/15/12
(Pre-refunded to 11/15/02)
4,000,000 Walnut Valley Water District, California, Certificates of 2/01 at 102 AAA 4,268,760
Participation (Badillo/ Grand Transmission Project),
Series 1992, 6.125%, 2/01/18 (Pre-refunded to 2/01/01)
- ----------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 11.4%
3,450,000 M-S-R Public Power Agency (California), San Juan Project 7/01 at 100 AAA 3,604,767
Revenue Bonds, Series 1991E, 6.000%, 7/01/22
2,430,000 Modesto Irrigation District, California, Certificates of 10/01 at 100 AAA 2,580,514
Participation (Refunding and Capital Improvements Project),
Series 1991A, 6.000%, 10/01/21
3,000,000 Northern California Power Agency, Hydroelectric Project 7/02 at 102 AAA 3,267,390
Number One, Revenue Bonds, 1992 Refunding Series A,
6.250%, 7/01/12
1,225,000 Turlock Irrigation District (California), Revenue Refunding No Opt. Call AAA 1,427,921
Bonds, Series 1992-A, 6.250%, 1/01/12
- ----------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 5.8%
4,000,000 Eastern Municipal Water District (Riverside County, California), 7/01 at 101 AAA 4,244,800
Water and Sewer Revenue Refunding Certificates of Participation,
Series 1991A, 6.300%, 7/01/20
1,250,000 Fairfield - Suisun Sewer District (Solano County California), 5/01 at 102 AAA 1,333,824
Sewer Revenue Refunding Bonds, Series 1991A, 6.250%, 5/01/16
- ----------------------------------------------------------------------------------------------------------------------------------
$ 92,215,000 Total Investments - (cost $87,878,811) - 100.9% 96,365,655
=============---------------------------------------------------------------------------------------------------------------------
TEMPORARY INVESTMENTS IN SHORT-TERM MUNICIPAL SECURITIES - 0.7%
$ 700,000 California Health Facilities Financing Authority, Sutter Health VMIG-1 700,000
Series B, Variable Rate Demand Bonds, 2.950%, 3/1/20+
- ----------------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - (1.6%) (1,564,577)
- ----------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $95,501,078
==================================================================================================================================
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 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 pricesat later
dates.
** Ratings (not covered by the report of independent auditors): Using the
higher of Standard & Poor's or Moody's rating. (WI) Security purchased on a
when-issued basis (note 1).
+ The security has a maturity of more than one year, but has variable rate
and demand features which qualify it as a short-term security. The rate
disclosed is that currently in effect. This rate changes periodically based
on market conditions or a specified market index.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
PORTFOLIO OF INVESTMENTS
NUVEEN INSURED NEW YORK SELECT TAX-FREE INCOME PORTFOLIO (NXN)
MARCH 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EDUCATION AND CIVIC ORGANIZATIONS - 20.2%
$ 1,000,000 New York City Industrial Development Agency, Civic Facility 11/04 at 102 AAA $1,116,480
Revenue Bonds (USTA National Tennis Center Incorporated
Project), 6.375%, 11/15/14
570,000 Dormitory Authority of the State of New York, City University No Opt. Call AAA 701,459
System Consolidated, Second General Resolution Revenue
Bonds, Series 1990C, 7.500%, 7/01/10
1,370,000 Dormitory Authority of the State of New York, Siena College, 7/02 at 102 AAA 1,478,463
Insured Revenue Bonds, Series 1992, 6.000%, 7/01/11
2,050,000 Dormitory Authority of the State of New York, Ithaca College, 7/01 at 102 AAA 2,219,043
Revenue Bonds, 6.500%, 7/01/10
2,250,000 Dormitory Authority of the State of New York, New York 7/01 at 102 AAA 2,415,083
University Insured Revenue Bonds, Series 1991, 6.250%, 7/01/09
1,100,000 Dormitory Authority of the State of New York, Mount Sinai 7/01 at 102 AAA 1,187,978
School of Medicine, Insured Revenue Bonds, Series 1991,
6.750%, 7/01/15
2,500,000 Dormitory Authority of the State of New York, Marist College, 7/02 at 102 AAA 2,684,025
Insured Revenue Bonds, Series 1992, 6.000%, 7/01/12
- ----------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 4.6%
2,500,000 New York State Medical Care Facilities Finance Agency, Hospital 8/02 at 102 AAA 2,708,250
and Nursing Home FHA - Insured Mortgage Revenue Bonds,
1992 Series C (Mount Sinai Hospital), 6.250%, 8/15/12
- ----------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 4.8%
1,395,000 New Hartford Housing Development Corporation, Mortgage 7/02 at 100 AAA 1,483,638
Revenue Refunding Bonds, Series 1992-A (Village Point Project -
FHA Insured Mortgage Loan, Section 8 Assisted Project),
7.375%, 1/01/24
1,245,000 New York State Housing Finance Agency, Insured Multi-Family 8/02 at 102 AAA 1,316,986
Housing Mortgage Revenue Bonds, Series 1992C (FHA Insured),
6.450%, 8/15/14
- ----------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 3.0%
Town of Clarkstown, Rickland County, New York, Various Purposes
Serial Bonds-1992:
505,000 5.600%, 6/15/10 No Opt. Call AAA 556,944
525,000 5.600%, 6/15/11 No Opt. Call AAA 577,448
525,000 5.600%, 6/15/12 No Opt. Call AAA 577,311
20,000 The City of New York, New York, General Obligation Bonds, 8/02 at 101 1/2 AAA 21,679
Fiscal 1992 Series C, 6.250%, 8/01/11
- ----------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 4.8%
20,000 New York State Medical Care Facilities Finance Agency, 8/02 at 102 AAA 21,672
Mental Health Services Facilities Improvement Revenue Bonds,
1992 Series D, 6.100%, 8/15/13
140,000 New York State Medical Care Facilities Finance Agency, 2/02 at 102 AAA 150,620
Mental Health Services Facilities Improvement Revenue Bonds,
1992 Series B, 6.250%, 8/15/18
200,000 New York State Thruway Authority, Highway and Bridge 4/05 at 102 AAA 203,426
Trust Fund Bonds, Series 1995B, 5.125%, 4/01/15
2,250,000 Triborough Bridge and Tunnel Authority (New York), Special 1/01 at 102 AAA 2,397,218
Obligation Refunding Bonds, Series 1991A, 6.625%, 1/01/17
- ----------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 4.8%
2,500,000 Port of Authority of New York and New Jersey, Consolidated 1/05 at 101 AAA 2,773,475
Revenue Bonds, Ninety-Seventh Series, 6.500%, 7/15/19
(Alternative Minimum Tax)
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. GUARANTEED - 42.4%
$ 3,500,000 Metropolitan Transportation Authority (New York), Commuter 7/02 at 102 AAA $3,836,805
Facilities Revenue Bonds, Series 1992B, 6.250%, 7/01/17
(Pre-refunded to 7/01/02)
2,250,000 Metropolitan Transportation Authority, Transit Facilities Revenue Bonds, 7/02 at 102 AAA 2,475,045
Series J, 6.375%, 7/01/10 (Pre-refunded to 7/01/02)
235,000 The City of New York, New York, General Obligation Bonds, 8/02 at 101 1/2 AAA 256,853
Fiscal 1992 Series C, 6.250%, 8/01/11 (Pre-refunded to 8/01/02)
2,000,000 The City of New York, New York, General Obligation Bonds, 8/04 at 101 AAA 2,310,800
Fiscal 1994 Series B, 6.950%, 8/15/12 (Pre-refunded to 8/15/04)
1,000,000 New York City Municipal Water Finance Authority, 6/02 at 101 1/2 AAA 1,088,660
Water and Sewer System Revenue Bonds, Series 1992C,
6.200%, 6/15/21 (Pre-refunded to 6/15/02)
630,000 New York City Municipal Water Finance Authority, 6/01 at 100 AAA 666,219
Water And Sewer System Revenue Bonds, Fiscal 1992 Series A,
6.250%, 6/15/21 (Pre-refunded to 6/15/01)
1,560,000 Dormitory Authority of the State of New York, Judicial Facilities No Opt. Call AAA 1,956,146
Lease Revenue Bonds (Suffolk County Issue), Series 1986,
7.375%, 7/01/16
2,400,000 Dormitory Authority of the State of New York, Hamilton College, 7/01 at 102 AAA 2,597,904
Insured Revenue Bonds, Series 1991, 6.500%, 7/01/21
(Pre-refunded to 7/01/01)
1,965,000 New York State Medical Care Facilities Finance Agency, 2/02 at 102 AAA 2,135,621
Mental Health Services Facilities Improvement Revenue Bonds,
1992 Series B, 6.250%, 8/15/18 (Pre-refunded to 2/15/02)
2,500,000 New York State Medical Care Facilities Finance Agency, 2/05 at 102 AAA 2,896,825
New York Hospital FHA - Insured Mortgage Revenue Bonds,
1994 Series A, 6.750%, 8/15/14 (Pre-refunded to 2/15/05)
230,000 New York State Medical Care Facilities Financing Agency, 8/02 at 102 AAA 251,365
Mental Health Services Facilities Improvement Revenue Bonds,
1992 Series D, 6.100%, 8/15/13 (Pre-refunded to 8/15/02)
1,500,000 New York State Thruway Authority, General Revenue Bonds, 1/02 at 100 AAA 1,571,685
Series A, 5.500%, 1/01/23 (Pre-refunded to 1/01/02)
2,000,000 New York State Thruway Authority, Local Highway and 4/02 at 102 AAA 2,149,480
Bridge Service Contract Bonds, Series 1992, 6.000%, 4/01/10
(Pre-refunded to 4/01/02)
485,000 Suffolk County Water Authority (New York), Waterworks Revenue No Opt. Call AAA 574,206
Bonds, Series 1986-V, 6.750%, 6/01/12
- ----------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 3.6%
1,945,000 New York State Power Authority, General Purpose Bonds, 1/02 at 102 AAA 2,088,133
Series 1992 AA, 6.250%, 1/01/23
- ----------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 9.9%
4,900,000 New York City Municipal Water Finance Authority, 6/02 at 101 1/2 AAA 5,094,333
Water and Sewer System Revenue Bonds,
Fiscal 1993 Series A, 5.750%, 6/15/18
620,000 New York City Municipal Water Finance Authority, 6/01 at 100 AAA 650,063
Water And Sewer System Revenue Bonds,
Fiscal 1992 Series A, 6.250%, 6/15/21
- ----------------------------------------------------------------------------------------------------------------------------------
$ 52,385,000 Total Investments - (cost $52,269,156) - 98.1% 57,191,341
=============---------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.9% 1,111,489
- ----------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $58,302,830
==================================================================================================================================
All of the bonds in the portfolio are either covered by Original Issue
Insurance, Secondary Market Insurance, or are backed by an escrow or trust
containing sufficient U.S. government or U.S. government agency securities, any
of which ensure the timely payment of principal and interest.
* Optional Call Provisions (not covered by the report of independent
auditors): Dates (month and year) and prices of the earliest optional call
or redemption. There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent auditors): Using the
higher of Standard & Poor's or Moody's rating.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS
MARCH 31, 1999
INSURED INSURED
CALIFORNIA NEW YORK
SELECT SELECT SELECT SELECT SELECT
TAX-FREE TAX-FREE 2 TAX-FREE 3 TAX-FREE TAX-FREE
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments in municipal securities,
at market value (note 1) $251,052,526 $267,186,906 $191,299,200 $96,365,655 $57,191,341
Temporary investments in short-term
municipal securities, at amortized
cost, which approximates market value
(note 1) -- 1,000,000 1,200,000 700,000 --
Cash -- -- -- 127,975 614,183
Receivables:
Interest 5,154,674 4,720,566 3,118,907 1,453,196 803,331
Investments sold 95,000 228,769 -- -- --
Other assets 25,642 27,106 24,331 15,331 14,259
- ----------------------------------------------------------------------------------------------------------------------------
Total assets 256,327,842 273,163,347 195,642,438 98,662,157 58,623,114
- ----------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft 237,705 420,783 425,947 -- --
Payable for investments purchased -- -- -- 2,662,341 --
Accrued expenses:
Surveillance and administration fees (note 6) 52,700 67,345 48,746 24,338 14,864
Other 174,405 159,009 121,500 61,434 51,461
Dividends payable 1,228,357 1,276,438 881,561 412,966 253,959
- ----------------------------------------------------------------------------------------------------------------------------
Total liabilities 1,693,167 1,923,575 1,477,754 3,161,079 320,284
- ----------------------------------------------------------------------------------------------------------------------------
Net assets (note 7) $254,634,675 $271,239,772 $194,164,684 $95,501,078 $58,302,830
============================================================================================================================
Shares outstanding 16,378,097 17,607,068 12,964,123 6,257,068 3,907,068
============================================================================================================================
Net asset value per share outstanding
(net assets divided by shares outstanding) $ 15.55 $ 15.41 $ 14.98 $ 15.26 $ 14.92
============================================================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
YEAR ENDED MARCH 31, 1999
INSURED INSURED
CALIFORNIA NEW YORK
SELECT SELECT SELECT SELECT SELECT
TAX-FREE TAX-FREE 2 TAX-FREE 3 TAX-FREE TAX-FREE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME (NOTE 1) $15,725,652 $16,475,098 $11,425,548 $5,388,393 $3,324,326
- ----------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Surveillance and administration fees (note 6) 622,930 795,267 575,140 286,569 175,438
Shareholders' servicing agent fees and expenses 50,050 47,993 36,842 13,253 9,134
Custodian's fees and expenses 53,154 54,384 47,872 35,886 33,031
Trustees' fees and expenses (note 6) 21,646 22,885 16,362 8,111 5,095
Professional fees 16,330 16,378 16,144 14,669 14,567
Shareholders' reports - printing and mailing expenses 98,008 99,175 72,540 31,560 24,703
Stock exchange listing fees 24,262 24,262 24,262 16,170 16,170
Investor relations expense 24,075 24,773 17,998 7,767 5,114
Other expenses 12,631 12,318 9,451 5,476 4,187
- ----------------------------------------------------------------------------------------------------------------------------------
Total expenses 923,086 1,097,435 816,611 419,461 287,439
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income 14,802,566 15,377,663 10,608,937 4,968,932 3,036,887
- ----------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS
Net realized gain (loss) from investment
transactions (notes 1 and 4) 50,661 1,568 -- 102,624 (639)
Net change in unrealized appreciation
or depreciation of investments (1,343,004) (572,900) 325,764 220,687 63,716
- ----------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) from investments (1,292,343) (571,332) 325,764 323,311 63,077
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $13,510,223 $14,806,331 $10,934,701 $5,292,243 $3,099,964
==================================================================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SELECT TAX-FREE SELECT TAX-FREE 2 SELECT TAX-FREE 3
----------------------------- ----------------------------- ----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
3/31/99 3/31/98 3/31/99 3/31/98 3/31/99 3/31/98
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 14,802,566 $ 14,826,057 $ 15,377,663 $ 15,413,609 $ 10,608,937 $ 10,628,855
Net realized gain (loss)
from investment
transactions
(notes 1 and 4) 50,661 (17,707) 1,568 (20,819) -- --
Net change in unrealized
appreciation
or depreciation
of investments (1,343,004) 7,729,748 (572,900) 8,791,112 325,764 7,940,296
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
from operations 13,510,223 22,538,098 14,806,331 24,183,902 10,934,701 18,569,151
- ----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM UNDISTRIBUTED NET
INVESTMENT INCOME (NOTE 1) (14,740,297) (14,765,019) (15,318,159) (15,608,661) (10,669,473) (10,734,291)
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in
net assets (1,230,074) 7,773,079 (511,828) 8,575,241 265,228 7,834,860
Net assets at beginning of year 255,864,749 248,091,670 271,751,600 263,176,359 193,899,456 186,064,596
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $254,634,675 $255,864,749 $271,239,772 $271,751,600 $194,164,684 $193,899,456
==================================================================================================================================
Balance of undistributed net
investment income at
end of year $ 194,939 $ 132,670 $ 107,446 $ 47,942 $ 43,553 $ 19,044
==================================================================================================================================
<CAPTION>
INSURED CALIFORNIA SELECT TAX-FREE INSURED NEW YORK SELECT TAX-FREE
------------------------------------ --------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
3/31/99 3/31/98 3/31/99 3/31/98
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $4,968,932 $ 4,981,811 $ 3,036,887 $ 3,046,992
Net realized gain (loss) from investment
transactions (notes 1 and 4) 102,624 2,045 (639) (1,028)
Net change in unrealized appreciation or
depreciation of investments 220,687 4,310,650 63,716 2,470,172
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations 5,292,243 9,294,506 3,099,964 5,516,136
- ----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM UNDISTRIBUTED NET
INVESTMENT INCOME (NOTE 1) (4,955,598) (5,024,425) (3,047,515) (3,047,514)
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets 336,645 4,270,081 52,449 2,468,622
Net assets at beginning of year 95,164,433 90,894,352 58,250,381 55,781,759
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $95,501,078 $95,164,433 $58,302,830 $58,250,381
==================================================================================================================================
Balance of undistributed net investment income at end of year $ 22,833 $ 9,499 $ 71,493 $ 82,121
==================================================================================================================================
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The Trusts covered in this report and their corresponding New York Stock
Exchange symbols are Nuveen Select Tax-Free Income Portfolio (NXP), Nuveen
Select Tax-Free Income Portfolio 2 (NXQ), Nuveen Select Tax-Free Income
Portfolio 3 (NXR), Nuveen Insured California Select Tax-Free Income Portfolio
(NXC) and Nuveen Insured New York Select Tax-Free Income Portfolio (NXN).
The Trusts are registered under the Investment Company Act of 1940 as
closed-end, diversified management investment companies.
The Trusts' investment adviser, Nuveen Institutional Advisory Corp. ( the
"Adviser"), a wholly owned subsidiary of The John Nuveen Company, administers
the investments and maintains ongoing surveillance of such investments to insure
that they continue to meet the Trusts' investment objectives and credit quality
standards. The Adviser does not intend to adjust the portfolios except 1) to
invest interest payments on municipal obligations that are not currently needed
to pay dividends or expenses; 2) to reinvest principal payments on municipal
obligations resulting from their maturity or early redemption; 3) to sell
municipal obligations when the Adviser believes that continuing to hold them
would be inconsistent with maintaining the Trusts' high credit quality, and to
reinvest the proceeds of such sales; and 4) for certain other purposes.
The Trusts intend to liquidate all of their assets no later than the year 2017,
unless extended, making a single liquidating distribution to shareholders at
that time. Any extension of these dates may be made only by an amendment to each
Trust's declaration of Trust approved by the Board of Trustees and by the
shareholders.
The following is a summary of significant accounting policies followed by the
Trusts in the preparation of their financial statements in accordance with
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, 1999, Insured California Select Tax-Free had outstanding when-issued
purchase commitments of $2,662,341. There were no such outstanding purchase
commitments in any of the other Trusts.
INVESTMENT INCOME
Interest income is determined on the basis of interest accrued, adjusted for
amortization of premiums and accretion of discounts on long-term debt securities
when required for federal income tax purposes.
INCOME TAXES
Each Trust is a separate taxpayer for federal income tax purposes. Each Trust
intends to comply with the requirements of the Internal Revenue Code applicable
to regulated investment companies and to distribute all of its tax-exempt net
investment income, in addition to any significant amounts of net realized
capital gains and/or market discount realized from investment transactions. In
light of the Adviser's intention not to adjust the Trusts' investments except
under limited conditions, it is expected that the Trusts will generally realize
minimal, if any, amounts of both net realized capital gains and market discount.
The Trusts intend to retain such minimal amounts and, therefore, will record a
provision for federal income taxes on the amounts retained. To the extent more
significant amounts of net capital gains are realized, the Trusts may elect to
distribute such amounts to shareholders and no federal income tax provision on
these amounts will then be required.
Furthermore, each Trust intends to satisfy conditions which will enable interest
from municipal securities, which is exempt from regular federal income tax for
all Trusts and exempt from California state income taxes for Insured California
Select Tax-Free and from New York state income taxes for Insured New York Select
Tax-Free, to retain such tax-exempt status when distributed to shareholders of
the Trusts. All income dividends paid during the fiscal year ended March 31,
1999, have been designated Exempt Interest Dividends.
<PAGE>
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Tax-exempt net investment income is declared monthly as a dividend and payment
is made or reinvestment is credited to shareholder accounts on the first
business day after month end. Net realized capital gains and/or market discount
from investment transactions, if any, are distributed to shareholders not less
frequently than annually. Furthermore, capital gains are distributed only to the
extent they exceed available capital loss carryforwards.
Distributions to shareholders of tax-exempt net investment income, net realized
capital gains and/or market discount are recorded on the ex-dividend date. The
amount and timing of distributions are determined in accordance with federal
income tax regulations, which may differ from generally accepted accounting
principles. Accordingly, temporary over-distributions as a result of these
differences may occur and will be classified as either distributions in excess
of net investment income, distributions in excess of net realized gains and/or
distributions in excess of net ordinary taxable income from investment
transactions, where applicable.
INSURANCE
Insured California Select Tax-Free and Insured New York Select Tax-Free invest
in municipal securities which are either covered by insurance or are backed by
an escrow or trust account containing sufficient U.S. government or U.S.
government agency securities, both of which ensure the timely payment of
principal and interest. Each insured municipal security is covered by Original
Issue Insurance, Secondary Market Insurance or Portfolio Insurance. Such
insurance does not guarantee the market value of the municipal securities or the
value of the Trusts' shares. Original Issue Insurance and Secondary Market
Insurance remain in effect as long as the municipal securities covered thereby
remain outstanding and the insurer remains in business, regardless of whether
the Trusts ultimately dispose of such municipal securities. Consequently, the
market value of the municipal securities covered by Original Issue Insurance or
Secondary Market Insurance may reflect value attributable to the insurance.
Portfolio Insurance is effective only while the municipal securities are held by
the Trust. Accordingly, neither the prices used in determining the market value
of the underlying municipal securities nor the net asset value of the Trusts'
shares include value, if any, attributable to the Portfolio Insurance. Each
policy of the Portfolio Insurance does, however, give the Trusts the right to
obtain permanent insurance with respect to the municipal security covered by the
Portfolio Insurance policy at the time of its sale.
DERIVATIVE FINANCIAL INSTRUMENTS
The Trusts are not authorized to invest in derivative financial instruments.
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. Actual results may differ
from those estimates.
2. TRUST SHARES
There were no share transactions during the fiscal year ended March 31, 1999,
nor during the fiscal year ended March 31, 1998, in any of the Trusts.
3. DISTRIBUTIONS TO SHAREHOLDERS
The Trusts declared dividend distributions from their tax-exempt net investment
income which were paid May 3, 1999, to shareholders of record on April 15, 1999,
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>
Dividend per share $.0750 $.0725 $.0680 $.0660 $.0650
=========================================================================================================
</TABLE>
4. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of investments in long-term municipal
securities and temporary municipal securities during the fiscal year ended March
31, 1999, were as follows:
<TABLE>
<CAPTION>
INSURED INSURED
CALIFORNIA NEW YORK
SELECT SELECT SELECT SELECT SELECT
TAX-FREE TAX-FREE 2 TAX-FREE 3 TAX-FREE TAX-FREE
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Purchases:
Long-term municipal securities $3,402,295 $2,579,976 $ -- $2,662,341 $ --
Temporary municipal securities 6,900,000 8,785,000 4,200,000 2,400,000 6,000,000
Sales and Maturities:
Long-term municipal securities 3,121,240 2,235,000 230,000 518,060 15,000
Temporary municipal securities 6,900,000 8,785,000 3,500,000 1,900,000 6,565,000
=========================================================================================================
</TABLE>
At March 31, 1999, the identified cost of investments owned for federal income
tax purposes was the same as the cost for financial reporting purposes for each
Trust.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
At March 31, 1999, 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 $193,438 $618,333
2002 -- -- 15,243 -- 432
2003 -- -- -- -- 1,954
2004 79,117 -- 170,137 -- 321,550
2005 31,707 44,455 674,505 -- 1,480
2006 24,357 44,578 3,603 -- 828
2007 -- -- -- -- 933
- ---------------------------------------------------------------------------------------------------------
Total $135,181 $89,033 $1,063,602 $193,438 $945,510
=========================================================================================================
</TABLE>
5. UNREALIZED APPRECIATION (DEPRECIATION)
Gross unrealized appreciation and gross unrealized depreciation of investments
at March 31, 1999, 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 $26,784,369 $25,363,768 $16,689,689 $8,486,844 $4,922,185
depreciation -- (60) -- -- --
- ---------------------------------------------------------------------------------------------------------
Net unrealized appreciation $26,784,369 $25,363,708 $16,689,689 $8,486,844 $4,922,185
=========================================================================================================
</TABLE>
6. SURVEILLANCE AND ADMINISTRATION FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Under the Trusts' investment management agreements with the Adviser, each Trust
pays an annual surveillance and administration fee, payable monthly, at the
rates set forth below, which are based upon the average daily net 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.
<PAGE>
7. COMPOSITION OF NET ASSETS
At March 31, 1999, each Trust had an unlimited number of $.01 par value shares
of beneficial interest authorized. Net assets consisted of:
<TABLE>
<CAPTION>
INSURED INSURED
CALIFORNIA NEW YORK
SELECT SELECT SELECT SELECT SELECT
TAX-FREE TAX-FREE 2 TAX-FREE 3 TAX-FREE TAX-FREE
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Capital paid-in $ 163,781 $ 176,071 $ 129,641 $ 62,571 $ 39,071
Paid-in surplus 227,626,767 245,681,943 178,365,403 87,122,268 54,215,788
Balance of undistributed net investment income 194,939 107,446 43,553 22,833 71,493
Accumulated net realized gain (loss) from
investment transactions (135,181) (89,396) (1,063,602) (193,438) (945,707)
Net unrealized appreciation of investments 26,784,369 25,363,708 16,689,689 8,486,844 4,922,185
- --------------------------------------------------------------------------------------------------------------------------
Net assets $254,634,675 $271,239,772 $194,164,684 $95,501,078 $58,302,830
==========================================================================================================================
</TABLE>
8. INVESTMENT COMPOSITION
At March 31, 1999, 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 3% 6% 3% 2% 21%
Forest and Paper Products 2 3 -- -- --
Health Care 9 8 9 8 5
Housing/Multifamily 8 9 10 -- 5
Housing/Single Family 8 7 4 -- --
Tax Obligation/General 6 1 3 7 3
Tax Obligation/Limited 10 7 4 18 5
Transportation 8 6 11 12 5
U.S. Guaranteed 44 48 39 36 43
Utilities 1 -- 11 11 3
Water and Sewer 1 3 6 6 10
Other -- 2 -- -- --
- --------------------------------------------------------------------------------------------------------
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 (51% for Select Tax-Free, 61% for Select Tax-Free 2, 47% 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>
FINANCIAL HIGHLIGHTS
Selected data for a share outstanding
throughout each period is as follows:
<TABLE>
<CAPTION>
INVESTMENT OPERATIONS LESS DISTRIBUTIONS
---------------------------------- --------------------------------------------
NET
REALIZED/
BEGINNING NET UNREALIZED NET
NET ASSET INVESTMENT INVESTMENT INVESTMENT CAPITAL
VALUE INCOME GAIN (LOSS) TOTAL INCOME GAINS TOTAL
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SELECT TAX-FREE
Year Ended 3/31:
1999 $15.62 $.90 $(.07) $ .83 $(.90) $-- $(.90)
1998 15.15 .90 .47 1.37 (.90) -- (.90)
1997 15.07 .90 .10 1.00 (.92) -- (.92)
1996 14.71 .91 .39 1.30 (.94) -- (.94)
1995 14.68 .91 .11 1.02 (.95) (.04) (.99)
1994 15.03 .91 (.31) .60 (.95) -- (.95)
<CAPTION>
SELECT TAX-FREE 2
<S> <C> <C> <C> <C> <C> <C>
Year Ended 3/31:
1999 15.43 .87 (.02) .85 (.87) -- (.87)
1998 14.95 .88 .49 1.37 (.89) -- (.89)
1997 14.92 .88 .04 .92 (.89) -- (.89)
1996 14.57 .88 .38 1.26 (.91) -- (.91)
1995 14.55 .89 .04 .93 (.91) -- (.91)
1994 14.76 .88 (.18) .70 (.91) -- (.91)
<CAPTION>
SELECT TAX-FREE 3
<S> <C> <C> <C> <C> <C> <C>
Year ended 3/31:
1999 14.96 .82 .02 .84 (.82) -- (.82)
1998 14.35 .82 .62 1.44 (.83) -- (.83)
1997 14.23 .82 .13 .95 (.83) -- (.83)
1996 13.90 .83 .34 1.17 (.84) -- (.84)
1995 13.83 .80 .11 .91 (.84) -- (.84)
1994 14.27 .82 (.42) .40 (.84) -- (.84)
<CAPTION>
INSURED CALIFORNIA SELECT TAX-FREE
<S> <C> <C> <C> <C> <C> <C>
Year ended 3/31:
1999 15.21 .79 .05 .84 (.79) -- (.79)
1998 14.53 .79 .69 1.48 (.80) -- (.80)
1997 14.42 .80 .11 .91 (.80) -- (.80)
1996 14.16 .80 .27 1.07 (.81) -- (.81)
1995 13.92 .80 .26 1.06 (.82) -- (.82)
1994 14.53 .79 (.58) .21 (.82) -- (.82)
<CAPTION>
INSURED NEW YORK SELECT TAX-FREE
<S> <C> <C> <C> <C> <C> <C>
Year ended 3/31:
1999 14.91 .78 .01 .79 (.78) -- (.78)
1998 14.28 .78 .63 1.41 (.78) -- (.78)
1997 14.25 .78 .03 .81 (.78) -- (.78)
1996 14.04 .78 .21 .99 (.78) -- (.78)
1995 13.86 .77 .19 .96 (.78) -- (.78)
1994 14.37 .76 (.49) .27 (.78) -- (.78)
<PAGE>
<CAPTION>
TOTAL RETURN
---------------------------
ENDING ENDING BASED ON BASED ON
NET ASSET MARKET MARKET NET ASSET
VALUE VALUE VALUE* VALUE
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SELECT TAX-FREE
Year Ended 3/31:
1999 $15.55 $16.3750 9.02% 5.43%
1998 15.62 15.8750 14.06 9.24
1997 15.15 14.7500 4.58 6.79
1996 15.07 15.0000 9.14 8.97
1995 14.71 14.6250 9.14 7.38
1994 14.68 14.3750 .23 3.85
<CAPTION>
SELECT TAX-FREE 2
<S> <C> <C> <C> <C>
Year Ended 3/31:
1999 15.41 15.8750 9.51 5.63
1998 15.43 15.3125 14.92 9.34
1997 14.95 14.1250 .93 6.34
1996 14.92 14.8750 13.02 8.79
1995 14.57 14.0000 8.84 6.74
1994 14.55 13.7500 (.94) 4.63
<CAPTION>
SELECT TAX-FREE 3
<S> <C> <C> <C> <C>
Year ended 3/31:
1999 14.98 15.2500 7.78 5.76
1998 14.96 14.9375 19.38 10.24
1997 14.35 13.2500 3.30 6.85
1996 14.23 13.6250 11.41 8.56
1995 13.90 13.0000 2.82 6.97
1994 13.83 13.5000 1.37 2.64
<CAPTION>
INSURED CALIFORNIA SELECT TAX-FREE
<S> <C> <C> <C> <C>
Year ended 3/31:
1999 15.26 15.7500 8.22 5.65
1998 15.21 15.3125 16.52 10.41
1997 14.53 13.8750 3.06 6.46
1996 14.42 14.2500 9.80 7.67
1995 14.16 13.7500 4.47 7.97
1994 13.92 14.0000 (.51) 1.19
<CAPTION>
INSURED NEW YORK SELECT TAX-FREE
<S> <C> <C> <C> <C>
Year ended 3/31:
1999 14.92 15.1250 6.14 5.40
1998 14.91 15.0000 18.31 10.07
1997 14.28 13.3750 4.91 5.79
1996 14.25 13.5000 8.94 7.13
1995 14.04 13.1250 3.43 7.28
1994 13.86 13.5000 (2.54) 1.68
<PAGE>
<CAPTION>
RATIOS/SUPPLEMENTAL DATA
-----------------------------------------------------
RATIO OF NET
RATIO OF INVESTMENT
ENDING EXPENSES TO INCOME TO PORTFOLIO
NET ASSETS AVERAGE AVERAGE TURNOVER
(000) NET ASSETS NET ASSETS RATE
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SELECT TAX-FREE
Year Ended 3/31:
1999 $254,635 .36% 5.78% 1%
1998 255,865 .36 5.83 1
1997 248,092 .39 5.97 1
1996 246,858 .36 6.02 1
1995 240,890 .37 6.32 17
1994 240,398 .38 5.90 10
<CAPTION>
SELECT TAX-FREE 2
<S> <C> <C> <C> <C>
Year Ended 3/31:
1999 271,240 .40 5.65 1
1998 271,752 .40 5.72 --
1997 263,176 .42 5.86 2
1996 262,768 .42 5.89 1
1995 256,548 .41 6.22 12
1994 256,098 .41 5.79 1
<CAPTION>
SELECT TAX-FREE 3
<S> <C> <C> <C> <C>
Year ended 3/31:
1999 194,165 .42 5.45 --
1998 193,899 .42 5.56 --
1997 186,065 .44 5.74 5
1996 184,464 .44 5.79 4
1995 180,226 .51 6.09 7
1994 89,988 .48 5.60 8
<CAPTION>
INSURED CALIFORNIA SELECT TAX-FREE
<S> <C> <C> <C> <C>
Year ended 3/31:
1999 95,501 .44 5.20 1
1998 95,164 .44 5.31 --
1997 90,894 .45 5.47 --
1996 90,223 .44 5.50 --
1995 88,586 .48 5.77 7
1994 87,116 .47 5.27 --
<CAPTION>
INSURED NEW YORK SELECT TAX-FREE
<S> <C> <C> <C> <C>
Year ended 3/31:
1999 58,303 .49 5.19 --
1998 58,250 .49 5.30 --
1997 55,782 .51 5.42 --
1996 55,682 .48 5.44 --
1995 54,855 .57 5.63 14
1994 54,159 .54 5.14 --
</TABLE>
* Total Investment Return on Market Value is the combination of reinvested
dividend income, reinvested capital gains distributions, if any, and changes
in stock price per share. Total Return on Net Asset Value is the combination
of reinvested dividend income, reinvested capital gains distributions, if any,
and changes in net asset value per share. Total returns are not annualized.
<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, 1999, 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, 1999, 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, 1999, 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 14, 1999
<PAGE>
Fund Information
BOARD OF TRUSTEES
James E. Bacon
Jack B. Evans
William T. Kissick
Thomas E. Leafstrand
Timothy R. Schwertfeger
Sheila W. Wellington
FUND MANAGER
Nuveen Institutional Advisory Corp.
333 West Wacker Drive
Chicago, IL 60606
CUSTODIAN, TRANSFER AGENT
AND SHAREHOLDER SERVICES
The Chase Manhattan Bank
4 New York Plaza
New York, NY 10004-2413
(800) 257-8787
LEGAL COUNSEL
Chapman and Cutler
Chicago, IL
INDEPENDENT AUDITORS
Ernst & Young LLP
Chicago, IL
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 millennium.
Over the last 10 years, we have updated or replaced our trading, fund
management, and pricing systems at Nuveen - systems that directly affect our
investors and their financial advisers - to address Year 2000 concerns.
We continue to work closely with our transfer agent, custodian, firms through
whom we buy and sell portfolio securities, and other service partners to monitor
the Year 2000 readiness of their systems, while addressing other remaining
systems issues.
In addition, the Funds hold securities of issuers whose business operations
leave them susceptible to Year 2000 concerns. We seek to evaluate an issuer's
Year 2000 readiness as part of our initial and ongoing research of these
issuers. This is only one of the many factors considered in determining whether
to buy, sell, or continue holding a particular security.
We anticipate that all significant components of our Year 2000 review, repair,
and testing program will be complete by mid-1999. This includes appropriate
industry-wide testing of critical systems and receipt of satisfactory assurances
from critical service providers, vendors, and issuers regarding their Year 2000
readiness. We are also making Year 2000 contingency plans to guide recovery
efforts in the event that, despite our remediation attempts, Year 2000 issues
adversely affect the Funds. Although we cannot give complete assurance at this
time that the steps we take will be sufficient to prevent any problems that
would impact the Nuveen Exchange-Traded Funds, we can assure you that we will
take all reasonable steps to prevent disruption of the services provided by your
Fund.
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-months ended March 31, 1999. 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
quality investments designed for individuals seeking to build and sustain
wealth. In fact, more than 1.3 million investors have trusted Nuveen to help
them pursue their financial goals.
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 investments and services to
help meet your unique circumstances and financial planning needs. Our equity,
balanced, and tax-free income funds, along with our defined portfolios and
private asset management, can help you build a better, well-diversified
portfolio.
Talk with your financial adviser to learn more about how Nuveen investment
products and services can help you. Or call us at (800) 257-8787 for more
information, including a prospectus where applicable. Please read that
information carefully before investing.
LOGO:
NUVEEN
helping investors sustain the wealth of a lifetime(tm).
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, IL 60606-1286
www.nuveen.com
PAN-1-3-99
