N-CSR 1 file001.txt NUVEEN INSURED TAX-FREE ADVANTAGE MUNICIPAL FUND UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-21213 --------------------- Nuveen Insured Tax-Free Advantage Municipal Fund -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) Nuveen Investments 333 West Wacker Drive Chicago, IL 60606 -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Jessica R. Droeger Nuveen Investments 333 West Wacker Drive Chicago, IL 60606 -------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: (312) 917-7700 ------------------- Date of fiscal year end: October 31 ------------------ Date of reporting period: October 31, 2006 ------------------ Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORTS TO STOCKHOLDERS. ------------------------------ ANNUAL REPORT October 31, 2006 ------------------------------ Nuveen Investments Municipal Closed-End Funds NUVEEN INSURED QUALITY MUNICIPAL FUND, INC. NQI NUVEEN INSURED MUNICIPAL OPPORTUNITY FUND, INC. NIO NUVEEN PREMIER INSURED MUNICIPAL INCOME FUND, INC. NIF NUVEEN INSURED PREMIUM INCOME MUNICIPAL FUND 2 NPX NUVEEN INSURED DIVIDEND ADVANTAGE MUNICIPAL FUND NVG NUVEEN INSURED TAX-FREE ADVANTAGE MUNICIPAL FUND NEA Photo of: Woman and man at the beach. Photo of: A child. DEPENDABLE, TAX-FREE INCOME BECAUSE IT'S NOT WHAT YOU EARN, IT'S WHAT YOU KEEP.(R) [LOGO] NUVEEN INVESTMENTS Photo of: Woman Photo of: Woman Photo of: Man and child NOW YOU CAN RECEIVE YOUR NUVEEN FUND REPORTS FASTER. NO MORE WAITING. SIGN UP TODAY TO RECEIVE NUVEEN FUND INFORMATION BY E-MAIL. It only takes a minute to sign up for E-Reports. Once enrolled, you'll receive an e-mail as soon as your Nuveen Investments Fund information is ready -- no more waiting for delivery by regular mail. Just click on the link within the e-mail to see the report, and save it on your computer if you wish. ------------------ DELIVERY DIRECT TO YOUR E-MAIL INBOX ------------------ IT'S FAST, EASY & FREE: WWW.INVESTORDELIVERY.COM WWW.NUVEEN.COM/ACCOUNTACCESS if you get your Nuveen Fund dividends if you get your Nuveen Fund and statements from your financial OR dividends and statements advisor or brokerage account. directly from Nuveen. (BE SURE TO HAVE THE ADDRESS SHEET THAT ACCOMPANIED THIS REPORT HANDY. YOU'LL NEED IT TO COMPLETE THE ENROLLMENT PROCESS.) [LOGO] NUVEEN INVESTMENTS Chairman's LETTER TO SHAREHOLDERS Photo of Timothy R. Schwertfeger Timothy R. Schwertfeger Chairman of the Board Once again, I am pleased to report that over the twelve-month period covered by this report your Fund continued to provide you with attractive monthly tax-free income. For more details about the management strategy and performance of your Fund, please read the Portfolio Manager's Comments, the Dividend and Share Price Information, and the Performance Overview sections of this report. For some time, I've used these letters to remind you that municipal bonds can be an important building block in a well balanced investment portfolio. In addition to providing attractive tax-free monthly income, a municipal bond investment like your Fund may help you achieve and benefit from greater portfolio diversification. Portfolio diversification is a recognized way to try to reduce some of the risk that comes with investing. For more information about this important investment strategy, I encourage you to contact your personal financial advisor. "IN ADDITION TO PROVIDING ATTRACTIVE TAX-FREE MONTHLY INCOME, A MUNICIPAL BOND INVESTMENT LIKE YOUR FUND MAY HELP YOU ACHIEVE AND BENEFIT FROM GREATER PORTFOLIO DIVERSIFICATION." We also are pleased to be able to offer you a choice concerning how you receive your shareholder reports and other Fund information. As an alternative to mailed copies, you can sign up to receive future Fund reports and other Fund information by e-mail and the Internet. The inside front cover of this report contains information on how you can sign up. We are grateful that you have chosen us as a partner as you pursue your financial goals, and we look forward to continuing to earn your trust in the months and years ahead. At Nuveen Investments, our mission continues to be to assist you and your financial advisor by offering investment services and products that can help you to secure your financial objectives. Sincerely, /s/ Timothy R. Schwertfeger Timothy R. Schwertfeger CHAIRMAN OF THE BOARD December 15, 2006 Nuveen Investments Municipal Closed-End Funds NQI, NIO, NIF, NPX, NVG, NEA Portfolio Manager's COMMENTS PORTFOLIO MANAGER PAUL BRENNAN DISCUSSES U.S. ECONOMIC AND MUNICIPAL MARKET CONDITIONS, KEY INVESTMENT STRATEGIES, AND THE ANNUAL PERFORMANCE OF THESE SIX INSURED FUNDS. WITH 17 YEARS OF INVESTMENT EXPERIENCE, INCLUDING 15 YEARS AT NUVEEN, PAUL ASSUMED PORTFOLIO MANAGEMENT RESPONSIBILITY FOR NQI, NIO, NIF, NPX, NVG, AND NEA IN JULY 2006. WHAT FACTORS AFFECTED THE U.S. ECONOMY AND MUNICIPAL MARKET DURING THE ANNUAL REPORTING PERIOD ENDED OCTOBER 31, 2006? In response to market concerns about oil prices, inflation, and the actions of the Federal Reserve over the past 12 months, bond yields exhibited some volatility during this reporting period, with longer-term rates hitting a peak in June 2006 before falling sharply for the remainder of the period. For the period as a whole, interest rates at the shorter end of the taxable yield curve generally continued to rise, while longer rates ended the period close to where they began it or even declined. As short-term rates approached and exceeded the levels of long-term rates, the taxable yield curve became increasingly flat and subsequently inverted. Consequently, bonds with longer durations 1 generally outperformed those with shorter durations during this period. Between November 1, 2005 and October 31, 2006, the Federal Reserve announced six increases of 0.25% each in the fed funds rate before pausing to leave monetary policy unchanged at the August-October 2006 sessions of its Open Market Committee. The increases raised the short-term target by 150 basis points, from 3.75% to 5.25%, its highest level since March 2001. During this same period, the yield on the benchmark 10-year U.S. Treasury note rose just four basis points to end October 2006 at 4.60%. In contrast, in the municipal market, the yield on the Bond Buyer 25 Revenue Bond Index, a widely followed measure of longer-term municipal market rates, fell to 4.78% at the end of October 2006, a decline of 43 basis points from the end of October 2005. Economic growth over the past year reflected the fluctuations in interest rates, energy prices, and the effects of a softening housing market. After expanding at a rate of 1.8% in the fourth quarter of 2005, the U.S. gross domestic product (GDP) rebounded sharply with a 5.6% gain in the first quarter of 2006 before moderating to a pace of 2.6% in the second quarter of 2006 (all GDP numbers annualized). In the third quarter of 2006, the rate of GDP growth slowed to 2.2%, largely as the result of an 18% slump in residential investment, the largest decrease in 15 years. Despite the recent slowdown in economic 1 Duration is a measure of a bond's price sensitivity as interest rates change, with longer duration bonds displaying more sensitivity to these changes than bonds with shorter durations. 4 growth, the markets continued to keep a close eye on inflation trends. While declining energy prices contributed to a benign 1.3% year-over-year increase in the Consumer Price Index as of October 2006, the core rate (which excludes food and energy prices) rose 2.7% for the same period. In general, the jobs picture remained positive, with national unemployment at 4.4% in October 2006, down from 4.9% in October 2005, the lowest level since May 2001. Over the 12 months ended October 2006, municipal bond issuance nationwide totaled $367.1 billion, down 8% from the previous 12 months. This total reflected the general decrease in the supply of municipal paper during 2006. After reaching record levels in calendar year 2005, municipal issuance declined during the first 10 months of 2006, with $295.1 billion in new securities coming to market, off 12.5% from the same period in 2005. A major factor in 2006's drop was the sharp reduction in pre-refunding volume, which fell almost 50% from last year's levels. Overall, demand for municipal bonds, especially those offering higher yields, continued to be strong and broad-based, with retail investors, institutional investors such as hedge funds and arbitragers, and foreign participants all taking part in the market. WHAT KEY STRATEGIES WERE USED TO MANAGE THESE FUNDS DURING THIS REPORTING PERIOD? As the yield curve flattened over this 12-month period, we continued to emphasize careful management of the Funds' underlying portfolios in line with our established targets. This included pursuing a disciplined approach to duration management and yield curve positioning throughout the period. As part of this approach, we generally focused on purchasing bonds that we believed provided attractive reward opportunities without excessive risk, emphasizing attractively priced bonds with defensive coupons at or near the 20-year part of the yield curve. For these Funds, our purchases of defensive coupon bonds included bonds with premium coupons 2. In recent months, we broadened our strategic scope in these six Funds to place additional emphasis on income strategies by purchasing bonds that offered the potential for more income such as zero coupon bonds, discount bonds and inverse floaters. (Inverse floaters are bonds with coupons structured to move in the opposite direction of short-term interest rates. For example, if short-term market interest rates decline, the interest rate 2 Premium coupon bonds are credits that, at the time of purchase, are trading above their par values because their coupons are higher than current coupon levels. Historically, these bonds have held their value better than current coupon bonds when interest rates rise and bond values consequently fall. 5 earned by the inverse floater will rise. An inverse floater increases the market rate risk and duration of the investment.) Further, to help increase the Funds' income-generating potential and better manage interest risk, we employed additional tools such as interest rate swap agreements. Although municipal bond issuance nationwide declined during this period, much of the new paper was insured, so the reduction in supply did not have a major impact on the implementation of this or other strategies we had planned for these Funds, which invest entirely or predominantly in insured bonds. In general, our new purchases centered on the essential services sectors, with an emphasis on keeping the Funds well diversified geographically. The Funds also continued to purchase paper issued in states such as California, New York and Ohio. Because of the relatively higher income tax levels in specialty states, municipal bonds issued in these states are generally in great demand by in-state retail investors, which helps to support their value. These bonds also provide additional liquidity, making it easier for us to execute trades as part of implementing our strategies. During this period, as part of our yield curve and income strategies, we were also selling holdings with shorter durations, including pre-refunded bonds, especially in NVG, as well as bonds with less attractive call features and credits producing lower tax-exempt income streams. A portion of the proceeds from these sales were reinvested out longer on the yield curve, which enabled us to maintain the Funds' durations within our preferred strategic range and contributed to their performance during this period. At the beginning of this reporting period, NEA was using forward interest rate swaps, a type of derivative financial instrument. As discussed in our last shareholder report, we began using these swaps in late 2004 as part of our duration management strategies in an effort to reduce some of the interest rate risk in NEA. We believe this hedging strategy was effective in achieving the intended goal of reducing the Funds' net asset value (NAV) volatility, and we removed the hedges from NEA in September 2006. HOW DID THE FUNDS PERFORM? Individual results for these Funds, as well as relevant index and peer group information, are presented in the accompanying table. 6 TOTAL RETURNS ON NET ASSET VALUE* For periods ended 10/31/06 1-YEAR 5-YEAR 10-YEAR --------------------------------------------------------------------- NQI 6.53% 6.11% 6.49% --------------------------------------------------------------------- NIO 7.05% 6.27% 6.42% --------------------------------------------------------------------- NIF 6.46% 6.19% 6.22% --------------------------------------------------------------------- NPX 6.75% 6.24% 6.63% --------------------------------------------------------------------- NVG 7.39% NA NA --------------------------------------------------------------------- NEA 7.82% NA NA --------------------------------------------------------------------- Lehman Brothers Insured Municipal Bond Index 3 6.15% 5.28% 6.06% --------------------------------------------------------------------- Lipper Insured Municipal Debt Funds Average 4 7.11% 5.70% 6.10% --------------------------------------------------------------------- * Annualized. Past performance is not predictive of future results. Current performance may be higher or lower than the data shown. Returns do not reflect the deduction of taxes that shareholders may have to pay on Fund distributions or upon the sale of Fund shares. For additional information, see the individual Performance Overview for your Fund in this report. For the 12 months ended October 31, 2006, the total returns on NAV for all six of the Funds in this report exceeded the return on the Lehman Brothers Insured Municipal Bond Index. NVG and NEA outperformed the average return for the Funds' insured Lipper peer group, while NIO performed in line with this return, and NQI, NIF, and NPX trailed the peer group average for this period. For longer periods, all the Funds outperformed the benchmark and the peer averages. Factors that influenced the Funds' returns during this period included yield curve positioning and duration management, implementation of income strategies, the use of financial leverage, allocations to noninsured credits in NVG and NEA, and advance refunding activity. 5 As longer-term municipal rates declined and the yield curve flattened over the course of this period, yield curve and duration positioning played an important role in the performance of these Funds. Overall, bonds with maturities between one and four years were the most adversely impacted by changes in the interest rate environment over this period, as interest rates in that part of the curve rose. As a result, these shorter bonds generally underperformed longer bonds, with the longest bonds (those with maturities of 3 The Lehman Brothers Insured Municipal Bond Index is an unleveraged, unmanaged national index comprising a broad range of insured municipal bonds. Results for the Lehman index do not reflect any expenses. 4 The Lipper Insured Municipal Debt Funds category average is calculated using the returns of all closed-end funds in this category for each period as follows: 1 year, 26; 5 years, 21; and 10 years, 18. Fund and Lipper returns assume reinvestment of dividends. 5 Advance refundings, also known as pre-refundings or refinancings, occur when an issuer sells new bonds and uses the proceeds to fund principal and interest payments of older existing bonds. This process often results in lower borrowing costs for bond issuers. 7 more than 22 years) achieving the best returns for the period. NIO, NVG, and NEA had relatively more exposure to the longer part of the curve than NQI, NIF, and NPX, which were hurt by their heavier exposure to the shorter end of the curve, especially bonds with short call dates. We continued to work to strengthen the yield curve positioning of all of these Funds. As previously mentioned, in recent months we implemented additional income strategies by adding zero coupon bonds, discount coupon bonds, and inverse floaters to our portfolios, all of which had a positive impact on the Funds' performances for this period. Zero coupon bonds, for example, typically have very long durations and tend to be very sensitive to changes in interest rates. With rates at the long end of the curve declining throughout much of this 12-month period, the zero coupon segment of the municipal market substantially outperformed other similarly rated coupon bearing bonds. Another factor in the annual performance of these Funds, especially relative to that of the unleveraged Lehman Brothers Insured Municipal Bond Index, was the use of financial leverage. While leveraging can add volatility to a Fund's NAV and share price, this strategy can also provide opportunities for additional income and total return for common shareholders. Over this 12-month reporting period, the Funds' performances were positively impacted by the leveraging strategy, although not to the extent we have seen in past years. Over the long term, we firmly believe that the use of financial leverage should continue to work to the benefit of these Funds. This is demonstrated by the total return performance of NQI, NIO, NIF, and NPX--both absolute and relative to the Lehman Brothers Insured Municipal Bond Index--over the 5-year and 10-year periods ended October 31, 2006. In addition, NEA, which can invest up to 20% of its portfolio in uninsured investment-grade quality securities, benefited from allocations of lower-quality credits during this period, as these bonds generally outperformed other credit quality sectors. The performance of this sector was largely the result of investor demand for the higher yields typically associated with lower-quality bonds, which drove up their value and caused credit spreads (the difference in interest rates of higher-quality and lower-quality bonds) to tighten. As of October 31, 2006, NEA held 2% of its portfolio in bonds rated BBB and 3% in bonds rated A. Among the lower-rated credits making contributions to NEA's total 8 return were several hospital holdings, as the health care sector ranked second in terms of performance among the Lehman Brothers Insured Municipal Bond Index revenue sectors for the period. NVG, which also can invest in uninsured securities, did not hold any bonds rated below AA as of the end of this period. We also continued to see positive contributions from advance refunding activity, which benefited these Funds through price appreciation and enhanced credit quality. While advance refundings generally enhanced performance for this 12-month period, the Funds' holdings of older, previously pre-refunded bonds tended to underperform the general municipal market, due primarily to their shorter effective maturities. During the first half of this period, NQI, NIF, and NPX also experienced some calls affecting their holdings of higher-yielding housing bonds, which impacted the income component of these Funds' total returns. HOW WERE THE FUNDS POSITIONED IN TERMS OF CREDIT QUALITY AND BOND CALLS AS OF OCTOBER 31, 2006? Maintaining strong credit quality remained an important requirement. As of October 31, 2006, NQI, NIO, NIF, and NPX continued to be 100% invested in insured and/or U.S. guaranteed securities, while NVG and NEA, which can invest up to 20% of their portfolios in uninsured investment-grade quality securities, had allocated 93% and 90% of their portfolios, respectively, to insured and U.S. guaranteed bonds rated AAA. At the end of October 2006, potential call exposure for the period November 2006 through the end of 2008 ranged from 2% in NIF, 4% in NEA, and 6% in NVG to 9% in NQI, 10% in NPX, and 12% in NIO. The number of actual bond calls in all of these Funds depends largely on future market interest rates. 9 Dividend and Share Price INFORMATION As previously noted, these six Funds use leverage to potentially enhance opportunities for additional income for common shareholders. The benefits of leveraging are tied in part to the short-term rates that leveraged Funds pay their MuniPreferred(R) shareholders. During periods of low short-term rates, these Funds generally pay lower dividends to their MuniPreferred shareholders, which can leave more earnings to support common share dividends. Conversely, when short-term interest rates rise, as they did during this reporting period, the Funds' borrowing costs also rise, impacting their income streams and reducing the extent of the benefits of leveraging. The Funds' income streams were also impacted as the proceeds from older, higher-yielding bonds that matured, were called or were sold were reinvested into bonds currently available in the market, which generally offered lower yields. These factors resulted in one monthly dividend reduction in NEA, two in NVG, three in NIO, NIF, and NPX, and four in NQI over the 12-month period ended October 31, 2006. Due to capital gains generated by normal portfolio activity such as the sale of appreciated securities and bond calls, common shareholders of the following Funds received capital gains and net ordinary income distributions at the end of December 2005, as follows: LONG-TERM CAPITAL GAINS ORDINARY INCOME (PER SHARE) (PER SHARE) -------------------------------------------------------------------------------- NQI $0.0775 -- -------------------------------------------------------------------------------- NIO $0.1394 $0.0004 -------------------------------------------------------------------------------- NIF $0.0955 -- -------------------------------------------------------------------------------- These distributions had a slight negative impact on the earning power per common share of these three Funds and were a minor factor in the common share dividend reductions noted above. All of the Funds in this report seek to pay stable dividends at rates that reflect each Fund's past results and projected future performance. During certain periods, each Fund may pay dividends at a rate that may be more or less than the amount of net investment income actually earned by the Fund during the period. If a Fund has cumulatively earned more than it has paid in dividends, it holds the excess in reserve as undistributed net investment income (UNII) as part of the Fund's NAV. Conversely, if a Fund has cumulatively paid dividends in excess of its earnings, the excess constitutes negative UNII that is likewise reflected in the Fund's NAV. Each Fund will, over time, pay all of 10 its net investment income as dividends to shareholders. As of October 31, 2006, NQI, NIO, and NPX had positive UNII balances for both financial statement and tax purposes, while NIF, NVG, and NEA had negative UNII balances for financial statement purposes and positive UNII balances for tax purposes. At the end of the reporting period, the Funds' share prices were trading at discounts to their NAVs as shown in the accompanying chart: 10/31/06 12-MONTH AVERAGE DISCOUNT DISCOUNT -------------------------------------------------------------------------------- NQI -3.70% -3.53% -------------------------------------------------------------------------------- NIO -5.27% -4.74% -------------------------------------------------------------------------------- NIF -5.19% -4.43% -------------------------------------------------------------------------------- NPX -7.98% -8.52% -------------------------------------------------------------------------------- NVG -3.94% -3.95% -------------------------------------------------------------------------------- NEA -3.88% -5.58% -------------------------------------------------------------------------------- 11 Nuveen Insured Quality Municipal Fund, Inc. NQI Performance OVERVIEW As of October 31, 2006 FUND SNAPSHOT -------------------------------------------------------------------------------- Common Share Price $ 14.83 -------------------------------------------------------------------------------- Common Share Net Asset Value $ 15.40 -------------------------------------------------------------------------------- Premium/(Discount) to NAV -3.70% -------------------------------------------------------------------------------- Market Yield 4.90% -------------------------------------------------------------------------------- Taxable-Equivalent Yield 1 6.81% -------------------------------------------------------------------------------- Net Assets Applicable to Common Shares ($000) $ 589,928 -------------------------------------------------------------------------------- Average Effective Maturity on Securities (Years) 18.61 -------------------------------------------------------------------------------- Leverage-Adjusted Duration 8.00 -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 12/19/90) ----------------------------------- ON SHARE PRICE ON NAV ----------------------------------- 1-Year 2.76% 6.53% ----------------------------------- 5-Year 6.51% 6.11% ----------------------------------- 10-Year 6.41% 6.49% ----------------------------------- STATES (as a % of total investments) -------------------------------------------------------------------------------- California 18.9% -------------------------------------------------------------------------------- Texas 13.0% -------------------------------------------------------------------------------- New York 10.3% -------------------------------------------------------------------------------- Illinois 10.1% -------------------------------------------------------------------------------- Washington 7.5% -------------------------------------------------------------------------------- Florida 5.0% -------------------------------------------------------------------------------- Nevada 4.7% -------------------------------------------------------------------------------- Hawaii 4.0% -------------------------------------------------------------------------------- Kentucky 3.8% -------------------------------------------------------------------------------- Ohio 2.0% -------------------------------------------------------------------------------- Pennsylvania 2.0% -------------------------------------------------------------------------------- Massachusetts 1.6% -------------------------------------------------------------------------------- West Virginia 1.5% -------------------------------------------------------------------------------- Maryland 1.2% -------------------------------------------------------------------------------- Other 14.4% -------------------------------------------------------------------------------- INDUSTRIES (as a % of total investments) -------------------------------------------------------------------------------- Transportation 22.3% -------------------------------------------------------------------------------- U.S. Guaranteed 15.7% -------------------------------------------------------------------------------- Tax Obligation/Limited 15.0% -------------------------------------------------------------------------------- Tax Obligation/General 13.9% -------------------------------------------------------------------------------- Health Care 11.4% -------------------------------------------------------------------------------- Utilities 9.0% -------------------------------------------------------------------------------- Other 12.7% -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- CREDIT QUALITY (as a % of total investments) [PIE CHART] Insured 81% U.S. Guaranteed 16% FHA/FNMA/GNMA Guaranteed 3% -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE 2 [BAR CHART] 0.0740 0.0705 0.0705 0.0705 0.067 0.067 0.067 0.0635 0.0635 0.0635 0.0605 0.0605 ----------------------------------------------------------------------------------------------------- Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
-------------------------------------------------------------------------------- -------------------------------------------------------------------------------- SHARE PRICE PERFORMANCE [LINE CHART] Weekly Date Closing Price -------- ------------- 11/01/05 15.33 15.38 15.39 15.31 15.44 15.46 15.32 15.10 15.02 14.97 14.92 14.91 14.89 14.55 14.70 14.62 14.60 14.60 14.74 14.67 14.62 14.76 14.73 14.66 14.71 14.56 14.57 14.55 14.59 14.40 14.35 14.35 14.39 14.38 14.36 14.42 14.42 14.56 14.51 14.60 14.76 14.79 14.79 14.83 14.95 14.96 15.00 15.07 15.10 15.08 14.97 14.96 15.06 15.09 15.09 15.21 15.34 15.32 15.23 15.33 15.44 15.50 15.61 15.58 15.50 15.34 15.26 15.26 15.25 15.07 15.04 15.01 14.93 14.91 14.98 14.95 15.00 15.04 15.00 14.97 15.02 15.09 15.00 15.06 15.05 14.86 14.75 14.75 14.81 14.88 14.93 14.86 14.85 15.03 15.03 14.96 14.94 14.86 14.94 15.00 15.00 14.88 14.96 15.00 14.99 15.01 14.99 14.91 14.84 14.79 14.68 14.57 14.54 14.55 14.46 14.50 14.51 14.45 14.45 14.51 14.54 14.57 14.56 14.55 14.55 14.62 14.50 14.44 14.45 14.45 14.38 14.43 14.44 14.25 14.25 14.38 14.58 14.52 14.55 14.57 14.28 14.22 14.29 14.23 14.24 14.26 14.21 14.31 14.20 14.12 14.21 14.18 14.12 14.14 13.95 13.81 13.89 13.91 13.99 13.98 13.88 13.97 13.86 13.97 13.98 13.93 13.92 13.85 13.91 14.00 13.98 14.00 14.08 14.09 14.10 14.10 14.04 13.99 13.96 13.86 13.80 13.84 13.93 14.01 14.02 14.05 14.15 14.21 14.30 14.33 14.55 14.59 14.70 14.81 14.68 14.73 14.79 14.78 14.70 14.74 14.90 14.76 14.89 14.83 14.83 14.83 14.82 14.81 14.84 14.83 14.83 14.76 14.76 14.77 14.60 14.61 14.62 14.55 14.58 14.50 14.49 14.53 14.41 14.50 14.47 14.52 14.58 14.61 14.61 14.79 14.69 14.63 14.63 14.62 14.65 14.67 14.66 14.68 14.65 14.66 14.66 14.64 14.60 14.56 14.57 14.60 14.67 14.67 14.66 14.76 14.75 14.74 14.78 14.82 10/31/06 14.83 PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. -------------------------------------------------------------------------------- 1 Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment, in order to equal the yield of the Fund on an after-tax basis. It is based on a federal income tax rate of 28%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 2 The Fund paid shareholders a capital gains distribution in December 2005 of $0.0775 per share. 12 Nuveen Insured Municipal Opportunity Fund, Inc. NIO Performance OVERVIEW As of October 31, 2006 -------------------------------------------------------------------------------- CREDIT QUALITY (as a % of total investments) [PIE CHART] Insured 74% U.S. Guaranteed 25% FHA/FNMA/GNMA Guaranteed 1% -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE 2 [BAR CHART] 0.0710 0.0710 0.0710 0.0710 0.0675 0.0675 0.0675 0.0645 0.0645 0.0645 0.0615 0.0615 ---------------------------------------------------------------------------------------------- Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
-------------------------------------------------------------------------------- -------------------------------------------------------------------------------- SHARE PRICE PERFORMANCE [LINE CHART] Weekly Date Closing Price -------- ------------- 11/01/05 14.51 14.55 14.52 14.43 14.42 14.45 14.35 14.20 14.32 14.22 14.21 14.23 14.24 14.20 14.23 14.25 14.23 14.28 14.35 14.37 14.24 14.29 14.34 14.20 14.25 14.27 14.22 14.20 14.22 13.94 14.02 13.96 13.95 13.94 14.03 14.08 14.06 14.03 14.14 14.31 14.42 14.44 14.44 14.72 14.84 14.89 15.00 14.96 14.80 14.83 14.94 14.91 14.92 15.03 15.06 15.14 15.14 15.23 15.21 15.10 15.12 15.12 15.24 15.24 15.20 15.15 15.12 15.02 15.20 15.19 15.16 15.10 15.12 15.13 15.10 15.14 15.16 15.15 15.15 15.23 15.31 15.29 15.36 15.20 15.21 15.14 14.95 15.02 15.06 14.95 14.95 14.91 14.80 14.85 14.85 14.85 14.79 14.81 14.85 14.95 14.98 14.90 14.98 14.95 15.02 15.11 15.03 14.97 14.91 14.73 14.70 14.60 14.55 14.44 14.35 14.38 14.39 14.37 14.43 14.51 14.46 14.47 14.54 14.57 14.57 14.61 14.57 14.51 14.55 14.62 14.56 14.58 14.50 14.40 14.44 14.42 14.45 14.37 14.39 14.46 14.41 14.45 14.41 14.43 14.50 14.45 14.41 14.51 14.58 14.50 14.38 14.43 14.40 14.36 14.41 14.19 14.24 14.25 14.19 14.14 14.04 14.01 13.94 13.90 13.94 13.90 13.98 14.04 14.03 14.10 14.07 14.06 14.09 14.08 14.14 14.11 14.11 14.15 14.26 14.24 14.18 14.35 14.45 14.46 14.49 14.54 14.65 14.68 14.86 14.94 14.90 14.85 14.90 14.82 14.82 14.78 14.84 14.76 14.78 14.85 14.88 14.83 14.89 14.88 14.83 14.83 14.85 14.85 14.86 14.87 14.88 14.88 14.91 14.85 14.64 14.74 14.81 14.81 14.80 14.75 14.71 14.72 14.65 14.64 14.62 14.65 14.74 14.73 14.73 14.80 14.85 14.80 14.80 14.85 14.76 14.78 14.70 14.68 14.72 14.70 14.64 14.61 14.48 14.50 14.47 14.59 14.61 14.59 14.60 14.61 14.68 14.70 14.73 14.70 10/31/06 14.75 PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. -------------------------------------------------------------------------------- FUND SNAPSHOT -------------------------------------------------------------------------------- Common Share Price $ 14.75 -------------------------------------------------------------------------------- Common Share Net Asset Value $ 15.57 -------------------------------------------------------------------------------- Premium/(Discount) to NAV -5.27% -------------------------------------------------------------------------------- Market Yield 5.00% -------------------------------------------------------------------------------- Taxable-Equivalent Yield 1 6.94% -------------------------------------------------------------------------------- Net Assets Applicable to Common Shares ($000) $1,263,172 -------------------------------------------------------------------------------- Average Effective Maturity on Securities (Years) 16.90 -------------------------------------------------------------------------------- Leverage-Adjusted Duration 8.41 -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 9/19/91) ----------------------------------- ON SHARE PRICE ON NAV ----------------------------------- 1-Year 8.26% 7.05% ----------------------------------- 5-Year 6.66% 6.27% ----------------------------------- 10-Year 6.23% 6.42% ----------------------------------- STATES (as a % of total investments) -------------------------------------------------------------------------------- California 19.6% -------------------------------------------------------------------------------- Texas 10.3% -------------------------------------------------------------------------------- Alabama 7.1% -------------------------------------------------------------------------------- Nevada 5.5% -------------------------------------------------------------------------------- New York 5.4% -------------------------------------------------------------------------------- Illinois 4.3% -------------------------------------------------------------------------------- Michigan 4.3% -------------------------------------------------------------------------------- Colorado 4.2% -------------------------------------------------------------------------------- Florida 3.7% -------------------------------------------------------------------------------- Massachusetts 3.0% -------------------------------------------------------------------------------- Wisconsin 2.7% -------------------------------------------------------------------------------- South Carolina 2.6% -------------------------------------------------------------------------------- Louisiana 2.5% -------------------------------------------------------------------------------- Ohio 2.0% -------------------------------------------------------------------------------- Indiana 1.8% -------------------------------------------------------------------------------- New Jersey 1.6% -------------------------------------------------------------------------------- Hawaii 1.6% -------------------------------------------------------------------------------- Washington 1.5% -------------------------------------------------------------------------------- Pennsylvania 1.4% -------------------------------------------------------------------------------- Arizona 1.4% -------------------------------------------------------------------------------- Kentucky 1.4% -------------------------------------------------------------------------------- Other 12.1% -------------------------------------------------------------------------------- INDUSTRIES (as a % of total investments) -------------------------------------------------------------------------------- U.S. Guaranteed 25.1% -------------------------------------------------------------------------------- Tax Obligation/Limited 18.1% -------------------------------------------------------------------------------- Transportation 15.0% -------------------------------------------------------------------------------- Tax Obligation/General 12.7% -------------------------------------------------------------------------------- Utilities 8.1% -------------------------------------------------------------------------------- Health Care 7.7% -------------------------------------------------------------------------------- Water and Sewer 6.2% -------------------------------------------------------------------------------- Other 7.1% -------------------------------------------------------------------------------- 1 Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment, in order to equal the yield of the Fund on an after-tax basis. It is based on a federal income tax rate of 28%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 2 The Fund paid shareholders capital gains and net ordinary income distributions in December 2005 of $0.1398 per share. 13 Nuveen Premier Insured Municipal Income Fund, Inc. NIF Performance OVERVIEW As of October 31, 2006 FUND SNAPSHOT -------------------------------------------------------------------------------- Common Share Price $ 14.60 -------------------------------------------------------------------------------- Common Share Net Asset Value $ 15.40 -------------------------------------------------------------------------------- Premium/(Discount) to NAV -5.19% -------------------------------------------------------------------------------- Market Yield 5.01% -------------------------------------------------------------------------------- Taxable-Equivalent Yield 1 6.96% -------------------------------------------------------------------------------- Net Assets Applicable to Common Shares ($000) $ 299,001 -------------------------------------------------------------------------------- Average Effective Maturity on Securities (Years) 15.13 -------------------------------------------------------------------------------- Leverage-Adjusted Duration 8.51 -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 12/19/91) ----------------------------------- ON SHARE PRICE ON NAV ----------------------------------- 1-Year 7.68% 6.46% ----------------------------------- 5-Year 5.58% 6.19% ----------------------------------- 10-Year 6.22% 6.22% ----------------------------------- STATES (as a % of total investments) -------------------------------------------------------------------------------- California 20.3% -------------------------------------------------------------------------------- Washington 12.2% -------------------------------------------------------------------------------- Illinois 10.5% -------------------------------------------------------------------------------- Texas 6.9% -------------------------------------------------------------------------------- Nevada 5.6% -------------------------------------------------------------------------------- New York 5.5% -------------------------------------------------------------------------------- Colorado 4.7% -------------------------------------------------------------------------------- Florida 3.3% -------------------------------------------------------------------------------- Oregon 2.8% -------------------------------------------------------------------------------- Hawaii 2.5% -------------------------------------------------------------------------------- Michigan 2.4% -------------------------------------------------------------------------------- Tennessee 2.4% -------------------------------------------------------------------------------- Missouri 2.2% -------------------------------------------------------------------------------- Georgia 2.2% -------------------------------------------------------------------------------- Indiana 1.9% -------------------------------------------------------------------------------- Other 14.6% -------------------------------------------------------------------------------- INDUSTRIES (as a % of total investments) -------------------------------------------------------------------------------- Tax Obligation/General 23.7% -------------------------------------------------------------------------------- U.S. Guaranteed 19.4% -------------------------------------------------------------------------------- Transportation 18.4% -------------------------------------------------------------------------------- Tax Obligation/Limited 12.6% -------------------------------------------------------------------------------- Health Care 10.0% -------------------------------------------------------------------------------- Utilities 6.4% -------------------------------------------------------------------------------- Other 9.5% -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- CREDIT QUALITY (as a % of total investments) [PIE CHART] Insured 80% U.S. Guaranteed 19% FHA/FNMA/GNMA Guaranteed 1% -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE 2 [BAR CHART] 0.0710 0.0675 0.0675 0.0675 0.0675 0.0675 0.0675 0.0640 0.0640 0.0640 0.0610 0.0610 ---------------------------------------------------------------------------------------------- Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
-------------------------------------------------------------------------------- -------------------------------------------------------------------------------- SHARE PRICE PERFORMANCE [LINE CHART] Weekly Date Closing Price -------- ------------- 11/01/05 14.42 14.41 14.46 14.33 14.32 14.32 14.15 14.11 14.01 14.09 14.11 14.13 14.10 14.02 14.18 14.15 14.20 14.26 14.38 14.36 14.37 14.42 14.23 14.29 14.25 14.26 14.38 14.22 14.16 13.90 13.97 13.92 13.97 14.04 13.97 14.07 14.14 14.19 14.15 14.29 14.41 14.31 14.31 14.41 14.44 14.51 14.61 14.60 14.56 14.47 14.51 14.47 14.48 14.59 14.62 14.64 14.72 14.84 14.88 14.86 14.88 14.77 14.91 15.03 14.99 15.00 15.00 14.99 14.87 14.95 15.00 15.00 14.96 14.87 14.90 14.80 14.76 14.75 14.86 14.85 14.95 14.99 14.99 15.16 15.02 14.87 14.74 14.86 14.85 14.86 14.82 14.75 14.76 14.81 14.76 14.60 14.65 14.76 14.62 14.87 15.00 15.00 14.93 14.90 14.98 14.99 14.98 14.90 14.76 14.76 14.69 14.72 14.60 14.51 14.47 14.49 14.38 14.37 14.37 14.41 14.40 14.29 14.30 14.44 14.44 14.50 14.54 14.58 14.50 14.52 14.44 14.39 14.36 14.33 14.23 14.25 14.40 14.49 14.52 14.54 14.60 14.60 14.55 14.54 14.57 14.35 14.44 14.52 14.60 14.48 14.30 14.18 14.22 14.20 14.20 13.97 13.86 13.88 14.08 14.10 14.11 14.05 14.07 13.95 13.95 13.75 13.86 13.89 13.83 13.91 14.03 14.04 14.04 14.10 14.06 14.01 14.04 14.02 14.09 14.19 14.22 14.31 14.48 14.46 14.26 14.42 14.60 14.66 15.07 15.01 14.89 14.92 15.00 14.85 14.75 14.77 14.65 14.58 14.53 14.71 14.73 14.69 14.70 14.70 14.80 14.76 14.76 14.67 14.79 14.86 14.85 14.85 14.84 14.71 14.56 14.56 14.57 14.53 14.55 14.55 14.46 14.49 14.49 14.66 14.71 14.68 14.73 14.74 14.63 14.78 14.68 14.69 14.69 14.61 14.67 14.71 14.70 14.64 14.74 14.74 14.58 14.59 14.50 14.45 14.48 14.49 14.50 14.52 14.45 14.43 14.44 14.54 14.59 14.56 10/31/06 14.60 PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. -------------------------------------------------------------------------------- 1 Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment, in order to equal the yield of the Fund on an after-tax basis. It is based on a federal income tax rate of 28%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 2 The Fund paid shareholders a capital gains distribution in December 2005 of $0.0955 per share. 14 Nuveen Insured Premium Income Municipal Fund 2 NPX Performance OVERVIEW As of October 31, 2006 -------------------------------------------------------------------------------- CREDIT QUALITY (as a % of total investments) [PIE CHART] Insured 85% U.S. Guaranteed 14% FHA/FNMA/GNMA Guaranteed 1% -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE [BAR CHART] 0.0635 0.0600 0.0600 0.0600 0.0570 0.0570 0.0570 0.0540 0.0540 0.0540 0.0540 0.0540 ---------------------------------------------------------------------------------------------- Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
-------------------------------------------------------------------------------- -------------------------------------------------------------------------------- SHARE PRICE PERFORMANCE [LINE CHART] Weekly Date Closing Price -------- ------------- 11/01/05 12.88 12.83 12.75 12.81 12.80 12.86 12.75 12.61 12.65 12.58 12.50 12.53 12.54 12.47 12.44 12.48 12.51 12.53 12.61 12.60 12.65 12.63 12.65 12.57 12.54 12.51 12.56 12.55 12.51 12.42 12.44 12.47 12.47 12.44 12.46 12.43 12.43 12.52 12.54 12.58 12.61 12.65 12.65 12.67 12.79 13.03 13.08 13.18 13.00 12.85 12.89 12.95 12.96 12.99 13.00 13.06 13.07 13.14 13.11 13.05 13.10 13.08 13.09 13.13 13.08 13.05 12.96 13.04 13.04 13.15 13.20 13.14 13.14 13.14 13.13 13.14 13.11 13.16 13.09 13.15 13.15 13.22 13.19 13.14 13.06 13.00 12.86 12.82 12.85 12.87 12.91 12.90 12.92 12.96 12.95 12.92 12.95 12.93 12.95 12.91 12.93 12.92 12.94 12.91 12.99 13.08 13.08 12.94 12.93 12.90 12.82 12.72 12.74 12.69 12.64 12.62 12.62 12.53 12.55 12.54 12.52 12.58 12.60 12.66 12.66 12.67 12.75 12.70 12.68 12.68 12.67 12.77 12.85 12.70 12.71 12.75 12.71 12.72 12.71 12.88 12.75 12.65 12.63 12.60 12.59 12.55 12.55 12.58 12.68 12.62 12.65 12.64 12.59 12.56 12.55 12.36 12.31 12.32 12.32 12.32 12.30 12.24 12.23 12.22 12.14 12.15 12.18 12.17 12.28 12.32 12.27 12.29 12.26 12.29 12.42 12.32 12.28 12.25 12.26 12.22 12.29 12.25 12.33 12.38 12.38 12.38 12.38 12.44 12.50 12.58 12.63 12.65 12.71 12.65 12.64 12.61 12.57 12.52 12.58 12.68 12.68 12.72 12.76 12.72 12.78 12.71 12.77 12.79 12.84 12.88 12.88 12.97 13.03 12.99 12.90 12.87 12.90 12.90 12.86 12.81 12.85 12.86 12.83 12.84 12.89 12.87 12.91 12.91 12.91 12.97 12.93 12.96 12.96 13.00 12.98 12.97 12.97 13.00 12.98 12.97 12.93 12.96 12.92 12.85 12.91 12.96 12.98 13.07 13.05 13.05 13.03 13.05 13.06 13.01 10/31/06 13.03 PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. -------------------------------------------------------------------------------- FUND SNAPSHOT -------------------------------------------------------------------------------- Common Share Price $ 13.03 -------------------------------------------------------------------------------- Common Share Net Asset Value $ 14.16 -------------------------------------------------------------------------------- Premium/(Discount) to NAV -7.98% -------------------------------------------------------------------------------- Market Yield 4.97% -------------------------------------------------------------------------------- Taxable-Equivalent Yield 1 6.90% -------------------------------------------------------------------------------- Net Assets Applicable to Common Shares ($000) $ 528,984 -------------------------------------------------------------------------------- Average Effective Maturity on Securities (Years) 16.76 -------------------------------------------------------------------------------- Leverage-Adjusted Duration 8.39 -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 7/22/93) ----------------------------------- ON SHARE PRICE ON NAV ----------------------------------- 1-Year 7.11% 6.75% ----------------------------------- 5-Year 4.98% 6.24% ----------------------------------- 10-Year 7.47% 6.63% ----------------------------------- STATES (as a % of total investments) -------------------------------------------------------------------------------- California 13.6% -------------------------------------------------------------------------------- Texas 9.8% -------------------------------------------------------------------------------- New York 9.4% -------------------------------------------------------------------------------- Pennsylvania 9.3% -------------------------------------------------------------------------------- Colorado 6.0% -------------------------------------------------------------------------------- Hawaii 5.2% -------------------------------------------------------------------------------- Wisconsin 4.8% -------------------------------------------------------------------------------- Washington 4.6% -------------------------------------------------------------------------------- Georgia 2.5% -------------------------------------------------------------------------------- North Dakota 2.5% -------------------------------------------------------------------------------- Illinois 2.5% -------------------------------------------------------------------------------- Oregon 2.4% -------------------------------------------------------------------------------- Massachusetts 2.3% -------------------------------------------------------------------------------- Nevada 2.1% -------------------------------------------------------------------------------- New Jersey 2.1% -------------------------------------------------------------------------------- Virginia 2.0% -------------------------------------------------------------------------------- Louisiana 1.9% -------------------------------------------------------------------------------- Arkansas 1.9% -------------------------------------------------------------------------------- Arizona 1.6% -------------------------------------------------------------------------------- Utah 1.5% -------------------------------------------------------------------------------- Other 12.0% -------------------------------------------------------------------------------- INDUSTRIES (as a % of total investments) -------------------------------------------------------------------------------- Utilities 17.8% -------------------------------------------------------------------------------- U.S. Guaranteed 13.5% -------------------------------------------------------------------------------- Tax Obligation/General 12.2% -------------------------------------------------------------------------------- Transportation 11.8% -------------------------------------------------------------------------------- Tax Obligation/Limited 11.8% -------------------------------------------------------------------------------- Water and Sewer 11.1% -------------------------------------------------------------------------------- Health Care 9.6% -------------------------------------------------------------------------------- Education and Civic Organizations 8.0% -------------------------------------------------------------------------------- Other 4.2% -------------------------------------------------------------------------------- 1 Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment, in order to equal the yield of the Fund on an after-tax basis. It is based on a federal income tax rate of 28%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 15 Nuveen Insured Dividend Advantage Municipal Fund NVG Performance OVERVIEW As of October 31, 2006 FUND SNAPSHOT -------------------------------------------------------------------------------- Common Share Price $ 14.89 -------------------------------------------------------------------------------- Common Share Net Asset Value $ 15.50 -------------------------------------------------------------------------------- Premium/(Discount) to NAV -3.94% -------------------------------------------------------------------------------- Market Yield 5.16% -------------------------------------------------------------------------------- Taxable-Equivalent Yield 1 7.17% -------------------------------------------------------------------------------- Net Assets Applicable to Common Shares ($000) $ 462,037 -------------------------------------------------------------------------------- Average Effective Maturity on Securities (Years) 15.12 -------------------------------------------------------------------------------- Leverage-Adjusted Duration 7.82 -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 3/25/02) ----------------------------------- ON SHARE PRICE ON NAV ----------------------------------- 1-Year 11.09% 7.39% ----------------------------------- Since Inception 6.39% 8.08% ----------------------------------- STATES (as a % of total investments) -------------------------------------------------------------------------------- Texas 18.3% -------------------------------------------------------------------------------- Indiana 10.4% -------------------------------------------------------------------------------- Illinois 10.4% -------------------------------------------------------------------------------- Washington 9.1% -------------------------------------------------------------------------------- Florida 8.7% -------------------------------------------------------------------------------- California 8.4% -------------------------------------------------------------------------------- Tennessee 6.2% -------------------------------------------------------------------------------- Nevada 2.9% -------------------------------------------------------------------------------- Alabama 2.8% -------------------------------------------------------------------------------- Colorado 2.8% -------------------------------------------------------------------------------- New York 2.5% -------------------------------------------------------------------------------- Pennsylvania 2.4% -------------------------------------------------------------------------------- Alaska 2.4% -------------------------------------------------------------------------------- Other 12.7% -------------------------------------------------------------------------------- INDUSTRIES (as a % of total investments) -------------------------------------------------------------------------------- U.S. Guaranteed 23.5% -------------------------------------------------------------------------------- Tax Obligation/Limited 16.9% -------------------------------------------------------------------------------- Transportation 14.4% -------------------------------------------------------------------------------- Tax Obligation/General 13.1% -------------------------------------------------------------------------------- Water and Sewer 8.1% -------------------------------------------------------------------------------- Utilities 7.3% -------------------------------------------------------------------------------- Education and Civic Organizations 7.3% -------------------------------------------------------------------------------- Health Care 7.1% -------------------------------------------------------------------------------- Other 2.3% -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- CREDIT QUALITY (as a % of total investments) [PIE CHART] Insured 66% U.S. Guaranteed 24% FHA/FNMA/GNMA Guaranteed 3% AAA (Uninsured) 2% AA (Uninsured) 5% -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE [BAR CHART] 0.0705 0.0705 0.0705 0.0705 0.0705 0.0705 0.0705 0.0670 0.0670 0.0670 0.0640 0.0640 ---------------------------------------------------------------------------------------------- Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
-------------------------------------------------------------------------------- -------------------------------------------------------------------------------- SHARE PRICE PERFORMANCE [LINE CHART] Weekly Date Closing Price -------- ------------- 11/01/05 14.20 14.08 14.12 14.06 14.12 14.18 14.13 14.06 14.16 14.07 14.05 14.13 14.06 13.95 14.03 14.00 13.93 14.07 14.14 14.15 14.03 14.03 14.14 14.04 14.00 14.05 14.10 14.10 14.11 13.97 13.93 13.90 13.97 14.03 14.00 13.99 14.06 14.00 14.05 14.08 14.17 14.12 14.12 14.23 14.34 14.36 14.58 14.65 14.60 14.50 14.55 14.70 14.72 14.96 14.90 14.86 14.90 14.98 14.95 15.00 14.94 14.92 15.03 15.03 14.92 14.87 14.91 15.01 14.93 14.98 14.85 14.74 14.87 14.94 14.94 15.01 14.89 15.02 15.00 15.00 15.01 15.04 14.98 15.04 15.05 15.00 14.94 15.04 15.07 15.05 14.92 14.91 14.91 14.92 15.01 15.08 15.00 14.94 14.90 14.80 14.82 14.81 14.85 14.87 14.88 14.93 14.98 14.99 15.07 14.97 14.98 14.88 14.88 14.89 14.61 14.72 14.88 14.90 15.00 14.98 14.98 15.00 14.99 15.10 15.10 15.05 15.01 15.04 14.93 14.89 14.82 14.75 14.75 14.60 14.49 14.58 14.79 14.66 14.60 14.72 14.60 14.59 14.55 14.55 14.68 14.66 14.54 14.63 14.72 14.59 14.62 14.62 14.72 14.60 14.63 14.45 14.45 14.33 14.33 14.42 14.23 14.19 14.04 14.11 14.08 14.06 14.00 14.00 14.08 14.23 14.16 14.18 14.29 14.37 14.55 14.35 14.30 14.41 14.35 14.30 14.41 14.37 14.35 14.37 14.50 14.75 14.75 14.84 14.89 14.94 14.93 15.01 15.10 15.13 15.11 15.07 15.12 14.96 14.99 15.00 15.02 14.99 15.00 15.00 15.05 14.94 15.09 15.00 15.07 15.08 15.07 15.06 15.05 15.04 14.93 14.91 14.99 14.94 14.88 14.89 14.77 14.81 14.85 14.80 14.76 14.78 14.77 14.87 14.81 14.91 14.94 14.86 14.86 14.86 14.90 14.93 14.93 14.95 14.87 14.92 14.81 14.87 14.65 14.73 14.71 14.75 14.83 14.89 14.91 14.86 14.80 14.78 14.80 14.84 10/31/06 14.89 PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. -------------------------------------------------------------------------------- 1 Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment, in order to equal the yield of the Fund on an after-tax basis. It is based on a federal income tax rate of 28%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 16 Nuveen Insured Tax-Free Advantage Municipal Fund NEA Performance OVERVIEW As of October 31, 2006 -------------------------------------------------------------------------------- CREDIT QUALITY (as a % of total investments) [PIE CHART] Insured 81% U.S. Guaranteed 9% AAA (Uninsured) 3% AA (Uninsured) 2% A (Uninsured) 3% BBB (Uninsured) 2% -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE [BAR CHART] 0.0620 0.0620 0.0620 0.0620 0.0620 0.0620 0.0620 0.0620 0.0620 0.0620 0.0590 0.0590 ---------------------------------------------------------------------------------------------- Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
-------------------------------------------------------------------------------- -------------------------------------------------------------------------------- SHARE PRICE PERFORMANCE [LINE CHART] Weekly Date Closing Price -------- ------------- 11/01/05 13.47 13.44 13.37 13.18 13.31 13.33 13.27 13.20 13.16 13.06 13.02 13.15 13.08 13.15 13.17 13.09 13.09 13.07 13.17 13.05 12.98 13.12 13.09 13.08 13.10 13.01 13.13 13.09 13.16 13.09 13.11 13.10 13.09 13.04 13.01 13.01 13.04 13.12 13.11 13.23 13.35 13.34 13.34 13.56 13.63 13.68 13.70 13.71 13.68 13.68 13.94 13.65 13.60 13.70 13.74 13.72 13.81 14.01 13.93 13.83 13.95 13.83 13.88 13.84 13.70 13.62 13.60 13.60 13.67 13.73 13.75 13.95 13.84 13.92 13.90 14.00 14.05 14.07 14.02 14.04 14.10 14.10 14.07 14.02 13.85 13.85 13.80 13.80 13.95 13.87 13.71 13.65 13.80 13.75 13.82 13.73 13.57 13.67 13.63 13.75 13.71 13.73 13.75 13.69 13.78 13.80 13.79 13.84 13.75 13.72 13.65 13.56 13.48 13.50 13.56 13.73 13.60 13.59 13.65 13.66 13.70 13.70 13.75 13.71 13.71 13.79 13.85 13.90 13.90 13.85 13.74 13.75 13.72 13.70 13.75 13.84 14.01 13.71 13.75 13.83 13.71 13.79 13.76 13.59 13.55 13.53 13.70 13.85 13.79 13.59 13.58 13.50 13.54 13.53 13.58 13.60 13.53 13.48 13.46 13.48 13.44 13.48 13.48 13.46 13.52 13.62 13.53 13.65 13.61 13.84 13.75 13.81 13.88 14.05 13.99 14.18 14.10 14.08 13.99 14.05 14.02 14.08 14.04 14.20 14.20 14.12 14.21 14.22 14.24 14.25 14.39 14.50 14.51 14.47 14.47 14.40 14.48 14.39 14.30 14.31 14.33 14.30 14.34 14.37 14.42 14.35 14.40 14.39 14.49 14.42 14.45 14.52 14.46 14.47 14.31 14.33 14.29 14.29 14.35 14.24 14.36 14.33 14.35 14.39 14.45 14.39 14.36 14.40 14.49 14.59 14.50 14.46 14.46 14.56 14.58 14.56 14.55 14.57 14.49 14.47 14.38 14.43 14.33 14.40 14.35 14.34 14.35 14.37 14.30 14.30 14.39 14.30 14.30 14.29 10/31/06 14.35 PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. -------------------------------------------------------------------------------- FUND SNAPSHOT -------------------------------------------------------------------------------- Common Share Price $ 14.35 -------------------------------------------------------------------------------- Common Share Net Asset Value $ 14.93 -------------------------------------------------------------------------------- Premium/(Discount) to NAV -3.88% -------------------------------------------------------------------------------- Market Yield 4.93% -------------------------------------------------------------------------------- Taxable-Equivalent Yield 1 6.85% -------------------------------------------------------------------------------- Net Assets Applicable to Common Shares ($000) $ 276,506 -------------------------------------------------------------------------------- Average Effective Maturity on Securities (Years) 19.81 -------------------------------------------------------------------------------- Leverage-Adjusted Duration 7.94 -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 11/21/02) ----------------------------------- ON SHARE PRICE ON NAV ----------------------------------- 1-Year 12.82% 7.82% ----------------------------------- Since Inception 4.72% 6.89% ----------------------------------- STATES (as a % of total investments) -------------------------------------------------------------------------------- California 19.2% -------------------------------------------------------------------------------- Texas 8.6% -------------------------------------------------------------------------------- Michigan 7.7% -------------------------------------------------------------------------------- New York 6.8% -------------------------------------------------------------------------------- Washington 6.1% -------------------------------------------------------------------------------- Indiana 5.8% -------------------------------------------------------------------------------- Pennsylvania 5.8% -------------------------------------------------------------------------------- Alabama 5.5% -------------------------------------------------------------------------------- South Carolina 4.9% -------------------------------------------------------------------------------- Wisconsin 4.4% -------------------------------------------------------------------------------- Massachusetts 3.3% -------------------------------------------------------------------------------- Arizona 2.5% -------------------------------------------------------------------------------- Colorado 2.5% -------------------------------------------------------------------------------- Illinois 2.5% -------------------------------------------------------------------------------- Other 14.4% -------------------------------------------------------------------------------- INDUSTRIES (as a % of total investments) -------------------------------------------------------------------------------- Tax Obligation/General 27.2% -------------------------------------------------------------------------------- Tax Obligation/Limited 26.2% -------------------------------------------------------------------------------- Health Care 13.4% -------------------------------------------------------------------------------- Utilities 9.5% -------------------------------------------------------------------------------- U.S. Guaranteed 8.7% -------------------------------------------------------------------------------- Transportation 7.0% -------------------------------------------------------------------------------- Other 8.0% -------------------------------------------------------------------------------- 1 Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment, in order to equal the yield of the Fund on an after-tax basis. It is based on a federal income tax rate of 28%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 17 Shareholder MEETING REPORT The Annual Shareholder Meeting was held on August 1, 2006, at The Northern Trust Company, 50 South LaSalle Street, Chicago, Illinois 60675.
NQI NIO NIF ---------------------------------------------------------------------------------------------------------------------------------- APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS: Common and Common and Common and MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred shares voting shares voting shares voting shares voting shares voting voting shares together together together together together together as a class as a class as a class as a class as a class as a class ---------------------------------------------------------------------------------------------------------------------------------- Robert P. Bremner For 32,238,455 -- 71,979,626 -- 17,463,741 -- Withhold 582,095 -- 716,295 -- 80,482 -- ---------------------------------------------------------------------------------------------------------------------------------- Total 32,820,550 -- 72,695,921 -- 17,544,223 -- ================================================================================================================================== Lawrence H. Brown For 32,254,410 -- 71,999,392 -- 17,458,106 -- Withhold 566,140 -- 696,529 -- 86,117 -- ---------------------------------------------------------------------------------------------------------------------------------- Total 32,820,550 -- 72,695,921 -- 17,544,223 -- ================================================================================================================================== Jack B. Evans For 32,245,601 -- 71,990,365 -- 17,463,741 -- Withhold 574,949 -- 705,556 -- 80,482 -- ---------------------------------------------------------------------------------------------------------------------------------- Total 32,820,550 -- 72,695,921 -- 17,544,223 -- ================================================================================================================================== William C. Hunter For 32,259,218 -- 72,014,623 -- 17,462,941 -- Withhold 561,332 -- 681,298 -- 81,282 -- ---------------------------------------------------------------------------------------------------------------------------------- Total 32,820,550 -- 72,695,921 -- 17,544,223 -- ================================================================================================================================== David J. Kundert For 32,251,880 -- 72,005,412 -- 17,462,381 -- Withhold 568,670 -- 690,509 -- 81,842 -- ---------------------------------------------------------------------------------------------------------------------------------- Total 32,820,550 -- 72,695,921 -- 17,544,223 -- ================================================================================================================================== William J. Schneider For -- 11,492 -- 25,195 -- 5,780 Withhold -- 29 -- 314 -- 2 ---------------------------------------------------------------------------------------------------------------------------------- Total -- 11,521 -- 25,509 -- 5,782 ================================================================================================================================== Timothy R. Schwertfeger For -- 11,491 -- 25,195 -- 5,780 Withhold -- 30 -- 314 -- 2 ---------------------------------------------------------------------------------------------------------------------------------- Total -- 11,521 -- 25,509 -- 5,782 ================================================================================================================================== Judith M. Stockdale For 32,243,979 -- 71,998,805 -- 17,460,139 -- Withhold 576,571 -- 697,116 -- 84,084 -- ---------------------------------------------------------------------------------------------------------------------------------- Total 32,820,550 -- 72,695,921 -- 17,544,223 -- ================================================================================================================================== Eugene S. Sunshine For 32,253,943 -- 72,008,705 -- 17,462,181 -- Withhold 566,607 -- 687,216 -- 82,042 -- ---------------------------------------------------------------------------------------------------------------------------------- Total 32,820,550 -- 72,695,921 -- 17,544,223 -- ==================================================================================================================================
18
NPX NVG NEA ---------------------------------------------------------------------------------------------------------------------------------- APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS: Common and Common and Common and MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred shares voting shares voting shares voting shares voting shares voting voting shares together together together together together together as a class as a class as a class as a class as a class as a class ---------------------------------------------------------------------------------------------------------------------------------- Robert P. Bremner For 34,175,124 -- 28,127,919 -- 17,801,431 -- Withhold 352,757 -- 111,800 -- 181,736 -- ---------------------------------------------------------------------------------------------------------------------------------- Total 34,527,881 -- 28,239,719 -- 17,983,167 -- ================================================================================================================================== Lawrence H. Brown For 34,168,776 -- 28,123,917 -- 17,782,900 -- Withhold 359,105 -- 115,802 -- 200,267 -- ---------------------------------------------------------------------------------------------------------------------------------- Total 34,527,881 -- 28,239,719 -- 17,983,167 -- ================================================================================================================================== Jack B. Evans For 34,159,360 -- 28,127,016 -- 17,792,731 -- Withhold 368,521 -- 112,703 -- 190,436 -- ---------------------------------------------------------------------------------------------------------------------------------- Total 34,527,881 -- 28,239,719 -- 17,983,167 -- ================================================================================================================================== William C. Hunter For 34,169,095 -- 28,128,777 -- 17,791,124 -- Withhold 358,786 -- 110,942 -- 192,043 -- ---------------------------------------------------------------------------------------------------------------------------------- Total 34,527,881 -- 28,239,719 -- 17,983,167 -- ================================================================================================================================== David J. Kundert For 34,175,624 -- 28,126,977 -- 17,783,567 -- Withhold 352,257 -- 112,742 -- 199,600 -- ---------------------------------------------------------------------------------------------------------------------------------- Total 34,527,881 -- 28,239,719 -- 17,983,167 -- ================================================================================================================================== William J. Schneider For -- 9,872 -- 8,641 -- 5,202 Withhold -- 4 -- 36 -- 5 ---------------------------------------------------------------------------------------------------------------------------------- Total -- 9,876 -- 8,677 -- 5,207 ================================================================================================================================== Timothy R. Schwertfeger For -- 9,872 -- 8,641 -- 5,202 Withhold -- 4 -- 36 -- 5 ---------------------------------------------------------------------------------------------------------------------------------- Total -- 9,876 -- 8,677 -- 5,207 ================================================================================================================================== Judith M. Stockdale For 34,174,404 -- 28,127,919 -- 17,788,695 -- Withhold 353,477 -- 111,800 -- 194,472 -- ---------------------------------------------------------------------------------------------------------------------------------- Total 34,527,881 -- 28,239,719 -- 17,983,167 -- ================================================================================================================================== Eugene S. Sunshine For 34,169,387 -- 28,129,633 -- 17,789,861 -- Withhold 358,494 -- 110,086 -- 193,306 -- ---------------------------------------------------------------------------------------------------------------------------------- Total 34,527,881 -- 28,239,719 -- 17,983,167 -- ==================================================================================================================================
19 Report of INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM THE BOARD OF DIRECTORS/TRUSTEES AND SHAREHOLDERS NUVEEN INSURED QUALITY MUNICIPAL FUND, INC. NUVEEN INSURED MUNICIPAL OPPORTUNITY FUND, INC. NUVEEN PREMIER INSURED MUNICIPAL INCOME FUND, INC. NUVEEN INSURED PREMIUM INCOME MUNICIPAL FUND 2 NUVEEN INSURED DIVIDEND ADVANTAGE MUNICIPAL FUND NUVEEN INSURED TAX-FREE ADVANTAGE MUNICIPAL FUND We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of Nuveen Insured Quality Municipal Fund, Inc., Nuveen Insured Municipal Opportunity Fund, Inc., Nuveen Premier Insured Municipal Income Fund, Inc., Nuveen Insured Premium Income Municipal Fund 2, Nuveen Insured Dividend Advantage Municipal Fund and Nuveen Insured Tax-Free Advantage Municipal Fund (the "Funds") as of October 31, 2006, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of 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 financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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. We were not engaged to perform an audit of the Funds' internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of October 31, 2006, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. 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 positions of Nuveen Insured Quality Municipal Fund, Inc., Nuveen Insured Municipal Opportunity Fund, Inc., Nuveen Premier Insured Municipal Income Fund, Inc., Nuveen Insured Premium Income Municipal Fund 2, Nuveen Insured Dividend Advantage Municipal Fund and Nuveen Insured Tax-Free Advantage Municipal Fund at October 31, 2006, the results of their operations for the year then ended, changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the periods indicated therein in conformity with U.S. generally accepted accounting principles. /s/ Ernst & Young LLP Chicago, Illinois December 14, 2006 20 Nuveen Insured Quality Municipal Fund, Inc. (NQI) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 1.5% (1.0% OF TOTAL INVESTMENTS) $ 1,135 Birmingham Waterworks and Sewerage Board, Alabama, Water and 1/13 at 100.00 AAA $ 1,226,277 Sewerage Revenue Bonds, Series 2002B, 5.250%, 1/01/20 - MBIA Insured 7,500 Huntsville Healthcare Authority, Alabama, Revenue Bonds, 6/15 at 100.00 AAA 7,909,050 Series 2005A, 5.000%, 6/01/24 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ 8,635 Total Alabama 9,135,327 ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 1.6% (1.1% OF TOTAL INVESTMENTS) 9,200 Phoenix, Arizona, Civic Improvement Corporation, Senior Lien 7/12 at 100.00 AAA 9,618,416 Airport Revenue Bonds, Series 2002B, 5.250%, 7/01/32 - FGIC Insured (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ ARKANSAS - 0.8% (0.5% OF TOTAL INVESTMENTS) 4,250 University of Arkansas, Fayetteville, Revenue Bonds, Medical 11/14 at 100.00 Aaa 4,504,192 Sciences Campus, Series 2004B, 5.000%, 11/01/24 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 28.5% (18.9% OF TOTAL INVESTMENTS) 1,500 Acalanes Union High School District, Contra Costa County, 8/15 at 100.00 AAA 1,606,875 California, General Obligation Bonds, Series 2005, 5.000%, 8/01/24 - FGIC Insured California Department of Water Resources, Water System Revenue Bonds, Central Valley Project, Series 2005AC: 4,045 5.000%, 12/01/24 - MBIA Insured 12/14 at 100.00 AAA 4,330,253 4,000 5.000%, 12/01/26 - MBIA Insured 12/14 at 100.00 AAA 4,249,680 1,275 California Educational Facilities Authority, Revenue Bonds, 10/15 at 100.00 Aaa 1,398,012 Occidental College, Series 2005A, 5.250%, 10/01/23 - MBIA Insured 2,370 California Infrastructure Economic Development Bank, First Lien 1/28 at 100.00 AAA 3,351,014 Revenue Bonds, San Francisco Bay Area Toll Bridge, Series 2003A. Residuals Series 1485, 7.327%, 7/01/33 (Pre-refunded 1/01/28) - AMBAC Insured (IF) 13,175 California Pollution Control Financing Authority, Revenue 9/09 at 101.00 AAA 13,893,960 Refunding Bonds, Southern California Edison Company, Series 1999A, 5.450%, 9/01/29 - MBIA Insured 8,000 California, General Obligation Bonds, Series 2002, 5.000%, 10/12 at 100.00 AAA 8,336,160 10/01/32 - MBIA Insured 3,750 California, General Obligation Bonds, Series 2004, 5.000%, 4/14 at 100.00 AAA 3,945,450 4/01/31 - AMBAC Insured 20,500 California, General Obligation Refunding Bonds, Series 2002, 4/12 at 100.00 AAA 21,509,215 5.000%, 4/01/27 - AMBAC Insured 2,340 Cerritos Public Financing Authority, California, Tax Allocation 11/17 at 102.00 AAA 2,549,360 Revenue Bonds, Los Cerritos Redevelopment Projects, Series 2002A, 5.000%, 11/01/24 - AMBAC Insured 5,000 Clovis Unified School District, Fresno County, California, No Opt. Call AAA 2,206,800 General Obligation Bonds, Series 2001A, 0.000%, 8/01/25 - FGIC Insured Foothill/Eastern Transportation Corridor Agency, California, Toll Road Revenue Refunding Bonds, Series 1999: 22,985 0.000%, 1/15/24 - MBIA Insured 1/10 at 44.52 AAA 8,979,090 22,000 0.000%, 1/15/31 - MBIA Insured 1/10 at 29.11 AAA 5,590,420 50,000 0.000%, 1/15/37 - MBIA Insured 1/10 at 20.19 AAA 8,811,000 5,000 Garden Grove, California, Certificates of Participation, 3/12 at 101.00 AAA 5,264,100 Financing Project, Series 2002A, 5.125%, 3/01/32 - AMBAC Insured 5,500 Golden State Tobacco Securitization Corporation, California, 6/15 at 100.00 AAA 5,803,985 Tobacco Settlement Asset-Backed Revenue Bonds, Series 2005A, 5.000%, 6/01/35 - FGIC Insured 3,795 Kern Community College District, California, General Obligation 11/15 at 100.00 AAA 4,122,812 Bonds, Series 2005, 5.000%, 11/01/20 - FSA Insured 5,795 Kern Community College District, California, General Obligation No Opt. Call AAA 2,528,069 Bonds, Series 2006, 0.000%, 11/01/25 - FSA Insured
21 Nuveen Insured Quality Municipal Fund, Inc. (NQI) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA (continued) $ 5,423 Moreno Valley Public Finance Authority, California, GNMA 1/12 at 105.00 Aaa $ 5,707,924 Collateralized Assisted Living Housing Revenue Bonds, CDC Assisted Living Project, Series 2000A, 7.500%, 1/20/42 5,650 Ontario Redevelopment Financing Authority, San Bernardino County, 2/07 at 100.00 AAA 5,911,086 California, Revenue Bonds, Redevelopment Project 1, Series 1993, 5.850%, 8/01/22 - MBIA Insured (ETM) 3,615 Pasadena Unified School District, Los Angeles County, California, 5/13 at 100.00 AAA 3,928,240 General Obligation Bonds, Series 2003D, 5.000%, 5/01/24 (Pre-refunded 5/01/13) - MBIA Insured 2,590 Riverside County Public Financing Authority, California, Tax 10/14 at 100.00 AAA 2,730,922 Allocation Bonds, Multiple Projects, Series 2004, 5.000%, 10/01/25 - XLCA Insured 2,000 San Diego Redevelopment Agency, California, Subordinate Lien Tax 9/14 at 100.00 AAA 2,146,460 Allocation Bonds, Centre City Project, Series 2004A, 5.000%, 9/01/21 - XLCA Insured San Francisco Airports Commission, California, Revenue Refunding Bonds, San Francisco International Airport, Second Series 2001, Issue 27A: 7,200 5.125%, 5/01/21 - MBIA Insured (Alternative Minimum Tax) 5/11 at 100.00 AAA 7,538,112 12,690 5.250%, 5/01/31 - MBIA Insured (Alternative Minimum Tax) 5/11 at 100.00 AAA 13,178,438 San Francisco Bay Area Rapid Transit District, California, Sales Tax Revenue Bonds, Series 2005A: 2,000 5.000%, 7/01/21 - MBIA Insured 7/15 at 100.00 AAA 2,161,140 3,655 5.000%, 7/01/22 - MBIA Insured 7/15 at 100.00 AAA 3,935,521 3,840 5.000%, 7/01/23 - MBIA Insured 7/15 at 100.00 AAA 4,120,166 3,500 Saugus Union School District, Los Angeles County, California, No Opt. Call AAA 1,691,130 General Obligation Bonds, Series 2006, 0.000%, 8/01/23 - FGIC Insured 1,000 Sierra Joint Community College District, Tahoe Truckee, 8/14 at 100.00 AAA 1,058,840 California, General Obligation Bonds, School Facilities Improvement District 1, Series 2005A, 5.000%, 8/01/27 - FGIC Insured 1,575 Sierra Joint Community College District, Western Nevada, 8/14 at 100.00 AAA 1,665,531 California, General Obligation Bonds, School Facilities Improvement District 2, Series 2005A, 5.000%, 8/01/27 - FGIC Insured 3,600 Ventura County Community College District, California, General 8/15 at 100.00 AAA 3,831,912 Obligation Bonds, Series 2005B, 5.000%, 8/01/28 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ 239,368 Total California 168,081,677 ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 1.7% (1.1% OF TOTAL INVESTMENTS) 2,015 Board of Trustees of the University of Northern Colorado, Revenue 6/15 at 100.00 AAA 2,163,888 Bonds, Series 2005, 5.000%, 6/01/22 - FSA Insured 4,335 Denver City and County, Colorado, Airport Revenue Bonds, Series 11/16 at 100.00 AAA 5,244,830 2006, 7.281%, 11/15/25 - FGIC Insured (IF) 1,250 Jefferson County School District R1, Colorado, General Obligation 12/14 at 100.00 AAA 1,331,888 Bonds, Series 2004, 5.000%, 12/15/24 - FSA Insured 1,000 University of Colorado, Enterprise System Revenue Bonds, Series 6/15 at 100.00 AAA 1,063,420 2005, 5.000%, 6/01/30 - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ 8,600 Total Colorado 9,804,026 ------------------------------------------------------------------------------------------------------------------------------------ CONNECTICUT - 0.4% (0.2% OF TOTAL INVESTMENTS) 2,000 Connecticut, General Obligation Bonds, Series 2004D, 5.000%, 12/14 at 100.00 AAA 2,147,620 12/01/22 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ DISTRICT OF COLUMBIA - 1.4% (0.9% OF TOTAL INVESTMENTS) 8,000 Washington Convention Center Authority, District of Columbia, 10/08 at 101.00 AAA 8,262,800 Senior Lien Dedicated Tax Revenue Bonds, Series 1998, 5.000%, 10/01/21 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 7.5% (5.0% OF TOTAL INVESTMENTS) 3,450 Collier County, Florida, Capital Improvement Revenue Bonds, 10/14 at 100.00 AAA 3,666,384 Series 2005, 5.000%, 10/01/24 - MBIA Insured 3,250 Florida State Board of Education, Full Faith and Credit Public 6/13 at 101.00 AAA 3,479,938 Education Capital Outlay Bonds, Series 2003J, 5.000%, 6/01/22 - AMBAC Insured 20,000 Lee County, Florida, Airport Revenue Bonds, Series 2000A, 5.750%, 10/10 at 101.00 AAA 21,537,000 10/01/25 - FSA Insured (Alternative Minimum Tax)
22
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA (continued) $ 4,115 Miami-Dade County Housing Finance Authority, Florida, Multifamily 7/11 at 100.00 AAA $ 4,294,661 Housing Revenue Bonds, Monterey Pointe Apartments, Series 2001-2A, 5.850%, 7/01/37 - FSA Insured (Alternative Minimum Tax) 7,000 Miami-Dade County, Florida, Aviation Revenue Bonds, Miami 10/12 at 100.00 AAA 7,404,880 International Airport, Series 2002, 5.375%, 10/01/32 - FGIC Insured (Alternative Minimum Tax) 3,780 Palm Beach County School Board, Florida, Certificates of 8/13 at 100.00 AAA 4,058,548 Participation, Series 2003A, 5.000%, 8/01/16 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ 41,595 Total Florida 44,441,411 ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 0.3% (0.1% OF TOTAL INVESTMENTS) 1,000 Atlanta, Georgia, Water and Wastewater Revenue Bonds, Series 11/14 at 100.00 AAA 1,066,830 2004, 5.000%, 11/01/22 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ HAWAII - 6.0% (4.0% OF TOTAL INVESTMENTS) 1,620 Hawaii County, Hawaii, General Obligation Bonds, Series 2003A, 7/13 at 100.00 AAA 1,733,530 5.000%, 7/15/21 - FSA Insured 16,180 Hawaii Department of Budget and Finance, Special Purpose Revenue 11/06 at 101.00 AAA 16,373,836 Bonds, Hawaiian Electric Company Inc., Series 1996A, 6.200%, 5/01/26 - MBIA Insured (Alternative Minimum Tax) Hawaii Department of Transportation, Airport System Revenue Refunding Bonds, Series 2000B: 8,785 6.625%, 7/01/18 - FGIC Insured (Alternative Minimum Tax) 7/10 at 101.00 AAA 9,691,788 7,000 6.000%, 7/01/19 - FGIC Insured (Alternative Minimum Tax) 7/10 at 101.00 AAA 7,581,770 ------------------------------------------------------------------------------------------------------------------------------------ 33,585 Total Hawaii 35,380,924 ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 15.2% (10.1% OF TOTAL INVESTMENTS) 9,500 Chicago, Illinois, Second Lien General Airport Revenue Refunding 1/10 at 101.00 AAA 10,035,135 Bonds, O'Hare International Airport, Series 1999, 5.500%, 1/01/15 - AMBAC Insured (Alternative Minimum Tax) 2,875 Chicago, Illinois, Third Lien General Airport Revenue Bonds, 1/16 at 100.00 AAA 3,131,076 O'Hare International Airport, Series 2005A, 5.250%, 1/01/24 - MBIA Insured 25,000 Illinois Health Facilities Authority, Revenue Bonds, Iowa Health 2/10 at 101.00 AAA 26,986,250 System, Series 2000, 5.875%, 2/15/30 - AMBAC Insured (ETM) 13,275 Illinois, General Obligation Bonds, Illinois FIRST Program, 5/11 at 100.00 AAA 14,024,905 Series 2001, 5.250%, 5/01/26 - FSA Insured 15,785 Illinois, General Obligation Bonds, Illinois FIRST Program, 4/12 at 100.00 AAA 16,800,133 Series 2002, 5.250%, 4/01/27 - FSA Insured 18,000 Metropolitan Pier and Exposition Authority, Illinois, Revenue No Opt. Call AAA 8,223,120 Bonds, McCormick Place Expansion Project, Series 2002A, 0.000%, 12/15/24 - MBIA Insured 10,000 University of Illinois, Certificates of Participation, Utility 8/11 at 100.00 AAA 10,744,400 Infrastructure Projects, Series 2001B, 5.250%, 8/15/21 (Pre-refunded 8/15/11) - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ 94,435 Total Illinois 89,945,019 ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 1.6% (1.1% OF TOTAL INVESTMENTS) 7,790 Indiana Transportation Finance Authority, Highway Revenue Bonds, No Opt. Call AAA 9,402,140 Series 1990A, 7.250%, 6/01/15 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 0.5% (0.4% OF TOTAL INVESTMENTS) 3,000 Wichita, Kansas, Water and Sewerage Utility Revenue Bonds, Series 10/13 at 100.00 AAA 3,216,120 2003, 5.000%, 10/01/21 - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 5.7% (3.8% OF TOTAL INVESTMENTS) 3,015 Kentucky Asset/Liability Commission, General Fund Revenue Project 5/15 at 100.00 AAA 3,209,196 Notes, First Series 2005, 5.000%, 5/01/25 - MBIA Insured Kentucky Economic Development Finance Authority, Health System Revenue Bonds, Norton Healthcare Inc., Series 2000C: 2,530 6.150%, 10/01/27 - MBIA Insured 10/13 at 101.00 AAA 2,904,718 12,060 6.150%, 10/01/28 - MBIA Insured 10/13 at 101.00 AAA 13,846,207
23 Nuveen Insured Quality Municipal Fund, Inc. (NQI) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY (continued) Kentucky Economic Development Finance Authority, Health System Revenue Bonds, Norton Healthcare Inc., Series 2000C: $ 3,815 6.150%, 10/01/27 (Pre-refunded 10/01/13) - MBIA Insured 10/13 at 101.00 AAA $ 4,419,105 6,125 6.150%, 10/01/28 (Pre-refunded 10/01/13) - MBIA Insured 10/13 at 101.00 Aaa 7,094,894 2,230 Kentucky State Property and Buildings Commission, Revenue Bonds, 8/15 at 100.00 AAA 2,392,277 Project 85, Series 2005, 5.000%, 8/01/23 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ 29,775 Total Kentucky 33,866,397 ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 1.4% (0.9% OF TOTAL INVESTMENTS) 2,040 Louisiana State, Gas Tax Revenue Bonds, Series 2006, 4.500%, 5/16 at 100.00 AAA 2,024,088 5/01/41 (WI/DD, Settling 11/02/06) - FGIC Insured 2,310 Louisiana State, Gasoline Tax Revenue Bonds, Series 2006, 5/16 at 100.00 AAA 2,255,992 Residuals 660-1, 5.850%, 5/01/41 (WI/DD, Settling 11/02/06) - FGIC Insured (IF) 275 Louisiana State, Gasoline Tax Revenue Bonds, Series 2006, 5/16 at 100.00 AAA 299,486 Residuals 661, 6.597%, 5/01/39 (WI/DD, Settling 11/02/06) - FSA Insured (IF) 3,515 Orleans Levee District, Louisiana, Levee District General 12/06 at 102.50 AAA 3,625,969 Obligation Bonds, Series 1986, 5.950%, 11/01/15 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ 8,140 Total Louisiana 8,205,535 ------------------------------------------------------------------------------------------------------------------------------------ MAINE - 1.4% (1.0% OF TOTAL INVESTMENTS) 8,000 Maine Health and Higher Educational Facilities Authority, Revenue 7/09 at 101.00 AAA 8,545,760 Bonds, Series 1999B, 6.000%, 7/01/29 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ MARYLAND - 1.8% (1.2% OF TOTAL INVESTMENTS) 2,100 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 AAA 2,159,745 Revenue Bonds, Western Maryland Health, Series 2006A, 4.750%, 7/01/36 (WI/DD, Settling 11/16/06) - MBIA Insured 7,535 Maryland Transportation Authority, Airport Parking Revenue Bonds, 3/12 at 101.00 AAA 8,165,680 Baltimore-Washington International Airport Passenger Facility, Series 2002B, 5.500%, 3/01/18 - AMBAC Insured (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ 9,635 Total Maryland 10,325,425 ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 2.4% (1.6% OF TOTAL INVESTMENTS) 5,000 Massachusetts Bay Transportation Authority, Senior Sales Tax 7/12 at 100.00 AAA 5,359,650 Revenue Refunding Bonds, Series 2002A, 5.000%, 7/01/27 (Pre-refunded 7/01/12) - FGIC Insured 1,680 Massachusetts College Building Authority, Project Revenue Bonds, 5/16 at 100.00 AAA 1,785,067 Series 2006A, 5.000%, 5/01/36 - AMBAC Insured 1,100 Massachusetts Water Resources Authority, General Revenue Bonds, 8/17 at 100.00 AAA 1,218,613 Series 2005A, 5.250%, 8/01/26 - MBIA Insured Massachusetts, Special Obligation Dedicated Tax Revenue Bonds, Series 2004: 1,250 5.250%, 1/01/21 (Pre-refunded 1/01/14) - FGIC Insured 1/14 at 100.00 AAA 1,371,337 1,000 5.250%, 1/01/22 (Pre-refunded 1/01/14) - FGIC Insured 1/14 at 100.00 AAA 1,097,070 1,195 5.250%, 1/01/23 (Pre-refunded 1/01/14) - FGIC Insured 1/14 at 100.00 AAA 1,310,999 2,000 5.250%, 1/01/24 (Pre-refunded 1/01/14) - FGIC Insured 1/14 at 100.00 AAA 2,194,140 ------------------------------------------------------------------------------------------------------------------------------------ 13,225 Total Massachusetts 14,336,876 ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 0.8% (0.6% OF TOTAL INVESTMENTS) 4,750 Michigan Strategic Fund, Collateralized Limited Obligation 9/09 at 102.00 AAA 5,012,295 Pollution Control Revenue Refunding Bonds, Detroit Edison Company, Series 1999A, 5.550%, 9/01/29 - MBIA Insured (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 0.0% (0.0% OF TOTAL INVESTMENTS) 12 St. Louis Park, Minnesota, GNMA Mortgage-Backed Securities 4/07 at 100.00 Aaa 12,174 Program Single Family Residential Mortgage Revenue Bonds, Series 1991A, 7.250%, 4/20/23 ------------------------------------------------------------------------------------------------------------------------------------
24
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ MISSISSIPPI - 1.4% (0.9% OF TOTAL INVESTMENTS) $ 2,715 Harrison County Wastewater Management District, Mississippi, No Opt. Call AAA $ 3,389,406 Revenue Refunding Bonds, Wastewater Treatment Facilities, Series 1991B, 7.750%, 2/01/14 - FGIC Insured 2,545 Harrison County Wastewater Management District, Mississippi, No Opt. Call AAA 3,206,751 Wastewater Treatment Facilities Revenue Refunding Bonds, Series 1991A, 8.500%, 2/01/13 - FGIC Insured 1,440 Mississippi Home Corporation, GNMA Collateralized Single Family 12/06 at 105.00 Aaa 1,456,488 Mortgage Revenue Bonds, Series 1996C, 7.600%, 6/01/29 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ 6,700 Total Mississippi 8,052,645 ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 7.0% (4.7% OF TOTAL INVESTMENTS) 33,700 Director of Nevada State Department of Business and Industry, 1/10 at 100.00 AAA 35,124,496 Revenue Bonds, Las Vegas Monorail Project, First Tier, Series 2000, 5.375%, 1/01/40 - AMBAC Insured 5,720 Reno, Nevada, Senior Lien Sales and Room Tax Revenue Bonds, Reno 6/12 at 100.00 AAA 6,150,888 Transportation Rail Access Corridor Project, Series 2002, 5.125%, 6/01/32 (Pre-refunded 6/01/12) - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ 39,420 Total Nevada 41,275,384 ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 1.1% (0.7% OF TOTAL INVESTMENTS) New Jersey Economic Development Authority, Revenue Bonds, Motor Vehicle Surcharge, Series 2004A: 1,700 5.000%, 7/01/22 - MBIA Insured 7/14 at 100.00 AAA 1,827,466 1,700 5.000%, 7/01/23 - MBIA Insured 7/14 at 100.00 AAA 1,802,561 2,500 New Jersey Turnpike Authority, Revenue Bonds, Series 2003A, 5.000%, 1/01/19 - FGIC Insured 7/13 at 100.00 AAA 2,674,325 ------------------------------------------------------------------------------------------------------------------------------------ 5,900 Total New Jersey 6,304,352 ------------------------------------------------------------------------------------------------------------------------------------ NEW MEXICO - 1.1% (0.7% OF TOTAL INVESTMENTS) New Mexico Finance Authority, Public Project Revolving Fund Revenue Bonds, Series 2004C: 1,420 5.000%, 6/01/22 - AMBAC Insured 6/14 at 100.00 AAA 1,513,479 3,290 5.000%, 6/01/23 - AMBAC Insured 6/14 at 100.00 AAA 3,497,731 1,530 New Mexico State University, Revenue Bonds, Series 2004, 5.000%, 4/14 at 100.00 AAA 1,624,783 4/01/23 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ 6,240 Total New Mexico 6,635,993 ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 15.5% (10.3% OF TOTAL INVESTMENTS) 11,760 Dormitory Authority of the State of New York, New York City, 5/10 at 101.00 AAA 12,745,488 Lease Revenue Bonds, Court Facilities, Series 1999, 5.750%, 5/15/30 (Pre-refunded 5/15/10) - AMBAC Insured 1,100 Dormitory Authority of the State of New York, Revenue Bonds, 2/15 at 100.00 AAA 1,170,103 Mental Health Services Facilities Improvements, Series 2005A, 5.000%, 2/15/24 - AMBAC Insured 15,000 Dormitory Authority of the State of New York, Revenue Bonds, 10/12 at 100.00 AAA 16,577,700 School Districts Financing Program, Series 2002D, 5.500%, 10/01/17 - MBIA Insured 5,000 Long Island Power Authority, New York, Electric System General 6/16 at 100.00 AAA 5,355,550 Revenue Bonds, Series 2006A, 5.000%, 12/01/25 - FGIC Insured 8,000 Metropolitan Transportation Authority, New York, State Service 7/12 at 100.00 AAA 8,484,880 Contract Refunding Bonds, Series 2002A, 5.000%, 7/01/25 - FGIC Insured 1,630 New York City Sales Tax Asset Receivable Corporation, New York, 10/14 at 100.00 AAA 1,740,677 Dedicated Revenue Bonds, Local Government Assistance Corporation, Series 2004A, 5.000%, 10/15/24 - MBIA Insured 10,255 New York State Housing Finance Agency, Mortgage Revenue Refunding 11/06 at 102.00 AAA 10,480,918 Bonds, Housing Project, Series 1996A, 6.125%, 11/01/20 - FSA Insured 4,200 New York State Mortgage Agency, Homeowner Mortgage Revenue Bonds, 10/09 at 100.00 AAA 4,330,578 Series 82, 5.550%, 10/01/19 - MBIA Insured (Alternative Minimum Tax) 10,120 New York State Thruway Authority, General Revenue Bonds, Series 7/15 at 100.00 AAA 10,789,539 2005G, 5.000%, 1/01/26 - FSA Insured 1,950 New York State Thruway Authority, Highway and Bridge Trust Fund 10/15 at 100.00 AAA 2,103,329 Bonds, Second Generation, Series 2005B, 5.000%, 4/01/21 - AMBAC Insured 6,595 New York State Thruway Authority, State Personal Income Tax 3/15 at 100.00 AAA 7,028,555 Revenue Bonds, Series 2005A, 5.000%, 3/15/25 - FSA Insured
25 Nuveen Insured Quality Municipal Fund, Inc. (NQI) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK (continued) New York State Urban Development Corporation, Service Contract Revenue Bonds, Series 2005B: $ 2,460 5.000%, 3/15/24 - FSA Insured 3/15 at 100.00 AAA $ 2,625,337 2,465 5.000%, 3/15/25 - FSA Insured 3/15 at 100.00 AAA 2,627,049 5,000 Triborough Bridge and Tunnel Authority, New York, Subordinate 11/13 at 100.00 AAA 5,261,700 Lien General Purpose Revenue Bonds, Series 2003A, 5.000%, 11/15/32 - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ 85,535 Total New York 91,321,403 ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 3.1% (2.0% OF TOTAL INVESTMENTS) 1,585 Cincinnati City School District, Hamilton County, Ohio, General No Opt. Call AAA 1,827,394 Obligation Bonds, Series 2006, 5.250%, 12/01/23 - FGIC Insured 7,000 Cleveland State University, Ohio, General Receipts Bonds, Series 6/14 at 100.00 AAA 7,653,450 2004, 5.250%, 6/01/19 - FGIC Insured 5,000 Lorain County, Ohio, Health Facilities Revenue Bonds, Catholic 9/09 at 102.00 AAA 5,320,050 Healthcare Partners, Series 1999A, 5.500%, 9/01/29 - AMBAC Insured 3,065 Oak Hills Local School District, Hamilton County, Ohio, General 12/15 at 100.00 AAA 3,278,324 Obligation Bonds, Series 2005, 5.000%, 12/01/24 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ 16,650 Total Ohio 18,079,218 ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 0.4% (0.3% OF TOTAL INVESTMENTS) 2,250 Oklahoma Capitol Improvement Authority, State Facilities Revenue 7/15 at 100.00 AAA 2,403,945 Bonds, Series 2005F, 5.000%, 7/01/24 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 3.0% (2.0% OF TOTAL INVESTMENTS) 3,000 Allegheny County Sanitary Authority, Pennsylvania, Sewerage 12/15 at 100.00 AAA 3,211,170 Revenue Bonds, Series 2005A, 5.000%, 12/01/23 - MBIA Insured 7,000 Allegheny County, Pennsylvania, Airport Revenue Refunding Bonds, 1/08 at 101.00 AAA 7,168,840 Pittsburgh International Airport, Series 1997A, 5.250%, 1/01/16 - MBIA Insured (Alternative Minimum Tax) Delaware County Authority, Pennsylvania, Revenue Bonds, Villanova University, Series 2006: 3,260 5.000%, 8/01/23 - AMBAC Insured 8/16 at 100.00 AAA 3,516,758 1,600 5.000%, 8/01/24 - AMBAC Insured 8/16 at 100.00 AAA 1,722,000 2,000 Pittsburgh Public Parking Authority, Pennsylvania, Parking 12/15 at 100.00 AAA 2,143,920 Revenue Bonds, Series 2005B, 5.000%, 12/01/23 - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ 16,860 Total Pennsylvania 17,762,688 ------------------------------------------------------------------------------------------------------------------------------------ PUERTO RICO - 1.4% (1.0% OF TOTAL INVESTMENTS) 2,500 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series 7/15 at 100.00 AAA 2,701,425 2005RR, 5.000%, 7/01/22 - FGIC Insured 5,000 Puerto Rico, Highway Revenue Bonds, Highway and Transportation No Opt. Call AAA 5,732,150 Authority, Series 2003AA, 5.500%, 7/01/16 - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ 7,500 Total Puerto Rico 8,433,575 ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 0.5% (0.4% OF TOTAL INVESTMENTS) 3,000 Charleston County School District, South Carolina, General 2/14 at 100.00 AAA 3,197,700 Obligation Bonds, Series 2004A, 5.000%, 2/01/22 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 1.0% (0.7% OF TOTAL INVESTMENTS) Knox County Health, Educational and Housing Facilities Board, Tennessee, Hospital Revenue Refunding Bonds, Covenant Health, Series 2002A: 7,500 0.000%, 1/01/24 - FSA Insured 1/13 at 52.75 AAA 2,986,875 5,000 0.000%, 1/01/25 - FSA Insured 1/13 at 49.71 AAA 1,874,350 2,750 0.000%, 1/01/26 - FSA Insured 1/13 at 46.78 AAA 966,598 ------------------------------------------------------------------------------------------------------------------------------------ 15,250 Total Tennessee 5,827,823 ------------------------------------------------------------------------------------------------------------------------------------
26
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 19.6% (13.0% OF TOTAL INVESTMENTS) $ 8,000 Abilene Health Facilities Development Corporation, Texas, 3/07 at 101.00 AAA $ 8,095,920 Hospital Revenue Refunding and Improvement Bonds, Hendrick Medical Center Project, Series 1995C, 6.150%, 9/01/25 - MBIA Insured 5,275 Austin, Texas, Combined Utility System Revenue Refunding Bonds, 11/07 at 100.00 AAA 5,348,956 Series 1997, 5.125%, 11/15/20 11/15/20 - FSA Insured 3,135 Corpus Christi, Texas, Utility System Revenue Bonds, Series 2004, 7/14 at 100.00 AAA 3,414,172 5.250%, 7/15/20 - FSA Insured 3,000 Dallas-Ft. Worth International Airport, Texas, Joint Revenue 11/11 at 100.00 AAA 3,255,600 Refunding and Improvement Bonds, Series 2001A, 5.750%, 11/01/13 - FGIC Insured (Alternative Minimum Tax) 3,735 Grand Prairie Independent School District, Dallas County, Texas, 2/13 at 100.00 AAA 3,923,543 General Obligation Bonds, Series 2003, 5.125%, 2/15/31 - FSA Insured 1,865 Harris County Hospital District, Texas, Revenue Refunding Bonds, No Opt. Call AAA 1,984,062 Series 1990, 7.400%, 2/15/10 - AMBAC Insured 715 Harris County Hospital District, Texas, Revenue Refunding Bonds, No Opt. Call AAA 750,678 Series 1990, 7.400%, 2/15/10 - AMBAC Insured (ETM) 5,000 Houston, Texas, First Lien Combined Utility System Revenue Bonds, 5/14 at 100.00 AAA 5,433,750 Series 2004A, 5.250%, 5/15/24 - FGIC Insured 4,500 Houston, Texas, General Obligation Public Improvement Bonds, 3/11 at 100.00 AAA 4,702,680 Series 2001A, 5.000%, 3/01/22 - FSA Insured 17,000 Houston, Texas, Junior Lien Water and Sewerage System Revenue No Opt. Call AAA 21,333,810 Refunding Bonds, Series 2002A, 5.750%, 12/01/32 - FSA Insured (ETM) 4,685 Houston, Texas, Subordinate Lien Airport System Revenue Bonds, 7/10 at 100.00 AAA 4,916,486 Series 2000A, 5.500%, 7/01/19 - FSA Insured (Alternative Minimum Tax) 19,200 Jefferson County Health Facilities Development Corporation, 8/11 at 100.00 AAA 20,364,864 Texas, FHA-Insured Mortgage Revenue Bonds, Baptist Hospital of Southeast Texas, Series 2001, 5.400%, 8/15/31 - AMBAC Insured 6,000 Laredo Community College District, Texas, Limited Tax General 8/10 at 100.00 AAA 6,375,540 Obligation Bonds, Series 2001, 5.375%, 8/01/31 (Pre-refunded 8/01/10) - AMBAC Insured 2,000 Laredo Independent School District Public Facilities Corporation, 8/11 at 100.00 AAA 2,069,440 Texas, Lease Revenue Bonds, Series 2004A, 5.000%, 8/01/24 - AMBAC Insured 22,045 North Central Texas Health Facilities Development Corporation, 8/12 at 101.00 AAA 23,382,691 Revenue Bonds, Children's Medical Center of Dallas, Series 2002, 5.250%, 8/15/32 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ 106,155 Total Texas 115,352,192 ------------------------------------------------------------------------------------------------------------------------------------ UTAH - 0.3% (0.2% OF TOTAL INVESTMENTS) 1,660 Salt Lake City, Utah, Hospital Revenue Refunding Bonds, IHC 12/06 at 100.00 AAA 1,698,993 Hospitals Inc., Series 1988A, 8.000%, 5/15/07 (ETM) ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 11.3% (7.5% OF TOTAL INVESTMENTS) 10,730 Chelan County Public Utility District 1, Washington, Hydro 7/11 at 101.00 AAA 11,578,314 Consolidated System Revenue Refunding Bonds, Series 2001C, 5.650%, 7/01/32 - MBIA Insured (Alternative Minimum Tax) 15,025 Seattle Housing Authority, Washington, GNMA Collateralized 11/11 at 105.00 AAA 17,016,414 Mortgage Loan Low Income Housing Assistance Revenue Bonds, Park Place Project, Series 2000A, 7.000%, 5/20/42 4,610 Seattle Housing Authority, Washington, GNMA Collateralized 9/11 at 102.00 AAA 5,026,882 Mortgage Loan Low Income Housing Assistance Revenue Bonds, RHF/Esperanza Apartments Project, Series 2000A, 6.125%, 3/20/42 (Alternative Minimum Tax) 5,000 Seattle, Washington, Municipal Light and Power Revenue Bonds, 12/10 at 100.00 AAA 5,292,050 Series 2000, 5.250%, 12/01/21 - FSA Insured 11,750 Washington Public Power Supply System, Revenue Refunding Bonds, 7/08 at 102.00 AAA 12,220,235 Nuclear Project 1, Series 1998A, 5.125%, 7/01/17 - MBIA Insured 2,500 Washington State Healthcare Facilities Authority, Revenue Bonds, 12/09 at 101.00 AAA 2,652,600 Providence Services, Series 1999, 5.375%, 12/01/19 (Pre-refunded 12/01/09) - MBIA Insured 10,000 Washington State, General Obligation Bonds, Series R-2003A, 1/12 at 100.00 AAA 10,569,600 5.000%, 1/01/19 - MBIA Insured
27 Nuveen Insured Quality Municipal Fund, Inc. (NQI) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON (continued) $ 2,250 Washington, Certificates of Participation, Washington Convention 7/09 at 100.00 AAA $ 2,334,488 and Trade Center, Series 1999, 5.250%, 7/01/14 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ 61,865 Total Washington 66,690,583 ------------------------------------------------------------------------------------------------------------------------------------ WEST VIRGINIA - 2.3% (1.5% OF TOTAL INVESTMENTS) 12,845 West Virginia Water Development Authority, Infrastructure Revenue 10/10 at 100.00 AAA 13,755,454 Bonds, Infrastructure and Jobs Development Council Program, Series 2000A, 5.500%, 10/01/39 (Pre-refunded 10/01/10) - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 0.7% (0.5% OF TOTAL INVESTMENTS) 2,180 Green Bay, Wisconsin, Water System Revenue Bonds, Series 2004, 11/14 at 100.00 Aaa 2,310,386 5.000%, 11/01/26 - FSA Insured 1,675 Wisconsin Public Power Incorporated System, Power Supply System 7/15 at 100.00 AAA 1,774,528 Revenue Bonds, Series 2005A, 5.000%, 7/01/30 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ 3,855 Total Wisconsin 4,084,914 ------------------------------------------------------------------------------------------------------------------------------------ $ 926,680 Total Long-Term Investments (cost $831,476,418) - 150.2% 886,187,826 ============------------------------------------------------------------------------------------------------------------------------ SHORT-TERM INVESTMENTS - 0.2% (0.1% OF TOTAL INVESTMENTS) 1,000 Idaho Health Facilities Authority, Revenue Bonds, St. Luke's A-1+ 1,000,000 Regional Medical Center, Variable Rate Demand Obligations, Series 2000, 3.640%, 7/01/30 - FSA Insured (4) 300 New York City, New York, General Obligation Bonds, Variable Rate A-1+ 300,000 Demand Obligations, Fiscal Series 2002A-7, 3.550%, 11/01/24 - AMBAC Insured (4) ------------------------------------------------------------------------------------------------------------------------------------ $ 1,300 Total Short-Term Investments (cost $1,300,000) 1,300,000 ============------------------------------------------------------------------------------------------------------------------------ Total Investments (cost $832,776,418) - 150.4% 887,487,826 --------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 3.5% 20,440,250 --------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (53.9)% (318,000,000) --------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 589,928,076 =====================================================================================================================
All of the bonds in the Portfolio of Investments, excluding temporary investments in short-term municipal securities, are either covered by Original Issue Insurance, Secondary Market Insurance or Portfolio Insurance, or are backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities, any of which ensure the timely payment of principal and interest. (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions (not covered by the report of independent registered public accounting firm): 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. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's or Moody's rating. Ratings below BBB by Standard & Poor's Group or Baa by Moody's Investor Service, Inc. are considered to be below investment grade. (4) Investment has a maturity of more than one year, but has variable rate and demand features which qualify it as a short-term investment. The rate disclosed is that in effect at the end of the reporting period. This rate changes periodically based on market conditions or a specified market index. WI/DD Purchased on a when-issued or delayed delivery basis. (ETM) Escrowed to maturity. (IF) Inverse floating rate investment. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 28 Nuveen Insured Municipal Opportunity Fund, Inc. (NIO) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 10.7% (7.1% OF TOTAL INVESTMENTS) Birmingham Special Care Facilities Financing Authority, Alabama, Revenue Bonds, Baptist Health System Inc., Series 1996A: $ 7,465 5.875%, 11/15/19 (Pre-refunded 11/15/06) - MBIA Insured 11/06 at 102.00 AAA $ 7,620,645 1,750 5.875%, 11/15/26 (Pre-refunded 11/15/06) - MBIA Insured 11/06 at 102.00 AAA 1,786,487 11,175 Hoover Board of Education, Alabama, Capital Outlay Tax 2/11 at 100.00 AAA 11,819,127 Anticipation Warrants, Series 2001, 5.250%, 2/15/22 - MBIA Insured Jefferson County, Alabama, Sewer Revenue Capital Improvement Warrants, Series 1999A: 10,815 5.000%, 2/01/33 (Pre-refunded 2/01/09) - FGIC Insured 2/09 at 101.00 AAA 11,244,572 9,790 5.000%, 2/01/33 (Pre-refunded 2/01/09) - FGIC Insured 2/09 at 101.00 AAA 10,189,726 29,860 5.750%, 2/01/38 (Pre-refunded 2/01/09) - FGIC Insured 2/09 at 101.00 AAA 31,559,333 2,500 Jefferson County, Alabama, Sewer Revenue Capital Improvement 8/12 at 100.00 AAA 2,698,300 Warrants, Series 2002B, 5.125%, 2/01/42 (Pre-refunded 8/01/12) - FGIC Insured Jefferson County, Alabama, Sewer Revenue Capital Improvement Warrants, Series 2002D: 425 5.000%, 2/01/38 (Pre-refunded 8/01/12) - FGIC Insured 8/12 at 100.00 AAA 455,065 14,800 5.000%, 2/01/42 (Pre-refunded 8/01/12) - FGIC Insured 8/12 at 100.00 AAA 15,878,624 18,760 Jefferson County, Alabama, Sewer Revenue Capitol Improvement 2/11 at 101.00 AAA 19,950,510 Warrants, Series 2001A, 5.000%, 2/01/41 (Pre-refunded 2/01/11) - FGIC Insured 10,195 Jefferson County, Alabama, Sewer Revenue Refunding Warrants, 2/07 at 100.00 AAA 10,235,576 Series 1997A, 5.375%, 2/01/27 - FGIC Insured 5,240 Jefferson County, Alabama, Sewer Revenue Refunding Warrants, 2/11 at 101.00 AAA 5,583,220 Series 2003B, 5.000%, 2/01/41 (Pre-refunded 2/01/11) - FGIC Insured 6,000 University of Alabama, Tuscaloosa, General Revenue Bonds, 7/14 at 100.00 AAA 6,345,780 Series 2004A, 5.000%, 7/01/29 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ 128,775 Total Alabama 135,366,965 ------------------------------------------------------------------------------------------------------------------------------------ ALASKA - 1.4% (0.9% OF TOTAL INVESTMENTS) 3,190 Alaska Housing Finance Corporation, Collateralized Veterans 12/09 at 100.00 AAA 3,321,556 Mortgage Program Bonds, First Series 1999A-1, 6.150%, 6/01/39 11,245 Alaska Housing Finance Corporation, General Mortgage Revenue 6/09 at 100.00 AAA 11,587,635 Bonds, Series 1999A, 6.050%, 6/01/39 - MBIA Insured 3,000 Alaska Student Loan Corporation, Student Loan Revenue Bonds, 7/08 at 100.00 AAA 3,057,780 Series 1998A, 5.250%, 7/01/14 - AMBAC Insured (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ 17,435 Total Alaska 17,966,971 ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 2.1% (1.4% OF TOTAL INVESTMENTS) Arizona State University, Certificates of Participation, Resh Infrastructure Projects, Series 2005A: 2,000 5.000%, 9/01/25 - AMBAC Insured 3/15 at 100.00 AAA 2,120,800 2,000 5.000%, 9/01/27 - AMBAC Insured 3/15 at 100.00 AAA 2,116,460 1,000 Arizona State University, System Revenue Bonds, Series 2005, 7/15 at 100.00 AAA 1,064,660 5.000%, 7/01/27 - AMBAC Insured 1,000 Maricopa County Union High School District 210, Phoenix, Arizona, 7/14 at 100.00 AAA 1,068,480 General Obligation Bonds, Series 2004A, 5.000%, 7/01/22 - FSA Insured 1,150 Phoenix Civic Improvement Corporation, Arizona, Junior Lien 7/14 at 100.00 AAA 1,218,598 Wastewater System Revenue Bonds, Series 2004, 5.000%, 7/01/27 - MBIA Insured 13,490 Phoenix Civic Improvement Corporation, Arizona, Junior Lien Water 7/15 at 100.00 AAA 14,038,503 System Revenue Bonds, Series 2005, 4.750%, 7/01/25 - MBIA Insured
29 Nuveen Insured Municipal Opportunity Fund, Inc. (NIO) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA (continued) $ 4,815 Pima County Industrial Development Authority, Arizona, Lease 1/07 at 100.50 AAA $ 4,833,056 Obligation Revenue Refunding Bonds, Tucson Electric Power Company, Series 1988A, 7.250%, 7/15/10 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ 25,455 Total Arizona 26,460,557 ------------------------------------------------------------------------------------------------------------------------------------ ARKANSAS - 0.7% (0.5% OF TOTAL INVESTMENTS) 3,660 Arkansas State University, Student Fee Revenue Bonds, Beebe 9/15 at 100.00 Aaa 3,878,173 Campus, Series 2006, 5.000%, 9/01/35 - AMBAC Insured Pulaski County, Arkansas, Hospital Revenue Bonds, Arkansas Children's Hospital, Series 2005: 2,000 5.000%, 3/01/25 - AMBAC Insured 3/15 at 100.00 AAA 2,110,680 3,000 5.000%, 3/01/30 - AMBAC Insured 3/15 at 100.00 AAA 3,168,180 ------------------------------------------------------------------------------------------------------------------------------------ 8,660 Total Arkansas 9,157,033 ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 29.6% (19.6% OF TOTAL INVESTMENTS) 5,600 Alameda Corridor Transportation Authority, California, No Opt. Call AAA 3,110,464 Subordinate Lien Revenue Bonds, Series 2004A, 0.000%, 10/01/20 - AMBAC Insured 10,000 California Department of Veterans Affairs, Home Purchase Revenue 6/12 at 101.00 AAA 10,758,400 Bonds, Series 2002A, 5.300%, 12/01/21 - AMBAC Insured California Department of Water Resources, Power Supply Revenue Bonds, Series 2002A: 30,000 5.375%, 5/01/17 (Pre-refunded 5/01/12) - XLCA Insured 5/12 at 101.00 AAA 33,079,498 25,000 5.375%, 5/01/18 (Pre-refunded 5/01/12) - AMBAC Insured 5/12 at 101.00 AAA 27,566,250 California Department of Water Resources, Water System Revenue Bonds, Central Valley Project, Series 2005AC: 3,700 5.000%, 12/01/24 - MBIA Insured 12/14 at 100.00 AAA 3,960,924 2,820 5.000%, 12/01/27 - MBIA Insured 12/14 at 100.00 AAA 2,990,046 6,000 California Infrastructure Economic Development Bank, First Lien 1/28 at 100.00 AAA 8,483,580 Revenue Bonds, San Francisco Bay Area Toll Bridge, Series 2003A. Residuals Series 1485, 7.327%, 7/01/33 (Pre-refunded 1/01/28) - AMBAC Insured (IF) California Rural Home Mortgage Finance Authority, GNMA Mortgage-Backed Securities Program Single Family Mortgage Revenue Bonds, Series 1996A: 5 7.550%, 11/01/26 (Alternative Minimum Tax) No Opt. Call AAA 5,088 10 7.750%, 5/01/27 (Alternative Minimum Tax) No Opt. Call AAA 10,185 4,500 California, General Obligation Bonds, Series 1998, 5.000%, 10/08 at 101.00 AAA 4,650,345 10/01/19 - FGIC Insured 10,150 California, General Obligation Bonds, Series 2004, 5.000%, 12/14 at 100.00 AAA 10,719,111 6/01/31 - AMBAC Insured 3,500 Coachella Valley Unified School District, Riverside County, 8/15 at 100.00 AAA 3,736,075 California, General Obligation Bonds, Series 2005A, 5.000%, 8/01/26 - FGIC Insured 20,000 Cucamonga County Water District, San Bernardino County, 9/11 at 101.00 AAA 21,188,400 California, Certificates of Participation, Water Shares Purchase, Series 2000, 5.125%, 9/01/35 - FGIC Insured 5,750 East Bay Municipal Utility District, Alameda and Contra Costa 6/15 at 100.00 AAA 6,118,920 Counties, California, Water System Subordinated Revenue Bonds, Series 2005A, 5.000%, 6/01/27 - MBIA Insured 10,000 Golden State Tobacco Securitization Corporation, California, 6/15 at 100.00 AAA 10,552,700 Tobacco Settlement Asset-Backed Revenue Bonds, Series 2005A, 5.000%, 6/01/38 - FGIC Insured 1,520 Hayward Redevelopment Agency, California, Downtown Redevelopment 3/16 at 100.00 AAA 1,599,207 Project Tax Allocation Bonds, Series 2006, 5.000%, 3/01/36 - XLCA Insured 4,000 Kern Community College District, California, General Obligation 11/15 at 100.00 AAA 4,345,520 Bonds, Series 2005, 5.000%, 11/01/20 - FSA Insured 5,600 Kern Community College District, California, General Obligation No Opt. Call AAA 2,555,616 Bonds, Series 2006, 0.000%, 11/01/24 - FSA Insured 5,000 Long Beach Bond Financing Authority, California, Lease Revenue 11/11 at 101.00 AAA 5,308,900 Refunding Bonds, Long Beach Aquarium of the South Pacific, Series 2001, 5.250%, 11/01/30 - AMBAC Insured 1,875 Los Angeles Department of Water and Power, California, Waterworks 7/16 at 100.00 AAA 2,004,600 Revenue Bonds, Series 2006A-1, 5.000%, 7/01/36 - AMBAC Insured 2,740 Los Angeles Harbors Department, California, Revenue Bonds, Series 8/16 at 102.00 AAA 2,946,760 2006A, 5.000%, 8/01/22 - FGIC Insured (Alternative Minimum Tax)
30
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA (continued) $ 20,000 Los Angeles Unified School District, California, General 7/13 at 100.00 AAA $ 21,504,400 Obligation Bonds, Series 2003A, 5.000%, 7/01/21 - FSA Insured 2,000 Los Angeles Unified School District, California, General 7/15 at 100.00 AAA 2,145,920 Obligation Bonds, Series 2005A-2, 5.000%, 7/01/23 - MBIA Insured 3,000 Los Angeles Unified School District, California, General 7/16 at 100.00 AAA 3,232,170 Obligation Bonds, Series 2006F, 5.000%, 7/01/24 - FGIC Insured 6,205 Port of Oakland, California, Revenue Bonds, Series 2002L, 5.000%, 11/12 at 100.00 AAA 6,465,858 11/01/22 - FGIC Insured (Alternative Minimum Tax) Poway Redevelopment Agency, California, Tax Allocation Bonds, Paguay Redevelopment Project, Series 2001: 15,000 5.200%, 6/15/30 - AMBAC Insured 12/11 at 101.00 AAA 15,885,750 5,000 5.125%, 6/15/33 - AMBAC Insured 12/11 at 101.00 AAA 5,256,800 2,035 Redding, California, Electric System Revenue Certificates of 6/15 at 100.00 AAA 2,145,989 Participation, Series 2005, 5.000%, 6/01/30 - FGIC Insured 6,000 Redlands Unified School District, San Bernardino County, 7/13 at 100.00 AAA 6,320,820 California, General Obligation Bonds, Series 2003, 5.000%, 7/01/26 - FSA Insured 2,285 Rio Hondo Community College District, California, General 8/15 at 100.00 AAA 2,477,626 Obligation Bonds, Series 2005A, 5.000%, 8/01/20 - FGIC Insured 2,970 Riverside Community College District, California, General 8/15 at 100.00 AAA 3,199,789 Obligation Bonds, Series 2005, 5.000%, 8/01/22 - FSA Insured 2,500 Sacramento County Sanitation District Financing Authority, 12/15 at 100.00 AAA 2,646,425 California, Revenue Bonds, Series 2005B, 4.750%, 12/01/21 - FGIC Insured 13,710 San Francisco Airports Commission, California, Revenue 5/11 at 100.00 AAA 14,266,215 Refunding Bonds, San Francisco International Airport, Second Series 2001, Issue 27A, 5.250%, 5/01/26 - MBIA Insured (Alternative Minimum Tax) 11,500 San Francisco Bay Area Rapid Transit District, California, 7/11 at 100.00 AAA 12,090,180 Sales Tax Revenue Bonds, Series 2001, 5.125%, 7/01/36 - AMBAC Insured San Francisco Bay Area Rapid Transit District, California, Sales Tax Revenue Bonds, Series 2005A: 1,220 5.000%, 7/01/22 - MBIA Insured 7/15 at 100.00 AAA 1,313,635 1,280 5.000%, 7/01/23 - MBIA Insured 7/15 at 100.00 AAA 1,373,389 66,685 San Joaquin Hills Transportation Corridor Agency, Orange No Opt. Call AAA 36,701,421 County, California, Senior Lien Toll Road Revenue Bonds, Series 1993, 0.000%, 1/01/21 (ETM) San Joaquin Hills Transportation Corridor Agency, Orange County, California, Toll Road Revenue Refunding Bonds, Series 1997A: 31,615 5.250%, 1/15/30 - MBIA Insured 1/07 at 102.00 AAA 32,335,504 21,500 0.000%, 1/15/32 - MBIA Insured No Opt. Call AAA 6,951,595 12,525 San Jose Redevelopment Agency, California, Tax Allocation 8/10 at 101.00 AAA 13,191,956 Bonds, Merged Area Redevelopment Project, Series 2002, 5.000%, 8/01/20 - MBIA Insured 11,000 Santa Ana Financing Authority, California, Lease Revenue Bonds, No Opt. Call AAA 13,871,440 Police Administration and Housing Facility, Series 1994A, 6.250%, 7/01/24 - MBIA Insured 5,000 Walnut Energy Center Authority, California, Electric Revenue 1/14 at 100.00 AAA 5,234,050 Bonds, Turlock Irrigation District, Series 2004A, 5.000%, 1/01/34 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ 400,800 Total California 374,301,521 ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 6.4% (4.2% OF TOTAL INVESTMENTS) 1,080 Arkansas River Power Authority, Colorado, Power Revenue Bonds, 10/16 at 100.00 AAA 1,164,348 Series 2006, 5.250%, 10/01/40 - XLCA Insured 1,900 Aspen, Colorado, Sales Tax Revenue Bonds, Parks and Open Space, 11/15 at 100.00 AAA 2,080,291 Series 2005B, 5.250%, 11/01/24 - FSA Insured 1,000 Colorado Department of Transportation, Certificates of 6/14 at 100.00 AAA 1,056,010 Participation, Series 2004, 5.000%, 6/15/25 - MBIA Insured
31 Nuveen Insured Municipal Opportunity Fund, Inc. (NIO) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ COLORADO (continued) $ 4,950 Denver Convention Center Hotel Authority, Colorado, Senior 12/13 at 100.00 AAA $ 5,356,593 Revenue Bonds, Convention Center Hotel, Series 2003A, 5.000%, 12/01/33 (Pre-refunded 12/01/13) - XLCA Insured 1,740 Douglas County School District RE1, Douglas and Elbert Counties, 12/14 at 100.00 Aaa 1,846,558 Colorado, General Obligation Bonds, Series 2005B, 5.000%, 12/15/28 - FSA Insured 35,995 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, No Opt. Call AAA 17,357,869 Series 1997B, 0.000%, 9/01/23 - MBIA Insured 30,800 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, 9/10 at 102.00 AAA 33,750,946 Series 2000A, 5.750%, 9/01/35 (Pre-refunded 9/01/10) - MBIA Insured 11,800 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, 9/10 at 74.80 AAA 7,651,946 Series 2000B, 0.000%, 9/01/15 (Pre-refunded 9/01/10) - MBIA Insured 10,000 E-470 Public Highway Authority, Colorado, Toll Revenue Bonds, No Opt. Call AAA 3,989,300 Series 2004A, 0.000%, 9/01/27 - MBIA Insured 2,750 Jefferson County School District R1, Colorado, General Obligation 12/14 at 100.00 AAA 2,930,153 Bonds, Series 2004, 5.000%, 12/15/24 - FSA Insured 2,500 Summit County School District RE-1, Summit, Colorado, General 12/14 at 100.00 Aaa 2,666,700 Obligation Bonds, Series 2004B, 5.000%, 12/01/24 - FGIC Insured 1,000 University of Colorado, Enterprise System Revenue Bonds, Series 6/15 at 100.00 AAA 1,063,420 2005, 5.000%, 6/01/30 - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ 105,515 Total Colorado 80,914,134 ------------------------------------------------------------------------------------------------------------------------------------ CONNECTICUT - 0.3% (0.2% OF TOTAL INVESTMENTS) 4,000 Connecticut, General Obligation Bonds, Series 2004D, 5.000%, 12/14 at 100.00 AAA 4,278,080 12/01/24 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ DISTRICT OF COLUMBIA - 0.8% (0.6% OF TOTAL INVESTMENTS) District of Columbia Water and Sewerage Authority, Subordinate Lien Public Utility Revenue Bonds, Series 2003: 5,000 5.125%, 10/01/24 - FGIC Insured 10/13 at 100.00 AAA 5,368,050 5,000 5.125%, 10/01/25 - FGIC Insured 10/13 at 100.00 AAA 5,368,050 ------------------------------------------------------------------------------------------------------------------------------------ 10,000 Total District of Columbia 10,736,100 ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 5.6% (3.7% OF TOTAL INVESTMENTS) 1,000 Hillsborough County School Board, Florida, Certificates of 7/15 at 100.00 AAA 1,057,930 Participation, Master Lease Program, Series 2005A, 5.000%, 7/01/26 - MBIA Insured Indian Trace Development District, Florida, Water Management Special Benefit Assessment Bonds, Series 2005: 645 5.000%, 5/01/25 - MBIA Insured 5/15 at 102.00 Aaa 693,839 1,830 5.000%, 5/01/27 - MBIA Insured 5/15 at 102.00 Aaa 1,960,497 4,425 Jacksonville Economic Development Commission, Florida, Healthcare 11/12 at 100.00 AAA 4,801,435 Facilities Revenue Bonds, Mayo Clinic, Series 2001C, 5.500%, 11/15/36 - MBIA Insured 1,505 Lee County, Florida, Transportation Facilities Revenue Bonds, 10/14 at 100.00 AAA 1,612,021 Series 2004B, 5.000%, 10/01/21 - AMBAC Insured 2,000 Marco Island, Florida, Water Utility System Revenue Bonds, Series 10/13 at 100.00 AAA 2,105,540 2003, 5.000%, 10/01/27 - MBIA Insured 2,150 Miami-Dade County, Florida, Aviation Revenue Bonds, Miami 10/12 at 100.00 AAA 2,234,775 International Airport, Series 2002A, 5.125%, 10/01/35 - FSA Insured (Alternative Minimum Tax) 35,920 Miami-Dade County, Florida, Aviation Revenue Bonds, Miami 10/12 at 100.00 AAA 37,997,611 International Airport, Series 2002, 5.375%, 10/01/32 - FGIC Insured (Alternative Minimum Tax) 5,320 Miami-Dade County, Florida, Public Facilities Revenue Bonds, 6/15 at 100.00 AAA 5,629,784 Jackson Health System, Series 2005B, 5.000%, 6/01/25 - MBIA Insured Northern Palm Beach County Improvement District, Florida, Revenue Bonds, Water Control and Improvement Development Unit 9B, Series 2005: 1,290 5.000%, 8/01/23 - MBIA Insured 8/15 at 102.00 AAA 1,394,116 2,145 5.000%, 8/01/29 - MBIA Insured 8/15 at 102.00 AAA 2,296,887
32
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA (continued) Ocala, Florida, Utility System Revenue Bonds, Series 2005B: $ 1,025 5.250%, 10/01/24 - FGIC Insured 10/15 at 100.00 Aaa $ 1,123,892 2,590 5.000%, 10/01/27 - FGIC Insured 10/15 at 100.00 Aaa 2,749,622 2,320 Osceola County, Florida, Transportation Revenue Bonds, Osceola 4/14 at 100.00 Aaa 2,463,724 Parkway, Series 2004, 5.000%, 4/01/23 - MBIA Insured 2,225 Plantation, Florida, Non-Ad Valorem Revenue Refunding and 8/13 at 100.00 Aaa 2,382,641 Improvement Bonds, Series 2003, 5.000%, 8/15/18 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ 66,390 Total Florida 70,504,314 ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 0.9% (0.6% OF TOTAL INVESTMENTS) 1,000 Atlanta, Georgia, Water and Wastewater Revenue Bonds, Series 11/14 at 100.00 AAA 1,066,830 2004, 5.000%, 11/01/22 - FSA Insured 1,520 College Park Business and Industrial Development Authority, 9/14 at 102.00 AAA 1,676,484 Georgia, Revenue Bonds, Public Safety Project, Series 2004, 5.250%, 9/01/23 - MBIA Insured Fulton County Development Authority, Georgia, Revenue Bonds, Georgia Tech Molecular Science Building, Series 2004: 1,695 5.250%, 5/01/19 - MBIA Insured 5/14 at 100.00 AAA 1,851,771 1,135 5.250%, 5/01/20 - MBIA Insured 5/14 at 100.00 AAA 1,237,661 4,500 5.000%, 5/01/36 - MBIA Insured 5/14 at 100.00 AAA 4,736,970 1,250 Glynn-Brunswick Memorial Hospital Authority, Georgia, Revenue 2/07 at 102.00 AAA 1,276,400 Bonds, Southeast Georgia Health Systems, Series 1996, 5.250%, 8/01/13 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ 11,100 Total Georgia 11,846,116 ------------------------------------------------------------------------------------------------------------------------------------ HAWAII - 2.4% (1.6% OF TOTAL INVESTMENTS) 24,250 Hawaii Department of Budget and Finance, Special Purpose Revenue 11/06 at 101.00 AAA 24,540,515 Bonds, Hawaiian Electric Company Inc., Series 1996A, 6.200%, 5/01/26 - MBIA Insured (Alternative Minimum Tax) 5,000 Hawaii, General Obligation Bonds, Series 2005DF, 5.000%, 7/01/25 7/15 at 100.00 AAA 5,334,600 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ 29,250 Total Hawaii 29,875,115 ------------------------------------------------------------------------------------------------------------------------------------ IDAHO - 0.3% (0.2% OF TOTAL INVESTMENTS) 495 Idaho Housing Agency, Single Family Mortgage Senior Bonds, Series No Opt. Call Aa1 508,712 1994B-1, 6.750%, 7/01/22 440 Idaho Housing Agency, Single Family Mortgage Senior Bonds, Series No Opt. Call Aa1 452,896 1994B-2, 6.900%, 7/01/26 (Alternative Minimum Tax) 550 Idaho Housing Agency, Single Family Mortgage Senior Bonds, Series 1/07 at 100.00 Aaa 563,173 1995B, 6.600%, 7/01/27 (Alternative Minimum Tax) Idaho Housing and Finance Association, Grant and Revenue Anticipation Bonds, Federal Highway Trust Funds, Series 2006: 1,000 5.000%, 7/15/23 - MBIA Insured 7/16 at 100.00 Aaa 1,076,800 1,065 5.000%, 7/15/24 - MBIA Insured 7/16 at 100.00 Aaa 1,144,140 ------------------------------------------------------------------------------------------------------------------------------------ 3,550 Total Idaho 3,745,721 ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 6.5% (4.3% OF TOTAL INVESTMENTS) 1,050 Bedford Park, Illinois, General Obligation Bonds, Series 2004A, 12/14 at 100.00 AAA 1,150,118 5.250%, 12/15/20 - FSA Insured Chicago, Illinois, Second Lien Passenger Facility Charge Revenue Refunding Bonds, O'Hare International Airport, Series 2001E: 4,615 5.500%, 1/01/17 - AMBAC Insured (Alternative Minimum Tax) 1/11 at 101.00 AAA 4,919,867 4,870 5.500%, 1/01/18 - AMBAC Insured (Alternative Minimum Tax) 1/11 at 101.00 AAA 5,191,712 7,200 Chicago, Illinois, Third Lien General Airport Revenue Bonds, 1/16 at 100.00 AAA 7,841,304 O'Hare International Airport, Series 2005A, 5.250%, 1/01/24 - MBIA Insured 10,000 Illinois Development Finance Authority, Revenue Bonds, Provena 5/08 at 101.00 AAA 10,326,200 Health, Series 1998A, 5.500%, 5/15/21 - MBIA Insured 2,095 Illinois Educational Facilities Authority, Revenue Bonds, Robert 12/07 at 100.00 Aaa 2,141,677 Morris College, Series 2000, 5.800%, 6/01/30 - MBIA Insured
33 Nuveen Insured Municipal Opportunity Fund, Inc. (NIO) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS (continued) $ 4,500 Illinois Health Facilities Authority, Revenue Bonds, Alexian 1/09 at 101.00 AAA $ 4,674,015 Brothers Health System, Series 1999, 5.000%, 1/01/19 (Pre-refunded 1/01/09) - FSA Insured 7,000 Illinois Health Facilities Authority, Revenue Bonds, Hospital 6/08 at 101.00 Aaa 7,178,920 Sisters Services Inc. Obligated Group, Series 1998A, 5.000%, 6/01/18 - MBIA Insured 6,000 Illinois Toll Highway Authority, State Toll Highway Authority 7/16 at 100.00 AAA 6,414,720 Revenue Bonds, Series 2006, 5.000%, 1/01/26 - FSA Insured 22,410 Illinois, General Obligation Bonds, Illinois FIRST Program, 2/12 at 100.00 AAA 23,591,903 Series 2002, 5.125%, 2/01/27 - FGIC Insured Schaumburg, Illinois, General Obligation Bonds, Series 2004B: 4,260 5.000%, 12/01/22 - FGIC Insured 12/14 at 100.00 AAA 4,537,965 2,365 5.000%, 12/01/23 - FGIC Insured 12/14 at 100.00 AAA 2,512,623 4,000 Southwestern Illinois Development Authority, School Revenue No Opt. Call AAA 1,739,720 Bonds, Triad School District 2, Madison County, Illinois, Series 2006, 0.000%, 10/01/25 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ 80,365 Total Illinois 82,220,744 ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 2.8% (1.8% OF TOTAL INVESTMENTS) 2,030 Decatur Township-Marion County Multi-School Building Corporation, 7/13 at 100.00 AAA 2,167,309 Indiana, First Mortgage Bonds, Series 2003, 5.000%, 7/15/20 - FGIC Insured 20,000 Indianapolis Local Public Improvement Bond Bank, Indiana, Series No Opt. Call AAA 7,866,000 1999E, 0.000%, 2/01/28 - AMBAC Insured 3,250 Indianapolis Local Public Improvement Bond Bank, Indiana, 7/12 at 100.00 AAA 3,525,113 Waterworks Project, Series 2002A, 5.250%, 7/01/33 (Pre-refunded 7/01/12) - MBIA Insured 1,340 Monroe-Gregg Grade School Building Corporation, Morgan County, 1/14 at 100.00 AAA 1,409,801 Indiana, First Mortgage Bonds, Series 2004, 5.000%, 1/15/25 - FSA Insured 5,000 Noblesville Redevelopment Authority, Indiana, Economic 7/13 at 100.00 AAA 5,235,800 Development Lease Rental Bonds, Exit 10 Project, Series 2003, 5.000%, 1/15/28 - AMBAC Insured 10,000 Purdue University, Indiana, Student Fee Bonds, Series 2002O, 1/12 at 100.00 AAA 10,564,800 5.000%, 7/01/19 - MBIA Insured 3,705 Whitley County Middle School Building Corporation, Columbia City, 7/13 at 100.00 AAA 3,990,804 Indiana, First Mortgage Bonds, Series 2003, 5.000%, 7/15/16 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ 45,325 Total Indiana 34,759,627 ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 1.2% (0.8% OF TOTAL INVESTMENTS) 2,055 Kansas Turnpike Authority, Revenue Bonds, Series 2004A-2, 5.000%, 9/14 at 101.00 AAA 2,207,707 9/01/23 - FSA Insured Neosho County Unified School District 413, Kansas, General Obligation Bonds, Series 2006: 2,145 5.000%, 9/01/27 - FSA Insured 9/14 at 100.00 Aaa 2,276,810 4,835 5.000%, 9/01/29 - FSA Insured 9/14 at 100.00 Aaa 5,125,438 5,000 University of Kansas Hospital Authority, Health Facilities 9/09 at 100.00 AAA 5,247,900 Revenue Bonds, KU Health System, Series 1999A, 5.650%, 9/01/29 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ 14,035 Total Kansas 14,857,855 ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 2.1% (1.4% OF TOTAL INVESTMENTS) 3,870 Kenton County School District Finance Corporation, Kentucky, 6/14 at 100.00 Aaa 4,145,699 School Building Revenue Bonds, Series 2004, 5.000%, 6/01/20 - MBIA Insured 7,500 Kentucky Turnpike Authority, Economic Development Road Revenue 7/16 at 100.00 AAA 8,055,525 Bonds, Revitalization Project, Series 2006B, 5.000%, 7/01/25 - AMBAC Insured 12,980 Louisville and Jefferson County Metropolitan Sewer District, 11/11 at 101.00 AAA 14,115,361 Kentucky, Sewer and Drainage System Revenue Bonds, Series 2001A, 5.500%, 5/15/34 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ 24,350 Total Kentucky 26,316,585 ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 3.8% (2.5% OF TOTAL INVESTMENTS) 5,000 DeSoto Parish, Louisiana, Pollution Control Revenue Refunding 9/09 at 102.00 AAA 5,379,800 Bonds, Cleco Utility Group Inc. Project, Series 1999, 5.875%, 9/01/29 - AMBAC Insured
34
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA (continued) $ 3,025 Lafayette City and Parish, Louisiana, Utilities Revenue Bonds, 11/14 at 100.00 AAA $ 3,301,183 Series 2004, 5.250%, 11/01/22 - MBIA Insured 1,640 Louisiana Public Facilities Authority, Revenue Bonds, Baton Rouge 7/14 at 100.00 AAA 1,758,998 General Hospital, Series 2004, 5.250%, 7/01/24 - MBIA Insured 8,150 Louisiana State, Gas Tax Revenue Bonds, Series 2006, 4.500%, 5/16 at 100.00 AAA 8,086,430 5/01/41 (WI/DD, Settling 11/02/06) - FGIC Insured 9,235 Louisiana State, Gasoline Tax Revenue Bonds, Series 2006, 5/16 at 100.00 AAA 9,019,086 Residuals 660-1, 5.850%, 5/01/41 (WI/DD, Settling 11/02/06) - FGIC Insured (IF) 1,100 Louisiana State, Gasoline Tax Revenue Bonds, Series 2006, 5/16 at 100.00 AAA 1,197,944 Residuals 661, 6.597%, 5/01/39 (WI/DD, Settling 11/02/06) - FSA Insured (IF) Louisiana, Gasoline and Fuels Tax Revenue Bonds, Series 2005A: 2,400 5.000%, 5/01/25 - FGIC Insured 5/15 at 100.00 AAA 2,549,280 4,415 5.000%, 5/01/26 - FGIC Insured 5/15 at 100.00 AAA 4,683,123 5,000 5.000%, 5/01/27 - FGIC Insured 5/15 at 100.00 AAA 5,303,650 5,985 Orleans Levee District, Louisiana, Levee District General 12/06 at 102.50 AAA 6,173,946 Obligation Bonds, Series 1986, 5.950%, 11/01/15 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ 45,950 Total Louisiana 47,453,440 ------------------------------------------------------------------------------------------------------------------------------------ MAINE - 0.3% (0.1% OF TOTAL INVESTMENTS) 3,000 Maine Health and Higher Educational Facilities Authority, Revenue 7/13 at 100.00 AAA 3,153,270 Bonds, Series 2003B, 5.000%, 7/01/28 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ MARYLAND - 0.5% (0.3% OF TOTAL INVESTMENTS) 5,345 Baltimore, Maryland, Senior Lien Convention Center Hotel Revenue 9/16 at 100.00 AAA 5,862,984 Bonds, Series 2006A, 5.250%, 9/01/28 - XLCA Insured ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 4.5% (3.0% OF TOTAL INVESTMENTS) 22,500 Massachusetts Development Finance Authority, Revenue Bonds, WGBH 1/12 at 101.00 AAA 24,603,750 Educational Foundation, Series 2002A, 5.375%, 1/01/42 (Pre-refunded 1/01/12) - AMBAC Insured 11,000 Massachusetts School Building Authority, Dedicated Sales Tax 8/15 at 100.00 AAA 11,778,250 Revenue Bonds, Series 2005A, 5.000%, 8/15/23 - FSA Insured 15,000 Massachusetts, Special Obligation Dedicated Tax Revenue Bonds, 1/14 at 100.00 AAA 16,456,050 Series 2004, 5.250%, 1/01/23 (Pre-refunded 1/01/14) - FGIC Insured University of Massachusetts Building Authority, Senior Lien Project Revenue Bonds, Series 2004-1: 1,500 5.375%, 11/01/20 (Pre-refunded 11/01/14) - AMBAC Insured 11/14 at 100.00 AAA 1,676,130 2,500 5.375%, 11/01/21 (Pre-refunded 11/01/14) - AMBAC Insured 11/14 at 100.00 AAA 2,793,550 ------------------------------------------------------------------------------------------------------------------------------------ 52,500 Total Massachusetts 57,307,730 ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 6.4% (4.3% OF TOTAL INVESTMENTS) 5,490 Detroit City School District, Wayne County, Michigan, Unlimited No Opt. Call AAA 6,884,131 Tax School Building and Site Improvement Bonds, Series 2001A, 6.000%, 5/01/29 - FSA Insured 6,000 Detroit, Michigan, General Obligation Bonds, Series 2001A-1, 10/11 at 100.00 AAA 6,454,800 5.375%, 4/01/18 - MBIA Insured 7,420 Detroit, Michigan, Senior Lien Water Supply System Revenue Bonds, 7/07 at 101.00 AAA 7,548,589 Series 1997A, 5.000%, 7/01/27 - MBIA Insured Detroit, Michigan, Sewerage Disposal System Revenue Bonds, Series 1999A: 15,825 5.750%, 7/01/26 (Pre-refunded 1/01/10) - FGIC Insured 1/10 at 101.00 AAA 17,007,128 20,000 5.875%, 7/01/27 (Pre-refunded 1/01/10) - FGIC Insured 1/10 at 101.00 AAA 21,565,200 8,000 Gaylord Community Schools, Otsego and Antrim Counties, Michigan, 5/07 at 37.75 AAA 2,966,960 School Building and Site Refunding Bonds, Series 1992, 0.000%, 5/01/21 (Pre-refunded 5/01/07) - MBIA Insured 1,085 Grand Rapids Community College, Kent County, Michigan, General 5/13 at 100.00 AAA 1,176,487 Obligation Refunding Bonds, Series 2003, 5.250%, 5/01/20 - AMBAC Insured 6,850 Wayne County, Michigan, Airport Revenue Bonds, Detroit 12/08 at 101.00 AAA 7,119,548 Metropolitan Wayne County Airport, Series 1998A, 5.375%, 12/01/15 - MBIA Insured (Alternative Minimum Tax)
35 Nuveen Insured Municipal Opportunity Fund, Inc. (NIO) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN (continued) $ 10,000 Wayne County, Michigan, Limited Tax General Obligation Airport 12/11 at 101.00 AAA $ 10,711,800 Hotel Revenue Bonds, Detroit Metropolitan Wayne County Airport, Series 2001A, 5.250%, 12/01/25 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ 80,670 Total Michigan 81,434,643 ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 1.1% (0.7% OF TOTAL INVESTMENTS) 13,020 St. Paul Housing and Redevelopment Authority, Minnesota, GNMA 12/11 at 102.00 Aaa 13,990,120 Collateralized Multifamily Housing Revenue Bonds, Marian Center Project, Series 2001A, 6.450%, 6/20/43 ------------------------------------------------------------------------------------------------------------------------------------ NEBRASKA - 0.2% (0.1% OF TOTAL INVESTMENTS) Nebraska Public Power District, General Revenue Bonds, Series 2005A: 1,000 5.000%, 1/01/24 - FSA Insured 1/15 at 100.00 AAA 1,064,370 1,000 5.000%, 1/01/25 - FSA Insured 1/15 at 100.00 AAA 1,063,660 ------------------------------------------------------------------------------------------------------------------------------------ 2,000 Total Nebraska 2,128,030 ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 8.3% (5.5% OF TOTAL INVESTMENTS) 12,105 Clark County, Nevada, General Obligation Bank Bonds, Southern 12/12 at 100.00 AAA 12,629,631 Nevada Water Authority Loan, Series 2002, 5.000%, 6/01/32 - MBIA Insured 7,370 Clark County, Nevada, Subordinate Lien Airport Revenue Bonds, 7/14 at 100.00 AAA 7,835,858 Series 2004A-2, 5.125%, 7/01/25 - FGIC Insured Director of Nevada State Department of Business and Industry, Revenue Bonds, Las Vegas Monorail Project, First Tier, Series 2000: 15,000 5.625%, 1/01/34 - AMBAC Insured 1/10 at 102.00 AAA 16,079,550 13,000 5.375%, 1/01/40 - AMBAC Insured 1/10 at 100.00 AAA 13,549,510 14,985 Reno, Nevada, Capital Improvement Revenue Bonds, Series 2002, 6/12 at 100.00 AAA 16,076,058 5.375%, 6/01/32 - FGIC Insured 25,300 Reno, Nevada, Capital Improvement Revenue Bonds, Series 2002, 6/12 at 100.00 AAA 27,576,241 5.375%, 6/01/32 (Pre-refunded 6/01/12) - FGIC Insured 10,000 Reno, Nevada, Senior Lien Sales and Room Tax Revenue Bonds, Reno 6/12 at 100.00 AAA 10,753,300 Transportation Rail Access Corridor Project, Series 2002, 5.125%, 6/01/27 (Pre-refunded 6/01/12) - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ 97,760 Total Nevada 104,500,148 ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 2.4% (1.6% OF TOTAL INVESTMENTS) Essex County Improvement Authority, New Jersey, Guaranteed Revenue Bonds, Project Consolidation, Series 2004: 2,000 5.125%, 10/01/21 - MBIA Insured 10/14 at 100.00 Aaa 2,160,480 2,250 5.125%, 10/01/22 - MBIA Insured 10/14 at 100.00 Aaa 2,424,195 New Jersey Economic Development Authority, Revenue Bonds, Motor Vehicle Surcharge, Series 2004A: 3,850 5.000%, 7/01/22 - MBIA Insured 7/14 at 100.00 AAA 4,138,673 3,850 5.000%, 7/01/23 - MBIA Insured 7/14 at 100.00 AAA 4,082,271 New Jersey Turnpike Authority, Revenue Bonds, Series 2003A: 8,250 5.000%, 1/01/19 - FGIC Insured 7/13 at 100.00 AAA 8,825,273 2,000 5.000%, 1/01/23 - FSA Insured 7/13 at 100.00 AAA 2,125,540 3,320 New Jersey Turnpike Authority, Revenue Bonds, Series 2005A, 1/15 at 100.00 AAA 3,557,546 5.000%, 1/01/21 - FSA Insured 2,795 Rutgers State University, New Jersey, Revenue Bonds, Series 5/14 at 100.00 AAA 3,000,796 2004E, 5.000%, 5/01/22 - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ 28,315 Total New Jersey 30,314,774 ------------------------------------------------------------------------------------------------------------------------------------ NEW MEXICO - 0.3% (0.2% OF TOTAL INVESTMENTS) 3,660 San Juan County, New Mexico, Subordinate Gross Receipts Tax 6/15 at 100.00 AAA 3,895,667 Revenue Bonds, Series 2005, 5.000%, 6/15/25 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 8.2% (5.4% OF TOTAL INVESTMENTS) 1,880 Dormitory Authority of the State of New York, FHA-Insured 2/15 at 100.00 AAA 2,002,050 Mortgage Revenue Bonds, Montefiore Hospital, Series 2004, 5.000%, 8/01/23 - FGIC Insured
36
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK (continued) $ 3,335 Dormitory Authority of the State of New York, State Personal 3/15 at 100.00 AAA $ 3,559,145 Income Tax Revenue Bonds, Series 2005F, 5.000%, 3/15/24 - AMBAC Insured 8,685 Long Island Power Authority, New York, Electric System General 6/08 at 101.00 AAA 9,009,124 Revenue Bonds, Series 1998A, 5.300%, 12/01/19 (Pre-refunded 6/01/08) - FSA Insured 12,500 Long Island Power Authority, New York, Electric System General 6/16 at 100.00 AAA 13,388,875 Revenue Bonds, Series 2006A, 5.000%, 12/01/25 - FGIC Insured Metropolitan Transportation Authority, New York, State Service Contract Refunding Bonds, Series 2002A: 2,500 5.000%, 7/01/21 - FGIC Insured 7/12 at 100.00 AAA 2,669,250 5,000 5.000%, 7/01/25 - FGIC Insured 7/12 at 100.00 AAA 5,303,050 4,825 New York City Sales Tax Asset Receivable Corporation, New York, 10/14 at 100.00 AAA 5,152,618 Dedicated Revenue Bonds, Local Government Assistance Corporation, Series 2004A, 5.000%, 10/15/24 - MBIA Insured 10,525 New York City, New York, General Obligation Bonds, Fiscal Series 4/15 at 100.00 AAA 11,181,655 2005M, 5.000%, 4/01/26 - FGIC Insured 5,000 New York City, New York, General Obligation Bonds, Fiscal Series 9/15 at 100.00 AAA 5,374,500 2006F-1, 5.000%, 9/01/21 - AMBAC Insured 5,000 New York State Thruway Authority, General Revenue Bonds, Series 1/15 at 100.00 AAA 5,314,700 2005F, 5.000%, 1/01/26 - AMBAC Insured 3,000 New York State Thruway Authority, General Revenue Bonds, Series 7/15 at 100.00 AAA 3,106,530 2005G, 4.750%, 1/01/29 - FSA Insured New York State Thruway Authority, Highway and Bridge Trust Fund Bonds, Second Generation, Series 2005B: 3,770 5.000%, 4/01/21 - AMBAC Insured 10/15 at 100.00 AAA 4,066,435 7,000 5.000%, 4/01/22 - AMBAC Insured 10/15 at 100.00 AAA 7,528,570 3,650 New York State Urban Development Corporation, Service Contract 3/15 at 100.00 AAA 3,889,951 Revenue Bonds, Series 2005B, 5.000%, 3/15/25 - FSA Insured New York State Urban Development Corporation, State Personal Income Tax Revenue Bonds, Series 2004A-1: 1,000 5.000%, 3/15/23 - FGIC Insured 3/14 at 100.00 AAA 1,060,960 5,000 5.000%, 3/15/25 - FGIC Insured 3/14 at 100.00 AAA 5,295,000 15,000 Triborough Bridge and Tunnel Authority, New York, Subordinate 11/12 at 100.00 AAA 15,686,850 Lien General Purpose Revenue Refunding Bonds, Series 2002E, 5.000%, 11/15/32 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ 97,670 Total New York 103,589,263 ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 1.4% (0.9% OF TOTAL INVESTMENTS) Mooresville, North Carolina, Enterprise System Revenue Bonds, Series 2004: 2,115 5.000%, 5/01/22 - FGIC Insured 5/14 at 100.00 AAA 2,254,400 2,575 5.000%, 5/01/26 - FGIC Insured 5/14 at 100.00 AAA 2,727,595 5,000 North Carolina Municipal Power Agency 1, Catawba Electric Revenue 1/13 at 100.00 AAA 5,417,850 Bonds, Series 2003A, 5.250%, 1/01/16 - FSA Insured Raleigh Durham Airport Authority, North Carolina, Airport Revenue Bonds, Series 2005A: 3,205 5.000%, 5/01/23 - AMBAC Insured 5/15 at 100.00 Aaa 3,418,549 3,295 5.000%, 5/01/24 - AMBAC Insured 5/15 at 100.00 Aaa 3,507,231 ------------------------------------------------------------------------------------------------------------------------------------ 16,190 Total North Carolina 17,325,625 ------------------------------------------------------------------------------------------------------------------------------------ NORTH DAKOTA - 0.6% (0.4% OF TOTAL INVESTMENTS) Grand Forks, North Dakota, Sales Tax Revenue Bonds, Alerus Project, Series 2005A: 2,195 5.000%, 12/15/22 - MBIA Insured 12/15 at 100.00 Aaa 2,362,171 1,355 5.000%, 12/15/23 - MBIA Insured 12/15 at 100.00 Aaa 1,453,901 3,000 5.000%, 12/15/24 - MBIA Insured 12/15 at 100.00 Aaa 3,211,890 ------------------------------------------------------------------------------------------------------------------------------------ 6,550 Total North Dakota 7,027,962 ------------------------------------------------------------------------------------------------------------------------------------
37 Nuveen Insured Municipal Opportunity Fund, Inc. (NIO) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 3.0% (2.0% OF TOTAL INVESTMENTS) $ 3,485 Cincinnati City School District, Hamilton County, Ohio, General No Opt. Call AAA $ 4,017,961 Obligation Bonds, Series 2006, 5.250%, 12/01/23 - FGIC Insured 2,650 Cleveland State University, Ohio, General Receipts Bonds, Series 6/14 at 100.00 AAA 2,890,090 2004, 5.250%, 6/01/24 - FGIC Insured 2,000 Columbus City School District, Franklin County, Ohio, General 12/14 at 100.00 AAA 2,218,940 Obligation Bonds, Series 2004, 5.250%, 12/01/25 (Pre-refunded 12/01/14) - FSA Insured 2,385 Columbus, Ohio, Tax Increment Financing Bonds, Easton Project, 6/14 at 100.00 AAA 2,524,403 Series 2004A, 5.000%, 12/01/22 - AMBAC Insured 2,205 Hamilton City School District, Ohio, General Obligation Bonds, 6/15 at 100.00 Aaa 2,358,005 Series 2005, 5.000%, 12/01/24 - MBIA Insured 20,100 Lucas County, Ohio, Hospital Revenue Bonds, ProMedica Healthcare 11/09 at 101.00 AAA 21,155,652 Obligated Group, Series 1999, 5.375%, 11/15/39 - AMBAC Insured 3,000 Ross Local School District, Butler County, Ohio, General 12/13 at 100.00 Aaa 3,165,360 Obligation Bonds, Series 2003, 5.000%, 12/01/28 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ 35,825 Total Ohio 38,330,411 ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 1.7% (1.1% OF TOTAL INVESTMENTS) 3,500 Oklahoma Capitol Improvement Authority, State Facilities Revenue 7/15 at 100.00 AAA 3,739,470 Bonds, Series 2005F, 5.000%, 7/01/24 - AMBAC Insured 4,655 Oklahoma Housing Finance Agency, GNMA Collateralized Single No Opt. Call AAA 4,846,507 Family Mortgage Revenue Bonds, Series 1987A, 7.997%, 8/01/18 (Alternative Minimum Tax) 5,245 Oklahoma State Industries Authority, Revenue Bonds, Oklahoma 2/11 at 100.00 Aaa 5,523,719 Medical Research Foundation, Series 2001, 5.250%, 2/01/21 - AMBAC Insured 2,515 Oklahoma State University, Athletic Facilities Revenue Bonds, 8/14 at 100.00 AAA 2,653,099 Series 2004, 5.000%, 8/01/34 - AMBAC Insured 4,880 University of Oklahoma, Student Housing Revenue Bonds, Series 7/14 at 100.00 Aaa 5,204,178 2004, 5.000%, 7/01/22 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ 20,795 Total Oklahoma 21,966,973 ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 0.8% (0.5% OF TOTAL INVESTMENTS) Oregon Department of Administrative Services, Certificates of Participation, Series 2005A: 2,535 5.000%, 5/01/25 - FSA Insured 5/15 at 100.00 AAA 2,690,826 2,115 5.000%, 5/01/30 - FSA Insured 5/15 at 100.00 AAA 2,234,138 3,470 Oregon Department of Administrative Services, Certificates of 11/15 at 100.00 AAA 3,759,294 Participation, Series 2005B, 5.000%, 11/01/18 - FGIC Insured 1,315 Oregon Housing and Community Services Department, Single Family 1/07 at 101.00 Aa2 1,328,702 Mortgage Revenue Bonds, Series 1995A, 6.450%, 7/01/26 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ 9,435 Total Oregon 10,012,960 ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 2.2% (1.4% OF TOTAL INVESTMENTS) 7,925 Commonwealth Financing Authority, Pennsylvania, State 6/16 at 100.00 AAA 8,501,544 Appropriation Lease Bonds, Series 2006A, 5.000%, 6/01/26 - FSA Insured 1,800 Pennsylvania Higher Educational Facilities Authority, Revenue 5/15 at 100.00 AAA 1,914,624 Bonds, Drexel University, Series 2005A, 5.000%, 5/01/28 - MBIA Insured 2,625 Pennsylvania Turnpike Commission, Turnpike Revenue Bonds, Series 6/16 at 100.00 AAA 2,818,121 2006A, 5.000%, 12/01/26 - AMBAC Insured 6,335 Radnor Township School District, Delaware County, Pennsylvania, 8/15 at 100.00 Aaa 6,744,621 General Obligation Bonds, Series 2005B, 5.000%, 2/15/30 - FSA Insured Reading School District, Berks County, Pennsylvania, General Obligation Bonds, Series 2005: 3,285 5.000%, 1/15/22 - FSA Insured 1/16 at 100.00 AAA 3,542,281 3,450 5.000%, 1/15/23 - FSA Insured 1/16 at 100.00 AAA 3,709,164 ------------------------------------------------------------------------------------------------------------------------------------ 25,420 Total Pennsylvania 27,230,355 ------------------------------------------------------------------------------------------------------------------------------------
38
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ PUERTO RICO - 0.5% (0.3% OF TOTAL INVESTMENTS) $ 2,500 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series 7/15 at 100.00 AAA $ 2,652,300 2005RR, 5.000%, 7/01/30 - XLCA Insured 2,000 Puerto Rico Highway and Transportation Authority, Highway Revenue 7/13 at 100.00 AAA 2,178,480 Bonds, Series 2003G, 5.250%, 7/01/19 - FGIC Insured 1,550 Puerto Rico Municipal Finance Agency, Series 2005C, 5.250%, No Opt. Call AAA 1,772,596 8/01/21 - CIFG Insured ------------------------------------------------------------------------------------------------------------------------------------ 6,050 Total Puerto Rico 6,603,376 ------------------------------------------------------------------------------------------------------------------------------------ RHODE ISLAND - 2.0% (1.3% OF TOTAL INVESTMENTS) 2,195 Providence Housing Development Corporation, Rhode Island, 1/07 at 100.00 AAA 2,198,578 FHA-Insured Section 8 Assisted Mortgage Revenue Refunding Bonds, Barbara Jordan Apartments, Series 1994A, 6.750%, 7/01/25 - MBIA Insured 20,475 Rhode Island Depositors Economic Protection Corporation, Special 2/11 at 100.00 AAA 21,839,864 Obligation Refunding Bonds, Series 1993B, 5.250%, 8/01/21 (Pre-refunded 2/01/11) - MBIA Insured 1,405 Rhode Island Health and Educational Building Corporation, Higher 9/14 at 100.00 Aaa 1,556,557 Education Auxiliary Enterprise Revenue Bonds, Series 2004A, 5.500%, 9/15/24 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ 24,075 Total Rhode Island 25,594,999 ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 4.0% (2.6% OF TOTAL INVESTMENTS) 10,000 Beaufort County, South Carolina, Tax Increment Bonds, New River 12/12 at 100.00 AAA 10,460,700 Redevelopment Project, Series 2002, 5.000%, 6/01/27 - MBIA Insured Medical University Hospital Authority, South Carolina, FHA-Insured Mortgage Revenue Bonds, Series 2004A: 2,000 5.250%, 8/15/22 - MBIA Insured 8/14 at 100.00 AAA 2,160,900 2,105 5.250%, 8/15/23 - MBIA Insured 8/14 at 100.00 AAA 2,269,969 4,855 Piedmont Municipal Power Agency, South Carolina, Electric Revenue No Opt. Call AAA 3,668,778 Bonds, Series 1988A, 0.000%, 1/01/13 - AMBAC Insured (ETM) 9,190 Piedmont Municipal Power Agency, South Carolina, Electric Revenue 7/09 at 76.63 AAA 6,393,391 Bonds, Series 1988A, 0.000%, 1/01/13 (Pre-refunded 7/01/09) - AMBAC Insured 7,955 Piedmont Municipal Power Agency, South Carolina, Electric Revenue No Opt. Call AAA 5,968,716 Bonds, Series 1988A, 0.000%, 1/01/13 - AMBAC Insured 8,000 South Carolina JOBS Economic Development Authority, Industrial 11/12 at 100.00 AAA 8,528,720 Revenue Bonds, South Carolina Electric and Gas Company, Series 2002A, 5.200%, 11/01/27 - AMBAC Insured 10,000 South Carolina JOBS Economic Development Authority, Industrial 11/12 at 100.00 AAA 10,642,200 Revenue Bonds, South Carolina Electric and Gas Company, Series 2002B, 5.450%, 11/01/32 - AMBAC Insured (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ 54,105 Total South Carolina 50,093,374 ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 0.5% (0.4% OF TOTAL INVESTMENTS) 6,455 Memphis-Shelby County Airport Authority, Tennessee, Airport 3/11 at 100.00 AAA 6,850,885 Revenue Bonds, Series 2001A, 5.500%, 3/01/18 - FSA Insured (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 15.6% (10.3% OF TOTAL INVESTMENTS) 22,650 Brazos River Authority, Texas, Revenue Refunding Bonds, Houston 5/08 at 102.00 AAA 23,499,828 Industries Inc., Series 1998C, 5.125%, 5/01/19 - AMBAC Insured 521 Capital Area Housing Finance Corporation, Texas, FNMA Backed 4/12 at 106.00 AAA 533,545 Single Family Mortgage Revenue Refunding Bonds, Series 2002A-2, 6.300%, 4/01/35 - AMBAC Insured (Alternative Minimum Tax) 12,500 Dallas-Ft. Worth International Airport, Texas, Joint Revenue 11/09 at 100.00 AAA 13,315,625 Bonds, Series 2000A, 6.125%, 11/01/35 - FGIC Insured (Alternative Minimum Tax) Harris County, Texas, Toll Road Senior Lien Revenue Bonds, Series 1989: 9,000 0.000%, 8/15/18 (Pre-refunded 8/15/09) - AMBAC Insured 8/09 at 53.84 AAA 4,376,700 39,000 0.000%, 8/15/19 (Pre-refunded 8/15/09) - AMBAC Insured 8/09 at 50.26 AAA 17,704,440 7,280 0.000%, 8/15/20 (Pre-refunded 8/15/09) - AMBAC Insured 8/09 at 46.91 AAA 3,085,118 5,085 0.000%, 8/15/21 (Pre-refunded 8/15/09) - AMBAC Insured 8/09 at 43.80 AAA 2,011,626
39 Nuveen Insured Municipal Opportunity Fund, Inc. (NIO) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ TEXAS (continued) $ 25,000 Harris County-Houston Sports Authority, Texas, Junior Lien 11/11 at 100.00 AAA $ 26,518,250 Revenue Refunding Bonds, Series 2001B, 5.250%, 11/15/40 - MBIA Insured 4,671 Houston Housing Finance Corporation, Texas, GNMA Collateralized 9/11 at 105.00 Aaa 5,001,240 Mortgage Multifamily Housing Revenue Bonds, RRG Apartments Project, Series 2001, 6.350%, 3/20/42 Houston, Texas, First Lien Combined Utility System Revenue Bonds, Series 2004A: 4,000 5.250%, 5/15/24 - FGIC Insured 5/14 at 100.00 AAA 4,347,000 5,000 5.250%, 5/15/25 - MBIA Insured 5/14 at 100.00 AAA 5,433,750 6,570 Houston, Texas, General Obligation Public Improvement Bonds, 3/11 at 100.00 AAA 7,043,237 Series 2001A, 5.375%, 3/01/19 (Pre-refunded 3/01/11) - FSA Insured 17,500 Houston, Texas, Hotel Occupancy Tax and Special Revenue Bonds, 9/11 at 100.00 AAA 18,522,700 Convention and Entertainment Project, Series 2001B, 5.250%, 9/01/33 - AMBAC Insured 4,170 Houston, Texas, Subordinate Lien Airport System Revenue Bonds, 7/10 at 100.00 AAA 4,417,615 Series 2000B, 5.500%, 7/01/30 - FSA Insured 23,865 Jefferson County Health Facilities Development Corporation, 8/11 at 100.00 AAA 25,441,761 Texas, FHA-Insured Mortgage Revenue Bonds, Baptist Hospital of Southeast Texas, Series 2001, 5.500%, 8/15/41 - AMBAC Insured 140 Lower Colorado River Authority, Texas, Revenue Refunding and 5/11 at 100.00 Aaa 148,348 Improvement Bonds, Series 2001A, 5.000%, 5/15/21 (Pre-refunded 5/15/11) - MBIA Insured 8,065 Lower Colorado River Authority, Texas, Revenue Refunding and 5/11 at 100.00 AAA 8,476,880 Improvement Bonds, Series 2001A, 5.000%, 5/15/21 - MBIA Insured Port of Houston Authority, Harris County, Texas, General Obligation Port Improvement Bonds, Series 2001B: 3,205 5.500%, 10/01/18 - FGIC Insured (Alternative Minimum Tax) 10/11 at 100.00 AAA 3,413,870 3,375 5.500%, 10/01/19 - FGIC Insured (Alternative Minimum Tax) 10/11 at 100.00 AAA 3,594,949 7,205 San Antonio, Texas, Airport System Improvement Revenue Bonds, 7/11 at 101.00 AAA 7,699,839 Series 2001, 5.375%, 7/01/15 - FGIC Insured (Alternative Minimum Tax) Tarrant County Health Facilities Development Corporation, Texas, Revenue Bonds, Texas Health Resources System, Series 1997A: 2,900 5.250%, 2/15/22 - MBIA Insured 2/08 at 102.00 AAA 3,004,139 6,655 5.000%, 2/15/26 - MBIA Insured 2/08 at 101.00 AAA 6,798,948 165 Tarrant County Health Facilities Development Corporation, Texas, 2/08 at 101.00 Aaa 169,567 Revenue Bonds, Texas Health Resources System, Series 1997A, 5.000%, 2/15/26 (Pre-refunded 2/15/08) - MBIA Insured 1,840 Ysleta Independent School District Public Facility Corporation, 11/09 at 100.00 AAA 1,919,709 Texas, Lease Revenue Refunding Bonds, Series 2001, 5.375%, 11/15/24 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ 220,362 Total Texas 196,478,684 ------------------------------------------------------------------------------------------------------------------------------------ UTAH - 0.3% (0.2% OF TOTAL INVESTMENTS) 2,000 Clearfield City, Utah, Sales Tax Revenue Bonds, Series 2003, 7/13 at 100.00 AAA 2,099,800 5.000%, 7/01/28 - FGIC Insured 1,625 Utah Housing Finance Agency, FHA-Insured Section 8 Assisted 1/07 at 100.00 AA 1,628,006 Multifamily Housing Revenue Bonds, Series 1992A, 7.400%, 7/01/24 ------------------------------------------------------------------------------------------------------------------------------------ 3,625 Total Utah 3,727,806 ------------------------------------------------------------------------------------------------------------------------------------ VIRGINIA - 2.0% (1.3% OF TOTAL INVESTMENTS) 8,000 Greater Richmond Convention Center Authority, Virginia, Hotel Tax 6/15 at 100.00 AAA 8,485,360 Revenue Bonds, Series 2005, 5.000%, 6/15/30 - MBIA Insured 1,035 Loudoun County Industrial Development Authority, Virginia, Lease 6/14 at 100.00 AAA 1,130,603 Revenue Bonds, Public Safety Facilities, Series 2003A, 5.250%, 12/15/20 - FSA Insured 4,840 Metropolitan Washington D.C. Airports Authority, Airport System 10/11 at 101.00 AAA 5,195,208 Revenue Bonds, Series 2001A, 5.500%, 10/01/19 - MBIA Insured (Alternative Minimum Tax) 10,000 Virginia Housing Development Authority, Commonwealth Mortgage 7/11 at 100.00 AAA 10,577,300 Bonds, Series 2001H-1, 5.375%, 7/01/36 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ 23,875 Total Virginia 25,388,471 ------------------------------------------------------------------------------------------------------------------------------------
40
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 2.2% (1.5% OF TOTAL INVESTMENTS) $ 2,500 Grant County Public Utility District 2, Washington, Revenue 1/15 at 100.00 AAA $ 2,636,025 Bonds, Wanapum Hydroelectric Development, Series 2005A, 5.000%, 1/01/29 - FGIC Insured 3,500 King County School District 401, Highline, Washington, General 12/14 at 100.00 AAA 3,715,985 Obligation Bonds, Series 2004, 5.000%, 10/01/24 - FGIC Insured 3,195 Kitsap County, Washington, Limited Tax General Obligation Bonds, 7/10 at 100.00 AAA 3,407,819 Series 2000, 5.500%, 7/01/25 (Pre-refunded 7/01/10) - AMBAC Insured 4,250 Snohomish County Public Utility District 1, Washington, No Opt. Call AAA 5,025,200 Generation System Revenue Bonds, Series 1989, 6.650%, 1/01/16 - FGIC Insured (ETM) Tacoma, Washington, Solid Waste Utility Revenue Refunding Bonds, Series 2006: 3,890 5.000%, 12/01/24 - XLCA Insured 12/16 at 100.00 AAA 4,155,103 4,085 5.000%, 12/01/25 - XLCA Insured 12/16 at 100.00 AAA 4,359,921 4,290 5.000%, 12/01/26 - XLCA Insured 12/16 at 100.00 AAA 4,571,424 ------------------------------------------------------------------------------------------------------------------------------------ 25,710 Total Washington 27,871,477 ------------------------------------------------------------------------------------------------------------------------------------ WEST VIRGINIA - 0.8% (0.5% OF TOTAL INVESTMENTS) 10,000 Harrison County Commission, West Virginia, Solid Waste Disposal 11/06 at 100.00 AAA 10,119,100 Revenue Bonds, West Penn Power Company - Harrison Station, Series 1993B, 6.300%, 5/01/23 - MBIA Insured (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 4.0% (2.7% OF TOTAL INVESTMENTS) 18,000 Wisconsin Health and Educational Facilities Authority, Revenue 8/07 at 102.00 AAA 18,534,420 Bonds, Aurora Healthcare Inc., Series 1997, 5.250%, 8/15/17 - MBIA Insured 15,000 Wisconsin Health and Educational Facilities Authority, Revenue 2/07 at 102.00 AAA 15,382,500 Bonds, Marshfield Clinic, Series 1997, 5.750%, 2/15/27 - MBIA Insured 550 Wisconsin Housing and Economic Development Authority, Housing 1/07 at 100.00 AAA 550,952 Revenue Bonds, Series 1992A, 6.850%, 11/01/12 - MBIA Insured 1,675 Wisconsin Public Power Incorporated System, Power Supply System 7/15 at 100.00 AAA 1,774,528 Revenue Bonds, Series 2005A, 5.000%, 7/01/30 - AMBAC Insured 2,890 Wisconsin, General Obligation Bonds, Series 2004-3, 5.250%, 5/14 at 100.00 AAA 3,149,435 5/01/20 - FGIC Insured 10,945 Wisconsin, General Obligation Bonds, Series 2004-4, 5.000%, 5/14 at 100.00 AAA 11,703,051 5/01/20 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ 49,060 Total Wisconsin 51,094,886 ------------------------------------------------------------------------------------------------------------------------------------ $ 1,942,427 Total Investments (cost $1,786,083,730) - 151.4% 1,912,654,851 ============------------------------------------------------------------------------------------------------------------------------ Other Assets Less Liabilities - 2.4% 30,516,883 --------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (53.8)% (680,000,000) --------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $1,263,171,734 =====================================================================================================================
All of the bonds in the Portfolio of Investments, excluding temporary investments in short-term municipal securities, are either covered by Original Issue Insurance, Secondary Market Insurance or Portfolio Insurance, or are backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities, any of which ensure the timely payment of principal and interest. (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions (not covered by the report of independent registered public accounting firm): 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. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's or Moody's rating. Ratings below BBB by Standard & Poor's Group or Baa by Moody's Investor Service, Inc. are considered to be below investment grade. WI/DD Purchased on a when-issued or delayed delivery basis. (ETM) Escrowed to maturity. (IF) Inverse floating rate investment. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 41 Nuveen Premier Insured Municipal Income Fund, Inc. (NIF) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 1.1% (0.8% OF TOTAL INVESTMENTS) $ 3,200 Auburn, Alabama, General Obligation Warrants, Series 2005, 8/15 at 100.00 AAA $ 3,386,848 5.000%, 8/01/30 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 1.5% (1.0% OF TOTAL INVESTMENTS) 4,370 Phoenix Civic Improvement Corporation, Arizona, Junior Lien Water 7/15 at 100.00 AAA 4,547,684 System Revenue Bonds, Series 2005, 4.750%, 7/01/25 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ ARKANSAS - 1.4% (0.9% OF TOTAL INVESTMENTS) 4,020 Northwest Community College District, Arkansas, General 5/15 at 100.00 AAA 4,297,782 Obligation Bonds, Series 2005, 5.000%, 5/15/23 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 30.8% (20.3% OF TOTAL INVESTMENTS) ABAG Finance Authority for Non-Profit Corporations, California, Insured Certificates of Participation, Children's Hospital Medical Center of Northern California, Series 1999: 6,750 5.875%, 12/01/19 - AMBAC Insured 12/09 at 101.00 AAA 7,243,358 10,000 6.000%, 12/01/29 - AMBAC Insured 12/09 at 101.00 AAA 10,768,500 1,000 California Department of Water Resources, Water System Revenue 12/14 at 100.00 AAA 1,062,420 Bonds, Central Valley Project, Series 2005AC, 5.000%, 12/01/26 - MBIA Insured 1,250 California Pollution Control Financing Authority, Remarketed 4/11 at 102.00 AAA 1,346,088 Revenue Bonds, Pacific Gas and Electric Company, Series 1996A, 5.350%, 12/01/16 - MBIA Insured (Alternative Minimum Tax) 4,775 Clovis Unified School District, Fresno County, California, No Opt. Call AAA 2,107,494 General Obligation Bonds, Series 2001A, 0.000%, 8/01/25 - FGIC Insured 1,005 Folsom Cordova Unified School District, Sacramento County, 10/14 at 100.00 AAA 1,067,330 California, General Obligation Bonds, School Facilities Improvement District 2, Series 2004B, 5.000%, 10/01/26 - FSA Insured 1,150 Kern Community College District, California, General Obligation No Opt. Call AAA 549,194 Bonds, Series 2006, 0.000%, 11/01/23 - FSA Insured 85 Kern County Housing Authority, California, GNMA Guaranteed No Opt. Call AAA 87,718 Tax-Exempt Mortgage Obligation Bonds, Series 1994A-I, 7.150%, 12/30/24 (Alternative Minimum Tax) 55 Kern County Housing Authority, California, GNMA Guaranteed No Opt. Call AAA 56,906 Tax-Exempt Mortgage Obligation Bonds, Series 1994A-III, 7.450%, 6/30/25 (Alternative Minimum Tax) 4,750 La Verne-Grand Terrace Housing Finance Agency, California, No Opt. Call AAA 6,384,095 Single Family Residential Mortgage Revenue Bonds, Series 1984A, 10.250%, 7/01/17 (ETM) 5,000 Ontario Redevelopment Financing Authority, San Bernardino No Opt. Call AAA 6,912,250 County, California, Revenue Refunding Bonds, Redevelopment Project 1, Series 1995, 7.400%, 8/01/25 - MBIA Insured 8,880 Pomona, California, GNMA/FHLMC Collateralized Single Family No Opt. Call AAA 11,855,066 Mortgage Revenue Refunding Bonds, Series 1990B, 7.500%, 8/01/23 (ETM) 12,655 San Bernardino County, California, GNMA Mortgage-Backed No Opt. Call AAA 14,895,568 Securities Program Single Family Home Mortgage Revenue Bonds, Series 1988A, 8.300%, 9/01/14 (Alternative Minimum Tax) (ETM) 10,005 San Bernardino, California, GNMA Mortgage-Backed Securities No Opt. Call AAA 12,885,439 Program Single Family Mortgage Revenue Refunding Bonds, Series 1990A, 7.500%, 5/01/23 (ETM) 4,300 San Francisco Airports Commission, California, Revenue Refunding 5/11 at 100.00 AAA 4,501,928 Bonds, San Francisco International Airport, Second Series 2001, Issue 27A, 5.125%, 5/01/19 - MBIA Insured (Alternative Minimum Tax) 2,000 San Jose Redevelopment Agency, California, Tax Allocation Bonds, 8/14 at 100.00 AAA 2,185,820 Merged Area Redevelopment Project, Series 2004A, 5.250%, 8/01/19 - MBIA Insured 4,455 San Mateo County Community College District, California, General No Opt. Call AAA 2,366,719 Obligation Bonds, Series 2006B, 0.000%, 9/01/21 - MBIA Insured 1,815 University of California, General Revenue Bonds, Series 2005G, 5/13 at 101.00 AAA 1,870,031 4.750%, 5/15/31 - MBIA Insured
42
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA (continued) $ 3,600 Ventura County Community College District, California, General 8/15 at 100.00 AAA $ 3,831,912 Obligation Bonds, Series 2005B, 5.000%, 8/01/28 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ 83,530 Total California 91,977,836 ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 7.2% (4.7% OF TOTAL INVESTMENTS) 1,500 Adams and Arapahoe Counties Joint School District 28J, Aurora, 12/13 at 100.00 AAA 1,622,850 Colorado, General Obligation Bonds, Series 2003A, 5.125%, 12/01/21 - FSA Insured 2,500 Denver City and County, Colorado, Airport System Revenue 11/12 at 100.00 AAA 2,701,475 Refunding Bonds, Series 2002E, 5.500%, 11/15/18 - FGIC Insured (Alternative Minimum Tax) 6,000 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, 9/10 at 102.00 AAA 6,574,860 Series 2000A, 5.750%, 9/01/29 (Pre-refunded 9/01/10) - MBIA Insured 4,405 Garfield, Eagle and Pitkin Counties School District RE-1, 12/14 at 100.00 AAA 4,693,572 Roaring Fork, Colorado, General Obligation Bonds, Series 2005A, 5.000%, 12/15/24 - FSA Insured 2,065 Jefferson County School District R1, Colorado, General Obligation 12/14 at 100.00 AAA 2,200,278 Bonds, Series 2004, 5.000%, 12/15/24 - FSA Insured 1,390 Teller County School District RE-2, Woodland Park, Colorado, 12/14 at 100.00 AAA 1,487,634 General Obligation Bonds, Series 2004, 5.000%, 12/01/22 - MBIA Insured 1,000 University of Colorado, Enterprise System Revenue Bonds, Series 6/12 at 100.00 AAA 1,061,640 2002A, 5.000%, 6/01/19 - FGIC Insured 1,000 University of Colorado, Enterprise System Revenue Bonds, Series 6/15 at 100.00 AAA 1,063,420 2005, 5.000%, 6/01/30 - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ 19,860 Total Colorado 21,405,729 ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 5.1% (3.3% OF TOTAL INVESTMENTS) 2,285 Florida Municipal Loan Council, Revenue Bonds, Series 2005A, 2/15 at 100.00 AAA 2,431,697 5.000%, 2/01/23 - MBIA Insured 1,500 JEA, Florida, Water and Sewerage System Revenue Bonds, Series 10/13 at 100.00 AAA 1,608,060 2004A, 5.000%, 10/01/19 - FGIC Insured 4,145 Miami, Florida, General Obligation Bonds, Series 2002, 5.000%, 1/12 at 100.00 AAA 4,360,250 1/01/22 - MBIA Insured 4,240 Reedy Creek Improvement District, Florida, Utility Revenue Bonds, 10/13 at 100.00 AAA 4,622,830 Series 2003-1, 5.250%, 10/01/17 - MBIA Insured 2,000 Tallahassee, Florida, Energy System Revenue Bonds, Series 2005, 10/15 at 100.00 AAA 2,123,260 5.000%, 10/01/28 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ 14,170 Total Florida 15,146,097 ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 3.4% (2.2% OF TOTAL INVESTMENTS) 2,950 Atlanta, Georgia, Airport General Revenue Bonds, Series 2004G, 1/15 at 100.00 AAA 3,123,077 5.000%, 1/01/25 - FSA Insured 6,500 Medical Center Hospital Authority, Georgia, Revenue Anticipation 8/09 at 102.00 AAA 6,925,685 Certificates, Columbus Regional Healthcare System, Inc. Project, Series 1999, 5.500%, 8/01/25 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ 9,450 Total Georgia 10,048,762 ------------------------------------------------------------------------------------------------------------------------------------ HAWAII - 3.7% (2.5% OF TOTAL INVESTMENTS) 2,250 Hawaii Department of Budget and Finance, Special Purpose Revenue 1/09 at 101.00 AAA 2,381,760 Bonds, Hawaiian Electric Company Inc., Series 1999D, 6.150%, 1/01/20 - AMBAC Insured (Alternative Minimum Tax) 8,030 Hawaii Department of Transportation, Airport System Revenue 7/10 at 101.00 AAA 8,824,809 Refunding Bonds, Series 2000B, 6.500%, 7/01/15 - FGIC Insured (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ 10,280 Total Hawaii 11,206,569 ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 15.9% (10.5% OF TOTAL INVESTMENTS) 4,000 Bridgeview, Illinois, General Obligation Bonds, Series 2002, 12/12 at 100.00 AAA 4,231,680 5.000%, 12/01/22 - FGIC Insured 8,200 Chicago Board of Education, Illinois, General Obligation Lease No Opt. Call AAA 9,441,972 Certificates, Series 1992A, 6.250%, 1/01/15 - MBIA Insured 10,000 Chicago, Illinois, General Obligation Refunding Bonds, 1/10 at 101.00 AAA 10,612,500 Series 2000D, 5.500%, 1/01/35 - FGIC Insured
43 Nuveen Premier Insured Municipal Income Fund, Inc. (NIF) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS (continued) $ 1,450 Chicago, Illinois, Third Lien General Airport Revenue Bonds, 1/16 at 100.00 AAA $ 1,579,152 O'Hare International Airport, Series 2005A, 5.250%, 1/01/24 - MBIA Insured 23,110 Illinois Development Finance Authority, Local Government Program No Opt. Call Aaa 15,296,737 Revenue Bonds, Kane, Cook and DuPage Counties School District U46 - Elgin, Series 2002, 0.000%, 1/01/17 - FSA Insured 5,010 Metropolitan Pier and Exposition Authority, Illinois, Revenue No Opt. Call AAA 2,640,671 Refunding Bonds, McCormick Place Expansion Project, Series 1996A, 0.000%, 12/15/21 - MBIA Insured 3,225 Regional Transportation Authority, Cook, DuPage, Kane, Lake, No Opt. Call AAA 3,646,346 McHenry and Will Counties, Illinois, General Obligation Bonds, Series 1992A, 9.000%, 6/01/09 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ 54,995 Total Illinois 47,449,058 ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 2.9% (1.9% OF TOTAL INVESTMENTS) Indiana University, Parking Facility Revenue Bonds, Series 2004: 1,015 5.250%, 11/15/19 - AMBAC Insured 11/14 at 100.00 AAA 1,114,643 1,060 5.250%, 11/15/20 - AMBAC Insured 11/14 at 100.00 AAA 1,161,749 1,100 5.250%, 11/15/21 - AMBAC Insured 11/14 at 100.00 AAA 1,204,797 9,255 Indianapolis Local Public Improvement Bond Bank, Indiana, Series No Opt. Call AAA 4,174,838 1999E, 0.000%, 2/01/25 - AMBAC Insured 1,000 Metropolitan School District Steuben County K-5 Building 7/14 at 102.00 AAA 1,096,520 Corporation, Indiana, First Mortgage Bonds, Series 2003, 5.250%, 1/15/21 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ 13,430 Total Indiana 8,752,547 ------------------------------------------------------------------------------------------------------------------------------------ IOWA - 1.2% (0.8% OF TOTAL INVESTMENTS) 3,345 Ames, Iowa, Hospital Revenue Refunding Bonds, Mary Greeley 6/13 at 100.00 Aaa 3,552,959 Medical Center, Series 2003, 5.000%, 6/15/17 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 1.4% (0.9% OF TOTAL INVESTMENTS) 1,245 Kansas Development Finance Authority, Board of Regents, Revenue 4/15 at 100.00 AAA 1,329,984 Bonds, Kansas State University Housing System, Series 2005A, 5.000%, 4/01/23 - MBIA Insured 2,760 Neosho County Unified School District 413, Kansas, General 9/14 at 100.00 Aaa 2,918,203 Obligation Bonds, Series 2006, 5.000%, 9/01/31 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ 4,005 Total Kansas 4,248,187 ------------------------------------------------------------------------------------------------------------------------------------ MARYLAND - 2.2% (1.4% OF TOTAL INVESTMENTS) 1,200 Maryland Economic Development Corporation, Student Housing 6/16 at 100.00 AAA 1,281,408 Revenue Refunding Bonds, University of Maryland College Park Projects, Series 2006, 5.000%, 6/01/28 - CIFG Insured 5,000 Maryland Transportation Authority, Airport Parking Revenue Bonds, 3/12 at 101.00 AAA 5,268,250 Baltimore-Washington International Airport Passenger Facility, Series 2002B, 5.125%, 3/01/21 - AMBAC Insured (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ 6,200 Total Maryland 6,549,658 ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 1.6% (1.0% OF TOTAL INVESTMENTS) 4,400 Massachusetts School Building Authority, Dedicated Sales Tax 8/15 at 100.00 AAA 4,711,300 Revenue Bonds, Series 2005A, 5.000%, 8/15/23 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 3.6% (2.4% OF TOTAL INVESTMENTS) 6,500 Michigan Higher Education Student Loan Authority, Revenue Bonds, No Opt. Call AAA 6,847,230 Series 2000 XII-T, 5.300%, 9/01/10 - AMBAC Insured (Alternative Minimum Tax) 3,810 Michigan Housing Development Authority, GNMA Collateralized 8/12 at 102.00 Aaa 4,005,605 Limited Obligation Multifamily Housing Revenue Bonds, Cranbrook Apartments, Series 2001A, 5.500%, 2/20/43 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ 10,310 Total Michigan 10,852,835 ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 1.8% (1.2% OF TOTAL INVESTMENTS) 4,860 Minneapolis-St. Paul Metropolitan Airports Commission, Minnesota, 1/11 at 100.00 AAA 5,214,974 Airport Revenue Bonds, Series 2001B, 5.750%, 1/01/15 - FGIC Insured (Alternative Minimum Tax)
44
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA (continued) $ 145 Minnesota Housing Finance Agency, Rental Housing Bonds, Series 2/07 at 100.00 AAA $ 145,806 1995D, 5.950%, 2/01/18 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ 5,005 Total Minnesota 5,360,780 ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 3.4% (2.2% OF TOTAL INVESTMENTS) 7,495 Jefferson County Industrial Development Authority, Missouri, 8/07 at 100.00 AAA 7,918,393 Housing Revenue Bonds, Richardson Road Apartments Project, Series 1985, 11.000%, 12/15/15 (Pre-refunded 8/15/07) 2,000 Missouri Western State College, Auxiliary System Revenue Bonds, 10/13 at 100.00 AAA 2,146,600 Series 2003, 5.000%, 10/01/21 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ 9,495 Total Missouri 10,064,993 ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 8.5% (5.6% OF TOTAL INVESTMENTS) 3,000 Clark County, Nevada, General Obligation Bank Bonds, Southern 12/12 at 100.00 AAA 3,130,020 Nevada Water Authority Loan, Series 2002, 5.000%, 6/01/32 - MBIA Insured 8,000 Clark County, Nevada, Subordinate Lien Airport Revenue Bonds, 7/11 at 100.00 AAA 8,538,880 Series 2001B, 5.125%, 7/01/21 (Pre-refunded 7/01/11) - FGIC Insured 7,990 Reno, Nevada, Senior Lien Sales and Room Tax Revenue Bonds, Reno 6/12 at 100.00 AAA 8,641,984 Transportation Rail Access Corridor Project, Series 2002, 5.250%, 6/01/41 (Pre-refunded 6/01/12) - AMBAC Insured 5,050 Washoe County, Nevada, Gas and Water Facilities Remarketed 12/14 at 100.00 AAA 5,124,993 Revenue Refunding Bonds, Sierra Pacific Power Company, Series 1987, 6.300%, 12/01/14 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ 24,040 Total Nevada 25,435,877 ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 1.1% (0.8% OF TOTAL INVESTMENTS) New Jersey Economic Development Authority, Revenue Bonds, Motor Vehicle Surcharge, Series 2004A: 1,200 5.000%, 7/01/22 - MBIA Insured 7/14 at 100.00 AAA 1,289,976 1,200 5.000%, 7/01/23 - MBIA Insured 7/14 at 100.00 AAA 1,272,396 800 Rutgers State University, New Jersey, Certificates of 1/14 at 100.00 AAA 843,008 Participation, Lower Georges Street University Redevelopment Associates LLC, Series 2004, 5.000%, 1/01/24 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ 3,200 Total New Jersey 3,405,380 ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 8.3% (5.5% OF TOTAL INVESTMENTS) 1,000 Dormitory Authority of the State of New York, FHA-Insured 2/15 at 100.00 AAA 1,064,920 Mortgage Revenue Bonds, Montefiore Hospital, Series 2004, 5.000%, 8/01/23 - FGIC Insured 5,000 Long Island Power Authority, New York, Electric System General 6/16 at 100.00 AAA 5,355,550 Revenue Bonds, Series 2006A, 5.000%, 12/01/25 - FGIC Insured 10,000 Metropolitan Transportation Authority, New York, Transportation 11/12 at 100.00 AAA 10,736,700 Revenue Refunding Bonds, Series 2002F, 5.250%, 11/15/27 - MBIA Insured 5,700 New York State Thruway Authority, General Revenue Bonds, Series 7/15 at 100.00 AAA 6,077,112 2005G, 5.000%, 1/01/26 - FSA Insured 1,450 New York State Thruway Authority, Highway and Bridge Trust Fund 10/15 at 100.00 AAA 1,564,014 Bonds, Second Generation, Series 2005B, 5.000%, 4/01/21 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ 23,150 Total New York 24,798,296 ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 2.1% (1.5% OF TOTAL INVESTMENTS) 3,100 North Carolina Medical Care Commission, FHA-Insured Mortgage 10/13 at 100.00 AAA 3,273,910 Revenue Bonds, Betsy Johnson Regional Hospital Project, Series 2003, 5.125%, 10/01/32 - FSA Insured 3,050 Raleigh Durham Airport Authority, North Carolina, Airport Revenue 5/15 at 100.00 Aaa 3,262,280 Bonds, Series 2005A, 5.000%, 5/01/22 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ 6,150 Total North Carolina 6,536,190 ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 0.3% (0.2% OF TOTAL INVESTMENTS) 820 Cincinnati City School District, Hamilton County, Ohio, General No Opt. Call AAA 944,394 Obligation Bonds, Series 2006, 5.250%, 12/01/22 - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------
45 Nuveen Premier Insured Municipal Income Fund, Inc. (NIF) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 1.6% (1.1% OF TOTAL INVESTMENTS) $ 3,500 Oklahoma Capitol Improvement Authority, State Facilities 7/15 at 100.00 AAA $ 3,739,470 Revenue Bonds, Series 2005F, 5.000%, 7/01/24 - AMBAC Insured 980 Oklahoma Housing Finance Agency, GNMA Collateralized Single No Opt. Call AAA 1,020,317 Family Mortgage Revenue Bonds, Series 1987A, 7.997%, 8/01/18 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ 4,480 Total Oklahoma 4,759,787 ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 4.2% (2.8% OF TOTAL INVESTMENTS) Oregon Health Sciences University, Revenue Bonds, Series 2002A: 5,000 5.000%, 7/01/26 - MBIA Insured 1/13 at 100.00 AAA 5,255,250 7,000 5.000%, 7/01/32 - MBIA Insured 1/13 at 100.00 AAA 7,330,120 ------------------------------------------------------------------------------------------------------------------------------------ 12,000 Total Oregon 12,585,370 ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 2.3% (1.6% OF TOTAL INVESTMENTS) 1,500 Allegheny County Sanitary Authority, Pennsylvania, Sewerage 12/15 at 100.00 AAA 1,605,585 Revenue Bonds, Series 2005A, 5.000%, 12/01/23 - MBIA Insured 4,000 Commonwealth Financing Authority, Pennsylvania, State 6/16 at 100.00 AAA 4,291,000 Appropriation Lease Bonds, Series 2006A, 5.000%, 6/01/26 - FSA Insured 1,050 Pennsylvania Turnpike Commission, Turnpike Revenue Bonds, Series 6/16 at 100.00 AAA 1,127,249 2006A, 5.000%, 12/01/26 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ 6,550 Total Pennsylvania 7,023,834 ------------------------------------------------------------------------------------------------------------------------------------ PUERTO RICO - 2.1% (1.4% OF TOTAL INVESTMENTS) 2,500 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series 7/15 at 100.00 AAA 2,701,425 2005RR, 5.000%, 7/01/22 - FGIC Insured 1,000 Puerto Rico Municipal Finance Agency, Series 2005C, 5.250%, No Opt. Call AAA 1,143,610 8/01/21 - CIFG Insured 2,000 Puerto Rico, Highway Revenue Bonds, Highway and Transportation No Opt. Call AAA 2,296,720 Authority, Series 2003AA, 5.500%, 7/01/17 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ 5,500 Total Puerto Rico 6,141,755 ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 3.6% (2.4% OF TOTAL INVESTMENTS) 3,000 Blount County Public Building Authority, Tennessee, Local 6/15 at 100.00 Aaa 3,203,670 Government Public Improvement Lease Bonds, Oak Ridge, Series 2005B-9-A, 5.000%, 6/01/24 - AMBAC Insured 2,055 Memphis, Tennessee, Sanitary Sewerage System Revenue Bonds, 10/14 at 100.00 AAA 2,199,672 Series 2004, 5.000%, 10/01/22 - FSA Insured 5,000 Metropolitan Government of Nashville-Davidson County Health and 11/09 at 101.00 AAA 5,385,050 Educational Facilities Board, Tennessee, Revenue Bonds, Ascension Health Credit Group, Series 1999A, 6.000%, 11/15/30 (Pre-refunded 11/15/09) - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ 10,055 Total Tennessee 10,788,392 ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 10.5% (6.9% OF TOTAL INVESTMENTS) 12,500 Dallas-Ft. Worth International Airport, Texas, Joint Revenue 11/09 at 100.00 AAA 13,031,250 Refunding and Improvement Bonds, Series 2001A, 5.500%, 11/01/35 - FGIC Insured (Alternative Minimum Tax) North Harris County Regional Water Authority, Texas, Senior Water Revenue Bonds, Series 2003: 4,565 5.250%, 12/15/20 - FGIC Insured 12/13 at 100.00 AAA 4,964,072 4,800 5.250%, 12/15/21 - FGIC Insured 12/13 at 100.00 AAA 5,199,360 7,600 San Antonio, Texas, Airport System Improvement Revenue Bonds, 7/11 at 101.00 AAA 8,098,560 Series 2001, 5.375%, 7/01/16 - FGIC Insured (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ 29,465 Total Texas 31,293,242 ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 18.5% (12.2% OF TOTAL INVESTMENTS) 5,000 Chelan County Public Utility District 1, Washington, Hydro 7/11 at 101.00 AAA 5,382,050 Consolidated System Revenue Bonds, Series 2001B, 5.600%, 1/01/36 - MBIA Insured (Alternative Minimum Tax) King County School District 405, Bellevue, Washington, General Obligation Bonds, Series 2002: 12,060 5.000%, 12/01/19 - FGIC Insured 12/12 at 100.00 AAA 12,855,960 12,785 5.000%, 12/01/20 - FGIC Insured 12/12 at 100.00 AAA 13,628,810
46
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON (continued) Pierce County School District 343, Dieringer, Washington, General Obligation Refunding Bonds, Series 2003: $ 2,755 5.250%, 12/01/18 - FGIC Insured 6/13 at 100.00 Aaa $ 2,984,822 2,990 5.250%, 12/01/19 - FGIC Insured 6/13 at 100.00 Aaa 3,239,426 4,715 Port of Seattle, Washington, Revenue Bonds, Series 2001B, 5.625%, 10/11 at 100.00 AAA 5,065,702 4/01/17 - FGIC Insured (Alternative Minimum Tax) 895 Port of Seattle, Washington, Special Facility Revenue Bonds, 3/10 at 101.00 AAA 961,463 Terminal 18, Series 1999C, 6.000%, 9/01/29 - MBIA Insured (Alternative Minimum Tax) 1,265 Tacoma, Washington, General Obligation Bonds, Series 2002, 12/12 at 100.00 AAA 1,348,490 5.000%, 12/01/18 - FGIC Insured 4,200 Tacoma, Washington, Solid Waste Utility Revenue Refunding Bonds, 12/11 at 100.00 AAA 4,530,288 Series 2001, 5.250%, 12/01/20 (Pre-refunded 12/01/11) - AMBAC Insured 5,000 Washington, General Obligation Bonds, Series 2001C, 5.250%, 1/11 at 100.00 AAA 5,262,900 1/01/26 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ 51,665 Total Washington 55,259,911 ------------------------------------------------------------------------------------------------------------------------------------ $ 437,140 Total Investments (cost $422,929,142) - 151.3% 452,532,052 ============------------------------------------------------------------------------------------------------------------------------ Other Assets Less Liabilities - 2.5% 7,468,984 --------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (53.8)% (161,000,000) --------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 299,001,036 =====================================================================================================================
All of the bonds in the Portfolio of Investments, excluding temporary investments in short-term municipal securities, are either covered by Original Issue Insurance, Secondary Market Insurance or Portfolio Insurance, or are backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities, any of which ensure the timely payment of principal and interest. (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions (not covered by the report of independent registered public accounting firm): 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. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's or Moody's rating. Ratings below BBB by Standard & Poor's Group or Baa by Moody's Investor Service, Inc. are considered to be below investment grade. (ETM) Escrowed to maturity. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 47 Nuveen Insured Premium Income Municipal Fund 2 (NPX) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 2.2% (1.5% OF TOTAL INVESTMENTS) $ 3,750 Huntsville Healthcare Authority, Alabama, Revenue Bonds, Series 6/15 at 100.00 AAA $ 3,954,525 2005A, 5.000%, 6/01/24 - MBIA Insured Jefferson County, Alabama, General Obligation Warrants, Series 2004A: 1,395 5.000%, 4/01/22 - MBIA Insured 4/14 at 100.00 AAA 1,484,182 1,040 5.000%, 4/01/23 - MBIA Insured 4/14 at 100.00 AAA 1,103,742 Montgomery Water and Sewerage Board, Alabama, Water and Sewerage Revenue Bonds, Series 2005: 2,220 5.000%, 3/01/24 - FSA Insured 3/15 at 100.00 AAA 2,365,366 2,590 5.000%, 3/01/25 - FSA Insured 3/15 at 100.00 AAA 2,757,702 ------------------------------------------------------------------------------------------------------------------------------------ 10,995 Total Alabama 11,665,517 ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 2.4% (1.6% OF TOTAL INVESTMENTS) 12,365 Phoenix Civic Improvement Corporation, Arizona, Junior Lien Water 7/15 at 100.00 AAA 12,822,258 System Revenue Bonds, Series 2005, 4.750%, 7/01/27 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ ARKANSAS - 2.9% (1.9% OF TOTAL INVESTMENTS) 7,745 Arkansas Development Finance Authority, State Facility Revenue 6/14 at 100.00 AAA 8,446,697 Bonds, Donaghey Plaza Project, Series 2004, 5.250%, 6/01/25 - FSA Insured University of Arkansas, Fayetteville, Revenue Bonds, Medical Sciences Campus, Series 2004B: 2,000 5.000%, 11/01/27 - MBIA Insured 11/14 at 100.00 Aaa 2,121,020 2,000 5.000%, 11/01/28 - MBIA Insured 11/14 at 100.00 Aaa 2,119,620 2,480 University of Arkansas, Monticello Campus, Revenue Bonds, Series 12/13 at 100.00 Aaa 2,602,710 2005, 5.000%, 12/01/35 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ 14,225 Total Arkansas 15,290,047 ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 20.3% (13.6% OF TOTAL INVESTMENTS) 2,000 California Department of Water Resources, Water System Revenue 12/14 at 100.00 AAA 2,141,040 Bonds, Central Valley Project, Series 2005AC, 5.000%, 12/01/24 - MBIA Insured 1,800 California Educational Facilities Authority, Revenue Bonds, 10/15 at 100.00 Aaa 1,909,548 Occidental College, Series 2005A, 5.000%, 10/01/33 - MBIA Insured 2,335 California Infrastructure Economic Development Bank, First Lien 1/28 at 100.00 AAA 3,301,527 Revenue Bonds, San Francisco Bay Area Toll Bridge, Series 2003A. Residuals Series 1485, 7.327%, 7/01/33 (Pre-refunded 1/01/28) - AMBAC Insured (IF) 31,200 Foothill/Eastern Transportation Corridor Agency, California, 1/10 at 24.23 AAA 6,597,552 Toll Road Revenue Refunding Bonds, Series 1999, 0.000%, 1/15/34 - MBIA Insured 1,735 Fullerton Public Financing Authority, California, Tax Allocation 9/15 at 100.00 AAA 1,837,105 Revenue Bonds, Series 2005, 5.000%, 9/01/27 - AMBAC Insured 7,000 Golden State Tobacco Securitization Corporation, California, 6/15 at 100.00 AAA 7,386,890 Tobacco Settlement Asset-Backed Revenue Bonds, Series 2005A, 5.000%, 6/01/35 - FGIC Insured 1,870 Kern Community College District, California, General Obligation No Opt. Call AAA 893,037 Bonds, Series 2006, 0.000%, 11/01/23 - FSA Insured 6,520 Los Angeles Unified School District, California, General 7/15 at 100.00 AAA 7,020,410 Obligation Bonds, Series 2005E, 5.000%, 7/01/22 - AMBAC Insured 4,000 Los Angeles Unified School District, California, General 7/16 at 100.00 AAA 4,309,560 Obligation Bonds, Series 2006F, 5.000%, 7/01/24 - FGIC Insured 15,000 Orange County Sanitation District, California, Certificates of 8/13 at 100.00 AAA 16,048,200 Participation, Series 2003, 5.250%, 2/01/30 - FGIC Insured 10,000 Orange County Water District, California, Revenue Certificates of 8/13 at 100.00 AAA 10,473,100 Participation, Series 2003B, 5.000%, 8/15/34 - MBIA Insured
48
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA (continued) $ 1,000 Orange County Water District, California, Revenue Certificates of 2/15 at 100.00 AAA $ 1,060,120 Participation, Series 2005B, 5.000%, 8/15/24 - MBIA Insured 1,435 Pasadena Area Community College District, Los Angeles County, 6/13 at 100.00 AAA 1,560,376 California, General Obligation Bonds, Series 2003A, 5.000%, 6/01/22 (Pre-refunded 6/01/13) - FGIC Insured 12,265 Sacramento City Financing Authority, California, Capital 12/09 at 102.00 AAA 13,334,017 Improvement Revenue Bonds, Solid Waste and Redevelopment Projects, Series 1999, 5.800%, 12/01/19 (Pre-refunded 12/01/09) - AMBAC Insured 735 Sacramento City Financing Authority, California, Capital 12/09 at 102.00 AAA 795,946 Improvement Revenue Bonds, Solid Waste and Redevelopment Projects, Series 1999, 5.800%, 12/01/19 - AMBAC Insured San Diego County, California, Certificates of Participation, Edgemoor Facility Project and Regional System, Series 2005: 1,675 5.000%, 2/01/24 - AMBAC Insured 2/15 at 100.00 AAA 1,775,299 720 5.000%, 2/01/25 - AMBAC Insured 2/15 at 100.00 AAA 761,054 4,725 San Diego Unified School District, San Diego County, California, 7/15 at 100.00 AAA 5,641,650 General Obligation Bonds, Series 2006, Residuals Series 1499, 7.326%, 7/01/29 - FSA Insured (IF) 2,000 San Jose Redevelopment Agency, California, Tax Allocation Bonds, 8/14 at 100.00 AAA 2,185,820 Merged Area Redevelopment Project, Series 2004A, 5.250%, 8/01/19 - MBIA Insured 5,000 Torrance, California, Certificates of Participation, Series No Opt. Call AAA 5,288,900 2005B, 5.000%, 6/01/24 - AMBAC Insured 12,500 University of California, Revenue Bonds, Multi-Purpose Projects, 5/13 at 100.00 AAA 13,106,500 Series 2003A, 5.000%, 5/15/33 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ 125,515 Total California 107,427,651 ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 8.9% (6.0% OF TOTAL INVESTMENTS) 1,940 Colorado Educational and Cultural Facilities Authority, Charter 6/13 at 100.00 AAA 2,077,333 School Revenue Bonds, Adams School District 12 - Pinnacle School, Series 2003, 5.250%, 6/01/23 - XLCA Insured 3,405 Colorado Educational and Cultural Facilities Authority, Charter 12/13 at 100.00 AAA 3,661,907 School Revenue Bonds, Classical Academy, Series 2003, 5.250%, 12/01/23 - XLCA Insured 3,500 Colorado Health Facilities Authority, Revenue Bonds, Poudre 12/09 at 101.00 Aaa 3,748,465 Valley Healthcare Inc., Series 1999A, 5.750%, 12/01/23 (Pre-refunded 12/01/09) - FSA Insured 17,145 Denver Convention Center Hotel Authority, Colorado, Senior 12/13 at 100.00 AAA 18,553,290 Revenue Bonds, Convention Center Hotel, Series 2003A, 5.000%, 12/01/33 (Pre-refunded 12/01/13) - XLCA Insured 6,100 Denver School District 1, Colorado, General Obligation Bonds, 12/13 at 100.00 AAA 6,548,716 Series 2004, 5.000%, 12/01/18 - FSA Insured 1,325 El Paso County, Colorado, Certificates of Participation, 12/12 at 100.00 AAA 1,383,870 Detention Facility Project, Series 2002B, 5.000%, 12/01/27 - AMBAC Insured Jefferson County School District R1, Colorado, General Obligation Bonds, Series 2004: 2,500 5.000%, 12/15/22 - FSA Insured 12/14 at 100.00 AAA 2,676,275 5,125 5.000%, 12/15/23 - FSA Insured 12/14 at 100.00 AAA 5,471,706 2,000 5.000%, 12/15/24 - FSA Insured 12/14 at 100.00 AAA 2,131,020 1,000 University of Colorado, Enterprise System Revenue Bonds, Series 6/15 at 100.00 AAA 1,063,420 2005, 5.000%, 6/01/30 - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ 44,040 Total Colorado 47,316,002 ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 0.8% (0.5% OF TOTAL INVESTMENTS) 4,000 Florida State Board of Education, Full Faith and Credit Public 6/13 at 101.00 AAA 4,283,000 Education Capital Outlay Bonds, Series 2003J, 5.000%, 6/01/22 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 3.8% (2.5% OF TOTAL INVESTMENTS) 4,000 Cobb County Development Authority, Georgia, Parking Revenue 7/14 at 100.00 Aaa 4,239,640 Bonds, Kennesaw State University, Series 2004, 5.000%, 7/15/24 - MBIA Insured 2,925 Columbus, Georgia, Water and Sewerage Revenue Bonds, Series 2005, 5/14 at 100.00 AAA 3,111,937 5.000%, 5/01/23 - MBIA Insured
49 Nuveen Insured Premium Income Municipal Fund 2 (NPX) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA (continued) Municipal Electric Authority of Georgia, Combustion Turbine Revenue Bonds, Series 2003A: $ 1,775 5.000%, 11/01/21 - MBIA Insured 11/13 at 100.00 AAA $ 1,889,133 2,580 5.000%, 11/01/22 - MBIA Insured 11/13 at 100.00 AAA 2,745,894 4,500 South Fulton Municipal Regional Water and Sewerage Authority, 1/13 at 100.00 Aaa 4,704,750 Georgia, Water and Sewerage Revenue Bonds, Series 2003, 5.000%, 1/01/33 - MBIA Insured 3,000 Valdosta and Lowndes County Hospital Authority, Georgia, Revenue 10/12 at 101.00 AAA 3,205,920 Certificates, South Georgia Medical Center, Series 2002, 5.200%, 10/01/22 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ 18,780 Total Georgia 19,897,274 ------------------------------------------------------------------------------------------------------------------------------------ HAWAII - 7.8% (5.2% OF TOTAL INVESTMENTS) 2,375 Hawaii County, Hawaii, General Obligation Bonds, Series 2003A, 7/13 at 100.00 AAA 2,541,440 5.000%, 7/15/19 - FSA Insured 20,000 Hawaii Department of Budget and Finance, Special Purpose Revenue 7/10 at 101.00 AAA 21,391,997 Refunding Bonds, Hawaiian Electric Company Inc., Series 2000, 5.700%, 7/01/20 - AMBAC Insured (Alternative Minimum Tax) Hawaii Department of Transportation, Airport System Revenue Refunding Bonds, Series 2000B: 6,105 6.100%, 7/01/16 - FGIC Insured (Alternative Minimum Tax) 7/10 at 101.00 AAA 6,638,760 9,500 6.625%, 7/01/17 - FGIC Insured (Alternative Minimum Tax) 7/10 at 101.00 AAA 10,480,590 ------------------------------------------------------------------------------------------------------------------------------------ 37,980 Total Hawaii 41,052,787 ------------------------------------------------------------------------------------------------------------------------------------ IDAHO - 0.1% (0.1% OF TOTAL INVESTMENTS) 475 Idaho Housing and Finance Association, Single Family Mortgage 1/08 at 101.50 AAA 476,235 Bonds, Series 1998E, 5.450%, 7/01/18 - AMBAC Insured (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 3.7% (2.5% OF TOTAL INVESTMENTS) 1,015 Chicago Park District, Illinois, Limited Tax General Obligation 7/11 at 100.00 AAA 1,091,013 Park Bonds, Series 2001C, 5.500%, 1/01/18 - FGIC Insured Illinois Health Facilities Authority, Revenue Bonds, Lutheran General Health System, Series 1993A: 3,230 6.125%, 4/01/12 - FSA Insured (ETM) No Opt. Call AAA 3,441,662 5,000 6.250%, 4/01/18 - FSA Insured (ETM) No Opt. Call AAA 5,940,850 1,950 Illinois Health Facilities Authority, Revenue Refunding Bonds, No Opt. Call AAA 2,292,907 SSM Healthcare System, Series 1992AA, 6.550%, 6/01/14 - MBIA Insured 6,000 Illinois Toll Highway Authority, State Toll Highway Authority 7/16 at 100.00 AAA 6,414,720 Revenue Bonds, Series 2006, 5.000%, 1/01/26 - FSA Insured 255 Peoria, Moline and Freeport, Illinois, GNMA Collateralized Single 4/07 at 104.00 AAA 259,358 Family Mortgage Revenue Bonds, Series 1995A, 7.600%, 4/01/27 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ 17,450 Total Illinois 19,440,510 ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 0.9% (0.6% OF TOTAL INVESTMENTS) Hamilton County Public Building Corporation, Indiana, First Mortgage Bonds, Series 2004: 2,105 5.000%, 8/01/23 - FSA Insured 8/14 at 100.00 AAA 2,227,427 2,215 5.000%, 8/01/24 - FSA Insured 8/14 at 100.00 AAA 2,339,306 ------------------------------------------------------------------------------------------------------------------------------------ 4,320 Total Indiana 4,566,733 ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 0.3% (0.2% OF TOTAL INVESTMENTS) 1,500 Kansas Turnpike Authority, Revenue Bonds, Series 2004A-2, 5.000%, 9/14 at 101.00 AAA 1,603,110 9/01/27 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 1.1% (0.7% OF TOTAL INVESTMENTS) 6,010 Kentucky Economic Development Finance Authority, Health System No Opt. Call AAA 2,115,159 Revenue Bonds, Norton Healthcare Inc., Series 2000B, 0.000%, 10/01/28 - MBIA Insured 3,575 Kentucky Turnpike Authority, Economic Development Road Revenue 7/15 at 100.00 AAA 3,816,920 Bonds, Revitalization Project, Series 2005B, 5.000%, 7/01/25 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ 9,585 Total Kentucky 5,932,079 ------------------------------------------------------------------------------------------------------------------------------------
50
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 2.9% (1.9% OF TOTAL INVESTMENTS) $ 1,640 Louisiana Public Facilities Authority, Revenue Bonds, Baton Rouge 7/14 at 100.00 AAA $ 1,758,998 General Hospital, Series 2004, 5.250%, 7/01/24 - MBIA Insured 3,400 Louisiana State, Gas Tax Revenue Bonds, Series 2006, 4.500%, 5/16 at 100.00 AAA 3,373,480 5/01/41 (WI/DD, Settling 11/02/06) - FGIC Insured 3,630 Louisiana State, Gasoline Tax Revenue Bonds, Series 2006, 5/16 at 100.00 AAA 3,545,131 Residuals 660-1, 5.850%, 5/01/41 (WI/DD, Settling 11/02/06) - FGIC Insured (IF) 440 Louisiana State, Gasoline Tax Revenue Bonds, Series 2006, 5/16 at 100.00 AAA 479,178 Residuals 661, 6.597%, 5/01/39 (WI/DD, Settling 11/02/06) - FSA Insured (IF) Louisiana, Gasoline and Fuels Tax Revenue Bonds, Series 2005A: 1,200 5.000%, 5/01/25 - FGIC Insured 5/15 at 100.00 AAA 1,274,640 2,210 5.000%, 5/01/26 - FGIC Insured 5/15 at 100.00 AAA 2,344,213 2,500 5.000%, 5/01/27 - FGIC Insured 5/15 at 100.00 AAA 2,651,825 ------------------------------------------------------------------------------------------------------------------------------------ 15,020 Total Louisiana 15,427,465 ------------------------------------------------------------------------------------------------------------------------------------ MARYLAND - 0.9% (0.6% OF TOTAL INVESTMENTS) 1,865 Baltimore, Maryland, Senior Lien Convention Center Hotel Revenue 9/16 at 100.00 AAA 2,048,908 Bonds, Series 2006A, 5.250%, 9/01/26 - XLCA Insured 2,580 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 AAA 2,653,401 Revenue Bonds, Western Maryland Health, Series 2006A, 4.750%, 7/01/36 (WI/DD, Settling 11/16/06) - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ 4,445 Total Maryland 4,702,309 ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 3.5% (2.3% OF TOTAL INVESTMENTS) 3,000 Massachusetts Development Finance Authority, Revenue Bonds, WGBH No Opt. Call AAA 3,814,050 Educational Foundation, Series 2002A, 5.750%, 1/01/42 - AMBAC Insured 2,600 Massachusetts Health and Educational Facilities Authority, 10/13 at 100.00 AAA 2,729,220 Revenue Bonds, Simmons College, Series 2003F, 5.000%, 10/01/33 - FGIC Insured 4,910 Massachusetts, General Obligation Bonds, Consolidated Loan, No Opt. Call AAA 5,564,454 Series 2002C, 5.500%, 11/01/15 - MBIA Insured Massachusetts, Special Obligation Dedicated Tax Revenue Bonds, Series 2004: 3,650 5.250%, 1/01/22 (Pre-refunded 1/01/14) - FGIC Insured 1/14 at 100.00 AAA 4,004,305 2,000 5.250%, 1/01/24 (Pre-refunded 1/01/14) - FGIC Insured 1/14 at 100.00 AAA 2,194,140 ------------------------------------------------------------------------------------------------------------------------------------ 16,160 Total Massachusetts 18,306,169 ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 1.9% (1.3% OF TOTAL INVESTMENTS) 10,000 Michigan Housing Development Authority, Rental Housing Revenue 4/07 at 102.00 AAA 10,287,000 Bonds, Series 1997A, 6.000%, 4/01/16 - AMBAC Insured (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 0.2% (0.1% OF TOTAL INVESTMENTS) 885 Minnesota Housing Finance Agency, Rental Housing Bonds, Series 2/07 at 100.00 AAA 889,921 1995D, 5.950%, 2/01/18 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 0.6% (0.4% OF TOTAL INVESTMENTS) 945 Hazelwood Industrial Development Authority, Missouri, GNMA 3/07 at 102.00 AAA 975,769 Collateralized Project Multifamily Housing Revenue Refunding Bonds, Lakes Apartments Project, Series 1996, 6.000%, 9/20/16 1,000 Jackson County Reorganized School District R-7, Lees Summit, 3/16 at 100.00 Aaa 1,098,560 Missouri, General Obligation Bonds, Series 2006, 5.250%, 3/01/25 - MBIA Insured 535 Missouri Housing Development Commission, Multifamily Housing 12/06 at 102.00 AAA 546,165 Revenue Bonds, Brookstone Village Apartments, Series 1996A, 6.000%, 12/01/16 - FSA Insured (Alternative Minimum Tax) 750 Missouri Western State College, Auxiliary System Revenue Bonds, 10/13 at 100.00 AAA 787,733 Series 2003, 5.000%, 10/01/33 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ 3,230 Total Missouri 3,408,227 ------------------------------------------------------------------------------------------------------------------------------------
51 Nuveen Insured Premium Income Municipal Fund 2 (NPX) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ NEBRASKA - 0.7% (0.5% OF TOTAL INVESTMENTS) Nebraska Public Power District, General Revenue Bonds, Series 2005A: $ 1,000 5.000%, 1/01/24 - FSA Insured 1/15 at 100.00 AAA $ 1,064,370 1,000 5.000%, 1/01/25 - FSA Insured 1/15 at 100.00 AAA 1,063,660 1,290 Omaha Public Power District, Nebraska, Electric System Revenue 2/17 at 100.00 AAA 1,502,231 Bonds, Nebraska City 2, Series 2006A, Residuals 1508-2, 7.530%, 2/01/49 (WI/DD, Settling 11/02/06) - AMBAC Insured (IF) ------------------------------------------------------------------------------------------------------------------------------------ 3,290 Total Nebraska 3,630,261 ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 3.2% (2.1% OF TOTAL INVESTMENTS) 5,000 Clark County, Nevada, Industrial Development Revenue Bonds, 7/10 at 102.00 AAA 5,444,100 Southwest Gas Corporation, Series 2000C, 5.950%, 12/01/38 - AMBAC Insured (Alternative Minimum Tax) 3,280 Clark County, Nevada, Subordinate Lien Airport Revenue Bonds, 7/14 at 100.00 AAA 3,491,757 Series 2004A-2, 5.125%, 7/01/24 - FGIC Insured Director of Nevada State Department of Business and Industry, Revenue Bonds, Las Vegas Monorail Project, First Tier, Series 2000: 5,000 0.000%, 1/01/27 - AMBAC Insured No Opt. Call AAA 2,034,050 5,500 5.625%, 1/01/32 - AMBAC Insured 1/10 at 102.00 AAA 5,895,835 ------------------------------------------------------------------------------------------------------------------------------------ 18,780 Total Nevada 16,865,742 ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 3.1% (2.1% OF TOTAL INVESTMENTS) Essex County Improvement Authority, New Jersey, Guaranteed Revenue Bonds, Project Consolidation, Series 2004: 2,000 5.125%, 10/01/21 - MBIA Insured 10/14 at 100.00 Aaa 2,160,480 2,250 5.125%, 10/01/22 - MBIA Insured 10/14 at 100.00 Aaa 2,424,195 1,560 Mount Olive Township Board of Education, Morris County, New 1/15 at 100.00 Aaa 1,665,300 Jersey, General Obligation Bonds, Series 2004, 5.000%, 1/15/22 - MBIA Insured New Jersey Economic Development Authority, Revenue Bonds, Motor Vehicle Surcharge, Series 2004A: 1,475 5.000%, 7/01/22 - MBIA Insured 7/14 at 100.00 AAA 1,585,596 1,475 5.000%, 7/01/23 - MBIA Insured 7/14 at 100.00 AAA 1,563,987 3,075 New Jersey Transit Corporation, Certificates of Participation No Opt. Call AAA 3,462,173 Refunding, Series 2003, 5.500%, 10/01/15 - FSA Insured 3,315 New Jersey Turnpike Authority, Revenue Bonds, Series 2005A, 1/15 at 100.00 AAA 3,526,033 5.000%, 1/01/25 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ 15,150 Total New Jersey 16,387,764 ------------------------------------------------------------------------------------------------------------------------------------ NEW MEXICO - 0.9% (0.6% OF TOTAL INVESTMENTS) New Mexico Finance Authority, Public Project Revolving Fund Revenue Bonds, Series 2004C: 1,415 5.000%, 6/01/22 - AMBAC Insured 6/14 at 100.00 AAA 1,508,149 1,050 5.000%, 6/01/24 - AMBAC Insured 6/14 at 100.00 AAA 1,113,483 2,000 New Mexico Finance Authority, Public Project Revolving Fund 6/15 at 100.00 Aaa 2,133,280 Revenue Bonds, Series 2005E, 5.000%, 6/15/25 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ 4,465 Total New Mexico 4,754,912 ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 14.0% (9.4% OF TOTAL INVESTMENTS) 1,120 Dormitory Authority of the State of New York, FHA-Insured 2/15 at 100.00 AAA 1,192,710 Mortgage Revenue Bonds, Montefiore Hospital, Series 2004, 5.000%, 8/01/23 - FGIC Insured Dormitory Authority of the State of New York, Insured Revenue Bonds, New Island Hospital, Series 1999B: 3,400 5.750%, 7/01/19 (Pre-refunded 7/01/09) - MBIA Insured 7/09 at 101.00 AAA 3,627,120 5,750 6.000%, 7/01/24 (Pre-refunded 7/01/09) - MBIA Insured 7/09 at 101.00 AAA 6,168,888 1,785 Dormitory Authority of the State of New York, Revenue Bonds, 2/15 at 100.00 AAA 1,898,758 Mental Health Services Facilities Improvements, Series 2005A, 5.000%, 2/15/24 - AMBAC Insured 1,000 Dormitory Authority of the State of New York, State Personal 3/15 at 100.00 AAA 1,067,210 Income Tax Revenue Bonds, Series 2005F, 5.000%, 3/15/24 - AMBAC Insured
52
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK (continued) Long Island Power Authority, New York, Electric System General Revenue Bonds, Series 2006A: $ 10,675 5.000%, 12/01/23 - FGIC Insured 6/16 at 100.00 AAA $ 11,477,867 5,000 5.000%, 12/01/25 - FGIC Insured 6/16 at 100.00 AAA 5,355,550 1,755 Nassau County, New York, General Obligation Improvement Bonds, 3/10 at 100.00 AAA 1,892,680 Series 2000E, 6.000%, 3/01/16 (Pre-refunded 3/01/10) - FSA Insured 7,500 Nassau Health Care Corporation, New York, County Guaranteed 8/09 at 102.00 AAA 8,081,850 Revenue Bonds, Series 1999, 5.750%, 8/01/29 (Pre-refunded 8/01/09) - FSA Insured 3,225 New York City Sales Tax Asset Receivable Corporation, New York, 10/14 at 100.00 AAA 3,443,978 Dedicated Revenue Bonds, Local Government Assistance Corporation, Series 2004A, 5.000%, 10/15/24 - MBIA Insured 5,000 New York City, New York, General Obligation Bonds, Fiscal Series 11/14 at 100.00 AAA 5,344,750 2004E, 5.000%, 11/01/21 - FSA Insured 8,580 New York State Housing Finance Agency, Mortgage Revenue Refunding 11/06 at 102.00 AAA 8,769,017 Bonds, Housing Project, Series 1996A, 6.125%, 11/01/20 - FSA Insured New York State Thruway Authority, General Revenue Bonds, Series 2005G: 3,770 5.000%, 1/01/25 - FSA Insured 7/15 at 100.00 AAA 4,025,116 5,980 5.000%, 1/01/26 - FSA Insured 7/15 at 100.00 AAA 6,375,637 5,000 New York State Thruway Authority, Highway and Bridge Trust Fund 10/15 at 100.00 AAA 5,393,150 Bonds, Second Generation, Series 2005B, 5.000%, 4/01/21 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ 69,540 Total New York 74,114,281 ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 1.8% (1.2% OF TOTAL INVESTMENTS) 1,250 Appalachian State University, North Carolina, Revenue Bonds, 7/15 at 100.00 Aaa 1,330,188 Series 2005, 5.000%, 7/15/30 - MBIA Insured Mooresville, North Carolina, Enterprise System Revenue Bonds, Series 2004: 2,225 5.000%, 5/01/23 - FGIC Insured 5/14 at 100.00 AAA 2,365,731 2,335 5.000%, 5/01/24 - FGIC Insured 5/14 at 100.00 AAA 2,478,019 2,900 Raleigh Durham Airport Authority, North Carolina, Airport Revenue 5/15 at 100.00 Aaa 3,108,307 Bonds, Series 2005A, 5.000%, 5/01/21 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ 8,710 Total North Carolina 9,282,245 ------------------------------------------------------------------------------------------------------------------------------------ NORTH DAKOTA - 3.7% (2.5% OF TOTAL INVESTMENTS) 10,715 Fargo, North Dakota, Health System Revenue Bonds, MeritCare 6/10 at 101.00 AAA 11,416,833 Obligated Group, Series 2000A, 5.600%, 6/01/21 - FSA Insured 8,000 North Dakota, Student Loan Trust Revenue Bonds, Series 2000B, 12/10 at 100.00 AAA 8,398,400 5.850%, 12/01/25 - AMBAC Insured (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ 18,715 Total North Dakota 19,815,233 ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 0.9% (0.6% OF TOTAL INVESTMENTS) 1,430 Cincinnati City School District, Hamilton County, Ohio, No Opt. Call AAA 1,646,931 General Obligation Bonds, Series 2006, 5.250%, 12/01/22 - FGIC Insured 1,930 Marysville Exempted Village School District, Ohio, Certificates 6/15 at 100.00 AAA 2,141,470 of Participation, School Facilities Project, Series 2005, 5.250%, 12/01/22 (Pre-refunded 6/01/15) - MBIA Insured 700 Shaker Heights, Ohio, General Obligation Bonds, Series 2003, 12/13 at 100.00 AAA 755,279 5.250%, 12/01/26 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ 4,060 Total Ohio 4,543,680 ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 1.4% (0.9% OF TOTAL INVESTMENTS) 1,500 Oklahoma Capitol Improvement Authority, State Facilities Revenue 7/15 at 100.00 AAA 1,602,630 Bonds, Series 2005F, 5.000%, 7/01/24 - AMBAC Insured Oklahoma City Airport Trust, Oklahoma, Junior Lien Tax Exempt Bonds, Twenty Seventh Series 2000A: 1,320 5.125%, 7/01/20 - FSA Insured 7/10 at 100.00 AAA 1,369,975 4,040 5.250%, 7/01/21 - FSA Insured 7/10 at 100.00 AAA 4,229,355 ------------------------------------------------------------------------------------------------------------------------------------ 6,860 Total Oklahoma 7,201,960 ------------------------------------------------------------------------------------------------------------------------------------
53 Nuveen Insured Premium Income Municipal Fund 2 (NPX) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 3.5% (2.4% OF TOTAL INVESTMENTS) $ 2,110 Oregon Department of Administrative Services, Certificates of 5/15 at 100.00 AAA $ 2,228,856 Participation, Series 2005A, 5.000%, 5/01/30 - FSA Insured 1,520 Portland Housing Authority, Oregon, Multifamily Housing Revenue 7/10 at 100.00 Aaa 1,576,149 Bonds, Lovejoy Station Apartments, Series 2000, 6.000%, 7/01/33 - MBIA Insured (Alternative Minimum Tax) Portland, Oregon, Airport Way Urban Renewal and Redevelopment Bonds, Series 2000A: 4,405 5.700%, 6/15/17 (Pre-refunded 6/15/10) - AMBAC Insured 6/10 at 101.00 Aaa 4,765,505 3,665 5.750%, 6/15/18 (Pre-refunded 6/15/10) - AMBAC Insured 6/10 at 101.00 Aaa 3,971,101 4,265 5.750%, 6/15/19 (Pre-refunded 6/15/10) - AMBAC Insured 6/10 at 101.00 Aaa 4,621,213 1,375 5.750%, 6/15/20 (Pre-refunded 6/15/10) - AMBAC Insured 6/10 at 101.00 Aaa 1,489,840 ------------------------------------------------------------------------------------------------------------------------------------ 17,340 Total Oregon 18,652,664 ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 13.9% (9.3% OF TOTAL INVESTMENTS) 12,620 Allegheny County Hospital Development Authority, Pennsylvania, 11/10 at 102.00 AAA 14,113,829 Insured Revenue Bonds, West Penn Allegheny Health System, Series 2000A, 6.500%, 11/15/30 - MBIA Insured 2,000 Allegheny County Sanitary Authority, Pennsylvania, Sewerage 12/15 at 100.00 AAA 2,140,780 Revenue Bonds, Series 2005A, 5.000%, 12/01/23 - MBIA Insured 9,485 Berks County Municipal Authority, Pennsylvania, Hospital Revenue 11/09 at 102.00 AAA 10,315,791 Bonds, Reading Hospital and Medical Center, Series 1999, 6.000%, 11/01/19 (Pre-refunded 11/01/09) - FSA Insured 725 Central Dauphin School District, Dauphin County, Pennsylvania, 2/16 at 100.00 AAA 891,395 General Obligation Bonds, Series 2006, 6.750%, 2/01/24 (Pre-refunded 2/01/16) - MBIA Insured 4,235 Delaware County Authority, Pennsylvania, Revenue Bonds, Villanova 8/16 at 100.00 AAA 4,557,919 University, Series 2006, 5.000%, 8/01/24 - AMBAC Insured 5,780 Pennsylvania Higher Educational Facilities Authority, Revenue 5/15 at 100.00 AAA 6,148,070 Bonds, Drexel University, Series 2005A, 5.000%, 5/01/28 - MBIA Insured 1,050 Pennsylvania Turnpike Commission, Turnpike Revenue Bonds, Series 6/16 at 100.00 AAA 1,127,249 2006A, 5.000%, 12/01/26 - AMBAC Insured Philadelphia Gas Works, Pennsylvania, Revenue Bonds, General Ordinance, Fifth Series 2004A-1: 5,235 5.000%, 9/01/24 - FSA Insured 9/14 at 100.00 AAA 5,527,898 3,000 5.000%, 9/01/25 - FSA Insured 9/14 at 100.00 AAA 3,165,810 2,360 Philadelphia, Pennsylvania, Water and Wastewater Revenue Bonds, 8/07 at 102.00 AAA 2,429,903 Series 1997A, 5.125%, 8/01/27 - AMBAC Insured (ETM) 10,370 Philadelphia, Pennsylvania, Water and Wastewater Revenue Bonds, 8/07 at 102.00 AAA 10,669,278 Series 1997A, 5.125%, 8/01/27 - AMBAC Insured 3,785 Reading School District, Berks County, Pennsylvania, General 1/16 at 100.00 AAA 4,057,293 Obligation Bonds, Series 2005, 5.000%, 1/15/25 - FSA Insured 2,500 Seneca Valley School District, Butler County, Pennsylvania, 7/14 at 100.00 Aaa 2,699,400 General Obligation Bonds, Series 2004, 5.125%, 1/01/23 - FGIC Insured 1,705 Solebury Township, Pennsylvania, General Obligation Bonds, Series 6/15 at 100.00 Aaa 1,821,179 2005, 5.000%, 12/15/25 - AMBAC Insured 3,650 State Public School Building Authority, Pennsylvania, Lease 6/13 at 100.00 AAA 3,834,508 Revenue Bonds, Philadelphia School District, Series 2003, 5.000%, 6/01/29 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ 68,500 Total Pennsylvania 73,500,302 ------------------------------------------------------------------------------------------------------------------------------------ PUERTO RICO - 0.5% (0.3% OF TOTAL INVESTMENTS) 2,500 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series 7/15 at 100.00 AAA 2,701,425 2005RR, 5.000%, 7/01/22 - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 0.4% (0.3% OF TOTAL INVESTMENTS) 1,955 Greenville County School District, South Carolina, Installment 12/16 at 100.00 AAA 2,083,248 Purchase Revenue Bonds, Series 2006, 5.000%, 12/01/28 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------
54
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 14.7% (9.8% OF TOTAL INVESTMENTS) Brazos River Authority, Texas, Revenue Refunding Bonds, Houston Industries Inc., Series 1998C: $ 10,000 5.125%, 5/01/19 - AMBAC Insured 5/08 at 102.00 AAA $ 10,375,200 9,000 5.125%, 11/01/20 - AMBAC Insured 11/08 at 102.00 AAA 9,388,350 Corpus Christi, Texas, Utility System Revenue Bonds, Series 2004: 3,475 5.000%, 7/15/22 - FSA Insured 7/14 at 100.00 AAA 3,687,879 3,645 5.000%, 7/15/23 - FSA Insured 7/14 at 100.00 AAA 3,858,415 12,500 Dallas-Ft. Worth International Airport, Texas, Joint Revenue 11/09 at 100.00 AAA 13,031,250 Refunding and Improvement Bonds, Series 2001A, 5.500%, 11/01/35 - FGIC Insured (Alternative Minimum Tax) 4,485 Lower Colorado River Authority, Texas, Contract Revenue Refunding 5/12 at 100.00 AAA 4,754,907 Bonds, Transmission Services Corporation, Series 2003B, 5.000%, 5/15/21 - FSA Insured 10,000 Lower Colorado River Authority, Texas, Contract Revenue Refunding 5/13 at 100.00 AAA 10,427,000 Bonds, Transmission Services Corporation, Series 2003C, 5.000%, 5/15/33 - AMBAC Insured 4,151 Panhandle Regional Housing Finance Corporation, Texas, GNMA 7/12 at 105.00 Aaa 4,559,043 Collateralized Multifamily Housing Mortgage Revenue Bonds, Renaissance of Amarillo Apartments, Series 2001A, 6.650%, 7/20/42 Tarrant County Health Facilities Development Corporation, Texas, Hospital Revenue Bonds, Cook Children's Healthcare System, Series 2000A: 6,725 5.750%, 12/01/17 - FSA Insured 12/10 at 101.00 AAA 7,262,193 7,500 5.750%, 12/01/24 - FSA Insured 12/10 at 101.00 AAA 8,112,075 2,300 Texas State University System, Financing Revenue Refunding Bonds, 3/12 at 100.00 AAA 2,432,296 Series 2002, 5.000%, 3/15/18 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ 73,781 Total Texas 77,888,608 ------------------------------------------------------------------------------------------------------------------------------------ UTAH - 2.2% (1.5% OF TOTAL INVESTMENTS) 8,600 Intermountain Power Agency, Utah, Power Supply Revenue Refunding 7/13 at 100.00 AAA 9,199,678 Bonds, Series 2003A, 5.000%, 7/01/18 - FSA Insured 2,385 Mountain Regional Water Special Service District, Utah, Water 12/13 at 100.00 AAA 2,503,535 Revenue Bonds, Series 2003, 5.000%, 12/15/33 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ 10,985 Total Utah 11,703,213 ------------------------------------------------------------------------------------------------------------------------------------ VERMONT - 0.2% (0.1% OF TOTAL INVESTMENTS) 1,320 Vermont Educational and Health Buildings Financing Agency, 12/10 at 101.00 AAA 1,441,678 Revenue Bonds, Fletcher Allen Health Care Inc., Series 2000A, 6.000%, 12/01/23 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ VIRGINIA - 3.0% (2.0% OF TOTAL INVESTMENTS) Greater Richmond Convention Center Authority, Virginia, Hotel Tax Revenue Bonds, Series 2005: 5,880 5.000%, 6/15/20 - MBIA Insured 6/15 at 100.00 AAA 6,333,877 5,000 5.000%, 6/15/22 - MBIA Insured 6/15 at 100.00 AAA 5,363,250 Loudoun County Industrial Development Authority, Virginia, Lease Revenue Bonds, Public Safety Facilities, Series 2003A: 1,150 5.250%, 12/15/22 - FSA Insured 6/14 at 100.00 AAA 1,255,432 500 5.250%, 12/15/23 - FSA Insured 6/14 at 100.00 AAA 545,840 2,250 Virginia Housing Development Authority, Multifamily Housing 1/08 at 102.00 AAA 2,325,915 Bonds, Series 1997B, 6.050%, 5/01/17 - MBIA Insured (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ 14,780 Total Virginia 15,824,314 ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 6.9% (4.6% OF TOTAL INVESTMENTS) 10,000 Chelan County Public Utility District 1, Washington, Hydro 7/11 at 101.00 AAA 10,764,100 Consolidated System Revenue Bonds, Series 2001B, 5.600%, 1/01/36 - MBIA Insured (Alternative Minimum Tax) 1,370 Clark County School District 101, La Center, Washington, General 12/12 at 100.00 Aaa 1,451,625 Obligation Bonds, Series 2002, 5.000%, 12/01/22 - FSA Insured 5,230 Douglas County Public Utility District 1, Washington, Revenue 9/09 at 102.00 AAA 5,653,002 Bonds, Wells Hydroelectric, Series 1999A, 6.125%, 9/01/29 - MBIA Insured (Alternative Minimum Tax) 1,545 Tacoma, Washington, General Obligation Bonds, Series 2004, 12/14 at 100.00 AAA 1,655,838 5.000%, 12/01/19 - MBIA Insured
55 Nuveen Insured Premium Income Municipal Fund 2 (NPX) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON (continued) $ 3,950 Washington State Healthcare Facilities Authority, Revenue Bonds, 11/08 at 101.00 Aaa $ 4,074,899 Swedish Health Services, Series 1998, 5.125%, 11/15/22 - AMBAC Insured 6,200 Washington State, General Obligation Purpose Bonds, Series 2003A, 7/12 at 100.00 AAA 6,583,904 5.000%, 7/01/20 - FGIC Insured 10,855 Washington, General Obligation Bonds, Series 2000S-5, 0.000%, No Opt. Call AAA 6,223,497 1/01/20 - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ 39,150 Total Washington 36,406,865 ------------------------------------------------------------------------------------------------------------------------------------ WEST VIRGINIA - 1.5% (1.0% OF TOTAL INVESTMENTS) 8,000 Pleasants County, West Virginia, Pollution Control Revenue Bonds, 11/06 at 101.00 AAA 8,146,000 Monongahela Power Company Pleasants Station Project, Series 1995C, 6.150%, 5/01/15 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 7.2% (4.8% OF TOTAL INVESTMENTS) 7,000 La Crosse, Wisconsin, Resource Recovery Revenue Refunding Bonds, No Opt. Call AAA 8,396,080 Northern States Power Company Project, Series 1996, 6.000%, 11/01/21 - MBIA Insured (Alternative Minimum Tax) 12,750 Milwaukee County, Wisconsin, Airport Revenue Bonds, Series 2000A, 12/10 at 100.00 Aaa 13,614,578 5.750%, 12/01/25 - FGIC Insured (Alternative Minimum Tax) 5,000 Wisconsin Health and Educational Facilities Authority, Revenue 2/07 at 101.00 AAA 5,059,250 Bonds, Mercy Health System Corporation, Series 1995, 6.125%, 8/15/13 - AMBAC Insured 6,250 Wisconsin Health and Educational Facilities Authority, Revenue 2/07 at 102.00 AAA 6,385,000 Bonds, Sinai Samaritan Medical Center Inc., Series 1996, 5.750%, 8/15/16 - MBIA Insured 4,225 Wisconsin State, General Obligation Bonds, Series 2006A, 4.750%, 5/16 at 100.00 AAA 4,403,802 5/01/25 - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ 35,225 Total Wisconsin 37,858,710 ------------------------------------------------------------------------------------------------------------------------------------ $ 774,076 Total Long-Term Investments (cost $750,029,995) - 148.9% 787,597,399 ============------------------------------------------------------------------------------------------------------------------------ SHORT-TERM INVESTMENTS - 0.7% (0.5% OF TOTAL INVESTMENTS) 1,000 Idaho Health Facilities Authority, Revenue Bonds, St. Luke's A-1+ 1,000,000 Regional Medical Center, Variable Rate Demand Obligations, Series 2000, 3.640%, 7/01/30 - FSA Insured (4) 2,700 Puerto Rico Government Development Bank, Adjustable Refunding A-1+ 2,700,000 Bonds, Variable Rate Demand Obligations, Series 1985, 3.410%, 12/01/15 - MBIA Insured (4) ------------------------------------------------------------------------------------------------------------------------------------ $ 3,700 Total Short-Term Investments (cost $3,700,000) 3,700,000 ============------------------------------------------------------------------------------------------------------------------------ Total Investments (cost $753,729,995) - 149.6% 791,297,399 --------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 1.2% 6,586,564 --------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (50.8)% (268,900,000) --------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 528,983,963 =====================================================================================================================
All of the bonds in the Portfolio of Investments, excluding temporary investments in short-term municipal securities, are either covered by Original Issue Insurance, Secondary Market Insurance or Portfolio Insurance, or are backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities, any of which ensure the timely payment of principal and interest. (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions (not covered by the report of independent registered public accounting firm): 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. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's or Moody's rating. Ratings below BBB by Standard & Poor's Group or Baa by Moody's Investor Service, Inc. are considered to be below investment grade. (4) Investment has a maturity of more than one year, but has variable rate and demand features which qualify it as a short-term investment. The rate disclosed is that in effect at the end of the reporting period. This rate changes periodically based on market conditions or a specified market index. WI/DD Purchased on a when-issued or delayed delivery basis. (ETM) Escrowed to maturity. (IF) Inverse floating rate investment. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 56 Nuveen Insured Dividend Advantage Municipal Fund (NVG) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 4.2% (2.8% OF TOTAL INVESTMENTS) $ 5,310 Athens, Alabama, Water and Sewerage Revenue Warrants, Series 2002, 5/12 at 101.00 AAA $ 5,710,905 5.300%, 5/01/32 - MBIA Insured 3,045 Hoover, Alabama, General Obligation Bonds, Series 2003, 5.000%, 3/12 at 101.00 AAA 3,247,249 3/01/20 - MBIA Insured 10,000 Jefferson County, Alabama, Sewer Revenue Capital Improvement 2/09 at 101.00 AAA 10,488,700 Warrants, Series 1999A, 5.375%, 2/01/36 (Pre-refunded 2/01/09) - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ 18,355 Total Alabama 19,446,854 ------------------------------------------------------------------------------------------------------------------------------------ ALASKA - 3.5% (2.4% OF TOTAL INVESTMENTS) 15,000 Alaska, International Airport System Revenue Bonds, Series 2002B, 10/12 at 100.00 AAA 16,320,450 5.250%, 10/01/27 (Pre-refunded 10/01/12) - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 1.1% (0.8% OF TOTAL INVESTMENTS) 5,000 Phoenix, Arizona, Civic Improvement Corporation, Senior Lien 7/12 at 100.00 AAA 5,227,400 Airport Revenue Bonds, Series 2002B, 5.250%, 7/01/32 - FGIC Insured (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 12.5% (8.4% OF TOTAL INVESTMENTS) 2,000 Alameda Corridor Transportation Authority, California, No Opt. Call AAA 1,110,880 Subordinate Lien Revenue Bonds, Series 2004A, 0.000%, 10/01/20 - AMBAC Insured California Educational Facilities Authority, Revenue Bonds, Occidental College, Series 2005A: 1,485 5.000%, 10/01/26 - MBIA Insured 10/15 at 100.00 Aaa 1,589,084 1,565 5.000%, 10/01/27 - MBIA Insured 10/15 at 100.00 Aaa 1,671,060 2,000 California Infrastructure Economic Development Bank, First Lien 1/28 at 100.00 AAA 2,827,860 Revenue Bonds, San Francisco Bay Area Toll Bridge, Series 2003A. Residuals Series 1485, 7.327%, 7/01/33 (Pre-refunded 1/01/28) - AMBAC Insured (IF) California, General Obligation Bonds, Series 2000: 375 5.250%, 9/01/17 (Pre-refunded 9/01/10) - MBIA Insured 9/10 at 100.00 AAA 398,539 2,635 5.250%, 9/01/17 (Pre-refunded 9/01/10) - MBIA Insured 9/10 at 100.00 AAA 2,800,399 190 5.250%, 9/01/17 (Pre-refunded 9/01/10) - MBIA Insured 9/10 at 100.00 AAA 202,278 10,000 California, General Obligation Refunding Bonds, Series 2002, No Opt. Call AAA 10,541,400 5.000%, 2/01/23 - MBIA Insured 8,890 California, General Obligation Veterans Welfare Bonds, 12/08 at 101.00 AA- 9,138,742 Series 1997BH, 5.400%, 12/01/14 (Alternative Minimum Tax) 3,000 California, General Obligation Veterans Welfare Bonds, Series 6/07 at 101.00 AAA 3,047,070 2001BZ, 5.375%, 12/01/24 - MBIA Insured (Alternative Minimum Tax) 2,425 Fullerton Public Financing Authority, California, Tax Allocation 9/15 at 100.00 AAA 2,567,711 Revenue Bonds, Series 2005, 5.000%, 9/01/27 - AMBAC Insured 1,990 Kern Community College District, California, General Obligation No Opt. Call AAA 868,138 Bonds, Series 2006, 0.000%, 11/01/25 - FSA Insured 625 Los Angeles Department of Water and Power, California, Waterworks 7/16 at 100.00 AAA 668,200 Revenue Bonds, Series 2006A-1, 5.000%, 7/01/36 - AMBAC Insured 7,935 Los Angeles, California, Certificates of Participation, 4/12 at 100.00 AAA 8,414,036 Series 2002, 5.300%, 4/01/32 - AMBAC Insured 7,500 Northern California Power Agency, Revenue Refunding Bonds, 7/08 at 101.00 AAA 7,745,700 Hydroelectric Project 1, Series 1998A, 5.200%, 7/01/32 - MBIA Insured 2,320 Sacramento Municipal Utility District, California, Electric 8/11 at 100.00 AAA 2,485,300 Revenue Bonds, Series 2001P, 5.250%, 8/15/18 - FSA Insured 1,690 Ventura County Community College District, California, General 8/15 at 100.00 AAA 1,798,870 Obligation Bonds, Series 2005B, 5.000%, 8/01/28 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ 56,625 Total California 57,875,267 ------------------------------------------------------------------------------------------------------------------------------------
57 Nuveen Insured Dividend Advantage Municipal Fund (NVG) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 4.2% (2.8% OF TOTAL INVESTMENTS) $ 17,300 Adams County, Colorado, FHA-Insured Mortgage Revenue Bonds, 8/15 at 100.00 AAA $ 18,375,195 Platte Valley Medical Center, Series 2005, 5.000%, 8/01/24 - MBIA Insured 750 Arkansas River Power Authority, Colorado, Power Revenue Bonds, 10/16 at 100.00 AAA 814,898 Series 2006, 5.250%, 10/01/32 - XLCA Insured ------------------------------------------------------------------------------------------------------------------------------------ 18,050 Total Colorado 19,190,093 ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 12.9% (8.7% OF TOTAL INVESTMENTS) Florida Municipal Loan Council, Revenue Bonds, Series 2003B: 2,305 5.250%, 12/01/17 - MBIA Insured 12/13 at 100.00 AAA 2,511,528 1,480 5.250%, 12/01/18 - MBIA Insured 12/13 at 100.00 AAA 1,610,684 11,600 Greater Orlando Aviation Authority, Florida, Airport Facilities 10/12 at 100.00 AAA 12,162,136 Revenue Bonds, Series 2002B, 5.125%, 10/01/21 - FSA Insured (Alternative Minimum Tax) 6,000 JEA, Florida, Water and Sewerage System Revenue Bonds, 4/07 at 100.00 AAA 6,040,560 Series 2002A, 5.500%, 10/01/41 - MBIA Insured 8,155 Lee County, Florida, Solid Waste System Revenue Refunding Bonds, 10/11 at 100.00 Aaa 8,767,277 Series 2001, 5.625%, 10/01/13 - MBIA Insured (Alternative Minimum Tax) Miami-Dade County, Florida, Aviation Revenue Bonds, Miami International Airport, Series 2002: 7,165 5.625%, 10/01/15 - FGIC Insured (Alternative Minimum Tax) 10/12 at 100.00 AAA 7,796,380 5,600 5.750%, 10/01/16 - FGIC Insured (Alternative Minimum Tax) 10/12 at 100.00 AAA 6,137,824 10,000 5.125%, 10/01/21 - FGIC Insured (Alternative Minimum Tax) 10/12 at 100.00 AAA 10,506,000 2,000 5.250%, 10/01/22 - FGIC Insured (Alternative Minimum Tax) 10/12 at 100.00 AAA 2,114,300 1,000 Orange County, Florida, Sales Tax Revenue Bonds, Series 2002B, 1/13 at 100.00 AAA 1,058,600 5.000%, 1/01/25 - FGIC Insured 1,000 Tallahassee, Florida, Energy System Revenue Bonds, Series 2005, 10/15 at 100.00 AAA 1,061,630 5.000%, 10/01/28 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ 56,305 Total Florida 59,766,919 ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 2.2% (1.5% OF TOTAL INVESTMENTS) 6,925 Atlanta and Fulton County Recreation Authority, Georgia, 12/15 at 100.00 AAA 7,369,170 Guaranteed Revenue Bonds, Park Improvement, Series 2005A, 5.000%, 12/01/30 - MBIA Insured 1,000 Atlanta, Georgia, Water and Wastewater Revenue Bonds, Series 11/14 at 100.00 AAA 1,066,830 2004, 5.000%, 11/01/22 - FSA Insured 1,695 Georgia Housing and Finance Authority, Single Family Mortgage 12/11 at 100.00 AAA 1,758,325 Bonds, Series 2002B-2, 5.500%, 6/01/32 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ 9,620 Total Georgia 10,194,325 ------------------------------------------------------------------------------------------------------------------------------------ IDAHO - 1.0% (0.6% OF TOTAL INVESTMENTS) Idaho Housing and Finance Association, Grant and Revenue Anticipation Bonds, Federal Highway Trust Funds, Series 2006: 3,000 5.000%, 7/15/23 - MBIA Insured 7/16 at 100.00 Aaa 3,230,400 1,130 5.000%, 7/15/24 - MBIA Insured 7/16 at 100.00 Aaa 1,213,970 ------------------------------------------------------------------------------------------------------------------------------------ 4,130 Total Idaho 4,444,370 ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 15.4% (10.4% OF TOTAL INVESTMENTS) 10,000 Bolingbrook, Illinois, General Obligation Bonds, Series 2002A, 1/12 at 100.00 AAA 10,851,600 5.375%, 1/01/38 (Pre-refunded 1/01/12) - FGIC Insured 1,305 Chicago, Illinois, General Obligation Bonds, Series 2001A, 1/11 at 101.00 AAA 1,401,870 5.500%, 1/01/38 - MBIA Insured Chicago, Illinois, General Obligation Bonds, Series 2001A: 50 5.500%, 1/01/38 (Pre-refunded 1/01/11) - MBIA Insured 1/11 at 101.00 AAA 54,185 3,645 5.500%, 1/01/38 (Pre-refunded 1/01/11) - MBIA Insured 1/11 at 101.00 AAA 3,950,087 11,765 Chicago, Illinois, Revenue Bonds, Skyway Toll Bridge, Series 1/07 at 102.00 AAA 12,036,772 1996, 5.500%, 1/01/23 (Pre-refunded 1/01/07) - MBIA Insured
58
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS (continued) Chicago, Illinois, Second Lien Passenger Facility Charge Revenue Bonds, O'Hare International Airport, Series 2001C: $ 4,250 5.500%, 1/01/16 - AMBAC Insured (Alternative Minimum Tax) 1/11 at 101.00 AAA $ 4,539,213 4,485 5.500%, 1/01/17 - AMBAC Insured (Alternative Minimum Tax) 1/11 at 101.00 AAA 4,781,279 4,730 5.500%, 1/01/18 - AMBAC Insured (Alternative Minimum Tax) 1/11 at 101.00 AAA 5,042,464 2,930 5.500%, 1/01/19 - AMBAC Insured (Alternative Minimum Tax) 1/11 at 101.00 AAA 3,118,897 3,600 Chicago, Illinois, Third Lien General Airport Revenue Bonds, 1/16 at 100.00 AAA 3,920,652 O'Hare International Airport, Series 2005A, 5.250%, 1/01/24 - MBIA Insured 3,000 Chicago, Illinois, Third Lien General Airport Revenue Refunding 1/12 at 100.00 AAA 3,249,240 Bonds, O'Hare International Airport, Series 2002A, 5.750%, 1/01/17 - MBIA Insured (Alternative Minimum Tax) 4,000 Cicero, Cook County, Illinois, General Obligation Corporate 12/12 at 101.00 AAA 4,254,320 Purpose Bonds, Series 2002, 5.000%, 12/01/21 - MBIA Insured 730 DuPage County Community School District 200, Wheaton, Illinois, 10/13 at 100.00 Aaa 790,597 General Obligation Bonds, Series 2003C, 5.250%, 10/01/22 - FSA Insured 770 DuPage County Community School District 200, Wheaton, Illinois, 10/13 at 100.00 Aaa 845,922 General Obligation Bonds, Series 2003C, 5.250%, 10/01/22 (Pre-refunded 10/01/13) - FSA Insured 4,000 Illinois Toll Highway Authority, State Toll Highway Authority 7/16 at 100.00 AAA 4,276,480 Revenue Bonds, Series 2006, 5.000%, 1/01/26 - FSA Insured 5,000 Illinois, General Obligation Bonds, Illinois FIRST Program, 4/12 at 100.00 AAA 5,344,200 Series 2002, 5.250%, 4/01/23 - FSA Insured 2,700 University of Illinois, Certificates of Participation, Utility 8/11 at 100.00 AAA 2,871,504 Infrastructure Projects, Series 2001A, 5.000%, 8/15/20 (Pre-refunded 8/15/11) - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ 66,960 Total Illinois 71,329,282 ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 15.5% (10.4% OF TOTAL INVESTMENTS) 3,380 Evansville, Indiana, Sewerage Works Revenue Refunding Bonds, 7/13 at 100.00 AAA 3,607,474 Series 2003A, 5.000%, 7/01/20 - AMBAC Insured Indiana Bond Bank, Special Program Bonds, Hendricks County Redevelopment District, Series 2002D: 2,500 5.375%, 4/01/23 - AMBAC Insured 4/12 at 100.00 AAA 2,678,400 7,075 5.250%, 4/01/26 - AMBAC Insured 4/12 at 100.00 AAA 7,529,993 7,000 5.250%, 4/01/30 - AMBAC Insured 4/12 at 100.00 AAA 7,450,170 10,000 Indiana Health Facility Financing Authority, Hospital Revenue 7/12 at 100.00 AAA 10,524,000 Bonds, Marion General Hospital, Series 2002, 5.250%, 7/01/32 - AMBAC Insured 25,000 Indianapolis Local Public Improvement Bond Bank, Indiana, 7/12 at 100.00 AAA 27,116,249 Waterworks Project, Series 2002A, 5.250%, 7/01/33 (Pre-refunded 7/01/12) - MBIA Insured Northern Wells Community School Building Corporation, Wells County, Indiana, First Mortgage Bonds, Series 2001: 420 5.250%, 1/15/19 - FGIC Insured 7/12 at 100.00 AAA 449,505 430 5.250%, 7/15/19 - FGIC Insured 7/12 at 100.00 AAA 460,208 1,675 5.400%, 7/15/23 - FGIC Insured 7/12 at 100.00 AAA 1,802,484 6,960 Valparaiso Middle School Building Corporation, Indiana, First 1/13 at 100.00 AAA 7,354,423 Mortgage Refunding Bonds, Series 2002, 5.000%, 7/15/24 - MBIA Insured 2,490 Whitley County Middle School Building Corporation, Columbia City, 7/13 at 100.00 AAA 2,658,424 Indiana, First Mortgage Bonds, Series 2003, 5.000%, 1/15/18 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ 66,930 Total Indiana 71,631,330 ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 1.6% (1.1% OF TOTAL INVESTMENTS) 2,030 Louisiana State, Gas Tax Revenue Bonds, Series 2006, 4.500%, 5/16 at 100.00 AAA 2,014,166 5/01/41 (WI/DD, Settling 11/02/06) - FGIC Insured 2,080 Louisiana State, Gasoline Tax Revenue Bonds, Series 2006, 5/16 at 100.00 AAA 2,031,370 Residuals 660-1, 5.850%, 5/01/41 (WI/DD, Settling 11/02/06) - FGIC Insured (IF) 260 Louisiana State, Gasoline Tax Revenue Bonds, Series 2006, 5/16 at 100.00 AAA 283,150 Residuals 661, 6.597%, 5/01/39 (WI/DD, Settling 11/02/06) - FSA Insured (IF)
59 Nuveen Insured Dividend Advantage Municipal Fund (NVG) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA (continued) $ 3,085 New Orleans, Louisiana, General Obligation Refunding Bonds, 9/12 at 100.00 AAA $ 3,251,837 Series 2002, 5.125%, 9/01/21 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ 7,455 Total Louisiana 7,580,523 ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 1.0% (0.7% OF TOTAL INVESTMENTS) 2,630 Massachusetts College Building Authority, Project Revenue Bonds, 5/16 at 100.00 AAA 2,802,975 Series 2006A, 5.000%, 5/01/31 - AMBAC Insured 1,550 Massachusetts Water Resources Authority, General Revenue Bonds, 8/17 at 100.00 AAA 1,717,137 Series 2005A, 5.250%, 8/01/26 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ 4,180 Total Massachusetts 4,520,112 ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 2.4% (1.6% OF TOTAL INVESTMENTS) 1,600 St. Louis County Pattonville School District R3, Missouri, 3/14 at 100.00 AAA 1,747,184 General Obligation Bonds, Series 2004, 5.250%, 3/01/19 - FSA Insured 8,735 St. Louis, Missouri, Airport Revenue Bonds, Airport Development 7/11 at 100.00 AAA 9,369,947 Program, Series 2001A, 5.250%, 7/01/31 (Pre-refunded 7/01/11) - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ 10,335 Total Missouri 11,117,131 ------------------------------------------------------------------------------------------------------------------------------------ NEBRASKA - 1.9% (1.3% OF TOTAL INVESTMENTS) 6,360 Lincoln, Nebraska, Electric System Revenue Bonds, Series 2005, 9/15 at 100.00 AA 6,724,682 5.000%, 9/01/32 Municipal Energy Agency of Nebraska, Power Supply System Revenue Bonds, Series 2003A: 1,000 5.250%, 4/01/20 - FSA Insured 4/13 at 100.00 AAA 1,082,140 1,000 5.250%, 4/01/21 - FSA Insured 4/13 at 100.00 AAA 1,078,890 ------------------------------------------------------------------------------------------------------------------------------------ 8,360 Total Nebraska 8,885,712 ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 4.3% (2.9% OF TOTAL INVESTMENTS) 9,810 Clark County School District, Nevada, General Obligation Bonds, 6/12 at 100.00 AAA 10,511,807 Series 2002C, 5.000%, 6/15/21 (Pre-refunded 6/15/12) - MBIA Insured 8,750 Truckee Meadows Water Authority, Nevada, Water Revenue Bonds, 7/11 at 100.00 AAA 9,386,038 Series 2001A, 5.250%, 7/01/34 (Pre-refunded 7/01/11) - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ 18,560 Total Nevada 19,897,845 ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 0.5% (0.4% OF TOTAL INVESTMENTS) 2,150 New Jersey Transportation Trust Fund Authority, Transportation No Opt. Call AA- 2,431,521 System Bonds, Series 2006A, 5.250%, 12/15/20 ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 3.7% (2.5% OF TOTAL INVESTMENTS) 1,120 Dormitory Authority of the State of New York, FHA-Insured 2/15 at 100.00 AAA 1,192,710 Mortgage Revenue Bonds, Montefiore Hospital, Series 2004, 5.000%, 8/01/23 - FGIC Insured 3,660 Dormitory Authority of the State of New York, Revenue Bonds, 2/15 at 100.00 AAA 3,903,866 Mental Health Services Facilities Improvements, Series 2005B, 5.000%, 2/15/23 - AMBAC Insured 1,500 Metropolitan Transportation Authority, New York, Transportation 11/15 at 100.00 AAA 1,599,330 Revenue Bonds, Series 2005B, 5.000%, 11/15/30 - AMBAC Insured 10,000 Metropolitan Transportation Authority, New York, Transportation 11/12 at 100.00 AAA 10,544,200 Revenue Refunding Bonds, Series 2002A, 5.000%, 11/15/30 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ 16,280 Total New York 17,240,106 ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 0.6% (0.4% OF TOTAL INVESTMENTS) 2,435 North Carolina Medical Care Commission, FHA-Insured Mortgage 10/13 at 100.00 AAA 2,650,814 Revenue Bonds, Betsy Johnson Regional Hospital Project, Series 2003, 5.375%, 10/01/24 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------
60
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 1.8% (1.2% OF TOTAL INVESTMENTS) Oregon, General Obligation Veterans Welfare Bonds, Series 82: $ 5,560 5.375%, 12/01/31 12/11 at 100.00 AA- $ 5,742,924 2,590 5.500%, 12/01/42 12/11 at 100.00 AA- 2,672,699 ------------------------------------------------------------------------------------------------------------------------------------ 8,150 Total Oregon 8,415,623 ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 3.6% (2.4% OF TOTAL INVESTMENTS) 4,500 Allegheny County, Pennsylvania, Airport Revenue Refunding Bonds, No Opt. Call AAA 4,939,200 Pittsburgh International Airport, Series 1997A, 5.750%, 1/01/13 - MBIA Insured (Alternative Minimum Tax) 5,000 Pennsylvania Higher Educational Facilities Authority, Revenue 7/08 at 100.00 AAA 5,162,650 Bonds, University of Pennsylvania, Series 1998, 5.500%, 7/15/38 (Pre-refunded 7/15/08) - MBIA Insured 1,050 Pennsylvania Turnpike Commission, Turnpike Revenue Bonds, 6/16 at 100.00 AAA 1,127,249 Series 2006A, 5.000%, 12/01/26 - AMBAC Insured 2,000 Philadelphia Municipal Authority, Pennsylvania, Lease Revenue 11/13 at 100.00 AAA 2,159,140 Bonds, Series 2003B, 5.250%, 11/15/18 - FSA Insured 2,000 Reading School District, Berks County, Pennsylvania, General 1/16 at 100.00 AAA 2,172,700 Obligation Bonds, Series 2005, 5.000%, 1/15/19 - FSA Insured 1,000 State Public School Building Authority, Pennsylvania, Lease 6/13 at 100.00 AAA 1,060,910 Revenue Bonds, Philadelphia School District, Series 2003, 5.000%, 6/01/23 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ 15,550 Total Pennsylvania 16,621,849 ------------------------------------------------------------------------------------------------------------------------------------ PUERTO RICO - 0.4% (0.2% OF TOTAL INVESTMENTS) 1,225 Puerto Rico Municipal Finance Agency, Series 2005C, 5.250%, No Opt. Call AAA 1,400,922 8/01/21 - CIFG Insured ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 1.5% (1.0% OF TOTAL INVESTMENTS) 1,950 Greenville County School District, South Carolina, Installment 12/16 at 100.00 AAA 2,077,920 Purchase Revenue Bonds, Series 2006, 5.000%, 12/01/28 - FSA Insured Greenville, South Carolina, Tax Increment Revenue Improvement Bonds, Series 2003: 1,000 5.500%, 4/01/17 - MBIA Insured 4/13 at 100.00 AAA 1,101,050 2,300 5.000%, 4/01/21 - MBIA Insured 4/13 at 100.00 AAA 2,455,112 1,000 Scago Educational Facilities Corporation, South Carolina, 10/15 at 100.00 AAA 1,069,320 Spartanburg County School District 5, Series 2005, 5.000%, 4/01/21 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ 6,250 Total South Carolina 6,703,402 ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 9.2% (6.2% OF TOTAL INVESTMENTS) Memphis, Tennessee, Sanitary Sewerage System Revenue Bonds, Series 2004: 1,495 5.000%, 10/01/19 - FSA Insured 10/14 at 100.00 AAA 1,609,936 1,455 5.000%, 10/01/20 - FSA Insured 10/14 at 100.00 AAA 1,563,587 1,955 5.000%, 10/01/21 - FSA Insured 10/14 at 100.00 AAA 2,096,757 10,000 Memphis-Shelby County Sports Authority, Tennessee, Revenue Bonds, 11/12 at 100.00 AAA 10,567,600 Memphis Arena, Series 2002A, 5.125%, 11/01/28 - AMBAC Insured 10,000 Memphis-Shelby County Sports Authority, Tennessee, Revenue Bonds, 11/12 at 100.00 AAA 10,567,600 Memphis Arena, Series 2002B, 5.125%, 11/01/29 - AMBAC Insured 15,195 Tennessee State School Bond Authority, Higher Educational 5/12 at 100.00 AAA 16,186,170 Facilities Second Program Bonds, Series 2002A, 5.250%, 5/01/32 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ 40,100 Total Tennessee 42,591,650 ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 27.3% (18.3% OF TOTAL INVESTMENTS) 3,500 Dallas-Ft. Worth International Airport, Texas, Joint Revenue 11/11 at 100.00 AAA 3,798,200 Refunding and Improvement Bonds, Series 2001A, 5.750%, 11/01/13 - FGIC Insured (Alternative Minimum Tax) 10,000 Gainesville Hospital District, Texas, Limited Tax General 8/11 at 100.00 Aaa 10,508,200 Obligation Bonds, Series 2002, 5.375%, 8/15/32 - MBIA Insured 1,210 Galveston, Texas, General Obligation Bonds, Series 2001, 5.250%, 5/11 at 100.00 AAA 1,280,410 5/01/21 - AMBAC Insured 2,435 Galveston, Texas, General Obligation Bonds, Series 2001, 5.250%, 5/11 at 100.00 AAA 2,604,208 5/01/21 (Pre-refunded 5/01/11) - AMBAC Insured
61 Nuveen Insured Dividend Advantage Municipal Fund (NVG) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ TEXAS (continued) Harris County Health Facilities Development Corporation, Texas, Thermal Utility Revenue Bonds, TECO Project, Series 2003: $ 2,240 5.000%, 11/15/16 - MBIA Insured 11/13 at 100.00 AAA $ 2,387,235 2,355 5.000%, 11/15/17 - MBIA Insured 11/13 at 100.00 AAA 2,502,352 13,000 Houston Area Water Corporation, Texas, Contract Revenue Bonds, 3/12 at 100.00 AAA 13,695,500 Northeast Water Purification Plant, Series 2002, 5.125%, 3/01/32 - FGIC Insured 2,500 Houston Higher Education Finance Corporation, Texas, Revenue 11/09 at 101.00 AAA 2,652,400 Bonds, Rice University, Series 1999A, 5.375%, 11/15/29 (Pre-refunded 11/15/09) 1,000 Houston, Texas, First Lien Combined Utility System Revenue Bonds, 5/14 at 100.00 AAA 1,086,750 Series 2004A, 5.250%, 5/15/24 - FGIC Insured 4,345 San Antonio, Texas, Water System Senior Lien Revenue Refunding 5/12 at 100.00 AAA 4,734,529 Bonds, Series 2002, 5.500%, 5/15/17 - FSA Insured 5,970 Texas Department of Housing and Community Affairs, Residential 7/11 at 100.00 AAA 6,186,651 Mortgage Revenue Bonds, Series 2001A, 5.350%, 7/01/33 (Alternative Minimum Tax) 8,635 Texas Department of Housing and Community Affairs, Single Family 3/12 at 100.00 AAA 8,965,116 Mortgage Bonds, Series 2002B, 5.550%, 9/01/33 - MBIA Insured (Alternative Minimum Tax) Texas Public Finance Authority, Revenue Bonds, Texas Southern University Financing System, Series 2002: 3,520 5.125%, 11/01/20 - MBIA Insured 5/12 at 100.00 Aaa 3,752,214 3,520 5.125%, 11/01/21 - MBIA Insured 5/12 at 100.00 Aaa 3,752,214 Texas Student Housing Authority, Revenue Bonds, Austin Project, Senior Series 2001A: 9,400 5.375%, 1/01/23 - MBIA Insured 1/12 at 102.00 Aaa 10,205,862 11,665 5.500%, 1/01/33 - MBIA Insured 1/12 at 102.00 Aaa 12,761,393 5,000 Texas Water Development Board, Senior Lien State Revolving Fund 1/10 at 100.00 AAA 5,234,250 Revenue Bonds, Series 1999B, 5.250%, 7/15/17 9,145 Texas, General Obligation Bonds, Veterans Housing Assistance 6/12 at 100.00 Aa1 9,632,154 Program Fund II, Series 2002A-1, 5.250%, 12/01/22 (Alternative Minimum Tax) Williamson County, Texas, General Obligation Bonds, Series 2002: 3,500 5.200%, 2/15/21 (Pre-refunded 2/15/12) - FSA Insured 2/12 at 100.00 AAA 3,769,920 3,000 5.250%, 2/15/22 (Pre-refunded 2/15/12) - FSA Insured 2/12 at 100.00 AAA 3,238,530 7,340 5.250%, 2/15/23 (Pre-refunded 2/15/12) - FSA Insured 2/12 at 100.00 AAA 7,923,603 5,000 5.250%, 2/15/25 (Pre-refunded 2/15/12) - FSA Insured 2/12 at 100.00 AAA 5,397,550 ------------------------------------------------------------------------------------------------------------------------------------ 118,280 Total Texas 126,069,241 ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 13.6% (9.1% OF TOTAL INVESTMENTS) 6,600 Energy Northwest, Washington, Electric Revenue Refunding Bonds, 7/12 at 100.00 AAA 7,105,956 Columbia Generating Station - Nuclear Project 2, Series 2002B, 5.350%, 7/01/18 - FSA Insured 7,675 Energy Northwest, Washington, Electric Revenue Refunding Bonds, 7/12 at 100.00 AAA 8,334,129 Nuclear Project 1, Series 2002A, 5.500%, 7/01/15 - MBIA Insured 2,500 Port of Seattle, Washington, Revenue Refunding Bonds, Series 11/12 at 100.00 AAA 2,743,200 2002D, 5.750%, 11/01/15 - FGIC Insured (Alternative Minimum Tax) 2,200 Snohomish County School District 2, Everett, Washington, General 12/13 at 100.00 AAA 2,360,424 Obligation Bonds, Series 2003B, 5.000%, 6/01/17 - FSA Insured 3,255 Thurston and Pierce Counties School District, Washington, General 6/13 at 100.00 Aaa 3,551,270 Obligation Bonds, Yelm Community Schools, Series 2003, 5.250%, 12/01/16 - FSA Insured Washington State Economic Development Finance Authority, Wastewater Revenue Bonds, LOTT Project, Series 2002: 2,000 5.500%, 6/01/17 - AMBAC Insured 6/12 at 100.00 Aaa 2,181,620 4,325 5.125%, 6/01/22 - AMBAC Insured 6/12 at 100.00 Aaa 4,597,302 10,000 Washington State Healthcare Facilities Authority, Revenue Bonds, 10/11 at 100.00 Aaa 10,683,600 Children's Hospital and Regional Medical Center, Series 2001, 5.125%, 10/01/31 (Pre-refunded 10/01/11) - AMBAC Insured 15,000 Washington State Healthcare Facilities Authority, Revenue Bonds, 8/13 at 102.00 AAA 15,788,850 Harrison Memorial Hospital, Series 1998, 5.000%, 8/15/28 - AMBAC Insured
62
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON (continued) $ 5,170 Whitman County School District 267, Pullman, Washington, General 6/12 at 100.00 Aaa $ 5,485,990 Obligation Bonds, Series 2002, 5.000%, 12/01/20 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ 58,725 Total Washington 62,832,341 ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 2.8% (1.9% OF TOTAL INVESTMENTS) 11,950 Wisconsin, Transportation Revenue Refunding Bonds, Series 2002-1, 7/12 at 100.00 AAA 12,778,016 5.125%, 7/01/18 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ $ 646,960 Total Investments (cost $643,773,825) - 148.7% 687,163,098 ============------------------------------------------------------------------------------------------------------------------------ Other Assets Less Liabilities - 1.7% 7,873,722 --------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (50.4)% (233,000,000) --------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 462,036,820 =====================================================================================================================
At least 80% of the Fund's net assets (including net assets attributable to Preferred shares) are invested in municipal securities that are either covered by Original Issue Insurance, Secondary Market Insurance or Portfolio Insurance which ensures the timely payment of principal and interest. Up to 20% of the Fund's net assets (including net assets attributable to Preferred shares) may be invested in municipal securities that are (i) either backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities (also ensuring the timely payment of principal and interest), or (ii) rated, at the time of investment, within the four highest grades (Baa or BBB or better by Moody's, S&P or Fitch) or unrated but judged to be of comparable quality by the Adviser. (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions (not covered by the report of independent registered public accounting firm): 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. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's or Moody's rating. Ratings below BBB by Standard & Poor's Group or Baa by Moody's Investor Service, Inc. are considered to be below investment grade. WI/DD Purchased on a when-issued or delayed delivery basis. (IF) Inverse floating rate investment. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 63 Nuveen Insured Tax-Free Advantage Municipal Fund (NEA) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 8.3% (5.5% OF TOTAL INVESTMENTS) $ 5,655 Colbert County-Northwest Health Care Authority, Alabama, Revenue 6/13 at 101.00 Baa3 $ 5,939,729 Bonds, Helen Keller Hospital, Series 2003, 5.750%, 6/01/27 3,100 Huntsville Healthcare Authority, Alabama, Revenue Bonds, Series 5/12 at 102.00 AAA 3,386,378 1998A, 5.400%, 6/01/22 - MBIA Insured 6,280 Jefferson County, Alabama, Sewer Revenue Capital Improvement 8/12 at 100.00 AAA 6,737,686 Warrants, Series 2002D, 5.000%, 2/01/32 (Pre-refunded 8/01/12) - FGIC Insured 1,750 Montgomery, Alabama, General Obligation Warrants, Series 2003, 5/12 at 101.00 AAA 1,869,105 5.000%, 5/01/21 - AMBAC Insured 4,500 Sheffield, Alabama, Electric Revenue Bonds, Series 2003, 5.500%, 7/13 at 100.00 Aaa 4,896,135 7/01/29 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ 21,285 Total Alabama 22,829,033 ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 3.8% (2.5% OF TOTAL INVESTMENTS) 10,000 Maricopa County Pollution Control Corporation, Arizona, Revenue 11/12 at 100.00 AAA 10,437,500 Bonds, Arizona Public Service Company - Palo Verde Project, Series 2002A, 5.050%, 5/01/29 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 28.9% (19.2% OF TOTAL INVESTMENTS) 26,300 California State Public Works Board, Lease Revenue Bonds, 12/12 at 100.00 AAA 27,497,175 Department of General Services, Capital East End Project, Series 2002A, 5.000%, 12/01/27 - AMBAC Insured 7,500 California, General Obligation Bonds, Series 2004, 5.000%, 4/14 at 100.00 AAA 7,890,900 4/01/31 - AMBAC Insured 13,500 California, General Obligation Refunding Bonds, Series 2002, 4/12 at 100.00 AAA 14,388,435 5.250%, 4/01/30 - XLCA Insured 2,910 Cathedral City Public Financing Authority, California, Tax 8/12 at 102.00 AAA 3,071,330 Allocation Bonds, Housing Set-Aside, Series 2002D, 5.000%, 8/01/26 - MBIA Insured 2,500 Irvine Public Facilities and Infrastructure Authority, 3/07 at 103.00 AAA 2,581,125 California, Assessment Revenue Bonds, Series 2003C, 5.000%, 9/02/23 - AMBAC Insured 4,000 Montara Sanitation District, California, General Obligation 8/11 at 101.00 AAA 4,184,040 Bonds, Series 2003, 5.000%, 8/01/28 - FGIC Insured Plumas County, California, Certificates of Participation, Capital Improvement Program, Series 2003A: 1,130 5.250%, 6/01/19 - AMBAC Insured 6/13 at 101.00 AAA 1,230,050 1,255 5.250%, 6/01/21 - AMBAC Insured 6/13 at 101.00 AAA 1,360,320 1,210 Redding Joint Powers Financing Authority, California, Lease 3/13 at 100.00 AAA 1,263,107 Revenue Bonds, Capital Improvement Projects, Series 2003A, 5.000%, 3/01/23 - AMBAC Insured 3,750 Sacramento Municipal Utility District, California, Electric 8/13 at 100.00 AAA 3,949,163 Revenue Bonds, Series 2003R, 5.000%, 8/15/28 - MBIA Insured 1,500 San Diego Community College District, California, General 5/13 at 100.00 AAA 1,575,045 Obligation Bonds, Series 2003A, 5.000%, 5/01/28 - FSA Insured 3,000 San Jose Redevelopment Agency, California, Tax Allocation Bonds, 8/10 at 101.00 AAA 3,101,400 Merged Area Redevelopment Project, Series 2002, 5.000%, 8/01/32 - MBIA Insured 1,055 Turlock Irrigation District, California, Certificates of 1/13 at 100.00 AAA 1,103,003 Participation, Series 2003A, 5.000%, 1/01/28 - MBIA Insured 6,300 University of California, Revenue Bonds, Multi-Purpose Projects, 5/13 at 100.00 AAA 6,605,676 Series 2003A, 5.000%, 5/15/33 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ 75,910 Total California 79,800,769 ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 3.8% (2.5% OF TOTAL INVESTMENTS) Bowles Metropolitan District, Colorado, General Obligation Bonds, Series 2003: 4,300 5.500%, 12/01/23 - FSA Insured 12/13 at 100.00 AAA 4,747,286 3,750 5.500%, 12/01/28 - FSA Insured 12/13 at 100.00 AAA 4,122,975
64
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ COLORADO (continued) $ 1,450 Colorado Educational and Cultural Facilities Authority, Charter 8/14 at 100.00 AAA $ 1,562,636 School Revenue Bonds, Peak-to-Peak Charter School, Series 2004, 5.250%, 8/15/24 - XLCA Insured ------------------------------------------------------------------------------------------------------------------------------------ 9,500 Total Colorado 10,432,897 ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 1.2% (0.8% OF TOTAL INVESTMENTS) 3,000 Pinellas County Health Facilities Authority, Florida, Revenue 5/13 at 100.00 Aa3 (4) 3,305,550 Bonds, Baycare Health System, Series 2003, 5.500%, 11/15/27 (Pre-refunded 5/15/13) ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 2.0% (1.3% OF TOTAL INVESTMENTS) 1,410 DeKalb County, Georgia, Water and Sewer Revenue Bonds, Series 10/16 at 100.00 AAA 1,504,794 2006A, 5.000%, 10/01/35 - FSA Insured 3,825 Metropolitan Atlanta Rapid Transit Authority, Georgia, Sales Tax 1/13 at 100.00 AAA 4,001,141 Revenue Bonds, Second Indenture Series 2002, 5.000%, 7/01/32 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ 5,235 Total Georgia 5,505,935 ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 3.7% (2.5% OF TOTAL INVESTMENTS) 905 Cook County School District 100, Berwyn South, Illinois, General 12/13 at 100.00 Aaa 995,699 Obligation Refunding Bonds, Series 2003B, 5.250%, 12/01/21 (Pre-refunded 12/01/13) - FSA Insured Cook County School District 145, Arbor Park, Illinois, General Obligation Bonds, Series 2004: 3,285 5.125%, 12/01/20 - FSA Insured 12/14 at 100.00 Aaa 3,546,716 2,940 5.125%, 12/01/23 - FSA Insured 12/14 at 100.00 Aaa 3,153,209 2,500 Illinois Health Facilities Authority, Revenue Bonds, Lake Forest 7/13 at 100.00 A- 2,615,600 Hospital, Series 2003, 5.250%, 7/01/23 ------------------------------------------------------------------------------------------------------------------------------------ 9,630 Total Illinois 10,311,224 ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 8.8% (5.8% OF TOTAL INVESTMENTS) 2,500 Evansville, Indiana, Sewerage Works Revenue Refunding Bonds, 7/13 at 100.00 AAA 2,650,900 Series 2003A, 5.000%, 7/01/23 - AMBAC Insured 2,190 Indiana Bond Bank, Advance Purchase Funding Bonds, Common School 8/13 at 100.00 AAA 2,327,488 Fund, Series 2003B, 5.000%, 8/01/19 - MBIA Insured 1,000 Indiana University, Student Fee Revenue Bonds, Series 2003O, 8/13 at 100.00 AAA 1,062,230 5.000%, 8/01/22 - FGIC Insured IPS Multi-School Building Corporation, Indiana, First Mortgage Revenue Bonds, Series 2003: 11,020 5.000%, 7/15/19 - MBIA Insured 7/13 at 100.00 AAA 11,765,393 6,000 5.000%, 7/15/20 - MBIA Insured 7/13 at 100.00 AAA 6,405,840 ------------------------------------------------------------------------------------------------------------------------------------ 22,710 Total Indiana 24,211,851 ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 2.4% (1.6% OF TOTAL INVESTMENTS) 6,250 Kansas Development Finance Authority, Board of Regents, Revenue 4/13 at 102.00 AAA 6,699,250 Bonds, Scientific Research and Development Facilities Projects, Series 2003C, 5.000%, 10/01/22 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 0.3% (0.3% OF TOTAL INVESTMENTS) 985 Kentucky State Property and Buildings Commission, Revenue 8/13 at 100.00 AAA 1,065,829 Refunding Bonds, Project 77, Series 2003, 5.000%, 8/01/23 (Pre-refunded 8/01/13) - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 2.2% (1.5% OF TOTAL INVESTMENTS) 5,785 New Orleans, Louisiana, General Obligation Refunding Bonds, 12/12 at 100.00 AAA 6,151,711 Series 2002, 5.300%, 12/01/27 - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 5.0% (3.3% OF TOTAL INVESTMENTS) 9,000 Massachusetts Bay Transportation Authority, Senior Sales Tax 7/12 at 100.00 AAA 9,647,370 Revenue Refunding Bonds, Series 2002A, 5.000%, 7/01/27 (Pre-refunded 7/01/12) - FGIC Insured 1,125 Massachusetts Development Finance Authority, Revenue Bonds, 9/13 at 100.00 A1 1,187,910 Middlesex School, Series 2003, 5.125%, 9/01/23
65 Nuveen Insured Tax-Free Advantage Municipal Fund (NEA) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS (continued) $ 3,000 Massachusetts Turnpike Authority, Metropolitan Highway System 1/07 at 102.00 AAA $ 3,065,010 Revenue Bonds, Senior Series 1997A, 5.000%, 1/01/37 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ 13,125 Total Massachusetts 13,900,290 ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 11.6% (7.7% OF TOTAL INVESTMENTS) 6,130 Detroit, Michigan, Senior Lien Water Supply System Revenue Bonds, 7/13 at 100.00 AAA 6,628,676 Series 2003A, 5.000%, 7/01/23 (Pre-refunded 7/01/13) - MBIA Insured 4,465 Detroit, Michigan, Senior Lien Water Supply System Revenue 7/13 at 100.00 AAA 4,745,268 Refunding Bonds, Series 2003C, 5.000%, 7/01/22 - MBIA Insured 10,800 Michigan Strategic Fund, Limited Obligation Resource Recovery 12/12 at 100.00 AAA 11,421,000 Revenue Refunding Bonds, Detroit Edison Company, Series 2002D, 5.250%, 12/15/32 - XLCA Insured 2,250 Romulus Community Schools, Wayne County, Michigan, General 5/11 at 100.00 AA 2,379,015 Obligation Refunding Bonds, Series 2001, 5.250%, 5/01/25 6,500 Wayne County, Michigan, Limited Tax General Obligation Airport 12/11 at 101.00 AAA 6,803,030 Hotel Revenue Bonds, Detroit Metropolitan Wayne County Airport, Series 2001A, 5.000%, 12/01/30 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ 30,145 Total Michigan 31,976,989 ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 1.1% (0.7% OF TOTAL INVESTMENTS) 240 Clay County Public School District 53, Liberty, Missouri, General 3/14 at 100.00 AAA 261,437 Obligation Bonds, Series 2004, 5.250%, 3/01/24 - FSA Insured 215 Clay County Public School District 53, Liberty, Missouri, General 3/14 at 100.00 AAA 234,204 Obligation Bonds, Series 2004, 5.250%, 3/01/23 - FSA Insured Clay County Public School District 53, Liberty, Missouri, General Obligation Bonds, Series 2004: 1,110 5.250%, 3/01/23 (Pre-refunded 3/01/14) - FSA Insured 3/14 at 100.00 AAA 1,222,931 1,260 5.250%, 3/01/24 (Pre-refunded 3/01/14) - FSA Insured 3/14 at 100.00 AAA 1,388,192 ------------------------------------------------------------------------------------------------------------------------------------ 2,825 Total Missouri 3,106,764 ------------------------------------------------------------------------------------------------------------------------------------ NEBRASKA - 1.9% (1.3% OF TOTAL INVESTMENTS) 5,000 Lincoln, Nebraska, Sanitary Sewerage System Revenue Refunding 6/13 at 100.00 AAA 5,256,950 Bonds, Series 2003, 5.000%, 6/15/28 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 0.9% (0.6% OF TOTAL INVESTMENTS) 2,315 Clark County, Nevada, Subordinate Lien Airport Revenue Bonds, 7/11 at 100.00 AAA 2,478,346 Series 2001B, 5.200%, 7/01/31 (Pre-refunded 7/01/11) - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ NEW MEXICO - 0.8% (0.5% OF TOTAL INVESTMENTS) 1,975 New Mexico State University, Revenue Bonds, Series 2004, 5.000%, 4/14 at 100.00 AAA 2,115,403 4/01/19 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 10.2% (6.8% OF TOTAL INVESTMENTS) 25,000 Metropolitan Transportation Authority, New York, Transportation 11/12 at 100.00 AAA 26,158,500 Revenue Refunding Bonds, Series 2002F, 5.000%, 11/15/31 - MBIA Insured 1,850 New York State Urban Development Corporation, Service Contract 3/15 at 100.00 AAA 1,971,619 Revenue Bonds, Series 2005B, 5.000%, 3/15/25 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ 26,850 Total New York 28,130,119 ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 3.4% (2.2% OF TOTAL INVESTMENTS) 8,700 North Carolina Medical Care Commission, Revenue Bonds, Maria 10/13 at 100.00 AA 9,272,895 Parham Medical Center, Series 2003, 5.375%, 10/01/33 - RAAI Insured ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 0.3% (0.3% OF TOTAL INVESTMENTS) 1,000 Oklahoma Capitol Improvement Authority, State Facilities Revenue 7/15 at 100.00 AAA 1,068,420 Bonds, Series 2005F, 5.000%, 7/01/24 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 3.2% (2.1% OF TOTAL INVESTMENTS) 8,350 Oregon Health Sciences University, Revenue Bonds, Series 2002A, 1/13 at 100.00 AAA 8,743,786 5.000%, 7/01/32 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------
66
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 8.7% (5.8% OF TOTAL INVESTMENTS) $ 3,000 Lehigh County General Purpose Authority, Pennsylvania, Hospital 8/13 at 100.00 Baa1 $ 3,163,560 Revenue Bonds, St. Luke's Hospital of Bethlehem, Series 2003, 5.375%, 8/15/33 2,000 Philadelphia Gas Works, Pennsylvania, Revenue Bonds, General 8/13 at 100.00 AAA 2,094,860 Ordinance, Fourth Series 1998, 5.000%, 8/01/32 - FSA Insured 925 Philadelphia, Pennsylvania, Water and Wastewater Revenue Bonds, 8/07 at 102.00 AAA 952,399 Series 1997A, 5.125%, 8/01/27 - AMBAC Insured (ETM) 4,075 Philadelphia, Pennsylvania, Water and Wastewater Revenue Bonds, 8/07 at 102.00 AAA 4,192,604 Series 1997A, 5.125%, 8/01/27 - AMBAC Insured 13,000 State Public School Building Authority, Pennsylvania, Lease 6/13 at 100.00 AAA 13,634,270 Revenue Bonds, Philadelphia School District, Series 2003, 5.000%, 6/01/33 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ 23,000 Total Pennsylvania 24,037,693 ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 7.3% (4.9% OF TOTAL INVESTMENTS) 5,000 Florence County, South Carolina, Hospital Revenue Bonds, McLeod 11/14 at 100.00 AAA 5,401,200 Regional Medical Center, Series 2004A, 5.250%, 11/01/23 - FSA Insured Greenville County School District, South Carolina, Installment Purchase Revenue Bonds, Series 2003: 3,000 5.000%, 12/01/22 12/13 at 100.00 AA- 3,159,720 1,785 5.000%, 12/01/23 12/13 at 100.00 AA- 1,875,553 1,365 Myrtle Beach, South Carolina, Water and Sewerage System Revenue 3/13 at 100.00 AAA 1,500,886 Refunding Bonds, Series 2003, 5.375%, 3/01/19 (Pre-refunded 3/01/13) - FGIC Insured 8,000 South Carolina Transportation Infrastructure Bank, Revenue Bonds, 10/12 at 100.00 Aaa 8,342,560 Series 2002A, 5.000%, 10/01/33 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ 19,150 Total South Carolina 20,279,919 ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 12.9% (8.6% OF TOTAL INVESTMENTS) 7,975 Fort Bend Independent School District, Fort Bend County, Texas, 8/10 at 100.00 AAA 8,279,645 General Obligation Bonds, Series 2000, 5.000%, 8/15/25 12,500 Grand Prairie Independent School District, Dallas County, Texas, 2/13 at 100.00 AAA 13,131,000 General Obligation Bonds, Series 2003, 5.125%, 2/15/31 - FSA Insured 2,000 Houston, Texas, First Lien Combined Utility System Revenue Bonds, 5/14 at 100.00 AAA 2,173,500 Series 2004A, 5.250%, 5/15/25 - MBIA Insured 5,515 Houston, Texas, General Obligation Refunding Bonds, Series 2002, 3/12 at 100.00 AAA 5,907,117 5.250%, 3/01/20 - MBIA Insured 5,850 Katy Independent School District, Harris, Fort Bend and Waller 2/12 at 100.00 AAA 6,219,311 Counties, Texas, General Obligation Bonds, Series 2002A, 5.125%, 2/15/18 ------------------------------------------------------------------------------------------------------------------------------------ 33,840 Total Texas 35,710,573 ------------------------------------------------------------------------------------------------------------------------------------ VIRGINIA - 0.6% (0.4% OF TOTAL INVESTMENTS) 1,500 Hampton, Virginia, Revenue Bonds, Convention Center Project, 1/13 at 100.00 AAA 1,582,380 Series 2002, 5.125%, 1/15/28 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 9.1% (6.1% OF TOTAL INVESTMENTS) 4,945 Broadway Office Properties, King County, Washington, Lease 12/12 at 100.00 AAA 5,148,536 Revenue Bonds, Washington Project, Series 2002, 5.000%, 12/01/31 - MBIA Insured 5,250 Chelan County Public Utility District 1, Washington, Hydro 7/12 at 100.00 AAA 5,483,730 Consolidated System Revenue Bonds, Series 2002C, 5.125%, 7/01/33 - AMBAC Insured 2,135 Kitsap County Consolidated Housing Authority, Washington, Revenue 7/13 at 100.00 Aaa 2,244,077 Bonds, Bremerton Government Center, Series 2003, 5.000%, 7/01/23 - MBIA Insured 1,935 Pierce County School District 343, Dieringer, Washington, General 6/13 at 100.00 Aaa 2,098,759 Obligation Refunding Bonds, Series 2003, 5.250%, 12/01/17 - FGIC Insured 9,670 Washington State, General Obligation Bonds, Series 2003D, 5.000%, 6/13 at 100.00 AAA 10,247,492 12/01/21 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ 23,935 Total Washington 25,222,594 ------------------------------------------------------------------------------------------------------------------------------------
67 Nuveen Insured Tax-Free Advantage Municipal Fund (NEA) (continued) Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE ------------------------------------------------------------------------------------------------------------------------------------ WEST VIRGINIA - 1.2% (0.8% OF TOTAL INVESTMENTS) $ 3,000 West Virginia State Building Commission, Lease Revenue Refunding No Opt. Call AAA $ 3,427,230 Bonds, Regional Jail and Corrections Facility, Series 1998A, 5.375%, 7/01/21 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 6.7% (4.4% OF TOTAL INVESTMENTS) 1,190 Sun Prairie Area School District, Dane County, Wisconsin, General 3/14 at 100.00 Aaa 1,293,911 Obligation Bonds, Series 2004C, 5.250%, 3/01/24 - FSA Insured 4,605 Wisconsin Health and Educational Facilities Authority, Revenue 9/13 at 100.00 A- 4,993,340 Bonds, Franciscan Sisters of Christian Charity Healthcare Ministry, Series 2003A, 5.875%, 9/01/33 3,000 Wisconsin Health and Educational Facilities Authority, Revenue No Opt. Call AAA 3,491,460 Bonds, Meriter Hospital Inc., Series 1992A, 6.000%, 12/01/22 - FGIC Insured 3,600 Wisconsin Health and Educational Facilities Authority, Revenue 8/13 at 100.00 A- 3,735,468 Bonds, Wheaton Franciscan Services Inc., Series 2003A, 5.125%, 8/15/33 4,750 Wisconsin Health and Educational Facilities Authority, Revenue 8/08 at 102.00 AAA 4,941,758 Refunding Bonds, Wausau Hospital Inc., Series 1998A, 5.125%, 8/15/20 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ 17,145 Total Wisconsin 18,455,937 ------------------------------------------------------------------------------------------------------------------------------------ $ 392,145 Total Investments (cost $392,947,524) - 150.3% 415,517,837 ============------------------------------------------------------------------------------------------------------------------------ Other Assets Less Liabilities - 1.8% 4,988,140 --------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (52.1)% (144,000,000) --------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 276,505,977 =====================================================================================================================
At least 80% of the Fund's net assets (including net assets attributable to Preferred shares) are invested in municipal securities that are either covered by Original Issue Insurance, Secondary Market Insurance or Portfolio Insurance which ensures the timely payment of principal and interest. Up to 20% of the Fund's net assets (including net assets attributable to Preferred shares) may be invested in municipal securities that are (i) either backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities (also ensuring the timely payment of principal and interest), or (ii) rated, at the time of investment, within the four highest grades (Baa or BBB or better by Moody's, S&P or Fitch) or unrated but judged to be of comparable quality by the Adviser. (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions (not covered by the report of independent registered public accounting firm): 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. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's or Moody's rating. Ratings below BBB by Standard & Poor's Group or Baa by Moody's Investor Service, Inc. are considered to be below investment grade. (4) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. (ETM) Escrowed to maturity. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 68 Statement of ASSETS AND LIABILITIES October 31, 2006
INSURED INSURED PREMIER QUALITY OPPORTUNITY INSURED INCOME (NQI) (NIO) (NIF) ------------------------------------------------------------------------------------------------------------- ASSETS Investments, at value (cost $832,776,418, $1,786,083,730, $422,929,142, $753,729,995, $643,773,825 and $392,947,524, respectively) $ 887,487,826 $ 1,912,654,851 $ 452,532,052 Cash 6,868,159 2,987,045 -- Receivables: Interest 12,389,343 29,498,809 7,461,524 Investments sold 23,200,090 46,681,207 1,234,254 Other assets 85,299 150,080 48,206 ------------------------------------------------------------------------------------------------------------- Total assets 930,030,717 1,991,971,992 461,276,036 ------------------------------------------------------------------------------------------------------------- LIABILITIES Cash overdraft -- -- 876,425 Payable for investments purchased 21,326,727 47,134,132 -- Accrued expenses: Management fees 467,789 980,925 241,253 Other 190,376 393,480 101,524 Preferred share dividends payable 117,749 291,721 55,798 ------------------------------------------------------------------------------------------------------------- Total liabilities 22,102,641 48,800,258 1,275,000 ------------------------------------------------------------------------------------------------------------- Preferred shares, at liquidation value 318,000,000 680,000,000 161,000,000 ------------------------------------------------------------------------------------------------------------- Net assets applicable to Common shares $ 589,928,076 $ 1,263,171,734 $ 299,001,036 ============================================================================================================= Common shares outstanding 38,295,278 81,138,036 19,419,608 ============================================================================================================= Net asset value per Common share outstanding (net assets applicable to Common shares, divided by Common shares outstanding) $ 15.40 $ 15.57 $ 15.40 ============================================================================================================= NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF: ------------------------------------------------------------------------------------------------------------- Common shares, $.01 par value per share $ 382,953 $ 811,380 $ 194,196 Paid-in surplus 534,535,198 1,128,874,275 269,465,714 Undistributed (Over-distribution of) net investment income 1,459,534 4,886,834 (97,094) Accumulated net realized gain (loss) from investments and derivative transactions (1,161,017) 2,028,124 (164,690) Net unrealized appreciation (depreciation) of investments 54,711,408 126,571,121 29,602,910 ------------------------------------------------------------------------------------------------------------- Net assets applicable to Common shares $ 589,928,076 $ 1,263,171,734 $ 299,001,036 ============================================================================================================= Authorized shares: Common 200,000,000 200,000,000 200,000,000 Preferred 1,000,000 1,000,000 1,000,000 ============================================================================================================= INSURED INSURED INSURED DIVIDEND TAX-FREE PREMIUM INCOME 2 ADVANTAGE ADVANTAGE (NPX) (NVG) (NEA) ------------------------------------------------------------------------------------------------------------- ASSETS Investments, at value (cost $832,776,418, $1,786,083,730, $422,929,142, $753,729,995, $643,773,825 and $392,947,524, respectively) $ 791,297,399 $ 687,163,098 $ 415,517,837 Cash 3,219,135 2,606,591 -- Receivables: Interest 13,732,856 9,704,955 6,352,739 Investments sold 24,038,789 6,974,848 -- Other assets 65,383 40,288 19,668 ------------------------------------------------------------------------------------------------------------- Total assets 832,353,562 706,489,780 421,890,244 ------------------------------------------------------------------------------------------------------------- LIABILITIES Cash overdraft -- -- 1,121,965 Payable for investments purchased 33,689,805 11,061,979 -- Accrued expenses: Management fees 412,117 184,313 107,116 Other 262,833 112,824 71,559 Preferred share dividends payable 104,844 93,844 83,627 ------------------------------------------------------------------------------------------------------------- Total liabilities 34,469,599 11,452,960 1,384,267 ------------------------------------------------------------------------------------------------------------- Preferred shares, at liquidation value 268,900,000 233,000,000 144,000,000 ------------------------------------------------------------------------------------------------------------- Net assets applicable to Common shares $ 528,983,963 $ 462,036,820 $ 276,505,977 ============================================================================================================= Common shares outstanding 37,353,512 29,807,822 18,515,282 ============================================================================================================= Net asset value per Common share outstanding (net assets applicable to Common shares, divided by Common shares outstanding) $ 14.16 $ 15.50 $ 14.93 ============================================================================================================= NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF: ------------------------------------------------------------------------------------------------------------- Common shares, $.01 par value per share $ 373,535 $ 298,078 $ 185,153 Paid-in surplus 491,941,518 423,484,088 261,528,621 Undistributed (Over-distribution of) net investment income 86,758 (273,743) (315,778) Accumulated net realized gain (loss) from investments and derivative transactions (985,252) (4,860,876) (7,462,332) Net unrealized appreciation (depreciation) of investments 37,567,404 43,389,273 22,570,313 ------------------------------------------------------------------------------------------------------------- Net assets applicable to Common shares $ 528,983,963 $ 462,036,820 $ 276,505,977 ============================================================================================================= Authorized shares: Common Unlimited Unlimited Unlimited Preferred Unlimited Unlimited Unlimited =============================================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 69 Statement of OPERATIONS Year Ended October 31, 2006
INSURED INSURED PREMIER QUALITY OPPORTUNITY INSURED INCOME (NQI) (NIO) (NIF) ------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME $ 44,710,515 $ 94,025,460 $ 22,577,285 ------------------------------------------------------------------------------------------------------------- EXPENSES Management fees 5,512,363 11,560,935 2,843,056 Preferred shares - auction fees 795,381 1,700,880 402,631 Preferred shares - dividend disbursing agent fees 50,000 70,000 30,000 Shareholders' servicing agent fees and expenses 89,770 147,734 38,197 Custodian's fees and expenses 220,966 462,352 100,834 Directors'/Trustees' fees and expenses 20,030 42,814 9,672 Professional fees 41,439 78,142 27,366 Shareholders' reports - printing and mailing expenses 84,376 169,305 45,435 Stock exchange listing fees 14,821 29,977 9,965 Investor relations expense 86,989 181,019 45,652 Portfolio insurance expense -- 28,903 -- Other expenses 56,074 81,839 31,689 ------------------------------------------------------------------------------------------------------------- Total expenses before custodian fee credit and expense reimbursement 6,972,209 14,553,900 3,584,497 Custodian fee credit (18,796) (28,725) (17,786) Expense reimbursement -- -- -- ------------------------------------------------------------------------------------------------------------- Net expenses 6,953,413 14,525,175 3,566,711 ------------------------------------------------------------------------------------------------------------- Net investment income 37,757,102 79,500,285 19,010,574 ------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) from investments (1,191,796) 1,907,145 (164,691) Net realized gain (loss) from forward swaps -- -- -- Net increase from payments by the Adviser for losses realized on the disposal of investments purchased in violation of investment restrictions 27,762 42,338 -- Change in net unrealized appreciation (depreciation) of investments 10,625,581 25,620,352 4,920,062 Change in net unrealized appreciation (depreciation) of forward swaps -- -- -- ------------------------------------------------------------------------------------------------------------- Net realized and unrealized gain (loss) 9,461,547 27,569,835 4,755,371 ------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO PREFERRED SHAREHOLDERS From net investment income (9,396,258) (19,724,590) (4,829,477) From accumulated net realized gains (565,042) (2,314,744) (363,000) ------------------------------------------------------------------------------------------------------------- Decrease in net assets applicable to Common shares from distributions to Preferred shareholders (9,961,300) (22,039,334) (5,192,477) ------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets applicable to Common shares from operations $ 37,257,349 $ 85,030,786 $ 18,573,468 ============================================================================================================= INSURED INSURED INSURED DIVIDEND TAX-FREE PREMIUM INCOME 2 ADVANTAGE ADVANTAGE (NPX) (NVG) (NEA) ------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME $ 38,022,632 $ 33,211,012 $ 19,822,942 ------------------------------------------------------------------------------------------------------------- EXPENSES Management fees 4,851,178 4,242,846 2,593,376 Preferred shares - auction fees 672,572 582,859 360,222 Preferred shares - dividend disbursing agent fees 50,000 30,000 20,000 Shareholders' servicing agent fees and expenses 52,067 9,025 5,219 Custodian's fees and expenses 169,020 159,547 94,846 Directors'/Trustees' fees and expenses 17,430 15,304 9,059 Professional fees 33,534 35,151 24,862 Shareholders' reports - printing and mailing expenses 77,206 63,798 38,731 Stock exchange listing fees 13,808 2,536 1,575 Investor relations expense 75,275 67,131 41,252 Portfolio insurance expense -- -- -- Other expenses 31,587 34,363 25,577 ------------------------------------------------------------------------------------------------------------- Total expenses before custodian fee credit and expense reimbursement 6,043,677 5,242,560 3,214,719 Custodian fee credit (12,509) (11,548) (2,937) Expense reimbursement -- (2,063,912) (1,328,639) ------------------------------------------------------------------------------------------------------------- Net expenses 6,031,168 3,167,100 1,883,143 ------------------------------------------------------------------------------------------------------------- Net investment income 31,991,464 30,043,912 17,939,799 ------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) from investments 287,636 (1,161,908) 70,087 Net realized gain (loss) from forward swaps -- -- 1,283,477 Net increase from payments by the Adviser for losses realized on the disposal of investments purchased in violation of investment restrictions -- -- -- Change in net unrealized appreciation (depreciation) of investments 10,227,465 11,104,043 7,086,220 Change in net unrealized appreciation (depreciation) of forward swaps -- -- (1,430,007) ------------------------------------------------------------------------------------------------------------- Net realized and unrealized gain (loss) 10,515,101 9,942,135 7,009,777 ------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO PREFERRED SHAREHOLDERS From net investment income (8,461,641) (7,450,053) (4,393,243) From accumulated net realized gains -- -- -- ------------------------------------------------------------------------------------------------------------- Decrease in net assets applicable to Common shares from distributions to Preferred shareholders (8,461,641) (7,450,053) (4,393,243) ------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets applicable to Common shares from operations $ 34,044,924 $ 32,535,994 $ 20,556,333 =============================================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 70 Statement of CHANGES IN NET ASSETS
INSURED QUALITY (NQI) ----------------------------------- YEAR YEAR ENDED ENDED 10/31/06 10/31/05 ------------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income $ 37,757,102 $ 39,418,327 Net realized gain (loss) from investments (1,191,796) 3,528,017 Net realized gain (loss) from forward swaps -- -- Net increase from payments by the Adviser for losses realized on the disposal of investments purchased in violation of investment restrictions 27,762 -- Change in net unrealized appreciation (depreciation) of investments 10,625,581 (18,408,001) Change in net unrealized appreciation (depreciation) of forward swaps -- -- Distributions to Preferred Shareholders: From net investment income (9,396,258) (6,065,197) From accumulated net realized gains (565,042) (159,181) ------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets applicable to Common shares from operations 37,257,349 18,313,965 ------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (30,556,817) (36,927,040) From accumulated net realized gains (2,966,866) (2,090,966) ------------------------------------------------------------------------------------------------------------- Decrease in net assets applicable to Common shares from distributions to Common shareholders (33,523,683) (39,018,006) ------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS Net proceeds from Common shares issued to shareholders due to reinvestment of distributions 417,197 1,453,639 ------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets applicable to Common shares from capital share transactions 417,197 1,453,639 ------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets applicable to Common shares 4,150,863 (19,250,402) Net assets applicable to Common shares at the beginning of year 585,777,213 605,027,615 ------------------------------------------------------------------------------------------------------------- Net assets applicable to Common shares at the end of year $ 589,928,076 $ 585,777,213 ============================================================================================================= Undistributed (Over-distribution of) net investment income at the end of year $ 1,459,534 $ 3,658,654 ============================================================================================================= INSURED OPPORTUNITY (NIO) ----------------------------------- YEAR YEAR ENDED ENDED 10/31/06 10/31/05 ------------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income $ 79,500,285 $ 81,917,886 Net realized gain (loss) from investments 1,907,145 14,031,164 Net realized gain (loss) from forward swaps -- -- Net increase from payments by the Adviser for losses realized on the disposal of investments purchased in violation of investment restrictions 42,338 -- Change in net unrealized appreciation (depreciation) of investments 25,620,352 (53,551,554) Change in net unrealized appreciation (depreciation) of forward swaps -- -- Distributions to Preferred Shareholders: From net investment income (19,724,590) (13,081,165) From accumulated net realized gains (2,314,744) (217,348) ------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets applicable to Common shares from operations 85,030,786 29,098,983 ------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (65,186,316) (74,809,273) From accumulated net realized gains (11,310,643) (2,636,993) ------------------------------------------------------------------------------------------------------------- Decrease in net assets applicable to Common shares from distributions to Common shareholders (76,496,959) (77,446,266) ------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS Net proceeds from Common shares issued to shareholders due to reinvestment of distributions -- -- ------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets applicable to Common shares from capital share transactions -- -- ------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets applicable to Common shares 8,533,827 (48,347,283) Net assets applicable to Common shares at the beginning of year 1,254,637,907 1,302,985,190 ------------------------------------------------------------------------------------------------------------- Net assets applicable to Common shares at the end of year $ 1,263,171,734 $ 1,254,637,907 ============================================================================================================= Undistributed (Over-distribution of) net investment income at the end of year $ 4,886,834 $ 10,377,919 =============================================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 71 Statement of CHANGES IN NET ASSETS (continued)
PREMIER INSURED INCOME (NIF) ----------------------------------- YEAR YEAR ENDED ENDED 10/31/06 10/31/05 ------------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income $ 19,010,574 $ 19,566,875 Net realized gain (loss) from investments (164,691) 2,211,037 Net realized gain (loss) from forward swaps -- -- Net increase from payments by the Adviser for losses realized on the disposal of investments purchased in violation of investment restrictions -- -- Change in net unrealized appreciation (depreciation) of investments 4,920,062 (12,070,538) Change in net unrealized appreciation (depreciation) of forward swaps -- -- Distributions to Preferred Shareholders: From net investment income (4,829,477) (3,104,665) From accumulated net realized gains (363,000) (127,563) ------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets applicable to Common shares from operations 18,573,468 6,475,146 ------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (15,341,495) (17,999,191) From accumulated net realized gains (1,854,574) (1,655,759) ------------------------------------------------------------------------------------------------------------- Decrease in net assets applicable to Common shares from distributions to Common shareholders (17,196,069) (19,654,950) ------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS Net proceeds from Common shares issued to shareholders due to reinvestment of distributions -- 136,954 ------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets applicable to Common shares from capital share transactions -- 136,954 ------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets applicable to Common shares 1,377,399 (13,042,850) Net assets applicable to Common shares at the beginning of year 297,623,637 310,666,487 ------------------------------------------------------------------------------------------------------------- Net assets applicable to Common shares at the end of year $ 299,001,036 $ 297,623,637 ============================================================================================================= Undistributed (Over-distribution of) net investment income at the end of year $ (97,094) $ 1,063,304 ============================================================================================================= INSURED PREMIUM INCOME 2 (NPX) ----------------------------------- YEAR YEAR ENDED ENDED 10/31/06 10/31/05 ------------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income $ 31,991,464 $ 33,147,615 Net realized gain (loss) from investments 287,636 10,740,879 Net realized gain (loss) from forward swaps -- -- Net increase from payments by the Adviser for losses realized on the disposal of investments purchased in violation of investment restrictions -- -- Change in net unrealized appreciation (depreciation) of investments 10,227,465 (26,834,953) Change in net unrealized appreciation (depreciation) of forward swaps -- -- Distributions to Preferred Shareholders: From net investment income (8,461,641) (5,295,715) From accumulated net realized gains -- -- ------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets applicable to Common shares from operations 34,044,924 11,757,826 ------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (25,568,479) (30,947,388) From accumulated net realized gains -- -- ------------------------------------------------------------------------------------------------------------- Decrease in net assets applicable to Common shares from distributions to Common shareholders (25,568,479) (30,947,388) ------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS Net proceeds from Common shares issued to shareholders due to reinvestment of distributions -- -- ------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets applicable to Common shares from capital share transactions -- -- ------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets applicable to Common shares 8,476,445 (19,189,562) Net assets applicable to Common shares at the beginning of year 520,507,518 539,697,080 ------------------------------------------------------------------------------------------------------------- Net assets applicable to Common shares at the end of year $ 528,983,963 $ 520,507,518 ============================================================================================================= Undistributed (Over-distribution of) net investment income at the end of year $ 86,758 $ 2,128,188 =============================================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 72
INSURED DIVIDEND ADVANTAGE (NVG) ----------------------------------- YEAR YEAR ENDED ENDED 10/31/06 10/31/05 ------------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income $ 30,043,912 $ 29,839,906 Net realized gain (loss) from investments (1,161,908) (174,429) Net realized gain (loss) from forward swaps -- (3,525,412) Net increase from payments by the Adviser for losses realized on the disposal of investments purchased in violation of investment restrictions -- -- Change in net unrealized appreciation (depreciation) of investments 11,104,043 (10,512,717) Change in net unrealized appreciation (depreciation) of forward swaps -- 2,750,245 Distributions to Preferred Shareholders: From net investment income (7,450,053) (4,486,974) From accumulated net realized gains -- (278,326) ------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets applicable to Common shares from operations 32,535,994 13,612,293 ------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (24,516,934) (26,409,732) From accumulated net realized gains -- (3,573,972) ------------------------------------------------------------------------------------------------------------- Decrease in net assets applicable to Common shares from distributions to Common shareholders (24,516,934) (29,983,704) ------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS Net proceeds from Common shares issued to shareholders due to reinvestment of distributions -- -- ------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets applicable to Common shares from capital share transactions -- -- ------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets applicable to Common shares 8,019,060 (16,371,411) Net assets applicable to Common shares at the beginning of year 454,017,760 470,389,171 ------------------------------------------------------------------------------------------------------------- Net assets applicable to Common shares at the end of year $ 462,036,820 $ 454,017,760 ============================================================================================================= Undistributed (Over-distribution of) net investment income at the end of year $ (273,743) $ 1,649,541 ============================================================================================================= INSURED TAX-FREE ADVANTAGE (NEA) ----------------------------------- YEAR YEAR ENDED ENDED 10/31/06 10/31/05 ------------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income $ 17,939,799 $ 17,988,913 Net realized gain (loss) from investments 70,087 299,519 Net realized gain (loss) from forward swaps 1,283,477 (9,115,854) Net increase from payments by the Adviser for losses realized on the disposal of investments purchased in violation of investment restrictions -- -- Change in net unrealized appreciation (depreciation) of investments 7,086,220 (2,445,575) Change in net unrealized appreciation (depreciation) of forward swaps (1,430,007) 7,736,635 Distributions to Preferred Shareholders: From net investment income (4,393,243) (2,741,233) From accumulated net realized gains -- (14,037) ------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets applicable to Common shares from operations 20,556,333 11,708,368 ------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (13,664,277) (15,062,183) From accumulated net realized gains -- (179,616) ------------------------------------------------------------------------------------------------------------- Decrease in net assets applicable to Common shares from distributions to Common shareholders (13,664,277) (15,241,799) ------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS Net proceeds from Common shares issued to shareholders due to reinvestment of distributions -- 35,393 ------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets applicable to Common shares from capital share transactions -- 35,393 ------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets applicable to Common shares 6,892,056 (3,498,038) Net assets applicable to Common shares at the beginning of year 269,613,921 273,111,959 ------------------------------------------------------------------------------------------------------------- Net assets applicable to Common shares at the end of year $ 276,505,977 $ 269,613,921 ============================================================================================================= Undistributed (Over-distribution of) net investment income at the end of year $ (315,778) $ (198,057) =============================================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 73 Notes to FINANCIAL STATEMENTS 1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES The funds (the "Funds") covered in this report and their corresponding Common share stock exchange symbols are Nuveen Insured Quality Municipal Fund, Inc. (NQI), Nuveen Insured Municipal Opportunity Fund, Inc. (NIO), Nuveen Premier Insured Municipal Income Fund, Inc. (NIF), Nuveen Insured Premium Income Municipal Fund 2 (NPX), Nuveen Insured Dividend Advantage Municipal Fund (NVG) and Nuveen Insured Tax-Free Advantage Municipal Fund (NEA). Common shares of Insured Quality (NQI), Insured Opportunity (NIO), Premier Insured Income (NIF) and Insured Premium Income 2 (NPX) are traded on the New York Stock Exchange while Common shares of Insured Dividend Advantage (NVG) and Insured Tax-Free Advantage (NEA) are traded on the American Stock Exchange. The Funds are registered under the Investment Company Act of 1940, as amended, as closed-end, diversified management investment companies. Each Fund seeks to provide current income exempt from regular federal income tax, and in the case of Insured Tax-Free Advantage (NEA) the alternative minimum tax applicable to individuals, by investing primarily in a diversified portfolio of municipal obligations issued by state and local government authorities or certain U.S. territories. The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements in accordance with U.S. generally accepted accounting principles. INVESTMENT VALUATION The prices of municipal bonds in each Fund's investment portfolio are provided by a pricing service approved by the Fund's Board of Directors/Trustees. When market price quotes are not readily available (which is usually the case for municipal securities), the pricing service establishes fair 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, evaluations of anticipated cash flows or collateral and general market conditions. Prices of forward swap contracts are also provided by an independent pricing service approved by each Fund's Board of Directors/ Trustees. If the pricing service is unable to supply a price for a municipal bond or forward swap contract, each Fund may use a market price or fair market value quote provided by a major broker/dealer in such investments. If it is determined that the market price or fair market value for an investment is unavailable or inappropriate, the Board of Directors/Trustees of the Funds, or its designee, may establish a fair value for the investment. Temporary investments in securities that have variable rate and demand features qualifying them as short-term investments are valued at amortized cost, which approximates market value. INVESTMENT TRANSACTIONS Investment transactions are recorded on a trade date basis. Realized gains and losses from transactions are determined on the specific identification method. Investments purchased on a when-issued or delayed delivery basis may have extended settlement periods. Any investments so purchased are subject to market fluctuation during this period. The Funds have instructed the custodian to segregate assets with a current value at least equal to the amount of the when-issued/delayed delivery purchase commitments. At October 31, 2006, Insured Quality (NQI), Insured Opportunity (NIO), Insured Premium Income 2 (NPX) and Insured Dividend Advantage (NVG) had outstanding when-issued/delayed delivery purchase commitments of $6,434,647, $17,251,556, $11,061,616 and $4,087,131, respectively. There were no such outstanding purchase commitments in either Premier Insured Income (NIF) or Insured Tax-Free Advantage (NEA) at October 31, 2006. INVESTMENT INCOME Interest income, which includes the amortization of premiums and accretion of discounts for financial reporting purposes, is recorded on an accrual basis. Investment income also includes paydown gains and losses, if any. FEDERAL INCOME TAXES Each Fund is a separate taxpayer for federal income tax purposes. Each Fund intends to distribute substantially all net investment income and net capital gains to shareholders and to otherwise comply with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies. Therefore, no federal income tax provision is required. Furthermore, each Fund intends to satisfy conditions which will enable interest from municipal securities, which is exempt from regular federal income tax, and in the case of Insured Tax-Free Advantage (NEA) the alternative minimum tax applicable to individuals, 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 October 31, 2006, have been designated Exempt Interest Dividends. Net realized capital gains and ordinary income distributions paid by the Funds are subject to federal taxation. DIVIDENDS AND DISTRIBUTIONS TO COMMON SHAREHOLDERS Dividends from tax-exempt net investment income are declared monthly. 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. 74 Distributions to Common shareholders of tax-exempt net investment income, net realized capital gains and/or market discount, if any, 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 U.S. generally accepted accounting principles. PREFERRED SHARES The Funds have issued and outstanding Preferred shares, $25,000 stated value per share, as a means of effecting financial leverage. Each Fund's Preferred shares are issued in more than one Series. The dividend rate paid by the Funds on each Series is determined every seven days, pursuant to a dutch auction process overseen by the auction agent, and is payable at the end of each rate period. The number of Preferred shares outstanding, by Series and in total, for each Fund is as follows:
PREMIER INSURED INSURED INSURED INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) ----------------------------------------------------------------------------------------- Number of shares: Series M 2,600 4,000 -- 2,080 3,160 -- Series T 2,600 4,000 -- 2,200 3,080 2,880 Series W 2,600 4,000 840 2,080 -- 2,880 Series W2 -- 3,200 -- -- -- -- Series TH 2,320 4,000 2,800 2,200 3,080 -- Series TH2 -- 4,000 -- -- -- -- Series F 2,600 4,000 2,800 2,196 -- -- ----------------------------------------------------------------------------------------- Total 12,720 27,200 6,440 10,756 9,320 5,760 =========================================================================================
INSURANCE Insured Quality (NQI), Insured Opportunity (NIO), Premier Insured Income (NIF) and Insured Premium Income 2 (NPX) invest only in municipal securities which are either covered by insurance or are backed by an escrow or trust account containing sufficient U.S. Government or U.S. Government agency securities, both of which ensure the timely payment of principal and interest. Insured Dividend Advantage (NVG) and Insured Tax-Free Advantage (NEA) invest at least 80% of their net assets (including net assets attributable to Preferred shares) in municipal securities that are covered by insurance. Each Fund may also invest up to 20% of its net assets (including net assets attributable to Preferred shares) in municipal securities which are either (i) backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities, or (ii) rated, at the time of investment, within the four highest grades (Baa or BBB or better by Moody's, S&P or Fitch) or unrated but judged to be of comparable quality by the Adviser. Each insured municipal security is covered by Original Issue Insurance, Secondary Market Insurance or Portfolio Insurance. Such insurance does not guarantee the market value of the municipal securities or the value of the Funds' Common shares. Original Issue Insurance and Secondary Market Insurance remain in effect as long as the municipal securities covered thereby remain outstanding and the insurer remains in business, regardless of whether the Funds ultimately dispose of such municipal securities. Consequently, the market value of the municipal securities covered by Original Issue Insurance or Secondary Market Insurance may reflect value attributable to the insurance. Portfolio Insurance, in contrast, is effective only while the municipal securities are held by the Funds. Accordingly, neither the prices used in determining the market value of the underlying municipal securities nor the Common share net asset value of the Funds include value, if any, attributable to the Portfolio Insurance. Each policy of the Portfolio Insurance does, however, give the Funds the right to obtain permanent insurance with respect to the municipal security covered by the Portfolio Insurance policy at the time of its sale. INVERSE FLOATING RATE SECURITIES The Funds are authorized to invest in inverse floating rate securities. During the fiscal year ended October 31, 2006, Insured Quality (NQI), Insured Opportunity (NIO), Insured Premium Income 2 (NPX) and Insured Dividend Advantage (NVG) invested in inverse floating rate securities for the purpose of enhancing portfolio yield. Inverse floating rate securities are identified in the Portfolio of Investments and are valued daily. The interest rate of an inverse floating rate security has an inverse relationship to the interest rate of a short-term floating rate security. Consequently, as the interest rate of the floating rate security rises, the interest rate on the inverse floating rate security declines. Conversely, as the interest rate of the floating rate security declines, the interest rate on the inverse floating rate security rises. The price of an inverse floating rate security will be more volatile than that of an otherwise comparable fixed rate security since the interest rate is dependent on an underlying fixed coupon rate or the general level of long-term interest rates as well as the short-term interest paid on the floating rate security, and because the inverse floating rate security typically bears the risk of loss of a greater face value of an underlying bond. There were no such securities in either Premier Insured Income (NIF) or Insured Tax-Free Advantage (NEA) during the fiscal year ended October 31, 2006. FORWARD SWAP TRANSACTIONS The Funds are authorized to invest in certain derivative financial instruments. The Funds' use of forward interest rate swap transactions is intended to help the Fund manage its overall interest rate sensitivity, either shorter or longer, generally to more closely align the Fund's interest rate sensitivity with that of the broader municipal market. Forward interest rate swap transactions involve each Fund's agreement with a counterparty to pay, in the future, a fixed or variable rate payment in exchange for the counterparty paying the Fund a variable or fixed rate payment, the accruals for which would begin at a specified date in the future (the "effective date"). The amount of the payment obligation is based on the notional amount of the forward swap contract and the termination date of the swap (which is akin to a bond's maturity). The value of the Fund's swap commitment would increase or decrease based primarily on the extent to which long-term interest rates for bonds having a maturity of the swap's termination date increases or decreases. The Funds may terminate a swap contract prior to the effective date, at which point a realized gain or loss is recognized. When a forward 75 Notes to FINANCIAL STATEMENTS (continued) swap is terminated, it ordinarily does not involve the delivery of securities or other underlying assets or principal, but rather is settled in cash on a net basis. Each Fund intends, but is not obligated, to terminate its forward swaps before the effective date. Accordingly, the risk of loss with respect to the swap counterparty on such transactions is limited to the credit risk associated with a counterparty failing to honor its commitment to pay any realized gain to the Fund upon termination. To reduce such credit risk, all counterparties are required to pledge collateral daily (based on the daily valuation of each swap) on behalf of each Fund with a value approximately equal to the amount of any unrealized gain above a pre-determined threshold. Reciprocally, when any of the Funds have an unrealized loss on a swap contract, the Funds have instructed the custodian to pledge assets of the Funds as collateral with a value approximately equal to the amount of the unrealized loss above a pre-determined threshold. Collateral pledges are monitored and subsequently adjusted if and when the swap valuations fluctuate, either up or down, by at least the predetermined threshold amount. At October 31, 2006, the Funds did not have any forward swap contracts outstanding. CUSTODIAN FEE CREDIT Each Fund has an arrangement with the custodian bank whereby certain custodian fees and expenses are reduced by credits earned on each Fund's cash on deposit with the bank. Such deposit arrangements are an alternative to overnight investments. INDEMNIFICATIONS Under the Funds' organizational documents, their Officers and Directors/Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In addition, in the normal course of business, the Funds enter into contracts that provide general indemnifications to other parties. The Funds' maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, the Funds have not had prior claims or losses pursuant to these contracts and expect the risk of loss to be remote. USE OF ESTIMATES The preparation of financial statements in conformity with U.S. 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 applicable to Common shares from operations during the reporting period. Actual results may differ from those estimates. 2. FUND SHARES Transactions in Common shares were as follows:
INSURED INSURED PREMIER INSURED QUALITY (NQI) OPPORTUNITY (NIO) INCOME (NIF) ---------------------- ------------------------ ------------------------ YEAR YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED 10/31/06 10/31/05 10/31/06 10/31/05 10/31/06 10/31/05 ------------------------------------------------------------------------------------------------------------------------ Common shares issued to shareholders due to reinvestment of distributions 27,000 91,214 -- -- -- 8,559 ========================================================================================================================
INSURED INSURED INSURED PREMIUM INCOME 2 (NPX) DIVIDEND ADVANTAGE (NVG) TAX-FREE ADVANTAGE (NEA) ---------------------- ------------------------ ------------------------ YEAR YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED 10/31/06 10/31/05 10/31/06 10/31/05 10/31/06 10/31/05 ------------------------------------------------------------------------------------------------------------------------ Common shares issued to shareholders due to reinvestment of distributions -- -- -- -- -- 2,359 ========================================================================================================================
76 3. INVESTMENT TRANSACTIONS Purchases and sales (including maturities but excluding short-term investments and derivative transactions) during the fiscal year ended October 31, 2006, were as follows:
PREMIER INSURED INSURED INSURED INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) ------------------------------------------------------------------------------------------------------------------------------- Purchases $113,637,479 $ 257,102,495 $ 38,238,892 $117,323,779 $100,483,060 $ 4,414,520 Sales and maturities 124,675,966 287,709,620 42,378,851 118,611,170 101,025,153 1,403,536 ===============================================================================================================================
4. INCOME TAX INFORMATION The following information is presented on an income tax basis. Differences between amounts for financial statement and federal income tax purposes are primarily due to the treatment of paydown gains and losses, timing differences in recognizing taxable market discount and timing differences in recognizing certain gains and losses on investment transactions. To the extent that differences arise that are permanent in nature, such amounts are reclassified within the capital accounts on the Statement of Assets and Liabilities presented in the annual report, based on their Federal tax basis treatment; temporary differences do not require reclassification. Temporary and permanent differences do not impact the net asset values of the Funds. At October 31, 2006, the cost of investments was as follows:
PREMIER INSURED INSURED INSURED INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) ------------------------------------------------------------------------------------------------------------------------------- Cost of investments $832,311,969 $1,784,548,341 $422,863,541 $753,692,128 $645,547,749 $395,696,355 ===============================================================================================================================
Gross unrealized appreciation and gross unrealized depreciation of investments at October 31, 2006, were as follows:
PREMIER INSURED INSURED INSURED INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) ------------------------------------------------------------------------------------------------------------------------------- Gross unrealized: Appreciation $ 55,501,724 $ 128,269,344 $ 29,668,511 $ 37,616,143 $ 43,573,834 $ 22,608,131 Depreciation (325,867) (162,834) -- (10,872) (1,958,485) (2,786,649) ------------------------------------------------------------------------------------------------------------------------------- Net unrealized appreciation (depreciation) of investments $ 55,175,857 $ 128,106,510 $ 29,668,511 $ 37,605,271 $ 41,615,349 $ 19,821,482 ===============================================================================================================================
The tax components of undistributed net tax-exempt income, net ordinary income and net long-term capital gains at October 31, 2006, the Funds' tax year end, were as follows:
PREMIER INSURED INSURED INSURED INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) ------------------------------------------------------------------------------------------------------------------------------- Undistributed net tax-exempt income * $ 3,429,697 $ 8,633,157 $ 1,077,692 $ 2,170,823 $ 1,543,240 $ 822,436 Undistributed net ordinary income ** -- -- -- -- -- -- Undistributed net long-term capital gains -- 2,028,125 -- -- -- -- ===============================================================================================================================
* Undistributed net tax-exempt income (on a tax basis) has not been reduced for the dividend declared on October 2, 2006, paid on November 1, 2006. ** Net ordinary income consists of taxable market discount income and net short-term capital gains, if any. The tax character of distributions paid during the tax years ended October 31, 2006 and October 31, 2005, was designated for purposes of the dividends paid deduction as follows:
PREMIER INSURED INSURED INSURED INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE 2006 (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) ------------------------------------------------------------------------------------------------------------------------------- Distributions from net tax-exempt income $ 40,449,144 $ 85,552,575 $ 20,340,320 $ 34,358,230 $ 32,151,520 $ 18,082,303 Distributions from net ordinary income ** -- 36,367 -- -- -- -- Distributions from net long-term capital gains *** 3,529,489 13,627,650 2,216,110 -- -- -- ===============================================================================================================================
77 Notes to FINANCIAL STATEMENTS (continued)
PREMIER INSURED INSURED INSURED INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE 2005 (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) ------------------------------------------------------------------------------------------------------------------------------- Distributions from net tax-exempt income $ 43,231,354 $ 88,622,431 $ 21,307,834 $ 36,572,931 $ 31,059,072 $ 18,006,667 Distributions from net ordinary income ** 425,383 -- 801,863 -- 320,955 -- Distributions from net long-term capital gains 1,943,044 2,854,341 981,459 -- 3,528,645 193,086 ===============================================================================================================================
** Net ordinary income consists of taxable market discount income and net short-term capital gains, if any. *** The Funds designated as a long-term capital gain dividend, pursuant to Internal Revenue Code Section 852(b)(3), the amount necessary to reduce the earnings and profits of the Funds related to net capital gain to zero for the tax year ended October 31, 2006. At October 31, 2006, the following Funds had unused capital loss carryforwards available for federal income tax purposes to be applied against future capital gains, if any. If not applied, the carryforwards will expire as follows:
PREMIER INSURED INSURED INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE QUALITY INCOME INCOME 2 ADVANTAGE ADVANTAGE (NQI) (NIF) (NPX) (NVG) (NEA) ------------------------------------------------------------------------------------------------------------------------ Expiration year: 2008 $ -- $ -- $ 985,195 $ -- $ -- 2009 -- -- -- -- -- 2010 -- -- -- -- -- 2011 -- -- -- -- -- 2012 -- -- -- -- -- 2013 -- -- -- 1,715,199 4,675,683 2014 1,161,017 164,690 -- 1,187,192 -- ------------------------------------------------------------------------------------------------------------------------ Total $ 1,161,017 $ 164,690 $ 985,195 $ 2,902,391 $ 4,675,683 ========================================================================================================================
5. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES Each Fund's management fee is separated into two components - a complex-level component, based on the aggregate amount of all fund assets managed by Nuveen Asset Management (the "Adviser"), a wholly owned subsidiary of Nuveen Investments, Inc., ("Nuveen"), and a specific fund-level component, based only on the amount of assets within each individual fund. This pricing structure enables Nuveen fund shareholders to benefit from growth in the assets within each individual fund as well as from growth in the amount of complex-wide assets managed by the Adviser. The annual fund-level fee, payable monthly, for each Fund is based upon the average daily net assets (including net assets attributable to Preferred shares) of each Fund as follows:
INSURED QUALITY (NQI) INSURED OPPORTUNITY (NIO) PREMIER INSURED INCOME (NIF) INSURED PREMIUM INCOME 2 (NPX) AVERAGE DAILY NET ASSETS (INCLUDING NET ASSETS ATTRIBUTABLE TO PREFERRED SHARES) FUND-LEVEL FEE RATE ------------------------------------------------------------------------------------------------------------------------------- For the first $125 million .4500% For the next $125 million .4375 For the next $250 million .4250 For the next $500 million .4125 For the next $1 billion .4000 For the next $3 billion .3875 For net assets over $5 billion .3750 ===============================================================================================================================
78
INSURED DIVIDEND ADVANTAGE (NVG) INSURED TAX-FREE ADVANTAGE (NEA) AVERAGE DAILY NET ASSETS (INCLUDING NET ASSETS ATTRIBUTABLE TO PREFERRED SHARES) FUND-LEVEL FEE RATE ------------------------------------------------------------------------------------------------------------------------------- For the first $125 million .4500% For the next $125 million .4375 For the next $250 million .4250 For the next $500 million .4125 For the next $1 billion .4000 For net assets over $2 billion .3750 ===============================================================================================================================
The annual complex-level fee, payable monthly, which is additive to the fund-level fee, for all Nuveen sponsored funds in the U.S., is based on the aggregate amount of total fund assets managed as stated in the table below. As of October 31, 2006, the complex-level fee rate was .1852%.
COMPLEX-LEVEL ASSETS(1) COMPLEX-LEVEL FEE RATE ------------------------------------------------------------------------------------------------------------------------------- For the first $55 billion .2000% For the next $1 billion .1800 For the next $1 billion .1600 For the next $3 billion .1425 For the next $3 billion .1325 For the next $3 billion .1250 For the next $5 billion .1200 For the next $5 billion .1175 For the next $15 billion .1150 For Managed Assets over $91 billion(2) .1400 ===============================================================================================================================
(1) The complex-level fee component of the management fee for the funds is calculated based upon the aggregate Managed Assets ("Managed Assets" means the average daily net assets of each fund including assets attributable to all types of leverage used by the Nuveen funds) of Nuveen-sponsored funds in the U.S. (2) With respect to the complex-wide Managed Assets over $91 billion, the fee rate or rates that will apply to such assets will be determined at a later date. In the unlikely event that complex-wide Managed Assets reach $91 billion prior to a determination of the complex-level fee rate or rates to be applied to Managed Assets in excess of $91 billion, the complex-level fee rate for such complex-wide Managed Assets shall be .1400% until such time as a different rate or rates is determined. The management fee compensates the Adviser for overall investment advisory and administrative services and general office facilities. The Funds pay no compensation directly to those of its Directors/Trustees who are affiliated with the Adviser or to its Officers, all of whom receive remuneration for their services to the Funds from the Adviser or its affiliates. The Board of Directors/Trustees has adopted a deferred compensation plan for independent Directors/Trustees that enables Directors/Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from certain Nuveen advised funds. Under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of select Nuveen advised funds. For the first ten years of Insured Dividend Advantage's (NVG) operations, the Adviser has agreed to reimburse the Fund, as a percentage of average daily net assets (including net assets attributable to Preferred shares), for fees and expenses in the amounts and for the time periods set forth below: YEAR ENDING YEAR ENDING MARCH 31, MARCH 31, -------------------------------------------------------------------------------- 2002* .30% 2008 .25% 2003 .30 2009 .20 2004 .30 2010 .15 2005 .30 2011 .10 2006 .30 2012 .05 2007 .30 ================================================================================ * From the commencement of operations. The Adviser has not agreed to reimburse Insured Dividend Advantage (NVG) for any portion of its fees and expenses beyond March 31, 2012. For the first eight years of Insured Tax-Free Advantage's (NEA) operations, the Adviser has agreed to reimburse the Fund, as a percentage of average daily net assets (including net assets attributable to Preferred shares), for fees and expenses in the amounts and for the time periods set forth below: YEAR ENDING YEAR ENDING NOVEMBER 30, NOVEMBER 30, -------------------------------------------------------------------------------- 2002* .32% 2007 .32% 2003 .32 2008 .24 2004 .32 2009 .16 2005 .32 2010 .08 2006 .32 ================================================================================ * From the commencement of operations. 79 Notes to FINANCIAL STATEMENTS (continued) The Adviser has not agreed to reimburse Insured Tax-Free Advantage (NEA) for any portion of its fees and expenses beyond November 30, 2010. As a result of certain trading errors that occurred during the fiscal year ended October 31, 2006, Insured Quality (NQI) and Insured Opportunity (NIO) were reimbursed $27,762 and $42,338, respectively, by the Adviser to offset losses realized on the disposal of investments in violation of investment guidelines. 6. NEW ACCOUNTING PRONOUNCEMENTS FINANCIAL ACCOUNTING STANDARDS BOARD INTERPRETATION NO. 48 On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB Interpretation No. 48 ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Fund's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. At this time, management is evaluating the implications of FIN 48 and does not expect the adoption of FIN 48 will have a significant impact on the net assets or results of operations of the Funds. FINANCIAL ACCOUNTING STANDARDS BOARD STATEMENT ON FINANCIAL ACCOUNTING STANDARDS NO. 157 In September 2006, the Financial Accounting Standards Board (FASB) issued Statement on Financial Accounting Standards (SFAS) No. 157, "Fair Value Measurements." This standard establishes a single authoritative definition of fair value, sets out a framework for measuring fair value and requires additional disclosures about fair value measurements. SFAS No. 157 applies to fair value measurements already required or permitted by existing standards. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. The changes to current generally accepted accounting principles from the application of this standard relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements. As of October 31, 2006, the Funds do not believe the adoption of SFAS No. 157 will impact the financial statement amounts; however, additional disclosures may be required about the inputs used to develop the measurements and the effect of certain of the measurements included within the Statement of Operations for the period. 7. SUBSEQUENT EVENT DISTRIBUTIONS TO COMMON SHAREHOLDERS The Funds declared Common share dividend distributions from their tax-exempt net investment income which were paid on December 1, 2006, to shareholders of record on November 15, 2006, as follows:
PREMIER INSURED INSURED INSURED INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) ------------------------------------------------------------------------------------------------------------------------------- Dividend per share $.0605 $.0615 $.0610 $.0540 $.0640 $.0590 ===============================================================================================================================
80 Financial HIGHLIGHTS 81 Financial HIGHLIGHTS Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions --------------------------------------------------------------- -------------------------------- Distributions Distributions from Net from Net Beginning Investment Capital Investment Capital Common Net Income to Gains to Income to Gains to Share Net Realized/ Preferred Preferred Common Common Net Asset Investment Unrealized Share- Share- Share- Share- Value Income Gain (Loss) holders+ holders+ Total holders holders Total ------------------------------------------------------------------------------------------------------------------------------------ INSURED QUALITY (NQI) ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2006 $ 15.31 $ .99 $ .24 $ (.25) $ (.01) $ .97 $ (.80) $ (.08) $ (.88) 2005 15.85 1.03 (.39) (.16) -- .48 (.97) (.05) (1.02) 2004 15.72 1.08 .20 (.08) -- 1.20 (1.02) (.05) (1.07) 2003 15.87 1.10 (.05) (.07) (.01) .97 (1.00) (.12) (1.12) 2002 15.78 1.12 .03 (.11) (.01) 1.03 (.92) (.02) (.94) INSURED OPPORTUNITY (NIO) ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2006 15.46 .98 .34 (.24) (.03) 1.05 (.80) (.14) (.94) 2005 16.06 1.01 (.50) (.16) -- .35 (.92) (.03) (.95) 2004 15.89 1.05 .20 (.08) -- 1.17 (.97) (.03) (1.00) 2003 15.83 1.06 .17 (.07) (.01) 1.15 (.97) (.12) (1.09) 2002 15.72 1.15 .03 (.11) (.01) 1.06 (.93) (.02) (.95) PREMIER INSURED INCOME (NIF) ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2006 15.33 .98 .25 (.25) (.02) .96 (.79) (.10) (.89) 2005 16.00 1.01 (.49) (.16) (.01) .35 (.93) (.09) (1.02) 2004 15.69 1.03 .36 (.08) -- 1.31 (.98) (.02) (1.00) 2003 15.59 1.05 .13 (.07) -- 1.11 (.98) (.03) (1.01) 2002 15.55 1.14 (.05) (.11) -- .98 (.94) -- (.94) ==================================================================================================================================== Total Returns ------------------------- Offering Based Costs and Ending on Preferred Common Based Common Share Share Ending on Share Net Underwriting Net Asset Market Market Asset Discounts Value Value Value* Value* ------------------------------------------------------------------------------------- INSURED QUALITY (NQI) ------------------------------------------------------------------------------------- Year Ended 10/31: 2006 $ -- $ 15.40 $ 14.83 2.76% 6.53%*** 2005 -- 15.31 15.31 2.11 3.09 2004 -- 15.85 16.00 4.37 7.90 2003 -- 15.72 16.39 12.92 6.27 2002 -- 15.87 15.55 10.82 6.83 INSURED OPPORTUNITY (NIO) ------------------------------------------------------------------------------------- Year Ended 10/31: 2006 -- 15.57 14.75 8.26 7.05*** 2005 -- 15.46 14.52 (3.72) 2.21 2004 -- 16.06 16.05 9.47 7.64 2003 -- 15.89 15.64 10.22 7.51 2002 -- 15.83 15.21 9.80 7.01 PREMIER INSURED INCOME (NIF) ------------------------------------------------------------------------------------- Year Ended 10/31: 2006 -- 15.40 14.60 7.68 6.46 2005 -- 15.33 14.40 (1.66) 2.16 2004 -- 16.00 15.64 7.55 8.62 2003 -- 15.69 15.51 7.84 7.28 2002 -- 15.59 15.33 6.84 6.57 ===================================================================================== Ratios/Supplemental Data ----------------------------------------------------------------------------------------- Before Credit/Reimbursement After Credit/Reimbursement** --------------------------- ---------------------------- Ratio of Net Ratio of Net Ratio of Investment Ratio of Investment Ending Expenses Income to Expenses Income to Net to Average Average to Average Average Assets Net Assets Net Assets Net Assets Net Assets Applicable Applicable Applicable Applicable Applicable Portfolio to Common to Common to Common to Common to Common Turnover Shares (000) Shares++ Shares++ Shares++ Shares++ Rate --------------------------------------------------------------------------------------------------------------- INSURED QUALITY (NQI) --------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2006 $ 589,928 1.20% 6.49% 1.20% 6.49% 13% 2005 585,777 1.19 6.58 1.19 6.58 21 2004 605,028 1.19 6.88 1.19 6.88 8 2003 598,102 1.20 6.93 1.20 6.94 14 2002 601,495 1.23 7.22 1.21 7.24 44 INSURED OPPORTUNITY (NIO) --------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2006 1,263,172 1.17 6.38 1.17 6.38 13 2005 1,254,638 1.16 6.35 1.16 6.35 25 2004 1,302,985 1.16 6.59 1.16 6.59 8 2003 1,288,087 1.17 6.67 1.16 6.68 21 2002 1,283,353 1.20 7.42 1.19 7.42 37 PREMIER INSURED INCOME (NIF) --------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2006 299,001 1.22 6.44 1.21 6.44 8 2005 297,624 1.20 6.39 1.20 6.40 20 2004 310,666 1.21 6.53 1.20 6.53 13 2003 303,912 1.22 6.66 1.21 6.68 25 2002 301,121 1.25 7.40 1.23 7.42 43 =============================================================================================================== Preferred Shares at End of Period --------------------------------------- Aggregate Liquidation Amount and Market Asset Outstanding Value Coverage (000) Per Share Per Share ------------------------------------------------------------- INSURED QUALITY (NQI) ------------------------------------------------------------- Year Ended 10/31: 2006 $ 318,000 $ 25,000 $ 71,378 2005 318,000 25,000 71,052 2004 318,000 25,000 72,565 2003 318,000 25,000 72,021 2002 318,000 25,000 72,287 INSURED OPPORTUNITY (NIO) ------------------------------------------------------------- Year Ended 10/31: 2006 680,000 25,000 71,440 2005 680,000 25,000 71,126 2004 680,000 25,000 72,904 2003 680,000 25,000 72,356 2002 680,000 25,000 72,182 PREMIER INSURED INCOME (NIF) ------------------------------------------------------------- Year Ended 10/31: 2006 161,000 25,000 71,429 2005 161,000 25,000 71,215 2004 161,000 25,000 73,240 2003 161,000 25,000 72,191 2002 161,000 25,000 71,758 =============================================================
* Total Return on Market Value is the combination of changes in the market price per share and the effect of reinvested dividend income and reinvested capital gains distributions, if any, at the average price paid per share at the time of reinvestment. Total Return on Common Share Net Asset Value is the combination of changes in Common share net asset value, reinvested dividend income at net asset value and reinvested capital gains distributions at net asset value, if any. Total returns are not annualized. ** After custodian fee credit and expense reimbursement, where applicable. *** During the fiscal year ended October 31, 2006, Insured Quality (NQI) and Insured Opportunity (NIO) received payments from the Adviser of $27,762 and $42,338, respectively, to offset losses realized on the disposal of investments purchased in violation of each Fund's investment restrictions. This reimbursement did not have an impact on the Funds' Total Return on Common Share Net Asset Value. + The amounts shown are based on Common share equivalents. ++ Ratios do not reflect the effect of dividend payments to Preferred shareholders; income ratios reflect income earned on assets attributable to Preferred shares. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. Spread 82-83 Financial HIGHLIGHTS (continued) Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions --------------------------------------------------------------- -------------------------------- Distributions Distributions from Net from Net Beginning Investment Capital Investment Capital Common Net Income to Gains to Income to Gains to Share Net Realized/ Preferred Preferred Common Common Net Asset Investment Unrealized Share- Share- Share- Share- Value Income Gain (Loss) holders+ holders+ Total holders holders Total ------------------------------------------------------------------------------------------------------------------------------------ INSURED PREMIUM INCOME 2 (NPX) ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2006 $ 13.93 $ .86 $ .28 $ (.23) $ -- $ .91 $ (.68) $ -- $ (.68) 2005 14.45 .89 (.44) (.14) -- .31 (.83) -- (.83) 2004 14.24 .93 .23 (.07) -- 1.09 (.88) -- (.88) 2003 14.17 .96 .03 (.06) -- .93 (.86) -- (.86) 2002 13.94 .99 .16 (.10) -- 1.05 (.82) -- (.82) INSURED DIVIDEND ADVANTAGE (NVG) ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2006 15.23 1.01 .33 (.25) -- 1.09 (.82) -- (.82) 2005 15.78 1.00 (.38) (.15) (.01) .46 (.89) (.12) (1.01) 2004 15.41 1.02 .42 (.07) -- 1.37 (.93) (.07) (1.00) 2003 15.35 1.03 .15 (.07) (.01) 1.10 (.93) (.11) (1.04) 2002(a) 14.33 .55 1.10 (.05) -- 1.60 (.47) -- (.47) INSURED TAX-FREE ADVANTAGE (NEA) ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2006 14.56 .97 .38 (.24) -- 1.11 (.74) -- (.74) 2005 14.75 .97 (.19) (.15) -- .63 (.81) (.01) (.82) 2004 14.54 .99 .21 (.07) -- 1.13 (.92) (.01) (.93) 2003(b) 14.33 .82 .42 (.05) -- 1.19 (.78) -- (.78) ==================================================================================================================================== Total Returns ----------------------- Offering Based Costs and Ending on Preferred Common Based Common Share Share Ending on Share Net Underwriting Net Asset Market Market Asset Discounts Value Value Value** Value** ----------------------------------------------------------------------------------- INSURED PREMIUM INCOME 2 (NPX) ----------------------------------------------------------------------------------- Year Ended 10/31: 2006 $ -- $ 14.16 $ 13.03 7.11% 6.75% 2005 -- 13.93 12.83 (3.32) 2.14 2004 -- 14.45 14.11 6.42 7.89 2003 -- 14.24 14.12 8.84 6.70 2002 -- 14.17 13.77 6.32 7.83 INSURED DIVIDEND ADVANTAGE (NVG) ----------------------------------------------------------------------------------- Year Ended 10/31: 2006 -- 15.50 14.89 11.09 7.39 2005 -- 15.23 14.17 2.00 2.93 2004 -- 15.78 14.89 7.61 9.19 2003 -- 15.41 14.81 6.10 7.37 2002(a) (.11) 15.35 14.96 2.84 10.44 INSURED TAX-FREE ADVANTAGE (NEA) ----------------------------------------------------------------------------------- Year Ended 10/31: 2006 -- 14.93 14.35 12.82 7.82 2005 -- 14.56 13.41 (4.68) 4.33 2004 .01 14.75 14.91 7.41 8.07 2003(b) (.20) 14.54 14.79 3.87 6.98 =================================================================================== Ratios/Supplemental Data ----------------------------------------------------------------------------------------- Before Credit/Reimbursement After Credit/Reimbursement*** --------------------------- ----------------------------- Ratio of Net Ratio of Net Ratio of Investment Ratio of Investment Ending Expenses Income to Expenses Income to Net to Average Average to Average Average Assets Net Assets Net Assets Net Assets Net Assets Applicable Applicable Applicable Applicable Applicable Portfolio to Common to Common to Common to Common to Common Turnover Shares (000) Shares++ Shares++ Shares++ Shares++ Rate --------------------------------------------------------------------------------------------------------------- INSURED PREMIUM INCOME 2 (NPX) --------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2006 $ 528,984 1.16% 6.14% 1.16% 6.15% 15% 2005 520,508 1.16 6.20 1.16 6.20 23 2004 539,697 1.16 6.52 1.16 6.53 14 2003 530,975 1.17 6.68 1.16 6.69 31 2002 527,800 1.20 7.13 1.19 7.14 26 INSURED DIVIDEND ADVANTAGE (NVG) --------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2006 462,037 1.15 6.15 .70 6.60 15 2005 454,018 1.15 5.96 .70 6.42 2 2004 470,389 1.15 6.09 .70 6.54 11 2003 459,368 1.17 6.22 .72 6.67 25 2002(a) 457,432 1.10* 5.71* .61* 6.20* 22 INSURED TAX-FREE ADVANTAGE (NEA) --------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2006 276,506 1.19 6.12 .69 6.61 -- 2005 269,614 1.19 6.06 .70 6.55 1 2004 273,112 1.20 6.24 .71 6.73 13 2003(b) 269,112 1.12* 5.52* .65* 6.00* 72 =============================================================================================================== Preferred Shares at End of Period --------------------------------------- Aggregate Liquidation Amount and Market Asset Outstanding Value Coverage (000) Per Share Per Share ------------------------------------------------------------- INSURED PREMIUM INCOME 2 (NPX) ------------------------------------------------------------- Year Ended 10/31: 2006 $ 268,900 $ 25,000 $ 74,180 2005 268,900 25,000 73,392 2004 268,900 25,000 75,176 2003 268,900 25,000 74,365 2002 268,900 25,000 74,070 INSURED DIVIDEND ADVANTAGE (NVG) ------------------------------------------------------------- Year Ended 10/31: 2006 233,000 25,000 74,575 2005 233,000 25,000 73,714 2004 233,000 25,000 75,471 2003 233,000 25,000 74,288 2002(a) 233,000 25,000 74,081 INSURED TAX-FREE ADVANTAGE (NEA) ------------------------------------------------------------- Year Ended 10/31: 2006 144,000 25,000 73,005 2005 144,000 25,000 71,808 2004 144,000 25,000 72,415 2003(b) 144,000 25,000 71,721 =============================================================
* Annualized. ** Total Return on Market Value is the combination of changes in the market price per share and the effect of reinvested dividend income and reinvested capital gains distributions, if any, at the average price paid per share at the time of reinvestment. Total Return on Common Share Net Asset Value is the combination of changes in Common share net asset value, reinvested dividend income at net asset value and reinvested capital gains distributions at net asset value, if any. Total returns are not annualized. *** After custodian fee credit and expense reimbursement, where applicable. + The amounts shown are based on Common share equivalents. ++ Ratios do not reflect the effect of dividend payments to Preferred shareholders; income ratios reflect income earned on assets attributable to Preferred shares. (a) For the period March 25, 2002 (commencement of operations) through October 31, 2002. (b) For the period November 21, 2002 (commencement of operations) through October 31, 2003. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. Spread 84-85 Board Members AND OFFICERS The management of the Funds, including general supervision of the duties performed for the Funds by the Adviser, is the responsibility of the Board Members of the Funds. The number of board members of the Fund is currently set at nine. None of the board members who are not "interested" persons of the Funds has ever been a director or employee of, or consultant to, Nuveen or its affiliates. The names and business addresses of the board members and officers of the Funds, their principal occupations and other affiliations during the past five years, the number of portfolios each oversees and other directorships they hold are set forth below.
NUMBER OF PORTFOLIOS PRINCIPAL OCCUPATION(S) IN FUND COMPLEX NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY AND ADDRESS WITH THE FUNDS OR APPOINTED(2) DURING PAST 5 YEARS BOARD MEMBER ---------------------------------------------------------------------------------------------------------------------------------- BOARD MEMBER WHO IS AN INTERESTED PERSON OF THE FUNDS: ---------------------------------------------------------------------------------------------------------------------------------- Timothy R. Schwertfeger(1) Chairman of 1994 Chairman (since 1996) and Director of 171 3/28/49 the Board Nuveen Investments, Inc., Nuveen 333 W. Wacker Drive and Board Investments, LLC, Nuveen Advisory Chicago, IL 60606 Member Corp. and Nuveen Institutional Advisory Corp.(3); formerly, Director (1996-2006) of Institutional Capital Corporation; Chairman and Director (since 1997) of Nuveen Asset Management; Chairman and Director of Rittenhouse Asset Management, Inc. (since 1999); Chairman of Nuveen Investments Advisers Inc. (since 2002). BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS: ---------------------------------------------------------------------------------------------------------------------------------- Robert P. Bremner Lead Independent 1997 Private Investor and Management 171 8/22/40 Board member Consultant. 333 W. Wacker Drive Chicago, IL 60606 ---------------------------------------------------------------------------------------------------------------------------------- Lawrence H. Brown Board member 1993 Retired (since 1989) as Senior Vice 171 7/29/34 President of The Northern Trust 333 W. Wacker Drive Company; Director (since 2002) Chicago, IL 60606 Community Advisory Board for Highland Park and Highwood, United Way of the North Shore; Director (since 2006) of the Michael Rolfe Pancreatic Cancer Foundation. ---------------------------------------------------------------------------------------------------------------------------------- Jack B. Evans Board member 1999 President, The Hall-Perrine 171 10/22/48 Foundation, a private philanthropic 333 W. Wacker Drive corporation (since 1996); Director and Chicago, IL 60606 Vice Chairman, United Fire Group, a publicly held company; Adjunct Faculty Member, University of Iowa; Director, Gazette Companies; Life Trustee of Coe College and Iowa College Foundation; formerly, Director, Alliant Energy; formerly, Director, Federal Reserve Bank of Chicago; formerly, President and Chief Operating Officer, SCI Financial Group, Inc., a regional financial services firm. ---------------------------------------------------------------------------------------------------------------------------------- William C. Hunter Board member 2004 Dean, Tippie College of Business, 171 3/6/48 University of Iowa (since June 2006); 333 W. Wacker Drive formerly, Dean and Distinguished Chicago, IL 60606 Professor of Finance, School of Business at the University of Connecticut (2003-2006); previously, Senior Vice President and Director of Research at the Federal Reserve Bank of Chicago (1995-2003); Director (since 1997), Credit Research Center at Georgetown University; Director (since 2004) of Xerox Corporation; Director, SS&C Technologies, Inc. (May 2005 - October 2005). ---------------------------------------------------------------------------------------------------------------------------------- David J. Kundert Board member 2005 Retired (since 2004) as Chairman, 169 10/28/42 JPMorgan Fleming Asset Management, 333 W. Wacker Drive President and CEO, Banc One Investment Chicago, IL 60606 Advisors Corporation, and President, One Group Mutual Funds; prior thereto, Executive Vice President, Banc One Corporation and Chairman and CEO, Banc One Investment Management Group; Board of Regents, Luther College; member of the Wisconsin Bar Association; member of Board of Directors, Friends of Boerner Botanical Gardens.
86
NUMBER OF PORTFOLIOS PRINCIPAL OCCUPATION(S) IN FUND COMPLEX NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY AND ADDRESS WITH THE FUNDS OR APPOINTED(2) DURING PAST 5 YEARS BOARD MEMBER ---------------------------------------------------------------------------------------------------------------------------------- BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS (CONTINUED): ---------------------------------------------------------------------------------------------------------------------------------- William J. Schneider Board member 1997 Chairman of Miller-Valentine Partners 171 9/24/44 Ltd., a real estate investment 333 W. Wacker Drive company; formerly, Senior Partner and Chicago, IL 60606 Chief Operating Officer (retired, 2004) of Miller-Valentine Group; formerly, Vice President, Miller-Valentine Realty; Board Member, Chair of the Finance Committee and member of the Audit Committee of Premier Health Partners, the not-for-profit company of Miami Valley Hospital; Vice President, Dayton Philharmonic Orchestra Association; Board Member, Regional Leaders Forum, which promotes cooperation on economic development issues; Director, Dayton Development Coalition; formerly, Member, Community Advisory Board, National City Bank, Dayton, Ohio and Business Advisory Council, Cleveland Federal Reserve Bank. ---------------------------------------------------------------------------------------------------------------------------------- Judith M. Stockdale Board member 1997 Executive Director, Gaylord and 171 12/29/47 Dorothy Donnelley Foundation (since 333 W. Wacker Drive 1994); prior thereto, Executive Chicago, IL 60606 Director, Great Lakes Protection Fund (from 1990 to 1994). ---------------------------------------------------------------------------------------------------------------------------------- Eugene S. Sunshine Board member 2005 Senior Vice President for Business and 171 1/22/50 Finance, Northwestern University 333 W. Wacker Drive (since 1997); Director (since 2003), Chicago, IL 60606 Chicago Board Options Exchange; formerly, Director (2003-2006), National Mentor Holdings, a privately-held, national provider of home and community-based services; Chairman (since 1997), Board of Directors, Rubicon, a pure captive insurance company owned by Northwestern University; Director (since 1997), Evanston Chamber of Commerce and Evanston Inventure, a business development organization. NUMBER OF PORTFOLIOS NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED PRINCIPAL OCCUPATION(S) IN FUND COMPLEX AND ADDRESS WITH THE FUNDS OR APPOINTED(4) DURING PAST 5 YEARS OVERSEEN BY OFFICER ---------------------------------------------------------------------------------------------------------------------------------- OFFICERS OF THE FUND: ---------------------------------------------------------------------------------------------------------------------------------- Gifford R. Zimmerman Chief 1988 Managing Director (since 2002), 171 9/9/56 Administrative Assistant Secretary and Associate 333 W. Wacker Drive Officer General Counsel, formerly, Vice Chicago, IL 60606 President and Assistant General Counsel, of Nuveen Investments, LLC; Managing Director (2002-2004), General Counsel (1998-2004) and Assistant Secretary, formerly, Vice President of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3); Managing Director (since 2002) and Assistant Secretary and Associate General Counsel, formerly, Vice President (since 1997), of Nuveen Asset Management; Managing Director (since 2004) and Assistant Secretary (since 1994) of Nuveen Investments, Inc.; Assistant Secretary of NWQ Investment Management Company, LLC. (since 2002); Vice President and Assistant Secretary of Nuveen Investments Advisers Inc. (since 2002); Managing Director, Associate General Counsel and Assistant Secretary of Rittenhouse Asset Management, Inc.; Assistant Secretary of Symphony Asset Management LLC (since 2003), Tradewinds NWQ Global Investors, LLC and Santa Barbara Asset Management, LLC; (since 2006); Chartered Financial Analyst.
87 Board Members AND OFFICERS (CONTINUED)
NUMBER OF PORTFOLIOS NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED PRINCIPAL OCCUPATION(S) IN FUND COMPLEX AND ADDRESS WITH THE FUNDS OR APPOINTED(4) DURING PAST 5 YEARS OVERSEEN BY OFFICER ---------------------------------------------------------------------------------------------------------------------------------- OFFICERS OF THE FUNDS (CONTINUED): ---------------------------------------------------------------------------------------------------------------------------------- Julia L. Antonatos Vice President 2004 Managing Director (since 2005), 171 9/22/63 formerly Vice President (since 2002); 333 W. Wacker Drive formerly, Assistant Vice President Chicago, IL 60606 (since 2000) of Nuveen Investments, LLC; Chartered Financial Analyst. ---------------------------------------------------------------------------------------------------------------------------------- Michael T. Atkinson Vice President 2000 Vice President (since 2002), formerly, 171 2/3/66 and Assistant Assistant Vice President (since 2000) 333 W. Wacker Drive Secretary of Nuveen Investments, LLC. Chicago, IL 60606 ---------------------------------------------------------------------------------------------------------------------------------- Peter H. D'Arrigo Vice President 1999 Vice President and Treasurer of Nuveen 171 11/28/67 Investments, LLC and of Nuveen 333 W. Wacker Drive Investments, Inc. (since 1999); Vice Chicago, IL 60606 President and Treasurer of Nuveen Asset Management (since 2002) and of Nuveen Investments Advisers Inc. (since 2002); Assistant Treasurer of NWQ Investment Management Company, LLC. (since 2002); Vice President and Treasurer of Nuveen Rittenhouse Asset Management, Inc. (since 2003); Treasurer of Symphony Asset Management LLC (since 2003) and Santa Barbara Asset Management, LLC (since 2006); Assistant Treasurer, Tradewinds NWQ Global Investors, LLC (since 2006); formerly, Vice President and Treasurer (1999-2004) of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3); Chartered Financial Analyst. ---------------------------------------------------------------------------------------------------------------------------------- John N. Desmond Vice President 2005 Vice President, Director of Investment 171 8/24/61 Operations, Nuveen Investments, LLC 333 W. Wacker Drive (since January 2005); formerly, Chicago, IL 60606 Director, Business Manager, Deutsche Asset Management (2003-2004), Director, Business Development and Transformation, Deutsche Trust Bank Japan (2002-2003); previously, Senior Vice President, Head of Investment Operations and Systems, Scudder Investments Japan, (2000-2002), Senior Vice President, Head of Plan Administration and Participant Services, Scudder Investments (1995-2002). ---------------------------------------------------------------------------------------------------------------------------------- Jessica R. Droeger Vice President 1998 Vice President (since 2002), Assistant 171 9/24/64 and Secretary Secretary and Assistant General 333 W. Wacker Drive Counsel (since 1998) formerly, Chicago, IL 60606 Assistant Vice President (since 1998) of Nuveen Investments, LLC; Vice President (2002-2004) and Assistant Secretary (1998-2004) formerly, Assistant Vice President of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3); Vice President and Assistant Secretary (since 2005) of Nuveen Asset Management. ---------------------------------------------------------------------------------------------------------------------------------- Lorna C. Ferguson Vice President 1998 Managing Director (since 2004), 171 10/24/45 formerly, Vice President of Nuveen 333 W. Wacker Drive Investments, LLC, Managing Director Chicago, IL 60606 (2004) formerly, Vice President (1998-2004) of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3); Managing Director (since 2005) of Nuveen Asset Management. ---------------------------------------------------------------------------------------------------------------------------------- William M. Fitzgerald Vice President 1995 Managing Director (since 2002), 171 3/2/64 formerly, Vice President of Nuveen 333 W. Wacker Drive Investments; Managing Director Chicago, IL 60606 (1997-2004) of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3); Managing Director (since 2001) of Nuveen Asset Management; Vice President (since 2002) of Nuveen Investments Advisers Inc.; Chartered Financial Analyst.
88
NUMBER OF PORTFOLIOS NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED PRINCIPAL OCCUPATION(S) IN FUND COMPLEX AND ADDRESS WITH THE FUNDS OR APPOINTED(4) DURING PAST 5 YEARS OVERSEEN BY OFFICER ---------------------------------------------------------------------------------------------------------------------------------- OFFICERS OF THE FUNDS (CONTINUED): ---------------------------------------------------------------------------------------------------------------------------------- Stephen D. Foy Vice President 1998 Vice President (since 1993) and Funds 171 5/31/54 and Controller Controller (since 1998) of Nuveen 333 W. Wacker Drive Investments, LLC; formerly, Vice Chicago, IL 60606 President and Funds Controller (1998-2004) of Nuveen Investments, Inc.; Certified Public Accountant. ---------------------------------------------------------------------------------------------------------------------------------- Walter M. Kelly Chief 2003 Vice President and Assistant Secretary 171 2/24/70 Officer and (since 2006) formerly, Assistant Vice 333 West Wacker Drive Vice President President and Assistant General Chicago, IL 60606 Counsel (since 2003) of Nuveen Investments, LLC; Vice President (since 2006) and Assistant Secretary (since 2003) formerly, Assistant Vice President of Nuveen Asset Management; previously, Associate (2001-2003) at the law firm of Vedder, Price, Kaufman & Kammholz. ---------------------------------------------------------------------------------------------------------------------------------- David J. Lamb Vice President 2000 Vice President (since 2000) of Nuveen 171 3/22/63 Investments, LLC; Certified Public 333 W. Wacker Drive Accountant. Chicago, IL 60606 ---------------------------------------------------------------------------------------------------------------------------------- Tina M. Lazar Vice President 2002 Vice President of Nuveen Investments, 171 8/27/61 LLC (since 1999). 333 W. Wacker Drive Chicago, IL 60606 ---------------------------------------------------------------------------------------------------------------------------------- Larry W. Martin Vice President 1988 Vice President, Assistant Secretary 171 7/27/51 and Assistant and Assistant General Counsel of 333 W. Wacker Drive Secretary Nuveen Investments, LLC; formerly, Chicago, IL 60606 Vice President and Assistant Secretary of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3); Vice President (since 2005) and Assistant Secretary of Nuveen Investments, Inc.; Vice President (since 2005) and Assistant Secretary (since 1997) of Nuveen Asset Management; Vice President (since 2000), Assistant Secretary and Assistant General Counsel (since 1998) of Rittenhouse Asset Management, Inc.; Vice President and Assistant Secretary of Nuveen Investments Advisers Inc. (since 2002); Assistant Secretary of NWQ Investment Management Company, LLC (since 2002), Symphony Asset Management LLC (since 2003) and Tradewinds NWQ Global Investors, LLC and Santa Barbara Asset Management, LLC (since 2006).
(1) Mr. Schwertfeger is an "interested person" of the Funds, as defined in the Investment Company Act of 1940, because he is an officer and board member of the Adviser. (2) Board members serve an indefinite term until his/her successor is elected. The year first elected or appointed represents the year in which the board member was first elected or appointed to any fund in the Nuveen Complex. (3) Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp. were reorganized into Nuveen Asset Management, effective January 1, 2005. (4) Officers serve one year terms through July of each year. The year first elected or appointed represents the year in which the Officer was first elected or appointed to any fund in the Nuveen Complex. 89 ANNUAL INVESTMENT MANAGEMENT AGREEMENT APPROVAL PROCESS The Board of Trustees is responsible for overseeing the performance of the investment adviser to the Funds and determining whether to continue the advisory arrangements. At a meeting held on May 23-25, 2006 (the "MAY MEETING"), the Board of Trustees of the Funds, including the independent Trustees, unanimously approved the continuance of the Investment Management Agreement between each Fund and NAM (the "FUND ADVISER"). THE APPROVAL PROCESS During the course of the year, the Board received a wide variety of materials relating to the services provided by the Fund Adviser and the performance of each Fund. To assist the Board in its evaluation of the advisory contract with the Fund Adviser at the May Meeting, the independent Trustees received extensive materials in advance of their meeting which outlined, among other things: o the nature, extent and quality of services provided by the Fund Adviser; o the organization and business operations of the Fund Adviser, including the responsibilities of various departments and key personnel; o the Fund's past performance, the Fund's performance compared to funds of similar investment objectives compiled by an independent third party and to customized benchmarks; o the profitability of the Fund Adviser and certain industry profitability analyses for unaffiliated advisers; o the expenses of the Fund Adviser in providing the various services; o the advisory fees (gross and net management fees) and total expense ratios of the Fund, including comparisons of such fees and expenses with those of comparable, unaffiliated funds based on information and data provided by Lipper (the "PEER UNIVERSE") as well as compared to a subset of funds within the Peer Universe (the "PEER GROUP") to the respective Fund (as applicable); o the advisory fees the Fund Adviser assesses to other types of investment products or clients; o the soft dollar practices of the Fund Adviser, if any; and o from independent legal counsel, a legal memorandum describing, among other things, the duties of the Trustees under the Investment Company Act of 1940 (the "1940 ACT") as well as the general principles of relevant state law in reviewing and approving advisory contracts; the requirements of the 1940 Act in such matters; an adviser's fiduciary duty with respect to advisory agreements and compensation; the standards used by courts in determining whether investment company boards of directors have fulfilled their duties; and factors to be considered by the Board in voting on advisory agreements. At the May Meeting, the Fund Adviser made a presentation to and responded to questions from the Board. After the presentations and after reviewing the written materials, the independent Trustees met privately with their legal counsel to review the Board's duties in reviewing advisory contracts and consider the renewal of the advisory contracts. It is with this background that the Trustees considered the advisory contract with the Fund Adviser. The independent Trustees, in consultation with independent counsel, reviewed the factors set out in judicial decisions and SEC directives relating to the renewal of advisory contracts. As outlined in more detail below, the Trustees considered all factors they believed relevant with respect to each Fund, including the following: (a) the nature, extent and quality of the services to be provided by the Fund Adviser; (b) the investment performance of the Fund and the Fund Adviser; (c) the costs of the services to be provided and profitability of the Fund Adviser and its affiliates; (d) the extent to which economies of scale would be realized as the Fund grows; and (e) whether fee levels reflect these economies of scale for the benefit of Fund investors. A. NATURE, EXTENT AND QUALITY OF SERVICES In reviewing the Fund Adviser, the Trustees considered the nature, extent and quality of the Fund Adviser's services. The Trustees reviewed materials outlining, among other things, the Fund Adviser's organization and business; the types of services that the Fund Adviser or its affiliates provide and are expected to provide to the Funds; the performance record of the applicable Fund (as described in further detail below); and any initiatives and enhancements Nuveen has taken for its municipal fund product line. In connection with their continued service as Trustees, the Trustees also have a good understanding of the Fund Adviser's organization, operations and personnel. In this regard, the Trustees are familiar with and have evaluated the professional experience, qualifications and credentials of the Fund Adviser's personnel. The Trustees further reviewed materials describing, among other things, the teams and 90 personnel involved in the investment, research, risk-management and operational processes involved in managing municipal funds and their respective functions. Given the Trustees' experience with the Funds and Fund Adviser, the Trustees recognized the demonstrated history of care and depth of experience of the respective personnel in managing these Funds. In this regard, the Trustees considered the continued quality of the Fund Adviser's investment process in making portfolio management decisions as well as additional refinements and improvements adopted to the portfolio management processes noted below. With respect to the services provided to municipal funds, including the Funds, the Trustees noted that the Fund Adviser continues to make refinements to its portfolio management process including, among other things, the increased use of derivatives to enhance management of risk, additional analytical software for research staff and improved municipal pricing processes. In addition to advisory services, the independent Trustees considered the quality of any administrative or non-advisory services provided. The Fund Adviser provides the Funds with such administrative and other services (exclusive of, and in addition to, any such services provided by others for the Funds) and officers and other personnel as are necessary for the operations of the respective Fund. In connection with the review of the Investment Management Agreement, the Trustees considered the extent and quality of these other services which include, among other things, providing: product management (E.G., product positioning, performance benchmarking, risk management); fund administration (E.G., daily net asset value pricing and reconciliation, tax reporting, fulfilling regulatory filing requirements); oversight of third party service providers; administration of board relations (E.G., organizing board meetings and preparing related materials); compliance (E.G., monitoring compliance with investment policies and guidelines and regulatory requirements); and legal support (E.G., helping prepare and file registration statements, amendments thereto, proxy statements and responding to regulatory requests and/or inquiries). As the Funds operate in a highly regulated industry and given the importance of compliance, the Trustees considered, in particular, the additions of experienced personnel to the compliance teams and the enhancements to technology and related systems to support the compliance activities for the Funds (including a new reporting system for quarterly portfolio holdings). In addition to the foregoing, the Trustees also noted the additional services that the Fund Adviser or its affiliates provide to closed-end funds, including, in particular, secondary market support activities. The Trustees recognized Nuveen's continued commitment to supporting the secondary market for the common shares of its closed-end funds through a variety of initiatives designed to raise investor and analyst awareness and understanding of closed-end funds. These efforts include providing advertising and other media relations programs, continued contact with analysts, maintaining and enhancing its website for closed-end funds, and targeted advisor communication programs. With respect to funds that utilize leverage through the issuance of preferred shares, the Trustees noted Nuveen's continued support for the preferred shares by maintaining, among other things, an in-house preferred trading desk; designating a product manager whose responsibilities include creating and disseminating product information and managing relations in connection with the preferred share auction; and maintaining systems necessary to test compliance with rating agency requirements. Based on their review, the Trustees found that, overall, the nature, extent and quality of services provided (and expected to be provided) to the respective Funds under the Investment Management Agreement were of a high level and were satisfactory. B. THE INVESTMENT PERFORMANCE OF THE FUND AND FUND ADVISER The Board considered the investment performance for each Fund, including the Fund's historic performance as well as its performance compared to funds with similar investment objectives identified by an independent third party (the "PERFORMANCE PEER GROUP") and portfolio level performance against customized benchmarks, as described below. In evaluating the performance information, in certain instances, the Trustees noted that the closest Performance Peer Group for a fund still may not adequately reflect such fund's investment objectives, strategies and portfolio duration, thereby limiting the usefulness of the comparisons of such fund's performance with that of the Performance Peer Group. With respect to state specific municipal funds, the Trustees recognized that certain state municipal funds do not have a corresponding state specific Performance Peer Group in which case their performance is measured against a more general municipal category for various states. The closed-end state municipal funds that do not have corresponding state-specific Performance Peer Groups are from Arizona, Connecticut, Georgia, Maryland, Massachusetts, Missouri, North Carolina, Ohio, Texas, and Virginia. Further, due to a lack of state-specific unleveraged categories, certain unleveraged state municipal funds are included in their leveraged state category (such as, the Nuveen California Select Tax-Free Income Fund, Nuveen California Municipal Value Fund, Nuveen New York Select Tax-Free Income Fund and Nuveen New York Municipal Value Fund). In reviewing performance, the Trustees reviewed performance information including, among other things, total return information compared with the Fund's Performance Peer Group for the one-, three- and five-year periods (as applicable) ending December 31, 2005. The Trustees also reviewed the Fund's portfolio level performance (which does not reflect fund level fees and expenses) compared to customized portfolio-level benchmarks for the one- and three-year periods ending December 31, 2005 (as applicable). This analysis is designed to assess the efficacy of investment decisions against appropriate measures of risk and total return, within specific market segments. This information supplements the Fund performance information provided to the Board at each of their quarterly meetings. Based on their review, the Trustees determined that the respective Fund's absolute and relative investment performance over time had been satisfactory. C. FEES, EXPENSES AND PROFITABILITY 1. FEES AND EXPENSES In evaluating the management fees and expenses of a Fund, the Board reviewed, among other things, the Fund's advisory fees (net and gross management fees) and total expense ratios (before and after expense reimbursements and/or waivers) in absolute terms as well as comparisons to the gross management fees (before waivers), net management fees (after waivers) and total expense ratios (before and after waivers) of comparable funds in the Peer Universe and the Peer Group. The Trustees reviewed data regarding the construction of Peer Groups as well as the methods of measurement for the fee and expense analysis and the performance analysis. In certain cases, due to the small number of peers in the Peer Universe, the Peer Universe and Peer Group 91 ANNUAL INVESTMENT MANAGEMENT AGREEMENT APPROVAL PROCESS (continued) may be the same. Further, the Trustees recognized that in certain cases the closest Peer Universe and/or Peer Group did not adequately reflect a fund's investment objectives and strategies limiting the usefulness of comparisons. In reviewing comparisons, the Trustees also considered the size of the Peer Universe and/or Peer Group, the composition of the Peer Group (including differences in the use of leverage and insurance) as well as differing levels of fee waivers and/or expense reimbursements. In this regard, the Trustees considered the fund-level and complex-wide breakpoint schedules (described in further detail below) and any fee waivers and reimbursements provided by Nuveen (applicable, in particular, for certain funds launched since 1999). Based on their review of the fee and expense information provided, the Trustees determined that each Fund's net total expense ratio was within an acceptable range compared to peers. 2. COMPARISONS WITH THE FEES OF OTHER CLIENTS The Trustees further reviewed data comparing the advisory fees of the Fund Adviser with fees the Fund Adviser charges to other clients, including municipal managed accounts. In general, the fees charged for separate accounts are somewhat lower than the fees assessed to the Funds. The Trustees recognized that the differences in fees are attributable to a variety of factors, including the differences in services provided, product distribution, portfolio investment policies, investor profiles, account sizes and regulatory requirements. The Trustees noted, in particular, that the range of services provided to the Funds is more extensive than that provided to managed separate accounts. As described in further detail above, such additional services include, but are not limited to, providing: product management, fund administration, oversight of third party service providers, administration of board relations, and legal support. Funds further operate in a highly regulated industry requiring extensive compliance functions compared to the other investment products. In addition to the costs of the additional services, administrative costs may also be greater for funds as the average account size for separate accounts is notably larger than the retail accounts of funds. Given the differences in the product structures, particularly the extensive services provided to closed-end municipal funds, the Trustees believe such facts justify the different levels of fees. 3. PROFITABILITY OF FUND ADVISER In conjunction with its review of fees, the Trustees also considered the profitability of Nuveen Investments for advisory activities (which incorporated Nuveen's wholly-owned affiliated sub-advisers). The Trustees reviewed data comparing Nuveen's profitability with other fund sponsors prepared by three independent third party service providers as well as comparisons of the revenues, expenses and profits margins of various unaffiliated management firms with similar amounts of assets under management prepared by Nuveen. The Trustees further reviewed the 2005 Annual Report for Nuveen Investments. In considering profitability, the Trustees recognized the inherent limitations in determining profitability as well as the difficulties in comparing the profitability of other unaffiliated advisers. Profitability may be affected by numerous factors, including the methodology for allocating expenses, the adviser's business mix, the types of funds managed, the adviser's capital structure and cost of capital. Further, individual fund or product line profitability of other sponsors is generally not publicly available. Accordingly, the profitability information that is publicly available from various investment advisory or management firms may not be representative of the industry. Notwithstanding the foregoing, in reviewing profitability, the Trustees reviewed Nuveen's methodology and assumptions for allocating expenses across product lines to determine profitability. In this regard, the methods of allocation used appeared reasonable. The Trustees also, to the extent available, compared Nuveen's profitability margins (including pre- and post-marketing profit margins) with the profitability of various unaffiliated management firms. The Trustees noted that Nuveen's profitability is enhanced due to its efficient internal business model. The Trustees also recognized that while a number of factors affect profitability, Nuveen's profitability may change as fee waivers and/or expense reimbursement commitments of Nuveen to various funds in the Nuveen complex expire. To keep apprised of profitability and developments that may affect profitability, the Trustees have requested profitability analysis be provided periodically during the year. Based on their review, the Trustees were satisfied that the Fund Adviser's level of profitability was reasonable in light of the services provided. In evaluating the reasonableness of the compensation, the Trustees also considered any other revenues paid to the Fund Adviser as well as any indirect benefits (such as soft dollar arrangements, if any) the Fund Adviser and its affiliates are expected to receive that are directly attributable to their management of the Funds, if any. See Section E below for additional information. Based on their review of the overall fee arrangements of the applicable Fund, the Trustees determined that the advisory fees and expenses of the respective Fund were reasonable. 92 D. ECONOMIES OF SCALE AND WHETHER FEE LEVELS REFLECT THESE ECONOMIES OF SCALE With respect to economies of scale, the Trustees recognized the potential benefits resulting from the costs of a fund being spread over a larger asset base as a fund grows. To help ensure the shareholders share in these benefits, the Trustees have reviewed and considered the breakpoints in the advisory fee schedules that reduce advisory fees as the applicable Fund's assets grow. In addition to advisory fee breakpoints as assets in a respective Fund rise, after lengthy discussions with management, the Board also approved a complex-wide fee arrangement that was introduced on August 1, 2004. Pursuant to the complex-wide fee arrangement, the fees of the funds in the Nuveen complex, including the Funds, are reduced as the assets in the fund complex reach certain levels. In evaluating the complex-wide fee arrangement, the Trustees considered, among other things, the historic and expected fee savings to shareholders as assets grow, the amount of fee reductions at various asset levels, and that the arrangement would extend to all funds in the Nuveen complex. The Trustees noted that 2005 was the first full year to reflect the fee reductions from the complex wide fee arrangement. The Trustees also considered the impact, if any, the complex-wide fee arrangement may have on the level of services provided. Based on their review, the Trustees concluded that the breakpoint schedule and complex-wide fee arrangement currently was acceptable and desirable in providing benefits from economies of scale to shareholders. E. INDIRECT BENEFITS In evaluating fees, the Trustees also considered any indirect benefits or profits the Fund Adviser or its affiliates may receive as a result of its relationship with each Fund. In this regard, the Trustees considered revenues received by affiliates of the Fund Adviser for serving as agent at Nuveen's preferred trading desk and for serving as a co-manager in the initial public offering of new closed-end exchange traded funds. In addition to the above, the Trustees considered whether the Fund Adviser received any benefits from soft dollar arrangements. With respect to NAM, the Trustees noted that NAM does not currently have any soft dollar arrangements and does not pay excess brokerage commissions (or spreads on principal transactions) in order to receive research services; however, the Fund Adviser may from time to time receive and have access to research generally provided to institutional clients. F. APPROVAL The Trustees did not identify any single factor discussed previously as all-important or controlling. The Trustees, including a majority of independent Trustees, concluded that the terms of the Investment Management Agreements were fair and reasonable, that the Fund Adviser's fees are reasonable in light of the services provided to each Fund, and that the renewal of the Investment Management Agreements should be approved. 93 Reinvest Automatically EASILY AND CONVENIENTLY Sidebar text: NUVEEN MAKES REINVESTING EASY. A PHONE CALL IS ALL IT TAKES TO SET UP YOUR REINVESTMENT ACCOUNT. NUVEEN CLOSED-END FUNDS DIVIDEND REINVESTMENT PLAN Your Nuveen Closed-End Fund allows you to conveniently reinvest dividends and/or capital gains distributions in additional fund shares. By choosing to reinvest, you'll be able to invest money regularly and automatically, and watch your investment grow through the power of tax-free compounding. Just like dividends or distributions in cash, there may be times when income or capital gains taxes may be payable on dividends or distributions that are reinvested. It is important to note that an automatic reinvestment plan does not ensure a profit, nor does it protect you against loss in a declining market. EASY AND CONVENIENT To make recordkeeping easy and convenient, each month you'll receive a statement showing your total dividends and distributions, the date of investment, the shares acquired and the price per share, and the total number of shares you own. HOW SHARES ARE PURCHASED The shares you acquire by reinvesting will either be purchased on the open market or newly issued by the Fund. If the shares are trading at or above net asset value at the time of valuation, the Fund will issue new shares at the then-current market price. If the shares are trading at less than net asset value, shares for your account will be purchased on the open market. Dividends and distributions received to purchase shares in the open market will normally be invested shortly after the dividend payment date. No interest will be paid on dividends and distributions awaiting reinvestment. Because the market price of the shares may increase before purchases are completed, the average purchase price per share may exceed the market price at the time of valuation, resulting in the acquisition of fewer shares than if the dividend or distribution had been paid in shares issued by the Fund. A pro rata portion of any applicable brokerage commissions on open market purchases will be paid by Plan participants. These commissions usually will be lower than those charged on individual transactions. FLEXIBLE You may change your distribution option or withdraw from the Plan at any time, should your needs or situation change. Should you withdraw, you can receive a certificate for all whole shares credited to your reinvestment account and cash payment for fractional shares, or cash payment for all reinvestment account shares, less brokerage commissions and a $2.50 service fee. You can reinvest whether your shares are registered in your name, or in the name of a brokerage firm, bank, or other nominee. Ask your investment advisor if his or her firm will participate on your behalf. Participants whose shares are registered in the name of one firm may not be able to transfer the shares to another firm and continue to participate in the Plan. The Fund reserves the right to amend or terminate the Plan at any time. Although the Fund reserves the right to amend the Plan to include a service charge payable by the participants, there is no direct service charge to participants in the Plan at this time. CALL TODAY TO START REINVESTING DIVIDENDS AND/OR DISTRIBUTIONS For more information on the Nuveen Automatic Reinvestment Plan or to enroll in or withdraw from the Plan, speak with your financial advisor or call us at (800) 257-8787. 94 Automatic Dividend REINVESTMENT PLAN NOTICE OF AMENDMENT TO THE TERMS AND CONDITIONS These Funds are amending the terms and conditions of their Automatic Dividend Reinvestment Plan (the "Plan") as further described below effective with the close of business on February 1st, 2007. THESE CHANGES ARE INTENDED TO ENABLE PLAN PARTICIPANTS UNDER CERTAIN CIRCUMSTANCES TO REINVEST FUND DISTRIBUTIONS AT A LOWER AGGREGATE COST THAN IS POSSIBLE UNDER THE EXISTING PLAN. Shareholders who do not wish to continue as participants under the amended Plan may withdraw from the Plan by notifying the Plan Agent prior to the effective date of the amendments. Participants should refer to their Plan document for notification instructions, or may simply call Nuveen at (800) 257-8787. Fund shareholders who elect to participate in the Plan are able to have Fund distributions consisting of income dividends, realized capital gains and returns of capital automatically reinvested in additional Fund shares. Under the Plan's existing terms, the Plan Agent purchases Fund shares in the open market if the Fund's shares are trading at a discount to their net asset value on the payable date for the distribution. If the Fund's shares are trading at or above their net asset value on the payable date for the distribution, the Plan Agent purchases newly-issued Fund shares directly from the Fund at a price equal to the greater of the shares' net asset value or 95% of the shares' market value. Under the Plan's amended terms, if the Plan Agent begins purchasing Fund shares on the open market while shares are trading below net asset value, but the Fund's shares subsequently trade at or above their net asset value before the Plan Agent is able to complete its purchases, the Plan Agent may cease open-market purchases and may invest the uninvested portion of the distribution in newly-issued Fund shares at a price equal to the greater of the shares' net asset value or 95% of the shares' market value. This change will permit Plan participants under these circumstances to reinvest Fund distributions at a lower aggregate cost than is possible under the existing Plan. 95 Notes 96 Notes 97 Notes 98 Other Useful INFORMATION QUARTERLY PORTFOLIO OF INVESTMENTS AND PROXY VOTING INFORMATION Each Fund's (i) quarterly portfolio of investments, (ii) information regarding how the Funds voted proxies relating to portfolio securities held during the 12-month period ended June 30, 2006, and (iii) a description of the policies and procedures that the Funds used to determine how to vote proxies relating to portfolio securities are available without charge, upon request, by calling Nuveen Investments toll-free at (800) 257-8787 or on Nuveen's website at www.nuveen.com. You may also obtain this and other Fund information directly from the Securities and Exchange Commission ("SEC"). The SEC may charge a copying fee for this information. Visit the SEC on-line at http://www.sec.gov or in person at the SEC's Public Reference Room in Washington, D.C. Call the SEC at 1-202-942-8090 for room hours and operation. You may also request Fund information by sending an e-mail request to publicinfo@sec.gov or by writing to the SEC's Public References Section at 450 Fifth Street NW, Washington, D.C. 20549. GLOSSARY OF TERMS USED IN THIS REPORT AVERAGE ANNUAL TOTAL RETURN: This is a commonly used method to express an investment's performance over a particular, usually multi-year time period. It expresses the return that would have been necessary each year to equal the investment's actual cumulative performance (including change in NAV or market price and reinvested dividends and capital gains distributions, if any) over the time period being considered. AVERAGE EFFECTIVE MATURITY: The average of all the maturities of the bonds in a Fund's portfolio, computed by weighting each maturity date (the date the security comes due) by the market value of the security. This figure does not account for the likelihood of prepayments or the exercise of call provisions. MODIFIED DURATION: Duration is a measure of the expected period over which a bond's principal and interest will be paid, and consequently is a measure of the sensitivity of a bond's or bond Fund's value to changes when market interest rates change. Generally, the longer a bond's or Fund's duration, the more the price of the bond or Fund will change as interest rates change. MARKET YIELD (ALSO KNOWN AS DIVIDEND YIELD OR CURRENT YIELD): An investment's current annualized dividend divided by its current market price. NET ASSET VALUE (NAV): A Fund's common share NAV per share is calculated by subtracting the liabilities of the Fund (including any MuniPreferred shares issued in order to leverage the Fund) from its total assets and then dividing the remainder by the number of shares outstanding. Fund NAVs are calculated at the end of each business day. TAXABLE-EQUIVALENT YIELD: The yield necessary from a fully taxable investment to equal, on an after-tax basis, the yield of a municipal bond investment. BOARD OF DIRECTORS/TRUSTEES Robert P. Bremner Lawrence H. Brown Jack B. Evans William C. Hunter David J. Kundert William J. Schneider Timothy R. Schwertfeger Judith M. Stockdale Eugene S. Sunshine FUND MANAGER Nuveen Asset Management 333 West Wacker Drive Chicago, IL 60606 CUSTODIAN State Street Bank & Trust Company Boston, MA TRANSFER AGENT AND SHAREHOLDER SERVICES State Street Bank & Trust Company Nuveen Funds P.O. Box 43071 Providence, RI 02940-3071 (800) 257-8787 LEGAL COUNSEL Chapman and Cutler LLP Chicago, IL INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ernst & Young LLP Chicago, IL 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 PERIOD COVERED BY THIS REPORT. ANY FUTURE REPURCHASES WILL BE REPORTED TO SHAREHOLDERS IN THE NEXT ANNUAL OR SEMIANNUAL REPORT. 99 Nuveen Investments: SERVING Investors For GENERATIONS Photo of: 2 women looking at a photo album. Since 1898, financial advisors and their clients have relied on Nuveen Investments to provide dependable investment solutions. For the past century, Nuveen Investments has adhered to the belief that the best approach to investing is to apply conservative risk-management principles to help minimize volatility. Building on this tradition, we today offer a range of high quality equity and fixed-income solutions that are integral to a well-diversified core portfolio. Our clients have come to appreciate this diversity, as well as our continued adherence to proven, long-term investing principles. WE OFFER MANY DIFFERENT INVESTING SOLUTIONS FOR OUR CLIENTS' DIFFERENT NEEDS. Managing more than $154 billion in assets, Nuveen Investments offers access to a number of different asset classes and investing solutions through a variety of products. Nuveen Investments markets its capabilities under four distinct brands: Nuveen, a leader in fixed-income investments; NWQ, a leader in value-style equities; Rittenhouse, a leader in growth-style equities; and Symphony, a leading institutional manager of market-neutral alternative investment portfolios. FIND OUT HOW WE CAN HELP YOU REACH YOUR FINANCIAL GOALS. To learn more about the products and services Nuveen Investments offers, talk to your financial advisor, or call us at (800) 257-8787. Please read the information provided carefully before you invest. BE SURE TO OBTAIN A PROSPECTUS, WHERE APPLICABLE. INVESTORS SHOULD CONSIDER THE INVESTMENT OBJECTIVE AND POLICIES, RISK CONSIDERATIONS, CHARGES AND EXPENSES OF THE FUND CAREFULLY BEFORE INVESTING. THE PROSPECTUS CONTAINS THIS AND OTHER INFORMATION RELEVANT TO AN INVESTMENT IN THE FUND. FOR A PROSPECTUS, PLEASE CONTACT YOUR SECURITIES REPRESENTATIVE OR NUVEEN INVESTMENTS, 333 W. WACKER DR., CHICAGO, IL 60606. PLEASE READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST OR SEND MONEY. o Share prices Learn more o Fund details about Nuveen Funds at o Daily financial news www.nuveen.com/cef o Investor education o Interactive planning tools [LOGO] NUVEEN INVESTMENTS EAN-D-1006D ITEM 2. CODE OF ETHICS. As of the end of the period covered by this report, the registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. There were no amendments to or waivers from the Code during the period covered by this report. The registrant has posted the code of ethics on its website at www.nuveen.com/etf. (To view the code, click on the Investor Resources drop down menu box, click on Fund Governance and then click on Code of Conduct.) ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The registrant's Board of Directors or Trustees determined that the registrant has at least one "audit committee financial expert" (as defined in Item 3 of Form N-CSR) serving on its Audit Committee. The registrant's audit committee financial expert is Jack B. Evans, Chairman of the Audit Committee, who is "independent" for purposes of Item 3 of Form N-CSR. Mr. Evans was formerly President and Chief Operating Officer of SCI Financial Group, Inc., a full service registered broker-dealer and registered investment adviser ("SCI"). As part of his role as President and Chief Operating Officer, Mr. Evans actively supervised the Chief Financial Officer (the "CFO") and actively supervised the CFO's preparation of financial statements and other filings with various regulatory authorities. In such capacity, Mr. Evans was actively involved in the preparation of SCI's financial statements and the resolution of issues raised in connection therewith. Mr. Evans has also served on the audit committee of various reporting companies. At such companies, Mr. Evans was involved in the oversight of audits, audit plans, and the preparation of financial statements. Mr. Evans also formerly chaired the audit committee of the Federal Reserve Bank of Chicago. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Nuveen Insured Tax-Free Advantage Municipal Fund The following tables show the amount of fees that Ernst & Young LLP, the Fund's auditor, billed to the Fund during the Fund's last two full fiscal years. For engagements with Ernst & Young LLP the Audit Committee approved in advance all audit services and non-audit services that Ernst & Young LLP provided to the Fund, except for those non-audit services that were subject to the pre-approval exception under Rule 2-01 of Regulation S-X (the "pre-approval exception"). The pre-approval exception for services provided directly to the Fund waives the pre-approval requirement for services other than audit, review or attest services if: (A) the aggregate amount of all such services provided constitutes no more than 5% of the total amount of revenues paid by the Fund to its accountant during the fiscal year in which the services are provided; (B) the Fund did not recognize the services as non-audit services at the time of the engagement; and (C) the services are promptly brought to the Audit Committee's attention, and the Committee (or its delegate) approves the services before the audit is completed. The Audit Committee has delegated certain pre-approval responsibilities to its Chairman (or, in his absence, any other member of the Audit Committee). SERVICES THAT THE FUND'S AUDITOR BILLED TO THE FUND
AUDIT FEES BILLED AUDIT-RELATED FEES TAX FEES ALL OTHER FEES FISCAL YEAR ENDED TO FUND (1) BILLED TO FUND (2) BILLED TO FUND (3) BILLED TO FUND (4) ---------------------------------------------------------------------------------------------------------------------- October 31, 2006 $ 16,438 $ 0 $ 400 $ 2,950 ---------------------------------------------------------------------------------------------------------------------- Percentage approved 0% 0% 0% 0% pursuant to pre-approval exception ---------------------------------------------------------------------------------------------------------------------- October 31, 2005 $ 15,435 $ 0 $ 947 $ 2,750 ---------------------------------------------------------------------------------------------------------------------- Percentage approved 0% 0% 0% 0% pursuant to pre-approval exception ----------------------------------------------------------------------------------------------------------------------
(1) "Audit Fees" are the aggregate fees billed for professional services for the audit of the Fund's annual financial statements and services provided in connection with statutory and regulatory filings or engagements. (2) "Audit Related Fees" are the aggregate fees billed for assurance and related services reasonably related to the performance of the audit or review of financial statements and are not reported under "Audit Fees". (3) "Tax Fees" are the aggregate fees billed for professional services for tax advice, tax compliance, and tax planning. (4) "All Other Fees" are the aggregate fees billed for products and services other than "Audit Fees", "Audit Related Fees", and "Tax Fees". SERVICES THAT THE FUND'S AUDITOR BILLED TO THE ADVISER AND AFFILIATED FUND SERVICE PROVIDERS The following tables show the amount of fees billed by Ernst & Young LLP to Nuveen Asset Management ("NAM" or the "Adviser"), and any entity controlling, controlled by or under common control with NAM ("Control Affiliate") that provides ongoing services to the Fund ("Affiliated Fund Service Provider"), for engagements directly related to the Fund's operations and financial reporting, during the Fund's last two full fiscal years. The tables also show the percentage of fees subject to the pre-approval exception. The pre-approval exception for services provided to the Adviser and any Affiliated Fund Service Provider (other than audit, review or attest services) waives the pre-approval requirement if: (A) the aggregate amount of all such services provided constitutes no more than 5% of the total amount of revenues paid to Ernst & Young LLP by the Fund, the Adviser and Affiliated Fund Service Providers during the fiscal year in which the services are provided that would have to be pre-approved by the Audit Committee; (B) the Fund did not recognize the services as non-audit services at the time of the engagement; and (C) the services are promptly brought to the Audit Committee's attention, and the Committee (or its delegate) approves the services before the Fund's audit is completed.
FISCAL YEAR ENDED AUDIT-RELATED FEES TAX FEES BILLED TO ALL OTHER FEES BILLED TO ADVISER AND ADVISER AND BILLED TO ADVISER AFFILIATED FUND AFFILIATED FUND AND AFFILIATED FUND SERVICE PROVIDERS SERVICE PROVIDERS (1) SERVICE PROVIDERS ----------------------------------------------------------------------------------------------------- October 31, 2006 $ 0 $ 2,200 $ 0 ----------------------------------------------------------------------------------------------------- Percentage approved 0% 0% 0% pursuant to pre-approval exception ----------------------------------------------------------------------------------------------------- October 31, 2005 $ 0 $ 2,200 $ 0 ----------------------------------------------------------------------------------------------------- Percentage approved 0% 0% 0% pursuant to pre-approval exception -----------------------------------------------------------------------------------------------------
(1) The amounts reported for the Fund under the column heading "Tax Fees" represents amounts billed to the Adviser exclusively for the preparation for the Fund's tax return, the cost of which is borne by the Adviser. In the aggregate, for all Nuveen funds for which Ernst & Young LLP serves as independent registered public accounting firm, these fees amounted to $275,000 in 2006 and $282,575 in 2005. NON-AUDIT SERVICES The following table shows the amount of fees that Ernst & Young LLP billed during the Fund's last two full fiscal years for non-audit services. The Audit Committee is required to pre-approve non-audit services that Ernst & Young LLP provides to the Adviser and any Affiliated Fund Services Provider, if the engagement related directly to the Fund's operations and financial reporting (except for those subject to the de minimis exception described above). The Audit Committee requested and received information from Ernst & Young LLP about any non-audit services that Ernst & Young LLP rendered during the Fund's last fiscal year to the Adviser and any Affiliated Fund Service Provider. The Committee considered this information in evaluating Ernst & Young LLP's independence.
FISCAL YEAR ENDED TOTAL NON-AUDIT FEES BILLED TO ADVISER AND AFFILIATED FUND SERVICE TOTAL NON-AUDIT FEES PROVIDERS (ENGAGEMENTS BILLED TO ADVISER AND RELATED DIRECTLY TO THE AFFILIATED FUND SERVICE TOTAL NON-AUDIT FEES OPERATIONS AND FINANCIAL PROVIDERS (ALL OTHER BILLED TO FUND REPORTING OF THE FUND) ENGAGEMENTS) TOTAL ----------------------------------------------------------------------------------------------------------------------- October 31, 2006 $ 3,350 $ 2,200 $ 0 $ 5,550 October 31, 2005 $ 3,697 $ 2,200 $ 0 $ 5,897
"Non-Audit Fees billed to Adviser" for both fiscal year ends represent "Tax Fees" billed to Adviser in their respective amounts from the previous table. Audit Committee Pre-Approval Policies and Procedures. Generally, the Audit Committee must approve (i) all non-audit services to be performed for the Fund by the Fund's independent accountants and (ii) all audit and non-audit services to be performed by the Fund's independent accountants for the Affiliated Fund Service Providers with respect to operations and financial reporting of the Fund. Regarding tax and research projects conducted by the independent accountants for the Fund and Affiliated Fund Service Providers (with respect to operations and financial reports of the Fund) such engagements will be (i) pre-approved by the Audit Committee if they are expected to be for amounts greater than $10,000; (ii) reported to the Audit Committee chairman for his verbal approval prior to engagement if they are expected to be for amounts under $10,000 but greater than $5,000; and (iii) reported to the Audit Committee at the next Audit Committee meeting if they are expected to be for an amount under $5,000. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. The registrant's Board of Directors or Trustees has a separately designated Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (15 U.S.C. 78c(a)(58)(A)). The members of the audit committee are Robert P. Bremner, Lawrence H. Brown, Jack B. Evans, William J. Schneider and Eugene S. Sunshine. ITEM 6. SCHEDULE OF INVESTMENTS. See Portfolio of Investments in Item 1. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. The registrant invests its assets primarily in municipal bonds and cash management securities. On rare occasions the registrant may acquire, directly or through a special purpose vehicle, equity securities of a municipal bond issuer whose bonds the registrant already owns when such bonds have deteriorated or are expected shortly to deteriorate significantly in credit quality. The purpose of acquiring equity securities generally will be to acquire control of the municipal bond issuer and to seek to prevent the credit deterioration or facilitate the liquidation or other workout of the distressed issuer's credit problem. In the course of exercising control of a distressed municipal issuer, NAM may pursue the registrant's interests in a variety of ways, which may entail negotiating and executing consents, agreements and other arrangements, and otherwise influencing the management of the issuer. NAM does not consider such activities proxy voting for purposes of Rule 206(4)-6 under the 1940 Act, but nevertheless provides reports to the registrant's Board of Trustees on its control activities on a quarterly basis. In the rare event that a municipal issuer were to issue a proxy or that the registrant were to receive a proxy issued by a cash management security, NAM would either engage an independent third party to determine how the proxy should be voted or vote the proxy with the consent, or based on the instructions, of the registrant's Board of Trustees or its representative. A member of NAM's legal department would oversee the administration of the voting, and ensure that records were maintained in accordance with Rule 206(4)-6, reports were filed with the SEC on Form N-PX, and the results provided to the registrant's Board of Trustees and made available to shareholders as required by applicable rules. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. THE PORTFOLIO MANAGER The following individual has primary responsibility for the day-to-day implementation of the registrant's investment strategies: NAME FUND Paul Brennan Nuveen Insured Tax-Free Advantage Municipal Fund Other Accounts Managed. In addition to managing the registrant, the portfolio manager is also primarily responsible for the day-to-day portfolio management of the following accounts: NUMBER OF PORTFOLIO MANAGER TYPE OF ACCOUNT MANAGED ACCOUNTS ASSETS -------------------------------------------------------------------------------- Paul Brennan Registered Investment Company 14 $12.164 billion Other Pooled Investment Vehicles 0 $0.00 Other Accounts 1 $.6 million * Assets are as of October 31, 2006. None of the assets in these accounts are subject to an advisory fee based on performance. Compensation. Each portfolio manager's compensation consists of three basic elements--base salary, cash bonus and long-term incentive compensation. The compensation strategy is to annually compare overall compensation, including these three elements, to the market in order to create a compensation structure that is competitive and consistent with similar financial services companies. As discussed below, several factors are considered in determining each portfolio manager's total compensation. In any year these factors may include, among others, the effectiveness of the investment strategies recommended by the portfolio manager's investment team, the investment performance of the accounts managed by the portfolio manager, and the overall performance of Nuveen Investments, Inc. (the parent company of NAM). Although investment performance is a factor in determining the portfolio manager's compensation, it is not necessarily a decisive factor. The portfolio manager's performance is evaluated in part by comparing manager's performance against a specified investment benchmark. This fund-specific benchmark is a customized subset (limited to bonds in each Fund's specific state and with certain maturity parameters) of the S&P/Investortools Municipal Bond index, an index comprised of bonds held by managed municipal bond fund customers of Standard & Poor's Securities Pricing, Inc. that are priced daily and whose fund holdings aggregate at least $2 million. As of October 31, 2006, the S&P/Investortools Municipal Bond index was comprised of 48,513 securities with an aggregate current market value of $ 923,532 billion. Base salary. Each portfolio manager is paid a base salary that is set at a level determined by NAM in accordance with its overall compensation strategy discussed above. NAM is not under any current contractual obligation to increase a portfolio manager's base salary. Cash bonus. Each portfolio manager is also eligible to receive an annual cash bonus. The level of this bonus is based upon evaluations and determinations made by each portfolio manager's supervisors, along with reviews submitted by his peers. These reviews and evaluations often take into account a number of factors, including the effectiveness of the investment strategies recommended to the NAM's investment team, the performance of the accounts for which he serves as portfolio manager relative to any benchmarks established for those accounts, his effectiveness in communicating investment performance to stockholders and their representatives, and his contribution to the NAM's investment process and to the execution of investment strategies. The cash bonus component is also impacted by the overall performance of Nuveen Investments, Inc. in achieving its business objectives. Long-term incentive compensation. Each portfolio manager is eligible to receive bonus compensation in the form of equity-based awards issued in securities issued by Nuveen Investments, Inc. The amount of such compensation is dependent upon the same factors articulated for cash bonus awards but also factors in his long-term potential with the firm. Material Conflicts of Interest. Each portfolio manager's simultaneous management of the registrant and the other accounts noted above may present actual or apparent conflicts of interest with respect to the allocation and aggregation of securities orders placed on behalf of the Registrant and the other account. NAM, however, believes that such potential conflicts are mitigated by the fact that the NAM has adopted several policies that address potential conflicts of interest, including best execution and trade allocation policies that are designed to ensure (1) that portfolio management is seeking the best price for portfolio securities under the circumstances, (2) fair and equitable allocation of investment opportunities among accounts over time and (3) compliance with applicable regulatory requirements. All accounts are to be treated in a non-preferential manner, such that allocations are not based upon account performance, fee structure or preference of the portfolio manager. In addition, NAM has adopted a Code of Conduct that sets forth policies regarding conflicts of interest. Beneficial Ownership of Securities. As of the October 31, 2006, the portfolio manager beneficially owned the following dollar range of equity securities issued by the Registrant and other Nuveen Funds managed by NAM's municipal investment team.
--------------------------------------------------------------------------------------------------------------------------- DOLLAR RANGE OF DOLLAR EQUITY RANGE OF SECURITIES EQUITY BENEFICIALLY SECURITIES OWNED IN BENEFICIALLY THE OWNED IN REMAINDER FUND OF NUVEEN FUNDS MANAGED BY NAM'S MUNICIPAL NAME OF PORTFOLIO INVESTMENT MANAGER FUND TEAM --------------------------------------------------------------------------------------------------------------------------- Paul Brennan Nuveen Insured Tax-Free Advantage Municipal Fund $0 $10,001 - $50,000 ---------------------------------------------------------------------------------------------------------------------------
PORTFOLIO MANAGER BIO: Paul Brennan, CFA, CPA, became a portfolio manager of Flagship Financial Inc. in 1994, and subsequently became an Assistant Vice President of NAM upon the acquisition of Flagship Resources Inc. by Nuveen in 1997. He became Vice President of NAM in 2002. He currently manages investments for 15 Nuveen-sponsored investment companies. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. There have been no material changes to the procedures by which shareholders may recommend nominees to the registrants Board implemented after the registrant last provided disclosure in response to this item. ITEM 11. CONTROLS AND PROCEDURES. (a) The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (the "Exchange Act") (17 CFR 240.13a-15(b) or 240.15d-15(b)). (b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated. (a)(1) Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit: Not applicable because the code is posted on registrant's website at www.nuveen.com/etf and there were no amendments during the period covered by this report. (To view the code, click on the Investor Resources drop down menu box, click on Fund Governance and then Code of Conduct.) (a)(2) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the 1940 Act (17 CFR 270.30a-2(a)) in the exact form set forth below: Ex-99.CERT Attached hereto. (a)(3) Any written solicitation to purchase securities under Rule 23c-1 under the 1940 Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable. (b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act, provide the certifications required by Rule 30a-2(b) under the 1940 Act (17 CFR 270.30a-2(b)); Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR 240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished pursuant to this paragraph will not be deemed "filed" for purposes of Section 18 of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference. Ex-99.906 CERT attached hereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) Nuveen Insured Tax-Free Advantage Municipal Fund ----------------------------------------------------------- By (Signature and Title)* /s/ Jessica R. Droeger ---------------------------------------------- Jessica R. Droeger Vice President and Secretary Date: January 5, 2007 ------------------------------------------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ Gifford R. Zimmerman ---------------------------------------------- Gifford R. Zimmerman Chief Administrative Officer (principal executive officer) Date: January 5, 2007 ------------------------------------------------------------------- By (Signature and Title)* /s/ Stephen D. Foy ---------------------------------------------- Stephen D. Foy Vice President and Controller (principal financial officer) Date: January 5, 2007 ------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature.