NUVEEN Exchange-Traded Funds
MAY 31, 1998
ANNUAL REPORT
DEPENDABLE, TAX-FREE INCOME
TO HELP YOU KEEP MORE OF
WHAT YOU EARN.
NTC
Connecticut
NMT
Massachusetts
NOM
Missouri
NPW
Washington
Photo of: People reading
<PAGE>
Highlights
As of May 31, 1998
CONTENTS
1 Dear Shareholder
4 NTC Commentary and Overview
6 NMT Commentary and Overview
8 NOM Commentary and Overview
10 NPW Commentary and Overview
12 Report of Independent Auditors
13 Portfolio of Investments
24 Statement of Net Assets
25 Statement of Operations
26 Statement of Changes in Net Assets
27 Notes to Financial Statements
30 Financial Highlights
32 Building Better Portfolios
33 Fund Information
================================================================================
Credit Quality Performance Highlights
Nuveen Connecticut Premium Income Municipal Fund (NTC)
o Steady dividend for 10 consecutive months
o Taxable-equivalent yield of 7.81%*
o One-year total return on net asset value
of 12.39%
Pie Chart:
AAA/Pre-refunded 68%
AA 18%
A 2%
BBB/NR 12%
Nuveen Massachusetts Premium Income Municipal Fund (NMT)
o Steady dividend for 16 consecutive months
o Taxable-equivalent yield of 8.45%*
o One-year total return on net asset value
of 11.91%
Pie Chart:
AAA/Pre-refunded 57%
AA 19%
A 20%
BBB/NR 4%
Nuveen Missouri Premium Income Municipal Fund (NOM)
o Steady dividend for 10 consecutive months
o Taxable-equivalent yield of 8.07%*
o One-year total return on net asset value
of 11.31%
Pie Chart:
AAA/Pre-refunded 78%
AA 15%
A 2%
BBB/NR 5%
Nuveen Washington Premium Income Municipal Fund (NPW)
o Steady dividend for 19 consecutive months
o Taxable-equivalent yield of 8.04%*
o One-year total return on net asset value
of 12.64%
Pie Chart:
AAA/Pre-refunded 68%
AA 29%
A 3%
*For investors in the 31% federal and applicable state income tax bracket.
See your fund's performance overview for more information.
================================================================================
A New Benefit for Nuveen Exchange-Traded Fund Shareholders
The benefits of your Nuveen Exchange-Traded Fund just got better. Now investors
with at least $50,000 in Nuveen holdings - including Exchange-Traded Funds - are
eligible for a reduction in the sales charge on purchases of Class A shares of
any Nuveen Mutual Fund.
This program is available for any of Nuveen's collection of Premier Adviser(SM)
equity and municipal bond investments. Now you can diversify your portfolio with
the quality investments you count on from Nuveen and the benefit of reduced
rates.
For more information, contact your financial adviser and ask for a prospectus.
Or call Nuveen Investor Services at (800) 257-8787. Please read it carefully
before you invest.
<PAGE>
PHOTO OF: TIMOTHY R. SCHWERTFEGER
CHAIRMAN OF THE BOARD
SIDEBAR TEXT: Wealth takes a lifetime to build. Once achieved, it should
be preserved.
Graphic of: Bond Buyer 40 chart
Dear Shareholder
I'm pleased to share with you this performance report for the Nuveen
Connecticut, Massachusetts, Missouri and Washington Exchange-Traded Funds. Over
the past 12 months, each of these funds continued to perform well and meet their
objectives of providing you with attractive tax-free income and strong after-tax
total returns.
THE ECONOMY IN REVIEW
Fixed-income investments enjoyed bullish performance over the past year, as
declining interest rates and low inflation spurred a bond market rally. The
equity markets also exhibited continued strength despite recent volatility
sparked by Asia's financial problems and their possible effects on U.S.
corporate earnings. Although interest rates have trended slightly upward in
recent months, a year-to-date comparison shows that today's rates are
significantly lower than they were one year ago. As shown in the accompanying
chart, between the end of May 1997 and May 1998, the yield on the Bond Buyer 40,
an unmanaged index of long-term municipal bonds, fell from 5.74% to 5.22%.
Much of the decline in interest rates resulted from expectations that the
financial problems of Asia would restrain the prices of imported goods and
reduce foreign demand for U.S. products and services, thereby keeping inflation
at moderate levels. These inflation expectations were largely fulfilled, as the
Consumer Price Index rose only 1.5% for the 12 months ended May 1998, remaining
at one of its lowest levels in years. The Asian situation also provided
additional strength to the bond market rally, as many investors made a "flight
to quality" by moving assets into high-quality U.S. bonds in the face of the
uncertainty in that region.
In coming months, we will continue to watch closely several key factors that are
likely to affect the future of the economy, including the demand for goods and
services, the availability of qualified employees, the strength of the dollar,
and indications from the Federal Reserve. With many investors still waiting for
the full impact of Asia's difficulties to show up in U.S. economic statistics,
the potential long-term effect of this crisis on American markets continues to
cause concern. We expect that the development of these factors will continue to
influence the tone of the fixed-income markets during the remainder of the year.
MUNICIPAL MARKET REVIEW
As interest rates continued to decline over the past year, bond prices rose.
This price appreciation for the bonds in our portfolios contributed to strong
total returns for the year.
Another major factor in bond performance over the last 12 months was the
continued strength of the U.S. economy, which helped boost the credit quality of
many municipal bonds. With the improvements in the fundamental financial health
of many municipalities and revenue projects financed by bonds, major credit
rating agencies upgraded the credit quality of thousands of issuers over the
past year, while downgrading relatively few. These boosts in credit quality also
contributed to the funds' performance as upgraded bonds increased in value.
The combination of low interest rates and a strong economy set new issuance on a
record pace and stimulated a dramatic increase in the refinancing of existing
bonds as issuers sought to lower their interest costs. The first quarter of 1998
saw $68 billion of new municipal issuance, up 70% from the same period in 1997.
The flood of new issues continued with May's long-awaited sale of the first
segment of Long Island (New York) Power Authority's $7 billion offering, the
largest issuance in municipal bond history. Although the nationwide supply of
municipal bonds remained heavy, the supply of bonds in each state varied
according to local economic conditions. This level of issuance high lights the
value of Nuveen's expertise in the municipal market, as our portfolio management
teams worked diligently to sift through the available issues to select those
undervalued securities that would help the funds achieve their investment
objectives.
DIVERSIFICATION: THE KEY TO A BETTER PORTFOLIO
In view of current market conditions, we believe that investors will find
diversification to be an increasingly important investment strategy in the
months ahead. An appropriately diversified portfolio - one that balances
different types of investments, levels of risk and tax management - can help
cushion your portfolio against volatility and enhance your return potential.
Many investors select Nuveen's municipal bond funds because their emphasis on
dependable tax-free income and attractive after-tax returns makes them ideal for
building and sustaining long-term financial security. These funds also work well
with other Nuveen investments to create the foundation of a diversified,
well-balanced portfolio. In fact, recent studies by Nuveen Research have found
that portfolios combining municipal bonds and stocks generated higher after-tax
returns with lower levels of risk than similar portfolios combining stocks and
Treasury or corporate bonds.
We encourage you to talk to your financial adviser about Nuveen's range of
equity and balanced funds, including the Nuveen European Value Fund. This new
equity mutual fund offers a portfolio of quality European company stocks for
investors seeking long-term growth potential and international diversification.
The fund is just one of an ever-expanding range of Nuveen products and services
designed to help investors achieve diversification while building a
tax-efficient, risk-sensitive investment portfolio. If you'd like to learn more
about the Nuveen European Value Fund or any of our other investments, contact
your financial adviser or call Nuveen Investor Services at (800) 257-8787 for a
prospectus. Please read the information carefully before you invest.
When seeking quality investment solutions that withstand the test of time, we
hope that you continue to think of Nuveen. Today, more than ever, you can count
on Nuveen for a wide range of investments that can help you build a
well-balanced portfolio designed to achieve your financial goals. We thank you
for your continued confidence in us and our family of investments.
Sincerely,
TIMOTHY R. SCHWERTFEGER
Chairman of the Board
July 15, 1998
Sidebar text: "Another major factor in bond performance over the last 12 months
was the continued strength of the U.S. economy, which helped boost the credit
quality of many municipal bonds."
Sidebar text: "Today, more than ever, you can count on Nuveen for a wide range
of investments that can help you build a well-balanced portfolio designed to
achieve your financial goals."
<PAGE>
Nuveen Connecticut Premium Income Municipal Fund
Portfolio Manager's Comments
PORTFOLIO MANAGER DAN SOLENDER DISCUSSES FUND PERFORMANCE, THE MUNICIPAL MARKET,
AND KEY INVESTMENT STRATEGIES FOR THE CONNECTICUT FUND.
CONNECTICUT STATE UPDATE
The high credit ratings assigned to Connecticut's long-term general obligation
debt by Moody's and Standard & Poor's (Aa3 and AA-, respectively) recognize the
state's diverse economic base and solid financial position. Connecticut has
recovered from most of its recessionary employment loss, with small businesses
fueling growth in the services, wholesale, and retail trade industries.
The strong economy continues to generate higher-than-anticipated general fund
revenues, enabling the state to reduce its general fund deficit to its lowest
level in 10 years. The recovery is also helping to improve financial performance
at the local level, with cities and towns showing improved general fund
balances. In line with national municipal trends, Connecticut's new issue volume
has risen 85% in the first five months of 1998. Much of this new supply has been
issued at the state level in the general obligation and housing categories. It
is anticipated that the ongoing strength of the national economy will continue
to propel Connecticut's tax receipts above budget expectations and maintain
state and local government's improved financial positions.
FUND PERFORMANCE
For the year ended May 31, 1998, the Nuveen Connecticut Premium Income Municipal
Fund provided an outstanding total return on net asset value of 12.39%, which
is equivalent to a taxable return of 15.49% for investors in the combined 34.1%
federal and state income tax bracket. The total return significantly
outperformed the unleveraged Lehman Brothers Municipal Bond Index's annual
return of 9.38% - a difference of more than 300 basis points.
Much of this outperformance can be attributed to the fund's longer
leverage-adjusted duration of 10.26 years, compared with the index's 7.11 years.
In a year that saw municipal bond yields as measured by the Bond Buyer 40 fall
more than 50 basis points, longer duration proved to be beneficial to
performance. Duration measures a bond fund's price volatility, or reaction to
interest rate movements. The longer the duration, the more sensitive the fund to
changes in interest rates. During a period of falling interest rates and market
rallies, such as that of the past year, longer duration enables a fund to
participate more fully in market gains, but can make the fund more vulnerable to
potential price declines when rates rise. In addition, the fund's leveraged
structure added significantly to these strong total returns.
As a result of good call protection, the fund was able to maintain its dividend
as interest rates dropped during the year. In addition, we were able to increase
the dividend during the year because of the accumulation of income from bonds
purchased over the past several years when interest rates were higher. Since
that increase in August 1997, the fund has provided shareholders with 10
consecutive months of steady income. As of May 31, 1998, the fund offered a
competitive current market yield of 5.15%, which translates to 7.81% on a
taxable-equivalent basis for investors in the combined 34.1% federal and state
income tax bracket.
KEY STRATEGIES
In Connecticut, supply is typically dominated by two key issuers: the state
housing authority and the state's general obligation bonds. Over the past year,
we took advantage of opportunities to purchase smaller new issues in the health
care and education sectors in order to help diversify the fund and boost its
income level. As of May 31, 1998, health care and education bonds accounted for
almost 40% of the fund's allocations. In addition, a number of pre-refundings,
especially in the health care and education sectors, enhanced the portfolio's
credit quality and contributed to the fund's price appreciation. In a
pre-refunding, a bond is essentially repaid early and becomes secured by U.S.
government or agency securities until it can be called by the issuer. As a
result, its credit quality typically improves, generally leading to price
appreciation.
OUTLOOK FOR THE FUTURE
Looking ahead, we expect the U.S. economy to remain in its current growth mode,
although progress should come at a more modest pace. The Asian financial crisis
will continue to impact U.S. growth, and we expect to see a slowdown in
corporate earnings, a strengthening dollar, especially versus Asian currencies,
and the continuation of benign inflation despite tight labor markets. This
should create less impetus for the Federal Reserve, which currently remains in a
neutral position, to tighten interest rates in the second half of 1998. We view
the economic slowdown and the current direction of the dollar as positive
indicators for the fixed-income markets, including municipal bonds, and much of
our outlook is contingent upon the further development of these factors.
Given the fund's current allocation, we are looking to improve the fund's
structure through added diversification, as changes in the market make
additional sectors more attractive. We may also extend the duration slightly as
opportunities allow. The Connecticut fund currently provides good call
protection, and that should continue to provide support for the dividend in
coming months.
<PAGE>
Nuveen Connecticut Premium Income Municipal Fund
Performance Overview
As of May 31, 1998
NTC
PORTFOLIO STATISTICS
==================================================
Inception Date 5/93
- --------------------------------------------------
Share Price 15 1/2
- --------------------------------------------------
Net Asset Value Per Share $14.49
- --------------------------------------------------
Current Market Yield 5.15%
- --------------------------------------------------
Taxable-Equivalent Yield (Federal Only)(1) 7.46%
- --------------------------------------------------
Taxable-Equivalent Yield
(Federal and State)(1) 7.81%
- --------------------------------------------------
Fund Net Assets ($000) $113,384
- --------------------------------------------------
Average Weighted Maturity (Years) 19.82
- --------------------------------------------------
Leverage-Adjusted Duration (Years) 10.26
- --------------------------------------------------
ANNUALIZED TOTAL RETURN
==================================================
ON SHARE PRICE ON NAV
- --------------------------------------------------
1-Year 15.61% 12.39%
- --------------------------------------------------
3-Year 13.06% 9.06%
- --------------------------------------------------
5-Year 6.15% 6.40%
- --------------------------------------------------
Since Inception 6.15% 6.26%
- --------------------------------------------------
TAXABLE-EQUIVALENT TOTAL RETURN(2)
==================================================
ON SHARE PRICE ON NAV
- --------------------------------------------------
1-Year 18.60% 15.49%
- --------------------------------------------------
3-Year 16.07% 12.11%
- --------------------------------------------------
5-Year 8.96% 9.30%
- --------------------------------------------------
Since Inception 8.96% 9.16%
- --------------------------------------------------
TOP 5 SECTORS
==================================================
Health Care 20%
- --------------------------------------------------
Education and Civic Organizations 19%
- --------------------------------------------------
Utilities 12%
- --------------------------------------------------
Tax Obligation (General) 9%
- --------------------------------------------------
Transportation 8%
- --------------------------------------------------
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen fund on an after-tax basis. 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 34.1%.
2 Taxable-equivalent total return is based on the annualized total return and a
combined federal and state income tax rate of 34.1%. It represents the return
on a taxable investment necessary to equal the return of the Nuveen fund on an
after-tax basis.
Bar Chart:
1997-1998 Monthly Tax-Free Dividends Per Share
June 97 0.065
July 97 0.065
August 97 0.0665
September 97 0.0665
October 97 0.0665
November 97 0.0665
December 97 0.0665
January 98 0.0665
February 98 0.0665
March 98 0.0665
April 98 0.0665
May 98 0.0665
<PAGE>
Nuveen Massachusetts Premium Income Municipal Fund
Portfolio Manager's Comments
PORTFOLIO MANAGER STEVE PETERSON DISCUSSES FUND PERFORMANCE, THE MUNICIPAL
MARKET, AND KEY INVESTMENT STRATEGIES FOR THE MASSACHUSETTS FUND.
ON JULY 1, 1998, NUVEEN MADE SEVERAL CHANGES IN THE MANAGEMENT OF ITS FUNDS TO
MAKE MORE EFFICIENT USE OF STAFF RESOURCES AND PORTFOLIO MANAGER EXPERTISE. AS A
RESULT, TOM FUTRELL ASSUMED MANAGEMENT RESPONSIBILITIES FOR THIS FUND. TOM IS A
15-YEAR VETERAN OF NUVEEN AND AN EXPERIENCED INVESTMENT PROFES SIONAL WHO HAS
MANAGED A RANGE OF OTHER MUNICIPAL BOND FUNDS.
MASSACHUSETTS STATE UPDATE
The high credit ratings assigned to the state's long-term general obligation
debt by Moody's and Standard & Poor's (Aa3 and AA-, respectively) recognize the
commonwealth's rebounding economy and healthy financial position. Growth has
largely been driven by employment gains in health care, construction, research,
and computer and business services. In addition, the combination of
better-than-expected tax collections and under-budget expenditures has enabled
the commonwealth and many of its municipalities to strengthen cash and reserve
positions. In line with national municipal trends, new issue volume in
Massachusetts through May 1998 rose 233% over the same period last year and was
characterized by diversity across sectors. Well-known for its large debt burden,
Massachusetts is currently financing the Central Artery/Third Tunnel project in
Boston with a combination of state general obligation bonds, federal highway
grant anticipation notes, and revenues from both the Massachusetts Turnpike and
Port Authorities.
FUND PERFORMANCE
For the year ended May 31, 1998, the total return on net asset value for the
Nuveen Massachusetts Premium Income Municipal Fund was 11.91%, equivalent to a
taxable return of 15.90% for investors in the combined 39.3% federal and state
income tax bracket. The total return outperformed the unleveraged Lehman
Brothers Municipal Bond Index's annual return of 9.38% by more than 250 basis
points.
Much of this outperformance can be attributed to the fund's longer
leverage-adjusted duration of 8.91 years, compared with the index's 7.11 years.
In a year that saw municipal bond yields, as measured by the Bond Buyer 40, fall
more than 50 basis points, longer duration proved to be beneficial to
performance. Duration measures a bond fund's price volatility, or reaction to
interest rate movements. The longer the duration, the more sensitive the fund to
changes in interest rates. During a period of falling interest rates and market
rallies, such as that of the past year, longer duration enables a fund to
participate more fully in market gains, but can make the fund more vulnerable to
potential price declines when rates rise. In addition, the fund's leveraged
structure added significantly to these strong total returns.
Despite the low interest rate environment of the past year, good call protection
helped to support the dividend of the fund and prevent income from being
impacted. The fund has now provided shareholders with 16 consecutive months of
steady income. As of May 31, 1998, the fund offered a competitive current market
yield of 5.13%, which translates to 8.45% on a taxable-equivalent basis for
investors in the combined 39.3% federal and state income tax bracket.
KEY STRATEGIES
Over the past year, we focused on a number of sectors, including housing bonds,
FHA-insured bonds, health care and utilities. We also found value in zero-coupon
bonds, which are issued at a significant discount to their par value and
generally increase in value incrementally rather than paying a traditional
coupon rate. In the health care sector, hospitals offered several attractive
opportunities, as industry consolidation resulted in the issuance of new debt as
well as debt restructuring. Through fairly active trading, we were able to
purchase bonds at lower prices and then sell them as prices appreciated,
replacing them with bonds offering better call protection and more attractive
coupons. The overall credit quality of the Massachusetts fund remains high due
to a number of pre-refundings, which also con tributed to the fund's price
appreciation. In a pre-refunding, a bond is essentially repaid early and becomes
secured by U.S. government or agency securities until it can be called by the
issuer. As a result, its credit quality typically improves, generally leading to
price appreciation.
OUTLOOK FOR THE FUTURE
Looking ahead, we expect the U.S. economy to remain in its current growth mode,
although progress should come at a more modest pace. The Asian financial crisis
will continue to impact U.S. growth, and we expect to see a slowdown in
corporate earnings, a strengthening dollar, especially versus Asian currencies,
and the continuation of benign inflation despite tight labor markets. This
should create less impetus for the Federal Reserve, which currently remains in a
neutral position, to tighten interest rates in the second half of 1998. We view
the economic slowdown and the current direction of the dollar as positive
indicators for the fixed-income markets, including municipal bonds, and much of
our outlook is contingent upon the further development of these factors.
The current call protection of the Massachusetts fund averages approximately
seven years. In the months ahead, we plan to extend this average by continuing
to buy bonds with better call protection. We will also take advantage of
opportunities to further upgrade portfolio quality by buying higher-quality
bonds since they remain a good value relative to lower-rated bonds.
<PAGE>
Nuveen Massachusetts Premium Income Municipal Fund
Performance Overview
As of May 31, 1998
NMT
PORTFOLIO STATISTICS
==================================================
Inception Date 3/93
- --------------------------------------------------
Share Price 16 1/2
- --------------------------------------------------
Net Asset Value Per Share $14.91
- --------------------------------------------------
Current Market Yield 5.13%
- --------------------------------------------------
Taxable-Equivalent Yield (Federal Only)(1) 7.43%
- --------------------------------------------------
Taxable-Equivalent Yield
(Federal and State)(1) 8.45%
- --------------------------------------------------
Fund Net Assets ($000) $102,936
- --------------------------------------------------
Average Weighted Maturity (Years) 20.02
- --------------------------------------------------
Leverage-Adjusted Duration (Years) 8.91
- --------------------------------------------------
ANNUALIZED TOTAL RETURN(2)
==================================================
ON SHARE PRICE ON NAV
- --------------------------------------------------
1-Year 18.08% 11.91%
- --------------------------------------------------
3-Year 13.55% 8.87%
- --------------------------------------------------
5-Year 7.58% 7.20%
- --------------------------------------------------
Since Inception 7.62% 6.95%
- --------------------------------------------------
TAXABLE-EQUIVALENT TOTAL RETURN(2)
==================================================
ON SHARE PRICE ON NAV
- --------------------------------------------------
1-Year 21.89% 15.90%
- --------------------------------------------------
3-Year 17.50% 12.85%
- --------------------------------------------------
5-Year 11.41% 11.08%
- --------------------------------------------------
Since Inception 11.30% 10.67%
- --------------------------------------------------
TOP 5 SECTORS
==================================================
U.S. Guaranteed 23%
- --------------------------------------------------
Health Care 20%
- --------------------------------------------------
Education and Civic Organizations 18%
- --------------------------------------------------
Housing (Multifamily) 9%
- --------------------------------------------------
Tax Obligation (General) 9%
- --------------------------------------------------
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen fund on an after-tax basis. 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 39.3%.
2 Taxable-equivalent total return is based on the annualized total return and a
combined federal and state income tax rate of 39.3%. It represents the return
on a taxable investment necessary to equal the return of the Nuveen fund on an
after-tax basis.
Bar Chart:
1997-1997 Monthly Tax-Free Dividends Per Share
June 97 0.0705
July 97 0.0705
August 97 0.0705
September 97 0.0705
October 97 0.0705
November 97 0.0705
December 97 0.0705
January 98 0.0705
February 98 0.0705
March 98 0.0705
April 98 0.0705
May 98 0.0705
<PAGE>
Nuveen Missouri Premium Income Municipal Fund
Portfolio Manager's Comments
PORTFOLIO MANAGER JOHN GAMBLA DISCUSSES FUND PERFORMANCE, THE MUNICIPAL MARKET,
AND KEY INVESTMENT STRATEGIES FOR THE MISSOURI FUND FOR THE PERIOD COVERED BY
THIS REPORT.
ON JULY 1, 1998, NUVEEN MADE SEVERAL CHANGES IN THE MANAGEMENT OF ITS FUNDS TO
MAKE MORE EFFICIENT USE OF STAFF RESOURCES AND PORTFOLIO MANAGER EXPERTISE. AS A
RESULT, MIKE DAVERN ASSUMED MANAGEMENT RESPONSIBILITIES FOR THIS FUND. MIKE IS A
7-YEAR VETERAN OF NUVEEN WITH 16 YEARS OF EXPERIENCE AS AN INVESTMENT
PROFESSIONAL. HE HAS MANAGED A RANGE OF OTHER STATE AND NATIONAL MUNICIPAL BOND
FUNDS.
MISSOURI STATE UPDATE
Missouri confirmed its AAA credit quality status as a municipal issuer with
another year of sound financial operations and economic growth. The state ended
fiscal year 1997 with a budget stabilization fund totaling approximately $370
million, or nearly 4% of general fund revenues. The general fund, fueled by
strong individual income tax and sales/use tax revenues, increased 18% to $1.7
billion. High levels of economic growth between 1995 and 1997 and increasing
personal incomes resulted in income tax revenues that surpassed the
constitutional state limit, and taxpayers were subsequently rewarded with a
refund totaling $695 million.
Missouri's economy remains diversified, with recent declines in manufacturing
employment replaced by job gains in the services sector. Lease revenue debt,
which constitutes nearly one-third of total bond issuance, is an important
component of financing state capital programs. Missouri debt should continue to
attract investor attention, as new issue volume - in line with national
municipal trends increased 94% during the first quarter of 1998.
FUND PERFORMANCE
For the year ended May 31, 1998, the total return on net asset value for the
Nuveen Missouri Premium Income Municipal Fund was 11.31%, which is equivalent
to a taxable return of 14.31% for investors in the combined 35.1% federal and
state income tax bracket. The total return outpaced the unleveraged Lehman
Brothers Municipal Bond Index's annual return of 9.38% by almost 200 basis
points.
Much of this outperformance can be attributed to the fund's longer
leverage-adjusted duration of 10.34 years, compared with the index's 7.11 years.
In a year that saw municipal bond yields as measured by the Bond Buyer 40 fall
more than 50 basis points, longer duration proved to be beneficial to
performance. Duration measures a bond fund's price volatility, or reaction to
interest rate movements. The longer the duration, the more sensitive the fund to
changes in interest rates. During a period of falling interest rates and market
rallies, such as that of the past year, longer duration enables a fund to
participate more fully in market gains, but can make the fund more vulnerable to
potential price declines when rates rise. In addition, the fund's leveraged
structure added significantly to these strong total returns.
Despite the low interest rate environment of the past year, good call protection
helped support the dividend of the fund and prevent income from being impacted.
In addition, the accumulation of income from higher-yielding bonds purchased
over the past several years allowed us to increase the dividend. Since that
increase in August 1997, the fund has provided shareholders with 10 consecutive
months of steady income. As of May 31, 1998, the fund offered a competitive
current market yield of 5.24%, which translates to 8.07% on a taxable-equivalent
basis for investors in the combined 35.1% federal and state income tax bracket.
KEY STRATEGIES
Over the past year, we focused on the purchase of insured bonds as well as bonds
with higher coupons. The majority of the bonds we added offer maturities in the
range of 15 to 20 years, which we felt offered the best values compared to their
historical levels of volatility.
OUTLOOK FOR THE FUTURE
Looking ahead, we expect the U.S. economy to remain in its current growth mode,
although progress should come at a more modest pace. The Asian financial crisis
will continue to impact U.S. growth, and we expect to see a slowdown in
corporate earnings, a strengthening dollar, especially versus Asian currencies,
and the continuation of benign inflation despite tight labor markets. This
should create less impetus for the Federal Reserve, which currently remains in a
neutral position, to tighten interest rates in the second half of 1998. We view
the economic slowdown and the current direction of the dollar as positive
indicators for the fixed-income markets, including municipal bonds, and much of
our outlook is contingent upon the further development of these factors.
Given the current environment of low interest rates and tight credit spreads,
our primary focus in the months ahead will be on preserving shareholder capital.
We plan to achieve this by upgrading portfolio quality and taking on additional
risk only when strong price appreciation potential or competitive yields
compensate the fund for doing so. This approach should help us reduce
above-market interest rate exposure where appropriate without eroding the income
levels of the fund.
<PAGE>
Nuveen Missouri Premium Income Municipal Fund
Performance Overview
As of May 31, 1998
NOM
PORTFOLIO STATISTICS
==================================================
Inception Date 5/93
- --------------------------------------------------
Share Price 14 3/16
- --------------------------------------------------
Net Asset Value Per Share $14.44
- --------------------------------------------------
Current Market Yield 5.24%
- --------------------------------------------------
Taxable-Equivalent Yield (Federal Only)(1) 7.59%
- --------------------------------------------------
Taxable-Equivalent Yield
(Federal and State)(1) 8.07%
- --------------------------------------------------
Fund Net Assets ($000) $46,935
- --------------------------------------------------
Average Weighted Maturity (Years) 17.06
- --------------------------------------------------
Leverage-Adjusted Duration (Years) 10.34
- --------------------------------------------------
ANNUALIZED TOTAL RETURN
==================================================
ON SHARE PRICE ON NAV
- --------------------------------------------------
1-Year 14.53% 11.31%
- --------------------------------------------------
3-Year 11.69% 8.10%
- --------------------------------------------------
5-Year 4.12% 6.11%
- --------------------------------------------------
Since Inception 4.29% 5.88%
- --------------------------------------------------
TAXABLE-EQUIVALENT TOTAL RETURN(2)
==================================================
ON SHARE PRICE ON NAV
- --------------------------------------------------
1-Year 17.68% 14.31%
- --------------------------------------------------
3-Year 14.85% 11.06%
- --------------------------------------------------
5-Year 7.06% 8.97%
- --------------------------------------------------
Since Inception 7.24% 8.73%
- --------------------------------------------------
TOP 5 SECTORS
==================================================
Tax Obligation (General) 18%
- --------------------------------------------------
Tax Obligation (Limited) 17%
- --------------------------------------------------
Housing (Multifamily) 14%
- --------------------------------------------------
Water and Sewer 11%
- --------------------------------------------------
U.S. Guaranteed 10%
- --------------------------------------------------
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen fund on an after-tax basis. The
federal only rate is based on the current market yield and a federal income
tax rate of 31%. The rate shown for federal and state highlights the added
value of owning shares that are also exempt from state taxes. It is based on a
combined federal and state income tax rate of 35.1%.
2 Taxable-equivalent total return is based on the annualized total return and a
combined federal and state income tax rate of 35.1%. 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 $0.0151
per share.
1997-1998 Monthly Tax-Free Dividends Per Share(3)
June 97 0.061
July 97 0.061
August 97 0.062
September 97 0.062
October 97 0.062
November 97 0.062
December 97 0.062
January 98 0.062
February 98 0.062
March 98 0.062
April 98 0.062
May 98 0.062
<PAGE>
Nuveen Washington Premium Income Municipal Fund
Portfolio Manager's Comments
PORTFOLIO MANAGER DAN SOLENDER DISCUSSES FUND PERFORMANCE, THE MUNICIPAL MARKET,
AND KEY INVESTMENT STRATEGIES FOR THE WASHINGTON FUND FOR THE PERIOD COVERED BY
THIS REPORT.
ON JULY 1, 1998, NUVEEN MADE SEVERAL CHANGES IN THE MANAGEMENT OF ITS FUNDS TO
MAKE MORE EFFICIENT USE OF STAFF RESOURCES AND PORTFOLIO MANAGER EXPERTISE. AS A
RESULT, MIKE DAVERN ASSUMED MANAGEMENT RESPONSIBILITIES FOR THIS FUND. MIKE IS A
7-YEAR VETERAN OF NUVEEN WITH 16 YEARS OF EXPERIENCE AS AN INVESTMENT
PROFESSIONAL. HE HAS MANAGED A RANGE OF OTHER STATE AND NATIONAL MUNICIPAL BOND
FUNDS.
WASHINGTON STATE UPDATE
The state of Washington continues to benefit from a growing and increasingly
diversified economic base. Employment rose 4.1% in 1997, and the unemployment
rate as of April 1998 was 4.2%, slightly below the national rate. Boeing plays
an important but declining role in the state's economy, supplanted by Microsoft
and other high-tech companies. With the recent addition of $75 million, the
state's "rainy day" fund reserves now total almost $380 million. One of the few
clouds on the horizon is the potentially dampening effect that the state's ties
with Asian trading partners could have on economic growth going forward. In
response to the state's broadening economic base and continued solid financial
performance, Washington's general obligation debt rating was upgraded during the
year. As municipalities throughout the state also benefited from the
strengthening economy, Standard & Poor's upgraded 10 issuers, with no
downgrades, reflecting similar situations across the country. Contrary to the
national trend of heavy supply, bond issuance in the state dropped 13% for the
first four months of 1998 compared with the same period in 1997, with most of
the new supply issued by school districts. It is anticipated that Washington's
future bond supply should be healthy, given the state's heavy infrastructure
needs due to high population growth. Recently, the state treasurer announced a
new program that could double the annual number of certificate of participation
bonds. The program is intended to help local municipalities borrow for equipment
and real estate acquisitions at the state's lower interest rates.
FUND PERFORMANCE
For the year ended May 31, 1998, the Nuveen Washington Premium Income Municipal
Fund provided an outstanding total return on net asset value of 12.64%, which
is equivalent to a taxable return of 15.11% for investors in the 31% federal
income tax bracket. The total return significantly outperformed the unleveraged
Lehman Brothers Municipal Bond Index's annual return of 9.38% - a difference of
more than 300 basis points.
Much of this outperformance can be attributed to the fund's longer
leverage-adjusted duration of 9.42 years, compared with the index's 7.11 years.
In a year that saw municipal bond yields as measured by the Bond Buyer 40 fall
more than 50 basis points, longer duration proved to be beneficial to
performance. Duration measures a bond fund's price volatility, or reaction to
interest rate movements. The longer the duration, the more sensitive the fund to
changes in interest rates. During a period of falling interest rates and market
rallies, such as that of the past year, longer duration enables a fund to
participate more fully in market gains, but can make the fund more vulnerable to
potential price declines when rates rise. In addition, the fund's leveraged
structure added significantly to these strong total returns.
Despite the low interest rate environment of the past year, good call protection
helped support the dividend of the fund and prevent income from being impacted.
The fund has now provided shareholders with 19 consecutive months of steady
income. As of May 31, 1998, the fund offered a competitive current market yield
of 5.55%, which translates to 8.04% on a taxable-equivalent basis for investors
in the 31% federal income tax bracket.
KEY STRATEGIES
Given the duration, diversification, attractive coupons, and excellent level of
call protection, the fund was strategically positioned for the market
environment of the past year. So, we kept trading to a minimum and made changes
only when they would add further to performance. Washington's credit quality is
relatively high, with most of the market rated AAA or AA, so the majority of
these changes involved the purchase of insured bonds. This included insured
health care bonds, which provided the higher yields found in the health care
sector as well as AAA ratings. The state's low-cost sources of power also made
public power bonds attractive, and we continue to maintain substantial holdings
in the Washington Public Power Supply System.
OUTLOOK FOR THE FUTURE
Looking ahead, we expect the U.S. economy to remain in its current growth mode,
although progress should come at a more modest pace. The Asian financial crisis
will continue to impact U.S. growth, and we expect to see a slowdown in
corporate earnings, a strengthening dollar, especially versus Asian currencies,
and the continuation of benign inflation despite tight labor markets. This
should create less impetus for the Federal Reserve, which currently remains in a
neutral position, to tighten interest rates in the second half of 1998. We view
the economic slowdown and the current direction of the dollar as positive
indicators for the fixed-income markets, including municipal bonds, and much of
our outlook is contingent upon the further development of these factors.
Given the Washington fund's current strategic position, we do not anticipate
making substantial changes to the portfolio unless market conditions change. Our
efforts will be focused on maintaining the fund's duration while continuing to
diversify by sector and add lower coupon and discount bonds if priced
attractively.
<PAGE>
Nuveen Washington Premium Income Municipal Fund
Performance Overview
As of May 31, 1998
NPW
PORTFOLIO STATISTICS
==================================================
Inception Date 3/93
- --------------------------------------------------
Share Price 13 5/8
- --------------------------------------------------
Net Asset Value Per Share $15.06
- --------------------------------------------------
Current Market Yield 5.55%
- --------------------------------------------------
Taxable-Equivalent Yield(1) 8.04%
- --------------------------------------------------
Fund Net Assets ($000) $51,948
- --------------------------------------------------
Average Weighted Maturity (Years) 19.70
- --------------------------------------------------
Leverage-Adjusted Duration (Years) 9.42
- --------------------------------------------------
ANNUALIZED TOTAL RETURN
==================================================
ON SHARE PRICE ON NAV
- --------------------------------------------------
1-Year 15.26% 12.64%
- --------------------------------------------------
3-Year 11.83% 8.78%
- --------------------------------------------------
5-Year 3.12% 7.06%
- --------------------------------------------------
Since Inception 3.97% 6.83%
- --------------------------------------------------
TAXABLE-EQUIVALENT TOTAL RETURN(2)
==================================================
ON SHARE PRICE ON NAV
- --------------------------------------------------
1-Year 18.04% 15.11%
- --------------------------------------------------
3-Year 14.73% 11.30%
- --------------------------------------------------
5-Year 5.87% 9.61%
- --------------------------------------------------
Since Inception 6.63% 9.28%
- --------------------------------------------------
TOP 5 SECTORS
==================================================
Tax Obligation (General) 21%
- --------------------------------------------------
Utilities 15%
- --------------------------------------------------
Water and Sewer 13%
- --------------------------------------------------
U.S. Guaranteed 13%
- --------------------------------------------------
Health Care 10%
- --------------------------------------------------
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen fund on an after-tax basis. It is
based on the current market yield and a federal income tax rate of 31%.
2 Taxable-equivalent total return is based on the annualized total return and a
federal income tax rate of 31%. It represents the return on a taxable
investment necessary to equal the return of the Nuveen fund on an after-tax
basis.
Bar Chart:
1997-1998 Monthly Tax-Free Dividends Per Share
June 97 0.063
July 97 0.063
August 97 0.063
September 97 0.063
October 97 0.063
November 97 0.063
December 97 0.063
January 98 0.063
February 98 0.063
March 98 0.063
April 98 0.063
May 98 0.063
<PAGE>
REPORT OF INDEPENDENT AUDITORS
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS
NUVEEN CONNECTICUT PREMIUM INCOME MUNICIPAL FUND
NUVEEN MASSACHUSETTS PREMIUM INCOME MUNICIPAL FUND
NUVEEN MISSOURI PREMIUM INCOME MUNICIPAL FUND
NUVEEN WASHINGTON PREMIUM INCOME MUNICIPAL FUND
We have audited the accompanying statements of net assets, including the
portfolios of investments, of Nuveen Connecticut Premium Income Municipal Fund,
Nuveen Massachusetts Premium Income Municipal Fund, Nuveen Missouri Premium
Income Municipal Fund and Nuveen Washington Premium Income Municipal Fund, as of
May 31, 1998, and the related statements of operations, changes in net assets
and the financial highlights for the periods indicated therein. These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and the financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments owned as of May
31, 1998, by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Nuveen
Connecticut Premium Income Municipal Fund, Nuveen Massachusetts Premium Income
Municipal Fund, Nuveen Missouri Premium Income Municipal Fund and Nuveen
Washington Premium Income Municipal Fund, as of May 31, 1998, the results of
their operations, changes in their net assets and financial highlights for the
periods indicated therein in conformity with generally accepted accounting
principles.
Chicago, Illinois
July 14, 1998
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS
NUVEEN CONNECTICUT PREMIUM INCOME MUNICIPAL FUND (NTC)
May 31, 1998
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EDUCATION AND CIVIC ORGANIZATIONS - 19.2%
Connecticut Higher Education Supplemental Loan Authority,
Revenue Bonds (Family Education Loan Program), 1996 Series A:
$ 1,580,000 5.800%, 11/15/14 (Alternative Minimum Tax) 11/06 at 102 Aaa $ 1,678,513
1,000,000 5.875%, 11/15/17 (Alternative Minimum Tax) 11/06 at 102 Aaa 1,032,720
4,450,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Quinnipiac
College Issue, Series D, 6.000% 7/01/23 7/03 at 102 BBB- 4,555,332
State of Connecticut Health and Educational Facilities
Authority, Revenue Bonds, Sacred Heart University Issue, Series
B:
2,600,000 5.700%, 7/01/16 7/03 at 102 BBB- 2,623,972
1,000,000 5.800%, 7/01/23 7/03 at 102 BBB- 1,006,280
2,000,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Trinity College
Issue, Series C, 5.875%, 7/01/26 7/06 at 102 Aaa 2,130,700
2,040,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, The Loomis
Chaffee School Issue, Series C, 5.500%, 7/01/16 7/06 at 102 Aaa 2,106,892
2,920,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Connecticut College
Issue, Series C-1, 5.500%, 7/01/20 7/07 at 102 Aaa 3,030,376
3,810,000 The University of Connecticut, Student Fee Revenue Bonds, 1998 Series A,
4.750%, 11/15/27 11/07 at 101 Aaa 3,585,667
- ------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 19.6%
2,000,000 Connecticut Development Authority, Solid Waste Disposal Facilities Revenue Bonds, Pfizer Inc.
Project, 1994 Series, 7.000%, 7/01/25 (Alternative Minimum Tax) 7/05 at 102 Aaa 2,323,040
1,000,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Newington
Children's Hospital, Series A, 6.050%, 7/01/10 7/04 at 102 Aaa 1,091,920
2,725,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Saint Francis
Hospital and Medical Center Issue, Series B, 6.200%, 7/01/22 7/02 at 102 Aaa 2,946,870
2,000,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Hospital of
Saint Raphael Issue, Series H, 5.200% 7/01/08 No Opt. Call Aaa 2,120,100
1,500,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Lawrence and
Memorial Hospital Issue, Series D, 5.000%, 7/01/22 7/03 at 102 Aaa 1,456,980
2,200,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Day Kimball
Hospital Issue, Series A, 5.375%, 7/01/26 7/06 at 102 Aaa 2,226,378
4,160,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Kent School Issue,
Series B, 5.625%, 7/01/16 7/06 at 102 Aaa 4,350,403
1,000,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds,
The William W. Backus Hospital Issue, Series D, 5.750%, 7/01/27 7/07 at 102 Aaa 1,059,700
3,000,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Middlesex
Hospital Issue, Series H, Revenue Bonds, Middlesex Health Services Issue, Series I,
5.125%, 7/01/27 7/07 at 101 Aaa 2,948,640
1,500,000 Puerto Rico Industrial, Tourist, Educational, Medical and Environmental Control Facilities
Financing Authority, Hospital Revenue Refunding Bonds, 1995 Series A, FHA Insured
Mortgage-Doctor Pila Hospital Project, 6.125%, 8/01/25 8/05 at 101 1/2 AAA 1,650,660
- ------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 5.9%
3,000,000 Waterbury Housing Authority, Mortgage Revenue Refunding Bonds, Waterbury NSA II - Series 98C FHA/
Section 8, 5.450%, 7/01/23 1/02 at 100 Aaa 2,995,770
1,405,000 Waterbury Nonprofit Housing Corporation, Connecticut Taxable Mortgage Revenue Refunding Bonds,
FHA Insured Mortgage Loan-Fairmont Heights Section 8 Assisted Project, Series 1993A,
6.500%, 7/01/07 7/02 at 101 Aaa 1,508,001
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
HOUSING/MULTIFAMILY (continued)
$ 1,930,000 Housing Authority of the City of Willimantic, Multi-Family Housing Revenue Bonds, Series 1995A,
GNMA Collateralized Mortgage Loan-Village Heights Apartments Project,
8.000%, 10/20/30 10/05 at 105 AAA $ 2,221,160
- ------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 5.3%
3,175,000 Connecticut Housing Finance Authority, Housing Mortgage Finance Program Bonds, 1993 Series B,
6.200%, 5/15/12 5/03 at 102 Aa 3,380,073
2,490,000 Connecticut Housing FInance Authority, Housing Mortgage Finance Program Bonds, 1996 Subseries E-2,
6.150%, 11/15/27 (Alternative Minimum Tax) 11/06 at 102 AA 2,643,832
- ------------------------------------------------------------------------------------------------------------------------------------
LONG TERM CARE - 6.3%
Connecticut Development Authority, Health Facility Refunding
Revenue Bonds, Alzheimer's Resource Center of Connecticut, Inc.
Project, 1994 Series A:
1,500,000 6.875%, 8/15/04 No Opt. Call N/R 1,603,695
1,000,000 7.000%, 8/15/09 8/04 at 102 N/R 1,083,820
2,000,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Nursing Home
Program Issue, Series 1994, AHF/Hartford, Inc. Project, 7.125%, 11/01/24 11/04 at 102 AA- 2,299,380
2,000,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Nursing Home
Program Issue, Series 1993, Mansfield Center for Nursing and
Rehabilitation Project, 5.875%, 11/01/12 11/03 at 102 Aaa 2,164,360
- ------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 9.1%
2,000,000 State of Connecticut, General Obligation Bonds, 1993 Series E,
6.000%, 3/15/12 No Opt. Call AA- 2,268,120
2,750,000 State of Connecticut, General Obligation Bonds, 1993 Series D,
5.100%, 8/01/11 8/03 at 101 1/2 AA- 2,816,138
1,650,000 State of Connecticut, General Fund Obligation Bonds, 1994 Series A, Issued By Connecticut
Development Authority, 6.375%, 10/15/14 10/04 at 102 AA- 1,843,644
3,500,000 Commonwealth of Puerto Rico, Public Improvement Bonds of 1998,
4.875%, 7/01/23 7/08 at 101 Aaa 3,403,575
- ------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 5.8%
1,800,000 State of Connecticut, Special Tax Obligation Bonds, Transportation Infrastructure Purposes,
1991 Series B, 6.500%, 10/01/10 No Opt. Call AA- 2,117,286
1,900,000 Capitol Region Education Council, Revenue Bonds, 6.700%, 10/15/10 10/05 at 102 BBB 2,063,267
2,250,000 City of Waterbury Connecticut, General Obligation Tax Revenue Intercept Refunding Bonds,
1993 Issue, 5.375%, 4/15/08 4/03 at 102 Aaa 2,354,400
- ------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 7.4%
3,000,000 State of Connecticut, Airport Revenue RefundingBonds, Bradley International Airport, Series 1992,
7.650%, 10/01/12 10/04 at 100 Aaa 3,524,910
City of New Haven, Connecticut, Air Rights Parking Facility Revenue Bonds, Series 1991:
3,000,000 6.625%, 12/01/05 12/01 at 102 Aaa 3,289,800
1,500,000 6.500%, 12/01/15 12/01 at 102 Aaa 1,632,165
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 5.7%
2,405,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, University of
Hartford Issue, Series C, 8.000%, 7/01/18 (Pre-refunded to 7/01/03) 7/03 at 100 Aaa 2,765,317
2,020,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Trinity College Issue,
Series C, 6.000%, 7/01/22 (Pre-refunded to 7/01/02) 7/02 at 102 Aaa 2,200,062
1,250,000 State of Connecticut, Health and Educational Facilities Authority, Revenue Bonds, Choate Rosemary
Hall Issue, Series A, 7.000%, 7/01/25 (Pre-refunded to 7/01/04) 7/04 at 101 Aaa 1,447,062
- ------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 11.7%
1,400,000 Connecticut Development Authority, Water Facilities Revenue Bonds, Bridgeport Hydraulic Company
Project, 1993 B Series, 5.500%, 6/01/28 6/03 at 102 Aaa 1,434,300
2,795,000 Connecticut Development Authority, Water Facilities Revenue Bonds, Bridgeport Hydraulic Company
Project, 1993 A Series, 5.600%, 6/01/28 (Alternative Minimum Tax) 6/03 at 102 Aaa 2,866,524
3,250,000 Connecticut Municipal Electric Energy Cooperative, Power Supply System Revenue Bonds, 1993 A Series,
5.000%, 1/01/18 1/04 at 102 Aaa 3,209,895
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
UTILITIES (continued)
$ 2,200,000 Connecticut Resources Recovery Authority, Bridgeport Resco Company, L.P. Project Bonds, Series A,
Adjustable Convertible Extendable Securities-Aces, 7.625%, 1/01/09 1/03 at 100 A $ 2,279,420
3,235,000 Connecticut Resources Recovery Authority, Resource Recovery Revenue Bonds, American Ref-Fuel,
Company of Southeastern Connecticut Project, 1989 Series A,
7.700%, 11/15/11 11/98 at 103 AA- 3,480,892
- ------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 2.8%
1,000,000 State of Connecticut, Clean Water Fund Subordinate Revenue Refunding Bonds, 1996 Series,
5.250%, 7/01/10 1/05 at 101 Aaa 1,044,530
2,000,000 South Central Connecticut Regional Water Authority, Water System Revenue Bonds, Eleventh Series,
5.750%, 8/01/12 8/03 at 102 Aaa 2,130,540
- ------------------------------------------------------------------------------------------------------------------------------------
$ 105,890,000 Total Investments - (cost $106,025,594) - 98.8% 111,997,081
=============
Other Assets Less Liabilities - 1.2% 1,386,991
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $ 113,384,072
====================================================================================================================
* Optional Call Provisions (not covered by the report of independent
auditors): Dates (month and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying prices at later dates.
** Ratings (not covered by the report of independent auditors): Using the higher
of Standard & Poor's or Moody's rating.
N/R Investment is not rated.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
NUVEEN MASSACHUSETTS PREMIUM INCOME MUNICIPAL FUND (NMT)
May 31, 1998
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EDUCATION AND CIVIC ORGANIZATIONS - 17.8%
$ 870,000 Massachusetts Educational Financing Authority, Education Loan Revenue Bonds, Issue E, Series 1995,
6.150%, 7/01/10 (Alternative Minimum Tax) 7/04 at 102 Aaa $ 944,951
1,970,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, Boston College Issue,
Series K, 5.250%, 6/01/23 6/03 at 102 Aaa 1,974,570
1,175,000 Massachusetts Industrial Finance Agency, Revenue Bonds (Brooks School Issue), Series 1993,
5.950%, 7/01/23 7/03 at 102 A3 1,223,810
3,500,000 Massachusetts Industrial Finance Agency, Revenue Bonds, Phillips Academy Issue, Series 1993,
5.375%, 9/01/23 9/08 at 102 Aa1 3,554,705
2,645,000 Massachusetts Industrial Finance Agency, Revenue Bonds (Whitehead Institute for Biomedical
Research-1993 Issue), 5.125%, 7/01/26 7/03 at 102 Aa1 2,608,049
1,500,000 Massachusetts Industrial Finance Agency, Revenue Bonds (College of the Holy Cross-1996 Issue),
5.500%, 3/01/20 3/06 at 102 Aaa 1,547,865
1,765,000 The New England Education Loan Marketing Corporation, Student Loan Revenue Bonds, 1992
Subordinated Issue C, 6.750%, 9/01/02 (Alternative Minimum Tax) No Opt. Call A1 1,915,166
4,000,000 The New England Loan Marketing Corporation, Student Loan Revenue Bonds, 1992 Subordinated
Issue H, 6.900%, 11/01/09 (Alternative Minimum Tax) No Opt. Call A1 4,509,960
- ------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 19.7%
2,805,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, Series 1998A (Caregroup
Issue), 5.000%, 7/01/25 7/08 at 102 Aaa 2,715,913
3,000,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, Lahey Clinic Medical
Center Issue, Series B, 5.625%, 7/01/15 7/03 at 102 Aaa 3,106,980
1,000,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, Massachusetts General
Hospital Issue, Series G, 5.375%, 7/01/11 7/00 at 100 Aaa 1,040,250
4,000,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, New England Medical
Center Hospitals, Series 1993-G1, 5.375%, 7/01/24 7/04 at 102 Aaa 4,032,400
2,000,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds (Daughters of Charity
National Health System-The Carney Hospital), Series D, 6.100%, 7/01/14 7/04 at 102 AA+ 2,159,120
400,000 Massachusetts Health and Educational Facilities Authority, Revenue Refunding Bonds (Cardinal
Cushing General Hospital), Series 1989-A, 8.500%, 7/01/00 7/99 at 102 1/2N/R 415,472
Massachusetts Health and Educational Facilities Authority,
Revenue Refunding Bonds, Youville Issue (FHA Insured Project),
Series B:
2,580,000 6.125%, 2/15/15 2/04 at 102 Aa 2,718,236
1,000,000 6.000%, 2/15/25 2/04 at 102 Aa 1,039,320
3,000,000 Massachusetts Industrial Finance Agency, Revenue Bonds, Harvard Community Health Plan, Inc.,
Issue 1988 Series B (Refunding Bonds), 8.125%, 10/01/17 10/98 at 102 A- 3,098,880
- ------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 9.2%
3,800,000 Massachusetts Housing FInance Agency, Housing Project Revenue Bonds,
6.300%, 10/01/13 4/03 at 102 A1 4,028,684
1,945,000 Massachusetts Housing Finance Agency, Rental Housing Mortgage Revenue Bonds, 1995 Series A
(FHA Insured Mortgage Loans), 7.350%, 1/01/35 (Alternative Minimum Tax) 1/05 at 102 Aaa 2,131,331
3,315,000 Massachusetts Housing Finance Agency, Rental Housing Mortgage Revenue Bonds, 1997 Series C,
5.625%, 7/01/40 (Alternative Minimum Tax) 7/07 at 101 Aaa 3,343,410
- ------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 2.5%
2,450,000 Massachusetts Housing Finance Agency, Single Family Housing Revenue Bonds, Series 9,
8.100%, 12/01/21 (Alternative Minimum Tax) 12/98 at 102 Aa 2,524,407
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LONG TERM CARE - 2.7%
$ 1,000,000 Massachusetts Health and Educational Facilities Authority, Revenue Refunding Bonds, Youville Hospital
Issue (FHA Insured Project), Series A, 6.250%, 2/15/41 2/07 at 102 Aa2 $ 1,070,030
1,125,000 Massachusetts Industrial Financial Agency, Revenue Bonds, Heights Crossing Limited Partnership
Issue (FHA Insured Project), Series 1995 6.000%, 2/01/15
(Alternative Minimum Tax) 2/06 at 102 AAA 1,176,964
500,000 Massachusetts Industrial Finance Agency, Revenue Bonds, Briscoe House Assisted Living Issue
(FHA Insured Project), 6.050%, 2/01/17 (Alternative Minimum Tax) 8/07 at 105 AAA 543,250
- ------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 8.7%
Town of Barnstable, Massachusetts, General Obligation Bonds:
1,020,000 5.750%, 9/15/10 9/04 at 102 Aa3 1,102,804
1,020,000 5.750%, 9/15/11 9/04 at 102 Aa3 1,099,886
965,000 5.750%, 9/15/12 9/04 at 102 Aa3 1,029,086
1,000,000 City of Chelsea, Massachusetts, General Obligation Bonds, School Project Loan, Act of 1948,
7.000%, 6/15/03 No Opt. Call Aaa 1,124,620
4,375,000 City of Lowell, Massachusetts, General Obligation Bonds, State Qualified
Bonds, 5.600%, 11/01/1 11/03 at 102 Aaa 4,638,813
- ------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 6.6%
2,500,000 Massachusetts Industrial Finance Agency, Parking Facility Revenue Bonds (Avon Associates Project),
Series 1998A, 5.375%, 4/01/20 4/03 at 102 Aaa 2,520,425
4,000,000 Massachusetts Port Authority, Special Facilities Revenue Bonds (U.S. Air Project), Series 1996-A,
5.750%, 9/01/16 (Alternative Minimum Tax) 9/06 at 102 Aaa 4,234,800
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 22.3%
1,250,000 Massachusetts Health and Educational Facilities Authority, Revenue Refunding Bonds, Worcester
Polytechnic Institute Issue, Series E, 6.750%, 9/01/11
(Pre-refunded to 9/01/02) 9/02 at 102 Aaa 1,396,738
2,500,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, Malden Hospital Issue
(FHA Insured Project), Series A, 5.000%, 8/01/16 No Opt. Call AAA 2,519,175
Massachusetts Health and Educational Facilities Authority,
Revenue Bonds, New England Deaconess Hospital Issue, Series D:
3,310,000 6.625%, 4/01/12 (Pre-refunded to 4/01/02) 4/02 at 102 AAA 3,658,642
1,000,000 6.875%, 4/01/22 (Pre-refunded to 4/01/02) 4/02 at 102 AAA 1,113,740
2,500,000 Massachusetts Industrial Finance Agency, Revenue Refunding Bonds, College of the Holy Cross-1992
Issue II, 6.375%, 11/01/15 (Pre-refunded to 11/01/02) 11/02 at 102 A1*** 2,764,750
1,355,000 Massachusetts Industrial Finance Agency, Revenue Bonds, Merrimack College Issue, Series 1992,
7.125%, 7/01/12 (Pre-refunded to 7/01/02) 7/02 at 102 AAA 1,530,472
1,000,000 Massachusetts Port Authority, Revenue Bonds, Series 1982, 13.000%, 7/01/13 No Opt. Call Aaa 1,715,830
3,000,000 Massachusetts Water Resources Authority, General Revenue Bonds, 1991 Series A,
5.750%, 12/01/21 (Pre-refunded to 12/01/01) 12/01 at 100 Aaa 3,170,640
1,750,000 Puerto Rico Aqueduct and Sewer Authority, Revenue Bonds, Series 1988A, 7.875%, 7/01/17
(Pre-refunded to 7/01/98) 7/98 at 102 AAA 1,791,055
3,000,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series P, 7.000%, 7/01/21
(Pre-refunded to 7/01/01) 7/01 at 102 Aaa 3,313,410
- ------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 5.6%
3,225,000 Massachusetts Industrial Finance Agency, Resource Recovery Revenue Bonds, Semass Project,
Series 1991B, 9.250%, 7/01/15 (Alternative Minimum Tax) 7/01 at 103 N/R 3,620,255
2,000,000 Massachusetts Municipal Wholesale Electric Company, A Public Corporation of The Commonwealth of
Massachusetts, Power Supply System Revenue Bonds, 6.000%, 7/01/18 7/02 at 100 Aaa 2,103,960
- ------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 2.8%
3,000,000 Massachusetts Water Resources Authority, General Revenue Refunding Bonds, 1993 Series B,
5.000%, 3/01/22 3/03 at 100 A 2,902,560
- ------------------------------------------------------------------------------------------------------------------------------------
$ 95,115,000 Total Investments - (cost $94,334,218) - 97.9% 100,775,384
=============
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TEMPORARY INVESTMENTS IN SHORT-TERM MUNICIPAL SECURITIES - 0.3%
$ 300,000 Massachusetts Health and Educational Facilities Authority (Capital
============ Asset Program), Variable Rate Demand Bonds, 3.950%, 1/01/35+ VMIG-1 $ 300,000
Other Assets Less Liabilities - 1.8% 1,860,586
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $ 102,935,970
====================================================================================================================
* Optional Call Provisions (not covered by the report of independent auditors):
Dates (month and year) and prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at later dates.
** Ratings (not covered by the report of independent auditors): Using the
higher of Standard & Poor's or Moody's rating.
*** Securities are backed by an escrow or trust containing sufficient U.S.
government or U.S. government agency securities which ensures the timely payment
of principal and interest. Securities are normally considered to be equivalent
to AAA rated securities.
N/R Investment is not rated.
+ The security has a maturity of more than one year, but has variable rate
and demand features which qualify it as a short-term security. The rate
disclosed is that currently in effect. This rate changes periodically based on
market conditions or a specified market index.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
NUVEEN MISSOURI PREMIUM INCOME MUNICIPAL FUND (NOM)
May 31, 1998
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EDUCATIONAL AND CIVIC ORGANIZATIONS - 5.7%
$ 500,000 The Industrial Development Authority of the City of Kansas City, Missouri (Ewing Marion Kauffman
Foundation Project), Fixed Rate Revenue Bonds, Series 1997B,
5.700%, 4/01/27 4/07 at 100 AAA $ 526,545
1,775,000 Northwest Missouri State University, Housing System Revenue Bonds
Series 1998, 7.000%, 6/01/11 6/08 at 100 Aaa 2,129,343
- ------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 9.3%
1,000,000 Health and Educational Facilities Authority of the State of Missouri, Health Facilities Revenue Bonds
(BJC Health System), Series 1994A, 6.750%, 5/15/12 No Opt. Call AA 1,188,260
1,000,000 Health and Educational Facilities Authority of the State of Missouri, Health Facilities Refunding
Revenue Bonds (SSM Health Care), Series 1992AA, 6.250% 6/01/07 6/02 at 102 Aaa 1,089,460
1,000,000 Health and Educational Facilities Authority of the State of Missouri, Health Facilities Revenue Bonds
(Lake of the Ozarks General Hospital, Inc.), Series 1996, 6.500%, 2/15/21 2/06 at 102 BBB+ 1,088,410
1,000,000 Ray County, Missouri, Hospital Revenue Bonds (Ray County Memorial Hospital), Series 1997,
5.750%, 11/15/12 5/05 at 101 1/2N/R 1,008,230
- ------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 14.0%
1,550,000 Missouri Housing Development Commission, Multifamily Housing Revenue Bonds (Brookstone Village
Apartments Project), 1996 Series A, 6.100%, 12/01/21 (Alternative
Minimum Tax) 12/06 at 102 Aaa 1,625,981
650,000 The Industrial Development Authority of the City of Kansas City Missouri, Multifamily Housing Revenue
Refunding Bonds (President Gardens Apartment Project), Series 1997A,
5.550%, 8/01/25 2/08 at 102 AAA 657,748
1,250,000 The Industrial Development Authority of St. Charles County, Missouri, Multifamily Housing Revenue
Bonds (Ashwood Apartments Project), Series 1998A 5.600% 4/01/30
(Alternative Minimum Tax) 4/08 at 102 Aaa 1,256,350
1,045,000 The Industrial Development Authority of the County of St. Louis, Missouri, Multifamily Housing Revenue
Refunding Bonds (GNMA Collateralized-South Summit Apartments Project), Series 1997A,
5.950%, 4/20/17 4/07 at 102 AAA 1,105,924
600,000 Multifamily Housing Revenue Refunding Bonds (GNMA Collateralized-South Summit Apartments
Project), Series 1997B, 6.000%, 10/20/15 (Alternative Minimum Tax) 4/07 at 102 AAA 631,842
1,250,000 The Industrial Development Authority of The City of University City, Missouri, Multifamily Housing
Revenue Refunding Bonds (GNMA Collateralized-Canterbury Gardens Project), Series 1995A,
5.900%, 12/20/20 12/05 at 102 AAA 1,298,975
- ------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 9.3%
2,190,000 Missouri Housing Development Commission, Single Family Mortgage Revenue Bonds, Series 1991-A
(GNMA Mortgage-Backed Securities Program), 7.375%, 8/01/23 (Alternative
Minimum Tax) 2/01 at 102 AAA 2,316,056
1,835,000 Missouri Housing Development Commission, Single Family Mortgage Revenue Bonds (Homeownership
Loan Program), 1995 Series C, 7.250%, 9/01/26 (Alternative Minimum Tax) 3/06 at 105 AAA 2,065,036
- ------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 17.2%
2,020,000 Ritenour School District of St. Louis County, Missouri, General Obligation School Bonds, Series 1995,
7.375%, 2/01/12 No Opt. Call Aaa 2,519,546
1,500,000 Francis Howell School District, St. Charles County, Missouri, General Obligation Refunding Bonds,
Series 1994A, 7.800%, 3/01/08 No Opt. Call Aaa 1,890,480
1,000,000 School District of the City of St. Charles, Missouri, General Obligation Bonds (Missouri Direct Deposit
Program), Series 1996A, 5.625%, 3/01/14 3/06 at 100 AA 1,054,140
1,395,000 The Board of Education of the City of St. Louis (Missouri), General Obligation School Refunding Bonds,
Series 1993A, 8.500%, 4/01/07 No Opt. Call Aaa 1,805,800
625,000 Reorganized School District No. R-IV of Stone County, Missouri (Reeds Spring, Missouri), General
Obligation School Building Refunding and Improvement Bonds, Series 1995,
7.600%, 3/01/10 No Opt. Call Aaa 799,325
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TAX OBLIGATION/LIMITED - 16.5%
$ 1,000,000 Regional Convention and Sports Complex Authority, Convention and Sports Facility Project and
Refunding Bonds, Series A 1993 (State of Missouri Sponsor), 5.500%, 8/15/13 8/03 at 102 A1 $ 1,027,140
1,000,000 Fort Zumwalt School District Improvement Corporation, Leasehold Revenue Bonds, Fort Zumwalt, S.D.,
St. Charles County, Series 1997, 5.600%, 3/01/17 3/07 at 100 Aaa 1,043,480
1,000,000 Land Clearance For Redevelopment Authority of Kansas City, Missouri, Lease Revenue Bonds (Municipal
Auditorium and Muehlebach Hotel Redevelopment Projects), Series 1995A,
5.900%, 12/01/18 12/05 at 102 Aaa 1,072,810
1,000,000 Kansas City Municipal Assistance Corporation, Leasehold Revenue Capital Improvement Bonds (Kansas
City, Missouri, Lessee), Series 1996B, 5.700%, 1/15/13 1/06 at 101 Aaa 1,064,750
1,800,000 St. Louis Municipal Finance Corporation, City Justice Center, Leasehold Revenue Improvement Bonds,
Series 1996A (City of St. Louis, Missouri, Lessee), 5.750%, 2/15/11 2/06 at 102 Aaa 1,950,966
1,500,000 St. Louis Municipal Finance Corporation, Leasehold Revenue Refunding Bonds,
5.850%, 7/15/09 7/30 at 102 Aa3 1,593,105
- ------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 6.0%
1,500,000 City of Kansas City, Missouri, General Improvement Airport Revenue Bonds, Series 1996A,
6.900%, 9/01/11 (Alternative Minimum Tax) 9/04 at 101 Aaa 1,692,480
1,000,000 The City of St. Louis, Missouri, Airport Revenue Bonds, Series 1997 (1997 Capital Improvement Program),
Lambert-St. Louis International Airport, 6.000%, 7/01/12
(Alternative Minimum Tax) No Opt. Call Aaa 1,117,440
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 9.5%
1,290,000 Health and Education Facilities Authority of the State of Missouri, Health Facilities Revenue Bonds
(SSM Health Care Obligated Group Projects), Series 1990B, 7.000%, 6/01/15 No. Opt. Call Aaa 1,394,516
1,500,000 Certificates of Receipt, Series 1993. St. Louis County, Missouri, GNMA Collateralized Mortgage Revenue
Bonds, Series 1989A, 5.650%, 7/01/20 (Alternative Minimum Tax) No Opt. Call AAA 1,643,220
1,275,000 St. Louis Municipal Finance Corporation, Leasehold Revenue Improvement and Refunding Bonds,
Series 1992 (City of St. Louis Missouri, Lessee), 6.250%, 2/15/12
(Pre-refunded to 2/15/05) 2/05 at 100 Aaa 1,424,405
- ------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 10.4%
1,225,000 State Environmental Improvement and Energy Resources Authority (State of Missouri), Water Pollution
Control Revenue Bonds (State Revolving Fund Program-City of Kansas City Project), Series 1995B,
7.750%, 1/01/08 1/05 at 102 Aa1 1,482,127
1,000,000 State Environmental Improvement and Energy Resources Authority (State of Missouri), Water Pollution
Control Revenue Bonds (State Revolving Fund Program-City of Branson Project), Series 1995A,
6.050%, 7/01/16 7/04 at 102 Aaa 1,090,800
1,000,000 State Environmental Improvement and Energy Resources Authority (State of Missouri), Water Pollution
Control Revenue Bonds (State Revolving Fund Program-Multiple Participant Series), Series 1996D,
5.875%, 1/01/15 1/06 at 101 Aa1 1,065,430
350,000 State Environmental Improvement and Energy Resources Authority (State of Missouri),Water Pollution
Control Revenue Bonds (State Revolving Fund Program-City of Kansas City Project), Series 1997C,
6.750%, 1/01/12 No Opt. Call Aa1 421,046
750,000 The City of St. Louis, Missouri, Water Revenue Refunding and Improvement Bonds, Series 1994,
6.000%, 7/01/14 7/04 at 102 Aaa 819,900
- ------------------------------------------------------------------------------------------------------------------------------------
$ 41,375,000 Total Investments - (costs $42,958,628) - 97.9% 45,961,066
=============
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TEMPORARY INVESTMENTS IN SHORT-TERM MUNICIPAL SECURITIES - 0.6%
$ 300,000 The Industrial Development Authority of the City of Independence, Missouri, Variable Rate Demand
=============
Industrial Development Revenue Bonds (The Groves and Graceland College Nursing Arts Center
Projects), Series 1997A, 4.000%, 11/01/27+ A-1+ $ 300,000
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.5% 674,254
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $ 46,935,320
====================================================================================================================
* Optional Call Provisions: (not covered by the report of independent
auditors): Dates (month and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying prices at later dates.
** Ratings (not covered by the report of independent auditors): Using the
higher of Standard & Poor's or Moody's rating.
N/R Investment is not rated.
+ The security has a maturity of more than one year, but has variable rate
and demand features which qualify it as a short-term security. The rate
disclosed is that currently in effect. This rate changes periodically based on
market conditions or a specified market index.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
NUVEEN WASHINGTON PREMIUM INCOME MUNICIPAL FUND (NPW)
May 31, 1998
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EDUCATIONAL AND CIVIC ORGANIZATIONS - 5.1%
$ 1,400,000 Washington State University, Housing and Dining System Revenue and Refunding Bonds,
Series 1994, 6.375%, 10/01/18 10/04 at 101 Aaa $ 1,545,684
1,000,000 University of Washington, Housing and Dining System Revenue Refunding Bonds, Junior Lien
Series 1996, 5.125%, 12/01/15 12/06 at 102 Aaa 1,007,680
65,000 Western Washington University, Housing and Dining System Revenue Bonds, Series 1992,
6.375%, 10/01/22 10/02 at 101 Aaa 70,153
- ------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 9.9%
2,000,000 Washington Health Care Facilities Authority, Highline Community Hospital,
Series 1998, 5.000%, 8/15/21 8/08 at 102 AA 1,915,100
2,000,000 Washington Health Care Authority, Revenue Bonds, Series 1992 (The Children's Hospital and Medical
Center, Seattle), 6.125%, 10/01/13 10/02 at 102 Aaa 2,167,900
1,000,000 Washington Health Care Facilities Authority, Revenue Bonds, Series 1993A (The Heart Institute of
Spokane), 5.800%, 8/15/18 8/04 at 102 AA- 1,038,240
- ------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 6.0%
970,000 Washington State Housing Finance Commission, Multifamily Mortgage Revenue Bonds (GNMA
Mortgage Backed Securities Program), Series 1989A, 7.700%, 7/01/32
(Alternative Minimum Tax) 1/00 at 103 AAA 1,018,558
2,000,000 Housing Authority of the County of King Washington, Housing Revenue Bonds, 1995 (Woodridge Park
Project), 6.350%, 5/01/25 (Alternative Minimum Tax) 5/05 at 100 AA+ 2,087,320
- ------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 4.4%
1,610,000 Washington State Housing Finance Commission, Single-Family Mortgage Revenue Bonds (Mortgage
Backed Securities Program), Series 1992D-1, 6.150%, 1/01/26
(Alternative Minimum Tax) No Opt. Call AAA 1,751,294
500,000 Washington State Housing Finance Commission, Single Family Program Bonds, 1997 Series 2A,
6.050%, 12/01/16 6/07 at 102 Aaa 524,585
- ------------------------------------------------------------------------------------------------------------------------------------
LONG TERM CARE- 3.5%
1,640,000 Housing Authority of Skagit County, Low-Income Housing Assistance Revenue Bonds, 1993
(GNMA Collateralized Mortgage Loan-Sea Mar Project), 7.000%, 6/20/35 11/04 at 104 AAA 1,839,768
- ------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 20.7%
2,000,000 State of Washington, General Obligation Bonds, Series 1994B,
6.000%, 5/01/19 5/04 at 100 Aa1 2,108,660
1,655,000 Everett, Limited Tax General Obligation Bonds, 5.125%, 9/01/17 9/07 at 100 Aaa 1,660,313
1,000,000 Federal Way School District No. 210, King County, Washington, Unlimited Tax General Obligation and
Refunding Bonds, 1993, 5.750%, 12/01/12 No Opt. Call Aaa 1,108,410
1,360,000 Tahoma School District No. 409, King County, Washington, Unlimited Tax General Obligation
Improvement and Refunding Bonds, 1997, 6.000%, 12/01/10 No Opt. Call Aaa 1,544,402
1,000,000 Peninsula School District No. 401, Pierce County, Washington, Unlimited Tax General Obligation
Refunding Bonds, 1993, 5.500%, 12/01/09 No Opt. Call Aaa 1,082,980
1,000,000 The City of Renton, Washington, Limited Tax General Obligation Bonds, General Purpose/Public
Improvement Bonds, 1997B, 5.750%, 12/01/17 6/07 at 100 Aaa 1,061,290
1,500,000 Mukilteo School District No. 6, Snohomish County, Washington, Unlimited Tax General Obligation and
Refunding Bonds, 1993, 5.700%, 12/01/12 No Opt. Call Aaa 1,656,465
500,000 Edmonds School District No. 15, Snohomish County, Washington, Unlimited Tax General Obligation
Bonds, Series 1994, 6.500%, 12/01/08 No Opt. Call AA- 579,800
- ------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 3.6%
Seattle Indian Services Commission, Special Obligation Bonds, 1994:
1,000,000 6.000%, 11/01/16 11/04 at 100 Aa1 1,061,070
750,000 6.150%, 11/01/24 11/04 at 100 Aa1 810,945
- ------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 4.7%
1,300,000 Port of Seattle, Washington, Revenue Bonds, Series 1996A, 5.500%, 9/01/21 9/06 at 101 Aaa 1,339,806
1,000,000 Port of Vancouver, Clark County, Washington, Limited Tax General Obligation Bonds, 1994 Series B,
6.000%, 12/01/04 (Alternative Minimum Tax) No Opt. Call Aaa 1,099,750
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. GUARANTEED - 12.8%
$ 1,250,000 Washington Health Care Facilities Authority, Revenue Bonds Refunding Series 1992 (Franciscan
Health System/Saint Clare Hospital, Tacoma), 6.625%, 7/01/20
(Pre-refunded to 7/01/02) 7/02 at 102 Aaa $ 1,388,075
2,400,000 Washington Health Care Facilities Authority, Revenue Bonds, Series 1992 (Swedish Hospital Medical
Center, Seattle), 6.300%, 11/15/22 (Pre-refunded to 11/15/02) 11/02 at 102 Aaa 2,651,712
1,000,000 Port of Seattle, Washington, Revenue Bonds, Series 1990A, 6.000%, 12/01/14
(Pre-refunded to 12/01/00) 12/00 at 100 AA-*** 1,048,400
1,435,000 Western Washington University, Housing and Dining System Revenue Bonds, 6.375%, 10/01/22
(Pre-refunded to 10/01/02) 10/02 at 101 Aaa 1,576,391
- ------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 14.3%
1,000,000 Washington Public Power Supply System, Nuclear Project No. 1, Refunding Revenue Bonds, Series 1993A,
5.700%, 7/01/17 7/03 at 102 Aaa 1,034,010
1,000,000 Washington Public Power Supply System, Nuclear Project No. 3, Refunding Revenue Bonds, Series 1993B,
7.000%, 7/01/09 No Opt. Call Aa1 1,187,880
1,100,000 Public Utility District No. 1 of Klickitat County, Washington, Electric Revenue Bonds, 1995,
5.650%, 10/01/15 10/05 at 101 Aaa 1,155,220
1,000,000 Lewis County Public Utility District, Cowlitz Falls Hydroelectric Project, Revenue Refunding Bonds,
Series 1993, 5.500%, 10/01/22 10/03 at 102 Aa1 1,018,640
500,000 The City of Seattle, Washington, Municipal Light and Power Revenue Bonds,
1992A, 5.750%, 8/01/12 8/02 at 102 AA 531,015
1,000,000 City of Seattle, Washington, Municipal Light and Power Revenue Bonds,
5.625%, 10/01/21 10/06 at 102 Aaa 1,046,620
1,385,000 Public Utility District No. 1 of Snohomish County, Washington, Generation System Revenue Bonds,
Series 1993B, 5.750%, 1/01/09 (Alternative Minimum Tax) 1/04 at 102 A1 1,466,438
- ------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 13.2%
1,050,000 City of Bellevue, King County, Washington, Water and Sewer Revenue Refunding Bonds, 1994,
5.875%, 7/01/09 7/04 at 100 Aa 1,128,708
1,035,000 Covington Water District, Water Revenue Bonds, Refunding Series 1995,
6.050%, 3/01/20 3/05 at 100 Aaa 1,102,844
800,000 Kitsap County, Washington, Sewer Revenue Bonds, 1996, 5.750%, 7/01/16 7/06 at 100 Aaa 844,376
900,000 City of Richland, Washington, Water and Sewer Improvement Revenue Bonds,
1993, 5.625%, 4/01/12 4/03 at 100 Aaa 945,441
1,200,000 Sammamish Plateau Water and Sewer District, King County, Washington, Water and Sewer Revenue
Refunding Bonds, 1996, 5.500%, 12/01/16 12/06 at 100 Aaa 1,234,452
500,000 The City of Seattle, Washington, Water System and Refunding Revenue Bonds,
1993, 5.250%, 12/01/23 6/03 at 101 AA 500,870
1,000,000 Yakima-Tieton Irrigation District, Yakima County, Washington, Refunding Revenue Bonds, 1992,
6.125%, 6/01/13 6/03 at 102 Aaa 1,090,470
- ------------------------------------------------------------------------------------------------------------------------------------
$ 47,805,000 Total Investments - (cost $47,643,718) - 98.2% 51,031,735
=============
Temporary Investments in Short-Term Municipal Securities - 0.4%
$ 200,000 Washington Health Care Facilities Authority, Variable Rate Demand Revenue Bonds (Sisters of
=============
Providence), Series 1985B, 3.950%, 10/01/05+ VMIG-1 200,000
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.4% 716,360
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $ 51,948,095
====================================================================================================================
* Optional Call Provisions (not covered by the report of independent
auditors): Dates (month and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying prices at later dates.
** Ratings (not covered by the report of independent auditors): Using the
higher of Standard & Poor's or Moody's rating.
*** Securities are backed by an escrow or trust containing sufficient U.S.
government or U.S. government agency securities which ensures the timely payment
of principal and interest. Securities are normally considered to be equivalent
to AAA rated securities.
+ The security has a maturity of more than one year, but has variable rate
and demand features which qualify it as a short-term security. The rate
disclosed is that currently in effect. This rate changes periodically based on
market conditions or a specified market index.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF NET ASSETS
May 31, 1998
<CAPTION>
CONNECTICUT MASSACHUSETTS MISSOURI WASHINGTON
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investments in municipal securities, at
market value (note 1) $111,997,081 $100,775,384 $45,961,066 $51,031,735
Temporary investments in short-term municipal securities,
at amortized cost, which approximates market value (note 1) -- 300,000 300,000 200,000
Cash -- 230,610 22,063 57,938
Receivables:
Interest 1,969,949 1,852,756 842,644 883,115
Investments sold -- 200,000 -- --
Other assets 13,877 12,307 4,418 2,918
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets 113,980,907 103,371,057 47,130,191 52,175,706
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft 133,034 -- -- --
Accrued expenses:
Management fees (note 6) 62,157 56,478 25,741 28,462
Other 47,720 45,592 30,971 47,606
Preferred share dividends payable 9,441 6,988 5,326 5,380
Common share dividends payable 344,483 326,029 132,833 146,163
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 596,835 435,087 194,871 227,611
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets (note 7) $113,384,072 $102,935,970 $46,935,320 $51,948,095
- ------------------------------------------------------------------------------------------------------------------------------------
Preferred shares, at liquidation value $ 38,300,000 $ 34,000,000 $16,000,000 $17,000,000
====================================================================================================================================
Preferred shares outstanding 1,532 1,360 640 680
====================================================================================================================================
Common shares outstanding 5,180,192 4,624,524 2,142,460 2,320,051
====================================================================================================================================
Net asset value per Common share outstanding (net assets less Preferred shares
at liquidation value, divided by Common shares
outstanding) $ 14.49 $ 14.91 $ 14.44 $ 15.06
====================================================================================================================================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
Year Ended May 31, 1998
<CAPTION>
CONNECTICUT MASSACHUSETTS MISSOURI WASHINGTON
<S> <C> <C> <C> <C>
INVESTMENT INCOME (NOTE 1) $6,139,952 $5,781,968 $2,581,960 $2,832,407
- ------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees (note 6) 726,805 661,353 301,470 333,129
Preferred shares - auction fees 95,750 85,001 40,000 42,501
Preferred shares - dividend disbursing agent fees 9,629 9,548 9,629 9,548
Shareholders' servicing agent fees and expenses 17,063 8,584 7,125 2,997
Custodian's fees and expenses 38,206 37,528 32,810 32,080
Trustees' fees and expenses (note 6) 1,991 1,893 1,363 1,408
Professional fees 17,228 16,910 16,732 16,554
Shareholders' reports - printing and mailing expenses 31,228 28,835 20,183 7,333
Stock exchange listing fees 16,188 16,183 1,979 2,121
Investor relations expense 9,701 8,222 4,190 3,945
Other expenses 16,793 16,523 12,353 12,446
- ------------------------------------------------------------------------------------------------------------------------------------
Total expenses 980,582 890,580 447,834 464,062
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income 5,159,370 4,891,388 2,134,126 2,368,345
- ------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN FROM INVESTMENTS
Net realized gain from investment transactions (notes 1 and 4) 422,013 671,439 380,799 94,941
Net change in unrealized appreciation or
depreciation of investments 4,143,106 3,102,632 1,267,040 2,195,317
- ------------------------------------------------------------------------------------------------------------------------------------
Net gain from investments 4,565,119 3,774,071 1,647,839 2,290,258
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $9,724,489 $8,665,459 $3,781,965 $4,658,603
====================================================================================================================================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
CONNECTICUT MASSACHUSETTS
- -----------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
5/31/98 5/31/97 5/31/98 5/31/97
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 5,159,370 $ 5,134,299 $ 4,891,388 $ 4,887,537
Net realized gain (loss) from investment transactions
(notes 1 and 4) 422,013 (580,033) 671,439 (139,469)
Net change in unrealized appreciation or
depreciation of investments 4,143,106 3,607,938 3,102,632 2,550,049
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations 9,724,489 8,162,204 8,665,459 7,298,117
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1)
From undistributed net investment income:
Common shareholders (4,108,452) (3,909,724) (3,905,877) (3,840,666)
Preferred shareholders (1,169,485) (1,050,779) (1,096,311) (1,017,157)
- -----------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from distributions to shareholders (5,277,937) (4,960,503) (5,002,188) (4,857,823)
- -----------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (NOTE 2)
Net proceeds from Common shares issued to shareholders due
to reinvestment of distributions 413,844 394,287 266,611 262,693
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from capital share transactions 413,844 394,287 266,611 262,693
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets 4,860,396 3,595,988 3,929,882 2,702,987
Net assets at beginning of year 108,523,676 104,927,688 99,006,088 96,303,101
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $113,384,072 $108,523,676 $102,935,970 $99,006,088
===================================================================================================================================
Balance of undistributed net investment income
at end of year $ 284,103 $ 402,670 $ 214,228 $ 325,028
===================================================================================================================================
<PAGE>
<CAPTION>
MISSOURI WASHINGTON
- -----------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
5/31/98 5/31/97 5/31/98 5/31/97
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 2,134,126 $ 2,125,190 $ 2,368,345 $ 2,371,693
Net realized gain (loss) from investment transactions
(notes 1 and 4) 380,799 135,827 94,941 22,234
Net change in unrealized appreciation or
depreciation of investments 1,267,040 1,026,731 2,195,317 1,324,756
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations 3,781,965 3,287,748 4,658,603 3,718,683
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1)
From undistributed net investment income:
Common shareholders (1,629,870) (1,553,262) (1,753,958) (1,742,358)
Preferred shareholders (526,508) (524,137) (596,423) (602,507)
- -----------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from distributions to shareholders (2,156,378) (2,077,399) (2,350,381) (2,344,865)
- -----------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (NOTE 2)
Net proceeds from Common shares issued to shareholders due
to reinvestment of distributions 85,411 -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from capital share transactions 85,411 -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets 1,710,998 1,210,349 2,308,222 1,373,818
Net assets at beginning of year 45,224,322 44,013,973 49,639,873 48,266,055
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $46,935,320 $45,224,322 $51,948,095 $49,639,873
===================================================================================================================================
Balance of undistributed net investment income
at end of year $ 156,882 $ 179,134 $ 105,628 $ 87,664
===================================================================================================================================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The state Funds (the "Funds") covered in this report and their corresponding
stock exchange symbols are Nuveen Connecticut Premium Income Municipal Fund
(NTC), Nuveen Massachusetts Premium Income Municipal Fund (NMT), Nuveen Missouri
Premium Income Municipal Fund (NOM) and Nuveen Washington Premium Income
Municipal Fund (NPW). Connecticut and Massachusetts are traded on the New York
Stock Exchange while Missouri and Washington are traded on the American Stock
Exchange.
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 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 May
31, 1998, there were no such outstanding purchase commitments in any of the
Funds.
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 Fund
intends to satisfy conditions which will enable interest from municipal
securities, which is exempt from regular federal and designated state income
taxes, if any, to retain such tax-exempt status when distributed to shareholders
of the Funds. All monthly tax-exempt income dividends paid during the fiscal
year ended May 31, 1998, have been designated Exempt Interest Dividends. 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 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 one Series. The dividend rate on each
Series may change every seven days, as set by the auction agent. The number of
shares outstanding for each Fund is as follows:
<TABLE>
<CAPTION>
CONNECTICUT MASSACHUSETTS MISSOURI WASHINGTON
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Number of Shares:
Series Th 1,532 1,360 640 680
==========================================================================================================
</TABLE>
Derivative Financial Instruments
The Funds may invest in transactions in certain derivative financial instruments
including futures, forward, swap, 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 fiscal year ended May 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.
2. FUND SHARES
Transactions in Common shares were as follows:
<TABLE>
<CAPTION>
CONNECTICUT MASSACHUSETTS
- ----------------------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
5/31/98 5/31/97 5/31/98 5/31/97
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares issued to shareholders
due to reinvestment of
distributions 27,446 25,362 17,254 18,609
==========================================================================================================
<CAPTION>
MISSOURI WASHINGTON
- ----------------------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
5/31/98 5/31/97 5/31/98 5/31/97
- ----------------------------------------------------------------------------------------------------------
Shares issued to shareholders
due to reinvestment of
distributions 5,923 -- -- --
==========================================================================================================
</TABLE>
3. DISTRIBUTIONS TO COMMON SHAREHOLDERS
The Funds declared Common share dividend distributions from their tax-exempt net
investment income which were paid on July 1, 1998, to shareholders of record on
June 15, 1998, as follows:
<TABLE>
<CAPTION>
CONNECTICUT MASSACHUSETTS MISSOURI WASHINGTON
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dividend per share $.0665 $.0705 $.0620 $.0630
==========================================================================================================
</TABLE>
4. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of investments in municipal
securities and temporary municipal investments for the year ended May 31, 1998,
were as follows:
<TABLE>
<CAPTION>
CONNECTICUT MASSACHUSETTS MISSOURI WASHINGTON
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Purchases:
Investments in municipal securities $16,347,950 $16,775,239 $12,062,820 $4,928,148
Temporary municipal investments 5,600,000 8,300,000 4,800,000 4,600,000
Sales and Maturities:
Investments in municipal securities 14,670,110 16,722,320 11,650,583 4,939,330
Temporary municipal investments 6,300,000 8,200,000 7,800,000 4,400,000
==========================================================================================================
</TABLE>
<PAGE>
At May 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 May 31, 1998, the 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>
CONNECTICUT MASSACHUSETTS MISSOURI WASHINGTON
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Expiration year:
2003 $ 895,482 $ 615,511 $ 949,075 $469,931
2004 1,105,901 945,779 708,417 70,082
2005 847,914 195,761 -- --
- ----------------------------------------------------------------------------------------------------------
Total $2,849,297 $1,757,051 $1,657,492 $540,013
==========================================================================================================
</TABLE>
5. UNREALIZED APPRECIATION (DEPRECIATION)
Gross unrealized appreciation and gross unrealized depreciation of investments
at May 31, 1998, were as follows:
<TABLE>
<CAPTION>
CONNECTICUT MASSACHUSETTS MISSOURI WASHINGTON
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gross unrealized:
appreciation $6,012,681 $6,441,166 $3,002,438 $3,394,435
depreciation (41,194) -- -- (6,418)
- ---------------------------------------------------------------------------------------------------------
Net unrealized appreciation $5,971,487 $6,441,166 $3,002,438 $3,388,017
=========================================================================================================
</TABLE>
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 as follows:
<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSET VALUE MANAGEMENT FEE
- -----------------------------------------------------------------------------------------------------------
<S> <C>
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
===========================================================================================================
</TABLE>
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 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 May 31, 1998, net assets consisted of:
<TABLE>
<CAPTION>
CONNECTICUT MASSACHUSETTS MISSOURI WASHINGTON
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Preferred shares, $25,000 stated value per share,
at liquidation value $ 38,300,000 $ 34,000,000 $16,000,000 $17,000,000
Common shares, $.01 par value per share 51,802 46,245 21,425 23,201
Paid-in surplus 71,625,977 63,991,382 29,412,067 31,971,262
Balance of undistributed net investment income 284,103 214,228 156,882 105,628
Accumulated net realized gain (loss)
from investment transactions (2,849,297) (1,757,051) (1,657,492) (540,013)
Net unrealized appreciation of investments 5,971,487 6,441,166 3,002,438 3,388,017
- ----------------------------------------------------------------------------------------------------------
Net assets $113,384,072 $102,935,970 $46,935,320 $51,948,095
==========================================================================================================
Authorized shares:
Common Unlimited Unlimited Unlimited Unlimited
Preferred Unlimited Unlimited Unlimited Unlimited
==========================================================================================================
</TABLE>
<PAGE>
<TABLE>
Financial Highlights
Selected data for a Common share outstanding throughout each period is
as follows:
<CAPTION>
Investment Operations Less Distributions
-------------------------------------------- ------------------------------------------------
Net Net Net
Realized/ Investment Investment Capital Capital
Beginning Net Unrealized Income Income Gain Gain
Net Asset Investment Investment To Common To Preferred To Common To Preferred
Value Income Gain (Loss) Total Shareholders Shareholders+ Shareholders Shareholders+ Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Connecticut
Year Ended 5/31:
1998 $ 13.63 $ 1.00 $ .89 $ 1.89 $ (.80) $ (.23) $-- $-- $ (1.03)
1997 12.99 1.00 .60 1.60 (.76) (.20) -- -- (.96)
1996 13.20 .98 (.21) .77 (.73) (.25) -- -- (.98)
1995 12.45 .98 .74 1.72 (.74) (.23) -- -- (.97)
1994 13.96 .77 (1.40) (.63) (.61) (.13) -- -- (.74)
<CAPTION>
Massachusetts
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Year Ended 5/31:
1998 14.11 1.06 .83 1.89 (.85) (.24) -- -- (1.09)
1997 13.58 1.06 .53 1.59 (.84) (.22) -- -- (1.06)
1996 13.76 1.05 (.19) .86 (.80) (.24) -- -- (1.04)
1995 12.90 1.04 .84 1.88 (.78) (.24) -- -- (1.02)
1994 14.08 .87 (1.01) (.14) (.74) (.15) -- -- (.89)
<CAPTION>
Missouri
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Year Ended 5/31:
1998 13.68 .99 .78 1.77 (.76) (.25) -- -- (1.01)
1997 13.11 1.00 .55 1.55 (.73) (.25) -- -- (.98)
1996 13.37 .96 (.30) .66 (.67) (.25) -- -- (.92)
1995 12.35 .95 1.02 1.97 (.69) (.26) -- -- (.95)
1994 13.90 .76 (1.40) (.64) (.59) (.14) -- -- (.73)
<CAPTION>
Washington
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Year Ended 5/31:
1998 14.07 1.02 .99 2.01 (.76) (.26) -- -- (1.02)
1997 13.48 1.02 .58 1.60 (.75) (.26) -- -- (1.01)
1996 13.71 1.02 (.23) .79 (.74) (.28) -- -- (1.02)
1995 12.97 1.01 .77 1.78 (.77) (.27) -- -- (1.04)
1994 14.09 .91 (.93) (.02) (.76) (.16) (.01) -- (.93)
<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>
Connecticut
Year Ended 5/31:
1998 $-- $14.49 $15.5000 15.61% 12.39%
1997 -- 13.63 14.1250 9.58 11.01
1996 -- 12.99 13.6250 14.06 3.97
1995 -- 13.20 12.6250 2.22 12.74
1994 (.14) 12.45 13.1250 (8.73) (6.74)
<CAPTION>
Massachusetts
<S> <C> <C> <C> <C> <C>
Year Ended 5/31:
1998 -- 14.91 16.5000 18.08 11.91
1997 -- 14.11 14.7500 13.76 10.28
1996 -- 13.58 13.7500 8.99 4.55
1995 -- 13.76 13.3750 14.12 13.58
1994 (.15) 12.90 12.5000 (13.64) (3.38)
<CAPTION>
Missouri
<S> <C> <C> <C> <C> <C>
Year Ended 5/31:
1998 -- 14.44 14.1875 14.53 11.31
1997 -- 13.68 13.0625 10.53 10.09
1996 -- 13.11 12.5000 10.07 3.09
1995 -- 13.37 12.0000 6.13 14.74
1994 (.18) 12.35 12.0000 (17.26) (7.16)
<CAPTION>
Washington
<S> <C> <C> <C> <C> <C>
Year Ended 5/31:
1998 -- 15.06 13.6250 15.26 12.64
1997 -- 14.07 12.5000 12.94 10.16
1996 -- 13.48 11.7500 7.44 3.75
1995 -- 13.71 11.6250 .41 12.36
1994 (.17) 12.97 12.3750 (16.88) (2.73)
<PAGE>
<CAPTION>
Ratios/Supplemental Data
----------------------------------------------------
Ratio of Net
Ratio of Investment
Ending Expenses to Income to Portfolio
Net Assets Average Average Turnover
(000) Net Assets++ Net Assets++ Rate
<S> <C> <C> <C> <C>
Connecticut
Year Ended 5/31:
1998 $ 113,384 .88% 4.61% 13%
1997 108,524 .89 4.79 18
1996 104,928 .89 4.71 15
1995 105,851 .92 4.99 18
1994 101,595 .95 3.95 9
Massachusetts
Year Ended 5/31:
1998 102,936 .88 4.81 17
1997 99,006 .88 4.99 22
1996 96,303 .88 4.95 18
1995 97,071 .94 5.20 29
1994 93,078 .97 4.26 33
Missouri
Year Ended 5/31:
1998 46,935 .97 4.60 25
1997 45,224 .99 4.74 36
1996 44,014 1.01 4.57 34
1995 44,566 1.08 4.86 34
1994 42,343 1.05 3.92 39
Washington
Year Ended 5/31:
1998 51,948 .91 4.62 10
1997 49,640 .94 4.83 11
1996 48,266 .94 4.81 20
1995 48,812 1.04 5.04 16
1994 47,095 1.08 4.42 29
* Annualized.
** Total Investment Return on Market Value is the combination of reinvested
dividend income, reinvested capital gain 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 gain 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.
</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
Alabama
Arizona
California
Colorado
Connecticut
Florida
Georgia
Kansas
Kentucky
Louisiana
Maryland
Massachusetts
Michigan
Missouri
New Jersey
New Mexico
New York
North Carolina
Ohio
Pennsylvania
South Carolina
Tennessee
Virginia
Wisconsin
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
Financial Services, and Nuveen Advisory Corp. Each brings a specialized
expertise in a particular investment style or asset class, time-tested
investment strategies and a focus on consistent, long-term performance. With
Nuveen's Premier Adviser funds, you have all the advantages of a family of funds
plus the benefits of specialized investment expertise.
Private Asset Management
Rittenhouse Financial Services and Nuveen Asset Management offer comprehensive,
customized investment management solutions to investors with assets of $250,000
or more to invest. A range of actively managed growth, balanced and municipal
income-oriented portfolios are available, all based upon a disciplined
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, experienced, professional
security selection and surveillance and daily liquidity at that day's net asset
value for quick access to your assets.
<PAGE>
Fund Information
BOARD OF TRUSTEES
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 12-month period ended May 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:
1898 - 1998
NUVEEN
OUR SECOND CENTURY
helping investors sustain the wealth of a lifetime.(tm)
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, IL60606-1286
www.nuveen.com
FAN-3-5-98
