NUVEEN Exchange-Traded Funds
December 31, 1998
Semiannual Report
Dependable, tax-free income to help you keep more of what you earn.
NQJ
NNJ
New Jersey
NQP
NPY
Pennsylvania
Photo of: Couple gardening.
<PAGE>
Highlights
As of December 31, 1998
Contents
1 Dear Shareholder
3 New Jersey Portfolio Manager's Comments
5 NQJ Performance Overview
6 NNJ Performance Overview
7 Pennsylvania Portfolio Manager's Comments
9 NQP Performance Overview
10 NPY Performance Overview
11 Shareholder Meeting Report
15 Portfolio of Investments
34 Statement of Net Assets
35 Statement of Operations
36 Statement of Changes in Net Assets
37 Notes to Financial Statements
41 Financial Highlights
44 Building Better Portfolios
45 Fund Information
Credit Quality Performance Highlights
================================================================================
Nuveen New Jersey Investment Quality Municipal Fund, Inc. (NQJ)
o Taxable-equivalent yield of 8.39%*
o Taxable-equivalent one-year total return on
share price of 11.05%*
o Good credit quality, with 80% of the fund's
investments rated AA or higher
Pie Chart:
AAA/U.S. Guaranteed 64%
AA 16%
A 5%
BBB/NR 13%
Other 2%
Nuveen New Jersey Premium Income Municipal Fund, Inc. (NNJ)
o Outperformed Lehman Brothers Municipal Bond
Index** for the one-year period
o Steady dividend for 16 consecutive months
o Taxable-equivalent one-year total return on
share price of 17.76%*
Pie Chart:
AAA/U.S. Guaranteed 60%
AA 10%
A 16%
BBB/NR 9%
Other 5%
Nuveen Pennsylvania Investment Quality Municipal
Fund (NQP)Taxable-equivalent yield of 8.32%*
o Steady dividend for 28 consecutive months
o Taxable-equivalent one-year total return
on share price of 14.32%*
Pie Chart:
AAA/U.S. Guaranteed 76%
AA 14%
A 6%
BBB/NR 4%
Nuveen Pennsylvania Premium Income Municipal Fund 2 (NPY)
o Outperformed Lehman Brothers Municipal Bond
Index's** total return and its Lipper Peer
Group's*** average total return for the
one-year period
o One-year total return performance ranked
the fund #1 out of 8 funds in its Lipper
Peer Group
o Taxable-equivalent yield of 7.81%*
Pie Chart:
AAA/U.S. Guaranteed 76%
AA 11%
A 5%
BBB/NR 8%
* For investors in the 31% federal and applicable state income tax bracket. See
your fund's performance overview in this report for more information.
** The Lehman Brothers Municipal Bond Index is an unleveraged index comprised of
a broad range of municipal bonds and does not reflect any initial or ongoing
expenses.
***The Lipper Peer Group return represents the average annualized return of the
8 funds in the Lipper Pennsylvania Municipal Debt category.The return assumes
reinvestment of dividends and does not reflect any applicable sales charges.
<PAGE>
Photo of: Timothy R. Schwertfeger
Chairman of the Board
Sideline 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 have continued to perform well, meeting their
primary objectives of providing you with attractive levels of tax-free income
and after-tax total returns. The year's strong market for fixed-income
securities, bolstered by investor demand for quality investments, benefited
these funds and led to solid share price performances. The combination of
attractive tax-free income and after-tax total returns illustrates once again
that Nuveen's municipal bond funds can serve as excellent investment options for
income-oriented investors.
The Year in Review
Over the past year, the markets endured bouts of volatility, as the Asian
financial crisis spilled over into emerging markets and affected economies
around the globe. Investors responded by seeking a haven from the uncertainty in
more conservative investments, such as municipal bond funds. To avert a
potential domestic credit crunch and bring some stability to global markets, the
Federal Reserve moved to ease short-term interest rates for the first time in
almost three years. Between the end of September and mid-November, three
successive cuts brought the federal funds rate to 4.75%. As interest rates
continued to trend downward, the competitive yields offered by our
exchange-traded funds stimulated additional investor interest and demand.
In this environment, the market for exchange-traded municipal bond funds was
exceptionally strong. These funds continued to represent bright spots among
fixed-income investments, offering attractive income in a market that places a
high premium on yield. In addition, the funds generally maintained good levels
of call protection, resulting in relatively stable income streams.
Throughout 1998, the U.S. economy exhibited more strength than had been expected
at the outset, and current conditions indicate that this momentum could continue
in 1999. In the coming months, we will continue to watch several key factors
affecting the economy's future, including corporate earnings reports, wage and
employment statistics, the strength of the U.S. dollar, events in international
markets, and any further interest rate indications from the Federal Reserve.
These factors will influence the outlook for fixed-income markets well into
1999.
Municipal Bonds: A Compelling Value
Over the past year, rising bond prices drove yields on 30-year Treasuries to
historic lows. With yields on long Treasury bonds pushing below 5% at times, the
yield on the Bond Buyer 40, an unmanaged index of long-term municipal bonds,
fell just 15 basis points - from 5.41% to 5.26% - compared with the 82-point
drop in Treasury yields over the past 12 months. As of December 31, 1998, the
ratio of long-term municipal yields to 30-year Treasury yields stood at more
than 103%, compared with the more typical range of 86-87%. Over the past few
months, this ratio has reached as high as 104%. For investors, this means that
quality long-term municipal bonds currently offer approximately 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 present an exceptionally attractive investment option relative
to Treasuries.
<PAGE>
In the municipal market, where foreign demand was limited by foreign investors'
inability to benefit from the tax advantages of municipals, low interest rates
and the strong economy combined to generate high levels of new issuance and a
dramatic increase in the refinancing of existing bonds. In 1998, there was $284
billion of municipal issuance, 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.
The continued strength of the U.S. economy also produced improvements in the
fundamental financial health of many municipalities and boosted the overall
credit quality of municipal bonds. In 1998, issues upgraded by Moody's
outnumbered downgrades by a margin of 4 to 1. At Standard & Poor's, the ratio
was more than 2 to 1.
Nuveen Expertise Is Key
The key to taking advantage of the exceptional values currently available in the
municipal market is the ability of a proven investment manager. At Nuveen, we
recognize the value of time-tested expertise. The high 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 the flood of issues to select those securities best suited to help the
funds achieve their investment objectives.
As a further enhancement to our management capabilities, Nuveen has assembled a
strong core of Premier AdvisersSM, a group of managers who are experts in their
particular areas of the market, to provide their experience and insights. In
addition to Nuveen Investment Advisory Services, our Premier Adviser for
tax-free investing, you can rely on other Premier Advisers for equity
investments, including Institutional Capital Corporation for value investing and
Rittenhouse Financial Services, Inc. for growth investing. For more information
about the funds managed by these Premier Advisers, including charges and
expenses, contact your financial adviser for a prospectus, or call Nuveen at
(800) 621-7227. Please read the prospectus carefully before you invest or
send money.
We encourage you to talk with your financial adviser about the ways Nuveen's
expanding selection of investments can help you establish a diversified
portfolio designed to build and sustain long-term financial security. We are
grateful for the confidence you have placed in us, and we intend to continue
earning your trust in the years ahead.
Sincerely,
Timothy R. Schwertfeger
Chairman of the Board
February 15, 1999
Graphic of: Bond Buyer 40 Line Chart.
Sideline text: "The key to taking advantage of the exceptional values currently
available in the municipal market is the ability of a proven investment
manager."
<PAGE>
New Jersey Portfolio Manager's Comments
Portfolio manager Tom Futrell discusses the market environment, fund
performance, and the outlook for the New Jersey funds. Tom, a 15-year veteran of
Nuveen with management responsibility for a range of national and state
municipal bond funds, assumed management of NQJ and NNJ on July 1, 1998, as part
of Nuveen's efforts to maximize the efficient use of staff resources and
portfolio manager expertise.
What economic factors have affected the municipal market in New Jersey?
New Jersey is a heavily populated state with one of the highest resident wealth
levels in the nation. With a prime East Coast location, the state provides an
ideal site for corporations and enables residents to take advantage of
employment opportunities in New York and Pennsylvania, as well as New Jersey.
This, in turn, benefits the state by providing strong levels of business and
personal income taxes.
The state has one of the most diverse economies in the U.S., with representation
from the chemical/pharmaceutical industry, the communications sector, and the
financial services industry. The state economy continued to do well, as
evidenced by solid job growth and lower unemployment statistics. As a mature
economy, New Jersey lagged national growth averages, but its regional economic
status was above average, mostly due to job growth. In line with national
trends, New Jersey's economy is expected to moderate somewhat in 1999.
Total municipal issuance in the state in 1998 was $8.6 billion, which ranked New
Jersey ninth in the nation. However, contrary to the national average, which was
up 29% for the year, issuance in New Jersey fell 5% from 1997 levels. This
resulted not so much from an actual decrease in issuance, but from the fact that
the state's level for 1997 had been inflated by one of the largest municipal
issues ever brought to market: the New Jersey Economic Development Authority
State Pension Funding Bonds. In 1998, the largest issuers in the state were
general tax obligation bonds from the state of New Jersey, the New Jersey
Economic Development Authority, and the New Jersey Health Care Financing
Authority. The state continues to enjoy strong demand, in both primary new
issuance and the secondary market.
How did the New Jersey funds perform over the past year?
For the 12 months ended December 31, 1998, NQJ and NNJ produced the following
total returns on net asset value (NAV), compared to the total return of the
Lehman Brothers Municipal Bond Index(1).
<TABLE>
<CAPTION>
Lehman Brothers
Total Return Taxable-Equivalent Municipal Bond
Fund on NAV Total Return on NAV* Index Total Return(1)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
NQJ 5.97% 9.36% 6.48%
- --------------------------------------------------------------------------------
NNJ 6.73% 9.89% 6.48%
- --------------------------------------------------------------------------------
</TABLE>
* Taxable-equivalent total return is based on the annualized total return and a
combined federal and state income tax rate of 35.4%. It represents the return
on a taxable investment necessary to equal the return of the Nuveen fund on an
after-tax basis.
See your fund's performance overview in this report, on pages 5-6, for more
complete information.
Much of the funds' performance over the past 12 months can be tied to duration.
As of December 31, 1998, NQJ and NNJ had fund durations2 of 6.24 and 9.16 years,
respectively, compared with the unleveraged Lehman index's duration of 7.30
years. Duration measures a bond fund's price volatility, or reaction to interest
rate movements. The longer the duration, the more sensitive the fund's NAV is to
changes in interest rates. During a period of falling interest rates, longer
duration enables a fund's NAV to participate more fully in market gains.
However, when rates rise, longer duration can make the fund's NAV more
vulnerable to potential price declines. As interest rates trended downward
during 1998, funds with durations longer than that of the index, like NNJ,
tended to outperform the market, while funds with shorter durations, like NQJ,
generally underperformed.
One contribution to the underperformance of NQJ was our decision to maintain the
funds' higher imbedded yields for as long as possible by holding bonds purchased
during periods of higher interest rates. In the current low interest rate
environment, if we had sold these bonds in an attempt to capture slightly higher
total returns, we would have had to replace the bonds with issues offering lower
yields, which could have led to even greater dividend reductions than those
declared last year. Selling these bonds also leads to the recognition of capital
gains and the payment of taxable distributions, which effectively reduces the
amount of assets working to earn income for the fund. Adding to our hold
decision was the fact that many of the bonds in these portfolios were
irreplaceable given market conditions, offering a combination of purchase price
and yield that would been impossible to duplicate.
1 The Lehman Brothers Municipal Bond Index is an unleveraged index comprising a
broad range of investment-grade municipal bonds; results for the index do not
reflect any initial or ongoing expenses.
2 Fund duration, also known as leverage-adjusted duration, takes into account
the leveraging process for each fund and therefore differs from the duration
of the actual portfolio of individual bonds that make up the fund. Unless
otherwise noted, references to duration in this commentary are intended to
indicate fund duration.
<PAGE>
How were the funds' dividends and share prices affected by the interest rate
volatility of the past year?
In the current low interest rate environment, good call protection helped
support NNJ's dividend and protect the income of this fund from erosion. As of
December 31, 1998, the fund had provided shareholders with 62 consecutive months
of steady or increasing dividends. However, the combination of bond calls and
declining interest rates contributed to a reduction in the income level of NQJ,
necessitating a dividend cut in November 1998. As bonds were called from the
portfolio, proceeds had to be reinvested in bonds paying relatively lower
current interest rates, which reduced the income earned by the fund. Despite the
single dividend adjustment to NQJ, both funds continued to provide competitive
current market yields.
As Tim mentioned in his letter to shareholders, share price performance among
the Nuveen exchange-traded funds has been strong over the past 12 months. As
interest rates fell, active demand for these funds resulted in increased share
prices. The strong demand for individual bonds by retail investors in New Jersey
also contributed to these funds' improved positions. As of December 31, 1998,
both New Jersey funds were trading at premiums to their net asset values.
<TABLE>
<CAPTION>
Current Premium/ Total Return
Market Yield Discount on Share Price
- --------------------------------------------------------------------------------
Taxable 1 Year Ending Taxable
12/31/98 Equivalent* 12/31/97 12/31/98 12/31/98 Equivalent*
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NQJ 5.42% 8.39% 5.62% 8.02% 7.84% 11.05%
- --------------------------------------------------------------------------------
NNJ 5.20% 8.05% -.37% 7.19% 14.59% 17.76%
- --------------------------------------------------------------------------------
*35.4% federal and state income tax bracket
See your fund's performance overview in this report, on pages 5-6, for more
complete information.
</TABLE>
What key strategies were used to manage the funds during the past year?
Over the past year, our primary focus was on the higher end of the credit
spectrum as well as on the longer end of the yield curve (20 to 30 years). With
the Federal Reserve's easing of interest rates, the yield curve steepened
somewhat in the final quarter of 1998, meaning that the difference between
yields of lower-rated and higher-rated bonds widened. Lower-rated bonds tend to
pay higher interest rates due to the credit risk involved in purchasing them.
Nuveen does buy lower-rated bonds, but they have to be at least investment grade
quality (comparable to BBB or better). We believe the funds are being
compensated for taking on this additional risk. Overall, the credit quality of
the New Jersey funds continues to be high, with 80% of NQJ and 70% of NNJ
invested in bonds rated AAA and AA. The relatively high percentages of lower and
non-rated bonds in these portfolios reflect the greater diversity of New Jersey
issuance compared with other states.
Two interesting additions to both portfolios that were purchased over the past
year were the private placement of an insured Bergen County lease offering as
well as a non-rated private placement for a small, well-established private
school (The Gill/St. Bernard's School). Another example of Nuveen's
institutional buying power and exceptional access to the market was our purchase
of a large position in a Puerto Rico housing issue for NQJ. This
GNMA-collateralized issue offered very attractive yields as well as high credit
quality and can potentially provide us with exceptional value in secondary
market trading.
As of December 31, 1998 NNJ had an allocation of 24% in the transportation
sector. Many of these transportation bonds were purchased when the portfolio was
assembled in 1992, and based on their purchase price, yields, and outstanding
performance, we continue to hold them.
What is Nuveen's outlook for the future?
Looking ahead for the New Jersey funds, our goal will be to continue purchasing
securities that provide incremental yield to support the income streams of these
funds. We plan to employ a variety of methods to find such bonds: using credit
quality plays, taking advantage of oversupply in the market or specific sectors,
or investing in special issues, such as private placements, that Nuveen's
detailed surveillance and research enable us to find. If the interest rate
environment remains at its current low levels through 1999, we anticipate that
NQJ will face continued pressure from bond calls. This, in turn, may put
pressure on the dividend. Over the next three years, approximately 38% of NQJ's
portfolio will be subject to calls. We consider this a very manageable number
and will use it as an opportunity to improve the fund's general structure. This
will be accomplished by investing in bonds with market-neutral durations,
attractive yields, and good call protection. Selecting bonds that enhance the
funds' performance is an area where Nuveen's expertise - as an experienced
investment manager knowledgeable about the unique aspects of the New Jersey
municipal market - can result in added value for our investors.
The current market environment - influenced by declining interest rates, benign
inflation, and strong municipal supply has helped to position municipal bonds as
one of the most compelling values in today's marketplace. We expect that the
excellent municipal-to-Treasury ratio (municipal yields are currently higher
than Treasury yields even before the tax advantage of municipals is accounted
for), combined with continued volatility in the equity markets and investors'
increasing awareness of the need for asset allocation rebalancing, will result
in growing demand for municipal bond funds. 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, as the market
recognizes the value of these quality investments.
<PAGE>
Nuveen New Jersey Investment Quality Municipal Fund, Inc.
Performance Overview
As of December 31, 1998
NQJ
Portfolio Statistics
============================================================
Inception Date 2/91
- ------------------------------------------------------------
Share Price $16 15/16
- ------------------------------------------------------------
Net Asset Value Per Share $15.68
- ------------------------------------------------------------
Current Market Yield 5.42%
- ------------------------------------------------------------
Taxable-Equivalent Yield (Federal Only)(1) 7.86%
- ------------------------------------------------------------
Taxable-Equivalent Yield (Federal and State)(1) 8.39%
- ------------------------------------------------------------
Fund Net Assets ($000) $440,620
- ------------------------------------------------------------
Average Weighted Maturity (Years) 15.78
- ------------------------------------------------------------
Leverage-Adjusted Duration (Years) 6.24
- ------------------------------------------------------------
Annualized Total Return
============================================================
On Share Price On NAV
- ------------------------------------------------------------
1-Year 7.84% 5.97%
- ------------------------------------------------------------
3-Year 9.03% 6.49%
- ------------------------------------------------------------
5-Year 6.88% 6.13%
- ------------------------------------------------------------
Since Inception 8.01% 8.13%
- ------------------------------------------------------------
Taxable-Equivalent Total Return(2)
============================================================
On Share Price On NAV
- ------------------------------------------------------------
1-Year 11.05% 9.36%
- ------------------------------------------------------------
3-Year 12.39% 9.92%
- ------------------------------------------------------------
5-Year 10.47% 9.71%
- ------------------------------------------------------------
Since Inception 11.52% 11.70%
- ------------------------------------------------------------
Top 5 Sectors
============================================================
U.S. Guaranteed 19%
- ------------------------------------------------------------
Housing (Multifamily) 11%
- ------------------------------------------------------------
Transportation 11%
- ------------------------------------------------------------
Health Care 11%
- ------------------------------------------------------------
Tax Obligation (General) 10%
- ------------------------------------------------------------
Bar Chart:
1998 Monthly Tax-Free Dividends Per Share(3)
Jan 98 0.0795
Feb 98 0.0795
Mar 98 0.0795
Apr 98 0.0795
May 98 0.0795
Jun 98 0.0795
Jul 98 0.0795
Aug 98 0.0795
Sep 98 0.0795
Oct 98 0.0795
Nov 98 0.0765
Dec 98 0.0765
Line Chart:
Share Price Performance
1/2/98 16.625
17
17.625
17.313
17.125
17.313
17.063
16.625
17.063
17
17.375
17.063
17.125
17.438
16.875
16.563
16.438
16.938
16.313
16.375
16.813
17.188
17
17.125
17.188
17.125
17.5
17.313
17.313
17.375
17.938
17.875
17.563
17.75
17.625
17.938
17
17.563
18.313
17.188
17.375
17.81
18.06
17.75
16.75
16.88
17
16.81
16.88
16.94
12/31/98 16.9375
Weekly Closing Price
Past performance is not predictive of future results.
1 A taxable-equivalent represents the yield on a taxable investment necessary to
equal that 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 taxes. It is based on a combined federal and
state income tax rate of 35.4%.
2 Taxable-equivalent total return is based on the annualized total return and a
combined federal and state income tax rate of 35.4%. It represents the return
on a taxable investment necessary to equal the return of the Nuveen fund on an
after-tax basis.
3 The Fund also paid shareholders taxable distributions in December of $0.0253
per share.
<PAGE>
Nuveen New Jersey Premium Income Municipal Fund, Inc.
Performance Overview
As of December 31, 1998
NNJ
Portfolio Statistics
========================================================
Inception Date 12/92
- --------------------------------------------------------
Share Price $16 5/8
- --------------------------------------------------------
Net Asset Value Per Share $15.51
- --------------------------------------------------------
Current Market Yield 5.20%
- --------------------------------------------------------
Taxable-Equivalent Yield (Federal Only)(1) 7.54%
- --------------------------------------------------------
Taxable-Equivalent Yield (Federal and State)(1) 8.05%
- --------------------------------------------------------
Fund Net Assets ($000) $276,869
- --------------------------------------------------------
Average Weighted Maturity (Years) 17.93
- --------------------------------------------------------
Leverage-Adjusted Duration (Years) 9.16
- --------------------------------------------------------
Annualized Total Return
========================================================
On Share Price On NAV
- --------------------------------------------------------
1-Year 14.59% 6.73%
- --------------------------------------------------------
3-Year 14.23% 7.14%
- --------------------------------------------------------
5-Year 10.25% 6.64%
- --------------------------------------------------------
Since Inception 7.71% 7.46%
- --------------------------------------------------------
Taxable-Equivalent Total Return(2)
========================================================
On Share Price On NAV
- --------------------------------------------------------
1-Year 17.76% 9.89%
- --------------------------------------------------------
3-Year 17.64% 10.33%
- --------------------------------------------------------
5-Year 13.77% 9.86%
- --------------------------------------------------------
Since Inception 11.04% 10.58%
- --------------------------------------------------------
Top 5 Sectors
========================================================
Transportation 24%
- --------------------------------------------------------
Housing (Multifamily) 11%
- --------------------------------------------------------
Education and Civic Organizations 11%
- --------------------------------------------------------
Tax Obligation (Limited) 11%
- --------------------------------------------------------
Tax Obligation (General) 10%
- --------------------------------------------------------
Bar Chart:
1998 Monthly Tax-Free Dividends Per Share(3)
Jan 98 0.072
Feb 98 0.072
Mar 98 0.072
Apr 98 0.072
May 98 0.072
Jun 98 0.072
Jul 98 0.072
Aug 98 0.072
Sep 98 0.072
Oct 98 0.072
Nov 98 0.072
Dec 98 0.072
Line Chart:
Share Price Performance
1/2/98 15.375
15.5
15.688
15.5
15.875
15.875
16
15.938
15.75
15.438
15.875
15.938
15.875
15.875
15.688
15.063
15
15.125
14.875
15
15.25
15.563
15.688
15.688
15.625
15.875
16.625
16.125
16.063
16.25
16.188
16.125
16.313
15.688
15.875
15.938
16.063
16.125
16.563
16.25
16.25
16.44
16.5
16.69
16.69
16.56
16.75
16.75
16.81
16.75
12/31/98 16.625
Weekly Closing Price
Past performance is not predictive of future results.
1 A taxable-equivalent represents the yield on a taxable investment necessary to
equal that 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 taxes. It is based on a combined federal and
state income tax rate of 35.4%.
2 Taxable-equivalent total return is based on the annualized total return and a
combined federal and state income tax rate of 35.4%. It represents the return
on a taxable investment necessary to equal the return of the Nuveen fund on an
after-tax basis.
3 The Fund also paid shareholders taxable distributions in December of $0.0038
per share.
<PAGE>
Pennsylvania Portfolio Manager's Comments
Portfolio manager Tom O'Shaughnessy talks about fund performance, key investment
strategies, and the outlook for the Pennsylvania funds. Tom, a 15-year veteran
of Nuveen with responsibility for a range of state municipal bond funds, has
managed NQP since its inception in 1991 and NPY since March 1995.
What economic factors have affected the municipal market in Pennsylvania?
The Pennsylvania economy has continued to improve in terms of diversity, but as
a mature economy, it is limited in the amount of growth that can be expected.
Over the past year, the state has seen its strongest employment growth in
business services, healthcare, and consumer services, with continued job losses
in the mining and manufacturing sectors. The state's unemployment and per capita
income statistics reflect national averages.
In 1998, Pennsylvania issued a total of $15.6 billion in municipal bonds, an
increase of 33% over 1997, placing it slightly ahead of the national average
increase of 29%. In terms of total issuance, the state ranked fourth in the
nation. Philadelphia's sale of $1.3 billion in taxable pension obligation bonds
in mid-January got 1999 off to a good start. The heavy supply over the past year
has been met with steady demand, as individual investors in the state continued
to demonstrate a high level of loyalty to purchasing Pennsylvania issues.
Since July 1998, much of the municipal market's attention has been focused on
the impact of the bankruptcy declaration by a group of Philadelphia hospitals
under the umbrella of the Allegheny Health and Education Research Foundation
(AHERF). This situation has highlighted concerns in the healthcare sector, as
medical costs outpace inflation and hospitals face pressure from health insurers
and the government. To maintain patient volume, hospital systems have felt
compelled to purchase physician group practices, which have generally produced
losses. In addition to the still-unresolved court test of indenture provisions,
the bankruptcy prompted MBIA, a large municipal bond insurance company, to stop
underwriting hospital issues that are rated less than A- and to require
mortgages on less secure issues. In the coming year, healthcare issuers will
continue to require close attention. As bond insurers become more cautious, we
may see a widening of spreads between lower-rated and higher-rated bonds, that
is, a greater difference in yield between lower-rated and higher-rated bonds. It
is important to note that the Nuveen Pennsylvania funds do not hold any AHERF
bonds.
How did the Pennsylvania funds perform over the past year?
For the 12 months ended December 31, 1998, NQP and NPY produced the following
total returns on net asset value (NAV) and share price, compared to the total
return of the Lehman Brothers Municipal Bond Index(1).
Lehman Brothers
Total Return Taxable-Equivalent Municipal Bond
Fund on NAV Total Return on NAV* Index Total Return(1)
- --------------------------------------------------------------------------------
NQP 5.53% 8.69% 6.48%
- --------------------------------------------------------------------------------
NPY 6.96% 9.52% 6.48%
- --------------------------------------------------------------------------------
* Taxable-equivalent total return is based on the annualized total return and a
combined federal and state income tax rate of 32.9%. It represents the return
on a taxable investment necessary to equal the return of the Nuveen fund on an
after-tax basis.
See your fund's performance overview in this report, on pages 9-10, for more
complete information.
Much of the funds' performance over the past 12 months can be tied to duration.
As of December 31, 1998, NQP and NPY had fund durations(2) of 5.93 and 9.48
years, respectively, compared with the unleveraged Lehman index's duration of
7.30 years. Duration measures a bond fund's price volatility, or reaction to
interest rate movements. The longer the duration, the more sensitive the fund's
net asset value (NAV) is to changes in interest rates. During a period of
falling interest rates, longer duration enables a fund's NAV to participate more
fully in market gains. However, when rates rise, longer duration can make the
fund's NAV more vulnerable to potential price declines. As interest rates
trended downward during 1998, funds with durations longer than that of the
index, like NPY, tended to outperform the market, while funds with shorter
durations, like NQP, generally underperformed.
Contributing to the underperformance of NQP was our decision to maintain the
fund's higher imbedded yield for as long as possible by holding bonds purchased
during periods of higher interest rates. In the current low interest rate
environment, if we had sold these bonds in an attempt to capture slightly higher
total returns, we would have had to replace the bonds with issues offering lower
yields, which could have negatively impacted the monthly dividend. Selling these
bonds also leads to the recognition of capital gains and the payment of taxable
distributions, which effectively reduces the amount of assets working to earn
income for the fund. Adding to our hold decision was the fact that many of the
bonds in this portfolio were irreplaceable given market conditions, offering a
combination of purchase price and yield that would have been impossible to
duplicate.
1 The Lehman Brothers Municipal Bond Index is an unleveraged index comprising a
broad range of investment-grade municipal bonds; results for the index do not
reflect any initial or ongoing expenses.
2 Fund duration, also known as leverage-adjusted duration, takes into account
the leveraging process for each fund and therefore differs from the duration
of the actual portfolio of individual bonds that make up the fund. Unless
otherwise noted, references to duration in this commentary are intended to
indicate fund duration.
<PAGE>
How were the funds' dividends and share prices affected by the interest rate
volatility of the past year?
In the current low interest rate environment, good call protection helped
support the dividend of NQP and protect the income of this fund from erosion. As
of December 31, 1998, NQP had provided shareholders with 29 consecutive months
of steady income. After having its dividend lowered earlier in 1998, NPY has
paid shareholders the same dividend since June. Both funds continued to provide
competitive market yields.
As Tim mentioned in his letter to shareholders, share price performance among
the Nuveen exchange-traded funds has been strong over the past 12 months. As
interest rates fell, active demand for these funds generally resulted in strong
share price performance. As of December 31, 1998, NQP was trading at a premium
of 13.32% to its net asset value. However, for NPY, the dividend cut in May
impacted demand for the fund and led to a decline in share price, while strong
bond market performance boosted the fund's net asset value. As a result, the
discount on the fund widened over the year.
<TABLE>
<CAPTION>
Current Premium/ Total Return
Market Yield Discount on Share Price
- --------------------------------------------------------------------------------
Taxable 1 Year Ending Taxable
12/31/98 Equivalent* 12/31/97 12/31/98 12/31/98 Equivalent*
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NQP 5.58% 8.32% 6.82% 13.32% 11.37% 14.32%
- --------------------------------------------------------------------------------
NPY 5.24% 7.81% -3.78% -5.79% 5.06% 7.73%
- --------------------------------------------------------------------------------
*32.9% federal and state income tax bracket
See your fund's performance overview in this report, on pages 9-10, for more
complete information.
</TABLE>
What key strategies were used to manage the funds during the past year?
NQP offered strong risk-adjusted performance, exceptionally steady income, and
lower duration, which helped to protect its share price during the market
volatility of the past 12 months. The credit quality of this fund continued to
be extremely high, with 90% of its holdings rated AAA and AA and almost half of
the fund invested in U.S. Guaranteed bonds as of December 31, 1998. With the
declining interest rate environment of the past year, the issue for older funds
such as NQP becomes one of maintaining above-market income streams for as long
as possible. This fund was assembled in 1991, and its average call protection
extends to 2001. We are now carefully balancing the need for eventual changes in
the fund against the goal of maintaining high levels of tax-free income for
shareholders.
Both funds saw very little activity in terms of new investments in 1998 due to
the fact that the bonds currently held in these portfolios offer higher income
streams than bonds that can be bought in the market today. The bonds we did
purchase were at the long end of yield curve. With the Federal Reserve's easing
of interest rates, the yield curve steepened somewhat in the final quarter of
1998, meaning that the difference in yields between lower-rated and higher-rated
bonds widened. Lower-rated bonds tend to pay higher interest rates due to the
credit risk involved in purchasing them. Nuveen does buy lower-rated bonds, but
they have to be at least investment grade quality (comparable to BBB or better).
We believe the funds are being compensated for taking on this additional risk.
Concerning the AHERF situation, we continue to closely monitor the hospital
sector in Pennsylvania. Eighteen months ago, NPY owned several issues that would
have been affected by the bankruptcy, but Nuveen's detailed surveillance and
research enabled us to identify those bonds as declining credits. Consequently,
we were able to sell our positions far in advance of the default. While NPY
currently has an allocation of 15% in healthcare, we have continued to reduce
our position in lower-rated Pennsylvania hospitals, selling bonds such as those
issued for Temple and Crozer-Chester (Delaware County) hospitals. However, the
current situation has resulted in a large number of hospital bonds being put out
for bid, and we continue to watch the market for opportunities to find good
bonds at bargain prices.
What is Nuveen's outlook for the future?
Looking ahead for the Pennsylvania funds, our focus will remain on strategies
that support the income streams of these funds. Given current market conditions,
we plan to use the proceeds from bond calls and interest payments to maintain
the durations of these funds relative to the market. If we remain in the current
low inflation environment, we will also consider buying longer bonds to further
lengthen the duration of NQP and enable this fund to participate more fully in
market gains because, as mentioned earlier, funds with longer durations
generally tend to outperform the market. We are currently seeing a large amount
of Philadelphia issuance, especially in gas, water, and sewer bonds, which
provides us with the opportunity to buy while prices are inexpensive due to the
heavy supply and then sell at higher prices when the supply is lower. Selecting
bonds that will enhance the funds' performance is an area where Nuveen's
expertise - as an experienced investment manager knowledgeable about the unique
aspects of the Pennsylvania municipal market - can result in added value for our
investors.
The current market environment - influenced by declining interest rates, benign
inflation, and strong municipal supply has helped to position municipal bonds as
one of the most compelling values in today's marketplace. We expect that the
excellent municipal-to-Treasury ratio (municipal yields are currently higher
than Treasury yields even before the tax advantage of municipals is accounted
for), combined with continued volatility in the equity markets and investors'
increasing awareness of the need for asset allocation rebalancing, will result
in growing demand for municipal bond funds. 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, as the market
recognizes the value of these quality investments.
<PAGE>
Nuveen Pennsylvania Investment Quality Municipal Fund
Performance Overview
As of December 31, 1998
NQP
Portfolio Statistics
==================================================
Inception Date 2/91
- --------------------------------------------------
Share Price $18 1/16
- --------------------------------------------------
Net Asset Value Per Share $15.94
- --------------------------------------------------
Current Market Yield 5.58%
- --------------------------------------------------
Taxable-Equivalent Yield (Federal Only)(1) 8.09%
- --------------------------------------------------
Taxable-Equivalent Yield
(Federal and State)(1) 8.32%
- --------------------------------------------------
Fund Net Assets ($000) $364,115
- --------------------------------------------------
Average Weighted Maturity (Years) 11.93
- --------------------------------------------------
Leverage-Adjusted Duration (Years) 5.93
- --------------------------------------------------
Annualized Total Return
==================================================
On Share Price On NAV
- --------------------------------------------------
1-Year 11.37% 5.53%
- --------------------------------------------------
3-Year 8.26% 5.89%
- --------------------------------------------------
5-Year 7.06% 5.74%
- --------------------------------------------------
Since Inception 9.13% 8.61%
- --------------------------------------------------
Taxable-Equivalent Total Return(2)
==================================================
On Share Price On NAV
- --------------------------------------------------
1-Year 14.32% 8.69%
- --------------------------------------------------
3-Year 11.32% 9.07%
- --------------------------------------------------
5-Year 10.31% 9.04%
- --------------------------------------------------
Since Inception 12.37% 11.95%
- --------------------------------------------------
Top 5 Sectors
==================================================
U.S. Guaranteed 47%
- --------------------------------------------------
Education and Civic Organizations 14%
- --------------------------------------------------
Housing (Single Family) 14%
- --------------------------------------------------
Utilities 11%
- --------------------------------------------------
Tax Obligation (General) 4%
- --------------------------------------------------
Bar Chart:
1998 Monthly Tax-Free Dividends Per Share(3)
Jan 98 0.084
Feb 98 0.084
Mar 98 0.084
Apr 98 0.084
May 98 0.084
Jun 98 0.084
Jul 98 0.084
Aug 98 0.084
Sep 98 0.084
Oct 98 0.084
Nov 98 0.084
Dec 98 0.084
Line Chart:
Share Price Performance
1/2/98 17.25
18.063
18
17.688
17.688
17.875
18.125
17.313
17.125
17.313
17.625
17.938
17.625
17.813
17.688
17.688
17.125
17
17.188
17.375
17.438
17.438
17.563
17.125
17.375
17.688
18
17.375
17.125
17.188
17.375
17.25
17.813
17.563
17.375
17.438
17.25
17.375
17.813
17.313
17.563
17.81
17.81
18
17.31
17.31
17.75
18
18
17.94
12/31/98 18.0625
Weekly Closing Price
Past performance is not predictive of future results.
1 A taxable-equivalent represents the yield on a taxable investment necessary to
equal that 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 taxes. It is based on a combined federal and
state income tax rate of 32.9%.
2 Taxable-equivalent total return is based on the annualized total return and a
combined federal and state income tax rate of 32.9%. It represents the return
on a taxable investment necessary to equal the return of the Nuveen fund on an
after-tax basis.
3 The Fund also paid shareholders taxable distributions in December of $0.0045
per share.
<PAGE>
Nuveen Pennsylvania Premium Income Municipal Fund 2
Performance Overview
As of December 31, 1998
NPY
Portfolio Statistics
==================================================
Inception Date 3/93
- --------------------------------------------------
Share Price $14 3/16
- --------------------------------------------------
Net Asset Value Per Share $15.06
- --------------------------------------------------
Current Market Yield 5.24%
- --------------------------------------------------
Taxable-Equivalent Yield (Federal Only)(1) 7.59%
- --------------------------------------------------
Taxable-Equivalent Yield
(Federal and State)(1) 7.81%
- --------------------------------------------------
Fund Net Assets ($000) $355,303
- --------------------------------------------------
Average Weighted Maturity (Years) 17.87
- --------------------------------------------------
Leverage-Adjusted Duration (Years) 9.48
- --------------------------------------------------
Annualized Total Return
==================================================
On Share Price On NAV
- --------------------------------------------------
1-Year 5.06% 6.96%
- --------------------------------------------------
3-Year 10.86% 7.54%
- --------------------------------------------------
5-Year 6.91% 6.47%
- --------------------------------------------------
Since Inception 4.92% 6.88%
- --------------------------------------------------
Taxable-Equivalent Total Return(2)
==================================================
On Share Price On NAV
- --------------------------------------------------
1-Year 7.73% 9.52%
- --------------------------------------------------
3-Year 13.84% 10.23%
- --------------------------------------------------
5-Year 10.05% 9.33%
- --------------------------------------------------
Since Inception 7.88% 9.64%
- --------------------------------------------------
Top 5 Sectors
==================================================
U.S. Guaranteed 15%
- --------------------------------------------------
Health Care 15%
- --------------------------------------------------
Education and Civic Organizations 15%
- --------------------------------------------------
Utilities 13%
- --------------------------------------------------
Tax Obligation (Limited) 11%
- --------------------------------------------------
Bar Chart:
1998 Monthly Tax-Free Dividends Per Share(3)
Jan 98 0.065
Feb 98 0.065
Mar 98 0.065
Apr 98 0.065
May 98 0.062
Jun 98 0.062
Jul 98 0.062
Aug 98 0.062
Sep 98 0.062
Oct 98 0.062
Nov 98 0.062
Dec 98 0.062
Line Chart:
Share Price Performance
1/2/98 14.063
14.375
14.313
14.125
14.25
14.188
14.125
13.938
13.938
13.875
13.813
13.813
13.813
14
14
14
13.938
13.938
13.813
13.813
13.688
13.813
13.688
13.438
13.5
13.625
13.813
13.75
13.875
13.813
13.75
13.625
13.688
13.75
13.75
13.75
13.75
13.813
14.188
14.125
14.188
14.25
14.25
14.31
14.44
14.44
14.44
14.5
14.38
14.25
12/31/98 14.1875
Weekly Closing Price
Past performance is not predictive of future results.
1 A taxable-equivalent represents the yield on a taxable investment necessary to
equal that 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 taxes. It is based on a combined federal and
state income tax rate of 32.9%.
2 Taxable-equivalent total return is based on the annualized total return and a
combined federal and state income tax rate of 32.9%. It represents the return
on a taxable investment necessary to equal the return of the Nuveen fund on an
after-tax basis.
<PAGE>
<TABLE>
Shareholder Meeting Report
<CAPTION>
NQJ
- ------------------------------------------------------------------------------------------------------------------------------------
Approval of the Directors was reached as follows:
Preferred Preferred
Common Shares Shares
Shares Series-M Series-TH
====================================================================================================================================
<S> <C> <C> <C>
Robert P. Bremner
For 17,920,541 3,160 1,947
Withhold 199,389 8 --
- ------------------------------------------------------------------------------------------------------------------------------------
Total 18,119,930 3,168 1,947
====================================================================================================================================
Lawrence H. Brown
For 17,923,446 3,160 1,947
Withhold 196,484 8 --
- ------------------------------------------------------------------------------------------------------------------------------------
Total 18,119,930 3,168 1,947
====================================================================================================================================
Anthony T. Dean
For 17,925,546 3,160 1,947
Withhold 194,384 8 --
- ------------------------------------------------------------------------------------------------------------------------------------
Total 18,119,930 3,168 1,947
====================================================================================================================================
Anne E. Impellizzeri
For 17,917,053 3,160 1,947
Withhold 202,877 8 --
- ------------------------------------------------------------------------------------------------------------------------------------
Total 18,119,930 3,168 1,947
====================================================================================================================================
Peter R. Sawers
For 17,922,957 3,160 1,947
Withhold 196,973 8 --
- ------------------------------------------------------------------------------------------------------------------------------------
Total 18,119,930 3,168 1,947
====================================================================================================================================
William J. Schneider
For -- 3,160 1,947
Withhold -- 8 --
- ------------------------------------------------------------------------------------------------------------------------------------
Total -- 3,168 1,947
====================================================================================================================================
Timothy R. Schwertfeger
For -- 3,160 1,947
Withhold -- 8 --
- ------------------------------------------------------------------------------------------------------------------------------------
Total -- 3,168 1,947
====================================================================================================================================
Judith M. Stockdale
For 17,924,386 3,160 1,947
Withhold 195,544 8 --
- ------------------------------------------------------------------------------------------------------------------------------------
Total 18,119,930 3,168 1,947
====================================================================================================================================
Ratification of auditors was reached as follows:
For 17,863,620 3,155 1,946
Against 99,827 13 --
Abstain 156,483 -- 1
- ------------------------------------------------------------------------------------------------------------------------------------
Total 18,119,930 3,168 1,947
====================================================================================================================================
</TABLE>
<PAGE>
<TABLE>
Shareholder Meeting Report
<CAPTION>
NNJ
- ------------------------------------------------------------------------------------------------------------------------------------
Approval of the Directors was reached as follows:
Preferred Preferred Preferred
Common Shares Shares Shares
Shares Series-T Series-W Series-TH
====================================================================================================================================
<S> <C> <C> <C> <C>
Robert P. Bremner
For 10,976,855 466 1,254 1,558
Withhold 113,171 1 179 1
- ------------------------------------------------------------------------------------------------------------------------------------
Total 11,090,026 467 1,433 1,559
====================================================================================================================================
Lawrence H. Brown
For 10,977,529 466 1,254 1,558
Withhold 112,497 1 179 1
- ------------------------------------------------------------------------------------------------------------------------------------
Total 11,090,026 467 1,433 1,559
====================================================================================================================================
Anthony T. Dean
For 10,978,729 466 1,254 1,558
Withhold 111,297 1 179 1
- ------------------------------------------------------------------------------------------------------------------------------------
Total 11,090,026 467 1,433 1,559
====================================================================================================================================
Anne E. Impellizzeri
For 10,971,722 466 1,254 1,558
Withhold 118,304 1 179 1
- ------------------------------------------------------------------------------------------------------------------------------------
Total 11,090,026 467 1,433 1,559
====================================================================================================================================
Peter R. Sawers
For 10,977,729 466 1,254 1,558
Withhold 112,297 1 179 1
- ------------------------------------------------------------------------------------------------------------------------------------
Total 11,090,026 467 1,433 1,559
====================================================================================================================================
William J. Schneider
For -- 466 1,254 1,558
Withhold -- 1 179 1
- ------------------------------------------------------------------------------------------------------------------------------------
Total -- 467 1,433 1,559
====================================================================================================================================
Timothy R. Schwertfeger
For -- 466 1,254 1,558
Withhold -- 1 179 1
- ------------------------------------------------------------------------------------------------------------------------------------
Total -- 467 1,433 1,559
====================================================================================================================================
Judith M. Stockdale
For 10,974,947 466 1,254 1,558
Withhold 115,079 1 179 1
- ------------------------------------------------------------------------------------------------------------------------------------
Total 11,090,026 467 1,433 1,559
====================================================================================================================================
Ratification of auditors was reached as follows:
For 10,967,098 460 1,376 1,534
Against 29,237 -- -- --
Abstain 93,691 7 57 25
- ------------------------------------------------------------------------------------------------------------------------------------
Total 11,090,026 467 1,433 1,559
====================================================================================================================================
</TABLE>
<PAGE>
<TABLE>
Shareholder Meeting Report
<CAPTION>
NQP
- ------------------------------------------------------------------------------------------------------------------------------------
Approval of the Trustees was reached as follows:
Preferred Preferred
Common Shares Shares
Shares Series-W Series-TH
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Robert P. Bremner
For 14,105,671 2,374 1,957
Withhold 152,407 17 4
- ------------------------------------------------------------------------------------------------------------------------------------
Total 14,258,078 2,391 1,961
====================================================================================================================================
Lawrence H. Brown
For 14,102,067 2,375 1,957
Withhold 156,011 16 4
- ------------------------------------------------------------------------------------------------------------------------------------
Total 14,258,078 2,391 1,961
====================================================================================================================================
Anthony T. Dean
For 14,104,901 2,375 1,957
Withhold 153,177 16 4
- ------------------------------------------------------------------------------------------------------------------------------------
Total 14,258,078 2,391 1,961
====================================================================================================================================
Anne E. Impellizzeri
For 14,092,099 2,375 1,957
Withhold 165,979 16 4
- ------------------------------------------------------------------------------------------------------------------------------------
Total 14,258,078 2,391 1,961
====================================================================================================================================
Peter R. Sawers
For 14,098,296 2,375 1,957
Withhold 159,782 16 4
- ------------------------------------------------------------------------------------------------------------------------------------
Total 14,258,078 2,391 1,961
====================================================================================================================================
William J. Schneider
For -- 2,375 1,957
Withhold -- 16 4
- ------------------------------------------------------------------------------------------------------------------------------------
Total -- 2,391 1,961
====================================================================================================================================
Timothy R. Schwertfeger
For -- 2,375 1,957
Withhold -- 16 4
- ------------------------------------------------------------------------------------------------------------------------------------
Total -- 2,391 1,961
====================================================================================================================================
Judith M. Stockdale
For 14,098,982 2,374 1,957
Withhold 159,096 17 4
- ------------------------------------------------------------------------------------------------------------------------------------
Total 14,258,078 2,391 1,961
====================================================================================================================================
Ratification of auditors was reached as follows:
For 14,121,253 2,376 1,957
Against 53,609 -- --
Abstain 83,216 15 4
- ------------------------------------------------------------------------------------------------------------------------------------
Total 14,258,078 2,391 1,961
====================================================================================================================================
</TABLE>
<PAGE>
<TABLE>
Shareholder Meeting Report
<CAPTION>
NPY
- ------------------------------------------------------------------------------------------------------------------------------------
Approval of the Trustees was reached as follows:
Preferred Preferred Preferred
Common Shares Shares Shares
Shares Series-M Series-TH Series-F
====================================================================================================================================
<S> <C> <C> <C> <C>
Robert P. Bremner
For 14,263,609 756 1,887 1,630
Withhold 158,040 12 17 12
- ------------------------------------------------------------------------------------------------------------------------------------
Total 14,421,649 768 1,904 1,642
====================================================================================================================================
Lawrence H. Brown
For 14,264,237 756 1,887 1,631
Withhold 157,412 12 17 11
- ------------------------------------------------------------------------------------------------------------------------------------
Total 14,421,649 768 1,904 1,642
====================================================================================================================================
Anthony T. Dean
For 14,265,472 756 1,887 1,631
Withhold 156,177 12 17 11
- ------------------------------------------------------------------------------------------------------------------------------------
Total 14,421,649 768 1,904 1,642
====================================================================================================================================
Anne E. Impellizzeri
For 14,253,619 756 1,887 1,631
Withhold 168,030 12 17 11
- ------------------------------------------------------------------------------------------------------------------------------------
Total 14,421,649 768 1,904 1,642
====================================================================================================================================
Peter R. Sawers
For 14,256,178 756 1,887 1,631
Withhold 165,471 12 17 11
- ------------------------------------------------------------------------------------------------------------------------------------
Total 14,421,649 768 1,904 1,642
====================================================================================================================================
William J. Schneider
For -- 756 1,887 1,631
Withhold -- 12 17 11
- ------------------------------------------------------------------------------------------------------------------------------------
Total -- 768 1,904 1,642
====================================================================================================================================
Timothy R. Schwertfeger
For -- 756 1,887 1,631
Withhold -- 12 17 11
- ------------------------------------------------------------------------------------------------------------------------------------
Total -- 768 1,904 1,642
====================================================================================================================================
Judith M. Stockdale
For 14,262,216 756 1,887 1,630
Withhold 159,433 12 17 12
- ------------------------------------------------------------------------------------------------------------------------------------
Total 14,421,649 768 1,904 1,642
====================================================================================================================================
Ratification of auditors was reached as follows:
For 14,296,336 753 1,888 1,631
Against 30,944 1 1 --
Abstain 94,369 14 15 11
- ------------------------------------------------------------------------------------------------------------------------------------
Total 14,421,649 768 1,904 1,642
====================================================================================================================================
</TABLE>
<PAGE>
<TABLE>
Portfolio of Investments
Nuveen New Jersey Investment Quality Municipal Fund, Inc. (NQJ)
December 31, 1998
(Unaudited)
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Basic Materials - 1.5%
$ 6,250,000 The Pollution Control Financing Authority of Salem County (New Jersey), 11/01 at 102 AA- $6,724,688
Waste Disposal Revenue Bonds (E.I. du Pont de Nemours and Company -
Chambers Works Project), 1991 Series A, 6.500%, 11/15/21
(Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Capital Goods - 0.2%
1,000,000 New Jersey Economic Development Authority, Economic Development No Opt. Call N/R 950,000
Bonds, Bridgewater ResourcesInc., Series 1991, 9.500%, 2/01/01
(Alternative Minimum Tax)+
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Staples - 1.2%
5,000,000 New Jersey Economic Development Authority, Economic Development 12/01 at 100 N/R 5,154,250
Revenue Bonds (J &J Snack Foods Corporation of New Jersey
Project), Series 1991, 7.250%, 12/01/05 (Alternative MinimumTax)
- ------------------------------------------------------------------------------------------------------------------------------------
Education and Civic Organizations - 4.9%
3,000,000 New Jersey Economic Development Authority, School Revenue Bonds 2/08 at 101 N/R 3,017,910
(Gill/St. Bernard School), Series 1998, 6.000%, 2/01/25 (DD)
New Jersey Educational Facilities Authority, Seton Hall
University Project Revenue Bonds, 1991 Series, Project D:
500,000 6.875%, 7/01/10 7/01 at 102 A- 536,670
2,500,000 7.000%, 7/01/21 7/01 at 102 A- 2,681,425
New Jersey Educational Facilities Authority, Revenue Bonds,
Saint Peters College Issue, 1998, Series B:
1,000,000 5.375%, 7/01/18 7/08 at 102 BBB 1,014,570
1,750,000 5.500%, 7/01/27 7/08 at 102 BBB 1,784,685
1,250,000 New Jersey Educational Facilities Authority, Seton Hall University 7/08 at 101 AAA 1,252,538
Project Revenue Refunding Bonds, 1998 Series, Project F,
5.000%, 7/01/21
265,000 New Jersey Educational Assistance Authority, Senior Student 7/01 at 102 A 280,688
Loan Revenue Bonds, 1991 Series A, 7.200%, 7/01/09
(Alternative Minimum Tax)
5,735,000 New Jersey Educational Assistance Authority, Student Loan Revenue 6/07 at 102 AAA 6,181,011
Bonds, NJ Class Loan Program, Series 1997 A, 5.800%, 6/01/16
(Alternative Minimum Tax)
Rutgers, The State University (The State University of New
Jersey), General Obligation Refunding Bonds, 1992 Series A:
2,900,000 6.500%, 5/01/13 5/02 at 102 AA 3,175,645
1,725,000 6.500%, 5/01/18 5/02 at 102 AA 1,879,094
- ------------------------------------------------------------------------------------------------------------------------------------
Energy - 2.0%
8,000,000 Pollution Control Financing Authority of Middlesex County 12/02 at 102 N/R 8,686,400
(New Jersey), Pollution Control Revenue Refunding Bonds,
Series 1992 (Amerada Hess Corporation Project), 6.875%, 12/01/22
- ------------------------------------------------------------------------------------------------------------------------------------
Health Care - 10.8%
250,000 Camden County Improvement Authority (New Jersey), Health System 5/08 at 102 AAA 263,698
Revenue Bonds, Catholic Health East Issue, Series 1998B,
5.000%, 11/15/08
300,000 New Jersey Health Care Facilities Financing Authority, Revenue Bonds, 7/00 at 102 AAA 319,563
Community Medical Center/Kensington Manor Care Center Issue,
Series E, 7.000%, 7/01/20
New Jersey Health Care Facilities Financing Authority, Refunding
Revenue Bonds, Barnert Hospital (FHA Insured Mortgage), Series
B:
540,000 6.750%, 8/01/11 2/01 at 102 AAA 580,689
2,845,000 6.800%, 8/01/19 2/01 at 102 AAA 3,039,883
9,300,000 New Jersey Health Care Facilities Financing Authority, Revenue 7/01 at 102 AAA 9,968,019
Bonds, Centrastate Medical Center Issue, Series 1991A,
6.625%, 7/01/11
3,000,000 New Jersey Health Care Facilities Financing Authority, Revenue 7/99 at 100 AAA 3,042,120
Bonds, Beth Israel Hospital Association of Passaic Issue, Series B,
6.250%, 7/01/14
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Health Care (continued)
$ 2,070,000 New Jersey Health Care Facilities Financing Authority, Revenue Bonds, 7/01 at 102 AAA $2,236,325
Robert Wood Johnson University Hospital, Series B, 6.625%, 7/01/16
4,350,000 New Jersey Health Care Facilities Financing Authority, Revenue Bonds, 7/01 at 102 AAA 4,691,606
Mercer Medical Center Issue, Series 1991, 6.500%, 7/01/10
5,025,000 New Jersey Health Care Facilities Financing Authority, Revenue Bonds, 7/01 at 102 N/R 5,315,897
Pascack Valley Hospital Association Issue, Series 1991,
6.700%, 7/01/11
3,800,000 New Jersey Health Care Facilities Financing Authority, Revenue Bonds, 7/02 at 102 N/R 4,063,606
Palisades Medical Center Obligated Group Issue, Series 1992,
7.500%, 7/01/06
New Jersey Health Care Facilities Financing Authority, Refunding
Revenue Bonds, Atlantic City Medical Center Issue, Series C:
3,600,000 6.800%, 7/01/05 7/02 at 102 A- 3,975,156
2,800,000 6.800%, 7/01/11 7/02 at 102 A- 3,081,652
2,535,000 New Jersey Health Care Facilities Financing Authority, Revenue Bonds, 7/03 at 102 Baa2 2,648,467
Deborah Heart and Lung Center Issue, Series of 1993, 6.200%, 7/01/13
4,320,000 New Jersey Health Care Facilities Financing Authority, Revenue and 7/08 at 101 Aaa 4,298,832
Refunding Bonds (Saint Barnabas Medical Center/West Hudson
Hospital Obligated Group), Series 1998A, 5.000%, 7/01/23
- ------------------------------------------------------------------------------------------------------------------------------------
Housing/Multifamily - 11.2%
3,790,000 The Hudson County Improvement Authority Multifamily Housing 6/04 at 100 AAA 4,085,014
Revenue Bonds, Series 1992 A , (Conduit Financing - Observer Park
Project), 6.900%, 6/01/22 (Alternative Minimum Tax)
1,445,000 Housing Finance Corporation of the City of Long Branch, Long Branch, 10/99 at 100 N/R 1,452,731
New Jersey, Section 8 Assisted Housing Revenue Bonds, Washington
Manor Associates Ltd., 1980 Elderly Project, 10.000%, 10/01/11
12,000,000 New Jersey Housing and Mortgage Finance Agency, Multifamily 11/01 at 102 AAA 13,091,040
Housing Revenue Refunding Bonds (Presidential Plaza at Newport
Project - FHA Insured Mortgage), 1991 Series 1, 7.000%, 5/01/30
1,500,000 New Jersey Housing and Mortgage Finance Agency, Multifamily 5/05 at 102 AAA 1,608,330
Housing Revenue Bonds, 1995 Series A, 6.000%, 11/01/14
4,500,000 New Jersey Housing and Mortgage Finance Agency, Multifamily 5/06 at 102 AAA 4,855,005
Housing Revenue Bonds, 1996 Series A, 6.250%, 5/01/28
(Alternative Minimum Tax)
New Jersey Housing and Mortgage Finance Agency, Section 8 Bonds,
1991 Series A:
3,000,000 6.800%, 11/01/05 11/02 at 102 AA+ 3,204,420
2,500,000 6.900%, 11/01/07 11/01 at 103 AA+ 2,672,775
4,700,000 6.950%, 11/01/08 11/01 at 103 AA+ 5,024,488
1,000,000 7.100%, 11/01/11 11/01 at 103 AA+ 1,068,840
9,650,000 New Jersey Housing and Mortgage Finance Agency, Housing 5/02 at 102 A+ 10,387,067
Revenue Bonds, 1992 Series A, 6.950%, 11/01/13
1,810,000 New Jersey Housing and Mortgage Finance Agency, Housing Revenue 11/02 at 102 A+ 1,948,556
Refunding Bonds, 1992 Series One, 6.700%, 11/01/28
- ------------------------------------------------------------------------------------------------------------------------------------
Housing/Single Family - 9.4%
5,500,000 New Jersey Housing and Mortgage Finance Agency, Home Buyer 10/00 at 102 AAA 5,709,330
Revenue Bonds, 1990 Series F-2, 6.300%, 4/01/25 (Alternative
Minimum Tax)
3,255,000 New Jersey Housing and Mortgage Finance Agency, Home Buyer 10/99 at 102 AAA 3,365,930
Revenue Bonds, 1989 Series D, 7.600%, 10/01/09 (Alternative
Minimum Tax)
2,605,000 New Jersey Housing and Mortgage Finance Agency, Home Buyer 10/05 at 101 1/2 AAA 2,807,252
Revenue Bonds, 1995 Series O, 6.350%, 10/01/27 (Alternative
Minimum Tax)
5,000,000 New Jersey Housing and Mortgage Finance Agency, Home Buyer 4/07 at 101 1/2 AAA 5,344,700
Revenue Bonds, 1996 Series S, 6.050%, 10/01/28 (Alternative
Minimum Tax)
10,000,000 New Jersey Housing and Mortgage Finance Agency Home Buyer 10/07 at 101 1/2 AAA 10,554,500
Revenue Bonds, 1997 Series U, 5.850%, 4/01/29 (Alternative
Minimum Tax)
13,000,000 Puerto Rico Housing Finance Corporation, Homeownership Mortgage 12/08 at 101 AAA 13,069,420
Revenue Bonds (GNMA Guaranteed Mortgage Loans), 1998 Series A,
5.200%, 12/01/32 (Alternative Minimum Tax) (DD)
710,000 Puerto Rico Housing Finance Corporation, Single Family Mortgage 10/01 at 102 AAA 750,903
Revenue Bonds, Portfolio One, Series C, 6.750%, 10/15/13
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Industrial/Other - 0.4%
$ 1,750,000 New Jersey Economic Development Authority, Insured Revenue 5/08 at 101 AAA $1,687,438
Refunding Bonds (Educational Testing Service Issue), Series 1998A,
4.750%, 5/15/25
- ------------------------------------------------------------------------------------------------------------------------------------
Tax Obligation/General - 9.9%
1,265,000 Township of East Brunswick, In the County of Middlesex, New Jersey, 4/03 at 101 Aa2 1,301,394
General Obligation Refunding Bonds, Series 1993, 5.125%, 4/01/13
County of Essex, New Jersey, General Obligation Refunding Bonds
of 1996, Tax-Exempt Bonds, Series A-1:
3,000,000 6.000%, 11/15/07 No Opt. Call Aaa 3,412,080
1,000,000 5.000%, 11/15/11 8/07 at 101 Aaa 1,043,990
2,320,000 City of Hoboken, Fiscal Year Adjustment General Obligation Bonds, No Opt. Call AAA 3,036,555
Series 1991, 8.900%, 8/01/06
5,250,000 Township of Howell, In the County of Monmouth, New Jersey, 1/02 at 102 AAA 5,760,405
General Obligation Refunding Bonds, Series 1991, 6.800%, 1/01/14
3,675,000 The City of New Jersey (Hudson County, New Jersey), Fiscal Year No Opt. Call AAA 4,649,169
Adjustment Bonds, Series B 1991, 8.400%, 5/15/06
1,000,000 The Monmouth County Improvement Authority (Monmouth County, 7/07 at 101 AAA 1,090,270
New Jersey), Revenue Bonds, Series 1997 (Howell Township Board
of Education Project), 5.800%, 7/15/17
2,000,000 Town of Morristown, In the County of Morris, New Jersey, 8/05 at 102 AAA 2,282,320
General Obligation Refunding Bonds, Series 1995, 6.500%, 8/01/19
5,000,000 State of New Jersey, General Obligation Bonds, Various Series, 8/02 at 101 1/2 AA+ 5,474,500
6.375%, 8/01/11
State of New Jersey, General Obligation Bonds, Series D:
8,000,000 5.750%, 2/15/06 No Opt. Call AA+ 8,861,360
5,000,000 6.000%, 2/15/11 No Opt. Call AA+ 5,772,650
1,000,000 Township of West Deptford, County of Gloucester, New Jersey, 3/06 at 102 AAA 1,046,810
General Obligation Bonds, Series of 1996, 5.250%, 3/01/14
- ------------------------------------------------------------------------------------------------------------------------------------
Tax Obligation/Limited - 7.1%
The Bergen County Utilities Authority, 1998 Water Pollution
Control System Revenue Bonds, Series A:
2,760,000 5.000%, 12/15/13 12/07 at 101 AAA 2,835,127
3,400,000 5.000%, 12/15/14 12/07 at 101 AAA 3,470,788
1,000,000 The Board of Education of the Town of Dover, in the County of Morris, 12/01 at 100 AAA 1,070,270
New Jersey, as Lessee, Certificates of Participation, 6.600%, 6/01/11
2,535,000 The Board of Education of the Township of Mansfield, in the County of 3/06 at 102 AAA 2,759,778
Warren, New Jersey, Certificates of Participation, 5.900%, 3/01/15
The State of New Jersey, as Lessee, and The Mercer County
Improvement Authority, as Lessor, Relating to the Richard J. Hughes
Justice Complex:
3,000,000 6.050%, 1/01/09 7/99 at 100 Aa 3,006,690
1,585,000 6.050%, 1/01/13 7/99 at 100 Aa 1,588,630
1,000,000 6.050%, 1/01/14 7/99 at 100 Aa 1,002,250
1,720,000 6.050%, 1/01/16 7/99 at 100 Aa 1,723,784
2,000,000 6.050%, 1/01/17 7/99 at 100 Aa 2,004,320
4,000,000 New Jersey Economic Development Authority, Lease Revenue Bonds, 11/08 at 101 Aaa 3,835,760
Series 1998 (Bergen County Administration Complex),
4.750%, 11/15/26
2,445,000 New Jersey Sports and Exposition Authority, State Contract Bonds, 3/02 at 102 AA- 2,673,608
1992 Series A, 6.500%, 3/01/19
1,895,000 North Bergen Township Municipal Utility Authority, Sewer Revenue No Opt. Call AAA 2,491,262
Refunding Bonds, Series 1993, 7.875%, 12/15/09
1,180,000 The Raritan Township Municipal Utilities Authority, Hunterdon County, 5/02 at 102 A+ 1,281,669
New Jersey (Secured by a Service Contract with the Township of
Raritan), Revenue Bonds, Series 1992 (Bank Qualified),
6.450%, 5/01/12
1,325,000 The South Toms River Sewerage Authority, Ocean County, 11/02 at 102 N/R 1,414,530
New Jersey, Sewer Refunding Revenue Bonds, Series 1992
(Bank-Qualified), 7.400%, 11/01/05
- ------------------------------------------------------------------------------------------------------------------------------------
Transportation - 10.8%
3,000,000 New Jersey Economic Development Authority, Economic Development 11/01 at 102 Baa2 3,252,090
Bonds (American Airlines, Inc. Project), 7.100%, 11/01/31
(Alternative Minimum Tax)
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Transportation (continued)
$ 3,500,000 New Jersey Highway Authority (Garden State Parkway), Senior Parkway 1/02 at 102 AA- $3,769,780
Revenue Refunding Bonds, 1992 Series, 6.250%, 1/01/14
5,000,000 New Jersey Turnpike Authority, Turnpike Revenue Bonds, 1/99 at 100 BBB+ 5,007,900
Series 1991 A (Refunding Bonds), 6.900%, 1/01/14
New Jersey Turnpike Authority, Turnpike Revenue Bonds, Series 1991C:
9,000,000 6.500%, 1/01/08 No Opt. Call AAA 10,541,790
1,950,000 6.500%, 1/01/16 No Opt. Call BBB+ 2,300,903
3,150,000 The Port Authority of New York and New Jersey, Consolidated Bonds, 7/04 at 101 AA- 3,407,765
Ninety-Fifth Series, 6.125%, 7/15/29 (Alternative Minimum Tax)
4,300,000 The Port Authority of New York and New Jersey, Special Project Bonds, 6/02 at 102 BBB- 4,624,349
Series 1R Delta Air Lines, Inc. Project, LaGuardia Airport Passenger
Terminal, 6.950%, 6/01/08
4,500,000 The Port Authority of New York and New Jersey, Consolidated Bonds, 1/03 at 101 AA- 4,776,570
Eighty-Fourth Series, 6.000%, 1/15/28 (Alternative Minimum Tax)
5,000,000 The Port Authority of New York and New Jersey, Consolidated Bonds, 10/02 at 101 AAA 5,361,800
One Hundred Second Series (Revenue Bonds), Non-AMT Bonds,
5.875%, 10/15/27
4,350,000 The Port Authority of New York and New Jersey, Special Project 12/07 at 100 AAA 4,596,602
Bonds, Series 6, JFK International Air Terminal LLC Project,
5.750%, 12/01/25 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Guaranteed - 18.5%
1,500,000 The Board of Education of the Township of Bedminster, Certificates 3/01 at 102 A1*** 1,637,295
of Participation, In the County of Somerset, New Jersey,
7.125%, 9/01/10 (Pre-refunded to 3/01/01)
7,000,000 The Bergen County Utilities Authority, 1992 Water Pollution 6/02 at 102 AAA 7,757,610
Control System Revenue Bonds, Series A, 6.500%, 12/15/12
(Pre-refunded to 6/15/02)
7,800,000 County of Essex, New Jersey, Fiscal Year Adjustment Bonds, 12/01 at 101 AAA 8,496,618
Series 1991, 6.500%, 12/01/11 (Pre-refunded to 12/01/01)
4,095,000 The Board of Education of the Township of Evesham, in the County 9/01 at 102 AAA 4,510,069
of Burlington, New Jersey, Certificates of Participation,
6.875%, 9/01/11 (Pre-refunded to 9/01/01)
8,200,000 The City of Jersey City (Hudson County, New Jersey), Fiscal Year 5/01 at 102 AAA 8,910,694
Adjustment Bonds, Series A 1991, 6.600%, 5/15/11
(Pre-refunded to 5/15/01)
950,000 The Mercer County Improvement Authority, Mercer County, 11/00 at 102 Aa2*** 1,022,314
New Jersey, Revenue Bonds (County Courthouse Project), Series 1991,
6.600%, 11/01/14 (Pre-refunded to 11/01/00)
3,500,000 The Monmouth County Improvement Authority (Monmouth County, 2/01 at 102 AAA 3,791,165
New Jersey), Sewage Facilities Revenue Refunding Bonds,
Series 1991, 6.750%, 2/01/13 (Pre-refunded to 2/01/01)
5,600,000 New Jersey Economic Development Authority, Lease Rental Bonds, 3/02 at 102 AAA 6,225,520
1992 Series (Liberty State Park Project), 6.800%, 3/15/22
(Pre-refunded to 3/15/02)
New Jersey Health Care Facilities Financing Authority, Refunding
Revenue Bonds, Barnert Hospital (FHA Insured Mortgage), Series B:
90,000 6.750%, 8/01/11 (Pre-refunded to 2/01/01) 2/01 at 100 AAA 97,449
355,000 6.800%, 8/01/19 (Pre-refunded to 2/01/01) 2/01 at 102 AAA 384,738
4,875,000 New Jersey Health Care Facilities Financing Authority, Revenue Bonds, 7/01 at 102 AAA 5,343,244
St. Peters Medical Center Issue, Series E, 6.875%, 7/01/11
(Pre-refunded to 7/01/01)
7,500,000 New Jersey Health Care Facilities Financing Authority, Revenue 7/01 at 102 AAA 8,171,475
Bonds, JFK Health Systems Obligated Group Issue, Series 1991,
6.600%, 7/01/08 (Pre-refunded to 7/01/01)
New Jersey Economic Development Authority, Revenue Bonds
(New Jersey Performing Arts Center Site Acquisition Project),
1991 Series:
610,000 6.600%, 6/15/04 (Pre-refunded to 6/15/01) 6/01 at 102 Aaa 664,211
3,800,000 6.750%, 6/15/12 (Pre-refunded to 6/15/01) 6/01 at 102 Aaa 4,151,006
State of New Jersey, General Obligation Bonds (Various Bonds):
8,200,000 6.750%, 9/15/07 (Pre-refunded to 9/15/01) 9/01 at 101 1/2 AA+*** 8,972,440
850,000 6.800%, 9/15/10 (Pre-refunded to 9/15/01) 9/01 at 101 1/2 AA+*** 931,158
1,200,000 County of Passaic, New Jersey, General Improvement Bonds, 9/99 at 102 N/R*** 1,251,636
6.700%, 9/01/10 (Pre-refunded to 9/01/99)
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Guaranteed (continued)
$ 6,000,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series P, 7/01 at 102 Aaa $6,612,360
7.000%, 7/01/11 (Pre-refunded to 7/01/01)
2,450,000 University of Medicine and Dentistry of New Jersey Bonds, Series E, 12/01 at 102 AA-*** 2,689,488
6.500%, 12/01/18 (Pre-refunded to 12/01/01)
- ------------------------------------------------------------------------------------------------------------------------------------
Utilities - 4.3%
3,700,000 Pollution Control Financing Authority of Camden County (Camden 12/01 at 102 B2 3,689,566
County, New Jersey), Solid Waste Disposal and Resource Recovery
System Revenue Bonds, Series 1991B, 7.500%, 12/01/09
(Alternative Minimum Tax)
3,500,000 Pollution Control Financing Authority of Camden County (Camden 12/01 at 102 B2 3,490,410
County, New Jersey), Solid Waste Disposal and Resource Recovery
System Revenue Bonds, Series 1991A, 7.500%, 12/01/10
(Alternative Minimum Tax)
400,000 New Jersey Economic Development Authority, Adjustable - Fixed 7/01 at 103 Baa1 434,672
Rate Pollution Control Revenue Bonds, 1985 Series (Jersey Central
Power and Light Company Project), 7.100%, 7/01/15
6,000,000 Puerto Rico Electric Power Authority, Power Revenue Refunding Bonds, No Opt. Call AAA 7,235,820
Series Y, 7.000%, 7/01/07
4,000,000 The Union County Utilities Authority (New Jersey), Solid Waste 6/08 at 101 AAA 3,941,600
Facility Senior Lease Revenue Bonds (Ogden Martin Systems of
Union, Inc. Lessee- Series 1998 A), 5.000%, 6/01/23
(Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Water and Sewer - 7.8%
Cape May County (New Jersey), Municipal Utilities Authority,
Sewer Revenue Refunding Bonds, Series 1992-A:
2,000,000 6.000%, 1/01/11 1/03 at 102 AAA 2,174,819
7,600,000 5.750%, 1/01/16 1/03 at 102 AAA 8,055,619
5,000,000 New Jersey Economic Development Authority, Water Facilities Revenue No Opt. Call N/R 5,146,299
Bonds (New Jersey-American Water Company, Inc. Project),
Series 1991 7.400%, 11/01/01 (Alternative Minimum Tax)
7,500,000 New Jersey Economic Development Authority, Water Facilities Revenue 5/06 at 102 AAA 8,168,399
Bonds (New Jersey-American Water Company, Inc. Project),
Series 1996, 6.000%, 5/01/36 (Alternative Minimum Tax)
6,250,000 New Jersey Economic Development Authority, Water Facilities 7/08 at 102 AAA 6,284,874
Revenue Bonds (New Jersey-American Water Company, Inc. Project),
Series 1998A, 5.250%, 7/01/38 (Alternative Minimum Tax)
4,000,000 Passaic Valley Sewerage Commissioners (State of New Jersey), 12/02 at 102 AAA 4,328,039
Sewer System Bonds, Series D, 5.800%, 12/01/18
- ------------------------------------------------------------------------------------------------------------------------------------
$ 409,955,000 Total Investments - (cost $409,486,401) - 100.0% 440,632,951
=============
Other Assets Less Liabilities - 0.0% (12,531)
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $440,620,420
====================================================================================================================
* 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.
*** 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.
(DD) Security purchased on a delayed delivery basis (note 1).
+ The Fund has not received the last two semi-annual interest coupon
payments on these bonds. The issuer is in the process of attempting to
re-structure the debt by bringing to market new obligations whose proceeds will
be used to call the current defaulted bonds at 102% of par, plus accrued
interest.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Portfolio of Investments
Nuveen New Jersey Premium Income Municipal Fund, Inc. (NNJ)
December 31, 1998
(Unaudited)
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Capital Goods - 1.7%
$ 4,880,000 New Jersey Economic Development Authority, Economic Development No Opt. Call N/R $4,636,000
Bonds (Bridgewater Resources Inc. Project), 1994 Series A,
8.375%, 11/01/04 (Alternative Minimum Tax)+
- ------------------------------------------------------------------------------------------------------------------------------------
Education and Civic Organizations - 11.3%
3,530,000 New Jersey Economic Development Authority, Economic Development No Opt. Call N/R 4,448,082
Bonds (Yeshiva Ktana of Passaic-1992 Project), 8.000%, 9/15/18
3,000,000 New Jersey Economic Development Authority, School Revenue Bonds 2/08 at 101 N/R 3,017,910
(Gill/St. Bernard School), Series 1998, 6.000%, 2/01/25 (DD)
890,000 New Jersey Educational Facilities Authority, Trenton State College 7/99 at 100 A+ 892,350
Issue, Revenue Bonds, Series 1976 D, 6.750%, 7/01/08
2,095,000 New Jersey Educational Facilities Authority, Refunding Revenue Bonds, 7/02 at 102 AAA 2,280,722
Trenton State College Issue, Series 1992E, 6.000%, 7/01/09
1,000,000 New Jersey Educational Facilities Authority, Revenue Bonds, New 7/04 at 102 AAA 1,102,200
Jersey Institute of Technology Issue, Series 1994A, 6.000%, 7/01/24
New Jersey Educational Facilities Authority, Revenue Bonds,
Trenton State College Issue, Series 1996 A:
4,000,000 5.100%, 7/01/21 7/06 at 101 AAA 4,013,440
3,750,000 5.125%, 7/01/24 7/06 at 101 AAA 3,766,800
3,330,000 New Jersey Educational Facilities Authority, Revenue Bonds, 7/06 at 101 AAA 3,550,746
Montclair State University, Series 1996 C (Dormitory/Cafeteria
Facility), 5.400%, 7/01/12
2,500,000 New Jersey Educational Facilities Authority, Revenue Bonds, Rowan 7/06 at 101 AAA 2,741,000
College of New Jersey Issue, Series 1996 E, 6.000%, 7/01/21
745,000 New Jersey Educational Facilities Authority, Student Loan Revenue 7/02 at 102 A+ 797,433
Bonds, 1992 Series A, NJ Class Loan Program, 6.125%, 7/01/09
(Alternative Minimum Tax)
4,595,000 New Jersey Educational Facilities Authority, Student Loan Revenue 7/03 at 102 A+ 4,756,974
Bonds, 1993 Series A, NJ Class Loan Program, 5.300%, 7/01/10
(Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Forest and Paper Products - 0.4%
1,035,000 New Jersey Economic Development Authority, Economic Growth Bonds, 12/03 at 102 Aa3 1,099,305
Composite Issue-1992 Second Series T, 5.300%, 12/01/07
(Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Health Care - 4.4%
45,000 New Jersey Health Care Facilities Financing Authority, Revenue Bonds, 7/03 at 102 AAA 46,332
St. Peters Medical Center Issue, Series 1993F, 5.000%, 7/01/11
860,000 New Jersey Health Care Facilities Financing Authority, Refunding 8/04 at 102 AAA 953,104
Revenue Bonds, Wayne General Hospital Corp. Issue (FHA Insured
Mortgage), Series B, 5.750%, 8/01/11
2,000,000 New Jersey Health Care Facilities Financing Authority, Revenue Bonds, 7/04 at 102 AAA 2,263,520
Monmouth Medical Center Issue, Series C, 6.250%, 7/01/16
New Jersey Health Care Facilities Financing Authority, Revenue
Bonds, Dover General Hospital and Medical Center Issue, Series 1994:
1,015,000 7.000%, 7/01/03 No Opt. Call AAA 1,143,946
800,000 7.000%, 7/01/04 No Opt. Call AAA 917,656
7,000,000 Puerto Rico Industrial, Medical, Educational, and Environmental 12/03 at 103 A2 6,926,360
Pollution Control Facilities Financing Authority, Adjustable Rate
Industrial Revenue Bonds, 1983 Series A (American Home Products
Corporation), 5.100%, 12/01/18
- ------------------------------------------------------------------------------------------------------------------------------------
Housing/Multifamily - 11.4%
885,000 Housing Finance Corporation of the City of Long Branch, Long Branch, 10/99 at 100 N/R 889,735
New Jersey, Section 8 Assisted Housing Revenue Bonds,
Washington Manor Associates Ltd., 1980 Elderly Project,
10.000%, 10/01/11
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Housing/Multifamily (continued)
$ 4,000,000 New Jersey Housing and Mortgage Finance Agency, Multifamily 11/01 at 102 AAA $4,363,680
(Presidential Plaza at Newport Project - FHA Insured Mortgages),
1991 Series 1, 7.000%, 5/01/30
2,875,000 New Jersey Housing and Mortgage Finance Agency, Multifamily 5/05 at 102 AAA 3,082,633
Housing Revenue Bonds, 1995 Series A, 6.000%, 11/01/14
7,000,000 New Jersey Housing and Mortgage Finance Agency, Multifamily 11/07 at 101 1/2 AAA 7,217,980
Housing Revenue Bonds, 1997 Series A, 5.550%, 5/01/27
(Alternative Minimum Tax)
2,250,000 New Jersey Housing Finance Agency, Special Pledge Revenue 11/99 at 100 A+ 2,317,500
Obligations, 1975 Series One, 9.000%, 11/01/18
New Jersey Housing and Mortgage Finance Agency, Housing Revenue
Bonds, 1992 Series A:
2,365,000 6.700%, 5/01/05 5/02 at 102 A+ 2,536,013
8,000,000 6.950%, 11/01/13 5/02 at 102 A+ 8,611,040
2,370,000 New Jersey Housing and Mortgage Finance Agency, Housing 11/02 at 102 A+ 2,551,424
Revenue Refunding Bonds, 1992 Series One, 6.700%, 11/01/28
- ------------------------------------------------------------------------------------------------------------------------------------
Housing/Single Family - 3.3%
1,000,000 New Jersey Housing and Mortgage Finance Agency, Home Buyer 10/05 at 101 1/2 AAA 1,074,820
Revenue Bonds, 1995 Series O, 6.300%, 10/01/23
(Alternative Minimum Tax)
525,000 New Jersey Housing and Mortgage Finance Agency, Home Buyer 4/06 at 101 1/2 AAA 553,560
Revenue Bonds, 1996 Series P, 5.650%, 4/01/14
1,000,000 New Jersey Housing and Mortgage Finance Agency, Home Buyer 4/06 at 101 1/2 AAA 1,058,010
Revenue Bonds, 1996 Series Q, 5.875%, 4/01/17
(Alternative Minimum Tax)
2,500,000 New Jersey Housing and Mortgage Finance Agency, Home Buyer 4/07 at 101 1/2 AAA 2,672,350
Revenue Bonds, 1996 Series S, 6.050%, 10/01/28
(Alternative Minimum Tax)
New Jersey Housing and Mortgage Finance Agency, Home Buyer
Revenue Bonds, 1997 Series U:
1,965,000 5.700%, 10/01/14 (Alternative Minimum Tax) 10/07 at 101 1/2 AAA 2,073,134
1,500,000 5.850%, 4/01/29 (Alternative Minimum Tax) 10/07 at 101 1/2 AAA 1,583,175
- ------------------------------------------------------------------------------------------------------------------------------------
Industrial/Other - 1.2%
895,000 New Jersey Economic Development Authority, Economic Growth Bonds, 10/03 at 102 A+ 939,866
Richard L Tauber Composite Issue, 1993 Series H-2, 5.000%, 10/01/05
(Alternative Minimum Tax)
2,315,000 New Jersey Economic Development Authority, Economic Growth 12/03 at 102 Aa3 2,458,831
Bonds, Composite Issue, 1992 Second Series H, 5.300%, 12/01/07
(Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Long Term Care - 1.3%
3,255,000 New Jersey Economic Development Authority (Morris Hall/
St. Lawrence, Inc. Project), Series 1993A, 6.150%, 4/01/13 4/03 at 102 A+ 3,536,297
- ------------------------------------------------------------------------------------------------------------------------------------
Tax Obligation/General - 9.7%
785,000 County of Morris, New Jersey, General Improvement Bonds of 1993, No Opt. Call AAA 845,869
5.125%, 5/13/11
State of New Jersey, General Obligation Bonds, Series D:
2,760,000 5.750%, 2/15/06 No Opt. Call AA+ 3,057,169
4,000,000 5.800%, 2/15/07 No Opt. Call AA+ 4,478,120
2,500,000 6.000%, 2/15/11 No Opt. Call AA+ 2,886,325
1,560,000 6.000%, 2/15/13 No Opt. Call AA+ 1,797,931
4,000,000 County of Passaic, State of New Jersey, General Obligation Refunding No Opt. Call AAA 4,264,680
Bonds, Series 1993, 5.125%, 9/01/12
5,000,000 Commonwealth of Puerto Rico, Public Improvement Bonds of 1995 7/05 at 101 1/2 AAA 5,363,150
(General Obligation Bonds), 5.750%, 7/01/24
650,000 The Board of Education of the Southern Gloucester County, Regional No Opt. Call AAA 677,898
High School District, Gloucester County, New Jersey, School District
Bonds, Series 1993, 5.000%, 10/01/14
Sparta Township School District, General Obligation Bonds (Unlimited Tax):
1,100,000 5.800%, 9/01/19 9/06 at 100 AAA 1,176,252
1,100,000 5.800%, 9/01/20 9/06 at 100 AAA 1,174,800
1,100,000 5.800%, 9/01/21 9/06 at 100 AAA 1,173,271
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Tax Obligation/Limited - 10.9%
$ 1,275,000 Camden County Improvement Authority (Camden County, New Jersey), 10/05 at 102 AAA $1,365,041
County Guaranteed Lease Bonds, Series of 1995, 5.625%, 10/01/15
1,000,000 Hudson County Improvement Authority (State of New Jersey), Utility 1/08 at 101 1/2 AAA 1,035,760
System Revenue Bonds, Series 1997 (Harrison Franchise Acquisition
Project), 5.350%, 1/01/27
1,000,000 The Jersey City Sewerage Authority (Hudson County, New Jersey), No Opt. Call AAA 1,175,580
Sewer Revenue Refunding Bonds, Series 1993, 6.250%, 1/01/14
The State of New Jersey, as Lessee, and The Mercer County
Improvement Authority, as Lessor, Relating to the Richard J. Hughes
Justice Complex:
750,000 6.050%, 1/01/11 7/99 at 100 Aa 751,718
1,000,000 6.050%, 1/01/12 7/99 at 100 Aa 1,002,290
1,500,000 6.050%, 1/01/16 7/99 at 100 Aa 1,503,300
2,000,000 New Jersey Economic Development Authority, Lease Revenue Bonds, 11/08 at 101 Aaa 1,917,880
Series 1998 (Bergen County Administration Complex), 4.750%, 11/15/26
1,000,000 New Jersey Economic Development Authority, Revenue Bonds (Public 8/03 at 102 AAA 1,060,610
Schools Small Project Loan Program), Series 1993, 5.400%, 8/15/12
1,500,000 New Jersey Economic Development Authority, Market Transition No Opt. Call AAA 1,722,195
Facility Senior Lien Revenue Bonds, Series 1994A, 7.000%, 7/01/04
New Jersey Transportation Trust Fund Authority, Transportation System
Bonds, 1995 Series A:
750,000 5.500%, 6/15/12 6/05 at 102 AAA 805,478
5,000,000 5.000%, 6/15/15 6/05 at 102 AAA 5,072,200
1,100,000 New Jersey Transportation Trust Fund Authority, Transportation System 6/05 at 102 AAA 1,164,724
Bonds, 1995 Series B, 5.500%, 6/15/15
510,000 The Board of Education of the Township of Piscataway in the County 6/03 at 102 AAA 540,335
of Middlesex, New Jersey, Certificates of Participation, 1993 Series,
5.375%, 12/15/10
8,160,000 Puerto Rico Public Buildings Authority, Public Education and Health 7/03 at 101 1/2 A 8,659,555
Facilities Refunding Bonds, Series M, Guaranteed by the
Commonwealth of Puerto Rico, 5.750%, 7/01/15
2,250,000 Western Monmouth Utilities Authority (Monmouth County, 2/05 at 102 AAA 2,413,913
New Jersey), Revenue Refunding Bonds, 1995 Series A,
5.600%, 2/01/14
- ------------------------------------------------------------------------------------------------------------------------------------
Transportation - 23.8%
5,000,000 Delaware River Port Authority (New Jersey), Port District Project 1/08 at 101 AAA 5,005,850
Bonds, Series B of 1998, 5.000%, 1/01/19
4,245,000 Delaware River Port Authority (New Jersey and Pennsylvania), 1/06 at 102 AAA 4,423,884
Revenue Bonds, Series of 1995, 5.500%, 1/01/26
New Jersey Turnpike Authority, Turnpike Revenue Bonds, Series 1991C:
1,000,000 6.500%, 1/01/08 No Opt. Call BBB+ 1,153,480
7,920,000 6.500%, 1/01/16 No Opt. Call BBB+ 9,345,204
4,700,000 6.500%, 1/01/16 No Opt. Call AAA 5,655,087
3,000,000 The Port Authority of New York and New Jersey, Consolidated Bonds, 10/04 at 101 AAA 3,366,570
Ninety-Sixth Series, 6.600%, 10/01/23 (Alternative Minimum Tax)
The Port Authority of New York and New Jersey, Consolidated Bonds,
Ninety-Ninth Series:
1,200,000 5.750%, 11/01/09 (Alternative Minimum Tax) 5/05 at 101 AAA 1,303,476
2,500,000 5.750%, 11/01/14 (Alternative Minimum Tax) 5/05 at 101 AAA 2,678,825
1,500,000 The Port Authority of New York and New Jersey, Consolidated Bonds, 7/06 at 101 AA- 1,641,600
One Hundred and Sixth Series, 6.000%, 7/01/16
(Alternative Minimum Tax)
2,500,000 The Port Authority of New York and New Jersey, One Hundredth 6/05 at 101 AAA 2,667,050
Series, 5.750%, 12/15/20
6,000,000 The Port Authority of New York and New Jersey, Consolidated Bonds, 6/05 at 101 AA- 6,227,280
One Hundred-Twelfth Series, 5.250%, 12/01/13
(Alternative Minimum Tax)
The Port Authority of New York and New Jersey, Special Project
Bonds, Series 6, JFK International Air Terminal LLC Project:
10,000,000 5.750%, 12/01/22 (Alternative Minimum Tax) 12/07 at 102 AAA 10,663,700
11,000,000 5.750%, 12/01/25 (Alternative Minimum Tax) 12/07 at 100 AAA 11,623,590
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Guaranteed - 4.5%
$ 250,000 The Board of Education of the Township of Franklin, in the County of 6/99 at 100 AAA $ 259,058
Somerset, New Jersey, Certificates of Participation, Series 1989,
6.900%, 12/15/00 (Pre-refunded to 6/15/99)
2,000,000 New Jersey Health Care Facilities Financing Authority, Revenue Bonds, 7/99 at 102 A-*** 2,083,180
Newton Memorial Hospital Issue, Series A, 7.500%, 7/01/19
(Pre-refunded to 7/01/99)
State of New Jersey, General Obligation Bonds (Various Bonds):
1,300,000 6.800%, 9/15/10 (Pre-refunded to 9/15/01) 9/01 at 101 1/2 AA+*** 1,424,124
2,385,000 6.800%, 9/15/11 (Pre-refunded to 9/15/01) 9/01 at 101 1/2 AA+*** 2,612,720
2,030,000 New Jersey Turnpike Authority, Turnpike Revenue Bonds, 1984 Series, No Opt. Call AAA 2,310,343
10.375%, 1/01/03
3,500,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series R, 7/02 at 101 1/2 BBB+*** 3,848,180
6.250%, 7/01/17 (Pre-refunded to 7/01/02)
- ------------------------------------------------------------------------------------------------------------------------------------
Utilities - 6.8%
6,600,000 Pollution Control Financing Authority of Camden County (Camden County, No Opt. Call B2 6,539,676
New Jersey), Solid Waste Disposal and Resource Recovery System
Revenue Bonds, Series 1991 C, 7.125%, 12/01/01
(Alternative Minimum Tax)
6,500,000 Pollution Control Financing Authority of Camden County (Camden 12/01 at 102 B2 6,523,855
County, New Jersey), Solid Waste Disposal and Resource Recovery
System Revenue Bonds, Series 1991 D, 7.250%, 12/01/10
1,000,000 The Essex County Utilities Authority (Essex County, New Jersey), Solid 4/06 at 102 AAA 1,069,830
Waste System Revenue Bonds (Secured by a County Deficiency
Agreement with the County of Essex), Solid Waste System Revenue
Bonds, Tax Exempt), 5.600%, 4/01/16
1,000,000 Puerto Rico Electric Power Authority, Power Revenue Refunding Bonds, 7/05 at 100 AAA 1,014,560
Series Z, 5.250%, 7/01/21
3,500,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series X, 7/05 at 100 AAA 3,644,340
5.500%, 7/01/25
- ------------------------------------------------------------------------------------------------------------------------------------
Water and Sewer - 8.5%
5,250,000 Cape May County (New Jersey), Municipal Utilities Authority, Sewer 1/03 at 102 AAA 5,564,738
Revenue Refunding Bonds, Series 1992-A, 5.750%, 1/01/16
1,485,000 New Jersey Economic Development Authority, Water Facilities 8/01 at 102 A 1,592,692
Refunding Bonds (Elizabeth Water Company Project), 1991 Series A,
6.700%, 8/01/21 (Alternative Minimum Tax)
3,100,000 New Jersey Economic Development Authority, Water Facilities 3/04 at 102 AAA 3,293,874
Revenue Refunding Bonds (Hackensack Water Company Project),
1994 Series B, 5.900%, 3/01/24 (Alternative Minimum Tax)
6,250,000 New Jersey Economic Development Authority, Water Facilities 7/08 at 102 AAA 6,284,874
Revenue Bonds (New Jersey-American Water Company, Inc. Project),
Series 1998A, 5.250%, 7/01/38 (Alternative Minimum Tax)
3,000,000 The North Hudson Sewerage Authority (New Jersey), Sewer Revenue 8/06 at 101 AAA 3,013,409
Bonds, Series 1996, 5.125%, 8/01/22
1,040,000 Passaic Valley Sewerage Commissioners (State of New Jersey), 12/02 at 102 AAA 1,124,728
Sewer System Bonds, Series D, 5.750%, 12/01/10
1,000,000 The Stony Brook Regional Sewerage Authority (Princeton, New Jersey), No Opt. Call Aa 1,099,169
Revenue Refunding Bonds, 1993 Series B, 5.450%, 12/01/12
1,500,000 The Wanaque Valley Regional Sewerage Authority (Passaic County, No Opt. Call AAA 1,671,389
New Jersey), Sewer Revenue Refunding Bonds, 1993 Series B
(Insured), 5.750%, 9/01/18
- ------------------------------------------------------------------------------------------------------------------------------------
$ 258,375,000 Total Investments - (cost $257,612,273) - 99.2% 274,690,307
=============
Other Assets Less Liabilities - 0.8% 2,179,087
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $276,869,394
====================================================================================================================
* 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.
*** 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.
(DD) Security purchased on a delayed delivery basis (note 1).
+ The Fund has not received the last two semi-annual interest coupon
payments on these bonds. The issuer is in the process of attempting to
re-structure the debt by bringing to market new obligations whose proceeds will
be used to call the current defaulted bonds at 102% of par, plus accrued
interest.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Portfolio of Investments
Nuveen Pennsylvania Investment Quality Municipal Fund (NQP)
December 31, 1998
(Unaudited)
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Education and Civic Organizations - 13.9%
$ 2,000,000 Allegheny County Higher Education Building Authority (Commonwealth 9/08 at 102 BBB $1,960,220
of Pennsylvania), College Revenue Bonds, Series A of 1998
(Chatham College), 5.250%, 9/01/18
4,500,000 Delaware County Authority (Commonwealth of Pennsylvania), 8/01 at 100 AAA 4,828,050
University Revenue Bonds, Series of 1991 (Villanova University),
6.900%, 8/01/16
3,400,000 Lehigh County General Purpose Authority, College Revenue Bonds, 6/02 at 100 AAA 3,681,996
Series of 1992 (Allentown College of St. Francis de Sales Project),
6.750%, 12/15/12
4,970,000 Pennsylvania Higher Education Assistance Agency, Student Loan No Opt. Call AAA 5,246,481
Adjustable Rate Tender Revenue Refunding Bonds, 1985 Series A,
6.800%, 12/01/00
4,000,000 Pennsylvania Higher Education Assistance Agency, Student Loan 9/01 at 102 AAA 4,294,960
Revenue Bonds, Fixed Rate Bonds, 1991 Series C, 7.150%, 9/01/21
(Alternative Minimum Tax)
3,000,000 Pennsylvania Higher Education Assistance Agency, Student Loan 9/02 at 102 AAA 3,120,030
Revenue Bonds, Fixed Rate Bonds, 1992 Series C, 6.400%, 3/01/22
(Alternative Minimum Tax)
10,580,000 Pennsylvania Higher Educational Facilities Authority, Revenue Bonds 7/99 at 102 AAA 10,923,533
(Thomas Jefferson University - Life Sciences Building Project),
1989 Series A, 6.000%, 7/01/19
3,825,000 The Pennsylvania State University, Refunding Bonds, Series 1992, 3/01 at 102 AA- 4,135,934
6.250%, 3/01/11
2,900,000 Scranton - Lackawanna Health and Welfare Authority, City of 3/02 at 102 A- 3,105,755
Scranton, Lackawanna County, Pennsylvania, University Revenue
Bonds (University of Scranton Project), 1992 Series A, 6.500%, 3/01/13
8,445,000 Swarthmore Borough Authority, Pennsylvania, Swarthmore College 9/08 at 100 Aaa 8,246,374
Revenue Bonds, Series of 1998, 5.000%, 9/15/28
495,000 The General Municipal Authority of the City of Wilkes - Barre, 12/02 at 102 N/R 542,381
College Misericordia Revenue Bonds Refunding, Series B of 1992,
7.750%, 12/01/12
645,000 The General Municipal Authority of the City of Wilkes - Barre, 12/00 at 100 N/R 706,739
College Misericordia Revenue Bonds, Refunding Series A of 1992,
7.750%, 12/01/12
- ------------------------------------------------------------------------------------------------------------------------------------
Health Care - 2.7%
3,520,000 The Hospitals and Higher Education Facilities Authority of 12/01 at 102 AAA 3,867,670
Philadelphia, Hospital Revenue Refunding Bonds, Series of 1991
(Magee Rehabilitation Hospital Project), 7.000%, 12/01/10
5,500,000 Health Care Facilities Authority of Sayre, Variable Rate Hospital 12/01 at 103 AAA 6,045,105
Revenue Bonds (VHA of Pennsylvania, Inc. Capital Asset Financing
Program), Series of 1985E (Guthrie Healthcare System Conversion),
7.200%, 12/01/20
- ------------------------------------------------------------------------------------------------------------------------------------
Housing/Multifamily - 0.3%
995,000 Urban Redevelopment Authority of Pittsburgh, Redevelopment 8/02 at 102 A 1,048,352
Mortgage Revenue Bonds, 1992 Series C, 7.125%, 8/01/13
(Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Housing/Single Family - 13.7%
2,000,000 Allegheny County Residential Finance Authority, Single Family 11/08 at 102 Aaa 2,022,520
Mortgage Revenue Bonds, 1998 Series DD-2, 5.400%, 11/01/29
(Alternative Minimum Tax)
11,855,000 Allegheny County Residential Finance Authority, Single Family No Opt. Call Aaa 1,857,441
Mortgage Revenue Bonds, 1994 Series Y, 0.000%, 5/01/27
(Alternative Minimum Tax)
210,000 Redevelopment Authority of the City of Altoona (Altoona, 12/01 at 102 A3 222,443
Pennsylvania), Home Improvement Loan Revenue Bonds,
Series of 1991 (Cities of Altoona and Meadville Program)
(FHA Title 1 Insured Loans), 7.150%, 12/01/09
(Alternative Minimum Tax)
2,060,000 Redevelopment Authority of the County of Berks (Pennsylvania), No Opt. Call A+ 2,285,323
Senior Single Family Mortgage Bonds, 1986 Series A,
8.000%, 12/01/17 (Alternative Minimum Tax)
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Housing/Single Family (continued)
$ 4,725,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 4/02 at 102 AA+ $5,022,817
Revenue Bonds, Series 1992-33, 6.900%, 4/01/17
1,000,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 4/02 at 102 AA+ 1,046,440
Revenue Bonds, Series 1992-34B, 7.000%, 4/01/24
(Alternative Minimum Tax)
5,000,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 10/99 at 102 AA+ 5,160,200
Revenue Bonds, Series W, 7.625%, 10/01/10
(Alternative Minimum Tax)
2,000,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 10/05 at 102 AA+ 2,130,300
Revenue Bonds, Series 1995-46, 6.200%, 10/01/14
(Alternative Minimum Tax)
1,000,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 4/06 at 102 AA+ 1,057,670
Revenue Bonds, Series 1996-48, 6.150%, 4/01/25
(Alternative Minimum Tax)
5,725,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 4/06 at 102 AA+ 6,166,054
Revenue Bonds, Series 1996-49, 6.450%, 4/01/25
(Alternative Minimum Tax)
4,000,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 4/06 at 102 AA+ 4,282,440
Revenue Bonds, Series 1996-50B, 6.350%, 10/01/27
(Alternative Minimum Tax)
5,000,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 4/06 at 102 AA+ 5,324,450
Revenue Bonds, Series 1996-52B, 6.250%, 10/01/24
(Alternative Minimum Tax)
5,000,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 10/07 at 101 1/2 AA+ 5,178,000
Revenue Bonds, Series 1997-59A, 5.750%, 10/01/23
(Alternative Minimum Tax)
2,000,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 10/08 at 101 AA+ 1,983,800
Revenue Bonds, Series 1998-64A Bonds, 4.500%, 4/01/28
(Alternative Minimum Tax)
1,620,000 Urban Redevelopment Authority of Pittsburgh, Mortgage Revenue 4/06 at 102 AAA 1,743,071
Bonds, 1996 Series C, 6.550%, 4/01/28 (Alternative Minimum Tax)
1,110,000 Urban Redevelopment Authority of Pittsburgh, Mortgage Revenue 10/07 at 102 AAA 1,187,023
Bonds, 1997 Series A, 6.250%, 10/01/28 (Alternative Minimum Tax)
2,865,000 Urban Redevelopment Authority of Pittsburgh, Mortgage Revenue 10/01 at 102 AAA 3,020,655
Bonds, 1991 Series G, 7.050%, 4/01/23 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Industrial/Other - 0.4%
1,250,000 Philadelphia Authority for Industrial Development, Revenue Bonds, 5/02 at 102 A+ 1,359,763
Series of 1992 (National Board of Medical Examiners Project),
6.750%, 5/01/12
- ------------------------------------------------------------------------------------------------------------------------------------
Long Term Care - 1.1%
3,225,000 Montgomery County Higher Education and Health Authority, Mortgage 1/06 at 101 BBB 3,429,465
Revenue Bonds, Series of 1996 (Waverly Heights Project),
6.375%, 1/01/26
630,000 The Hospitals and Higher Education Facilities Authority of Philadelphia, 8/02 at 102 A- 692,672
Hospital Revenue Bonds (Childrens Seashore House), Series 1992A,
7.000%, 8/15/03
- ------------------------------------------------------------------------------------------------------------------------------------
Tax Obligation/General - 4.4%
1,355,000 Bensalem Township School District, Bucks County, Pennsylvania 7/06 at 100 AAA 1,490,080
General Obligation Bonds, Series of 1996, 5.850%, 7/15/12
Redevelopment Authority of the City of Harrisburg, Dauphin
County, Pennsylvania, Guaranteed Revenue Bonds, Series B of
1998:
2,750,000 0.000%, 5/01/24 (DD) 5/16 at 103 AAA 739,338
2,750,000 0.000%, 11/01/24 (DD) 5/16 at 103 AAA 720,060
5,160,000 0.000%, 5/01/25 (DD) 5/16 at 103 AAA 1,315,697
6,000,000 Commonwealth of Pennsylvania, General Obligation Bonds, 3/02 at 101 1/2 AA 6,515,880
First Series of 1992, 6.375%, 9/15/11
5,000,000 State Public School Building Authority (Commonwealth of 3/01 at 100 AAA 5,285,500
First Series of 1992, 6.375%, 9/15/11 (Hazelton Area School District
Project), Series J of 1991, 6.500%, 3/01/08
- ------------------------------------------------------------------------------------------------------------------------------------
Tax Obligation/Limited - 0.3%
1,000,000 York County Solid Waste and Refuse Authority (Commonwealth of No Opt. Call AAA 1,098,850
Pennsylvania), Solid Waste System Refunding Revenue Bonds
(County Guaranteed), Series of 1997, 5.500%, 12/01/12
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Transportation - 3.4%
$ 2,500,000 County of Allegheny, Pennsylvania, Airport Revenue Bonds, 1/02 at 102 AAA $2,715,200
Series 1992A and 1992B (Greater Pittsburgh International Airport),
6.625%, 1/01/22 (Alternative Minimum Tax)
1,650,000 Pennsylvania Turnpike Commission, Pennsylvania Turnpike Revenue 12/01 at 102 Aa3 1,793,220
Bonds, Series N of 1991, 6.500%, 12/01/13
735,000 Pennsylvania Turnpike Commission, Pennsylvania Turnpike Revenue 12/02 at 102 AAA 759,512
Bonds, Series O of 1992, 5.500%, 12/01/17
7,315,000 Philadelphia Authority for Industrial Development, Airport Revenue 7/08 at 101 AAA 7,128,468
Bonds, Series 1998A (Philadelphia Airport System Project),
5.000%, 7/01/23 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Guaranteed - 46.6%
6,300,000 Allegheny County Hospital Development Authority, Hospital 10/01 at 100 BBB+*** 6,858,747
Revenue Bonds, Series 1991 A (St. Margaret Memorial Hospital),
7.125%, 10/01/21 (Pre-refunded to 10/01/01)
Bethlehem Authority, Northampton and Lehigh Counties, Pennsylvania,
Water Revenue Bonds, Series of 1992:
3,045,000 6.250%, 11/15/11 (Pre-refunded to 11/15/01) 11/01 at 100 AAA 3,264,453
4,000,000 6.250%, 11/15/21 (Pre-refunded to 11/15/01) 11/01 at 100 AAA 4,288,280
8,250,000 Blair County Hospital Authority, Hospital First Mortgage Revenue 2/99 at 102 N/R*** 8,447,918
Bonds, Series of 1989 (Mercy Hospital, Sublessee), 8.125%, 2/01/14
(Pre-refunded to 2/01/99)
5,000,000 Butler County Hospital Authority (Butler County, Pennsylvania), 6/01 at 102 AAA 5,481,400
Hospital Revenue Bonds, Series 1991 A (North Hills Passavant
Hospital), 7.000%, 6/01/22 (Pre-refunded to 6/01/01)
3,400,000 Erie County Hospital Authority, Pennsylvania, Hospital Revenue Bonds 2/01 at 102 AAA 3,707,258
(Hamot Medical Center), 1991 Series A, 7.100%, 2/15/10
(Pre-refunded to 2/15/01)
2,875,000 Franklin County Industrial Development Authority, Hospital Revenue 7/99 at 102 AAA 2,983,819
Refunding Bonds (The Chambersburg Hospital), Series of 1991,
6.700%, 7/01/08 (Pre-refunded to 7/01/99)
2,000,000 Hampton Township School District (Allegheny County, Pennsylvania), 11/04 at 100 AAA 2,298,500
General Obligation Bonds, Series of 1995, 6.750%, 11/15/21
(Pre-refunded to 11/15/04)
4,000,000 Lower Pottsgrove Township Authority, Montgomery County, 11/99 at 100 AAA 4,120,080
Pennsylvania, Guaranteed Sewer Revenue Bonds, Series of 1991
(Guaranteed by the Township of Lower Pottsgrove), 6.700%, 11/01/16
(Pre-refunded to 11/01/99)
3,130,000 McKean County Solid Waste Authority (McKean County, 1/02 at 100 AAA 3,398,711
Pennsylvania), Guaranteed Solid Waste Revenue Bonds,
Series of 1992, 6.650%, 1/01/12 (Pre-refunded to 1/01/02)
4,500,000 Pennsylvania Turnpike Commission, Pennsylvania Turnpike Revenue 12/01 at 102 AAA 5,019,930
Bonds, Series I of 1986, 7.200%, 12/01/17 (Pre-refunded to 12/01/01)
1,000,000 Philadelphia Authority for Industrial Development, Convertible 7/99 at 102 AAA 1,039,330
Project Revenue Bonds (PGH Development Corporation),
Series of 1989, 7.000%, 7/01/17 (Pre-refunded to 7/01/99)
4,885,000 Philadelphia Authority for Industrial Development, Convertible 7/99 at 102 AA*** 5,079,276
Project Revenue Bonds (PGH/CHDC Parking Facilities), Series of 1989,
7.125%, 7/01/17 (Pre-refunded to 7/01/99)
4,270,000 City of Philadelphia, Pennsylvania, Gas Works Revenue Bonds, 6/01 at 102 AAA 4,756,823
Thirteenth Series, 7.700%, 6/15/21 (Pre-refunded to 6/15/01)
8,530,000 The Hospitals and Higher Education Facilities Authority of 8/01 at 102 Aa*** 9,450,387
Philadelphia, Refunding Revenue Bonds, Saint Agnes Medical
Center Project (FHA Insured Mortgage), Series 1991,
7.250%, 8/15/31 (Pre-refunded to 8/15/01)
1,850,000 The School District of Philadelphia, Pennsylvania, General 5/02 at 100 3/4 AAA 2,025,584
Obligation Bonds, Series A of 1992, 6.500%, 5/15/05
(Pre-refunded to 5/15/02)
3,250,000 The School District of Philadelphia, Pennsylvania, General Obligation 7/01 at 102 AAA 3,531,093
Bonds, Series B of 1991, 7.000%, 7/01/05 (Pre-refunded to 7/01/01)
10,625,000 City of Philadelphia, Pennsylvania, Water and Sewer Revenue Bonds, 8/01 at 100 AAA 11,512,188
Sixteenth Series, 7.000%, 8/01/18 (Pre-refunded to 8/01/01)
8,800,000 The Hospitals and Higher Education Facilities Authority of Philadelphia, 12/01 at 102 N/R*** 9,812,704
Hospital Revenue Bonds, Series of 1991 (Presbyterian Medical
Center of Philadelphia), 7.250%, 12/01/21 (Pre-refunded to 12/01/01)
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Guaranteed (continued)
$ 6,110,000 The Hospitals and Higher Education Facilities Authority of Philadelphia, 2/02 at 102 Aaa $6,720,633
Hospital Revenue Bonds (The Childrens Hospital of Philadelphia
Project), Series A of 1992, 6.500%, 2/15/21 (Pre-refunded to 2/15/02)
The Philadelphia Municipal Authority, Pennsylvania, Justice Lease
Revenue Bonds, 1991 Series B:
1,500,000 7.100%, 11/15/11 (Pre-refunded to 11/15/01) 11/01 at 102 AAA 1,669,515
9,900,000 7.125%, 11/15/18 (Pre-refunded to 11/15/01) 11/01 at 102 AAA 11,025,234
3,000,000 The Pittsburgh Water and Sewer Authority (Pennsylvania), Water No Opt. Call AAA 3,470,490
and Sewer System Revenue Refunding Bonds, Series of 1986,
7.625%, 9/01/04
7,065,000 The Pittsburgh Water and Sewer Authority (Pennsylvania), Water and 9/01 at 102 AAA 7,712,437
Sewer System Revenue Refunding Bonds, Series A of 1991,
6.500%, 9/01/14 (Pre-refunded to 9/01/01)
2,500,000 Saint Mary Hospital Authority, Hospital Revenue Bonds, 7/02 at 102 AAA 2,769,625
Series 1992A (Franciscan Health System/Saint Mary Hospital Of
Langhorne Inc.), 6.500%, 7/01/12 (Pre-refunded to 7/01/02)
3,730,000 Scranton - Lackawanna Health and Welfare Authority, City of 6/00 at 102 N/R*** 4,009,340
Scranton, Lackawanna County, Pennsylvania, University Revenue
Bonds, Series of 1990 (University of Scranton Project), 1990
Series A, 7.400%, 6/15/10 (Pre-refunded to 6/15/00)
8,475,000 Somerset County General Authority, Commonwealth of 10/01 at 100 AAA 9,235,970
Pennsylvania, Commonwealth Lease Revenue Bonds,
Series of 1991, 7.000%, 10/15/13 (Pre-refunded to 10/15/01)
3,500,000 Upper Merion Area School District, Montgomery County, 9/01 at 100 Aa2*** 3,790,500
Pennsylvania, General Obligation Bonds, Series of 1993,
6.900%, 9/01/16 (Pre-refunded to 9/01/01)
3,000,000 Warrington Township Municipal Authority, Bucks County, 11/15 at 100 AAA 3,622,620
Pennsylvania, Water and Sewer Revenue Bonds, Series of 1991,
7.100%, 12/01/21 (Pre-refunded to 11/15/15)
5,000,000 West Chester Area School District, Chester and Delaware Counties, 1/01 at 100 Aa1*** 5,310,200
Pennsylvania, General Obligation Bonds, Series A of 1991,
6.700%, 1/15/11 (Pre-refunded to 1/15/01)
5,450,000 The Municipal Authority of the Borough of West View (Allegheny No Opt. Call AAA 7,756,713
County, Pennsylvania,) Special Obligation Bonds, Series of 1985A,
9.500%, 11/15/14
5,000,000 County of Westmoreland, Commonwealth of Pennsylvania, 8/01 at 100 AAA 5,378,250
General Obligation Bonds, Series 1992, 6.700%, 8/01/09
(Pre-refunded to 8/01/01)
- ------------------------------------------------------------------------------------------------------------------------------------
Utilities - 11.3%
5,000,000 Beaver County Industrial Development Authority (Pennsylvania), 9/99 at 102 Baa3 5,192,550
Pollution Control Revenue Refunding Bonds, 1989 Series A
(Ohio Edison Company, Beaver Valley Project), 7.750%, 9/01/24
3,750,000 Delaware County Industrial Development Authority, Pollution 4/01 at 102 BBB+ 4,017,300
Control Revenue Refunding Bonds, 1991 Series A (Philadelphia
Electric Company Project), 7.375%, 4/01/21
400,000 Greater Lebanon Refuse Authority, Lebanon County, Pennsylvania, 11/02 at 100 A- 426,080
Solid Waste Revenue Bonds, Series of 1992, 7.000%, 11/15/04
Lancaster County Solid Waste Management Authority, Resource
Recovery System Revenue Bonds, 1998 Series A:
3,780,000 5.250%, 12/15/07 (Alternative Minimum Tax) No Opt. Call AAA 4,049,136
3,900,000 5.250%, 12/15/08 (Alternative Minimum Tax) No Opt. Call AAA 4,183,023
4,000,000 Lehigh County Industrial Development Authority, Pollution Control 8/05 at 102 AAA 4,477,720
Revenue Refunding Bonds, 1995 Series A (Pennsylvania Power
and Light Company Project), 6.150%, 8/01/29
3,000,000 Luzerne County Industrial Development Authority, Exempt Facilities 10/02 at 102 A 3,325,830
Revenue Refunding Bonds, 1992 Series A (Pennsylvania Gas and
Water Company Project), 7.200%, 10/01/17 (Alternative Minimum Tax)
3,550,000 Luzerne County Industrial Development Authority, Exempt Facilities 12/02 at 102 A- 3,937,837
Revenue Bonds, 1992 Series B (Pennsylvania Gas and Water
Company Project), 7.125%, 12/01/22 (Alternative Minimum Tax)
5,000,000 Luzerne County Industrial Development Authority, Exempt Facilities 12/04 at 102 AAA 5,738,449
Revenue Refunding Bonds, 1994 Series A (Pennsylvania Gas and
Water Company Project), 7.000%, 12/01/17
(Alternative Minimum Tax)
5,500,000 Montgomery County Industrial Development Authority (Pennsylvania), 1/03 at 100 A 5,846,664
Resource Recovery Revenue Bonds (Montgomery County Project),
Series 1989, 7.500%, 1/01/12
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Water and Sewer - 1.3%
$ 4,390,000 Fairview Township Authority, York County, Pennsylvania, Guaranteed 11/01 at 100 AAA $4,714,332
Sewer Revenue Bonds, Series of 1991 (Guaranteed by the Township
of Fairview, York County, Pennsylvania), 6.700%, 11/01/21
- ------------------------------------------------------------------------------------------------------------------------------------
$ 353,475,000 Total Investments - (cost $333,909,421) - 99.4% 361,944,861
=============
Other Assets Less Liabilities - 0.6% 2,170,233
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $364,115,094
====================================================================================================================
* 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.
*** 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.
(DD) Security purchased on a delayed delivery basis (note 1).
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Portfolio of Investments
Nuveen Pennsylvania Premium Income Municipal Fund 2 (NPY)
December 31, 1998
(Unaudited)
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Capital Goods - 0.6%
$ 2,000,000 New Morgan Industrial Development Authority (Pennsylvania), Solid 4/04 at 102 A2 $2,167,700
Waste Disposal Revenue Bonds (New Morgan Landfill Company, Inc.
Project), Series 1994, 6.500%, 4/01/19 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Education and Civic Organizations - 14.9%
3,000,000 Chester County Health and Education Facilities Authority 10/08 at 102 BBB- 3,025,470
(Pennsylvania), College Revenue Bonds, Series of 1998
(Immaculata College), 5.625%, 10/15/27
5,000,000 Gettysburg Municipal Authority (Pennsylvania), College Revenue 8/08 at 101 AAA 4,926,600
Bonds (Gettysburg College), Series 1998, 5.000%, 8/15/23
1,350,000 Lancaster Higher Education Authority, City of Lancaster, Pennsylvania, 4/03 at 100 AAA 1,437,399
College Revenue Bonds, Series of 1993 (Franklin and Marshall
College Project), 5.700%, 4/15/13
10,000,000 Pennsylvania Higher Education Assistance Agency, Student Loan 1/03 at 102 AAA 10,714,700
Revenue Bonds, 1988 Series D, 6.050%, 1/01/19
(Alternative Minimum Tax)
10,000,000 Pennsylvania Higher Education Assistance Agency, Student Loan No Opt. Call AAA 10,113,900
Revenue Bonds, 1984 Series A, 4.625%, 12/01/00
3,250,000 Pennsylvania Higher Education Facility Authority, College 11/03 at 102 AAA 3,602,235
Revenue Refunding Bonds (Allegheny College), Series 1993A,
6.100%, 11/01/08
Pennsylvania Higher Educational Facilities Authority (Commonwealth
of Pennsylvania), LaSalle University Revenue Bonds, Series of 1998,
500,000 5.250%, 5/01/18 5/08 at 101 Aaa 513,695
1,000,000 5.250%, 5/01/23 5/08 at 101 Aaa 1,017,090
6,365,000 Pennsylvania Higher Educational Facilities Authority, Revenue Bonds 7/99 at 102 AAA 6,571,672
(Thomas Jefferson University - Life Sciences Building Project),
1989 Series A, 6.000%, 7/01/19
4,615,000 Pennsylvania Higher Educational Facilities Authority (Commonwealth 7/03 at 102 AAA 4,823,460
of Pennsylvania), Revenue Bonds (Widener University),
1993 Series A, 5.250%, 7/15/11
1,005,000 The Hospitals and Higher Education Facilities Authority of Philadelphia, 5/04 at 102 AAA 1,107,520
Community College Revenue Bonds (Community College of
Philadelphia), Series of 1994, 6.100%, 5/01/10
3,340,000 State Public School Building Authority (Commonwealth of 3/03 at 100 AAA 3,558,803
Pennsylvania), College Revenue Bonds (Northampton County Area
Community College Project), Series U of 1993, 5.850%, 3/15/15
1,275,000 The General Municipal Authority of the City of Wilkes-Barre 12/02 at 102 N/R 1,397,043
(Pennsylvania), College Misericordia Revenue Bonds, Refunding
Series B of 1992, 7.750%, 12/01/12
- ------------------------------------------------------------------------------------------------------------------------------------
Health Care - 14.8%
8,500,000 Allegheny County Hospital Development Authority (Pennsylvania), 5/06 at 102 AAA 9,110,895
Hospital Revenue Bonds, Series A of 1996 (South Hills Health
System), 5.875%, 5/01/26
14,000,000 Allegheny County Hospital Development Authority (Pennsylvania), 4/07 at 102 AAA 14,745,640
Health Center Revenue Bonds, Series 1997A (University of
Pittsburgh Medical Center System), 5.625%, 4/01/27
2,100,000 Delaware County Authority (Commonwealth of Pennsylvania), 12/03 at 102 AAA 2,197,545
Hospital Revenue Bonds, Series of 1994 (Crozer-Chester Medical
Center), 5.300%, 12/15/11
Franklin County Industrial Development Authority, Hospital
Revenue Refunding Bonds (The Chambersburg Hospital), Series of
1998:
2,030,000 5.000%, 7/01/08 No Opt. Call Aaa 2,121,330
2,300,000 5.000%, 7/01/18 7/08 at 100 Aaa 2,274,585
1,000,000 Montgomery County Higher Education and Health Authority 10/07 at 101 AAA 1,009,330
(Pennsylvania), Health Care Revenue Bonds, 1997 Series A (Holy
Redeemer Health System), 5.250%, 10/01/27
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Health Care (continued)
$ 8,400,000 Montgomery County Higher Education and Health Authority, 1/09 at 101 AAA $8,220,324
Revenue Bonds, Series 1998 (Pottstown Healthcare Corporation),
5.000%, 1/01/27
485,000 Montgomery County Higher Education and Health Authority, 6/03 at 102 AAA 527,850
Hospital Revenue Bonds, Series A of 1993 (Abington Memorial
Hospital), 6.000%, 6/01/22
4,700,000 Pennsylvania Higher Education Facilities Authority (Commonwealth 1/06 at 101 AA 4,943,601
of Pennsylvania), The University of Pennsylvania Health Services
Revenue Bonds, Series A of 1996, 5.750%, 1/01/22
The Hospitals and Higher Education Facilities Authority of
Philadelphia (Pennsylvania), Health System Revenue Bonds,
Series 1997A (Jefferson Health System):
1,400,000 5.500%, 5/15/07 No Opt. Call AA- 1,514,744
1,000,000 5.500%, 5/15/08 No Opt. Call AA- 1,083,520
City of Pottsville Hospital Authority, Hospital Revenue Bonds
(The Pottsville Hospital and Warne Clinic), Series of 1998:
2,000,000 5.500%, 7/01/18 7/08 at 100 BBB 1,996,200
2,000,000 5.625%, 7/01/24 7/08 at 100 BBB 2,008,040
1,000,000 Washington County Hospital Authority (Pennsylvania), Hospital 7/08 at 101 AAA 1,001,550
Revenue Bonds, Series 1998 (The Washington Hospital Project),
5.100%, 7/01/18
- ------------------------------------------------------------------------------------------------------------------------------------
Housing/Multifamily - 3.9%
4,345,000 Bucks County Redevelopment Authority, Pennsylvania, Second Lien 8/03 at 100 Baa2 4,464,748
Multifamily Mortgage Revenue Bonds, Section 8 Assisted (Country
Commons Apartments), Series 1993A, 6.200%, 8/01/14
(Alternative Minimum Tax)
1,725,000 Luzerne County Housing Corporation, Mortgage Revenue Refunding 7/03 at 100 Aaa 1,790,222
Bonds, Series 1993 (FHA Insured Mortgage Loan - Freeland
Apartments Section 8 Assisted Project), 6.125%, 7/15/23
5,000,000 Pennsylvania Housing Finance Agency, Rental Housing Refunding 7/02 at 102 AAA 5,348,000
Bonds, Issue 1992, 6.400%, 7/01/12
2,345,000 Swissvale Housing Development Corporation (an Instrumentality 7/03 at 100 Aa 2,416,405
of the Allegheny County Housing Authority), Multifamily Mortgage
Revenue Refunding Bonds, Series 1993C (FHA Insured
Mortgage Loan - Section 8 Assisted Swissvale Project),
6.100%, 7/01/22
- ------------------------------------------------------------------------------------------------------------------------------------
Housing/Single Family - 9.0%
1,130,000 Allegheny County Residential Finance Authority, Single Family 11/08 at 102 Aaa 1,142,758
Mortgage Revenue Bonds, 1998 Series DD-1, 5.350%, 11/01/19
(Alternative Minimum Tax)
2,000,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 10/03 at 102 AA+ 2,042,820
Revenue Bonds, Series 1993-37A, 5.450%, 10/01/17
1,120,000 Pennsylvania Housing Finance Agency, Single Family Mortgage No Opt. Call AA+ 1,291,954
Revenue Bonds, Series 1996-47, 6.750%, 10/01/06
(Alternative Minimum Tax)
3,305,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 4/06 at 102 AA+ 3,541,836
Revenue Bonds, Series 1996-51, 6.375%, 4/01/28
(Alternative Minimum Tax)
2,750,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 10/06 at 102 AA+ 2,915,165
Revenue Bonds, Series 1997-54A, 6.150%, 10/01/22
(Alternative Minimum Tax)
Pennsylvania Housing Finance Agency, Single Family Mortgage
Revenue Bonds, Series 1997-56A:
1,500,000 6.050%, 10/01/16 (Alternative Minimum Tax) 4/07 at 102 AA+ 1,594,050
4,000,000 6.150%, 10/01/27 (Alternative Minimum Tax) 4/07 at 102 AA+ 4,249,560
1,650,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 4/07 at 101 1/2 AA+ 1,740,503
Revenue Bonds, Series 1997-58A, 5.950%, 10/01/28
(Alternative Minimum Tax)
1,645,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 10/07 at 101 1/2 AA+ 1,689,283
Revenue Bonds, Series 1997-59A, 5.700%, 4/01/17
(Alternative Minimum Tax)
1,700,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 4/08 at 101 1/2 AA+ 1,735,615
Revenue Bonds, Series 1998-62A, 5.500%, 10/01/22
(Alternative Minimum Tax)
2,000,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 10/08 at 101 AA+ 1,983,800
Revenue Bonds, Series 1998-64A, 4.500%, 4/01/28
(Alternative Minimum Tax)
1,500,000 Urban Redevelopment Authority of Pittsburgh, Mortgage Revenue 4/06 at 102 AAA 1,618,140
Bonds, 1996 Series C, 6.500%, 10/01/23 (Alternative Minimum Tax)
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Housing/Single Family (continued)
Urban Redevelopment Authority of Pittsburgh Mortgage Revenue
Bonds, 1997 Series A:
$ 845,000 6.150%, 10/01/16 (Alternative Minimum Tax) 10/07 at 102 AAA $ 903,922
765,000 6.200%, 10/01/21 (Alternative Minimum Tax) 10/07 at 102 AAA 816,966
1,375,000 Urban Redevelopment Authority of Pittsburgh, Mortgage Revenue 4/03 at 102 AAA 1,455,699
Bonds, 1992 Series D, 6.500%, 4/01/17
2,460,000 Urban Redevelopment Authority of Pittsburgh, Mortgage Revenue 4/03 at 102 AAA 2,621,425
Bonds, 1992 Series C-1, 6.800%, 10/01/25 (Alternative Minimum Tax)
615,000 Urban Redevelopment Authority of Pittsburgh, Mortgage Revenue 4/04 at 102 AAA 671,734
Bonds, 1994 Series B, 6.950%, 10/01/10 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Industrial/Other - 0.7%
2,165,000 Montgomery County Industrial Development Authority, Health 6/03 at 102 N/R 2,296,740
Facilities Revenue Bonds, Series of 1993 (ECRI Project),
6.850%, 6/01/13
- ------------------------------------------------------------------------------------------------------------------------------------
Long Term Care - 2.4%
1,230,000 Pennsylvania Economic Development Financing Authority, 6/08 at 100 A 1,187,971
Revenue Bonds, Series A of 1998 (Northwestern Human
Services, Inc. Project), 5.250%, 6/01/28
Philadelphia Authority for Industrial Development
(Pennsylvania), Health Care Facilities Revenue Bonds, Series
1998A (Pauls Run):
1,350,000 5.750%, 5/15/18 5/08 at 102 N/R 1,343,034
1,650,000 5.875%, 5/15/28 5/08 at 102 N/R 1,649,868
4,000,000 Philadelphia Hospital and Higher Educational Facilities Authority 8/03 at 102 BBB+ 4,274,360
of Philadelphia, Revenue Refunding Bonds, Series 1992
(Philadelphia MR Project), 5.625%, 8/01/04
- ------------------------------------------------------------------------------------------------------------------------------------
Tax Obligation/General - 9.8%
2,000,000 Bangor Area School District, Northampton County, Pennsylvania, 3/06 at 100 AAA 2,072,560
General Obligation Bonds, Series B of 1996, 5.500%, 3/15/18
2,500,000 Bensalem Township School District, Bucks County, Pennsylvania, 7/06 at 100 AAA 2,692,825
General Obligation Bonds, Series of 1996, 5.875%, 7/15/16
Redevelopment Authority of the City of Harrisburg, Dauphin
County, Pennsylvania, Guaranteed Revenue Bonds, Series B of
1998:
1,750,000 0.000%, 5/01/22 (DD) 5/16 at 75 9/16 AAA 522,865
2,750,000 0.000%, 11/01/22 (DD) 5/16 at 103 AAA 800,278
2,750,000 0.000%, 5/01/23 (DD) 5/16 at 103 AAA 779,433
2,750,000 0.000%, 11/01/23 (DD) 5/16 at 103 AAA 759,138
4,305,000 County of Montgomery, Pennsylvania, General Obligation Bonds, 10/06 at 100 Aaa 4,409,138
Series B of 1996, 5.375%, 10/15/21
7,800,000 North Penn School District, Montgomery and Bucks Counties, 3/06 at 100 Aa3 7,878,624
Pennsylvania, General Obligation Bonds, Series of 1996, 5.125%, 3/01/17
2,000,000 The School District of Philadelphia, Pennsylvania, General Obligation No Opt. Call AAA 2,317,340
Refunding Bonds, Series A of 1995, 6.250%, 9/01/09
9,050,000 The School District of Philadelphia, Pennsylvania, General Obligation 4/09 at 100 AAA 8,571,527
Bonds, Series A of 1999, 4.750%, 4/01/27 (WI)
4,000,000 Wallenpaupack Area School District, Wayne and Pike Counties, 4/01 at 100 AAA 4,137,480
Pennsylvania, General Obligation Bonds, Series of 1993,
5.500%, 4/01/11
- ------------------------------------------------------------------------------------------------------------------------------------
Tax Obligation/Limited - 10.9%
10,000,000 Dauphin County General Authority, School Revenue Bonds, No Opt. Call Aaa 10,155,900
Series of 1997 (School District Pooled Financing Program II),
4.450%, 9/01/32
4,060,000 Delaware Valley Regional Finance Authority, Local Government 4/06 at 100 AAA 4,466,853
Revenue Bonds, Series A, 6.000%, 4/15/26
17,900,000 The Harrisburg Authority, Dauphin County, Pennsylvania Tax-Exempt 9/07 at 100 AAA 18,841,719
Revenue Bonds (The City of Harrisburg Project), Series II of 1997,
5.625%, 9/15/22
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Tax Obligation/Limited (continued)
Pennsylvania Industrial Development Authority, Economic Development
Revenue Bonds, Series 1994:
$ 2,000,000 7.000%, 7/01/06 No Opt. Call AAA $2,345,160
2,550,000 7.000%, 1/01/07 No Opt. Call AAA 3,013,773
- ------------------------------------------------------------------------------------------------------------------------------------
Transportation - 0.3%
1,000,000 The Philadelphia Parking Authority, Airport Parking Revenue Bonds, No Opt. Call AAA 1,107,120
Series of 1997, 5.750%, 9/01/07
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Guaranteed - 15.7%
750,000 Allegheny County Hospital Development Authority (Pennsylvania), 6/02 at 102 N/R*** 839,325
Health and Education Revenue Bonds, Series 1992 (The
Rehabilitation Institute of Pittsburg Project), 7.000%, 6/01/22
(Pre-refunded to 6/01/02)
3,000,000 Allegheny County Hospital Development Authority (Pennsylvania), 11/02 at 100 AAA 3,268,080
Health Center Revenue Bonds, Series 1992A (Presbyterian
University Health System, Inc. Project), 6.250%, 11/01/23
(Pre-refunded to 11/01/02)
9,065,000 Bethlehem Area School District, Northampton and Lehigh Counties, 3/01 at 100 AAA 9,449,900
Pennsylvania, General Obligation Bonds, Series of 1993,
5.600%, 9/01/12 (Pre-refunded to 3/01/01)
Bethlehem Authority, Northampton and Lehigh Counties,
Pennsylvania, Water Revenue Bonds, Series A of 1992:
3,785,000 6.100%, 11/15/18 (Pre-refunded to 11/15/02) 11/02 at 100 AAA 4,110,434
3,100,000 6.100%, 11/15/21 (Pre-refunded to 11/15/02) 11/02 at 100 AAA 3,366,538
1,500,000 Fort LeBoeuf School District (Erie County, Pennsylvania), General 1/03 at 100 AAA 1,613,520
Obligation Bonds, Series A of 1993, 5.800%, 1/01/16
(Pre-refunded to 1/01/03)
3,500,000 Hollidaysburg Sewer Authority (Pennsylvania), Guaranteed Sewer 1/03 at 100 AAA 3,803,555
Revenue Bonds, Series of 1993, 6.100%, 1/01/23
(Pre-refunded to 1/01/03)
1,500,000 Ligonier Valley School District (Westmoreland County, 3/04 at 100 AAA 1,648,380
Pennsylvania), General Obligation Bonds, Series of 1994,
6.000%, 3/01/23 (Pre-refunded to 3/01/04)
2,015,000 Montgomery County Higher Educational and Health Authority 6/03 at 102 AAA 2,225,829
(Pennsylvania), Hospital Revenue Bonds, Series A of 1993
(Abington Memorial Hospital), 6.000%, 6/01/22
(Pre-refunded to 6/01/03)
1,670,000 Pennsylvania Higher Educational Facilities Authority, College and
University Revenue Bonds, 9th Series, 7.625%, 7/01/15 No Opt. Call Aaa 2,051,879
1,300,000 City of Philadelphia, Pennsylvania, Water and Sewer Revenue Bonds, 8/01 at 102 AAA 1,447,823
Sixteenth Series, 7.500%, 8/01/10 (Pre-refunded to 8/01/01)
The Hospitals and Higher Education Facilities Authority of Philadelphia
(Pennsylvania), Hospital Revenue Bonds, Series of 1993 (Presbyterian
Medical Center of Philadelphia):
1,000,000 6.500%, 12/01/11 12/03 at 102 AAA 1,171,240
3,690,000 6.650%, 12/01/19 12/03 at 102 AAA 4,475,601
1,750,000 Pine - Richland School District (Allegheny County, Pennsylvania), 9/03 at 100 AAA 1,920,923
General Obligation Bonds, Series A of 1993, 6.100%, 9/01/18
(Pre-refunded to 9/01/03)
5,000,000 The Pittsburgh (Pennsylvania), Water and Sewer Authority, Water 9/05 at 100 AAA 5,511,000
and Sewer System Subordinate Revenue Bonds, Series B of 1995,
5.750%, 9/01/25 (Pre-refunded to 9/01/05)
3,660,000 Rose Tree Media School District, Delaware County, Pennsylvania, 9/01 at 100 AAA 3,951,226
General Obligation Bonds, Series of 1993, 6.700%, 3/15/12
(Pre-refunded to 9/15/01)
2,500,000 Schuylkill Valley School District, Berks County, Pennsylvania, 4/03 at 100 AAA 2,702,250
General Obligation Bonds, Series of 1993, 5.850%, 4/15/13
(Pre-refunded to 4/15/03)
1,650,000 The Municipal Authority of the Borough of West View (Allegheny No Opt. Call AAA 2,348,363
County, Pennsylvania), Special Obligation Bonds, Series of 1985A,
9.500%, 11/15/14
- ------------------------------------------------------------------------------------------------------------------------------------
Utilities - 13.5%
6,000,000 Beaver County Industrial Development Authority, Pennsylvania, 6/08 at 102 AAA 6,078,960
Exempt Facilities Revenue Bonds, 1998 Series A (Shippingport
Project), 5.375%, 6/01/28 (Alternative Minimum Tax)
7,590,000 Indiana County Industrial Development Authority (Pennsylvania), 5/07 at 102 AAA 8,175,341
Pollution Control Revenue Bonds, 1997 Series A (Metropolitan
Edison Company Project), 5.950%, 5/01/27 (Alternative Minimum Tax)
15,000,000 Lehigh County Industrial Development Authority, Pollution Control 11/02 at 102 AAA 16,528,950
Revenue Refunding Bonds, 1992 Series A (Pennsylvania Power and
Light Company Project), 6.400%, 11/01/21
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Utilities (continued)
$ 7,350,000 Luzerne County Industrial Development Authority, Exempt Facilities 10/02 at 102 A $8,148,284
Revenue Refunding Bonds, 1992 Series A (Pennsylvania Gas and
Water Company Project), 7.200%, 10/01/17 (Alternative Minimum Tax)
4,500,000 Luzerne County Industrial Development Authority, Exempt Facilities 12/02 at 102 A- 4,991,625
Revenue Bonds, 1992 Series B (Pennsylvania Gas and Water
Company Project), 7.125%, 12/01/22 (Alternative Minimum Tax)
3,575,000 Montgomery County Industrial Development Authority (Pennsylvania), 12/01 at 102 AAA 3,884,095
Pollution Control Revenue Refunding Bonds, 1991 Series B
(Philadelphia Electric Company Project), 6.700%, 12/01/21
- ------------------------------------------------------------------------------------------------------------------------------------
Water and Sewer - 5.5%
1,975,000 Delaware County Industrial Development Authority, Water Facilities 6/02 at 102 AAA 2,159,860
Revenue Refunding Bonds (Philadelphia Suburban Water Company
Project), Series of 1992, 6.500%, 6/01/10
5,500,000 Northumberland County Industrial Development Authority, Exempt 10/03 at 102 N/R 5,686,339
Facilities Revenue Bonds, 1993 Series (Roaring Creek Water
Company Project), 6.375%, 10/15/23 (Alternative Minimum Tax)
City of Philadelphia, Pennsylvania, Water and Wastewater Revenue
Bonds, Series 1993:
2,335,000 5.750%, 6/15/13 6/03 at 102 AAA 2,521,612
2,300,000 5.500%, 6/15/14 6/03 at 102 AAA 2,430,984
City of Philadelphia, Pennsylvania, Water and Wastewater Revenue
Bonds, Series 1995:
3,000,000 6.750%, 8/01/05 No Opt. Call AAA 3,443,879
2,730,000 6.250%, 8/01/10 No Opt. Call AAA 3,170,621
- ------------------------------------------------------------------------------------------------------------------------------------
$ 349,240,000 Total Investments - (cost $341,100,257) - 102.0% 362,517,168
=============
Other Assets Less Liabilities - (2.0)% (7,214,164)
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $355,303,004
====================================================================================================================
* 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.
*** 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.
(DD) Security purchased on a delayed delivery basis (note 1).
(WI) Security purchased on a when-issued basis (note 1).
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Statement of Net Assets
December 31, 1998
(Unaudited)
<CAPTION>
New Jersey New Jersey Pennsylvania Pennsylvania
Investment Quality Premium Income Investment Quality Premium Income 2
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
Investments in municipal securities, at market
value (note 1) $440,632,951 $274,690,307 $361,944,861 $362,517,168
Cash -- 220,688 -- 10,075
Receivables:
Interest 7,974,838 5,116,126 6,064,503 5,473,488
Investments sold 9,486,000 390,000 360,558 512,563
Other assets 11,056 25,392 11,431 23,953
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets 458,104,845 280,442,513 368,381,353 368,537,247
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities
Payable for investments purchased 16,162,437 3,100,470 2,776,875 11,538,358
Accrued expenses:
Management fees (note 6) 238,262 151,446 197,448 192,844
Other 1,083,726 321,203 1,291,936 1,503,041
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 17,484,425 3,573,119 4,266,259 13,234,243
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets (note 7) $440,620,420 $276,869,394 $364,115,094 $355,303,004
====================================================================================================================================
Preferred shares, at liquidation value $130,000,000 $ 91,600,000 $110,000,000 $118,100,000
====================================================================================================================================
Preferred shares outstanding 5,200 3,664 4,400 4,724
====================================================================================================================================
Common shares outstanding 19,804,656 11,945,059 15,942,228 15,747,463
====================================================================================================================================
Netasset value per Common share outstanding (net assets
less Preferred shares at liquidation value,
divided by Common shares outstanding) $ 15.68 $ 15.51 $ 15.94 $ 15.06
====================================================================================================================================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Statement of Operations
Six Months ended December 31, 1998
(Unaudited)
<CAPTION>
New Jersey New Jersey Pennsylvania Pennsylvania
Investment Quality Premium Income Investment Quality Premium Income 2
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income (note1) $13,034,076 $7,602,417 $11,136,376 $ 9,592,779
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses
Management fees (note 6) 1,411,898 894,980 1,171,288 1,141,069
Preferred shares - auction fees 163,835 115,442 138,629 148,838
Preferred shares - dividend disbursing agent fees 10,081 15,123 10,081 15,123
Shareholders' servicing agent fees and expenses 24,814 12,721 29,142 26,728
Custodian's fees and expenses 36,647 28,540 32,358 31,757
Directors'/Trustees' fees and expenses (note 6) 2,120 1,312 1,765 1,682
Professional fees 9,187 8,939 9,086 9,044
Shareholders' reports - printing and mailing expenses 61,085 40,601 42,719 53,436
Stock exchange listing fees 12,484 12,230 12,560 12,230
Investor relations expense 19,035 11,831 17,007 15,988
Other expenses 13,403 9,716 10,679 8,519
- ------------------------------------------------------------------------------------------------------------------------------------
Total expenses 1,764,589 1,151,435 1,475,314 1,464,414
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income 11,269,487 6,450,982 9,661,062 8,128,365
- ------------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Investments
Net realized gain (loss) from investment
transactions (notes 1 and 4) 33,519 (384,786) 72,124 1,357
Net change in unrealized appreciation or
depreciation of investments 1,157,389 2,549,638 80,789 2,692,910
- ------------------------------------------------------------------------------------------------------------------------------------
Net gain from investments 1,190,908 2,164,852 152,913 2,694,267
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $12,460,395 $8,615,834 $ 9,813,975 $10,822,632
====================================================================================================================================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Statement of Changes in Net Assets
(Unaudited)
<CAPTION>
New Jersey Investment Quality New Jersey Premium Income
Six Months Ended Year Ended Six Months Ended Year Ended
12/31/98 6/30/98 12/31/98 6/30/98
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations
Net investment income $ 11,269,487 $ 22,760,040 $ 6,450,982 $ 13,081,889
Net realized gain (loss) from investment
transactions (notes 1 and 4) 33,519 1,145,279 (384,786) 1,139,335
Net change in unrealized appreciation
or depreciation of investments 1,157,389 4,551,886 2,549,638 6,532,010
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations 12,460,395 28,457,205 8,615,834 20,753,234
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders (note 1)
From undistributed net investment income:
Common shareholders (9,375,634) (18,755,870) (5,212,648) (10,251,340)
Preferred shareholders (2,066,200) (4,393,050) (1,419,832) (3,059,919)
From accumulated net realized gains
from investment transactions:
Common shareholders (501,059) (592,823) -- --
Preferred shareholders (56,968) (132,888) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from distributions
to shareholders (11,999,861) (23,874,631) (6,632,480) (13,311,259)
- ------------------------------------------------------------------------------------------------------------------------------------
Capital Share Transactions (note 2)
Net proceeds from Common shares issued to shareholders
due to reinvestment of distributions 1,281,937 2,673,402 610,250 760,188
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets 1,742,471 7,255,976 2,593,604 8,202,163
Net assets at beginning of period 438,877,949 431,621,973 274,275,790 266,073,627
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period $ 440,620,420 $ 438,877,949 $ 276,869,394 $ 274,275,790
====================================================================================================================================
Balance of undistributed net investment
income at end of period $ 387,710 $ 560,057 $ 426,456 $ 607,954
====================================================================================================================================
<PAGE>
<CAPTION>
Pennsylvania Investment Quality Pennsylvania Premium Income 2
Six Months Ended Year Ended Six Months Ended Year Ended
12/31/98 6/30/98 12/31/98 6/30/98
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations
Net investment income $ 9,661,062 $ 19,406,751 $ 8,128,365 $ 16,145,833
Net realized gain (loss) from investment
transactions (notes 1 and 4) 72,124 736,176 1,357 2,190,521
Net change in unrealized appreciation
or depreciation of investments 80,789 670,433 2,692,910 8,353,368
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations 9,813,975 20,813,360 10,822,632 26,689,722
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders (note 1)
From undistributed net investment income:
Common shareholders (8,036,842) (15,952,202) (5,858,055) (12,188,569)
Preferred shareholders (1,738,047) (3,634,806) (1,784,927) (4,129,260)
From accumulated net realized gains
from investment transactions:
Common shareholders (71,740) (828,412) -- --
Preferred shareholders (2,148) (192,317) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from
distributions to shareholders (9,848,777) (20,607,737) (7,642,982) (16,317,829)
- ------------------------------------------------------------------------------------------------------------------------------------
Capital Share Transactions (note 2)
Net proceeds from Common shares
issued to shareholders due to
reinvestment of distributions 1,010,848 2,184,617 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets 976,046 2,390,240 3,179,650 10,371,893
Net assets at beginning of period 363,139,048 360,748,808 352,123,354 341,751,461
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period $ 364,115,094 $ 363,139,048 $ 355,303,004 $ 352,123,354
- ------------------------------------------------------------------------------------------------------------------------------------
Balance of undistributed net investment
income at end of period $ 416,001 $ 529,828 $ 626,973 $ 141,590
- ------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to Financial Statements
(Unaudited)
1. General Information and Significant Accounting Policies
The state Funds (the "Funds") covered in this report and their corresponding New
York Stock Exchange symbols are Nuveen New Jersey Investment Quality Municipal
Fund, Inc. (NQJ), Nuveen New Jersey Premium Income Municipal Fund, Inc. (NNJ),
Nuveen Pennsylvania Investment Quality Municipal Fund (NQP) and Nuveen
Pennsylvania Premium Income Municipal Fund 2 (NPY).
Each Fund invests primarily in a diversified portfolio of municipal obligations
issued by state and local government authorities within a single state. The
Funds are registered under the Investment Company Act of 1940 as closed-end,
diversified management investment companies.
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements in accordance with
generally accepted accounting principles.
Securities Valuation
The prices of municipal bonds in each Fund's investment portfolio are provided
by a pricing service approved by the Fund's Board of Directors/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
December 31, 1998, New Jersey Investment Quality, New Jersey Premium Income,
Pennsylvania Investment Quality and Pennsylvania Premium Income 2 had
when-issued and delayed delivery purchase commit ments of $16,162,437,
$3,100,470, $2,776,875 and $11,538,358, respectively.
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 Fund is a separate taxpayer for federal income tax purposes. Each Fund
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. The
Funds currently consider significant net realized capital gains and/or market
discount as amounts in excess of $.01 per Common share. Furthermore, each New
Jersey Fund intends to satisfy conditions which will enable interest from
municipal securities, which is exempt from regular federal and New Jersey state
income taxes, to retain such tax-exempt status when distributed to the
shareholders of the New Jersey Funds. Each Pennsylvania Fund intends to satisfy
conditions which will enable interest from municipal securities, which is exempt
from regular federal, Pennsylvania state personal income and the Philadelphia
School District Investment Income taxes, to retain such tax-exempt status when
distributed to shareholders of the Pennsylvania Funds. Net realized capital gain
and market discount distributions are subject to federal taxation.
Dividends and Distributions to Shareholders
Tax-exempt net investment income is declared as a dividend monthly and payment
is made or reinvestment is credited to shareholder accounts on the first
business day after month end. Net realized capital gains and/or market discount
from investment transactions, if any, are distributed to shareholders not less
frequently than annually. Furthermore, capital gains are distributed only to the
extent they exceed available capital loss carryforwards.
Distributions to shareholders of tax-exempt net investment income, net realized
capital gains and/or market discount are recorded on the ex-dividend date. The
amount and timing of 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.
<PAGE>
Preferred Shares
The Funds have issued and outstanding $25,000 stated value Preferred shares.
Each Fund's Preferred shares are issued in more than one Series. The dividend
rate on each Series may change every seven days, as set by the auction agent.
The number of shares outstanding, by Series and in total, were as follows:
<TABLE>
<CAPTION>
New Jersey New Jersey Pennsylvania Pennsylvania
Investment Premium Investment Premium
Quality Income Quality Income 2
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Number of Shares:
Series M 3,200 -- -- 844
Series T -- 624 -- --
Series W -- 1,440 2,400 --
Series Th 2,000 1,600 2,000 2,080
Series F -- -- -- 1,800
- ---------------------------------------------------------------------------------------------------------
Total 5,200 3,664 4,400 4,724
=========================================================================================================
</TABLE>
Derivative Financial Instruments
The Funds may invest in 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 December 31, 1998.
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. Fund Shares
Transactions in Common shares were as follows:
<TABLE>
<CAPTION>
New Jersey Investment Quality New Jersey Premium Income
Six Months Ended Year Ended Six Months Ended Year Ended
12/31/98 6/30/98 12/31/98 6/30/98
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares issued to shareholders
due to reinvestment
of distributions 73,582 161,805 37,519 49,041
===============================================================================================================
<CAPTION>
Pennsylvania
Pennsylvania Investment Quality Premium Income 2
- ---------------------------------------------------------------------------------------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
12/31/98 6/30/98 12/31/98 6/30/98
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares issued to shareholders
due to reinvestment of
distributions 58,149 128,464 -- --
=========================================================================================================
</TABLE>
<PAGE>
3. Distributions to Common Shareholders
The Funds declared Common share dividend distributions from their tax-exempt net
investment income which were paid February 1, 1999, to shareholders of record on
January 15, 1999, as follows:
<TABLE>
<CAPTION>
New Jersey New Jersey Pennsylvania Pennsylvania
Investment Premium Investment Premium
Quality Income Quality Income 2
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dividend per share $ .0765 $ .0720 $ .0840 $ .0620
=========================================================================================================
</TABLE>
4. Securities Transactions
Purchases and sales (including maturities) of investments in municipal
securities and temporary municipal investments during the six months ended
December 31, 1998, were as follows:
<TABLE>
<CAPTION>
New Jersey New Jersey Pennsylvania Pennsylvania
Investment Premium Investment Premium
Quality Income Quality Income 2
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Purchases:
Investments in municipal securities $36,103,382 $16,217,094 $15,703,058 $15,142,088
Temporary municipal investments 12,900,000 5,400,000 9,195,000 14,905,000
Sales and Maturities:
Investments in municipal securities 26,767,540 17,648,202 20,050,740 695,000
Temporary municipal investments 12,900,000 5,400,000 9,995,000 17,305,000
=========================================================================================================
</TABLE>
At December 31, 1998, the identified cost of investments owned for federal
income tax purposes was the same as the cost for financial reporting purposes
for each Fund.
At June 30, 1998, the Funds' last fiscal year end, the following Funds 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>
New Jersey Pennsylvania
Premium Premium
Income Income 2
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Expiration year:
2002 $3,583,548 $ --
2003 129,409 67,894
2004 650,143 40,999
2005 174,583 169,168
- ---------------------------------------------------------------------------------------------------------
Total $4,537,683 $278,061
=========================================================================================================
</TABLE>
5. Unrealized Appreciation (Depreciation)
Gross unrealized appreciation and gross unrealized depreciation of investments
at December 31, 1998, were as follows:
<TABLE>
<CAPTION>
New Jersey New Jersey Pennsylvania Pennsylvania
Investment Premium Investment Premium
Quality Income Quality Income 2
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gross unrealized:
appreciation $31,246,486 $17,704,578 $28,053,730 $21,511,960
depreciation (99,936) (626,544) (18,290) (95,049)
- ---------------------------------------------------------------------------------------------------------
Net unrealized appreciation $31,146,550 $17,078,034 $28,035,440 $21,416,911
=========================================================================================================
</TABLE>
<PAGE>
6. Management Fee and Other Transactions with Affiliates
Under the Funds' investment management agreements with Nuveen Advisory Corp.
(the "Adviser"), a wholly owned subsidiary of The John Nuveen Company, each Fund
pays an annual management fee, payable monthly, at the rates set forth below,
which are based upon the average daily net asset value of each Fund:
Average Daily Net Asset Value Management Fee
- --------------------------------------------------------------------------------
For the first $125 million .6500 of 1%
For the next $125 million .6375 of 1
For the next $250 million .6250 of 1
For the next $500 million .6125 of 1
For the next $1 billion .6000 of 1
For net assets over $2 billion .5875 of 1
================================================================================
The fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Funds pay no
compensation directly to those of its Directors/Trustees who are affiliated with
the Adviser or to their officers, all of whom receive remuneration for their
services to the Funds from the Adviser.
7. Composition of Net Assets At December 31, 1998, net assets consisted of:
<TABLE>
<CAPTION>
New Jersey New Jersey Pennsylvania Pennsylvania
Investment Premium Investment Premium
Quality Income Quality Income 2
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Preferred shares, $25,000 stated value per share,
at liquidation value $ 130,000,000 $ 91,600,000 $110,000,000 $118,100,000
Common shares, $.01 par value per share 198,047 119,451 159,422 157,475
Paid-in surplus 278,811,071 172,572,553 225,453,689 215,275,700
Balance of undistributed net investment income 387,710 426,456 416,001 626,973
Accumulated net realized gain (loss) from
investment transactions 77,042 (4,927,100) 50,542 (274,055)
Net unrealized appreciation of investments 31,146,550 17,078,034 28,035,440 21,416,911
- ---------------------------------------------------------------------------------------------------------
Net assets $440,620,420 $276,869,394 $364,115,094 $355,303,004
- ---------------------------------------------------------------------------------------------------------
Authorized shares:
Common 200,000,000 200,000,000 Unlimited Unlimited
Preferred 1,000,000 1,000,000 Unlimited Unlimited
=========================================================================================================
</TABLE>
<PAGE>
<TABLE>
Financial Highlights
(Unaudited)
Selected data for a Common share outstanding throughout each
period is as follows:
<CAPTION>
Investment Operations
-------------------------------------
Net
Realized/
Beginning Net Unrealized
Net Asset Investment Investment
Value Income Gain (Loss) Total
<C> <C> <C> <C> <C>
New Jersey Investment Quality
Year Ended 6/30:
1999 (a) $ 15.65 $ .57 $ .06 $ .63
1998 15.41 1.16 .29 1.45
1997 15.05 1.18 .34 1.52
1996 15.06 1.17 (.01) 1.16
1995 14.73 1.20 .40 1.60
1994 15.88 1.20 (1.07) .13
<CAPTION>
New Jersey Premium Income
<C> <C> <C> <C> <C>
Year Ended 6/30:
1999 (a) 15.34 .54 .19 .73
1998 14.71 1.10 .65 1.75
1997 14.18 1.09 .51 1.60
1996 13.97 1.08 .20 1.28
1995 13.46 1.06 .55 1.61
11 mos. ended
6/30/94 14.52 .94 (1.12) (.18)
<CAPTION>
Pennsylvania Investment Quality
<C> <C> <C> <C> <C>
Year Ended 6/30:
1999 (a) 15.94 .61 -- .61
1998 15.91 1.23 .10 1.33
1997 15.72 1.26 .22 1.48
1996 15.86 1.28 (.08) 1.20
1995 15.49 1.29 .41 1.70
1994 16.42 1.30 (.86) .44
<CAPTION>
Pennsylvania Premium Income 2
<C> <C> <C> <C> <C>
Year Ended 6/30:
1999 (a) 14.86 .52 .16 .68
1998 14.20 1.02 .67 1.69
1997 13.57 1.04 .63 1.67
1996 13.25 1.04 .33 1.37
1995 12.53 1.05 .77 1.82
1994 14.35 1.00 (1.71) (.71)
<PAGE>
<CAPTION>
Less Distributions
-------------------------------------------------------------
Net Net
Investment Investment Capital Capital
Income Income Gain Gain
To Common To Preferred To Common To Preferred
Shareholders Shareholders+ Shareholders Shareholders+ Total
New Jersey
Investment Quality
Year Ended 6/30:
<C> <C> <C> <C> <C> <C>
1999 (a) $ (.47) $ (.10) $ (.03) $ -- $ (.60)
1998 (.95) (.22) (.03) (.01) (1.21)
1997 (.95) (.21) -- -- (1.16)
1996 (.94) (.23) -- -- (1.17)
1995 (1.01) (.24) (.02) -- (1.27)
1994 (1.07) (.14) (.06) (.01) (1.28)
<CAPTION>
New Jersey
Premium Income
<C> <C> <C> <C> <C> <C>
Year Ended 6/30:
1999 (a) (.44) (.12) -- -- (.56)
1998 (.86) (.26) -- -- (1.12)
1997 (.84) (.23) -- -- (1.07)
1996 (.81) (.26) -- -- (1.07)
1995 (.81) (.28) (.01) -- (1.10)
11 mos. ended
6/30/94 (.71) (.17) -- -- (.88)
<CAPTION>
Pennsylvania
Investment Quality
<C> <C> <C> <C> <C> <C>
Year Ended 6/30:
1999 (a) (.50) (.11) -- -- (.61)
1998 (1.01) (.23) (.05) (.01) (1.30)
1997 (1.01) (.24) (.03) (.01) (1.29)
1996 (1.05) (.25) (.03) (.01) (1.34)
1995 (1.07) (.26) -- -- (1.33)
1994 (1.16) (.16) (.04) (.01) (1.37)
<CAPTION>
Pennsylvania Premium
Income 2
<C> <C> <C> <C> <C> <C>
Year Ended 6/30:
1999 (a) (.37) (.11) -- -- (.48)
1998 (.77) (.26) -- -- (1.03)
1997 (.78) (.26) -- -- (1.04)
1996 (.78) (.27) -- -- (1.05)
1995 (.81) (.29) -- -- (1.10)
1994 (.79) (.18) -- -- (.97)
<PAGE>
<CAPTION>
Total Returns
-----------------------------------
Organization and
Offering Costs and
Preferred Share Ending
Underwriting Net Asset Ending Based on Based on Net
Discounts Value Market Value Market Value** Asset Value**
<S> <C> <C> <C> <C> <C>
New Jersey
Investment Quality
Year Ended 6/30:
1999 (a) $-- $ 15.68 $ 16.9375 1.77% 3.39%
1998 -- 15.65 17.1250 11.38 8.12
1997 -- 15.41 16.3125 16.50 8.92
1996 -- 15.05 14.8750 8.17 6.28
1995 -- 15.06 14.6250 3.03 9.71
1994 -- 14.73 15.2500 (4.63) (.27)
<CAPTION>
New Jersey
Premium Income
<S> <C> <C> <C> <C> <C>
Year Ended 6/30:
1999 (a) -- 15.51 16.6250 9.71 3.98
1998 -- 15.34 15.5625 11.12 10.35
1997 -- 14.71 14.8125 20.95 9.94
1996 -- 14.18 13.0000 4.24 7.37
1995 -- 13.97 13.2500 14.60 10.39
11 mos. ended
6/30/94 -- 13.46 12.3750 (13.16) (2.61)
<CAPTION>
Pennsylvania
Investment Quality
Year Ended 6/30:
<S> <C> <C> <C> <C> <C>
1999 (a) -- 15.94 18.0625 7.79 3.22
1998 -- 15.94 17.2500 8.77 7.02
1997 -- 15.91 16.8750 9.75 8.01
1996 -- 15.72 16.3750 12.74 6.00
1995 -- 15.86 15.5000 2.32 9.77
1994 -- 15.49 16.2500 (.39) 1.23
<CAPTION>
Pennsylvania Premium
Income 2
Year Ended 6/30:
<S> <C> <C> <C> <C> <C>
1999 (a) -- 15.06 14.1875 8.38 3.87
1998 -- 14.86 13.4375 6.27 10.29
1997 -- 14.20 13.3750 14.82 10.61
1996 -- 13.57 12.3750 2.21 8.39
1995 -- 13.25 12.8750 11.50 12.87
1994 (.14) 12.53 12.3750 (10.29) (7.60)
<PAGE>
<CAPTION>
Ratios/Supplemental Data
----------------------------------------------------------------------------------------
Ratio of Net Ratio of Net
Ratio of Investment Ratio of Investment
Expenses to Income to Expenses to Income to
Average Average Average Total Average Total
Ending Net Assets Net Assets Net Assets Net Assets Portfolio
Net Assets Applicable to Applicable to Including Including Turnover
(000) Common Shares++ Common Shares++ Preferred++ Preferred++ Rate
New Jersey
Investment Quality
Year Ended 6/30:
<S> <C> <C> <C> <C> <C> <C>
1999 (a) $ 440,620 1.13%* 7.20%* .79%* 5.07%* 6%
1998 438,878 1.13 7.40 .79 5.20 6
1997 431,622 1.14 7.70 .80 5.36 15
1996 422,338 1.16 7.67 .81 5.33 16
1995 420,944 1.23 8.06 .85 5.57 13
1994 259,718 1.16 7.67 .82 5.39 5
<CAPTION>
New Jersey
Premium Income
Year Ended 6/30:
<S> <C> <C> <C> <C> <C> <C>
1999 (a) 276,869 1.23* 6.92* .83* 4.63* 6
1998 274,276 1.25 7.24 .83 4.81 13
1997 266,074 1.27 7.53 .83 4.91 18
1996 259,708 1.32 7.53 .86 4.90 32
1995 257,251 1.46 7.89 .94 5.08 15
11 mos. ended
6/30/94 113,458 1.38* 7.12* .91* 4.72* 12
<CAPTION>
Pennsylvania
Investment Quality
Year Ended 6/30:
<S> <C> <C> <C> <C> <C> <C>
1999 (a) 364,115 1.15* 7.54* .80* 5.26* 4
1998 363,139 1.15 7.65 .80 5.34 9
1997 360,749 1.17 7.96 .81 5.52 8
1996 355,823 1.18 7.98 .82 5.53 12
1995 355,831 1.27 8.28 .87 5.70 9
1994 191,718 1.21 7.95 .84 5.54 3
<CAPTION>
Pennsylvania Premium
Income 2
Year Ended 6/30:
<S> <C> <C> <C> <C> <C> <C>
1999 (a) 355,303 1.23* 6.82* .82* 4.55* --
1998 352,123 1.24 6.99 .82 4.63 32
1997 341,751 1.27 7.47 .83 4.85 29
1996 331,863 1.30 7.59 .84 4.90 19
1995 326,771 1.46 8.23 .92 5.20 5
1994 139,053 1.36 7.11 .90 4.70 11
* Annualized.
** Total 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.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
(a) For the six months ended December 31, 1998.
</TABLE>
<PAGE>
Building a Better Portfolio Can Make You a Successful Investor
Nuveen Family of Mutual Funds
Nuveen offers a variety of funds designed to help you reach your financial
goals.
Growth
Nuveen Rittenhouse Growth Fund
Growth and Income
European Value Fund
Growth and Income Stock Fund
Balanced Stock and Bond Fund
Balanced Municipal and Stock Fund
Tax-Free Income
National Funds
Long-Term
Insured
Intermediate-Term
Limited-Term
State Funds
Arizona
California
Colorado
Connecticut
Florida
Georgia
Kansas
Kentucky
Louisiana
Maryland
Massachusetts
Michigan
Missouri
New Jersey
New Mexico
New York
North Carolina
Ohio
Pennsylvania
Tennessee
Virginia
Wisconsin
Successful investors know that a well-diversified portfolio - one that balances
different types of investments, levels of risk and tax management - can be the
foundation for building and sustaining wealth. That's why Nuveen offers you and
your financial adviser a wide range of quality investments that can help you
build a better portfolio in the pursuit of your financial goals
Exchange-Traded Funds
Nuveen Exchange-Traded Funds offer investors actively managed portfolios of
investment-grade quality municipal bonds. The fund shares are listed and traded
on the New York and American stock exchanges. Exchange-traded funds provide the
investment convenience, price visibility and liquidity of common stocks.
MuniPreferred(R)
Nuveen MuniPreferred offers investors a AAA rated investment with an attractive
tax-free yield for the cash reserves portion of an investment portfolio.
MuniPreferred shares are backed 2-to-1 by the long-term portfolios of Nuveen
dual-class exchange-traded funds and are available for national as well as a
wide variety of state-specific portfolios.
Mutual Funds
Nuveen offers a family of equity, balanced and municipal bond funds featuring
Premier AdvisersSM including Institutional Capital Corporation, Rittenhouse
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Rittenhouse Financial Services and Nuveen Asset Management offer comprehensive,
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investment philosophy.
Defined Portfolios
Nuveen Defined Portfolios are fixed portfolios of quality securities that are a
convenient, attractive alternative to purchasing individual securities. They
provide low-cost diversification to reduce risk, while also offering
experienced, professional security selection and surveillance. In addition,
Nuveen Defined Portfolios provide daily liquidity at that day's net asset value
for quick access to your assets.
<PAGE>
Fund Information
Board of Directors/Trustees
Robert P. Bremner
Lawrence H. Brown
Anthony T. Dean
Anne E. Impellizzeri
Peter R. Sawers
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
Fund Manager
Nuveen 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
Morgan, Lewis &
Bockius LLP
Washington, D.C.
Independent Auditors
Ernst & Young LLP
Chicago, IL
Year 2000
The concern that computer systems may have problems processing date-related
information in the year 2000 and beyond has challenged businesses and
organizations to thoroughly review all aspects of their operations. We have
undertaken just such an approach at Nuveen in preparation for the millennium.
Over the last 10 years, our trading, fund management and pricing systems at
Nuveen - the systems that directly affect our investors and their financial
advisers - have been updated or replaced to address the Year 2000 concerns. We
continue to work closely with our transfer agent, custodian and other service
partners to monitor readiness and address other remaining systems issues. Our
initial testing indicates we are on schedule, and we have targeted year-end 1998
to complete verification of vendor compliance and service partner readiness.
However, we can give no complete assurance at this time that the steps we have
taken will be sufficient to prevent any problems that would impact the Nuveen
Exchange-Traded Funds.
Each fund intends to repurchase shares of its own common or preferred stock in
the future at such times and in such amounts as is deemed advisable. No shares
were repurchased during the six-months ended December 31, 1998. Any future
repurchases will be reported to shareholders in the next annual or semiannual
report.
<PAGE>
Serving Investors for Generations
Photo of: John Nuveen, Sr.
Since our founding in 1898, John Nuveen & Co. has been synonymous with
investments that withstand the test of time. Today we offer a broad range of
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
1898 1998
OUR SECOND CENTURY
helping investors sustain the wealth of a lifetime(TM).
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, IL 60606-1286
www.nuveen.com
FSA-2-12-98
