Nuveen Exchange-Traded Funds
Providing tax-free income to help you live your dreams
SELECT MATURITIES (NIM)
SEMIANNUAL REPORT/NOVEMBER 30, 1996
Photographic image of couple walking on beach.
<PAGE>
CONTENTS
3 Dear shareholder
5 Answering your questions
10 Fund performance
11 Commonly used terms
13 Shareholder meeting report
14 Portfolio of investments
21 Statement of net assets
22 Statement of operations
23 Statement of changes in net assets
24 Notes to financial statements
30 Financial highlights
<PAGE>
"Municipal bonds continue to play an important role in meeting the investment
goals of conservative investors."
Photographic image of headshot of Chairman and Chief Executive Officer
of Nuveen.
Dear
shareholder
As we begin a new year, I am pleased to have this opportunity to
report to you on the performance of your fund, which continues to achieve its
goal of delivering attractive tax-free income from a portfolio of
investment-grade quality municipal bonds. Because the proceeds from these
bonds are used to maintain and improve our nation's infrastructure, your
investment has several benefits: As you support the publicly funded projects
that enhance your communities, you also benefit from the credit strength of
these communities and receive income that is exempt from federal income taxes.
Municipal bonds continue to play an important role in meeting the investment
goals of conservative investors. As of November 30, 1996, investors in the
Nuveen Select Maturities Municipal Fund were receiving an annual tax-free
yield of 5.89%. To match this yield, an investor in the 36% federal income tax
bracket would have had to earn 9.20% on taxable alternatives. During the past
few years, as the bond market fluctuated in value, the net asset value of the
fund tended to react more quickly than the fund's share price. At the time of
this writing, the fund's share price was $11.00 per share, and its net asset
value was $11.88 per share. Over the past 12 months, the fund posted a total
return on net asset value of 5.41%, equivalent to a taxable total return of
8.55%.
<PAGE>
This performance is especially encouraging in light of a bond market that
essentially ended the year where it began. The current economy reflects a
combination of factors that traditionally bode well for the bond market.
Yields remain attractive, and the economy continues to expand at a moderate
pace. We believe that the fund is positioned to perform well in changing
markets due to both Nuveen's prudent portfolio management philosophy--which
employs research-oriented bond selection--as well as our conservative dividend
policy. By setting dividends at levels that are expected to remain stable for
at least six months, Nuveen strives to smooth out periods of market
fluctuation, enabling investors to depend on their tax-free dividends with
confidence. With this focus, we anticipate many more years of progress and
success for fund shareholders.
At the same time, Nuveen continues to meet the challenge of our investors'
expanding needs for capital preservation, current income, and future growth.
In November, we introduced the Nuveen Growth and Income Stock Fund, the first
of three equity-based mutual funds designed to provide a complement to our
current municipal bond funds. Tailor-made to address the needs of many Nuveen
investors, these funds can play a critical role in achieving a balanced
strategy for investors who expect their investments to provide a core element
of their financial security.
In an additional move to increase the range of investment solutions
available to our investors, Nuveen has acquired Flagship Resources Inc., a
highly regarded fixed-income mutual fund specialist that shares our views on
the importance of research and emphasizes a conservative, value-oriented
approach to portfolio management. We are currently in the process of combining
our tax-exempt mutual fund activities, which will result in the broadest
selection of municipal bond funds available in the U.S.
We are excited about these recent developments, and we are pleased to be
bringing our investors expanded options for achieving wealth preservation,
dependable income, and long-term asset growth. Thank you for your continued
confidence in Nuveen and our family of investments.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
January 15, 1997
<PAGE>
Answering your
questions
Tom Spalding, head of Nuveen's portfolio management team, talks about 1996's
municipal bond market and offers insights into factors that affected
performance
How would you categorize the municipal market over the past 12 months?
Over the past year, the bond market--despite some fluctuations--has been
relatively stable compared with recent years. While 1994 represented the worst
period in recent bond market history and 1995 the best in a decade, 1996's
bond market ended the year about where it began, rebounding from a mid-year
decline.
Following a strong start to the year, a succession of mixed reports
affecting interest rate and inflation forecasts caused investors to view the
markets alternatively with enthusiasm, then uncertainty. In the third quarter,
evidence of an economic slowdown, the strong U.S. dollar, and lack of
inflationary pressures combined to allay investor fears, sparking a rally in
bonds that continued through the post-election period. Throughout the year,
the municipal market continued to reward investors with solid returns,
dependable income, and opportunities to purchase bonds with strong credit
quality.
<PAGE>
Photographic image of Tom Spalding, Portfolio Manager at Nuveen.
Tom Spalding, head of Nuveen's portfolio management team, answers investors'
questions on developments in the municipal market.
A look at the current economy shows a positive tone, reflecting a
combination of factors that historically bode well for the bond market,
especially long-term issues. Yields remain attractive, as inflation maintains
the same modest pace that it has demonstrated over the past five years, giving
every indication of being well under control. At the same time, the economy
continues to moderate, as evidenced by the lack of price pressure at the
consumer and producer levels, steady employment statistics, low labor costs,
and a stable money supply.
What principal factors affected the bond market--and Nuveen funds--in 1996?
In 1996, the continued euphoria in the equity market focused investors'
attention on stocks and brought record amounts of new money into stock-based
mutual funds, bypassing the bond market. Some investors, concerned about an
eventual correction in the stock market, decided to take their profits, but
adopted a wait-and-see attitude about investing capital gains, electing to go
with short-term vehicles until a clearer picture of market trends emerged.
Both of these events affected demand for bond issues of all types.
Although they were the focus of much specula tion, interest rates, a key
factor affecting bond market performance, were relatively stable in 1996
compared with the two previous years. Over the past 12 months, the yield on
the 30-year Treasury bond, which serves as a benchmark for long-term interest
<PAGE>
rates, operated within a range of 130 basis points, compared with ranges
exceeding 200 basis points in both 1994 and 1995. In 1994 and into early 1995,
the Federal Reserve made an unprecedented series of moves to tighten interest
rates; the result was the worst bond market in recent history. As 1995
progressed, the Fed reacted to low inflation statistics by easing rates, and
the bond market rallied. In 1996, constant conjectures about the Fed's next
interest rate move--as well as worries about the potential return of inflation
and uncertainty over the direction of the economy--caused numerous fits and
starts in the bond market. Adding to the general concern in the pre-election
months was the debate about the flat tax and its effect on tax-free
investments such as municipal bonds. As the election settled that question and
the Fed continued to stand pat on interest rates, the bond market enjoyed a
resurgence of confidence in the post-election period, making up much of the
ground it had lost during the summer doldrums.
<PAGE>
Has Nuveen continued to follow a value investing approach during this period?
Yes. At Nuveen, we define value investing as a disciplined approach to security
selection and portfolio construction that 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. We continue to believe that this approach is the best investment
strategy for the funds we manage.
Successful value investing depends on obtaining detailed insights into the
outlook for individual issuers and the characteristics of specific
bonds--information that may go beyond that used by the market as a whole.
That's where our award-winning Research Department excels. To find the
municipal bonds we consider for our portfolios, Nuveen Research uses its
special insights to help portfolio managers target bonds that may be upgraded,
which results in a higher level of quality and safety in the portfolios, as
well as bonds that are anticipated to increase in value as the result of
factors as yet unrecognized by the investment community in general.
<PAGE>
We continue to be committed to maintaining Nuveen's tradition of value
investing and prudent management, with a focus on building shareholder value,
providing research-oriented management, and delivering dependable performance,
in the belief that this will contribute to many more years of investment
success for our fund shareholders.
What is the status of bond calls in the fund's portfolio?
Bond call exposure for this fund is moderate. The bond market has dealt with
the issue of bond calls and pre-refundings for years. Although this has put
some pressure on the dividends of our older funds (those issued before 1991),
all of our funds have performed very well through this period.
<PAGE>
<TABLE>
NUVEEN SELECT MATURITIES MUNICIPAL FUND
NIM
In keeping with the Fund's goal of providing attractive, dependable tax-free
income, shareholders have enjoyed 36 months of steady dividends. In addition,
shareholders received a capital gains distribution in December 1995.
<CAPTION>
12 MONTH DIVIDEND HISTORY
Date Monthly Dividends Supplemental Dividends Capital Gains
<S> <C> <C> <C>
12/13/95 $0.0540 .0433
1/10/96 $0.0540
2/13/96 $0.0540
3/13/96 $0.0540
4/11/96 $0.0540
5/13/96 $0.0540
6/12/96 $0.0540
7/11/96 $0.0540
8/13/96 $0.0540
9/11/96 $0.0540
10/10/96 $0.0540
11/13/96 $0.0540
<CAPTION>
FUND HIGHLIGHTS 11/30/96
<S> <C>
Yield 5.89%
Taxable-equivalent yield 9.20%
Annual total return on NAV 5.41%
Taxable-equivalent total return 8.55%
Share price $11.00
NAV $11.88
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, 1996) 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 1996 incomes of $121,300-$263,750
for investors filing singly, $147,700-$263,750 for those filing jointly.
Net Asset Value (NAV)
The market value of all securities and other assets held by 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.
<PAGE>
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, 1996. Any future
repurchases will be reported to shareholders in the next annual or semiannual
report.
<PAGE>
<TABLE>
SHAREHOLDER MEETING REPORT
On July 24, 1996, 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,
Anthony T. Dean, 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 11,177,866
Abstain 84,835
----------
Total 11,262,701
==========
Anthony T. Dean
For 11,177,966
Abstain 84,735
----------
Total 11,262,701
==========
Anne E. Impellizzeri
For 11,183,966
Abstain 78,735
----------
Total 11,262,701
==========
Margaret K. Rosenheim
For 11,183,267
Abstain 79,434
----------
Total 11,262,701
==========
Peter R. Sawers
For 11,177,367
Abstain 85,334
----------
Total 11,262,701
==========
Timothy R. Schwertfeger
For 11,184,867
Abstain 77,834
----------
Total 11,262,701
==========
RATIFICATION OF AUDITORS
WAS REACHED AS FOLLOWS:
For 11,118,156
Against 55,237
Abstain 89,308
----------
Total 11,262,701
==========
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
(Unaudited)
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION RATINGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
ARIZONA - 1.8%
$ 2,470,000 Arizona Educational Loan Marketing Corporation,
Educational Loan Revenue Bonds, 6.375%, 9/01/05
(Alternative Minimum Tax) Aa 9/02 at 101 $ 2,602,417
- -------------------------------------------------------------------------------------------------------------------
ARKANSAS - 0.9%
1,190,000 Arkansas Student Loan Authority, Student Loan
Revenue Bonds, Series 1992A-2 (Subordinate),
6.750%, 6/01/06 (Alternative Minimum Tax) A 6/01 at 102 1,271,467
- -------------------------------------------------------------------------------------------------------------------
COLORADO - 6.3%
5,500,000 City and County of Denver, Colorado, Airport
System Revenue Bonds, Series 1991A,
8.750%, 11/15/23 (Alternative Minimum Tax) Baa 11/01 at 102 6,534,440
1,405,846 El Paso County,Colorado, Single Family Mortgage
Revenue Tax-Exempt Refunding Bonds, Series
1992A Class A-2, 8.750%, 6/01/11 Aaa No Opt. Call 1,532,625
1,000,000 Summit County, Colorado, Sports Facilities Refunding
Revenue Bonds (Keystone Resorts Management, Inc.
Project), Series 1990, 7.750%, 9/01/06 A- No Opt. Call 1,201,740
- -------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 4.7%
1,000,000 District of Columbia (Washington, D.C.), General
Obligation Refunding Bonds, Series 1994A,
6.000%, 6/01/11 Aaa No Opt. Call 1,070,230
5,400,000 District of Columbia (Washington, D.C.), General
Obligation Refunding Bonds, Series 1993A,
6.000%, 6/01/07 Aaa No Opt. Call 5,791,500
- -------------------------------------------------------------------------------------------------------------------
FLORIDA - 4.2%
2,000,000 State of Florida, Faith and Credit, State Board of
Education, Public Education Capital Outlay Bonds,
Series 1986-C, 7.100%, 6/01/07 Aaa No Opt. Call 2,085,060
3,500,000 Hillsborough County Industrial Development
Authority, Pollution Control Revenue Refunding
Bonds (Tampa Electric Company Project), Series
1992, 8.000%, 5/01/22 AA 5/02 at 103 4,089,890
- -------------------------------------------------------------------------------------------------------------------
GEORGIA - 8.8%
2,540,000 Municipal Electric Authority of Georgia, General
Power Revenue Bonds, 1992B Series,
7.500%, 1/01/07 Aaa No Opt. Call 3,041,523
1,800,000 State of Georgia, General Obligation Bonds, 1994-D,
6.700%, 8/01/09 Aaa No Opt. Call 2,102,094
890,000 Urban Residential Finance Authority, Of The City Of
Atlanta, Revenue Bonds (Landrum Arms Project),
Series 1994, 6.750%, 7/01/04 N/R No Opt. Call 934,019
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION RATINGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
GEORGIA (CONTINUED)
$ 5,755,000 Development Authority of Burke County,Georgia,
Pollution Control Revenue Bonds (Oglethorpe
Power Corporation Vogtle Project),Series 1992,
8.000%, 1/01/15 Aaa 1/03 at 103 $ 6,834,523
- -------------------------------------------------------------------------------------------------------------------
ILLINOIS - 11.0%
4,300,000 Illinois Development Finance Authority, Child Care
Facility Revenue Bonds, Series 1992 (Illinois
Facilities Fund Project), 7.400%, 9/01/04 N/R 9/02 at 102 4,515,688
2,465,000 Illinois Housing Development Authority, Section 8
Elderly Housing Revenue Bonds (Skyline Towers
Apartments), Series 1992B, 6.625%, 11/01/07 A 11/02 at 102 2,605,382
1,300,000 General Obligation Lease Certificates, 1992 Series A
(Board of Education of the City of Chicago), Illinois,
6.125%, 1/01/07 Aaa No Opt. Call 1,431,495
2,720,000 Chicago Metropolitan Housing Development
Corporation (Chicago, Illinois), Housing
Development Revenue Refunding Bonds (FHA-
Insured Mortgage Loan-Section 8 Assisted Project),
Series 1993B, 5.700%, 1/01/13 Aaa 7/03 at 100 2,736,157
3,000,000 City of Chicago, Illinois, Tax Increment Allocation
Revenue and Refunding Bonds (Stockyards
Industrial-Commercial Redevelopment Project),
Series 1994A, 9.250%, 1/01/12 N/R No Opt. Call 3,341,700
680,000 City of Danville, Vermilion County, Illinois, Single
Family Mortgage Revenue Refunding Bonds, Series
1993, 7.300%, 11/01/10 A1 11/03 at 102 717,754
800,000 City of Rock Island, Illinois, Residential Mortgage
Revenue Refunding Bonds, Series 1992,
7.700%, 9/01/08 Aa 9/02 at 102 857,912
- -------------------------------------------------------------------------------------------------------------------
INDIANA - 5.7%
The Indianapolis Local Public Improvement Bond
Bank, Series 1992 D Bonds:
1,000,000 6.400%, 2/01/05 A+ No Opt. Call 1,099,930
1,000,000 6.600%, 2/01/07 A+ No Opt. Call 1,119,500
2,100,000 The Indianapolis Local Public Improvement Bond
Bank, Transportation Revenue Bonds, Series 1992,
6.000%, 7/01/10 Aa 7/03 at 102 2,223,270
1,540,000 The Trustees of Indiana University, Indiana University
Facility Revenue Bonds, Series 1994A,
6.000%, 11/15/06 Aaa No Opt. Call 1,683,020
2,000,000 Hospital Authority of Elkhart County, Indiana,
Hospital Revenue Bonds, Series 1992 (Elkhart
General Hospital, Inc.), 7.000%, 7/01/08 A1 7/02 at 102 2,188,780
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION RATINGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
LOUISIANA - 1.4%
$ 2,000,000 Louisiana Public Facilities Authority, Student Loan
Revenue Bonds, 6.750%, 9/01/06 (Alternative
Minimum Tax) Aaa 9/02 at 102 $ 2,121,580
- -------------------------------------------------------------------------------------------------------------------
MAINE - 1.1%
1,500,000 Maine Educational Loan Marketing Corporation,
Student Loan Revenue Bonds, Series 1992, Student
Loan Revenue Refunding Bonds, Subordinate
Series 1992A-2, 6.600%, 5/01/05 (Alternative
Minimum Tax) A 5/02 at 101 1,579,275
- -------------------------------------------------------------------------------------------------------------------
MARYLAND - 1.4%
2,000,000 Anne Arundel County, Maryland, Multi-Family Housing
Revenue Bonds (Woodside Apartments Project),
Series 1994, 7.450%, 12/01/24 (Alternative
Minimum Tax), (Mandatory put 12/01/03) BBB+ No Opt. Call 2,112,460
- -------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 1.2%
1,760,000 Massachusetts Municipal Wholesale Electric
Company, Power Supply System Revenue Bonds,
1994 Series B, 4.700%, 7/01/06 Aaa No Opt. Call 1,736,557
- -------------------------------------------------------------------------------------------------------------------
MICHIGAN - 2.9%
3,800,000 Greater Detroit Resource Recovery Authority,
Michigan, Resource Revenue Refunding Bonds,
Series 1996-A, 6.250%, 12/13/07 Aaa No Opt. Call 4,209,336
- -------------------------------------------------------------------------------------------------------------------
NEBRASKA - 4.2%
Nebraska Public Gas Agency, Gas Supply System
Revenue Bonds, 1995 Series A:
1,000,000 5.250%, 4/01/02 Baa1 No Opt. Call 1,009,980
1,250,000 5.300%, 4/01/03 Baa1 No Opt. Call 1,259,938
1,000,000 5.400%, 4/01/04 Baa1 No Opt. Call 1,008,960
2,400,000 Airport Authority of the City of Omaha (Nebraska),
Airport Facilities Revenue Refunding Bonds, Series
1991, 8.375%, 1/01/14 A 1/02 at 102 2,819,088
- -------------------------------------------------------------------------------------------------------------------
NEW YORK - 13.6%
2,000,000 New York State Medical Care, Facilities Finance
Agency, FHA-Insured Mortgage Project Revenue
Bonds, 1995 Series C, 6.100%, 8/15/15 AA+ 2/06 at 102 2,086,460
2,000,000 The City of New York, General Obligation Bonds,
Fiscal 1996 Series B, 6.750%, 8/15/03 Baa1 No Opt. Call 2,177,080
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION RATINGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
NEW YORK (CONTINUED)
The City of New York, General Obligation Bonds,
Fiscal 1991 Series D:
$ 1,910,000 9.500%, 8/01/02 (Pre-refunded to 8/01/01) Baa1 8/01 at 101 1/2 $ 2,333,256
2,090,000 9.500%, 8/01/02 Baa1 8/01 at 101 1/2 2,491,573
4,000,000 New York City Housing Development Corporation,
Multi-Family Housing Revenue Bonds, 1993
Series A, 5.700%, 11/01/13 Aa 5/03 at 102 4,023,680
4,000,000 New York City Industrial Development Agency,
Amended and Restated Industrial Development
Revenue Bonds (1991 Japan Airlines Company,
Ltd. Project), 6.000%, 11/01/15 (Alternative
Minimum Tax) Aaa 11/04 at 102 4,107,800
2,130,000 City of Niagara Falls, Niagara County, New York,
Water Treatment Plant (Serial),Bonds, 1994,
8.500%, 11/01/07 (Alternative Minimum Tax) Aaa No Opt. Call 2,757,732
- -------------------------------------------------------------------------------------------------------------------
OHIO - 5.4%
2,000,000 Akron, Bath and Copley Joint Township Hospital
District, Ohio, Hospital Facilities Revenue Bonds,
Series 1992 (Summa Health System Project),
6.250%, 11/15/07 A 11/02 at 102 2,087,100
4,500,000 County Of Hamilton, Ohio, Hospital Facilities
Revenue, Refunding Bonds, Series 1992A
(Bethesda Hospital, Inc.), 6.250%, 1/01/06 A1 No Opt. Call 4,773,285
1,000,000 City of Oxford, Ohio, Water Supply System Mortgage
Revenue, Series 1992 Refunding Bonds,
6.000%, 12/01/14 Aaa 12/02 at 102 1,048,170
- -------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 1.5%
1,890,000 Pennsylvania Higher Educational Facilities Authority,
College and University Revenue Bonds, 9th Series,
7.625%, 7/01/15 Aaa No Opt.Call 2,238,006
- -------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 2.1%
3,000,000 Rhode Island Housing and Mortgage, Finance
Corporation, Homeownership Opportunity
Bonds, Series 7, 6.500%, 4/01/25 (Alternative
Minimum Tax) AA+ 4/02 at 102 3,069,840
- -------------------------------------------------------------------------------------------------------------------
SOUTH DAKOTA - 2.1%
2,925,000 South Dakota Student Loan Assistance Corporation,
Student Loan Revenue Bonds, Series 1989-C,
7.400%, 8/01/99 (Alternative Minimum Tax) A No Opt. Call 3,065,400
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION RATINGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
TENNESSEE - 0.7%
$ 1,000,000 Tennessee Housing Development Agency,
Homeownership Program Bonds, Issue WR,
Series 1992, 6.400%, 7/01/06 Aa 7/02 at 102 $ 1,035,980
- -------------------------------------------------------------------------------------------------------------------
TEXAS - 4.9%
1,415,000 City of Austin, Texas, Water, Sewer and Electric
Refunding Revenue Bonds, Series 1982,
14.000%, 11/15/01 A No Opt. Call 1,832,057
625,000 Austin-Travis County MHMR Center Revenue Bonds
(Mental Health and Mental Retardation Center
Facilities Acquisition Program), Series 1995-A,
6.500%, 3/01/15 Aaa 3/05 at 102 681,025
1,165,000 City of Galveston Property Finance Authority, Inc.,
Single Family Mortgage Revenue Bonds, Series
1991A, 8.500%, 9/01/11 A 9/01 at 103 1,268,161
1,185,000 Texas Community MHMR Centers Revenue Bonds
(Mental Health and Mental Retardation Center
Facilities Acquisition Program), Series 1995 A-E,
6.500%, 3/01/15 Aaa 3/05 at 102 1,291,223
1,200,000 Travis County Health Facilities Development
Corporation, Hospital Revenue Bonds (Daughters
of Charity Health Services of Austin), Series 1993B,
5.900%, 11/15/07 Aa 11/03 at 102 1,267,188
855,000 Tri-County MHMR Services Revenue Bonds (Mental
Health and Mental Retardation Center Facilities
Acquisition Program), Series 1995-E,
6.500%, 3/01/15 Aaa 3/05 at 102 931,642
- -------------------------------------------------------------------------------------------------------------------
VIRGINIA - 1.5%
2,000,000 Hampton Redevelopment and Housing Authority
Multi-Family Housing Revenue Refunding Bonds,
Series 1994 (Chase Hampton II Apartments),
7.000%, 7/01/24 (Mandatory put 7/01/04) Baa2 7/02 at 104 2,164,640
- -------------------------------------------------------------------------------------------------------------------
WASHINGTON - 10.5%
Washington Health Care Facilities Authority, Revenue Bonds,
Series 1996 (Yakima Valley Memorial Hospital Association,
Yakima):
1,880,000 6.000%, 12/01/09 AAA No Opt. Call 2,022,710
1,500,000 6.000%, 12/01/10 AAA No Opt. Call 1,602,885
Washington Public Power Supply System, Nuclear
Project No. 1 Refunding Revenue Bonds,
Series 1993A:
2,500,000 7.000%, 7/01/07 Aa1 No Opt. Call 2,875,925
3,000,000 7.000%, 7/01/08 Aa1 No Opt. Call 3,493,950
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION RATINGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
WASHINGTON (CONTINUED)
$ 7,000,000 Washington Public Power Supply System, Nuclear
Project No. 3 Refunding Revenue Bonds, Series
1990B, 0.000%, 7/01/06 Aa1 No Opt. Call $ 4,223,170
1,255,000 Public Utility District No. 1, of Douglas County,
Washington, Wells Hydroelectric Revenue Bonds,
Series of 1990, 7.700%, 9/01/08 (Alternative
Minimum Tax) A+ 9/00 at 102 1,382,470
- -------------------------------------------------------------------------------------------------------------------
$134,090,846 Total Investments - (cost $135,510,240) - 97.9% 143,801,698
=================--------------------------------------------------------------------------------------------------
TEMPORARY INVESTMENTS IN SHORT-TERM
MUNICIPAL SECURITIES - 0.6%
$ 100,000 Joliet Regional Port District Marine Terminal
Revenue Refunding Bonds (Exxon Project), 1989
Variable Rate Demand Bonds, 4.050%, 10/01/24+ A-1+ 100,000
800,000 The City of New York, General Obligation Bonds,
Fiscal 1995 Series B, Variable Rate Demand Bonds,
4.050%, 8/15/22+ VMIG-1 800,000
- -------------------------------------------------------------------------------------------------------------------
$ 900,000 Total Temporary Investments - 0.6% 900,000
=================--------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.5% 2,213,383
- -------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $146,915,081
===================================================================================================================
<PAGE>
<CAPTION>
NUMBER MARKET MARKET
STANDARD & POOR'S MOODY'S OF ISSUES VALUE PERCENT
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 22 $ 53,056,893 37%
RATINGS* AA+, AA, AA- Aa1, Aa, Aa2, Aa3 12 31,849,682 22
PORTFOLIO OF A+ A1 6 11,281,719 8
INVESTMENTS A, A- A, A2, A3 9 17,729,670 12
(EXCLUDING BBB+, BBB, BBB- Baal, Baa, Baa2, Baa3 9 21,092,327 15
TEMPORARY Non-rated Non-rated 3 8,791,407 6
INVESTMENTS):
- -------------------------------------------------------------------------------------------------------------------
TOTAL 61 $143,801,698 100%
===================================================================================================================
<FN>
* Ratings: Using the higher of Standard & Poor's or Moody's rating.
N/R - Investment is not rated.
** 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.
+ 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.
</FN>
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) $143,801,698
Temporary investments in short-term municipal
securities, at amortized cost (note 1) 900,000
Receivables:
Interest 2,649,943
Investments sold 345,674
Other assets 8,147
------------
Total assets 147,705,462
------------
LIABILITIES
Accrued expenses:
Management fees (note 6) 59,818
Other 62,549
Dividends payable 668,014
------------
Total liabilities 790,381
------------
Net assets (note 7) $146,915,081
============
Shares outstanding 12,370,635
============
Net asset value per share outstanding (net
assets divided by shares outstanding) $ 11.88
============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
Six months ended November 30, 1996
(Unaudited)
<CAPTION>
<S> <C>
INVESTMENT INCOME
Tax-exempt interest income (note 1) $4,352,756
----------
Expenses:
Management fees (note 6) 360,596
Shareholders' servicing agent fees and expenses 12,665
Custodian's fees and expenses 22,079
Trustees' fees and expenses (note 6) 1,228
Professional fees 8,068
Shareholders' reports--printing and mailing expenses 35,654
Stock exchange listing fees 16,685
Investor relations expense 5,741
Other expenses 4,224
----------
Total expenses 466,940
----------
Net investment income 3,885,816
----------
REALIZED AND UNREALIZED GAIN
(LOSS) FROM INVESTMENTS
Net realized gain (loss) from investment transactions
(notes 1 and 3) (92,744)
Net change in unrealized appreciation or depreciation
of investments 3,766,360
----------
Net gain from investments 3,673,616
----------
Net increase in net assets from operations $7,559,432
==========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES
IN NET ASSETS
(Unaudited)
<CAPTION>
6 months ended Year ended
11/30/96 5/31/96
- -------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
Net investment income $ 3,885,816 $ 7,938,793
Net realized gain (loss) from investment transactions (92,744) 922,639
Net change in unrealized appreciation or depreciation
of investments 3,766,360 (2,000,905)
------------ ------------
Net increase in net assets from operations 7,559,432 6,860,527
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS (note 1)
From undistributed net investment income (4,008,086) (8,031,140)
From accumulated net realized gains from investment
transactions -- (517,776)
------------ ------------
Decrease in net assets from distributions to
shareholders (4,008,086) (8,548,916)
------------ ------------
CAPITAL SHARE TRANSACTIONS (note 2)
Net proceeds from shares issued to shareholders due
to reinvestment of distributions -- 65,320
------------ ------------
Net increase in net assets derived from capital
share transactions -- 65,320
------------ ------------
Net increase (decrease) in net assets 3,551,346 (1,623,069)
Net assets at beginning of period 143,363,735 144,986,804
------------ ------------
Net assets at end of period $146,915,081 $143,363,735
============ ============
Balance of undistributed net investment income at
end of period $ 225,970 $ 348,240
============ ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. GENERAL INFORMATION AND SIGNIFICANT
ACCOUNTING POLICIES
At November 30, 1996, 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 assembling and managing
its portfolio, the Fund has purchased municipal
obligations having remaining effective maturities of
no more than fifteen years, that in the opinion if
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
Fund's investment adviser, Nuveen Advisory Corp.
(the "Adviser"), a wholly owned subsidiary of The
John Nuveen Company, will actively monitor the
effective maturities of the Fund's investments in
response to prevailing market conditions, and will
adjust its portfolio consistent with its investment
policy of maintaining an average effective remaining
maturity for the Fund's 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 Board of
Trustees. Temporary investments in securities that
have variable rate and demand features qualifying
them as short-term securities are traded and valued
at amortized cost.
<PAGE>
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, 1996,
there were no such purchase commitments in the Fund.
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 to shareholders
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
investments transactions. The Fund currently
considers significant net realized capital gains
and/or market discount 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. Net realized
capital gain and market discount distributions are
subject to federal taxation.
Dividends and Tax-exempt net investment income is declared as a
Distributions to dividend monthly and payment is made or reinvestment
Shareholders is credited to shareholder accounts after month-end.
Net realized capital gains and/or market discount
from investment transactions are distributed to
shareholders not less frequently than annually.
Furthermore, capital gains are distributed only to
the extent they exceed available capital loss
carryovers.
<PAGE>
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 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 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.
Derivative Financial In October 1994, the Financial Accounting Standards
Instruments 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 Fund is
authorized to invest in such financial instruments,
and may do so in the future, the Fund did not make
any such investments during the six months ended
November 30, 1996.
Use of Estimates The preparation of financial statements
in conformity with generally accepted accounting
principles requires management to make estimates and
assumptions that affect the reported amounts of
assets and liabilities at the date of the financial
statements and the reported amounts of increases and
decreases in net assets from operations during the
reporting period.
2. FUND SHARES
There were no share transactions during the six
months ended November 30, 1996. The Fund issued
5,489 shares due to reinvestment of distributions
during the year ended May 31, 1996.
<PAGE>
3. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of
investments in municipal securities and temporary
municipal investments during the six months ended
November 30, 1996, were as follows:
<TABLE>
<CAPTION>
<S> <C>
PURCHASES
Investments in municipal securities $6,853,927
Temporary municipal investments 2,000,000
SALES AND MATURITIES
Investments in municipal securities 6,232,917
Temporary municipal investments 2,800,000
=========
</TABLE>
At November 30, 1996, 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 2, 1996, the Fund declared a dividend
distribution of $.0540 per share from its tax-exempt
net investment income which was paid December 31,
1996, to shareholders of record on December 15,
1996.
5. UNREALIZED APPRECIATION (DEPRECIATION)
Gross unrealized appreciation and gross unrealized
depreciation of investments at November 30, 1996,
were as follows:
<TABLE>
<CAPTION>
<S> <C>
Gross unrealized:
Appreciation $8,347,679
Depreciation (56,221)
-------------
Net unrealized appreciation $8,291,458
=============
</TABLE>
<PAGE>
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:
<TABLE>
<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
</TABLE>
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 At November 30, 1996,
net assets consisted of:
<TABLE>
<CAPTION>
<S> <C>
Common shares, $.01 par value per share $ 123,706
Paid-in surplus 138,037,345
Balance of undistributed net investment income 225,970
Accumulated net realized gain from
investment transactions 236,602
Net unrealized appreciation of investments 8,291,458
------------
Net assets $146,915,081
============
Authorized shares:
Common Unlimited
============
</TABLE>
<PAGE>
8. INVESTMENT COMPOSITION
The Fund invests in municipal securities which
include general obligation, escrowed and revenue
bonds. At November 30, 1996, the revenue sources by
municipal purpose for these investments, expressed
as a percent of total investments, were as follows:
<TABLE>
<CAPTION>
<S> <C>
Revenue Bonds:
Housing Facilities 16%
Electric Utilities 15
Health Care Facilities 13
Pollution Control Facilities 11
Educational Facilities 8
Transportation 8
Lease Rental Facilities 4
Water/Sewer Facilities 1
Other 8
General Obligation Bonds 11
Escrowed Bonds 5
-----
100%
=====
</TABLE>
In addition, 35% of the long-term and
intermediate-term investments owned by the Fund are
either 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, both 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.
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
(Unaudited)
<CAPTION>
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
Operating performance
Dividends
Net asset Net realized & from
value Net unrealized tax-exempt Distributions
beginning investment gain (loss) from net investment from
of period income investments income capital gains
<S> <C> <C> <C> <C> <C>
6 mos. ended
11/30/1996 $11.590 $.314 $.300 $(.324) $ --
Year ended 5/31,
1996 11.730 .641 (.090) (.648) (.043)
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) --
<PAGE>
<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 value+ value+
<S> <C> <C> <C> <C> <C>
6 mos. ended
11/30/1996 $ -- $11.880 $11.000 1.77% 5.37%
Year ended 5/31,
1996 -- 11.590 11.125 6.14 4.76
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
11/30/1996 $146,915 .65%* 5.37%* 4%
Year ended 5/31,
1996 143,364 .63 5.45 25
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.
+ 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.
</FN>
</TABLE>
<PAGE>
For nearly 100 years, Nuveen has earned its reputation as a tax-free
income specialist.
photographic image of John Nuveen Sr., founder of Nuveen.
Your
investment
partner
Since 1898, John Nuveen & Co. Incorporated has worked to bring together the
various participants in the municipal bond industry and build strong
partnerships that benefit all concerned. Investors, financial advisers,
municipal officials, investment bankers--Nuveen believes that forging
relationships with these groups based on trust and value is the key to
successful investing.
As the oldest and largest municipal bond specialist in the United States,
Nuveen's investment bankers work with issuers to understand and meet their
needs in structuring and selling their bond issues.
Nuveen also works closely with financial advisers around the country,
including brokerage firms, banks, insurance companies, and independent
financial planners, to bring the benefits of tax-free investing to you. These
advisers are experts at identifying your needs and recommending the best
solutions for your situation. Together we make a powerful team, helping you
create a successful investment plan that meets your needs today and in the
future.
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, Illinois 60606-1286
FSA-1-11.96
