-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BJ1a1ij1lWivjxnqQb8q7PuiP2XuXJL4JgV0p7akLuMoi6g1Pq9gu/scxuWhWMkJ wccEzwbEV1Ew5pq5CWbgXw== 0000891804-06-000023.txt : 20060106 0000891804-06-000023.hdr.sgml : 20060106 20060106104921 ACCESSION NUMBER: 0000891804-06-000023 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20051031 FILED AS OF DATE: 20060106 DATE AS OF CHANGE: 20060106 EFFECTIVENESS DATE: 20060106 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NUVEEN MUNICIPAL MARKET OPPORTUNITY FUND INC CENTRAL INDEX KEY: 0000860188 IRS NUMBER: 363689957 STATE OF INCORPORATION: MN FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-06040 FILM NUMBER: 06515377 BUSINESS ADDRESS: STREET 1: 333 W WACKER DR CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3129178200 MAIL ADDRESS: STREET 1: 333 W WACKER CITY: CHICAGO STATE: IL ZIP: 60606 N-CSR 1 file001.txt NUVEEN MUNICIPAL MARKET OPPORTUNITY FUND, INC. 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 811-06040 --------------------- Nuveen Municipal Market Opportunity Fund, Inc. ------------------------------------------------------------------------------ (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, 2005 ------------------ 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, 2005 Nuveen Investments Municipal Exchange-Traded Closed-End Funds NUVEEN PERFORMANCE PLUS MUNICIPAL FUND, INC. NPP NUVEEN MUNICIPAL ADVANTAGE FUND, INC. NMA NUVEEN MUNICIPAL MARKET OPPORTUNITY FUND, INC. NMO NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND NAD NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND 2 NXZ NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND 3 NZF Photo of: Man, woman and child 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: Man and child Photo of: Woman 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 if you get your Nuveen Fund dividends and statements from your financial advisor or brokerage account. OR WWW.NUVEEN.COM/ACCOUNTACCESS if you get your Nuveen Fund dividends and statements 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 Photo of: Timothy R. Schwertfeger Timothy R. Schwertfeger Chairman of the Board Chairman's LETTER TO SHAREHOLDERS Once again, I am pleased to report that over the 12-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 see the Portfolio Manager's Comments and Performance Overview sections of this report. Given recent reports of a strengthening economy, some market commentators are speculating about whether longer-term interest rates will soon begin to rise substantially, mirroring the rise that has taken place in shorter-term rates. If longer-term rates do begin to rise significantly, some have suggested that this would be a signal to begin selling your holdings of fixed-income investments. "IN FACT, A WELL-DIVERSIFIED PORTFOLIO MAY ACTUALLY HELP TO REDUCE YOUR OVERALL INVESTMENT RISK OVER THE LONG TERM." Nobody knows what the market will do in the future or what investments will turn out to be tomorrow's best performers. But from our experience, we do know that a well-balanced portfolio, structured and carefully monitored with the help of a trusted investment professional, can be an important component in helping you achieve your long-term financial goals. In fact, a well-diversified portfolio may actually help to reduce your overall investment risk over the long term. That is one reason why we believe that a municipal bond investment like your Fund can be an important building block in a comprehensive investment program designed to perform well in a variety of market conditions. As an added convenience for you, I urge you to consider receiving future Fund reports and other Fund information by e-mail and the Internet. Not only will you be able to receive the information faster, but this also may help lower your Fund's expenses. Sign up is quick and easy - see the inside front cover of this report for instructions. Earlier in 2005, The St. Paul Travelers Companies, Inc., which owned 79% of Nuveen Investments, Inc. (the parent of your Fund's investment adviser), sold a substantial portion of its stake in Nuveen. More recently, St. Paul sold the balance of its shares to Nuveen Investments or to others. Please be assured that these transactions only affect Nuveen's corporate structure, and they do not have any impact on the investment objectives or management of your Fund. 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. 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. Sincerely, /s/ Timothy R. Schwertfeger Timothy R. Schwertfeger Chairman of the Board December 15, 2005 Nuveen Investments Municipal Exchange-Traded Closed-End Funds NPP, NMA, NMO, NAD, NXZ, NZF Portfolio Manager's COMMENTS Portfolio manager Tom Spalding discusses the economic and municipal market environments, key investment strategies and the annual performance of these six Funds. With 30 years of investment experience at Nuveen, Tom has managed NXZ since its inception in 2001 and NPP, NMA, NMO, NAD and NZF since 2003. WHAT FACTORS AFFECTED THE U.S. ECONOMY AND MUNICIPAL MARKET DURING THE 12-MONTH PERIOD ENDED OCTOBER 31, 2005? Between November 1, 2004, and October 31, 2005, the Federal Reserve implemented eight 0.25% increases in the closely-watched fed funds rate. These increases, which were aimed at controlling the pace of inflation, raised this short-term target rate to 3.75% from 1.75%. (On November 1, 2005, and December 13, 2005, the fed funds rate was increased by 0.25% to reach 4.25%.) Over this same 12-month period, shorter-term municipal market rates also rose significantly. Longer-term yields declined throughout much of this period before rising toward the end of the fiscal year. The yield on the benchmark 10-year U.S. Treasury note ended October 2005 at 4.56%, compared with 4.03% one year earlier. Longer-term yields in the municipal market followed a similar pattern, with the yield on the Bond Buyer 25 Revenue Bond Index, a widely followed measure of longer-term municipal market rates, ending the reporting period at 5.21%, an increase of 24 basis points from October 31, 2004. Together, the steady rise in shorter-term rates and the much more modest increase in longer rates over this period produced an overall flattening of the yield curve, which generally led to better relative performance for bonds with longer effective maturities and poorer returns for bonds with shorter maturities or short call dates. The economy continued to improve over the 12-month period. After expanding at an annualized rate of 3.3% in the fourth quarter of 2004, the U.S. gross domestic product (GDP) grew by annualized rates of 3.8% in the first quarter of 2005, 3.3% in the second quarter and 3.8% in the third quarter. The overall employment picture showed some improvement, with national unemployment at 5.0% in October 2005, down from 5.5% in October 2004. However, the 4.3% year-over-year increase in the Consumer Price Index as of October 2005 raised some inflation concerns. Over the 12 months ended October 2005, municipal bond new issue supply nationwide remained strong, as $363.4 billion in new securities came to market. A major factor behind this strong supply was the flattening yield curve, which made advance refundings 4 more economically attractive for many issuers. (Advance refundings, also known as pre-refundings or refinancings, occur when an issuer sells new bonds and uses the proceeds to fund the principal and interest payments of older, previously issued bonds that carry a higher coupon rate. This process usually results in lower total borrowing costs for bond issuers.) Between January and October 2005, pre-refunding volume was nearly 50% higher than during the same period in 2004, as issuers sought to take advantage of the current interest rate environment. WHAT KEY STRATEGIES WERE USED TO MANAGE THESE FUNDS DURING THE 12 MONTHS ENDED OCTOBER 31, 2005? With rising short-term interest rates and the overall flattening of the yield curve, our focus during this period centered on finding attractive bonds that we believed would add value to the Funds' portfolios and that, in our judgment, also had the potential to perform well under a variety of future market scenarios, regardless of economic or interest rate trends. In general, our purchase activity centered on buying bonds that matured in about 25 years and that had about 10 years of call protection. In our opinion, bonds with these maturity and call protection characteristics offered more attractive opportunities and the best values during this period. In particular, we looked for attractively priced premium bonds - bonds that at the time of purchase were trading above their par values because their coupons were higher than current coupon levels. Historically, premium bonds have held their value better than current coupon bonds when interest rates have risen. Premium bonds also are good candidates for advance refundings, and trading pre-refunded bonds at opportune times in the interest rate cycle has historically been a key strategy for adding value to these Funds. Overall, the ample new issue supply during this period provided us with opportunities to find the types of bonds we were seeking. While our main focus was on the 25-year part of the yield curve, we kept an opportunistic eye toward all types of issuance that we believed could add value to the Funds' portfolios. In general, we were buying essential services revenue bonds that would also help us keep the Funds well diversified geographically. Lower-rated bonds generally were in great demand during this period, and as a result we did not find many attractive opportunities among lower-rated issues to add securities that we believed would enhance value. As a result, the majority of our purchase activity focused on higher quality bonds, especially during the second half of this 12-month period. 5 In NXZ, our strategy also included the use of 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 in an effort to reduce some of NXZ's interest rate risk. These hedges were not an attempt to profit from correctly predicting the timing and direction of interest rate movements. Instead, our sole objective was to reduce the interest rate risk of the Fund without having a negative impact on its income stream or common share dividends over the short term. We believe the hedging strategy was effective in achieving the intended goal of helping to reduce NXZ's net asset value (NAV) volatility, and in September 2005, we removed the hedge from this Fund. However, during the period that the hedge was in place, it had a slight negative impact on NXZ's performance, which affected the Fund's total return for the entire reporting period. The negative impact was caused by the decline of long-term interest rates during much of the period the hedge was in place, which resulted in a decline in the value of the hedge as the value of the Fund's portfolio rose. HOW DID THE FUNDS PERFORM? Individual results for these Funds, as well as for comparative indexes and averages, are presented in the accompanying table. TOTAL RETURNS ON NET ASSET VALUE* For periods ended 10/31/05 1-YEAR 5-YEAR 10-YEAR - -------------------------------------------------------------------------------- NPP 3.83% 7.86% 6.62% - -------------------------------------------------------------------------------- NMA 4.42% 8.36% 6.87% - -------------------------------------------------------------------------------- NMO 3.78% 7.33% 6.15% - -------------------------------------------------------------------------------- NAD 4.27% 9.14% NA - -------------------------------------------------------------------------------- NXZ 7.83% NA NA - -------------------------------------------------------------------------------- NZF 6.09% NA NA - -------------------------------------------------------------------------------- Lehman Brothers Municipal Bond Index1 2.54% 5.98% 5.85% - -------------------------------------------------------------------------------- Lipper General Leveraged Municipal Debt Funds Average2 5.08% 7.75% 6.52% - -------------------------------------------------------------------------------- *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. 1 The Lehman Brothers Municipal Bond Index is an unleveraged, unmanaged national index comprising a broad range of investment-grade municipal bonds. Results for the Lehman Brothers index do not reflect any expenses. 2 The Lipper General Leveraged Municipal Debt Funds category average is calculated using the returns of all closed-end exchange-traded funds in this category for each period as follows: 1 year, 64 funds; 5 years, 48 funds; and 10 years, 43 funds. Fund and Lipper returns assume reinvestment of dividends. 6 For the 12 months ended October 31, 2005, the total returns on NAV for all six of the Funds in this report exceeded the return on the Lehman Brothers Municipal Bond Index. NXZ and NZF also outperformed the average return for their Lipper peer group for this period, while NPP, NMA, NMO and NAD underperformed this peer average. One of the factors that, on balance, benefited the 12-month performance of these Funds relative to that of the unleveraged Lehman Brothers index was the Funds' use of financial leverage, even though increases in longer-term municipal bond rates caused the value of the Funds' holdings to fall, and the Funds' financial leverage exacerbated this decline in value. Leveraging can provide opportunities for enhanced income for common shareholders when short-term interest rates remain below the yields of the bonds purchased for the Funds' portfolios. This continued to be the case during these 12 months. At the same time, leveraging can add volatility to a Fund's NAV and share price, and can act to constrain overall Fund performance during periods when interest rates rise. This was evident during this reporting period. As noted earlier, longer maturity bonds generally performed better than securities with shorter maturities over the course of this 12-month period. Yield curve positioning or, more specifically, heavier exposure to the longer end of the yield curve helped the performances of NXZ and NZF, which were established in 2001. The other four Funds, which were introduced between 1989 and 1999, had relatively greater exposures to the shorter end of the yield curve. One of our ongoing tasks is to more closely align the yield curve positioning of all of these Funds. Each of these Funds benefited during this period from their allocations of lower-rated bonds, as these bonds generally outperformed higher-rated credits. As of October 31, 2005, allocations of bonds rated BBB or lower and non-rated bonds accounted for 10% of NMO's portfolio, 12% of NPP, 15% of NAD, 18% of NZF, 19% of NMA and 20% of NXZ. Among the specific securities making contributions to the Funds' total returns for this period were bonds backed by the 1998 master tobacco settlement agreement as the litigation environment improved and supply/demand dynamics drove tobacco bond prices higher. Each Fund had about 5% to 6% of their portfolio in uninsured tobacco bonds as of October 31, 2005. Lower-rated hospital holdings also contributed positively to the Funds' total returns, as the healthcare sector ranked second in performance among the Lehman municipal revenue sectors for the period. An additional factor in the performance differential among these Funds was their relative weightings of zero coupon bonds. These bonds do not make periodic interest payments 7 and therefore typically have very long initial maturities. The prices of these bonds tend to be very sensitive to changes in interest rates. Zero coupon bonds in the Lehman Municipal Bond Index outperformed the general market by 130 basis points. In addition to yield curve positioning, credit exposure, and specific holdings, another factor in the Funds' performances during this period was advance refundings. Refinancings rose sharply during this period, and the Funds' performances benefited from the amount of their portfolios that became advance refunded and the timing of these events. Generally, newly refunded bonds receive a higher credit rating, which usually translates to a higher price. While newly pre-refunded bonds tended to enhance the Funds' returns, the Funds' holdings of older, previously pre-refunded bonds tended to underperform the general municipal market during this period, primarily because of the shorter effective maturities of these bonds. This was especially true in NPP and NMO. HOW WERE THE FUNDS POSITIONED IN TERMS OF CREDIT QUALITY AND BOND CALLS AS OF OCTOBER 31, 2005? We continued to believe that maintaining strong credit quality was an important requirement. As of October 31, 2005, all six of these Funds continued to offer excellent credit quality, with allocations of bonds rated AAA/U.S. guaranteed and AA ranging from 68% in NXZ to 77% in NMA, 80% in NZF, 83% in NAD and 84% in NPP and NMO. As of October 31, 2005, potential call exposure for the period from November 2005 through the end of 2006 ranged from 3% in NZF to 4% in NXZ, 6% in NMO, 9% in NAD, and 10% in NMA and NPP. The number of actual bond calls in all of these Funds depends largely on future market interest rates. 8 Dividend and Share Price INFORMATION All of the Funds in this report use leverage to enhance opportunities for additional income for common shareholders. The extent of this benefit is tied in part to the short-term rates these Funds pay their MuniPreferred(R) shareholders. During periods of low short-term rates, leveraged Funds generally pay lower dividends to their MuniPreferred(R) shareholders, which can leave more earnings to support common share dividends. However, when short-term interest rates rise, as they did during this reporting period, the Funds' borrowing costs also rise. While leveraging still provided benefits for common shareholders, the extent of these benefits was reduced. This resulted in one monthly dividend reduction in NZF and two in NPP, NMA, NMO and NAD over the 12-month period ended October 31, 2005. The dividend of NXZ remained stable throughout this reporting period. In addition, due to normal portfolio activity, common shareholders of the following Funds received capital gains and net ordinary income distributions at the end of December 2004 as follows: LONG-TERM CAPITAL GAINS ORDINARY INCOME (PER SHARE) (PER SHARE) - -------------------------------------------------------------------------------- NPP $0.0151 $0.0037 - -------------------------------------------------------------------------------- NMA $0.0149 $ -- - -------------------------------------------------------------------------------- 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 its net investment income as dividends to shareholders. As of October 31, 2005, all of the Funds in this report had positive UNII balances for both financial statement and tax purposes. 9 At the end of the reporting period, the Funds' were trading at discounts to their NAVs as shown in the accompanying chart: 10/31/05 12-MONTH DISCOUNT AVERAGE DISCOUNT - -------------------------------------------------------------------------------- NPP -6.96% -7.42% - -------------------------------------------------------------------------------- NMA -3.25% -3.53% - -------------------------------------------------------------------------------- NMO -6.27% -7.06% - -------------------------------------------------------------------------------- NAD -4.58% -3.95% - -------------------------------------------------------------------------------- NXZ -1.01% -2.06% - -------------------------------------------------------------------------------- NZF -5.94% -6.28% - -------------------------------------------------------------------------------- 10 Nuveen Performance Plus Municipal Fund, Inc. NPP Performance OVERVIEW As of October 31, 2005 Pie Chart: CREDIT QUALITY (as a % of total investments) AAA/U.S. Guaranteed 76% AA 8% A 4% BBB 9% BB or Lower 1% NR 2% Bar Chart: 2004-2005 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Nov 0.081 Dec 0.081 Jan 0.081 Feb 0.081 Mar 0.078 Apr 0.078 May 0.078 Jun 0.078 Jul 0.078 Aug 0.078 Sep 0.0745 Oct 0.0745 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 11/1/04 14.93 14.96 14.91 14.9 14.55 14.14 14.31 14.24 14.31 14.37 14.42 14.47 14.51 14.49 14.43 14.45 14.47 14.45 14.45 14.31 14.22 14.27 14.17 14.28 14.33 14.33 14.4 14.34 14.37 14.3 14.29 14.34 14.25 14.27 14.28 14.25 14.27 14.21 14.23 14.24 14.33 14.45 14.49 14.55 14.53 14.5 14.58 14.71 14.55 14.5 14.44 14.35 14.33 14.37 14.31 14.32 14.4 14.4 14.34 14.37 14.39 14.47 14.46 14.53 14.6 14.59 14.69 14.78 14.8 14.88 14.91 14.81 14.77 14.68 14.69 14.65 14.54 14.4 14.56 14.7 14.75 14.76 14.75 14.76 14.78 14.83 14.88 14.84 14.69 14.64 14.54 14.39 14.35 14.2 14.27 14.22 14.11 13.87 13.58 13.68 13.74 13.72 14 14.13 14.3 14.18 14.14 14.23 14.14 14.1 14.15 14.17 14.16 14.12 14.1 14.15 14.19 14.15 14.08 14.13 14.15 14.15 14.31 14.24 14.25 14.25 14.31 14.33 14.4 14.45 14.39 14.45 14.47 14.43 14.37 14.37 14.41 14.43 14.49 14.5 14.45 14.51 14.51 14.49 14.51 14.59 14.65 14.64 14.7 14.76 14.76 14.8 14.8 14.75 14.75 14.61 14.62 14.69 14.69 14.7 14.68 14.77 14.78 14.76 14.79 14.81 14.9 14.94 14.98 14.91 14.91 14.98 15.07 15.17 15.2 15.26 15.18 15.13 15.19 14.98 15.1 15.1 15.01 15.13 15.1 15.23 15.24 15.26 15.2 15.2 15.23 15.29 15.2 15.24 15.11 15.09 15.11 15.19 15.08 15.16 15.17 15.13 15.09 15.03 15.05 15.06 15.09 15.09 15.13 15.14 15.21 15.28 15.33 15.37 15.41 15.46 15.38 15.39 15.44 15.39 15.29 15.2 15 15.05 15.08 15.14 15.16 14.95 14.95 14.78 14.79 14.93 14.97 15.03 15.05 15.08 15.08 15.05 15.04 15.02 15.04 14.74 14.64 14.54 14.46 14.37 14.43 14.42 14.53 14.58 14.58 14.48 14.46 14.45 10/31/05 14.43 FUND SNAPSHOT - ------------------------------------ Common Share Price $14.43 - ------------------------------------ Common Share Net Asset Value $15.51 - ------------------------------------ Premium/(Discount) to NAV -6.96% - ------------------------------------ Market Yield 6.20% - ------------------------------------ Taxable-Equivalent Yield1 8.61% - ------------------------------------ Net Assets Applicable to Common Shares ($000) $929,544 - ------------------------------------ Average Effective Maturity on Securities (Years) 15.39 - ------------------------------------ Leverage-Adjusted Duration 8.27 - ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 6/22/89) - ------------------------------------ ON SHARE PRICE ON NAV - ------------------------------------ 1-Year 3.02% 3.83% - ------------------------------------ 5-Year 10.31% 7.86% - ------------------------------------ 10-Year 6.12% 6.62% - ------------------------------------ STATES (as a % of total investments) - ------------------------------------ Illinois 13.2% - ------------------------------------ New York 9.8% - ------------------------------------ California 9.0% - ------------------------------------ New Jersey 4.8% - ------------------------------------ Louisiana 4.6% - ------------------------------------ Michigan 4.5% - ------------------------------------ Indiana 4.5% - ------------------------------------ Texas 3.9% - ------------------------------------ Colorado 3.3% - ------------------------------------ Florida 3.1% - ------------------------------------ Washington 3.0% - ------------------------------------ Utah 3.0% - ------------------------------------ Massachusetts 2.8% - ------------------------------------ South Carolina 2.8% - ------------------------------------ Ohio 2.7% - ------------------------------------ Pennsylvania 2.5% - ------------------------------------ Nevada 2.4% - ------------------------------------ Georgia 2.1% - ------------------------------------ Minnesota 2.1% - ------------------------------------ Wisconsin 1.4% - ------------------------------------ Other 14.5% - ------------------------------------ SECTORS (as a % of total investments) - ------------------------------------ U.S. Guaranteed 25.6% - ------------------------------------ Tax Obligation/Limited 15.4% - ------------------------------------ Tax Obligation/General 13.2% - ------------------------------------ Utilities 10.0% - ------------------------------------ Transportation 9.3% - ------------------------------------ Healthcare 8.7% - ------------------------------------ Consumer Staples 5.9% - ------------------------------------ Other 11.9% - ------------------------------------ 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 also paid shareholders capital gains and net ordinary income distributions in December 2004 of $0.0188 per share. 11 Nuveen Municipal Advantage Fund, Inc. NMA Performance OVERVIEW As of October 31, 2005 Pie Chart: CREDIT QUALITY (as a % of total investments) AAA/U.S. Guaranteed 66% AA 11% A 4% BBB 16% BB or Lower 3% Bar Chart: 2004-2005 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Nov 0.086 Dec 0.086 Jan 0.086 Feb 0.086 Mar 0.083 Apr 0.083 May 0.083 Jun 0.083 Jul 0.083 Aug 0.083 Sep 0.0795 Oct 0.0795 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 11/1/04 15.68 15.75 15.77 15.72 15.43 15.04 15.2 15.2 15.29 15.21 15.3 15.44 15.52 15.5 15.46 15.46 15.37 15.37 15.4 15.36 15.25 15.28 15.19 15.31 15.34 15.34 15.33 15.32 15.4 15.27 15.22 15.27 15.18 15.12 15.06 15.1 15.07 15.1 15.1 15.04 15.11 15.23 15.29 15.34 15.3 15.39 15.37 15.46 15.43 15.48 15.33 15.3 15.12 15.15 15.2 15.27 15.22 15.2 15.17 15.18 15.23 15.31 15.36 15.44 15.4 15.44 15.58 15.59 15.7 15.75 15.79 15.76 15.76 15.76 15.66 15.55 15.47 15.38 15.41 15.52 15.7 15.68 15.67 15.71 15.7 15.7 15.68 15.7 15.47 15.42 15.26 15.21 15.19 15.09 15.1 15.08 15.05 14.85 14.42 14.55 14.36 14.35 14.52 14.65 14.78 14.76 14.74 14.78 14.77 14.79 14.82 14.87 14.89 14.92 14.96 15.04 15.15 14.87 14.92 14.93 15.14 15.14 15.1 15.21 15.2 15.2 15.17 15.23 15.28 15.33 15.28 15.26 15.39 15.28 15.26 15.32 15.24 15.17 15.28 15.33 15.29 15.31 15.25 15.22 15.21 15.31 15.32 15.38 15.45 15.46 15.5 15.55 15.49 15.5 15.41 15.34 15.33 15.31 15.4 15.37 15.39 15.46 15.48 15.57 15.59 15.69 15.68 15.67 15.67 15.7 15.69 15.78 15.75 15.83 15.85 15.91 15.8 15.77 15.71 15.56 15.63 15.66 15.61 15.6 15.66 15.65 15.68 15.81 15.72 15.72 15.78 15.89 15.77 15.72 15.65 15.65 15.57 15.63 15.58 15.66 15.68 15.77 15.7 15.78 15.77 15.75 15.8 15.82 15.77 15.8 15.82 15.81 15.84 15.88 15.93 15.97 15.95 15.94 16.01 16.06 16.01 15.89 15.71 15.66 15.64 15.7 15.76 15.68 15.6 15.51 15.58 15.66 15.75 15.84 15.84 15.84 15.81 15.72 15.76 15.85 15.75 15.55 15.44 15.38 15.39 15.34 15.3 15.24 15.19 15.2 15.19 15.05 15.13 15.17 10/31/05 15.19 FUND SNAPSHOT - ------------------------------------ Common Share Price $15.19 - ------------------------------------ Common Share Net Asset Value $15.70 - ------------------------------------ Premium/(Discount) to NAV -3.25% - ------------------------------------ Market Yield 6.28% - ------------------------------------ Taxable-Equivalent Yield1 8.72% - ------------------------------------ Net Assets Applicable to Common Shares ($000) $675,678 - ------------------------------------ Average Effective Maturity on Securities (Years) 17.26 - ------------------------------------ Leverage-Adjusted Duration 7.11 - ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 12/19/89) - ------------------------------------ ON SHARE PRICE ON NAV - ------------------------------------ 1-Year 3.29% 4.42% - ------------------------------------ 5-Year 10.68% 8.36% - ------------------------------------ 10-Year 7.01% 6.87% - ------------------------------------ STATES (as a % of total investments) - ------------------------------------ Texas 12.2% - ------------------------------------ New York 11.0% - ------------------------------------ Illinois 10.1% - ------------------------------------ Washington 9.5% - ------------------------------------ California 6.9% - ------------------------------------ Wisconsin 5.1% - ------------------------------------ Louisiana 5.1% - ------------------------------------ Tennessee 3.4% - ------------------------------------ South Carolina 3.1% - ------------------------------------ Ohio 3.0% - ------------------------------------ Colorado 2.8% - ------------------------------------ Nevada 2.5% - ------------------------------------ Indiana 2.4% - ------------------------------------ North Carolina 2.1% - ------------------------------------ Alabama 2.1% - ------------------------------------ New Jersey 2.1% - ------------------------------------ Massachusetts 1.6% - ------------------------------------ Oklahoma 1.5% - ------------------------------------ Other 13.5% - ------------------------------------ SECTORS (as a % of total investments) - ------------------------------------ U.S. Guaranteed 21.6% - ------------------------------------ Healthcare 16.5% - ------------------------------------ Utilities 15.8% - ------------------------------------ Transportation 13.0% - ------------------------------------ Tax Obligation/Limited 7.0% - ------------------------------------ Housing/Single Family 6.7% - ------------------------------------ Tax Obligation/General 6.1% - ------------------------------------ Consumer Staples 5.4% - ------------------------------------ Other 7.9% - ------------------------------------ 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 also paid shareholders a capital gains distribution in December 2004 of $0.0149 per share. 12 Nuveen Municipal Market Opportunity Fund, Inc. NMO Performance OVERVIEW As of October 31, 2005 Pie Chart: CREDIT QUALITY (as a % of total investments) AAA/U.S. Guaranteed 73% AA 11% A 6% BBB 7% BB or Lower 2% NR 1% Bar Chart: 2004-2005 MONTHLY TAX-FREE DIVIDENDS PER SHARE Nov 0.079 Dec 0.079 Jan 0.079 Feb 0.079 Mar 0.076 Apr 0.076 May 0.076 Jun 0.076 Jul 0.076 Aug 0.076 Sep 0.0725 Oct 0.0725 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 11/1/04 14.49 14.56 14.53 14.6 14.35 14.04 14.16 14.09 14.2 14.24 14.24 14.28 14.34 14.29 14.2 14.24 14.22 14.2 14.22 14.1 14.09 14.12 13.99 14.11 14.13 14.15 14.12 14.1 14.16 14.09 14.04 14.01 13.96 13.93 13.96 13.96 13.9 13.95 13.9 13.95 13.96 14.03 14.08 14.14 14.07 14.12 14.23 14.34 14.32 14.28 14.25 14.17 14.14 14.23 14.15 14.22 14.22 14.23 14.25 14.24 14.27 14.47 14.44 14.48 14.45 14.47 14.5 14.5 14.49 14.55 14.58 14.53 14.57 14.59 14.58 14.59 14.44 14.33 14.44 14.53 14.59 14.62 14.65 14.67 14.68 14.63 14.56 14.53 14.36 14.33 14.13 14.04 13.94 13.91 13.83 13.77 13.62 13.55 13.33 13.46 13.26 13.24 13.45 13.65 13.74 13.73 13.71 13.81 13.74 13.71 13.73 13.75 13.68 13.71 13.7 13.77 13.84 13.78 13.75 13.79 13.82 13.86 13.92 13.97 13.93 13.93 13.97 14.01 14.04 14.13 13.97 14 14.1 14.11 14.08 14.07 14.08 14.11 14.16 14.18 14.15 14.17 14.23 14.24 14.17 14.29 14.32 14.45 14.6 14.45 14.5 14.47 14.41 14.39 14.44 14.27 14.29 14.26 14.39 14.39 14.39 14.43 14.48 14.54 14.68 14.79 14.74 14.87 14.92 14.88 14.92 14.95 14.94 14.97 14.98 15.03 14.99 15.01 14.95 14.84 14.84 14.85 14.72 14.75 14.78 14.9 14.98 14.96 14.94 14.94 14.92 14.96 14.95 14.94 14.87 14.88 14.84 14.92 14.89 14.9 14.79 14.87 14.8 14.74 14.75 14.81 14.83 14.88 14.87 14.79 14.82 14.88 14.86 14.94 14.95 14.93 14.92 14.98 14.94 14.96 14.9 14.86 14.65 14.62 14.6 14.55 14.59 14.46 14.46 14.25 14.33 14.44 14.47 14.51 14.5 14.48 14.46 14.44 14.39 14.37 14.41 14.22 14.01 14.05 14 14.06 14.05 14 14.11 14.15 14.18 14.11 14.13 14.14 10/31/05 14.19 FUND SNAPSHOT - ------------------------------------ Common Share Price $14.19 - ------------------------------------ Common Share Net Asset Value $15.14 - ------------------------------------ Premium/(Discount) to NAV -6.27% - ------------------------------------ Market Yield 6.13% - ------------------------------------ Taxable-Equivalent Yield1 8.51% - ------------------------------------ Net Assets Applicable to Common Shares ($000) $689,682 - ------------------------------------ Average Effective Maturity on Securities (Years) 14.25 - ------------------------------------ Leverage-Adjusted Duration 7.83 - ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 3/21/90) - ------------------------------------ ON SHARE PRICE ON NAV - ------------------------------------ 1-Year 4.70% 3.78% - ------------------------------------ 5-Year 8.57% 7.33% - ------------------------------------ 10-Year 6.22% 6.15% - ------------------------------------ STATES (as a % of total investments) - ------------------------------------ Texas 15.6% - ------------------------------------ New York 13.7% - ------------------------------------ Washington 12.0% - ------------------------------------ Illinois 7.3% - ------------------------------------ Minnesota 5.3% - ------------------------------------ California 4.4% - ------------------------------------ South Carolina 4.3% - ------------------------------------ Georgia 3.9% - ------------------------------------ Nevada 3.5% - ------------------------------------ Colorado 3.3% - ------------------------------------ North Dakota 2.8% - ------------------------------------ New Jersey 2.7% - ------------------------------------ Pennsylvania 2.5% - ------------------------------------ Massachusetts 2.2% - ------------------------------------ Puerto Rico 1.9% - ------------------------------------ Other 14.6% - ------------------------------------ SECTORS (as a % of total investments) - ------------------------------------ U.S. Guaranteed 29.4% - ------------------------------------ Tax Obligation/General 16.6% - ------------------------------------ Transportation 16.5% - ------------------------------------ Tax Obligation/Limited 9.6% - ------------------------------------ Healthcare 7.0% - ------------------------------------ Utilities 7.0% - ------------------------------------ Consumer Staples 5.4% - ------------------------------------ Other 8.5% - ------------------------------------ 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. 13 Nuveen Dividend Advantage Municipal Fund NAD Performance OVERVIEW As of October 31, 2005 Pie Chart: CREDIT QUALITY (as a % of total investments) AAA/U.S. Guaranteed 72% AA 11% A 2% BBB 7% BB or Lower 5% NR 3% Bar Chart: 2004-2005 MONTHLY TAX-FREE DIVIDENDS PER SHARE Nov 0.0855 Dec 0.0855 Jan 0.0855 Feb 0.0855 Mar 0.0825 Apr 0.0825 May 0.0825 Jun 0.0825 Jul 0.0825 Aug 0.0825 Sep 0.079 Oct 0.079 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 11/1/04 15.33 15.45 15.35 15.34 15.02 14.6 14.7 14.64 14.67 14.73 14.73 14.78 14.86 14.77 14.63 14.7 14.72 14.79 14.79 14.67 14.52 14.56 14.35 14.58 14.67 14.76 14.8 14.86 14.89 14.9 14.82 14.91 14.83 14.75 14.74 14.73 14.66 14.74 14.69 14.7 14.64 14.67 14.87 14.9 14.81 14.8 15.06 15.1 14.9 14.73 14.59 14.6 14.56 14.54 14.49 14.59 14.57 14.48 14.52 14.54 14.64 14.73 14.75 14.79 14.87 14.86 14.89 14.94 14.92 15.03 15.07 15 15.04 14.96 14.95 14.92 14.86 14.83 14.82 14.97 14.99 15.02 15.02 14.96 15.01 15.02 15.05 14.96 14.74 14.72 14.6 14.49 14.42 14.4 14.41 14.35 14.32 14.19 13.82 13.89 13.84 13.84 13.91 14.05 14.2 14.24 14.26 14.31 14.27 14.28 14.34 14.4 14.35 14.3 14.28 14.34 14.43 14.39 14.29 14.34 14.44 14.36 14.47 14.53 14.54 14.54 14.62 14.63 14.7 14.77 14.67 14.82 14.88 14.82 14.87 14.81 14.83 14.88 14.85 14.9 14.87 14.85 14.83 14.82 14.81 14.87 14.94 14.97 15.07 15.01 15.07 15.09 15.15 15.15 15.15 15 15 14.98 15 14.97 14.97 15.03 15.12 15.15 15.2 15.25 15.22 15.32 15.43 15.42 15.43 15.43 15.48 15.52 15.49 15.55 15.54 15.53 15.48 15.3 15.52 15.5 15.43 15.46 15.48 15.45 15.54 15.59 15.55 15.55 15.5 15.57 15.55 15.59 15.49 15.44 15.44 15.49 15.41 15.38 15.39 15.38 15.33 15.35 15.44 15.4 15.46 15.46 15.53 15.55 15.58 15.58 15.64 15.65 15.74 15.79 15.72 15.78 15.8 15.75 15.67 15.59 15.5 15.45 15.42 15.45 15.57 15.47 15.38 15.21 15.2 15.24 15.28 15.28 15.32 15.31 15.26 15.15 15.1 15.03 15.12 14.89 14.77 14.7 14.58 14.53 14.62 14.58 14.65 14.67 14.63 14.57 14.51 14.53 10/31/05 14.58 FUND SNAPSHOT - ------------------------------------ Common Share Price $14.58 - ------------------------------------ Common Share Net Asset Value $15.28 - ------------------------------------ Premium/(Discount) to NAV -4.58% - ------------------------------------ Market Yield 6.50% - ------------------------------------ Taxable-Equivalent Yield1 9.03% - ------------------------------------ Net Assets Applicable to Common Shares ($000) $599,887 - ------------------------------------ Average Effective Maturity on Securities (Years) 15.66 - ------------------------------------ Leverage-Adjusted Duration 7.91 - ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 5/26/99) - ------------------------------------ ON SHARE PRICE ON NAV - ------------------------------------ 1-Year 1.77% 4.27% - ------------------------------------ 5-Year 9.79% 9.14% - ------------------------------------ Since Inception 6.15% 7.61% - ------------------------------------ STATES (as a % of total investments) - ------------------------------------ Illinois 24.8% - ------------------------------------ New York 10.2% - ------------------------------------ Texas 10.1% - ------------------------------------ Washington 7.7% - ------------------------------------ Wisconsin 4.7% - ------------------------------------ New Jersey 4.4% - ------------------------------------ Florida 3.8% - ------------------------------------ Pennsylvania 3.4% - ------------------------------------ Ohio 2.8% - ------------------------------------ Louisiana 2.7% - ------------------------------------ Indiana 2.6% - ------------------------------------ Colorado 2.5% - ------------------------------------ Michigan 2.4% - ------------------------------------ California 2.3% - ------------------------------------ Rhode Island 2.2% - ------------------------------------ Other 13.4% - ------------------------------------ SECTORS (as a % of total investments) - ------------------------------------ Healthcare 17.1% - ------------------------------------ U.S. Guaranteed 16.1% - ------------------------------------ Tax Obligation/Limited 14.2% - ------------------------------------ Tax Obligation/General 13.4% - ------------------------------------ Transportation 11.8% - ------------------------------------ Utilities 8.3% - ------------------------------------ Consumer Staples 5.4% - ------------------------------------ Other 13.7% - ------------------------------------ 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. 14 Nuveen Dividend Advantage Municipal Fund 2 NXZ Performance OVERVIEW As of October 31, 2005 Pie Chart: CREDIT QUALITY (as a % of total investments) AAA/U.S. Guaranteed 61% AA 7% A 12% BBB 9% BB or Lower 8% NR 3% Bar Chart: 2004-2005 MONTHLY TAX-FREE DIVIDENDS PER SHARE Nov 0.086 Dec 0.086 Jan 0.086 Feb 0.086 Mar 0.086 Apr 0.086 May 0.086 Jun 0.086 Jul 0.086 Aug 0.086 Sep 0.086 Oct 0.086 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 11/1/04 15.44 15.53 15.65 15.65 15.18 14.76 15 14.9 14.89 15.03 15.16 15.2 15.19 15.14 14.96 15.14 15.14 15.11 15.18 15.07 15.09 15.09 14.93 15.21 15.25 15.22 15.35 15.35 15.42 15.41 15.42 15.47 15.47 15.48 15.45 15.49 15.48 15.46 15.47 15.48 15.46 15.62 15.67 15.46 15.29 15.34 15.41 15.45 15.45 15.42 15.34 15.23 15.14 15.03 15.05 15.04 15.04 15 14.97 14.99 15.06 15.21 15.2 15.37 15.33 15.45 15.45 15.56 15.52 15.55 15.55 15.43 15.43 15.38 15.34 15.44 15.25 15.15 15.21 15.28 15.42 15.38 15.35 15.39 15.5 15.57 15.7 15.65 15.33 15.41 15.3 15.03 15.03 15 14.95 14.97 15.03 14.87 14.56 14.69 14.57 14.61 14.88 14.95 15.14 15.13 15.09 15.2 15.14 15.11 15.07 15.09 15.1 15.09 15.16 15.1 15.18 15.08 15.06 15.05 15.08 15.09 15.24 15.28 15.29 15.29 15.38 15.42 15.4 15.43 15.39 15.39 15.52 15.39 15.45 15.5 15.53 15.52 15.55 15.5 15.41 15.47 15.5 15.51 15.54 15.59 15.62 15.69 15.77 15.72 15.76 15.86 15.9 15.84 15.84 15.65 15.64 15.7 15.89 15.84 15.81 15.82 15.84 15.94 16 15.92 15.84 15.96 16.05 15.98 15.92 16 16.05 16.08 16.16 16.22 16.1 16.04 16.06 15.83 16.01 15.99 15.94 15.99 15.87 15.82 15.97 16 16 16 16.01 16.07 16.14 16.12 16.03 16.01 15.99 16.02 15.94 16 16.03 15.99 15.97 16 16.07 16.11 16.29 16.24 16.29 16.32 16.22 16.2 16.39 16.59 16.64 16.68 16.7 16.85 16.79 16.85 16.6 16.33 16.31 16.46 16.45 16.32 16.4 16.39 16.15 16.14 16.09 16.15 16.19 16.25 16.27 16.24 16.22 16.19 16.27 16.21 16.3 16.01 15.64 15.6 15.67 15.58 15.49 15.5 15.82 15.55 15.56 15.45 15.5 15.45 10/31/05 15.64 FUND SNAPSHOT - ------------------------------------ Common Share Price $15.64 - ------------------------------------ Common Share Net Asset Value $15.80 - ------------------------------------ Premium/(Discount) to NAV -1.01% - ------------------------------------ Market Yield 6.60% - ------------------------------------ Taxable-Equivalent Yield1 9.17% - ------------------------------------ Net Assets Applicable to Common Shares ($000) $462,862 - ------------------------------------ Average Effective Maturity on Securities (Years) 22.27 - ------------------------------------ Leverage-Adjusted Duration 7.40 - ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 3/27/01) - ------------------------------------ ON SHARE PRICE ON NAV - ------------------------------------ 1-Year 8.58% 7.83% - ------------------------------------ Since Inception 7.71% 8.87% - ------------------------------------ STATES (as a % of total investments) - ------------------------------------ Texas 16.7% - ------------------------------------ Michigan 9.7% - ------------------------------------ California 7.6% - ------------------------------------ Illinois 7.6% - ------------------------------------ New York 4.3% - ------------------------------------ Colorado 4.2% - ------------------------------------ Washington 4.1% - ------------------------------------ New Mexico 3.7% - ------------------------------------ Florida 3.4% - ------------------------------------ Missouri 3.4% - ------------------------------------ Indiana 3.3% - ------------------------------------ Alabama 2.9% - ------------------------------------ Louisiana 2.8% - ------------------------------------ Nevada 2.8% - ------------------------------------ Massachusetts 2.7% - ------------------------------------ Kansas 2.6% - ------------------------------------ Oregon 2.6% - ------------------------------------ Pennsylvania 2.5% - ------------------------------------ Other 13.1% - ------------------------------------ SECTORS (as a % of total investments) - ------------------------------------ Healthcare 17.9% - ------------------------------------ Tax Obligation/Limited 15.5% - ------------------------------------ U.S. Guaranteed 13.3% - ------------------------------------ Transportation 13.2% - ------------------------------------ Water and Sewer 8.8% - ------------------------------------ Utilities 7.0% - ------------------------------------ Tax Obligation/General 6.3% - ------------------------------------ Consumer Staples 5.1% - ------------------------------------ Other 12.9% - ------------------------------------ 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 Dividend Advantage Municipal Fund 3 NZF Performance OVERVIEW As of October 31, 2005 Pie Chart: CREDIT QUALITY (as a % of total investments) AAA/U.S. Guaranteed 71% AA 9% A 2% BBB 10% BB or Lower 2% NR 6% Bar Chart: 2004-2005 MONTHLY TAX-FREE DIVIDENDS PER SHARE Nov 0.0805 Dec 0.0805 Jan 0.0805 Feb 0.0805 Mar 0.0805 Apr 0.0805 May 0.0805 Jun 0.0805 Jul 0.0805 Aug 0.0805 Sep 0.077 Oct 0.077 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 11/1/04 14.45 14.49 14.62 14.62 14.39 13.95 14 14 14 14.07 14.16 14.26 14.31 14.37 14.25 14.32 14.33 14.34 14.32 14.17 14.2 14.16 14 14.1 14.14 14.12 14.14 14.17 14.22 14.1 14.07 14.07 14 13.95 13.99 14.03 14.07 14.08 14.15 14.03 14.07 14.15 14.18 14.24 14.3 14.26 14.45 14.51 14.69 14.62 14.5 14.43 14.32 14.12 14.17 14.18 14.24 14.16 14.14 14.13 14.15 14.23 14.34 14.4 14.39 14.39 14.49 14.53 14.53 14.57 14.6 14.54 14.57 14.56 14.5 14.45 14.39 14.3 14.37 14.43 14.45 14.46 14.45 14.51 14.54 14.6 14.69 14.55 14.46 14.45 14.3 14.19 14.16 14.18 14.22 14.18 14.07 13.91 13.67 13.79 13.8 13.79 13.95 14.1 14.14 14.12 14.15 14.23 14.15 14.16 14.13 14.21 14.09 14.07 14.07 14.08 14.18 14.16 14.12 14.1 14.15 14.18 14.26 14.35 14.32 14.32 14.35 14.44 14.44 14.41 14.3 14.39 14.47 14.35 14.41 14.41 14.48 14.45 14.48 14.48 14.47 14.49 14.52 14.56 14.56 14.61 14.67 14.69 14.78 14.77 14.78 14.85 14.85 14.9 14.91 14.77 14.76 14.71 14.75 14.68 14.72 14.75 14.82 14.86 14.92 14.86 14.82 14.9 14.99 15 15.05 15.13 15.15 15.19 15.26 15.31 15.25 15.24 15.18 14.95 15.04 14.95 14.94 14.98 14.98 14.98 15 15.05 15.1 15.1 15.14 15.13 15.12 15.11 15.03 15 15.03 15.09 15.05 15.06 15.08 15.12 15.06 15.11 15.17 15.13 15.06 15.08 15.13 15.17 15.18 15.2 15.26 15.35 15.42 15.47 15.3 15.32 15.41 15.4 15.21 15.08 14.91 14.9 14.91 14.94 14.93 14.56 14.47 14.4 14.35 14.51 14.5 14.53 14.5 14.5 14.45 14.49 14.48 14.45 14.53 14.33 14.08 14.1 14.1 14.05 14.09 14.09 14.33 14.35 14.38 14.3 14.36 14.37 10/31/05 14.41 FUND SNAPSHOT - ------------------------------------ Common Share Price $14.41 - ------------------------------------ Common Share Net Asset Value $15.32 - ------------------------------------ Premium/(Discount) to NAV -5.94% - ------------------------------------ Market Yield 6.41% - ------------------------------------ Taxable-Equivalent Yield1 8.90% - ------------------------------------ Net Assets Applicable to Common Shares ($000) $617,358 - ------------------------------------ Average Effective Maturity on Securities (Years) 18.72 - ------------------------------------ Leverage-Adjusted Duration 7.03 - ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 9/25/01) - ------------------------------------ ON SHARE PRICE ON NAV - ------------------------------------ 1-Year 6.11% 6.09% - ------------------------------------ Since Inception 5.62% 8.09% - ------------------------------------ STATES (as a % of total investments) - ------------------------------------ Illinois 12.2% - ------------------------------------ Texas 12.1% - ------------------------------------ Washington 10.7% - ------------------------------------ California 6.9% - ------------------------------------ Michigan 6.1% - ------------------------------------ Nevada 5.3% - ------------------------------------ Colorado 5.2% - ------------------------------------ Indiana 4.0% - ------------------------------------ Iowa 3.8% - ------------------------------------ New York 3.5% - ------------------------------------ Wisconsin 3.0% - ------------------------------------ Louisiana 2.3% - ------------------------------------ Kentucky 2.1% - ------------------------------------ Missouri 1.7% - ------------------------------------ Oregon 1.7% - ------------------------------------ Ohio 1.6% - ------------------------------------ New Jersey 1.6% - ------------------------------------ Georgia 1.5% - ------------------------------------ Other 14.7% - ------------------------------------ SECTORS (as a % of total investments) - ------------------------------------ Transportation 17.6% - ------------------------------------ Healthcare 16.1% - ------------------------------------ Tax Obligation/General 12.9% - ------------------------------------ U.S. Guaranteed 10.1% - ------------------------------------ Water and Sewer 8.3% - ------------------------------------ Utilities 7.4% - ------------------------------------ Education and Civic Organizations 5.9% - ------------------------------------ Consumer Staples 5.8% - ------------------------------------ Tax Obligation/Limited 5.5% - ------------------------------------ Other 10.4% - ------------------------------------ 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 Shareholder MEETING REPORT The Annual Shareholder Meeting was held on July 26, 2005 at The Northern Trust Bank, 50 S. LaSalle St., Chicago, Illinois.
NPP NMA NMO - ------------------------------------------------------------------------------------------------------------------------------------ APPROVAL OF THE NEW INVESTMENT MANAGEMENT AGREEMENT WAS REACHED AS FOLLOWS: Common and Common and Common and MuniPreferred MuniPreferred MuniPreferred shares voting shares voting shares voting together together together as a class as a class as a class ==================================================================================================================================== For 52,862,723 37,087,433 40,218,602 Against 373,374 336,660 334,594 Abstain 574,348 444,500 413,430 - ------------------------------------------------------------------------------------------------------------------------------------ Total 53,810,445 37,868,593 40,966,626 ==================================================================================================================================== 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 shares voting 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 53,315,159 -- 37,446,063 -- 40,553,436 -- Withhold 495,286 -- 422,530 -- 413,190 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 53,810,445 -- 37,868,593 -- 40,966,626 -- ==================================================================================================================================== Lawrence H. Brown For 53,296,458 -- 37,452,096 -- 40,590,710 -- Withhold 513,987 -- 416,497 -- 375,916 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 53,810,445 -- 37,868,593 -- 40,966,626 -- ==================================================================================================================================== Jack B. Evans For 53,324,307 -- 37,457,019 -- 40,585,623 -- Withhold 486,138 -- 411,574 -- 381,003 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 53,810,445 -- 37,868,593 -- 40,966,626 -- ==================================================================================================================================== William C. Hunter For 53,322,571 -- 37,507,732 -- 40,593,172 -- Withhold 487,874 -- 360,861 -- 373,454 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 53,810,445 -- 37,868,593 -- 40,966,626 -- ==================================================================================================================================== David J. Kundert For 53,331,019 -- 37,501,768 -- 40,592,913 -- Withhold 479,426 -- 366,825 -- 373,713 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 53,810,445 -- 37,868,593 -- 40,966,626 -- ==================================================================================================================================== William J. Schneider For -- 16,898 -- 13,106 -- 14,539 Withhold -- 97 -- 49 -- 69 - ------------------------------------------------------------------------------------------------------------------------------------ Total -- 16,995 -- 13,155 -- 14,608 ==================================================================================================================================== Timothy R. Schwertfeger For -- 16,895 -- 13,098 -- 14,547 Withhold -- 100 -- 57 -- 61 - ------------------------------------------------------------------------------------------------------------------------------------ Total -- 16,995 -- 13,155 -- 14,608 ==================================================================================================================================== Judith M. Stockdale For 53,310,458 -- 37,499,595 -- 40,587,488 -- Withhold 499,987 -- 368,998 -- 379,138 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 53,810,445 -- 37,868,593 -- 40,966,626 -- ==================================================================================================================================== Eugene S. Sunshine For 53,307,530 -- 37,502,134 -- 40,577,226 -- Withhold 502,915 -- 366,459 -- 389,400 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 53,810,445 -- 37,868,593 -- 40,966,626 -- ====================================================================================================================================
17 Shareholder MEETING REPORT (continued)
NAD NXZ NZF - ------------------------------------------------------------------------------------------------------------------------------------ APPROVAL OF THE NEW INVESTMENT MANAGEMENT AGREEMENT WAS REACHED AS FOLLOWS: Common and Common and Common and MuniPreferred MuniPreferred MuniPreferred shares voting shares voting shares voting together together together as a class as a class as a class ==================================================================================================================================== For 37,977,618 28,297,610 38,783,698 Against 280,169 162,725 322,800 Abstain 269,279 189,801 228,204 - ------------------------------------------------------------------------------------------------------------------------------------ Total 38,527,066 28,650,136 39,334,702 ==================================================================================================================================== 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 shares voting 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 38,090,074 -- 28,447,863 -- 39,064,983 -- Withhold 436,992 -- 202,273 -- 269,719 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 38,527,066 -- 28,650,136 -- 39,334,702 -- ==================================================================================================================================== Lawrence H. Brown For 38,087,066 -- 28,452,771 -- 39,056,658 -- Withhold 440,000 -- 197,365 -- 278,044 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 38,527,066 -- 28,650,136 -- 39,334,702 -- ==================================================================================================================================== Jack B. Evans For 38,092,084 -- 28,453,050 -- 39,072,765 -- Withhold 434,982 -- 197,086 -- 261,937 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 38,527,066 -- 28,650,136 -- 39,334,702 -- ==================================================================================================================================== William C. Hunter For 38,106,231 -- 28,458,908 -- 39,070,348 -- Withhold 420,835 -- 191,228 -- 264,354 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 38,527,066 -- 28,650,136 -- 39,334,702 -- ==================================================================================================================================== David J. Kundert For 38,100,806 -- 28,461,057 -- 39,063,232 -- Withhold 426,260 -- 189,079 -- 271,470 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 38,527,066 -- 28,650,136 -- 39,334,702 -- ==================================================================================================================================== William J. Schneider For -- 11,467 -- 8,635 -- 11,964 Withhold -- 11 -- 40 -- 41 - ------------------------------------------------------------------------------------------------------------------------------------ Total -- 11,478 -- 8,675 -- 12,005 ==================================================================================================================================== Timothy R. Schwertfeger For -- 11,467 -- 8,635 -- 11,964 Withhold -- 11 -- 40 -- 41 - ------------------------------------------------------------------------------------------------------------------------------------ Total -- 11,478 -- 8,675 -- 12,005 ==================================================================================================================================== Judith M. Stockdale For 38,101,238 -- 28,463,512 -- 39,068,858 -- Withhold 425,828 -- 186,624 -- 265,844 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 38,527,066 -- 28,650,136 -- 39,334,702 -- ==================================================================================================================================== Eugene S. Sunshine For 38,097,911 -- 28,470,902 -- 39,070,723 -- Withhold 429,155 -- 179,234 -- 263,979 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 38,527,066 -- 28,650,136 -- 39,334,702 -- ====================================================================================================================================
18 Report of INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM THE BOARD OF DIRECTORS, TRUSTEES AND SHAREHOLDERS NUVEEN PERFORMANCE PLUS MUNICIPAL FUND, INC. NUVEEN MUNICIPAL ADVANTAGE FUND, INC. NUVEEN MUNICIPAL MARKET OPPORTUNITY FUND, INC. NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND 2 NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND 3 We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of Nuveen Performance Plus Municipal Fund, Inc., Nuveen Municipal Advantage Fund, Inc., Nuveen Municipal Market Opportunity Fund, Inc., Nuveen Dividend Advantage Municipal Fund, Nuveen Dividend Advantage Municipal Fund 2 and Nuveen Dividend Advantage Municipal Fund 3 as of October 31, 2005, 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, 2005, by correspondence with the custodian and brokers or 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 Performance Plus Municipal Fund, Inc., Nuveen Municipal Advantage Fund, Inc., Nuveen Municipal Market Opportunity Fund, Inc., Nuveen Dividend Advantage Municipal Fund, Nuveen Dividend Advantage Municipal Fund 2 and Nuveen Dividend Advantage Municipal Fund 3 at October 31, 2005, and 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 their 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, 2005 19 Nuveen Performance Plus Municipal Fund, Inc. (NPP) Portfolio of INVESTMENTS October 31, 2005
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 1.2% (0.8% OF TOTAL INVESTMENTS) Jefferson County, Alabama, Sewer Revenue Refunding Warrants, Series 1997A: $ 3,640 5.625%, 2/01/22 (Pre-refunded to 2/01/07) - FGIC Insured 2/07 at 101.00 AAA $ 3,785,673 1,435 5.625%, 2/01/22 - FGIC Insured 2/07 at 101.00 AAA 1,487,550 3,820 5.375%, 2/01/27 (Pre-refunded to 2/01/07) - FGIC Insured 2/07 at 100.00 AAA 3,924,515 1,505 5.375%, 2/01/27 - FGIC Insured 2/07 at 100.00 AAA 1,537,764 - ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 1.3% (0.9% OF TOTAL INVESTMENTS) 1,000 Arizona State Transportation Board, Highway Revenue Bonds, 7/12 at 100.00 AAA 1,088,630 Series 2002B, 5.250%, 7/01/22 (Pre-refunded to 7/01/12) Phoenix, Arizona, Civic Improvement Corporation, Senior Lien Airport Revenue Bonds, Series 2002B: 5,365 5.750%, 7/01/15 (Alternative Minimum Tax) - FGIC Insured 7/12 at 100.00 AAA 5,829,233 5,055 5.750%, 7/01/16 (Alternative Minimum Tax) - FGIC Insured 7/12 at 100.00 AAA 5,492,409 - ------------------------------------------------------------------------------------------------------------------------------------ ARKANSAS - 0.7% (0.4% OF TOTAL INVESTMENTS) 5,080 Independence County, Arkansas, Hydroelectric Power Revenue 5/13 at 100.00 A 5,214,010 Bonds, Series 2003, 5.350%, 5/01/28 - ACA Insured 1,000 Washington County, Arkansas, Hospital Revenue Bonds, 2/15 at 100.00 BBB 970,320 Washington Regional Medical Center, Series 2005A, 5.000%, 2/01/35 - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 13.4% (9.0% OF TOTAL INVESTMENTS) 3,500 Alameda Corridor Transportation Authority, California, 10/17 at 100.00 AAA 2,587,410 Subordinate Lien Revenue Bonds, Series 2004A, 0.000%, 10/01/25 - AMBAC Insured 11,000 Anaheim Public Finance Authority, California, Subordinate No Opt. Call AAA 5,506,270 Lease Revenue Bonds, Public Improvement Project, Series 1997C, 0.000%, 9/01/20 - FSA Insured 3,000 California Health Facilities Financing Authority, Health Facility 3/13 at 100.00 A 3,011,670 Revenue Bonds, Adventist Health System/West, Series 2003A, 5.000%, 3/01/33 2,380 California Infrastructure Economic Development Bank, Revenue 10/11 at 101.00 A- 2,422,816 Bonds, J. David Gladstone Institutes, Series 2001, 5.250%, 10/01/34 6,435 California, General Obligation Refunding Bonds, Series 2002, No Opt. Call AAA 7,471,743 6.000%, 4/01/16 - AMBAC Insured 5,300 California, General Obligation Bonds, Series 2004, 5.100%, 2/01/34 2/09 at 100.00 A 5,350,244 California Department of Water Resources, Power Supply Revenue Bonds, Series 2002A: 4,000 6.000%, 5/01/15 5/12 at 101.00 A2 4,528,520 2,975 5.375%, 5/01/22 5/12 at 101.00 A2 3,203,718 East Bay Municipal Utility District, Alameda and Contra Costa Counties, California, Water System Subordinated Revenue Refunding Bonds, Series 1996: 3,935 4.750%, 6/01/21 (Pre-refunded to 6/01/06) - FGIC Insured 6/06 at 100.00 AAA 3,976,593 2,990 4.750%, 6/01/21 - FGIC Insured 6/06 at 100.00 AAA 2,995,442 10,000 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 BBB 11,407,500 Tobacco Settlement Asset-Backed Bonds, Series 2003A-1, 6.750%, 6/01/39 8,000 Golden State Tobacco Securitization Corporation, California, 6/15 at 100.00 A- 8,026,880 Tobacco Settlement Asset-Backed Revenue Bonds, Series 2005A, 5.000%, 6/01/45 1,000 Mt. Diablo Hospital District, California, Insured Hospital Revenue 12/05 at 100.00 AAA 1,027,710 Bonds, Series 1993A, 5.125%, 12/01/23 - AMBAC Insured 13,450 Ontario Redevelopment Financing Authority, San Bernardino No Opt. Call AAA 16,869,528 County, California, Revenue Refunding Bonds, Redevelopment Project 1, Series 1995, 7.200%, 8/01/17 - MBIA Insured 17,585 Palmdale Community Redevelopment Agency, California, No Opt. Call AAA 18,870,112 Residential Mortgage Revenue Refunding Bonds, Series 1991A, 7.150%, 2/01/10 20 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA (continued) $ 2,325 Palmdale Community Redevelopment Agency, California, No Opt. Call AAA $ 3,056,027 Restructured Single Family Mortgage Revenue Bonds, Series 1986D, 8.000%, 4/01/16 (Alternative Minimum Tax) 2,000 San Francisco Airports Commission, California, Revenue Bonds, 5/09 at 101.00 AAA 2,050,980 San Francisco International Airport, Second Series 1999, Issue 23B, 5.125%, 5/01/30 - FGIC Insured 2,000 San Francisco Airports Commission, California, Revenue 5/11 at 100.00 AAA 2,060,800 Refunding Bonds, San Francisco International Airport, Second Series 2001, Issue 27B, 5.125%, 5/01/26 - FGIC Insured 3,000 San Joaquin Hills Transportation Corridor Agency, Orange No Opt. Call AAA 682,200 County, California, Toll Road Revenue Refunding Bonds, Series 1997A, 0.000%, 1/15/35 - MBIA Insured 15,745 Walnut Valley Unified School District, Los Angeles County, 8/11 at 103.00 AAA 19,127,341 California, General Obligation Refunding Bonds, Series 1997A, 7.200%, 2/01/16 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 4.9% (3.3% OF TOTAL INVESTMENTS) 3,000 Colorado Educational and Cultural Facilities Authority, Charter 8/14 at 100.00 AAA 3,147,210 School Revenue Bonds, Peak-to-Peak Charter School, Series 2004, 5.250%, 8/15/34 - XLCA Insured 5,860 Colorado Health Facilities Authority, Revenue Refunding Bonds, 9/11 at 100.00 AA 6,084,438 Catholic Health Initiatives, Series 2001, 5.250%, 9/01/21 7,575 Denver City and County, Colorado, Airport System Revenue 11/07 at 101.00 AAA 7,883,454 Bonds, Series 1997E, 5.250%, 11/15/23 - MBIA Insured 20,000 Denver Convention Center Hotel Authority, Colorado, Senior 12/13 at 100.00 AAA 20,446,200 Revenue Bonds, Convention Center Hotel, Series 2003A, 5.000%, 12/01/33 - XLCA Insured 10,615 E-470 Public Highway Authority, Colorado, Senior Revenue No Opt. Call AAA 4,955,082 Bonds, Series 1997B, 0.000%, 9/01/21 - MBIA Insured 10,000 E-470 Public Highway Authority, Colorado, Senior Revenue No Opt. Call AAA 2,601,100 Bonds, Series 2000B, 0.000%, 9/01/32 - MBIA Insured 755 Jefferson County School District R1, Colorado, General 12/14 at 100.00 AAA 791,882 Obligation Bonds, Series 2004, 5.000%, 12/15/22 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ DISTRICT OF COLUMBIA - 2.1% (1.4% OF TOTAL INVESTMENTS) 5,590 District of Columbia, General Obligation Bonds, Series 1999B, 6/09 at 101.00 AAA 5,983,704 5.500%, 6/01/13 - FSA Insured 6,440 District of Columbia Tobacco Settlement Corporation, Tobacco 5/11 at 101.00 BBB 6,878,950 Settlement Asset-Backed Bonds, Series 2001, 6.250%, 5/15/24 6,000 Washington Convention Center Authority, District of Columbia, 10/08 at 101.00 AAA 6,336,780 Senior Lien Dedicated Tax Revenue Bonds, Series 1998, 5.250%, 10/01/10 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 4.7% (3.1% OF TOTAL INVESTMENTS) Broward County Housing Finance Authority, Florida, Multifamily Housing Revenue Bonds, Venice Homes Apartments, Series 2001A: 1,545 5.700%, 1/01/32 (Alternative Minimum Tax) - FSA Insured 7/11 at 100.00 AAA 1,572,439 1,805 5.800%, 1/01/36 (Alternative Minimum Tax) - FSA Insured 7/11 at 100.00 AAA 1,844,187 2,915 Florida Housing Finance Corporation, Homeowner Mortgage 1/10 at 100.00 AAA 3,029,472 Revenue Bonds, Series 2000-11, 5.850%, 1/01/22 (Alternative Minimum Tax) - FSA Insured 10,050 Florida State Board of Education, Full Faith and Credit Public 6/10 at 101.00 AAA 10,995,002 Education Capital Outlay Refunding Bonds, Series 1999D, 5.750%, 6/01/22 7,000 Hillsborough County Aviation Authority, Florida, Revenue Bonds, 10/13 at 100.00 AAA 7,410,690 Tampa International Airport, Series 2003A, 5.250%, 10/01/17 (Alternative Minimum Tax) - MBIA Insured 10,750 Martin County Industrial Development Authority, Florida, 12/05 at 101.00 BB+ 10,832,130 Industrial Development Revenue Bonds, Indiantown Cogeneration LP, Series 1994A, 7.875%, 12/15/25 (Alternative Minimum Tax) 2,570 Miami-Dade County Housing Finance Authority, Florida, 6/11 at 100.00 AAA 2,669,716 Multifamily Mortgage Revenue Bonds, Country Club Villas II Project, Series 2001-1A, 5.850%, 1/01/37 (Alternative Minimum Tax) - FSA Insured 3,500 Miami-Dade County, Florida, Aviation Revenue Bonds, Miami 10/15 at 100.00 AAA 3,510,430 International Airport, Series 2005A, 5.000%, 10/01/37 (Alternative Minimum Tax) (WI, settling 11/02/05) - XLCA Insured 1,700 Miami-Dade County, Florida, Beacon Tradeport Community 5/12 at 102.00 AA 1,816,144 Development District, Special Assessment Bonds, Commercial Project, Series 2002A, 5.625%, 5/01/32 - RAAI Insured 21 Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued) Portfolio of INVESTMENTS October 31, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 3.2% (2.1% OF TOTAL INVESTMENTS) $ 4,920 Atlanta, Georgia, Airport General Revenue Refunding Bonds, 1/10 at 101.00 AAA $ 5,374,706 Series 2000A, 5.600%, 1/01/30 (Pre-refunded to 1/01/10) - FGIC Insured 5,000 Atlanta, Georgia, Water and Wastewater Revenue Bonds, No Opt. Call AAA 5,682,600 Series 1999A, 5.500%, 11/01/22 - FGIC Insured 2,000 George L. Smith II World Congress Center Authority, Atlanta, 7/10 at 101.00 AAA 2,131,180 Georgia, Revenue Refunding Bonds, Domed Stadium Project, Series 2000, 5.500%, 7/01/20 (Alternative Minimum Tax) - MBIA Insured 15,000 Private Colleges and Universities Authority, Georgia, Revenue 11/09 at 101.00 AA*** 16,328,100 Bonds, Emory University, Series 1999A, 5.500%, 11/01/25 (Pre-refunded to 11/01/09) - ------------------------------------------------------------------------------------------------------------------------------------ IDAHO - 0.2% (0.1% OF TOTAL INVESTMENTS) 615 Idaho Housing and Finance Association, Single Family Mortgage 7/10 at 100.00 Aa2 641,574 Bonds, Series 2000G-2, 5.950%, 7/01/25 (Alternative Minimum Tax) 865 Idaho Housing and Finance Association, Single Family Mortgage 1/10 at 100.00 A1 898,562 Bonds, Series 2000D, 6.200%, 7/01/14 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 19.8% (13.2% OF TOTAL INVESTMENTS) 3,000 Chicago, Illinois, General Obligation Bonds, Library Projects, 1/08 at 102.00 AAA 3,214,440 Series 1997, 5.750%, 1/01/17 (Pre-refunded to 1/01/08) - FGIC Insured Chicago, Illinois, General Obligation Bonds, City Colleges of Chicago Capital Improvement Project, Series 1999: 32,170 0.000%, 1/01/21 - FGIC Insured No Opt. Call AAA 15,714,723 32,670 0.000%, 1/01/22 - FGIC Insured No Opt. Call AAA 15,126,863 10,000 Chicago Board of Education, Illinois, Unlimited Tax General No Opt. Call AAA 5,166,900 Obligation Bonds, Dedicated Tax Revenues, Series 1998B-1, 0.000%, 12/01/19 - FGIC Insured 10,000 Chicago Board of Education, Illinois, Unlimited Tax General No Opt. Call AAA 4,896,900 Obligation Bonds, Dedicated Tax Revenues, Series 1999A, 0.000%, 12/01/20 - FGIC Insured 9,145 Chicago, Illinois, Revenue Bonds, Midway Airport, Series 1996A, 1/07 at 101.00 AAA 9,421,545 5.500%, 1/01/29 - MBIA Insured DuPage County Forest Preserve District, Illinois, General Obligation Bonds, Series 2000: 8,000 0.000%, 11/01/18 No Opt. Call AAA 4,402,240 15,285 0.000%, 11/01/19 No Opt. Call AAA 7,987,330 2,955 Illinois Health Facilities Authority, Revenue Bonds, Silver Cross 8/09 at 101.00 A 3,004,112 Hospital and Medical Centers, Series 1999, 5.250%, 8/15/15 4,580 Illinois Health Facilities Authority, Revenue Bonds, Midwest 8/10 at 102.00 Aaa 4,952,262 Care Center IX, Inc., Series 2000, 6.250%, 8/20/35 3,000 Illinois Health Facilities Authority, Revenue Bonds, Lake Forest 7/13 at 100.00 A- 3,197,730 Hospital, Series 2003, 6.000%, 7/01/33 4,000 Illinois Health Facilities Authority, FHA-Insured Mortgage 8/13 at 100.00 AAA 4,088,480 Revenue Refunding Bonds, Sinai Health System, Series 2003, 5.150%, 2/15/37 4,415 Illinois Health Facilities Authority, Revenue Refunding Bonds, 1/06 at 100.00 BBB- 4,417,340 Proctor Community Hospital, Series 1991, 7.375%, 1/01/23 5,000 Kane, McHenry, Cook and DeKalb Counties Community Unit 12/11 at 100.00 AAA 5,505,550 School District 300, Carpentersville, Illinois, General Obligation Bonds, Series 2000, 5.500%, 12/01/19 (Pre-refunded to 12/01/11) - MBIA Insured 3,700 Libertyville, Illinois, Affordable Housing Revenue Bonds, 11/09 at 100.00 A3 3,818,622 Liberty Towers Project, Series 1999A, 7.000%, 11/01/29 (Alternative Minimum Tax) 6,000 McHenry County Conservation District, Illinois, General 2/11 at 100.00 AAA 6,581,580 Obligation Bonds, Series 2001A, 5.625%, 2/01/21 (Pre-refunded to 2/01/11) - FGIC Insured Metropolitan Pier and Exposition Authority, Illinois, Revenue Refunding Bonds, McCormick Place Expansion Project, Series 1996A: 9,400 0.000%, 12/15/18 - MBIA Insured No Opt. Call AAA 5,142,364 16,570 0.000%, 12/15/20 - MBIA Insured No Opt. Call AAA 8,159,399 23,550 0.000%, 12/15/22 - MBIA Insured No Opt. Call AAA 10,418,991 13,000 0.000%, 12/15/24 - MBIA Insured No Opt. Call AAA 5,170,620 22 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS (continued) Metropolitan Pier and Exposition Authority, Illinois, Revenue Refunding Bonds, McCormick Place Expansion Project, Series 1998A: $ 5,180 5.500%, 12/15/23 - FGIC Insured No Opt. Call AAA $ 5,960,212 5,100 5.500%, 12/15/23 - FGIC Insured No Opt. Call AAA 5,778,147 10,650 Metropolitan Pier and Exposition Authority, Illinois, Revenue No Opt. Call AAA 13,890,689 Bonds, McCormick Place Hospitality Facility, Series 1996A, 7.000%, 7/01/26 17,865 Regional Transportation Authority, Cook, DuPage, Kane, Lake, No Opt. Call AAA 20,735,727 McHenry and Will Counties, Illinois, General Obligation Bonds, Series 1999, 5.750%, 6/01/23 - FSA Insured 6,090 Sherman, Illinois, GNMA Mortgage Revenue Refunding Bonds, 10/09 at 102.00 AAA 6,583,716 Villa Vianney, Series 1999A, 6.450%, 10/01/29 - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 6.7% (4.5% OF TOTAL INVESTMENTS) 2,465 Danville Multi-School Building Corporation, Indiana, First 7/11 at 100.00 AAA 2,643,392 Mortgage Refunding Bonds, Series 2001, 5.250%, 7/15/18 - AMBAC Insured 14,000 Indiana Health Facility Financing Authority, Hospital Revenue 8/10 at 101.50 AAA 14,948,780 Bonds, Clarian Health Obligated Group, Series 2000A, 5.500%, 2/15/30 - MBIA Insured 2,500 Indiana Health Facility Financing Authority, Hospital Revenue No Opt. Call AAA 2,947,000 Refunding Bonds, Columbus Regional Hospital, Series 1993, 7.000%, 8/15/15 - FSA Insured Indiana Health Facility Financing Authority, Revenue Bonds, Ancilla Systems Inc. Obligated Group, Series 1997: 15,380 5.250%, 7/01/17 - MBIA Insured 7/07 at 101.00 AAA 16,068,716 2,250 5.250%, 7/01/22 - MBIA Insured 7/07 at 101.00 AAA 2,341,620 4,320 5.250%, 7/01/22 - MBIA Insured 7/07 at 101.00 AAA 4,495,910 2,000 Indiana Health Facility Financing Authority, Revenue Bonds, 5/15 at 100.00 AAA 2,048,640 Community Hospitals of Indiana, Series 2005A, 5.000%, 5/01/35 - AMBAC Insured Indiana Transportation Finance Authority, Highway Revenue Bonds, Series 2000: 1,285 5.375%, 12/01/25 (Pre-refunded to 12/01/10) 12/10 at 100.00 Aa2*** 1,395,767 6,715 5.375%, 12/01/25 12/10 at 100.00 Aa2 7,171,351 3,105 Indiana University, Student Fee Revenue Bonds, Series 2003O, 8/13 at 100.00 AAA 3,337,689 5.250%, 8/01/20 - FGIC Insured 1,000 Marion County Convention and Recreational Facilities Authority, 6/11 at 100.00 AAA 1,042,850 Indiana, Excise Taxes Lease Rental Revenue Refunding Senior Bonds, Series 2001A, 5.000%, 6/01/21 - MBIA Insured 2,395 Shelbyville Central Renovation School Building Corporation, 7/15 at 100.00 AAA 2,261,000 Indiana, First Mortgage Bonds, Series 2005, 4.375%, 7/15/26 - MBIA Insured 1,800 Sunman Dearborn High School Building Corporation, Indiana, 1/15 at 100.00 AAA 1,858,194 First Mortgage Bonds, Series 2005, 5.000%, 7/15/25 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ IOWA - 0.6% (0.4% OF TOTAL INVESTMENTS) 5,000 Iowa Tobacco Settlement Authority, Tobacco Settlement 6/11 at 101.00 BBB 5,142,300 Asset-Backed Revenue Bonds, Series 2001B, 5.600%, 6/01/35 - ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 1.3% (0.9% OF TOTAL INVESTMENTS) 3,790 Kansas Department of Transportation, Highway Revenue Bonds, 3/14 at 100.00 AA+ 3,964,492 Series 2004A, 5.000%, 3/01/23 5,790 Sedgwick County Unified School District 259, Wichita, Kansas, 9/10 at 100.00 AA 5,340,812 General Obligation Bonds, Series 2000, 3.500%, 9/01/17 3,200 Wyandotte County Unified School District 500, Kansas, General 9/11 at 100.00 AAA 3,025,248 Obligation Bonds, Series 2001, 4.000%, 9/01/21 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 0.4% (0.3% OF TOTAL INVESTMENTS) 3,700 Louisville and Jefferson County Metropolitan Sewer District, 5/07 at 101.00 AAA 3,909,642 Kentucky, Sewer and Drainage System Revenue Bonds, Series 1997A, 6.250%, 5/15/26 (Pre-refunded to 5/15/07) - MBIA Insured 23 Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued) Portfolio of INVESTMENTS October 31, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 6.9% (4.6% OF TOTAL INVESTMENTS) $ 1,250 East Baton Rouge Mortgage Finance Authority, Louisiana, 10/07 at 102.00 Aaa $ 1,291,438 GNMA/FNMA Mortgage-Backed Securities Program Single Family Mortgage Revenue Refunding Bonds, Series 1997B-1, 5.750%, 10/01/26 4,000 Lafayette City and Parish, Louisiana, Utilities Revenue Bonds, 11/14 at 100.00 AAA 4,218,520 Series 2004, 5.250%, 11/01/25 - MBIA Insured 4,650 Louisiana Public Facilities Authority, Revenue Bonds, Baton 7/14 at 100.00 AAA 4,809,960 Rouge General Hospital, Series 2004, 5.250%, 7/01/33 - MBIA Insured 35,700 Louisiana Stadium and Exposition District, Hotel Occupancy 7/06 at 102.00 AAA 37,033,038 Tax Bonds, Series 1996, 5.750%, 7/01/26 (Pre-refunded to 7/01/06) - FGIC Insured Tobacco Settlement Financing Corporation, Louisiana, Tobacco Settlement Asset-Backed Bonds, Series 2001B: 10,000 5.500%, 5/15/30 5/11 at 101.00 BBB 10,256,100 6,250 5.875%, 5/15/39 5/11 at 101.00 BBB 6,521,625 - ------------------------------------------------------------------------------------------------------------------------------------ MAINE - 0.6% (0.4% OF TOTAL INVESTMENTS) 5,680 Portland, Maine, Airport Revenue Bonds, Series 2003A, 7/13 at 100.00 AAA 5,815,809 5.000%, 7/01/32 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MARYLAND - 1.8% (1.2% OF TOTAL INVESTMENTS) 1,110 Maryland Community Development Administration, Residential 9/10 at 100.00 Aa2 1,128,004 Revenue Bonds, Series 2000H, 5.800%, 9/01/32 (Alternative Minimum Tax) 7,720 Maryland Transportation Authority, Airport Parking Revenue 3/12 at 101.00 AAA 8,008,265 Bonds, Baltimore-Washington International Airport Passenger Facility, Series 2002B, 5.125%, 3/01/20 (Alternative Minimum Tax) - AMBAC Insured 7,090 Takoma Park, Maryland, Hospital Facilities Revenue Refunding No Opt. Call AAA 7,990,288 and Improvement Bonds, Washington Adventist Hospital, Series 1995, 6.500%, 9/01/12 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 4.2% (2.8% OF TOTAL INVESTMENTS) 1,380 Massachusetts Educational Finance Authority, Student Loan 12/09 at 101.00 AAA 1,423,884 Revenue Refunding Bonds, Series 2000G, 5.700%, 12/01/11 (Alternative Minimum Tax) - MBIA Insured Massachusetts, General Obligation Bonds, Consolidated Loan, Series 2002E: 1,255 5.250%, 1/01/22 (Pre-refunded to 1/01/13) - FGIC Insured 1/13 at 100.00 AAA 1,359,567 3,745 5.250%, 1/01/22 (Pre-refunded to 1/01/13) - FGIC Insured 1/13 at 100.00 AAA 4,057,033 890 Massachusetts, General Obligation Bonds, Consolidated Loan, 11/12 at 100.00 AA*** 965,534 Series 2002C, 5.250%, 11/01/30 (Pre-refunded to 11/01/12) Massachusetts Development Finance Authority, Revenue Bonds, 100 Cambridge Street Redevelopment, M/SRBC Project, Series 2002A: 4,000 5.125%, 8/01/28 - MBIA Insured 2/12 at 100.00 AAA 4,154,680 5,625 5.125%, 2/01/34 - MBIA Insured 2/12 at 100.00 AAA 5,788,350 1,420 Massachusetts Health and Educational Facilities Authority, 7/08 at 101.00 Aaa 1,422,556 Revenue Bonds, Southcoast Health System Obligated Group, Series 1998A, 4.750%, 7/01/27 - MBIA Insured 4,365 Massachusetts Health and Educational Facilities Authority, 10/15 at 100.00 AAA 4,555,620 Revenue Bonds, Berkshire Health System, Series 2005F, 5.000%, 10/01/19 - AGC Insured 5,745 Massachusetts Industrial Finance Agency, Resource Recovery 12/08 at 102.00 BBB 5,861,394 Revenue Refunding Bonds, Ogden Haverhill Project, Series 1998A, 5.600%, 12/01/19 (Alternative Minimum Tax) 8,500 Route 3 North Transportation Improvements Association, 6/10 at 100.00 AAA 9,185,270 Massachusetts, Lease Revenue Bonds, Series 2000, 5.375%, 6/15/33 (Pre-refunded to 6/15/10) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 6.8% (4.5% OF TOTAL INVESTMENTS) 17,000 Birmingham City School District, Oakland County, Michigan, 11/07 at 100.00 AAA 17,096,560 School Building and Site Bonds, Series 1998, 4.750%, 11/01/24 - FSA Insured 5,000 Detroit, Michigan, Second Lien Sewerage Disposal System 7/15 at 100.00 AAA 5,160,250 Revenue Bonds, Series 2005A, 5.000%, 7/01/35 - MBIA Insured 3,000 Detroit, Michigan, Senior Lien Water Supply System Revenue 7/07 at 101.00 AAA 3,119,010 Bonds, Series 1997A, 5.000%, 7/01/21 (Pre-refunded to 7/01/07) - MBIA Insured 24 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN (continued) $ 4,030 Hancock Hospital Finance Authority, Michigan, FHA-Insured 8/08 at 100.00 AAA $ 4,206,111 Mortgage Hospital Revenue Bonds, Portage Health System Inc., Series 1998, 5.450%, 8/01/47 - MBIA Insured 1,500 Michigan State Building Authority, Revenue Bonds, Facilities 10/11 at 100.00 AA- 1,550,010 Program, Series 2001I, 5.000%, 10/15/24 5,000 Michigan State Building Authority, Revenue Refunding Bonds, 10/13 at 100.00 AAA 5,157,100 Facilities Program, Series 2003II, 5.000%, 10/15/29 - MBIA Insured 7,115 Michigan State Hospital Finance Authority, Hospital Revenue 3/13 at 100.00 A1 7,602,876 Refunding Bonds, Henry Ford Health System, Series 2003A, 5.500%, 3/01/16 5,000 Michigan State Hospital Finance Authority, Hospital Revenue No Opt. Call AAA 5,409,400 Refunding Bonds, Sisters of Mercy Health Corporation, Series 1993P, 5.375%, 8/15/14 - MBIA Insured 3,000 Michigan Strategic Fund, Collateralized Limited Obligation 9/09 at 102.00 AAA 3,141,660 Pollution Control Revenue Refunding Bonds, Detroit Edison Company, Series 1999A, 5.550%, 9/01/29 (Alternative Minimum Tax) - MBIA Insured 10,000 Wayne County, Michigan, Airport Revenue Bonds, Detroit 12/08 at 101.00 AAA 10,478,800 Metropolitan Wayne County Airport, Series 1998A, 5.375%, 12/01/16 (Alternative Minimum Tax) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 3.1% (2.1% OF TOTAL INVESTMENTS) 3,000 Minneapolis-St. Paul Metropolitan Airports Commission, 1/11 at 100.00 AAA 3,160,440 Minnesota, Subordinate Airport Revenue Bonds, Series 2001C, 5.250%, 1/01/26 - FGIC Insured 20,770 St. Paul Housing and Redevelopment Authority, Minnesota, 11/15 at 103.00 AAA 25,557,900 Sales Tax Revenue Refunding Bonds, Civic Center Project, Series 1996, 7.100%, 11/01/23 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MISSISSIPPI - 1.3% (0.9% OF TOTAL INVESTMENTS) 9,750 Mississippi Business Finance Corporation, Pollution Control 4/06 at 100.00 BBB- 9,930,375 Revenue Refunding Bonds, System Energy Resources Inc. Project, Series 1998, 5.875%, 4/01/22 2,475 Mississippi Hospital Equipment and Facilities Authority, 9/14 at 100.00 N/R 2,478,341 Revenue Bonds, Baptist Memorial Healthcare, Series 2004B-1, 5.000%, 9/01/24 - ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 1.6% (1.1% OF TOTAL INVESTMENTS) 2,000 Missouri-Illinois Metropolitan District Bi-State Development 10/13 at 100.00 AAA 2,058,520 Agency, Mass Transit Sales Tax Appropriation Bonds, Metrolink Cross County Extension Project, Series 2002B, 5.000%, 10/01/32 - FSA Insured 6,350 Kansas City, Missouri, Airport Revenue Bonds, General 9/12 at 100.00 AAA 6,792,722 Improvement Projects, Series 2003B, 5.250%, 9/01/17 - FGIC Insured 3,815 Missouri Health and Educational Facilities Authority, Revenue 6/11 at 101.00 AAA 4,146,218 Bonds, SSM Healthcare System, Series 2001A, 5.250%, 6/01/28 (Pre-refunded to 6/01/11) - AMBAC Insured 1,845 Missouri Health and Educational Facilities Authority, Revenue 5/13 at 100.00 AA 1,954,372 Bonds, BJC Health System, Series 2003, 5.250%, 5/15/18 - ------------------------------------------------------------------------------------------------------------------------------------ MONTANA - 0.7% (0.5% OF TOTAL INVESTMENTS) 830 Montana Board of Housing, Single Family Mortgage Bonds, 6/07 at 101.50 AA+ 840,159 Series 1997A-1, 6.150%, 6/01/30 (Alternative Minimum Tax) 920 Montana Board of Housing, Single Family Mortgage Bonds, 12/09 at 100.00 AA+ 934,242 Series 2000A-2, 6.450%, 6/01/29 (Alternative Minimum Tax) 4,795 Montana Higher Education Student Assistance Corporation, 12/08 at 101.00 A2 4,894,736 Student Loan Revenue Bonds, Subordinate Series 1998B, 5.500%, 12/01/31 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ NEBRASKA - 0.2% (0.1% OF TOTAL INVESTMENTS) 1,475 Nebraska Investment Finance Authority, Single Family Housing 9/10 at 100.00 AAA 1,483,850 Revenue Bonds, Series 2000E, 5.850%, 9/01/20 (Alternative Minimum Tax) 25 Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued) Portfolio of INVESTMENTS October 31, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 3.6% (2.4% OF TOTAL INVESTMENTS) $ 5,000 Clark County, Nevada, General Obligation Bank Bonds, 6/11 at 100.00 AAA $ 5,360,700 Southern Nevada Water Authority Loan, Series 2001, 5.300%, 6/01/19 - FGIC Insured 10,900 Clark County School District, Nevada, General Obligation Bonds, 6/12 at 100.00 AAA 12,021,719 Series 2002C, 5.500%, 6/15/19 (Pre-refunded to 6/15/12) - MBIA Insured 4,980 Director of Nevada State Department of Business and Industry, 1/10 at 100.00 AAA 5,146,432 Revenue Bonds, Las Vegas Monorail Project, First Tier, Series 2000, 5.375%, 1/01/40 - AMBAC Insured 10,465 Nevada, General Obligation Bonds, Municipal Bond Bank 5/06 at 101.00 AAA 10,737,404 Project 52, Series 1996A, 6.000%, 5/15/21 (Pre-refunded to 5/15/06) - ------------------------------------------------------------------------------------------------------------------------------------ NEW HAMPSHIRE - 1.6% (1.0% OF TOTAL INVESTMENTS) 3,265 New Hampshire Health and Education Facilities Authority, 1/15 at 100.00 A 3,287,463 Revenue Bonds, Southern New Hampshire University, Series 2005, 5.000%, 1/01/30 - ACA Insured New Hampshire Housing Finance Authority, FHLMC Multifamily Housing Remarketed Revenue Bonds, Countryside LP, Series 1994: 3,725 6.000%, 7/01/18 (Alternative Minimum Tax) 7/10 at 101.00 Aaa 3,937,064 6,945 6.100%, 7/01/24 (Alternative Minimum Tax) 7/10 at 101.00 Aaa 7,304,890 - ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 7.2% (4.8% OF TOTAL INVESTMENTS) 2,885 New Jersey Higher Education Assistance Authority, Student 6/10 at 101.00 AAA 2,931,362 Loan Revenue Bonds, Series 2000A, 6.000%, 6/01/13 (Alternative Minimum Tax) - MBIA Insured 3,000 New Jersey Economic Development Authority, Transportation 5/09 at 100.00 AAA 3,180,150 Sublease Revenue Bonds, Light Rail Transit System, Series 1999A, 5.250%, 5/01/17 (Pre-refunded to 5/01/09) - FSA Insured 8,750 New Jersey Transportation Trust Fund Authority, Transportation 6/07 at 102.00 AAA 9,211,563 System Bonds, Series 1996B, 5.250%, 6/15/16 (Pre-refunded to 6/15/07) 9,250 New Jersey Transportation Trust Fund Authority, Transportation 6/13 at 100.00 AAA 10,255,290 System Bonds, Series 2003C, 5.500%, 6/15/23 (Pre-refunded to 6/15/13) 4,500 New Jersey Transportation Trust Fund Authority, Transportation No Opt. Call AAA 5,049,045 System Bonds, Series 2001C, 5.500%, 12/15/18 - FSA Insured 10,000 New Jersey Turnpike Authority, Revenue Bonds, Series 2003A, 7/13 at 100.00 AAA 10,485,800 5.000%, 1/01/20 - FSA Insured 13,890 Tobacco Settlement Financing Corporation, New Jersey, 6/12 at 100.00 BBB 14,440,044 Tobacco Settlement Asset-Backed Bonds, Series 2002, 5.750%, 6/01/32 4,060 Tobacco Settlement Financing Corporation, New Jersey, 6/13 at 100.00 BBB 4,631,445 Tobacco Settlement Asset-Backed Bonds, Series 2003, 6.750%, 6/01/39 West Deptford Township, Gloucester County, New Jersey, General Obligation Bonds, Series 2000: 3,150 5.500%, 9/01/21 (Pre-refunded to 9/01/10) - FGIC Insured 9/10 at 100.00 Aaa 3,429,500 3,335 5.500%, 9/01/22 (Pre-refunded to 9/01/10) - FGIC Insured 9/10 at 100.00 Aaa 3,630,915 - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 14.7% (9.8% OF TOTAL INVESTMENTS) 1,500 Hempstead Industrial Development Agency, New York, Resource No Opt. Call BB+ 1,559,655 Recovery Revenue Refunding Bonds, American Ref-Fuel Company of Hempstead LP, Series 2001, 5.000%, 12/01/10 (Mandatory put 6/01/10) 13,220 Metropolitan Transportation Authority, New York, Dedicated 11/12 at 100.00 AAA 14,434,389 Tax Fund Bonds, Series 2002A, 5.500%, 11/15/26 - FSA Insured 5 New York City, New York, General Obligation Bonds, Fiscal 2/06 at 100.00 A+ 5,064 Series 1987D, 8.500%, 8/01/08 6,300 New York City, New York, General Obligation Bonds, Fiscal 5/10 at 101.00 AAA 7,029,729 Series 2000A, 6.250%, 5/15/26 - FSA Insured 16,295 New York City, New York, General Obligation Bonds, Fiscal 2/06 at 101.50 A+*** 16,653,979 Series 1996F, 5.750%, 2/01/15 (Pre-refunded to 2/01/06) 10,000 New York City Municipal Water Finance Authority, New York, 6/09 at 101.00 AA+*** 10,920,200 Water and Sewerage System Revenue Bonds, Fiscal Series 2000A, 5.750%, 6/15/30 (Pre-refunded to 6/15/09) New York City Municipal Water Finance Authority, New York, Water and Sewerage System Revenue Bonds, Fiscal Series 1996B: 7,270 5.750%, 6/15/26 (Pre-refunded to 6/15/06) - MBIA Insured 6/06 at 101.00 AAA 7,466,799 13,380 5.750%, 6/15/26 - MBIA Insured 6/06 at 101.00 AAA 13,733,901 26 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK (continued) New York City Municipal Water Finance Authority, New York, Water and Sewerage System Revenue Bonds, Fiscal Series 1997A: $ 3,495 5.500%, 6/15/24 (Pre-refunded to 6/15/06) - MBIA Insured 6/06 at 101.00 AAA $ 3,584,262 1,380 5.500%, 6/15/24 - MBIA Insured 6/06 at 101.00 AAA 1,412,554 7,810 New York City Transitional Finance Authority, New York, Future 8/09 at 101.00 AAA 8,556,246 Tax Secured Bonds, Fiscal Series 2000A, 5.750%, 8/15/24 (Pre-refunded to 8/15/09) 2,250 Dormitory Authority of the State of New York, Lease Revenue 7/09 at 101.00 AAA 2,439,877 Bonds, State University Dormitory Facilities, Series 1999C, 5.500%, 7/01/29 (Pre-refunded to 7/01/09) - MBIA Insured 1,500 Dormitory Authority of the State of New York, Revenue Bonds, 8/07 at 101.00 AAA 1,565,370 St. Barnabas Hospital, Series 1997, 5.450%, 8/01/35 - AMBAC Insured 2,070 Dormitory Authority of the State of New York, Insured Revenue 7/08 at 101.00 AAA 2,202,294 Bonds, 853 Schools Program, Gateway-Longview Inc., Series 1998A, 5.500%, 7/01/18 - AMBAC Insured 5,500 Dormitory Authority of the State of New York, FHA-Insured 2/14 at 100.00 AAA 5,675,120 Mortgage Revenue Bonds, Kaleida Health, Series 2004, 5.050%, 2/15/25 Dormitory Authority of the State of New York, Improvement Revenue Bonds, Mental Health Services Facilities, Series 1996B: 1,930 5.375%, 2/15/26 (Pre-refunded to 2/15/06) - MBIA Insured 2/06 at 102.00 AAA 1,982,207 35 5.375%, 2/15/26 (Pre-refunded to 2/15/06) - MBIA Insured 2/06 at 102.00 AAA 35,947 35 5.375%, 2/15/26 - MBIA Insured 2/06 at 102.00 AAA 35,884 17,000 Dormitory Authority of the State of New York, Third General 7/09 at 101.00 AAA 18,434,630 Resolution Consolidated Revenue Bonds, City University System, Series 1999-1, 5.500%, 7/01/29 (Pre-refunded to 7/01/09) - FSA Insured 3,000 Dormitory Authority of the State of New York, Third General 1/08 at 102.00 AAA 3,193,050 Resolution Consolidated Revenue Bonds, City University System, Series 1997-1, 5.375%, 7/01/24 (Pre-refunded to 1/01/08) - FSA Insured Dormitory Authority of the State of New York, Revenue Bonds, Marymount Manhattan College, Series 1999: 1,580 6.375%, 7/01/13 - RAAI Insured 7/09 at 101.00 AA 1,731,980 9,235 6.125%, 7/01/21 - RAAI Insured 7/09 at 101.00 AA 10,011,941 3,000 New York State Energy Research and Development Authority, 9/08 at 102.00 AAA 3,225,030 Pollution Control Revenue Bonds, Rochester Gas and Electric Corporation, Series 1998A, 5.950%, 9/01/33 (Alternative Minimum Tax) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 0.2% (0.1% OF TOTAL INVESTMENTS) 2,000 North Carolina Municipal Power Agency 1, Catawba Electric 1/08 at 102.00 AAA 2,080,260 Revenue Bonds, Series 1998A, 5.000%, 1/01/20 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 4.0% (2.7% OF TOTAL INVESTMENTS) 7,500 Cleveland, Ohio, Airport System Revenue Bonds, Series 2000A, 1/10 at 101.00 AAA 7,634,400 5.000%, 1/01/31 - FSA Insured 3,650 Montgomery County, Ohio, Revenue Bonds, Catholic Health 5/14 at 100.00 AA 3,715,773 Initiatives, Series 2004A, 5.000%, 5/01/30 5,080 Ohio Housing Finance Agency, GNMA Mortgage-Backed 7/09 at 100.00 Aaa 5,115,204 Securities Program Residential Mortgage Revenue Bonds, Series 1999C, 5.750%, 9/01/30 (Alternative Minimum Tax) 6,600 Ohio Water Development Authority, Solid Waste Disposal 9/08 at 102.00 N/R 6,639,864 Revenue Bonds, Bay Shore Power, Series 1998A, 5.875%, 9/01/20 (Alternative Minimum Tax) 13,600 Ohio Water Development Authority, Solid Waste Disposal 9/09 at 102.00 N/R 14,060,496 Revenue Bonds, Bay Shore Power, Series 1998B, 6.625%, 9/01/20 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 0.3% (0.2% OF TOTAL INVESTMENTS) 3,400 Tulsa Municipal Airport Trust, Oklahoma, Revenue Refunding 6/09 at 100.00 B- 3,237,956 Bonds, American Airlines Inc., Series 2000B, 6.000%, 6/01/35 (Alternative Minimum Tax) (Mandatory put 12/01/08) - ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 1.0% (0.7% OF TOTAL INVESTMENTS) 9,150 Port of St. Helens, Oregon, Pollution Control Revenue Bonds, No Opt. Call Baa1 9,276,179 Portland General Electric Company, Series 1985B, 4.800%, 6/01/10 27 Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued) Portfolio of INVESTMENTS October 31, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 3.7% (2.5% OF TOTAL INVESTMENTS) Bethlehem Authority, Northampton and Lehigh Counties, Pennsylvania, Guaranteed Water Revenue Bonds, Series 1998: $ 3,125 0.000%, 5/15/22 - FSA Insured No Opt. Call AAA $ 1,412,344 3,125 0.000%, 5/15/23 - FSA Insured No Opt. Call AAA 1,334,656 3,135 0.000%, 5/15/24 - FSA Insured No Opt. Call AAA 1,266,321 3,155 0.000%, 5/15/26 - FSA Insured No Opt. Call AAA 1,137,314 4,145 0.000%, 11/15/26 - FSA Insured No Opt. Call AAA 1,457,506 2,800 0.000%, 5/15/28 - FSA Insured No Opt. Call AAA 901,908 3,000 0.000%, 11/15/28 - FSA Insured No Opt. Call AAA 942,330 3,935 Carbon County Industrial Development Authority, Pennsylvania, No Opt. Call BBB- 4,215,998 Resource Recovery Revenue Refunding Bonds, Panther Creek Partners Project, Series 2000, 6.650%, 5/01/10 (Alternative Minimum Tax) 11,000 Delaware County Authority, Pennsylvania, Health System Revenue 11/08 at 102.00 AAA 11,248,600 Bonds, Catholic Health East Issue, Series 1998A, 4.875%, 11/15/18 - AMBAC Insured Pennsylvania Economic Development Financing Authority, Senior Lien Resource Recovery Revenue Bonds, Northampton Generating Project, Series 1994A: 2,100 6.400%, 1/01/09 (Alternative Minimum Tax) 1/06 at 100.00 BBB- 2,106,321 4,500 6.500%, 1/01/13 (Alternative Minimum Tax) 1/06 at 100.00 BBB- 4,544,460 700 Pennsylvania Economic Development Financing Authority, 1/06 at 100.00 N/R 701,302 Subordinate Resource Recovery Revenue Bonds, Northampton Generating Project, Series 1994C, 6.875%, 1/01/11 (Alternative Minimum Tax) 2,750 Pennsylvania Economic Development Financing Authority, No Opt. Call N/R 2,774,640 Senior Lien Resource Recovery Revenue Bonds, Northampton Generating Project, Series 1994B, 6.750%, 1/01/07 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ PUERTO RICO - 0.1% (0.1% OF TOTAL INVESTMENTS) 1,250 Puerto Rico Highway and Transportation Authority, Highway 7/10 at 101.00 AAA 1,390,788 Revenue Bonds, Series 2000B, 5.875%, 7/01/21 (Pre-refunded to 7/01/10) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ RHODE ISLAND - 1.2% (0.9% OF TOTAL INVESTMENTS) 2,000 Kent County Water Authority, Rhode Island, General Revenue 7/12 at 100.00 AAA 2,079,980 Bonds, Series 2002A, 5.000%, 7/15/23 - MBIA Insured 7,000 Rhode Island Housing and Mortgage Finance Corporation, 10/14 at 100.00 AA+ 6,783,280 Homeownership Opportunity Bond Program, Series 50A, 4.650%, 10/01/34 Rhode Island Health and Educational Building Corporation, Revenue Refunding Bonds, Salve Regina University, Series 2002: 1,260 5.250%, 3/15/17 - RAAI Insured 3/12 at 101.00 AA 1,322,698 1,080 5.250%, 3/15/18 - RAAI Insured 3/12 at 101.00 AA 1,130,684 - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 4.1% (2.8% OF TOTAL INVESTMENTS) 2,625 Medical University Hospital Authority, South Carolina, 8/14 at 100.00 AAA 2,770,320 FHA-Insured Mortgage Revenue Bonds, Series 2004A, 5.250%, 2/15/25 - MBIA Insured 22,855 Piedmont Municipal Power Agency, South Carolina, Electric No Opt. Call AAA 6,439,853 Revenue Bonds, Series 2004A-2, 0.000%, 1/01/31 - AMBAC Insured 6,925 South Carolina, General Obligation Bonds, Series 1999A, 10/09 at 101.00 Aaa 6,966,342 4.000%, 10/01/14 21,000 Tobacco Settlement Revenue Management Authority, 5/11 at 101.00 BBB 22,284,570 South Carolina, Tobacco Settlement Asset-Backed Bonds, Series 2001B, 6.000%, 5/15/22 - ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 1.3% (0.9% OF TOTAL INVESTMENTS) 2,260 Johnson City Health and Educational Facilities Board, 7/23 at 100.00 AAA 2,366,288 Tennessee, Hospital Revenue Refunding and Improvement Bonds, Johnson City Medical Center, Series 1998C, 5.125%, 7/01/25 (Pre-refunded to 7/01/23) - MBIA Insured 1,700 Memphis-Shelby County Airport Authority, Tennessee, Airport 3/10 at 101.00 AAA 1,833,892 Revenue Bonds, Series 1999D, 6.000%, 3/01/24 (Alternative Minimum Tax) - AMBAC Insured 6,000 Metropolitan Government of Nashville-Davidson County 12/17 at 100.00 AAA 6,982,320 Health and Educational Facilities Board, Tennessee, Revenue Refunding and Improvement Bonds, Meharry Medical College, Series 1996, 6.000%, 12/01/19 - AMBAC Insured 1,000 Tennessee Housing Development Agency, Homeownership 7/10 at 101.00 AA 1,010,380 Program Bonds, Series 2000-1, 6.375%, 7/01/25 (Alternative Minimum Tax) 28 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 5.8% (3.9% OF TOTAL INVESTMENTS) $ 3,740 Austin, Texas, Subordinate Lien Hotel Occupancy Tax Revenue 11/09 at 100.00 AAA $ 4,056,666 Refunding Bonds, Series 1999, 5.625%, 11/15/17 (Pre-refunded to 11/15/09) - AMBAC Insured 3,975 Bell County Health Facilities Development Corporation, Texas, 2/10 at 101.00 AAA 4,349,008 Revenue Bonds, Scott and White Memorial Hospital and Scott, Sherwood and Brindley Foundation, Series 2000A, 6.125%, 8/15/23 - MBIA Insured Central Texas Regional Mobility Authority, Travis and Williamson Counties, Toll Road Revenue Bonds, Series 2005: 4,000 5.000%, 1/01/35 - FGIC Insured 1/15 at 100.00 AAA 4,095,760 3,000 5.000%, 1/01/45 - FGIC Insured 1/15 at 100.00 AAA 3,038,340 1,000 Fort Worth, Texas, Water and Sewerage Revenue Bonds, 2/08 at 100.00 AA*** 1,044,620 Series 1998, 5.250%, 2/15/15 (Pre-refunded to 2/15/08) 1,000 Harlingen Independent School District, Cameron County, Texas, 8/09 at 100.00 AAA 1,080,960 Unlimited Tax School Building Bonds, Series 1999, 5.650%, 8/15/29 (Pre-refunded to 8/15/09) 1,625 Harris County Health Facilities Development Corporation, 7/09 at 101.00 AAA 1,711,564 Texas, Revenue Bonds, Christus Health, Series 1999A, 5.375%, 7/01/24 - MBIA Insured 4,000 Houston Community College, Texas, Limited Tax General 2/13 at 100.00 AAA 4,119,080 Obligation Bonds, Series 2003, 5.000%, 2/15/27 - AMBAC Insured 3,885 Houston Independent School District, Public Facility No Opt. Call AAA 2,018,529 Corporation, Harris County, Texas, Lease Revenue Bonds, Cesar E. Chavez High School, Series 1998A, 0.000%, 9/15/19 - AMBAC Insured 1,690 Webb County, Laredo, Texas, Combination Tax and Sewer 2/08 at 100.00 AAA 1,695,188 System, Revenue Certificates of Obligation, Series 1998A, 4.500%, 2/15/18 - MBIA Insured Leander Independent School District, Williamson and Travis Counties, Texas, Unlimited Tax School Building and Refunding Bonds, Series 1998: 4,930 0.000%, 8/15/20 8/06 at 46.47 AAA 2,204,647 3,705 0.000%, 8/15/22 8/06 at 41.33 AAA 1,481,741 385 Lubbock Housing Finance Corporation, Texas, GNMA 6/07 at 102.00 AAA 388,542 Mortgage-Backed Securities Program Single Family Mortgage Revenue Refunding Bonds, Series 1997A, 6.125%, 12/01/17 3,480 Pearland, Texas, General Obligation Bonds, Series 2002, 3/12 at 100.00 AAA 3,571,872 5.000%, 3/01/27 - FGIC Insured 6,835 San Antonio, Texas, Electric and Gas System Revenue 2/09 at 100.00 Aa1 6,839,716 Refunding Bonds, New Series 1998A, 4.500%, 2/01/21 6,000 Spring Branch Independent School District, Harris County, 2/11 at 100.00 AAA 6,181,140 Texas, Limited Tax Schoolhouse and Refunding Bonds, Series 2001, 5.125%, 2/01/26 4,000 Tarrant Regional Water District, Texas, Water Revenue 3/13 at 100.00 AAA 4,161,520 Refunding and Improvement Bonds, Series 1999, 5.000%, 3/01/22 - FSA Insured 1,740 Texas, General Obligation Bonds, Water Financial Assistance, 8/09 at 100.00 AAA 1,842,991 State Participation Program, Series 1999C, 5.500%, 8/01/29 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ UTAH - 4.4% (3.0% OF TOTAL INVESTMENTS) 2,000 Intermountain Power Agency, Utah, Power Supply Revenue 7/06 at 102.00 AAA 2,074,560 Bonds, Special Obligation Crossover, Sixth Series 1996B, 6.000%, 7/01/16 - MBIA Insured Intermountain Power Agency, Utah, Power Supply Revenue Refunding Bonds, Series 1997B: 3,315 5.750%, 7/01/19 (Pre-refunded to 7/01/07) - MBIA Insured 7/07 at 102.00 AAA 3,519,734 6,685 5.750%, 7/01/19 - MBIA Insured 7/07 at 102.00 AAA 7,060,162 Utah County, Utah, Hospital Revenue Bonds, IHC Health Services Inc., Series 1997: 12,885 5.250%, 8/15/21 - MBIA Insured 8/07 at 101.00 AAA 13,372,826 3,900 5.250%, 8/15/26 - MBIA Insured 8/07 at 101.00 AAA 3,973,554 3,870 Utah Housing Corporation, Single Family Mortgage Bonds, 1/12 at 100.00 AA- 3,926,579 Series 2002A-1, 5.300%, 7/01/18 (Alternative Minimum Tax) 25 Utah Housing Finance Agency, Single Family Mortgage Bonds, 1/10 at 100.00 AA 25,105 Series 2000B, 6.250%, 7/01/22 (Alternative Minimum Tax) 2,105 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/10 at 100.00 AA- 2,149,373 Series 2000D-1, 6.050%, 7/01/14 (Alternative Minimum Tax) 29 Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued) Portfolio of INVESTMENTS October 31, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ UTAH (continued) $ 2,470 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/10 at 100.00 Aa1 $ 2,535,109 Series 2000E-1, Class III, 6.000%, 1/01/15 (Alternative Minimum Tax) 685 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/10 at 100.00 AA 687,815 Series 2000E-1, Class II, 6.150%, 1/01/27 (Alternative Minimum Tax) 985 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/11 at 100.00 AA 1,007,547 Series 2001A-2, 5.650%, 7/01/27 (Alternative Minimum Tax) 815 Utah Housing Finance Agency, Single Family Mortgage Bonds, 1/11 at 100.00 Aa2 837,804 Series 2001B-1, 5.750%, 7/01/19 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ VERMONT - 0.3% (0.2% OF TOTAL INVESTMENTS) 2,920 Vermont Housing Finance Agency, Single Family Housing Bonds, 12/05 at 101.00 Aa3*** 3,092,280 Series 1994-5, 7.000%, 11/01/27 (Alternative Minimum Tax) (Pre-refunded to 12/01/05) - ------------------------------------------------------------------------------------------------------------------------------------ VIRGIN ISLANDS - 0.8% (0.5% OF TOTAL INVESTMENTS) 2,500 Virgin Islands Public Finance Authority, Revenue Bonds, 1/14 at 100.00 BBB 2,732,900 Refinery Project - Hovensa LLC, Series 2003, 6.125%, 7/01/22 (Alternative Minimum Tax) 4,700 Virgin Islands Public Finance Authority, Gross Receipts Taxes 10/14 at 100.00 AA 4,818,769 Loan Note, Series 2003, 5.000%, 10/01/33 - RAAI Insured - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 4.5% (3.0% OF TOTAL INVESTMENTS) 12,235 Chelan County Public Utility District 1, Washington, Columbia No Opt. Call AAA 4,261,573 River-Rock Island Hydro-Electric System Revenue Refunding Bonds, Series 1997A, 0.000%, 6/01/26 - MBIA Insured 3,100 Cowlitz County Public Utilities District 1, Washington, Electric 9/14 at 100.00 AAA 3,190,117 Production Revenue Bonds, Series 2004, 5.000%, 9/01/28 - FGIC Insured 5,000 Energy Northwest, Washington, Electric Revenue Refunding 7/13 at 100.00 Aaa 5,423,700 Bonds, Nuclear Project 1, Series 2003A, 5.500%, 7/01/16 1,815 Grant County Public Utility District 2, Washington, Revenue 1/06 at 102.00 AAA 1,859,504 Bonds, Master Lease Program, Wanapum Hydroelectric Development, Series 1997A, 5.625%, 1/01/26 (Pre-refunded to 1/01/06) - MBIA Insured 2,295 King County School District 414, Lake Washington, 12/10 at 100.00 Aa1*** 2,491,727 Washington, General Obligation Bonds, Series 2000, 5.375%, 12/01/16 (Pre-refunded to 12/01/10) 2,015 Port of Seattle, Washington, Special Facility Revenue Bonds, 3/10 at 101.00 AAA 2,209,024 Terminal 18, Series 1999A, 6.000%, 9/01/29 - MBIA Insured 12,000 Washington, Motor Vehicle Fuel Tax General Obligation Bonds, 1/11 at 100.00 Aa1 12,463,320 Series 2001D, 5.250%, 1/01/26 5,000 Washington State Housing Finance Commission, Non-Profit 7/09 at 101.00 AA 5,379,950 Housing Revenue Bonds, Kline Galland Center, Series 1999, 6.000%, 7/01/29 - RAAI Insured 4,685 Washington State Healthcare Facilities Authority, Revenue 12/09 at 101.00 AAA 4,982,638 Bonds, Providence Services, Series 1999, 5.375%, 12/01/19 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ WEST VIRGINIA - 0.5% (0.4% OF TOTAL INVESTMENTS) 5,000 Mason County, West Virginia, Pollution Control Revenue Bonds, 10/11 at 100.00 BBB 5,091,850 Appalachian Power Company, Series 2003L, 5.500%, 10/01/22 - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 2.1% (1.4% OF TOTAL INVESTMENTS) 11,620 Wisconsin Health and Educational Facilities Authority, 2/10 at 101.00 AA 12,663,825 Revenue Bonds, Marshfield Clinic, Series 1999, 6.250%, 2/15/29 - RAAI Insured 7,490 Wisconsin Health and Educational Facilities Authority, Revenue 7/08 at 103.00 N/R 6,994,459 Bonds, Millennium Housing Foundation Inc., Series 1998, 6.100%, 1/01/28 - ------------------------------------------------------------------------------------------------------------------------------------ $ 1,468,055 Total Long-Term Investments (cost $1,301,727,964) - 149.1% 1,386,493,621 =============----------------------------------------------------------------------------------------------------------------------- 30 PRINCIPAL MARKET AMOUNT (000) DESCRIPTION(1) RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ SHORT-TERM INVESTMENTS - 0.2% (0.1% OF TOTAL INVESTMENTS) $ 1,500 Puerto Rico Government Development Bank, Adjustable VMIG-1 $ 1,500,000 Refunding Bonds, Variable Rate Demand Obligations, Series 1985, 2.580%, 12/01/15 - MBIA Insured + - ------------------------------------------------------------------------------------------------------------------------------------ $ 1,500 Total Short-Term Investments (cost $1,500,000) 1,500,000 ============------------------------------------------------------------------------------------------------------------------------ Total Investments (cost $1,303,227,964) - 149.3% 1,387,993,621 -------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.2% 20,550,863 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (51.5)% (479,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 929,544,484 ====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. * 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. ** Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's or Moody's rating. *** Securities are backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensures the timely payment of principal and interest. Such securities are normally considered to be equivalent to AAA rated securities. N/R Investment is not rated. (WI) Security purchased on a when-issued basis. + Security has a maturity of more than one year, but has variable rate and demand features which qualify it as a short-term security. The rate disclosed is that in effect at the end of the reporting period. This rate changes periodically based on market conditions or a specified market index. See accompanying notes to financial statements. 31 Nuveen Municipal Advantage Fund, Inc. (NMA) Portfolio of INVESTMENTS October 31, 2005
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 3.2% (2.1% OF TOTAL INVESTMENTS) $ 10,000 Jefferson County, Alabama, Sewer Revenue Capital 2/09 at 101.00 AAA $ 10,710,400 Improvement Warrants, Series 1999A, 5.375%, 2/01/36 (Pre-refunded to 2/01/09) - FGIC Insured 5,075 Lauderdale County and Florence Healthcare Authority, 7/09 at 101.00 AAA 5,350,725 Alabama, Revenue Bonds, Coffee Health Group, Series 1999A, 5.250%, 7/01/24 - MBIA Insured 5,155 Phenix City Industrial Development Board, Alabama, 5/12 at 100.00 BBB 5,535,130 Environmental Improvement Revenue Bonds, MeadWestvaco Corporation, Series 2002A, 6.350%, 5/15/35 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ ALASKA - 0.4% (0.2% OF TOTAL INVESTMENTS) Alaska Housing Finance Corporation, General Housing Purpose Bonds, Series 2005A: 1,125 5.250%, 12/01/34 - FGIC Insured 12/14 at 100.00 AAA 1,181,734 1,280 5.250%, 12/01/41 - FGIC Insured 12/14 at 100.00 AAA 1,335,834 - ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 0.8% (0.5% OF TOTAL INVESTMENTS) 5,000 Maricopa County Pollution Control Corporation, Arizona, 5/06 at 101.00 BBB 5,085,300 Remarketed Revenue Refunding Bonds, Public Service Company of New Mexico, Series 1992A, 5.750%, 11/01/22 - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 10.4% (6.9% OF TOTAL INVESTMENTS) 2,500 Alameda Corridor Transportation Authority, California, 10/17 at 100.00 AAA 1,848,150 Subordinate Lien Revenue Bonds, Series 2004A, 0.000%, 10/01/25 - AMBAC Insured 3,000 California Health Facilities Financing Authority, Health Facility 3/13 at 100.00 A 3,011,670 Revenue Bonds, Adventist Health System/West, Series 2003A, 5.000%, 3/01/33 3,550 California Department of Water Resources, Power Supply 5/12 at 101.00 A2 3,822,924 Revenue Bonds, Series 2002A, 5.375%, 5/01/22 7,500 California State Public Works Board, Lease Revenue Bonds, 4/14 at 100.00 A- 7,704,075 Department of Mental Health, Coalinga State Hospital, Series 2004A, 5.125%, 6/01/29 9,955 Capistrano Unified School District, Orange County, California, No Opt. Call AAA 2,703,579 Special Tax Bonds, Community Facilities District, Series 2005, 0.000%, 9/01/31 - FGIC Insured 7,535 Contra Costa County, California, GNMA Mortgage-Backed No Opt. Call AAA 9,867,761 Securities Program Home Mortgage Revenue Bonds, Series 1989, 7.750%, 5/01/22 (Alternative Minimum Tax) 2,990 East Bay Municipal Utility District, Alameda and Contra Costa 6/06 at 100.00 AAA 2,995,442 Counties, California, Water System Subordinated Revenue Refunding Bonds, Series 1996, 4.750%, 6/01/21 - FGIC Insured 2,000 Folsom Cordova Unified School District, Sacramento County, No Opt. Call AAA 622,280 California, General Obligation Bonds, School Facilities Improvement District 1, Series 2004B, 0.000%, 10/01/28 - MBIA Insured 3,360 Folsom Cordova Unified School District, Sacramento County, No Opt. Call AAA 1,144,483 California, General Obligation Bonds, School Facilities Improvement District 2, Series 2002A, 0.000%, 7/01/27 - MBIA Insured 2,315 Gateway Unified School District, California, General Obligation No Opt. Call AAA 600,766 Bonds, Series 2004B, 0.000%, 8/01/32 - FGIC Insured 3,000 Golden State Tobacco Securitization Corporation, California, No Opt. Call AAA 1,071,690 Tobacco Settlement Asset-Backed Revenue Bonds, Series 2005A, 0.000%, 6/01/26 - FSA Insured 1,275 Madera Unified School District, Madera County, California, 8/12 at 100.00 AAA 1,364,416 General Obligation Bonds, Series 2002, 5.250%, 8/01/23 - FSA Insured North Orange County Community College District, California, General Obligation Bonds, Series 2003B: 7,735 0.000%, 8/01/25 - FGIC Insured No Opt. Call AAA 2,933,421 4,000 0.000%, 8/01/26 - FGIC Insured No Opt. Call AAA 1,429,760 5,000 Palmdale Community Redevelopment Agency, California, No Opt. Call AAA 5,902,800 Residential Mortgage Revenue Refunding Bonds, Series 1991B, 7.375%, 2/01/12 32 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA (continued) $ 5,000 Palmdale Community Redevelopment Agency, California, No Opt. Call AAA $ 6,561,850 Single Family Restructured Mortgage Revenue Bonds, Series 1986A, 8.000%, 3/01/16 (Alternative Minimum Tax) 9,315 Perris, California, GNMA Mortgage-Backed Securities Program No Opt. Call AAA 11,457,450 Single Family Mortgage Revenue Bonds, Series 1989A, 7.600%, 1/01/23 (Alternative Minimum Tax) 13,000 San Joaquin Hills Transportation Corridor Agency, Orange No Opt. Call AAA 2,956,200 County, California, Toll Road Revenue Refunding Bonds, Series 1997A, 0.000%, 1/15/35 - MBIA Insured 7,250 San Jose-Evergreen Community College District, Santa Clara 9/15 at 100.00 AAA 2,082,563 County, California, General Obligation Bonds, Series 2005A, 0.000%, 9/01/29 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 4.2% (2.8% OF TOTAL INVESTMENTS) 8,350 Colorado Health Facilities Authority, Remarketed Revenue Bonds, 7/06 at 102.00 AAA 8,732,597 Kaiser Permanente System, Series 1994A, 5.350%, 11/01/16 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, Series 1997B: 2,650 0.000%, 9/01/16 - MBIA Insured No Opt. Call AAA 1,617,560 7,650 0.000%, 9/01/26 - MBIA Insured No Opt. Call AAA 2,684,691 1,000 E-470 Public Highway Authority, Colorado, Senior Revenue 9/10 at 102.00 AAA 1,104,180 Bonds, Series 2000A, 5.750%, 9/01/35 - MBIA Insured 10,000 E-470 Public Highway Authority, Colorado, Senior Revenue No Opt. Call AAA 2,601,100 Bonds, Series 2000B, 0.000%, 9/01/32 - MBIA Insured 4,125 Municipal Subdistrict Northern Colorado Water District, Revenue 12/07 at 101.00 AAA 4,317,019 Bonds, Series 1997G, 5.250%, 12/01/15 - AMBAC Insured Platte River Power Authority, Colorado, Power Revenue Refunding Bonds, Series 2002EE: 2,000 5.375%, 6/01/17 6/12 at 100.00 AA 2,166,740 5,000 5.375%, 6/01/18 6/12 at 100.00 AA 5,416,850 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRICT OF COLUMBIA - 0.4% (0.3% OF TOTAL INVESTMENTS) 715 District of Columbia Housing Finance Agency, GNMA 12/05 at 102.00 AAA 733,619 Collateralized Single Family Mortgage Revenue Bonds, Series 1988F-1, 6.375%, 6/01/26 (Alternative Minimum Tax) 2,165 District of Columbia Housing Finance Agency, GNMA/FNMA 6/07 at 102.00 AAA 2,170,477 Single Family Mortgage Revenue Bonds, Series 1997B, 5.900%, 12/01/28 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 1.9% (1.3% OF TOTAL INVESTMENTS) 2,770 Florida Housing Finance Corporation, Housing Revenue Bonds, 12/10 at 100.00 AAA 2,875,288 Stratford Point Apartments, Series 2000O-1, 5.850%, 12/01/31 (Alternative Minimum Tax) - FSA Insured 10,130 Tampa, Florida, Healthcare System Revenue Bonds, Allegany 12/05 at 100.00 AAA 10,162,112 Health System - St. Mary's Hospital, Series 1993, 5.125%, 12/01/23 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 0.6% (0.4% OF TOTAL INVESTMENTS) 4,000 Augusta, Georgia, Water and Sewerage Revenue Bonds, 10/14 at 100.00 AAA 4,225,120 Series 2004, 5.250%, 10/01/39 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ HAWAII - 0.5% (0.4% OF TOTAL INVESTMENTS) 1,285 Hawaii Housing Finance and Development Corporation, 7/07 at 102.00 AAA 1,289,973 Single Family Mortgage Purchase Revenue Bonds, Series 1997A, 5.750%, 7/01/30 (Alternative Minimum Tax) 2,215 Hawaii Housing and Community Development Corporation, 7/10 at 102.00 AAA 2,311,109 GNMA Collateralized Multifamily Housing Revenue Bonds, Sunset Villas, Series 2000, 5.700%, 7/20/31 - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 15.3% (10.1% OF TOTAL INVESTMENTS) 5,865 Chicago, Illinois, General Obligation Bonds, Neighborhoods 7/10 at 101.00 AAA 6,672,845 Alive 21 Program, Series 2000A, 6.500%, 1/01/35 (Pre-refunded to 7/01/10) - FGIC Insured 4,000 Chicago Board of Education, Illinois, Unlimited Tax General 12/07 at 102.00 AAA 4,283,960 Obligation Bonds, Dedicated Tax Revenues, Series 1997, 5.750%, 12/01/20 (Pre-refunded to 12/01/07) - AMBAC Insured 12,500 Chicago Board of Education, Illinois, Unlimited Tax General 12/07 at 102.00 AAA 13,084,000 Obligation Bonds, Dedicated Tax Revenues, Series 1997A, 5.250%, 12/01/27 - AMBAC Insured 2,175 Chicago Board of Education, Illinois, Unlimited Tax General No Opt. Call AAA 681,667 Obligation Bonds, Dedicated Tax Revenues, Series 1998B-1, 0.000%, 12/01/28 - FGIC Insured 33 Nuveen Municipal Advantage Fund, Inc. (NMA) (continued) Portfolio of INVESTMENTS October 31, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS (continued) $ 1,515 Chicago Board of Education, Illinois, Unlimited Tax General No Opt. Call AAA $ 407,323 Obligation Bonds, Dedicated Tax Revenues, Series 1999A, 0.000%, 12/01/31 - FGIC Insured 5,000 Chicago, Illinois, Special Facility Revenue Bonds, O'Hare No Opt. Call N/R 2,272,050 International Airport, United Air Lines Inc. Project, Series 2001A, 6.375%, 11/01/35 (Alternative Minimum Tax) (Mandatory put 5/01/13)# 5,000 Chicago, Illinois, Second Lien Passenger Facility Charge Revenue 1/11 at 101.00 AAA 5,166,100 Bonds, O'Hare International Airport, Series 2001A, 5.375%, 1/01/32 (Alternative Minimum Tax) - AMBAC Insured 5,000 Chicago, Illinois, Second Lien Wastewater Transmission 1/08 at 102.00 AAA 5,305,500 Revenue Bonds, Series 1997, 5.250%, 1/01/28 (Pre-refunded to 1/01/08) - AMBAC Insured 10,115 Illinois Health Facilities Authority, Revenue Refunding Bonds, 11/06 at 102.00 AAA 10,595,361 Rush-Presbyterian-St. Luke's Medical Center Obligated Group, Series 1996A, 6.250%, 11/15/20 - MBIA Insured 6,165 Illinois Health Facilities Authority, Revenue Bonds, Sarah Bush 2/07 at 102.00 A 6,347,361 Lincoln Health Center, Series 1996B, 5.750%, 2/15/22 4,210 Illinois Health Facilities Authority, Revenue Bonds, Victory 8/07 at 101.00 BBB- 4,182,425 Health Services, Series 1997A, 5.375%, 8/15/16 6,000 Illinois Health Facilities Authority, Revenue Bonds, Condell 5/12 at 100.00 Baa2 6,266,940 Medical Center, Series 2002, 5.750%, 5/15/22 10,740 Lake and McHenry Counties Community Unit School 1/15 at 66.94 Aaa 4,547,531 District 118, Wauconda, Illinois, General Obligation Bonds, Series 2005B, 0.000%, 1/01/23 - FSA Insured Metropolitan Pier and Exposition Authority, Illinois, Revenue Bonds, McCormick Place Expansion Project, Series 1999A: 13,455 5.500%, 12/15/24 - FGIC Insured 12/09 at 101.00 AAA 14,504,221 10,430 5.250%, 12/15/28 - FGIC Insured 12/09 at 101.00 AAA 10,968,814 4,600 Regional Transportation Authority, Cook, DuPage, Kane, Lake, No Opt. Call AAA 5,747,746 McHenry and Will Counties, Illinois, General Obligation Bonds, Series 1990A, 7.200%, 11/01/20 - AMBAC Insured 1,940 University of Illinois, Auxiliary Facilities Systems Revenue 4/13 at 100.00 AAA 2,015,388 Bonds, Series 2003A, 5.000%, 4/01/23 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 3.6% (2.4% OF TOTAL INVESTMENTS) 5,205 Indiana Health Facility Financing Authority, Hospital Revenue 8/10 at 101.50 AAA 5,557,743 Bonds, Clarian Health Obligated Group, Series 2000A, 5.500%, 2/15/30 - MBIA Insured 9,000 Indiana Health Facility Financing Authority, Hospital Revenue 5/06 at 102.00 AAA 9,280,710 Refunding and Improvement Bonds, Community Hospitals of Indiana, Series 1995, 5.700%, 5/15/22 - MBIA Insured 6,075 LaGrange County Jail Building Corporation, Indiana, First 10/09 at 101.00 A3*** 6,566,589 Mortgage Jail Bonds, Series 1998, 5.400%, 10/01/21 (Pre-refunded to 10/01/09) 2,725 St. Joseph County Hospital Authority, Indiana, Revenue Bonds, 2/09 at 102.00 BBB 2,844,273 Madison Center Inc., Series 1999, 5.450%, 2/15/12 - ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 1.8% (1.2% OF TOTAL INVESTMENTS) 5,000 Burlington, Kansas, Environmental Improvement Revenue No Opt. Call A3 5,103,500 Bonds, Kansas City Power and Light Company Project, Series 1998A, 4.750%, 9/01/15 (Mandatory put 10/01/07) 4,935 Kansas Department of Transportation, Highway Revenue 3/14 at 100.00 AA+ 5,172,768 Bonds, Series 2004A, 5.000%, 3/01/22 1,750 Wamego, Kansas, Pollution Control Revenue Bonds, Kansas 6/14 at 100.00 AAA 1,848,823 Gas and Electric Company, Series 2004, 5.300%, 6/01/31 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 1.6% (1.1% OF TOTAL INVESTMENTS) 5,500 Louisville and Jefferson County Metropolitan Sewer District, 5/07 at 101.00 AAA 5,683,480 Kentucky, Sewer and Drainage System Revenue Bonds, Series 1997A, 5.250%, 5/15/27 - MBIA Insured 4,950 Louisville and Jefferson County Metropolitan Sewer District, 11/07 at 101.00 AAA 5,143,149 Kentucky, Sewer and Drainage System Revenue Bonds, Series 1997B, 5.200%, 5/15/25 - MBIA Insured 34 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 7.7% (5.1% OF TOTAL INVESTMENTS) $ 13,500 De Soto Parish, Louisiana, Pollution Control Revenue 9/09 at 102.00 AAA $ 14,774,265 Refunding Bonds, Cleco Utility Group Inc. Project, Series 1999, 5.875%, 9/01/29 - AMBAC Insured 6,650 Louisiana Public Facilities Authority, Revenue Bonds, Baton 7/14 at 100.00 AAA 6,878,760 Rouge General Hospital, Series 2004, 5.250%, 7/01/33 - MBIA Insured 9,395 Louisiana Public Facilities Authority, Extended Care Facilities No Opt. Call BBB 11,843,055 Revenue Bonds, Comm-Care Corporation Project, Series 1994, 11.000%, 2/01/14 Tobacco Settlement Financing Corporation, Louisiana, Tobacco Settlement Asset-Backed Bonds, Series 2001B: 6,000 5.500%, 5/15/30 5/11 at 101.00 BBB 6,153,660 11,750 5.875%, 5/15/39 5/11 at 101.00 BBB 12,260,655 - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 2.4% (1.6% OF TOTAL INVESTMENTS) 1,750 Massachusetts Health and Educational Facilities Authority, 1/09 at 101.00 AAA 1,789,428 Revenue Bonds, UMass Memorial Healthcare, Series 1998A, 5.000%, 7/01/28 - AMBAC Insured 4,135 Massachusetts Housing Finance Agency, Single Family 12/09 at 100.00 AAA 4,145,999 Housing Revenue Bonds, Series 77, 5.950%, 6/01/25 (Alternative Minimum Tax) - FSA Insured 10,000 Massachusetts Turnpike Authority, Metropolitan Highway 1/07 at 102.00 AAA 10,117,500 System Revenue Bonds, Senior Series 1997A, 5.000%, 1/01/37 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 1.6% (1.1% OF TOTAL INVESTMENTS) 3,275 Michigan State Hospital Finance Authority, Revenue Refunding 2/06 at 100.00 BB- 3,276,507 Bonds, Detroit Medical Center Obligated Group, Series 1993A, 6.500%, 8/15/18 Michigan State Hospital Finance Authority, Hospital Revenue Bonds, Detroit Medical Center Obligated Group, Series 1998A: 4,995 5.250%, 8/15/23 8/08 at 101.00 BB- 4,742,103 3,000 5.250%, 8/15/28 8/08 at 101.00 BB- 2,799,000 - ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 1.9% (1.2% OF TOTAL INVESTMENTS) 5,000 Minneapolis-St. Paul Metropolitan Airports Commission, 1/11 at 100.00 AAA 5,200,500 Minnesota, Subordinate Airport Revenue Bonds, Series 2001C, 5.250%, 1/01/32 - FGIC Insured 4,780 Minnesota Housing Finance Agency, Single Family Mortgage 7/09 at 100.00 AA+ 4,896,632 Revenue Bonds, Series 2000C, 5.550%, 7/01/24 (Alternative Minimum Tax) 2,510 Minnesota Housing Finance Agency, Single Family Mortgage 1/10 at 100.00 AA+ 2,535,326 Revenue Bonds, Series 2000J, 5.400%, 1/01/23 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ MISSISSIPPI - 0.0% (0.0% OF TOTAL INVESTMENTS) 55 Coahoma-Clarksdale Housing Development Corporation, 2/06 at 100.00 AAA 55,101 Mississippi, FHA-Insured Section 8 Assisted Multifamily Mortgage Revenue Refunding Bonds, Gooden Estates and McLaurin Arms, Series 1990A, 8.000%, 8/01/24 60 Coahoma-Clarksdale Housing Development Corporation, 2/06 at 100.00 AAA 60,110 Mississippi, FHA-Insured Section 8 Assisted Multifamily Mortgage Revenue Refunding Bonds, Gooden Estates and McLaurin Arms, Series 1990B, 8.000%, 8/01/24 - ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 0.3% (0.2% OF TOTAL INVESTMENTS) 1,500 Missouri-Illinois Metropolitan District Bi-State Development 10/13 at 100.00 AAA 1,543,890 Agency, Mass Transit Sales Tax Appropriation Bonds, Metrolink Cross County Extension Project, Series 2002B, 5.000%, 10/01/32 - FSA Insured 255 Missouri Housing Development Commission, Single Family 9/09 at 102.00 AAA 264,782 Mortgage Revenue Bonds, Homeownership Loan Program, Series 2000A-1, 7.500%, 3/01/31 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ MONTANA - 1.6% (1.0% OF TOTAL INVESTMENTS) 3,730 Montana Board of Housing, Single Family Program Bonds, 12/05 at 102.00 AA+ 3,738,877 Series 1995B, 6.400%, 12/01/27 (Alternative Minimum Tax) 6,920 Montana Board of Housing, Single Family Mortgage Bonds, 6/07 at 101.50 AA+ 7,124,901 Series 1997A-1, 6.050%, 12/01/37 - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 3.7% (2.5% OF TOTAL INVESTMENTS) 7,310 Clark County, Nevada, Limited Tax General Obligation Bank 7/10 at 100.00 AA 7,863,952 Bonds, Series 2000, 5.500%, 7/01/19 35 Nuveen Municipal Advantage Fund, Inc. (NMA) (continued) Portfolio of INVESTMENTS October 31, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA (continued) $ 7,500 Clark County, Nevada, Subordinate Lien Airport Revenue Bonds, 7/10 at 101.00 AAA $ 8,352,225 Series 1999A, 6.000%, 7/01/29 (Pre-refunded to 7/01/10) - MBIA Insured 7,910 Director of Nevada State Department of Business and Industry, 1/10 at 100.00 AAA 8,174,352 Revenue Bonds, Las Vegas Monorail Project, First Tier, Series 2000, 5.375%, 1/01/40 - AMBAC Insured 660 Nevada Housing Division, Single Family Mortgage Bonds, 4/07 at 102.00 Aaa 671,920 Senior Series 1997C-2, 5.750%, 4/01/29 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 3.1% (2.1% OF TOTAL INVESTMENTS) Tobacco Settlement Financing Corporation, New Jersey, Tobacco Settlement Asset-Backed Bonds, Series 2002: 15,150 5.750%, 6/01/32 6/12 at 100.00 BBB 15,749,940 5,000 6.125%, 6/01/42 6/12 at 100.00 BBB 5,247,700 - ------------------------------------------------------------------------------------------------------------------------------------ NEW MEXICO - 1.1% (0.8% OF TOTAL INVESTMENTS) 7,500 Farmington, New Mexico, Pollution Control Revenue Refunding 4/06 at 101.00 BBB 7,657,200 Bonds, Public Service Company of New Mexico - San Juan Project, Series 1997B, 5.800%, 4/01/22 - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 16.5% (11.0% OF TOTAL INVESTMENTS) 7,000 Metropolitan Transportation Authority, New York, State Service 7/12 at 100.00 AA- 7,283,920 Contract Refunding Bonds, Series 2002A, 5.125%, 1/01/29 Nassau County, New York, General Obligation Improvement Bonds, Series 2000F: 3,980 7.000%, 3/01/11 (Pre-refunded to 3/01/10) - FSA Insured 3/10 at 100.00 AAA 4,539,110 4,070 7.000%, 3/01/12 (Pre-refunded to 3/01/10) - FSA Insured 3/10 at 100.00 AAA 4,641,754 3,925 7.000%, 3/01/15 (Pre-refunded to 3/01/10) - FSA Insured 3/10 at 100.00 AAA 4,476,384 10,000 New York City, New York, General Obligation Bonds, Fiscal 10/07 at 101.00 Aaa 10,642,500 Series 1997G, 6.000%, 10/15/26 (Pre-refunded to 10/15/07) 7,435 New York City, New York, General Obligation Bonds, Fiscal 5/10 at 101.00 A+*** 8,229,504 Series 2000A, 5.750%, 5/15/20 (Pre-refunded to 5/15/10) 9,850 New York City Municipal Water Finance Authority, New York, 6/09 at 101.00 AAA 10,756,397 Water and Sewerage System Revenue Bonds, Fiscal Series 2000A, 5.750%, 6/15/31 (Pre-refunded to 6/15/09) - FGIC Insured 5,000 New York City Municipal Water Finance Authority, New York, 6/07 at 101.00 AAA 5,259,500 Water and Sewerage System Revenue Bonds, Fiscal Series 1997B, 5.750%, 6/15/29 (Pre-refunded to 6/15/07) - FGIC Insured 10,000 New York City Municipal Water Finance Authority, New York, 12/14 at 100.00 AAA 10,308,300 Water and Sewerage System Revenue Bonds, Fiscal Series 2005B, 5.000%, 6/15/36 - FSA Insured 10,000 New York City Transitional Finance Authority, New York, Future 5/10 at 101.00 AAA 11,150,600 Tax Secured Bonds, Fiscal Series 2000B, 6.000%, 11/15/29 (Pre-refunded to 5/15/10) 4,975 New York City Industrial Development Agency, New York, 12/08 at 102.00 Ba2 4,227,307 Special Facilities Revenue Bonds, British Airways PLC, Series 1998, 5.250%, 12/01/32 (Alternative Minimum Tax) 3,000 New York City Industrial Development Agency, New York, 12/12 at 101.00 Ba2 3,231,870 Special Facilities Revenue Bonds, British Airways PLC, Series 2002, 7.625%, 12/01/32 (Alternative Minimum Tax) 3,655 Dormitory Authority of the State of New York, Revenue Bonds, 5/08 at 101.00 AA-*** 3,861,690 State University Educational Facilities, Series 1997, 5.125%, 5/15/27 (Pre-refunded to 5/15/08) Dormitory Authority of the State of New York, Revenue Bonds, Mental Health Services Facilities Improvements, Series 1997B: 2,965 5.625%, 2/15/21 (Pre-refunded to 2/15/07) 2/07 at 102.00 AA-*** 3,115,148 4,395 5.625%, 2/15/21 2/07 at 102.00 AA- 4,581,524 9,495 New York State Mortgage Agency, Homeowner Mortgage 4/10 at 100.00 Aa1 9,899,487 Revenue Bonds, Series 94, 5.800%, 10/01/20 (Alternative Minimum Tax) 5,000 New York State Urban Development Corporation, Service 1/09 at 101.00 AAA 5,443,650 Contract Revenue Bonds, Correctional Facilities, Series 1999C, 6.000%, 1/01/29 (Pre-refunded to 1/01/09) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 3.2% (2.1% OF TOTAL INVESTMENTS) 8,200 North Carolina Housing Finance Agency, Home Ownership 7/09 at 100.00 AA 8,501,350 Revenue Bonds, 1998 Trust Agreement, Series 7A, 6.250%, 1/01/29 (Alternative Minimum Tax) 5,735 North Carolina Housing Finance Agency, Home Ownership 1/10 at 100.00 AA 5,848,438 Revenue Bonds, 1998 Trust Agreement, Series 8A, 5.950%, 1/01/27 (Alternative Minimum Tax) 36 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA (continued) $ 5,880 North Carolina Housing Finance Agency, Home Ownership 1/10 at 100.00 AA $ 6,069,806 Revenue Bonds, 1998 Trust Agreement, Series 9A, 5.875%, 7/01/31 (Alternative Minimum Tax) 1,250 North Carolina Housing Finance Agency, Home Ownership 7/10 at 100.00 AAA 1,270,963 Revenue Bonds, 1998 Trust Agreement, Series 10A, 5.400%, 7/01/32 (Alternative Minimum Tax) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ NORTH DAKOTA - 0.4% (0.2% OF TOTAL INVESTMENTS) 2,515 North Dakota Housing Finance Agency, Home Mortgage Finance 7/08 at 102.00 Aaa 2,534,215 Program Bonds, Series 1998B, 5.500%, 7/01/29 (Alternative Minimum Tax) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 4.5% (3.0% OF TOTAL INVESTMENTS) 5,000 Akron, Bath and Copley Joint Township Hospital District, Ohio, 11/09 at 101.00 Baa1 5,118,900 Hospital Facilities Revenue Bonds, Summa Health System, Series 1998A, 5.375%, 11/15/18 6,000 Cuyahoga County, Ohio, Hospital Revenue Bonds, University 7/09 at 101.00 AAA 6,388,440 Hospitals Health System, Series 1999, 5.500%, 1/15/30 - AMBAC Insured Montgomery County, Ohio, Hospital Facilities Revenue Bonds, Kettering Medical Center, Series 1999: 7,840 6.750%, 4/01/18 4/10 at 101.00 A 8,621,648 5,000 6.750%, 4/01/22 4/10 at 101.00 A 5,485,850 1,915 Ohio Housing Finance Agency, GNMA Mortgage-Backed 8/10 at 100.00 Aaa 1,963,392 Securities Program Residential Mortgage Revenue Bonds, Series 2000D, 5.450%, 9/01/31 (Alternative Minimum Tax) 2,650 Ohio, General Obligation Bonds, Higher Education, Series 2003A, 5/13 at 100.00 AA+ 2,765,779 5.000%, 5/01/22 - ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 2.2% (1.5% OF TOTAL INVESTMENTS) Oklahoma State Industries Authority, Health System Revenue Bonds, Integris Baptist Medical Center, Series 1999A: 2,110 5.750%, 8/15/29 (Pre-refunded to 8/15/09) - MBIA Insured 8/09 at 101.00 AAA 2,299,795 2,890 5.750%, 8/15/29 - MBIA Insured 8/09 at 101.00 AAA 3,105,623 10,000 Tulsa Municipal Airport Trust, Oklahoma, Revenue Refunding 12/08 at 100.00 B- 9,429,100 Bonds, American Airlines Inc., Series 2001B, 5.650%, 12/01/35 (Alternative Minimum Tax) (Mandatory put 12/01/08) - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 1.3% (0.8% OF TOTAL INVESTMENTS) 2,225 Carbon County Industrial Development Authority, Pennsylvania, No Opt. Call BBB- 2,383,887 Resource Recovery Revenue Refunding Bonds, Panther Creek Partners Project, Series 2000, 6.650%, 5/01/10 (Alternative Minimum Tax) 2,600 Pennsylvania Turnpike Commission, Turnpike Revenue Bonds, 12/14 at 100.00 AAA 2,837,562 Series 2004A, 5.500%, 12/01/31 - AMBAC Insured 3,240 Washington County Authority, Pennsylvania, Capital Funding No Opt. Call AAA 3,448,948 Revenue Bonds, Capital Projects and Equipment Acquisition Program, Series 1999, 6.150%, 12/01/29 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ PUERTO RICO - 1.4% (0.9% OF TOTAL INVESTMENTS) 4,000 Puerto Rico, General Obligation Bonds, Series 2000B, 7/10 at 100.00 AAA 4,351,160 5.625%, 7/01/19 - MBIA Insured 5,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/15 at 100.00 AAA 5,247,900 Series 2005RR, 5.000%, 7/01/26 - XLCA Insured - ------------------------------------------------------------------------------------------------------------------------------------ RHODE ISLAND - 1.9% (1.2% OF TOTAL INVESTMENTS) 12,250 Rhode Island Health and Educational Building Corporation, 5/07 at 102.00 AAA 12,843,022 Hospital Financing Revenue Bonds, Lifespan Obligated Group, Series 1996, 5.500%, 5/15/16 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 4.7% (3.1% OF TOTAL INVESTMENTS) 10,000 Greenville County School District, South Carolina, Installment 12/12 at 101.00 AA-*** 11,448,000 Purchase Revenue Bonds, Series 2002, 6.000%, 12/01/20 (Pre-refunded to 12/01/12) 2,500 Lexington County Health Service District, South Carolina, 11/13 at 100.00 A 2,651,975 Hospital Revenue Refunding and Improvement Bonds, Series 2003, 5.750%, 11/01/28 3,000 Myrtle Beach, South Carolina, Hospitality and Accommodation 6/14 at 100.00 AAA 3,075,840 Fee Revenue Bonds, Series 2004A, 5.000%, 6/01/36 - FGIC Insured 1,220 Piedmont Municipal Power Agency, South Carolina, Electric No Opt. Call AAA 527,882 Revenue Bonds, Series 2004A-2, 0.000%, 1/01/23 - FGIC Insured 37 Nuveen Municipal Advantage Fund, Inc. (NMA) (continued) Portfolio of INVESTMENTS October 31, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA (continued) South Carolina Public Service Authority, Revenue Refunding Bonds, Santee Cooper Electric System, Series 2003A: $ 3,560 5.000%, 1/01/20 - AMBAC Insured 7/13 at 100.00 AAA $ 3,732,945 2,125 5.000%, 1/01/21 - AMBAC Insured 7/13 at 100.00 AAA 2,222,559 7,500 Tobacco Settlement Revenue Management Authority, 5/11 at 101.00 BBB 8,056,050 South Carolina, Tobacco Settlement Asset-Backed Bonds, Series 2001B, 6.375%, 5/15/28 - ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 5.2% (3.4% OF TOTAL INVESTMENTS) 6,000 Knox County Health, Educational and Housing Facilities Board, 4/12 at 101.00 Baa3 6,323,400 Tennessee, Hospital Revenue Bonds, Baptist Health System of East Tennessee Inc., Series 2002, 6.500%, 4/15/31 20,415 Knox County Health, Educational and Housing Facilities Board, 1/13 at 75.87 AAA 11,032,878 Tennessee, Hospital Revenue Refunding Bonds, Covenant Health, Series 2002A, 0.000%, 1/01/18 - FSA Insured 1,750 Metropolitan Government of Nashville-Davidson County, 5/11 at 100.00 AA 1,808,170 Tennessee, Electric System Revenue Bonds, Series 2001A, 5.125%, 5/15/26 14,385 Metropolitan Government of Nashville-Davidson County 11/09 at 101.00 AAA 15,814,725 Health and Educational Facilities Board, Tennessee, Revenue Bonds, Ascension Health Credit Group, Series 1999A, 5.875%, 11/15/28 (Pre-refunded to 11/15/09) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 18.3% (12.2% OF TOTAL INVESTMENTS) 11,810 Brazos River Authority, Texas, Pollution Control Revenue No Opt. Call Baa2 12,498,641 Refunding Bonds, TXU Electric Company, Series 2001C, 5.750%, 5/01/36 (Alternative Minimum Tax) (Mandatory put 11/01/11) 6,000 Brazos River Authority, Texas, Revenue Refunding Bonds, No Opt. Call AAA 6,349,440 Houston Lighting and Power Company, Series 1998, 5.050%, 11/01/18 (Alternative Minimum Tax) - AMBAC Insured 10,000 Central Texas Regional Mobility Authority, Travis and 1/15 at 100.00 AAA 10,127,800 Williamson Counties, Toll Road Revenue Bonds, Series 2005, 5.000%, 1/01/45 - FGIC Insured 8,400 Gulf Coast Waste Disposal Authority, Texas, Waste Disposal 4/09 at 101.00 BBB- 8,542,128 Revenue Bonds, Valero Energy Corporation, Series 1999, 5.700%, 4/01/32 (Alternative Minimum Tax) 10,000 Harris County Health Facilities Development Corporation, 5/06 at 102.00 AAA 10,325,800 Texas, Special Facilities Revenue Bonds, Texas Medical Center Project, Series 1996, 5.900%, 5/15/16 - MBIA Insured 5,000 Harris County Health Facilities Development Corporation, 11/13 at 100.00 AAA 5,096,000 Texas, Thermal Utility Revenue Bonds, TECO Project, Series 2003, 5.000%, 11/15/30 - MBIA Insured 13,110 Houston, Texas, Subordinate Lien Airport System Revenue 7/10 at 100.00 AAA 13,996,367 Bonds, Series 2000B, 5.500%, 7/01/30 - FSA Insured Houston Community College, Texas, Limited Tax General Obligation Bonds, Series 2003: 3,460 5.000%, 2/15/28 (Pre-refunded to 2/15/13) - AMBAC Insured 2/13 at 100.00 AAA 3,717,424 1,540 5.000%, 2/15/28 - AMBAC Insured 2/13 at 100.00 AAA 1,581,041 Houston, Texas, Water Conveyance System Contract, Certificates of Participation, Series 1993A-J: 5,490 6.800%, 12/15/10 - AMBAC Insured No Opt. Call AAA 6,251,408 2,000 6.800%, 12/15/11 - AMBAC Insured No Opt. Call AAA 2,310,240 9,345 Leander Independent School District, Williamson and Travis 8/15 at 35.34 AAA 1,962,917 Counties, Texas, General Obligation Bonds, Series 2005, 0.000%, 8/15/34 - FGIC Insured 16,305 Matagorda County Navigation District 1, Texas, Revenue 5/09 at 101.00 BBB- 16,591,968 Bonds, Reliant Energy Inc., Series 1999B, 5.950%, 5/01/30 (Alternative Minimum Tax) 3,425 Sabine River Authority, Texas, Pollution Control Revenue No Opt. Call Baa2 3,629,746 Refunding Bonds, TXU Electric Company, Series 2001A, 5.500%, 5/01/22 (Mandatory put 11/01/11) 4,700 Sam Rayburn Municipal Power Agency, Texas, Power Supply 10/12 at 100.00 Baa2 4,970,344 System Revenue Refunding Bonds, Series 2002A, 6.000%, 10/01/21 4,000 Texas, General Obligation Bonds, Water Financial Assistance, 8/09 at 100.00 Aa1 4,239,640 State Participation Program, Series 1999C, 5.500%, 8/01/35 6,840 Travis County Health Facilities Development Corporation, 11/09 at 101.00 AAA 7,519,828 Texas, Revenue Bonds, Ascension Health Credit Group, Series 1999A, 5.875%, 11/15/24 (Pre-refunded to 11/15/09) - AMBAC Insured 38 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS (continued) $ 2,500 Trinity River Authority of Texas, Pollution Control Revenue No Opt. Call Baa2 $ 2,528,675 Refunding Bonds, TXU Electric Company, Series 2001A, 5.000%, 5/01/27 (Alternative Minimum Tax) (Mandatory put 11/01/06) 245 Wood Glen Housing Finance Corporation, Texas, FHA-Insured 1/06 at 100.00 AAA 245,811 Section 8 Assisted Mortgage Revenue Bonds, Copperwood I Project, Series 1990A, 7.625%, 1/01/10 - MBIA Insured 3,000 Wylie Independent School District, Taylor County, Texas, 8/15 at 74.57 AAA 1,369,230 General Obligation Bonds, Series 2005, 0.000%, 8/15/21 - ------------------------------------------------------------------------------------------------------------------------------------ UTAH - 0.3% (0.2% OF TOTAL INVESTMENTS) Intermountain Power Agency, Utah, Power Supply Revenue Refunding Bonds, Series 1997B: 730 5.750%, 7/01/19 (Pre-refunded to 7/01/07) - MBIA Insured 7/07 at 102.00 AAA 775,085 1,470 5.750%, 7/01/19 - MBIA Insured 7/07 at 102.00 AAA 1,552,496 - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 14.3% (9.5% OF TOTAL INVESTMENTS) 8,810 Chelan County Public Utility District 1, Washington, Hydro 7/11 at 101.00 AAA 9,343,357 Consolidated System Revenue Bonds, Series 2001A, 5.600%, 1/01/36 (Alternative Minimum Tax) - MBIA Insured 10,730 Chelan County Public Utility District 1, Washington, Hydro 7/11 at 101.00 AAA 11,435,498 Consolidated System Revenue Refunding Bonds, Series 2001C, 5.650%, 7/01/32 (Alternative Minimum Tax) - MBIA Insured 5,665 Chelan County Public Utility District 1, Washington, Hydro 7/12 at 100.00 AAA 5,802,093 Consolidated System Revenue Bonds, Series 2002B, 5.250%, 7/01/37 (Alternative Minimum Tax) - AMBAC Insured 10,730 Pierce County School District 320, Sumner, Washington, 12/10 at 100.00 Aaa 12,083,268 Unlimited Tax General Obligation Bonds, Series 2000, 6.250%, 12/01/17 (Pre-refunded to 12/01/10) - FSA Insured 10,550 Port of Seattle, Washington, Limited Tax General Obligation 12/10 at 100.00 AA+ 11,253,791 Bonds, Series 2000B, 5.750%, 12/01/25 (Alternative Minimum Tax) 5,315 Port of Seattle, Washington, Revenue Bonds, Series 2000B, No Opt. Call AAA 5,760,450 6.000%, 2/01/10 (Alternative Minimum Tax) - MBIA Insured 19,475 Port of Seattle, Washington, Special Facility Revenue Bonds, 3/10 at 101.00 AAA 21,350,248 Terminal 18, Series 1999A, 6.000%, 9/01/29 - MBIA Insured 5,000 Port of Seattle, Washington, Special Facility Revenue Bonds, 3/10 at 101.00 AAA 5,408,650 Terminal 18, Series 1999B, 6.000%, 9/01/20 (Alternative Minimum Tax) - MBIA Insured 5,000 Washington State Healthcare Facilities Authority, Revenue 12/09 at 101.00 AAA 5,317,650 Bonds, Providence Services, Series 1999, 5.375%, 12/01/19 - MBIA Insured 8,750 Washington Public Power Supply System, Revenue Refunding 7/08 at 102.00 Aaa 9,149,520 Bonds, Nuclear Project 3, Series 1998A, 5.125%, 7/01/18 - ------------------------------------------------------------------------------------------------------------------------------------ WEST VIRGINIA - 0.8% (0.5% OF TOTAL INVESTMENTS) 5,000 Mason County, West Virginia, Pollution Control Revenue Bonds, 10/11 at 100.00 BBB 5,091,850 Appalachian Power Company, Series 2003L, 5.500%, 10/01/22 - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 7.7% (5.1% OF TOTAL INVESTMENTS) 7,395 Badger Tobacco Asset Securitization Corporation, Wisconsin, 6/12 at 100.00 BBB 7,841,584 Tobacco Settlement Asset-Backed Bonds, Series 2002, 6.125%, 6/01/27 2,250 Green Bay, Wisconsin, Water System Revenue Bonds, 11/14 at 100.00 Aaa 2,323,260 Series 2004, 5.000%, 11/01/29 - FSA Insured 5,000 Madison, Wisconsin, Industrial Development Revenue 4/12 at 100.00 AA- 5,329,400 Refunding Bonds, Madison Gas and Electric Company Projects, Series 2002A, 5.875%, 10/01/34 (Alternative Minimum Tax) 3,000 Southeast Wisconsin Professional Baseball Park District, Sales No Opt. Call AAA 3,383,040 Tax Revenue Refunding Bonds, Series 1998A, 5.500%, 12/15/19 - MBIA Insured 39 Nuveen Municipal Advantage Fund, Inc. (NMA) (continued) Portfolio of INVESTMENTS October 31, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN (continued) $ 2,350 Wisconsin Housing and Economic Development Authority, 3/10 at 100.00 AA $ 2,403,320 Home Ownership Revenue Bonds, Series 2000B, 5.750%, 3/01/22 (Alternative Minimum Tax) Wisconsin Health and Educational Facilities Authority, Revenue Bonds, Aurora Medical Group Inc., Series 1996: 10,000 5.600%, 11/15/16 - FSA Insured 5/06 at 102.00 AAA 10,308,100 20,000 5.750%, 11/15/25 - FSA Insured 5/06 at 102.00 AAA 20,623,400 - ------------------------------------------------------------------------------------------------------------------------------------ $ 1,044,000 Total Long-Term Investments (cost $951,789,105) - 150.8% 1,019,106,800 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.2% 14,571,273 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (53.0)% (358,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 675,678,073 ====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. * 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. ** Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's or Moody's rating. *** Securities are backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensures the timely payment of principal and interest. Such securities are normally considered to be equivalent to AAA rated securities. N/R Investment is not rated. # On December 9, 2002, UAL Corporation, the holding company of United Air Lines, Inc., filed for federal bankruptcy protection. The Adviser determined that it was likely United would not remain current on their interest payment obligations with respect to these bonds and thus has stopped accruing interest. See accompanying notes to financial statements. 40 Nuveen Municipal Market Opportunity Fund, Inc. (NMO) Portfolio of INVESTMENTS October 31, 2005
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ALASKA - 0.4% (0.2% OF TOTAL INVESTMENTS) Alaska Housing Finance Corporation, General Housing Purpose Bonds, Series 2005A: $ 1,125 5.250%, 12/01/34 - FGIC Insured 12/14 at 100.00 AAA $ 1,181,734 1,275 5.250%, 12/01/41 - FGIC Insured 12/14 at 100.00 AAA 1,330,615 - ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 0.5% (0.3% OF TOTAL INVESTMENTS) 3,000 Arizona State Transportation Board, Highway Revenue Bonds, 7/11 at 100.00 AAA 3,249,150 Series 2001, 5.250%, 7/01/20 (Pre-refunded to 7/01/11) 250 Pima County Industrial Development Authority, Arizona, 5/07 at 105.85 AAA 252,838 FNMA/GNMA Single Family Mortgage Revenue Bonds, Series 1997A, 7.100%, 11/01/29 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ ARKANSAS - 1.8% (1.2% OF TOTAL INVESTMENTS) 5,000 Arkansas Development Finance Authority, Hospital Revenue 2/10 at 100.00 BBB*** 5,640,500 Bonds, Washington Regional Medical Center, Series 2000, 7.000%, 2/01/15 (Pre-refunded to 2/01/10) 3,480 Cabot School District 4, Lonoke County, Arkansas, General 8/08 at 100.00 Aaa 3,582,347 Obligation Refunding Bonds, Series 2003, 5.000%, 2/01/27 - AMBAC Insured 2,865 University of Arkansas, Fayetteville, Various Facilities Revenue 12/12 at 100.00 Aaa 3,175,194 Bonds, Series 2002, 5.500%, 12/01/20 (Pre-refunded to 12/01/12) - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 6.7% (4.4% OF TOTAL INVESTMENTS) 1,350 Antelope Valley Union High School District, Los Angeles No Opt. Call AAA 406,323 County, California, General Obligation Bonds, Series 2004B, 0.000%, 8/01/29 - MBIA Insured 1,350 California Educational Facilities Authority, Revenue Refunding No Opt. Call Aaa 242,312 Bonds, Loyola Marymount University, Series 2001A, 0.000%, 10/01/39 - MBIA Insured 4,295 California Health Facilities Financing Authority, Health Facility 3/13 at 100.00 A 4,311,708 Revenue Bonds, Adventist Health System/West, Series 2003A, 5.000%, 3/01/33 1,000 California Department of Water Resources, Power Supply 5/12 at 101.00 A2 1,100,100 Revenue Bonds, Series 2002A, 5.750%, 5/01/17 10,445 Castaic Lake Water Agency, California, Revenue Certificates No Opt. Call AAA 3,183,323 of Participation, Water System Improvement Project, Series 1999, 0.000%, 8/01/29 - AMBAC Insured 5,000 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 AAA 5,368,750 Enhanced Tobacco Settlement Asset-Backed Bonds, Series 2003B, 5.000%, 6/01/38 (Pre-refunded to 6/01/13) - AMBAC Insured 3,500 Golden State Tobacco Securitization Corporation, California, No Opt. Call AAA 1,250,305 Tobacco Settlement Asset-Backed Revenue Bonds, Series 2005A, 0.000%, 6/01/26 - FSA Insured 490 Los Angeles Department of Water and Power, California, 4/06 at 100.00 AA-*** 490,823 Electric Plant Revenue Bonds, Second Series 1993, 4.750%, 10/15/20 995 Los Angeles Department of Water and Power, California, 2/06 at 100.00 AA-*** 1,001,229 Electric Plant Revenue Bonds, Series 1994, 5.375%, 2/15/34 Orange County, California, Recovery Certificates of Participation, Series 1996A: 13,100 5.875%, 7/01/19 (Pre-refunded to 7/01/06) - MBIA Insured 7/06 at 102.00 AAA 13,606,970 690 6.000%, 7/01/26 (Pre-refunded to 7/01/06) - MBIA Insured 7/06 at 102.00 AAA 717,220 1,000 Pajaro Valley Unified School District, Santa Cruz County, No Opt. Call AAA 298,900 California, General Obligation Bonds, Series 2005B, 0.000%, 8/01/29 - FSA Insured San Joaquin Hills Transportation Corridor Agency, Orange County, California, Toll Road Revenue Refunding Bonds, Series 1997A: 5,000 0.000%, 1/15/17 - MBIA Insured 1/14 at 102.00 AAA 5,025,100 26,000 0.000%, 1/15/35 - MBIA Insured No Opt. Call AAA 5,912,400 41 Nuveen Municipal Market Opportunity Fund, Inc. (NMO) (continued) Portfolio of INVESTMENTS October 31, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA (continued) $ 5,000 San Jose-Evergreen Community College District, Santa Clara 9/15 at 100.00 AAA $ 1,517,350 County, California, General Obligation Bonds, Series 2005A, 0.000%, 9/01/28 - MBIA Insured 4,825 Santa Monica Community College District, Los Angeles County, No Opt. Call AAA 1,757,313 California, General Obligation Bonds, Series 2005C, 0.000%, 8/01/25 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 5.1% (3.3% OF TOTAL INVESTMENTS) 3,000 Broomfield, Colorado, Master Facilities Lease Purchase 12/09 at 100.00 AAA 3,233,340 Agreement, Certificates of Participation, Series 1999, 5.750%, 12/01/24 - AMBAC Insured 6,285 Broomfield, Colorado, Sales and Use Tax Revenue Refunding 12/12 at 100.00 Aaa 6,873,465 and Improvement Bonds, Series 2002A, 5.500%, 12/01/22 - AMBAC Insured 11,465 Denver City and County, Colorado, Airport System Revenue 11/10 at 100.00 AAA 12,450,073 Refunding Bonds, Series 2000A, 6.000%, 11/15/18 (Alternative Minimum Tax) - AMBAC Insured 20,000 E-470 Public Highway Authority, Colorado, Senior Revenue 9/10 at 31.42 AAA 5,220,400 Bonds, Series 2000B, 0.000%, 9/01/28 (Pre-refunded to 9/01/10) - MBIA Insured E-470 Public Highway Authority, Colorado, Toll Revenue Bonds, Series 2004B: 3,500 0.000%, 9/01/27 - MBIA Insured 9/20 at 67.94 AAA 1,107,120 13,300 0.000%, 9/01/31 - MBIA Insured 9/20 at 53.77 AAA 3,313,296 6,250 0.000%, 9/01/32 - MBIA Insured 9/20 at 50.83 AAA 1,472,250 8,000 0.000%, 3/01/36 - MBIA Insured No Opt. Call AAA 1,550,960 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRICT OF COLUMBIA - 0.5% (0.3% OF TOTAL INVESTMENTS) 3,165 Washington Convention Center Authority, District of Columbia, 10/08 at 100.00 AAA 3,145,187 Senior Lien Dedicated Tax Revenue Bonds, Series 1998, 4.750%, 10/01/28 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 5.9% (3.9% OF TOTAL INVESTMENTS) 15,000 Atlanta, Georgia, Airport General Revenue Refunding Bonds, 1/10 at 101.00 AAA 16,386,300 Series 2000A, 5.600%, 1/01/30 (Pre-refunded to 1/01/10) - FGIC Insured 14,330 Fulton County Facilities Corporation, Georgia, Certificates 11/10 at 101.00 AAA 15,599,781 of Participation, Public Purpose Project, Series 1999, 5.500%, 11/01/18 - AMBAC Insured 8,000 Georgia, General Obligation Bonds, Series 1995C, No Opt. Call AAA 8,811,040 7.250%, 7/01/08 - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 11.1% (7.3% OF TOTAL INVESTMENTS) 5,250 Chicago, Illinois, Revenue Bonds, Midway Airport, 1/09 at 101.00 AAA 5,351,325 Series 1998B, 5.000%, 1/01/28 - MBIA Insured 2,300 Chicago, Illinois, Motor Fuel Tax Revenue Refunding Bonds, No Opt. Call AAA 2,519,190 Series 1993, 5.375%, 1/01/14 - AMBAC Insured 4,000 Chicago, Illinois, Motor Fuel Tax Revenue Bonds, Series 2003A, 7/13 at 100.00 AAA 4,087,880 5.000%, 1/01/33 - AMBAC Insured 5,210 Illinois Housing Development Authority, Section 8 Elderly 1/06 at 100.00 A- 5,265,747 Housing Revenue Bonds, Garden House of River Oaks West Development, Series 1992A, 6.875%, 1/01/20 38,645 Illinois, General Obligation Bonds, Illinois FIRST Program, 4/10 at 100.00 AAA 41,154,220 Series 2000, 5.500%, 4/01/25 - MBIA Insured Lake and McHenry Counties Community Unit School District 118, Wauconda, Illinois, General Obligation Bonds, Series 2005B: 10,230 0.000%, 1/01/22 - FSA Insured 1/15 at 70.63 Aaa 4,586,314 6,780 0.000%, 1/01/24 - FSA Insured 1/15 at 63.44 Aaa 2,711,051 1,975 Lake County Community High School District 127, Grayslake, No Opt. Call AAA 2,600,601 Illinois, General Obligation Bonds, Series 2002A, 9.000%, 2/01/13 - FGIC Insured Metropolitan Pier and Exposition Authority, Illinois, Revenue Bonds, McCormick Place Expansion Project, Series 2002A: 3,250 0.000%, 6/15/25 - MBIA Insured 6/22 at 101.00 AAA 1,937,163 3,270 5.000%, 12/15/28 - MBIA Insured 6/12 at 101.00 AAA 3,358,421 1,830 0.000%, 6/15/37 - MBIA Insured No Opt. Call AAA 377,456 11,000 0.000%, 12/15/38 - MBIA Insured No Opt. Call AAA 2,101,770 3,650 0.000%, 6/15/39 - MBIA Insured No Opt. Call AAA 678,170 42 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 1.3% (0.8% OF TOTAL INVESTMENTS) $ 4,695 Indiana Educational Facilities Authority, Revenue Bonds, 2/11 at 100.00 AAA $ 5,027,500 Butler University, Series 2001, 5.500%, 2/01/26 - MBIA Insured 14,251 Indianapolis, Indiana, Special Facility Revenue Bonds, 11/05 at 102.00 N/R 1,748,461 United Airlines Inc., Indianapolis Maintenance Center Project, Series 1995A, 6.500%, 11/15/31 (Alternative Minimum Tax)# 2,000 Petersburg, Indiana, Pollution Control Revenue Refunding 8/11 at 102.00 Baa2 2,079,240 Bonds, Indianapolis Power and Light Company, Series 1991, 5.750%, 8/01/21 - ------------------------------------------------------------------------------------------------------------------------------------ IOWA - 0.6% (0.4% OF TOTAL INVESTMENTS) 4,215 Iowa Finance Authority, Solid Waste Disposal Revenue Bonds, No Opt. Call N/R 4,282,735 IPSCO Project, Series 1997, 6.000%, 6/01/27 (Alternative Minimum Tax) (Mandatory put 6/01/07) - ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 1.6% (1.1% OF TOTAL INVESTMENTS) Jefferson County School District Finance Corporation, Kentucky, School Building Revenue Bonds, Series 2000A: 3,045 5.250%, 7/01/17 - FSA Insured 1/10 at 101.00 AAA 3,248,650 7,490 5.250%, 7/01/20 - FSA Insured 1/10 at 101.00 AAA 7,947,639 - ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 1.6% (1.0% OF TOTAL INVESTMENTS) 7,415 Louisiana Local Government Environmental Facilities and 12/12 at 100.00 AAA 7,554,105 Community Development Authority, Revenue Bonds, Baton Rouge Community College Facilities Corporation, Series 2002, 5.000%, 12/01/32 - MBIA Insured 3,350 Louisiana Public Facilities Authority, Revenue Bonds, 7/14 at 100.00 AAA 3,465,240 Baton Rouge General Hospital, Series 2004, 5.250%, 7/01/33 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MARYLAND - 1.6% (1.0% OF TOTAL INVESTMENTS) Frederick County, Maryland, General Obligation Public Facilities Bonds, Series 2002: 3,710 5.000%, 11/01/18 11/12 at 101.00 AA 3,945,845 3,890 5.000%, 11/01/19 11/12 at 101.00 AA 4,133,864 2,500 Maryland Department of Transportation, Consolidated No Opt. Call AA 2,811,525 Transportation Revenue Bonds, Series 2002, 5.500%, 2/01/16 - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 3.4% (2.2% OF TOTAL INVESTMENTS) Massachusetts Bay Transportation Authority, Assessment Bonds, Series 2000A: 4,150 5.250%, 7/01/30 (Pre-refunded to 7/01/10) 7/10 at 100.00 AAA 4,464,612 1,100 5.250%, 7/01/30 7/10 at 100.00 AAA 1,162,260 10,000 Massachusetts Water Resources Authority, General Revenue 8/10 at 101.00 AAA 11,018,500 Bonds, Series 2000A, 5.750%, 8/01/39 (Pre-refunded to 8/01/10) - FGIC Insured 6,195 University of Massachusetts Building Authority, Facilities 11/10 at 100.00 AAA 6,652,501 Revenue Bonds, Senior Series 2000A, 5.125%, 11/01/25 (Pre-refunded to 11/01/10) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 0.3% (0.2% OF TOTAL INVESTMENTS) 2,090 Grand Rapids Building Authority, Kent County, Michigan, 8/10 at 100.00 AAA 2,239,686 Limited Tax General Obligation Bonds, Series 2000, 5.375%, 8/01/17 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 8.1% (5.3% OF TOTAL INVESTMENTS) 13,675 Minnesota, General Obligation Bonds, Series 2000, 11/10 at 100.00 AAA 14,605,447 5.125%, 11/01/16 2,895 Minnesota Housing Finance Agency, Single Family Remarketed 1/11 at 101.00 AA+ 2,977,073 Mortgage Bonds, Series 1998H-2, 6.050%, 7/01/31 (Alternative Minimum Tax) Minnesota Agricultural and Economic Development Board, Healthcare System Revenue Bonds, Fairview Hospital and Healthcare Services, Series 2000A: 29,070 6.375%, 11/15/29 (Pre-refunded to 11/15/10) 11/10 at 101.00 A*** 32,977,880 930 6.375%, 11/15/29 11/10 at 101.00 A 1,004,558 3,225 St. Paul Housing and Redevelopment Authority, Minnesota, 11/15 at 103.00 AAA 3,968,427 Sales Tax Revenue Refunding Bonds, Civic Center Project, Series 1996, 7.100%, 11/01/23 - FSA Insured 43 Nuveen Municipal Market Opportunity Fund, Inc. (NMO) (continued) Portfolio of INVESTMENTS October 31, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MISSISSIPPI - 1.1% (0.8% OF TOTAL INVESTMENTS) $ 5,900 Mississippi Business Finance Corporation, Pollution Control 4/06 at 100.00 BBB- $ 6,009,150 Revenue Refunding Bonds, System Energy Resources Inc. Project, Series 1998, 5.875%, 4/01/22 1,340 Mississippi Home Corporation, GNMA Mortgage-Backed 7/07 at 105.00 Aaa 1,399,322 Securities Program Single Family Mortgage Revenue Bonds, Series 1997D-5, 6.750%, 7/01/29 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 0.4% (0.2% OF TOTAL INVESTMENTS) 7,000 Kansas City Municipal Assistance Corporation, Missouri, No Opt. Call AAA 2,451,750 Leasehold Revenue Bonds, Series 2004B-1, 0.000%, 4/15/27 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 5.3% (3.5% OF TOTAL INVESTMENTS) 9,555 Clark County, Nevada, General Obligation Bank Bonds, 6/11 at 100.00 AAA 10,197,287 Southern Nevada Water Authority Loan, Series 2001, 5.300%, 6/01/20 - FGIC Insured Director of Nevada State Department of Business and Industry, Revenue Bonds, Las Vegas Monorail Project, First Tier, Series 2000: 8,500 0.000%, 1/01/26 - AMBAC Insured No Opt. Call AAA 3,090,685 5,315 0.000%, 1/01/27 - AMBAC Insured No Opt. Call AAA 1,822,939 21,000 5.375%, 1/01/40 - AMBAC Insured 1/10 at 100.00 AAA 21,701,820 - ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 4.2% (2.7% OF TOTAL INVESTMENTS) 170 Camden County Pollution Control Financing Authority, 12/05 at 100.00 Baa3 170,828 New Jersey, Solid Waste Disposal and Resource Recovery System Revenue Bonds, Series 1991D, 7.250%, 12/01/10 18,000 New Jersey Transportation Trust Fund Authority, Transportation 6/10 at 100.00 AAA 19,737,180 System Bonds, Series 2000B, 5.750%, 6/15/17 (Pre-refunded to 6/15/10) 5,000 New Jersey Turnpike Authority, Revenue Bonds, Growth and 1/17 at 100.00 AAA 3,198,900 Income Securities, Series 2004B, 0.000%, 1/01/35 - AMBAC Insured 3,000 Rahway Valley Sewerage Authority, New Jersey, Sewer Revenue No Opt. Call Aaa 1,145,640 Bonds, Series 2005A, 0.000%, 9/01/25 - MBIA Insured 3,165 Tobacco Settlement Financing Corporation, New Jersey, 6/12 at 100.00 BBB 3,321,794 Tobacco Settlement Asset-Backed Bonds, Series 2002, 6.125%, 6/01/42 1,195 Tobacco Settlement Financing Corporation, New Jersey, 6/13 at 100.00 BBB 1,326,617 Tobacco Settlement Asset-Backed Bonds, Series 2003, 6.375%, 6/01/32 - ------------------------------------------------------------------------------------------------------------------------------------ NEW MEXICO - 1.9% (1.2% OF TOTAL INVESTMENTS) 5,925 New Mexico Hospital Equipment Loan Council, Hospital 8/11 at 101.00 AA-*** 6,524,373 Revenue Bonds, Presbyterian Healthcare Services, Series 2001A, 5.500%, 8/01/21 (Pre-refunded to 8/01/11) 5,675 University of New Mexico, Revenue Refunding Bonds, No Opt. Call AA 6,347,885 Series 1992A, 6.250%, 6/01/12 - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 20.9% (13.7% OF TOTAL INVESTMENTS) 5,000 Long Island Power Authority, New York, Electric System 6/08 at 101.00 AAA 5,248,500 General Revenue Bonds, Series 1998A, 5.250%, 12/01/26 - MBIA Insured 6,750 Nassau County Tobacco Settlement Corporation, New York, 7/09 at 101.00 BBB- 7,139,205 Tobacco Settlement Asset-Backed Bonds, Series 1999A, 6.400%, 7/15/33 New York City, New York, General Obligation Bonds, Fiscal Series 2002G: 1,000 5.000%, 8/01/17 8/12 at 100.00 A+ 1,037,310 10,500 5.750%, 8/01/18 8/12 at 100.00 A+ 11,554,095 5,000 New York City, New York, General Obligation Bonds, 8/12 at 100.00 A+ 5,501,950 Fiscal Series 2003A, 5.750%, 8/01/16 New York City, New York, General Obligation Bonds, Fiscal Series 1997H: 1,510 6.125%, 8/01/25 (Pre-refunded to 8/01/07) 8/07 at 101.00 A+*** 1,602,065 8,490 6.125%, 8/01/25 8/07 at 101.00 A+ 8,943,706 19,715 New York City, New York, General Obligation Bonds, 3/06 at 101.50 A+*** 20,226,999 Fiscal Series 1996I, 5.875%, 3/15/18 (Pre-refunded to 3/15/06) 17,870 New York City Transitional Finance Authority, New York, 8/09 at 101.00 AAA 19,577,479 Future Tax Secured Bonds, Fiscal Series 2000A, 5.750%, 8/15/24 (Pre-refunded to 8/15/09) 44 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK (continued) Dormitory Authority of the State of New York, Improvement Revenue Bonds, Mental Health Services Facilities, Series 1997A: $ 19,290 5.750%, 2/15/27 (Pre-refunded to 2/15/07) 2/07 at 102.00 AA-*** $ 20,296,938 465 5.750%, 2/15/27 (Pre-refunded to 2/15/07) 2/07 at 102.00 AA-*** 489,273 245 5.750%, 2/15/27 2/07 at 102.00 AA- 256,226 4,500 New York State Energy Research and Development Authority, 1/06 at 101.00 AAA 4,552,155 Gas Facilities Revenue Bonds, Brooklyn Union Gas Company, Series 1989C, 5.600%, 6/01/25 (Alternative Minimum Tax) - MBIA Insured 4,785 New York State Medical Care Facilities Finance Agency, 11/05 at 102.00 Aa1 4,891,706 Secured Mortgage Revenue Bonds, Brookdale Family Care Centers Inc., Series 1995A, 6.375%, 11/15/19 7,805 New York State Power Authority, General Revenue Bonds, 11/12 at 100.00 Aa2 8,120,712 Series 2002A, 5.000%, 11/15/21 10,000 Port Authority of New York and New Jersey, Special Project 12/07 at 102.00 AAA 10,593,000 Bonds, JFK International Air Terminal LLC, Sixth Series 1997, 5.750%, 12/01/22 (Alternative Minimum Tax) - MBIA Insured 5,400 New York State Tobacco Settlement Financing Corporation, 6/10 at 100.00 AA- 5,767,416 Tobacco Settlement Asset-Backed and State Contingency Contract-Backed Bonds, Series 2003A-1, 5.500%, 6/01/16 8,000 TSASC Inc., New York, Tobacco Flexible Amortization Bonds, 7/09 at 101.00 BBB 8,465,680 Series 1999-1, 6.250%, 7/15/34 - ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 1.2% (0.9% OF TOTAL INVESTMENTS) 7,500 North Carolina Municipal Power Agency 1, Catawba Electric 1/13 at 100.00 AAA 8,011,275 Revenue Bonds, Series 2003A, 5.250%, 1/01/19 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ NORTH DAKOTA - 4.3% (2.8% OF TOTAL INVESTMENTS) 22,905 Fargo, North Dakota, Health System Revenue Bonds, MeritCare 6/10 at 101.00 AAA 24,731,674 Obligated Group, Series 2000A, 5.625%, 6/01/31 - FSA Insured North Dakota Water Commission, Water Development and Management Program Bonds, Series 2000A: 2,230 5.700%, 8/01/18 (Pre-refunded to 8/01/10) - MBIA Insured 8/10 at 100.00 AAA 2,444,682 2,450 5.750%, 8/01/19 (Pre-refunded to 8/01/10) - MBIA Insured 8/10 at 100.00 AAA 2,691,178 - ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 2.6% (1.7% OF TOTAL INVESTMENTS) 16,140 Montgomery County, Ohio, Hospital Facilities Revenue Bonds, No Opt. Call A 17,988,191 Kettering Medical Center, Series 1999, 6.300%, 4/01/12 - ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 0.0% (0.0% OF TOTAL INVESTMENTS) 300 Tulsa Municipal Airport Trust, Oklahoma, Revenue Refunding 6/09 at 100.00 B- 285,702 Bonds, American Airlines Inc., Series 2000B, 6.000%, 6/01/35 (Alternative Minimum Tax) (Mandatory put 12/01/08) - ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 2.4% (1.6% OF TOTAL INVESTMENTS) 5,000 Oregon Health Sciences University, Revenue Bonds, 1/13 at 100.00 AAA 5,356,850 Series 2002A, 5.250%, 7/01/22 - MBIA Insured Portland, Oregon, Water System Revenue Bonds, Series 2000A: 6,780 5.375%, 8/01/18 8/10 at 100.00 Aa1 7,268,635 3,880 5.500%, 8/01/20 8/10 at 100.00 Aa1 4,171,466 - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 3.9% (2.5% OF TOTAL INVESTMENTS) 5,000 Delaware County Industrial Development Authority, 1/08 at 102.00 BB+ 5,177,150 Pennsylvania, Resource Recovery Revenue Refunding Bonds, Series 1997A, 6.200%, 7/01/19 15,050 Pennsylvania, General Obligation Bonds, Second 9/11 at 101.00 AA 16,082,129 Series 2001, 5.000%, 9/15/14 5,000 Pennsylvania Higher Education Assistance Agency, Capital 12/10 at 100.00 AAA 5,543,300 Acquisition Revenue Bonds, Series 2000, 5.875%, 12/15/30 (Pre-refunded to 12/15/10) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ PUERTO RICO - 2.9% (1.9% OF TOTAL INVESTMENTS) 7,700 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 7,934,927 Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33 12,500 Puerto Rico Housing Finance Authority, Capital Fund Program No Opt. Call AA 12,264,375 Revenue Bonds, Series 2003, 4.500%, 12/01/23 45 Nuveen Municipal Market Opportunity Fund, Inc. (NMO) (continued) Portfolio of INVESTMENTS October 31, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 6.5% (4.3% OF TOTAL INVESTMENTS) $ 24,730 Greenville County School District, South Carolina, Installment 12/12 at 101.00 AA- $ 26,519,710 Purchase Revenue Bonds, Series 2002, 5.500%, 12/01/22 21,570 Piedmont Municipal Power Agency, South Carolina, Electric No Opt. Call AAA 6,389,897 Revenue Bonds, Series 2004A-2, 0.000%, 1/01/30 - AMBAC Insured 1,405 Three Rivers Solid Waste Authority, South Carolina, Solid 1/07 at 102.00 AAA 1,462,479 Waste Disposal Facilities Revenue Bonds, Series 1997, 5.300%, 1/01/27 - MBIA Insured 10,000 Tobacco Settlement Revenue Management Authority, 5/11 at 101.00 BBB 10,741,400 South Carolina, Tobacco Settlement Asset-Backed Bonds, Series 2001B, 6.375%, 5/15/28 - ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 0.7% (0.5% OF TOTAL INVESTMENTS) 5,000 Knox County Health, Educational and Housing Facilities 7/13 at 100.00 AA 5,082,450 Board, Tennessee, Hospital Revenue Bonds, East Tennessee Children's Hospital, Series 2003A, 5.000%, 7/01/23 - RAAI Insured - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 24.0% (15.6% OF TOTAL INVESTMENTS) 5,000 Alliance Airport Authority, Texas, Special Facilities Revenue 12/05 at 100.00 CCC 3,776,550 Bonds, American Airlines Inc., Series 1990, 7.500%, 12/01/29 (Alternative Minimum Tax) 12,250 Austin, Texas, Subordinate Lien Hotel Occupancy Tax Revenue 11/09 at 100.00 AAA 13,362,668 Refunding Bonds, Series 1999, 5.800%, 11/15/29 (Pre-refunded to 11/15/09) - AMBAC Insured 11,255 Brazos River Authority, Texas, Pollution Control Revenue No Opt. Call Baa2 11,911,279 Refunding Bonds, TXU Electric Company, Series 2001C, 5.750%, 5/01/36 (Alternative Minimum Tax) (Mandatory put 11/01/11) Brownsville Independent School District, Cameron County, Texas, General Obligation Bonds, Series 1999: 5,015 5.625%, 8/15/25 (Pre-refunded to 8/15/09) 8/09 at 100.00 AAA 5,416,601 8,825 5.625%, 8/15/29 (Pre-refunded to 8/15/09) 8/09 at 100.00 AAA 9,531,706 1,000 Cedar Hill Independent School District, Dallas County, Texas, No Opt. Call AAA 260,420 General Obligation Bonds, Series 2002, 0.000%, 8/15/32 - FGIC Insured 10,000 Central Texas Regional Mobility Authority, Travis and Williamson 1/15 at 100.00 AAA 10,127,800 Counties, Toll Road Revenue Bonds, Series 2005, 5.000%, 1/01/45 - FGIC Insured Clear Creek Independent School District, Galveston and Harris Counties, Texas, Unlimited Tax Schoolhouse and Refunding Bonds, Series 2000: 16,740 5.400%, 2/15/18 (Pre-refunded to 2/15/10) 2/10 at 100.00 AAA 18,047,394 585 5.400%, 2/15/18 2/10 at 100.00 AAA 622,902 9,660 5.650%, 2/15/19 (Pre-refunded to 2/15/10) 2/10 at 100.00 AAA 10,509,983 340 5.650%, 2/15/19 2/10 at 100.00 AAA 365,786 6,645 5.700%, 2/15/20 (Pre-refunded to 2/15/10) 2/10 at 100.00 AAA 7,242,851 235 5.700%, 2/15/20 2/10 at 100.00 AAA 253,140 7,750 5.700%, 2/15/21 (Pre-refunded to 2/15/10) 2/10 at 100.00 AAA 8,447,268 270 5.700%, 2/15/21 2/10 at 100.00 AAA 290,841 6,000 Dallas-Ft. Worth International Airport Facility Improvement 11/09 at 101.00 Caa2 3,896,460 Corporation, Texas, Revenue Bonds, American Airlines Inc., Series 1999, 6.375%, 5/01/35 (Alternative Minimum Tax) 11,750 Dallas-Ft. Worth International Airport Facility Improvement 11/07 at 100.00 CCC 10,885,435 Corporation, Texas, Revenue Refunding Bonds, American Airlines Inc., Series 2000C, 6.150%, 5/01/29 (Alternative Minimum Tax) (Mandatory put 11/01/07) 21,500 Houston, Texas, Subordinate Lien Airport System Revenue 7/10 at 100.00 AAA 22,953,615 Bonds, Series 2000B, 5.500%, 7/01/30 - FSA Insured 1,250 Houston, Texas, Junior Lien Water and Sewerage System 12/11 at 100.00 AAA 1,306,625 Revenue Refunding Bonds, Series 2001A, 5.000%, 12/01/20 - FSA Insured 9,350 Leander Independent School District, Williamson and Travis 8/15 at 39.49 AAA 2,196,783 Counties, Texas, General Obligation Bonds, Series 2005, 0.000%, 8/15/32 - FGIC Insured 15,000 San Antonio Independent School District, Bexar County, 8/09 at 100.00 AAA 16,288,350 Texas, General Obligation Bonds, Series 1999, 5.800%, 8/15/29 (Pre-refunded to 8/15/09) 46 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS (continued) $ 5,000 White Settlement Independent School District, Tarrant County, 8/15 at 36.81 AAA $ 1,078,350 Texas, General Obligation Bonds, Series 2005, 0.000%, 8/15/34 3,970 Wichita Falls, Wichita County, Texas, Priority Lien Water and 8/11 at 100.00 AAA 4,132,333 Sewerage System Revenue Bonds, Series 2001, 5.000%, 8/01/21 - AMBAC Insured Wylie Independent School District, Taylor County, Texas, General Obligation Bonds, Series 2005: 3,000 0.000%, 8/15/23 8/15 at 67.10 AAA 1,233,300 2,000 0.000%, 8/15/24 8/15 at 63.56 AAA 776,400 - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 18.4% (12.0% OF TOTAL INVESTMENTS) 5,500 Clark County Public Utility District 1, Washington, Generating 1/11 at 100.00 AAA 5,754,375 System Revenue Refunding Bonds, Series 2000, 5.125%, 1/01/20 - FSA Insured 2,755 Cowlitz County, Washington, Special Sewerage Revenue No Opt. Call AAA 3,081,054 Refunding Bonds, CSOB Wastewater Treatment Facilities, Series 2002, 5.500%, 11/01/16 - FGIC Insured 10,000 Energy Northwest, Washington, Electric Revenue Refunding 7/11 at 101.00 AAA 10,858,600 Bonds, Nuclear Project 3, Series 2001A, 5.500%, 7/01/17 - FSA Insured 2,500 King County, Washington, Sewer Revenue Bonds, 1/12 at 100.00 AAA 2,587,325 Series 2001, 5.000%, 1/01/23 - FGIC Insured 33,490 Port of Seattle, Washington, Revenue Bonds, Series 2000A, 8/10 at 100.00 AAA 36,027,872 5.625%, 2/01/30 - MBIA Insured 6,950 Port of Seattle, Washington, Revenue Bonds, Series 2000B, 8/10 at 100.00 AAA 7,379,649 5.625%, 2/01/24 (Alternative Minimum Tax) - MBIA Insured Seattle, Washington, General Obligation Refunding and Improvement Bonds, Series 2002: 6,165 4.400%, 12/01/19 12/12 at 100.00 AAA 6,170,364 6,445 4.500%, 12/01/20 12/12 at 100.00 AAA 6,485,604 3,000 Spokane County School District 81, Spokane, Washington, 6/15 at 100.00 AAA 2,622,690 General Obligation Bonds, Series 2005, 0.000%, 6/01/24 - MBIA Insured Tacoma, Washington, Electric System Revenue Refunding Bonds, Series 2001A: 6,630 5.750%, 1/01/17 (Pre-refunded to 1/01/11) - FSA Insured 1/11 at 101.00 AAA 7,356,317 3,500 5.750%, 1/01/18 (Pre-refunded to 1/01/11) - FSA Insured 1/11 at 101.00 AAA 3,883,425 12,265 Washington State Tobacco Settlement Authority, Tobacco 6/13 at 100.00 BBB 13,296,977 Settlement Asset-Backed Revenue Bonds, Series 2002, 6.500%, 6/01/26 9,000 Washington, Motor Vehicle Fuel Tax General Obligation 1/12 at 100.00 AAA 9,369,180 Bonds, Series 2002C, 5.000%, 1/01/21 - FSA Insured 7,890 Washington State Higher Education Facilities Authority, 11/09 at 101.00 AA 8,513,310 Revenue Bonds, Pacific Lutheran University, Series 1999, 5.950%, 11/01/29 - RAAI Insured 3,520 Washington State Healthcare Facilities Authority, Revenue 10/11 at 100.00 Aaa 3,617,750 Bonds, Children's Hospital and Regional Medical Center, Series 2001, 5.000%, 10/01/21 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 0.8% (0.6% OF TOTAL INVESTMENTS) 4,220 Badger Tobacco Asset Securitization Corporation, Wisconsin, 6/12 at 100.00 BBB 4,474,842 Tobacco Settlement Asset-Backed Bonds, Series 2002, 6.125%, 6/01/27 1,250 Wisconsin Health and Educational Facilities Authority, Revenue 3/08 at 101.00 N/R 1,237,270 Bonds, United Lutheran Program for the Aging Inc., Series 1998, 5.700%, 3/01/28 - ------------------------------------------------------------------------------------------------------------------------------------ WYOMING - 0.4% (0.3% OF TOTAL INVESTMENTS) 2,800 Jackson National Rural Utilities Cooperative Financing 5/07 at 101.00 A 2,876,636 Corporation, Wyoming, Guaranteed Gas Supply Revenue Bonds, Lower Valley Power and Light Inc., Series 1997B, 5.875%, 5/01/26 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ $ 1,155,086 Total Long-Term Investments (cost $993,471,718) - 152.4% 1,051,176,907 =============----------------------------------------------------------------------------------------------------------------------- 47 Nuveen Municipal Market Opportunity Fund, Inc. (NMO) (continued) Portfolio of INVESTMENTS October 31, 2005 PRINCIPAL MARKET AMOUNT (000) DESCRIPTION(1) RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ SHORT-TERM INVESTMENTS - 0.4% (0.3% OF TOTAL INVESTMENTS) $ 2,000 Idaho Health Facilities Authority, Revenue Bonds, St. Luke's VMIG-1 $ 2,000,000 Regional Medical Center, Variable Rate Demand Obligations, Series 2000, 2.730%, 7/01/30 - FSA Insured + 1,000 Idaho Health Facilities Authority, Revenue Bonds, St. Luke's VMIG-1 1,000,000 Regional Medical Center, Variable Rate Demand Obligations, Series 2005, 2.730%, 7/01/35 - FSA Insured + - ------------------------------------------------------------------------------------------------------------------------------------ $ 3,000 Total Short-Term Investments (cost $3,000,000) 3,000,000 =============----------------------------------------------------------------------------------------------------------------------- Total Investments (cost $996,471,718) - 152.8% 1,054,176,907 -------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.3% 15,505,286 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (55.1)% (380,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 689,682,193 ====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. * 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. ** Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's or Moody's rating. *** Securities are backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensures the timely payment of principal and interest. Such securities are normally considered to be equivalent to AAA rated securities. N/R Investment is not rated. # On December 9, 2002, UAL Corporation, the holding company of United Air Lines, Inc., filed for federal bankruptcy protection. The Adviser determined that it was likely United would not remain current on their interest payment obligations with respect to these bonds and thus has stopped accruing interest. + Security has a maturity of more than one year, but has variable rate and demand features which qualify it as a short-term security. The rate disclosed is that in effect at the end of the reporting period. This rate changes periodically based on market conditions or a specified market index. See accompanying notes to financial statements. 48 Nuveen Dividend Advantage Municipal Fund (NAD) Portfolio of INVESTMENTS October 31, 2005
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 0.3% (0.2% OF TOTAL INVESTMENTS) $ 1,500 Alabama 21st Century Authority, Tobacco Settlement Revenue 6/10 at 102.00 A- $ 1,580,850 Bonds, Series 2000, 5.750%, 12/01/20 - ------------------------------------------------------------------------------------------------------------------------------------ ALASKA - 0.1% (0.1% OF TOTAL INVESTMENTS) 750 Alaska Housing Finance Corporation, General Housing Purpose 12/14 at 100.00 AAA 787,823 Bonds, Series 2005A, 5.250%, 12/01/34 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 3.4% (2.3% OF TOTAL INVESTMENTS) 1,535 Alameda Corridor Transportation Authority, California, Senior No Opt. Call AAA 303,270 Lien Revenue Bonds, Series 1999A, 0.000%, 10/01/37 - MBIA Insured California, General Obligation Bonds, Series 1997: 2,195 5.000%, 10/01/18 (Pre-refunded to 10/01/07) - AMBAC Insured 10/07 at 101.00 AAA 2,292,875 210 5.000%, 10/01/18 (Pre-refunded to 10/01/07) - AMBAC Insured 10/07 at 101.00 AAA 219,364 200 5.000%, 10/01/18 - AMBAC Insured 10/07 at 101.00 AAA 208,112 3,500 Golden State Tobacco Securitization Corporation, California, No Opt. Call AAA 1,250,305 Tobacco Settlement Asset-Backed Revenue Bonds, Series 2005A, 0.000%, 6/01/26 - FSA Insured 2,475 Los Angeles Department of Water and Power, California, 7/06 at 100.00 AA- 2,497,176 Power System Revenue Bonds, Series 2001A-3, 5.375%, 7/01/20 9,375 Sacramento County Sanitation District Financing Authority, 12/05 at 101.00 AA 9,489,938 California, Revenue Bonds, Series 2000A, 5.875%, 12/01/27 17,000 San Joaquin Hills Transportation Corridor Agency, Orange No Opt. Call AAA 3,865,800 County, California, Toll Road Revenue Refunding Bonds, Series 1997A, 0.000%, 1/15/35 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 3.6% (2.5% OF TOTAL INVESTMENTS) 10,250 Denver City and County, Colorado, Airport System Revenue 11/06 at 101.00 AAA 10,552,477 Bonds, Series 1996D, 5.500%, 11/15/25 - MBIA Insured 2,950 Denver Convention Center Hotel Authority, Colorado, Senior 12/13 at 100.00 AAA 3,049,917 Revenue Bonds, Convention Center Hotel, Series 2003A, 5.000%, 12/01/22 - XLCA Insured 1,475 Denver, Colorado, FHA-Insured Multifamily Housing Revenue 10/07 at 102.00 AAA 1,511,993 Bonds, Boston Lofts Project, Series 1997A, 5.750%, 10/01/27 (Alternative Minimum Tax) 3,205 Denver City and County, Colorado, Airport Special Facilities 1/09 at 101.00 AAA 3,444,253 Revenue Bonds, Rental Car Projects, Series 1999A, 6.000%, 1/01/12 (Alternative Minimum Tax) - MBIA Insured 8,515 E-470 Public Highway Authority, Colorado, Senior Revenue No Opt. Call AAA 3,166,643 Bonds, Series 1997B, 0.000%, 9/01/25 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ CONNECTICUT - 0.5% (0.3% OF TOTAL INVESTMENTS) 2,700 Connecticut Development Authority, Health Facilities Revenue 2/06 at 101.00 N/R 2,722,653 Refunding Bonds, Alzheimer's Resource Center of Connecticut Inc., Series 1994A, 7.125%, 8/15/14 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRICT OF COLUMBIA - 0.9% (0.6% OF TOTAL INVESTMENTS) 5,000 Washington Convention Center Authority, District of Columbia, 10/08 at 101.00 AAA 5,280,650 Senior Lien Dedicated Tax Revenue Bonds, Series 1998, 5.250%, 10/01/13 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 5.6% (3.8% OF TOTAL INVESTMENTS) 1,630 Florida Housing Finance Agency, Housing Revenue Bonds, 12/07 at 102.00 AAA 1,690,995 Mar Lago Village Apartments, Series 1997F, 5.800%, 12/01/17 (Alternative Minimum Tax) - AMBAC Insured 14,350 JEA St. John's River Power Park System, Florida, Revenue 10/11 at 100.00 Aa2 15,437,300 Refunding Bonds, Issue 2, Series 2002-17, 5.250%, 10/01/13 49 Nuveen Dividend Advantage Municipal Fund (NAD) (continued) Portfolio of INVESTMENTS October 31, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA (continued) $ 13,625 Martin County Industrial Development Authority, Florida, 12/05 at 101.00 BB+ $ 13,729,095 Industrial Development Revenue Bonds, Indiantown Cogeneration LP, Series 1994A, 7.875%, 12/15/25 (Alternative Minimum Tax) 2,405 Venice, Florida, Revenue Bonds, Bon Secours System, Revenue 8/06 at 102.00 AAA 2,494,370 Bonds, Series 1996, 5.600%, 8/15/16 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 1.4% (0.9% OF TOTAL INVESTMENTS) 4,000 Forsyth County Water and Sewerage Authority, Georgia, 4/10 at 101.00 AA*** 4,428,840 Revenue Bonds, Series 2000, 6.000%, 4/01/25 (Pre-refunded to 4/01/10) 3,500 Gainesville and Hall County Hospital Authority, Georgia, 5/09 at 101.00 AAA 3,730,650 Revenue Anticipation Certificates, Northeast Georgia Health Services Inc., Series 1999, 5.500%, 5/15/29 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ IDAHO - 0.3% (0.2% OF TOTAL INVESTMENTS) 435 Idaho Housing and Finance Association, Single Family Mortgage 7/09 at 101.00 Aa2 436,588 Bonds, Series 1999E, 5.750%, 1/01/21 (Alternative Minimum Tax) 495 Idaho Housing and Finance Association, Single Family Mortgage 1/10 at 100.00 Aa2 518,542 Bonds, Series 2000D, 6.350%, 7/01/22 (Alternative Minimum Tax) 615 Idaho Housing and Finance Association, Single Family Mortgage 7/10 at 100.00 Aaa 617,349 Bonds, Series 2000E, 5.950%, 7/01/20 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 35.9% (24.8% OF TOTAL INVESTMENTS) 3,635 Channahon, Illinois, Revenue Refunding Bonds, Morris Hospital, 12/09 at 102.00 BBB+ 3,785,380 Series 1999, 5.750%, 12/01/12 22,750 Chicago, Illinois, General Obligation Refunding Bonds, No Opt. Call AAA 25,756,413 Emergency Telephone System, Series 1999, 5.500%, 1/01/23 - FGIC Insured 7,250 Chicago Board of Education, Illinois, Unlimited Tax General No Opt. Call AAA 8,311,038 Obligation Bonds, Dedicated Tax Revenues, Series 1999A, 5.500%, 12/01/26 - FGIC Insured 2,620 Chicago, Illinois, Motor Fuel Tax Revenue Refunding Bonds, No Opt. Call AAA 2,869,686 Series 1993, 5.375%, 1/01/14 - AMBAC Insured Chicago, Illinois, FHA/GNMA Multifamily Housing Revenue Bonds, Archer Court Apartments, Series 1999A: 865 5.500%, 12/20/19 (Alternative Minimum Tax) 10/10 at 101.00 AAA 902,238 1,210 5.600%, 12/20/29 (Alternative Minimum Tax) 10/10 at 101.00 AAA 1,237,467 1,925 5.650%, 12/20/40 (Alternative Minimum Tax) 10/10 at 101.00 AAA 1,963,789 Chicago, Illinois, Wastewater Transmission Revenue Bonds, Series 1995: 3,795 5.125%, 1/01/25 (Pre-refunded to 1/01/06) - FGIC Insured 1/06 at 102.00 AAA 3,884,904 1,145 5.125%, 1/01/25 - FGIC Insured 1/06 at 102.00 AAA 1,170,419 1,000 DuPage County Community School District 200, Wheaton, 11/13 at 100.00 Aaa 1,075,790 Illinois, General Obligation Bonds, Series 2003B, 5.250%, 11/01/20 - FSA Insured 500 Hoffman Estates Park District, Cook County, Illinois, General 12/09 at 102.00 AAA 532,260 Obligation Bonds, Series 1999, 5.375%, 12/01/29 - MBIA Insured 24,835 Illinois Development Finance Authority, Revenue Bonds, 9/07 at 102.00 AAA 26,172,861 Presbyterian Home of Lake Forest, Series 1999, 5.625%, 9/01/31 - FSA Insured 3,935 Illinois Development Finance Authority, Local Government No Opt. Call Aaa 2,630,980 Program Revenue Bonds, Lake County School District 116 - Round Lake, Series 1999, 0.000%, 1/01/15 - MBIA Insured 5,570 Illinois Finance Authority, Revenue Bonds, University of 7/14 at 100.00 Aa1 5,697,442 Chicago, Series 2004A, 5.000%, 7/01/34 5,400 Illinois Health Facilities Authority, Revenue Bonds, Loyola 7/07 at 101.00 AAA 5,506,758 University Health System, Series 1997A, 5.000%, 7/01/24 - MBIA Insured 5,490 Illinois Health Facilities Authority, Revenue Bonds, Sarah Bush 2/07 at 102.00 A 5,654,151 Lincoln Health Center, Series 1996B, 5.500%, 2/15/16 17,280 Illinois Health Facilities Authority, Converted Adjustable 10/07 at 102.00 AAA 18,492,192 Rate Revenue Bonds, Highland Park Hospital, Series 1991A, 6.000%, 10/01/15 (Pre-refunded to 10/01/07) - FGIC Insured 9,900 Illinois Health Facilities Authority, Remarketed Revenue Bonds, 8/11 at 103.00 Aa1 10,718,136 University of Chicago Project, Series 1985A, 5.500%, 8/01/20 50 Nuveen Dividend Advantage Municipal Fund (NAD) (continued) Portfolio of INVESTMENTS October 31, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS (continued) $ 7,245 Illinois Health Facilities Authority, Revenue Refunding Bonds, 1/06 at 100.00 BBB- $ 7,248,840 Proctor Community Hospital, Series 1991, 7.375%, 1/01/23 1,500 Illinois Housing Development Authority, Housing Finance 1/15 at 100.00 AAA 1,488,090 Bonds, Series 2005E, 4.800%, 1/01/36 (WI, settling 11/01/05) - FGIC Insured 5,000 Kane, McHenry, Cook and DeKalb Counties Community Unit 12/11 at 100.00 AAA 5,505,550 School District 300, Carpentersville, Illinois, General Obligation Bonds, Series 2000, 5.500%, 12/01/19 (Pre-refunded to 12/01/11) - MBIA Insured 11,345 Lake and McHenry Counties Community Unit School 1/15 at 60.14 Aaa 4,284,780 District 118, Wauconda, Illinois, General Obligation Bonds, Series 2005B, 0.000%, 1/01/25 - FSA Insured 3,000 Lombard Public Facilities Corporation, Illinois, First Tier 1/16 at 100.00 N/R 3,137,550 Conference Center and Hotel Revenue Bonds, Series 2005A-1, 7.125%, 1/01/36 Metropolitan Pier and Exposition Authority, Illinois, Revenue Refunding Bonds, McCormick Place Expansion Project, Series 1996A: 9,750 0.000%, 12/15/22 - MBIA Insured No Opt. Call AAA 4,313,595 13,000 0.000%, 12/15/23 - MBIA Insured No Opt. Call AAA 5,454,930 22,500 Metropolitan Pier and Exposition Authority, Illinois, Revenue 12/09 at 101.00 AAA 24,254,550 Bonds, McCormick Place Expansion Project, Series 1999A, 5.500%, 12/15/24 - FGIC Insured Regional Transportation Authority, Cook, DuPage, Kane, Lake, McHenry and Will Counties, Illinois, General Obligation Bonds, Series 1999: 22,650 5.750%, 6/01/19 - FSA Insured No Opt. Call AAA 26,039,346 3,500 5.750%, 6/01/23 - FSA Insured No Opt. Call AAA 4,062,415 1,300 Schaumburg, Illinois, General Obligation Bonds, Series 2004B, 12/14 at 100.00 AAA 1,376,466 5.250%, 12/01/34 - FGIC Insured 4,500 Will County School District 122, New Lenox, Illinois, General No Opt. Call Aaa 2,463,705 Obligation Bonds, Series 2000B, 0.000%, 11/01/18 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 3.8% (2.6% OF TOTAL INVESTMENTS) 8,000 Indiana Health Facility Financing Authority, Hospital Revenue 8/10 at 101.50 AAA 8,603,600 Bonds, Clarian Health Obligated Group, Series 2000A, 5.500%, 2/15/26 - MBIA Insured 8,755 Indiana Health Facility Financing Authority, Hospital Revenue 11/09 at 101.00 AAA 9,510,994 Bonds, Charity Obligated Group, Series 1999D, 5.500%, 11/15/24 (Pre-refunded to 11/15/09) - MBIA Insured 4,190 Indianapolis, Indiana, Economic Development Revenue Bonds, 6/09 at 101.00 Aa3*** 4,547,323 Park Tudor Foundation Inc., Project, Series 1999, 5.700%, 6/01/24 (Pre-refunded to 6/01/09) - ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 0.8% (0.5% OF TOTAL INVESTMENTS) 3,825 Wichita, Kansas, Water and Sewerage Utility Revenue Bonds, 10/06 at 101.00 AAA 3,728,725 Series 1999, 4.000%, 10/01/18 - FGIC Insured 1,000 Wyandotte County-Kansas City Unified Government, Kansas, 12/15 at 100.00 N/R 1,023,750 Sales Tax Special Obligation Bonds, Redevelopment Project Area B, Series 2005, 5.000%, 12/01/20 - ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 1.7% (1.2% OF TOTAL INVESTMENTS) 3,030 Hardin County School District Finance Corporation, Kentucky, 2/10 at 101.00 Aa3*** 3,330,334 School Building Revenue Bonds, Series 2000, 5.750%, 2/01/20 (Pre-refunded to 2/01/10) Kentucky Economic Development Finance Authority, Hospital System Revenue Refunding and Improvement Bonds, Appalachian Regional Healthcare Inc., Series 1997: 1,850 5.850%, 10/01/17 4/08 at 102.00 BB- 1,828,059 5,000 5.875%, 10/01/22 4/08 at 102.00 BB- 4,882,000 - ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 4.0% (2.7% OF TOTAL INVESTMENTS) 2,245 Lafayette, Louisiana, Sales Tax Revenue Bonds, Public 5/10 at 101.50 AAA 2,435,892 Improvements, Series 2000B, 5.625%, 5/01/25 - FGIC Insured 1,750 Louisiana Local Government Environmental Facilities and 6/12 at 105.00 Aaa 1,916,425 Community Development Authority, GNMA Collateralized Mortgage Revenue Refunding Bonds, Sharlo Apartments, Series 2002A, 6.500%, 6/20/37 5,350 Louisiana Public Facilities Authority, Revenue Bonds, 7/14 at 100.00 AAA 5,534,040 Baton Rouge General Hospital, Series 2004, 5.250%, 7/01/33 - MBIA Insured 51 Nuveen Dividend Advantage Municipal Fund (NAD) (continued) Portfolio of INVESTMENTS October 31, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA (continued) $ 13,570 Louisiana Transportation Authority, Senior Lien Toll Road 12/10 at 38.73 AAA $ 4,022,284 Revenue Bonds, Series 2005B, 0.000%, 12/01/28 - AMBAC Insured 9,545 Tobacco Settlement Financing Corporation, Louisiana, 5/11 at 101.00 BBB 9,789,447 Tobacco Settlement Asset-Backed Bonds, Series 2001B, 5.500%, 5/15/30 - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 2.4% (1.6% OF TOTAL INVESTMENTS) 1,500 Boston Industrial Development Financing Authority, 9/12 at 102.00 N/R 1,476,330 Massachusetts, Subordinate Revenue Bonds, Crosstown Center Project, Series 2002, 8.000%, 9/01/35 (Alternative Minimum Tax) 4,365 Massachusetts Health and Educational Facilities Authority, 10/15 at 100.00 AAA 4,555,620 Revenue Bonds, Berkshire Health System, Series 2005F, 5.000%, 10/01/19 - AGC Insured 785 Massachusetts Port Authority, Special Facilities Revenue 9/06 at 102.00 AAA 812,185 Bonds, US Airways Group Inc., Series 1996A, 5.875%, 9/01/23 (Alternative Minimum Tax) - MBIA Insured 7,000 Massachusetts Port Authority, Special Facilities Revenue 7/07 at 102.00 AAA 7,311,080 Bonds, BOSFUEL Corporation, Series 1997, 5.500%, 7/01/18 (Alternative Minimum Tax) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 3.5% (2.4% OF TOTAL INVESTMENTS) 2,435 Detroit, Michigan, Senior Lien Water Supply System Revenue 7/11 at 100.00 AAA 2,554,339 Bonds, Series 2001A, 5.250%, 7/01/33 - FGIC Insured 15,255 Michigan State Hospital Finance Authority, Hospital Revenue 8/08 at 101.00 BB- 14,232,915 Bonds, Detroit Medical Center Obligated Group, Series 1998A, 5.250%, 8/15/28 4,000 Wayne County, Michigan, Airport Revenue Bonds, Detroit 12/08 at 101.00 AAA 4,191,520 Metropolitan Wayne County Airport, Series 1998A, 5.375%, 12/01/16 (Alternative Minimum Tax) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 0.5% (0.3% OF TOTAL INVESTMENTS) 2,250 Minneapolis-St. Paul Metropolitan Airports Commission, 4/11 at 101.00 N/R 1,440,000 Minnesota, Special Facilities Revenue Bonds, Northwest Airlines Inc. Project, Series 2001A, 7.000%, 4/01/25 (Alternative Minimum Tax)# 1,315 Minnesota Housing Finance Agency, Single Family Mortgage 1/10 at 101.00 AA+ 1,344,995 Bonds, Series 1998H-1, 5.650%, 7/01/31 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 1.9% (1.3% OF TOTAL INVESTMENTS) 7,000 Kansas City Municipal Assistance Corporation, Missouri, No Opt. Call AAA 2,451,750 Leasehold Revenue Bonds, Series 2004B-1, 0.000%, 4/15/27 - AMBAC Insured Missouri Health and Educational Facilities Authority, Revenue Bonds, SSM Healthcare System, Series 2001A: 2,185 5.250%, 6/01/21 (Pre-refunded to 6/01/11) - AMBAC Insured 6/11 at 101.00 AAA 2,382,786 2,185 5.250%, 6/01/21 - AMBAC Insured 6/11 at 101.00 AAA 2,318,853 3,670 5.250%, 6/01/28 (Pre-refunded to 6/01/11) - AMBAC Insured 6/11 at 101.00 AAA 3,988,629 - ------------------------------------------------------------------------------------------------------------------------------------ MONTANA - 0.4% (0.3% OF TOTAL INVESTMENTS) 1,245 Montana Board of Housing, Single Family Mortgage Bonds, 12/09 at 100.00 AA+ 1,264,273 Series 2000A-2, 6.450%, 6/01/29 (Alternative Minimum Tax) 1,000 Montana Higher Education Student Assistance Corporation, 12/09 at 100.00 A2 1,053,040 Student Loan Revenue Bonds, Subordinate Series 1999B, 6.400%, 12/01/32 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ NEBRASKA - 0.3% (0.2% OF TOTAL INVESTMENTS) 1,600 NebHelp Inc., Nebraska, Senior Subordinate Bonds, Student No Opt. Call AAA 1,634,992 Loan Program, Series 1993A-5A, 6.200%, 6/01/13 (Alternative Minimum Tax) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 1.6% (1.1% OF TOTAL INVESTMENTS) 2,115 Clark County, Nevada, General Obligation Bank Bonds, 6/11 at 100.00 AAA 2,267,576 Southern Nevada Water Authority Loan, Series 2001, 5.300%, 6/01/19 - FGIC Insured Director of Nevada State Department of Business and Industry, Revenue Bonds, Las Vegas Monorail Project, First Tier, Series 2000: 8,000 0.000%, 1/01/19 - AMBAC Insured No Opt. Call AAA 4,289,600 3,000 5.375%, 1/01/40 - AMBAC Insured 1/10 at 100.00 AAA 3,100,260 52 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NEW HAMPSHIRE - 0.2% (0.2% OF TOTAL INVESTMENTS) $ 1,440 New Hampshire Housing Finance Agency, Single Family 1/06 at 102.00 Aa2 $ 1,446,221 Mortgage Acquisition Revenue Bonds, Series 1995D, 6.550%, 7/01/26 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 6.3% (4.4% OF TOTAL INVESTMENTS) 2,505 New Jersey Higher Education Assistance Authority, Student 6/10 at 101.00 AAA 2,545,255 Loan Revenue Bonds, Series 2000A, 6.000%, 6/01/13 (Alternative Minimum Tax) - MBIA Insured 1,460 New Jersey Health Care Facilities Financing Authority, 8/11 at 100.00 AAA 1,477,520 FHA-Insured Mortgage Revenue Bonds, Jersey City Medical Center, Series 2001, 4.800%, 8/01/21 - AMBAC Insured 4,130 New Jersey Transit Corporation, Certificates of Participation, No Opt. Call AAA 4,542,587 Federal Transit Administration Grants, Series 2002A, 5.500%, 9/15/13 - AMBAC Insured 4,000 New Jersey Transportation Trust Fund Authority, Transportation No Opt. Call AA- 4,541,400 System Bonds, Series 1999A, 5.750%, 6/15/18 10,000 Port Authority of New York and New Jersey, Special Project 12/07 at 102.00 AAA 10,637,400 Bonds, JFK International Air Terminal LLC, Sixth Series 1997, 5.900%, 12/01/17 (Alternative Minimum Tax) - MBIA Insured Tobacco Settlement Financing Corporation, New Jersey, Tobacco Settlement Asset-Backed Bonds, Series 2002: 10,810 5.750%, 6/01/32 6/12 at 100.00 BBB 11,238,076 3,165 6.125%, 6/01/42 6/12 at 100.00 BBB 3,321,794 - ------------------------------------------------------------------------------------------------------------------------------------ NEW MEXICO - 0.7% (0.5% OF TOTAL INVESTMENTS) 4,000 University of New Mexico, FHA-Insured Mortgage Hospital 7/14 at 100.00 AAA 4,085,800 Revenue Bonds, Series 2004, 5.000%, 7/01/32 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 14.7% (10.2% OF TOTAL INVESTMENTS) 5,000 Long Island Power Authority, New York, Electric System 6/08 at 101.00 AAA 5,248,500 General Revenue Bonds, Series 1998A, 5.250%, 12/01/26 - FSA Insured Nassau County, New York, General Obligation Improvement Bonds, Series 1999B: 4,005 5.250%, 6/01/19 (Pre-refunded to 6/01/09) - AMBAC Insured 6/09 at 102.00 AAA 4,338,737 7,005 5.250%, 6/01/21 (Pre-refunded to 6/01/09) - AMBAC Insured 6/09 at 102.00 AAA 7,588,727 2,000 New York City, New York, General Obligation Bonds, Fiscal 2/08 at 101.00 AAA 2,095,160 Series 1998E, 5.250%, 8/01/14 - AMBAC Insured New York City, New York, General Obligation Bonds, Fiscal Series 1998F: 70 5.375%, 8/01/19 (Pre-refunded to 2/01/08) - MBIA Insured 2/08 at 101.00 AAA 73,994 13,930 5.375%, 8/01/19 - MBIA Insured 2/08 at 101.00 AAA 14,632,351 5,000 New York City Municipal Water Finance Authority, New York, 12/14 at 100.00 AAA 5,154,150 Water and Sewerage System Revenue Bonds, Fiscal Series 2005B, 5.000%, 6/15/36 - FSA Insured 10,000 New York City Transitional Finance Authority, New York, 8/09 at 101.00 AAA 10,955,500 Future Tax Secured Bonds, Fiscal Series 2000A, 5.750%, 8/15/24 (Pre-refunded to 8/15/09) 4,600 Dormitory Authority of the State of New York, Improvement 2/07 at 102.00 AAA 4,799,686 Revenue Bonds, Mental Health Services Facilities, Series 1996E, 5.250%, 2/15/18 - AMBAC Insured 2,170 Dormitory Authority of the State of New York, Insured 7/07 at 102.00 AA 2,279,064 Revenue Bonds, Franciscan Health Partnership Obligated Group - Frances Shervier Home and Hospital, Series 1997, 5.500%, 7/01/17 - RAAI Insured Dormitory Authority of the State of New York, Improvement Revenue Bonds, Mental Health Services Facilities, Series 1996B: 4,305 5.125%, 8/15/21 (Pre-refunded to 2/15/06) - MBIA Insured 2/06 at 102.00 AAA 4,417,877 85 5.125%, 8/15/21 (Pre-refunded to 2/15/06) - MBIA Insured 2/06 at 102.00 AAA 87,239 80 5.125%, 8/15/21 - MBIA Insured 2/06 at 102.00 AAA 81,978 7,500 Dormitory Authority of the State of New York, Secured 2/08 at 101.50 AAA 7,891,500 Hospital Revenue Refunding Bonds, Wyckoff Heights Medical Center, Series 1998H, 5.300%, 8/15/21 - MBIA Insured 2,000 Dormitory Authority of the State of New York, Third General 1/08 at 102.00 AAA 2,128,700 Resolution Consolidated Revenue Bonds, City University System, Series 1997-1, 5.375%, 7/01/24 (Pre-refunded to 1/01/08) - FSA Insured 53 Nuveen Dividend Advantage Municipal Fund (NAD) (continued) Portfolio of INVESTMENTS October 31, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK (continued) $ 7,500 New York State Urban Development Corporation, Revenue 1/06 at 102.00 AAA $ 7,680,900 Bonds, Correctional Facilities, Series 1995-6, 5.375%, 1/01/25 (Pre-refunded to 1/01/06) - AMBAC Insured 8,800 New York City Sales Tax Asset Receivable Corporation, 10/14 at 100.00 AAA 9,137,656 New York, Dedicated Revenue Bonds, Local Government Assistance Corporation, Series 2004A, 5.000%, 10/15/32 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 4.1% (2.8% OF TOTAL INVESTMENTS) 2,300 Amherst Exempted Village School District, Ohio, Unlimited 12/11 at 100.00 Aaa 2,438,667 Tax General Obligation School Improvement Bonds, Series 2001, 5.125%, 12/01/21 - FGIC Insured 3,635 Franklin County, Ohio, FHA-Insured Multifamily Housing 1/06 at 102.00 Aa 3,679,820 Mortgage Revenue Bonds, Hamilton Creek Apartments Project, Series 1994A, 5.550%, 7/01/24 (Alternative Minimum Tax) 3,650 Montgomery County, Ohio, Revenue Bonds, Catholic Health 5/14 at 100.00 AA 3,715,773 Initiatives, Series 2004A, 5.000%, 5/01/30 13,000 Ohio Water Development Authority, Solid Waste Disposal 9/09 at 102.00 N/R 13,440,180 Revenue Bonds, Bay Shore Power, Series 1998B, 6.625%, 9/01/20 (Alternative Minimum Tax) 1,115 Warren County, Ohio, Special Assessment Bonds, Waterstone 12/07 at 101.00 Aa2 1,172,233 Boulevard Project, Series 1997, 5.500%, 12/01/17 - ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 0.4% (0.3% OF TOTAL INVESTMENTS) 2,355 Portland, Oregon, Downtown Waterfront Urban Renewal and 6/10 at 101.00 Aaa 2,547,710 Redevelopment Revenue Bonds, Series 2000A, 5.500%, 6/15/20 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 5.0% (3.4% OF TOTAL INVESTMENTS) 3,480 Allegheny County Hospital Development Authority, 11/10 at 102.00 B1 4,159,574 Pennsylvania, Revenue Bonds, West Penn Allegheny Health System, Series 2000B, 9.250%, 11/15/22 1,970 Carbon County Industrial Development Authority, Pennsylvania, No Opt. Call BBB- 2,110,678 Resource Recovery Revenue Refunding Bonds, Panther Creek Partners Project, Series 2000, 6.650%, 5/01/10 (Alternative Minimum Tax) 18,900 Philadelphia Airport System, Pennsylvania, Revenue Refunding 6/08 at 102.00 AAA 19,901,133 Bonds, Series 1998A, 5.500%, 6/15/18 (Alternative Minimum Tax) - FGIC Insured 3,205 Philadelphia School District, Pennsylvania, General Obligation 8/12 at 100.00 AAA 3,562,646 Bonds, Series 2002B, 5.625%, 8/01/16 (Pre-refunded to 8/01/12) - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ PUERTO RICO - 2.0% (1.4% OF TOTAL INVESTMENTS) 12,500 Puerto Rico Housing Finance Authority, Capital Fund Program No Opt. Call AA 12,264,375 Revenue Bonds, Series 2003, 4.500%, 12/01/23 - ------------------------------------------------------------------------------------------------------------------------------------ RHODE ISLAND - 3.2% (2.2% OF TOTAL INVESTMENTS) 2,015 Central Falls, Rhode Island, General Obligation School Bonds, 5/09 at 102.00 AA 2,197,861 Series 1999, 6.250%, 5/15/20 - RAAI Insured 3,500 Providence Redevelopment Agency, Rhode Island, Revenue 4/10 at 101.00 Aaa 3,856,405 Bonds, Public Safety and Municipal Building Projects, Series 1999A, 5.750%, 4/01/29 (Pre-refunded to 4/01/10) - AMBAC Insured 12,500 Rhode Island Tobacco Settlement Financing Corporation, 6/12 at 100.00 BBB 13,254,875 Tobacco Settlement Asset-Backed Bonds, Series 2002A, 6.125%, 6/01/32 - ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 1.8% (1.2% OF TOTAL INVESTMENTS) 6,400 Memphis-Shelby County Airport Authority, Tennessee, Airport 3/10 at 101.00 AAA 6,904,064 Revenue Bonds, Series 1999D, 6.000%, 3/01/24 (Alternative Minimum Tax) - AMBAC Insured 2,425 Memphis-Shelby County Airport Authority, Tennessee, Airport 3/11 at 100.00 AAA 2,501,582 Revenue Bonds, Series 2001B, 5.125%, 3/01/26 - FSA Insured 505 Tennessee Housing Development Agency, Homeownership 7/10 at 101.00 AA 510,242 Program Bonds, Series 2000-1, 6.375%, 7/01/25 (Alternative Minimum Tax) 910 Tennessee Housing Development Agency, Homeownership 7/10 at 100.00 AA 914,459 Program Bonds, Series 2000-2B, 6.250%, 1/01/20 (Alternative Minimum Tax) 54 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 14.7% (10.1% OF TOTAL INVESTMENTS) $ 1,000 Alliance Airport Authority, Texas, Special Facilities Revenue 12/05 at 100.00 CCC $ 755,310 Bonds, American Airlines Inc., Series 1990, 7.500%, 12/01/29 (Alternative Minimum Tax) 2,560 Brazos River Authority, Texas, Pollution Control Revenue 4/13 at 101.00 Baa2 3,034,957 Refunding Bonds, TXU Electric Company, Series 1999C, 7.700%, 3/01/32 (Alternative Minimum Tax) 4,675 Carrollton-Farmers Branch Independent School District, Dallas 2/09 at 100.00 AAA 5,050,683 County, Texas, Unlimited Tax School Building Bonds, Series 1999, 6.000%, 2/15/20 (Pre-refunded to 2/15/09) 2,820 Central Texas Regional Mobility Authority, Travis and 1/15 at 100.00 AAA 2,856,040 Williamson Counties, Toll Road Revenue Bonds, Series 2005, 5.000%, 1/01/45 - FGIC Insured Coppell Independent School District, Dallas County, Texas, Unlimited Tax School Building and Refunding Bonds, Series 1999: 5,130 0.000%, 8/15/20 8/09 at 52.47 AAA 2,268,948 7,000 0.000%, 8/15/21 8/09 at 49.48 AAA 2,919,700 7,345 0.000%, 8/15/23 8/09 at 44.01 AAA 2,724,628 7,000 0.000%, 8/15/24 8/09 at 41.50 AAA 2,448,740 7,350 0.000%, 8/15/25 8/09 at 39.14 AAA 2,441,009 7,000 0.000%, 8/15/26 8/09 at 36.91 AAA 2,190,720 6,000 Dallas-Ft. Worth International Airport Facility Improvement 11/07 at 100.00 CCC 5,558,520 Corporation, Texas, Revenue Refunding Bonds, American Airlines Inc., Series 2000C, 6.150%, 5/01/29 (Alternative Minimum Tax) (Mandatory put 11/01/07) 820 Dallas Area Rapid Transit, Texas, Senior Lien Sales Tax Revenue 12/11 at 100.00 AAA 836,982 Bonds, Series 2001, 5.000%, 12/01/31 - AMBAC Insured Harris County Health Facilities Development Corporation, Texas, Revenue Bonds, Christus Health, Series 1999A: 12,240 5.375%, 7/01/24 - MBIA Insured 7/09 at 101.00 AAA 12,892,025 11,180 5.375%, 7/01/29 - MBIA Insured 7/09 at 101.00 AAA 11,592,654 2,205 Harris County-Houston Sports Authority, Texas, Senior Lien No Opt. Call AAA 1,077,297 Revenue Refunding Bonds, Series 2001A, 0.000%, 11/15/20 - MBIA Insured 2,500 Houston, Texas, Hotel Occupancy Tax and Special Revenue No Opt. Call AAA 717,025 Bonds, Convention and Entertainment Project, Series 2001B, 0.000%, 9/01/30 - AMBAC Insured 2,500 Jefferson County, Texas, Certificates of Obligation, Series 2000, 8/10 at 100.00 AAA 2,767,475 6.000%, 8/01/25 (Pre-refunded to 8/01/10) - FSA Insured 2,000 Laredo, Texas, Sports Venue Sales Tax Revenue Bonds, 3/09 at 100.00 AAA 2,123,240 Series 2001, 5.300%, 3/15/26 (Pre-refunded to 3/15/09) - FGIC Insured 30,095 Leander Independent School District, Williamson and Travis 8/12 at 27.94 AAA 5,908,852 Counties, Texas, General Obligation Bonds, Series 2004, 0.000%, 8/15/34 9,345 Leander Independent School District, Williamson and Travis 8/15 at 37.33 AAA 2,073,375 Counties, Texas, General Obligation Bonds, Series 2005, 0.000%, 8/15/33 - FGIC Insured 1,500 Port Arthur, Texas, Jefferson County, General Obligation Bonds, 2/07 at 100.00 AAA 1,536,345 Series 1997, 5.000%, 2/15/21 (Pre-refunded to 2/15/07) - MBIA Insured 10,000 Tarrant County Health Facilities Development Corporation, 2/08 at 102.00 AAA 10,537,500 Texas, Revenue Bonds, Texas Health Resources System, Series 1997A, 5.250%, 2/15/17 - MBIA Insured 7,000 White Settlement Independent School District, Tarrant County, 8/15 at 34.92 AAA 1,431,360 Texas, General Obligation Bonds, Series 2005, 0.000%, 8/15/35 Wylie Independent School District, Taylor County, Texas, General Obligation Bonds, Series 2005: 3,000 0.000%, 8/15/20 8/15 at 78.46 AAA 1,457,790 3,000 0.000%, 8/15/22 8/15 at 70.77 AAA 1,305,000 - ------------------------------------------------------------------------------------------------------------------------------------ UTAH - 0.4% (0.3% OF TOTAL INVESTMENTS) Utah Housing Finance Agency, Single Family Mortgage Bonds, Series 1999C-2, Class II: 605 5.700%, 7/01/19 (Alternative Minimum Tax) 1/10 at 101.50 AAA 607,535 225 5.750%, 7/01/21 (Alternative Minimum Tax) 1/10 at 101.50 AA 235,175 220 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/09 at 101.00 AA 220,799 Series 1999D, 5.850%, 7/01/21 (Alternative Minimum Tax) 55 Nuveen Dividend Advantage Municipal Fund (NAD) (continued) Portfolio of INVESTMENTS October 31, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ UTAH (continued) $ 80 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/09 at 101.50 Aa2 $ 80,365 Series 1999F, 6.300%, 7/01/21 (Alternative Minimum Tax) 1,440 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/10 at 100.00 AA- 1,475,986 Series 2000F-2, Class III, 6.000%, 1/01/15 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ VIRGINIA - 0.6% (0.4% OF TOTAL INVESTMENTS) 3,395 Virginia Small Business Financing Authority, Industrial 11/09 at 102.00 N/R 3,423,145 Development Water Revenue Bonds, S.I.L. Clean Water, LLC Project, Series 1999, 7.250%, 11/01/24 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 11.1% (7.7% OF TOTAL INVESTMENTS) 4,000 Energy Northwest, Washington, Electric Revenue Refunding 7/13 at 100.00 Aaa 4,328,080 Bonds, Nuclear Project 3, Series 2003A, 5.500%, 7/01/17 - XLCA Insured Port of Seattle, Washington, Special Facility Revenue Bonds, Terminal 18, Series 1999B: 1,755 6.000%, 9/01/15 (Alternative Minimum Tax) - MBIA Insured 3/10 at 101.00 AAA 1,902,806 2,590 6.000%, 9/01/16 (Alternative Minimum Tax) - MBIA Insured 3/10 at 101.00 AAA 2,808,130 Port of Seattle, Washington, Special Facility Revenue Bonds, Terminal 18, Series 1999C: 875 6.000%, 9/01/15 (Alternative Minimum Tax) - MBIA Insured 3/10 at 101.00 AAA 948,693 1,260 6.000%, 9/01/16 (Alternative Minimum Tax) - MBIA Insured 3/10 at 101.00 AAA 1,366,117 9,760 Tacoma, Washington, Electric System Revenue Refunding 1/11 at 101.00 AAA 10,772,210 Bonds, Series 2001A, 5.625%, 1/01/21 (Pre-refunded to 1/01/11) - FSA Insured 7,330 Washington State Tobacco Settlement Authority, Tobacco 6/13 at 100.00 BBB 7,946,746 Settlement Asset-Backed Revenue Bonds, Series 2002, 6.500%, 6/01/26 11,605 Washington, Certificates of Participation, Washington 7/09 at 100.00 AAA 12,234,220 Convention and Trade Center, Series 1999, 5.250%, 7/01/16 - MBIA Insured 3,350 Washington, General Obligation Compound Interest Bonds, No Opt. Call AAA 1,914,927 Series 1999S-2, 0.000%, 1/01/18 - FSA Insured Washington, General Obligation Compound Interest Bonds, Series 1999S-3: 17,650 0.000%, 1/01/20 No Opt. Call Aa1 8,969,201 18,470 0.000%, 1/01/21 No Opt. Call Aa1 8,868,740 4,800 Washington Public Power Supply System, Revenue Refunding 7/07 at 102.00 AAA 5,027,616 Bonds, Nuclear Project 3, Series 1997A, 5.250%, 7/01/16 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 6.9% (4.7% OF TOTAL INVESTMENTS) 2,250 Green Bay, Wisconsin, Water System Revenue Bonds, 11/14 at 100.00 Aaa 2,323,260 Series 2004, 5.000%, 11/01/29 - FSA Insured 3,810 La Crosse, Wisconsin, Industrial Development Revenue 12/08 at 102.00 AAA 4,066,299 Refunding Bonds, Dairyland Power Cooperative, Series 1997C, 5.550%, 2/01/15 - AMBAC Insured 4,180 Wisconsin Health and Educational Facilities Authority, 5/09 at 101.00 A 4,295,911 Revenue Bonds, Kenosha Hospital and Medical Center Inc., Series 1999, 5.625%, 5/15/29 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, FH Healthcare Development Inc., Series 1999: 8,375 6.250%, 11/15/20 (Pre-refunded to 11/15/09) 11/09 at 101.00 N/R*** 9,303,117 5,000 6.250%, 11/15/28 (Pre-refunded to 11/15/09) 11/09 at 101.00 N/R*** 5,554,100 12,700 Wisconsin Health and Educational Facilities Authority, 8/09 at 101.00 Aaa 13,460,600 Revenue Bonds, Mercy Health System Corporation, Series 1999, 5.500%, 8/15/25 - AMBAC Insured 2,200 Wisconsin Health and Educational Facilities Authority, 8/13 at 100.00 A 2,222,350 Revenue Bonds, Wheaton Franciscan Services Inc., Series 2003A, 5.125%, 8/15/33 - ------------------------------------------------------------------------------------------------------------------------------------ $ 980,415 Total Long-Term Investments (cost $810,884,644) - 145.0% 869,545,517 =============----------------------------------------------------------------------------------------------------------------------- 56 PRINCIPAL MARKET AMOUNT (000) DESCRIPTION(1) RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ SHORT-TERM INVESTMENTS - 0.5% (0.3% OF TOTAL INVESTMENTS) $ 3,000 Massachusetts Development Finance Authority, Revenue Bonds, A-1+ $ 3,000,000 Boston University, Variable Rate Demand Obligations, Series 2002R-2, 2.720%, 10/01/42 - XLCA Insured + - ------------------------------------------------------------------------------------------------------------------------------------ $ 3,000 Total Short-Term Investments (cost $3,000,000) 3,000,000 =============----------------------------------------------------------------------------------------------------------------------- Total Investments (cost $813,884,644) - 145.5% 872,545,517 -------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 3.7% 22,341,129 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (49.2)% (295,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 599,886,646 ====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. * 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. ** Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's or Moody's rating. *** Securities are backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensures the timely payment of principal and interest. Such securities are normally considered to be equivalent to AAA rated securities. N/R Investment is not rated. # On September 14, 2005, Northwest Airlines Corporation ("Northwest Airlines"), the holding company of Northwest Airlines Inc., filed for federal bankruptcy protection. The Adviser determined that it was likely Northwest Airlines would not remain current on their interest payment obligations with respect to these bonds and thus has stopped accruing interest. (WI) Security purchased on a when-issued basis. + Security has a maturity of more than one year, but has variable rate and demand features which qualify it as a short-term security. The rate disclosed is that in effect at the end of the reporting period. This rate changes periodically based on market conditions or a specified market index. See accompanying notes to financial statements. 57 Nuveen Dividend Advantage Municipal Fund 2 (NXZ) Portfolio of INVESTMENTS October 31, 2005
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 4.2% (2.9% OF TOTAL INVESTMENTS) $ 18,500 Huntsville Healthcare Authority, Alabama, Revenue Bonds, 6/11 at 101.00 A2 $ 19,369,685 Series 2001A, 5.750%, 6/01/31 - ------------------------------------------------------------------------------------------------------------------------------------ ALASKA - 0.5% (0.3% OF TOTAL INVESTMENTS) 2,110 Northern Tobacco Securitization Corporation, Alaska, Tobacco 6/11 at 100.00 BBB 2,159,311 Settlement Asset-Backed Bonds, Series 2001, 5.500%, 6/01/29 - ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 0.6% (0.4% OF TOTAL INVESTMENTS) 2,500 Phoenix, Arizona, Civic Improvement Corporation, Senior Lien 7/12 at 100.00 AAA 2,571,275 Airport Revenue Bonds, Series 2002B, 5.250%, 7/01/32 (Alternative Minimum Tax) - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ ARKANSAS - 0.5% (0.3% OF TOTAL INVESTMENTS) 2,130 Arkansas Development Finance Authority, Single Family 1/12 at 100.00 AAA 2,180,140 Mortgage Revenue Bonds, GNMA Mortgage-Backed Securities Program, Series 2002C, 5.400%, 1/01/34 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 11.1% (7.6% OF TOTAL INVESTMENTS) 6,000 California Educational Facilities Authority, Revenue Bonds, 6/11 at 101.00 AAA 6,307,800 Stanford University, Series 2001Q, 5.250%, 12/01/32 13,825 California, Department of Veterans Affairs, Home Purchase 6/06 at 101.00 AAA 14,128,597 Revenue Bonds, Series 2001A, 5.550%, 12/01/25 - AMBAC Insured 11,200 California, General Obligation Bonds, Series 2003, 8/13 at 100.00 A 11,710,160 5.250%, 2/01/28 1,500 California Statewide Community Development Authority, 10/15 at 103.00 N/R 1,638,180 Senior Lien Revenue Bonds, East Valley Tourist Authority, Series 2003A, 9.250%, 10/01/20 (a) 6,000 California Statewide Community Development Authority, No Opt. Call A+ 5,882,400 Revenue Bonds, Kaiser Permanente System, Series 2004G, 2.300%, 4/01/34 (Mandatory put 5/01/07) 5,000 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 BBB 5,703,750 Tobacco Settlement Asset-Backed Bonds, Series 2003A-1, 6.750%, 6/01/39 6,000 Los Angeles Regional Airports Improvement Corporation, 12/12 at 102.00 B- 5,916,360 California, Sublease Revenue Bonds, Los Angeles International Airport, American Airlines Inc. Terminal 4 Project, Series 2002C, 7.500%, 12/01/24 (Alternative Minimum Tax) 200 Yuba County Water Agency, California, Yuba River Development 3/06 at 100.00 Baa3 198,770 Revenue Bonds, Pacific Gas and Electric Company, Series 1966A, 4.000%, 3/01/16 - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 6.1% (4.2% OF TOTAL INVESTMENTS) 2,835 Colorado Educational and Cultural Facilities Authority, Charter 8/11 at 100.00 AAA 3,360,042 School Revenue Bonds, Peak-to-Peak Charter School, Series 2001, 7.500%, 8/15/21 (Pre-refunded to 8/15/11) 2,500 Colorado Educational and Cultural Facilities Authority, 6/14 at 100.00 N/R 2,633,900 Revenue Bonds, Colorado Lutheran High School Association, Series 2004A, 7.625%, 6/01/34 10,000 E-470 Public Highway Authority, Colorado, Senior Revenue 9/10 at 31.42 AAA 2,610,200 Bonds, Series 2000B, 0.000%, 9/01/28 (Pre-refunded to 9/01/10) - MBIA Insured 1,885 Eagle County Air Terminal Corporation, Colorado, Airport 5/11 at 101.00 N/R 1,982,266 Terminal Revenue Bonds, Series 2001, 7.125%, 5/01/31 (Alternative Minimum Tax) 755 Jefferson County School District R1, Colorado, General 12/14 at 100.00 AAA 791,882 Obligation Bonds, Series 2004, 5.000%, 12/15/22 - FSA Insured 5,000 Northwest Parkway Public Highway Authority, Colorado, 6/11 at 102.00 AAA 5,229,600 Revenue Bonds, Senior Series 2001A, 5.250%, 6/15/41 - FSA Insured 58 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO (continued) Northwest Parkway Public Highway Authority, Colorado, Senior Lien Revenue Bonds, Series 2001B: $ 22,000 0.000%, 6/15/28 - FSA Insured 6/11 at 35.65 AAA $ 6,117,100 17,650 0.000%, 6/15/29 - AMBAC Insured 6/11 at 33.45 AAA 4,605,415 1,000 Plaza Metropolitan District 1, Lakewood, Colorado, Tax 6/14 at 101.00 N/R 1,099,380 Increment Revenue Bonds, Series 2003, 8.000%, 12/01/25 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRICT OF COLUMBIA - 0.3% (0.2% OF TOTAL INVESTMENTS) 1,210 District of Columbia Tobacco Settlement Corporation, Tobacco 5/11 at 101.00 BBB 1,292,474 Settlement Asset-Backed Bonds, Series 2001, 6.250%, 5/15/24 - ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 5.0% (3.4% OF TOTAL INVESTMENTS) 15,000 Jacksonville, Florida, Transportation Revenue Bonds, 10/11 at 100.00 AAA 15,859,650 Series 2001, 5.250%, 10/01/29 - MBIA Insured 3,000 Miami-Dade County, Florida, Aviation Revenue Bonds, Miami 10/12 at 100.00 AAA 3,112,710 International Airport, Series 2002, 5.375%, 10/01/32 (Alternative Minimum Tax) - FGIC Insured 4,000 Miami-Dade County Health Facility Authority, Florida, Hospital 8/11 at 101.00 AAA 4,143,400 Revenue Refunding Bonds, Miami Children's Hospital, Series 2001A, 5.125%, 8/15/26 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ HAWAII - 2.2% (1.5% OF TOTAL INVESTMENTS) Honolulu Board of Water Supply, Hawaii, Water System Revenue Bonds, Series 2001: 3,000 5.250%, 7/01/26 - FSA Insured 7/11 at 100.00 AAA 3,182,040 6,725 5.250%, 7/01/31 - FSA Insured 7/11 at 100.00 AAA 7,062,864 - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 11.1% (7.6% OF TOTAL INVESTMENTS) 15,270 Chicago, Illinois, General Obligation Bonds, Series 2001A, 1/11 at 101.00 AAA 15,873,165 5.250%, 1/01/33 - MBIA Insured 1,290 Chicago, Illinois, General Obligation Refunding Bonds, 1/06 at 102.00 AAA 1,318,638 Series 1996B, 5.125%, 1/01/25 - FGIC Insured 3,670 Chicago, Illinois, FHA/GNMA Collateralized Multifamily 12/11 at 100.00 A+ 3,774,632 Housing Revenue Bonds, Stone Terrace Apartments, Series 2001A, 5.750%, 12/20/42 (Alternative Minimum Tax) 1,755 Chicago, Illinois, Special Facility Revenue Bonds, O'Hare No Opt. Call N/R 797,490 International Airport, United Air Lines Inc. Project, Series 2001A, 6.375%, 11/01/35 (Alternative Minimum Tax) (Mandatory put 5/01/13)# 1,555 Chicago, Illinois, FNMA/GNMA Collateralized Single Family 4/11 at 105.00 AAA 1,613,826 Mortgage Revenue Bonds, Series 2001A, 6.250%, 10/01/32 (Alternative Minimum Tax) 3,180 Illinois Development Finance Authority, Revenue Bonds, 12/21 at 100.00 BBB 3,279,629 Chicago Charter School Foundation, Series 2002A, 6.250%, 12/01/32 5,000 Illinois Development Finance Authority, Revenue Bonds, 9/11 at 100.00 AAA 5,364,450 Illinois Wesleyan University, Series 2001, 5.500%, 9/01/32 - AMBAC Insured 3,100 Illinois Development Finance Authority, Revenue Bonds, 5/11 at 101.00 A- 3,295,827 Midwestern University, Series 2001B, 6.000%, 5/15/31 5,000 Illinois Health Facilities Authority, Revenue Bonds, Edward 2/11 at 101.00 AAA 5,169,600 Hospital Obligated Group, Series 2001B, 5.250%, 2/15/34 - FSA Insured 3,000 Illinois Educational Facilities Authority, Student Housing 5/12 at 101.00 Baa2 3,072,930 Revenue Bonds, Educational Advancement Foundation Fund, University Center Project, Series 2002, 6.250%, 5/01/34 2,275 Illinois, Sales Tax Revenue Bonds, Series 2001, 5.500%, 6/15/16 6/11 at 100.00 AAA 2,470,832 4,980 Metropolitan Pier and Exposition Authority, Illinois, Revenue 6/06 at 102.00 AAA 5,123,773 Refunding Bonds, McCormick Place Expansion Project, Series 1996A, 5.250%, 6/15/27 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 4.8% (3.3% OF TOTAL INVESTMENTS) 2,000 Indiana Health Facility Financing Authority, Hospital Revenue 9/11 at 100.00 A+ 2,053,800 Bonds, Methodist Hospitals Inc., Series 2001, 5.500%, 9/15/31 2,500 Indiana Health Facility Financing Authority, Hospital Revenue No Opt. Call AAA 2,947,000 Refunding Bonds, Columbus Regional Hospital, Series 1993, 7.000%, 8/15/15 - FSA Insured Indiana Transportation Finance Authority, Highway Revenue Bonds, Series 2003A: 4,000 5.000%, 6/01/23 - FSA Insured 6/13 at 100.00 AAA 4,158,400 6,000 5.000%, 6/01/24 - FSA Insured 6/13 at 100.00 AAA 6,221,940 59 Nuveen Dividend Advantage Municipal Fund 2 (NXZ) (continued) Portfolio of INVESTMENTS October 31, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA (continued) $ 3,107 Indianapolis, Indiana, Special Facility Revenue Bonds, 11/05 at 102.00 N/R $ 381,197 United Airlines Inc., Indianapolis Maintenance Center Project, Series 1995A, 6.500%, 11/15/31 (Alternative Minimum Tax)# 6,100 St. Joseph County Hospital Authority, Indiana, Revenue Bonds, 2/09 at 102.00 BBB 6,314,964 Madison Center Inc., Series 1999, 5.800%, 2/15/24 - ------------------------------------------------------------------------------------------------------------------------------------ IOWA - 0.2% (0.2% OF TOTAL INVESTMENTS) 1,000 Iowa Higher Education Loan Authority, Private College Facility 10/12 at 100.00 A 1,036,870 Revenue Bonds, Wartburg College, Series 2002, 5.500%, 10/01/28 - ACA Insured - ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 3.8% (2.6% OF TOTAL INVESTMENTS) 17,000 Wichita, Kansas, Hospital Facilities Revenue Refunding 11/11 at 101.00 A+ 17,772,140 and Improvement Bonds, Via Christi Health System Inc., Series 2001-III, 5.625%, 11/15/31 - ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 4.1% (2.8% OF TOTAL INVESTMENTS) 18,060 Tobacco Settlement Financing Corporation, Louisiana, Tobacco 5/11 at 101.00 BBB 18,844,888 Settlement Asset-Backed Bonds, Series 2001B, 5.875%, 5/15/39 - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 3.9% (2.7% OF TOTAL INVESTMENTS) 2,875 Massachusetts Port Authority, Special Facilities Revenue 7/07 at 102.00 AAA 3,019,038 Bonds, BOSFUEL Corporation, Series 1997, 5.750%, 7/01/39 (Alternative Minimum Tax) - MBIA Insured 15,000 Massachusetts Turnpike Authority, Metropolitan Highway 1/07 at 102.00 AAA 15,176,250 System Revenue Bonds, Senior Series 1997A, 5.000%, 1/01/37 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 14.2% (9.7% OF TOTAL INVESTMENTS) Detroit, Michigan, Senior Lien Water Supply System Revenue Bonds, Series 2001A: 14,610 5.250%, 7/01/33 - FGIC Insured 7/11 at 100.00 AAA 15,326,036 15,390 5.250%, 7/01/33 (Pre-refunded to 7/01/11) - FGIC Insured 7/11 at 100.00 AAA 16,651,672 20,000 5.500%, 7/01/33 - FGIC Insured 7/11 at 101.00 AAA 21,572,400 4,000 Michigan Municipal Bond Authority, Public School Academy 10/09 at 102.00 Ba1 4,333,640 Revenue Bonds, Detroit Academy of Arts and Sciences Charter School, Series 2001A, 8.000%, 10/01/31 Michigan State Hospital Finance Authority, Revenue Refunding Bonds, Detroit Medical Center Obligated Group, Series 1993A: 2,000 6.250%, 8/15/13 2/06 at 100.00 BB- 2,000,680 4,000 6.500%, 8/15/18 2/06 at 100.00 BB- 4,001,840 2,000 Michigan State Hospital Finance Authority, Hospital Revenue 8/08 at 101.00 BB- 1,916,540 Bonds, Detroit Medical Center Obligated Group, Series 1998A, 5.125%, 8/15/18 - ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 3.2% (2.2% OF TOTAL INVESTMENTS) 14,000 Minneapolis-St. Paul Metropolitan Airports Commission, 1/11 at 100.00 AAA 14,582,540 Minnesota, Airport Revenue Bonds, Series 2001A, 5.250%, 1/01/32 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 4.9% (3.4% OF TOTAL INVESTMENTS) 21,000 Missouri Health and Educational Facilities Authority, Revenue 6/11 at 101.00 AAA 22,823,220 Bonds, SSM Healthcare System, Series 2001A, 5.250%, 6/01/28 (Pre-refunded to 6/01/11) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ MONTANA - 0.8% (0.6% OF TOTAL INVESTMENTS) 3,780 Montana Board of Housing, Single Family Program Bonds, 12/10 at 100.00 AA+ 3,923,564 Series 2001A-2, 5.700%, 6/01/32 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 4.0% (2.8% OF TOTAL INVESTMENTS) 12,275 Director of Nevada State Department of Business and Industry, 1/10 at 100.00 AAA 12,685,231 Revenue Bonds, Las Vegas Monorail Project, First Tier, Series 2000, 5.375%, 1/01/40 - AMBAC Insured 3,500 Director of Nevada State Department of Business and Industry, 1/10 at 102.00 N/R 3,650,780 Revenue Bonds, Las Vegas Monorail Project, Second Tier, Series 2000, 7.375%, 1/01/40 2,330 Henderson, Nevada, Healthcare Facility Revenue Bonds, 7/08 at 101.00 A- 2,393,120 Catholic Healthcare West, Series 1998A, 5.250%, 7/01/18 60 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NEW HAMPSHIRE - 2.2% (1.5% OF TOTAL INVESTMENTS) $ 8,000 New Hampshire Business Finance Authority, Pollution Control 10/08 at 102.00 A3 $ 8,348,320 Remarketed Revenue Refunding Bonds, Connecticut Light and Power Company, Series 1992A, 5.850%, 12/01/22 1,890 New Hampshire Housing Finance Agency, Single Family 5/11 at 100.00 Aa2 1,924,474 Mortgage Acquisition Bonds, Series 2001A, 5.700%, 1/01/31 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 2.0% (1.3% OF TOTAL INVESTMENTS) 3,995 New Jersey Economic Development Authority, Special Facilities 11/10 at 101.00 B 3,452,599 Revenue Bonds, Continental Airlines Inc., Series 2000, 7.000%, 11/15/30 (Alternative Minimum Tax) 480 Tobacco Settlement Financing Corporation, New Jersey, 6/12 at 100.00 BBB 499,008 Tobacco Settlement Asset-Backed Bonds, Series 2002, 5.750%, 6/01/32 Tobacco Settlement Financing Corporation, New Jersey, Tobacco Settlement Asset-Backed Bonds, Series 2003: 1,500 6.375%, 6/01/32 6/13 at 100.00 BBB 1,665,210 425 6.750%, 6/01/39 6/13 at 100.00 BBB 484,819 2,700 6.250%, 6/01/43 6/13 at 100.00 BBB 2,985,093 - ------------------------------------------------------------------------------------------------------------------------------------ NEW MEXICO - 5.4% (3.7% OF TOTAL INVESTMENTS) New Mexico Hospital Equipment Loan Council, Hospital Revenue Bonds, Presbyterian Healthcare Services, Series 2001A: 12,000 5.500%, 8/01/25 (Pre-refunded to 8/01/11) 8/11 at 101.00 AA-*** 13,213,920 10,800 5.500%, 8/01/30 (Pre-refunded to 8/01/11) 8/11 at 101.00 AA-*** 11,892,528 - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 6.2% (4.3% OF TOTAL INVESTMENTS) 6,000 Long Island Power Authority, New York, Electric System 5/11 at 100.00 A- 6,295,560 General Revenue Bonds, Series 2001L, 5.375%, 5/01/33 12,000 New York City Municipal Water Finance Authority, New York, 6/11 at 101.00 AA+ 12,272,280 Water and Sewerage System Revenue Bonds, Fiscal Series 2001C, 5.125%, 6/15/33 5,000 New York City Industrial Development Agency, New York, 8/12 at 101.00 B- 5,068,600 Special Facilities Revenue Bonds, JFK Airport - American Airlines Inc., Series 2002B, 8.500%, 8/01/28 (Alternative Minimum Tax) 4,900 Dormitory Authority of the State of New York, Revenue Bonds, 7/10 at 101.00 Ba1 5,257,798 Mount Sinai NYU Health Obligated Group, Series 2000A, 6.625%, 7/01/19 - ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 1.7% (1.1% OF TOTAL INVESTMENTS) 2,950 North Carolina Capital Facilities Financing Agency, Revenue 4/13 at 100.00 AAA 3,016,818 Bonds, Johnson and Wales University, Series 2003A, 5.000%, 4/01/33 - XLCA Insured 4,500 North Carolina Eastern Municipal Power Agency, Power System 1/09 at 102.00 BBB 4,734,045 Revenue Refunding Bonds, Series 1999B, 5.600%, 1/01/15 - ------------------------------------------------------------------------------------------------------------------------------------ NORTH DAKOTA - 0.6% (0.4% OF TOTAL INVESTMENTS) 2,540 North Dakota Housing Finance Agency, Home Mortgage 7/10 at 100.00 Aa1 2,578,430 Finance Program Refunding Bonds, Series 2001A, 5.550%, 1/01/32 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 0.4% (0.3% OF TOTAL INVESTMENTS) 1,845 Columbus City School District, Franklin County, Ohio, General 6/13 at 100.00 AAA 1,904,243 Obligation Bonds, Series 2003, 5.000%, 12/01/28 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 0.8% (0.6% OF TOTAL INVESTMENTS) Oklahoma Development Finance Authority, Revenue Refunding Bonds, Hillcrest Healthcare System, Series 1999A: 2,655 5.125%, 8/15/10 (Pre-refunded to 8/15/09) 8/09 at 101.00 AAA 2,835,354 1,000 5.200%, 8/15/11 (Pre-refunded to 8/15/09) 8/09 at 101.00 AAA 1,070,570 - ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 3.8% (2.6% OF TOTAL INVESTMENTS) 8,000 Clackamas County Hospital Facility Authority, Oregon, Revenue 5/11 at 101.00 AA 8,362,400 Refunding Bonds, Legacy Health System, Series 2001, 5.250%, 5/01/21 9,000 Oregon Department of Administrative Services, Certificates 5/11 at 101.00 AAA 9,258,840 of Participation, Series 2001D, 5.000%, 5/01/26 - AMBAC Insured 61 Nuveen Dividend Advantage Municipal Fund 2 (NXZ) (continued) Portfolio of INVESTMENTS October 31, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 3.7% (2.5% OF TOTAL INVESTMENTS) $ 5,000 Allegheny County Hospital Development Authority, Pennsylvania, 11/10 at 102.00 B1 $ 5,954,500 Revenue Bonds, West Penn Allegheny Health System, Series 2000B, 9.250%, 11/15/30 2,225 Carbon County Industrial Development Authority, Pennsylvania, No Opt. Call BBB- 2,383,887 Resource Recovery Revenue Refunding Bonds, Panther Creek Partners Project, Series 2000, 6.650%, 5/01/10 (Alternative Minimum Tax) 8,000 Pennsylvania Higher Educational Facilities Authority, Revenue 1/11 at 101.00 Aa3 8,682,080 Bonds, UPMC Health System, Series 2001A, 6.000%, 1/15/31 - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 0.1% (0.1% OF TOTAL INVESTMENTS) 630 South Carolina Public Service Authority, Revenue Refunding 1/06 at 102.00 AAA 645,574 Bonds, Santee Cooper Electric System, Series 1996A, 5.750%, 1/01/22 (Pre-refunded to 1/01/06) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH DAKOTA - 1.1% (0.7% OF TOTAL INVESTMENTS) 4,820 South Dakota Housing Development Authority, Remarketed 5/09 at 102.00 AAA 5,011,643 Homeownership Mortgage Bonds, Series 1997E-4, 5.450%, 5/01/18 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 24.4% (16.7% OF TOTAL INVESTMENTS) 7,500 Austin, Texas, Electric Utility System Revenue Refunding Bonds, 11/10 at 100.00 AAA 7,657,725 Series 2001, 5.000%, 11/15/30 - FSA Insured Dallas-Fort Worth International Airport Public Facility Corporation, Texas, Airport Hotel Revenue Bonds, Series 2001: 15,000 5.250%, 1/15/26 - FSA Insured 1/09 at 100.00 AAA 15,594,150 1,750 5.200%, 1/15/31 - FSA Insured 1/09 at 100.00 AAA 1,806,368 6,000 Decatur Hospital Authority, Texas, Revenue Bonds, Wise 9/14 at 100.00 N/R 6,467,160 Regional Health System, Series 2004A, 7.125%, 9/01/34 10,000 Gulf Coast Industrial Development Authority, Texas, Solid 4/12 at 100.00 Ba1 11,278,100 Waste Disposal Revenue Bonds, Citgo Petroleum Corporation Project, Series 1998, 8.000%, 4/01/28 (Alternative Minimum Tax) 3,000 Harris County Health Facilities Development Corporation, 7/09 at 101.00 AAA 3,159,810 Texas, Revenue Bonds, Christus Health, Series 1999A, 5.375%, 7/01/24 - MBIA Insured 40,000 Harris County-Houston Sports Authority, Texas, Senior 11/30 at 54.04 AAA 5,963,200 Lien Revenue Refunding Bonds, Series 2001A, 0.000%, 11/15/40 - MBIA Insured 30,980 Harris County-Houston Sports Authority, Texas, Junior Lien 11/11 at 100.00 AAA 31,972,909 Revenue Refunding Bonds, Series 2001B, 5.250%, 11/15/40 - MBIA Insured Hays Consolidated Independent School District, Hays County, Texas, General Obligation School Building Bonds, Series 2001: 10,715 0.000%, 8/15/25 (Pre-refunded to 8/15/11) 8/11 at 43.18 AAA 3,684,674 12,940 0.000%, 8/15/26 (Pre-refunded to 8/15/11) 8/11 at 40.60 AAA 4,184,667 Houston, Texas, Hotel Occupancy Tax and Special Revenue Bonds, Convention and Entertainment Project, Series 2001B: 5,000 0.000%, 9/01/30 - AMBAC Insured No Opt. Call AAA 1,434,050 5,000 0.000%, 9/01/31 - AMBAC Insured No Opt. Call AAA 1,364,400 5,000 Metro Health Facilities Development Corporation, Texas, 1/11 at 100.00 B1 5,154,650 Hospital Revenue Bonds, Wilson N. Jones Memorial Hospital, Series 2001, 7.250%, 1/01/31 10,500 Texas, General Obligation Bonds, Water Financial Assistance 8/11 at 100.00 Aa1 10,902,360 Program, Series 2001, 5.250%, 8/01/35 2,000 Tom Green County Health Facilities Development Corporation, 5/11 at 101.00 Baa3 2,144,100 Texas, Hospital Revenue Bonds, Shannon Health System Project, Series 2001, 6.750%, 5/15/21 - ------------------------------------------------------------------------------------------------------------------------------------ VIRGINIA - 0.2% (0.1% OF TOTAL INVESTMENTS) 5,000 Pocahontas Parkway Association, Virginia, Senior Lien Revenue 8/08 at 23.55 BB- 1,004,750 Bonds, Route 895 Connector Toll Road, Series 1998B, 0.000%, 8/15/33 62 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 6.0% (4.1% OF TOTAL INVESTMENTS) Seattle, Washington, Municipal Light and Power Revenue Refunding and Improvement Bonds, Series 2001: $ 4,820 5.500%, 3/01/19 - FSA Insured 3/11 at 100.00 AAA $ 5,196,249 7,250 5.125%, 3/01/26 - FSA Insured 3/11 at 100.00 AAA 7,468,515 3,500 Tacoma, Washington, Electric System Revenue Refunding 1/11 at 101.00 AAA 3,883,425 Bonds, Series 2001A, 5.750%, 1/01/18 (Pre-refunded to 1/01/11) - FSA Insured 990 Washington State Tobacco Settlement Authority, Tobacco 6/13 at 100.00 BBB 1,073,299 Settlement Asset-Backed Revenue Bonds, Series 2002, 6.500%, 6/01/26 2,100 Washington, Certificates of Participation, Washington 7/09 at 100.00 AAA 2,210,817 Convention and Trade Center, Series 1999, 5.125%, 7/01/13 - MBIA Insured 7,500 Washington State Healthcare Facilities Authority, Revenue 10/11 at 100.00 AAA 7,854,900 Bonds, Sisters of Providence Health System, Series 2001A, 5.250%, 10/01/21 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ WEST VIRGINIA - 1.1% (0.8% OF TOTAL INVESTMENTS) 5,000 Mason County, West Virginia, Pollution Control Revenue Bonds, 10/11 at 100.00 BBB 5,091,850 Appalachian Power Company, Series 2003L, 5.500%, 10/01/22 - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 0.7% (0.5% OF TOTAL INVESTMENTS) 1,000 Wisconsin Health and Educational Facilities Authority, Revenue 5/12 at 100.00 N/R 1,091,630 Bonds, Divine Savior Healthcare, Series 2002A, 7.375%, 5/01/26 2,100 Wisconsin Health and Educational Facilities Authority, Revenue 8/13 at 100.00 A 2,121,331 Bonds, Wheaton Franciscan Services Inc., Series 2003A, 5.125%, 8/15/33 - ------------------------------------------------------------------------------------------------------------------------------------ $ 745,627 Total Long-Term Investments (cost $629,002,629) - 145.9% 675,355,575 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.1% 9,506,628 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (48.0)% (222,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 462,862,203 ====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. * 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. ** Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's or Moody's rating. *** Securities are backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensures the timely payment of principal and interest. Such securities are normally considered to be equivalent to AAA rated securities. N/R Investment is not rated. # On December 9, 2002, UAL Corporation, the holding company of United Air Lines, Inc., filed for federal bankruptcy protection. The Adviser determined that it was likely United would not remain current on their interest payment obligations with respect to these bonds and thus has stopped accruing interest. (a) The issuer has received a preliminary adverse determination from the Internal Revenue Service (the "IRS") regarding the tax-exempt status of the bonds' coupon payments. The Fund will continue to treat coupon payments as tax-exempt income until such time that it is formally determined that the interest on the bonds should be treated as taxable. See accompanying notes to financial statements. 63 Nuveen Dividend Advantage Municipal Fund 3 (NZF) Portfolio of INVESTMENTS October 31, 2005
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 0.9% (0.6% OF TOTAL INVESTMENTS) $ 5,655 Alabama State Port Authority, Revenue Bonds, State Docks 10/11 at 100.00 AAA $ 5,791,794 Department Facilities, Series 2001, 5.250%, 10/01/26 (Alternative Minimum Tax) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ ALASKA - 0.7% (0.4% OF TOTAL INVESTMENTS) 4,000 Alaska Student Loan Corporation, Student Loan Revenue 7/08 at 100.00 AAA 4,106,720 Bonds, Series 1998A, 5.250%, 7/01/14 (Alternative Minimum Tax) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ ARKANSAS - 0.9% (0.6% OF TOTAL INVESTMENTS) Sebastian County Health Facilities Board, Arkansas, Hospital Revenue Improvement Bonds, Sparks Regional Medical Center, Series 2001A: 1,805 5.500%, 11/01/13 11/11 at 101.00 Baa1 1,906,820 1,900 5.500%, 11/01/14 11/11 at 101.00 Baa1 1,994,753 1,745 5.250%, 11/01/21 11/11 at 101.00 Baa1 1,774,107 - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 10.2% (6.9% OF TOTAL INVESTMENTS) 5,000 California Infrastructure Economic Development Bank, 8/11 at 102.00 A+ 5,224,100 Revenue Bonds, Kaiser Hospital Assistance LLC, Series 2001A, 5.550%, 8/01/31 18,850 California, General Obligation Veterans Welfare Bonds, 6/07 at 101.00 AAA 19,134,447 Series 2001BZ, 5.350%, 12/01/21 (Alternative Minimum Tax) - MBIA Insured 1,500 California Statewide Community Development Authority, 10/15 at 103.00 N/R 1,638,180 Senior Lien Revenue Bonds, East Valley Tourist Authority, Series 2003A, 9.250%, 10/01/20 (a) 5,000 California Statewide Community Development Authority, No Opt. Call A+ 4,902,000 Revenue Bonds, Kaiser Permanente System, Series 2004G, 2.300%, 4/01/34 (Mandatory put 5/01/07) Los Angeles Regional Airports Improvement Corporation, California, Lease Revenue Refunding Bonds, LAXFUEL Corporation at Los Angeles International Airport, Series 2001: 13,955 5.750%, 1/01/16 (Alternative Minimum Tax) - AMBAC Insured 1/12 at 100.00 AAA 15,083,122 5,000 5.375%, 1/01/21 (Alternative Minimum Tax) - AMBAC Insured 1/12 at 100.00 AAA 5,173,950 1,500 5.250%, 1/01/23 (Alternative Minimum Tax) - AMBAC Insured 1/12 at 100.00 AAA 1,533,555 10,000 5.500%, 1/01/32 (Alternative Minimum Tax) - AMBAC Insured 1/12 at 100.00 AAA 10,312,600 - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 7.7% (5.2% OF TOTAL INVESTMENTS) 2,250 Canterberry Crossing Metropolitan District II, Parker, Colorado, 12/12 at 100.00 N/R 2,363,423 Limited Tax General Obligation Bonds, Series 2002, 7.375%, 12/01/32 1,775 Colorado Educational and Cultural Facilities Authority, Charter 6/11 at 100.00 Ba1 1,832,403 School Revenue Bonds, Weld County School District 6 - Frontier Academy, Series 2001, 7.375%, 6/01/31 3,250 Colorado Educational and Cultural Facilities Authority, Charter 5/12 at 102.00 N/R 3,439,605 School Revenue Bonds, Montessori Peaks Building Foundation, Series 2002A, 8.000%, 5/01/32 1,700 Colorado Educational and Cultural Facilities Authority, Charter 3/12 at 100.00 N/R 1,760,673 School Revenue Bonds, Belle Creek Education Center, Series 2002A, 7.625%, 3/15/32 3,380 Colorado Housing Finance Authority, Multifamily Project Bonds, 10/11 at 100.00 AAA 3,471,564 Class I, Series 2001A-1, 5.500%, 4/01/31 (Alternative Minimum Tax) 10,100 Colorado Springs, Colorado, Utility System Revenue Refunding 11/07 at 100.00 AA 10,436,330 and Improvement Bonds, Series 1997A, 5.375%, 11/15/26 2,000 Denver City and County, Colorado, Airport System Revenue 11/11 at 100.00 AAA 2,135,720 Refunding Bonds, Series 2001A, 5.500%, 11/15/16 (Alternative Minimum Tax) - FGIC Insured 64 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO (continued) Denver City and County, Colorado, Airport System Revenue Bonds, Series 1996A: $ 19,150 5.750%, 11/15/16 - MBIA Insured 11/06 at 101.00 AAA $ 19,805,122 1,105 5.500%, 11/15/25 - MBIA Insured 11/06 at 101.00 AAA 1,137,609 1,000 Plaza Metropolitan District 1, Lakewood, Colorado, Tax 6/14 at 101.00 N/R 1,099,380 Increment Revenue Bonds, Series 2003, 8.000%, 12/01/25 - ------------------------------------------------------------------------------------------------------------------------------------ DELAWARE - 0.5% (0.3% OF TOTAL INVESTMENTS) 2,835 Delaware Housing Authority, Multifamily Mortgage Revenue 7/12 at 100.00 Aa3 2,844,837 Bonds, Series 2001A, 5.400%, 7/01/24 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRICT OF COLUMBIA - 1.0% (0.7% OF TOTAL INVESTMENTS) 6,000 District of Columbia, Revenue Bonds, Catholic University of 10/09 at 101.00 AAA 6,453,360 America, Series 1999, 5.625%, 10/01/29 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 1.6% (1.1% OF TOTAL INVESTMENTS) 2,000 Dade County, Florida, Water and Sewerage System Revenue 10/07 at 102.00 AAA 2,113,280 Bonds, Series 1997, 5.375%, 10/01/16 - FGIC Insured Orange County Housing Finance Authority, Florida, Multifamily Housing Revenue Bonds, Oak Glen Apartments, Series 2001G: 1,105 5.400%, 12/01/32 - FSA Insured 12/11 at 100.00 AAA 1,130,161 2,195 5.450%, 12/01/41 - FSA Insured 12/11 at 100.00 AAA 2,238,790 4,175 Pace Property Finance Authority Inc., Florida, Utility System 9/07 at 102.00 AAA 4,392,142 Improvement and Revenue Refunding Bonds, Series 1997, 5.250%, 9/01/17 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 2.3% (1.5% OF TOTAL INVESTMENTS) 5,000 Atlanta, Georgia, Airport General Revenue Bonds, Series 2000B, 1/10 at 101.00 AAA 5,233,900 5.625%, 1/01/30 (Alternative Minimum Tax) - FGIC Insured 2,700 Atlanta, Georgia, Tax Allocation Bonds, Atlantic Station Project, 12/11 at 101.00 N/R 2,915,244 Series 2001, 7.900%, 12/01/24 3,740 Gainesville and Hall County Hospital Authority, Georgia, 5/11 at 100.00 A- 3,835,781 Revenue Anticipation Certificates, Northeast Georgia Health Services Inc., Series 2001, 5.500%, 5/15/31 2,000 Henry County Water and Sewerage Authority, Georgia, Revenue 2/10 at 101.00 AAA 2,189,260 Bonds, Series 2000, 5.625%, 2/01/30 (Pre-refunded to 2/01/10) - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ HAWAII - 0.9% (0.6% OF TOTAL INVESTMENTS) 5,125 Hawaii, Highway Revenue Bonds, Series 2001, 7/11 at 100.00 AAA 5,583,175 5.375%, 7/01/21 (Pre-refunded to 7/01/11) - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 18.0% (12.2% OF TOTAL INVESTMENTS) 3,000 Chicago, Illinois, General Obligation Bonds, Neighborhoods 1/11 at 100.00 AAA 3,270,090 Alive 21 Program, Series 2001A, 5.500%, 1/01/31 (Pre-refunded to 1/01/11) - FGIC Insured Chicago, Illinois, General Obligation Refunding Bonds, Series 1996B: 1,210 5.125%, 1/01/25 (Pre-refunded to 1/01/06) - FGIC Insured 1/06 at 102.00 AAA 1,238,665 1,290 5.125%, 1/01/25 - FGIC Insured 1/06 at 102.00 AAA 1,318,638 8,375 Chicago, Illinois, Revenue Bonds, Midway Airport, Series 2001A, 1/11 at 101.00 AAA 8,827,501 5.500%, 1/01/19 (Alternative Minimum Tax) - FSA Insured 4,950 Chicago, Illinois, Second Lien Passenger Facility Charge 1/11 at 101.00 AAA 5,114,439 Revenue Bonds, O'Hare International Airport, Series 2001A, 5.375%, 1/01/32 (Alternative Minimum Tax) - AMBAC Insured 1,750 Chicago, Illinois, Sales Tax Revenue Bonds, Series 1998, 7/08 at 102.00 AAA 1,830,605 5.250%, 1/01/28 - FGIC Insured 10,800 Chicago, Illinois, Sales Tax Revenue Bonds, Series 1999, 1/09 at 101.00 AAA 11,553,624 5.375%, 1/01/30 (Pre-refunded to 1/01/09) - FGIC Insured Chicago, Illinois, Second Lien Wastewater Transmission Revenue Bonds, Series 2001A: 2,220 5.500%, 1/01/16 - MBIA Insured No Opt. Call AAA 2,463,467 8,610 5.500%, 1/01/26 (Pre-refunded to 1/01/11) - AMBAC Insured 1/11 at 100.00 AAA 9,385,158 10,000 Chicago, Illinois, Senior Lien Water Revenue Bonds, Series 2001, 11/11 at 100.00 AAA 10,733,800 5.000%, 11/01/26 (Pre-refunded to 11/01/11) - AMBAC Insured 65 Nuveen Dividend Advantage Municipal Fund 3 (NZF) (continued) Portfolio of INVESTMENTS October 31, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS (continued) $ 2,415 Illinois Finance Authority, General Obligation Debt Certificates, 12/14 at 100.00 Aaa $ 2,510,513 Local Government Program - Kankakee County, Series 2005B, 5.000%, 12/01/24 - AMBAC Insured 1,100 Illinois Health Facilities Authority, Revenue Bonds, Condell 5/10 at 101.00 Baa2 1,175,713 Medical Center, Series 2000, 6.500%, 5/15/30 15,000 Illinois Health Facilities Authority, Revenue Bonds, Loyola 7/11 at 100.00 Baa1 15,769,800 University Health System, Series 2001A, 6.125%, 7/01/31 9,000 Illinois Health Facilities Authority, Revenue Bonds, Covenant 12/11 at 101.00 BBB 9,312,120 Retirement Communities Inc., Series 2001, 5.875%, 12/01/31 7,000 Lombard Public Facilities Corporation, Illinois, First Tier 1/16 at 100.00 N/R 7,320,950 Conference Center and Hotel Revenue Bonds, Series 2005A-1, 7.125%, 1/01/36 2,000 Metropolitan Pier and Exposition Authority, Illinois, Revenue No Opt. Call AAA 2,287,400 Refunding Bonds, McCormick Place Expansion Project, Series 1998A, 5.500%, 6/15/29 - FGIC Insured 16,900 Metropolitan Pier and Exposition Authority, Illinois, Revenue 12/09 at 101.00 AAA 17,773,054 Bonds, McCormick Place Expansion Project, Series 1999A, 5.250%, 12/15/28 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 5.9% (4.0% OF TOTAL INVESTMENTS) Clark-Pleasant Community School Building Corporation, Indiana, First Mortgage Bonds, Series 2001: 1,255 5.000%, 7/15/21 (Pre-refunded to 1/15/12) - AMBAC Insured 1/12 at 100.00 AAA 1,345,373 1,000 5.000%, 1/15/26 (Pre-refunded to 1/15/12) - AMBAC Insured 1/12 at 100.00 AAA 1,072,010 Evansville Vanderburgh Public Library Lease Corporation, Indiana, First Mortgage Bonds, Series 2001: 2,000 5.750%, 7/15/18 (Pre-refunded to 1/15/12) - MBIA Insured 1/12 at 100.00 AAA 2,226,520 2,750 5.125%, 1/15/24 (Pre-refunded to 1/15/12) - MBIA Insured 1/12 at 100.00 AAA 2,966,948 3,425 Gary, Indiana, GNMA/FHA Mortgage Revenue Bonds, Windsor 11/11 at 102.00 AAA 3,467,881 Square Project, Series 2001A, 5.375%, 10/20/41 (Alternative Minimum Tax) 1,250 Hamilton Southeastern Cumberland Campus School Building 1/12 at 100.00 AAA 1,313,487 Corporation, Indiana, First Mortgage Bonds, Series 2001, 5.125%, 1/15/23 - AMBAC Insured 2,800 Indiana Health Facility Financing Authority, Revenue Bonds, 5/15 at 100.00 AAA 2,868,096 Community Hospitals of Indiana, Series 2005A, 5.000%, 5/01/35 - AMBAC Insured 9,500 Indiana Educational Facilities Authority, Revenue Bonds, 2/11 at 100.00 AAA 10,172,790 Butler University, Series 2001, 5.500%, 2/01/26 - MBIA Insured 4,230 Indiana Finance Authority, Educational Facilities Revenue Bonds, 6/15 at 100.00 Aa3 4,359,776 Tudor Park Foundation, Series 2005B, 5.000%, 6/01/24 2,650 Indianapolis, Indiana, Special Facility Revenue Bonds, United 11/05 at 102.00 N/R 325,139 Airlines Inc., Indianapolis Maintenance Center Project, Series 1995A, 6.500%, 11/15/31 (Alternative Minimum Tax)# 3,500 University of Southern Indiana, Student Fee Bonds, 10/11 at 100.00 Aaa 3,652,285 Series 2001H, 5.000%, 10/01/21 - AMBAC Insured Wayne County Jail Holding Corporation, Indiana, First Mortgage Bonds, Series 2001: 1,150 5.625%, 7/15/18 - AMBAC Insured 1/13 at 101.00 AAA 1,274,557 1,090 5.500%, 7/15/22 - AMBAC Insured 1/13 at 101.00 AAA 1,196,013 - ------------------------------------------------------------------------------------------------------------------------------------ IOWA - 5.6% (3.8% OF TOTAL INVESTMENTS) 2,000 Iowa Finance Authority, Healthcare Revenue Bonds, Great River 5/11 at 100.00 AAA 2,060,920 Medical Center, Series 2001, 5.250%, 5/15/31 - FSA Insured Iowa Tobacco Settlement Authority, Tobacco Settlement Asset-Backed Revenue Bonds, Series 2001B: 28,000 5.300%, 6/01/25 6/11 at 101.00 BBB 28,425,880 3,950 5.600%, 6/01/35 6/11 at 101.00 BBB 4,062,417 - ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 3.1% (2.1% OF TOTAL INVESTMENTS) 18,500 Louisville and Jefferson County Metropolitan Sewer District, 11/11 at 101.00 AAA 19,325,470 Kentucky, Sewer and Drainage System Revenue Bonds, Series 2001A, 5.125%, 5/15/27 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 3.4% (2.3% OF TOTAL INVESTMENTS) 19,890 Tobacco Settlement Financing Corporation, Louisiana, 5/11 at 101.00 BBB 20,754,419 Tobacco Settlement Asset-Backed Bonds, Series 2001B, 5.875%, 5/15/39 66 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MAINE - 1.1% (0.7% OF TOTAL INVESTMENTS) Maine State Housing Authority, Single Family Mortgage Purchase Bonds, Series 2001B: $ 4,610 5.400%, 11/15/21 (Alternative Minimum Tax) 11/10 at 100.00 AA+ $ 4,748,392 2,015 5.500%, 11/15/32 (Alternative Minimum Tax) 11/10 at 100.00 AA+ 2,061,587 - ------------------------------------------------------------------------------------------------------------------------------------ MARYLAND - 2.1% (1.4% OF TOTAL INVESTMENTS) Maryland Community Development Administration, Insured Multifamily Housing Mortgage Loan Revenue Bonds, Series 2001B: 715 5.250%, 5/15/21 (Alternative Minimum Tax) 5/11 at 100.00 Aa2 733,790 1,570 5.250%, 7/01/21 (Alternative Minimum Tax) 7/11 at 100.00 Aa2 1,612,029 10,600 Maryland Energy Financing Administration, Revenue Bonds, 9/07 at 100.00 N/R 10,762,286 AES Warrior Run Project, Series 1995, 7.400%, 9/01/19 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 1.7% (1.2% OF TOTAL INVESTMENTS) 5,000 Massachusetts Port Authority, Special Facilities Revenue Bonds, 1/11 at 101.00 AAA 5,196,750 Delta Air Lines Inc., Series 2001A, 5.500%, 1/01/18 (Alternative Minimum Tax) - AMBAC Insured 315 Massachusetts Housing Finance Agency, Single Family 6/09 at 100.00 AAA 315,954 Housing Revenue Bonds, Series 71, 5.650%, 6/01/31 (Alternative Minimum Tax) - FSA Insured 5,000 Massachusetts Turnpike Authority, Metropolitan Highway 1/07 at 102.00 AAA 5,058,750 System Revenue Bonds, Senior Series 1997A, 5.000%, 1/01/37 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 9.1% (6.1% OF TOTAL INVESTMENTS) 15,000 Detroit City School District, Wayne County, Michigan, No Opt. Call AAA 18,181,050 Unlimited Tax School Building and Site Improvement Bonds, Series 2001A, 6.000%, 5/01/29 - FSA Insured 11,000 Kent Hospital Finance Authority, Michigan, Revenue Bonds, 7/11 at 101.00 AA*** 12,094,500 Spectrum Health, Series 2001A, 5.500%, 1/15/31 (Pre-refunded to 7/15/11) 1,235 Michigan State Building Authority, Revenue Bonds, Facilities 10/11 at 100.00 AA- 1,345,594 Program, Series 2001I, 5.500%, 10/15/18 3,485 Michigan State Hospital Finance Authority, Hospital Revenue No Opt. Call AAA 3,770,352 Refunding Bonds, Sisters of Mercy Health Corporation, Series 1993P, 5.375%, 8/15/14 - MBIA Insured Michigan State Hospital Finance Authority, Hospital Revenue Refunding Bonds, Sparrow Obligated Group, Series 2001: 1,400 5.500%, 11/15/21 11/11 at 101.00 A+ 1,463,448 2,500 5.625%, 11/15/31 11/11 at 101.00 A+ 2,595,450 1,355 Michigan State Hospital Finance Authority, Hospital Revenue 8/08 at 101.00 BB- 1,286,396 Bonds, Detroit Medical Center Obligated Group, Series 1998A, 5.250%, 8/15/23 12,640 Royal Oak Hospital Finance Authority, Michigan, Hospital 11/11 at 100.00 AAA 13,075,448 Revenue Bonds, William Beaumont Hospital, Series 2001M, 5.250%, 11/15/31 - MBIA Insured 2,395 Ypsilanti Community Utilities Authority, Washtenaw County, 5/11 at 100.00 AAA 2,509,697 Michigan, General Obligation Bonds, Sanitary Sewerage System 3, Series 2001, 5.100%, 5/01/31 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 0.4% (0.3% OF TOTAL INVESTMENTS) 2,350 Dakota County Community Development Agency, Minnesota, 10/11 at 105.00 Aaa 2,473,845 GNMA Collateralized Multifamily Housing Revenue Bonds, Rose Apartments Project, Series 2001, 6.350%, 10/20/37 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ MISSISSIPPI - 0.4% (0.2% OF TOTAL INVESTMENTS) 2,155 Mississippi Business Finance Corporation, GNMA Collateralized 5/09 at 103.00 AAA 2,199,630 Retirement Facility Mortgage Revenue Refunding Bonds, Aldersgate Retirement Community Inc. Project, Series 1999A, 5.450%, 5/20/34 - ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 2.5% (1.7% OF TOTAL INVESTMENTS) 2,000 Fenton, Missouri, Tax Increment Refunding and Improvement 10/12 at 100.00 N/R 2,043,900 Revenue Bonds, Gravois Bluffs Redevelopment Project, Series 2002, 6.125%, 10/01/21 Missouri Development Finance Board, Cultural Facilities Revenue Bonds, Nelson Gallery Foundation, Series 2001A: 3,335 5.250%, 12/01/19 - MBIA Insured 12/11 at 100.00 AAA 3,587,459 3,510 5.250%, 12/01/20 - MBIA Insured 12/11 at 100.00 AAA 3,754,507 3,695 5.250%, 12/01/21 - MBIA Insured 12/11 at 100.00 AAA 3,952,394 2,040 5.250%, 12/01/22 - MBIA Insured 12/11 at 100.00 AAA 2,175,395 67 Nuveen Dividend Advantage Municipal Fund 3 (NZF) (continued) Portfolio of INVESTMENTS October 31, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MONTANA - 0.8% (0.6% OF TOTAL INVESTMENTS) $ 5,000 Montana Board of Investments, Exempt Facility Revenue 7/10 at 101.00 B1 $ 5,194,350 Bonds, Stillwater Mining Company, Series 2000, 8.000%, 7/01/20 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ NEBRASKA - 1.0% (0.7% OF TOTAL INVESTMENTS) Nebraska Investment Finance Authority, Single Family Housing Revenue Bonds, Series 2001D: 2,570 5.250%, 9/01/21 (Alternative Minimum Tax) 9/11 at 100.00 AAA 2,633,967 3,460 5.375%, 9/01/32 (Alternative Minimum Tax) 9/11 at 100.00 AAA 3,521,207 - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 7.9% (5.3% OF TOTAL INVESTMENTS) 35,000 Clark County, Nevada, Limited Tax General Obligation Bank 7/10 at 100.00 AAA 37,458,750 Bonds, Series 2000, 5.500%, 7/01/30 - MBIA Insured 2,000 Director of Nevada State Department of Business and Industry, 1/10 at 100.00 AAA 2,066,840 Revenue Bonds, Las Vegas Monorail Project, First Tier, Series 2000, 5.375%, 1/01/40 - AMBAC Insured 4,000 Director of Nevada State Department of Business and Industry, 1/10 at 102.00 N/R 4,172,320 Revenue Bonds, Las Vegas Monorail Project, Second Tier, Series 2000, 7.375%, 1/01/40 350 Nevada Housing Division, Single Family Mortgage Bonds, 4/08 at 101.50 Aaa 359,440 Senior Series 1998A-1, 5.300%, 4/01/18 (Alternative Minimum Tax) 4,290 University of Nevada, Revenue Bonds, Community College 1/12 at 100.00 AAA 4,558,554 System, Series 2001A, 5.250%, 7/01/26 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ NEW HAMPSHIRE - 0.4% (0.2% OF TOTAL INVESTMENTS) 2,000 New Hampshire Health and Education Authority, Hospital 10/11 at 101.00 Aaa 2,170,660 Revenue Bonds, Concord Hospital, Series 2001, 5.500%, 10/01/21 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 2.4% (1.6% OF TOTAL INVESTMENTS) 10,000 New Jersey Economic Development Authority, Water Facilities 11/12 at 101.00 Aaa 10,361,900 Revenue Bonds, American Water Company, Series 2002A, 5.250%, 11/01/32 (Alternative Minimum Tax) - AMBAC Insured 4,125 New Jersey Transit Corporation, Certificates of Participation, No Opt. Call AAA 4,537,087 Federal Transit Administration Grants, Series 2002A, 5.500%, 9/15/13 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 5.3% (3.5% OF TOTAL INVESTMENTS) 1,780 East Rochester Housing Authority, New York, GNMA Secured 10/11 at 101.00 AAA 1,829,324 Revenue Bonds, Gates Senior Housing Inc., Series 2001, 5.300%, 4/20/31 5,350 Metropolitan Transportation Authority, New York, Dedicated 11/11 at 100.00 AAA 5,759,222 Tax Fund Bonds, Series 2001A, 5.000%, 11/15/31 (Pre-refunded to 11/15/11) - FGIC Insured 4,155 Monroe County Airport Authority, New York, Revenue Refunding No Opt. Call AAA 4,526,956 Bonds, Greater Rochester International Airport, Series 1999, 5.750%, 1/01/13 (Alternative Minimum Tax) - MBIA Insured 2,500 New York City, New York, General Obligation Bonds, Fiscal 8/12 at 100.00 AAA 2,761,400 Series 2002G, 5.625%, 8/01/20 - MBIA Insured New York City Municipal Water Finance Authority, New York, Water and Sewerage System Revenue Bonds, Fiscal Series 2001A: 8,610 5.500%, 6/15/33 - MBIA Insured 6/10 at 101.00 AAA 9,257,989 5,710 5.500%, 6/15/33 - FGIC Insured 6/10 at 101.00 AAA 6,139,735 2,000 New York State Tobacco Settlement Financing Corporation, 6/11 at 100.00 AA- 2,162,740 Tobacco Settlement Asset-Backed and State Contingency Contract-Backed Bonds, Series 2003B-1C, 5.500%, 6/01/16 - ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 0.3% (0.2% OF TOTAL INVESTMENTS) 1,800 North Carolina Municipal Power Agency 1, Catawba Electric No Opt. Call A3 1,956,762 Revenue Bonds, Series 2003A, 5.500%, 1/01/13 - ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 2.4% (1.6% OF TOTAL INVESTMENTS) 3,350 Ohio Housing Finance Agency, GNMA Mortgage-Backed 3/08 at 101.50 AAA 3,437,134 Securities Program Residential Mortgage Revenue Bonds, Series 1998A-1, 5.300%, 9/01/19 (Alternative Minimum Tax) - FSA Insured 7,600 Ohio Water Development Authority, Solid Waste Disposal 9/09 at 102.00 N/R 7,857,336 Revenue Bonds, Bay Shore Power, Series 1998B, 6.625%, 9/01/20 (Alternative Minimum Tax) 68 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ OHIO (continued) Portage County, Ohio, General Obligation Bonds, Series 2001: $ 1,870 5.000%, 12/01/21 - FGIC Insured 12/11 at 100.00 AAA $ 1,956,357 1,775 5.000%, 12/01/23 - FGIC Insured 12/11 at 100.00 AAA 1,847,668 - ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 0.4% (0.3% OF TOTAL INVESTMENTS) 2,500 Oklahoma Development Finance Authority, Revenue Refunding 8/09 at 101.00 AAA 2,713,850 Bonds, Hillcrest Healthcare System, Series 1999A, 5.625%, 8/15/29 (Pre-refunded to 8/15/09) - ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 2.5% (1.7% OF TOTAL INVESTMENTS) 4,700 Oregon Health, Housing, Educational and Cultural Facilities 11/11 at 101.00 AAA 4,962,777 Authority, Revenue Bonds, PeaceHealth Project, Series 2001, 5.250%, 11/15/21 - AMBAC Insured 10,000 Oregon Housing and Community Services Department, 7/10 at 100.00 Aaa 10,303,500 Multifamily Housing Revenue Bonds, Series 2000A, 6.050%, 7/01/42 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 1.9% (1.3% OF TOTAL INVESTMENTS) Allegheny County Hospital Development Authority, Pennsylvania, Revenue Bonds, West Penn Allegheny Health System, Series 2000B: 2,000 9.250%, 11/15/22 11/10 at 102.00 B1 2,390,560 2,000 9.250%, 11/15/30 11/10 at 102.00 B1 2,381,800 3,500 Pennsylvania Economic Development Financing Authority, 1/06 at 100.00 BB 3,523,415 Senior Lien Resource Recovery Revenue Bonds, Northampton Generating Project, Series 1994A, 6.600%, 1/01/19 (Alternative Minimum Tax) 3,205 Philadelphia School District, Pennsylvania, General Obligation 8/12 at 100.00 AAA 3,562,646 Bonds, Series 2002B, 5.625%, 8/01/16 (Pre-refunded to 8/01/12) - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 1.6% (1.1% OF TOTAL INVESTMENTS) 2,185 Greenville County, South Carolina, Special Source Revenue 4/11 at 101.00 AAA 2,372,320 Bonds, Road Improvement Project, Series 2001, 5.500%, 4/01/21 - AMBAC Insured 6,850 South Carolina Transportation Infrastructure Bank, Revenue 10/11 at 100.00 Aaa 7,528,219 Bonds, Series 2001A, 5.500%, 10/01/22 (Pre-refunded to 10/01/11) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 1.4% (0.9% OF TOTAL INVESTMENTS) 5,210 Memphis-Shelby County Airport Authority, Tennessee, 3/11 at 100.00 AAA 5,562,092 Airport Revenue Bonds, Series 2001A, 5.500%, 3/01/14 (Alternative Minimum Tax) - FSA Insured 1,330 Tennessee Housing Development Agency, Homeownership 1/09 at 101.00 AA 1,360,816 Program Bonds, Series 1998-2, 5.350%, 7/01/23 (Alternative Minimum Tax) 1,385 Tennessee Housing Development Agency, Homeownership 7/11 at 100.00 AA 1,418,115 Program Bonds, Series 2001-3A, 5.200%, 7/01/22 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 18.0% (12.1% OF TOTAL INVESTMENTS) 1,125 Brushy Creek Municipal Utility District, Williamson County, 6/09 at 100.00 Aaa 1,170,630 Texas, Combination Unlimited Tax and Revenue Refunding Bonds, Series 2001, 5.125%, 6/01/26 - FSA Insured 3,850 Dallas-Ft. Worth International Airport, Texas, Joint Revenue 11/11 at 100.00 AAA 4,006,772 Refunding and Improvement Bonds, Series 2001A, 5.500%, 11/01/35 (Alternative Minimum Tax) - FGIC Insured 5,000 Decatur Hospital Authority, Texas, Revenue Bonds, Wise 9/14 at 100.00 N/R 5,384,600 Regional Health System, Series 2004A, 7.000%, 9/01/25 Collins and Denton Counties, Frisco, Texas, General Obligation Bonds, Series 2001: 1,910 5.000%, 2/15/20 - FGIC Insured 2/11 at 100.00 AAA 1,989,036 2,005 5.000%, 2/15/21 - FGIC Insured 2/11 at 100.00 AAA 2,085,160 4,040 Harris County, Texas, Tax and Revenue Certificates of 8/11 at 100.00 AA+ 4,136,516 Obligation, Series 2001, 5.000%, 8/15/27 7,000 Houston, Texas, Subordinate Lien Airport System Revenue 7/08 at 101.00 AAA 7,326,200 Bonds, Series 1998B, 5.250%, 7/01/14 (Alternative Minimum Tax) - FGIC Insured Houston, Texas, Subordinate Lien Airport System Revenue Refunding Bonds, Series 2001A: 2,525 5.500%, 7/01/13 (Alternative Minimum Tax) - FGIC Insured 1/12 at 100.00 AAA 2,682,535 2,905 5.500%, 7/01/14 (Alternative Minimum Tax) - FGIC Insured 1/12 at 100.00 AAA 3,113,347 6,000 Houston, Texas, Junior Lien Water and Sewerage System No Opt. Call AAA 6,871,680 Revenue Refunding Bonds, Series 2001B, 5.500%, 12/01/29 - MBIA Insured 69 Nuveen Dividend Advantage Municipal Fund 3 (NZF) (continued) Portfolio of INVESTMENTS October 31, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS (continued) Jefferson County Health Facilities Development Corporation, Texas, FHA-Insured Mortgage Revenue Bonds, Baptist Hospital of Southeast Texas, Series 2001: $ 8,500 5.400%, 8/15/31 - AMBAC Insured 8/11 at 100.00 AAA $ 8,784,835 8,500 5.500%, 8/15/41 - AMBAC Insured 8/11 at 100.00 AAA 8,873,320 10,700 Laredo Independent School District, Webb County, Texas, 8/11 at 100.00 AAA 11,036,622 General Obligation Refunding Bonds, Series 2001, 5.000%, 8/01/25 2,500 Matagorda County Navigation District 1, Texas, Collateralized No Opt. Call AAA 2,628,175 Revenue Refunding Bonds, Houston Light and Power Company, Series 1997, 5.125%, 11/01/28 (Alternative Minimum Tax) - AMBAC Insured 1,540 Medina Valley Independent School District, Medina County, 2/11 at 100.00 Aaa 1,601,431 Texas, General Obligation Bonds, Series 2001, 5.250%, 2/15/26 5,430 Mineral Wells Independent School District, Pale Pinto and 2/08 at 100.00 Aaa 5,472,951 Parker Counties, Texas, Unlimited School Tax Building and Refunding Bonds, Series 1998, 4.750%, 2/15/22 3,000 North Central Texas Health Facilities Development Corporation, 2/08 at 102.00 AAA 3,157,500 Revenue Bonds, Texas Health Resources System, Series 1997B, 5.375%, 2/15/26 - MBIA Insured 3,045 Port of Houston Authority, Harris County, Texas, General 10/11 at 100.00 AAA 3,226,482 Obligation Port Improvement Bonds, Series 2001B, 5.500%, 10/01/17 (Alternative Minimum Tax) - FGIC Insured 10,915 Texas Department of Housing and Community Affairs, 7/11 at 100.00 AAA 11,354,984 Residential Mortgage Revenue Bonds, Series 2001A, 5.350%, 7/01/33 (Alternative Minimum Tax) 15,700 Texas Water Development Board, Senior Lien State Revolving 1/07 at 100.00 AAA 16,009,761 Fund Revenue Bonds, Series 1996B, 5.125%, 7/15/18 - ------------------------------------------------------------------------------------------------------------------------------------ UTAH - 1.0% (0.8% OF TOTAL INVESTMENTS) Utah Housing Corporation, Single Family Mortgage Bonds, Series 2001E: 2,055 5.200%, 1/01/18 (Alternative Minimum Tax) 7/11 at 100.00 AA- 2,075,632 630 5.500%, 1/01/23 (Alternative Minimum Tax) 7/11 at 100.00 Aa2 645,485 Utah Housing Corporation, Single Family Mortgage Bonds, Series 2001F-1: 2,575 4.950%, 7/01/18 (Alternative Minimum Tax) 7/11 at 100.00 Aa2 2,588,467 650 5.300%, 7/01/23 (Alternative Minimum Tax) 7/11 at 100.00 AA- 651,586 - ------------------------------------------------------------------------------------------------------------------------------------ VIRGINIA - 0.8% (0.5% OF TOTAL INVESTMENTS) 7,000 Pocahontas Parkway Association, Virginia, Senior Lien Revenue 8/08 at 77.58 BB- 4,638,690 Bonds, Route 895 Connector Toll Road, Series 1998B, 0.000%, 8/15/13 - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 15.9% (10.7% OF TOTAL INVESTMENTS) Bellingham Housing Authority, Washington, Housing Revenue Bonds, Varsity Village Project, Series 2001A: 1,000 5.500%, 12/01/27 - MBIA Insured 12/11 at 100.00 Aaa 1,074,440 2,000 5.600%, 12/01/36 - MBIA Insured 12/11 at 100.00 Aaa 2,154,320 2,090 Public Utility District 1, Benton County, Washington, Electric 11/11 at 100.00 AAA 2,294,695 Revenue Refunding Bonds, Series 2001A, 5.625%, 11/01/15 - FSA Insured 1,500 Grays Harbor County Public Utility District 1, Washington, 1/11 at 100.00 AAA 1,576,410 Electric System Revenue Bonds, Series 2001, 5.125%, 1/01/22 - AMBAC Insured 2,475 Klickitat County Public Utility District 1, Washington, Electric 12/11 at 100.00 AAA 2,538,137 Revenue Bonds, Series 2001B, 5.000%, 12/01/26 - AMBAC Insured 12,955 Port of Seattle, Washington, Passenger Facility Charge Revenue 12/08 at 101.00 AAA 13,558,962 Bonds, Series 1998B, 5.300%, 12/01/16 (Alternative Minimum Tax) - AMBAC Insured Port of Seattle, Washington, Revenue Bonds, Series 2001B: 2,535 5.625%, 4/01/18 (Alternative Minimum Tax) - FGIC Insured 10/11 at 100.00 AAA 2,723,097 16,000 5.100%, 4/01/24 (Alternative Minimum Tax) - FGIC Insured 10/08 at 100.00 AAA 16,157,120 5,680 Seattle, Washington, Municipal Light and Power Revenue 3/11 at 100.00 AAA 6,123,381 Refunding and Improvement Bonds, Series 2001, 5.500%, 3/01/18 - FSA Insured 4,530 Tacoma, Washington, Solid Waste Utility Revenue Refunding 12/11 at 100.00 AAA 4,808,550 Bonds, Series 2001, 5.250%, 12/01/21 - AMBAC Insured 2,250 Washington, Certificates of Participation, Washington 7/09 at 100.00 AAA 2,375,955 Convention and Trade Center, Series 1999, 5.250%, 7/01/14 - MBIA Insured 70 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON (continued) Washington State Healthcare Facilities Authority, Revenue Bonds, Group Health Cooperative of Puget Sound, Series 2001: $ 3,005 5.375%, 12/01/17 - AMBAC Insured 12/11 at 101.00 AAA $ 3,201,046 2,915 5.375%, 12/01/18 - AMBAC Insured 12/11 at 101.00 AAA 3,098,732 3,720 Washington State Healthcare Facilities Authority, Revenue 10/11 at 100.00 Aaa 3,966,004 Bonds, Children's Hospital and Regional Medical Center, Series 2001, 5.375%, 10/01/18 - AMBAC Insured Washington State Healthcare Facilities Authority, Revenue Bonds, Good Samaritan Hospital, Series 2001: 5,480 5.500%, 10/01/21 - RAAI Insured 10/11 at 101.00 AA 5,774,112 25,435 5.625%, 10/01/31 - RAAI Insured 10/11 at 101.00 AA 26,717,687 - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 4.5% (3.0% OF TOTAL INVESTMENTS) Appleton, Wisconsin, Waterworks Revenue Refunding Bonds, Series 2001: 3,705 5.375%, 1/01/20 - FGIC Insured 1/12 at 100.00 Aaa 3,980,763 1,850 5.000%, 1/01/21 - FGIC Insured 1/12 at 100.00 Aaa 1,932,121 1,735 Evansville Community School District, Dane, Green and Rock 4/11 at 100.00 AAA 1,896,301 Counties, Wisconsin, General Obligation Refunding Bonds, Series 2001, 5.500%, 4/01/20 (Pre-refunded to 4/01/11) - FGIC Insured 12,250 La Crosse, Wisconsin, Pollution Control Revenue Refunding 12/08 at 102.00 AAA 13,074,058 Bonds, Dairyland Power Cooperative, Series 1997B, 5.550%, 2/01/15 - AMBAC Insured 4,000 Wisconsin Health and Educational Facilities Authority, Revenue 10/11 at 101.00 AA- 4,111,320 Bonds, Froedtert and Community Health Obligated Group, Series 2001, 5.375%, 10/01/30 2,500 Wisconsin Health and Educational Facilities Authority, Revenue 2/12 at 100.00 BBB+ 2,635,325 Bonds, Marshfield Clinic, Series 2001B, 6.000%, 2/15/25 - ------------------------------------------------------------------------------------------------------------------------------------ $ 875,845 Total Long-Term Investments (cost $876,144,872) - 148.5% 916,634,769 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.0% 12,722,987 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (50.5)% (312,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 617,357,756 ====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. * 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. ** Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's or Moody's rating. *** Securities are backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensures the timely payment of principal and interest. Such securities are normally considered to be equivalent to AAA rated securities. N/R Investment is not rated. # On December 9, 2002, UAL Corporation, the holding company of United Air Lines, Inc., filed for federal bankruptcy protection. The Adviser determined that it was likely United would not remain current on their interest payment obligations with respect to these bonds and thus has stopped accruing interest. (a) The issuer has received a preliminary adverse determination from the Internal Revenue Service (the "IRS") regarding the tax-exempt status of the bonds' coupon payments. The Fund will continue to treat coupon payments as tax-exempt income until such time that it is formally determined that the interest on the bonds should be treated as taxable. See accompanying notes to financial statements. 71 Statement of ASSETS AND LIABILITIES October 31, 2005
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF) - ------------------------------------------------------------------------------------------------------------------------------------ ASSETS Investments, at market value (cost $1,303,227,964, $951,789,105, $996,471,718, $813,884,644, $629,002,629, $876,144,872, respectively) $1,387,993,621 $1,019,106,800 $1,054,176,907 $872,545,517 $675,355,575 $916,634,769 Receivables: Interest 21,966,104 18,216,696 16,896,706 13,391,987 11,552,426 15,315,541 Investments sold 7,317,146 25,313 315,000 12,446,520 -- -- Other assets 93,233 71,186 76,623 63,656 41,441 29,469 - ------------------------------------------------------------------------------------------------------------------------------------ Total assets 1,417,370,104 1,037,419,995 1,071,465,236 898,447,680 686,949,442 931,979,779 - ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES Cash overdraft 4,092,123 2,850,375 544,486 1,448,168 1,702,016 2,107,935 Payable for investments purchased 3,510,675 -- 300,556 1,500,000 -- -- Accrued expenses: Management fees 729,742 540,333 558,800 316,855 186,094 249,293 Other 343,431 247,020 264,819 188,994 132,634 203,132 Preferred share dividends payable 149,649 104,194 114,382 107,017 66,495 61,663 - ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 8,825,620 3,741,922 1,783,043 3,561,034 2,087,239 2,622,023 - ------------------------------------------------------------------------------------------------------------------------------------ Preferred shares, at liquidation value 479,000,000 358,000,000 380,000,000 295,000,000 222,000,000 312,000,000 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares $ 929,544,484 $ 675,678,073 $ 689,682,193 $599,886,646 $462,862,203 $617,357,756 ==================================================================================================================================== Common shares outstanding 59,914,073 43,025,594 45,540,872 39,267,491 29,290,868 40,310,119 ==================================================================================================================================== Net asset value per Common share outstanding (net assets applicable to Common shares, divided by Common shares outstanding) $ 15.51 $ 15.70 $ 15.14 $ 15.28 $ 15.80 $ 15.32 ==================================================================================================================================== NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF: - ------------------------------------------------------------------------------------------------------------------------------------ Common shares, $.01 par value per share $ 599,141 $ 430,256 $ 455,409 $ 392,675 $ 292,909 $ 403,101 Paid-in surplus 836,423,631 601,030,545 635,502,550 558,149,941 416,265,287 572,845,047 Undistributed net investment income 6,510,536 6,201,663 4,150,977 3,699,460 4,862,141 4,240,488 Accumulated net realized gain (loss)from investments and forward swaps 1,245,519 697,914 (8,131,932) (21,016,303) (4,911,080) (620,777) Net unrealized appreciation of investments and forward swaps 84,765,657 67,317,695 57,705,189 58,660,873 46,352,946 40,489,897 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares $ 929,544,484 $ 675,678,073 $ 689,682,193 $599,886,646 $462,862,203 $617,357,756 ==================================================================================================================================== Authorized shares: Common 200,000,000 200,000,000 200,000,000 Unlimited Unlimited Unlimited Preferred 1,000,000 1,000,000 1,000,000 Unlimited Unlimited Unlimited ====================================================================================================================================
See accompanying notes to financial statements. 72 Statement of OPERATIONS Year Ended October 31, 2005
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF) - ------------------------------------------------------------------------------------------------------------------------------------ INVESTMENT INCOME $ 72,018,498 $54,878,043 $ 55,161,965 $ 46,690,539 $36,299,236 $46,971,241 - ------------------------------------------------------------------------------------------------------------------------------------ EXPENSES Management fees 8,670,646 6,417,409 6,636,074 5,577,273 4,264,004 5,763,859 Preferred shares - auction fees 1,197,500 895,000 950,000 737,500 555,000 780,000 Preferred shares - dividend disbursing agent fees 50,000 50,000 40,000 30,000 30,000 30,000 Shareholders' servicing agent fees and expenses 181,169 110,995 120,604 15,992 6,830 9,233 Custodian's fees and expenses 308,025 218,409 229,236 191,424 141,290 193,156 Directors'/Trustees' fees and expenses 25,485 17,735 18,610 16,006 11,679 16,273 Professional fees 60,718 67,252 57,647 294,094 43,036 40,397 Shareholders' reports - printing and mailing expenses 112,561 82,137 87,642 69,645 52,815 73,238 Stock exchange listing fees 23,334 19,310 17,736 15,383 1,356 3,432 Investor relations expense 190,137 137,870 144,608 119,846 88,826 120,611 Other expenses 60,690 63,958 64,099 49,049 40,915 45,718 - ------------------------------------------------------------------------------------------------------------------------------------ Total expenses before custodian fee credit, expense reimbursement, and legal fee refund 10,880,265 8,080,075 8,366,256 7,116,212 5,235,751 7,075,917 Custodian fee credit (72,965) (57,595) (55,451) (59,219) (32,939) (44,064) Expense reimbursement -- -- -- (2,150,119) (2,064,478) (2,809,757) Legal fee refund -- (62,458) -- -- (21,923) -- - ------------------------------------------------------------------------------------------------------------------------------------ Net expenses 10,807,300 7,960,022 8,310,805 4,906,874 3,116,411 4,222,096 - ------------------------------------------------------------------------------------------------------------------------------------ Net investment income 61,211,198 46,918,021 46,851,160 41,783,665 33,182,825 42,749,145 - ------------------------------------------------------------------------------------------------------------------------------------ REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) from investments 1,174,258 739,548 6,140,447 (176,759) 365,453 60,740 Net realized gain (loss) from forward swaps -- -- -- -- (5,034,851) -- Change in net unrealized appreciation (depreciation) of investments (16,746,198) (10,417,790) (18,854,854) (10,221,934) 7,731,035 133,784 Change in net unrealized appreciation (depreciation) of forward swaps -- -- -- -- 3,532,408 -- - ------------------------------------------------------------------------------------------------------------------------------------ Net realized and unrealized gain (loss) (15,571,940) (9,678,242) (12,714,407) (10,398,693) 6,594,045 194,524 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO PREFERRED SHAREHOLDERS From net investment income (9,513,192) (6,994,789) (7,453,196) (5,755,365) (4,391,879) (6,046,697) From accumulated net realized gains from investments (69,318) (47,587) -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Preferred shareholders (9,582,510) (7,042,376) (7,453,196) (5,755,365) (4,391,879) (6,046,697) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from operations $ 36,056,748 $30,197,403 $ 26,683,557 $ 25,629,607 $35,384,991 $36,896,972 ====================================================================================================================================
See accompanying notes to financial statements. 73 Statement of CHANGES IN NET ASSETS
PERFORMANCE PLUS (NPP) MUNICIPAL ADVANTAGE (NMA) MARKET OPPORTUNITY (NMO) ----------------------------- ----------------------------- ------------------------------ YEAR YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED 10/31/05 10/31/04 10/31/05 10/31/04 10/31/05 10/31/04 - ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 61,211,198 $ 62,636,215 $ 46,918,021 $ 47,557,854 $ 46,851,160 $ 47,042,202 Net realized gain (loss) from investments 1,174,258 6,618,657 739,548 687,024 6,140,447 (1,201,262) Net realized gain (loss) from forward swaps -- -- -- -- -- -- Change in net unrealized appreciation (depreciation) of investments (16,746,198) 18,902,259 (10,417,790) 17,410,047 (18,854,854) 17,743,454 Change in net unrealized appreciation (depreciation) of forward swaps -- -- -- -- -- -- Distributions to Preferred shareholders: From net investment income (9,513,192) (4,452,180) (6,994,789) (3,307,419) (7,453,196) (3,607,167) From accumulated net realized gains from investments (69,318) -- (47,587) (42,016) -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from operations 36,056,748 83,704,951 30,197,403 62,305,490 26,683,557 59,977,227 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (56,600,807) (58,236,491) (43,068,628) (44,397,396) (41,760,989) (43,172,754) From accumulated net realized gains from investments (904,764) -- (641,084) (599,790) -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (57,505,571) (58,236,491) (43,709,712) (44,997,186) (41,760,989) (43,172,754) - ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Net proceeds from Common shares issued to shareholders due to reinvestment of distributions -- -- -- 734,804 -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares (21,448,823) 25,468,460 (13,512,309) 18,043,108 (15,077,432) 16,804,473 Net assets applicable to Common shares at the beginning of year 950,993,307 925,524,847 689,190,382 671,147,274 704,759,625 687,955,152 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of year $929,544,484 $950,993,307 $675,678,073 $689,190,382 $689,682,193 $704,759,625 ==================================================================================================================================== Undistributed net investment income at the end of year $ 6,510,536 $ 11,485,116 $ 6,201,663 $ 9,357,409 $ 4,150,977 $ 6,496,073 ====================================================================================================================================
See accompanying notes to financial statements. 74
DIVIDEND ADVANTAGE (NAD) DIVIDEND ADVANTAGE 2 (NXZ) DIVIDEND ADVANTAGE 3 (NZF) ----------------------------- ----------------------------- ------------------------------ YEAR YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED 10/31/05 10/31/04 10/31/05 10/31/04 10/31/05 10/31/04 - ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 41,783,665 $ 42,956,260 $ 33,182,825 $ 32,923,303 $ 42,749,145 $ 42,967,136 Net realized gain (loss) from investments (176,759) 1,200,358 365,453 (470,534) 60,740 530,482 Net realized gain (loss) from forward swaps -- -- (5,034,851) -- -- -- Change in net unrealized appreciation (depreciation) of investments (10,221,934) 16,389,360 7,731,035 18,712,940 133,784 23,226,246 Change in net unrealized appreciation (depreciation) of forward swaps -- -- 3,532,408 (3,532,408) -- -- Distributions to Preferred shareholders: From net investment income (5,755,365) (2,680,807) (4,391,879) (2,061,411) (6,046,697) (2,880,639) From accumulated net realized gains from investments -- -- -- (52,111) -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from operations 25,629,607 57,865,171 35,384,991 45,519,779 36,896,972 63,843,225 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (39,071,157) (40,278,262) (30,220,159) (30,219,035) (38,657,406) (38,879,112) From accumulated net realized gains from investments -- -- -- (850,299) -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (39,071,157) (40,278,262) (30,220,159) (31,069,334) (38,657,406) (38,879,112) - ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Net proceeds from Common shares issued to shareholders due to reinvestment of distributions -- 475,057 145,668 -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares (13,441,550) 18,061,966 5,310,500 14,450,445 (1,760,434) 24,964,113 Net assets applicable to Common shares at the beginning of year 613,328,196 595,266,230 457,551,703 443,101,258 619,118,190 594,154,077 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of year $599,886,646 $613,328,196 $462,862,203 $457,551,703 $617,357,756 $619,118,190 ==================================================================================================================================== Undistributed net investment income at the end of year $ 3,699,460 $ 6,910,277 $ 4,862,141 $ 6,314,546 $ 4,240,488 $ 6,237,051 ====================================================================================================================================
See accompanying notes to financial statements. 75 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 Performance Plus Municipal Fund, Inc. (NPP), Nuveen Municipal Advantage Fund, Inc. (NMA), Nuveen Municipal Market Opportunity Fund, Inc. (NMO), Nuveen Dividend Advantage Municipal Fund (NAD), Nuveen Dividend Advantage Municipal Fund 2 (NXZ) and Nuveen Dividend Advantage Municipal Fund 3 (NZF). Performance Plus (NPP), Municipal Advantage (NMA), Market Opportunity (NMO) and Dividend Advantage (NAD) are traded on the New York Stock Exchange while Dividend Advantage 2 (NXZ) and Dividend Advantage 3 (NZF) 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 by investing primarily in a diversified portfolio of municipal obligations issued by state and local government authorities or certain U.S. territories. Effective January 1, 2005, Nuveen Advisory Corp. ("NAC"), the Funds' previous Adviser, and its affiliate, Nuveen Institutional Advisory Corp. ("NIAC"), were merged into Nuveen Asset Management ("NAM"), each wholly owned subsidiaries of Nuveen Investments, Inc. ("Nuveen"). As a result of the merger, NAM is now the Adviser to all funds previously advised by either NAC or NIAC. 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 market value based on yields or prices of municipal bonds of comparable quality, type of issue, coupon, maturity and rating, indications of value from securities dealers, evaluations of anticipated cash flows or collateral and general market conditions. Prices of derivative investments 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 derivative investment, 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 are 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 and delayed delivery purchase commitments. At October 31, 2005, Performance Plus (NPP) and Dividend Advantage (NAD) had outstanding when-issued purchase commitments of $3,510,675 and $1,500,000, respectively. There were no such outstanding purchase commitments in any of the other Funds. 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. Professional Fees Professional fees presented in the Statement of Operations consist of legal fees incurred in the normal course of operations, audit fees, tax consulting fees and, in some cases, workout expenditures. Workout expenditures are incurred in an attempt to protect or enhance an investment, or to pursue other claims or legal actions on behalf of Fund shareholders. Legal fee refunds presented on the Statement of Operations for Municipal Advantage (NMA) and Dividend Advantage 2 (NXZ) reflect a refund of workout expenditures paid in a prior reporting period. 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, to retain such tax-exempt status when distributed to shareholders of the Funds. All monthly tax-exempt income dividends paid dur- 76 ing the fiscal year ended October 31, 2005, 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. 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:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF) - --------------------------------------------------------------------------------------------------------- Number of shares: Series M 4,000 3,000 4,000 4,000 3,000 -- Series T 4,000 3,000 4,000 4,000 3,000 -- Series W 4,000 3,000 3,200 -- -- 4,160 Series TH 3,160 2,320 -- 3,800 -- 4,160 Series F 4,000 3,000 4,000 -- 2,880 4,160 - --------------------------------------------------------------------------------------------------------- Total 19,160 14,320 15,200 11,800 8,880 12,480 =========================================================================================================
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 mitigate the negative impact that an increase in long-term interest rates could have on Common share net asset value. Forward interest rate swap transactions involve each Fund's agreement with the counterparty to pay, in the future, a fixed rate payment in exchange for the counterparty paying the Fund a variable 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 would increase or decrease in value based primarily on the extent to which long-term interest rates for bonds having a maturity of the swaps' termination date were to increase or decrease. The Funds may close out a contract prior to the effective date, at which point a realized gain or loss would be recognized. When a forward 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 minimize 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, 2005, 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 Director/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. 77 Notes to FINANCIAL STATEMENTS (continued) 2. FUND SHARES Transactions in Common shares were as follows:
MUNICIPAL MARKET PERFORMANCE PLUS (NPP) ADVANTAGE (NMA) OPPORTUNITY (NMO) ---------------------- ------------------ ------------------- YEAR YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED 10/31/05 10/31/04 10/31/05 10/31/04 10/31/05 10/31/04 - --------------------------------------------------------------------------------------------------------- Common shares issued to shareholders due to reinvestment of distributions -- -- -- 45,261 -- -- ========================================================================================================= DIVIDEND DIVIDEND DIVIDEND ADVANTAGE (NAD) ADVANTAGE 2 (NXZ) ADVANTAGE 3 (NZF) ------------------------ ------------------ ------------------- YEAR YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED 10/31/05 10/31/04 10/31/05 10/31/04 10/31/05 10/31/04 - --------------------------------------------------------------------------------------------------------- Common shares issued to shareholders due to reinvestment of distributions -- 29,786 8,868 -- -- -- =========================================================================================================
3. SECURITIES TRANSACTIONS Purchases and sales (including maturities) of investments in long-term municipal securities during the fiscal year ended October 31, 2005, were as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF) - ---------------------------------------------------------------------------------------------------------------- Purchases $89,358,777 $86,369,787 $71,369,446 $ 97,805,032 $10,760,952 $29,580,519 Sales and maturities 90,450,330 84,214,663 76,975,481 112,504,170 16,414,755 29,845,707 ================================================================================================================
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. At October 31, 2005, the cost of investments was as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF) - ---------------------------------------------------------------------------------------------------------------- Cost of investments $1,302,540,432 $950,605,250 $996,121,660 $812,979,519 $632,784,855 $875,958,051 ================================================================================================================
Gross unrealized appreciation and gross unrealized depreciation of investments at October 31, 2005, were as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF) - ---------------------------------------------------------------------------------------------------------------- Gross unrealized: Appreciation $87,734,466 $73,499,633 $ 74,373,534 $61,502,599 $50,162,357 $42,579,076 Depreciation (2,281,277) (4,998,083) (16,318,287) (1,936,601) (7,591,637) (1,902,358) - ---------------------------------------------------------------------------------------------------------------- Net unrealized appreciation of investments $85,453,189 $68,501,550 $ 58,055,247 $59,565,998 $42,570,720 $40,676,718 ================================================================================================================
78 The tax components of undistributed net investment income and net realized gains at October 31, 2005, were as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF) - ---------------------------------------------------------------------------------------------------------------- Undistributed net tax-exempt income * $10,432,188 $8,492,542 $7,024,566 $5,873,482 $6,955,460 $7,219,217 Undistributed net ordinary income ** 4,065 154,403 192,454 -- 12,183 -- Undistributed net long-term capital gains 1,245,519 593,511 -- -- -- -- ================================================================================================================
* Undistributed net tax-exempt income (on a tax basis) has not been reduced for the dividend declared on October 3, 2005, paid on November 1, 2005. ** 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 fiscal years ended October 31, 2005 and October 31, 2004, was designated for purposes of the dividends paid deduction as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 2005 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF) - ---------------------------------------------------------------------------------------------------------------- Distributions from net tax-exempt income $66,204,330 $50,312,299 $49,472,483 $45,021,305 $34,591,779 $44,838,770 Distributions from net ordinary income ** 238,651 -- -- -- -- -- Distributions from net long-term capital gains 974,082 688,671 -- -- -- -- ================================================================================================================
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 2004 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF) - ---------------------------------------------------------------------------------------------------------------- Distributions from net tax-exempt income $62,627,198 $47,642,154 $46,733,618 $42,925,745 $32,249,670 $41,658,844 Distributions from net ordinary income ** -- 11,261 -- -- 11 -- Distributions from net long-term capital gains -- 641,806 -- -- 902,410 -- ================================================================================================================
** Net ordinary income consists of taxable market discount income and net short-term capital gains, if any. At October 31, 2005, 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: MARKET DIVIDEND DIVIDEND DIVIDEND OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NMO) (NAD) (NXZ) (NZF) - ------------------------------------------------------------------------------- Expiration year: 2007 $ -- $ 1,724,693 $ -- $ -- 2008 -- 14,462,547 -- -- 2009 -- -- -- -- 2010 -- -- -- 620,777 2011 7,158,008 4,594,300 -- -- 2012 973,824 -- 246,691 -- 2013 -- 104,763 402,153 -- - ------------------------------------------------------------------------------- Total $8,131,932 $20,886,303 $648,844 $620,777 =============================================================================== 79 Notes to FINANCIAL STATEMENTS (continued) 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 the Adviser, 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: PERFORMANCE PLUS (NPP) AVERAGE DAILY NET ASSETS MUNICIPAL ADVANTAGE (NMA) (INCLUDING NET ASSETS MARKET OPPORTUNITY (NMO) 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 ================================================================================ DIVIDEND ADVANTAGE (NAD) AVERAGE DAILY NET ASSETS DIVIDEND ADVANTAGE 2 (NXZ) (INCLUDING NET ASSETS DIVIDEND ADVANTAGE 3 (NZF) 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, 2005, the complex-level fee rate was .1905%. 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. 80 The management fee compensates the Adviser for overall investment advisory and administrative services and general office facilities. The Funds pay no compensation directly to their Directors/Trustees who are affiliated with the Adviser or to their Officers, all of whom receive remuneration for their services to the Funds from the Adviser 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 Dividend Advantage's (NAD) 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 JULY 31, JULY 31, - -------------------------------------------------------------------------------- 1999* .30% 2005 .25% 2000 .30 2006 .20 2001 .30 2007 .15 2002 .30 2008 .10 2003 .30 2009 .05 2004 .30 ================================================================================ * From the commencement of operations. The Adviser has not agreed to reimburse Dividend Advantage (NAD) for any portion of its fees and expenses beyond July 31, 2009. For the first ten years of Dividend Advantage 2's (NXZ) 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, - -------------------------------------------------------------------------------- 2001* .30% 2007 .25% 2002 .30 2008 .20 2003 .30 2009 .15 2004 .30 2010 .10 2005 .30 2011 .05 2006 .30 ================================================================================ * From the commencement of operations. The Adviser has not agreed to reimburse Dividend Advantage 2 (NXZ) for any portion of its fees and expenses beyond March 31, 2011. For the first ten years of Dividend Advantage 3's (NZF) 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 SEPTEMBER 30, SEPTEMBER 30, - -------------------------------------------------------------------------------- 2001* .30% 2007 .25% 2002 .30 2008 .20 2003 .30 2009 .15 2004 .30 2010 .10 2005 .30 2011 .05 2006 .30 ================================================================================ * From the commencement of operations. The Adviser has not agreed to reimburse Dividend Advantage 3 (NZF) for any portion of its fees and expenses beyond September 30, 2011. 6. ANNOUNCEMENT REGARDING PARENT COMPANY OF ADVISER In early April, 2005, The St. Paul Travelers Companies, Inc. ("St. Paul Travelers"), which owned 79% of Nuveen, (A) completed a public offering of a substantial portion of its equity stake in Nuveen, (B) sold Nuveen $200 million of its Nuveen shares, (C) entered into an agreement with Nuveen to sell an additional $400 million of its Nuveen shares on a "forward" basis with payment for and settlement of these shares delayed for several months, and (D) entered into agreements with two unaffiliated investment banking firms to sell an amount equal to most or all of its remaining Nuveen shares for current payment but for future settlement. Transactions (C) and (D) above were settled in late July, which effectively reduced St. Paul Travelers' controlling stake in Nuveen and was deemed an "assignment" (as defined in the 1940 Act) of the investment management agreements between the Funds and the Adviser, which resulted in the automatic termination of each agreement under the 1940 Act. In anticipation of such deemed assignment, the Board of Directors/Trustees had approved new ongoing investment management agreements for each Fund and the submission of those agreements for approval by each respective Fund's shareholders, which shareholder approval was received prior to the settlement of transactions (C) and (D). The new ongoing management agreements took effect upon such settlement. 81 Notes to FINANCIAL STATEMENTS (continued) 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, 2005, to shareholders of record on November 15, 2005, as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF) - --------------------------------------------------------------------------------------------------------- Dividend per share $.0745 $.0795 $.0725 $.0790 $.0860 $.0770 =========================================================================================================
82 Financial HIGHLIGHTS 83 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 ==================================================================================================================================== PERFORMANCE PLUS (NPP) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2005 $15.87 $1.02 $ (.26) $(.16) $ -- $ .60 $ (.94) $(.02) $(.96) 2004 15.45 1.04 .42 (.07) -- 1.39 (.97) -- (.97) 2003 15.38 1.07 .05 (.07) -- 1.05 (.95) (.03) (.98) 2002 15.57 1.09 (.22) (.10) (.01) .76 (.90) (.04) (.94) 2001 14.36 1.10 1.17 (.23) -- 2.04 (.83) -- (.83) MUNICIPAL ADVANTAGE (NMA) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2005 16.02 1.09 (.24) (.16) -- .69 (1.00) (.01) (1.01) 2004 15.62 1.11 .41 (.08) -- 1.44 (1.03) (.01) (1.04) 2003 15.41 1.13 .25 (.07) (.01) 1.30 (1.02) (.07) (1.09) 2002 15.65 1.15 (.22) (.10) (.03) .80 (.94) (.10) (1.04) 2001 14.61 1.16 1.10 (.24) (.03) 1.99 (.87) (.08) (.95) MARKET OPPORTUNITY (NMO) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2005 15.48 1.03 (.29) (.16) -- .58 (.92) -- (.92) 2004 15.11 1.03 .37 (.08) -- 1.32 (.95) -- (.95) 2003 14.60 1.03 .50 (.08) -- 1.45 (.94) -- (.94) 2002 15.24 1.11 (.70) (.11) (.01) .29 (.91) (.02) (.93) 2001 14.45 1.16 .80 (.26) (.01) 1.69 (.87) (.03) (.90) DIVIDEND ADVANTAGE (NAD) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2005 15.62 1.06 (.25) (.15) -- .66 (1.00) -- (1.00) 2004 15.17 1.09 .46 (.07) -- 1.48 (1.03) -- (1.03) 2003 14.94 1.10 .19 (.07) -- 1.22 (.99) -- (.99) 2002 14.84 1.13 .01 (.10) -- 1.04 (.94) -- (.94) 2001 13.59 1.16 1.21 (.24) -- 2.13 (.88) -- (.88) DIVIDEND ADVANTAGE 2 (NXZ) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2005 15.63 1.13 .22 (.15) -- 1.20 (1.03) -- (1.03) 2004 15.13 1.12 .51 (.07) -- 1.56 (1.03) (.03) (1.06) 2003 14.89 1.16 .17 (.07) -- 1.26 (1.01) (.01) (1.02) 2002 15.07 1.15 (.32) (.10) -- .73 (.91) (.01) (.92) 2001(a) 14.33 .52 .88 (.09) -- 1.31 (.45) -- (.45) DIVIDEND ADVANTAGE 3 (NZF) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2005 15.36 1.06 .01 (.15) -- .92 (.96) -- (.96) 2004 14.74 1.06 .59 (.07) -- 1.58 (.96) -- (.96) 2003 14.56 1.07 .10 (.07) -- 1.10 (.93) -- (.93) 2002 14.47 1.03 .16 (.10) -- 1.09 (.91) -- (.91) 2001(b) 14.33 .03 .14 -- -- .17 -- -- -- ==================================================================================================================================== 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** ============================================================================================================== PERFORMANCE PLUS (NPP) - -------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2005 $ -- $15.51 $14.43 3.02% 3.83% 2004 -- 15.87 14.95 9.10 9.30 2003 -- 15.45 14.64 9.58 6.97 2002 (.01) 15.38 14.28 4.51 5.03 2001 -- 15.57 14.58 26.96 14.51 MUNICIPAL ADVANTAGE (NMA) - -------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2005 -- 15.70 $15.19 3.29 4.42 2004 -- 16.02 15.70 8.82 9.57 2003 -- 15.62 15.44 13.17 8.71 2002 -- 15.41 14.66 5.89 5.39 2001 -- 15.65 14.85 23.35 13.97 MARKET OPPORTUNITY (NMO) - -------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2005 -- 15.14 $14.19 4.70 3.78 2004 -- 15.48 14.44 7.97 9.00 2003 -- 15.11 14.29 10.62 10.24 2002 -- 14.60 13.80 .49 2.03 2001 -- 15.24 14.65 20.03 11.93 DIVIDEND ADVANTAGE (NAD) - -------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2005 -- 15.28 $14.58 1.77 4.27 2004 -- 15.62 15.31 8.37 10.06 2003 -- 15.17 15.12 11.41 8.41 2002 -- 14.94 14.50 2.01 7.26 2001 -- 14.84 15.14 27.35 16.03 DIVIDEND ADVANTAGE 2 (NXZ) - -------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2005 -- 15.80 $15.64 8.58 7.83 2004 -- 15.63 15.38 11.16 10.67 2003 -- 15.13 14.85 14.39 8.67 2002 .01 14.89 13.91 (.81) 5.16 2001(a) (.12) 15.07 14.96 2.75 8.39 DIVIDEND ADVANTAGE 3 (NZF) - -------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2005 -- 15.32 $14.41 6.11 6.09 2004 -- 15.36 14.50 12.45 11.10 2003 .01 14.74 13.80 9.04 7.82 2002 (.09) 14.56 13.53 (4.26) 7.20 2001(b) (.03) 14.47 15.07 .47 .98 ============================================================================================================== Ratios/Supplemental Data --------------------------------------------------------------------------------------------------- Before Credit/ After Credit/ Reimbursement/Refund Reimbursement/Refund*** -------------------------------- ------------------------------ 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 ==================================================================================================================================== PERFORMANCE PLUS (NPP) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2005 $929,544 1.15% 6.45% 1.14% 6.46% 6% 2004 950,993 1.17 6.69 1.17 6.70 11 2003 925,525 1.18 6.89 1.18 6.90 10 2002 921,376 1.18 7.11 1.17 7.12 11 2001 932,937 1.15 7.29 1.14 7.30 14 MUNICIPAL ADVANTAGE (NMA) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2005 675,678 1.17 6.81 1.16 6.82 8 2004 689,190 1.19 7.00 1.18 7.00 4 2003 671,147 1.21 7.27 1.20 7.27 7 2002 662,270 1.22 7.55 1.22 7.55 17 2001 672,673 1.23 7.60 1.22 7.61 18 MARKET OPPORTUNITY (NMO) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2005 689,682 1.19 6.66 1.18 6.67 7 2004 704,760 1.21 6.75 1.19 6.77 4 2003 687,955 1.25 6.94 1.25 6.94 9 2002 664,914 1.24 7.50 1.24 7.51 13 2001 694,025 1.23 7.73 1.23 7.74 11 DIVIDEND ADVANTAGE (NAD) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2005 599,887 1.17 6.48 .80 6.84 11 2004 613,328 1.14 6.69 .70 7.12 7 2003 595,266 1.35 6.78 .89 7.24 3 2002 586,045 1.25 7.24 .80 7.70 7 2001 581,089 1.26 7.56 .78 8.04 12 DIVIDEND ADVANTAGE 2 (NXZ) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2005 462,862 1.12 6.66 .67 7.12 2 2004 457,552 1.14 6.87 .69 7.32 3 2003 443,101 1.17 7.20 .71 7.66 11 2002 435,907 1.17 7.32 .70 7.79 9 2001(a) 441,308 1.13* 5.56* .63* 6.06* 5 DIVIDEND ADVANTAGE 3 (NZF) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2005 617,358 1.13 6.39 .68 6.84 3 2004 619,118 1.15 6.64 .69 7.10 3 2003 594,154 1.17 6.80 .71 7.26 3 2002 586,799 1.17 6.78 .70 7.25 7 2001(b) 583,100 .72* 2.05* .42* 2.36* 1 ==================================================================================================================================== Preferred Shares at End of Period ----------------------------------------- Aggregate Liquidation Amount and Market Asset Outstanding Value Coverage (000) Per Share Per Share =========================================================================== PERFORMANCE PLUS (NPP) - --------------------------------------------------------------------------- Year Ended 10/31: 2005 $479,000 $25,000 $73,515 2004 479,000 25,000 74,634 2003 479,000 25,000 73,305 2002 479,000 25,000 73,089 2001 444,000 25,000 77,530 MUNICIPAL ADVANTAGE (NMA) - --------------------------------------------------------------------------- Year Ended 10/31: 2005 358,000 25,000 72,184 2004 358,000 25,000 73,128 2003 358,000 25,000 71,868 2002 358,000 25,000 71,248 2001 358,000 25,000 71,974 MARKET OPPORTUNITY (NMO) - --------------------------------------------------------------------------- Year Ended 10/31: 2005 380,000 25,000 70,374 2004 380,000 25,000 71,366 2003 380,000 25,000 70,260 2002 380,000 25,000 68,744 2001 380,000 25,000 70,660 DIVIDEND ADVANTAGE (NAD) - --------------------------------------------------------------------------- Year Ended 10/31: 2005 295,000 25,000 75,838 2004 295,000 25,000 76,977 2003 295,000 25,000 75,446 2002 295,000 25,000 74,665 2001 295,000 25,000 74,245 DIVIDEND ADVANTAGE 2 (NXZ) - --------------------------------------------------------------------------- Year Ended 10/31: 2005 222,000 25,000 77,124 2004 222,000 25,000 76,526 2003 222,000 25,000 74,899 2002 222,000 25,000 74,089 2001(a) 222,000 25,000 74,697 DIVIDEND ADVANTAGE 3 (NZF) - --------------------------------------------------------------------------- Year Ended 10/31: 2005 312,000 25,000 74,468 2004 312,000 25,000 74,609 2003 312,000 25,000 72,608 2002 312,000 25,000 72,019 2001(b) -- -- -- ===========================================================================
* Annualized. ** Total Investment 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, expense reimbursement, and legal fee refund, 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, where applicable. (a) For the period March 27, 2001 (commencement of operations) through October 31, 2001. (b) For the period September 25, 2001 (commencement of operations) through October 31, 2001. See accompanying notes to financial statements. 84-85 SPREAD 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 IN POSITION(S) YEAR FIRST PRINCIPAL OCCUPATION(S) FUND COMPLEX NAME, BIRTHDATE HELD WITH ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY AND ADDRESS THE FUNDS 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 Nuveen Investments, 156 3/28/49 the Board Inc., Nuveen Investments, LLC, Nuveen Advisory Corp. and 333 W. Wacker Drive and Trustee Nuveen Institutional Advisory Corp.(3); Director (since 1996) Chicago, IL 60606 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 Board member 1997 Private Investor and Management Consultant. 156 8/22/40 333 W. Wacker Drive Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Lawrence H. Brown Board member 1993 Retired (since 1989) as Senior Vice President of The 156 7/29/34 Northern Trust Company; Director (since 2002) Community 333 W. Wacker Drive Advisory Board for Highland Park and Highwood, United Chicago, IL 60606 Way of the North Shore. - ------------------------------------------------------------------------------------------------------------------------------------ Jack B. Evans Board member 1999 President, The Hall-Perrine Foundation, a private philanthropic 156 10/22/48 corporation (since 1996); Director and Vice Chairman, United 333 W. Wacker Drive Fire Group, a publicly held company; Adjunct Faculty Member, Chicago, IL 60606 University of Iowa; Director, Gazette Companies; Life Trustee of Coe College; Director, 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 and Distinguished Professor of Finance, School of 156 3/6/48 Business at the University of Connecticut (since 2002); 333 W. Wacker Drive previously, Senior Vice President and Director of Research Chicago, IL 60606 at the Federal Reserve Bank of Chicago (1995-2003); Director (since 1997), Credit Research Center at Georgetown University; Director (since 2004) of Xerox Corporation. - ------------------------------------------------------------------------------------------------------------------------------------ David J. Kundert Board member 2005 Retired (since 2004) as Chairman, JPMorgan Fleming Asset 154 10/28/42 Management, President and CEO, Banc One Investment 333 W. Wacker Drive Advisors Corporation, and President, One Group Mutual Chicago, IL 60606 Funds; prior thereto, Executive Vice President, Banc One Corporation and Chairman and CEO, Banc One Investment Management Group; Board of Regents, Luther College; currently a member of the American and Wisconsin Bar Associations. 86 NUMBER OF PORTFOLIOS IN POSITION(S) YEAR FIRST PRINCIPAL OCCUPATION(S) FUND COMPLEX NAME, BIRTHDATE HELD WITH ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY AND ADDRESS THE FUNDS 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 Ltd., a real estate 156 9/24/44 investment company; formerly, Senior Partner and Chief 333 W. Wacker Drive Operating Officer (retired, December 2004), of Miller-Valentine Chicago, IL 60606 Group; formerly, Vice President, Miller-Valentine Realty, a construction company; 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 Dorothy Donnelley 156 12/29/47 Foundation (since 1994); prior thereto, Executive Director, 333 W. Wacker Drive Great Lakes Protection Fund (from 1990 to 1994). Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Eugene S. Sunshine Board member 2005 Senior Vice President for Business and Finance, 156 1/22/50 Northwestern University (since 1997); Director (since 2003), 333 W. Wacker Drive Chicago Board Options Exchange; Director (since 2003), Chicago, IL 60606 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 IN POSITION(S) YEAR FIRST FUND COMPLEX NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) OVERSEEN BY AND ADDRESS THE FUNDS APPOINTED(4) DURING PAST 5 YEARS OFFICER - ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS OF THE FUND: - ------------------------------------------------------------------------------------------------------------------------------------ Gifford R. Zimmerman Chief 1988 Managing Director (since 2002), Assistant Secretary and 156 9/9/56 Administrative Associate General Counsel, formerly, Vice President and 333 W. Wacker Drive Officer Assistant General Counsel, of Nuveen Investments, LLC; Chicago, IL 60606 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. (since 2003); Chartered Financial Analyst. 87 Board Members AND OFFICERS (CONTINUED) NUMBER OF PORTFOLIOS IN POSITION(S) YEAR FIRST FUND COMPLEX NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) OVERSEEN BY AND ADDRESS THE FUNDS APPOINTED(4) DURING PAST 5 YEARS OFFICER - ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS OF THE FUNDS (CONTINUED): - ------------------------------------------------------------------------------------------------------------------------------------ Julia L. Antonatos Vice President 2004 Managing Director (since 2005), formerly Vice President 156 9/22/63 (since 2002); formerly, Assistant Vice President (since 2000) 333 W. Wacker Drive of Nuveen Investments, LLC; Chartered Financial Analyst. Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Michael T. Atkinson Vice President 2000 Vice President (since 2002), formerly, Assistant Vice 156 2/3/66 and Assistant President (since 2000) of Nuveen Investments, LLC. 333 W. Wacker Drive Secretary Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Peter H. D'Arrigo Vice President 1999 Vice President of Nuveen Investments, LLC (since 1999); Vice 156 11/28/67 and Treasurer President and Treasurer (since 1999) of Nuveen Investments, 333 W. Wacker Drive Inc.; Vice President and Treasurer (1999-2004) of Nuveen Chicago, IL 60606 Advisory Corp. and Nuveen Institutional Advisory Corp.(3); Vice 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); Chartered Financial Analyst. - ------------------------------------------------------------------------------------------------------------------------------------ John N. Desmond Vice President 2005 Vice President, Director of Investment Operations, Nuveen 156 8/24/61 Investments, LLC (since January 2005); formerly, Director, 333 W. Wacker Drive Business Manager, Deutsche Asset Management (2003-2004), Chicago, IL 60606 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 Secretary and 156 9/24/64 and Secretary Assistant General Counsel (since 1998) formerly, Assistant 333 W. Wacker Drive Vice President (since 1998) of Nuveen Investments, LLC; Chicago, IL 60606 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), formerly, Vice President of 156 10/24/45 Nuveen Investments, LLC, Managing Director (2004) formerly, 333 W. Wacker Drive Vice President (1998-2004) of Nuveen Advisory Corp. and Chicago, IL 60606 Nuveen Institutional Advisory Corp.(3); Managing Director (since 2005) of Nuveen Asset Management. - ------------------------------------------------------------------------------------------------------------------------------------ William M. Fitzgerald Vice President 1995 Managing Director (since 2002), formerly, Vice President of 156 3/2/64 Nuveen Investments; Managing Director (1997-2004) of 333 W. Wacker Drive Nuveen Advisory Corp. and Nuveen Institutional Advisory Chicago, IL 60606 Corp.(3); Managing Director of Nuveen Asset Management (since 2001); Vice President of Nuveen Investments Advisers Inc. (since 2002); Chartered Financial Analyst. 88 NUMBER OF PORTFOLIOS IN POSITION(S) YEAR FIRST FUND COMPLEX NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) OVERSEEN BY AND ADDRESS THE FUNDS APPOINTED(4) DURING PAST 5 YEARS OFFICER - ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS OF THE FUNDS (CONTINUED): - ------------------------------------------------------------------------------------------------------------------------------------ Stephen D. Foy Vice President 1998 Vice President (since 1993) and Funds Controller (since 1998) 156 5/31/54 and Controller of Nuveen Investments, LLC; formerly, Vice President and 333 W. Wacker Drive Funds Controller (1998-2004) of Nuveen Investments, Inc.; Chicago, IL 60606 Certified Public Accountant. - ------------------------------------------------------------------------------------------------------------------------------------ James D. Grassi Vice President 2004 Vice President and Deputy Director of Compliance (since 2004) 156 4/13/56 and Chief of Nuveen Investments, LLC, Nuveen Investments Advisers Inc., 333 W. Wacker Drive Compliance Nuveen Asset Management and Rittenhouse Asset Management, Chicago, IL 60606 Officer Inc.; previously, Vice President and Deputy Director of Compliance (2004) of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3); formerly, Senior Attorney (1994-2004), The Northern Trust Company. - ------------------------------------------------------------------------------------------------------------------------------------ David J. Lamb Vice President 2000 Vice President (since 2000) of Nuveen Investments, 156 3/22/63 LLC; Certified Public Accountant. 333 W. Wacker Drive Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Tina M. Lazar Vice President 2002 Vice President of Nuveen Investments, LLC (since 1999). 156 8/27/61 333 W. Wacker Drive Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Larry W. Martin Vice President 1988 Vice President, Assistant Secretary and Assistant General 156 7/27/51 and Assistant Counsel of Nuveen Investments, LLC; Vice President and 333 W. Wacker Drive Secretary Assistant Secretary of Nuveen Advisory Corp. and Nuveen Chicago, IL 60606 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).
(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 At a meeting held on May 10-12, 2005, the Board of Trustees of the Funds, including the independent Trustees, unanimously approved the Investment Management Agreement between each Fund and NAM. THE APPROVAL PROCESS To assist the Board in its evaluation of an advisory contract with NAM, the independent Trustees received a report in adequate time in advance of their meeting which outlined, among other things, the services provided by NAM; the organization of NAM, including the responsibilities of various departments and key personnel; the Fund's past performance as well as the Fund's performance compared to funds of similar investment objectives compiled by an independent third party (a "Peer Group"); the profitability of NAM and certain industry profitability analyses for advisers to unaffiliated investment companies; the expenses of NAM in providing the various services; the management fees of NAM, including comparisons of such fees with the management fees of comparable funds in its Peer Group as well as comparisons of NAM's management fees with the fees NAM assesses to other types of investment products or accounts, if any; the soft dollar practices of NAM; and the expenses of each Fund, including comparisons of the Fund's expense ratios (after any fee waivers) with the expense ratios of its Peer Group. This information supplements that received by the Board throughout the year regarding Fund performance, expense ratios, portfolio composition, trade execution and sales activity. In addition to the foregoing materials, independent legal counsel to the independent Trustees provided, in advance of the meeting, a legal memorandum outlining, among other things, the duties of the Trustees under 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 Board meeting, NAM 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 each Investment Management Agreement with NAM. 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 NAM; (b) the investment performance of the Fund and NAM; (c) the costs of the services to be provided and profits to be realized by NAM and its affiliates from the relationship with the Fund; (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 evaluating the nature, extent and quality of NAM's services, the Trustees reviewed information concerning the types of services that NAM or its affiliates provide and are expected to provide to the Nuveen Funds; narrative and statistical information concerning the Fund's performance record and how such performance compares to the Fund's Peer Group; information describing NAM's organization and its various departments, the experience and responsibilities of key personnel, and available resources. In the discussion of key personnel, the Trustees received materials regarding the changes or additions in personnel of NAM. The Trustees further noted the willingness of the personnel of NAM to engage in open, candid discussions with the Board. The Trustees further considered the quality of NAM's investment process in making portfolio management decisions, including any refinements or improvements to the portfolio management processes, enhancements to technology and systems that are available to portfolio managers, and any additions of new personnel which may strengthen or expand the research and investment capabilities of NAM. In their review of the advisory contracts for the fixed income funds, such as the Funds, the Trustees also noted that Nuveen won the Lipper Award for Best Fund Family: Fixed Income-Large Asset Class, for 2004. Given the Trustees' experience with the Funds, other Nuveen funds and NAM, the Trustees noted that they were familiar with and continue to have a good understanding of the organization, operations and personnel of NAM. 90 In addition to advisory services, the independent Trustees considered the quality of the administrative or non-advisory services provided. In this regard, NAM 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 addition to investment management services, NAM and its affiliates provide each Fund with a wide range of services, including: preparing shareholder reports; providing daily accounting; providing quarterly financial statements; overseeing and coordinating the activities of other service providers; administering and organizing Board meetings and preparing the Board materials for such meetings; providing legal support (such as helping to prepare registration statements, amendments thereto and proxy statements and responding to regulatory inquiries); and performing other Fund administrative tasks necessary for the operation of the respective Fund (such as tax reporting and fulfilling regulatory filing requirements). In addition, in evaluating the administrative services, the Trustees considered, in particular, NAM's policies and procedures for assuring compliance with applicable laws and regulations in light of the new SEC regulations governing compliance. The Trustees noted NAM's focus on compliance and its compliance systems. In their review, the Trustees considered, among other things, the additions of experienced personnel to NAM's compliance group and modifications and other enhancements to NAM's computer systems. In addition to the foregoing, the Trustees also noted that NAM outsources certain services that cannot be replicated without significant costs or at the same level of expertise. Such outsourcing has been a beneficial and efficient use of resources by keeping expenses low while obtaining quality services. In addition to the above, in reviewing the variety of additional services that NAM or its affiliates must provide to closed-end funds, such as the Funds, the independent Trustees determined that Nuveen's commitment to supporting the secondary market for the common shares of its closed-end funds is particularly noteworthy. In this regard, the Trustees noted Nuveen's efforts to sponsor numerous forums for analysts and specialists regarding the various Nuveen closed-end funds, its creation of a new senior position dedicated to providing secondary market support services and enhancing communications with investors and analysts, and its advertising and media relations efforts designed to raise investor and analyst awareness of the closed-end funds. With respect to services provided to municipal funds, including the Funds, the Trustees also noted, among other things, the enhancements NAM implemented to its municipal portfolio management processes (e.g., the increased use of benchmarks to guide and assess the performance of its portfolio managers); the implementation of a risk management program; and the various initiatives being undertaken to enhance or modify NAM's computer systems as necessary to support the innovations of the municipal investment team (such as, the ability to assess certain historical data in order to create customized benchmarks, perform attribution analysis and facilitate the use of derivatives as hedging instruments). With respect to certain of the Nuveen funds with a less seasoned portfolio, the Trustees also noted the hedging program implemented for such funds and the team responsible for developing, implementing and monitoring the hedging procedures. The hedging program was designed to help maintain the applicable fund's duration with certain benchmarks. Based on their review, the Trustees concluded that, overall, they were satisfied with the nature, extent and quality of services provided (and expected to be provided) to the Funds under the Investment Management Agreements. B. THE INVESTMENT PERFORMANCE OF THE FUND AND ADVISER As previously noted, the Board received a myriad of performance information regarding each Fund and its Peer Group. Among other things, the Board received materials reflecting a Fund's historic performance and the Fund's performance compared to its Peer Group. In evaluating the performance information, in certain limited instances, the Trustees noted that the closest Peer Group for a Fund still would not adequately reflect such Fund's investment objectives and strategies, thereby limiting the usefulness of the comparisons of such Fund's performance with that of the Peer Group. As noted above, the performance data included, among other things, the respective Fund's performance relative to its peers. More specifically, a Fund's one-, three- and five-year total returns (as applicable) for the periods ending December 31, 2004 were evaluated relative to the unaffiliated funds in its respective Peer Group (including the returns of individual peers as well as the Peer Group average) as well as additional performance information with respect to all funds in the Peer Group. 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 that a Fund is expected to bear, the Trustees considered the respective Fund's current management fee structure and the Fund's expected expense ratios in absolute terms as well as compared with the fees and expense ratios of the unaffiliated funds in its Peer Group. The Trustees reviewed the financial information of NAM, including its respective revenues, expenses and profitability. In reviewing fees, the Trustees, among other things, reviewed comparisons of the Fund's gross management fees (fees after fund-level and complex-wide level breakpoints but before reimbursement and fee waivers), net management fees (after breakpoints and reimbursements and fee waivers) and total expense ratios (before and after waivers) with those of the unaffiliated funds in the Peer Group and peer averages. In this regard, the Trustees noted that the relative ranking of the Nuveen funds on fees and expenses was aided by the significant level of fee reductions provided by the fund-level and complex-wide breakpoint schedules, and the fee waivers and reimbursements provided by Nuveen for certain funds launched since 1999. The complex-wide breakpoint schedule was instituted in 2004 and is described in further detail below in Section D entitled "Economies of Scale and Whether Fee Levels Reflect these Economies of Scale." In their review of the fee and expense information provided, including, in particular, the expense ratios of the unaffiliated funds in the respective Peer Group, the Trustees determined that each Fund's net total expense ratio was within an acceptable range compared to such peers. 91 ANNUAL INVESTMENT MANAGEMENT AGREEMENT APPROVAL PROCESS (continued) 2. COMPARISONS WITH THE FEES OF OTHER CLIENTS The Trustees further compared the fees of NAM to the fees NAM assessed for other types of clients investing in municipal funds (such as municipal managed accounts). With respect to such separately managed accounts, the advisory fees for such accounts are generally lower than those charged to the comparable Funds. The Trustees noted, however, the additional services that are provided and the costs incurred by Nuveen in managing and operating registered investment companies, such as the Funds, compared to individually managed separate accounts. For instance, as described above, NAM and its affiliates provide numerous services to the Funds including, but not limited to, preparing shareholder reports; providing daily accounting; preparing quarterly financial statements; overseeing and coordinating the activities of other service providers; administering and organizing Board meetings and preparing the Board materials for such meetings; providing legal support; and administering all other aspects of the Fund's operations. Further, the Trustees noted the increased compliance requirements for funds in light of new SEC regulations and other legislation. These services are generally not required to the same extent, if at all, for separate accounts. In addition to the differences in services, the Trustees also considered, among other things, the differences in product distribution, investment policies, investor profiles and account sizes. Accordingly, the Trustees believe that the nature and number of services provided to operate a Fund merit the higher fees than those to separate managed accounts. 3. PROFITABILITY OF NAM In conjunction with its review of fees, the Trustees also considered NAM's profitability. The Trustees reviewed NAM's revenues, expenses and profitability margins (on both a pre-tax and after-tax basis). In reviewing profitability, the Trustees recognized that one of the most difficult issues in determining profitability is establishing a method of allocating expenses. Accordingly, the Trustees reviewed NAM's assumptions and methodology of allocating expenses. In this regard, the methods of allocation used appeared reasonable but the Board noted the inherent limitations in allocating costs among various advisory products. The Trustees also recognized that individual fund or product line profitability of other advisers is generally not publicly available. Further, profitability may be affected by numerous factors including the types of funds managed, expense allocations, business mix, etc. and therefore comparability of profitability is somewhat limited. Nevertheless, to the extent available, the Trustees considered NAM's profit margin compared to the profitability of various publicly-traded investment management companies and/or investment management companies that publicly disclose some or all of their financial results compiled by three independent third-party service providers. The Trustees also reviewed the revenues, expenses and profit margins of various unaffiliated advisory firms with similar amounts of assets under management for the last year prepared by NAM. Based on their review, the Trustees were satisfied that NAM's level of profitability from its relationship with each Fund was reasonable in light of the services provided. In evaluating the reasonableness of the compensation, the Trustees also considered any other revenues paid to NAM as well as any indirect benefits (such as soft dollar arrangements, if any) NAM 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. D. ECONOMIES OF SCALE AND WHETHER FEE LEVELS REFLECT THESE ECONOMIES OF SCALE In reviewing the compensation, the Trustees have long understood the benefits of economies of scale as the assets of a fund grow and have sought to ensure that shareholders share in these benefits. One method for shareholders to share in economies of scale is to include breakpoints in the advisory fee schedules that reduce fees as fund assets grow. Accordingly, the Trustees received and reviewed the schedules of advisory fees for each Fund, including fund-level breakpoints thereto. In addition, after lengthy negotiations with management, the Board in May, 2004 approved a complex-wide fee arrangement pursuant to which fees of the funds in the Nuveen complex, including the Funds, are reduced as the assets in the fund complex reach certain levels. The complex-wide fee arrangement was introduced on August 1, 2004 and the Trustees reviewed data regarding the reductions of fees for the Nuveen funds for the period of August 1, 2004 to December 31, 2004. 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 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 were acceptable and desirable in providing benefits from economies of scale to shareholders. 92 E. INDIRECT BENEFITS In evaluating fees, the Trustees also considered any indirect benefits or profits NAM or its affiliates may receive as a result of its relationship with each Fund. In this regard, the Trustees considered any benefits from soft dollar arrangements. The Trustees noted that although NAM manages a large amount of assets, it has very little, if any, brokerage to allocate. This is due to the fact that NAM typically manages the portfolios of the municipal funds in the Nuveen complex and municipal bonds generally trade on a principal basis. Accordingly, 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. In addition to soft dollar arrangements, the Trustees also considered any other revenues, if any, received by NAM or its affiliates. In this regard, the Trustees considered revenues received by Nuveen for serving as agent for broker-dealers at its preferred trading desk and for acting as co-manager in the initial public offering of new closed-end exchange-traded funds. F. OTHER CONSIDERATIONS Nuveen, until recently, was a majority-owned subsidiary of St. Paul Travelers Companies, Inc. ("St. Paul"). As noted, St. Paul earlier this year announced its intention to divest its equity stake in Nuveen. Nuveen is the parent of NAM. Pursuant to a series of transactions, St. Paul had begun to reduce its interest in Nuveen which will ultimately result in a change of control of Nuveen and therefore NAM. As mandated by the 1940 Act, such a change in control would result in an assignment of the Investment Management Agreements with NAM and the automatic termination of such agreements. Accordingly, the Board also considered the approval of a New Investment Management Agreement with each Fund in light of, and which would take effect upon, the anticipated change of control. More specifically, the Board considered for each Fund a New Investment Management Agreement on substantially identical terms to the existing Investment Management Agreement, to take effect after the change of control has occurred and the contract has been approved by Fund shareholders. In its review, the Board considered whether the various transactions necessary to divest St. Paul's interest will have an impact on the various factors they considered in approving NAM, such as the scope and quality of services to be provided following the change of control. In reviewing the St. Paul transactions, the Board considered, among other things, the impact, if any, on the operations and organizational structure of NAM; the possible benefits and costs of the transactions to the respective Fund; the potential implications of any arrangements used by Nuveen to finance certain of the transactions; the ability of NAM to perform its duties after the transactions; whether a fee structure or expense ratio would change; any changes to the current practices of the respective Fund; any changes to the terms of the advisory agreement; and any anticipated changes to the respective operations of NAM. Based on its review, the Board determined that St. Paul's divestiture would not affect the nature and quality of services provided by NAM, the terms of the respective Investment Management Agreement, including the fees thereunder, and would not materially affect the organization or operations of NAM. Accordingly, the Board determined that their analysis of the various factors regarding their approval of NAM would continue to apply after the change of control. G. 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 NAM's fees are reasonable in light of the services provided to each Fund, that the renewal of the NAM Investment Management Agreements should be approved and that the new, post-change of control NAM Investment Managements Agreement be approved and recommended to shareholders. 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 EXCHANGE-TRADED CLOSED-END FUNDS DIVIDEND REINVESTMENT PLAN Your Nuveen Exchange-Traded 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 Other Useful INFORMATION In April, 2005, The St. Paul Travelers Companies, Inc. ("St. Paul Travelers") sold the majority of its controlling equity interest in Nuveen Investments, Inc. ("Nuveen") to the general public. Nuveen is the parent of Nuveen Asset Management ("NAM"), which is each Fund's investment manager. This sale was deemed to be an "assignment" of the investment management agreement between each Fund and NAM and, if applicable, of the sub-advisory agreement between NAM and the Fund's sub-adviser. As required by law, the shareholders of each Fund were asked to approve a new investment management agreement and, if applicable, a new subadvisory agreement that reflected this change in ownership. The shareholders of each Fund voted this approval at a Shareholders' Meeting on July 26, 2005. There were no changes to the investment objectives or management of any Fund as a result of these actions. 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, 2005, 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. CEO CERTIFICATION DISCLOSURE Each Fund's Chief Executive Officer has submitted to the New York Stock Exchange the annual CEO certification as required by Section 303A.12(a) of the NYSE Listed Company Manual. Each Fund has filed with the Securities and Exchange Commission the certification of its Chief Executive Officer and Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act. 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. LEVERAGE-ADJUSTED 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. Leverage-adjusted duration takes into account the leveraging process for a Fund and therefore is longer than the duration of the Fund's portfolio of bonds. 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 Boston, MA TRANSFER AGENT AND SHAREHOLDER SERVICES State Street Bank & Trust 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. 95 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 $131 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 o Fund details Learn more o Daily financial news about Nuveen Funds at o Investor education WWW.NUVEEN.COM/ETF o Interactive planning tools Logo: NUVEEN Investments EAN-B-1005D 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 Municipal Market Opportunity Fund, Inc. 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 entered into on or after May 6, 2003, 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 BILLED TO FUND BILLED TO FUND BILLED TO FUND - ------------------------------------------------------------------------------------------------------------------------------------ October 31, 2005 $ 30,822 $ 0 $ 520 $ 2,750 - ------------------------------------------------------------------------------------------------------------------------------------ Percentage approved 0% 0% 0% 0% pursuant to pre-approval exception - ------------------------------------------------------------------------------------------------------------------------------------ October 31, 2004 $ 29,423 $ 0 $ 364 $ 2,550 - ------------------------------------------------------------------------------------------------------------------------------------ Percentage approved 0% 0% 0% 0% pursuant to pre-approval exception - ------------------------------------------------------------------------------------------------------------------------------------
The above "All Other Fees" are fees paid to audit firms to perform agreed upon procedures required by the rating agencies to rate fund preferred shares. The above "Tax Fees" were billed for professional services for tax advice, tax compliance, and tax planning. 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 SERVICE PROVIDERS - --------------------------------------------------------------------------------------------------------------------- October 31, 2005 $ 0 $ 282,575 $ 0 - --------------------------------------------------------------------------------------------------------------------- Percentage approved 0% 0% 0% pursuant to pre-approval exception - --------------------------------------------------------------------------------------------------------------------- October 31, 2004 $ 0 $ 0 $ 0 - --------------------------------------------------------------------------------------------------------------------- Percentage approved 0% 0% 0% pursuant to pre-approval exception - ---------------------------------------------------------------------------------------------------------------------
The above "Tax Fees" are primarily fees billed to the Adviser for Fund tax return preparation. 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. For engagements entered into on or after May 6, 2003, 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, 2005 $ 3,270 $ 282,575 $ 0 $ 285,845 October 31, 2004 $ 2,914 $ 0 $ 0 $ 2,914
The above "Non-Audit Fees billed to Adviser" for 2005 include "Tax-Fees" billed to Adviser in the amount of $282,575 from 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. In the rare event that a municipal issuer held by the Fund were to issue a proxy or that the Fund were to receive a proxy issued by a cash management security, the Adviser 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 Fund's Board of Directors or Trustees or its representative. In the case of a conflict of interest, the proxy would be submitted to the applicable Fund's Board to determine how the proxy should be voted. A member of the Adviser's legal department would oversee the administration of the voting, and ensure that records were maintained in accordance with Rule 204-2(c)(2) under the Investment Advisers Act of 1940 (17 CFR 275.204-2(c)(2)), reports were filed with the SEC on Form N-PX, and the results were provided to the Board of Directors or Trustees and made available to shareholders as required by applicable rules. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable at this time. 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 registrant's 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 Municipal Market Opportunity Fund, Inc. ----------------------------------------------------------- By (Signature and Title)* /s/ Jessica R. Droeger ---------------------------------------------- Jessica R. Droeger Vice President and Secretary Date: January 6, 2006 ------------------------------------------------------------------- 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 6, 2006 ------------------------------------------------------------------- By (Signature and Title)* /s/ Stephen D. Foy ---------------------------------------------- Stephen D. Foy Vice President and Controller (principal financial officer) Date: January 6, 2006 ------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature. EX-99.CERT 2 file002.txt CERTIFICATIONS CERTIFICATION I, Gifford R. Zimmerman, certify that: 1. I have reviewed this report on Form N-CSR of Nuveen Municipal Market Opportunity Fund, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) disclosed in this report any change in the registrant's internal control over financial reporting 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; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: January 6, 2006 /s/ Gifford R. Zimmerman ------------------------- -------------------------------- Gifford R. Zimmerman Chief Administrative Officer (principal executive officer) CERTIFICATION I, Stephen D. Foy, certify that: 1. I have reviewed this report on Form N-CSR of Nuveen Municipal Market Opportunity Fund, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) disclosed in this report any change in the registrant's internal control over financial reporting 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; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: January 6, 2006 /s/ Stephen D. Foy ------------------------- -------------------------------- Stephen D. Foy Vice President and Controller (principal financial officer) EX-99.906CERT 3 file003.txt CERTIFICATIONS Certification Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002; provided by the Chief Executive Officer and Chief Financial Officer, based on each such officer's knowledge and belief. The undersigned officers of Nuveen Municipal Market Opportunity Fund, Inc. (the "Fund"), certify that, to the best of each such officer's knowledge and belief: 1. The Form N-CSR of the Fund for the period ended October 31, 2005 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Fund. Date: January 6, 2006 ----------------------- /s/ Gifford R. Zimmerman --------------------------------- Gifford R. Zimmerman Chief Administrative Officer (principal executive officer) /s/ Stephen D. Foy --------------------------------- Stephen D. Foy Vice President, Controller (principal financial officer) -----END PRIVACY-ENHANCED MESSAGE-----