-----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, DZR6deN1Cq5lXicvudQpguJalhptJU+EfPpIXtCMLrxjznzmDY3wYome7doxuJpd ltfhTQl7NwsbkgYa0LKqFw== 0000891804-09-000059.txt : 20090109 0000891804-09-000059.hdr.sgml : 20090109 20090109151659 ACCESSION NUMBER: 0000891804-09-000059 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20081031 FILED AS OF DATE: 20090109 DATE AS OF CHANGE: 20090109 EFFECTIVENESS DATE: 20090109 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NUVEEN INSURED QUALITY MUNICIPAL FUND INC CENTRAL INDEX KEY: 0000869405 IRS NUMBER: 363734233 FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-06206 FILM NUMBER: 09518489 BUSINESS ADDRESS: STREET 1: 333 WEST 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 INSURED QUALITY MUNICIPAL 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 811-06206 --------------------- Nuveen Insured Quality Municipal 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) Kevin J. McCarthy 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, 2008 ------------------ 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 | Nuveen Investments October 31, 2008 | Municipal Closed-End Funds Photo of: Small child NUVEEN INSURED QUALITY MUNICIPAL FUND, INC. NQI NUVEEN INSURED MUNICIPAL OPPORTUNITY FUND, INC. NIO NUVEEN PREMIER INSURED MUNICIPAL INCOME FUND, INC. NIF NUVEEN INSURED PREMIUM INCOME MUNICIPAL FUND 2 NPX NUVEEN INSURED DIVIDEND ADVANTAGE MUNICIPAL FUND NVG NUVEEN INSURED TAX-FREE ADVANTAGE MUNICIPAL FUND NEA | [LOGO] It's not what you earn, it's what you keep.(R) | NUVEEN | Investments Photo of: Man working on computer Life is complex. Nuveen makes things e-simple. -------------------------------------------------- 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. Free e-Reports right to your e-mail! - -------------------------------------------------------------------------------- www.investordelivery.com | www.nuveen.com/accountaccess If you receive your Nuveen Fund | If you receive your Nuveen Fund dividends and statements from your OR dividends and statements directly financial advisor or brokerage account. | from Nuveen. | - -------------------------------------------------------------------------------- [LOGO] NUVEEN Investments Photo of: Robert P. Bremner Chairman's LETTER TO SHAREHOLDERS | Robert P. Bremner | Chairman of the Board Dear Shareholders, I'd like to use my initial letter to you to accomplish several things. First, I want to report that after fourteen years of service on your Fund's Board, including the last twelve as chairman, Tim Schwertfeger retired from the Board in June. The Board has elected me to replace him as the chairman, the first time this role has been filled by someone who is not an employee of Nuveen Investments. Electing an independent chairman marks a significant milestone in the management of your Fund, and it aligns us with what is now considered a "best practice" in the fund industry. Further, it demonstrates the independence with which your Board has always acted on your behalf. Following Tim will not be easy. During my eleven previous years on the Nuveen Fund Board, I found that Tim always set a very high standard by combining insightful industry and market knowledge and sound, clear judgment. While the Board will miss his wise counsel, I am certain we will retain the primary commitment Tim shared with all of us - an unceasing dedication to creating and retaining value for Nuveen Fund shareholders. This focus on value over time is a touchstone that I and all the other Board members will continue to use when making decisions on your behalf. Second, I also want to report that we are very fortunate to welcome two new Board members to our team. John Amboian, the current chairman and CEO of Nuveen Investments, has replaced Tim as Nuveen's representative on the Board. John's presence will allow the independent Board members to benefit not only from his leadership role at Nuveen but also his broad understanding of the fund industry and Nuveen's role within it. We also added Terry Toth as an independent director. A former CEO of the Northern Trust Company's asset management group, Terry will bring extensive experience in the fund industry to our deliberations. Third, on behalf of the entire Board, I would like you to know that we are closely monitoring the unprecedented market developments and their distressing impact on the Funds. We believe that these Funds continue to be actively and constructively managed for the long term and at the same time we are very aware that these are trying times for our investors. We appreciate the patience you have shown with the Board and with Nuveen Investments as they manage your investment through this extremely difficult period. Fourth, again on behalf of the entire Board, I would like to acknowledge the effort the whole Nuveen organization is making to resolve the auction rate preferred share situation in a satisfactory manner. As you know, we are actively pursuing a number of possible solutions, all with the goal of providing liquidity for preferred shareholders while preserving the potential benefits of leverage for common shareholders. We appreciate the patience you have shown as we've worked through the many difficulties involved. Finally, I urge you to take the time to review the Portfolio Manager's Comments, the Common Share Dividend and Share Price Information, and the Performance Overview sections of this report. All of us are grateful that you have chosen Nuveen Investments as a partner as you pursue your financial goals, and, on behalf of myself and the other members of your Fund's Board, let me say we look forward to continuing to earn your trust in the months and years ahead. Sincerely, /s/ Robert P. Bremner Robert P. Bremner Chairman of the Board December 23, 2008 Portfolio Manager's COMMENTS - -------------------------------------------------------------------------------- | NQI, NIO, NIF, Nuveen Investments Municipal Closed-End Funds | NPX, NVG, NEA Portfolio manager Paul Brennan discusses U.S. economic and municipal market conditions, key investment strategies and the twelve-month performance of these six insured Funds. With nineteen years of investment experience, including eleven years at Nuveen, Paul assumed portfolio management responsibility for NQI, NIO, NIF, NPX, NVG and NEA in 2006. WHAT FACTORS AFFECTED THE U.S. ECONOMY AND MUNICIPAL MARKET DURING THE TWELVE-MONTH REPORTING PERIOD ENDED OCTOBER 31, 2008? During this period, stress in the financial and credit markets led to increased price volatility for many securities, reduced liquidity and a general flight to quality. The Federal Reserve (Fed) began in September 2007 a series of interest rate cuts that lowered the fed funds rate by 325 basis points--from 5.25% to 2.00%--over an eight-month period ending April 2008. In October 2008, the Fed announced two additional reductions of 50 basis points each, bringing the fed funds rate down to 1.00%, its lowest level since 2003. (On December 16, after the end of this twelve-month period, the Fed reduced the fed funds rate target to 0.25% or less.) The Fed's rate-cutting actions also were a response to concerns about the pace of U.S. economic growth, as measured by the U.S. gross domestic product (GDP). After declining at an annual rate of 0.2% in the fourth quarter of 2007, GDP improved to a positive 0.9% in the first quarter of 2008 and posted growth of 2.8% in the second quarter of 2008 (all GDP numbers annualized). During the third quarter of 2008, however, GDP contracted at an annual rate of 0.5%, the biggest decrease since 2001, mainly as the result of the first decline in consumer spending since 1991 and an 18% drop in residential investment. The Consumer Price Index (CPI), driven largely by increased energy, food and transportation prices, registered a 3.7% year-over-year gain as of October 2008, while the core CPI (which excludes food and energy) rose 2.2% over this same period, above the Fed's unofficial target of 2.0% or lower. In the labor markets, October 2008 marked the tenth consecutive month of job losses. The national unemployment rate for October 2008 was 6.5%, its highest point in more than fourteen years, up from 4.8% in October 2007. In the municipal bond market, performance was significantly impacted by concerns about the credit markets, downgrades of municipal bond insurers, failed auctions of preferred shares and institutional investors' need to unwind various leveraging strategies. These events created surges of selling pressure, especially in late September and early October 2008. While some investors curtailed purchases, non-traditional buyers of Discussions of specific investments are for illustrative purposes only and are not intended as recommendations of individual investments. The views expressed in this commentary represent those of the portfolio manager as of the date of this report and are subject to change at any time, based on market conditions and other factors. The Funds disclaim any obligation to advise shareholders of such changes. - ---- 4 - ---- municipal bonds such as hedge funds, traditional buyers such as tax-exempt money market funds, and institutions were forced to sell holdings of longer-maturity bonds into a market already experiencing reduced liquidity. Combined with the Fed rate cuts, this selling produced a sharp steepening of the municipal yield curve, as longer-term interest rates rose and short-term rates declined over this period. In this environment, bonds with shorter maturities generally outperformed longer maturity bonds and higher quality bonds tended to outperform lower quality credits. Another item of note in the municipal market was the U.S. Supreme Court's May 2008 ruling that individual states could continue to offer their residents special tax treatment on municipal bonds issued within their borders. The high court's decision preserved tax rules in forty-two states, allowing them to continue to exempt from taxation the income their residents earn on in-state municipal bonds while taxing the income earned on municipal bonds issued in other states. Over the twelve months ended October 31, 2008, municipal bond issuance nationwide totaled $450.3 billion, a drop of 8% from the previous twelve months. The decrease during the month of October 2008 was more dramatic, with new issuance down more than 50% from that of October 2007. In 2008, insured bonds have comprised less than 20% of new supply, compared with the recent historical figure of approximately 50%. While market conditions during this period impacted the demand for municipal bonds, we continued to see demand from investors attracted by higher interest rates and yields relative to taxable bonds. WHAT KEY STRATEGIES WERE USED TO MANAGE THESE FUNDS? During this twelve-month period, with the municipal market characterized by volatility and a relatively steep yield curve, we sought to capitalize on a turbulent environment by continuing to focus on finding relative value by investing for the long term, preserving and enhancing liquidity, and managing duration(1) risk. As events in the general financial markets unfolded, we found attractive opportunities in various sectors of the municipal bond market, using a fundamental approach to identify undervalued sectors and individual credits with the potential to perform well over the long term. It is important to note that, during this reporting period, our strategies for these insured Funds were designed to mitigate some of the uncertainty surrounding bond insurers (please view page 8 for more complete detail). In addition, some portfolio activity was driven by our efforts to boost liquidity or cash reserves. Especially during the commotion of September and October, we believed it was prudent to take defensive measures that would reduce the Funds' exposure to market risk. These measures included pre-emptively selling some holdings and raising the Funds' cash reserves. Throughout the period, we selectively sold some holdings with shorter durations, including pre-refunded(2) bonds. We also took advantage of strong bids to sell bonds (1) Duration is a measure of a bond's price sensitivity as interest rates change, with longer duration bonds displaying more sensitivity to these changes than bonds with shorter durations. (2) Pre-refundings, also known as advance refundings or refinancings, occur when an issuer sells new bonds and uses the proceeds to fund principal and interest payments of older existing bonds. This process often results in lower borrowing costs for bond issuers. ---- 5 ---- that were attractive to the retail market. Given the market environment, retail demand was often strongest for higher credit quality bonds. At all times, we were careful to balance our efforts to enhance liquidity through sales to the retail market with our focus on maintaining the credit quality of our portfolios in an uncertain market. As a key dimension of risk management, we employed a disciplined approach to duration positioning as an important component of our overall strategy. As part of this approach, we used inverse floating rate securities(3), in all of these Funds. Inverse floaters typically provide the dual benefit of bringing the Funds' durations closer to our strategic target and enhancing their income-generation capabilities. HOW DID THE FUNDS PERFORM? Individual results for these Funds, as well as relevant index and peer group information, are presented in the accompanying table. Annualized Total Returns on Common Share Net Asset Value For periods ended 10/31/08 1-Year 5-Year 10-Year NQI -17.24% -0.12% 2.98% NIO -13.45% 0.68% 3.41% NIF -11.92% 1.08% 3.33% NPX -12.98% 0.78% 3.38% NVG -10.64% 1.98% N/A NEA -11.56% 2.13% N/A Lipper Insured Municipal Debt Funds Average(4) -14.93% 0.50% 2.97% Barclays Capital Insured Municipal Bond Index(5) -4.13% 2.65% 4.19% S&P National Municipal Bond Index(6) -4.15% 2.75% N/A For the twelve months ended October 31, 2008, the total returns on common share NAV for NIO, NIF, NPX, NVG and NEA exceeded the average return on the Lipper Insured Municipal Debt Funds Average, while NQI lagged this average. All of the Funds underperformed the Barclays Capital Insured Municipal Bond Index and the Standard & Poor's (S&P) National Municipal Bond Index. Key management factors that influenced the Funds' returns included duration positioning, credit exposure and sector allocations. In addition, a major factor affecting 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. (3) An inverse floating rate security is a financial instrument designed to pay long-term tax-exempt interest at a rate that varies inversely with a short-term tax-exempt interest rate index. For the Nuveen Funds, the index typically used is the Securities Industry and Financial Markets (SIFM) Municipal Swap Index (previously referred to as the Bond Market Association Index or BMA). Inverse floaters, including those inverse floating rate securities in which the Funds invested during this reporting period, are further defined within the Notes to Financial Statements and Glossary of Terms Used in this Report sections of this shareholder report. (4) The Lipper Insured Municipal Debt Funds Average is calculated using the returns of all closed-end funds in this category (all of which are leveraged) for each period as follows: 1 year, 23 funds; 5 years, 21 funds; and 10 years, 16 funds. Fund and Lipper returns assume reinvestment of dividends. (5) The Barclays Capital (formerly Lehman Brothers) Insured Municipal Bond Index is an unleveraged, unmanaged national index comprising a broad range of insured municipal bonds. Results for the Barclays Capital index do not reflect any expenses. (6) The Standard & Poor's (S&P) National Municipal Bond Index is an unleveraged, market value-weighted index designed to measure the performance of the investment-grade U.S. municipal bond market. - ---- 6 - ---- each Fund's performance over this period was the use of leverage. The impact of leverage is discussed in more detail on page eight. Over the period, bonds with maturities of ten years or less outperformed the market as a whole, with bonds maturing in one to six years generally benefiting the most, while bonds with the longest maturities (twenty-two years and longer) posted the worst returns. During this period, the Funds' varying levels of exposure to the longer part of the yield curve had a major influence on their performances relative to one another. NQI, for example, had the greatest exposure to the underperforming longer part of the curve, which hurt its performance. Conversely, NVG benefited from having the shortest duration among these Funds. In addition, the inverse floaters used by all six of these Funds generally had a negative impact on performance. This resulted from the fact that the inverse floaters effectively increased the Funds' exposure to longer maturity bonds at a time when shorter maturities were in favor in the market. Credit exposure, especially exposure to bonds backed by municipal bond insurers, also was a factor in performance during this period. Because risk-averse investors generally sought higher quality investments as disruptions in the financial markets deepened, bonds with higher credit quality ratings typically performed very well. At the same time, as many investors avoided high-yield securities, bonds rated BBB or below and non-rated bonds generally posted poor returns. As of October 31, 2008, NQI, NIO, NIF and NPX all had small holdings (approximately 1.5% or less) of BBB rated bonds. This exposure was generally the result of rating downgrades on certain municipal bond insurers over the past twelve months, rather than the result of any buying by these Funds. NEA, which can invest up to 20% of their assets in uninsured investment-grade quality securities, held approximately 2% in bonds rated BBB as of October 31, 2008. The impact of these lower-rated holdings varied. Insured bonds with underlying credits that were rated BBB or non-rated, originally purchased because of the higher yields they offered and the attractiveness of the underlying credit, experienced a disproportionately negative impact (compared with bonds with underlying credits rated AA or A) if the insurer backing the bond was downgraded from AAA. Sectors of the market that generally helped the Funds' performances included general obligation bonds, water and sewer, and utilities. Pre-refunded bonds, which are backed by U.S. Treasury securities, were one of the top performing segments of the market, due primarily to their shorter effective maturities, higher credit quality and perceived safety. Holdings of pre-refunded bonds ranged from 22% to 32% among these Funds, with NIO and NVG having the heaviest weightings of these issues and NQI the smallest. In general, bonds that carried any credit risk, regardless of sector, continued to post weak performance. Revenue bonds as a whole, and the industrial development sector ---- 7 ---- in particular, underperformed the general municipal market. Next to the industrial development sector, zero coupon bonds were among the worst performing categories, followed by the health care and housing sectors. IMPACT OF THE FUNDS' CAPITAL STRUCTURES AND LEVERAGE STRATEGIES ON PERFORMANCE In addition to the factors mentioned above, one of the primary factors negatively impacting the annual returns of these Funds relative to those of the unleveraged indexes was the Funds' use of financial leverage. While leverage offers opportunities to generate additional income and total returns for common shareholders, the benefits provided by leveraging are influenced by the price movements of the bonds in each Fund's portfolio. During this period, as yields on longer-term bonds rose and their prices correspondingly fell, declining valuations had a negative effect on performance that was magnified by the use of leverage. In addition, at various points during the twelve-month period, the Funds' borrowing costs were relatively high, negatively impacting their total returns. In the turbulent market environment of the past twelve months, the impact of any valuation change in the Fund's holdings - whether positive or negative - was magnified by the use of leverage. RECENT DEVELOPMENTS REGARDING BOND INSURANCE COMPANIES As mentioned earlier, another factor that had an impact on the performance of these Funds was their position in bonds backed by municipal bond insurers that experienced downgrades in their credit ratings. During the period covered by this report, AMBAC, CIFG, FGIC, MBIA, RAAI and SYNCORA (formerly XLCA) experienced one or more rating reductions by at least one or more rating agencies. Subsequent to the reporting period, AMBAC, MBIA and SYNCORA experienced further rating reductions while AGC and FSA received their first rating reductions by at least one rating agency. At the time this report was prepared, at least one rating agency has placed each of these insurers except AGC on "negative outlook" or "negative credit watch," which may presage one or more rating reductions for such insurer or insurers in the future. As concern increased about the balance sheets of these insurers, prices on bonds insured by these companies - especially those bonds with weaker underlying credits - declined, detracting from the Funds' performance. By the end of this period, most insured bonds were being valued according to their fundamentals as if they were uninsured. On the whole, the holdings of all of our Funds continued to be well diversified not only between insured and uninsured bonds, but also within the insured bond category. It is important to note that municipal bonds historically have had a very low rate of default. RECENT CHANGES TO INVESTMENT POLICIES OF NUVEEN INSURED FUNDS During March 2008, the Nuveen Fund Board approved changes to the investment policies of all of the Nuveen insured municipal closed-end Funds. The new policies require that (1) at least 80% of a Fund's net assets (including net assets attributable to - ---- 8 - ---- auction rate preferred shares) must be invested in insured municipal bonds guaranteed by insurers rated A or better by at least one rating agency at the time of purchase; (2) at least 80% of a Fund's net assets (including net assets attributable to auction rate preferred shares) must be invested in municipal bonds rated AA or better by at least one rating agency (with or without insurance), deemed to be of comparable quality by the Adviser, or backed by an escrow or trust containing sufficient U.S. government or government agency securities or U.S. Treasury-issued state and local government securities at the time of purchase; and (3) up to 20% of a Fund's net assets (including net assets attributable to auction rate preferred shares) may be invested in uninsured municipal bonds rated below AA by at least one rating agency or deemed to be of comparable quality by the Adviser at the time of purchase. These policy changes are designed to increase portfolio manager flexibility and retain the insured nature of the Funds' investment portfolios for current and future environments. RECENT DEVELOPMENTS IN THE MARKET ENVIRONMENT Beginning in October, the nation's financial institutions and financial markets--including the municipal bond market--experienced significant turmoil. Reductions in demand decreased valuations of municipal bonds across all credit ratings, especially those with lower credit ratings, and this generally reduced the Funds' net asset values. The municipal market is one in which dealer firms make markets in bonds on a principal basis using their proprietary capital, and during the recent market turmoil these firms' capital was severely constrained. As a result, some firms were unwilling to commit their capital to purchase and to serve as a dealer for municipal bonds. This reduction in dealer involvement in the market was accompanied by significant net selling pressure by investors, particularly with respect to lower-rated municipal bonds, as institutional investors generally removed money from the municipal bond market, at least in part because of their need to reduce the leveraging of their municipal investments. This de-leveraging was in part driven by the overall reduction in the amount of financing available for such leverage, the increased costs of such leverage financing, and the need to reduce leverage levels that had recently increased due to the decline in municipal bond prices. Municipal bond prices were further negatively impacted by concerns that the need for further de-leveraging and a supply overhang as a large amount of new issues were postponed would cause selling pressure to persist for a period of time. In addition to falling prices, these market conditions resulted in greater price volatility of municipal bonds; wider credit spreads (i.e., lower quality bonds fell in price more than higher quality bonds); significantly reduced liquidity (i.e., the ability to sell bonds at a price close to their carrying value), particularly for lower quality bonds; and a lack of price transparency (i.e., the ability to accurately determine the price at which a bond would likely trade). Reduced liquidity was most pronounced in mid-October, and although liquidity improved considerably over ensuing weeks, it may reoccur if financial turmoil persists or worsens. ---- 9 ---- RECENT DEVELOPMENTS IN THE AUCTION RATE PREFERRED SECURITIES MARKETS Beginning in February 2008, more shares for sale were submitted in the regularly scheduled auctions for the auction rate preferred shares issued by these Funds than there were offers to buy. This meant that these auctions "failed to clear" and that many or all auction rate preferred shareholders who wanted to sell their shares in these auctions were unable to do so. This decline in liquidity in auction rate preferred shares did not lower the credit quality of these shares, and auction rate preferred shareholders unable to sell their shares received distributions at the "maximum rate" applicable to failed auctions as calculated in accordance with the pre-established terms of the auction rate preferred shares. On June 11, 2008, Nuveen announced the Fund Board's approval of plans to use tender option bonds (TOBs), also known as floating rate securities, to refinance a portion of the municipal Funds' outstanding auction rate preferred shares, for which auctions have been failing for several months. This plan included an initial phase of approximately $1 billion in forty-one Funds. During the twelve-month reporting period, NQI, NIO, NIF, NVG and NEA redeemed $19,575,000, $56,650,000, $6,050,000, $6,025,000 and $11,200,000 of their outstanding auction rate preferred shares, respectively, at liquidation value, using the proceeds from the issuance of TOBs. On August 7, 2008, NPX issued par redemption notices for all outstanding shares of its auction rate preferred securities totaling $268.9 million. These redemptions were achieved through the issuance of $219 million of variable rate demand preferred shares (VRDP) and the proceeds from the creation of TOBs. VRDP is a new instrument designed to replace the auction rate preferred securities used as leverage in many Nuveen closed-end funds. VRDP is offered only to qualified institutional buyers, as defined pursuant to Rule 144A under the Securities Act of 1933. For current, up-to-date information, please visit the Nuveen CEF Auction Rate Preferred Resource Center at: http://www.nuveen.com/ResourceCenter/AuctionRatePreferred.aspx. - ----- 10 - ----- Common Share Dividend and Share Price INFORMATION - -------------------------------------------------------------------------------- During the twelve-month period ended October 31, 2008, there was one dividend increase in NQI, NIO, NIF and NVG, while the dividends of NPX and NEA remained stable throughout the reporting period. Due to capital gains generated by normal portfolio activity, common shareholders of NIO received a long-term capital gains distribution of $0.0019 per share at the end of December 2007. 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, 2008, NQI, NIO, NIF, NPX and NVG had positive UNII balances for tax purposes and negative UNII balances for financial statement purposes. NEA had a zero UNII balance for tax purposes and a negative UNII balance for financial statement purposes. The Funds' Board of Directors/Trustees approved an open-market share repurchase program on July 30, 2008, under which each Fund may repurchase up to 10% of its common shares. As of October 31, 2008, the Funds had not repurchased any of their outstanding common shares. As of October 31, 2008, the Funds' common share prices were trading at discounts to their common share NAVs as shown in the accompanying chart: 10/31/08 Twelve-Month Average Discount Discount NQI -4.54% -7.09% NIO -10.01% -9.50% NIF -10.77% -11.44% NPX -16.07% -11.82% NVG -11.13% -11.28% NEA -7.84% -5.33% ----- 11 ----- Fund Snapshot - -------------------------------------------------------------------------------- Common Share Price $ 11.15 - -------------------------------------------------------------------------------- Common Share Net Asset Value $ 11.68 - -------------------------------------------------------------------------------- Premium/(Discount) to NAV -4.54% - -------------------------------------------------------------------------------- Market Yield 6.62% - -------------------------------------------------------------------------------- Taxable-Equivalent Yield(4) 9.19% - -------------------------------------------------------------------------------- Net Assets Applicable to Common Shares ($000) $ 447,463 - -------------------------------------------------------------------------------- Average Effective Maturity on Securities (Years) 15.93 - -------------------------------------------------------------------------------- Leverage-Adjusted Duration 16.70 - -------------------------------------------------------------------------------- Average Annual Total Return (Inception 12/19/90) - -------------------------------------------------------------------------------- On Share Price On NAV - -------------------------------------------------------------------------------- 1-Year -13.35% -17.24% - -------------------------------------------------------------------------------- 5-Year -1.74% -0.12% - -------------------------------------------------------------------------------- 10-Year 2.87% 2.98% - -------------------------------------------------------------------------------- States (as a % of total investments) - -------------------------------------------------------------------------------- California 17.8% - -------------------------------------------------------------------------------- Texas 11.2% - -------------------------------------------------------------------------------- Illinois 10.9% - -------------------------------------------------------------------------------- New York 9.9% - -------------------------------------------------------------------------------- Washington 7.4% - -------------------------------------------------------------------------------- Florida 5.0% - -------------------------------------------------------------------------------- Kentucky 3.8% - -------------------------------------------------------------------------------- Nevada 3.4% - -------------------------------------------------------------------------------- Louisiana 2.4% - -------------------------------------------------------------------------------- Massachusetts 2.3% - -------------------------------------------------------------------------------- Hawaii 2.2% - -------------------------------------------------------------------------------- Colorado 2.1% - -------------------------------------------------------------------------------- Ohio 2.0% - -------------------------------------------------------------------------------- Other 19.6% - -------------------------------------------------------------------------------- Industries (as a % of total investments) - -------------------------------------------------------------------------------- U.S. Guaranteed 20.2% - -------------------------------------------------------------------------------- Transportation 18.1% - -------------------------------------------------------------------------------- Tax Obligation/Limited 17.4% - -------------------------------------------------------------------------------- Tax Obligation/General 15.0% - -------------------------------------------------------------------------------- Health Care 9.7% - -------------------------------------------------------------------------------- Utilities 6.9% - -------------------------------------------------------------------------------- Other 12.7% - -------------------------------------------------------------------------------- Insurers (as a % of total Insured investments) - -------------------------------------------------------------------------------- MBIA 32.4% - -------------------------------------------------------------------------------- AMBAC 27.4% - -------------------------------------------------------------------------------- FSA 21.7% - -------------------------------------------------------------------------------- FGIC 16.7% - -------------------------------------------------------------------------------- SYNCORA 1.6% - -------------------------------------------------------------------------------- AGC 0.2% - -------------------------------------------------------------------------------- NQI | Nuveen Insured Performance | Quality Municipal OVERVIEW | Fund, Inc. as of October 31, 2008 Credit Quality (as a % of total investments)(1), (2), (3) PIE CHART: Insured 76% U.S. Guaranteed 21% GNMA Guaranteed 3% 2007-2008 Monthly Tax-Free Dividends Per Common Share BAR CHART: Nov $ 0.0605 Dec 0.0605 Jan 0.0605 Feb 0.0605 Mar 0.0605 Apr 0.0605 May 0.0605 Jun 0.0605 Jul 0.0605 Aug 0.0605 Sep 0.0615 Oct 0.0615 Common Share Price Performance -- Weekly Closing Price LINE CHART: 11/01/07 $ 13.64 13.73 13.50 13.29 13.30 13.44 13.68 13.40 13.20 13.34 14.10 14.40 13.94 14.14 14.15 14.26 13.55 13.58 13.12 13.68 13.20 13.03 13.32 13.36 13.26 13.36 13.33 13.49 13.58 13.51 13.57 13.65 13.70 13.45 13.19 13.05 13.10 12.60 12.71 12.60 12.60 12.55 12.43 12.36 12.46 12.52 12.30 11.87 11.20 10.80 8.18 9.83 11.15 10/31/08 11.15 (1) Excluding short-term investments (2) The percentages shown in the foregoing chart may reflect the ratings on certain bonds insured by AGC, AMBAC, CIFG, FGIC, FSA, MBIA, RAAI and SYNCORA as of October 31, 2008. Please see the Portfolio Manager's Commentary for an expanded discussion of the affect on the Fund of changes to the ratings of certain bonds in the portfolio resulting from changes to the ratings of the underlying insurers both during the period and after period end. (3) At least 80% of the Fund's net assets (including net assets attributable to Auction Rate Preferred shares) are invested in municipal securities that are covered by insurance or backed by an escrow or trust account containing sufficient U.S. Government or U.S. Government agency securities or U.S. Treasury-issued State and Local Government Series securities to ensure the timely payment of principal and interest. See Notes to Financial Statements, Footnote 1 - Insurance, for more information. (4) 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. - ----- 12 - ----- NIO | Nuveen Insured Performance | Municipal Opportunity OVERVIEW | Fund, Inc. as of October 31, 2008 Credit Quality (as a % of total investments)(1), (2) PIE CHART: Insured 71% U.S. Guaranteed 29% 2007-2008 Monthly Tax-Free Dividends Per Common Share(4) BAR CHART: Nov $ 0.0580 Dec 0.0580 Jan 0.0580 Feb 0.0580 Mar 0.0580 Apr 0.0580 May 0.0580 Jun 0.0580 Jul 0.0580 Aug 0.0580 Sep 0.0590 Oct 0.0590 Common Share Price Performance -- Weekly Closing Price LINE CHART: 11/01/07 $ 13.58 13.58 13.30 13.12 13.39 13.29 13.29 13.16 13.26 13.19 13.83 13.86 13.73 14.30 14.20 14.51 13.52 13.47 13.04 13.49 12.99 12.85 13.30 13.23 13.41 13.45 13.61 13.59 13.84 13.80 13.71 13.84 13.62 13.25 12.93 12.81 12.87 12.75 12.69 12.66 12.63 12.75 12.73 12.54 12.61 12.69 12.41 11.87 11.32 10.80 8.77 10.49 10.93 10/31/08 11.15 (1) The percentages shown in the foregoing chart may reflect the ratings on certain bonds insured by AGC, AMBAC, CIFG, FSA, FGIC, MBIA, RAAI and SYNCORA as of October 31, 2008. Please see the Portfolio Manager's Commentary for an expanded discussion of the affect on the Fund of changes to the ratings of certain bonds in the portfolio resulting from changes to the ratings of the underlying insurers both during the period and after period end. (2) At least 80% of the Fund's net assets (including net assets attributable to Auction Rate Preferred shares) are invested in municipal securities that are covered by insurance or backed by an escrow or trust account containing sufficient U.S. Government or U.S. Government agency securities or U.S. Treasury-issued State and Local Government Series securities to ensure the timely payment of principal and interest. See Notes to Financial Statements, Footnote 1 - Insurance, for more information. (3) 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. (4) The Fund paid shareholders a capital gains distribution in December 2007 of $0.0019 per share. Fund Snapshot - -------------------------------------------------------------------------------- Common Share Price $ 11.15 - -------------------------------------------------------------------------------- Common Share Net Asset Value $ 12.39 - -------------------------------------------------------------------------------- Premium/(Discount) to NAV -10.01% - -------------------------------------------------------------------------------- Market Yield 6.35% - -------------------------------------------------------------------------------- Taxable-Equivalent Yield(3) 8.82% - -------------------------------------------------------------------------------- Net Assets Applicable to Common Shares ($000) $ 1,005,218 - -------------------------------------------------------------------------------- Average Effective Maturity on Securities (Years) 14.25 - -------------------------------------------------------------------------------- Leverage-Adjusted Duration 14.65 - -------------------------------------------------------------------------------- Average Annual Total Return (Inception 9/19/91) - -------------------------------------------------------------------------------- On Share Price On NAV - -------------------------------------------------------------------------------- 1-Year -13.17% -13.45% - -------------------------------------------------------------------------------- 5-Year -0.83% 0.68% - -------------------------------------------------------------------------------- 10-Year 2.23% 3.41% - -------------------------------------------------------------------------------- States (as a % of total investments) - -------------------------------------------------------------------------------- California 19.1% - -------------------------------------------------------------------------------- Texas 9.4% - -------------------------------------------------------------------------------- Alabama 6.8% - -------------------------------------------------------------------------------- Nevada 5.1% - -------------------------------------------------------------------------------- Colorado 4.7% - -------------------------------------------------------------------------------- Michigan 4.4% - -------------------------------------------------------------------------------- New York 4.0% - -------------------------------------------------------------------------------- South Carolina 4.0% - -------------------------------------------------------------------------------- Florida 3.8% - -------------------------------------------------------------------------------- Massachusetts 3.6% - -------------------------------------------------------------------------------- Louisiana 3.5% - -------------------------------------------------------------------------------- Illinois 3.5% - -------------------------------------------------------------------------------- Indiana 2.6% - -------------------------------------------------------------------------------- Pennsylvania 2.0% - -------------------------------------------------------------------------------- Washington 1.9% - -------------------------------------------------------------------------------- Oklahoma 1.9% - -------------------------------------------------------------------------------- Other 19.7% - -------------------------------------------------------------------------------- Industries (as a % of total investments) - -------------------------------------------------------------------------------- U.S. Guaranteed 29.2% - -------------------------------------------------------------------------------- Tax Obligation/Limited 17.8% - -------------------------------------------------------------------------------- Tax Obligation/General 12.9% - -------------------------------------------------------------------------------- Transportation 12.5% - -------------------------------------------------------------------------------- Utilities 8.9% - -------------------------------------------------------------------------------- Water and Sewer 7.3% - -------------------------------------------------------------------------------- Health Care 5.7% - -------------------------------------------------------------------------------- Other 5.7% - -------------------------------------------------------------------------------- Insurers (as a % of total Insured investments) - -------------------------------------------------------------------------------- MBIA 30.7% - -------------------------------------------------------------------------------- FGIC 29.9% - -------------------------------------------------------------------------------- AMBAC 22.6% - -------------------------------------------------------------------------------- FSA 12.2% - -------------------------------------------------------------------------------- SYNCORA 4.5% - -------------------------------------------------------------------------------- CIFG 0.1% - -------------------------------------------------------------------------------- ----- 13 ----- Fund Snapshot - -------------------------------------------------------------------------------- Common Share Price $ 11.19 - -------------------------------------------------------------------------------- Common Share Net Asset Value $ 12.54 - -------------------------------------------------------------------------------- Premium/(Discount) to NAV -10.77% - -------------------------------------------------------------------------------- Market Yield 5.95% - -------------------------------------------------------------------------------- Taxable-Equivalent Yield(3) 8.26% - -------------------------------------------------------------------------------- Net Assets Applicable to Common Shares ($000) $ 243,589 - -------------------------------------------------------------------------------- Average Effective Maturity on Securities (Years) 13.25 - -------------------------------------------------------------------------------- Leverage-Adjusted Duration 13.96 - -------------------------------------------------------------------------------- Average Annual Total Return (Inception 12/19/91) - -------------------------------------------------------------------------------- On Share Price On NAV - -------------------------------------------------------------------------------- 1-Year -11.12% -11.92% - -------------------------------------------------------------------------------- 5-Year -0.71% 1.08% - -------------------------------------------------------------------------------- 10-Year 1.94% 3.33% - -------------------------------------------------------------------------------- States (as a % of total investments) - -------------------------------------------------------------------------------- California 22.7% - -------------------------------------------------------------------------------- Illinois 11.5% - -------------------------------------------------------------------------------- Washington 11.0% - -------------------------------------------------------------------------------- Colorado 7.1% - -------------------------------------------------------------------------------- Texas 6.4% - -------------------------------------------------------------------------------- New York 4.4% - -------------------------------------------------------------------------------- Nevada 3.1% - -------------------------------------------------------------------------------- Oregon 2.6% - -------------------------------------------------------------------------------- Hawaii 2.5% - -------------------------------------------------------------------------------- Tennessee 2.5% - -------------------------------------------------------------------------------- Florida 2.4% - -------------------------------------------------------------------------------- Michigan 2.3% - -------------------------------------------------------------------------------- Indiana 2.3% - -------------------------------------------------------------------------------- Other 19.2% - -------------------------------------------------------------------------------- Industries (as a % of total investments) - -------------------------------------------------------------------------------- Tax Obligation/General 24.0% - -------------------------------------------------------------------------------- U.S. Guaranteed 22.0% - -------------------------------------------------------------------------------- Transportation 17.0% - -------------------------------------------------------------------------------- Tax Obligation/Limited 15.3% - -------------------------------------------------------------------------------- Health Care 6.8% - -------------------------------------------------------------------------------- Utilities 6.0% - -------------------------------------------------------------------------------- Water and Sewer 5.0% - -------------------------------------------------------------------------------- Other 3.9% - -------------------------------------------------------------------------------- Insurers (as a % of total Insured investments) - -------------------------------------------------------------------------------- MBIA 31.5% - -------------------------------------------------------------------------------- FGIC 30.3% - -------------------------------------------------------------------------------- AMBAC 21.0% - -------------------------------------------------------------------------------- FSA 16.7% - -------------------------------------------------------------------------------- CIFG 0.5% - -------------------------------------------------------------------------------- NIF | Nuveen Premier Performance | Insured Municipal OVERVIEW | Income Fund, Inc. as of October 31, 2008 Credit Quality (as a % of total investments)(1), (2) PIE CHART: Insured 69% U.S. Guaranteed 22% GNMA Guaranteed 9% 2007-2008 Monthly Tax-Free Dividends Per Common Share BAR CHART: Nov $ 0.0530 Dec 0.0530 Jan 0.0530 Feb 0.0530 Mar 0.0530 Apr 0.0530 May 0.0530 Jun 0.0530 Jul 0.0530 Aug 0.0530 Sep 0.0555 Oct 0.0555 Common Share Price Performance -- Weekly Closing Price LINE CHART: 11/01/07 $ 13.26 13.30 12.92 12.53 12.75 12.93 13.03 12.81 12.81 13.05 13.58 13.63 13.41 13.62 13.48 13.62 12.91 13.14 12.54 13.02 12.65 12.64 13.08 13.15 13.17 13.14 13.04 13.08 13.07 13.08 13.08 13.08 12.95 12.79 12.55 12.52 12.65 12.41 12.32 12.27 12.41 12.36 12.41 12.27 12.44 12.39 12.34 11.96 10.93 10.86 8.24 9.93 11.33 10/31/08 11.19 (1) The percentages shown in the foregoing chart may reflect the ratings on certain bonds insured by AGC, AMBAC, CIFG, FGIC, FSA, MBIA, RAAI and SYNCORA as of October 31, 2008. Please see the Portfolio Manager's Commentary for an expanded discussion of the affect on the Fund of changes to the ratings of certain bonds in the portfolio resulting from changes to the ratings of the underlying insurers both during the period and after period end. (2) At least 80% of the Fund's net assets (including net assets attributable to Auction Rate Preferred shares) are invested in municipal securities that are covered by insurance or backed by an escrow or trust account containing sufficient U.S. Government or U.S. Government agency securities or U.S. Treasury-issued State and Local Government Series securities to ensure the timely payment of principal and interest. See Notes to Financial Statements, Footnote 1 - Insurance, for more information. (3) 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 - ----- NPX | Nuveen Insured Performance | Premium Income OVERVIEW | Municipal Fund 2 as of October 31, 2008 Credit Quality (as a % of total investments)(1), (2) PIE CHART: Insured 78% U.S. Guaranteed 21% GNMA Guaranteed 1% 2007-2008 Monthly Tax-Free Dividends Per Common Share BAR CHART: Nov $ 0.0515 Dec 0.0515 Jan 0.0515 Feb 0.0515 Mar 0.0515 Apr 0.0515 May 0.0515 Jun 0.0515 Jul 0.0515 Aug 0.0515 Sep 0.0515 Oct 0.0515 Common Share Price Performance -- Weekly Closing Price LINE CHART: 11/01/07 $ 12.15 12.18 11.75 11.55 11.74 12.00 12.03 11.87 11.74 12.17 12.51 12.56 12.48 12.57 12.58 12.53 11.84 11.84 11.56 12.00 11.45 11.49 11.66 11.81 11.99 11.97 11.90 11.98 12.05 12.19 12.23 12.17 12.06 11.69 11.46 11.53 11.67 11.53 11.40 11.39 11.29 11.43 11.46 11.26 11.35 11.35 11.15 10.79 10.28 9.84 7.60 8.58 10.00 10/31/08 9.56 (1) The percentages shown in the foregoing chart may reflect the ratings on certain bonds insured by AGC, AMBAC, CIFG, FGIC, FSA, MBIA, RAAI and SYNCORA as of October 31, 2008. Please see the Portfolio Manager's Commentary for an expanded discussion of the affect on the Fund of changes to the ratings of certain bonds in the portfolio resulting from changes to the ratings of the underlying insurers both during the period and after period end. (2) At least 80% of the Fund's net assets (including net assets attributable to Variable Rate Demand Preferred shares) are invested in municipal securities that are covered by insurance or backed by an escrow or trust account containing sufficient U.S. Government or U.S. Government agency securities or U.S. Treasury-issued State and Local Government Series securities to ensure the timely payment of principal and interest. See Notes to Financial Statements, Footnote 1 - Insurance, for more information. (3) 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. Fund Snapshot - -------------------------------------------------------------------------------- Common Share Price $ 9.56 - -------------------------------------------------------------------------------- Common Share Net Asset Value $ 11.39 - -------------------------------------------------------------------------------- Premium/(Discount) to NAV -16.07% - -------------------------------------------------------------------------------- Market Yield 6.46% - -------------------------------------------------------------------------------- Taxable-Equivalent Yield(3) 8.97% - -------------------------------------------------------------------------------- Net Assets Applicable to Common Shares ($000) $ 425,557 - -------------------------------------------------------------------------------- Average Effective Maturity on Securities (Years) 13.69 - -------------------------------------------------------------------------------- Leverage-Adjusted Duration 14.28 - -------------------------------------------------------------------------------- Average Annual Total Return (Inception 7/22/93) - -------------------------------------------------------------------------------- On Share Price On NAV - -------------------------------------------------------------------------------- 1-Year -17.17% -12.98% - -------------------------------------------------------------------------------- 5-Year -2.16% 0.78% - -------------------------------------------------------------------------------- 10-Year 2.22% 3.38% - -------------------------------------------------------------------------------- States (as a % of total investments) - -------------------------------------------------------------------------------- California 14.3% - -------------------------------------------------------------------------------- Texas 10.9% - -------------------------------------------------------------------------------- Pennsylvania 8.4% - -------------------------------------------------------------------------------- New York 7.2% - -------------------------------------------------------------------------------- Colorado 6.7% - -------------------------------------------------------------------------------- Hawaii 5.1% - -------------------------------------------------------------------------------- Washington 4.4% - -------------------------------------------------------------------------------- New Jersey 4.1% - -------------------------------------------------------------------------------- Wisconsin 3.9% - -------------------------------------------------------------------------------- Louisiana 3.1% - -------------------------------------------------------------------------------- North Dakota 2.5% - -------------------------------------------------------------------------------- Georgia 2.5% - -------------------------------------------------------------------------------- Alabama 2.3% - -------------------------------------------------------------------------------- Oregon 2.3% - -------------------------------------------------------------------------------- Arizona 2.2% - -------------------------------------------------------------------------------- Other 20.1% - -------------------------------------------------------------------------------- Industries (as a % of total investments) - -------------------------------------------------------------------------------- U.S. Guaranteed 20.5% - -------------------------------------------------------------------------------- Utilities 19.8% - -------------------------------------------------------------------------------- Tax Obligation/Limited 13.5% - -------------------------------------------------------------------------------- Transportation 10.7% - -------------------------------------------------------------------------------- Tax Obligation/General 10.6% - -------------------------------------------------------------------------------- Water and Sewer 8.5% - -------------------------------------------------------------------------------- Education and Civic Organizations 7.4% - -------------------------------------------------------------------------------- Health Care 5.7% - -------------------------------------------------------------------------------- Other 3.3% - -------------------------------------------------------------------------------- Insurers (as a % of total Insured investments) - -------------------------------------------------------------------------------- AMBAC 26.6% - -------------------------------------------------------------------------------- MBIA 25.7% - -------------------------------------------------------------------------------- FSA 23.4% - -------------------------------------------------------------------------------- FGIC 19.6% - -------------------------------------------------------------------------------- SYNCORA 4.7% - -------------------------------------------------------------------------------- ----- 15 ----- Fund Snapshot - -------------------------------------------------------------------------------- Common Share Price $ 11.42 - -------------------------------------------------------------------------------- Common Share Net Asset Value $ 12.85 - -------------------------------------------------------------------------------- Premium/(Discount) to NAV -11.13% - -------------------------------------------------------------------------------- Market Yield 6.30% - -------------------------------------------------------------------------------- Taxable-Equivalent Yield(4) 8.75% - -------------------------------------------------------------------------------- Net Assets Applicable to Common Shares ($000) $ 383,035 - -------------------------------------------------------------------------------- Average Effective Maturity on Securities (Years) 12.23 - -------------------------------------------------------------------------------- Leverage-Adjusted Duration 13.31 - -------------------------------------------------------------------------------- Average Annual Total Return (Inception 3/25/02) - -------------------------------------------------------------------------------- On Share Price On NAV - -------------------------------------------------------------------------------- 1-Year -12.11% -10.64% - -------------------------------------------------------------------------------- 5-Year 0.75% 1.98% - -------------------------------------------------------------------------------- Since Inception 1.90% 4.13% - -------------------------------------------------------------------------------- States (as a % of municipal bonds)(3) - -------------------------------------------------------------------------------- Texas 15.5% - -------------------------------------------------------------------------------- Indiana 11.2% - -------------------------------------------------------------------------------- Washington 9.6% - -------------------------------------------------------------------------------- California 9.0% - -------------------------------------------------------------------------------- Florida 7.6% - -------------------------------------------------------------------------------- Illinois 7.5% - -------------------------------------------------------------------------------- Tennessee 7.0% - -------------------------------------------------------------------------------- Colorado 3.7% - -------------------------------------------------------------------------------- New York 3.1% - -------------------------------------------------------------------------------- Alabama 3.0% - -------------------------------------------------------------------------------- Louisiana 3.0% - -------------------------------------------------------------------------------- Other 19.8% - -------------------------------------------------------------------------------- Industries (as a % of total investments)(3) - -------------------------------------------------------------------------------- U.S. Guaranteed 30.0% - -------------------------------------------------------------------------------- Transportation 14.1% - -------------------------------------------------------------------------------- Tax Obligation/General 11.8% - -------------------------------------------------------------------------------- Tax Obligation/Limited 11.3% - -------------------------------------------------------------------------------- Utilities 9.5% - -------------------------------------------------------------------------------- Health Care 7.3% - -------------------------------------------------------------------------------- Water and Sewer 5.4% - -------------------------------------------------------------------------------- Education and Civic Organizations 5.1% - -------------------------------------------------------------------------------- Other 5.5% - -------------------------------------------------------------------------------- Insurers (as a % of total Insured investments) - -------------------------------------------------------------------------------- MBIA 35.2% - -------------------------------------------------------------------------------- AMBAC 26.6% - -------------------------------------------------------------------------------- FSA 21.4% - -------------------------------------------------------------------------------- FGIC 15.3% - -------------------------------------------------------------------------------- CIFG 1.4% - -------------------------------------------------------------------------------- SYNCORA 0.1% - -------------------------------------------------------------------------------- NVG | Nuveen Insured Performance | Dividend Advantage OVERVIEW | Municipal Fund as of October 31, 2008 Credit Quality (as a % of municipal bonds)(1), (2), (3) PIE CHART: Insured 62% U.S. Guaranteed 30% AAA (Uninsured) 2% AA (Uninsured) 6% 2007-2008 Monthly Tax-Free Dividends Per Common Share BAR CHART: Nov $ 0.0575 Dec 0.0575 Jan 0.0575 Feb 0.0575 Mar 0.0575 Apr 0.0575 May 0.0575 Jun 0.0575 Jul 0.0575 Aug 0.0575 Sep 0.0600 Oct 0.0600 Common Share Price Performance -- Weekly Closing Price LINE CHART: 11/01/07 $ 13.70 13.43 13.13 13.04 13.33 13.39 13.44 13.17 13.00 13.35 13.89 13.92 13.74 13.95 13.92 14.08 13.34 13.38 13.10 13.43 13.04 13.00 13.30 13.27 13.55 13.62 13.40 13.56 13.64 13.52 13.47 13.62 13.54 13.11 12.94 12.94 12.91 12.84 12.78 12.68 12.67 12.63 12.67 12.61 12.66 12.77 12.60 12.10 11.30 11.14 8.35 9.89 11.45 10/31/08 11.42 (1) The percentages shown in the foregoing chart may reflect the ratings on certain bonds insured by AGC, AMBAC, CIFG, FGIC, FSA, MBIA, RAAI and SYNCORA as of October 31, 2008. Please see the Portfolio Manager's Commentary for an expanded discussion of the affect on the Fund of changes to the ratings of certain bonds in the portfolio resulting from changes to the ratings of the underlying insurers both during the period and after period end. (2) At least 80% of the Fund's net assets (including net assets attributable to Auction Rate Preferred shares) are invested in municipal securities that are covered by insurance or backed by an escrow or trust account containing sufficient U.S. Government or U.S. Government agency securities or U.S. Treasury-issued State and Local Government Series securities to ensure the timely payment of principal and interest. See Notes to Financial Statements, Footnote 1 - Insurance, for more information. (3) Excluding derivative transactions. (4) 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 - ----- NEA | Nuveen Insured Performance | Tax-Free Advantage OVERVIEW | Municipal Fund as of October 31, 2008 Credit Quality (as a % of total investments)(1), (2) PIE CHART: Insured 67% U.S. Guaranteed 25% AAA (Uninsured) 3% AA (Uninsured) 1% A (Uninsured) 2% BBB (Uninsured) 2% 2007-2008 Monthly Tax-Free Dividends Per Common Share BAR CHART: Nov $ 0.0590 Dec 0.0590 Jan 0.0590 Feb 0.0590 Mar 0.0590 Apr 0.0590 May 0.0590 Jun 0.0590 Jul 0.0590 Aug 0.0590 Sep 0.0590 Oct 0.0590 Common Share Price Performance -- Weekly Closing Price LINE CHART: 11/01/07 $ 14.10 14.19 13.79 13.41 13.42 14.15 14.15 14.26 14.05 14.10 14.78 14.82 14.76 14.73 15.11 15.01 14.00 14.08 13.59 13.70 13.56 13.46 13.85 14.25 14.09 14.10 13.97 13.99 14.18 14.35 14.22 14.27 14.34 13.95 13.66 13.35 13.39 13.19 13.00 12.86 12.88 12.93 13.10 13.51 13.20 13.19 13.01 12.30 10.96 11.12 8.18 9.70 11.32 10/31/08 11.40 (1) The percentages shown in the foregoing chart may reflect the ratings on certain bonds insured by AGC, AMBAC, CIFG, FGIC, FSA, MBIA, RAAI and SYNCORA as of October 31, 2008. Please see the Portfolio Manager's Commentary for an expanded discussion of the affect on the Fund of changes to the ratings of certain bonds in the portfolio resulting from changes to the ratings of the underlying insurers both during the period and after period end. (2) At least 80% of the Fund's net assets (including net assets attributable to Auction Rate Preferred shares) are invested in municipal securities that are covered by insurance or backed by an escrow or trust account containing sufficient U.S. Government or U.S. Government agency securities or U.S. Treasury-issued State and Local Government Series securities to ensure the timely payment of principal and interest. See Notes to Financial Statements, Footnote 1 - Insurance, for more information. (3) 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. Fund Snapshot - -------------------------------------------------------------------------------- Common Share Price $ 11.40 - -------------------------------------------------------------------------------- Common Share Net Asset Value $ 12.37 - -------------------------------------------------------------------------------- Premium/(Discount) to NAV -7.84% - -------------------------------------------------------------------------------- Market Yield 6.21% - -------------------------------------------------------------------------------- Taxable-Equivalent Yield(3) 8.63% - -------------------------------------------------------------------------------- Net Assets Applicable to Common Shares ($000) $ 229,075 - -------------------------------------------------------------------------------- Average Effective Maturity on Securities (Years) 15.46 - -------------------------------------------------------------------------------- Leverage-Adjusted Duration 16.73 - -------------------------------------------------------------------------------- Average Annual Total Return (Inception 11/21/02) - -------------------------------------------------------------------------------- On Share Price On NAV - -------------------------------------------------------------------------------- 1-Year -15.97% -11.56% - -------------------------------------------------------------------------------- 5-Year 0.30% 2.13% - -------------------------------------------------------------------------------- Since Inception 0.89% 2.95% - -------------------------------------------------------------------------------- States (as a % of total investments) - -------------------------------------------------------------------------------- California 15.4% - -------------------------------------------------------------------------------- Washington 8.6% - -------------------------------------------------------------------------------- Texas 8.1% - -------------------------------------------------------------------------------- Michigan 7.9% - -------------------------------------------------------------------------------- Indiana 7.0% - -------------------------------------------------------------------------------- New York 6.9% - -------------------------------------------------------------------------------- Alabama 6.0% - -------------------------------------------------------------------------------- Pennsylvania 5.4% - -------------------------------------------------------------------------------- Colorado 4.7% - -------------------------------------------------------------------------------- Wisconsin 4.5% - -------------------------------------------------------------------------------- South Carolina 3.6% - -------------------------------------------------------------------------------- Arizona 3.5% - -------------------------------------------------------------------------------- Other 18.4% - -------------------------------------------------------------------------------- Industries (as a % of total investments) - -------------------------------------------------------------------------------- U.S. Guaranteed 25.0% - -------------------------------------------------------------------------------- Tax Obligation/Limited 20.6% - -------------------------------------------------------------------------------- Tax Obligation/General 16.2% - -------------------------------------------------------------------------------- Health Care 11.9% - -------------------------------------------------------------------------------- Utilities 9.4% - -------------------------------------------------------------------------------- Transportation 6.4% - -------------------------------------------------------------------------------- Water and Sewer 5.7% - -------------------------------------------------------------------------------- Other 4.8% - -------------------------------------------------------------------------------- Insurers (as a % of total Insured investments) - -------------------------------------------------------------------------------- MBIA 36.5% - -------------------------------------------------------------------------------- AMBAC 27.9% - -------------------------------------------------------------------------------- FSA 21.7% - -------------------------------------------------------------------------------- FGIC 8.7% - -------------------------------------------------------------------------------- SYNCORA 3.2% - -------------------------------------------------------------------------------- RAAI 2.0% - -------------------------------------------------------------------------------- ----- 17 ----- NQI | Shareholder MEETING REPORT NIO | NIF | The annual meeting of shareholders was held in the offices of Nuveen Investments on June 30, 2008; at this meeting the shareholders were asked to vote on the election of Board Members, the elimination of Fundamental Investment Policies and the approval of new Fundamental Investment Policies. The meeting was subsequently adjourned to July 28, 2008, and additionally adjourned to August 29, 2008. The meeting for NQI, NIO, NIF, NPX and NVG adjourned again to September 30, 2008, and additionally adjourned to October 28, 2008, for NQI, NIO, NIF and NVG.
NQI NIO NIF - ------------------------------------------------------------------------------------------------------------------------------------ Common and Auction Rate Common and Auction Rate Common and Auction Rate Auction Rate Preferred Auction Rate Preferred Auction Rate Preferred Preferred shares shares voting Preferred shares shares voting Preferred shares shares voting voting together together voting together together voting together together as a class as a class as a class as a class as a class as a class - ------------------------------------------------------------------------------------------------------------------------------------ To approve the elimination of the fundamental policy relating to insured/uninsured bonds. For -- -- 38,593,073 10,215 9,158,224 4,125 Against -- -- 2,106,527 1,521 642,563 868 Abstain -- -- 1,657,725 440 327,058 119 Broker Non-Votes -- -- 10,204,329 10,266 2,826,285 502 - ------------------------------------------------------------------------------------------------------------------------------------ Total -- -- 52,561,654 22,442 12,954,130 5,614 ==================================================================================================================================== To approve the fundamental policy relating to Municipal Obligations not more than 20% of Fund Assets. For 18,053,642 4,457 -- -- -- -- Against 906,231 500 -- -- -- -- Abstain 792,845 192 -- -- -- -- Broker Non-Votes 5,238,842 6,109 -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 24,991,560 11,258 -- -- -- -- ==================================================================================================================================== To approve the elimination of the fundamental policy relating to Municipal Obligations not more than 20% of Fund Assets. For -- -- -- -- -- -- Against -- -- -- -- -- -- Abstain -- -- -- -- -- -- Broker Non-Votes -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total -- -- -- -- -- -- ==================================================================================================================================== To approve the elimination of the fundamental policy relating to tax-exempt Municipal Obligations. For 18,017,711 4,376 -- -- -- -- Against 940,547 520 -- -- -- -- Abstain 794,460 253 -- -- -- -- Broker Non-Votes 5,238,842 6,109 -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 24,991,560 11,258 -- -- -- -- ==================================================================================================================================== To approve the elimination of the fundamental policy relating to rated portfolio insurance. For -- -- -- -- -- -- Against -- -- -- -- -- -- Abstain -- -- -- -- -- -- Broker Non-Votes -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total -- -- -- -- -- -- ==================================================================================================================================== To approve the elimination of the fundamental policy relating to tax-exempt municipal bonds. For -- -- -- -- -- -- Against -- -- -- -- -- -- Abstain -- -- -- -- -- -- Broker Non-Votes -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total -- -- -- -- -- -- ====================================================================================================================================
- ----- 18 - -----
NQI NIO NIF - ------------------------------------------------------------------------------------------------------------------------------------ Common and Auction Rate Common and Auction Rate Common and Auction Rate Auction Rate Preferred Auction Rate Preferred Auction Rate Preferred Preferred shares shares voting Preferred shares shares voting Preferred shares shares voting voting together together voting together together voting together together as a class as a class as a class as a class as a class as a class - ------------------------------------------------------------------------------------------------------------------------------------ To approve the new fundamental policy relating to tax-exempt securities. For 18,262,758 4,452 39,115,864 10,375 9,217,792 4,008 Against 733,464 497 1,745,414 1,373 595,458 893 Abstain 756,496 200 1,496,047 428 314,595 211 Broker Non-Votes 5,238,842 6,109 10,204,329 10,266 2,826,285 502 - ------------------------------------------------------------------------------------------------------------------------------------ Total 24,991,560 11,258 52,561,654 22,442 12,954,130 5,614 ==================================================================================================================================== Approval of the Board Members was reached as follows: John P. Amboian For 24,138,594 -- 50,851,391 -- 12,373,855 -- Withhold 852,966 -- 1,710,263 -- 580,275 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 24,991,560 -- 52,561,654 -- 12,954,130 -- ==================================================================================================================================== Robert P. Bremner For 24,140,676 -- 50,835,028 -- 12,362,075 -- Withhold 850,884 -- 1,726,626 -- 592,055 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 24,991,560 -- 52,561,654 -- 12,954,130 -- ==================================================================================================================================== Jack B. Evans For 24,137,763 -- 50,831,992 -- 12,364,595 -- Withhold 853,797 -- 1,729,662 -- 589,535 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 24,991,560 -- 52,561,654 -- 12,954,130 -- ==================================================================================================================================== William C. Hunter For -- 10,677 -- 21,296 -- 5,267 Withhold -- 581 -- 1,146 -- 347 - ------------------------------------------------------------------------------------------------------------------------------------ Total -- 11,258 -- 22,442 -- 5,614 ==================================================================================================================================== David J. Kundert For 24,131,327 -- 50,829,064 -- 12,359,416 -- Withhold 860,233 -- 1,732,590 -- 594,714 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 24,991,560 -- 52,561,654 -- 12,954,130 -- ==================================================================================================================================== William J. Schneider For -- 10,677 -- 21,297 -- 5,266 Withhold -- 581 -- 1,145 -- 348 - ------------------------------------------------------------------------------------------------------------------------------------ Total -- 11,258 -- 22,442 -- 5,614 ==================================================================================================================================== Judith M. Stockdale For 24,138,923 -- 50,826,156 -- 12,370,934 -- Withhold 852,637 -- 1,735,498 -- 583,196 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 24,991,560 -- 52,561,654 -- 12,954,130 -- ==================================================================================================================================== Carole E. Stone For 24,127,155 -- 50,804,301 -- 12,368,807 -- Withhold 864,405 -- 1,757,353 -- 585,323 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 24,991,560 -- 52,561,654 -- 12,954,130 -- ==================================================================================================================================== Terence J. Toth For 24,136,883 -- 50,807,314 -- 12,364,670 -- Withhold 854,677 -- 1,754,340 -- 589,460 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 24,991,560 -- 52,561,654 -- 12,954,130 -- ====================================================================================================================================
----- 19 ----- NPX | Shareholder MEETING REPORT (continued) NVG | NEA |
NPX NVG NEA - ------------------------------------------------------------------------------------------------------------------------------------ Common and Auction Rate Common and Auction Rate Common and Auction Rate Auction Rate Preferred Auction Rate Preferred Auction Rate Preferred Preferred shares shares voting Preferred shares shares voting Preferred shares shares voting voting together together voting together together voting together together as a class as a class as a class as a class as a class as a class - ------------------------------------------------------------------------------------------------------------------------------------ To approve the elimination of the fundamental policy relating to insured/uninsured bonds. For -- -- -- -- -- -- Against -- -- -- -- -- -- Abstain -- -- -- -- -- -- Broker Non-Votes -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total -- -- -- -- -- -- ==================================================================================================================================== To approve the fundamental policy relating to Municipal Obligations not more than 20% of Fund Assets. For -- -- -- -- -- -- Against -- -- -- -- -- -- Abstain -- -- -- -- -- -- Broker Non-Votes -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total -- -- -- -- -- -- ==================================================================================================================================== To approve the elimination of the fundamental policy relating to Municipal Obligations not more than 20% of Fund Assets. For 17,552,122 5,467 -- -- -- -- Against 1,120,303 1,014 -- -- -- -- Abstain 671,386 228 -- -- -- -- Broker Non-Votes 6,050,142 2,357 -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 25,393,953 9,066 -- -- -- -- ==================================================================================================================================== To approve the elimination of the fundamental policy relating to tax-exempt Municipal Obligations. For 17,569,702 5,602 -- -- -- -- Against 1,110,346 902 -- -- -- -- Abstain 663,763 205 -- -- -- -- Broker Non-Votes 6,050,142 2,357 -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 25,393,953 9,066 -- -- -- -- ==================================================================================================================================== To approve the elimination of the fundamental policy relating to rated portfolio insurance. For 17,476,989 5,515 -- -- -- -- Against 1,179,386 968 -- -- -- -- Abstain 687,436 226 -- -- -- -- Broker Non-Votes 6,050,142 2,357 -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 25,393,953 9,066 -- -- -- -- ==================================================================================================================================== To approve the elimination of the fundamental policy relating to tax-exempt municipal bonds. For -- -- 14,082,658 3,838 8,809,154 3,059 Against -- -- 1,041,372 504 405,719 252 Abstain -- -- 633,996 139 363,712 160 Broker Non-Votes -- -- 4,097,830 3,699 3,075,776 1,864 - ------------------------------------------------------------------------------------------------------------------------------------ Total -- -- 19,855,856 8,180 12,654,361 5,335 ====================================================================================================================================
- ----- 20 - -----
NPX NVG NEA - ------------------------------------------------------------------------------------------------------------------------------------ Common and Auction Rate Common and Auction Rate Common and Auction Rate Auction Rate Preferred Auction Rate Preferred Auction Rate Preferred Preferred shares shares voting Preferred shares shares voting Preferred shares shares voting voting together together voting together together voting together together as a class as a class as a class as a class as a class as a class - ------------------------------------------------------------------------------------------------------------------------------------ To approve the new fundamental policy relating to tax-exempt securities. For 17,677,608 5,675 14,205,802 3,849 8,849,483 3,063 Against 1,003,169 809 921,336 500 352,769 254 Abstain 663,034 225 630,888 132 376,333 154 Broker Non-Votes 6,050,142 2,357 4,097,830 3,699 3,075,776 1,864 - ------------------------------------------------------------------------------------------------------------------------------------ Total 25,393,953 9,066 19,855,856 8,180 12,654,361 5,335 ==================================================================================================================================== Approval of the Board Members was reached as follows: John P. Amboian For 24,463,837 -- 18,937,253 -- 12,358,285 -- Withhold 930,116 -- 918,603 -- 296,076 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 25,393,953 -- 19,855,856 -- 12,654,361 -- ==================================================================================================================================== Robert P. Bremner For -- -- -- -- -- -- Withhold -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total -- -- -- -- -- -- ==================================================================================================================================== Jack B. Evans For -- -- -- -- -- -- Withhold -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total -- -- -- -- -- -- ==================================================================================================================================== William C. Hunter For -- 8,622 -- 7,781 -- 4,928 Withhold -- 444 -- 399 -- 407 - ------------------------------------------------------------------------------------------------------------------------------------ Total -- 9,066 -- 8,180 -- 5,335 ==================================================================================================================================== David J. Kundert For 24,474,394 -- 18,939,577 -- 12,349,136 -- Withhold 919,559 -- 916,279 -- 305,225 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 25,393,953 -- 19,855,856 -- 12,654,361 -- ==================================================================================================================================== William J. Schneider For -- 8,622 -- 7,777 -- 4,923 Withhold -- 444 -- 403 -- 412 - ------------------------------------------------------------------------------------------------------------------------------------ Total -- 9,066 -- 8,180 -- 5,335 ==================================================================================================================================== Judith M. Stockdale For -- -- -- -- -- -- Withhold -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total -- -- -- -- -- -- ==================================================================================================================================== Carole E. Stone For -- -- -- -- -- -- Withhold -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Terence J. Toth For 24,470,860 -- 18,937,704 -- 12,356,695 -- Withhold 923,093 -- 918,152 -- 297,666 -- - ------------------------------------------------------------------------------------------------------------------------------------ Total 25,393,953 -- 19,855,856 -- 12,654,361 -- ====================================================================================================================================
----- 21 ----- Report of INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors/Trustees and Shareholders Nuveen Insured Quality Municipal Fund, Inc. Nuveen Insured Municipal Opportunity Fund, Inc. Nuveen Premier Insured Municipal Income Fund, Inc. Nuveen Insured Premium Income Municipal Fund 2 Nuveen Insured Dividend Advantage Municipal Fund Nuveen Insured Tax-Free Advantage Municipal Fund We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of Nuveen Insured Quality Municipal Fund, Inc., Nuveen Insured Municipal Opportunity Fund, Inc., Nuveen Premier Insured Municipal Income Fund, Inc., Nuveen Insured Premium Income Municipal Fund 2, Nuveen Insured Dividend Advantage Municipal Fund, and Nuveen Insured Tax-Free Advantage Municipal Fund (the "Funds") as of October 31, 2008, and the related statements of operations and cash flows (Nuveen Insured Premium Income Municipal Fund 2 only) 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 five years in the period then ended. 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, 2008, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial positions of Nuveen Insured Quality Municipal Fund, Inc., Nuveen Insured Municipal Opportunity Fund, Inc., Nuveen Premier Insured Municipal Income Fund, Inc., Nuveen Insured Premium Income Municipal Fund 2, Nuveen Insured Dividend Advantage Municipal Fund, and Nuveen Insured Tax-Free Advantage Municipal Fund at October 31, 2008, the results of their operations and cash flows (Nuveen Nuveen Insured Premium Income Municipal Fund 2 only) for the year then ended, changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended in conformity with U.S. generally accepted accounting principles. /s/ Ernst & Young LLP Chicago, Illinois December 23, 2008 - ----- 22 - ----- NQI | Nuveen Insured Quality Municipal Fund, Inc. | Portfolio of INVESTMENTS October 31, 2008
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Alabama - 1.9% (1.1% of Total Investments) $ 1,135 Birmingham Waterworks and Sewerage Board, Alabama, Water and 1/13 at 100.00 AAA $ 1,225,267 Sewerage Revenue Bonds, Series 2002B, 5.250%, 1/01/20 (Pre-refunded 1/01/13) - MBIA Insured 7,500 Huntsville Healthcare Authority, Alabama, Revenue Bonds, Series 6/15 at 100.00 A2 7,073,100 2005A, 5.000%, 6/01/24 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 8,635 Total Alabama 8,298,367 - ------------------------------------------------------------------------------------------------------------------------------------ Arizona - 3.0% (1.7% of Total Investments) 2,750 Mesa, Arizona, Utility System Revenue Bonds, Reset Option Longs, 7/17 at 100.00 Aa3 444,400 Series 11032- 11034, 8.606%, 7/01/31 - FSA Insured (IF) 9,200 Phoenix, Arizona, Civic Improvement Corporation, Senior Lien 7/12 at 100.00 AA 7,200,564 Airport Revenue Bonds, Series 2002B, 5.250%, 7/01/32 - FGIC Insured (Alternative Minimum Tax) 8,755 Phoenix, Arizona, Civic Improvement Revenue Bonds, Civic Plaza, No Opt. Call AA 5,824,964 Series 2005B, 0.000%, 7/01/39 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 20,705 Total Arizona 13,469,928 - ------------------------------------------------------------------------------------------------------------------------------------ Arkansas - 0.9% (0.5% of Total Investments) 4,250 University of Arkansas, Fayetteville, Revenue Bonds, Medical 11/14 at 100.00 Aa3 4,162,960 Sciences Campus, Series 2004B, 5.000%, 11/01/24 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ California - 30.9% (17.8% of Total Investments) California Department of Water Resources, Water System Revenue Bonds, Central Valley Project, Series 2005AC: 35 5.000%, 12/01/24 (Pre-refunded 12/01/14) - MBIA Insured 12/14 at 100.00 AAA 38,190 35 5.000%, 12/01/26 (Pre-refunded 12/01/14) - MBIA Insured 12/14 at 100.00 AAA 38,190 California Department of Water Resources, Water System Revenue Bonds, Central Valley Project, Series 2005AC: 4,010 5.000%, 12/01/24 - MBIA Insured 12/14 at 100.00 AAA 3,953,218 3,965 5.000%, 12/01/26 - MBIA Insured 12/14 at 100.00 AAA 3,818,612 1,275 California Educational Facilities Authority, Revenue Bonds, 10/15 at 100.00 Aa3 1,268,421 Occidental College, Series 2005A, 5.250%, 10/01/23 - MBIA Insured 13,175 California Pollution Control Financing Authority, Revenue Refunding 9/09 at 101.00 AA 11,772,258 Bonds, Southern California Edison Company, Series 1999A, 5.450%, 9/01/29 - MBIA Insured 13,445 California State, General Obligation Bonds, Series 2002, 5.000%, 4/12 at 100.00 AA 12,821,690 4/01/27 - AMBAC Insured 7,055 California State, General Obligation Bonds, Series 2002, 5.000%, 4/12 at 100.00 AAA 7,539,396 4/01/27 (Pre-refunded 4/01/12) - AMBAC Insured 5 California State, General Obligation Bonds, Series 2004, 5.000%, 4/14 at 100.00 AA 4,625 4/01/31 - AMBAC Insured 3,745 California State, General Obligation Bonds, Series 2004, 5.000%, 4/14 at 100.00 AAA 4,057,370 4/01/31 (Pre-refunded 4/01/14) - AMBAC Insured 8,000 California, General Obligation Bonds, Series 2002, 5.000%, 10/12 at 100.00 AA 7,361,360 10/01/32 - MBIA Insured 2,340 Cerritos Public Financing Authority, California, Tax Allocation 11/17 at 102.00 AA 2,160,311 Revenue Bonds, Los Cerritos Redevelopment Projects, Series 2002A, 5.000%, 11/01/24 - AMBAC Insured
----- 23 ----- NQI | Nuveen Insured Quality Municipal Fund, Inc. (continued) | Portfolio of INVESTMENTS October 31, 2008
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ California (continued) $ 5,000 Clovis Unified School District, Fresno County, California, General No Opt. Call AA $ 1,992,150 Obligation Bonds, Series 2001A, 0.000%, 8/01/25 - FGIC Insured Foothill/Eastern Transportation Corridor Agency, California, Toll Road Revenue Refunding Bonds, Series 1999: 22,985 0.000%, 1/15/24 - MBIA Insured 1/10 at 44.52 AA 6,952,963 22,000 0.000%, 1/15/31 - MBIA Insured 1/10 at 29.11 AA 3,684,560 50,000 0.000%, 1/15/37 - MBIA Insured 1/10 at 20.19 AA 4,949,500 5,000 Garden Grove, California, Certificates of Participation, Financing 3/12 at 101.00 AA 4,431,100 Project, Series 2002A, 5.125%, 3/01/32 - AMBAC Insured 2,125 Golden State Tobacco Securitization Corporation, California, 6/15 at 100.00 A 94,393 Tobacco Settlement Asset-Backed Revenue Bonds, Series 2005A, Trust 2448, 0.891%, 6/01/35 - FGIC Insured (IF) 5,795 Kern Community College District, California, General Obligation No Opt. Call AAA 2,130,706 Bonds, Series 2006, 0.000%, 11/01/25 - FSA Insured 5,348 Moreno Valley Public Finance Authority, California, GNMA 1/12 at 105.00 Aaa 5,671,394 Collateralized Assisted Living Housing Revenue Bonds, CDC Assisted Living Project, Series 2000A, 7.500%, 1/20/42 5,190 Ontario Redevelopment Financing Authority, San Bernardino County, 2/09 at 100.00 AA(4) 5,568,247 California, Revenue Bonds, Redevelopment Project 1, Series 1993, 5.850%, 8/01/22 - MBIA Insured (ETM) 3,615 Pasadena Unified School District, Los Angeles County, California, 5/13 at 100.00 AA(4) 3,913,274 General Obligation Bonds, Series 2003D, 5.000%, 5/01/24 (Pre-refunded 5/01/13) - MBIA Insured 2,590 Riverside County Public Financing Authority, California, Tax 10/14 at 100.00 BBB 2,322,065 Allocation Bonds, Multiple Projects, Series 2004, 5.000%, 10/01/25 - SYNCORA GTY Insured 2,000 San Diego Redevelopment Agency, California, Subordinate Lien Tax 9/14 at 100.00 A3 1,915,760 Allocation Bonds, Centre City Project, Series 2004A, 5.000%, 9/01/21 - SYNCORA GTY Insured San Francisco Airports Commission, California, Revenue Refunding Bonds, San Francisco International Airport, Second Series 2001, Issue 27A: 7,200 5.125%, 5/01/21 - MBIA Insured (Alternative Minimum Tax) 5/11 at 100.00 AA 6,207,264 12,690 5.250%, 5/01/31 - MBIA Insured (Alternative Minimum Tax) 5/11 at 100.00 AA 10,095,403 San Francisco Bay Area Rapid Transit District, California, Sales Tax Revenue Bonds, Series 2005A: 2,000 5.000%, 7/01/21 - MBIA Insured 7/15 at 100.00 AA+ 2,002,100 3,655 5.000%, 7/01/22 - MBIA Insured 7/15 at 100.00 AA+ 3,636,871 3,840 5.000%, 7/01/23 - MBIA Insured 7/15 at 100.00 AA+ 3,792,614 8,965 San Jose Redevelopment Agency, California, Tax Allocation Bonds, 8/17 at 100.00 AA 6,831,958 Merged Area Redevelopment Project, Series 2006C, 4.250%, 8/01/30 - MBIA Insured 3,500 Saugus Union School District, Los Angeles County, California, No Opt. Call A+ 1,432,760 General Obligation Bonds, Series 2006, 0.000%, 8/01/23 - FGIC Insured 1,000 Sierra Joint Community College District, Tahoe Truckee, California, 8/14 at 100.00 A+ 927,520 General Obligation Bonds, School Facilities Improvement District 1, Series 2005A, 5.000%, 8/01/27 - FGIC Insured 1,575 Sierra Joint Community College District, Western Nevada, 8/14 at 100.00 A+ 1,460,844 California, General Obligation Bonds, School Facilities Improvement District 2, Series 2005A, 5.000%, 8/01/27 - FGIC Insured 3,600 Ventura County Community College District, California, General 8/15 at 100.00 AA 3,372,156 Obligation Bonds, Series 2005B, 5.000%, 8/01/28 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 236,758 Total California 138,219,243 - ------------------------------------------------------------------------------------------------------------------------------------ Colorado - 2.4% (1.4% of Total Investments) 2,015 Board of Trustees of the University of Northern Colorado, Revenue 6/15 at 100.00 AAA 1,972,161 Bonds, Series 2005, 5.000%, 6/01/22 - FSA Insured Denver, Colorado, Airport Revenue Bonds, Trust 2365: 1,340 2.901%, 11/15/23 - FGIC Insured (IF) 11/16 at 100.00 AA 923,662 825 1.184%, 11/15/24 - FGIC Insured (IF) 11/16 at 100.00 AA 558,212 1,085 1.186%, 11/15/25 - FGIC Insured (IF) 11/16 at 100.00 AA 699,196
- ----- 24 - -----
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Colorado (continued) $ 9,780 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, No Opt. Call AA $ 1,837,369 Series 2000B, 0.000%, 9/01/32 - MBIA Insured 10,000 E-470 Public Highway Authority, Colorado, Toll Revenue Bonds, No Opt. Call AA 2,751,800 Series 2004A, 0.000%, 9/01/27 - MBIA Insured 1,250 Jefferson County School District R1, Colorado, General Obligation 12/14 at 100.00 Aa3 1,216,225 Bonds, Series 2004, 5.000%, 12/15/24 - FSA Insured (UB) 1,000 University of Colorado, Enterprise System Revenue Bonds, Series 6/15 at 100.00 AA 927,700 2005, 5.000%, 6/01/30 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 27,295 Total Colorado 10,886,325 - ------------------------------------------------------------------------------------------------------------------------------------ District of Columbia - 0.5% (0.3% of Total Investments) 1,335 Washington Convention Center Authority, District of Columbia, 10/16 at 100.00 AA 627,597 Senior Lien Dedicated Tax Revenue Bonds, Series 2007, Residuals 1606, 1.947%, 10/01/30 - AMBAC Insured (IF) 3,920 Washington District of Columbia Convention Center Authority, 10/16 at 100.00 AA 1,509,396 Dedicated Tax Revenue Bonds, Residual Series 1730, 1731, 1736, 0.471%, 10/01/36 - AMBAC Insured (IF) - ------------------------------------------------------------------------------------------------------------------------------------ 5,255 Total District of Columbia 2,136,993 - ------------------------------------------------------------------------------------------------------------------------------------ Florida - 8.7% (5.0% of Total Investments) 3,450 Collier County, Florida, Capital Improvement Revenue Bonds, Series 10/14 at 100.00 AA 3,317,969 2005, 5.000%, 10/01/24 - MBIA Insured 3,250 Florida State Board of Education, Full Faith and Credit Public 6/13 at 101.00 AAA 3,234,010 Education Capital Outlay Bonds, Series 2003J, 5.000%, 6/01/22 - AMBAC Insured 2,550 Florida State Board of Education, Public Education Capital Outlay 6/18 at 101.00 AAA 1,561,518 Bonds, Series 2008, Trust 2929, 0.054%, 6/01/38 - AGC Insured (IF) 20,000 Lee County, Florida, Airport Revenue Bonds, Series 2000A, 5.750%, 10/10 at 101.00 AAA 17,759,798 10/01/25 - FSA Insured (Alternative Minimum Tax) 4,115 Miami-Dade County Housing Finance Authority, Florida, Multifamily 7/11 at 100.00 AAA 3,474,953 Housing Revenue Bonds, Monterey Pointe Apartments, Series 2001-2A, 5.850%, 7/01/37 - FSA Insured (Alternative Minimum Tax) 7,000 Miami-Dade County, Florida, Aviation Revenue Bonds, Miami 10/12 at 100.00 A2 5,582,220 International Airport, Series 2002, 5.375%, 10/01/32 - FGIC Insured (Alternative Minimum Tax) 3,780 Palm Beach County School Board, Florida, Certificates of 8/13 at 100.00 AA 3,815,154 Participation, Series 2003A, 5.000%, 8/01/16 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 44,145 Total Florida 38,745,622 - ------------------------------------------------------------------------------------------------------------------------------------ Georgia - 0.2% (0.1% of Total Investments) 1,000 Atlanta, Georgia, Water and Wastewater Revenue Bonds, Series 2004, 11/14 at 100.00 AAA 977,660 5.000%, 11/01/22 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ Hawaii - 3.8% (2.2% of Total Investments) 1,620 Hawaii County, Hawaii, General Obligation Bonds, Series 2003A, 7/13 at 100.00 AAA 1,619,887 5.000%, 7/15/21 - FSA Insured Hawaii Department of Transportation, Airport System Revenue Refunding Bonds, Series 2000B: 8,785 6.625%, 7/01/18 - FGIC Insured (Alternative Minimum Tax) 7/10 at 101.00 A2 8,806,172 7,000 6.000%, 7/01/19 - FGIC Insured (Alternative Minimum Tax) 7/10 at 101.00 A2 6,658,120 - ------------------------------------------------------------------------------------------------------------------------------------ 17,405 Total Hawaii 17,084,179 - ------------------------------------------------------------------------------------------------------------------------------------ Illinois - 18.9% (10.9% of Total Investments) 9,500 Chicago, Illinois, Second Lien General Airport Revenue Refunding 1/10 at 101.00 AA 9,214,525 Bonds, O'Hare International Airport, Series 1999, 5.500%, 1/01/15 - AMBAC Insured (Alternative Minimum Tax) 2,875 Chicago, Illinois, Third Lien General Airport Revenue Bonds, O'Hare 1/16 at 100.00 AA 2,730,589 International Airport, Series 2005A, 5.250%, 1/01/24 - MBIA Insured 25,000 Illinois Health Facilities Authority, Revenue Bonds, Iowa Health 2/10 at 101.00 Aa3(4) 25,714,496 System, Series 2000, 5.875%, 2/15/30 - AMBAC Insured (ETM)
----- 25 ----- NQI | Nuveen Insured Quality Municipal Fund, Inc. (continued) | Portfolio of INVESTMENTS October 31, 2008
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Illinois (continued) $ 13,275 Illinois, General Obligation Bonds, Illinois FIRST Program, Series 5/11 at 100.00 AAA $ 13,214,864 2001, 5.250%, 5/01/26 - FSA Insured 15,785 Illinois, General Obligation Bonds, Illinois FIRST Program, Series 4/12 at 100.00 AAA 15,655,563 2002, 5.250%, 4/01/27 - FSA Insured 18,000 Metropolitan Pier and Exposition Authority, Illinois, Revenue No Opt. Call AAA 7,250,940 Bonds, McCormick Place Expansion Project, Series 2002A, 0.000%, 12/15/24 - MBIA Insured 10,000 University of Illinois, Certificates of Participation, Utility 8/11 at 100.00 AA(4) 10,652,700 Infrastructure Projects, Series 2001B, 5.250%, 8/15/21 (Pre-refunded 8/15/11) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 94,435 Total Illinois 84,433,677 - ------------------------------------------------------------------------------------------------------------------------------------ Indiana - 2.6% (1.5% of Total Investments) 3,730 Indiana Municipal Power Agency, Power Supply Revenue Bonds, Series 1/17 at 100.00 AA 3,047,373 2007A, 5.000%, 1/01/42 - MBIA Insured 7,790 Indiana Transportation Finance Authority, Highway Revenue Bonds, No Opt. Call AA+ 8,675,723 Series 1990A, 7.250%, 6/01/15 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 11,520 Total Indiana 11,723,096 - ------------------------------------------------------------------------------------------------------------------------------------ Kansas - 0.6% (0.4% of Total Investments) 3,000 Wichita, Kansas, Water and Sewerage Utility Revenue Bonds, Series 10/13 at 100.00 AA 2,881,200 2003, 5.000%, 10/01/21 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ Kentucky - 6.7% (3.8% of Total Investments) 3,015 Kentucky Asset/Liability Commission, General Fund Revenue Project 5/15 at 100.00 AA 2,909,897 Notes, First Series 2005, 5.000%, 5/01/25 - MBIA Insured Kentucky Economic Development Finance Authority, Health System Revenue Bonds, Norton Healthcare Inc., Series 2000C: 2,530 6.150%, 10/01/27 - MBIA Insured 10/13 at 101.00 AA 2,306,196 12,060 6.150%, 10/01/28 - MBIA Insured 10/13 at 101.00 AA 10,930,702 Kentucky Economic Development Finance Authority, Health System Revenue Bonds, Norton Healthcare Inc., Series 2000C: 3,815 6.150%, 10/01/27 (Pre-refunded 10/01/13) - MBIA Insured 10/13 at 101.00 AA(4) 4,334,298 6,125 6.150%, 10/01/28 (Pre-refunded 10/01/13) - MBIA Insured 10/13 at 101.00 AA(4) 6,958,735 2,230 Kentucky State Property and Buildings Commission, Revenue Bonds, 8/15 at 100.00 AAA 2,413,685 Project 85, Series 2005, 5.000%, 8/01/23 (Pre-refunded 8/01/15) - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 29,775 Total Kentucky 29,853,513 - ------------------------------------------------------------------------------------------------------------------------------------ Louisiana - 4.2% (2.4% of Total Investments) Louisiana State, Gasoline Tax Revenue Bonds, Series 2006: 11,325 4.750%, 5/01/39 - FSA Insured (UB) 5/16 at 100.00 Aa3 9,193,295 8,940 4.500%, 5/01/41 - FGIC Insured (UB) 5/16 at 100.00 Aa3 6,854,209 10 Louisiana State, Gasoline Tax Revenue Bonds, Series 2006, Residuals 5/16 at 100.00 Aa3 668 660-1, 10.855%, 5/01/41 - FGIC Insured (IF) 5 Louisiana State, Gasoline Tax Revenue Bonds, Series 2006, Residuals 5/16 at 100.00 Aa3 334 660-3, 10.838%, 5/01/41 - FGIC Insured (IF) 2,910 Orleans Levee District, Louisiana, Levee District General 12/08 at 100.00 AAA 2,913,667 Obligation Bonds, Series 1986, 5.950%, 11/01/15 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 23,190 Total Louisiana 18,962,173 - ------------------------------------------------------------------------------------------------------------------------------------ Maine - 1.8% (1.1% of Total Investments) 555 Maine Health and Higher Educational Facilities Authority, Revenue 7/09 at 101.00 Aaa 559,557 Bonds, Series 1999B, 6.000%, 7/01/29 - MBIA Insured
- ----- 26 - -----
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Maine (continued) $ 7,445 Maine Health and Higher Educational Facilities Authority, Revenue 7/09 at 101.00 Aaa $ 7,734,611 Bonds, Series 1999B, 6.000%, 7/01/29 (Pre-refunded 7/01/09) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 8,000 Total Maine 8,294,168 - ------------------------------------------------------------------------------------------------------------------------------------ Maryland - 1.9% (1.1% of Total Investments) 2,100 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 AA 1,455,909 Revenue Bonds, Western Maryland Health, Series 2006A, 4.750%, 7/01/36 - MBIA Insured 7,535 Maryland Transportation Authority, Airport Parking Revenue Bonds, 3/12 at 101.00 AA 7,132,556 Baltimore-Washington International Airport Passenger Facility, Series 2002B, 5.500%, 3/01/18 - AMBAC Insured (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 9,635 Total Maryland 8,588,465 - ------------------------------------------------------------------------------------------------------------------------------------ Massachusetts - 3.1% (1.8% of Total Investments) 5,000 Massachusetts Bay Transportation Authority, Senior Sales Tax 7/12 at 100.00 AAA 5,345,450 Revenue Refunding Bonds, Series 2002A, 5.000%, 7/01/27 (Pre-refunded 7/01/12) - FGIC Insured 3,465 Massachusetts Water Resources Authority, General Revenue Bonds, 2/17 at 100.00 Aa2 2,673,144 4.500%, 8/01/46 - FSA Insured (UB) Massachusetts, Special Obligation Dedicated Tax Revenue Bonds, Series 2004: 1,250 5.250%, 1/01/21 (Pre-refunded 1/01/14) - FGIC Insured 1/14 at 100.00 A(4) 1,300,013 1,000 5.250%, 1/01/22 (Pre-refunded 1/01/14) - FGIC Insured 1/14 at 100.00 A(4) 1,040,010 1,195 5.250%, 1/01/23 (Pre-refunded 1/01/14) - FGIC Insured 1/14 at 100.00 A(4) 1,242,812 2,000 5.250%, 1/01/24 (Pre-refunded 1/01/14) - FGIC Insured 1/14 at 100.00 A(4) 2,080,020 - ------------------------------------------------------------------------------------------------------------------------------------ 13,910 Total Massachusetts 13,681,449 - ------------------------------------------------------------------------------------------------------------------------------------ Michigan - 0.9% (0.5% of Total Investments) 4,750 Michigan Strategic Fund, Collateralized Limited Obligation 9/09 at 102.00 AA 3,977,460 Pollution Control Revenue Refunding Bonds, Detroit Edison Company, Series 1999A, 5.550%, 9/01/29 - MBIA Insured (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ Mississippi - 1.4% (0.8% of Total Investments) 2,715 Harrison County Wastewater Management District, Mississippi, No Opt. Call AA(4) 3,258,326 Revenue Refunding Bonds, Wastewater Treatment Facilities, Series 1991B, 7.750%, 2/01/14 - FGIC Insured (ETM) 2,545 Harrison County Wastewater Management District, Mississippi, No Opt. Call N/R(4) 3,071,179 Wastewater Treatment Facilities Revenue Refunding Bonds, Series 1991A, 8.500%, 2/01/13 - FGIC Insured (ETM) - ------------------------------------------------------------------------------------------------------------------------------------ 5,260 Total Mississippi 6,329,505 - ------------------------------------------------------------------------------------------------------------------------------------ Nebraska - 2.1% (1.2% of Total Investments) 12,155 Lincoln, Nebraska, Electric System Revenue Bonds, Series 2007A, 9/17 at 100.00 AA 9,553,222 4.500%, 9/01/37 - FGIC Insured (UB) - ------------------------------------------------------------------------------------------------------------------------------------ Nevada - 5.9% (3.4% of Total Investments) 33,700 Director of Nevada State Department of Business and Industry, 1/10 at 100.00 AA 20,258,416 Revenue Bonds, Las Vegas Monorail Project, First Tier, Series 2000, 5.375%, 1/01/40 - AMBAC Insured 5,720 Reno, Nevada, Senior Lien Sales and Room Tax Revenue Bonds, Reno 6/12 at 100.00 AA(4) 6,114,852 Transportation Rail Access Corridor Project, Series 2002, 5.125%, 6/01/32 (Pre-refunded 6/01/12) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 39,420 Total Nevada 26,373,268 - ------------------------------------------------------------------------------------------------------------------------------------ New Jersey - 1.3% (0.7% of Total Investments) New Jersey Economic Development Authority, Revenue Bonds, Motor Vehicle Surcharge, Series 2004A: 1,700 5.000%, 7/01/22 - MBIA Insured 7/14 at 100.00 AA 1,657,177 1,700 5.000%, 7/01/23 - MBIA Insured 7/14 at 100.00 AA 1,646,637 2,500 New Jersey Turnpike Authority, Revenue Bonds, Series 2003A, 5.000%, 7/13 at 100.00 AA 2,470,425 1/01/19 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 5,900 Total New Jersey 5,774,239 - ------------------------------------------------------------------------------------------------------------------------------------
----- 27 ----- NQI | Nuveen Insured Quality Municipal Fund, Inc. (continued) | Portfolio of INVESTMENTS October 31, 2008
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ New Mexico - 1.4% (0.8% of Total Investments) New Mexico Finance Authority, Public Project Revolving Fund Revenue Bonds, Series 2004C: $ 1,420 5.000%, 6/01/22 - AMBAC Insured 6/14 at 100.00 AA+ $ 1,413,014 3,290 5.000%, 6/01/23 - AMBAC Insured 6/14 at 100.00 AA+ 3,246,309 1,530 New Mexico State University, Revenue Bonds, Series 2004, 5.000%, 4/14 at 100.00 AA 1,509,835 4/01/23 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 6,240 Total New Mexico 6,169,158 - ------------------------------------------------------------------------------------------------------------------------------------ New York - 15.7% (9.1% of Total Investments) 11,760 Dormitory Authority of the State of New York, New York City, Lease 5/10 at 101.00 AA(4) 12,511,346 Revenue Bonds, Court Facilities, Series 1999, 5.750%, 5/15/30 (Pre-refunded 5/15/10) - AMBAC Insured 15,000 Dormitory Authority of the State of New York, Revenue Bonds, School 10/12 at 100.00 AA 15,560,850 Districts Financing Program, Series 2002D, 5.500%, 10/01/17 - MBIA Insured 4,070 Hudson Yards Infrastructure Corporation, New York, Revenue Bonds, 2/17 at 100.00 AA 2,896,497 Series 2006A, 4.500%, 2/15/47 - MBIA Insured (UB) 3,300 Long Island Power Authority, New York, Electric System General 11/16 at 100.00 AA 2,453,253 Revenue Bonds, Series 2006F, 4.250%, 5/01/33 - MBIA Insured (UB) 5,000 Long Island Power Authority, New York, Electric System General 6/16 at 100.00 A- 4,564,700 Revenue Bonds, Series 2006A, 5.000%, 12/01/25 - FGIC Insured 8,000 Metropolitan Transportation Authority, New York, State Service 7/12 at 100.00 AA 7,642,160 Contract Refunding Bonds, Series 2002A, 5.000%, 7/01/25 - FGIC Insured 1,740 New York Convention Center Development Corporation, Hotel Fee 11/15 at 100.00 A 1,037,005 Revenue Bonds, Trust 2364, 8.714%, 11/15/44 - AMBAC Insured (IF) 10,150 New York State Housing Finance Agency, Mortgage Revenue Refunding 11/08 at 100.00 AAA 10,151,015 Bonds, Housing Project, Series 1996A, 6.125%, 11/01/20 - FSA Insured 4,200 New York State Mortgage Agency, Homeowner Mortgage Revenue Bonds, 10/09 at 100.00 Aa1 3,963,918 Series 82, 5.550%, 10/01/19 - MBIA Insured (Alternative Minimum Tax) New York State Urban Development Corporation, State Personal Income Tax Revenue Bonds, Series 2005B: 2,460 5.000%, 3/15/24 - FSA Insured (UB) 3/15 at 100.00 AAA 2,433,899 2,465 5.000%, 3/15/25 - FSA Insured (UB) 3/15 at 100.00 AAA 2,421,641 5,000 Triborough Bridge and Tunnel Authority, New York, Subordinate Lien 11/13 at 100.00 Aa3 4,575,350 General Purpose Revenue Bonds, Series 2003A, 5.000%, 11/15/32 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 73,145 Total New York 70,211,634 - ------------------------------------------------------------------------------------------------------------------------------------ Ohio - 3.5% (2.0% of Total Investments) 7,000 Cleveland State University, Ohio, General Receipts Bonds, Series 6/14 at 100.00 AA 7,094,220 2004, 5.250%, 6/01/19 - FGIC Insured 3,065 Hamilton County, Ohio, Sales Tax Revenue Bonds, Tender Option Bond 12/16 at 100.00 A2 953,184 Trust 2706, 0.472%, 12/01/32 - AMBAC Insured (IF) 5,000 Lorain County, Ohio, Health Facilities Revenue Bonds, Catholic 9/09 at 102.00 AA 4,555,150 Healthcare Partners, Series 1999A, 5.500%, 9/01/29 - AMBAC Insured 3,065 Oak Hills Local School District, Hamilton County, Ohio, General 12/15 at 100.00 AAA 3,041,461 Obligation Bonds, Series 2005, 5.000%, 12/01/24 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 18,130 Total Ohio 15,644,015 - ------------------------------------------------------------------------------------------------------------------------------------ Oklahoma - 0.5% (0.3% of Total Investments) 2,250 Oklahoma Capitol Improvement Authority, State Facilities Revenue 7/15 at 100.00 AA 2,176,268 Bonds, Series 2005F, 5.000%, 7/01/24 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ Pennsylvania - 3.0% (1.8% of Total Investments) 3,000 Allegheny County Sanitary Authority, Pennsylvania, Sewerage Revenue 12/15 at 100.00 AA 2,755,080 Bonds, Series 2005A, 5.000%, 12/01/23 - MBIA Insured
- ----- 28 - -----
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Pennsylvania (continued) Delaware County Authority, Pennsylvania, Revenue Bonds, Villanova University, Series 2006: $ 3,260 5.000%, 8/01/23 - AMBAC Insured 8/16 at 100.00 AA $ 3,170,252 1,600 5.000%, 8/01/24 - AMBAC Insured 8/16 at 100.00 AA 1,544,064 5,400 Pennsylvania Public School Building Authority, Lease Revenue Bonds, 12/16 at 100.00 Aa3 4,292,622 School District of Philadelphia, Series 2006B, 4.500%, 6/01/32 - FSA Insured (UB) 2,000 Pittsburgh Public Parking Authority, Pennsylvania, Parking Revenue 12/15 at 100.00 AA 1,747,360 Bonds, Series 2005B, 5.000%, 12/01/23 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 15,260 Total Pennsylvania 13,509,378 - ------------------------------------------------------------------------------------------------------------------------------------ Puerto Rico - 2.2% (1.3% of Total Investments) 2,500 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series 7/15 at 100.00 AA 2,258,050 2005RR, 5.000%, 7/01/22 - FGIC Insured 25,000 Puerto Rico Sales Tax Financing Corporation, Sales Tax Revenue No Opt. Call AA 2,531,250 Bonds, Series 2007A, 0.000%, 8/01/42 - FGIC Insured 5,000 Puerto Rico, Highway Revenue Bonds, Highway and Transportation No Opt. Call A- 5,027,550 Authority, Series 2003AA, 5.500%, 7/01/16 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 32,500 Total Puerto Rico 9,816,850 - ------------------------------------------------------------------------------------------------------------------------------------ South Carolina - 2.4% (1.4% of Total Investments) 3,000 Charleston County School District, South Carolina, General 2/14 at 100.00 Aa1 2,985,390 Obligation Bonds, Series 2004A, 5.000%, 2/01/22 - AMBAC Insured 10,000 South Carolina Transportation Infrastructure Bank, Revenue Bonds, 10/16 at 100.00 A1 7,727,500 Series 2007A, 4.500%, 10/01/34 - SYNCORA GTY Insured - ------------------------------------------------------------------------------------------------------------------------------------ 13,000 Total South Carolina 10,712,890 - ------------------------------------------------------------------------------------------------------------------------------------ Tennessee - 1.3% (0.7% of Total Investments) Knox County Health, Educational and Housing Facilities Board, Tennessee, Hospital Revenue Refunding Bonds, Covenant Health, Series 2002A: 7,500 0.000%, 1/01/24 - FSA Insured 1/13 at 52.75 AAA 2,988,375 5,000 0.000%, 1/01/25 - FSA Insured 1/13 at 49.71 AAA 1,860,350 2,750 0.000%, 1/01/26 - FSA Insured 1/13 at 46.78 AAA 921,745 - ------------------------------------------------------------------------------------------------------------------------------------ 15,250 Total Tennessee 5,770,470 - ------------------------------------------------------------------------------------------------------------------------------------ Texas - 19.3% (11.2% of Total Investments) 8,000 Abilene Health Facilities Development Corporation, Texas, Hospital 3/09 at 100.00 AA 7,215,120 Revenue Refunding and Improvement Bonds, Hendrick Medical Center Project, Series 1995C, 6.150%, 9/01/25 - MBIA Insured 3,135 Corpus Christi, Texas, Utility System Revenue Bonds, Series 2004, 7/14 at 100.00 AAA 3,176,351 5.250%, 7/15/20 - FSA Insured (UB) 3,000 Dallas-Ft. Worth International Airport, Texas, Joint Revenue 11/11 at 100.00 A+ 3,004,080 Refunding and Improvement Bonds, Series 2001A, 5.750%, 11/01/13 - FGIC Insured (Alternative Minimum Tax) 3,735 Grand Prairie Independent School District, Dallas County, Texas, 2/13 at 100.00 AAA 4,023,940 General Obligation Bonds, Series 2003, 5.125%, 2/15/31 (Pre-refunded 2/15/13) - FSA Insured 1,035 Harris County Hospital District, Texas, Revenue Refunding Bonds, No Opt. Call AA 1,068,192 Series 1990, 7.400%, 2/15/10 - AMBAC Insured 285 Harris County Hospital District, Texas, Revenue Refunding Bonds, No Opt. Call AA(4) 292,627 Series 1990, 7.400%, 2/15/10 - AMBAC Insured (ETM) 5,000 Houston, Texas, First Lien Combined Utility System Revenue Bonds, 5/14 at 100.00 AA 4,657,750 Series 2004A, 5.250%, 5/15/24 - FGIC Insured 4,500 Houston, Texas, General Obligation Public Improvement Bonds, Series 3/11 at 100.00 AAA 4,486,680 2001A, 5.000%, 3/01/22 - FSA Insured
----- 29 ----- NQI | Nuveen Insured Quality Municipal Fund, Inc. (continued) | Portfolio of INVESTMENTS October 31, 2008
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Texas (continued) $ 17,000 Houston, Texas, Junior Lien Water and Sewerage System Revenue No Opt. Call AAA $ 17,997,048 Refunding Bonds, Series 2002A, 5.750%, 12/01/32 - FSA Insured (ETM) 4,685 Houston, Texas, Subordinate Lien Airport System Revenue Bonds, 7/10 at 100.00 AAA 4,319,617 Series 2000A, 5.500%, 7/01/19 - FSA Insured (Alternative Minimum Tax) 19,200 Jefferson County Health Facilities Development Corporation, Texas, 8/11 at 100.00 AA 15,013,248 FHA-Insured Mortgage Revenue Bonds, Baptist Hospital of Southeast Texas, Series 2001, 5.400%, 8/15/31 - AMBAC Insured 2,000 Laredo Independent School District Public Facilities Corporation, 8/11 at 100.00 AA 1,847,720 Texas, Lease Revenue Bonds, Series 2004A, 5.000%, 8/01/24 - AMBAC Insured 22,045 North Central Texas Health Facilities Development Corporation, 8/12 at 101.00 AA 19,480,283 Revenue Bonds, Children's Medical Center of Dallas, Series 2002, 5.250%, 8/15/32 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 93,620 Total Texas 86,582,656 - ------------------------------------------------------------------------------------------------------------------------------------ Washington - 12.2% (7.0% of Total Investments) 10,730 Chelan County Public Utility District 1, Washington, Hydro 7/11 at 101.00 AA 9,043,888 Consolidated System Revenue Refunding Bonds, Series 2001C, 5.650%, 7/01/32 - MBIA Insured (Alternative Minimum Tax) 15,025 Seattle Housing Authority, Washington, GNMA Collateralized Mortgage 11/11 at 105.00 AAA 14,617,973 Loan Low Income Housing Assistance Revenue Bonds, Park Place Project, Series 2000A, 7.000%, 5/20/42 4,530 Seattle Housing Authority, Washington, GNMA Collateralized Mortgage 9/11 at 102.00 AAA 3,932,176 Loan Low Income Housing Assistance Revenue Bonds, RHF/Esperanza Apartments Project, Series 2000A, 6.125%, 3/20/42 (Alternative Minimum Tax) 5,000 Seattle, Washington, Municipal Light and Power Revenue Bonds, 12/10 at 100.00 AAA 5,024,200 Series 2000, 5.250%, 12/01/21 - FSA Insured 2,500 Washington State Healthcare Facilities Authority, Revenue Bonds, 12/09 at 101.00 AA(4) 2,622,575 Providence Services, Series 1999, 5.375%, 12/01/19 (Pre-refunded 12/01/09) - MBIA Insured 21,510 Washington State, General Obligation Bonds, Series 2002, 0.000%, No Opt. Call AA+ 6,927,941 6/01/28 - MBIA Insured (UB) 10,000 Washington State, General Obligation Bonds, Series R-2003A, 5.000%, 1/12 at 100.00 AA+ 10,089,600 1/01/19 - MBIA Insured 2,250 Washington, Certificates of Participation, Washington Convention 7/09 at 100.00 AA 2,283,975 and Trade Center, Series 1999, 5.250%, 7/01/14 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 71,545 Total Washington 54,542,328 - ------------------------------------------------------------------------------------------------------------------------------------ West Virginia - 3.0% (1.8% of Total Investments) 12,845 West Virginia Water Development Authority, Infrastructure Revenue 10/10 at 100.00 AAA 13,595,020 Bonds, Infrastructure and Jobs Development Council Program, Series 2000A, 5.500%, 10/01/39 (Pre-refunded 10/01/10) - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ Wisconsin - 0.9% (0.5% of Total Investments) 1,635 Green Bay, Wisconsin, Water System Revenue Bonds, Series 2004, 11/14 at 100.00 Aaa 1,765,961 5.000%, 11/01/26 (Pre-refunded 11/01/14) - FSA Insured 545 Green Bay, Wisconsin, Water System Revenue Bonds, Series 2004, 11/14 at 100.00 Aaa 515,300 5.000%, 11/01/26 - FSA Insured 1,675 Wisconsin Public Power Incorporated System, Power Supply System 7/15 at 100.00 AA 1,551,617 Revenue Bonds, Series 2005A, 5.000%, 7/01/30 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 3,855 Total Wisconsin 3,832,878 - ------------------------------------------------------------------------------------------------------------------------------------ $ 984,038 Total Long-Term Investments (cost $837,363,243) - 169.1% 756,970,257 ============------------------------------------------------------------------------------------------------------------------------
- ----- 30 - -----
Principal Amount (000) Description (1) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Short-Term Investments - 4.2% (2.4% of Total Investments) $ 3,000 Dormitory Authority of the State of New York, State Personal Income Tax Revenue A-2 $ 3,000,000 Bonds, Series 2005C, Variable Rate Demand Obligations, 10.500%, 3/15/32 - AMBAC Insured (5) 5,655 Douglas County School District RE1, Douglas and Elbert Counties, Colorado, General A-1+ 5,655,000 Obligation Bonds, Series 2001, Trust 163, Variable Rate Demand Obligations, 2.270%, 6/15/09 - MBIA Insured (5) 4,000 Massachusetts Water Resources Authority, General Revenue Bonds, Tender Option Bond, VMIG-1 4,000,000 Trust 1080, Variable Rate Demand Obligations, 3.000%, 8/01/32 - FSA Insured (5) 2,000 New York City, New York, General Obligation Bonds, Fiscal Series 1995B2-B10, VMIG-1 2,000,000 Variable Rate Demand Obligations, 1.200%, 8/15/22 - MBIA Insured (5) 1,000 New York State Dorm Authority, Revenue Bonds, Non State Supported Debt, Cornell VMIG-1 1,000,000 University, Series 2008C, Variable Rate Demand Obligations, 1.150%, 7/01/37 (5) 3,000 Port of Tacoma, Washington, General Obligation Bonds, Tender Option Bond, Trust Aa3 3,000,000 2006-86, Variable Rate Demand Obligations, 3.320%, 6/01/25 - MBIA Insured (5) - ------------------------------------------------------------------------------------------------------------------------------------ $ 18,655 Total Short-Term Investments (cost $18,655,000) 18,655,000 ============------------------------------------------------------------------------------------------------------------------------ Total Investments (cost $856,018,243) - 173.3% 775,625,257 --------------------------------------------------------------------------------------------------------------------- Floating Rate Obligations - (10.4)% (46,750,000) --------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 3.8% 17,012,753 --------------------------------------------------------------------------------------------------------------------- Auction Rate Preferred Shares, at Liquidation Value - (66.7)% (6) (298,425,000) --------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 447,463,010 =====================================================================================================================
At least 80% of the Fund's net assets (including net assets attributable to Auction Rate Preferred shares) are invested in municipal securities that are covered by insurance or backed by an escrow or trust account containing sufficient U.S. Government or U.S. Government agency securities or U.S. Treasury-issued State and Local Government Series securities to ensure the timely payment of principal and interest. See Notes to Financial Statements, Footnote 1 - Insurance, for more information. (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's Group ("Standard & Poor's") or Moody's Investor Service, Inc. ("Moody's") rating. Ratings below BBB by Standard & Poor's or Baa by Moody's are considered to be below investment grade. The Portfolio of Investments may reflect the ratings on certain bonds insured by AGC, AMBAC, CIFG, FGIC, FSA, MBIA, RAAI and SYNCORA as of October 31, 2008. Please see the Portfolio Manager's Commentary for an expanded discussion of the affect on the Fund of changes to the ratings of certain bonds in the portfolio resulting from changes to the ratings of the underlying insurers both during the period and after period end. (4) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. (5) Investment has a maturity of more than one year, but has variable rate and demand features which qualify it as a short-term investment. The rate disclosed is that in effect at the end of the reporting period. This rate changes periodically based on market conditions or a specified market index. (6) Auction Rate Preferred Shares, at Liquidation Value as a percentage of Total Investments is 38.5%. N/R Not rated. (ETM) Escrowed to maturity. (IF) Inverse floating rate investment. (UB) Underlying bond of an inverse floating rate trust reflected as a financing transaction pursuant to the provisions of SFAS No. 140. See accompanying notes to financial statements. ----- 31 ----- NIO | Nuveen Insured Municipal Opportunity Fund, Inc. | Portfolio of INVESTMENTS October 31, 2008
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Alabama - 11.4% (6.8% of Total Investments) $ 3,500 Birmingham Waterworks And Sewer Board, Alabama, Water and Sewer 1/17 at 100.00 A3 $ 1,052,660 Revenue Bonds, Tender Option Bond Trust 2707, 0.596%, 1/01/43 - AMBAC Insured (IF) 11,175 Hoover Board of Education, Alabama, Capital Outlay Tax Anticipation 2/11 at 100.00 AA 11,197,909 Warrants, Series 2001, 5.250%, 2/15/22 - MBIA Insured Jefferson County, Alabama, Sewer Revenue Capital Improvement Warrants, Series 1999A: 10,815 5.000%, 2/01/33 (Pre-refunded 2/01/09) - FGIC Insured 2/09 at 101.00 AAA 11,004,154 9,790 5.000%, 2/01/33 (Pre-refunded 2/01/09) - FGIC Insured 2/09 at 101.00 AAA 9,961,227 29,860 5.750%, 2/01/38 (Pre-refunded 2/01/09) - FGIC Insured 2/09 at 101.00 AAA 30,454,511 2,500 Jefferson County, Alabama, Sewer Revenue Capital Improvement 8/12 at 100.00 AAA 2,681,275 Warrants, Series 2002B, 5.125%, 2/01/42 (Pre-refunded 8/01/12) - FGIC Insured Jefferson County, Alabama, Sewer Revenue Capital Improvement Warrants, Series 2002D: 425 5.000%, 2/01/38 (Pre-refunded 8/01/12) - FGIC Insured 8/12 at 100.00 AAA 449,931 14,800 5.000%, 2/01/42 (Pre-refunded 8/01/12) - FGIC Insured 8/12 at 100.00 AAA 15,808,176 18,760 Jefferson County, Alabama, Sewer Revenue Capitol Improvement 2/11 at 101.00 AAA 19,775,291 Warrants, Series 2001A, 5.000%, 2/01/41 (Pre-refunded 2/01/11) - FGIC Insured 10,195 Jefferson County, Alabama, Sewer Revenue Refunding Warrants, Series 2/09 at 100.00 BB 6,888,252 1997A, 5.375%, 2/01/27 - FGIC Insured 5,240 Jefferson County, Alabama, Sewer Revenue Refunding Warrants, Series 2/11 at 101.00 AAA 5,554,295 2003B, 5.000%, 2/01/41 (Pre-refunded 2/01/11) - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 117,060 Total Alabama 114,827,681 - ------------------------------------------------------------------------------------------------------------------------------------ Alaska - 1.3% (0.8% of Total Investments) 2,425 Alaska Housing Finance Corporation, Collateralized Veterans 12/09 at 100.00 AAA 2,366,145 Mortgage Program Bonds, First Series 1999A-1, 6.150%, 6/01/39 11,245 Alaska Housing Finance Corporation, General Mortgage Revenue Bonds, 6/09 at 100.00 AAA 10,820,839 Series 1999A, 6.050%, 6/01/39 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 13,670 Total Alaska 13,186,984 - ------------------------------------------------------------------------------------------------------------------------------------ Arizona - 2.3% (1.4% of Total Investments) Arizona State University, Certificates of Participation, Resh Infrastructure Projects, Series 2005A: 2,000 5.000%, 9/01/25 - AMBAC Insured 3/15 at 100.00 AA 1,876,360 2,000 5.000%, 9/01/27 - AMBAC Insured 3/15 at 100.00 AA 1,852,520 1,000 Arizona State University, System Revenue Bonds, Series 2005, 7/15 at 100.00 AA 883,410 5.000%, 7/01/27 - AMBAC Insured 1,000 Maricopa County Union High School District 210, Phoenix, Arizona, 7/14 at 100.00 AAA 1,077,250 General Obligation Bonds, Series 2004A, 5.000%, 7/01/22 (Pre-refunded 7/01/14) - FSA Insured 5,200 Mesa, Arizona, Utility System Revenue Bonds, Reset Option Longs, 7/17 at 100.00 AAA 840,320 Series 11032- 11034, 8.606%, 7/01/31 - FSA Insured (IF) 1,150 Phoenix Civic Improvement Corporation, Arizona, Junior Lien 7/14 at 100.00 AA+ 1,108,025 Wastewater System Revenue Bonds, Series 2004, 5.000%, 7/01/27 - MBIA Insured 13,490 Phoenix Civic Improvement Corporation, Arizona, Junior Lien Water 7/15 at 100.00 AA 12,435,757 System Revenue Bonds, Series 2005, 4.750%, 7/01/25 - MBIA Insured
- ----- 32 - -----
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Arizona (continued) $ 2,905 Pima County Industrial Development Authority, Arizona, Lease 1/09 at 100.00 Aaa $ 2,919,496 Obligation Revenue Refunding Bonds, Tucson Electric Power Company, Series 1988A, 7.250%, 7/15/10 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 28,745 Total Arizona 22,993,138 - ------------------------------------------------------------------------------------------------------------------------------------ Arkansas - 0.3% (0.2% of Total Investments) 3,660 Arkansas State University, Student Fee Revenue Bonds, Beebe Campus, 9/15 at 100.00 Aa3 3,026,966 Series 2006, 5.000%, 9/01/35 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ California - 32.0% (19.1% of Total Investments) 5,600 Alameda Corridor Transportation Authority, California, Subordinate No Opt. Call A 2,802,296 Lien Revenue Bonds, Series 2004A, 0.000%, 10/01/20 - AMBAC Insured 10,000 California Department of Veterans Affairs, Home Purchase Revenue 6/12 at 101.00 AA 9,983,600 Bonds, Series 2002A, 5.300%, 12/01/21 - AMBAC Insured California Department of Water Resources, Power Supply Revenue Bonds, Series 2002A: 30,000 5.375%, 5/01/17 (Pre-refunded 5/01/12) - SYNCORA GTY Insured 5/12 at 101.00 Aaa 32,741,398 25,000 5.375%, 5/01/18 (Pre-refunded 5/01/12) - AMBAC Insured 5/12 at 101.00 Aaa 27,284,500 California Department of Water Resources, Water System Revenue Bonds, Central Valley Project, Series 2005AC: 30 5.000%, 12/01/24 (Pre-refunded 12/01/14) - MBIA Insured 12/14 at 100.00 AAA 32,734 25 5.000%, 12/01/27 (Pre-refunded 12/01/14) - MBIA Insured 12/14 at 100.00 AAA 27,279 California Department of Water Resources, Water System Revenue Bonds, Central Valley Project, Series 2005AC: 3,670 5.000%, 12/01/24 - MBIA Insured 12/14 at 100.00 AAA 3,618,033 2,795 5.000%, 12/01/27 - MBIA Insured 12/14 at 100.00 AAA 2,704,749 10,150 California, General Obligation Bonds, Series 2004, 5.000%, 6/01/31 - 12/14 at 100.00 AA 9,386,619 AMBAC Insured 3,500 Coachella Valley Unified School District, Riverside County, 8/15 at 100.00 A- 3,265,395 California, General Obligation Bonds, Series 2005A, 5.000%, 8/01/26 - FGIC Insured 20,000 Cucamonga County Water District, San Bernardino County, California, 9/11 at 101.00 A+ 17,321,000 Certificates of Participation, Water Shares Purchase, Series 2000, 5.125%, 9/01/35 - FGIC Insured 5,750 East Bay Municipal Utility District, Alameda and Contra Costa 6/15 at 100.00 AA+ 5,534,260 Counties, California, Water System Subordinated Revenue Bonds, Series 2005A, 5.000%, 6/01/27 - MBIA Insured 2,500 Golden State Tobacco Securitization Corporation, California, 6/15 at 100.00 A2 -- Tobacco Settlement Asset-Backed Revenue Bonds, Series 2005A, Trust 2448, 0.891%, 6/01/38 - FGIC Insured (IF) 1,520 Hayward Redevelopment Agency, California, Downtown Redevelopment 3/16 at 100.00 A- 1,284,628 Project Tax Allocation Bonds, Series 2006, 5.000%, 3/01/36 - SYNCORA GTY Insured 5,600 Kern Community College District, California, General Obligation No Opt. Call AAA 2,196,432 Bonds, Series 2006, 0.000%, 11/01/24 - FSA Insured (4) 5,000 Long Beach Bond Financing Authority, California, Lease Revenue 11/11 at 101.00 AA 4,428,350 Refunding Bonds, Long Beach Aquarium of the South Pacific, Series 2001, 5.250%, 11/01/30 - AMBAC Insured 2,740 Los Angeles Harbors Department, California, Revenue Bonds, Series 8/16 at 102.00 AA 2,325,411 2006A, 5.000%, 8/01/22 - FGIC Insured (Alternative Minimum Tax) 20,000 Los Angeles Unified School District, California, General Obligation 7/13 at 100.00 AAA 19,998,600 Bonds, Series 2003A, 5.000%, 7/01/21 - FSA Insured 3,000 Los Angeles Unified School District, California, General Obligation 7/16 at 100.00 AA- 2,895,510 Bonds, Series 2006F, 5.000%, 7/01/24 - FGIC Insured 6,205 Port of Oakland, California, Revenue Bonds, Series 2002L, 5.000%, 11/12 at 100.00 A+ 5,137,864 11/01/22 - FGIC Insured (Alternative Minimum Tax) Poway Redevelopment Agency, California, Tax Allocation Bonds, Paguay Redevelopment Project, Series 2001: 15,000 5.200%, 6/15/30 - AMBAC Insured 12/11 at 101.00 AA 13,215,900 5,000 5.125%, 6/15/33 - AMBAC Insured 12/11 at 101.00 AA 4,275,100
----- 33 ----- NIO | Nuveen Insured Municipal Opportunity Fund, Inc. (continued) | Portfolio of INVESTMENTS October 31, 2008
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ California (continued) $ 2,035 Redding, California, Electric System Revenue Certificates of 6/15 at 100.00 AA $ 1,635,163 Participation, Series 2005, 5.000%, 6/01/30 - FGIC Insured 6,000 Redlands Unified School District, San Bernardino County, 7/13 at 100.00 AAA 5,814,780 California, General Obligation Bonds, Series 2003, 5.000%, 7/01/26 - FSA Insured 2,970 Riverside Community College District, California, General 8/15 at 100.00 AAA 2,955,180 Obligation Bonds, Series 2005, 5.000%, 8/01/22 - FSA Insured 2,500 Sacramento County Sanitation District Financing Authority, 12/15 at 100.00 AA 2,399,125 California, Revenue Bonds, Series 2005B, 4.750%, 12/01/21 - FGIC Insured 13,710 San Francisco Airports Commission, California, Revenue Refunding 5/11 at 100.00 AA 11,334,743 Bonds, San Francisco International Airport, Second Series 2001, Issue 27A, 5.250%, 5/01/26 - MBIA Insured (Alternative Minimum Tax) 3,030 San Francisco Bay Area Rapid Transit District, California, Sales 7/11 at 100.00 AA+ 2,846,715 Tax Revenue Bonds, Series 2001, 5.125%, 7/01/36 - AMBAC Insured 8,470 San Francisco Bay Area Rapid Transit District, California, Sales 7/11 at 100.00 AA+(5) 9,018,348 Tax Revenue Bonds, Series 2001, 5.125%, 7/01/36 (Pre-refunded 7/01/11) - AMBAC Insured 1,220 San Francisco Bay Area Rapid Transit District, California, Sales 7/15 at 100.00 AA+ 1,213,949 Tax Revenue Bonds, Series 2005A, 5.000%, 7/01/22 - MBIA Insured 66,685 San Joaquin Hills Transportation Corridor Agency, Orange County, No Opt. Call AAA 35,371,719 California, Senior Lien Toll Road Revenue Bonds, Series 1993, 0.000%, 1/01/21 (ETM) San Joaquin Hills Transportation Corridor Agency, Orange County, California, Toll Road Revenue Refunding Bonds, Series 1997A: 31,615 5.250%, 1/15/30 - MBIA Insured 1/09 at 100.00 AA 23,877,861 21,500 0.000%, 1/15/32 - MBIA Insured No Opt. Call AA 4,484,470 12,525 San Jose Redevelopment Agency, California, Tax Allocation Bonds, 8/10 at 101.00 AA(5) 13,252,452 Merged Area Redevelopment Project, Series 2002, 5.000%, 8/01/20 (Pre-refunded 8/01/10) - MBIA Insured 19,595 San Jose Redevelopment Agency, California, Tax Allocation Bonds, 8/17 at 100.00 AA 14,932,762 Merged Area Redevelopment Project, Series 2006C, 4.250%, 8/01/30 - MBIA Insured 11,250 Santa Ana Financing Authority, California, Lease Revenue Bonds, No Opt. Call AA 11,915,663 Police Administration and Housing Facility, Series 1994A, 6.250%, 7/01/24 - MBIA Insured 6,785 Santa Clara Valley Water District, California, Water Revenue Bonds, 6/16 at 100.00 AAA 5,427,593 Series 2006A, 3.750%, 6/01/25 (WI/DD, Settling 11/03/08) - FSA Insured 5,000 Walnut Energy Center Authority, California, Electric Revenue Bonds, 1/14 at 100.00 AA 4,534,800 Turlock Irrigation District, Series 2004A, 5.000%, 1/01/34 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 397,975 Total California 321,474,981 - ------------------------------------------------------------------------------------------------------------------------------------ Colorado - 7.6% (4.5% of Total Investments) 1,080 Arkansas River Power Authority, Colorado, Power Revenue Bonds, 10/16 at 100.00 BBB 824,515 Series 2006, 5.250%, 10/01/40 - SYNCORA GTY Insured 1,900 Aspen, Colorado, Sales Tax Revenue Bonds, Parks and Open Space, 11/15 at 100.00 AAA 1,911,058 Series 2005B, 5.250%, 11/01/24 - FSA Insured 1,000 Colorado Department of Transportation, Certificates of 6/14 at 100.00 AA 974,610 Participation, Series 2004, 5.000%, 6/15/25 - MBIA Insured 4,950 Denver Convention Center Hotel Authority, Colorado, Senior Revenue 12/13 at 100.00 N/R(5) 5,256,158 Bonds, Convention Center Hotel, Series 2003A, 5.000%, 12/01/33 (Pre-refunded 12/01/13) - SYNCORA GTY Insured 1,740 Douglas County School District RE1, Douglas and Elbert Counties, 12/14 at 100.00 Aaa 1,665,406 Colorado, General Obligation Bonds, Series 2005B, 5.000%, 12/15/28 - FSA Insured 35,995 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, No Opt. Call AA 13,465,010 Series 1997B, 0.000%, 9/01/23 - MBIA Insured 30,800 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, 9/10 at 102.00 AAA 33,130,326 Series 2000A, 5.750%, 9/01/35 (Pre-refunded 9/01/10) - MBIA Insured
- ----- 34 - -----
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Colorado (continued) $ 11,800 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, 9/10 at 74.80 Aaa $ 8,369,032 Series 2000B, 0.000%, 9/01/15 (Pre-refunded 9/01/10) - MBIA Insured 10,000 E-470 Public Highway Authority, Colorado, Toll Revenue Bonds, No Opt. Call AA 2,751,800 Series 2004A, 0.000%, 9/01/27 - MBIA Insured 4,520 Jefferson County School District R1, Colorado, General Obligation 12/14 at 100.00 AAA 4,397,870 Bonds, Series 2004, 5.000%, 12/15/24 - FSA Insured (UB) 2,500 Summit County School District RE-1, Summit, Colorado, General 12/14 at 100.00 Aa3 2,501,200 Obligation Bonds, Series 2004B, 5.000%, 12/01/24 - FGIC Insured 1,000 University of Colorado, Enterprise System Revenue Bonds, Series 6/15 at 100.00 AA 927,700 2005, 5.000%, 6/01/30 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 107,285 Total Colorado 76,174,685 - ------------------------------------------------------------------------------------------------------------------------------------ District of Columbia - 1.1% (0.6% of Total Investments) District of Columbia Water and Sewerage Authority, Subordinate Lien Public Utility Revenue Bonds, Series 2003: 5,000 5.125%, 10/01/24 - FGIC Insured 10/13 at 100.00 AA 4,854,150 5,000 5.125%, 10/01/25 - FGIC Insured 10/13 at 100.00 AA 4,821,650 2,670 Washington Convention Center Authority, District of Columbia, 10/16 at 100.00 AA 1,255,194 Senior Lien Dedicated Tax Revenue Bonds, Series 2007, Residuals 1606, 1.947%, 10/01/30 - AMBAC Insured (IF) - ------------------------------------------------------------------------------------------------------------------------------------ 12,670 Total District of Columbia 10,930,994 - ------------------------------------------------------------------------------------------------------------------------------------ Florida - 6.4% (3.8% of Total Investments) 1,000 Hillsborough County School Board, Florida, Certificates of 7/15 at 100.00 AA 952,560 Participation, Master Lease Program, Series 2005A, 5.000%, 7/01/26 - MBIA Insured Indian Trace Development District, Florida, Water Management Special Benefit Assessment Bonds, Series 2005: 645 5.000%, 5/01/25 - MBIA Insured 5/15 at 102.00 A2 581,784 1,830 5.000%, 5/01/27 - MBIA Insured 5/15 at 102.00 A2 1,617,830 4,425 Jacksonville Economic Development Commission, Florida, Healthcare 11/12 at 100.00 AA 3,929,931 Facilities Revenue Bonds, Mayo Clinic, Series 2001C, 5.500%, 11/15/36 - MBIA Insured 1,505 Lee County, Florida, Transportation Facilities Revenue Bonds, 10/14 at 100.00 AA 1,468,579 Series 2004B, 5.000%, 10/01/21 - AMBAC Insured 2,000 Marco Island, Florida, Water Utility System Revenue Bonds, Series 10/13 at 100.00 AA 1,889,980 2003, 5.000%, 10/01/27 - MBIA Insured 2,150 Miami-Dade County, Florida, Aviation Revenue Bonds, Miami 10/12 at 100.00 AAA 1,639,074 International Airport, Series 2002A, 5.125%, 10/01/35 - FSA Insured (Alternative Minimum Tax) 35,920 Miami-Dade County, Florida, Aviation Revenue Bonds, Miami 10/12 at 100.00 A2 28,644,761 International Airport, Series 2002, 5.375%, 10/01/32 - FGIC Insured (Alternative Minimum Tax) 12,930 Miami-Dade County, Florida, Public Facilities Revenue Bonds, 12/15 at 100.00 AA 10,957,529 Jackson Health System, Series 2005A, 5.000%, 6/01/32 - MBIA Insured 5,320 Miami-Dade County, Florida, Public Facilities Revenue Bonds, 6/15 at 100.00 AA 4,807,152 Jackson Health System, Series 2005B, 5.000%, 6/01/25 - MBIA Insured Northern Palm Beach County Improvement District, Florida, Revenue Bonds, Water Control and Improvement Development Unit 9B, Series 2005: 1,290 5.000%, 8/01/23 - MBIA Insured 8/15 at 102.00 AA 1,186,116 2,145 5.000%, 8/01/29 - MBIA Insured 8/15 at 102.00 AA 1,855,575 2,320 Osceola County, Florida, Transportation Revenue Bonds, Osceola 4/14 at 100.00 A2 2,166,022 Parkway, Series 2004, 5.000%, 4/01/23 - MBIA Insured
----- 35 ----- NIO | Nuveen Insured Municipal Opportunity Fund, Inc. (continued) | Portfolio of INVESTMENTS October 31, 2008
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Florida (continued) $ 2,225 Plantation, Florida, Non-Ad Valorem Revenue Refunding and 8/13 at 100.00 Aaa $ 2,251,277 Improvement Bonds, Series 2003, 5.000%, 8/15/18 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 75,705 Total Florida 63,948,170 - ------------------------------------------------------------------------------------------------------------------------------------ Georgia - 1.1% (0.6% of Total Investments) 1,000 Atlanta, Georgia, Water and Wastewater Revenue Bonds, Series 2004, 11/14 at 100.00 AAA 977,660 5.000%, 11/01/22 - FSA Insured 1,520 College Park Business and Industrial Development Authority, 9/14 at 102.00 AA 1,510,606 Georgia, Revenue Bonds, Public Safety Project, Series 2004, 5.250%, 9/01/23 - MBIA Insured Fulton County Development Authority, Georgia, Revenue Bonds, Georgia Tech Molecular Science Building, Series 2004: 1,695 5.250%, 5/01/19 - MBIA Insured 5/14 at 100.00 AA 1,735,595 1,135 5.250%, 5/01/20 - MBIA Insured 5/14 at 100.00 AA 1,152,854 4,500 5.000%, 5/01/36 - MBIA Insured 5/14 at 100.00 AA 4,042,215 1,250 Glynn-Brunswick Memorial Hospital Authority, Georgia, Revenue 2/09 at 100.00 AA 1,250,025 Bonds, Southeast Georgia Health Systems, Series 1996, 5.250%, 8/01/13 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 11,100 Total Georgia 10,668,955 - ------------------------------------------------------------------------------------------------------------------------------------ Idaho - 0.3% (0.2% of Total Investments) 235 Idaho Housing Agency, Single Family Mortgage Senior Bonds, Series No Opt. Call Aa1 243,606 1994B-1, 6.750%, 7/01/22 195 Idaho Housing Agency, Single Family Mortgage Senior Bonds, Series No Opt. Call Aa1 200,060 1994B-2, 6.900%, 7/01/26 (Alternative Minimum Tax) 280 Idaho Housing Agency, Single Family Mortgage Senior Bonds, Series 1/09 at 100.00 Aaa 285,452 1995B, 6.600%, 7/01/27 (Alternative Minimum Tax) Idaho Housing and Finance Association, Grant and Revenue Anticipation Bonds, Federal Highway Trust Funds, Series 2006: 1,000 5.000%, 7/15/23 - MBIA Insured 7/16 at 100.00 Aa3 1,006,920 1,065 5.000%, 7/15/24 - MBIA Insured 7/16 at 100.00 Aa3 1,068,302 - ------------------------------------------------------------------------------------------------------------------------------------ 2,775 Total Idaho 2,804,340 - ------------------------------------------------------------------------------------------------------------------------------------ Illinois - 5.8% (3.5% of Total Investments) 1,050 Bedford Park, Illinois, General Obligation Bonds, Series 2004A, 12/14 at 100.00 AAA 1,071,399 5.250%, 12/15/20 - FSA Insured Chicago, Illinois, Second Lien Passenger Facility Charge Revenue Refunding Bonds, O'Hare International Airport, Series 2001E: 4,615 5.500%, 1/01/17 - AMBAC Insured (Alternative Minimum Tax) 1/11 at 101.00 AA 4,384,481 4,870 5.500%, 1/01/18 - AMBAC Insured (Alternative Minimum Tax) 1/11 at 101.00 AA 4,562,703 7,200 Chicago, Illinois, Third Lien General Airport Revenue Bonds, O'Hare 1/16 at 100.00 AA 6,838,344 International Airport, Series 2005A, 5.250%, 1/01/24 - MBIA Insured 10,000 Illinois Development Finance Authority, Revenue Bonds, Provena 11/08 at 101.00 AA 9,260,100 Health, Series 1998A, 5.500%, 5/15/21 - MBIA Insured 2,095 Illinois Educational Facilities Authority, Revenue Bonds, Robert 12/08 at 100.00 A2 1,983,986 Morris College, Series 2000, 5.800%, 6/01/30 - MBIA Insured 22,510 Illinois, General Obligation Bonds, Illinois FIRST Program, Series 2/12 at 100.00 AA 21,999,473 2002, 5.125%, 2/01/27 - FGIC Insured Schaumburg, Illinois, General Obligation Bonds, Series 2004B: 4,260 5.000%, 12/01/22 - FGIC Insured 12/14 at 100.00 AA+ 4,235,122 2,365 5.000%, 12/01/23 - FGIC Insured 12/14 at 100.00 AA+ 2,340,215 4,000 Southwestern Illinois Development Authority, School Revenue Bonds, No Opt. Call AA 1,421,560 Triad School District 2, Madison County, Illinois, Series 2006, 0.000%, 10/01/25 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 62,965 Total Illinois 58,097,383 - ------------------------------------------------------------------------------------------------------------------------------------
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Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Indiana - 3.8% (2.3% of Total Investments) $ 2,030 Decatur Township-Marion County Multi-School Building Corporation, 7/13 at 100.00 AA+(5) $ 2,185,782 Indiana, First Mortgage Bonds, Series 2003, 5.000%, 7/15/20 (Pre-refunded 7/15/13) - FGIC Insured 8,000 Indiana Municipal Power Agency, Power Supply Revenue Bonds, Series 1/17 at 100.00 AA 6,535,920 2007A, 5.000%, 1/01/42 - MBIA Insured 20,000 Indianapolis Local Public Improvement Bond Bank, Indiana, Series No Opt. Call AA 6,220,400 1999E, 0.000%, 2/01/28 - AMBAC Insured 3,250 Indianapolis Local Public Improvement Bond Bank, Indiana, 7/12 at 100.00 AAA 3,492,028 Waterworks Project, Series 2002A, 5.250%, 7/01/33 (Pre-refunded 7/01/12) - MBIA Insured 1,340 Monroe-Gregg Grade School Building Corporation, Morgan County, 1/14 at 100.00 AAA 1,436,346 Indiana, First Mortgage Bonds, Series 2004, 5.000%, 1/15/25 (Pre-refunded 1/15/14) - FSA Insured 5,000 Noblesville Redevelopment Authority, Indiana, Economic Development 7/13 at 100.00 AA 4,728,050 Lease Rental Bonds, Exit 10 Project, Series 2003, 5.000%, 1/15/28 - AMBAC Insured 10,000 Purdue University, Indiana, Student Fee Bonds, Series 2002O, 1/12 at 100.00 Aa1 10,066,200 5.000%, 7/01/19 - MBIA Insured 3,705 Whitley County Middle School Building Corporation, Columbia City, 7/13 at 100.00 AAA 3,989,322 Indiana, First Mortgage Bonds, Series 2003, 5.000%, 7/15/16 (Pre-refunded 7/15/13) - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 53,325 Total Indiana 38,654,048 - ------------------------------------------------------------------------------------------------------------------------------------ Kansas - 1.4% (0.8% of Total Investments) 2,055 Kansas Turnpike Authority, Revenue Bonds, Series 2004A-2, 5.000%, 9/14 at 101.00 AAA 2,069,426 9/01/23 - FSA Insured Neosho County Unified School District 413, Kansas, General Obligation Bonds, Series 2006: 2,145 5.000%, 9/01/27 - FSA Insured 9/14 at 100.00 Aaa 2,144,850 4,835 5.000%, 9/01/29 - FSA Insured 9/14 at 100.00 Aaa 4,791,437 5,000 University of Kansas Hospital Authority, Health Facilities Revenue 9/09 at 100.00 AAA 5,165,800 Bonds, KU Health System, Series 1999A, 5.650%, 9/01/29 (Pre-refunded 9/01/09) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 14,035 Total Kansas 14,171,513 - ------------------------------------------------------------------------------------------------------------------------------------ Kentucky - 2.4% (1.4% of Total Investments) 3,870 Kenton County School District Finance Corporation, Kentucky, School 6/14 at 100.00 Aa3 3,773,560 Building Revenue Bonds, Series 2004, 5.000%, 6/01/20 - MBIA Insured 7,500 Kentucky Turnpike Authority, Economic Development Road Revenue 7/16 at 100.00 AA+ 7,317,300 Bonds, Revitalization Project, Series 2006B, 5.000%, 7/01/25 - AMBAC Insured 12,980 Louisville and Jefferson County Metropolitan Sewer District, 11/11 at 101.00 AA 12,598,648 Kentucky, Sewer and Drainage System Revenue Bonds, Series 2001A, 5.500%, 5/15/34 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 24,350 Total Kentucky 23,689,508 - ------------------------------------------------------------------------------------------------------------------------------------ Louisiana - 5.9% (3.5% of Total Investments) 5,000 DeSoto Parish, Louisiana, Pollution Control Revenue Refunding 9/09 at 102.00 AA 5,027,350 Bonds, Cleco Utility Group Inc. Project, Series 1999, 5.875%, 9/01/29 - AMBAC Insured 3,025 Lafayette City and Parish, Louisiana, Utilities Revenue Bonds, 11/14 at 100.00 AA 3,022,036 Series 2004, 5.250%, 11/01/22 - MBIA Insured 5,140 Louisiana Public Facilities Authority, Revenue Bonds, Baton Rouge 7/14 at 100.00 AA 4,821,012 General Hospital, Series 2004, 5.250%, 7/01/24 - MBIA Insured Louisiana State, Gasoline and Fuels Tax Revenue Bonds, Series 2005A: 2,400 5.000%, 5/01/25 - FGIC Insured 5/15 at 100.00 AA 2,301,072 4,415 5.000%, 5/01/26 - FGIC Insured 5/15 at 100.00 AA 4,216,678 5,000 5.000%, 5/01/27 - FGIC Insured 5/15 at 100.00 AA 4,739,850 Louisiana State, Gasoline and Fuels Tax Revenue Bonds, Series 2006: 3,300 4.750%, 5/01/39 - FSA Insured (UB) 5/16 at 100.00 AAA 2,678,841 35,725 4.500%, 5/01/41 - FGIC Insured (UB) 5/16 at 100.00 Aa3 27,390,000 38 Louisiana State, Gasoline Tax Revenue Bonds, Series 2006, Residuals 5/16 at 100.00 Aa3 2,559 660-1, 10.855%, 5/01/41 - FGIC Insured (IF)
----- 37 ----- NIO | Nuveen Insured Municipal Opportunity Fund, Inc. (continued) | Portfolio of INVESTMENTS October 31, 2008
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Louisiana (continued) $ 4,950 Orleans Levee District, Louisiana, Levee District General 12/08 at 100.00 AAA $ 4,956,237 Obligation Bonds, Series 1986, 5.950%, 11/01/15 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 68,993 Total Louisiana 59,155,635 - ------------------------------------------------------------------------------------------------------------------------------------ Maine - 0.3% (0.2% of Total Investments) 3,000 Maine Health and Higher Educational Facilities Authority, Revenue 7/13 at 100.00 AAA 2,873,010 Bonds, Series 2003B, 5.000%, 7/01/28 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ Maryland - 0.4% (0.3% of Total Investments) 5,345 Baltimore, Maryland, Senior Lien Convention Center Hotel Revenue 9/16 at 100.00 BBB- 4,459,761 Bonds, Series 2006A, 5.250%, 9/01/28 - SYNCORA GTY Insured - ------------------------------------------------------------------------------------------------------------------------------------ Massachusetts - 5.8% (3.5% of Total Investments) 22,500 Massachusetts Development Finance Authority, Revenue Bonds, WGBH 1/12 at 101.00 AA(5) 24,345,675 Educational Foundation, Series 2002A, 5.375%, 1/01/42 (Pre-refunded 1/01/12) - AMBAC Insured 11,000 Massachusetts School Building Authority, Dedicated Sales Tax 8/15 at 100.00 AAA 11,043,230 Revenue Bonds, Series 2005A, 5.000%, 8/15/23 - FSA Insured (UB) 7,255 Massachusetts Water Resources Authority, General Revenue Bonds, 2/17 at 100.00 AAA 5,597,015 4.500%, 8/01/46 - FSA Insured (UB) 15,000 Massachusetts, Special Obligation Dedicated Tax Revenue Bonds, 1/14 at 100.00 A(5) 15,600,150 Series 2004, 5.250%, 1/01/23 (Pre-refunded 1/01/14) - FGIC Insured 1,500 University of Massachusetts Building Authority, Senior Lien Project 11/14 at 100.00 AA(5) 1,655,460 Revenue Bonds, Series 2004-1, 5.375%, 11/01/20 (Pre-refunded 11/01/14) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 57,255 Total Massachusetts 58,241,530 - ------------------------------------------------------------------------------------------------------------------------------------ Michigan - 7.3% (4.4% of Total Investments) 5,490 Detroit City School District, Wayne County, Michigan, Unlimited Tax No Opt. Call AAA 5,839,713 School Building and Site Improvement Bonds, Series 2001A, 6.000%, 5/01/29 - FSA Insured (UB) 6,000 Detroit, Michigan, General Obligation Bonds, Series 2001A-1, 10/11 at 100.00 AA 5,962,560 5.375%, 4/01/18 - MBIA Insured 7,420 Detroit, Michigan, Senior Lien Water Supply System Revenue Bonds, 1/09 at 100.00 AA 6,700,928 Series 1997A, 5.000%, 7/01/27 - MBIA Insured Detroit, Michigan, Sewerage Disposal System Revenue Bonds, Series 1999A: 15,825 5.750%, 7/01/26 (Pre-refunded 1/01/10) - FGIC Insured 1/10 at 101.00 Aaa 16,563,078 20,000 5.875%, 7/01/27 (Pre-refunded 1/01/10) - FGIC Insured 1/10 at 101.00 Aaa 20,961,200 1,085 Grand Rapids Community College, Kent County, Michigan, General 5/13 at 100.00 AA 1,101,915 Obligation Refunding Bonds, Series 2003, 5.250%, 5/01/20 - AMBAC Insured 6,850 Wayne County, Michigan, Airport Revenue Bonds, Detroit Metropolitan 12/08 at 101.00 AA 6,558,670 Wayne County Airport, Series 1998A, 5.375%, 12/01/15 - MBIA Insured (Alternative Minimum Tax) 10,000 Wayne County, Michigan, Limited Tax General Obligation Airport 12/11 at 101.00 AA 9,822,600 Hotel Revenue Bonds, Detroit Metropolitan Wayne County Airport, Series 2001A, 5.250%, 12/01/25 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 72,670 Total Michigan 73,510,664 - ------------------------------------------------------------------------------------------------------------------------------------ Minnesota - 1.5% (0.9% of Total Investments) 13,020 Saint Paul Housing and Redevelopment Authority, Minnesota, 12/11 at 102.00 Aaa 14,640,469 Multifamily Housing Revenue Bonds, Marian Center Project, Series 2001A, 6.450%, 6/20/43 (Pre-refunded 12/20/11) - ------------------------------------------------------------------------------------------------------------------------------------
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Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Nebraska - 2.2% (1.3% of Total Investments) $ 27,125 Lincoln, Nebraska, Electric System Revenue Bonds, Series 2007A, 9/17 at 100.00 AA $ 21,318,894 4.500%, 9/01/37 - FGIC Insured (UB) 1,000 Nebraska Public Power District, General Revenue Bonds, Series 1/15 at 100.00 AAA 979,310 2005A, 5.000%, 1/01/25 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 28,125 Total Nebraska 22,298,204 - ------------------------------------------------------------------------------------------------------------------------------------ Nevada - 8.6% (5.1% of Total Investments) 8,475 Clark County, Nevada, General Obligation Bank Bonds, Southern 12/12 at 100.00 AA+ 7,710,301 Nevada Water Authority Loan, Series 2002, 5.000%, 6/01/32 - MBIA Insured 3,630 Clark County, Nevada, General Obligation Bank Bonds, Southern 12/12 at 100.00 Aa1(5) 3,894,264 Nevada Water Authority Loan, Series 2002, 5.000%, 6/01/32 (Pre-refunded 12/01/12) - MBIA Insured 7,370 Clark County, Nevada, Subordinate Lien Airport Revenue Bonds, 7/14 at 100.00 Aa3 6,775,978 Series 2004A-2, 5.125%, 7/01/25 - FGIC Insured Director of Nevada State Department of Business and Industry, Revenue Bonds, Las Vegas Monorail Project, First Tier, Series 2000: 15,000 5.625%, 1/01/34 - AMBAC Insured 1/10 at 102.00 AA 9,038,250 13,000 5.375%, 1/01/40 - AMBAC Insured 1/10 at 100.00 AA 7,814,820 14,985 Reno, Nevada, Capital Improvement Revenue Bonds, Series 2002, 6/12 at 100.00 Baa1 13,253,333 5.375%, 6/01/32 - FGIC Insured 25,300 Reno, Nevada, Capital Improvement Revenue Bonds, Series 2002, 6/12 at 100.00 Baa1(5) 27,223,812 5.375%, 6/01/32 (Pre-refunded 6/01/12) - FGIC Insured 10,000 Reno, Nevada, Senior Lien Sales and Room Tax Revenue Bonds, Reno 6/12 at 100.00 AA(5) 10,690,300 Transportation Rail Access Corridor Project, Series 2002, 5.125%, 6/01/27 (Pre-refunded 6/01/12) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 97,760 Total Nevada 86,401,058 - ------------------------------------------------------------------------------------------------------------------------------------ New Jersey - 2.5% (1.5% of Total Investments) Essex County Improvement Authority, New Jersey, Guaranteed Revenue Bonds, Project Consolidation, Series 2004: 2,000 5.125%, 10/01/21 - MBIA Insured 10/14 at 100.00 A1 2,006,480 2,250 5.125%, 10/01/22 - MBIA Insured 10/14 at 100.00 A1 2,244,353 New Jersey Economic Development Authority, Revenue Bonds, Motor Vehicle Surcharge, Series 2004A: 3,850 5.000%, 7/01/22 - MBIA Insured 7/14 at 100.00 AA 3,753,019 3,850 5.000%, 7/01/23 - MBIA Insured 7/14 at 100.00 AA 3,729,149 8,250 New Jersey Turnpike Authority, Revenue Bonds, Series 2003A, 5.000%, 7/13 at 100.00 AA 8,152,403 1/01/19 - FGIC Insured New Jersey Turnpike Authority, Revenue Bonds, Series 2005A: 3,320 5.000%, 1/01/21 - FSA Insured (UB) 1/15 at 100.00 AAA 3,346,062 2,000 5.000%, 1/01/23 - FSA Insured (UB) 7/13 at 100.00 AAA 1,938,660 - ------------------------------------------------------------------------------------------------------------------------------------ 25,520 Total New Jersey 25,170,126 - ------------------------------------------------------------------------------------------------------------------------------------ New Mexico - 0.3% (0.2% of Total Investments) 3,660 San Juan County, New Mexico, Subordinate Gross Receipts Tax Revenue 6/15 at 100.00 AA 3,508,220 Bonds, Series 2005, 5.000%, 6/15/25 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ New York - 6.8% (4.0% of Total Investments) 1,880 Dormitory Authority of the State of New York, FHA-Insured Mortgage 2/15 at 100.00 AA 1,690,684 Revenue Bonds, Montefiore Hospital, Series 2004, 5.000%, 8/01/23 - FGIC Insured 3,335 Dormitory Authority of the State of New York, State Personal Income 3/15 at 100.00 AAA 3,303,051 Tax Revenue Bonds, Series 2005F, 5.000%, 3/15/24 - AMBAC Insured 3,820 Hudson Yards Infrastructure Corporation, New York, Revenue Bonds, 2/17 at 100.00 AA 2,718,579 Series 2006A, 4.500%, 2/15/47 - MBIA Insured (UB)
----- 39 ----- NIO | Nuveen Insured Municipal Opportunity Fund, Inc. (continued) | Portfolio of INVESTMENTS October 31, 2008
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ New York (continued) $ 6,900 Long Island Power Authority, New York, Electric System General 11/16 at 100.00 AA $ 5,129,529 Revenue Bonds, Series 2006F, 4.250%, 5/01/33 - MBIA Insured (UB) 12,500 Long Island Power Authority, New York, Electric System General 6/16 at 100.00 A- 11,411,750 Revenue Bonds, Series 2006A, 5.000%, 12/01/25 - FGIC Insured Metropolitan Transportation Authority, New York, State Service Contract Refunding Bonds, Series 2002A: 1,500 5.000%, 7/01/21 - FGIC Insured 7/12 at 100.00 AA 1,461,450 5,000 5.000%, 7/01/25 - FGIC Insured 7/12 at 100.00 AA 4,776,350 5,000 New York City, New York, General Obligation Bonds, Fiscal Series 9/15 at 100.00 AA 4,856,700 2005F-1, 5.000%, 9/01/21 - AMBAC Insured 10,000 New York City, New York, General Obligation Bonds, Fiscal Series 4/15 at 100.00 AA 9,337,500 2005M, 5.000%, 4/01/26 - FGIC Insured 5,000 New York State Thruway Authority, General Revenue Bonds, Series 1/15 at 100.00 AA 4,831,900 2005F, 5.000%, 1/01/26 - AMBAC Insured New York State Urban Development Corporation, State Personal Income Tax Revenue Bonds, Series 2004A-1: 1,000 5.000%, 3/15/23 - FGIC Insured 3/14 at 100.00 AAA 989,840 5,000 5.000%, 3/15/25 - FGIC Insured 3/14 at 100.00 AAA 4,885,000 3,650 New York State Urban Development Corporation, State Personal 3/15 at 100.00 AAA 3,585,797 Income Tax Revenue Bonds, Series 2005B, 5.000%, 3/15/25 - FSA Insured (UB) 10,000 Triborough Bridge and Tunnel Authority, New York, Subordinate Lien 11/12 at 100.00 AA 9,212,400 General Purpose Revenue Refunding Bonds, Series 2002E, 5.000%, 11/15/32 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 74,585 Total New York 68,190,530 - ------------------------------------------------------------------------------------------------------------------------------------ North Carolina - 1.6% (0.9% of Total Investments) Mooresville, North Carolina, Enterprise System Revenue Bonds, Series 2004: 2,115 5.000%, 5/01/22 - FGIC Insured 5/14 at 100.00 AA 2,054,363 2,575 5.000%, 5/01/26 - FGIC Insured 5/14 at 100.00 AA 2,332,023 5,000 North Carolina Municipal Power Agency 1, Catawba Electric Revenue 1/13 at 100.00 AAA 5,157,750 Bonds, Series 2003A, 5.250%, 1/01/16 - FSA Insured Raleigh Durham Airport Authority, North Carolina, Airport Revenue Bonds, Series 2005A: 3,205 5.000%, 5/01/23 - AMBAC Insured 5/15 at 100.00 Aa3 3,009,719 3,295 5.000%, 5/01/24 - AMBAC Insured 5/15 at 100.00 Aa3 3,066,096 - ------------------------------------------------------------------------------------------------------------------------------------ 16,190 Total North Carolina 15,619,951 - ------------------------------------------------------------------------------------------------------------------------------------ North Dakota - 0.6% (0.4% of Total Investments) Grand Forks, North Dakota, Sales Tax Revenue Bonds, Alerus Project, Series 2005A: 2,195 5.000%, 12/15/22 - MBIA Insured 12/15 at 100.00 A1 2,147,039 1,355 5.000%, 12/15/23 - MBIA Insured 12/15 at 100.00 A1 1,336,545 3,000 5.000%, 12/15/24 - MBIA Insured 12/15 at 100.00 A1 2,938,080 - ------------------------------------------------------------------------------------------------------------------------------------ 6,550 Total North Dakota 6,421,664 - ------------------------------------------------------------------------------------------------------------------------------------ Ohio - 3.0% (1.8% of Total Investments) 2,650 Cleveland State University, Ohio, General Receipts Bonds, Series 6/14 at 100.00 AA 2,608,342 2004, 5.250%, 6/01/24 - FGIC Insured 2,000 Columbus City School District, Franklin County, Ohio, General 12/14 at 100.00 AAA 2,190,000 Obligation Bonds, Series 2004, 5.250%, 12/01/25 (Pre-refunded 12/01/14) - FSA Insured 2,385 Columbus, Ohio, Tax Increment Financing Bonds, Easton Project, 6/14 at 100.00 AA 2,209,464 Series 2004A, 5.000%, 12/01/22 - AMBAC Insured
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Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Ohio (continued) $ 2,205 Hamilton City School District, Ohio, General Obligation Bonds, 6/15 at 100.00 A2 $ 2,136,226 Series 2005, 5.000%, 12/01/24 - MBIA Insured 6,535 Hamilton County, Ohio, Sales Tax Revenue Bonds, Tender Option 12/16 at 100.00 A2 2,032,320 Bond Trust 2706, 0.472%, 12/01/32 - AMBAC Insured (IF) 20,100 Lucas County, Ohio, Hospital Revenue Bonds, ProMedica Healthcare 11/09 at 101.00 AA 15,846,438 Obligated Group, Series 1999, 5.375%, 11/15/39 - AMBAC Insured 3,000 Ross Local School District, Butler County, Ohio, General 12/13 at 100.00 Aaa 3,243,360 Obligation Bonds, Series 2003, 5.000%, 12/01/28 (Pre-refunded 12/01/13) - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 38,875 Total Ohio 30,266,150 - ------------------------------------------------------------------------------------------------------------------------------------ Oklahoma - 3.1% (1.9% of Total Investments) 3,500 Oklahoma Capitol Improvement Authority, State Facilities Revenue 7/15 at 100.00 AA 3,385,305 Bonds, Series 2005F, 5.000%, 7/01/24 - AMBAC Insured 3,050 Oklahoma Housing Finance Agency, GNMA Collateralized Single No Opt. Call AAA 3,150,101 Family Mortgage Revenue Bonds, Series 1987A, 7.997%, 8/01/18 (Alternative Minimum Tax) 21,000 Oklahoma Municipal Power Authority, Power Supply System Revenue 1/17 at 100.00 AA 15,009,540 Bonds, Series 2007, 4.500%, 1/01/47 - FGIC Insured 5,245 Oklahoma State Industries Authority, Revenue Bonds, Oklahoma 2/11 at 100.00 Aa3 5,104,644 Medical Research Foundation, Series 2001, 5.250%, 2/01/21 - AMBAC Insured 4,880 University of Oklahoma, Student Housing Revenue Bonds, Series 7/14 at 100.00 Aa3 4,757,073 2004, 5.000%, 7/01/22 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 37,675 Total Oklahoma 31,406,663 - ------------------------------------------------------------------------------------------------------------------------------------ Oregon - 0.3% (0.2% of Total Investments) 2,535 Oregon Department of Administrative Services, Certificates of 5/15 at 100.00 AAA 2,460,167 Participation, Series 2005A, 5.000%, 5/01/25 - FSA Insured 1,040 Oregon Housing and Community Services Department, Single Family 1/09 at 100.00 Aa2 1,008,166 Mortgage Revenue Bonds, Series 1995A, 6.450%, 7/01/26 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 3,575 Total Oregon 3,468,333 - ------------------------------------------------------------------------------------------------------------------------------------ Pennsylvania - 3.4% (2.0% of Total Investments) 7,925 Commonwealth Financing Authority, Pennsylvania, State 6/16 at 100.00 AAA 7,725,766 Appropriation Lease Bonds, Series 2006A, 5.000%, 6/01/26 - FSA Insured (UB) 1,800 Pennsylvania Higher Educational Facilities Authority, Revenue 5/15 at 100.00 AA 1,695,222 Bonds, Drexel University, Series 2005A, 5.000%, 5/01/28 - MBIA Insured 11,740 Pennsylvania Public School Building Authority, Lease Revenue 12/16 at 100.00 AAA 9,332,478 Bonds, School District of Philadelphia, Series 2006B, 4.500%, 6/01/32 - FSA Insured (UB) 2,625 Pennsylvania Turnpike Commission, Turnpike Revenue Bonds, Series 6/16 at 100.00 AA 2,507,531 2006A, 5.000%, 12/01/26 - AMBAC Insured 6,335 Radnor Township School District, Delaware County, Pennsylvania, 8/15 at 100.00 Aaa 6,101,492 General Obligation Bonds, Series 2005B, 5.000%, 2/15/30 - FSA Insured Reading School District, Berts County, Pennsylvania, General Obligation Bonds, Series 2005: 3,285 5.000%, 1/15/22 - FSA Insured (UB) 1/16 at 100.00 AAA 3,277,050 3,450 5.000%, 1/15/23 - FSA Insured (UB) 1/16 at 100.00 AAA 3,422,090 - ------------------------------------------------------------------------------------------------------------------------------------ 37,160 Total Pennsylvania 34,061,629 - ------------------------------------------------------------------------------------------------------------------------------------
----- 41 ----- NIO | Nuveen Insured Municipal Opportunity Fund, Inc. (continued) Portfolio of INVESTMENTS October 31, 2008
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Puerto Rico - 1.0% (0.6% of Total Investments) $ 2,500 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series 7/15 at 100.00 AAA $ 2,711,075 2005RR, 5.000%, 7/01/30 (Pre-refunded 7/01/15) - SYNCORA GTY Insured 2,000 Puerto Rico Highway and Transportation Authority, Highway Revenue 7/13 at 100.00 BBB+ 1,891,180 Bonds, Series 2003G, 5.250%, 7/01/19 - FGIC Insured 1,550 Puerto Rico Municipal Finance Agency, Series 2005C, 5.250%, No Opt. Call BBB- 1,432,960 8/01/21 - CIFG Insured 36,000 Puerto Rico Sales Tax Financing Corporation, Sales Tax Revenue No Opt. Call A+ 3,645,000 Bonds, Series 2007A, 0.000%, 8/01/42 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 42,050 Total Puerto Rico 9,680,215 - ------------------------------------------------------------------------------------------------------------------------------------ Rhode Island - 2.5% (1.5% of Total Investments) 2,195 Providence Housing Development Corporation, Rhode Island, 1/09 at 100.00 AA 2,278,212 FHA-Insured Section 8 Assisted Mortgage Revenue Refunding Bonds, Barbara Jordan Apartments, Series 1994A, 6.750%, 7/01/25 - MBIA Insured 20,475 Rhode Island Depositors Economic Protection Corporation, Special 2/11 at 100.00 AA (5) 21,589,045 Obligation Refunding Bonds, Series 1993B, 5.250%, 8/01/21 (Pre-refunded 2/01/11) - MBIA Insured 1,405 Rhode Island Health & Educational Building Corporation, Higher 9/14 at 100.00 Aa3 1,423,869 Education Auxiliary Enterprise Revenue Bonds, Series 2004A, 5.500%, 9/15/24 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 24,075 Total Rhode Island 25,291,126 - ------------------------------------------------------------------------------------------------------------------------------------ South Carolina - 6.8% (4.0% of Total Investments) 14,650 Anderson County School District 5, South Carolina, General 2/18 at 100.00 AAA 12,781,832 Obligation Bonds, Series 2008, Trust 1181, 7.194%, 2/01/38 - FSA Insured (IF) 10,000 Beaufort County, South Carolina, Tax Increment Bonds, New River 12/12 at 100.00 AA 9,477,800 Redevelopment Project, Series 2002, 5.000%, 6/01/27 - MBIA Insured Medical University Hospital Authority, South Carolina, FHA-Insured Mortgage Revenue Bonds, Series 2004A: 2,000 5.250%, 8/15/22 - MBIA Insured 8/14 at 100.00 AA 1,972,840 2,105 5.250%, 8/15/23 - MBIA Insured 8/14 at 100.00 AA 2,068,731 4,855 Piedmont Municipal Power Agency, South Carolina, Electric Revenue No Opt. Call Aaa 4,002,559 Bonds, Series 1988A, 0.000%, 1/01/13 - AMBAC Insured (ETM) 2,750 Piedmont Municipal Power Agency, South Carolina, Electric Revenue 7/09 at 76.63 Aa3(5) 2,035,605 Bonds, Series 1988A, 0.000%, 1/01/13 (Pre-refunded 7/01/09) - AMBAC Insured 7,955 Piedmont Municipal Power Agency, South Carolina, Electric Revenue No Opt. Call AA 6,328,680 Bonds, Series 1988A, 0.000%, 1/01/13 - AMBAC Insured 8,000 South Carolina JOBS Economic Development Authority, Industrial 11/12 at 100.00 AA 7,610,720 Revenue Bonds, South Carolina Electric and Gas Company, Series 2002A, 5.200%, 11/01/27 - AMBAC Insured 10,000 South Carolina JOBS Economic Development Authority, Industrial 11/12 at 100.00 AA 8,115,500 Revenue Bonds, South Carolina Electric and Gas Company, Series 2002B, 5.450%, 11/01/32 - AMBAC Insured (Alternative Minimum Tax) 17,500 South Carolina Transportation Infrastructure Bank, Revenue Bonds, 10/16 at 100.00 A1 13,523,125 Series 2007A, 4.500%, 10/01/34 - SYNCORA GTY Insured - ------------------------------------------------------------------------------------------------------------------------------------ 79,815 Total South Carolina 67,917,392 - ------------------------------------------------------------------------------------------------------------------------------------ Tennessee - 0.6% (0.4% of Total Investments) 6,455 Memphis-Shelby County Airport Authority, Tennessee, Airport 3/11 at 100.00 AAA 6,097,199 Revenue Bonds, Series 2001A, 5.500%, 3/01/18 - FSA Insured (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ Texas - 15.8% (9.4% of Total Investments) 22,650 Brazos River Authority, Texas, Revenue Refunding Bonds, Houston 11/08 at 102.00 AA 21,747,171 Industries Inc., Series 1998C, 5.125%, 5/01/19 - AMBAC Insured 521 Capital Area Housing Finance Corporation, Texas, FNMA Backed 4/12 at 106.00 Aaa 532,477 Single Family Mortgage Revenue Refunding Bonds, Series 2002A-2, 6.300%, 4/01/35 - AMBAC Insured (Alternative Minimum Tax)
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Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Texas (continued) $ 12,500 Dallas-Ft. Worth International Airport, Texas, Joint Revenue 11/09 at 100.00 A+ $ 10,832,000 Bonds, Series 2000A, 6.125%, 11/01/35 - FGIC Insured (Alternative Minimum Tax) Harris County, Texas, Toll Road Senior Lien Revenue Bonds, Series 1989: 9,000 0.000%, 8/15/18 (Pre-refunded 8/15/09) - AMBAC Insured 8/09 at 53.84 Aaa 4,764,150 39,000 0.000%, 8/15/19 (Pre-refunded 8/15/09) - AMBAC Insured 8/09 at 50.26 Aaa 19,271,850 7,280 0.000%, 8/15/20 (Pre-refunded 8/15/09) - AMBAC Insured 8/09 at 46.91 Aaa 3,358,264 5,085 0.000%, 8/15/21 (Pre-refunded 8/15/09) - AMBAC Insured 8/09 at 43.80 Aaa 2,189,703 25,000 Harris County-Houston Sports Authority, Texas, Junior Lien Revenue 11/11 at 100.00 AA 20,243,750 Refunding Bonds, Series 2001B, 5.250%, 11/15/40 - MBIA Insured 4,671 Houston Housing Finance Corporation, Texas, GNMA Collateralized 9/11 at 105.00 Aaa 4,331,185 Mortgage Multifamily Housing Revenue Bonds, RRG Apartments Project, Series 2001, 6.350%, 3/20/42 Houston, Texas, First Lien Combined Utility System Revenue Bonds, Series 2004A: 4,000 5.250%, 5/15/24 - FGIC Insured 5/14 at 100.00 AA 3,726,200 5,000 5.250%, 5/15/25 - MBIA Insured 5/14 at 100.00 AA 4,865,250 17,500 Houston, Texas, Hotel Occupancy Tax and Special Revenue Bonds, 9/11 at 100.00 AA 16,349,200 Convention and Entertainment Project, Series 2001B, 5.250%, 9/01/33 - AMBAC Insured 23,865 Jefferson County Health Facilities Development Corporation, Texas, 8/11 at 100.00 AA 17,704,728 FHA-Insured Mortgage Revenue Bonds, Baptist Hospital of Southeast Texas, Series 2001, 5.500%, 8/15/41 - AMBAC Insured 140 Lower Colorado River Authority, Texas, Revenue Refunding and 5/11 at 100.00 AA(5) 147,816 Improvement Bonds, Series 2001A, 5.000%, 5/15/21 (Pre-refunded 5/15/11) - MBIA Insured 8,065 Lower Colorado River Authority, Texas, Revenue Refunding and 5/11 at 100.00 AA 7,874,101 Improvement Bonds, Series 2001A, 5.000%, 5/15/21 - MBIA Insured Port of Houston Authority, Harris County, Texas, General Obligation Port Improvement Bonds, Series 2001B: 3,205 5.500%, 10/01/18 - FGIC Insured (Alternative Minimum Tax) 10/11 at 100.00 AAA 2,957,766 3,375 5.500%, 10/01/19 - FGIC Insured (Alternative Minimum Tax) 10/11 at 100.00 AAA 3,069,090 7,205 San Antonio, Texas, Airport System Improvement Revenue Bonds, 7/11 at 101.00 A+ 6,887,548 Series 2001, 5.375%, 7/01/15 - FGIC Insured (Alternative Minimum Tax) 7,550 Waco Health Facilities Development Corporation, Texas, Hillcrest 8/16 at 100.00 AA 6,493,378 Health System Project, FHA Insured Mortgage Revenue Bonds, Series 2006A, 5.000%, 8/01/31 - MBIA Insured 1,840 Ysleta Independent School District Public Facility Corporation, 11/09 at 100.00 AA 1,835,050 Texas, Lease Revenue Refunding Bonds, Series 2001, 5.375%, 11/15/24 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 207,452 Total Texas 159,180,677 - ------------------------------------------------------------------------------------------------------------------------------------ Utah - 1.6% (1.0% of Total Investments) 2,000 Clearfield City, Utah, Sales Tax Revenue Bonds, Series 2003, 7/13 at 100.00 AA-(5) 2,152,580 5.000%, 7/01/28 (Pre-refunded 7/01/13) - FGIC Insured 15,000 Utah Transit Authority, Sales Tax Revenue Bonds, Series 2008A, 6/18 at 100.00 AAA 14,222,700 5.000%, 6/15/32 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 17,000 Total Utah 16,375,280 - ------------------------------------------------------------------------------------------------------------------------------------ Virginia - 1.4% (0.9% of Total Investments) 1,035 Loudoun County Industrial Development Authority, Virginia, Lease 6/14 at 100.00 AAA 1,054,593 Revenue Bonds, Public Safety Facilities, Series 2003A, 5.250%, 12/15/20 - FSA Insured 4,840 Metropolitan Washington D.C. Airports Authority, Airport System 10/11 at 101.00 AA 4,518,188 Revenue Bonds, Series 2001A, 5.500%, 10/01/19 - MBIA Insured (Alternative Minimum Tax) 10,000 Virginia Housing Development Authority, Commonwealth Mortgage 7/11 at 100.00 AAA 8,974,800 Bonds, Series 2001H-1, 5.375%, 7/01/36 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 15,875 Total Virginia 14,547,581 - ------------------------------------------------------------------------------------------------------------------------------------
----- 43 ----- NIO | Nuveen Insured Municipal Opportunity Fund, Inc. (continued) | Portfolio of INVESTMENTS October 31, 2008
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Washington - 2.6% (1.5% of Total Investments) $ 2,500 Grant County Public Utility District 2, Washington, Revenue Bonds, 1/15 at 100.00 AA $ 2,334,200 Wanapum Hydroelectric Development, Series 2005A, 5.000%, 1/01/29 - FGIC Insured 3,500 King County School District 401, Highline, Washington, General 12/14 at 100.00 AA+ 3,465,770 Obligation Bonds, Series 2004, 5.000%, 10/01/24 - FGIC Insured 3,195 Kitsap County, Washington, Limited Tax General Obligation Bonds, 7/10 at 100.00 AA(5) 3,361,939 Series 2000, 5.500%, 7/01/25 (Pre-refunded 7/01/10) - AMBAC Insured 4,250 Snohomish County Public Utility District 1, Washington, Generation No Opt. Call Aaa 5,004,248 System Revenue Bonds, Series 1989, 6.650%, 1/01/16 - FGIC Insured (ETM) Tacoma, Washington, Solid Waste Utility Revenue Refunding Bonds, Series 2006: 3,890 5.000%, 12/01/24 - SYNCORA GTY Insured 12/16 at 100.00 AA 3,703,902 4,085 5.000%, 12/01/25 - SYNCORA GTY Insured 12/16 at 100.00 AA 3,860,407 4,290 5.000%, 12/01/26 - SYNCORA GTY Insured 12/16 at 100.00 AA 4,027,280 - ------------------------------------------------------------------------------------------------------------------------------------ 25,710 Total Washington 25,757,746 - ------------------------------------------------------------------------------------------------------------------------------------ Wisconsin - 2.7% (1.6% of Total Investments) 15,000 Wisconsin Health and Educational Facilities Authority, Revenue 2/09 at 100.00 AA 12,778,800 Bonds, Marshfield Clinic, Series 1997, 5.750%, 2/15/27 - MBIA Insured 290 Wisconsin, General Obligation Bonds, Series 2004-3, 5.250%, 5/01/20 - 5/14 at 100.00 Aa3 295,404 FGIC Insured 2,600 Wisconsin, General Obligation Bonds, Series 2004-3, 5.250%, 5/01/20 (Pre-refunded 5/01/14) - FGIC Insured 5/14 at 100.00 Aa3(5) 2,827,474 10,946 Wisconsin, General Obligation Bonds, Series 2004-4, 5.000%, 5/01/20 - 5/14 at 100.00 AA 11,018,222 MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 28,836 Total Wisconsin 26,919,900 - ------------------------------------------------------------------------------------------------------------------------------------ $ 1,962,546 Total Long-Term Investments (cost $1,775,939,594) - 165.8% 1,666,110,059 ============------------------------------------------------------------------------------------------------------------------------ Short-Term Investments - 1.7% (1.0% of Total Investments) 4,240 Indianapolis Local Public Improvement Bond Bank, Indiana, Waterworks A-1+ 4,240,000 Revenue Bonds, Macon Trust Series S, Variable Rate Demand Obligations, 3.820%, 1/01/21 - MBIA Insured (6) 7,500 King County, Washington, Sewer Revenue Bonds, Series 2005, Trust A-1 7,500,000 1200, Variable Rate Demand Obligations, 3.500%, 1/01/35 - FSA Insured (6) 1,645 Massachusetts Water Resources Authority, General Revenue Bonds, VMIG-1 1,645,000 Tender Option Bond, Trust 1080, 8/12 at 100.00, Variable Rate Demand Obligations, 3.000%, 8/01/32 - FSA Insured (6) 4,060 Mesa County Valley School District 51, Grand Junction, Colorado, VMIG-1 4,060,000 General Obligation Bonds, Trust 2696, Variable Rate Demand Obligations, 2.270%, 6/01/13 - MBIA Insured (6) - ------------------------------------------------------------------------------------------------------------------------------------ $ 17,445 Total Short-Term Investments (cost $17,445,000) 17,445,000 ============------------------------------------------------------------------------------------------------------------------------ Total Investments (cost $1,793,384,594) - 167.5% 1,683,555,059 ---------------------------------------------------------------------------------------------------------------------- Floating Rate Obligations - (9.7)% (97,378,333) ---------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 4.2% 42,391,243 ---------------------------------------------------------------------------------------------------------------------- Auction Rate Preferred Shares, at Liquidation Value - (62.0)% (7) (623,350,000) ---------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $1,005,217,969 ======================================================================================================================
- ----- 44 - ----- At least 80% of the Fund's net assets (including net assets attributable to Auction Rate Preferred shares) are invested in municipal securities that are covered by insurance or backed by an escrow or trust account containing sufficient U.S. Government or U.S. Government agency securities or U.S. Treasury-issued State and Local Government Series securities to ensure the timely payment of principal and interest. See Notes to Financial Statements, Footnote 1 - Insurance, for more information. (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's Group ("Standard & Poor's") or Moody's Investor Service, Inc. ("Moody's") rating. Ratings below BBB by Standard & Poor's or Baa by Moody's are considered to be below investment grade. The Portfolio of Investments may reflect the ratings on certain bonds insured by AGC, AMBAC, CIFG, FGIC, FSA, MBIA, RAAI and SYNCORA as of October 31, 2008. Please see the Portfolio Manager's Commentary for an expanded discussion of the affect on the Fund of changes to the ratings of certain bonds in the portfolio resulting from changes to the ratings of the underlying insurers both during the period and after period end. (4) Portion of investment has been pledged as collateral for Recourse Trusts. (5) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. (6) Investment has a maturity of more than one year, but has variable rate and demand features which qualify it as a short-term investment. The rate disclosed is that in effect at the end of the reporting period. This rate changes periodically based on market conditions or a specified market index. (7) Auction Rate Preferred Shares, at Liquidation Value as a percentage of Total Investments is 37.0%. N/R Not rated. WI/DD Purchased on a when-issued or delayed delivery basis. (ETM) Escrowed to maturity. (IF) Inverse floating rate investment. (UB) Underlying bond of an inverse floating rate trust reflected as a financing transaction pursuant to the provisions of SFAS No. 140. See accompanying notes to financial statements. ----- 45 ----- NIF | Nuveen Premier Insured Municipal Income Fund, Inc. | Portfolio of INVESTMENTS October 31, 2008
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Alabama - 1.2% (0.7% of Total Investments) $ 3,200 Auburn, Alabama, General Obligation Warrants, Series 2005, 5.000%, 8/15 at 100.00 AA $ 2,990,496 8/01/30 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ Arizona - 3.0% (1.8% of Total Investments) 4,370 Phoenix Civic Improvement Corporation, Arizona, Junior Lien Water 7/15 at 100.00 AA 4,028,485 System Revenue Bonds, Series 2005, 4.750%, 7/01/25 - MBIA Insured 5,000 Phoenix, Arizona, Civic Improvement Revenue Bonds, Civic Plaza, No Opt. Call AA 3,320,600 Series 2005B, 0.000%, 7/01/40 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 9,370 Total Arizona 7,349,085 - ------------------------------------------------------------------------------------------------------------------------------------ Arkansas - 1.6% (0.9% of Total Investments) 4,020 Northwest Community College District, Arkansas, General Obligation 5/15 at 100.00 AA 3,855,461 Bonds, Series 2005, 5.000%, 5/15/23 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ California - 37.3% (22.3% of Total Investments) ABAG Finance Authority for Non-Profit Corporations, California, Insured Certificates of Participation, Children's Hospital Medical Center of Northern California, Series 1999: 6,750 5.875%, 12/01/19 (Pre-refunded 12/01/09) - AMBAC Insured 12/09 at 101.00 AA(4) 7,112,003 10,000 6.000%, 12/01/29 (Pre-refunded 12/01/09) - AMBAC Insured 12/09 at 101.00 AA(4) 10,540,700 10 California Department of Water Resources, Water System Revenue 12/14 at 100.00 AAA 10,911 Bonds, Central Valley Project, Series 2005AC, 5.000%, 12/01/26 (Pre-refunded 12/01/14) - MBIA Insured 990 California Department of Water Resources, Water System Revenue 12/14 at 100.00 AAA 953,449 Bonds, Central Valley Project, Series 2005AC, 5.000%, 12/01/26 - MBIA Insured 1,250 California Pollution Control Financing Authority, Remarketed Revenue 4/11 at 102.00 AA 1,182,938 Bonds, Pacific Gas and Electric Company, Series 1996A, 5.350%, 12/01/16 - MBIA Insured (Alternative Minimum Tax) 4,775 Clovis Unified School District, Fresno County, California, General No Opt. Call AA 1,902,503 Obligation Bonds, Series 2001A, 0.000%, 8/01/25 - FGIC Insured (ETM) 1,005 Folsom Cordova Unified School District, Sacramento County, 10/14 at 100.00 AAA 968,096 California, General Obligation Bonds, School Facilities Improvement District 2, Series 2004B, 5.000%, 10/01/26 - FSA Insured 1,150 Kern Community College District, California, General Obligation No Opt. Call AAA 482,000 Bonds, Series 2006, 0.000%, 11/01/23 - FSA Insured 50 Kern County Housing Authority, California, GNMA Guaranteed No Opt. Call AAA 51,365 Tax-Exempt Mortgage Obligation Bonds, Series 1994A-I, 7.150%, 12/30/24 (Alternative Minimum Tax) 35 Kern County Housing Authority, California, GNMA Guaranteed No Opt. Call AAA 36,052 Tax-Exempt Mortgage Obligation Bonds, Series 1994A-III, 7.450%, 6/30/25 (Alternative Minimum Tax) 4,225 La Verne-Grand Terrace Housing Finance Agency, California, Single No Opt. Call AAA 5,390,086 Family Residential Mortgage Revenue Bonds, Series 1984A, 10.250%, 7/01/17 (ETM) 5,000 Ontario Redevelopment Financing Authority, San Bernardino County, No Opt. Call AA 5,815,700 California, Revenue Refunding Bonds, Redevelopment Project 1, Series 1995, 7.400%, 8/01/25 - MBIA Insured 8,880 Pomona, California, GNMA/FHLMC Collateralized Single Family Mortgage No Opt. Call AAA 10,742,314 Revenue Refunding Bonds, Series 1990B, 7.500%, 8/01/23 (ETM) 10,190 San Bernardino County, California, GNMA Mortgage-Backed Securities No Opt. Call AAA 11,583,686 Program Single Family Home Mortgage Revenue Bonds, Series 1988A, 8.300%, 9/01/14 (Alternative Minimum Tax) (ETM) 9,340 San Bernardino, California, GNMA Mortgage-Backed Securities Program No Opt. Call AAA 11,243,305 Single Family Mortgage Revenue Refunding Bonds, Series 1990A, 7.500%, 5/01/23 (ETM)
- ----- 46 - -----
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ California (continued) $ 4,300 San Francisco Airports Commission, California, Revenue Refunding 5/11 at 100.00 AA $ 3,839,083 Bonds, San Francisco International Airport, Second Series 2001, Issue 27A, 5.125%, 5/01/19 - MBIA Insured (Alternative Minimum Tax) 29,000 San Joaquin Hills Transportation Corridor Agency, Orange County, No Opt. Call AA 6,485,270 California, Toll Road Revenue Refunding Bonds, Series 1997A, 0.000%, 1/15/31 - MBIA Insured 2,000 San Jose Redevelopment Agency, California, Tax Allocation Bonds, 8/14 at 100.00 AA 1,993,180 Merged Area Redevelopment Project, Series 2004A, 5.250%, 8/01/19 - MBIA Insured 4,475 San Jose Redevelopment Agency, California, Tax Allocation Bonds, 8/17 at 100.00 AA 3,410,263 Merged Area Redevelopment Project, Series 2006C, 4.250%, 8/01/30 - MBIA Insured 4,455 San Mateo County Community College District, California, General No Opt. Call Aa1 2,159,784 Obligation Bonds, Series 2006B, 0.000%, 9/01/21 - MBIA Insured 1,815 University of California, General Revenue Bonds, Series 2005G, 5/13 at 101.00 Aa1 1,587,272 4.750%, 5/15/31 - MBIA Insured 3,600 Ventura County Community College District, California, General 8/15 at 100.00 AA 3,372,156 Obligation Bonds, Series 2005B, 5.000%, 8/01/28 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 113,295 Total California 90,862,116 - ------------------------------------------------------------------------------------------------------------------------------------ Colorado - 11.8% (7.1% of Total Investments) 1,500 Adams and Arapahoe Counties Joint School District 28J, Aurora, 12/13 at 100.00 AAA 1,508,265 Colorado, General Obligation Bonds, Series 2003A, 5.125%, 12/01/21 - FSA Insured 5,500 Colorado Health Facilities Authority, Colorado, Revenue Bonds, 4/18 at 100.00 AAA 4,395,600 Catholic Health Initiatives, Series 2006C-1, Trust 1090, 6.761%, 10/01/41 - FSA Insured (IF) 2,500 Denver City and County, Colorado, Airport System Revenue Refunding 11/12 at 100.00 A+ 2,312,475 Bonds, Series 2002E, 5.500%, 11/15/18 - FGIC Insured (Alternative Minimum Tax) 6,000 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, 9/10 at 102.00 AAA 6,453,960 Series 2000A, 5.750%, 9/01/29 (Pre-refunded 9/01/10) - MBIA Insured 20,000 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, No Opt. Call AA 4,369,000 Series 2000B, 0.000%, 9/01/30 - MBIA Insured 4,405 Garfield, Eagle and Pitkin Counties School District RE-1, Roaring 12/14 at 100.00 AAA 4,332,978 Fork, Colorado, General Obligation Bonds, Series 2005A, 5.000%, 12/15/24 - FSA Insured 2,065 Jefferson County School District R1, Colorado, General Obligation 12/14 at 100.00 AAA 2,009,204 Bonds, Series 2004, 5.000%, 12/15/24 - FSA Insured (UB) 1,390 Teller County School District RE-2, Woodland Park, Colorado, General 12/14 at 100.00 AA 1,382,994 Obligation Bonds, Series 2004, 5.000%, 12/01/22 - MBIA Insured 1,000 University of Colorado, Enterprise System Revenue Bonds, Series 6/12 at 100.00 AA-(4) 1,065,870 2002A, 5.000%, 6/01/19 (Pre-refunded 6/01/12) - FGIC Insured 1,000 University of Colorado, Enterprise System Revenue Bonds, Series 6/15 at 100.00 AA 927,700 2005, 5.000%, 6/01/30 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 45,360 Total Colorado 28,758,046 - ------------------------------------------------------------------------------------------------------------------------------------ District of Columbia - 0.1% (0.1% of Total Investments) 665 Washington Convention Center Authority, District of Columbia, Senior 10/16 at 100.00 AA 312,623 Lien Dedicated Tax Revenue Bonds, Series 2007, Residuals 1606, 1.947%, 10/01/30 - AMBAC Insured (IF) - ------------------------------------------------------------------------------------------------------------------------------------ Florida - 4.0% (2.4% of Total Investments) 2,285 Florida Municipal Loan Council, Revenue Bonds, Series 2005A, 5.000%, 2/15 at 100.00 AA 2,121,737 2/01/23 - MBIA Insured 1,500 JEA, Florida, Water and Sewerage System Revenue Bonds, Series 2004A, 10/13 at 100.00 AA 1,509,030 5.000%, 10/01/19 - FGIC Insured 4,240 Reedy Creek Improvement District, Florida, Utility Revenue Bonds, 10/13 at 100.00 AA 4,291,050 Series 2003-1, 5.250%, 10/01/17 - MBIA Insured
----- 47 ----- NIF | Nuveen Premier Insured Municipal Income Fund, Inc. (continued) | Portfolio of INVESTMENTS October 31, 2008
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Florida (continued) $ 2,000 Tallahassee, Florida, Energy System Revenue Bonds, Series 2005, 10/15 at 100.00 AA $ 1,898,340 5.000%, 10/01/28 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 10,025 Total Florida 9,820,157 - ------------------------------------------------------------------------------------------------------------------------------------ Georgia - 3.6% (2.1% of Total Investments) 2,950 Atlanta, Georgia, Airport General Revenue Bonds, Series 2004G, 1/15 at 100.00 AAA 2,882,652 5.000%, 1/01/25 - FSA Insured 6,500 Medical Center Hospital Authority, Georgia, Revenue Anticipation 8/09 at 102.00 AA 5,829,590 Certificates, Columbus Regional Healthcare System, Inc. Project, Series 1999, 5.500%, 8/01/25 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 9,450 Total Georgia 8,712,242 - ------------------------------------------------------------------------------------------------------------------------------------ Hawaii - 4.2% (2.5% of Total Investments) 2,250 Hawaii Department of Budget and Finance, Special Purpose Revenue 1/09 at 101.00 AA 2,158,650 Bonds, Hawaiian Electric Company Inc., Series 1999D, 6.150%, 1/01/20 - AMBAC Insured (Alternative Minimum Tax) 8,030 Hawaii Department of Transportation, Airport System Revenue 7/10 at 101.00 A2 8,095,364 Refunding Bonds, Series 2000B, 6.500%, 7/01/15 - FGIC Insured (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 10,280 Total Hawaii 10,254,014 - ------------------------------------------------------------------------------------------------------------------------------------ Illinois - 19.2% (11.5% of Total Investments) 4,000 Bridgeview, Illinois, General Obligation Bonds, Series 2002, 12/12 at 100.00 A- 3,897,280 5.000%, 12/01/22 - FGIC Insured 8,200 Chicago Board of Education, Illinois, General Obligation Lease No Opt. Call AA 8,714,714 Certificates, Series 1992A, 6.250%, 1/01/15 - MBIA Insured 10,000 Chicago, Illinois, General Obligation Refunding Bonds, Series 1/10 at 101.00 AA 9,768,700 2000D, 5.500%, 1/01/35 - FGIC Insured 1,450 Chicago, Illinois, Third Lien General Airport Revenue Bonds, O'Hare 1/16 at 100.00 AA 1,377,167 International Airport, Series 2005A, 5.250%, 1/01/24 - MBIA Insured 23,110 Illinois Development Finance Authority, Local Government Program No Opt. Call AAA 15,207,994 Revenue Bonds, Kane, Cook and DuPage Counties School District U46 - Elgin, Series 2002, 0.000%, 1/01/17 - FSA Insured 2,500 Illinois Municipal Electric Agency, Power Supply System Revenue 2/17 at 100.00 A+ 2,127,600 Bonds, Series 2007A, 5.000%, 2/01/35 - FGIC Insured 5,010 Metropolitan Pier and Exposition Authority, Illinois, Revenue No Opt. Call AA 2,433,307 Refunding Bonds, McCormick Place Expansion Project, Series 1996A, 0.000%, 12/15/21 - MBIA Insured 3,225 Regional Transportation Authority, Cook, DuPage, Kane, Lake, No Opt. Call AA 3,357,064 McHenry and Will Counties, Illinois, General Obligation Bonds, Series 1992A, 9.000%, 6/01/09 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 57,495 Total Illinois 46,883,826 - ------------------------------------------------------------------------------------------------------------------------------------ Indiana - 3.9% (2.3% of Total Investments) 2,130 Indiana Municipal Power Agency, Power Supply Revenue Bonds, Series 1/17 at 100.00 AA 1,740,189 2007A, 5.000%, 1/01/42 - MBIA Insured Indiana University, Parking Facility Revenue Bonds, Series 2004: 1,015 5.250%, 11/15/19 - AMBAC Insured 11/14 at 100.00 Aa1 1,044,567 1,060 5.250%, 11/15/20 - AMBAC Insured 11/14 at 100.00 Aa1 1,081,391 1,100 5.250%, 11/15/21 - AMBAC Insured 11/14 at 100.00 Aa1 1,114,157 9,255 Indianapolis Local Public Improvement Bond Bank, Indiana, Series No Opt. Call AA 3,513,476 1999E, 0.000%, 2/01/25 - AMBAC Insured 1,000 Metropolitan School District Steuben County K-5 Building 7/14 at 102.00 AAA 1,020,680 Corporation, Indiana, First Mortgage Bonds, Series 2003, 5.250%, 1/15/21 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 15,560 Total Indiana 9,514,460 - ------------------------------------------------------------------------------------------------------------------------------------ Iowa - 1.3% (0.7% of Total Investments) 3,345 Ames, Iowa, Hospital Revenue Refunding Bonds, Mary Greeley Medical 6/13 at 100.00 Aa3 3,045,121 Center, Series 2003, 5.000%, 6/15/17 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------
- ----- 48 - -----
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Kansas - 0.6% (0.3% of Total Investments) $ 1,385 Neosho County Unified School District 413, Kansas, General 9/14 at 100.00 Aaa $ 1,348,131 Obligation Bonds, Series 2006, 5.000%, 9/01/31 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ Louisiana - 2.8% (1.7% of Total Investments) 1,000 Louisiana Public Facilities Authority, Revenue Bonds, Baton Rouge 7/14 at 100.00 AA 937,940 General Hospital, Series 2004, 5.250%, 7/01/24 - MBIA Insured 7,160 Louisiana State, Gasoline Tax Revenue Bonds, Series 2006, 4.750%, 5/16 at 100.00 AAA 5,812,273 5/01/39 - FSA Insured (UB) - ------------------------------------------------------------------------------------------------------------------------------------ 8,160 Total Louisiana 6,750,213 - ------------------------------------------------------------------------------------------------------------------------------------ Maryland - 2.2% (1.3% of Total Investments) 1,200 Maryland Economic Development Corporation, Student Housing Revenue 6/16 at 100.00 Baa2 1,002,144 Refunding Bonds, University of Maryland College Park Projects, Series 2006, 5.000%, 6/01/28 - CIFG Insured 5,000 Maryland Transportation Authority, Airport Parking Revenue Bonds, 3/12 at 101.00 AA 4,322,500 Baltimore-Washington International Airport Passenger Facility, Series 2002B, 5.125%, 3/01/21 - AMBAC Insured (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 6,200 Total Maryland 5,324,644 - ------------------------------------------------------------------------------------------------------------------------------------ Massachusetts - 2.4% (1.4% of Total Investments) 4,400 Massachusetts School Building Authority, Dedicated Sales Tax 8/15 at 100.00 AAA 4,417,292 Revenue Bonds, Series 2005A, 5.000%, 8/15/23 - FSA Insured (UB) 1,725 Massachusetts Water Resources Authority, General Revenue Bonds, 2/17 at 100.00 AAA 1,330,786 4.500%, 8/01/46 - FSA Insured (UB) - ------------------------------------------------------------------------------------------------------------------------------------ 6,125 Total Massachusetts 5,748,078 - ------------------------------------------------------------------------------------------------------------------------------------ Michigan - 3.9% (2.3% of Total Investments) 6,500 Michigan Higher Education Student Loan Authority, Revenue Bonds, No Opt. Call AA 6,554,015 Series 2000 XII-T, 5.300%, 9/01/10 - AMBAC Insured (Alternative Minimum Tax) 3,810 Michigan Housing Development Authority, GNMA Collateralized Limited 8/12 at 102.00 Aaa 3,013,291 Obligation Multifamily Housing Revenue Bonds, Cranbrook Apartments, Series 2001A, 5.500%, 2/20/43 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 10,310 Total Michigan 9,567,306 - ------------------------------------------------------------------------------------------------------------------------------------ Minnesota - 2.0% (1.2% of Total Investments) 4,860 Minneapolis-St. Paul Metropolitan Airports Commission, Minnesota, 1/11 at 100.00 AA 4,822,335 Airport Revenue Bonds, Series 2001B, 5.750%, 1/01/15 - FGIC Insured (Alternative Minimum Tax) 145 Minnesota Housing Finance Agency, Rental Housing Bonds, Series 2/09 at 100.00 Aa1 145,358 1995D, 5.950%, 2/01/18 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 5,005 Total Minnesota 4,967,693 - ------------------------------------------------------------------------------------------------------------------------------------ Missouri - 0.8% (0.5% of Total Investments) 2,000 Missouri Western State College, Auxiliary System Revenue Bonds, 10/13 at 100.00 AA 1,951,600 Series 2003, 5.000%, 10/01/21 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ Nevada - 5.2% (3.1% of Total Investments) 2,100 Clark County, Nevada, General Obligation Bank Bonds, Southern 12/12 at 100.00 AA+ 1,910,517 Nevada Water Authority Loan, Series 2002, 5.000%, 6/01/32 - MBIA Insured 900 Clark County, Nevada, General Obligation Bank Bonds, Southern 12/12 at 100.00 Aa1(4) 965,520 Nevada Water Authority Loan, Series 2002, 5.000%, 6/01/32 (Pre-refunded 12/01/12) - MBIA Insured Director of Nevada State Department of Business and Industry, Revenue Bonds, Las Vegas Monorail Project, First Tier, Series 2000: 160 0.000%, 1/01/28 - AMBAC Insured No Opt. Call A 23,022 2,000 5.375%, 1/01/40 - AMBAC Insured 1/10 at 100.00 AA 1,202,280
----- 49 ----- NIF | Nuveen Premier Insured Municipal Income Fund, Inc. (continued) | Portfolio of INVESTMENTS October 31, 2008
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Nevada (continued) $ 7,990 Reno, Nevada, Senior Lien Sales and Room Tax Revenue Bonds, Reno 6/12 at 100.00 AA(4) $ 8,575,188 Transportation Rail Access Corridor Project, Series 2002, 5.250%, 6/01/41 (Pre-refunded 6/01/12) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 13,150 Total Nevada 12,676,527 - ------------------------------------------------------------------------------------------------------------------------------------ New Jersey - 1.0% (0.6% of Total Investments) New Jersey Economic Development Authority, Revenue Bonds, Motor Vehicle Surcharge, Series 2004A: 1,200 5.000%, 7/01/22 - MBIA Insured 7/14 at 100.00 AA 1,169,772 1,200 5.000%, 7/01/23 - MBIA Insured 7/14 at 100.00 AA 1,162,332 - ------------------------------------------------------------------------------------------------------------------------------------ 2,400 Total New Jersey 2,332,104 - ------------------------------------------------------------------------------------------------------------------------------------ New York - 7.3% (4.4% of Total Investments) 1,000 Dormitory Authority of the State of New York, FHA-Insured Mortgage 2/15 at 100.00 AA 899,300 Revenue Bonds, Montefiore Hospital, Series 2004, 5.000%, 8/01/23 - FGIC Insured 20 Hudson Yards Infrastructure Corporation, New York, Revenue Bonds, 2/17 at 100.00 AA 8,238 Driver Trust 1649, 2006, 4.745%, 2/15/47 - MBIA Insured (IF) 2,125 Hudson Yards Infrastructure Corporation, New York, Revenue Bonds, 2/17 at 100.00 AA 1,512,299 Series 2006A, 4.500%, 2/15/47 - MBIA Insured (UB) 5,000 Long Island Power Authority, New York, Electric System General 6/16 at 100.00 A- 4,564,700 Revenue Bonds, Series 2006A, 5.000%, 12/01/25 - FGIC Insured 10,000 Metropolitan Transportation Authority, New York, Transportation 11/12 at 100.00 AAA 10,851,700 Revenue Refunding Bonds, Series 2002F, 5.250%, 11/15/27 (Pre-refunded 11/15/12) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 18,145 Total New York 17,836,237 - ------------------------------------------------------------------------------------------------------------------------------------ North Carolina - 2.1% (1.3% of Total Investments) 3,100 North Carolina Medical Care Commission, FHA-Insured Mortgage 10/13 at 100.00 AAA 2,295,085 Revenue Bonds, Betsy Johnson Regional Hospital Project, Series 2003, 5.125%, 10/01/32 - FSA Insured 3,050 Raleigh Durham Airport Authority, North Carolina, Airport Revenue 5/15 at 100.00 Aa3 2,886,551 Bonds, Series 2005A, 5.000%, 5/01/22 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 6,150 Total North Carolina 5,181,636 - ------------------------------------------------------------------------------------------------------------------------------------ Ohio - 0.2% (0.1% of Total Investments) 1,535 Hamilton County, Ohio, Sales Tax Revenue Bonds, Tender Option Bond 12/16 at 100.00 A2 477,370 Trust 2706, 0.472%, 12/01/32 - AMBAC Insured (IF) - ------------------------------------------------------------------------------------------------------------------------------------ Oklahoma - 1.7% (1.0% of Total Investments) 3,500 Oklahoma Capitol Improvement Authority, State Facilities Revenue 7/15 at 100.00 AA 3,385,305 Bonds, Series 2005F, 5.000%, 7/01/24 - AMBAC Insured 640 Oklahoma Housing Finance Agency, GNMA Collateralized Single Family No Opt. Call AAA 661,005 Mortgage Revenue Bonds, Series 1987A, 7.997%, 8/01/18 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 4,140 Total Oklahoma 4,046,310 - ------------------------------------------------------------------------------------------------------------------------------------ Oregon - 4.3% (2.6% of Total Investments) Oregon Health Sciences University, Revenue Bonds, Series 2002A: 5,000 5.000%, 7/01/26 - MBIA Insured 1/13 at 100.00 AA 4,459,500 7,000 5.000%, 7/01/32 - MBIA Insured 1/13 at 100.00 AA 5,906,670 - ------------------------------------------------------------------------------------------------------------------------------------ 12,000 Total Oregon 10,366,170 - ------------------------------------------------------------------------------------------------------------------------------------ Pennsylvania - 3.5% (2.1% of Total Investments) 1,500 Allegheny County Sanitary Authority, Pennsylvania, Sewerage Revenue 12/15 at 100.00 AA 1,377,540 Bonds, Series 2005A, 5.000%, 12/01/23 - MBIA Insured 4,000 Commonwealth Financing Authority, Pennsylvania, State Appropriation 6/16 at 100.00 AAA 3,899,440 Lease Bonds, Series 2006A, 5.000%, 6/01/26 - FSA Insured (UB) 2,680 Pennsylvania Public School Building Authority, Lease Revenue Bonds, 12/16 at 100.00 AAA 2,130,412 School District of Philadelphia, Series 2006B, 4.500%, 6/01/32 - FSA Insured (UB)
- ----- 50 - -----
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Pennsylvania (continued) $ 1,050 Pennsylvania Turnpike Commission, Turnpike Revenue Bonds, Series 6/16 at 100.00 AA $ 1,003,013 2006A, 5.000%, 12/01/26 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 9,230 Total Pennsylvania 8,410,405 - ------------------------------------------------------------------------------------------------------------------------------------ Puerto Rico - 2.3% (1.4% of Total Investments) 2,500 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series 7/15 at 100.00 AA 2,258,050 2005RR, 5.000%, 7/01/22 - FGIC Insured 1,000 Puerto Rico Municipal Finance Agency, Series 2005C, 5.250%, 8/01/21 - No Opt. Call BBB- 924,490 CIFG Insured 5,000 Puerto Rico Sales Tax Financing Corporation, Sales Tax Revenue No Opt. Call AA 506,250 Bonds, Series 2007A, 0.000%, 8/01/42 - FGIC Insured 2,000 Puerto Rico, Highway Revenue Bonds, Highway and Transportation No Opt. Call AA 1,987,600 Authority, Series 2003AA, 5.500%, 7/01/17 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 10,500 Total Puerto Rico 5,676,390 - ------------------------------------------------------------------------------------------------------------------------------------ Tennessee - 4.2% (2.5% of Total Investments) 3,000 Blount County Public Building Authority, Tennessee, Local 6/15 at 100.00 Aa3 2,871,450 Government Improvement Loans, Oak Ridge General Obligation, 2005 Series B9A, Variable Rate Demand Obligations, 5.000%, 6/01/24 - AMBAC Insured 2,055 Memphis, Tennessee, Sanitary Sewerage System Revenue Bonds, Series 10/14 at 100.00 AAA 2,044,725 2004, 5.000%, 10/01/22 - FSA Insured 5,000 Metropolitan Government of Nashville-Davidson County Health and 11/09 at 101.00 AAA 5,268,200 Educational Facilities Board, Tennessee, Revenue Bonds, Ascension Health Credit Group, Series 1999A, 6.000%, 11/15/30 (Pre-refunded 11/15/09) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 10,055 Total Tennessee 10,184,375 - ------------------------------------------------------------------------------------------------------------------------------------ Texas - 10.7% (6.4% of Total Investments) 12,500 Dallas-Ft. Worth International Airport, Texas, Joint Revenue 11/09 at 100.00 A+ 9,911,500 Refunding and Improvement Bonds, Series 2001A, 5.500%, 11/01/35 - FGIC Insured (Alternative Minimum Tax) North Harris County Regional Water Authority, Texas, Senior Water Revenue Bonds, Series 2003: 4,565 5.250%, 12/15/20 - FGIC Insured 12/13 at 100.00 A+ 4,450,099 4,800 5.250%, 12/15/21 - FGIC Insured 12/13 at 100.00 A+ 4,632,912 7,600 San Antonio, Texas, Airport System Improvement Revenue Bonds, 7/11 at 101.00 A+ 7,185,800 Series 2001, 5.375%, 7/01/16 - FGIC Insured (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 29,465 Total Texas 26,180,311 - ------------------------------------------------------------------------------------------------------------------------------------ Washington - 18.3% (11.0% of Total Investments) 5,000 Chelan County Public Utility District 1, Washington, Hydro 7/11 at 101.00 AA 4,107,000 Consolidated System Revenue Bonds, Series 2001B, 5.600%, 1/01/36 - MBIA Insured (Alternative Minimum Tax) King County School District 405, Bellevue, Washington, General Obligation Bonds, Series 2002: 10,060 5.000%, 12/01/19 - FGIC Insured 12/12 at 100.00 AA+ 10,174,282 12,785 5.000%, 12/01/20 - FGIC Insured 12/12 at 100.00 AA+ 12,850,076 Pierce County School District 343, Dieringer, Washington, General Obligation Refunding Bonds, Series 2003: 2,755 5.250%, 12/01/18 - FGIC Insured 6/13 at 100.00 Aa1 2,830,432 2,990 5.250%, 12/01/19 - FGIC Insured 6/13 at 100.00 Aa1 3,054,494 4,715 Port of Seattle, Washington, Revenue Bonds, Series 2001B, 5.625%, 10/11 at 100.00 AA 4,497,403 4/01/17 - FGIC Insured (Alternative Minimum Tax) 895 Port of Seattle, Washington, Special Facility Revenue Bonds, 3/10 at 101.00 AAA 804,748 Terminal 18, Series 1999C, 6.000%, 9/01/29 - MBIA Insured (Alternative Minimum Tax) 1,265 Tacoma, Washington, General Obligation Bonds, Series 2002, 5.000%, 12/12 at 100.00 AA 1,285,948 12/01/18 - FGIC Insured
----- 51 ----- NIF | Nuveen Premier Insured Municipal Income Fund, Inc. (continued) | Portfolio of INVESTMENTS October 31, 2008
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Washington (continued) $ 5,000 Washington, General Obligation Bonds, Series 2001C, 5.250%, 1/01/26 - 1/11 at 100.00 AAA $ 5,009,750 FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 45,465 Total Washington 44,614,133 - ------------------------------------------------------------------------------------------------------------------------------------ $ 483,485 Total Long-Term Investments (cost $428,549,805) - 166.7% 405,997,280 ============------------------------------------------------------------------------------------------------------------------------ Short-Term Investments - 0.7% (0.4% of Total Investments) $ 1,660 Golden State Tobacco Securitization Corporation, California, VMIG-1 1,660,000 Tobacco Settlement Enhanced Revenue Bonds, Trust 1220, Variable Rate Demand Obligations, 6.640%, 6/01/35 - FGIC Insured (5) ============------------------------------------------------------------------------------------------------------------------------ Total Short-Term Investments (cost $1,660,000) 1,660,000 --------------------------------------------------------------------------------------------------------------------- Total Investments (cost $430,209,805) - 167.4% 407,657,280 --------------------------------------------------------------------------------------------------------------------- Floating Rate Obligations - (6.3)% (15,345,000) --------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.5% 6,226,586 --------------------------------------------------------------------------------------------------------------------- Auction Rate Preferred Shares, at Liquidation Value - (63.6)% (6) (154,950,000) --------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 243,588,866 =====================================================================================================================
At least 80% of the Fund's net assets (including net assets attributable to Auction Rate Preferred shares) are invested in municipal securities that are covered by insurance or backed by an escrow or trust account containing sufficient U.S. Government or U.S. Government agency securities or U.S. Treasury-issued State and Local Government Series securities to ensure the timely payment of principal and interest. See Notes to Financial Statements, Footnote 1 - Insurance, for more information. (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's Group ("Standard & Poor's") or Moody's Investor Service, Inc. ("Moody's") rating. Ratings below BBB by Standard & Poor's or Baa by Moody's are considered to be below investment grade. The Portfolio of Investments may reflect the ratings on certain bonds insured by AGC, AMBAC, CIFG, FGIC, FSA, MBIA, RAAI and SYNCORA as of October 31, 2008. Please see the Portfolio Manager's Commentary for an expanded discussion of the affect on the Fund of changes to the ratings of certain bonds in the portfolio resulting from changes to the ratings of the underlying insurers both during the period and after period end. (4) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. (5) Investment has a maturity of more than one year, but has variable rate and demand features which qualify it as a short-term investment. The rate disclosed is that in effect at the end of the reporting period. This rate changes periodically based on market conditions or a specified market index. (6) Auction Rate Preferred Shares, at Liquidation Value as a percentage of Total Investments is 38.0%. (ETM) Escrowed to maturity. (IF) Inverse floating rate investment. (UB) Underlying bond of an inverse floating rate trust reflected as a financing transaction pursuant to the provisions of SFAS No. 140. See accompanying notes to financial statements. - ----- 52 - ----- NPX | Nuveen Insured Premium Income Municipal Fund 2 | Portfolio of INVESTMENTS October 31, 2008
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Alabama - 3.8% (2.3% of Total Investments) $ 3,750 Huntsville Healthcare Authority, Alabama, Revenue Bonds, Series 6/15 at 100.00 A2 $ 3,536,550 2005A, 5.000%, 6/01/24 - MBIA Insured Jefferson County, Alabama, General Obligation Warrants, Series 2004A: 1,395 5.000%, 4/01/22 - MBIA Insured 4/14 at 100.00 AA 1,187,940 1,040 5.000%, 4/01/23 - MBIA Insured 4/14 at 100.00 AA 874,359 11,135 Limestone County Water and Sewer Authority, Alabama, Water 3/17 at 100.00 BBB- 8,093,809 Revenue Bonds, Series 2007, 4.500%, 12/01/37 - SYNCORA GTY Insured 2,590 Montgomery Water and Sewerage Board, Alabama, Water and Sewerage 3/15 at 100.00 AAA 2,536,050 Revenue Bonds, Series 2005, 5.000%, 3/01/25 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 19,910 Total Alabama 16,228,708 - ------------------------------------------------------------------------------------------------------------------------------------ Arizona - 2.6% (1.6% of Total Investments) 12,365 Phoenix Civic Improvement Corporation, Arizona, Junior Lien 7/15 at 100.00 AAA 11,236,817 Water System Revenue Bonds, Series 2005, 4.750%, 7/01/27 - MBIA Insured (UB) - ------------------------------------------------------------------------------------------------------------------------------------ Arkansas - 3.2% (1.9% of Total Investments) 7,745 Arkansas Development Finance Authority, State Facility Revenue 6/14 at 100.00 AAA 7,610,082 Bonds, Donaghey Plaza Project, Series 2004, 5.250%, 6/01/25 - FSA Insured University of Arkansas, Fayetteville, Revenue Bonds, Medical Sciences Campus, Series 2004B: 2,000 5.000%, 11/01/27 - MBIA Insured 11/14 at 100.00 Aa3 1,924,060 2,000 5.000%, 11/01/28 - MBIA Insured 11/14 at 100.00 Aa3 1,902,880 2,480 University of Arkansas, Monticello Campus, Revenue Bonds, Series 12/13 at 100.00 Aa3 2,241,796 2005, 5.000%, 12/01/35 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 14,225 Total Arkansas 13,678,818 - ------------------------------------------------------------------------------------------------------------------------------------ California - 23.8% (14.3% of Total Investments) 22,880 Alameda Corridor Transportation Authority, California, User Fee No Opt. Call AA 5,166,533 Senior Lien Revenue Bonds, Series 1999A, 0.000%, 10/01/32 - MBIA Insured (UB) 20 California Department of Water Resources, Water System Revenue 12/14 at 100.00 AAA 21,823 Bonds, Central Valley Project, Series 2005AC, 5.000%, 12/01/24 (Pre-refunded 12/01/14) - MBIA Insured 1,980 California Department of Water Resources, Water System Revenue 12/14 at 100.00 AAA 1,951,963 Bonds, Central Valley Project, Series 2005AC, 5.000%, 12/01/24 - MBIA Insured (4) 1,800 California Educational Facilities Authority, Revenue Bonds, 10/15 at 100.00 Aa3 1,609,200 Occidental College, Series 2005A, 5.000%, 10/01/33 - MBIA Insured 31,200 Foothill/Eastern Transportation Corridor Agency, California, 1/10 at 24.23 AA 5,983,848 Toll Road Revenue Refunding Bonds, Series 1999, 0.000%, 1/15/34 - MBIA Insured 1,735 Fullerton Public Financing Authority, California, Tax Allocation 9/15 at 100.00 AA 1,566,028 Revenue Bonds, Series 2005, 5.000%, 9/01/27 - AMBAC Insured 1,750 Golden State Tobacco Securitization Corporation, California, 6/15 at 100.00 A 77,735 Tobacco Settlement Asset-Backed Revenue Bonds, Series 2005A, Trust 2448, 0.891%, 6/01/35 - FGIC Insured (IF) 1,870 Kern Community College District, California, General Obligation No Opt. Call AAA 783,773 Bonds, Series 2006, 0.000%, 11/01/23 - FSA Insured
----- 53 ----- NPX | Nuveen Insured Premium Income Municipal Fund 2 (continued) | Portfolio of INVESTMENTS October 31, 2008
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ California (continued) $ 6,520 Los Angeles Unified School District, California, General 7/15 at 100.00 AA $ 6,487,661 Obligation Bonds, Series 2005E, 5.000%, 7/01/22 - AMBAC Insured 4,000 Los Angeles Unified School District, California, General 7/16 at 100.00 AA- 3,860,680 Obligation Bonds, Series 2006F, 5.000%, 7/01/24 - FGIC Insured 15,000 Orange County Sanitation District, California, Certificates of 8/13 at 100.00 AAA 16,446,899 Participation, Series 2003, 5.250%, 2/01/30 (Pre-refunded 8/01/13) - FGIC Insured 1,750 Orange County Water District, California, Revenue Certificates 8/13 at 100.00 AA+(5) 1,645,613 of Participation, Series 2003B, 5.000%, 8/15/34 - MBIA Insured (ETM) 8,250 Orange County Water District, California, Revenue Certificates 8/13 at 100.00 AA+ 7,457,423 of Participation, Series 2003B, 5.000%, 8/15/34 - MBIA Insured 750 Orange County Water District, California, Revenue Certificates 2/15 at 100.00 AA+ 729,983 of Participation, Series 2005B, 5.000%, 8/15/24 - MBIA Insured 1,435 Pasadena Area Community College District, Los Angeles County, 6/13 at 100.00 AA-(5) 1,554,765 California, General Obligation Bonds, Series 2003A, 5.000%, 6/01/22 (Pre-refunded 6/01/13) - FGIC Insured 12,265 Sacramento City Financing Authority, California, Capital 12/09 at 102.00 AA(5) 13,062,224 Improvement Revenue Bonds, Solid Waste and Redevelopment Projects, Series 1999, 5.800%, 12/01/19 (Pre-refunded 12/01/09) - AMBAC Insured 735 Sacramento City Financing Authority, California, Capital 12/09 at 102.00 AA 758,366 Improvement Revenue Bonds, Solid Waste and Redevelopment Projects, Series 1999, 5.800%, 12/01/19 - AMBAC Insured San Diego County, California, Certificates of Participation, Edgemoor Facility Project and Regional System, Series 2005: 1,675 5.000%, 2/01/24 - AMBAC Insured 2/15 at 100.00 AA+ 1,550,012 720 5.000%, 2/01/25 - AMBAC Insured 2/15 at 100.00 AA+ 660,557 San Joaquin Hills Transportation Corridor Agency, Orange County, California, Toll Road Revenue Refunding Bonds, Series 1997A: 3,825 0.000%, 1/15/32 - MBIA Insured No Opt. Call AA 797,819 26,900 0.000%, 1/15/34 - MBIA Insured No Opt. Call AA 4,865,941 2,000 San Jose Redevelopment Agency, California, Tax Allocation Bonds, 8/14 at 100.00 AA 1,993,180 Merged Area Redevelopment Project, Series 2004A, 5.250%, 8/01/19 - MBIA Insured 7,845 San Jose Redevelopment Agency, California, Tax Allocation Bonds, 8/17 at 100.00 AA 5,978,439 Merged Area Redevelopment Project, Series 2006C, 4.250%, 8/01/30 - MBIA Insured 5,000 Torrance, California, Certificates of Participation, Series No Opt. Call AA 4,842,000 2005B, 5.000%, 6/01/24 - AMBAC Insured 12,500 University of California, Revenue Bonds, Multi-Purpose Projects, 5/13 at 100.00 Aa1 11,336,125 Series 2003A, 5.000%, 5/15/33 - AMBAC Insured (UB) - ------------------------------------------------------------------------------------------------------------------------------------ 174,405 Total California 101,188,590 - ------------------------------------------------------------------------------------------------------------------------------------ Colorado - 11.2% (6.7% of Total Investments) 1,940 Colorado Educational and Cultural Facilities Authority, Charter 6/13 at 100.00 A 1,865,368 School Revenue Bonds, Adams School District 12 - Pinnacle School, Series 2003, 5.250%, 6/01/23 - SYNCORA GTY Insured 3,405 Colorado Educational and Cultural Facilities Authority, Revenue 12/13 at 100.00 A 3,271,115 Bonds, Classical Academy Charter School, Series 2003, 5.250%, 12/01/23 - SYNCORA GTY Insured 3,500 Colorado Health Facilities Authority, Revenue Bonds, Poudre 12/09 at 101.00 Aaa 3,687,320 Valley Healthcare Inc., Series 1999A, 5.750%, 12/01/23 (Pre-refunded 12/01/09) - FSA Insured 17,145 Denver Convention Center Hotel Authority, Colorado, Senior 12/13 at 100.00 N/R(5) 18,205,417 Revenue Bonds, Convention Center Hotel, Series 2003A, 5.000%, 12/01/33 (Pre-refunded 12/01/13) - SYNCORA GTY Insured 6,100 Denver School District 1, Colorado, General Obligation Bonds, 12/13 at 100.00 AAA 6,223,098 Series 2004, 5.000%, 12/01/18 - FSA Insured 12,000 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, No Opt. Call AA 2,621,400 Series 2000B, 0.000%, 9/01/30 - MBIA Insured
- ----- 54 - -----
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Colorado (continued) $ 1,325 El Paso County, Colorado, Certificates of Participation, 12/12 at 100.00 AA $ 1,226,606 Detention Facility Project, Series 2002B, 5.000%, 12/01/27 - AMBAC Insured Jefferson County School District R1, Colorado, General Obligation Bonds, Series 2004: 2,500 5.000%, 12/15/22 - FSA Insured (UB) 12/14 at 100.00 AAA 2,462,575 5,125 5.000%, 12/15/23 - FSA Insured (UB) 12/14 at 100.00 AAA 5,018,349 2,000 5.000%, 12/15/24 - FSA Insured (UB) 12/14 at 100.00 AAA 1,945,960 1,000 University of Colorado, Enterprise System Revenue Bonds, Series 6/15 at 100.00 AA 927,700 2005, 5.000%, 6/01/30 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 56,040 Total Colorado 47,454,908 - ------------------------------------------------------------------------------------------------------------------------------------ District of Columbia - 0.1% (0.1% of Total Investments) 1,065 Washington Convention Center Authority, District of Columbia, 10/16 at 100.00 AA 500,667 Senior Lien Dedicated Tax Revenue Bonds, Series 2007, Residuals 1606, 1.947%, 10/01/30 - AMBAC Insured (IF) - ------------------------------------------------------------------------------------------------------------------------------------ Florida - 0.9% (0.6% of Total Investments) 4,000 Florida State Board of Education, Full Faith and Credit Public 6/13 at 101.00 AAA 3,980,320 Education Capital Outlay Bonds, Series 2003J, 5.000%, 6/01/22 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ Georgia - 4.2% (2.5% of Total Investments) 4,000 Cobb County Development Authority, Georgia, Parking Revenue 7/14 at 100.00 A1 3,927,160 Bonds, Kennesaw State University, Series 2004, 5.000%, 7/15/24 - MBIA Insured 1,925 Columbus, Georgia, Water and Sewerage Revenue Bonds, Series 5/14 at 100.00 AA 1,903,498 2005, 5.000%, 5/01/23 - MBIA Insured Municipal Electric Authority of Georgia, Combustion Turbine Revenue Bonds, Series 2003A: 1,775 5.000%, 11/01/21 - MBIA Insured 11/13 at 100.00 AA 1,743,405 2,580 5.000%, 11/01/22 - MBIA Insured 11/13 at 100.00 AA 2,514,133 4,500 South Fulton Municipal Regional Water and Sewerage Authority, 1/13 at 100.00 A2(5) 4,819,770 Georgia, Water and Sewerage Revenue Bonds, Series 2003, 5.000%, 1/01/33 (Pre-refunded 1/01/13) - MBIA Insured 3,000 Valdosta and Lowndes County Hospital Authority, Georgia, Revenue 10/12 at 101.00 AA 2,843,250 Certificates, South Georgia Medical Center, Series 2002, 5.200%, 10/01/22 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 17,780 Total Georgia 17,751,216 - ------------------------------------------------------------------------------------------------------------------------------------ Hawaii - 8.6% (5.1% of Total Investments) 2,375 Hawaii County, Hawaii, General Obligation Bonds, Series 2003A, 7/13 at 100.00 AAA 2,405,590 5.000%, 7/15/19 - FSA Insured 20,000 Hawaii Department of Budget and Finance, Special Purpose Revenue 7/10 at 101.00 AA 18,399,597 Refunding Bonds, Hawaiian Electric Company Inc., Series 2000, 5.700%, 7/01/20 - AMBAC Insured (Alternative Minimum Tax) Hawaii Department of Transportation, Airport System Revenue Refunding Bonds, Series 2000B: 6,105 6.100%, 7/01/16 - FGIC Insured (Alternative Minimum Tax) 7/10 at 101.00 A2 6,049,261 9,500 6.625%, 7/01/17 - FGIC Insured (Alternative Minimum Tax) 7/10 at 101.00 A2 9,555,195 - ------------------------------------------------------------------------------------------------------------------------------------ 37,980 Total Hawaii 36,409,643 - ------------------------------------------------------------------------------------------------------------------------------------ Idaho - 0.1% (0.0% of Total Investments) 290 Idaho Housing and Finance Association, Single Family Mortgage 1/09 at 100.75 Aaa 284,876 Bonds, Series 1998E, 5.450%, 7/01/18 - AMBAC Insured (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ Illinois - 3.5% (2.1% of Total Investments) 1,015 Chicago Park District, Illinois, Limited Tax General Obligation 7/11 at 100.00 AA 1,041,380 Park Bonds, Series 2001C, 5.500%, 1/01/18 - FGIC Insured Illinois Health Facilities Authority, Revenue Bonds, Lutheran General Health System, Series 1993A: 2,365 6.125%, 4/01/12 - FSA Insured (ETM) No Opt. Call AAA 2,500,680 5,000 6.250%, 4/01/18 - FSA Insured (ETM) No Opt. Call AAA 5,606,250
----- 55 ----- NPX | Nuveen Insured Premium Income Municipal Fund 2 (continued) | Portfolio of INVESTMENTS October 31, 2008
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Illinois (continued) $ 1,950 Illinois Health Facilities Authority, Revenue Refunding Bonds, No Opt. Call AA(5) $ 2,246,420 SSM Healthcare System, Series 1992AA, 6.550%, 6/01/14 - MBIA Insured (ETM) 4,000 Illinois Municipal Electric Agency, Power Supply System Revenue 2/17 at 100.00 A+ 3,404,160 Bonds, Series 2007A, 5.000%, 2/01/35 - FGIC Insured 165 Peoria, Moline and Freeport, Illinois, GNMA Collateralized 4/09 at 102.00 AAA 167,308 Single Family Mortgage Revenue Bonds, Series 1995A, 7.600%, 4/01/27 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 14,495 Total Illinois 14,966,198 - ------------------------------------------------------------------------------------------------------------------------------------ Indiana - 1.7% (1.0% of Total Investments) Hamilton County Public Building Corporation, Indiana, First Mortgage Bonds, Series 2004: 2,105 5.000%, 8/01/23 - FSA Insured 8/14 at 100.00 AAA 2,085,339 2,215 5.000%, 8/01/24 - FSA Insured 8/14 at 100.00 AAA 2,179,272 3,730 Indiana Municipal Power Agency, Power Supply Revenue Bonds, 1/17 at 100.00 AA 3,047,373 Series 2007A, 5.000%, 1/01/42 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 8,050 Total Indiana 7,311,984 - ------------------------------------------------------------------------------------------------------------------------------------ Kansas - 0.3% (0.2% of Total Investments) 1,500 Kansas Turnpike Authority, Revenue Bonds, Series 2004A-2, 9/14 at 101.00 AAA 1,485,450 5.000%, 9/01/27 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ Kentucky - 1.2% (0.7% of Total Investments) 6,010 Kentucky Economic Development Finance Authority, Health System No Opt. Call AA 1,529,605 Revenue Bonds, Norton Healthcare Inc., Series 2000B, 0.000%, 10/01/28 - MBIA Insured 3,575 Kentucky Turnpike Authority, Economic Development Road Revenue 7/15 at 100.00 AA+ 3,487,913 Bonds, Revitalization Project, Series 2005B, 5.000%, 7/01/25 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 9,585 Total Kentucky 5,017,518 - ------------------------------------------------------------------------------------------------------------------------------------ Louisiana - 5.1% (3.1% of Total Investments) 4,455 Louisiana Public Facilities Authority, Revenue Bonds, Baton 7/14 at 100.00 AA 4,178,523 Rouge General Hospital, Series 2004, 5.250%, 7/01/24 - MBIA Insured Louisiana State, Gasoline and Fuels Tax Revenue Bonds, Series 2005A: 1,200 5.000%, 5/01/25 - FGIC Insured 5/15 at 100.00 AA 1,150,536 2,210 5.000%, 5/01/26 - FGIC Insured 5/15 at 100.00 AA 2,110,727 2,500 5.000%, 5/01/27 - FGIC Insured 5/15 at 100.00 AA 2,369,925 Louisiana State, Gasoline and Fuels Tax Revenue Bonds, Series 2006: 1,320 4.750%, 5/01/39 - FSA Insured (UB) 5/16 at 100.00 AAA 1,071,536 14,265 4.500%, 5/01/41 - FGIC Insured (UB) 5/16 at 100.00 AA 10,936,833 - ------------------------------------------------------------------------------------------------------------------------------------ 25,950 Total Louisiana 21,818,080 - ------------------------------------------------------------------------------------------------------------------------------------ Maryland - 0.8% (0.5% of Total Investments) 1,865 Baltimore, Maryland, Senior Lien Convention Center Hotel Revenue 9/16 at 100.00 BBB- 1,585,810 Bonds, Series 2006A, 5.250%, 9/01/26 - SYNCORA GTY Insured 2,580 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 AA 1,788,688 Revenue Bonds, Western Maryland Health, Series 2006A, 4.750%, 7/01/36 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 4,445 Total Maryland 3,374,498 - ------------------------------------------------------------------------------------------------------------------------------------ Massachusetts - 2.1% (1.3% of Total Investments) 3,000 Massachusetts Development Finance Authority, Revenue Bonds, WGBH No Opt. Call AA 2,828,730 Educational Foundation, Series 2002A, 5.750%, 1/01/42 - AMBAC Insured
- ----- 56 - -----
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Massachusetts (continued) $ 290 Massachusetts Port Authority, Special Facilities Revenue Bonds, 1/11 at 101.00 AA $ 204,079 Delta Air Lines Inc., Series 2001A, 5.000%, 1/01/27 - AMBAC Insured (Alternative Minimum Tax) Massachusetts, Special Obligation Dedicated Tax Revenue Bonds, Series 2004: 3,650 5.250%, 1/01/22 (Pre-refunded 1/01/14) - FGIC Insured 1/14 at 100.00 A(5) 3,796,037 2,000 5.250%, 1/01/24 (Pre-refunded 1/01/14) - FGIC Insured 1/14 at 100.00 A(5) 2,080,020 - ------------------------------------------------------------------------------------------------------------------------------------ 8,940 Total Massachusetts 8,908,866 - ------------------------------------------------------------------------------------------------------------------------------------ Michigan - 0.8% (0.5% of Total Investments) 3,170 Michigan Housing Development Authority, Rental Housing Revenue 4/09 at 100.00 AA 3,164,199 Bonds, Series 1997A, 6.000%, 4/01/16 - AMBAC Insured (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ Minnesota - 0.2% (0.1% of Total Investments) 885 Minnesota Housing Finance Agency, Rental Housing Bonds, Series 2/09 at 100.00 Aa1 887,186 1995D, 5.950%, 2/01/18 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ Missouri - 0.5% (0.3% of Total Investments) 1,000 Jackson County Reorganized School District R-7, Lees Summit, 3/16 at 100.00 Aa2 1,004,760 Missouri, General Obligation Bonds, Series 2006, 5.250%, 3/01/25 - MBIA Insured 450 Missouri Housing Development Commission, Multifamily Housing 12/08 at 100.00 AAA 450,023 Revenue Bonds, Brookstone Village Apartments, Series 1996A, 6.000%, 12/01/16 - FSA Insured (Alternative Minimum Tax) 750 Missouri Western State College, Auxiliary System Revenue Bonds, 10/13 at 100.00 AA 649,275 Series 2003, 5.000%, 10/01/33 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 2,200 Total Missouri 2,104,058 - ------------------------------------------------------------------------------------------------------------------------------------ Nebraska - 2.8% (1.7% of Total Investments) 1,000 Nebraska Public Power District, General Revenue Bonds, Series 1/15 at 100.00 AAA 979,310 2005A, 5.000%, 1/01/25 - FSA Insured 12,520 Nebraska Public Power District, Power Supply System Revenue 1/16 at 100.00 AA 10,282,300 Bonds, Series 2006A, 5.000%, 1/01/41 - FGIC Insured 865 Omaha Public Power District, Nebraska, Separate Electric System 2/17 at 100.00 AAA 768,674 Revenue Bonds, Nebraska City 2, Series 2006A, 14.495%, 2/01/49 - AMBAC Insured (IF) - ------------------------------------------------------------------------------------------------------------------------------------ 14,385 Total Nebraska 12,030,284 - ------------------------------------------------------------------------------------------------------------------------------------ Nevada - 2.5% (1.5% of Total Investments) 5,000 Clark County, Nevada, Industrial Development Revenue Bonds, 7/10 at 102.00 Aa3 3,567,050 Southwest Gas Corporation, Series 2000C, 5.950%, 12/01/38 - AMBAC Insured (Alternative Minimum Tax) 3,280 Clark County, Nevada, Subordinate Lien Airport Revenue Bonds, 7/14 at 100.00 Aa3 3,037,936 Series 2004A-2, 5.125%, 7/01/24 - FGIC Insured Director of Nevada State Department of Business and Industry, Revenue Bonds, Las Vegas Monorail Project, First Tier, Series 2000: 5,055 0.000%, 1/01/27 - AMBAC Insured No Opt. Call A 807,587 5,500 5.625%, 1/01/32 - AMBAC Insured 1/10 at 102.00 AA 3,316,115 - ------------------------------------------------------------------------------------------------------------------------------------ 18,835 Total Nevada 10,728,688 - ------------------------------------------------------------------------------------------------------------------------------------ New Jersey - 5.2% (3.1% of Total Investments) Essex County Improvement Authority, New Jersey, Guaranteed Revenue Bonds, Project Consolidation, Series 2004: 2,000 5.125%, 10/01/21 - MBIA Insured 10/14 at 100.00 A1 2,006,480 2,250 5.125%, 10/01/22 - MBIA Insured 10/14 at 100.00 A1 2,244,353 1,560 Mount Olive Township Board of Education, Morris County, New 1/15 at 100.00 Aa2 1,564,009 Jersey, General Obligation Bonds, Series 2004, 5.000%, 1/15/22 - MBIA Insured
----- 57 ----- NPX | Nuveen Insured Premium Income Municipal Fund 2 (continued) | Portfolio of INVESTMENTS October 31, 2008
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ New Jersey (continued) New Jersey Economic Development Authority, Revenue Bonds, Motor Vehicle Surcharge, Series 2004A: $ 1,475 5.000%, 7/01/22 - MBIA Insured 7/14 at 100.00 AA $ 1,437,845 1,475 5.000%, 7/01/23 - MBIA Insured 7/14 at 100.00 AA 1,428,700 New Jersey State Transportation Trust Fund Authority, Revenue Bonds, Series 2006C: 25,000 0.000%, 12/15/35 - AMBAC Insured (UB) No Opt. Call AA 4,807,500 10,000 0.000%, 12/15/36 - AMBAC Insured (UB) No Opt. Call AA 1,799,800 3,075 New Jersey Transit Corporation, Certificates of Participation No Opt. Call AAA 3,297,446 Refunding, Series 2003, 5.500%, 10/01/15 - FSA Insured 3,315 New Jersey Turnpike Authority, Revenue Bonds, Series 2005A, 1/15 at 100.00 AAA 3,316,525 5.000%, 1/01/25 - FSA Insured (UB) - ------------------------------------------------------------------------------------------------------------------------------------ 50,150 Total New Jersey 21,902,658 - ------------------------------------------------------------------------------------------------------------------------------------ New Mexico - 1.0% (0.6% of Total Investments) New Mexico Finance Authority, Public Project Revolving Fund Revenue Bonds, Series 2004C: 1,415 5.000%, 6/01/22 - AMBAC Insured 6/14 at 100.00 AA+ 1,408,038 1,050 5.000%, 6/01/24 - AMBAC Insured 6/14 at 100.00 AA+ 1,028,811 2,000 New Mexico Finance Authority, Public Project Revolving Fund 6/15 at 100.00 Aa3 1,949,220 Revenue Bonds, Series 2005E, 5.000%, 6/15/25 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 4,465 Total New Mexico 4,386,069 - ------------------------------------------------------------------------------------------------------------------------------------ New York - 11.5% (6.9% of Total Investments) 1,120 Dormitory Authority of the State of New York, FHA-Insured 2/15 at 100.00 AA 1,007,216 Mortgage Revenue Bonds, Montefiore Hospital, Series 2004, 5.000%, 8/01/23 - FGIC Insured 1,000 Dormitory Authority of the State of New York, State Personal 3/15 at 100.00 AAA 990,420 Income Tax Revenue Bonds, Series 2005F, 5.000%, 3/15/24 - AMBAC Insured 120 Hudson Yards Infrastructure Corporation, New York, Revenue 2/17 at 100.00 AA 49,426 Bonds, Driver Trust 1649, 2006, 4.745%, 2/15/47 - MBIA Insured (IF) 3,705 Hudson Yards Infrastructure Corporation, New York, Revenue 2/17 at 100.00 AA 2,636,737 Bonds, Series 2006A, 4.500%, 2/15/47 - MBIA Insured (UB) 2,700 Long Island Power Authority, New York, Electric System General 11/16 at 100.00 AA 2,007,207 Revenue Bonds, Series 2006F, 4.250%, 5/01/33 - MBIA Insured (UB) Long Island Power Authority, New York, Electric System General Revenue Bonds, Series 2006A: 10,675 5.000%, 12/01/23 - FGIC Insured 6/16 at 100.00 A- 9,925,081 5,000 5.000%, 12/01/25 - FGIC Insured 6/16 at 100.00 A- 4,564,700 1,755 Nassau County, New York, General Obligation Improvement Bonds, 3/10 at 100.00 AAA 1,839,767 Series 2000E, 6.000%, 3/01/16 (Pre-refunded 3/01/10) - FSA Insured 7,500 Nassau Health Care Corporation, New York, County Guaranteed 8/09 at 102.00 AAA 7,850,325 Revenue Bonds, Series 1999, 5.750%, 8/01/29 (Pre-refunded 8/01/09) - FSA Insured 5,000 New York City, New York, General Obligation Bonds, Fiscal Series 11/14 at 100.00 AAA 4,860,350 2004E, 5.000%, 11/01/21 - FSA Insured 1,540 New York Convention Center Development Corporation, Hotel Fee 11/15 at 100.00 A2 917,809 Revenue Bonds, Trust 2364, 8.714%, 11/15/44 - AMBAC Insured (IF) 8,495 New York State Housing Finance Agency, Mortgage Revenue 11/08 at 100.00 AAA 8,495,850 Refunding Bonds, Housing Project, Series 1996A, 6.125%, 11/01/20 - FSA Insured 3,770 New York State Thruway Authority, General Revenue Bonds, Series 7/15 at 100.00 AAA 3,732,639 2005G, 5.000%, 1/01/25 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 52,380 Total New York 48,877,527 - ------------------------------------------------------------------------------------------------------------------------------------ North Carolina - 1.9% (1.2% of Total Investments) 1,250 Appalachian State University, North Carolina, Revenue Bonds, 7/15 at 100.00 A1 1,159,313 Series 2005, 5.000%, 7/15/30 - MBIA Insured
- ----- 58 - -----
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ North Carolina (continued) Mooresville, North Carolina, Enterprise System Revenue Bonds, Series 2004: $ 2,225 5.000%, 5/01/23 - FGIC Insured 5/14 at 100.00 AA $ 2,068,560 2,335 5.000%, 5/01/24 - FGIC Insured 5/14 at 100.00 AA 2,150,185 2,900 Raleigh Durham Airport Authority, North Carolina, Airport 5/15 at 100.00 Aa3 2,769,413 Revenue Bonds, Series 2005A, 5.000%, 5/01/21 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 8,710 Total North Carolina 8,147,471 - ------------------------------------------------------------------------------------------------------------------------------------ North Dakota - 4.2% (2.5% of Total Investments) 10,715 Fargo, North Dakota, Health System Revenue Bonds, MeritCare 6/10 at 101.00 AAA 10,735,359 Obligated Group, Series 2000A, 5.600%, 6/01/21 - FSA Insured 8,000 North Dakota, Student Loan Trust Revenue Bonds, Series 2000B, 12/10 at 100.00 AA 7,222,000 5.850%, 12/01/25 - AMBAC Insured (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 18,715 Total North Dakota 17,957,359 - ------------------------------------------------------------------------------------------------------------------------------------ Ohio - 0.4% (0.2% of Total Investments) 2,700 Hamilton County, Ohio, Sales Tax Revenue Bonds, Tender Option 12/16 at 100.00 A2 839,673 Bond Trust 2706, 0.472%, 12/01/32 - AMBAC Insured (IF) 700 Shaker Heights, Ohio, General Obligation Bonds, Series 2003, 12/13 at 100.00 AA+ 691,117 5.250%, 12/01/26 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 3,400 Total Ohio 1,530,790 - ------------------------------------------------------------------------------------------------------------------------------------ Oklahoma - 0.3% (0.2% of Total Investments) 1,500 Oklahoma Capitol Improvement Authority, State Facilities Revenue 7/15 at 100.00 AA 1,450,845 Bonds, Series 2005F, 5.000%, 7/01/24 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ Oregon - 3.7% (2.3% of Total Investments) 1,520 Portland Housing Authority, Oregon, Multifamily Housing Revenue 7/10 at 100.00 A2 1,334,423 Bonds, Lovejoy Station Apartments, Series 2000, 6.000%, 7/01/33 - MBIA Insured (Alternative Minimum Tax) Portland, Oregon, Airport Way Urban Renewal and Redevelopment Bonds, Series 2000A: 4,405 5.700%, 6/15/17 (Pre-refunded 6/15/10) - AMBAC Insured 6/10 at 101.00 Aa3(5) 4,686,215 3,665 5.750%, 6/15/18 (Pre-refunded 6/15/10) - AMBAC Insured 6/10 at 101.00 Aa3(5) 3,901,869 4,265 5.750%, 6/15/19 (Pre-refunded 6/15/10) - AMBAC Insured 6/10 at 101.00 Aa3(5) 4,540,647 1,375 5.750%, 6/15/20 (Pre-refunded 6/15/10) - AMBAC Insured 6/10 at 101.00 Aa3(5) 1,463,866 - ------------------------------------------------------------------------------------------------------------------------------------ 15,230 Total Oregon 15,927,020 - ------------------------------------------------------------------------------------------------------------------------------------ Pennsylvania - 13.9% (8.4% of Total Investments) 12,620 Allegheny County Hospital Development Authority, Pennsylvania, 11/10 at 102.00 AAA 13,732,452 Insured Revenue Bonds, West Penn Allegheny Health System, Series 2000A, 6.500%, 11/15/30 (Pre-refunded 11/15/10) - MBIA Insured 2,000 Allegheny County Sanitary Authority, Pennsylvania, Sewerage 12/15 at 100.00 AA 1,836,720 Revenue Bonds, Series 2005A, 5.000%, 12/01/23 - MBIA Insured 9,485 Berks County Municipal Authority, Pennsylvania, Hospital Revenue 11/09 at 102.00 AAA 10,033,707 Bonds, Reading Hospital and Medical Center, Series 1999, 6.000%, 11/01/19 (Pre-refunded 11/01/09) - FSA Insured 4,235 Delaware County Authority, Pennsylvania, Revenue Bonds, 8/16 at 100.00 AA 4,086,944 Villanova University, Series 2006, 5.000%, 8/01/24 - AMBAC Insured 5,780 Pennsylvania Higher Educational Facilities Authority, Revenue 5/15 at 100.00 AA 5,443,546 Bonds, Drexel University, Series 2005A, 5.000%, 5/01/28 - MBIA Insured 4,585 Pennsylvania Public School Building Authority, Lease Revenue 12/16 at 100.00 AAA 3,644,754 Bonds, School District of Philadelphia, Series 2006B, 4.500%, 6/01/32 - FSA Insured (UB) 1,050 Pennsylvania Turnpike Commission, Turnpike Revenue Bonds, Series 6/16 at 100.00 AA 1,003,013 2006A, 5.000%, 12/01/26 - AMBAC Insured
----- 59 ----- NPX | Nuveen Insured Premium Income Municipal Fund 2 (continued) | Portfolio of INVESTMENTS October 31, 2008
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Pennsylvania (continued) Philadelphia Gas Works, Pennsylvania, Revenue Bonds, General Ordinance, Fifth Series 2004A-1: $ 5,235 5.000%, 9/01/24 - FSA Insured (UB) 9/14 at 100.00 AAA $ 4,907,708 3,000 5.000%, 9/01/25 - FSA Insured (UB) 9/14 at 100.00 AAA 2,795,940 2,360 Philadelphia, Pennsylvania, Water and Wastewater Revenue Bonds, 12/08 at 101.00 AAA 2,411,637 Series 1997A, 5.125%, 8/01/27 - AMBAC Insured (ETM) 3,785 Reading School District, Berks County, Pennsylvania, General 1/16 at 100.00 AAA 3,710,663 Obligation Bonds, Series 2005, 5.000%, 1/15/25 - FSA Insured (UB) 1,705 Solebury Township, Pennsylvania, General Obligation Bonds, 6/15 at 100.00 Aa3 1,664,660 Series 2005, 5.000%, 12/15/25 - AMBAC Insured 3,650 State Public School Building Authority, Pennsylvania, Lease 6/13 at 100.00 AAA 3,895,025 Revenue Bonds, Philadelphia School District, Series 2003, 5.000%, 6/01/29 (Pre-refunded 6/01/13) - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 59,490 Total Pennsylvania 59,166,769 - ------------------------------------------------------------------------------------------------------------------------------------ Puerto Rico - 0.5% (0.3% of Total Investments) 2,500 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/15 at 100.00 AA 2,258,050 Series 2005RR, 5.000%, 7/01/22 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ South Carolina - 0.4% (0.3% of Total Investments) 1,955 Greenville County School District, South Carolina, Installment 12/16 at 100.00 AAA 1,814,533 Purchase Revenue Bonds, Series 2006, 5.000%, 12/01/28 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ Texas - 18.1% (10.9% of Total Investments) Brazos River Authority, Texas, Revenue Refunding Bonds, Houston Industries Inc., Series 1998C: 10,000 5.125%, 5/01/19 - AMBAC Insured 11/08 at 102.00 AA 9,601,400 9,000 5.125%, 11/01/20 - AMBAC Insured 11/08 at 102.00 Aaa 8,457,750 Corpus Christi, Texas, Utility System Revenue Bonds, Series 2004: 3,475 5.000%, 7/15/22 - FSA Insured (UB) 7/14 at 100.00 AAA 3,393,616 3,645 5.000%, 7/15/23 - FSA Insured (UB) 7/14 at 100.00 AAA 3,537,655 4,645 Dallas, Texas, Waterworks and Sewer System Revenue Bonds, Tender 10/17 at 100.00 AAA 2,571,054 Option Bond Trust 2845, 6.500%, 10/01/32 - AMBAC Insured (IF) 12,500 Dallas-Ft. Worth International Airport, Texas, Joint Revenue 11/09 at 100.00 A+ 9,911,500 Refunding and Improvement Bonds, Series 2001A, 5.500%, 11/01/35 - FGIC Insured (Alternative Minimum Tax) 5,000 Harris County Hospital District, Texas, Revenue Bonds, Series 2/17 at 100.00 AA 4,161,050 2007A, 5.250%, 2/15/42 - MBIA Insured 4,485 Lower Colorado River Authority, Texas, Contract Revenue 5/12 at 100.00 AAA 4,484,910 Refunding Bonds, Transmission Services Corporation, Series 2003B, 5.000%, 5/15/21 - FSA Insured 10,000 Lower Colorado River Authority, Texas, Contract Revenue 5/13 at 100.00 AA 9,093,200 Refunding Bonds, Transmission Services Corporation, Series 2003C, 5.000%, 5/15/33 - AMBAC Insured 4,151 Panhandle Regional Housing Finance Corporation, Texas, GNMA 7/12 at 105.00 Aaa 3,994,341 Collateralized Multifamily Housing Mortgage Revenue Bonds, Renaissance of Amarillo Apartments, Series 2001A, 6.650%, 7/20/42 Tarrant County Health Facilities Development Corporation, Texas, Hospital Revenue Bonds, Cook Children's Healthcare System, Series 2000A: 6,725 5.750%, 12/01/17 (Pre-refunded 12/01/10) - FSA Insured 12/10 at 101.00 AAA 7,239,866 1,170 5.750%, 12/01/24 (Pre-refunded 12/01/10) - FSA Insured 12/10 at 101.00 AAA 1,259,575 6,330 5.750%, 12/01/24 (Pre-refunded 12/01/10) - FSA Insured 12/10 at 101.00 AAA 6,814,625 2,300 Texas State University System, Financing Revenue Refunding 3/12 at 100.00 AAA 2,329,601 Bonds, Series 2002, 5.000%, 3/15/18 - - ------------------------------------------------------------------------------------------------------------------------------------ 83,426 Total Texas 76,850,143 - ------------------------------------------------------------------------------------------------------------------------------------ Utah - 2.5% (1.5% of Total Investments) 8,600 Intermountain Power Agency, Utah, Power Supply Revenue Refunding 7/13 at 100.00 AAA 8,760,562 Bonds, Series 2003A, 5.000%, 7/01/18 - FSA Insured (UB)
- ----- 60 - -----
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Utah (continued) $ 2,385 Mountain Regional Water Special Service District, Utah, Water 12/13 at 100.00 AA $ 1,998,916 Revenue Bonds, Series 2003, 5.000%, 12/15/33 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 10,985 Total Utah 10,759,478 - ------------------------------------------------------------------------------------------------------------------------------------ Vermont - 0.3% (0.2% of Total Investments) 1,320 Vermont Educational and Health Buildings Financing Agency, 12/10 at 101.00 AA 1,259,504 Revenue Bonds, Fletcher Allen Health Care Inc., Series 2000A, 6.000%, 12/01/23 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ Virginia - 3.5% (2.1% of Total Investments) Greater Richmond Convention Center Authority, Virginia, Hotel Tax Revenue Bonds, Series 2005: 5,880 5.000%, 6/15/20 - MBIA Insured 6/15 at 100.00 AA 5,850,482 5,000 5.000%, 6/15/22 - MBIA Insured 6/15 at 100.00 AA 4,893,400 Loudoun County Industrial Development Authority, Virginia, Lease Revenue Bonds, Public Safety Facilities, Series 2003A: 1,150 5.250%, 12/15/22 - FSA Insured 6/14 at 100.00 AAA 1,161,063 500 5.250%, 12/15/23 - FSA Insured 6/14 at 100.00 AAA 503,595 2,250 Virginia Housing Development Authority, Multifamily Housing 1/09 at 101.00 Aa1 2,251,328 Bonds, Series 1997B, 6.050%, 5/01/17 - MBIA Insured (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 14,780 Total Virginia 14,659,868 - ------------------------------------------------------------------------------------------------------------------------------------ Washington - 7.4% (4.4% of Total Investments) 10,000 Chelan County Public Utility District 1, Washington, Hydro 7/11 at 101.00 AA 8,214,000 Consolidated System Revenue Bonds, Series 2001B, 5.600%, 1/01/36 - MBIA Insured (Alternative Minimum Tax) 1,370 Clark County School District 101, La Center, Washington, General 12/12 at 100.00 Aaa 1,349,532 Obligation Bonds, Series 2002, 5.000%, 12/01/22 - FSA Insured 5,230 Douglas County Public Utility District 1, Washington, Revenue 9/09 at 102.00 AA 4,773,630 Bonds, Wells Hydroelectric, Series 1999A, 6.125%, 9/01/29 - MBIA Insured (Alternative Minimum Tax) 1,545 Tacoma, Washington, General Obligation Bonds, Series 2004, 12/14 at 100.00 AA 1,564,730 5.000%, 12/01/19 - MBIA Insured 3,950 Washington State Healthcare Facilities Authority, Revenue Bonds, 11/08 at 101.00 Aa3 3,280,633 Swedish Health Services, Series 1998, 5.125%, 11/15/22 - AMBAC Insured 6,200 Washington State, General Obligation Purpose Bonds, Series 7/12 at 100.00 AA+ 6,249,104 2003A, 5.000%, 7/01/20 - FGIC Insured 10,855 Washington, General Obligation Bonds, Series 2000S-5, 0.000%, No Opt. Call AA+ 5,980,671 1/01/20 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 39,150 Total Washington 31,412,300 - ------------------------------------------------------------------------------------------------------------------------------------ West Virginia - 1.9% (1.1% of Total Investments) 8,000 Pleasants County, West Virginia, Pollution Control Revenue 11/08 at 100.00 AAA 8,020,880 Bonds, Monongahela Power Company Pleasants Station Project, Series 1995C, 6.150%, 5/01/15 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ Wisconsin - 6.6% (3.9% of Total Investments) 7,000 La Crosse, Wisconsin, Resource Recovery Revenue Refunding Bonds, No Opt. Call Aaa 6,525,750 Northern States Power Company Project, Series 1996, 6.000%, 11/01/21 - MBIA Insured (Alternative Minimum Tax) 12,750 Milwaukee County, Wisconsin, Airport Revenue Bonds, Series 12/10 at 100.00 A1 11,163,645 2000A, 5.750%, 12/01/25 - FGIC Insured (Alternative Minimum Tax) 6,250 Wisconsin Health and Educational Facilities Authority, Revenue 2/09 at 100.00 AA 6,214,563 Bonds, Sinai Samaritan Medical Center Inc., Series 1996, 5.750%, 8/15/16 - MBIA Insured 4,225 Wisconsin State, General Obligation Bonds, Series 2006A, 4.750%, 5/16 at 100.00 AA 4,002,689 5/01/25 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 30,225 Total Wisconsin 27,906,647 - ------------------------------------------------------------------------------------------------------------------------------------ $ 856,881 Total Long-Term Investments (cost $752,113,187) - 163.3% 694,799,483 ============------------------------------------------------------------------------------------------------------------------------
----- 61 ----- NPX | Nuveen Insured Premium Income Municipal Fund 2 (continued) | Portfolio of INVESTMENTS October 31, 2008
Principal Amount (000) Description (1) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Short-Term Investments - 3.0% (1.8% of Total Investments) $ 2,000 Dormitory Authority of the State of New York, State Personal A-2 $ 2,000,000 Income Tax Revenue Bonds, Series 2005C, Variable Rate Demand Obligations, 10.500%, 3/15/32 - AMBAC Insured (6) 6,855 New Jersey State Transportation Trust Fund Authority, Revenue VMIG-1 6,855,000 Bonds, Variable Rate Demand Obligations, Series 2006C, ROCS 684Z, 2.720%, 12/15/36 - AMBAC Insured (6) 4,120 Phoenix Civic Improvement Corporation, Arizona, Junior Lien VMIG-1 4,120,000 Water System Revenue Bonds, Variable Rate Demand Obligations, Series 2005, ROCS 674, 2.020%, 7/01/27 - MBIA Insured (6) - ------------------------------------------------------------------------------------------------------------------------------------ $ 12,975 Total Short-Term Investments (cost $12,975,000) 12,975,000 ============------------------------------------------------------------------------------------------------------------------------ Total Investments (cost $765,088,187) - 166.3% 707,774,483 --------------------------------------------------------------------------------------------------------------------- Floating Rate Obligations - (18.0)% (76,590,000) --------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 3.2% 13,372,186 --------------------------------------------------------------------------------------------------------------------- Variable Rate Demand Preferred Shares, at Liquidation Value - (219,000,000) (51.5)% (7) --------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 425,556,669 =====================================================================================================================
At least 80% of the Fund's net assets (including net assets attributable to Variable Rate Demand Preferred shares) are invested in municipal securities that are covered by insurance or backed by an escrow or trust account containing sufficient U.S. Government or U.S. Government agency securities or U.S. Treasury-issued State and Local Government Series securities to ensure the timely payment of principal and interest. See Notes to Financial Statements, Footnote 1 - Insurance, for more information. (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's Group ("Standard & Poor's") or Moody's Investor Service, Inc. ("Moody's") rating. Ratings below BBB by Standard & Poor's or Baa by Moody's are considered to be below investment grade. The Portfolio of Investments may reflect the ratings on certain bonds insured by AGC, AMBAC, CIFG, FGIC, FSA, MBIA, RAAI and SYNCORA as of October 31, 2008. Please see the Portfolio Manager's Commentary for an expanded discussion of the affect on the Fund of changes to the ratings of certain bonds in the portfolio resulting from changes to the ratings of the underlying insurers both during the period and after period end. (4) Portion of investment has been pledged as collateral for Recourse Trusts. (5) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. (6) Investment has a maturity of more than one year, but has variable rate and demand features which qualify it as a short-term investment. The rate disclosed is that in effect at the end of the reporting period. This rate changes periodically based on market conditions or a specified market index. (7) Variable Rate Demand Preferred Shares, at Liquidation Value, as a percentage of Total Investments is 30.9%. N/R Not rated. (ETM) Escrowed to maturity. (IF) Inverse floating rate investment. (UB) Underlying bond of an inverse floating rate trust reflected as a financing transaction pursuant to the provisions of SFAS No. 140. See accompanying notes to financial statements. - ----- 62 - ----- NVG | Nuveen Insured Dividend Advantage Municipal Fund | Portfolio of INVESTMENTS October 31, 2008
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Municipal Bonds - 158.3% (98.6% of Total Investments) Alabama - 4.8% (3.0% of Total Investments) $ 5,310 Athens, Alabama, Water and Sewerage Revenue Warrants, Series 2002, 5/12 at 101.00 AA $ 5,036,854 5.300%, 5/01/32 - MBIA Insured 3,045 Hoover, Alabama, General Obligation Bonds, Series 2003, 5.000%, 3/12 at 101.00 AA 3,061,260 3/01/20 - MBIA Insured 10,000 Jefferson County, Alabama, Sewer Revenue Capital Improvement 2/09 at 101.00 AAA 10,189,800 Warrants, Series 1999A, 5.375%, 2/01/36 (Pre-refunded 2/01/09) - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 18,355 Total Alabama 18,287,914 - ------------------------------------------------------------------------------------------------------------------------------------ Alaska - 4.2% (2.6% of Total Investments) 15,000 Alaska, International Airport System Revenue Bonds, Series 2002B, 10/12 at 100.00 AA(4) 16,154,549 5.250%, 10/01/27 (Pre-refunded 10/01/12) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ Arizona - 2.1% (1.3% of Total Investments) 5,000 Phoenix, Arizona, Civic Improvement Corporation, Senior Lien Airport 7/12 at 100.00 AA 3,913,350 Revenue Bonds, Series 2002B, 5.250%, 7/01/32 - FGIC Insured (Alternative Minimum Tax) 6,000 Phoenix, Arizona, Civic Improvement Revenue Bonds, Civic Plaza, No Opt. Call AA 4,008,000 Series 2005B, 0.000%, 7/01/37 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 11,000 Total Arizona 7,921,350 - ------------------------------------------------------------------------------------------------------------------------------------ California - 13.1% (8.2% of Total Investments) 2,000 Alameda Corridor Transportation Authority, California, Subordinate No Opt. Call AA 1,000,820 Lien Revenue Bonds, Series 2004A, 0.000%, 10/01/20 - AMBAC Insured California Educational Facilities Authority, Revenue Bonds, Occidental College, Series 2005A: 1,485 5.000%, 10/01/26 - MBIA Insured 10/15 at 100.00 Aa3 1,412,369 1,565 5.000%, 10/01/27 - MBIA Insured 10/15 at 100.00 Aa3 1,477,141 California, General Obligation Bonds, Series 2000: 375 5.250%, 9/01/17 (Pre-refunded 9/01/10) - MBIA Insured 9/10 at 100.00 AA(4) 393,705 190 5.250%, 9/01/17 (Pre-refunded 9/01/10) - MBIA Insured 9/10 at 100.00 AA(4) 200,389 10,000 California, General Obligation Refunding Bonds, Series 2002, 5.000%, 2/12 at 100.00 AA 9,789,800 2/01/23 - MBIA Insured 8,890 California, General Obligation Veterans Welfare Bonds, Series 1997BH, 12/08 at 101.00 AA- 8,922,271 5.400%, 12/01/14 (Alternative Minimum Tax) 3,000 California, General Obligation Veterans Welfare Bonds, Series 2001BZ, 12/08 at 100.00 AA 2,684,070 5.375%, 12/01/24 - MBIA Insured (Alternative Minimum Tax) 2,425 Fullerton Public Financing Authority, California, Tax Allocation 9/15 at 100.00 AA 2,188,829 Revenue Bonds, Series 2005, 5.000%, 9/01/27 - AMBAC Insured Golden State Tobacco Securitization Corporation, California, Enhanced Tobacco Settlement Asset-Backed Bonds, Series 2007A-1: 365 5.125%, 6/01/47 6/17 at 100.00 BBB 215,533 1,000 5.750%, 6/01/47 6/17 at 100.00 BBB 658,280 4,670 Golden State Tobacco Securitization Corporation, California, Tobacco 6/15 at 100.00 A 207,441 Settlement Asset-Backed Revenue Bonds, Series 2005A, Trust 2448, 0.891%, 6/01/35 - FGIC Insured (IF) 1,990 Kern Community College District, California, General Obligation No Opt. Call AAA 731,683 Bonds, Series 2006, 0.000%, 11/01/25 - FSA Insured
----- 63 ----- NVG | Nuveen Insured Dividend Advantage Municipal Fund (continued) | Portfolio of INVESTMENTS October 31, 2008
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ California (continued) $ 7,935 Los Angeles, California, Certificates of Participation, Series 2002, 4/12 at 100.00 AA $ 7,612,125 5.300%, 4/01/32 - AMBAC Insured 2,220 Northern California Power Agency, Revenue Refunding Bonds, 7/10 at 100.00 AAA 2,093,060 Hydroelectric Project 1, Series 1998A, 5.200%, 7/01/32 - MBIA Insured 2,320 Sacramento Municipal Utility District, California, Electric Revenue 8/11 at 100.00 AAA 2,360,043 Bonds, Series 2001P, 5.250%, 8/15/18 - FSA Insured (5) San Francisco Unified School District, California, General Obligation Bonds, Series 2007A: 1,000 3.000%, 6/15/25 - FSA Insured 6/17 at 100.00 AAA 678,700 1,180 3.000%, 6/15/26 - FSA Insured 6/17 at 100.00 AAA 808,229 6,720 San Jose Redevelopment Agency, California, Tax Allocation Bonds, 8/17 at 100.00 AA 5,121,110 Merged Area Redevelopment Project, Series 2006C, 4.250%, 8/01/30 - MBIA Insured 1,690 Ventura County Community College District, California, General 8/15 at 100.00 AA 1,583,040 Obligation Bonds, Series 2005B, 5.000%, 8/01/28 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 61,020 Total California 50,138,638 - ------------------------------------------------------------------------------------------------------------------------------------ Colorado - 5.9% (3.7% of Total Investments) 17,300 Adams County, Colorado, FHA-Insured Mortgage Revenue Bonds, Platte 8/15 at 100.00 AA 16,500,220 Valley Medical Center, Series 2005, 5.000%, 8/01/24 - MBIA Insured 750 Arkansas River Power Authority, Colorado, Power Revenue Bonds, 10/16 at 100.00 BBB 604,523 Series 2006, 5.250%, 10/01/32 - SYNCORA GTY Insured 17,000 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, No Opt. Call AA 5,461,930 Series 2000B, 0.000%, 9/01/25 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 35,050 Total Colorado 22,566,673 - ------------------------------------------------------------------------------------------------------------------------------------ District of Columbia - 1.4% (0.9% of Total Investments) 6,805 District of Columbia, Revenue Bonds, Georgetown University, Series 4/17 at 100.00 AA 5,012,223 2007A, 4.500%, 4/01/42 - AMBAC Insured 935 Washington Convention Center Authority, District of Columbia, Senior 10/16 at 100.00 AA 439,553 Lien Dedicated Tax Revenue Bonds, Series 2007, Residuals 1606, 1.947%, 10/01/30 - AMBAC Insured (IF) - ------------------------------------------------------------------------------------------------------------------------------------ 7,740 Total District of Columbia 5,451,776 - ------------------------------------------------------------------------------------------------------------------------------------ Florida - 12.1% (7.5% of Total Investments) Florida Municipal Loan Council, Revenue Bonds, Series 2003B: 2,305 5.250%, 12/01/17 - MBIA Insured 12/13 at 100.00 AA 2,326,068 1,480 5.250%, 12/01/18 - MBIA Insured 12/13 at 100.00 AA 1,481,036 11,600 Greater Orlando Aviation Authority, Florida, Airport Facilities 10/12 at 100.00 AAA 10,032,028 Revenue Bonds, Series 2002B, 5.125%, 10/01/21 - FSA Insured (Alternative Minimum Tax) 8,155 Lee County, Florida, Solid Waste System Revenue Refunding Bonds, 10/11 at 100.00 A2 8,214,368 Series 2001, 5.625%, 10/01/13 - MBIA Insured (Alternative Minimum Tax) Miami-Dade County, Florida, Aviation Revenue Bonds, Miami International Airport, Series 2002: 7,165 5.625%, 10/01/15 - FGIC Insured (Alternative Minimum Tax) 10/12 at 100.00 A2 6,951,340 5,600 5.750%, 10/01/16 - FGIC Insured (Alternative Minimum Tax) 10/12 at 100.00 A2 5,416,712 10,000 5.125%, 10/01/21 - FGIC Insured (Alternative Minimum Tax) 10/12 at 100.00 A2 8,532,400 2,000 5.250%, 10/01/22 - FGIC Insured (Alternative Minimum Tax) 10/12 at 100.00 A2 1,706,080 1,000 South Miami Health Facilities Authority, Florida, Hospital Revenue, 8/17 at 100.00 AA- 786,750 Baptist Health System Obligation Group, Series 2007, 5.000%, 8/15/42 (UB) 1,000 Tallahassee, Florida, Energy System Revenue Bonds, Series 2005, 10/15 at 100.00 AA 949,170 5.000%, 10/01/28 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 50,305 Total Florida 46,395,952 - ------------------------------------------------------------------------------------------------------------------------------------ Georgia - 2.3% (1.4% of Total Investments) 6,925 Atlanta and Fulton County Recreation Authority, Georgia, Guaranteed 12/15 at 100.00 AA 6,426,677 Revenue Bonds, Park Improvement, Series 2005A, 5.000%, 12/01/30 - MBIA Insured
- ----- 64 - -----
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Georgia (continued) $ 1,000 Atlanta, Georgia, Water and Wastewater Revenue Bonds, Series 2004, 11/14 at 100.00 AAA $ 977,660 5.000%, 11/01/22 - FSA Insured 1,695 Georgia Housing and Finance Authority, Single Family Mortgage Bonds, 12/11 at 100.00 AAA 1,401,680 Series 2002B-2, 5.500%, 6/01/32 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 9,620 Total Georgia 8,806,017 - ------------------------------------------------------------------------------------------------------------------------------------ Idaho - 1.1% (0.7% of Total Investments) Idaho Housing and Finance Association, Grant and Revenue Anticipation Bonds, Federal Highway Trust Funds, Series 2006: 3,000 5.000%, 7/15/23 - MBIA Insured 7/16 at 100.00 Aa3 3,020,760 1,130 5.000%, 7/15/24 - MBIA Insured 7/16 at 100.00 Aa3 1,133,503 - ------------------------------------------------------------------------------------------------------------------------------------ 4,130 Total Idaho 4,154,263 - ------------------------------------------------------------------------------------------------------------------------------------ Illinois - 12.1% (7.5% of Total Investments) 10,000 Bolingbrook, Illinois, General Obligation Bonds, Series 2002A, 1/12 at 100.00 A2(4) 10,713,500 5.375%, 1/01/38 (Pre-refunded 1/01/12) - FGIC Insured 1,305 Chicago, Illinois, General Obligation Bonds, Series 2001A, 5.500%, 1/11 at 101.00 AA 1,251,887 1/01/38 - MBIA Insured Chicago, Illinois, General Obligation Bonds, Series 2001A: 50 5.500%, 1/01/38 (Pre-refunded 1/01/11) - MBIA Insured 1/11 at 101.00 AA(4) 53,435 3,645 5.500%, 1/01/38 (Pre-refunded 1/01/11) - MBIA Insured 1/11 at 101.00 AA(4) 3,889,835 Chicago, Illinois, Second Lien Passenger Facility Charge Revenue Bonds, O'Hare International Airport, Series 2001C: 4,250 5.500%, 1/01/16 - AMBAC Insured (Alternative Minimum Tax) 1/11 at 101.00 AA 4,086,673 4,485 5.500%, 1/01/17 - AMBAC Insured (Alternative Minimum Tax) 1/11 at 101.00 AA 4,260,974 4,730 5.500%, 1/01/18 - AMBAC Insured (Alternative Minimum Tax) 1/11 at 101.00 AA 4,431,537 2,930 5.500%, 1/01/19 - AMBAC Insured (Alternative Minimum Tax) 1/11 at 101.00 AA 2,708,023 3,600 Chicago, Illinois, Third Lien General Airport Revenue Bonds, O'Hare 1/16 at 100.00 AA 3,419,172 International Airport, Series 2005A, 5.250%, 1/01/24 - MBIA Insured 3,000 Chicago, Illinois, Third Lien General Airport Revenue Refunding 1/12 at 100.00 AA 2,891,910 Bonds, O'Hare International Airport, Series 2002A, 5.750%, 1/01/17 - MBIA Insured (Alternative Minimum Tax) 4,000 Cicero, Cook County, Illinois, General Obligation Corporate Purpose 12/12 at 101.00 AA 3,877,720 Bonds, Series 2002, 5.000%, 12/01/21 - MBIA Insured 480 DuPage County Community School District 200, Wheaton, Illinois, 10/13 at 100.00 Aaa 485,150 General Obligation Bonds, Series 2003C, 5.250%, 10/01/22 - FSA Insured DuPage County Community School District 200, Wheaton, Illinois, General Obligation Bonds, Series 2003C: 770 5.250%, 10/01/22 (Pre-refunded 10/01/13) - FSA Insured 10/13 at 100.00 Aaa 839,616 250 5.250%, 10/01/22 (Pre-refunded 10/01/13) - FSA Insured 10/13 at 100.00 Aaa 272,603 3,500 Illinois Municipal Electric Agency, Power Supply System Revenue 2/17 at 100.00 A+ 2,978,640 Bonds, Series 2007A, 5.000%, 2/01/35 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 46,995 Total Illinois 46,160,675 - ------------------------------------------------------------------------------------------------------------------------------------ Indiana - 18.0% (11.2% of Total Investments) 3,380 Evansville, Indiana, Sewerage Works Revenue Refunding Bonds, Series 7/13 at 100.00 AA 3,295,230 2003A, 5.000%, 7/01/20 - AMBAC Insured Indiana Bond Bank, Special Program Bonds, Hendricks County Redevelopment District, Series 2002D: 2,500 5.375%, 4/01/23 (Pre-refunded 4/01/12) - AMBAC Insured 4/12 at 100.00 AA(4) 2,686,750 7,075 5.250%, 4/01/26 (Pre-refunded 4/01/12) - AMBAC Insured 4/12 at 100.00 AA(4) 7,575,061 7,000 5.250%, 4/01/30 (Pre-refunded 4/01/12) - AMBAC Insured 4/12 at 100.00 AA(4) 7,494,760 10,000 Indiana Health Facility Financing Authority, Hospital Revenue Bonds, 7/12 at 100.00 AA 8,766,400 Marion General Hospital, Series 2002, 5.250%, 7/01/32 - AMBAC Insured 3,200 Indiana Municipal Power Agency, Power Supply Revenue Bonds, Series 1/17 at 100.00 AA 2,614,368 2007A, 5.000%, 1/01/42 - MBIA Insured
----- 65 ----- NVG | Nuveen Insured Dividend Advantage Municipal Fund (continued) Portfolio of INVESTMENTS October 31, 2008
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Indiana (continued) $ 25,000 Indianapolis Local Public Improvement Bond Bank, Indiana, Waterworks 7/12 at 100.00 AAA $ 26,861,745 Project, Series 2002A, 5.250%, 7/01/33 (Pre-refunded 7/01/12) - MBIA Insured Northern Wells Community School Building Corporation, Wells County, Indiana, First Mortgage Bonds, Series 2001: 420 5.250%, 1/15/19 (Pre-refunded 7/15/12) - FGIC Insured 7/12 at 100.00 AA+(4) 452,004 430 5.250%, 7/15/19 (Pre-refunded 7/15/12) - FGIC Insured 7/12 at 100.00 AA+(4) 462,766 1,675 5.400%, 7/15/23 (Pre-refunded 7/15/12) - FGIC Insured 7/12 at 100.00 AA+(4) 1,811,362 6,960 Valparaiso Middle School Building Corporation, Indiana, First 1/13 at 100.00 AA+ 6,847,944 Mortgage Refunding Bonds, Series 2002, 5.000%, 7/15/24 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 67,640 Total Indiana 68,868,390 - ------------------------------------------------------------------------------------------------------------------------------------ Louisiana - 4.8% (3.0% of Total Investments) 10,000 Louisiana Public Facilities Authority, Revenue Bonds, Archdiocese of 7/17 at 100.00 Baa2 6,933,900 New Orleans, Series 2007, 4.500%, 7/01/37 - CIFG Insured 1,500 Louisiana Public Facilities Authority, Revenue Bonds, Baton Rouge 7/14 at 100.00 AA 1,406,910 General Hospital, Series 2004, 5.250%, 7/01/24 - MBIA Insured Louisiana State, Gasoline and Fuels Tax Revenue Bonds, Series 2006: 770 4.750%, 5/01/39 - FSA Insured (UB) 5/16 at 100.00 AAA 625,063 8,270 4.500%, 5/01/41 - FGIC Insured (UB) 5/16 at 100.00 AA 6,340,527 3 Louisiana State, Gasoline Tax Revenue Bonds, Series 2006, Residuals 5/16 at 100.00 AA 223 660-3, 10.838%, 5/01/41 - FGIC Insured (IF) 3,085 New Orleans, Louisiana, General Obligation Refunding Bonds, Series 9/12 at 100.00 AA 2,925,629 2002, 5.125%, 9/01/21 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 23,628 Total Louisiana 18,232,252 - ------------------------------------------------------------------------------------------------------------------------------------ Massachusetts - 0.6% (0.3% of Total Investments) 2,775 Massachusetts Water Resources Authority, General Revenue Bonds, 2/17 at 100.00 AAA 2,140,829 4.500%, 8/01/46 - FSA Insured (UB) - ------------------------------------------------------------------------------------------------------------------------------------ Michigan - 0.3% (0.2% of Total Investments) 1,500 Michigan State Hospital Finance Authority, Revenue Bonds, Trinity 12/16 at 100.00 Aa2 1,285,425 Health Care Group, Series 2006A, 5.000%, 12/01/31 (UB) - ------------------------------------------------------------------------------------------------------------------------------------ Missouri - 0.4% (0.3% of Total Investments) 1,600 St. Louis County Pattonville School District R3, Missouri, General 3/14 at 100.00 AAA 1,641,744 Obligation Bonds, Series 2004, 5.250%, 3/01/19 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ Nebraska - 2.1% (1.3% of Total Investments) 6,360 Lincoln, Nebraska, Electric System Revenue Bonds, Series 2005, 9/15 at 100.00 AA 5,860,804 5.000%, 9/01/32 Municipal Energy Agency of Nebraska, Power Supply System Revenue Bonds, Series 2003A: 1,000 5.250%, 4/01/20 - FSA Insured 4/13 at 100.00 AAA 1,008,570 1,000 5.250%, 4/01/21 - FSA Insured 4/13 at 100.00 AAA 1,000,730 - ------------------------------------------------------------------------------------------------------------------------------------ 8,360 Total Nebraska 7,870,104 - ------------------------------------------------------------------------------------------------------------------------------------ Nevada - 2.4% (1.5% of Total Investments) 8,750 Truckee Meadows Water Authority, Nevada, Water Revenue Bonds, Series 7/11 at 100.00 AAA 9,309,563 2001A, 5.250%, 7/01/34 (Pre-refunded 7/01/11) - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ New Jersey - 0.6% (0.3% of Total Investments) 2,150 New Jersey Transportation Trust Fund Authority, Transportation No Opt. Call AA- 2,175,069 System Bonds, Series 2006A, 5.250%, 12/15/20 - ------------------------------------------------------------------------------------------------------------------------------------
- ----- 66 - -----
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ New York - 5.0% (3.1% of Total Investments) $ 1,120 Dormitory Authority of the State of New York, FHA-Insured Mortgage 2/15 at 100.00 AA $ 1,007,216 Revenue Bonds, Montefiore Hospital, Series 2004, 5.000%, 8/01/23 - FGIC Insured 3,660 Dormitory Authority of the State of New York, Revenue Bonds, Mental 2/15 at 100.00 AA 3,547,089 Health Services Facilities Improvements, Series 2005B, 5.000%, 2/15/23 - AMBAC Insured 3,130 Hudson Yards Infrastructure Corporation, New York, Revenue Bonds, 2/17 at 100.00 AA 2,227,527 Series 2006A, 4.500%, 2/15/47 - MBIA Insured (UB) 2,400 Long Island Power Authority, New York, Electric System Revenue 11/16 at 100.00 AA 1,784,184 Bonds, Series 2006F, 4.250%, 5/01/33 - MBIA Insured (UB) 1,500 Metropolitan Transportation Authority, New York, Transportation 11/15 at 100.00 AA 1,326,240 Revenue Bonds, Series 2005B, 5.000%, 11/15/30 - AMBAC Insured 10,000 Metropolitan Transportation Authority, New York, Transportation 11/12 at 100.00 AAA 9,233,600 Revenue Refunding Bonds, Series 2002A, 5.000%, 11/15/30 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 21,810 Total New York 19,125,856 - ------------------------------------------------------------------------------------------------------------------------------------ North Carolina - 0.6% (0.3% of Total Investments) 2,125 North Carolina Medical Care Commission, FHA-Insured Mortgage Revenue 10/13 at 100.00 AAA 2,077,145 Bonds, Betsy Johnson Regional Hospital Project, Series 2003, 5.375%, 10/01/24 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ Ohio - 0.5% (0.3% of Total Investments) Buckeye Tobacco Settlement Financing Authority, Ohio, Tobacco Settlement Asset-Backed Revenue Bonds, Senior Lien, Series 2007A-2: 70 5.125%, 6/01/24 6/17 at 100.00 BBB 54,866 710 5.875%, 6/01/30 6/17 at 100.00 BBB 497,717 685 5.750%, 6/01/34 6/17 at 100.00 BBB 456,210 1,570 5.875%, 6/01/47 6/17 at 100.00 BBB 982,208 - ------------------------------------------------------------------------------------------------------------------------------------ 3,035 Total Ohio 1,991,001 - ------------------------------------------------------------------------------------------------------------------------------------ Oklahoma - 0.4% (0.3% of Total Investments) 2,000 Oklahoma Development Finance Authority, Revenue Bonds, Saint John 2/17 at 100.00 AA- 1,653,940 Health System, Series 2007, 5.000%, 2/15/37 - ------------------------------------------------------------------------------------------------------------------------------------ Oregon - 1.5% (1.0% of Total Investments) Oregon, General Obligation Veterans Welfare Bonds, Series 82: 4,530 5.375%, 12/01/31 12/11 at 100.00 AA 4,074,191 2,115 5.500%, 12/01/42 12/11 at 100.00 AA 1,862,744 - ------------------------------------------------------------------------------------------------------------------------------------ 6,645 Total Oregon 5,936,935 - ------------------------------------------------------------------------------------------------------------------------------------ Pennsylvania - 3.6% (2.3% of Total Investments) 4,500 Allegheny County, Pennsylvania, Airport Revenue Refunding Bonds, No Opt. Call AA 4,539,330 Pittsburgh International Airport, Series 1997A, 5.750%, 1/01/13 - MBIA Insured (Alternative Minimum Tax) 4,130 Pennsylvania Public School Building Authority, Lease Revenue Bonds, 12/16 at 100.00 AAA 3,283,061 School District of Philadelphia, Series 2006B, 4.500%, 6/01/32 - FSA Insured (UB) 1,050 Pennsylvania Turnpike Commission, Turnpike Revenue Bonds, Series 6/16 at 100.00 AA 1,003,013 2006A, 5.000%, 12/01/26 - AMBAC Insured 2,000 Philadelphia Municipal Authority, Pennsylvania, Lease Revenue Bonds, 11/13 at 100.00 AAA 2,037,120 Series 2003B, 5.250%, 11/15/18 - FSA Insured 2,000 Reading School District, Berks County, Pennsylvania, General 1/16 at 100.00 AAA 2,037,160 Obligation Bonds, Series 2005, 5.000%, 1/15/19 - FSA Insured (UB) 1,000 State Public School Building Authority, Pennsylvania, Lease Revenue 6/13 at 100.00 AAA 1,067,130 Bonds, Philadelphia School District, Series 2003, 5.000%, 6/01/23 (Pre-refunded 6/01/13) - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 14,680 Total Pennsylvania 13,966,814 - ------------------------------------------------------------------------------------------------------------------------------------
----- 67 ----- NVG | Nuveen Insured Dividend Advantage Municipal Fund (continued) | Portfolio of INVESTMENTS October 31, 2008
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Puerto Rico - 0.4% (0.3% of Total Investments) $ 1,225 Puerto Rico Municipal Finance Agency, Series 2005C, 5.250%, 8/01/21 - No Opt. Call BBB- $ 1,132,500 CIFG Insured 5,000 Puerto Rico Sales Tax Financing Corporation, Sales Tax Revenue No Opt. Call A+ 506,250 Bonds, Series 2007A, 0.000%, 8/01/42 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 6,225 Total Puerto Rico 1,638,750 - ------------------------------------------------------------------------------------------------------------------------------------ South Carolina - 1.6% (1.0% of Total Investments) 1,950 Greenville County School District, South Carolina, Installment 12/16 at 100.00 AAA 1,809,893 Purchase Revenue Bonds, Series 2006, 5.000%, 12/01/28 - FSA Insured Greenville, South Carolina, Tax Increment Revenue Improvement Bonds, Series 2003: 1,000 5.500%, 4/01/17 - MBIA Insured 4/13 at 100.00 AA 1,036,410 2,300 5.000%, 4/01/21 - MBIA Insured 4/13 at 100.00 AA 2,245,881 1,000 Scago Educational Facilities Corporation, South Carolina, 10/15 at 100.00 AAA 1,003,610 Installment Purchase Revenue Bonds, Spartanburg County School District 5, Series 2005, 5.000%, 4/01/21 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 6,250 Total South Carolina 6,095,794 - ------------------------------------------------------------------------------------------------------------------------------------ Tennessee - 11.2% (6.9% of Total Investments) Memphis, Tennessee, Sanitary Sewerage System Revenue Bonds, Series 2004: 1,495 5.000%, 10/01/19 - FSA Insured 10/14 at 100.00 AAA 1,518,651 1,455 5.000%, 10/01/20 - FSA Insured 10/14 at 100.00 AAA 1,465,301 1,955 5.000%, 10/01/21 - FSA Insured 10/14 at 100.00 AAA 1,954,922 10,000 Memphis-Shelby County Sports Authority, Tennessee, Revenue Bonds, 11/12 at 100.00 AA(4) 10,747,700 Memphis Arena, Series 2002A, 5.125%, 11/01/28 (Pre-refunded 11/01/12) - AMBAC Insured 10,000 Memphis-Shelby County Sports Authority, Tennessee, Revenue Bonds, 11/12 at 100.00 AA(4) 10,747,700 Memphis Arena, Series 2002B, 5.125%, 11/01/29 (Pre-refunded 11/01/12) - AMBAC Insured 15,195 Tennessee State School Bond Authority, Higher Educational Facilities 5/12 at 100.00 AAA 16,262,904 Second Program Bonds, Series 2002A, 5.250%, 5/01/32 (Pre-refunded 5/01/12) - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 40,100 Total Tennessee 42,697,178 - ------------------------------------------------------------------------------------------------------------------------------------ Texas - 24.8% (15.5% of Total Investments) 3,500 Dallas-Ft. Worth International Airport, Texas, Joint Revenue 11/11 at 100.00 A+ 3,504,760 Refunding and Improvement Bonds, Series 2001A, 5.750%, 11/01/13 - FGIC Insured (Alternative Minimum Tax) 10,000 Gainesville Hospital District, Texas, Limited Tax General Obligation 8/11 at 100.00 A2(4) 10,622,400 Bonds, Series 2002, 5.375%, 8/15/32 (Pre-refunded 8/15/11) - MBIA Insured 1,210 Galveston, Texas, General Obligation Bonds, Series 2001, 5.250%, 5/11 at 100.00 AAA 1,212,807 5/01/21 - AMBAC Insured Harris County Health Facilities Development Corporation, Texas, Thermal Utility Revenue Bonds, TECO Project, Series 2003: 2,240 5.000%, 11/15/16 - MBIA Insured 11/13 at 100.00 AA 2,261,795 2,355 5.000%, 11/15/17 - MBIA Insured 11/13 at 100.00 AA 2,365,974 13,000 Houston Area Water Corporation, Texas, Contract Revenue Bonds, 3/12 at 100.00 N/R(4) 13,850,459 Northeast Water Purification Plant, Series 2002, 5.125%, 3/01/32 (Pre-refunded 3/01/12) - FGIC Insured 1,000 Houston, Texas, First Lien Combined Utility System Revenue Bonds, 5/14 at 100.00 AA 931,550 Series 2004A, 5.250%, 5/15/24 - FGIC Insured 4,345 San Antonio, Texas, Water System Senior Lien Revenue Refunding Bonds, 5/12 at 100.00 AAA 4,593,100 Series 2002, 5.500%, 5/15/17 - FSA Insured 5,510 Texas Department of Housing and Community Affairs, Residential 7/11 at 100.00 AAA 5,240,396 Mortgage Revenue Bonds, Series 2001A, 5.350%, 7/01/33 (Alternative Minimum Tax) 8,350 Texas Department of Housing and Community Affairs, Single Family 3/12 at 100.00 AAA 6,873,637 Mortgage Bonds, Series 2002B, 5.550%, 9/01/33 - MBIA Insured (Alternative Minimum Tax) Texas Public Finance Authority, Revenue Bonds, Texas Southern University Financing System, Series 2002: 3,520 5.125%, 11/01/20 - MBIA Insured 5/12 at 100.00 A2 3,077,008 3,520 5.125%, 11/01/21 - MBIA Insured 5/12 at 100.00 A2 3,025,194
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Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Texas (continued) Texas Student Housing Authority, Revenue Bonds, Austin Project, Senior Series 2001A: $ 9,400 5.375%, 1/01/23 - MBIA Insured 1/12 at 102.00 A2 $ 7,230,480 11,665 5.500%, 1/01/33 - MBIA Insured 1/12 at 102.00 A2 8,251,938 5,000 Texas Water Development Board, Senior Lien State Revolving Fund 1/10 at 100.00 AAA 5,118,550 Revenue Bonds, Series 1999B, 5.250%, 7/15/17 9,145 Texas, General Obligation Bonds, Veterans Housing Assistance Program 6/12 at 100.00 Aa1 8,336,216 Fund II, Series 2002A-1, 5.250%, 12/01/22 (Alternative Minimum Tax) Williamson County, Texas, General Obligation Bonds, Series 2002: 3,000 5.250%, 2/15/22 (Pre-refunded 2/15/12) - FSA Insured 2/12 at 100.00 AAA 3,205,890 5,000 5.250%, 2/15/25 (Pre-refunded 2/15/12) - FSA Insured 2/12 at 100.00 AAA 5,343,150 - ------------------------------------------------------------------------------------------------------------------------------------ 101,760 Total Texas 95,045,304 - ------------------------------------------------------------------------------------------------------------------------------------ Utah - 1.6% (1.0% of Total Investments) 7,290 Utah Transit Authority, Sales Tax Revenue Bonds, Series 2008, Trust 6/18 at 100.00 AAA 6,279,679 1193, 7.752%, 6/15/36 - FSA Insured (IF) - ------------------------------------------------------------------------------------------------------------------------------------ Washington - 15.4% (9.6% of Total Investments) 5,385 Energy Northwest, Washington Public Power, Nine Canyon Wind Project 7/16 at 100.00 AA 4,334,225 Revenue Bonds, Series 2006A, 4.500%, 7/01/30 - AMBAC Insured 6,600 Energy Northwest, Washington, Electric Revenue Refunding Bonds, 7/12 at 100.00 AAA 6,713,586 Columbia Generating Station - Nuclear Project 2, Series 2002B, 5.350%, 7/01/18 - FSA Insured 7,675 Energy Northwest, Washington, Electric Revenue Refunding Bonds, 7/12 at 100.00 Aaa 8,056,908 Nuclear Project 1, Series 2002A, 5.500%, 7/01/15 - MBIA Insured 2,500 Port of Seattle, Washington, Revenue Refunding Bonds, Series 2002D, 11/12 at 100.00 AA 2,441,450 5.750%, 11/01/15 - FGIC Insured (Alternative Minimum Tax) 2,200 Snohomish County School District 2, Everett, Washington, General 12/13 at 100.00 AAA 2,263,096 Obligation Bonds, Series 2003B, 5.000%, 6/01/17 - FSA Insured 3,255 Thurston and Pierce Counties School District, Washington, General 6/13 at 100.00 Aaa 3,401,833 Obligation Bonds, Yelm Community Schools, Series 2003, 5.250%, 12/01/16 - FSA Insured 10,000 University of Washington, General Revenue Bonds, Refunding Series 6/17 at 100.00 AA+ 8,940,400 2007, 5.000%, 6/01/37 - AMBAC Insured Washington State Economic Development Finance Authority, Wastewater Revenue Bonds, LOTT Project, Series 2002: 2,000 5.500%, 6/01/17 - AMBAC Insured 6/12 at 100.00 Aa3 2,069,700 4,325 5.125%, 6/01/22 - AMBAC Insured 6/12 at 100.00 Aa3 4,252,167 15,000 Washington State Healthcare Facilities Authority, Revenue Bonds, 8/13 at 102.00 AA 11,403,150 Harrison Memorial Hospital, Series 1998, 5.000%, 8/15/28 - AMBAC Insured 5,170 Whitman County School District 267, Pullman, Washington, General 6/12 at 100.00 Aaa 5,193,317 Obligation Bonds, Series 2002, 5.000%, 12/01/20 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 64,110 Total Washington 59,069,832 - ------------------------------------------------------------------------------------------------------------------------------------ Wisconsin - 3.4% (2.1% of Total Investments) 11,950 Wisconsin, Transportation Revenue Refunding Bonds, Series 2002-1, 7/12 at 100.00 AA+(4) 12,801,438 5.125%, 7/01/18 (Pre-refunded 7/01/12) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ $ 663,598 Total Municipal Bonds (cost $641,787,614) 605,940,849 ============------------------------------------------------------------------------------------------------------------------------
Shares Description (1) Value - ------------------------------------------------------------------------------------------------------------------------------------ Investment Companies - 0.3% (0.2% of Total Investments) 21,650 BlackRock MuniHoldings Fund Inc. 232,305 13,600 BlackRock MuniEnhanced Fund Inc. 99,280 7,920 Dreyfus Strategic Municipal Fund 48,312 7,600 Morgan Stanley Dean Witter Insured Municipal Income Trust 81,776
----- 69 ----- NVG | Nuveen Insured Dividend Advantage Municipal Fund (continued) Portfolio of INVESTMENTS October 31, 2008
Shares Description (1) Value - ------------------------------------------------------------------------------------------------------------------------------------ Investment Companies (continued) 9,668 Morgan Stanley Quality Municipal Income Trust $ 89,139 26,280 PIMCO Municipal Income Fund II 243,616 9,500 Van Kampen Advantage Municipal Income Fund II 79,800 28,680 Van Kampen Investment Grade Municipal Trust 289,955 6,240 Van Kampen Municipal Trust 63,337 - ------------------------------------------------------------------------------------------------------------------------------------ Total Investment Companies (cost $1,690,861) 1,227,520 ---------------------------------------------------------------------------------------------------------------------- Total Long-Term Investments (cost $643,478,475) - 158.6% 607,168,369 ----------------------------------------------------------------------------------------------------------------------
Principal Amount (000) Description (1) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Short-Term Investments - 1.8% (1.2% of Total Investments) 2,075 New Jersey Housing and Mortgage Finance Agency, Capital Fund Program Revenue Bonds, VMIG-1 2,075,000 Tender Option Bond, Trust 2008-3034X, Variable Rate Demand Obligations, 2.720%, 5/01/27 - FSA Insured (6) 5,000 Sacramento Municipal Utility District, California, Electric Revenue Bonds, Refunding A-1+ 5,000,000 Series 2008 Trust 3301, Variable Rate Demand Obligations, 2.720%, 8/15/26 - FSA Insured (6) - ------------------------------------------------------------------------------------------------------------------------------------ $ 7,075 Total Short-Term Investments (cost $7,075,000) 7,075,000 ============------------------------------------------------------------------------------------------------------------------------ Total Investments (cost $650,553,475) - 160.4% 614,243,369 ---------------------------------------------------------------------------------------------------------------------- Floating Rate Obligations - (4.5)% (17,343,334) ---------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 3.4% 13,110,160 ---------------------------------------------------------------------------------------------------------------------- Auction Rate Preferred Shares, at Liquidation Value - (59.3)% (7) (226,975,000) ---------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 383,035,195 ======================================================================================================================
Forward Swaps outstanding at October 31, 2008:
Fund Fixed Rate Unrealized Notional Pay/Receive Floating Rate Fixed Rate Payment Effective Termination Appreciation Counterparty Amount Floating Rate Index (Annualized) Frequency Date (8) Date (Depreciation) - ------------------------------------------------------------------------------------------------------------------------------------ Goldman Sachs $25,250,000 Pay 3-Month USD-LIBOR 5.052% Semi-Annually 7/29/09 7/29/24 $ 1,124,391 ====================================================================================================================================
USD-LIBOR (United States Dollar-London Inter-Bank Offered Rate). At least 80% of the Fund's net assets (including net assets attributable to Auction Rate Preferred shares) are invested in municipal securities that are covered by insurance or backed by an escrow or trust account containing sufficient U.S. Government or U.S. Government agency securities or U.S. Treasury-issued State and Local Government Series securities to ensure the timely payment of principal and interest. See Notes to Financial Statements, Footnote 1 - Insurance, for more information. (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's Group ("Standard & Poor's") or Moody's Investor Service, Inc. ("Moody's") rating. Ratings below BBB by Standard & Poor's or Baa by Moody's are considered to be below investment grade. The Portfolio of Investments may reflect the ratings on certain bonds insured by AGC, AMBAC, CIFG, FGIC, FSA, MBIA, RAAI and SYNCORA as of October 31, 2008. Please see the Portfolio Manager's Commentary for an expanded discussion of the affect on the Fund of changes to the ratings of certain bonds in the portfolio resulting from changes to the ratings of the underlying insurers both during the period and after period end. (4) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. (5) Portion of investment has been pledged as collateral for Recourse Trusts. (6) Investment has a maturity of more than one year, but has variable rate and demand features which qualify it as a short-term investment. The rate disclosed is that in effect at the end of the reporting period. This rate changes periodically based on market conditions or a specified market index. (7) Auction Rate Preferred Shares, at Liquidation Value as a percentage of Total Investments is 37.0%. (8) Effective Date represents the date on which both the Fund and counterparty commence interest payment accruals on each forward swap contract. N/R Not rated. (IF) Inverse floating rate investment. (UB) Underlying bond of an inverse floating rate trust reflected as a financing transaction pursuant to the provisions of SFAS No. 140. See accompanying notes to financial statements. - ----- 70 - ----- NEA | Nuveen Insured Tax-Free Advantage Municipal Fund | Portfolio of INVESTMENTS October 31, 2008
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Alabama - 9.5% (6.0% of Total Investments) $ 1,000 Alabama Special Care Facilities Financing Authority, Revenue 11/16 at 100.00 Aa1 $ 826,500 Bonds, Ascension Health, Series 2006C-2, 5.000%, 11/15/36 (UB) 5,655 Colbert County-Northwest Health Care Authority, Alabama, Revenue 6/13 at 101.00 Baa3 4,670,973 Bonds, Helen Keller Hospital, Series 2003, 5.750%, 6/01/27 3,100 Huntsville Healthcare Authority, Alabama, Revenue Bonds, Series 5/12 at 102.00 AA(4) 3,343,815 1998A, 5.400%, 6/01/22 (Pre-refunded 5/14/12) - MBIA Insured 6,280 Jefferson County, Alabama, Sewer Revenue Capital Improvement 8/12 at 100.00 AAA 6,707,794 Warrants, Series 2002D, 5.000%, 2/01/32 (Pre-refunded 8/01/12) - FGIC Insured 1,750 Montgomery, Alabama, General Obligation Warrants, Series 2003, 5/12 at 101.00 AA 1,750,000 5.000%, 5/01/21 - AMBAC Insured 4,500 Sheffield, Alabama, Electric Revenue Bonds, Series 2003, 5.500%, 7/13 at 100.00 Aa3 4,412,565 7/01/29 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 22,285 Total Alabama 21,711,647 - ------------------------------------------------------------------------------------------------------------------------------------ Arizona - 5.5% (3.5% of Total Investments) 10,000 Maricopa County Pollution Control Corporation, Arizona, Revenue 11/12 at 100.00 AA 8,305,200 Bonds, Arizona Public Service Company - Palo Verde Project, Series 2002A, 5.050%, 5/01/29 - AMBAC Insured 6,545 Phoenix, Arizona, Civic Improvement Revenue Bonds, Civic Plaza, No Opt. Call AA 4,372,060 Series 2005B, 0.000%, 7/01/37 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 16,545 Total Arizona 12,677,260 - ------------------------------------------------------------------------------------------------------------------------------------ California - 24.5% (15.4% of Total Investments) 26,300 California State Public Works Board, Lease Revenue Bonds, 12/12 at 100.00 AA 23,721,021 Department of General Services, Capital East End Project, Series 2002A, 5.000%, 12/01/27 - AMBAC Insured 250 California State, General Obligation Bonds, Series 2002, 5.250%, 4/12 at 100.00 A1 236,765 4/01/30 - SYNCORA GTY Insured 5 California State, General Obligation Bonds, Series 2004, 5.000%, 4/14 at 100.00 AA 4,625 4/01/31 - AMBAC Insured 7,495 California State, General Obligation Bonds, Series 2004, 5.000%, 4/14 at 100.00 AAA 8,120,158 4/01/31 (Pre-refunded 4/01/14) - AMBAC Insured 2,910 Cathedral City Public Financing Authority, California, Tax 8/12 at 102.00 AA 2,730,511 Allocation Bonds, Housing Set-Aside, Series 2002D, 5.000%, 8/01/26 - MBIA Insured 250 Golden State Tobacco Securitization Corporation, California, 6/17 at 100.00 BBB 147,625 Enhanced Tobacco Settlement Asset-Backed Bonds, Series 2007A-1, 5.125%, 6/01/47 2,000 Golden State Tobacco Securitization Corporation, California, 6/15 at 100.00 A 88,840 Tobacco Settlement Asset-Backed Revenue Bonds, Series 2005A, Trust 2448, 0.891%, 6/01/35 - FGIC Insured (IF) 2,500 Irvine Public Facilities and Infrastructure Authority, 9/13 at 100.00 AA 2,297,950 California, Assessment Revenue Bonds, Series 2003C, 5.000%, 9/02/23 - AMBAC Insured 4,000 Montara Sanitation District, California, General Obligation 8/11 at 101.00 A+ 3,683,640 Bonds, Series 2003, 5.000%, 8/01/28 - FGIC Insured Plumas County, California, Certificates of Participation, Capital Improvement Program, Series 2003A: 1,130 5.250%, 6/01/19 - AMBAC Insured 6/13 at 101.00 AA 1,127,311 1,255 5.250%, 6/01/21 - AMBAC Insured 6/13 at 101.00 AA 1,219,283 1,210 Redding Joint Powers Financing Authority, California, Lease 3/13 at 100.00 AA 1,167,892 Revenue Bonds, Capital Improvement Projects, Series 2003A, 5.000%, 3/01/23 - AMBAC Insured
----- 71 ----- NEA | Nuveen Insured Tax-Free Advantage Municipal Fund (continued) | Portfolio of INVESTMENTS October 31, 2008
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ California (continued) $ 3,750 Sacramento Municipal Utility District, California, Electric Revenue 8/13 at 100.00 AA $ 3,423,975 Bonds, Series 2003R, 5.000%, 8/15/28 - MBIA Insured 1,500 San Diego Community College District, California, General 5/13 at 100.00 AAA 1,447,470 Obligation Bonds, Series 2003A, 5.000%, 5/01/28 - FSA Insured 1,055 Turlock Irrigation District, California, Certificates of 1/13 at 100.00 AA 994,105 Participation, Series 2003A, 5.000%, 1/01/28 - MBIA Insured 6,300 University of California, Revenue Bonds, Multi-Purpose Projects, 5/13 at 100.00 Aa1 5,713,407 Series 2003A, 5.000%, 5/15/33 - AMBAC Insured (UB) - ------------------------------------------------------------------------------------------------------------------------------------ 61,910 Total California 56,124,578 - ------------------------------------------------------------------------------------------------------------------------------------ Colorado - 7.5% (4.7% of Total Investments) Bowles Metropolitan District, Colorado, General Obligation Bonds, Series 2003: 4,300 5.500%, 12/01/23 - FSA Insured 12/13 at 100.00 AAA 4,356,760 3,750 5.500%, 12/01/28 - FSA Insured 12/13 at 100.00 AAA 3,751,463 1,450 Colorado Educational and Cultural Facilities Authority, Charter 8/14 at 100.00 A 1,382,532 School Revenue Bonds, Peak-to-Peak Charter School, Series 2004, 5.250%, 8/15/24 - SYNCORA GTY Insured 8,250 Colorado Health Facilities Authority, Colorado, Revenue Bonds, 4/18 at 100.00 AAA 6,593,400 Catholic Health Initiatives, Series 2006C-1, Trust 1090, 6.761%, 10/01/41 - FSA Insured (IF) 3,000 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, No Opt. Call AA 655,350 Series 2000B, 0.000%, 9/01/30 - MBIA Insured 2,900 E-470 Public Highway Authority, Colorado, Toll Revenue Bonds, No Opt. Call AA 471,134 Series 2004A, 0.000%, 9/01/34 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 23,650 Total Colorado 17,210,639 - ------------------------------------------------------------------------------------------------------------------------------------ District of Columbia - 0.1% (0.1% of Total Investments) 665 Washington Convention Center Authority, District of Columbia, 10/16 at 100.00 AA 312,623 Senior Lien Dedicated Tax Revenue Bonds, Series 2007, Residuals 1606, 1.947%, 10/01/30 - AMBAC Insured (IF) - ------------------------------------------------------------------------------------------------------------------------------------ Florida - 2.1% (1.3% of Total Investments) 2,500 Florida State Board of Education, Public Education Capital Outlay 6/18 at 101.00 AAA 1,530,900 Bonds, Series 2008, Trust 2929, 0.054%, 6/01/38 - AGC Insured (IF) 3,000 Pinellas County Health Facilities Authority, Florida, Revenue 5/13 at 100.00 Aa3(4) 3,284,010 Bonds, Baycare Health System, Series 2003, 5.500%, 11/15/27 (Pre-refunded 5/15/13) - ------------------------------------------------------------------------------------------------------------------------------------ 5,500 Total Florida 4,814,910 - ------------------------------------------------------------------------------------------------------------------------------------ Georgia - 2.4% (1.5% of Total Investments) 1,410 DeKalb County, Georgia, Water and Sewer Revenue Bonds, Series 10/16 at 100.00 AAA 1,317,123 2006A, 5.000%, 10/01/35 - FSA Insured 3,825 Metropolitan Atlanta Rapid Transit Authority, Georgia, Sales Tax 1/13 at 100.00 AA+(4) 4,096,805 Revenue Bonds, Second Indenture Series 2002, 5.000%, 7/01/32 (Pre-refunded 1/01/13) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 5,235 Total Georgia 5,413,928 - ------------------------------------------------------------------------------------------------------------------------------------ Illinois - 3.7% (2.3% of Total Investments) Cook County School District 145, Arbor Park, Illinois, General Obligation Bonds, Series 2004: 3,285 5.125%, 12/01/20 - FSA Insured 12/14 at 100.00 Aaa 3,327,114 2,940 5.125%, 12/01/23 - FSA Insured 12/14 at 100.00 Aaa 2,945,204 2,500 Illinois Health Facilities Authority, Revenue Bonds, Lake Forest 7/13 at 100.00 A- 2,159,275 Hospital, Series 2003, 5.250%, 7/01/23 - ------------------------------------------------------------------------------------------------------------------------------------ 8,725 Total Illinois 8,431,593 - ------------------------------------------------------------------------------------------------------------------------------------ Indiana - 11.0% (7.0% of Total Investments) 2,500 Evansville, Indiana, Sewerage Works Revenue Refunding Bonds, Series 7/13 at 100.00 AA 2,372,675 2003A, 5.000%, 7/01/23 - AMBAC Insured
- ----- 72 - -----
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Indiana (continued) $ 2,190 Indiana Bond Bank, Advance Purchase Funding Bonds, Common School 8/13 at 100.00 AA $ 2,110,262 Fund, Series 2003B, 5.000%, 8/01/19 - MBIA Insured 1,860 Indiana Municipal Power Agency, Power Supply Revenue Bonds, Series 1/17 at 100.00 AA 1,519,601 2007A, 5.000%, 1/01/42 - MBIA Insured 1,000 Indiana University, Student Fee Revenue Bonds, Series 2003O, 8/13 at 100.00 Aa1 995,010 5.000%, 8/01/22 - FGIC Insured IPS Multi-School Building Corporation, Indiana, First Mortgage Revenue Bonds, Series 2003: 11,020 5.000%, 7/15/19 (Pre-refunded 7/15/13) - MBIA Insured 7/13 at 100.00 AA(4) 11,830,740 6,000 5.000%, 7/15/20 (Pre-refunded 7/15/13) - MBIA Insured 7/13 at 100.00 AA(4) 6,441,420 - ------------------------------------------------------------------------------------------------------------------------------------ 24,570 Total Indiana 25,269,708 - ------------------------------------------------------------------------------------------------------------------------------------ Kansas - 2.2% (1.4% of Total Investments) 5,000 Kansas Development Finance Authority, Board of Regents, Revenue 4/13 at 102.00 AA 4,975,000 Bonds, Scientific Research and Development Facilities Projects, Series 2003C, 5.000%, 10/01/22 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ Kentucky - 0.5% (0.3% of Total Investments) 985 Kentucky State Property and Buildings Commission, Revenue Refunding 8/13 at 100.00 AA(4) 1,061,072 Bonds, Project 77, Series 2003, 5.000%, 8/01/23 (Pre-refunded 8/01/13) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ Louisiana - 2.3% (1.4% of Total Investments) 5,785 New Orleans, Louisiana, General Obligation Refunding Bonds, Series 12/12 at 100.00 Baa3 5,267,011 2002, 5.300%, 12/01/27 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ Massachusetts - 0.5% (0.3% of Total Investments) 1,125 Massachusetts Development Finance Authority, Revenue Bonds, 9/13 at 100.00 A1 1,086,930 Middlesex School, Series 2003, 5.125%, 9/01/23 - ------------------------------------------------------------------------------------------------------------------------------------ Michigan - 12.5% (7.9% of Total Investments) 6,130 Detroit, Michigan, Senior Lien Water Supply System Revenue Bonds, 7/13 at 100.00 AA(4) 6,597,658 Series 2003A, 5.000%, 7/01/23 (Pre-refunded 7/01/13) - MBIA Insured 4,465 Detroit, Michigan, Senior Lien Water Supply System Revenue 7/13 at 100.00 AA 4,198,975 Refunding Bonds, Series 2003C, 5.000%, 7/01/22 - MBIA Insured 1,000 Michigan State Hospital Finance Authority, Revenue Bonds, Trinity 12/16 at 100.00 AA 856,950 Health Care Group, Series 2006A, 5.000%, 12/01/31 (UB) 10,800 Michigan Strategic Fund, Limited Obligation Resource Recovery 12/12 at 100.00 Baa1 8,827,920 Revenue Refunding Bonds, Detroit Edison Company, Series 2002D, 5.250%, 12/15/32 - SYNCORA GTY Insured 2,250 Romulus Community Schools, Wayne County, Michigan, General 5/11 at 100.00 AA- 2,230,403 Obligation Refunding Bonds, Series 2001, 5.250%, 5/01/25 6,500 Wayne County, Michigan, Limited Tax General Obligation Airport 12/11 at 101.00 AA 6,016,660 Hotel Revenue Bonds, Detroit Metropolitan Wayne County Airport, Series 2001A, 5.000%, 12/01/30 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 31,145 Total Michigan 28,728,566 - ------------------------------------------------------------------------------------------------------------------------------------ Missouri - 1.3% (0.8% of Total Investments) 240 Clay County Public School District 53, Liberty, Missouri, General 3/14 at 100.00 AAA 241,090 Obligation Bonds, Series 2004, 5.250%, 3/01/24 - FSA Insured 215 Clay County Public School District 53, Liberty, Missouri, General 3/14 at 100.00 AAA 216,473 Obligation Bonds, Series 2004, 5.250%, 3/01/23 - FSA Insured Clay County Public School District 53, Liberty, Missouri, General Obligation Bonds, Series 2004: 1,110 5.250%, 3/01/23 (Pre-refunded 3/01/14) - FSA Insured 3/14 at 100.00 AAA 1,204,716 1,260 5.250%, 3/01/24 (Pre-refunded 3/01/14) - FSA Insured 3/14 at 100.00 AAA 1,367,516 - ------------------------------------------------------------------------------------------------------------------------------------ 2,825 Total Missouri 3,029,795 - ------------------------------------------------------------------------------------------------------------------------------------
----- 73 ----- NEA | Nuveen Insured Tax-Free Advantage Municipal Fund (continued) | Portfolio of INVESTMENTS October 31, 2008
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Nebraska - 2.1% (1.3% of Total Investments) $ 5,000 Lincoln, Nebraska, Sanitary Sewerage System Revenue Refunding 6/13 at 100.00 AA+ $ 4,753,700 Bonds, Series 2003, 5.000%, 6/15/28 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ New Mexico - 0.9% (0.6% of Total Investments) 1,975 New Mexico State University, Revenue Bonds, Series 2004, 5.000%, 4/14 at 100.00 AA 2,003,914 4/01/19 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ New York - 11.0% (6.9% of Total Investments) 20 Hudson Yards Infrastructure Corporation, New York, Revenue Bonds, 2/17 at 100.00 AA 8,238 Driver Trust 1649, 2006, 4.745%, 2/15/47 - MBIA Insured (IF) 1,960 Hudson Yards Infrastructure Corporation, New York, Revenue Bonds, 2/17 at 100.00 AA 1,394,873 Series 2006A, 4.500%, 2/15/47 - MBIA Insured (UB) 25,000 Metropolitan Transportation Authority, New York, Transportation 11/12 at 100.00 AA 21,956,499 Revenue Refunding Bonds, Series 2002F, 5.000%, 11/15/31 - MBIA Insured 1,850 New York State Urban Development Corporation, State Personal Income 3/15 at 100.00 AAA 1,817,459 Tax Revenue Bonds, Series 2005B, 5.000%, 3/15/25 - FSA Insured (UB) - ------------------------------------------------------------------------------------------------------------------------------------ 28,830 Total New York 25,177,069 - ------------------------------------------------------------------------------------------------------------------------------------ North Carolina - 2.8% (1.8% of Total Investments) 8,700 North Carolina Medical Care Commission, Revenue Bonds, Maria Parham 10/13 at 100.00 BBB+ 6,434,172 Medical Center, Series 2003, 5.375%, 10/01/33 - RAAI Insured - ------------------------------------------------------------------------------------------------------------------------------------ Ohio - 0.9% (0.5% of Total Investments) Buckeye Tobacco Settlement Financing Authority, Ohio, Tobacco Settlement Asset-Backed Revenue Bonds, Senior Lien, Series 2007A-2: 70 5.125%, 6/01/24 6/17 at 100.00 BBB 54,866 710 5.875%, 6/01/30 6/17 at 100.00 BBB 497,717 685 5.750%, 6/01/34 6/17 at 100.00 BBB 456,210 1,570 5.875%, 6/01/47 6/17 at 100.00 BBB 982,208 - ------------------------------------------------------------------------------------------------------------------------------------ 3,035 Total Ohio 1,991,001 - ------------------------------------------------------------------------------------------------------------------------------------ Oklahoma - 0.4% (0.3% of Total Investments) 1,000 Oklahoma Capitol Improvement Authority, State Facilities Revenue 7/15 at 100.00 AA 967,230 Bonds, Series 2005F, 5.000%, 7/01/24 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ Oregon - 3.1% (1.9% of Total Investments) 8,350 Oregon Health Sciences University, Revenue Bonds, Series 2002A, 1/13 at 100.00 AA 7,045,814 5.000%, 7/01/32 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ Pennsylvania - 8.7% (5.4% of Total Investments) 3,000 Lehigh County General Purpose Authority, Pennsylvania, Hospital 8/13 at 100.00 AAA 3,282,540 Revenue Bonds, St. Luke's Hospital of Bethlehem, Series 2003, 5.375%, 8/15/33 (Pre-refunded 8/15/13) 2,000 Philadelphia Gas Works, Pennsylvania, Revenue Bonds, General 8/13 at 100.00 AAA 1,736,980 Ordinance, Fourth Series 1998, 5.000%, 8/01/32 - FSA Insured (UB) 925 Philadelphia, Pennsylvania, Water and Wastewater Revenue Bonds, 12/08 at 101.00 AAA 945,239 Series 1997A, 5.125%, 8/01/27 - AMBAC Insured (ETM) 13,000 State Public School Building Authority, Pennsylvania, Lease Revenue 6/13 at 100.00 AAA 13,872,689 Bonds, Philadelphia School District, Series 2003, 5.000%, 6/01/33 (Pre-refunded 6/01/13) - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 18,925 Total Pennsylvania 19,837,448 - ------------------------------------------------------------------------------------------------------------------------------------ Puerto Rico - 0.4% (0.3% of Total Investments) 10,000 Puerto Rico Sales Tax Financing Corporation, Sales Tax Revenue No Opt. Call AA 944,200 Bonds, Series 2007A, 0.000%, 8/01/43 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ South Carolina - 5.6% (3.6% of Total Investments) 5,000 Florence County, South Carolina, Hospital Revenue Bonds, McLeod 11/14 at 100.00 AAA 4,943,800 Regional Medical Center, Series 2004A, 5.250%, 11/01/23 - FSA Insured
- ----- 74 - -----
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ South Carolina (continued) Greenville County School District, South Carolina, Installment Purchase Revenue Bonds, Series 2008, Trust 3219: $ 750 13.014%, 12/01/22 (IF) 12/13 at 100.00 AA $ 618,360 585 10.468%, 12/01/23 (IF) 12/13 at 100.00 AA 497,812 8,000 South Carolina Transportation Infrastructure Bank, Revenue Bonds, 10/12 at 100.00 Aa3 6,925,600 Series 2002A, 5.000%, 10/01/33 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 14,335 Total South Carolina 12,985,572 - ------------------------------------------------------------------------------------------------------------------------------------ Texas - 12.8% (8.1% of Total Investments) 7,975 Fort Bend Independent School District, Fort Bend County, Texas, 8/10 at 100.00 AAA 7,920,690 General Obligation Bonds, Series 2000, 5.000%, 8/15/25 12,500 Grand Prairie Independent School District, Dallas County, Texas, 2/13 at 100.00 AAA 13,466,999 General Obligation Bonds, Series 2003, 5.125%, 2/15/31 (Pre-refunded 2/15/13) - FSA Insured 2,000 Houston, Texas, First Lien Combined Utility System Revenue Bonds, 5/14 at 100.00 AA 1,946,100 Series 2004A, 5.250%, 5/15/25 - MBIA Insured 5,515 Houston, Texas, General Obligation Refunding Bonds, Series 2002, 3/12 at 100.00 AA 5,551,399 5.250%, 3/01/20 - MBIA Insured 465 Katy Independent School District, Harris, Fort Bend and Waller 2/12 at 100.00 AAA 475,086 Counties, Texas, General Obligation Bonds, Series 2002A, 5.125%, 2/15/18 - ------------------------------------------------------------------------------------------------------------------------------------ 28,455 Total Texas 29,360,274 - ------------------------------------------------------------------------------------------------------------------------------------ Virginia - 0.6% (0.4% of Total Investments) 1,500 Hampton, Virginia, Revenue Bonds, Convention Center Project, Series 1/13 at 100.00 AA 1,437,105 2002, 5.125%, 1/15/28 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ Washington - 12.8% (8.0% of Total Investments) 4,945 Broadway Office Properties, King County, Washington, Lease Revenue 12/12 at 100.00 AAA 4,544,999 Bonds, Washington Project, Series 2002, 5.000%, 12/01/31 - MBIA Insured 5,250 Chelan County Public Utility District 1, Washington, Hydro 7/12 at 100.00 AA 4,858,928 Consolidated System Revenue Bonds, Series 2002C, 5.125%, 7/01/33 - AMBAC Insured 7,500 King County, Washington, Sewer Revenue Bonds, Series 2006-2, 1/17 at 100.00 AAA 6,151,875 6.563%, 1/01/31 - FSA Insured (IF) 2,135 Kitsap County Consolidated Housing Authority, Washington, Revenue 7/13 at 100.00 A1 1,991,635 Bonds, Bremerton Government Center, Series 2003, 5.000%, 7/01/23 - MBIA Insured 1,935 Pierce County School District 343, Dieringer, Washington, General 6/13 at 100.00 Aa1 1,992,818 Obligation Refunding Bonds, Series 2003, 5.250%, 12/01/17 - FGIC Insured 9,670 Washington State, General Obligation Bonds, Series 2003D, 5.000%, 6/13 at 100.00 AA+ 9,709,647 12/01/21 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 31,435 Total Washington 29,249,902 - ------------------------------------------------------------------------------------------------------------------------------------ West Virginia - 1.3% (0.8% of Total Investments) 3,000 West Virginia State Building Commission, Lease Revenue Refunding No Opt. Call AA 2,910,000 Bonds, Regional Jail and Corrections Facility, Series 1998A, 5.375%, 7/01/21 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ Wisconsin - 7.1% (4.5% of Total Investments) 1,190 Sun Prairie Area School District, Dane County, Wisconsin, General 3/14 at 100.00 Aaa 1,277,108 Obligation Bonds, Series 2004C, 5.250%, 3/01/24 - FSA Insured 4,605 Wisconsin Health and Educational Facilities Authority, Revenue 9/13 at 100.00 BBB+(4) 5,120,069 Bonds, Franciscan Sisters of Christian Charity Healthcare Ministry, Series 2003A, 5.875%, 9/01/33 (Pre-refunded 9/01/13) 3,000 Wisconsin Health and Educational Facilities Authority, Revenue No Opt. Call A1 3,044,310 Bonds, Meriter Hospital Inc., Series 1992A, 6.000%, 12/01/22 - FGIC Insured 3,600 Wisconsin Health and Educational Facilities Authority, Revenue 8/13 at 100.00 A- 2,217,024 Bonds, Wheaton Franciscan Services Inc., Series 2003A, 5.125%, 8/15/33
----- 75 ----- NEA | Nuveen Insured Tax-Free Advantage Municipal Fund (continued) | Portfolio of INVESTMENTS October 31, 2008
Principal Optional Call Amount (000) Description (1) Provisions (2) Ratings (3) Value - ------------------------------------------------------------------------------------------------------------------------------------ Wisconsin (continued) $ 4,750 Wisconsin Health and Educational Facilities Authority, Revenue 2/09 at 102.00 AA $ 4,557,957 Refunding Bonds, Wausau Hospital Inc., Series 1998A, 5.125%, 8/15/20 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 17,145 Total Wisconsin 16,216,468 - ------------------------------------------------------------------------------------------------------------------------------------ $ 397,635 Total Long-Term Investments (cost $384,085,763) - 156.1% 357,429,129 ===============--------------------------------------------------------------------------------------------------------------------- Short-Term Investments - 2.6% (1.7% of Total Investments) 2,000 Florida Board of Education, Lottery Revenue Bonds, Series 2001B, A-1 2,000,000 Trust 570, Variable Rate Demand Obligations, 3.000%, 7/01/14 - FGIC Insured (5) 2,000 Maryland Health and Higher Educational Facilities Authority, A-1+ 2,000,000 Goucher College, Series 2007, Variable Rate Demand Obligations, 1.450%, 7/01/37 (5) 2,000 Port of Tacoma, Washington, General Obligation Bonds, Tender Option Aa3 2,000,000 Bond, Trust 2006-86, Variable Rate Demand Obligations, 3.320%, 6/01/25 - MBIA Insured (5) - ------------------------------------------------------------------------------------------------------------------------------------ $ 6,000 Total Short-Term Investments (cost $6,000,000) 6,000,000 ===============--------------------------------------------------------------------------------------------------------------------- Total Investments (cost $390,085,763) - 158.7% 363,429,129 --------------------------------------------------------------------------------------------------------------------- Floating Rate Obligations - (4.2)% (9,600,000) --------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 3.5% 8,046,283 --------------------------------------------------------------------------------------------------------------------- Auction Rate Preferred Shares, at Liquidation Value - (58.0)% (6) (132,800,000) --------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 229,075,412 =====================================================================================================================
At least 80% of the Fund's net assets (including net assets attributable to Auction Rate Preferred shares) are invested in municipal securities that are covered by insurance or backed by an escrow or trust account containing sufficient U.S. Government or U.S. Government agency securities or U.S. Treasury-issued State and Local Government Series securities to ensure the timely payment of principal and interest. See Notes to Financial Statements, Footnote 1 - Insurance, for more information. (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's Group ("Standard & Poor's") or Moody's Investor Service, Inc. ("Moody's") rating. Ratings below BBB by Standard & Poor's or Baa by Moody's are considered to be below investment grade. The Portfolio of Investments may reflect the ratings on certain bonds insured by AGC, AMBAC, CIFG, FGIC, FSA, MBIA, RAAI and SYNCORA as of October 31, 2008. Please see the Portfolio Manager's Commentary for an expanded discussion of the affect on the Fund of changes to the ratings of certain bonds in the portfolio resulting from changes to the ratings of the underlying insurers both during the period and after period end. (4) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. (5) Investment has a maturity of more than one year, but has variable rate and demand features which qualify it as a short-term investment. The rate disclosed is that in effect at the end of the reporting period. This rate changes periodically based on market conditions or a specified market index. (6) Auction Rate Preferred Shares, at Liquidation Value as a percentage of Total Investments is 36.5%. (ETM) Escrowed to maturity. (IF) Inverse floating rate investment. (UB) Underlying bond of an inverse floating rate trust reflected as a financing transaction pursuant to the provisions of SFAS No. 140. See accompanying notes to financial statements. - ----- 76 - ----- | Statement of | ASSETS & LIABILITIES October 31, 2008
Insured Insured Insured Insured Premier Insured Dividend Tax-Free Quality Opportunity Insured Income Premium Income 2 Advantage Advantage (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) - ------------------------------------------------------------------------------------------------------------------------------------ Assets Investments, at value (cost $856,018,243, $1,793,384,594, $430,209,805, $765,088,187, $650,553,475 and $390,085,763, respectively) $ 775,625,257 $ 1,683,555,059 $ 407,657,280 $ 707,774,483 $ 614,243,369 $ 363,429,129 Cash 7,632,112 24,694,557 320,850 274,739 3,949,053 2,896,158 Unrealized appreciation on forward swaps -- -- -- -- 1,124,391 -- Receivables: Dividends and Interest 11,712,921 27,871,203 6,900,471 13,024,538 9,798,593 6,445,289 Investments sold 315,000 560,000 301,383 50,032 371,509 -- Deferred offering costs -- -- -- 2,515,094 -- -- Other assets 97,081 185,630 54,183 75,865 52,965 27,274 - ------------------------------------------------------------------------------------------------------------------------------------ Total assets 795,382,371 1,736,866,449 415,234,167 723,714,751 629,539,880 372,797,850 - ------------------------------------------------------------------------------------------------------------------------------------ Liabilities Unrealized depreciation on Recourse Trusts -- 23,850 -- -- -- -- Variable Rate Demand Preferred shares, at liquidation value -- -- -- 219,000,000 -- -- Floating rate obligations 46,750,000 97,378,333 15,345,000 76,590,000 17,343,334 9,600,000 Payables: Investments purchased -- 5,214,363 -- -- -- -- Common share dividends 1,987,121 4,136,839 942,947 1,711,395 1,730,177 1,058,838 Auction Rate Preferred share dividends 80,800 141,765 39,356 -- 54,516 27,732 Offering costs -- -- -- 252,314 -- -- Accrued expenses: Management fees 394,947 842,533 213,044 339,643 220,990 120,660 Other 281,493 560,797 154,954 264,730 180,668 115,208 - ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 49,494,361 108,298,480 16,695,301 298,158,082 19,529,685 10,922,438 - ------------------------------------------------------------------------------------------------------------------------------------ Auction Rate Preferred shares, at liquidation value 298,425,000 623,350,000 154,950,000 -- 226,975,000 132,800,000 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares $ 447,463,010 $ 1,005,217,969 $ 243,588,866 $ 425,556,669 $ 383,035,195 $ 229,075,412 ==================================================================================================================================== Common shares outstanding 38,295,278 81,138,036 19,419,608 37,353,512 29,813,300 18,525,697 ==================================================================================================================================== Net asset value per Common share outstanding (net assets applicable to Common shares, divided by Common shares outstanding) $ 11.68 $ 12.39 $ 12.54 $ 11.39 $ 12.85 $ 12.37 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares consist of: - ------------------------------------------------------------------------------------------------------------------------------------ Common shares, $.01 par value per share $ 382,953 $ 811,380 $ 194,196 $ 373,535 $ 298,133 $ 185,257 Paid-in surplus 534,535,198 1,128,874,275 269,465,714 491,625,646 423,568,038 261,630,932 Undistributed (Over-distribution of) net investment income (1,704,040) (2,109,393) (488,406) (1,790,058) (853,988) (1,056,455) Accumulated net realized gain (loss) from investments and derivative transactions (5,358,115) (12,504,908) (3,030,113) (7,338,750) (4,791,273) (5,027,688) Net unrealized appreciation (depreciation) of investments and derivative transactions (80,392,986) (109,853,385) (22,552,525) (57,313,704) (35,185,715) (26,656,634) - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares $ 447,463,010 $ 1,005,217,969 $ 243,588,866 $ 425,556,669 $ 383,035,195 $ 229,075,412 ==================================================================================================================================== Authorized shares: Common 200,000,000 200,000,000 200,000,000 Unlimited Unlimited Unlimited Auction Rate Preferred and Variable Rate Demand Preferred 1,000,000 1,000,000 1,000,000 Unlimited Unlimited Unlimited ====================================================================================================================================
See accompanying notes to financial statements. ----- 77 ----- | Statement of | OPERATIONS Year Ended October 31, 2008
Insured Insured Insured Insured Premier Insured Dividend Tax-Free Quality Opportunity Insured Income Premium Income 2 Advantage Advantage (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) - ------------------------------------------------------------------------------------------------------------------------------------ Investment Income $ 45,694,660 $ 95,322,713 $ 22,538,840 $ 40,377,143 $ 33,934,835 $ 19,814,712 - ------------------------------------------------------------------------------------------------------------------------------------ Expenses Management fees 5,210,119 10,976,183 2,720,299 4,609,202 4,109,277 2,527,989 Auction fees 786,770 1,663,913 399,923 615,859 579,990 355,258 Dividend disbursing agent fees 50,000 69,996 30,000 53,542 30,000 20,009 Shareholders' servicing agent fees and expenses 67,996 110,001 27,362 39,156 6,726 3,839 Interest expense 1,399,649 2,785,237 488,067 4,309,811 646,976 166,661 Custodian's fees and expenses 138,371 266,698 85,173 139,665 123,872 66,157 Directors'/Trustees' fees and expenses 17,834 37,489 8,965 15,719 13,945 8,134 Professional fees 59,041 113,791 28,529 31,212 45,361 32,284 Shareholders' reports - printing and mailing expenses 106,632 236,259 53,774 93,706 81,115 51,802 Stock exchange listing fees 13,248 28,052 9,293 12,914 3,939 2,447 Investor relations expense 108,405 231,260 56,168 89,805 81,368 50,680 Portfolio insurance expense -- 9,119 -- -- -- -- Other expenses 46,231 67,900 28,253 428,298 25,915 22,103 - ------------------------------------------------------------------------------------------------------------------------------------ Total expenses before custodian fee credit and expense reimbursement 8,004,296 16,595,898 3,935,806 10,438,889 5,748,484 3,307,363 Custodian fee credit (101,791) (213,160) (74,118) (107,031) (101,140) (33,990) Expense reimbursement -- -- -- -- (1,475,511) (1,000,082) - ------------------------------------------------------------------------------------------------------------------------------------ Net expenses 7,902,505 16,382,738 3,861,688 10,331,858 4,171,833 2,273,291 - ------------------------------------------------------------------------------------------------------------------------------------ Net investment income 37,792,155 78,939,975 18,677,152 30,045,285 29,763,002 17,541,421 - ------------------------------------------------------------------------------------------------------------------------------------ Realized and Unrealized Gain (Loss) Net realized gain (loss) from: Investments (4,746,677) (12,623,776) (2,431,194) (7,350,763) (1,658,018) 1,751,437 Forward swaps -- -- -- 5,200 -- -- Change in net unrealized appreciation (depreciation) of: Investments (115,993,313) (199,798,296) (43,684,607) (79,485,056) (66,810,547) (44,503,698) Forward swaps -- -- -- (165,919) 1,124,391 -- - ------------------------------------------------------------------------------------------------------------------------------------ Net realized and unrealized gain (loss) (120,739,990) (212,422,072) (46,115,801) (86,996,538) (67,344,174) (42,752,261) - ------------------------------------------------------------------------------------------------------------------------------------ Distributions to Auction Rate Preferred Shareholders From net investment income (11,668,364) (24,746,755) (5,924,805) (7,428,415) (8,645,473) (5,024,148) From accumulated net realized gains -- (61,352) -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Auction Rate Preferred shareholders (11,668,364) (24,808,107) (5,924,805) (7,428,415) (8,645,473) (5,024,148) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from operations $ (94,616,199) $ (158,290,204) $ (33,363,454) $ (64,379,668) $ (46,226,645) $ (30,234,988) ====================================================================================================================================
See accompanying notes to financial statements. - ----- 78 - ----- | Statement of | CHANGES in NET ASSETS
Insured Quality (NQI) Insured Opportunity (NIO) ---------------------------------- ----------------------------------- Year Year Year Year Ended Ended Ended Ended 10/31/08 10/31/07 10/31/08 10/31/07 - ------------------------------------------------------------------------------------------------------------------------------------ Operations Net investment income $ 37,792,155 $ 37,781,613 $ 78,939,975 $ 79,137,275 Net realized gain (loss) from: Investments (4,746,677) 402,678 (12,623,776) 213,800 Forward swaps -- -- -- -- Change in net unrealized appreciation (depreciation) of: Investments (115,993,313) (19,111,081) (199,798,296) (36,626,210) Forward swaps -- -- -- -- Distributions to Auction Rate Preferred shareholders: From net investment income (11,668,364) (11,240,731) (24,746,755) (23,971,401) From accumulated net realized gains -- -- (61,352) (491,009) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from operations (94,616,199) 7,832,479 (158,290,204) 18,262,455 - ------------------------------------------------------------------------------------------------------------------------------------ Distributions to Common Shareholders From net investment income (27,878,967) (27,802,379) (56,634,349) (59,595,899) From accumulated net realized gains -- -- (154,162) (1,541,606) - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (27,878,967) (27,802,379) (56,788,511) (61,137,505) - ------------------------------------------------------------------------------------------------------------------------------------ Capital Share Transactions Net proceeds from Common shares issued to shareholders due to reinvestment of distributions -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from capital share transactions -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares (122,495,166) (19,969,900) (215,078,715) (42,875,050) Net assets applicable to Common shares at the beginning of year 569,958,176 589,928,076 1,220,296,684 1,263,171,734 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of year $ 447,463,010 $ 569,958,176 $ 1,005,217,969 $ 1,220,296,684 ==================================================================================================================================== Undistributed (Over-distribution of) net investment income at the end of year $ (1,704,040) $ 171,284 $ (2,109,393) $ 454,850 ====================================================================================================================================
See accompanying notes to financial statements. ----- 79 ----- | Statement of | CHANGES in NET ASSETS (continued)
Premier Insured Insured Premium Income (NIF) Income 2 (NPX) ---------------------------------- ----------------------------------- Year Year Year Year Ended Ended Ended Ended 10/31/08 10/31/07 10/31/08 10/31/07 - ------------------------------------------------------------------------------------------------------------------------------------ Operations Net investment income $ 18,677,152 $ 18,776,763 $ 30,045,285 $ 32,219,139 Net realized gain (loss) from: Investments (2,431,194) (437,572) (7,350,763) 670,365 Forward swaps -- -- 5,200 -- Change in net unrealized appreciation (depreciation) of: Investments (43,684,607) (8,470,828) (79,485,056) (15,396,052) Forward swaps -- -- (165,919) 165,919 Distributions to Auction Rate Preferred shareholders: From net investment income (5,924,805) (5,720,025) (7,428,415) (9,604,218) From accumulated net realized gains -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from operations (33,363,454) 4,148,338 (64,379,668) 8,055,153 - ------------------------------------------------------------------------------------------------------------------------------------ Distributions to Common Shareholders From net investment income (12,447,970) (13,749,084) (23,084,472) (24,018,307) From accumulated net realized gains -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (12,447,970) (13,749,084) (23,084,472) (24,018,307) - ------------------------------------------------------------------------------------------------------------------------------------ Capital Share Transactions Net proceeds from Common shares issued to shareholders due to reinvestment of distributions -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from capital share transactions -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares (45,811,424) (9,600,746) (87,464,140) (15,963,154) Net assets applicable to Common shares at the beginning of year 289,400,290 299,001,036 513,020,809 528,983,963 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of year $ 243,588,866 $ 289,400,290 $ 425,556,669 $ 513,020,809 ==================================================================================================================================== Undistributed (Over-distribution of) net investment income at the end of year $ (488,406) $ (789,440) $ (1,790,058) $ (1,335,549) ====================================================================================================================================
See accompanying notes to financial statements. - ----- 80 - -----
Insured Dividend Insured Tax-Free Advantage (NVG) Advantage (NEA) ---------------------------------- ----------------------------------- Year Year Year Year Ended Ended Ended Ended 10/31/08 10/31/07 10/31/08 10/31/07 - ------------------------------------------------------------------------------------------------------------------------------------ Operations Net investment income $ 29,763,002 $ 29,786,960 $ 17,541,421 $ 17,879,592 Net realized gain (loss) from: Investments (1,658,018) 1,658,186 1,751,437 683,061 Forward swaps -- -- -- -- Change in net unrealized appreciation (depreciation) of: Investments (66,810,547) (12,888,832) (44,503,698) (4,723,249) Forward swaps 1,124,391 -- -- -- Distributions to Auction Rate Preferred shareholders: From net investment income (8,645,473) (8,411,541) (5,024,148) (4,960,330) From accumulated net realized gains -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from operations (46,226,645) 10,144,773 (30,234,988) 8,879,074 - ------------------------------------------------------------------------------------------------------------------------------------ Distributions to Common Shareholders From net investment income (20,720,244) (22,283,514) (13,115,689) (13,111,078) From accumulated net realized gains -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (20,720,244) (22,283,514) (13,115,689) (13,111,078) - ------------------------------------------------------------------------------------------------------------------------------------ Capital Share Transactions Net proceeds from Common shares issued to shareholders due to reinvestment of distributions -- 84,005 34,771 117,345 - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from capital share transactions -- 84,005 34,771 117,345 - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares (66,946,889) (12,054,736) (43,315,906) (4,114,659) Net assets applicable to Common shares at the beginning of year 449,982,084 462,036,820 272,391,318 276,505,977 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of year $ 383,035,195 $ 449,982,084 $ 229,075,412 $ 272,391,318 ==================================================================================================================================== Undistributed (Over-distribution of) net investment income at the end of year $ (853,988) $ (1,234,207) $ (1,056,455) $ (507,596) ====================================================================================================================================
See accompanying notes to financial statements. ----- 81 ----- | Statement of | CASH FLOWS Year Ended October 31, 2008
Insured Premium Income 2 (NPX) - ------------------------------------------------------------------------------------------------------------------------------------ Cash Flows from Operating Activities: Net Increase (Decrease) in Net Assets Applicable to Common shares from Operations $ (64,379,668) Adjustments to reconcile the net increase (decrease) in net assets applicable to Common shares from operations to net cash provided by (used in) operating activities: Purchases of investments (66,664,771) Proceeds from sales and maturities of investments 147,494,953 Proceeds from (Purchases of) short-term investments, net (11,875,000) Proceeds from terminated forward swaps 5,200 Amortization (Accretion) of premiums and discounts, net 340,855 (Increase) Decrease in receivable for dividends and interest 824,822 (Increase) Decrease in receivable for investments sold 95 (Increase) Decrease in other assets 2,930 Increase (Decrease) in Auction Rate Preferred share dividends payable (92,718) Increase (Decrease) in accrued management fees (65,949) Increase (Decrease) in accrued other liabilities (54,626) Net realized (gain) loss from investments 7,350,763 Net realized (gain) loss from forward swaps (5,200) Change in net unrealized (appreciation) depreciation of investments 79,485,056 Change in net unrealized (appreciation) depreciation of forward swaps 165,919 - ------------------------------------------------------------------------------------------------------------------------------------ Net cash provided by (used in) operating activities 92,532,661 - ------------------------------------------------------------------------------------------------------------------------------------ Cash Flows from Financing Activities: Increase (Decrease) in floating rate obligations (17,310,000) Cash distributions paid to Common shareholders (23,073,630) Increase (Decrease) in Variable Rate Demand Preferred shares 219,000,000 (Increase) Decrease in deferred offering costs (2,515,094) Increase (Decrease) in offering costs payable 252,314 Increase (Decrease) in Auction Rate Preferred shares (268,900,000) - ------------------------------------------------------------------------------------------------------------------------------------ Net cash provided by (used in) financing activities (92,546,410) - ------------------------------------------------------------------------------------------------------------------------------------ Net Increase (Decrease) in Cash (13,749) Cash at the beginning of year 288,488 - ------------------------------------------------------------------------------------------------------------------------------------ Cash at the End of Year $ 274,739 ====================================================================================================================================
Supplemental Disclosure of Cash Flow Information Cash paid by insured Premium Income 2 (NPX) for interest (excluding amortization of offering costs) was $4,289,894. See accompanying notes to financial statements. - ----- 82 - ----- | Notes to | FINANCIAL STATEMENTS 1. General Information and Significant Accounting Policies The funds covered in this report and their corresponding Common share stock exchange symbols are Nuveen Insured Quality Municipal Fund, Inc. (NQI), Nuveen Insured Municipal Opportunity Fund, Inc. (NIO), Nuveen Premier Insured Municipal Income Fund, Inc. (NIF), Nuveen Insured Premium Income Municipal Fund 2 (NPX), Nuveen Insured Dividend Advantage Municipal Fund (NVG) and Nuveen Insured Tax-Free Advantage Municipal Fund (NEA) (collectively, the "Funds"). Common shares of Insured Quality (NQI), Insured Opportunity (NIO), Premier Insured Income (NIF) and Insured Premium Income 2 (NPX) are traded on the New York Stock Exchange while Common shares of Insured Dividend Advantage (NVG) and Insured Tax-Free Advantage (NEA) are traded on the American Stock Exchange. The Funds are registered under the Investment Company Act of 1940, as amended, as closed-end, diversified management investment companies. Each Fund seeks to provide current income exempt from regular federal income tax, and in the case of Insured Tax-Free Advantage (NEA) the alternative minimum tax applicable to individuals, by investing primarily in a diversified portfolio of municipal obligations issued by state and local government authorities or certain U.S. territories. The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements in accordance with U.S. generally accepted accounting principles. Investment Valuation The prices of municipal bonds in each Fund's investment portfolio are provided by a pricing service approved by the Fund's Board of Directors/Trustees. When market price quotes are not readily available (which is usually the case for municipal securities), the pricing service may establish fair value based on yields or prices of municipal bonds of comparable quality, type of issue, coupon, maturity and rating, indications of value from securities dealers, evaluations of anticipated cash flows or collateral and general market conditions. Prices of forward swap contracts are also provided by an independent pricing service approved by each Fund's Board of Directors/Trustees. If the pricing service is unable to supply a price for an investment or derivative instrument, each Fund may use market quotes provided by major broker/dealers in such investments. If it is determined that the market price for an investment or derivative instrument is unavailable or inappropriate, the Board of Directors/Trustees of the Funds, or its designee, may establish fair value in accordance with procedures established in good faith by the Board of Directors/Trustees. Temporary investments in securities that have variable rate and demand features qualifying them as short-term investments are valued at amortized cost, which approximates 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/delayed delivery basis may have extended settlement periods. Any investments so purchased are subject to market fluctuation during this period. The Funds have instructed the custodian to segregate assets with a current value at least equal to the amount of the when-issued/delayed delivery purchase commitments. At October 31, 2008, Insured Opportunity (NIO) had outstanding when issued/delayed delivery purchase commitments of $5,214,363. 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. Dividend income, if any, is recorded on the ex-dividend date. ----- 83 ----- | Notes to | FINANCIAL STATEMENTS (continued) Income Taxes Each Fund is a separate taxpayer for federal income tax purposes. Each Fund intends to distribute substantially all of its 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 and applicable state income taxes, if any, and in the case of Insured Tax-Free Advantage (NEA) the alternative minimum tax applicable to individuals, to retain such tax-exempt status when distributed to shareholders of the Funds. Net realized capital gains and ordinary income distributions paid by the Funds are subject to federal taxation. Effective April 30, 2008, the Funds adopted Financial Accounting Standards Board (FASB) Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the affirmative evaluation of tax positions taken or expected to be taken in the course of preparing the Funds' tax returns to determine whether it is "more-likely-than-not" (i.e., a greater than 50-percent likelihood) of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold may result in a tax expense in the current year. Implementation of FIN 48 required management of the Funds to analyze all open tax years, as defined by the statute of limitations, for all major jurisdictions, which includes federal and certain states. Open tax years are those that are open for examination by taxing authorities (i.e., generally the last four tax year ends and the interim tax period since then). The Funds have no examinations in progress. For all open tax years and all major taxing jurisdictions through the end of the reporting period, management of the Funds has reviewed all tax positions taken or expected to be taken in the preparation of the Funds' tax returns and concluded the adoption of FIN 48 resulted in no impact to the Funds' net assets or results of operations as of and during the fiscal year ended October 31, 2008. The Funds are also not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. 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 at least 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. - ----- 84 - ----- Auction Rate Preferred Shares The Funds have issued and outstanding Auction Rate Preferred shares, $25,000 stated value per share, as a means of effecting financial leverage. Each Fund's Auction Rate 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. As of October 31, 2008, the number of Auction Rate Preferred shares outstanding, by Series and in total, for each Fund is as follows: Premier Insured Insured Insured Insured Insured Dividend Tax-Free Quality Opportunity Income Advantage Advantage (NQI) (NIO) (NIF) (NVG) (NEA) - -------------------------------------------------------------------------------- Number of shares: Series M 2,440 3,666 -- 3,079 -- Series T 2,440 3,666 -- 3,000 2,656 Series W 2,440 3,667 808 -- 2,656 Series W2 -- 2,934 -- -- -- Series TH 2,177 3,667 2,695 3,000 -- Series TH2 -- 3,668 -- -- -- Series F 2,440 3,666 2,695 -- -- - -------------------------------------------------------------------------------- Total 11,937 24,934 6,198 9,079 5,312 ================================================================================ Beginning in February 2008, more shares for sale were submitted in the regularly scheduled auctions for the Auction Rate Preferred shares issued by the Funds than there were offers to buy. This meant that these auctions "failed to clear," and that many Auction Rate Preferred shareholders who wanted to sell their shares in these auctions were unable to do so. Auction Rate Preferred shareholders unable to sell their shares received distributions at the "maximum rate" applicable to failed auctions as calculated in accordance with the pre-established terms of the Auction Rate Preferred shares. These developments generally do not affect the management or investment policies of the Funds. However, one implication of these auction failures for Common shareholders is that the Funds' cost of leverage will likely be higher, at least temporarily, than it otherwise would have been had the auctions continued to be successful. As a result, the Funds' future Common share earnings may be lower than they otherwise would have been. On June 11, 2008, Nuveen Investments, Inc. ("Nuveen") announced the Fund Board's approval of plans to use tender option bonds (TOBs), also known as "floaters" or floating rate obligations, to refinance a portion of the municipal funds' outstanding Auction Rate Preferred shares, whose auctions have been failing for several months. The plan included an initial phase of approximately $1 billion in forty-one funds. During the fiscal year ended October 31, 2008, Insured Quality (NQI), Insured Opportunity (NIO), Premier Insured Income (NIF), Insured Dividend Advantage (NVG) and Insured Tax-Free Advantage (NEA) redeemed $19,575,000, $56,650,000, $6,050,000, $6,025,000 and $11,200,000 of their outstanding Auction Rate Preferred shares, respectively, at liquidation value, using the proceeds from the issuance of TOBs. Variable Rate Demand Preferred Shares On August 7, 2008, Insured Premium Income 2 (NPX) issued 2,190 Series 1 Variable Rate Demand Preferred (VRDP) shares, $100,000 liquidation value per share, through a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933. Proceeds of this offering along with the proceeds from the Fund's creation of TOBs, discussed above, were used to redeem all of the Fund's outstanding Auction Rate Preferred shares totaling $268,900,000. The VRDP shares have a maturity date of August 1, 2038. Dividends on the VRDP shares are set through a weekly remarketing process at a rate established by a remarketing agent, which is intended to result in the value of the VRDP shares approximately equaling their liquidation value. VRDP shares include a liquidity feature that allows VRDP shareholders who are tendering shares for remarketing to have their shares purchased by a liquidity provider, Deutsche Bank AG (acting through its New York branch), in the event that the remarketing agent is not able to sell the tendered VRDP shares to other qualified institutional buyers. Subject to certain conditions, VRDP shares may be redeemed, in whole or in part, at any time at the option of the Fund. The Fund may also redeem certain of the VRDP shares if the Fund fails to maintain certain asset coverage requirements and such failures are not cured by the applicable cure date. The redemption price per share is equal to the sum of the liquidation value per share plus any accumulated but unpaid dividends. ----- 85 ----- | Notes to | FINANCIAL STATEMENTS (continued) The terms of the VRDP shares provide that, if any VRDP shares tendered to the liquidity provider cannot be successfully remarketed, the dividend rate for all VRDP shares will be set at the Maximum Rate determined under a formula set forth in the Fund's organizational documents. The Maximum Rate is generally equal to a stated percentage spread in excess of the seven-day London Inter-Bank Offered Rate (LIBOR). If remarketings for these shares continue to be unsuccessful, the Maximum Rate is designed to escalate according to a specified schedule in order to enhance the remarketing agent's ability to successfully remarket the VRDP shares. This would increase the Fund's cost of leverage over time and reduce the Fund's Common share net earnings. There are various potential factors that could result in unsuccessful remarketings. These include periods of market stress, an actual or potential downgrade of the liquidity provider's credit ratings as well as changes in market perceptions regarding the financial strength of the Fund's liquidity provider. Insured Premium Income 2 (NPX) had $219,000,000 VRDP shares outstanding for the period August 7, 2008 through October 31, 2008 with an average annualized dividend (interest) rate of 3.56%. For financial reporting purposes only, VRDP shares, at their liquidation value, are recorded as a liability on the Statement of Assets and Liabilities and the dividends paid on the VRDP shares are included as a component of "Interest expense" on the Statement of Operations. Insurance Under normal circumstances, each Fund will invest at least 80% of their net assets (including net assets attributable to Auction Rate Preferred shares or VRDP shares) in municipal securities that are covered by insurance guaranteeing the timely payment of principal and interest. For purposes of this 80% test, insurers must have a claims paying ability rated at least "A" at the time of purchase by at least one independent rating agency. In addition, each Fund will invest at least 80% of its net assets (including net assets attributable to Auction Rate Preferred shares or VRDP shares) in municipal securities that are rated at least "AA" at the time of purchase (based on the higher of the rating of the insurer, if any, or the underlying security) by at least one independent rating agency, or are unrated but judged to be of similar credit quality by Nuveen Asset Management (the "Adviser"), a wholly-owned subsidiary of Nuveen, or municipal bonds backed by an escrow or trust account containing sufficient U.S. government or U.S. government agency securities or U.S. Treasury-issued State and Local Government Series securities to ensure timely payment of principal and interest. Each Fund may also invest up to 20% of its net assets (including net assets attributable to Auction Rate Preferred shares or VRDP shares) in municipal securities rated below "AA" (based on the higher rating of the insurer, if any, or the underlying bond) or are unrated but judged to be of comparable quality by the Adviser. Each insured municipal security is covered by Original Issue Insurance, Secondary Market Insurance or Portfolio Insurance. Such insurance does not guarantee the market value of the municipal securities or the value of the Funds' Common shares. Original Issue Insurance and Secondary Market Insurance remain in effect as long as the municipal securities covered thereby remain outstanding and the insurer remains in business, regardless of whether the Funds ultimately dispose of such municipal securities. Consequently, the market value of the municipal securities covered by Original Issue Insurance or Secondary Market Insurance may reflect value attributable to the insurance. Portfolio Insurance, in contrast, is effective only while the municipal securities are held by the Funds. Accordingly, neither the prices used in determining the market value of the underlying municipal securities nor the Common share net asset value of the Funds include value, if any, attributable to the Portfolio Insurance. Each policy of the Portfolio Insurance does, however, give the Funds the right to obtain permanent insurance with respect to the municipal security covered by the Portfolio Insurance policy at the time of its sale. - ----- 86 - ----- Inverse Floating Rate Securities Each Fund is authorized to invest in inverse floating rate securities. An inverse floating rate security is created by depositing a municipal bond, typically with a fixed interest rate, into a special purpose trust created by a broker-dealer. In turn, this trust (a) issues floating rate certificates, in face amounts equal to some fraction of the deposited bond's par amount or market value, that typically pay short-term tax-exempt interest rates to third parties, and (b) issues to a long-term investor (such as one of the Funds) an inverse floating rate certificate (sometimes referred to as an "inverse floater") that represents all remaining or residual interest in the trust. The income received by the inverse floater holder varies inversely with the short-term rate paid to the floating rate certificates' holders, and in most circumstances the inverse floater holder bears substantially all of the underlying bond's downside investment risk and also benefits disproportionately from any potential appreciation of the underlying bond's value. The price of an inverse floating rate security will be more volatile than that of the underlying bond because the interest rate is dependent on not only the fixed coupon rate of the underlying bond but also on the short-term interest paid on the floating rate certificates, and because the inverse floating rate security essentially bears the risk of loss of the greater face value of the underlying bond. A Fund may purchase an inverse floating rate security in a secondary market transaction without first owning the underlying bond (referred to as an "externally-deposited inverse floater"), or instead by first selling a fixed-rate bond to a broker-dealer for deposit into the special purpose trust and receiving in turn the residual interest in the trust (referred to as a "self-deposited inverse floater"). The inverse floater held by a Fund gives the Fund the right (a) to cause the holders of the floating rate certificates to tender their notes at par, and (b) to have the broker transfer the fixed-rate bond held by the trust to the Fund, thereby collapsing the trust. An investment in an externally-deposited inverse floater is identified in the Portfolio of Investments as an "Inverse floating rate investment". An investment in a self-deposited inverse floater is accounted for as a financing transaction in accordance with Statement of Financial Accounting Standards No. 140 (SFAS No. 140) "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities". In such instances, a fixed-rate bond deposited into a special purpose trust is identified in the Portfolio of Investments as an "Underlying bond of an inverse floating rate trust", with the Fund accounting for the short-term floating rate certificates issued by the trust as "Floating rate obligations" on the Statement of Assets and Liabilities. In addition, the Fund reflects in Investment Income the entire earnings of the underlying bond and the related interest paid to the holders of the short-term floating rate certificates is included as a component of "Interest expense" on the Statement of Operations. Each Fund may also enter into shortfall and forbearance agreements (sometimes referred to as a "recourse trust" or "credit recovery swap") (such agreements referred to herein as "Recourse Trusts") with a broker-dealer by which a Fund agrees to reimburse the broker-dealer, in certain circumstances, for the difference between the liquidation value of the fixed-rate bond held by the trust and the liquidation value of the floating rate certificates issued by the trust plus any shortfalls in interest cash flows. Under these agreements, a Fund's potential exposure to losses related to or on inverse floaters may increase beyond the value of a Fund's inverse floater investments as a Fund may potentially be liable to fulfill all amounts owed to holders of the floating rate certificates. At period end, any such shortfall is included as "Unrealized depreciation on Recourse Trusts" on the Statement of Assets and Liabilities. During the fiscal year ended October 31, 2008, each Fund invested in externally deposited inverse floaters and/or sell deposited inverse floaters. At October 31, 2008, each Fund's maximum exposure to externally-deposited Recourse Trusts, if any, is as follows:
Premier Insured Insured Insured Insured Insured Insured Premium Dividend Tax-Free Quality Opportunity Income Income 2 Advantage Advantage (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) - ------------------------------------------------------------------------------------------------------------------------ Maximum exposure $ 27,461,650 $ 27,560,000 $ 3,070,000 $ 20,675,000 $ 13,995,000 $ 6,000,000 ========================================================================================================================
----- 87 ----- | Notes to | FINANCIAL STATEMENTS (continued) The average floating rate obligations outstanding and average annual interest rate and fees related to self-deposited inverse floaters during the fiscal year ended October 31, 2008, were as follows:
Premier Insured Insured Insured Insured Insured Insured Premium Dividend Tax-Free Quality Opportunity Income Income 2 Advantage Advantage (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) - ------------------------------------------------------------------------------------------------------------------------------- Average floating rate obligations $ 48,736,268 $ 97,301,667 $ 17,333,169 $ 85,695,182 $ 23,142,186 $ 5,441,257 Average annual interest rate and fees 2.87% 2.86% 2.82% 2.87% 2.80% 3.06% ===============================================================================================================================
Forward Swap Transactions Each Fund is authorized to invest in forward interest rate swap transactions. Each Fund's use of forward interest rate swap transactions is intended to help the Fund manage its overall interest rate sensitivity, either shorter or longer, generally to more closely align the Fund's interest rate sensitivity with that of the broader municipal market. Forward interest rate swap transactions involve each Fund's agreement with a counterparty to pay, in the future, a fixed or variable rate payment in exchange for the counterparty paying the Fund a variable or fixed rate payment, the accruals for which would begin at a specified date in the future (the "effective date"). The amount of the payment obligation is based on the notional amount of the forward swap contract and the termination date of the swap (which is akin to a bond's maturity). The value of the Fund's swap commitment would increase or decrease based primarily on the extent to which long-term interest rates for bonds having a maturity of the swap's termination date increases or decreases. The Funds may terminate a swap contract prior to the effective date, at which point a realized gain or loss is recognized. When a forward swap is terminated, it ordinarily does not involve the delivery of securities or other underlying assets or principal, but rather is settled in cash on a net basis. Each Fund intends, but is not obligated, to terminate its forward swaps before the effective date. Accordingly, the risk of loss with respect to the swap counterparty on such transactions is limited to the credit risk associated with a counterparty failing to honor its commitment to pay any realized gain to the Fund upon termination. To reduce such credit risk, all counterparties are required to pledge collateral daily (based on the daily valuation of each swap) on behalf of each Fund with a value approximately equal to the amount of any unrealized gain above a pre-determined threshold. Reciprocally, when any of the Funds have an unrealized loss on a swap contract, the Funds have instructed the custodian to pledge assets of the Funds as collateral with a value approximately equal to the amount of the unrealized loss above a pre-determined threshold. Collateral pledges are monitored and subsequently adjusted if and when the swap valuations fluctuate, either up or down, by at least the predetermined threshold amount. Insured Premium Income 2 (NPX) and Insured Dividend Advantage (NVG) were the only Funds to invest in forward interest rate swap transactions during the fiscal year ended October 31, 2008. Zero Coupon Securities Each Fund is authorized to invest in zero coupon securities. A zero coupon security does not pay a regular interest coupon to its holders during the life of the security. Tax-exempt income to the holder of the security comes from accretion of the difference between the original purchase price of the security at issuance and the par value of the security at maturity and is effectively paid at maturity. Such securities are included in the Portfolios of Investments with a 0.000% coupon rate in their description. The market prices of zero coupon securities generally are more volatile than the market prices of securities that pay interest periodically. Offering Costs Costs incurred by Insured Premium Income 2 (NPX) in connection with its offering of the VRDP shares ($2,535,000) were recorded as a deferred charge which will be amortized over the 30-year life of the shares and is included as a component of "Interest expense" on the Statement of Operations. - ----- 88 - ----- Custodian Fee Credit Each Fund has an arrangement with the custodian bank whereby certain custodian fees and expenses are reduced by net credits earned on each Fund's cash on deposit with the bank. Such deposit arrangements are an alternative to overnight investments. Credits for cash balances may be offset by charges for any days on which a Fund overdraws its account at the custodian bank. Indemnifications Under the Funds' organizational documents, their Officers and Directors/Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In addition, in the normal course of business, the Funds enter into contracts that provide general indemnifications to other parties. The Funds' maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, the Funds have not had prior claims or losses pursuant to these contracts and expect the risk of loss to be remote. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets applicable to Common shares from operations during the reporting period. Actual results may differ from those estimates. 2. Fund Shares Common Shares On July 30, 2008, the Funds' Board of Directors/Trustees approved an open-market share repurchase program under which each Fund may repurchase an aggregate of up to approximately 10% of its outstanding Common shares. The Funds did not repurchase any of their Common shares during the fiscal year ended October 31, 2008. Transactions in Common shares were as follows:
Insured Insured Premier Insured Quality (NQI) Opportunity (NIO) Income (NIF) ----------------------- ----------------------- ------------------------ Year Year Year Year Year Year Ended Ended Ended Ended Ended Ended 10/31/08 10/31/07 10/31/08 10/31/07 10/31/08 10/31/07 - ---------------------------------------------------------------------------------------------------------------------- Common shares issued to shareholders due to reinvestment of distributions -- -- -- -- -- -- ======================================================================================================================
Insured Insured Insured Premium Income 2 (NPX) Dividend Advantage(NVG) Tax-Free Advantage (NEA) ----------------------- ----------------------- ------------------------ Year Year Year Year Year Year Ended Ended Ended Ended Ended Ended 10/31/08 10/31/07 10/31/08 10/31/07 10/31/08 10/31/07 - ---------------------------------------------------------------------------------------------------------------------- Common shares issued to shareholders due to reinvestment of distributions -- -- -- 5,478 2,432 7,983 ======================================================================================================================
Preferred Shares Transactions in Auction Rate Preferred shares were as follows:
Insured Quality (NQI) ----------------------------------------- Year Ended Year Ended 10/31/08 10/31/07 - ---------------------------------------------------------------------------------------------------------------------- Shares Amount Shares Amount - ---------------------------------------------------------------------------------------------------------------------- Auction Rate Preferred shares redeemed: Series M 160 $ 4,000,000 -- $ -- Series T 160 4,000,000 -- -- Series W 160 4,000,000 -- -- Series TH 143 3,575,000 -- -- Series F 160 4,000,000 -- -- - ---------------------------------------------------------------------------------------------------------------------- Total 783 $ 19,575,000 -- $ -- ======================================================================================================================
----- 89 ----- | Notes to | FINANCIAL STATEMENTS (continued)
Insured Opportunity (NIO) --------------------------------------- Year Ended Year Ended 10/31/08 10/31/07 - -------------------------------------------------------------------------------------------- Shares Amount Shares Amount - -------------------------------------------------------------------------------------------- Auction Rate Preferred shares redeemed: Series M 334 $ 8,350,000 -- $ -- Series T 334 8,350,000 -- -- Series W 333 8,325,000 -- -- Series W2 266 6,650,000 -- -- Series TH 333 8,325,000 -- -- Series TH2 332 8,300,000 -- -- Series F 334 8,350,000 -- -- - -------------------------------------------------------------------------------------------- Total 2,266 $ 56,650,000 -- $ -- ============================================================================================
Premier Insured Income (NIF) --------------------------------------- Year Ended Year Ended 10/31/08 10/31/07 - -------------------------------------------------------------------------------------------- Shares Amount Shares Amount - -------------------------------------------------------------------------------------------- Auction Rate Preferred shares redeemed: Series W 32 $ 800,000 -- $ -- Series TH 105 2,625,000 -- -- Series F 105 2,625,000 -- -- - -------------------------------------------------------------------------------------------- Total 242 $ 6,050,000 -- $ -- ============================================================================================
Insured Premium Income 2 (NPX) --------------------------------------- Year Ended Year Ended 10/31/08 10/31/07 - -------------------------------------------------------------------------------------------- Shares Amount Shares Amount - -------------------------------------------------------------------------------------------- Auction Rate Preferred shares redeemed: Series M 2,080 $ 52,000,000 -- $ -- Series T 2,200 55,000,000 -- -- Series W 2,080 52,000,000 -- -- Series TH 2,200 55,000,000 -- -- Series F 2,196 54,900,000 -- -- - -------------------------------------------------------------------------------------------- Total 10,756 $268,900,000 -- $ -- ============================================================================================
- ----- 90 - -----
Insured Dividend Advantage (NVG) ---------------------------------------- Year Ended Year Ended 10/31/08 10/31/07 - ---------------------------------------------------------------------------------------------------------------------- Shares Amount Shares Amount - ---------------------------------------------------------------------------------------------------------------------- Auction Rate Preferred shares redeemed: Series M 81 $ 2,025,000 -- $ -- Series T 80 2,000,000 -- -- Series TH 80 2,000,000 -- -- - ---------------------------------------------------------------------------------------------------------------------- Total 241 $ 6,025,000 -- $ -- ======================================================================================================================
Insured Tax-Free Advantage (NEA) ---------------------------------------- Year Ended Year Ended 10/31/08 10/31/07 - ---------------------------------------------------------------------------------------------------------------------- Shares Amount Shares Amount - ---------------------------------------------------------------------------------------------------------------------- Auction Rate Preferred shares redeemed: Series T 224 $ 5,600,000 -- $ -- Series W 224 5,600,000 -- -- - ---------------------------------------------------------------------------------------------------------------------- Total 448 $ 11,200,000 -- $ -- ======================================================================================================================
Transactions in Variable Rate Demand Preferred shares were as follows:
Insured Premium Income 2 (NPX) ---------------------------------------- Year Ended Year Ended 10/31/08 10/31/07 - ---------------------------------------------------------------------------------------------------------------------- Shares Amount Shares Amount - ---------------------------------------------------------------------------------------------------------------------- Variable Rate Demand Preferred shares issued: Series 1 2,190 $219,000,000 -- $ -- ======================================================================================================================
3. Investment Transactions Purchases and sales (including maturities but excluding short-term investments and derivative transactions) during the fiscal year ended October 31, 2008, were as follows:
Premier Insured Insured Insured Insured Insured Insured Premium Dividend Tax-Free Quality Opportunity Income Income 2 Advantage Advantage (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) - ---------------------------------------------------------------------------------------------------------------------- Purchases $ 62,048,094 $173,907,420 $26,027,390 $ 66,664,771 $ 50,123,194 $ 33,461,104 Sales and maturities 118,008,608 257,711,388 31,211,414 147,494,953 68,646,367 45,977,127 ======================================================================================================================
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 timing differences in recognizing taxable market discount, timing differences in recognizing certain gains and losses on investment transactions and the treatment of investments in inverse floating rate transactions subject to SFAS No. 140. To the extent that differences arise that are permanent in nature, such amounts are reclassified within the capital accounts on the Statement of Assets and Liabilities presented in the annual report, based on their federal tax basis treatment; temporary differences do not require reclassification. Temporary and permanent differences do not impact the net asset values of the Funds. At October 31, 2008, the cost of investments was as follows:
Premier Insured Insured Insured Insured Insured Insured Premium Dividend Tax-Free Quality Opportunity Income Income 2 Advantage Advantage (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) - ---------------------------------------------------------------------------------------------------------------------- Cost of investments $ 809,453,159 $ 1,695,008,170 $ 414,738,710 $ 688,703,987 $ 633,004,647 $ 380,355,345 ======================================================================================================================
----- 91 ----- | Notes to | FINANCIAL STATEMENTS (continued) Gross unrealized appreciation and gross unrealized depreciation of investments at October 31, 2008, were as follows:
Premier Insured Insured Insured Insured Insured Insured Premium Dividend Tax-Free Quality Opportunity Income Income 2 Advantage Advantage (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) - ----------------------------------------------------------------------------------------------------------------------------------- Gross unrealized: Appreciation $ 11,540,654 $ 43,655,181 $ 8,958,804 $ 10,292,120 $ 16,341,271 $ 7,079,467 Depreciation (92,127,352) (152,484,662) (31,396,537) (67,937,531) (52,441,388) (33,609,579) - ----------------------------------------------------------------------------------------------------------------------------------- Net unrealized appreciation (depreciation) of investments $(80,586,698) $(108,829,481) $(22,437,733) $(57,645,411) $(36,100,117) $ (26,530,112) ===================================================================================================================================
The tax components of undistributed net tax-exempt income, net ordinary income and net long-term capital gains at October 31, 2008, the Funds' tax year end, were as follows:
Premier Insured Insured Insured Insured Insured Insured Premium Dividend Tax-Free Quality Opportunity Income Income 2 Advantage Advantage (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) - ----------------------------------------------------------------------------------------------------------------------------------- Undistributed net tax-exempt income * $ 200,116 $ 725,061 $ 523,065 $ -- $ 765,434 $ -- Undistributed net ordinary income ** 360 120,852 271 48,735 308 -- Undistributed net long-term capital gains -- -- -- -- -- -- ===================================================================================================================================
* Undistributed net tax-exempt income (on a tax basis) has not been reduced for the dividend declared on October 1, 2008, paid on November 3, 2008. ** 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 Funds' tax years ended October 31, 2008 and October 31, 2007, was designated for purposes of the dividends paid deduction as follows:
Premier Insured Insured Insured Insured Insured Insured Premium Dividend Tax-Free Quality Opportunity Income Income 2 Advantage Advantage 2008 (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) - ----------------------------------------------------------------------------------------------------------------------------------- Distributions from net tax-exempt income *** $ 39,541,469 $ 81,436,577 $ 18,358,222 $ 32,147,770 $ 29,301,122 $ 18,112,355 Distributions from net ordinary income ** -- 4,243 -- 290,759 -- 49,701 Distributions from net long-term capital gains **** -- 211,271 -- -- -- -- ===================================================================================================================================
Premier Insured Insured Insured Insured Insured Insured Premium Dividend Tax-Free Quality Opportunity Income Income 2 Advantage Advantage 2007 (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) - ----------------------------------------------------------------------------------------------------------------------------------- Distributions from net tax-exempt income $ 39,047,625 $ 83,864,627 $ 19,606,912 $ 33,728,035 $ 30,917,881 $ 18,104,469 Distributions from net ordinary income ** -- -- -- -- -- -- Distributions from net long-term capital gains -- 2,032,615 -- -- -- -- ===================================================================================================================================
** Net ordinary income consists of taxable market discount income and net short-term capital gains, if any. *** The Funds hereby designate these amounts paid during the fiscal year ended October 31, 2008, as Exempt Interest Dividends. **** The Funds designated as a long-term capital gain dividend, pursuant to the Internal Revenue Code Section 852(b)(3), the amount necessary to reduce earnings and profits of the Funds related to net capital gain to zero for the tax year ended October 31, 2008. - ----- 92 - ----- At October 31, 2008, the Funds' tax year end, the Funds had unused capital loss carryforwards available for federal income tax purposes to be applied against future capital gains, if any. If not applied, the carryforwards will expire as follows:
Premier Insured Insured Insured Insured Insured Insured Premium Dividend Tax-Free Quality Opportunity Income Income 2 Advantage Advantage (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) - ----------------------------------------------------------------------------------------------------------------------------------- Expiration: October 31, 2013 $ -- $ -- $ -- $ -- $ 160,392 $ 4,675,683 October 31, 2014 731,585 -- 164,691 -- 1,187,192 -- October 31, 2015 -- -- 437,571 -- -- 35,274 October 31, 2016 3,901,375 11,531,354 2,437,248 6,922,132 3,430,093 378,957 - ----------------------------------------------------------------------------------------------------------------------------------- Total $ 4,632,960 $ 11,531,354 $ 3,039,510 $ 6,922,132 $ 4,777,677 $ 5,089,914 ===================================================================================================================================
Insured Premium Income 2 (NPX) had $295,910 of its capital loss carryforward expire on October 31, 2008. 5. Management Fees 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 Auction Rate Preferred shares or VRDP shares) of each Fund as follows:
Insured Quality (NQI) Insured Opportunity (NIO) Premier Insured Income (NIF) Average Daily Net Assets (including net assets attributable to Auction Rate Preferred Insured Premium Income 2 (NPX) shares or VRDP 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 ===================================================================================================================================
Insured Dividend Advantage (NVG) Average Daily Net Assets (including net assets attributable to Auction Rate Preferred Insured Tax-Free Advantage (NEA) shares or VRDP 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 following table. As of October 31, 2008, the complex-level fee rate was .1998%. ----- 93 ----- Notes to FINANCIAL STATEMENTS (continued) The complex-level fee schedule is as follows: Complex-Level Asset Breakpoint Level (1) Effective Rate at Breakpoint Level - -------------------------------------------------------------------------------- $55 billion .2000% $56 billion .1996 $57 billion .1989 $60 billion .1961 $63 billion .1931 $66 billion .1900 $71 billion .1851 $76 billion .1806 $80 billion .1773 $91 billion .1691 $125 billion .1599 $200 billion .1505 $250 billion .1469 $300 billion .1445 ================================================================================ (1) The complex-level component of the management fee for the funds is calculated based upon the aggregate daily net assets of all Nuveen funds, with such daily net assets to include assets attributable to preferred stock (Auction Rate Preferred shares or VRDP shares) issued by or borrowings by such funds but to exclude assets attributable to investments in other Nuveen funds. The management fee compensates the Adviser for overall investment advisory and administrative services and general office facilities. The Funds pay no compensation directly to those of its Directors/Trustees who are affiliated with the Adviser or to its Officers, all of whom receive remuneration for their services to the Funds from the Adviser or its affiliates. The Board of Directors/Trustees has adopted a deferred compensation plan for independent Directors/Trustees that enables Directors/Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from certain Nuveen advised funds. Under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of select Nuveen advised funds. For the first ten years of Insured Dividend Advantage's (NVG) operations, the Adviser has agreed to reimburse the Fund, as a percentage of average daily net assets (including net assets attributable to Auction Rate Preferred shares or VRDP shares), for fees and expenses in the amounts and for the time periods set forth below: Year Ending Year Ending March 31, March 31, - -------------------------------------------------------------------------------- 2002* .30% 2008 .25% 2003 .30 2009 .20 2004 .30 2010 .15 2005 .30 2011 .10 2006 .30 2012 .05 2007 .30 ================================================================================ * From the commencement of operations. The Adviser has not agreed to reimburse Insured Dividend Advantage (NVG) for any portion of its fees and expenses beyond March 31, 2012. - ----- 94 - ----- For the first eight years of Insured Tax-Free Advantage's (NEA) operations, the Adviser has agreed to reimburse the Fund, as a percentage of average daily net assets (including net assets attributable to Auction Rate Preferred shares or VRDP shares), for fees and expenses in the amounts and for the time periods set forth below:
Year Ending Year Ending November 30, November 30, - --------------------------------------------------------------------------------------------- 2002* .32% 2007 .32% 2003 .32 2008 .24 2004 .32 2009 .16 2005 .32 2010 .08 2006 .32 =============================================================================================
* From the commencement of operations. The Adviser has not agreed to reimburse Insured Tax-Free Advantage (NEA) for any portion of its fees and expenses beyond November 30, 2010. 6. New Accounting Pronouncements Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157 (SFAS No. 157) In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements." This standard establishes a single authoritative definition of fair value, sets out a framework for measuring fair value and requires additional disclosures about fair value measurements. SFAS No. 157 applies to fair value measurements already required or permitted by existing standards. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The changes to current generally accepted accounting principles from the application of this standard relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements. As of October 31, 2008, management does not believe the adoption of SFAS No. 157 will impact the financial statement amounts; however, additional disclosures may be required about the inputs used to develop the measurements and the effect of certain of the measurements included within the Statement of Operations for the period. Financial Accounting Standards Board Statement of Financial Accounting Standards No. 161 (SFAS No. 161) In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments and Hedging Activities." This standard is intended to enhance financial statement disclosures for derivative instruments and hedging activities and enable investors to understand: a) how and why a fund uses derivative instruments, b) how derivative instruments and related hedge items are accounted for, and c) how derivative instruments and related hedge items affect a fund's financial position, results of operations and cash flows. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. As of October 31, 2008, management does not believe the adoption of SFAS No. 161 will impact the financial statement amounts; however, additional footnote disclosures may be required about the use of derivative instruments and hedging items. 7. Subsequent Events Distributions to Common Shareholders The Funds declared Common share dividend distributions from their tax-exempt net investment income which were paid on December 1, 2008, to shareholders of record on November 15, 2008, as follows:
Premier Insured Insured Insured Insured Insured Insured Premium Dividend Tax-Free Quality Opportunity Income Income 2 Advantage Advantage (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) - --------------------------------------------------------------------------------------------- Dividend per share $.0615 $.0590 $.0555 $.0515 $.0600 $.0590 =============================================================================================
----- 95 ----- | Financial | HIGHLIGHTS Selected data for a Common share outstanding throughout each period:
Investment Operations ------------------------------------------------------------------- Distributions Distributions from Net from Beginning Investment Capital Common Net Income to Gains to Share Net Realized/ Auction Rate Auction Rate Net Asset Investment Unrealized Preferred Preferred Value Income Gain (Loss) Shareholders+ Shareholders+ Total - ----------------------------------------------------------------------------------------------------------------------- Insured Quality (NQI) - ----------------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2008 $ 14.88 $ .99 $ (3.16) $ (.30) $ -- $ (2.47) 2007 15.40 .99 (.49) (.29) -- .21 2006 15.31 .99 .24 (.25) (.01) .97 2005 15.85 1.03 (.39) (.16) -- .48 2004 15.72 1.08 .20 (.08) -- 1.20 Insured Opportunity (NIO) - ----------------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2008 15.04 .97 (2.62) (.30) --* (1.95) 2007 15.57 .98 (.45) (.30) (.01) .22 2006 15.46 .98 .34 (.24) (.03) 1.05 2005 16.06 1.01 (.50) (.16) -- .35 2004 15.89 1.05 .20 (.08) -- 1.17 ======================================================================================================================= Less Distributions ------------------------------- Offering Net Costs and Investment Capital Auction Rate Ending Income to Gains to Preferred Common Common Common Share Share Ending Share- Share- Underwriting Net Asset Market holders holders Total Discounts Value Value - ------------------------------------------------------------------------------------------------------------- Insured Quality (NQI) - ------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2008 $ (.73) $ -- $ (.73) $ -- $ 11.68 $ 11.15 2007 (.73) -- (.73) -- 14.88 13.61 2006 (.80) (.08) (.88) -- 15.40 14.83 2005 (.97) (.05) (1.02) -- 15.31 15.31 2004 (1.02) (.05) (1.07) -- 15.85 16.00 Insured Opportunity (NIO) - ------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2008 (.70) --* (.70) -- 12.39 11.15 2007 (.73) (.02) (.75) -- 15.04 13.56 2006 (.80) (.14) (.94) -- 15.57 14.75 2005 (.92) (.03) (.95) -- 15.46 14.52 2004 (.97) (.03) (1.00) -- 16.06 16.05 =============================================================================================================
Auction Rate Preferred Shares Variable Rate Demand Preferred Shares at End of Period at End of Period ------------------------------------- -------------------------------------- Aggregate Liquidation Aggregate Liquidation Amount and Market Asset Amount and Market Asset Outstanding Value Coverage Outstanding Value Coverage (000) Per Share Per Share (000) Per Share Per Share - ---------------------------------------------------------------------------------------------------------------------- Insured Quality (NQI) - ---------------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2008 $ 298,425 $ 25,000 $ 62,485 $ -- $ -- $ -- 2007 318,000 25,000 69,808 -- -- -- 2006 318,000 25,000 71,378 -- -- -- 2005 318,000 25,000 71,052 -- -- -- 2004 318,000 25,000 72,565 -- -- -- Insured Opportunity (NIO) - ---------------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2008 623,350 25,000 65,315 -- -- -- 2007 680,000 25,000 69,864 -- -- -- 2006 680,000 25,000 71,440 -- -- -- 2005 680,000 25,000 71,126 -- -- -- 2004 680,000 25,000 72,904 -- -- -- ======================================================================================================================
- ----- 96 - -----
Total Returns ------------------------ Based on Based Common on Share Net Market Asset Value** Value** - ------------------------------------------------------------------------------------------- Insured Quality (NQI) - ------------------------------------------------------------------------------------------- Year Ended 10/31: 2008 (13.35)% (17.24)% 2007 (3.48) 1.38 2006 2.76 6.53**** 2005 2.11 3.09 2004 4.37 7.90 Insured Opportunity (NIO) - ------------------------------------------------------------------------------------------- Year Ended 10/31: 2008 (13.17) (13.45) 2007 (3.18) 1.49 2006 8.26 7.05**** 2005 (3.72) 2.21 2004 9.47 7.64 =========================================================================================== Ratios/Supplemental Data ---------------------------------------------------------------------------------------------------------------- Ratios to Average Net Assets Ratios to Average Net Assets Applicable to Common Shares Applicable to Common Shares Before Credit/Reimbursement After Credit/Reimbursement*** ---------------------------------------- ---------------------------------------- Ending Net Assets Applicable Expenses Expenses Net Expenses Expenses Net Portfolio to Common Including Excluding Investment Including Excluding Investment Turnover Shares (000) Interest++(a) Interest++(a) Income++ Interest++(a) Interest++(a) Income++ Rate - ----------------------------------------------------------------------------------------------------------------------------------- Insured Quality (NQI) - ----------------------------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2008 $ 447,463 1.49% 1.23% 7.03% 1.47% 1.21% 7.05% 7% 2007 569,958 1.52 1.18 6.53 1.50 1.16 6.55 5 2006 589,928 1.20 1.20 6.49 1.20 1.20 6.49 13 2005 585,777 1.19 1.19 6.58 1.19 1.19 6.58 21 2004 605,028 1.19 1.19 6.88 1.19 1.19 6.88 8 Insured Opportunity (NIO) - ----------------------------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2008 1,005,218 1.43 1.19 6.76 1.41 1.17 6.78 9 2007 1,220,297 1.41 1.16 6.39 1.40 1.14 6.41 5 2006 1,263,172 1.17 1.17 6.38 1.17 1.17 6.38 13 2005 1,254,638 1.16 1.16 6.35 1.16 1.16 6.35 25 2004 1,302,985 1.16 1.16 6.59 1.16 1.16 6.59 8 ===================================================================================================================================
* Rounds to less than $.01 per share. ** Total Return Based 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. The last dividend declared in the period, which is typically paid on the first business day of the following month, is assumed to be reinvested at the ending market price. The actual reinvestment for the last dividend declared in the period may take place over several days, and in some instances may not be based on the market price, so the actual reinvestment price may be different from the price used in the calculation. Total returns are not annualized. Total Return Based 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. The last dividend declared in the period, which is typically paid on the first business day of the following month, is assumed to be reinvested at the ending net asset value. The actual reinvest price for the last dividend declared in the period may often be based on the Fund's market price (and not its net asset value), and therefore may be different from the price used in calculation. Total returns are not annualized. *** After custodian fee credit and expense reimbursement, where applicable. **** During the fiscal year ended October 31, 2006, Insured Quality (NQI) and Insured Opportunity (NIO) received payments from the Adviser of $27,762 and $42,338, respectively, to offset losses realized on the disposal of investments purchased in violation of each Fund's investment restrictions. This reimbursement did not have an impact on the Funds' Total Return on Common Share Net Asset Value. + The amounts shown are based on Common share equivalents. ++ Ratios do not reflect the effect of dividend payments to Auction Rate Preferred shareholders; income ratios reflect income earned on assets attributable to Auction Rate Preferred shares or VRDP shares, where applicable. (a) Interest expense arises from payments to Variable Rate Demand Preferred shareholders and the application of SFAS No. 140 to certain inverse floating rate transactions entered into by the Fund as more fully described in Footnote 1 - Variable Rate Demand Preferred Shares and Inverse Floating Rate Securities, where applicable. See accompanying notes to financial statements. ----- 97 ----- | Financial | HIGHLIGHTS (continued) Selected data for a Common share outstanding throughout each period:
Investment Operations ------------------------------------------------------------------- Distributions Distributions from Net from Beginning Investment Capital Common Net Income to Gains to Share Net Realized/ Auction Rate Auction Rate Net Asset Investment Unrealized Preferred Preferred Value Income Gain (Loss) Shareholders+ Shareholders+ Total - ----------------------------------------------------------------------------------------------------------------------- Premier Insured Income (NIF) - ----------------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2008 $ 14.90 $ .96 $ (2.37) $ (.31) $ -- $ (1.72) 2007 15.40 .97 (.47) (.29) -- .21 2006 15.33 .98 .25 (.25) (.02) .96 2005 16.00 1.01 (.49) (.16) (.01) .35 2004 15.69 1.03 .36 (.08) -- 1.31 Insured Premium Income 2 (NPX) - ----------------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2008 13.73 .80 (2.32) (.20) -- (1.72) 2007 14.16 .86 (.39) (.26) -- .21 2006 13.93 .86 .28 (.23) -- .91 2005 14.45 .89 (.44) (.14) -- .31 2004 14.24 .93 .23 (.07) -- 1.09 ======================================================================================================================= Less Distributions ------------------------------- Offering Net Costs and Investment Capital Auction Rate Ending Income to Gains to Preferred Common Common Common Share Share Ending Share- Share- Underwriting Net Asset Market holders holders Total Discounts Value Value - ------------------------------------------------------------------------------------------------------------- Premier Insured Income (NIF) - ------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2008 $ (.64) $ -- $ (.64) $ -- $ 12.54 $ 11.19 2007 (.71) -- (.71) -- 14.90 13.25 2006 (.79) (.10) (.89) -- 15.40 14.60 2005 (.93) (.09) (1.02) -- 15.33 14.40 2004 (.98) (.02) (1.00) -- 16.00 15.64 Insured Premium Income 2 (NPX) - ------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2008 (.62) -- (.62) -- 11.39 9.56 2007 (.64) -- (.64) -- 13.73 12.18 2006 (.68) -- (.68) -- 14.16 13.03 2005 (.83) -- (.83) -- 13.93 12.83 2004 (.88) -- (.88) -- 14.45 14.11 =============================================================================================================
Auction Rate Preferred Shares Variable Rate Demand Preferred Shares at End of Period at End of Period ------------------------------------- --------------------------------------- Aggregate Liquidation Aggregate Liquidation Amount and Market Asset Amount and Market Asset Outstanding Value Coverage Outstanding Value Coverage (000) Per Share Per Share (000) Per Share Per Share - ----------------------------------------------------------------------------------------------------------------------- Premier Insured Income (NIF) - ----------------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2008 $ 154,950 $ 25,000 $ 64,301 $ -- $ -- $ -- 2007 161,000 25,000 69,938 -- -- -- 2006 161,000 25,000 71,429 -- -- -- 2005 161,000 25,000 71,215 -- -- -- 2004 161,000 25,000 73,240 -- -- -- Insured Premium Income 2 (NPX) - ----------------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2008 -- -- -- 219,000 100,000 294,318 2007 268,900 25,000 72,696 -- -- -- 2006 268,900 25,000 74,180 -- -- -- 2005 268,900 25,000 73,392 -- -- -- 2004 268,900 25,000 75,176 -- -- -- =======================================================================================================================
- ------ 98 - ------
Total Returns ----------------------- Based on Based Common on Share Net Market Asset Value* Value* - ----------------------------------------------------------------------------------- Premier Insured Income (NIF) - ----------------------------------------------------------------------------------- Year Ended 10/31: 2008 (11.12)% (11.92)% 2007 (4.66) 1.40 2006 7.68 6.46 2005 (1.66) 2.16 2004 7.55 8.62 Insured Premium Income 2 (NPX) - ----------------------------------------------------------------------------------- Year Ended 10/31: 2008 (17.17) (12.98) 2007 (1.77) 1.55 2006 7.11 6.75 2005 (3.32) 2.14 2004 6.42 7.89 =================================================================================== Ratios/Supplemental Data --------------------------------------------------------------------------------------------------------------- Ratios to Average Net Assets Ratios to Average Net Assets Applicable to Common Shares Applicable to Common Shares Before Credit/Reimbursement After Credit/Reimbursement** ------------------------------------------ ------------------------------------------ Ending Net Assets Applicable Expenses Expenses Net Expenses Expenses Net Portfolio to Common Including Excluding Investment Including Excluding Investment Turnover Shares (000) Interest++(a) Interest++(a) Income++ Interest++(a) Interest++(a) Income++ Rate - ------------------------------------------------------------------------------------------------------------------------------------ Premier Insured Income (NIF) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2008 $ 243,589 1.42% 1.25% 6.72% 1.40% 1.22% 6.75% 6% 2007 289,400 1.38 1.21 6.41 1.36 1.19 6.43 9 2006 299,001 1.22 1.22 6.44 1.21 1.21 6.44 8 2005 297,624 1.20 1.20 6.39 1.20 1.20 6.40 20 2004 310,666 1.21 1.21 6.53 1.20 1.20 6.53 13 Insured Premium Income 2 (NPX) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2008 425,557 2.13 1.25 6.12 2.11 1.23 6.14 8 2007 513,021 1.76 1.16 6.19 1.74 1.14 6.21 5 2006 528,984 1.16 1.16 6.14 1.16 1.16 6.15 15 2005 520,508 1.16 1.16 6.20 1.16 1.16 6.20 23 2004 539,697 1.16 1.16 6.52 1.16 1.16 6.53 14 ====================================================================================================================================
* Total Return Based 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. The last dividend declared in the period, which is typically paid on the first business day of the following month, is assumed to be reinvested at the ending market price. The actual reinvestment for the last dividend declared in the period may take place over several days, and in some instances may not be based on the market price, so the actual reinvestment price may be different from the price used in the calculation. Total returns are not annualized. Total Return Based 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. The last dividend declared in the period, which is typically paid on the first business day of the following month, is assumed to be reinvested at the ending net asset value. The actual reinvest price for the last dividend declared in the period may often be based on the Fund's market price (and not its net asset value), and therefore may be different from the price used in calculation. Total returns are not annualized. ** After custodian fee credit and expense reimbursement, where applicable. + The amounts shown are based on Common share equivalents. ++ Ratios do not reflect the effect of dividend payments to Auction Rate Preferred shareholders; income ratios reflect income earned on assets attributable to Auction Rate Preferred shares or VRDP shares, where applicable. (a) Interest expense arises from payments to Variable Rate Demand Preferred shareholders and the application of SFAS No. 140 to certain inverse floating rate transactions entered into by the Fund as more fully described in Footnote 1 - Variable Rate Demand Preferred Shares and Inverse Floating Rate Securities, where applicable. See accompanying notes to financial statements. ------ 99 ------ | Financial | HIGHLIGHTS (continued) Selected data for a Common share outstanding throughout each period:
Investment Operations ------------------------------------------------------------------- Distributions Distributions from Net from Beginning Investment Capital Common Net Income to Gains to Share Net Realized/ Auction Rate Auction Rate Net Asset Investment Unrealized Preferred Preferred Value Income Gain (Loss) Shareholders+ Shareholders+ Total - ------------------------------------------------------------------------------------------------------------------ Insured Dividend Advantage (NVG) - ------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2008 $ 15.09 $ 1.00 $ (2.25) $ (.29) $ -- $ (1.54) 2007 15.50 1.00 (.38) (.28) -- .34 2006 15.23 1.01 .33 (.25) -- 1.09 2005 15.78 1.00 (.38) (.15) (.01) .46 2004 15.41 1.02 .42 (.07) -- 1.37 Insured Tax-Free Advantage (NEA) - ------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2008 14.71 .95 (2.31) (.27) -- (1.63) 2007 14.93 .97 (.21) (.27) -- .49 2006 14.56 .97 .38 (.24) -- 1.11 2005 14.75 .97 (.19) (.15) -- .63 2004 14.54 .99 .21 (.07) -- 1.13 ================================================================================================================== Less Distributions ------------------------------- Offering Net Costs and Investment Capital Auction Rate Ending Income to Gains to Preferred Common Common Common Share Share Ending Share- Share- Underwriting Net Asset Market holders holders Total Discounts Value Value - -------------------------------------------------------------------------------------------------------- Insured Dividend Advantage (NVG) - -------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2008 $ (.70) $ -- $ (.70) $ -- $ 12.85 $ 11.42 2007 (.75) -- (.75) -- 15.09 13.71 2006 (.82) -- (.82) -- 15.50 14.89 2005 (.89) (.12) (1.01) -- 15.23 14.17 2004 (.93) (.07) (1.00) -- 15.78 14.89 Insured Tax-Free Advantage (NEA) - -------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2008 (.71) -- (.71) -- 12.37 11.40 2007 (.71) -- (.71) -- 14.71 14.30 2006 (.74) -- (.74) -- 14.93 14.35 2005 (.81) (.01) (.82) -- 14.56 13.41 2004 (.92) (.01) (.93) .01 14.75 14.91 ========================================================================================================
Auction Rate Preferred Shares Variable Rate Demand Preferred Shares at End of Period at End of Period --------------------------------------------- ------------------------------------------- Aggregate Liquidation Aggregate Liquidation Amount and Market Asset Amount and Market Asset Outstanding Value Coverage Outstanding Value Coverage (000) Per Share Per Share (000) Per Share Per Share - ------------------------------------------------------------------------------------------------------------------------------ Insured Dividend Advantage (NVG) - ------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2008 $ 226,975 $ 25,000 $ 67,189 $ -- $ -- $ -- 2007 233,000 25,000 73,281 -- -- -- 2006 233,000 25,000 74,575 -- -- -- 2005 233,000 25,000 73,714 -- -- -- 2004 233,000 25,000 75,471 -- -- -- Insured Tax-Free Advantage (NEA) - ------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2008 132,800 25,000 68,124 -- -- -- 2007 144,000 25,000 72,290 -- -- -- 2006 144,000 25,000 73,005 -- -- -- 2005 144,000 25,000 71,808 -- -- -- 2004 144,000 25,000 72,415 -- -- -- ==============================================================================================================================
- ------ 100 - ------
Total Returns ------------------ Based on Based Common on Share Net Market Asset Value* Value* - -------------------------------------------------------- Insured Dividend Advantage (NVG) - -------------------------------------------------------- Year Ended 10/31: 2008 (12.11)% (10.64)% 2007 (3.12) 2.25 2006 11.09 7.39 2005 2.00 2.93 2004 7.61 9.19 Insured Tax-Free Advantage (NEA) - -------------------------------------------------------- Year Ended 10/31: 2008 (15.97) (11.56) 2007 4.59 3.35 2006 12.82 7.82 2005 (4.68) 4.33 2004 7.41 8.07 ======================================================== Ratios/Supplemental Data --------------------------------------------------------------------------------------------------------------- Ratios to Average Net Assets Ratios to Average Net Assets Applicable to Common Shares Applicable to Common Shares Before Credit/Reimbursement After Credit/Reimbursement** ---------------------------------------- ---------------------------------------- Ending Net Assets Applicable Expenses Expenses Net Expenses Expenses Net Portfolio to Common Including Excluding Investment Including Excluding Investment Turnover Shares (000) Interest++(a) Interest++(a) Income++ Interest++(a) Interest++(a) Income++ Rate - ------------------------------------------------------------------------------------------------------------------------------------ Insured Dividend Advantage (NVG) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2008 $ 383,035 1.32% 1.17% 6.48% .96% .81% 6.84% 7% 2007 449,982 1.31 1.14 6.15 .88 .71 6.58 12 2006 462,037 1.15 1.15 6.15 .70 .70 6.60 15 2005 454,018 1.15 1.15 5.96 .70 .70 6.42 2 2004 470,389 1.15 1.15 6.09 .70 .70 6.54 11 Insured Tax-Free Advantage (NEA) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2008 229,075 1.26 1.19 6.27 .86 .80 6.67 8 2007 272,391 1.19 1.17 6.04 .69 .67 6.54 6 2006 276,506 1.19 1.19 6.12 .69 .69 6.61 -- 2005 269,614 1.19 1.19 6.06 .70 .70 6.55 1 2004 273,112 1.20 1.20 6.24 .71 .71 6.73 13 ====================================================================================================================================
* Total Return Based 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. The last dividend declared in the period, which is typically paid on the first business day of the following month, is assumed to be reinvested at the ending market price. The actual reinvestment for the last dividend declared in the period may take place over several days, and in some instances may not be based on the market price, so the actual reinvestment price may be different from the price used in the calculation. Total returns are not annualized. Total Return Based 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. The last dividend declared in the period, which is typically paid on the first business day of the following month, is assumed to be reinvested at the ending net asset value. The actual reinvest price for the last dividend declared in the period may often be based on the Fund's market price (and not its net asset value), and therefore may be different from the price used in calculation. Total returns are not annualized. ** After custodian fee credit and expense reimbursement, where applicable. + The amounts shown are based on Common share equivalents. ++ Ratios do not reflect the effect of dividend payments to Auction Rate Preferred shareholders; income ratios reflect income earned on assets attributable to Auction Rate Preferred shares or VRDP shares, where applicable. (a) Interest expense arises from payments to Variable Rate Demand Preferred shareholders and the application of SFAS No. 140 to certain inverse floating rate transactions entered into by the Fund as more fully described in Footnote 1 - Variable Rate Demand Preferred Shares and Inverse Floating Rate Securities, where applicable. See accompanying notes to financial statements. ------ 101 ------ Board Members & 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 (referred to herein as "independent board members") 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 Principal Year First of Portfolios Occupation(s) Name, | Elected or in Fund Complex Including other Birthdate | Position(s) Held Appointed Overseen by Directorships & Address | with the Funds and Term(1) Board Member During Past 5 Years - ------------------------------------------------------------------------------------------------------------------------------------ Independent Board Members: o ROBERT P. BREMNER 8/22/40 | Chairman of Private Investor and Management Consultant. 333 W. Wacker Drive | the Board 1997 186 Chicago, IL 60606 | and Board member o JACK B. EVANS 10/22/48 | President, The Hall-Perrine Foundation, a private 333 W. Wacker Drive | Board member 1999 186 philanthropic corporation (since 1996); Director and Chicago, IL 60606 | Vice Chairman, United Fire Group, a publicly held company; Member of the Board of Regents for the State of Iowa University System; Director, Gazette Companies; Life Trustee of Coe College and Iowa College Foundation; Member of the Advisory Council of the Department of Finance in the Tippie College of Business, University of Iowa; 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. o WILLIAM C. HUNTER 3/6/48 | Dean, Tippie College of Business, University of Iowa 333 W. Wacker Drive | Board member 2004 186 (since July 2006); formerly, Dean and Distinguished Chicago, IL 60606 | Professor of Finance, School of Business at the University of Connecticut (2003-2006); previously, Senior Vice President and Director of Research at the Federal Reserve Bank of Chicago (1995-2003); Director (since 1997), Credit Research Center at Georgetown University; Director (since 2004) of Xerox Corporation; Director (since 2005), Beta Gamma Sigma International Honor Society; Director, SS&C Technologies, Inc. (May 2005-October 2005). o DAVID J. KUNDERT 10/28/42 | Director, Northwestern Mutual Wealth Management 333 W. Wacker Drive | Board member 2005 186 Company; Retired (since 2004) as Chairman, JPMorgan Chicago, IL 60606 | Fleming Asset Management, President and CEO, Banc One Investment Advisors Corporation, and President, One Group Mutual Funds; prior thereto, Executive Vice President, Banc One Corporation and Chairman and CEO, Banc One Investment Management Group; Member, Board of Regents, Luther College; member of the Wisconsin Bar Association; member of Board of Directors, Friends of Boerner Botanical Gardens; member of Investment Committee, Greater Milwaukee Foundation. o WILLIAM J. SCHNEIDER 9/24/44 | Chairman, formerly, Senior Partner and Chief Operating 333 W. Wacker Drive | Board member 1997 186 Officer (retired, 2004) of Miller-Valentine Partners Chicago, IL 60606 | Ltd., a real estate investment company; Director, Dayton Development Coalition; formerly, member, Business Advisory Council, Cleveland Federal Reserve Bank.
- ------ 102 - ------
- ------------------------------------------------------------------------------------------------------------------------------------ Number Principal Year First of Portfolios Occupation(s) Name, | Elected or in Fund Complex Including other Birthdate | Position(s) Held Appointed Overseen by Directorships & Address | with the Funds and Term(1) Board Member During Past 5 Years - ------------------------------------------------------------------------------------------------------------------------------------ Independent Board Members: o JUDITH M. STOCKDALE Executive Director, Gaylord and Dorothy Donnelley 12/29/47 | Foundation (since 1994); prior thereto, Executive 333 W. Wacker Drive | Board member 1997 186 Director, Great Lakes Protection Fund (from 1990 to Chicago, IL 60606 | 1994). o CAROLE E. STONE Director, Chicago Board Options Exchange (since 2006); 6/28/47 | Commissioner, New York State Commission on Public 333 W. Wacker Drive | Board member 2007 186 Authority Reform (since 2005); formerly, Chair New York Chicago, IL 60606 | Racing Association Oversight Board (2005-2007); formerly, Director, New York State Division of the Budget (2000-2004), Chair, Public Authorities Control Board (2000-2004) and Director, Local Government Assistance Corporation (2000-2004). o TERENCE J. TOTH Director, Legal & General Investment Management (since 9/29/59 | 2008); Private Investor (since 2007); CEO and 333 W. Wacker Drive | Board member 2008 186 President, Northern Trust Investments (2004-2007); Chicago, IL 60606 | Executive Vice President, Quantitative Management & Securities Lending (2007-2004); prior thereto, various positions with Northern Trust Company (since 1994); Member: Goodman Theatre Board (Since 2004); Chicago Fellowship Boards (since 2005), University of Illinois Leadership Council Board (since 2007) and Catalyst Schools of Chicago Board (since 2008); formerly Member: Northern Trust Mutual Funds Board (2005-2007), Northern Trust Japan Board (2004-2007), Northern Trust Securities Inc. Board (2003-2007) and Northern Trust Hong Kong Board (1997-2004). Interested Board Member: o JOHN P. AMBOIAN(2)(3) Chief Executive Officer (since July 2007) and Director 6/14/61 | (since 1999) of Nuveen Investments, Inc.; Chief 333 W. Wacker Drive | Board Member 2008 186 Executive Officer (since 2007) of Nuveen Asset Chicago, IL 60606 | Management, Rittenhouse Asset Management, Nuveen Investments Advisors, Inc. formerly, President (1999-2004) of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3)
------ 103 ------
- ------------------------------------------------------------------------------------------------------------------------------------ Number of Portfolios Name, | Year First in Fund Complex Principal Birthdate | Position(s) Held Elected or Overseen Occupation(s) and Address | with the Funds Appointed(4) by Officer During Past 5 Years - ------------------------------------------------------------------------------------------------------------------------------------ Officers of the Funds: o GIFFORD R. ZIMMERMAN Managing Director (since 2002), Assistant Secretary and 9/9/56 | Chief Associate General Counsel of Nuveen Investments, LLC; 333 W. Wacker Drive | Administrative 1988 186 Managing Director (since 2002), Associate General Chicago, IL 60606 | Officer Counsel and Assistant Secretary, of Nuveen Asset Management; Vice President and Assistant Secretary of NWQ Investment Management Company, LLC. (since 2002), Nuveen Investments Advisers Inc. (since 2002), Symphony Asset Management LLC, and NWQ Investment Management Company, LLC (since 2003), Tradewinds Global Investors, LLC, and Santa Barbara Asset Management, LLC (since 2006), Nuveen HydePark Group LLC and Nuveen Investment Solutions, Inc. (since 2007); Managing Director, Associate General Counsel and Assistant Secretary of Rittenhouse Asset Management, Inc. (since 2003); Managing Director (since 2004) and Assistant Secretary (since 1994) of Nuveen Investments, Inc.; formerly, Managing Director (2002-2004), General Counsel (1998-2004) and Assistant Secretary of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3); Chartered Financial Analyst. o WILLIAM ADAMS IV Executive Vice President of Nuveen Investments, Inc.; 6/9/55 | Executive Vice President, U.S. Structured Products of 333 W. Wacker Drive | Vice President 2007 120 Nuveen Investments, LLC, (since 1999), prior thereto, Chicago, IL 60606 | Managing Director of Structured Investments. o CEDRIC H. ANTOSIEWICZ Managing Director, (since 2004) previously, Vice 1/11/62 | President (1993-2004) of Nuveen Investments, LLC. 333 W. Wacker Drive | Vice President 2007 120 Chicago, IL 60606 | o MICHAEL T. ATKINSON Vice President (since 2002) of Nuveen Investments, LLC. 2/3/66 | Vice President 333 W. Wacker Drive | and Assistant 2000 186 Chicago, IL 60606 | Secretary o LORNA C. FERGUSON Managing Director (since 2004), formerly, Vice 10/24/45 | President of Nuveen Investments, LLC; Managing Director 333 W. Wacker Drive | Vice President 1998 186 (since 2005) of Nuveen Asset Management; Managing Chicago, IL 60606 | Director (2004-2005), formerly, Vice President (1998-2004) of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3) o STEPHEN D. FOY Vice President (since 1993) and Funds Controller (since 5/31/54 | Vice President 1998) of Nuveen Investments, LLC; formerly, Vice 333 W. Wacker Drive | and Controller 1998 186 President and Funds Controller (1998-2004) of Nuveen Chicago, IL 60606 | Investments, Inc.; Certified Public Accountant. o WALTER M. KELLY Senior Vice President (since 2008), Vice President 2/24/70 | Chief Compliance (2006-2008) formerly, Assistant Vice President and 333 W. Wacker Drive | Officer and 2003 186 Assistant General Counsel (2003-2006) of Nuveen Chicago, IL 60606 | Vice President Investments, LLC; Vice President (since 2006) and Assistant Secretary (since 2008) of Nuveen Asset Management. o DAVID J. LAMB Vice President (since 2000) of Nuveen Investments, LLC; 3/22/63 | Certified Public Accountant. 333 W. Wacker Drive | Vice President 2000 186 Chicago, IL 60606 |
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- ------------------------------------------------------------------------------------------------------------------------------------ Number of Portfolios Name, | Year First in Fund Complex Principal Birthdate | Position(s) Held Elected or Overseen Occupation(s) and Address | with the Funds Appointed(4) by Officer During Past 5 Years - ------------------------------------------------------------------------------------------------------------------------------------ Officers of the Funds: o TINA M. LAZAR Vice President of Nuveen Investments, LLC (since 1999). 8/27/61 | 333 W. Wacker Drive | Vice President 2002 186 Chicago, IL 60606 | o LARRY W. MARTIN Vice President, Assistant Secretary and Assistant 7/27/51 | Vice President General Counsel of Nuveen Investments, LLC; Vice 333 W. Wacker Drive | and Assistant 1988 186 President (since 2005) and Assistant Secretary of Chicago, IL 60606 | Secretary 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); NWQ Investment Management Company, LLC (since 2002), Symphony Asset Management LLC (since 2003), Tradewinds Global Investors, LLC, Santa Barbara Asset Management LLC (since 2006) and of Nuveen HydePark Group, LLC and Nuveen Investment Solutions, Inc. (since 2007); formerly, Vice President and Assistant Secretary of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3) o KEVIN J. MCCARTHY Managing Director (since 2008), formerly, Vice 3/26/66 | Vice President President (2007-2008), Nuveen Investments, LLC; Vice 333 W. Wacker Drive | and Secretary 2007 186 President, and Assistant Secretary, Nuveen Asset Chicago, IL 60606 | Management, Rittenhouse Asset Management, Inc., Nuveen Investment Advisers Inc., Nuveen Investment Institutional Services Group LLC, NWQ Investment Management Company, LLC, Tradewinds Global Investors LLC, NWQ Holdings, LLC, Symphony Asset Management LLC, Santa Barbara Asset Management LLC, Nuveen HydePark Group, LLC and Nuveen Investment Solutions, Inc. (since 2007); prior thereto, Partner, Bell, Boyd & Lloyd LLP (1997-2007). o JOHN V. MILLER Managing Director (since 2007), formerly, Vice 4/10/67 | President (2002-2007) of Nuveen Asset Management and 333 W. Wacker Drive | Vice President 2007 186 Nuveen Investments, LLC; Chartered Financial Analyst. Chicago, IL 60606 | o CHRISTOPHER M. ROHRBACHER Vice President, Nuveen Investments, LLC (since 2008); 8/1/71 | Vice President Vice President and Assistant Secretary, Nuveen Asset 333 W. Wacker Drive | and Assistant 2008 186 Management (since 2008); prior thereto, Associate, Chicago, IL 60606 | Secretary Skadden, Arps, Slate Meagher & Flom LLP (2002-2008). o JAMES F. RUANE Vice President, Nuveen Investments, LLC (since 2007); 7/3/62 | Vice President prior thereto, Partner, Deloitte & Touche USA LLP 333 W. Wacker Drive | and Assistant 2007 186 (2005-2007), formerly, senior tax manager (2002-2005); Chicago, IL 60606 | Secretary Certified Public Accountant. o MARK L. WINGET Vice President, Nuveen Investments, LLC (since 2008); 12/21/68 | Vice President Vice President and Assistant Secretary, Nuveen Asset 333 W. Wacker Drive | and Assistant 2008 186 Management (since 2008); prior thereto, Counsel, Vedder Chicago, IL 60606 | Secretary Price P.C. (1997-2007).
(1) For Insured Premium Income 2 (NPX), Insured Dividend Advantage (NVG) and Insured Tax-Free Advantage (NEA), Board Members serve three year terms, except for two board members who are elected by the holders of Preferred Shares. The Board of Trustees for NAD, NXZ and NZF is divided into three classes, Class I, Class II, and Class III, with each being elected to serve until the third succeeding annual shareholders' meeting subsequent to its election or thereafter in each case when its respective successors are duly elected or appointed, except two board members are elected by the holders of Preferred Shares to serve until the next annual shareholders' meeting subsequent to its election or thereafter in each case when its respective successors are duly elected or appointed. For Insured Quality (NQI), Insured Opportunity (NIO) and Premier Insured Income (NIF), the Board Members serve a one year term to serve until the next annual meeting or until their successors shall have been duly elected and qualified. The first year elected or appointed represents the year in which the board member was first elected or appointed to any fund in the Nuveen Complex. (2) Mr. Amboian is an interested trustee because of his position with Nuveen Investments, Inc. and certain of its subsidiaries, which are affiliates of the Nuveen Funds. (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. ------ 105 ------ Annual Investment Management Agreement Approval PROCESS - -------------------------------------------------------------------------------- The Investment Company Act of 1940, as amended (the "1940 Act"), provides, in substance, that each investment advisory agreement between a fund and its investment adviser will continue in effect from year to year only if its continuance is approved at least annually by the fund's board members, including by a vote of a majority of the board members who are not parties to the advisory agreement or "interested persons" of any parties (the "Independent Board Members"), cast in person at a meeting called for the purpose of considering such approval. In connection with such approvals, the fund's board members must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the advisory agreement. Accordingly, at a meeting held on May 28-29, 2008 (the "May Meeting"), the Boards of Trustees or Directors (as the case may be)(each, a "Board" and each Trustee or Director, a "Board Member") of the Funds, including a majority of the Independent Board Members, considered and approved the continuation of the advisory agreement (each, an "Advisory Agreement") between each Fund and Nuveen Asset Management ("NAM") for an additional one-year period. In preparation for their considerations at the May Meeting, the Board also held a separate meeting on April 23, 2008 (the "April Meeting"). Accordingly, the factors considered and determinations made regarding the renewals by the Independent Board Members include those made at the April Meeting. In addition, in evaluating the Advisory Agreements, as described in further detail below, the Independent Board Members reviewed a broad range of information relating to the Funds and NAM, including absolute performance, fee and expense information for the Funds as well as comparative performance, fee and expense information for a comparable peer group of funds, the performance information of recognized benchmarks (as applicable), the profitability of Nuveen for its advisory activities (which includes its wholly owned subsidiaries), and other information regarding the organization, personnel, and services provided by NAM. The Independent Board Members also met quarterly as well as at other times as the need arose during the year and took into account the information provided at such meetings and the knowledge gained therefrom. Prior to approving the renewal of the Advisory Agreements, the Independent Board Members reviewed the foregoing information with their independent legal counsel and with management, reviewed materials from independent legal counsel describing applicable law and their duties in reviewing advisory contracts, and met with independent legal counsel in private sessions without management present. The Independent Board Members considered the legal advice provided by independent legal counsel and relied upon their knowledge of NAM, its services and the Funds resulting from their meetings and other interactions throughout the year and their own business judgment in determining the factors to be considered in evaluating the Advisory Agreements. Each Board Member may have accorded different weight to the various factors in reaching his or her conclusions with respect to a Fund's Advisory Agreement. The Independent Board Members did not identify any single factor as all-important or controlling. The Independent Board Members' considerations were instead based on a comprehensive consideration of all the information presented. The principal factors considered by the Board and its conclusions are described below. A. Nature, Extent and Quality of Services In considering renewal of the Advisory Agreements, the Independent Board Members considered the nature, extent and quality of NAM's services, including advisory services and administrative services. The Independent Board Members reviewed materials outlining, among other things, NAM's organization and business; the types of services that NAM or its affiliates provide and are expected to provide to the Funds; the performance record of the applicable Fund (as described in further detail below); and any initiatives Nuveen had taken for the applicable fund product line. With respect to personnel, the Independent Board Members evaluated the background, experience and track record of NAM's - ------ 106 - ------ investment personnel. In this regard, the Independent Board Members considered the additional investment in personnel to support Nuveen fund advisory activities, including in operations, product management and marketing as well as related fund support functions, including sales, executive, finance, human resources and information technology. The Independent Board Members also reviewed information regarding portfolio manager compensation arrangements to evaluate NAM's ability to attract and retain high quality investment personnel. In evaluating the services of NAM, the Independent Board Members also considered NAM's ability to supervise the Funds' other service providers and given the importance of compliance, NAM's compliance program. Among other things, the Independent Board Members considered the report of the chief compliance officer regarding the Funds' compliance policies and procedures. In addition to advisory services, the Independent Board Members considered the quality of administrative services provided by NAM and its affiliates including product management, fund administration, oversight of service providers, shareholder services, administration of Board relations, regulatory and portfolio compliance and legal support. In addition to the foregoing services, the Independent Board Members also noted the additional services that NAM or its affiliates provide to closed-end funds, including, in particular, its secondary market support activities and the costs of such activities. The Independent Board Members recognized Nuveen's continued commitment to supporting the secondary market for the common shares of its closed-end funds through a variety of programs designed to raise investor and analyst awareness and understanding of closed-end funds. These efforts include maintaining an investor relations program to timely provide information and education to financial advisers and investors; providing advertising and marketing for the closed-end funds; maintaining its closed-end fund website; and providing educational seminars. With respect to closed-end funds that utilize leverage through the issuance of auction rate preferred securities ("ARPS"), the Board has recognized the unprecedented market conditions in the auction rate market industry with the failure of the auction process. The Independent Board Members noted Nuveen's efforts and the resources and personnel employed to analyze the situation, explore potential alternatives and develop and implement solutions that serve the interests of the affected funds and all of their respective shareholders. The Independent Board Members further noted Nuveen's commitment and efforts to keep investors and financial advisers informed as to its progress in addressing the ARPS situation through, among other things, conference calls, press releases, and information posted on its website as well as its refinancing activities. The Independent Board Members also noted Nuveen's continued support for holders of preferred shares of its closed-end funds by, among other things, seeking distribution for preferred shares with new market participants, managing relations with remarketing agents and the broker community, maintaining the leverage and risk management of leverage and maintaining systems necessary to test compliance with rating agency criteria. Based on their review, the Independent Board Members found that, overall, the nature, extent and quality of services provided (and expected to be provided) to the respective Funds under the Advisory Agreements were satisfactory. B. The Investment Performance of the Funds and NAM The Board considered the investment performance of each Fund, including the Fund's historic performance as well as its performance compared to funds with similar investment objectives (the "Performance Peer Group") based on data provided by an independent third party (as described below). The Independent Board Members also reviewed portfolio level performance (which does not reflect fund level fees, expenses and leverage), as described in further detail below. In evaluating the performance information, the Board considered whether the Fund has operated within its investment objectives and parameters and the impact that the investment mandates may have had on performance. In addition, in comparing a Fund's performance with that of its Performance Peer Group, the Independent Board Members took into account that the closest Performance Peer Group in certain ------ 107 ------ | Annual Investment Management Agreement | Approval Process (continued) instances may not adequately reflect the respective fund's investment objectives and strategies thereby hindering a meaningful comparison of the fund's performance with that of the Performance Peer Group. The Independent Board Members reviewed performance information including, among other things, total return information compared with the Fund's Performance Peer Group and recognized benchmarks for the one-, three-, and five-year periods (as applicable) ending December 31, 2007 and with the Performance Peer Group for the quarter and same yearly periods ending March 31, 2008 (as applicable). The Independent Board Members also reviewed the Fund's portfolio level performance (which does not reflect fund level fees and expenses (and leverage for closed-end funds)) compared to recognized benchmarks for the one-, three-, and five-year periods ending December 31, 2007 (as applicable). The analysis was used to assess the efficacy of investment decisions against appropriate measures of risk and total return, within specific market segments. This information supplemented the Fund performance information provided to the Board at each of its quarterly meetings. Based on their review, the Independent Board Members determined that each Fund's investment performance over time had been satisfactory. C. Fees, Expenses and Profitability 1. Fees and Expenses The Board evaluated the management fees and expenses of each Fund reviewing, among other things, such Fund's gross management fees (which take into account breakpoints), net management fees (which take into account fee waivers or reimbursements) and total expense ratios (before and after expense reimbursements and/or waivers) in absolute terms as well as compared to the gross management fees, net management fees (after waivers and/or reimbursements) and total expense ratios (before and after waivers) of a comparable universe of unaffiliated funds based on data provided by an independent data provider (the "Peer Universe") and/or a more focused subset of funds therein (the "Peer Group"). The Independent Board Members further reviewed data regarding the construction of Peer Groups as well as the methods of measurement for the fee and expense analysis and the performance analysis. In reviewing the comparisons of fee and expense information, the Independent Board Members took into account that in certain instances various factors such as the size of the Fund relative to peers, the size and particular composition of the Peer Group, the investment objectives of the peers, expense anomalies, and the timing of information used may impact the comparative data, thereby limiting the ability to make a meaningful comparison. The Independent Board Members also considered, among other things, the differences in the use of leverage and the differences in the use of insurance, if any. In reviewing the fee schedule for a Fund, the Independent Board Members also considered the fund-level and complex-wide breakpoint schedules (described in further detail below) and any fee waivers and reimbursements provided by Nuveen (applicable, in particular, for certain closed-end funds launched since 1999). Based on their review of the fee and expense information provided, the Independent Board Members determined that each Fund's management fees and net total expense ratio were reasonable in light of the nature, extent and quality of services provided to the Fund. 2. Comparisons with the Fees of Other Clients The Independent Board Members further reviewed information regarding the nature of services and fee rates offered by NAM to other clients. Such other clients include NAM's municipal separately managed accounts. In evaluating the comparisons of fees, the Independent Board Members noted that the fee rates charged to the Funds and other clients vary, among other things, because of the different services involved and the additional regulatory and compliance requirements associated with registered investment companies, such as the Funds. Accordingly, the Independent Board Members considered the differences in the product types, including, but not limited to, the services provided, the structure and operations, product distribution and costs thereof, portfolio investment policies, investor profiles, account sizes and regulatory requirements. The Independent Board Members noted, in particular, that - ------ 108 - ------ the range of services provided to the Funds (as discussed above) is much more extensive than that provided to separately managed accounts. Given the inherent differences in the products, particularly the extensive services provided to the Funds, the Independent Board Members believe such facts justify the different levels of fees. 3. Profitability of Nuveen In conjunction with its review of fees, the Independent Board Members also considered the profitability of Nuveen for its advisory activities (which incorporated Nuveen's wholly-owned affiliated sub-advisers) and its financial condition. The Independent Board Members reviewed the revenues and expenses of Nuveen's advisory activities for the last two years and the allocation methodology used in preparing the profitability data. The Independent Board Members noted this information supplemented the profitability information requested and received during the year to help keep them apprised of developments affecting profitability (such as changes in fee waivers and expense reimbursement commitments). In this regard, the Independent Board Members noted that they had also appointed an Independent Board Member as a point person to review and keep them apprised of changes to the profitability analysis and/or methodologies during the year. The Independent Board Members considered Nuveen's profitability compared with other fund sponsors prepared by two independent third party service providers as well as comparisons of the revenues, expenses and profit margins of various unaffiliated management firms with similar amounts of assets under management prepared by Nuveen. In reviewing profitability, the Independent Board Members recognized the subjective nature of determining profitability which may be affected by numerous factors including the allocation of expenses. Further, the Independent Board Members recognized the difficulties in making comparisons as the profitability of other advisers generally is not publicly available and the profitability information that is available for certain advisers or management firms may not be representative of the industry and may be affected by, among other things, the adviser's particular business mix, capital costs, types of funds managed and expense allocations. Notwithstanding the foregoing, the Independent Board Members reviewed Nuveen's methodology and assumptions for allocating expenses across product lines to determine profitability. In reviewing profitability, the Independent Board Members recognized Nuveen's investment in its fund business. Based on its review, the Independent Board Members concluded that Nuveen's level of profitability for its advisory activities was reasonable in light of the services provided. In evaluating the reasonableness of the compensation, the Independent Board Members also considered other amounts paid to NAM by the Funds as well as any indirect benefits (such as soft dollar arrangements, if any) NAM and its affiliates receive, or are expected to receive, that are directly attributable to the management of the Funds, if any. See Section E below for additional information on indirect benefits NAM may receive as a result of its relationship with the Funds. Based on their review of the overall fee arrangements of each Fund, the Independent Board Members 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 With respect to economies of scale, the Independent Board Members recognized the potential benefits resulting from the costs of a fund being spread over a larger asset base. The Independent Board Members therefore considered whether the Funds have appropriately benefited from any economies of scale and whether there is potential realization of any further economies of scale. In considering economies of scale, the Independent Board Members have recognized that economies of scale are difficult to measure and predict with precision, particularly on a fund-by-fund basis. Notwithstanding the foregoing, one method to help ensure the shareholders share in these benefits is to include breakpoints in the advisory fee schedule. Accordingly, the Independent Board Members reviewed and considered the fund-level breakpoints in the ------ 109 ------ | Annual Investment Management Agreement | Approval Process (continued) advisory fee schedules that reduce advisory fees. In this regard, given that the Funds are closed-end funds, the Independent Board Members recognized that although the Funds may from time to time make additional share offerings, the growth in their assets will occur primarily through appreciation of each Fund's investment portfolio. In addition to fund-level advisory fee breakpoints, the Board also considered the Funds' complex-wide fee arrangement. Pursuant to the complex-wide fee arrangement, the fees of the funds in the Nuveen complex, including the Funds, are reduced as the assets in the fund complex reach certain levels. In evaluating the complex-wide fee arrangement, the Independent Board Members recognized that the complex-wide fee schedule was recently revised in 2007 to provide for additional fee savings to shareholders and considered the amended schedule. The Independent Board Members further considered that the complex-wide fee arrangement seeks to provide the benefits of economies of scale to fund shareholders when total fund complex assets increase, even if assets of a particular fund are unchanged or have decreased. The approach reflects the notion that some of Nuveen's costs are attributable to services provided to all its funds in the complex and therefore all funds benefit if these costs are spread over a larger asset base. Based on their review, the Independent Board Members concluded that the breakpoint schedule and complex-wide fee arrangement were acceptable and desirable in providing benefits from economies of scale to shareholders. E. Indirect Benefits In evaluating fees, the Independent Board Members received and considered information regarding potential "fall out" or ancillary benefits NAM or its affiliates may receive as a result of its relationship with each Fund. In this regard, the Independent Board Members considered revenues received by affiliates of NAM for serving as agent at Nuveen's preferred trading desk and for serving as a co-manager in the initial public offering of new closed-end exchange traded funds. In addition to the above, the Independent Board Members considered whether NAM received any benefits from soft dollar arrangements whereby a portion of the commissions paid by a Fund for brokerage may be used to acquire research that may be useful to NAM in managing the assets of the Funds and other clients. The Independent Board Members noted that NAM does not currently have any soft dollar arrangements; however, to the extent certain bona fide agency transactions that occur on markets that traditionally trade on a principal basis and riskless principal transactions are considered as generating "commissions," NAM intends to comply with the applicable safe harbor provisions. Based on their review, the Independent Board Members concluded that any indirect benefits received by NAM as a result of its relationship with the Funds were reasonable and within acceptable parameters. F. Other Considerations The Independent Board Members did not identify any single factor discussed previously as all-important or controlling. The Board Members, including the Independent Board Members, unanimously concluded that the terms of the Advisory Agreements are fair and reasonable, that NAM's fees are reasonable in light of the services provided to each Fund and that the Advisory Agreements be renewed. - ------ 110 - ------ Reinvest Automatically EASILY and CONVENIENTLY -------------------------------------------------------------------------- Nuveen makes reinvesting easy. A phone call is all it takes to set up your reinvestment account. Nuveen Closed-End Funds Dividend Reinvestment Plan Your Nuveen Closed-End Fund allows you to conveniently reinvest dividends and/or capital gains distributions in additional Fund shares. By choosing to reinvest, you'll be able to invest money regularly and automatically, and watch your investment grow through the power of tax-free compounding. Just like dividends or distributions in cash, there may be times when income or capital gains taxes may be payable on dividends or distributions that are reinvested. It is important to note that an automatic reinvestment plan does not ensure a profit, nor does it protect you against loss in a declining market. Easy and convenient To make recordkeeping easy and convenient, each month you'll receive a statement showing your total dividends and distributions, the date of investment, the shares acquired and the price per share, and the total number of shares you own. How shares are purchased The shares you acquire by reinvesting will either be purchased on the open market or newly issued by the Fund. If the shares are trading at or above net asset value at the time of valuation, the Fund will issue new shares at the greater of the net asset value or 95% of 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. If the Plan Agent begins purchasing Fund shares on the open market while shares are trading below net asset value, but the Fund's shares subsequently trade at or above their net asset value before the Plan Agent is able to complete its purchases, the Plan Agent may cease open-market purchases and may invest the uninvested portion of the distribution in newly-issued Fund shares at a price equal to the greater of the shares' net asset value or 95% of the shares' market value on the last business day immediately prior to the purchase date. 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. ------ 111 ------ 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. - ------ 112 - ------ NOTES -------------------------------------------------------------------------- ------ 113 ------ Glossary of TERMS USED in this REPORT -------------------------------------------------------------------------- o Auction Rate Bond: An auction rate bond is a security whose interest payments are adjusted periodically through an auction process, which process typically also serves as a means for buying and selling the bond. Auctions that fail to attract enough buyers for all the shares offered for sale are deemed to have "failed", with current holders receiving a formula-based interest rate until the next scheduled auction. o 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. o Average Effective Maturity: The average of the number of years to maturity of the bonds in a Fund's portfolio, computed by weighting each bond's time to maturity (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 unless an escrow account has been established to redeem the bond before maturity. The market value weighting for an investment in an inverse floating rate security is the value of the portfolio's residual interest in the inverse floating rate trust, and does not include the value of the floating rate securities issued by the trust. o Inverse Floaters: Inverse floating rate securities are created by depositing a municipal bond, typically with a fixed interest rate, into a special purpose trust created by a broker-dealer. This trust, in turn, (a) issues floating rate certificates typically paying short-term tax-exempt interest rates to third parties in amounts equal to some fraction of the deposited bond's par amount or market value, and (b) issues an inverse floating rate certificate (sometimes referred to as an "inverse floater") to an investor (such as a Fund) interested in gaining investment exposure to a long-term municipal bond. The income received by the holder of the inverse floater varies inversely with the short-term rate paid to the floating rate certificates' holders, and in most circumstances the holder of the inverse floater bears substantially all of the underlying bond's downside investment risk. The holder of the inverse floater typically also benefits disproportionately from any potential appreciation of the underlying bond's value. Hence, an inverse floater essentially represents an investment in the underlying bond on a leveraged basis. o 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. o Market Yield (also known as Dividend Yield or Current Yield): An investment's current annualized dividend divided by its current market price. o Net Asset Value (NAV): A Fund's NAV per common share is calculated by subtracting the liabilities of the Fund (including any Preferred shares issued in order to leverage the Fund) from its total assets and then dividing the remainder by the number of common shares outstanding. Fund NAVs are calculated at the end of each business day. o 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. o Zero Coupon Bond: A zero coupon bond does not pay a regular interest coupon to its holders during the life of the bond. Tax-exempt income to the holder of the bond comes from accretion of the difference between the original purchase price of the bond at issuance and the par value of the bond at maturity and is effectively paid at maturity. The market prices of zero coupon bonds generally are more volatile than the market prices of bonds that pay interest periodically. - ------ 114 - ------ | Other Useful INFORMATION QUARTERLY PORTFOLIO OF INVESTMENTS AND PROXY VOTING INFORMATION You may obtain (i) each Fund's quarterly portfolio of investments, (ii) information regarding how the Funds voted proxies relating to portfolio securities held during the twelve-month period ended June 30, 2008, and (iii) a description of the policies and procedures that the Funds used to determine how to vote proxies relating to portfolio securities 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 (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 100 F Street NE, Washington, D.C. 20549. CEO Certification Disclosure Each Fund's Chief Executive Officer has submitted to the New York Stock Exchange (NYSE) 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. Board of Directors/Trustees John P. Amboian Robert P. Bremner Jack B. Evans William C. Hunter David J. Kundert William J. Schneider Judith M. Stockdale Carole E. Stone Terence J. Toth Fund Manager Nuveen Asset Management 333 West Wacker Drive Chicago, IL 60606 Custodian State Street Bank & Trust Company Boston, MA Transfer Agent and Shareholder Services State Street Bank & Trust Company Nuveen Funds P.O. Box 43071 Providence, RI 02940-3071 (800) 257-8787 Legal Counsel Chapman and Cutler LLP Chicago, IL Independent Registered Public Accounting Firm Ernst & Young LLP Chicago, IL Each Fund intends to repurchase and/or redeem shares of its own common or auction rate preferred stock in the future at such times and in such amounts as is deemed advisable. During the period covered by this report, NQI, NIO, NIF, NPX, NVG and NEA redeemed 783, 2,266, 242, 10,756, 241 and 448 auction rate preferred shares, respectively. Any future repurchases and/or redemptions will be reported to shareholders in the next annual or semi-annual report. ------ 115 ------ Nuveen Investments: - ------------------- SERVING INVESTORS FOR GENERATIONS 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. Nuveen Investments is a global investment management firm that seeks to help secure the long-term goals of institutions and high net worth investors as well as the consultants and financial advisors who serve them. Nuveen Investments markets its growing range of specialized investment solutions under the high-quality brands of HydePark, NWQ, Nuveen, Rittenhouse, Santa Barbara, Symphony and Tradewinds. In total, the Company managed $134 billion of assets on September 30, 2008. 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. Learn more about Nuveen Funds at: www.nuveen.com/etf | Share prices | Fund details | Daily financial news | Investor education | Interactive planning tools EAN-D-1008D 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 Shareholder 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, who is "independent" for purposes of Item 3 of Form N-CSR. Mr. Evans was formerly President and Chief Operating Officer of SCI Financial Group, Inc., a full service registered broker-dealer and registered investment adviser ("SCI"). As part of his role as President and Chief Operating Officer, Mr. Evans actively supervised the Chief Financial Officer (the "CFO") and actively supervised the CFO's preparation of financial statements and other filings with various regulatory authorities. In such capacity, Mr. Evans was actively involved in the preparation of SCI's financial statements and the resolution of issues raised in connection therewith. Mr. Evans has also served on the audit committee of various reporting companies. At such companies, Mr. Evans was involved in the oversight of audits, audit plans, and the preparation of financial statements. Mr. Evans also formerly chaired the audit committee of the Federal Reserve Bank of Chicago. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Nuveen Insured Quality Municipal 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 the Audit Committee approved in advance all audit services and non-audit services that Ernst & Young LLP provided to the Fund, except for those non-audit services that were subject to the pre-approval exception under Rule 2-01 of Regulation S-X (the "pre-approval exception"). The pre-approval exception for services provided directly to the Fund waives the pre-approval requirement for services other than audit, review or attest services if: (A) the aggregate amount of all such services provided constitutes no more than 5% of the total amount of revenues paid by the Fund to its accountant during the fiscal year in which the services are provided; (B) the Fund did not recognize the services as non-audit services at the time of the engagement; and (C) the services are promptly brought to the Audit Committee's attention, and the Committee (or its delegate) approves the services before the audit is completed. The Audit Committee has delegated certain pre-approval responsibilities to its Chairman (or, in his absence, any other member of the Audit Committee). SERVICES THAT THE FUND'S AUDITOR BILLED TO THE FUND
AUDIT FEES BILLED AUDIT-RELATED FEES TAX FEES ALL OTHER FEES FISCAL YEAR ENDED TO FUND (1) BILLED TO FUND (2) BILLED TO FUND (3) BILLED TO FUND (4) - ------------------------------------------------------------------------------------------------------------------------------------ October 31, 2008 $ 34,177 $ 0 $ 0 $ 3,350 - ------------------------------------------------------------------------------------------------------------------------------------ Percentage approved 0% 0% 0% 0% pursuant to pre-approval exception - ------------------------------------------------------------------------------------------------------------------------------------ October 31, 2007 $ 30,015 $ 0 $ 500 $ 2,350 - ------------------------------------------------------------------------------------------------------------------------------------ Percentage approved 0% 0% 0% 0% pursuant to pre-approval exception - ------------------------------------------------------------------------------------------------------------------------------------
(1) "Audit Fees" are the aggregate fees billed for professional services for the audit of the Fund's annual financial statements and services provided in connection with statutory and regulatory filings or engagements. (2) "Audit Related Fees" are the aggregate fees billed for assurance and related services reasonably related to the performance of the audit or review of financial statements and are not reported under "Audit Fees". (3) "Tax Fees" are the aggregate fees billed for professional services for tax advice, tax compliance, and tax planning. (4) "All Other Fees" are the aggregate fees billed for products and services for agreed upon procedures engagements performed for leveraged funds. 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, 2008 $ 0 $ 0 $ 0 - -------------------------------------------------------------------------------------------------------------- Percentage approved 0% 0% 0% pursuant to pre-approval exception - -------------------------------------------------------------------------------------------------------------- October 31, 2007 $ 0 $ 0 $ 0 - -------------------------------------------------------------------------------------------------------------- Percentage approved 0% 0% 0% pursuant to pre-approval exception - --------------------------------------------------------------------------------------------------------------
NON-AUDIT SERVICES The following table shows the amount of fees that Ernst & Young LLP billed during the Fund's last two full fiscal years for non-audit services. The Audit Committee is required to pre-approve non-audit services that Ernst & Young LLP provides to the Adviser and any Affiliated Fund Services Provider, if the engagement related directly to the Fund's operations and financial reporting (except for those subject to the de minimis exception described above). The Audit Committee requested and received information from Ernst & Young LLP about any non-audit services that Ernst & Young LLP rendered during the Fund's last fiscal year to the Adviser and any Affiliated Fund Service Provider. The Committee considered this information in evaluating Ernst & Young LLP's independence.
FISCAL YEAR ENDED TOTAL NON-AUDIT FEES BILLED TO ADVISER AND AFFILIATED FUND SERVICE TOTAL NON-AUDIT FEES PROVIDERS (ENGAGEMENTS BILLED TO ADVISER AND RELATED DIRECTLY TO THE AFFILIATED FUND SERVICE TOTAL NON-AUDIT FEES OPERATIONS AND FINANCIAL PROVIDERS (ALL OTHER BILLED TO FUND REPORTING OF THE FUND) ENGAGEMENTS) TOTAL - ----------------------------------------------------------------------------------------------------------------------------- October 31, 2008 $ 3,350 $ 0 $ 0 $ 3,350 October 31, 2007 $ 2,850 $ 0 $ 0 $ 2,850
"Non-Audit Fees billed to Adviser" for both fiscal year ends represent "Tax Fees" billed to Adviser in their respective amounts from the previous table. Audit Committee Pre-Approval Policies and Procedures. Generally, the Audit Committee must approve (i) all non-audit services to be performed for the Fund by the Fund's independent accountants and (ii) all audit and non-audit services to be performed by the Fund's independent accountants for the Affiliated Fund Service Providers with respect to operations and financial reporting of the Fund. Regarding tax and research projects conducted by the independent accountants for the Fund and Affiliated Fund Service Providers (with respect to operations and financial reports of the Fund) such engagements will be (i) pre-approved by the Audit Committee if they are expected to be for amounts greater than $10,000; (ii) reported to the Audit Committee chairman for his verbal approval prior to engagement if they are expected to be for amounts under $10,000 but greater than $5,000; and (iii) reported to the Audit Committee at the next Audit Committee meeting if they are expected to be for an amount under $5,000. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. The registrant's Board of Directors or Trustees has a separately designated Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (15 U.S.C. 78c(a)(58)(A)). The members of the audit committee are Robert P. Bremner, Jack B. Evans, Terence J. Toth, William J. Schneider and David J. Kundert. ITEM 6. SCHEDULE OF INVESTMENTS. See Portfolio of Investments in Item 1. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. The registrant invests its assets primarily in municipal bonds and cash management securities. On rare occasions the registrant may acquire, directly or through a special purpose vehicle, equity securities of a municipal bond issuer whose bonds the registrant already owns when such bonds have deteriorated or are expected shortly to deteriorate significantly in credit quality. The purpose of acquiring equity securities generally will be to acquire control of the municipal bond issuer and to seek to prevent the credit deterioration or facilitate the liquidation or other workout of the distressed issuer's credit problem. In the course of exercising control of a distressed municipal issuer, NAM may pursue the registrant's interests in a variety of ways, which may entail negotiating and executing consents, agreements and other arrangements, and otherwise influencing the management of the issuer. NAM does not consider such activities proxy voting for purposes of Rule 206(4)-6 under the 1940 Act, but nevertheless provides reports to the registrant's Board of Trustees on its control activities on a quarterly basis. In the rare event that a municipal issuer were to issue a proxy or that the registrant were to receive a proxy issued by a cash management security, NAM would either engage an independent third party to determine how the proxy should be voted or vote the proxy with the consent, or based on the instructions, of the registrant's Board of Trustees or its representative. A member of NAM's legal department would oversee the administration of the voting, and ensure that records were maintained in accordance with Rule 206(4)-6, reports were filed with the SEC on Form N-PX, and the results provided to the registrant's Board of Trustees and made available to shareholders as required by applicable rules. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. THE PORTFOLIO MANAGER The following individual has primary responsibility for the day-to-day implementation of the registrant's investment strategies: NAME FUND PAUL BRENNAN Nuveen Insured Quality Municipal Fund, Inc Other Accounts Managed. In addition to managing the registrant, the portfolio manager is also primarily responsible for the day-to-day portfolio management of the following accounts: NUMBER OF PORTFOLIO MANAGER TYPE OF ACCOUNT MANAGED ACCOUNTS ASSETS - -------------------------------------------------------------------------------- Paul Brennan Registered Investment Company 15 $12.23 billion Other Pooled Investment Vehicles 0 $0 Other Accounts 1 $.859 million * Assets are as of October 31, 2008. None of the assets in these accounts are subject to an advisory fee based on performance. Compensation. Each portfolio manager's compensation consists of three basic elements--base salary, cash bonus and long-term incentive compensation. The compensation strategy is to annually compare overall compensation, including these three elements, to the market in order to create a compensation structure that is competitive and consistent with similar financial services companies. As discussed below, several factors are considered in determining each portfolio manager's total compensation. In any year these factors may include, among others, the effectiveness of the investment strategies recommended by the portfolio manager's investment team, the investment performance of the accounts managed by the portfolio manager, and the overall performance of Nuveen Investments, Inc. (the parent company of NAM). Although investment performance is a factor in determining the portfolio manager's compensation, it is not necessarily a decisive factor. The portfolio manager's performance is evaluated in part by comparing manager's performance against a specified investment benchmark. This fund-specific benchmark is a customized subset (limited to bonds in each Fund's specific state and with certain maturity parameters) of the S&P/Investortools Municipal Bond index, an index comprised of bonds held by managed municipal bond fund customers of Standard & Poor's Securities Pricing, Inc. that are priced daily and whose fund holdings aggregate at least $2 million. As of October 31, 2008, the S&P/Investortools Municipal Bond index was comprised of 52,959 securities with an aggregate current market value of $1,009 billion. Base salary. Each portfolio manager is paid a base salary that is set at a level determined by NAM in accordance with its overall compensation strategy discussed above. NAM is not under any current contractual obligation to increase a portfolio manager's base salary. Cash bonus. Each portfolio manager is also eligible to receive an annual cash bonus. The level of this bonus is based upon evaluations and determinations made by each portfolio manager's supervisors, along with reviews submitted by his peers. These reviews and evaluations often take into account a number of factors, including the effectiveness of the investment strategies recommended to the NAM's investment team, the performance of the accounts for which he serves as portfolio manager relative to any benchmarks established for those accounts, his effectiveness in communicating investment performance to stockholders and their representatives, and his contribution to the NAM's investment process and to the execution of investment strategies. The cash bonus component is also impacted by the overall performance of Nuveen Investments, Inc. in achieving its business objectives. Long-term incentive compensation. In connection with the acquisition of Nuveen Investments, Inc., by a group of investors lead by Madison Dearborn Partners in November 2007, certain employees, including portfolio managers, received profit interests in Nuveen's parent. These profit interests entitle the holders to participate in the appreciation in the value of Nuveen beyond the issue date and vest over five to seven years, or earlier in the case of a liquidity event. Material Conflicts of Interest. Each portfolio manager's simultaneous management of the registrant and the other accounts noted above may present actual or apparent conflicts of interest with respect to the allocation and aggregation of securities orders placed on behalf of the Registrant and the other account. NAM, however, believes that such potential conflicts are mitigated by the fact that the NAM has adopted several policies that address potential conflicts of interest, including best execution and trade allocation policies that are designed to ensure (1) that portfolio management is seeking the best price for portfolio securities under the circumstances, (2) fair and equitable allocation of investment opportunities among accounts over time and (3) compliance with applicable regulatory requirements. All accounts are to be treated in a non-preferential manner, such that allocations are not based upon account performance, fee structure or preference of the portfolio manager, although the allocation procedures may provide allocation preferences to funds with special characteristics (such as favoring state funds versus national funds for allocations of in-state bonds). In addition, NAM has adopted a Code of Conduct that sets forth policies regarding conflicts of interest. Beneficial Ownership of Securities. As of October 31, 2008, the portfolio manager beneficially owned the following dollar range of equity securities issued by the Registrant and other Nuveen Funds managed by NAM's municipal investment team.
DOLLAR RANGE OF EQUITY SECURITIES DOLLAR RANGE OF BENEFICIALLY OWNED EQUITY IN THE REMAINDER OF SECURITIES NUVEEN FUNDS MANAGED BENEFICIALLY BY NAM'S MUNICIPAL NAME OF PORTFOLIO MANAGER FUND OWNED IN FUND INVESTMENT TEAM - ------------------------------------------------------------------------------------------------------------------- Paul Brennan Nuveen Insured Quality Municipal Fund, Inc $0 $100,001-$500,000
PORTFOLIO MANAGER BIO: Paul Brennan, CFA, CPA, became a portfolio manager of Flagship Financial Inc. in 1994, and subsequently became an Assistant Vice President of NAM upon the acquisition of Flagship Resources Inc. by Nuveen in 1997. He became Vice President of NAM in 2002. He currently manages investments for 16 Nuveen-sponsored investment companies. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Period* (a) (b) (c) (d)* TOTAL NUMBER OF AVERAGE TOTAL NUMBER OF SHARES MAXIMUM NUMBER (OR SHARES (OR PRICE (OR UNITS) PURCHASED AS APPROXIMATE DOLLAR VALUE) OF UNITS) PAID PER PART OF PUBLICLY SHARES (OR UNITS) THAT MAY YET PURCHASED SHARE (OR ANNOUNCED PLANS OR BE PURCHASED UNDER THE PLANS OR UNIT) PROGRAMS PROGRAMS AUGUST 7-31, 2008 0 $0 0 3,830,000 SEPTEMBER 1-30, 2008 0 $0 0 3,830,000 OCTOBER 1-31, 2008 0 $0 0 3,830,000 TOTAL 0
* The registrant's repurchase program, which authorized the repurchase of 3,830,000 shares, was announced August 7, 2008. Any repurchases made by the registrant pursuant to the program were made through open-market transactions. 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 Insured Quality Municipal Fund, Inc. ----------------------------------------------------------- By (Signature and Title) /s/ Kevin J. McCarthy ---------------------------------------------- Kevin J. McCarthy Vice President and Secretary Date: January 9, 2009 ------------------------------------------------------------------- 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 9, 2009 ------------------------------------------------------------------- By (Signature and Title) /s/ Stephen D. Foy ---------------------------------------------- Stephen D. Foy Vice President and Controller (principal financial officer) Date: January 9, 2009 ------------------------------------------------------------------- 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 Insured Quality Municipal 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 9, 2009 /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 Insured Quality Municipal 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 9, 2009 /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 Insured Quality Municipal 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, 2008 (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 9, 2009 ----------------------- /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-----