Nuveen Exchange-Traded Funds
Providing tax-free income to help you live your dreams.
NUVEEN SELECT MATURITIES MUNICIPAL FUND
SEMIANNUAL REPORT/NOVEMBER 30, 1995
Photographic image of man seated at breakfast table with wife standing behind
him.
CONTENTS
3 Dear shareholder
5 Answering your questions
9 Fund performance
10 Commonly used terms
12 Shareholder meeting report
13 Portfolio of investments
18 Statement of net assets
19 Statement of operations
20 Statement of changes in net assets
21 Notes to financial statements
26 Financial highlights
<PAGE>
Dear shareholder
"Over time, municipal bonds have proven to be a valuable and dependable
component of successful investment programs."
Photographic image of Richard J. Franke, Chairman of the Board
Since the beginning of 1995, we have enjoyed a rebound in the bond markets--a
welcome change from 1994, which was one of the most volatile periods in bond
market history. In fact, 1995 has unfolded as one of the best years for bonds
in a decade. The juxtaposition of these two contrasting periods serves as a
reminder that weathering the ups and downs of the markets is a normal part of
the investment process. We can gain a better perspective on this process if we
remember one of the basic principles of investing: A financial plan that
focuses on your long-term goals can minimize the impact of any short-term
market volatility.
Municipal bond funds continue to be an attractive way to invest for the long
term. Your fund offers steady tax-free income and diversification across
market sectors. Throughout the past year, we have kept our sights focused on
successfully meeting these objectives: seeking to provide you with a solid
source of current income and enhanced share price relative to the market as a
whole.
As of November 30, 1995, the current annual yield on share price for the
Select Maturities Fund was 5.51%. To match this yield, an investor in the 36%
federal income tax bracket would have had to earn at least 8.61% on taxable
alternatives. Without question, taxable yields at this level on investments of
comparable quality are difficult to achieve in today's markets.
Reflecting the rebound in the bond market, the Select Maturities Fund
reported a gain in net asset value over November 30, 1994, as well as a
substantial increase in share price. The 12-month total return on net asset
value, reflecting gains plus reinvested dividend income, was 17.08%, which
translates to 20.54% on a tax-equivalent basis. These performance results
remind us of the important role that municipal bonds--and the tax-free income
they provide--can play as part of an investment strategy focused on
diversification and long-term performance.
The value and dependability of your municipal bond investments are enhanced
by the fact that you have chosen tax-free exchange-traded funds managed by
Nuveen. We offer a combination of professional management, award-winning
research, and shareholder service that distinguishes Nuveen as a fund manager.
Our portfolio management strategy, which we call value investing, relies on
a disciplined approach to security selection and portfolio construction
designed to deliver above-market performance by emphasizing securities that
are underpriced or undervalued by the market. This approach is supported by
the strength of Nuveen Research, which provides the insights and experience to
assist portfolio managers in identifying and selecting bonds with strong
credit quality. Our research professionals continually monitor our holdings in
order to alert portfolio managers concerning changes that may affect quality.
<PAGE>
Nuveen also prides itself on its exceptional service to shareholders.
Through annual and semiannual reports, regular statements, as well as our
toll-free information lines, our communication programs help us stay in touch
with your needs and concerns. We also provide support to financial advisers
across the nation by supplying them with the information they need to answer
your questions and to recommend products to meet your needs.
As you review the following pages detailing the solid performance of your
funds, we trust you will come away with the feeling that these results,
coupled with Nuveen's continued pledge of premium service, add up to a
rewarding investment experience. We look forward to serving your tax-free
investment needs in the future.
Sincerely,
Richard J. Franke
Chairman of the Board
January 16, 1996
<PAGE>
Answering your questions
Tom Spalding, head of Nuveen's portfolio management team, offers insights into
the bond market recovery and the outlook for 1996.
How has the recovery of the municipal bond market affected Nuveen funds?
In short, the market recovery has helped most Nuveen funds regain some of the
share price they lost during 1994's market. To put this in perspective, the
setback in the bond market in 1994--which goes on record as one of the most
volatile periods in decades--was the first downturn experienced by many Nuveen
exchange-traded fund investors, and some reacted by selling their shares.
This, in turn, drove share prices down even further. Since the beginning of
the recovery in early 1995, however, municipal bond prices have increased, and
most Nuveen funds have seen their prices rise 12% to 15%.
Why does the fund continue to trade at a discount despite the recovery?
To understand why this is happening, it may be helpful to remember that each
share has two prices: the net asset value (NAV), which represents the
underlying value of the fund, and the share price, which reflects the market's
assessment of the fund.
As the market turned around in 1995, net asset values appreciated more
quickly than share prices. This is typical of a market that sometimes takes
time to recognize underlying value balanced against the various factors that
affect share price, such as interest rates, inflation forecasts, the relative
strength of the stock market, and the legislative and tax outlooks.
Investors in the Select Maturities Fund should be aware that the net asset
value for this fund remains quite strong, as shown in the pages of this
report. For long-term investors, in fact, the current period may present a
buying opportunity, as shares can be purchased at prices lower than their
underlying value--and at a time when the bond market is strong.
<PAGE>
Photographic image of Tom Spaulding
Tom Spalding, head of Nuveen's portfolio management team, answers investors'
questions on developments in the municipal market.
What does Nuveen see as the impact of the flat tax proposals?
We have been closely monitoring the various flat tax proposals currently being
debated in Congress and their implications for tax-free funds. Four major tax
reform proposals are currently under discussion, all with the common goal of
simplifying the federal tax code and increasing incentives for saving and
investment. It is important to note that none of the proposals has gained a
strong consensus and that implementation of any measure that manages to pass
both houses is at least two years away. We believe that some action on the tax
reform front is likely, as federal tax laws are constantly being reevaluated
and revised, although changes of the magnitude outlined in these proposals are
rare.
As we look at the bond market today, we can see some evidence that the
market is already compensating investors for the uncertainty of the tax reform
situation. Yields on municipal bonds are currently at levels equal to 90% or
more of long-term Treasury bond yields, an historically high position; the
typical yield ratio is 80-85%. Current municipal yields are comparable to
taxable yields in the 10% range, providing good value that is difficult to
match.
Once the tax reform issue is resolved, we're confident that municipal
bonds--because of their high credit quality and attractive yields--will
continue to hold a strategic place in the prudent investor's portfolio. The
importance of municipal bonds is enhanced by the integral role they play in
maintaining our way of life in this country. Our cities, counties, and states
will always have a need for financing to build and upgrade projects such as
roads, hospitals, and water treatment systems, and municipal bonds will
continue to be an essential way to match America's long-term needs for capital
improvements with investors' long-term needs for secure income.
What is Nuveen's outlook as we head into 1996?
Inflation remains low, and the economy seems to be expanding at a reasonable
pace. While both of these factors can change and have an impact on the bond
market, the current environment is favorable for bonds. Although the supply of
municipal bonds is down from past years, demand from institutional investors
such as insurance companies was strong in 1995, contributing to the rebound in
municipal prices. If we experience continued slow and steady economic growth,
combined with low inflation and stable interest rates, that should attract
greater numbers of individual investors as well.
<PAGE>
What does Nuveen mean by "value investing"? Where are Nuveen analysts finding
value today?
At Nuveen, we define value investing as a disciplined approach to security
selection and portfolio construction designed to deliver above-market
performance by emphasizing securities that offer good intrinsic value but that
are underpriced or undervalued by the market. Our value investing approach
concentrates on identifying individual bonds with current yields, prices,
credit quality, and future prospects that are exceptionally attractive in
relation to other bonds in the market.
As we search for value in the market today, our analysts continue to assess
investment potential across the entire spectrum of geographical and sector
opportunities. During 1995, we saw many credit upgrades on portfolio holdings,
meaning that our judgments about credit quality have been rewarded. We
currently favor revenue bonds that offer a dedicated revenue stream (such as
those issued for tollways or recycling plants) over general obligation bonds,
which rely on the taxing power of a state or municipality. One example of
revenue bonds that have performed exceptionally well for us recently are those
issued for the Denver International Airport.
<PAGE>
<TABLE>
NUVEEN SELECT MATURITIES MUNICIPAL FUND
NIM
In keeping with the Fund's objective of providing dependable tax-free income,
shareholders enjoyed 12 months of stable dividends. In addition, shareholders
received a capital gains distribution in December 1994.
12 MONTH DIVIDEND HISTORY
<CAPTION>
Date Monthly Dividends Supplemental Dividends Capital Gains
<S> <C> <C> <C>
12/94 $0.0540 $0.0222
1/95 $0.0540
2/95 $0.0540
3/95 $0.0540
4/95 $0.0540
5/95 $0.0540
6/95 $0.0540
7/95 $0.0540
8/95 $0.0540
9/95 $0.0540
10/95 $0.0540
11/95 $0.0540
<CAPTION>
FUND HIGHLIGHTS 11/30/95
<S> <C>
Yield 5.51%
Taxable-equivalent yield 8.61%
Annual total return on NAV 17.08%
Taxable-equivalent total return 20.54%
Federal tax rate 36.00%
Share price $11.75
NAV $11.95
The dividend history used in this chart constitutes past performance and does
not necessarily predict the future dividends of the Fund.
</TABLE>
<PAGE>
Commonly used terms
Yield
An exchange-traded fund's annualized monthly dividend on a given date (in the
case of this report, November 30, 1995) divided by its closing price per share
on that date.
Taxable equivalent yield
The return an investor subject to a given federal income tax rate would need
to obtain from a fully taxable investment to equal the fund's stated
annualized yield on share price. In this report, this tax rate is assumed to
be 36% for shareholders, based on 1995 incomes of $117,950-$256,500 for
investors filing singly, $143,600-$256,500 for those filing jointly.
Net Asset Value (NAV)
The market value of all securities and other assets held by an exchange-traded
fund, minus any liabilities. The NAV per share is the fund's net assets,
divided by its total number of shares outstanding.
Total return on NAV
The percentage change in a fund's NAV per share for a given period, assuming
reinvestment of all dividends and capital gains distributions, if any.
Taxable equivalent total return
The total return an investor subject to a given income tax rate would need to
obtain from a fully taxable investment to equal the Fund's stated total return
on NAV.
The Fund intends to repurchase shares of its own common stock in the future at
such times and in such amounts as are deemed advisable. No shares were
repurchased during the six months ended November 30, 1995. Any future
repurchases will be reported to shareholders in the next annual or semiannual
report.
<PAGE>
<TABLE>
SHAREHOLDER MEETING REPORT
On July 26, 1995, the Nuveen Select Maturities Fund held an Annual Meeting of
Shareholders. At the meeting, shareholders voted to elect directors of the
Fund and to ratify the selection of Ernst & Young, L.L.P. as the auditors for
the Fund. The directors elected at the meeting include: Lawrence H. Brown,
Richard J. Franke, Anne E. Impellizzeri, Margaret K. Rosenheim, Peter R.
Sawers, and Timothy R. Schwertfeger.
<CAPTION>
NIM
<S> <C>
Approval of the DIRECTORS
was reached as follows:
Lawrence H. Brown
For 11,324,996
Abstain 99,301
----------
Total 11,424,297
==========
Richard J. Franke
For 11,324,681
Abstain 99,616
----------
Total 11,424,297
==========
Anne E. Impellizzeri
For 11,321,433
Abstain 102,864
----------
Total 11,424,297
==========
Margaret K. Rosenheim
For 11,323,233
Abstain 101,064
----------
Total 11,424,297
==========
Peter R. Sawers
For 11,324,996
Abstain 99,301
----------
Total 11,424,297
==========
Timothy R. Schwertfeger
For 11,323,233
Abstain 101,064
----------
Total 11,424,297
==========
Ratification of auditors
was reached as follows:
For 11,309,207
Against 34,037
Abstain 81,053
----------
Total 11,424,297
==========
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
(Unaudited)
NUVEEN SELECT MATURITIES MUNICIPAL FUND (NIM)
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
ARIZONA - 1.8%
$ 2,470,000 Arizona Educational Loan Marketing Corporation,
Alternative Minimum Tax, 6.375%, 9/01/05 9/02 at 101 Aa $ 2,658,757
ARKANSAS - 1.1%
1,500,000 Arkansas Student Loan Authority, Alternative
Minimum Tax, 6.750%, 6/01/06 6/01 at 102 A 1,608,405
COLORADO - 6.5%
5,500,000 Denver City and County Airport System,
Alternative Minimum Tax, 8.750%, 11/15/23 11/01 at 102 Baa 6,506,445
1,760,844 El Paso County, Single Family Mortgage (FNMA),
8.750%, 6/01/11 No Opt. Call Aaa 1,949,606
1,000,000 Summit County (Keystone Resorts), 7.750%, 9/01/06 No Opt. Call A- 1,150,800
DISTRICT OF COLUMBIA - 3.9%
5,400,000 District of Columbia General Obligation,
6.000%, 6/01/07 No Opt. Call Aaa 5,736,798
FLORIDA - 4.3%
2,000,000 Florida State Board of Education, 7.100%, 6/01/07 No Opt. Call Aaa 2,170,500
3,500,000 Hillsborough County Industrial Development
Authority, Pollution Control (Tampa Electric),
8.000%, 5/01/22 5/02 at 103 Aa2 4,198,390
GEORGIA - 8.8%
1,800,000 Georgia General Obligation, 6.700%, 8/01/09 No Opt. Call Aaa 2,101,032
2,540,000 Georgia Municipal Electric Authority,
7.500%, 1/01/07 No Opt. Call Aaa 3,039,262
945,000 Atlanta Urban Residential Finance Authority
(Landrum Arms Project), 6.750%, 7/01/04 No Opt. Call N/R 994,546
5,755,000 Burke County Development Authority, Pollution
Control (Oglethorpe Power Corporation),
8.000%, 1/01/15 1/03 at 103 Aaa 7,010,281
ILLINOIS - 13.4%
4,700,000 Illinois Development Finance Authority (Child Care
Facility), 7.400%, 9/01/04 9/02 at 102 N/R 4,965,456
2,520,000 Illinois Health Facilities Authority (Columbus-
Cuneo-Cabrini Medical Center), 7.875%, 2/01/04 2/96 at 100 N/R 2,624,882
2,615,000 Illinois Housing Development Authority (Skyline
Towers), 6.625%, 11/01/07 11/02 at 102 A 2,780,268
1,300,000 Chicago Board of Education, General Obligation,
Lease Certificates, 6.125%, 1/01/07 No Opt. Call Aaa 1,429,649
2,805,000 Chicago Metropolitan Housing Development
Corporation, FHA-Insured (Section 8 Projects),
5.700%, 1/01/13 7/03 at 100 Aaa 2,816,837
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
ILLINOIS (CONTINUED)
$ 3,000,000 Chicago Tax Increment (Stockyards Industrial
Redevelopment), 9.250%, 1/01/12 No Opt. Call N/R $ 3,306,780
800,000 Danville Single Family Mortgage, 7.300%, 11/01/10 11/03 at 102 A1 841,296
1,105,000 Rock Island Residential Mortgage, 7.700%, 9/01/08 9/02 at 102 Aa 1,194,582
INDIANA - 5.6%
1,540,000 Indiana University Parking System, 6.000%, 11/15/06 No Opt. Call Aaa 1,672,070
Indianapolis Local Public Improvement Bond Bank:
1,000,000 6.400%, 2/01/05 No Opt. Call A+ 1,098,790
1,000,000 6.600%, 2/01/07 No Opt. Call A+ 1,113,800
2,100,000 6.000%, 7/01/10 7/03 at 102 Aa 2,206,848
2,000,000 Elkhart County Hospital Authority (Elkhart General
Hospital), 7.000%, 7/01/08 7/02 at 102 A1 2,178,980
LOUISIANA - 1.5%
2,000,000 Louisiana Public Facilities Authority, Student Loan,
Alternative Minimum Tax, 6.750%, 9/01/06 9/02 at 102 Aa 2,157,300
MAINE - 1.4%
2,000,000 Maine Educational Loan Marketing Corporation,
Alternative Minimum Tax, 6.600%, 5/01/05 5/02 at 101 A 2,115,540
MARYLAND - 3.8%
3,500,000 Maryland General Obligation, 4.600%, 7/15/06 7/03 at 101 Aaa 3,454,990
2,000,000 Anne Arundel County, Multi-Family Housing
(Woodside Project), Alternative Minimum Tax,
7.450%, 12/01/24 (Mandatory put 12/01/03) No Opt. Call BBB+ 2,124,780
MASSACHUSETTS - 1.2%
1,760,000 Massachusetts Municipal Wholesale Electric
Company, 4.700%, 7/01/06 No Opt. Call Aaa 1,730,414
NEBRASKA - 4.1%
Nebraska Public Gas Agency:
1,000,000 5.250%, 4/01/02 No Opt. Call Baa1 1,002,060
1,250,000 5.300%, 4/01/03 No Opt. Call Baa1 1,249,150
1,000,000 5.400%, 4/01/04 No Opt. Call Baa1 999,260
2,400,000 Omaha Airport Authority, 8.375%, 1/01/14 1/02 at 102 A 2,839,920
NEW YORK - 10.8%
2,000,000 New York Medical Care, FHA-Insured (Hebrew
Home), 6.100%, 8/15/15 2/06 at 102 AA+ 2,073,940
New York City General Obligation:
4,000,000 9.500%, 8/01/02 8/01 at 101 1/2 Baa1 4,879,560
2,000,000 6.750%, 8/15/03 No Opt. Call Baa1 2,168,200
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
NEW YORK (CONTINUED)
$ 4,000,000 New York City Housing Development Corporation,
Multi-Family Housing, 5.700%, 11/01/13 5/03 at 102 Aa $ 4,011,360
2,130,000 Niagara Falls Water Treatment System, Alternative
Minimum Tax, 8.500%, 11/01/07 No Opt. Call Aaa 2,760,714
NORTH DAKOTA - 0.7%
990,000 Mercer County Pollution Control (Basin Electric
Power Cooperative), 7.700%, 1/01/19 1/96 at 103 A2 1,022,977
OHIO - 5.4%
2,000,000 Akron, Bath, Copley Joint Township Hospital District
(Summa Health System), 6.250%, 11/15/07 11/02 at 102 A 2,141,420
4,500,000 Hamilton County, Hospital Facilities (Bethesda
Hospital), 6.250%, 1/01/06 No Opt. Call A1 4,765,500
1,000,000 Oxford Water Supply System Mortgage,
6.000%, 12/01/14 12/02 at 102 Aaa 1,048,510
PENNSYLVANIA - 1.6%
1,930,000 Pennsylvania Higher Educational Facilities Authority,
7.625%, 7/01/15 No Opt. Call Aaa 2,362,243
RHODE ISLAND - 3.0%
1,040,000 Rhode Island Clean Water Protection Finance Agency,
7.700%, 10/01/03 No Opt. Call Aaa 1,243,289
3,000,000 Rhode Island Housing and Mortgage Finance
Corporation, Alternative Minimum Tax,
6.500%, 4/01/25 4/02 at 102 AA+ 3,120,180
SOUTH DAKOTA - 2.6%
3,595,000 South Dakota Student Loan Assistance Corporation,
Alternative Minimum Tax, 7.400%, 8/01/99 No Opt. Call A 3,791,718
TENNESSEE - 0.7%
1,000,000 Tennessee Housing Development Agency,
Homeownership Program, 6.400%, 7/01/06 7/02 at 102 Aa 1,041,300
TEXAS - 6.0%
640,000 Austin-Travis County Mental Health Centers,
6.500%, 3/01/15 3/05 at 102 Aaa 685,645
1,460,000 Galveston Property Finance Authority, Single Family
Mortgage, 8.500%, 9/01/11 9/01 at 103 N/R 1,618,089
2,800,000 Grapevine Industrial Development Corporation
(American Airlines, Inc.), 9.250%, 12/01/12 12/95 at 102 Baa3 2,868,124
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
TEXAS (CONTINUED)
$ 1,215,000 Gulf Coast Center Mental Health and Mental
Retardation Center, 6.500%, 3/01/15 3/05 at 102 Aaa $ 1,302,553
1,400,000 Travis County Health Facilities Development
Corporation (Daughters of Charity Health System),
5.900%, 11/15/07 11/03 at 102 Aa 1,482,698
880,000 Tri-County Mental Health and Retardation Center,
6.500%, 3/01/15 3/05 at 102 Aaa 946,723
VIRGINIA - 1.5%
2,000,000 Hampton Redevelopment and Housing Authority
(Chase Hampton II Apartments), 7.000%, 7/01/24
(Mandatory put 7/01/04) 7/02 at 104 N/R 2,163,180
WASHINGTON - 8.7%
Washington Public Power Supply System, Nuclear
Project No. 1:
2,500,000 7.000%, 7/01/07 No Opt. Call Aa 2,852,650
3,000,000 7.000%, 7/01/08 No Opt. Call Aa 3,419,370
7,000,000 Washington Public Power Supply System, Nuclear
Project No. 3, 0.000%, 7/01/06 No Opt. Call Aa 3,980,200
1,255,000 Douglas County Public Utility District No. 1 (Wells
Hydroelectric), Alternative Minimum Tax,
7.700%, 9/01/08 9/00 at 102 A+ 1,404,860
1,000,000 King County School District No. 414, General
Obligation, 9.000%, 12/01/00 No Opt. Call Aa 1,208,290
$135,900,844 Total Investments - (cost $136,798,757) - 98.4% 145,391,767
============
TEMPORARY INVESTMENTS IN SHORT-TERM
MUNICIPAL SECURITIES - 0.2%
$ 300,000 Jasper County Pollution Control (Northern Indiana
============
Public Service), Variable Rate Demand Bonds,
3.800%, 4/01/19t VMIG-1 300,000
Other Assets Less Liabilities - 1.4% 2,049,224
Net Assets - 100% $147,740,991
============
<PAGE>
<CAPTION>
NUMBER MARKET MARKET
STANDARD & POOR'S MOODY'S OF ISSUES VALUE PERCENT
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 18 $ 43,461,116 30%
RATINGS** AA+, AA, AA- Aa1, Aa, Aa2, Aa3 14 35,605,865 24
PORTFOLIO OF A+ A1 6 11,403,226 8
INVESTMENTS A, A- A, A2, A3 8 17,451,048 12
(EXCLUDING BBB+, BBB, BBB- Baa1, Baa, Baa2, Baa3 8 21,797,579 15
TEMPORARY Non-rated Non-rated 6 15,672,933 11
INVESTMENTS):
TOTAL 60 $145,391,767 100%
<FN>
* Optional Call Provisions: 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: Using the higher of Standard & Poor's or Moody's rating.
N/R - Investment is not rated.
t The security has a maturity of more than one year, but has variable rate and
demand features which qualify it as a short-term security. The rate disclosed
is that currently in effect. This rate changes periodically based on market
conditions or a specified market index.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF NET ASSETS
(Unaudited)
<CAPTION>
<S> <C>
ASSETS
Investments in municipal securities, at market
value (note 1) $145,391,767
Temporary investments in short-term municipal
securities, at amortized cost (note 1) 300,000
Cash 6,665
Interest receivable 2,798,752
Other assets 33,180
------------
Total assets 148,530,364
------------
LIABILITIES
Accrued expenses:
Management fees (note 6) 59,898
Other 61,757
Dividends payable 667,718
------------
Total liabilities 789,373
------------
Net assets (note 7) $147,740,991
============
Shares outstanding 12,365,146
============
Net asset value per share outstanding (net assets
divided by shares outstanding) $ 11.95
============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
Six months ended November 30, 1995
(Unaudited)
<CAPTION>
<S> <C>
INVESTMENT INCOME
Tax-exempt interest income (note 1) $4,422,670
----------
Expenses:
Management fees (note 6) 361,550
Shareholders' servicing agent fees and expenses 12,739
Custodian's fees and expenses 23,128
Trustees' fees and expenses (note 6) 1,150
Professional fees 7,921
Shareholders' reports--printing and mailing expenses 28,250
Stock exchange listing fees 9,754
Investor relations expense 4,196
Other expenses 4,146
----------
Total expenses 452,834
----------
Net investment income 3,969,836
----------
REALIZED AND UNREALIZED GAIN
FROM INVESTMENTS
Net realized gain from investment transactions (note 3) 723,651
Net change in unrealized appreciation or depreciation
of investments 2,067,007
----------
Net gain from investments 2,790,658
----------
Net increase in net assets from operations $6,760,494
==========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
(Unaudited)
<CAPTION>
6 months ended Year ended
11/30/95 5/31/95
<S> <C> <C>
OPERATIONS
Net investment income $ 3,969,836 $ 7,862,011
Net realized gain from investment transactions 723,651 204,387
Net change in unrealized appreciation or depreciation
of investments 2,067,007 4,606,003
------------ ------------
Net increase in net assets from operations 6,760,494 12,672,401
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS (note 1)
From undistributed net investment income (4,006,307) (8,012,616)
From accumulated net realized gains from
investment transactions -- (198,988)
In excess of accumulated net realized gains from
investment transactions -- (75,518)
------------ ------------
Decrease in net assets from distributions
to shareholders (4,006,307) (8,287,122)
------------ ------------
Net increase in net assets 2,754,187 4,385,279
Net assets at beginning of period 144,986,804 140,601,525
------------ ------------
Net assets at end of period $147,740,991 $144,986,804
============ ============
Balance of undistributed net investment income
at end of period $ 404,115 $ 440,587
============ ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
At November 30, 1995, the Fund covered in this report and its corresponding
New York Stock Exchange symbol is Nuveen Select Maturities Municipal Fund
(NIM).
The Fund has invested in a diversified, investment-grade quality portfolio of
municipal obligations with intermediate characteristics having an initial
average effective maturity of approximately ten years. In originally
assembling the portfolio, the Fund's investment adviser, Nuveen Advisory Corp.
(the "Adviser"), a wholly owned subsidiary of The John Nuveen Company,
purchased municipal obligations having remaining effective maturities of no
more than fifteen years, that in the opinion of the Fund's investment adviser,
represent the best value in terms of the balance between yield and capital
preservation currently available from the intermediate sector of the municipal
market. The Adviser actively monitors the effective maturities of the Fund's
investments in response to prevailing market conditions, and adjusts the
portfolio consistent with the Fund's investment policy of maintaining an
average effective remaining maturity for the portfolio of between eight and
twelve years.
The Fund is registered under the Investment Company Act of 1940 as a
closed-end, diversified management investment company.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements in accordance with
generally accepted accounting principles.
Securities Valuation
Portfolio securities for which market quotations are readily available are
valued at the mean between the quoted bid and asked prices or the yield
equivalent. Portfolio securities for which market quotations are not readily
available are valued at fair value by consistent application of methods
determined in good faith by the Trustees. Temporary investments in securities
that have variable rate and demand features qualifying them as short-term
securities are traded and valued at amortized cost.
Securities Transactions
Securities transactions are recorded on a trade date basis. Realized gains and
losses from such transactions are determined on the specific identification
method. Securities purchased or sold on a when-issued or delayed delivery
basis may be settled a month or more after the transaction date. The
securities so purchased are subject to market fluctuation during this period.
The Fund has instructed the custodian to segregate assets in a separate
account with a current value at least equal to its purchase commitments. At
November 30, 1995, there were no such purchase commitments in the Fund.
<PAGE>
Interest Income
Interest income is determined on the basis of interest accrued, adjusted for
amortization of premiums and accretion of discounts on long-term debt
securities when required for federal income tax purposes.
Federal Income Taxes
The Fund intends to comply with the requirements of the Internal Revenue Code
applicable to regulated investment companies by distributing all of its net
investment income, in addition to any significant amounts of net realized
gains from investments, to shareholders. The Fund currently considers
significant net realized gains as amounts in excess of $.001 per share.
Furthermore, the Fund intends to satisfy conditions which will enable interest
from municipal securities, which is exempt from regular federal income tax, to
retain such tax-exempt status when distributed to shareholders of the Fund.
Dividends and Distributions to Shareholders
Net investment income is declared as a dividend monthly and payment is made or
reinvestment is credited to shareholder accounts after month-end. Net realized
gains from securities transactions are distributed to shareholders not less
frequently than annually only to the extent they exceed available capital loss
carryovers.
Distributions to shareholders of net investment income and net realized
capital gains are recorded on the ex-dividend date. The amount and timing of
such distributions are determined in accordance with federal income tax
regulations, which may differ from generally accepted accounting principles.
Accordingly, temporary over-distributions as a result of these differences may
result and will be classified as either distributions in excess of net
investment income or distributions in excess of net realized capital gains, if
applicable.
Derivative Financial Instruments
In October 1994, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 119 Disclosure about
Derivative Financial Instruments and Fair Value of Financial Instruments which
prescribes disclosure requirements for transactions in certain derivative
financial instruments including futures, forward, swap, and option contracts,
and other financial instruments with similar characteristics. Although the
Funds are authorized to invest in such financial instruments, and may do so in
the future, they did not make any such investments during the six months ended
November 30, 1995.
<PAGE>
<TABLE>
2. FUND SHARES
There were no share transactions during the six months ended November 30,
1995, or the year ended May 31, 1995.
3. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of investments in municipal
securities and temporary municipal investments during the six months ended
November 30, 1995, were as follows:
<CAPTION>
<S> <C>
PURCHASES
Investments in municipal securities $20,588,290
Temporary municipal investments 8,900,000
SALES AND MATURITIES
Investments in municipal securities 20,064,195
Temporary municipal investments 9,300,000
===========
At November 30, 1995, the identified cost of investments owned for federal
income tax purposes was the same as the cost for financial reporting purposes.
4. Distributions to Shareholders
On December 1, 1995, the Fund declared a dividend distribution of $.0540 per
share from its ordinary income and a capital gains distribution of $.0433 per
share, both of which were paid December 29, 1995, to shareholders of record on
December 15, 1995.
5. Unrealized Appreciation (Depreciation)
Gross unrealized appreciation and gross unrealized depreciation of investments
at November 30, 1995, were as follows:
<CAPTION>
<S> <C>
Gross unrealized:
Appreciation $8,601,501
Depreciation (8,491)
----------
Net unrealized appreciation $8,593,010
==========
</TABLE>
<PAGE>
<TABLE>
6. Management Fees and Other Transactions with Affiliates
Under the Fund's investment management agreement with the Adviser, the Fund
pays to the Adviser an annual management fee, payable monthly, at the rates
set forth below, which are based upon the average daily net asset value of the
Fund:
<CAPTION>
Average daily net asset value Management fee
<S> <C>
For the first $125,000,000 .5 of 1%
For the next $125,000,000 .4875 of 1
For the next $250,000,000 .475 of 1
For the next $500,000,000 .4625 of 1
For the next $1,000,000,000 .45 of 1
For net assets over $2,000,000,000 .4375 of 1
The fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Fund pays no
compensation directly to those Trustees who are affiliated with the Adviser or
to their officers, all of whom receive remuneration for their services to the
Fund from the Adviser.
7. Composition of Net Assets
<CAPTION>
At November 30, 1995, net assets consisted of:
<S> <C>
Common shares, $.01 par value per share $ 123,651
Paid-in surplus 137,972,082
Balance of undistributed net investment income 404,115
Accumulated net realized gain (loss) from
investment transactions 648,133
Net unrealized appreciation or depreciation
of investments 8,593,010
-----------
Net assets $147,740,991
============
Authorized shares Unlimited
============
</TABLE>
<PAGE>
<TABLE>
8. Investment Composition
<CAPTION>
The Fund invests in municipal securities which include general obligation,
escrowed and revenue bonds. At November 30, 1995, the revenue sources by
municipal purpose for these investments, expressed as a percent of total
investments, were as follows:
<S> <C>
Revenue Bonds:
Housing Facilities 17%
Electric Utilities 14
Health Care Facilities 11
Pollution Control Facilities 11
Educational Facilities 8
Transportation 8
Lease Rental Facilities 4
Water/Sewer Facilities 2
Other 5
General Obligation Bonds 15
Escrowed Bonds 5
----
100%
====
In addition, 27% of the long-term and intermediate-term investments owned by
the Fund are backed 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. Such insurance or escrow, however, does not
guarantee the market value of the municipal securities or the value of the
Fund's 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 the Fund.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
(Unaudited)
Selected data for a share outstanding throughout each period is as follows:
<CAPTION>
Operating performance
Net asset Net realized & Dividends
value Net unrealized from net Distributions
beginning investment gain (loss) from investment from net
of period income investments income capital gains
<S> <C> <C> <C> <C> <C>
6 mos. ended
11/30/95 $11.730 $.321 $ .223 $(.324) $ --
Year ended 5/31,
1995 11.370 .643 .387 (.648) (.022)**
1994 11.710 .616 (.275) (.646) (.035)
9/18/92 to
5/31/93 11.300 .392 .455 (.322) --
<CAPTION>
Total
Per share investment Total
Organiza- Net asset market return return on
tion and value end value end on market net asset
offering costs of period of period valuet valuet
<S> <C> <C> <C> <C> <C>
6 mos. ended
11/30/95 $ -- $11.950 $11.750 8.71% 4.72%
Year ended 5/31,
1995 -- 11.730 11.125 7.67 9.51
1994 -- 11.370 11.000 (1.90) 2.86
9/18/92 to
5/31/93 (.115) 11.710 11.875 1.74 6.54
<PAGE>
<CAPTION>
Ratios/Supplemental data
Ratio of
net
Net assets Ratio of investment
end of expenses income Portfolio
period (in to average to average turnover
thousands) net assets net assets rate
<S> <C> <C> <C> <C>
6 mos. ended
11/30/95 $147,741 .62%* 5.45%* 14%
Year ended 5/31,
1995 144,987 .65 5.64 38
1994 140,602 .72 5.26 11
9/18/92 to
5/31/93 91,599 .75* 5.11* 25
<FN>
* Annualized.
** The amount shown reflects a distribution in excess of net realized gains
from investment transactions of $.006 per share.
t 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.
</TABLE>
<PAGE>
Your investment partner
Photo of John Nuveen
For nearly 100 years, Nuveen has earned its reputation as a tax-free income
specialist by focusing on municipal bonds.
Since 1898, John Nuveen & Co. Incorporated has worked to bring together the
various articipants in the municipal bond industry and build strong
partnerships that benefit all concerned. Investors, financial advisers,
municipal officials, investment bankers--Nuveen believes that forging
relationships with these groups based on trust and value is the key to
successful investing.
As the oldest and largest municipal bond specialist in the United States,
Nuveen's investment bankers work with issuers to understand and meet their
needs in structuring and selling their bond issues.
Nuveen also works closely with financial advisers around the country,
including brokerage firms, banks, insurance companies, and independent
financial planners, to bring the benefits of tax-free investing to you. These
advisers are experts at identifying your needs and recommending the best
solutions for your situation. Together we make a powerful team, helping you
create a successful investment plan that meets your needs today and in the
future.
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, Illinois 60606-1286
ETF1-JAN 96
