-----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, BfQVcamcrKuCEFGD9QJYKauFWqm33uwmHDK5/MotMqIKcyjwvQ0h7xF8MRGHSpm5 Rl6i8fjILjNjsE+Ux7cxuA== 0000891804-99-000203.txt : 19990202 0000891804-99-000203.hdr.sgml : 19990202 ACCESSION NUMBER: 0000891804-99-000203 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981130 FILED AS OF DATE: 19990201 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NUVEEN MASSACHUSETTS PREMIUM INCOME MUNICIPAL FUND CENTRAL INDEX KEY: 0000897419 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 367032570 STATE OF INCORPORATION: MA FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-07484 FILM NUMBER: 99517813 BUSINESS ADDRESS: STREET 1: 333 WEST WACKER DR CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3129178200 MAIL ADDRESS: STREET 1: 333 WEST WACKER DRIVE STREET 2: 333 WEST WACKER DRIVE CITY: CHICAGO STATE: IL ZIP: 60606 N-30D 1 NUVEEN MASSACHUSETTS PREM INCOME MUNI FUND(NMT) NUVEEN Exchange-Traded Funds November 30, 1998 Semiannual Report Dependable, tax-free income to help you keep more of what you earn. NTC Connecticut NMT Massachusetts NOM Missouri NPW Washington Photo of: People reading Highlights As of November 30, 1998 Credit Quality Performance Highlights ================================================================================ Nuveen Connecticut Premium Income Municipal Fund (NTC) o One-year taxable-equivalent total return on share price of 15.7% for investors in the combined 34.1% federal and state income tax bracket o Outperformed the Lehman Brothers Municipal Bond Index and Lipper Peer Group average for the one-year period o Stable tax-free dividend for 16 months PIE CHART: AAA/U.S. Guaranteed 69% AA 18% A 2% BBB/NR 11% Nuveen Massachusetts Premium Income Municipal Fund (NMT) o One-year taxable-equivalent total return on share price of 14.77% for investors in the combined 39.3% federal and state income tax bracket o Outperformed the Lehman Brothers Municipal Bond Index and Lipper Peer Group average for the one-year period o Stable tax-free dividend for 22 months PIE CHART: AAA/U.S. Guaranteed 62% AA 16% A 18% BBB/NR 4% Nuveen Missouri Premium Income Municipal Fund (NOM) o One-year taxable-equivalent total return on share price of 18.10% for investors in the combined 35.1% federal and state income tax bracket o Outperformed the Lehman Brothers Municipal Bond Index and paralleled the Lipper Peer Group average for the one-year period o Increased its dividend in August, after posting 12 consecutive months of stable income PIE CHART: AAA/U.S. Guaranteed 78% AA 12% A 6% BBB/NR 4% Nuveen Washington Premium Income Municipal Fund (NPW) o One-year taxable-equivalent total return on share price of 17.86% for investors in the 31% federal income tax bracket o Outperformed the Lehman Brothers Municipal Bond Index and Lipper Peer Group average for the one-year period o Increased its dividend in August, after posting 21 consecutive months of stable income PIE CHART: AAA/U.S. Guaranteed 67% AA 27% A 3% BBB/NR 3% Contents 1 Dear Shareholder 4 NTC Commentary and Overview 6 NMT Commentary and Overview 8 NOM Commentary and Overview 10 NPW Commentary and Overview 12 Portfolio of Investments 23 Statement of Net Assets 24 Statement of Operations 25 Statement of Changes in Net Assets 26 Notes to Financial Statements 30 Financial Highlights 32 Building Better Portfolios 33 Fund Information Photo of: Timothy R. Schwertfeger Chairman of the Board Sidebar text: Wealth takes a lifetime to build. Once achieved, it should be preserved. Dear Shareholder I'm pleased to report that over the past 12 months, the Nuveen Exchange-Traded Funds covered here have continued to perform well, meeting their primary objective of providing you with attractive levels of tax-free income and after-tax total returns. The strong market in fixed-income securities, bolstered by investor demand for quality investments, benefited these funds and led to increases in share price. Attractive tax-free income, enhanced by strong share price performance, illustrates once again that Nuveen's Exchange-Traded Funds can provide an excellent investment option for income-oriented investors. The Year in Review Over the past year, the markets endured bouts of volatility, as the Asian financial crisis spilled over into emerging markets and affected economies around the globe. Investors responded by seeking a haven from the uncertainty in more conservative investments, such as municipal bond funds. To avert a potential domestic credit crunch and bring some stability to global markets, the Federal Reserve moved to ease short-term interest rates for the first time in almost three years. Between the end of September and mid-November, three successive cuts brought the federal funds rate to 4.75%. As interest rates continued to trend downward, the competitive yields offered by our exchange-traded funds stimulated additional investor interest and demand, which led to improved share prices overall. In this environment, the market for exchange-traded municipal bond funds has been exceptionally strong. These funds continue to represent a bright spot among fixed-income investments, offering attractive income in a market that places a high premium on yield. In addition, the funds have generally maintained good levels of call protection, resulting in relatively stable income streams. In the coming months, we will continue to watch several key factors affecting the future of the economy, including corporate earnings reports, wage and employment statistics, U.S. consumer confidence levels, the continuing impact of foreign financial turmoil, and any further interest rate indications from the Federal Reserve. These factors will influence the outlook for fixed-income markets well into 1999. Graphic of: Bond Buyer 40 Chart Municipal Bonds: A Compelling Value Over the past year, rising bond prices drove yields on 30-year Treasuries to historic lows. With yields on the long Treasury bond pushing below 5% at times, the yield on the Bond Buyer 40, an unmanaged index of long-term municipal bonds, fell just 26 basis points - from 5.36% to 5.10% - compared with the 99-point drop in Treasury yields over the past 12 months. As of November 30, 1998, the ratio of long-term municipal yields to 30-year Treasury yields stood at more than 100.8%, compared with the more typical range of 86-87%. Over the past few months, this ratio has been as high as 104%. For investors, this means that quality long-term municipal bonds currently offer about the same yield as Treasury bonds with comparable maturities - even before the tax advantages of municipal bonds are taken into account. On an after-tax basis in today's market, municipal bonds present an exceptionally attractive investment option relative to Treasuries. The steep decline in Treasury yields during the past year was due to several factors, including the strong interest in these investments by international investors. As the financial turmoil in Asia spread to economies worldwide and the dol lar strengthened against foreign currencies, the demand for U.S. dollar- denominated Treasury securities increased. Compounding this situation was the shortage of Treasury issues brought about by the federal budget surplus, which reversed the multi-billion dollar deficits of the past few years and reduced the federal government's need to issue bonds. In the municipal market, where foreign demand was limited by an inability of foreign investors to benefit from the tax advantages of municipals, low interest rates and a strong economy combined to generate high levels of new issuance and a dramatic increase in the refinancing of existing bonds. The first 11 months of 1998 saw over $255 billion of municipal issuance, up 28.4% over the same period in 1997. In terms of total municipal issuance, this put 1998 on pace as the second largest year on record. In addition, the continued strength of the U.S. economy produced improvements in the fundamental financial health of many municipalities and boosted the overall credit quality of municipal bonds. In the third quarter of 1998, issues upgraded by the two major rating agencies outnumbered downgrades by a margin of 7 to 2. Nuveen Expertise Is Key The key to taking advantage of the exceptional values currently available in the municipal market is the ability of a proven investment manager. At Nuveen, we recognize the value of time-tested expertise. The high level of recent municipal issuance, for example, highlighted the value of Nuveen's in-depth knowledge of the municipal market, as our portfolio management teams carefully analyzed the flood of issues to select those securities best suited to help the funds achieve their investment objectives. As a further enhancement to our management capabilities, Nuveen has assembled a strong core of Premier Advisers(SM), a group of managers who are experts in their particular areas of the market, to provide time-tested experience and insights. In addition to Nuveen Investment Advisory Services, our Premier Adviser for tax-free investing, you can rely on other Premier Advisers to share their wisdom in the equity market, including Institutional Capital Corporation for value investing and Rittenhouse Financial Services, Inc. for growth investing. For more information about the funds managed by these Premier Advisers, including charges and expenses, contact your finan cial adviser for a prospectus, or call Nuveen at (800) 621-7227. Please read the prospectus carefully before you invest or send money. We encourage you to talk with your financial adviser about the ways Nuveen's expanding selection of investments can assist you in establishing a diversified portfolio designed to help you build and sustain long-term financial security. Over the past 100 years, Nuveen has evolved from a company that dealt with only municipal bonds into a well respected firm that handles a variety of investment options. I look forward to continuing this exciting journey. We are grateful for the confidence you have placed in us, and we intend to continue earning your trust in the years ahead. Sincerely, Timothy R. Schwertfeger Chairman of the Board January 15, 1999 Sidebar text: "The key to taking advantage of the exceptional values currently available in the municipal market is the ability of a proven investment manager." Nuveen Connecticut Premium Income Municipal Fund (NTC) Portfolio Manager's Comments Portfolio manager Dan Solender reviews the municipal market, fund performance, and key investment strategies for the Connecticut fund. A six-year veteran of Nuveen, Dan has 11 years of investment experience. He has managed NTC since its inception in May 1993. WHERE DID CONNECTICUT RANK IN TERMS OF MUNICIPAL ISSUANCE SINCE THE BEGINNING OF THE YEAR? WHAT ECONOMIC FACTORS AFFECTED THE STATE? Connecticut, the wealthiest state in the country, was a relatively quiet participant in the municipal market, ranking 22nd in issuance for the year ended November 30, 1998. There has been a shortage of issuers, which makes it difficult for individual investors to buy single bonds. Nuveen is one of the largest municipal bond investors in Connecticut and is able to buy big blocks of bonds when they are issued. This underscores the importance of our brand name in a competitive marketplace. Connecticut generally sees flurries of trading activity as opposed to a steady marketplace. New deals are often the catalyst for these flurries. As investors raise funds to pay for new purchases, other bonds may have to be sold, which then spurs interest in the secondary market. Compared to prior years, Connecticut's economy has per formed well and been more in line with the national economy. Though its economic performance is expected to taper off slight ly in 1999 due to labor shortages, slower population increases, and slower national growth, Connecticut is still expected to experience moderate growth. The state's economy continued to diversify away from manufacturing and defense-related industries into a more service oriented economy, with a focus on the financial services sector, healthcare, and pharmaceuticals. Gaming has become the state's largest growth industry. HOW DID THE FUND PERFORM OVER THE PAST YEAR? For the 12-month period ended November 30, 1998, the Nuveen Connecticut Premium Income Municipal Fund (NTC) produced a total return on net asset value of 9.48%, providing a taxable-equivalent total return of 12.46% for investors in the combined 34.1% federal and state income tax bracket. The total return com pares with the Lehman Brothers Municipal Bond Index's(1) annual return of 7.76%. The fund also outperformed the relevant Lipper Peer Group(2) average return of 8.86%, ranking third among the group's 18 funds. Much of the fund's performance over the past 12 months can be tied to its duration. As of November 30, 1998, NTC had a leverage-adjusted duration(3) of 9.30 years, compared with the unleveraged Lehman index's duration of 7.22 years. Fund duration measures a bond fund's price volatility, or reaction to interest rate movements. The longer the duration, the more sensitive the fund is to changes in interest rates. During a period of falling interest rates, longer duration enables a fund to participate more fully in market gains. However, when rates rise, longer duration can make the fund more vulnerable to potential price declines. Over the past year, as interest rates trended downward, funds with durations longer than that of the index generally tended to outperform the market. HOW WERE THE FUND'S DIVIDEND AND SHARE PRICE AFFECTED? In the current low interest rate environment, good call protec tion helped support NTC's dividend and protect the income of this fund from erosion. As of November 30, 1998, NTC had provided shareholders with 16 consecutive months of steady income. NTC also offered a competitive mar ket yield of 4.87%, equivalent to a taxable yield of 7.39% for investors in the combined 34.1% federal and state income tax bracket. As Tim mentioned in his letter to shareholders, share price performance among the Nuveen Exchange-Traded Funds has been strong over the past 12 months. As interest rates fell, active demand for these funds increased share prices, further widening the spread between NTC's share price and its net asset value. As of November 30, 1998, NTC was trading at a premium of 11.02% to its net asset value and also had a one-year total return on its share price of 12.93%. WHAT KEY STRATEGIES WERE USED TO MANAGE THE FUND DURING THE PAST YEAR? The largest issuers in Connecticut are the state itself (general tax obligation bonds) and the state housing finance authority. The heavier supply of new issues in these two sectors made it challenging to find other types of issues to keep the fund well-diversified. One area where we did find opportunities to add value was the education sector, which represented 22% of the fund's investments, as of November 30, 1998. A number of small issues in the $10-50 million range enabled us to be selective and focus on bonds offering the best characteristics, such as those issued by Sacred Heart University and Fairfield University. We continued to hold the healthcare issues we purchased several years ago, which made up an additional 20% of the fund. We believe NTC is currently well-positioned in terms of duration, diversification by credit and sector, and call protection. Over the past year, we worked to further improve call protection by taking advantage of a situation where we were able to purchase bonds with 10 years of call protection for the price of a bond with five years of protection. Given the tight credit spreads in the current market, we continued to focus on high quality issues, with 69% of the portfolio's holdings invested in bonds rated AAA. WHAT IS NUVEEN'S OUTLOOK FOR THE FUTURE? Looking ahead for NTC, we will continue to watch the new issuance market for value, taking advantage of the buying opportunities that arise as issues come to market. This is an area where Nuveen's exceptional access to new deals and our expertise as an experienced investment manager knowledgeable about the unique aspects of the Connecticut municipal market can result in added value for our investors. Our goals for the coming year are to continue taking advantage of opportunities to add yield, extend call protection if we can do so inexpensively, and keep the fund well-diversified. The current market environment - influenced by declining interest rates, benign inflation, and strong municipal supply - has helped to position municipal bonds as one of the most compelling values in today's marketplace. We expect that the excellent municipal-to-Treasury ratio, combined with continued volatility in the equity markets and investors' increasing aware ness of the need for asset allocation rebalancing, will result in growing demand for municipal bond funds. We believe that investors who take advantage of current opportunities in the municipal market should be rewarded with healthy returns and attractive yields in the months ahead. 1 The Lehman Brothers Municipal Bond Index is an unleveraged index comprising a broad range of investment-grade municipal bonds and does not reflect any initial or ongoing expenses. 2 The Lipper Peer Group return represents the average annualized returns of the 18 funds in the Lipper State Leveraged Municipal Debt category. The return assumes reinvestment of dividends and does not reflect any applicable sales charges. 3 Leverage-adjusted duration, also known as fund duration, takes into account the leveraging process for each fund and therefore differs from the duration of the actual portfolio of individual bonds that make up the fund. Unless otherwise noted, refer ences to duration in this commentary are intended to indicate fund duration. Nuveen Connecticut Premium Income Municipal Fund Performance Overview As of November 30, 1998 NTC Portfolio Statistics ================================================== Inception Date 5/93 - -------------------------------------------------- Share Price $16 3/8 - -------------------------------------------------- Net Asset Value Per Share $14.75 - -------------------------------------------------- Market Yield 4.87% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Only)(1) 7.06% - -------------------------------------------------- Taxable-Equivalent Yield (Federal and State)(1) 7.39% - -------------------------------------------------- Fund Net Assets ($000) $114,898 - -------------------------------------------------- Average Effective Maturity (Years) 18.67 - -------------------------------------------------- Leverage-Adjusted Duration (Years) 9.30 - -------------------------------------------------- Annualized Total Return ================================================== On Share Price On NAV - -------------------------------------------------- 1-Year 12.93% 9.48% - -------------------------------------------------- 3-Year 12.83% 8.32% - -------------------------------------------------- 5-Year 7.69% 7.28% - -------------------------------------------------- Since Inception 7.08% 6.51% - -------------------------------------------------- Taxable-Equivalent Total Return(2) ================================================== On Share Price On NAV - -------------------------------------------------- 1-Year 15.70% 12.46% - -------------------------------------------------- 3-Year 15.75% 11.28% - -------------------------------------------------- 5-Year 10.66% 10.35% - -------------------------------------------------- Since Inception 9.91% 9.43% - -------------------------------------------------- Top Five Sectors (as a % of total investments) ================================================== Education and Civic Organizations 22% - -------------------------------------------------- Health Care 20% - -------------------------------------------------- Utilities 12% - -------------------------------------------------- Tax Obligation (General) 8% - -------------------------------------------------- Transportation 8% - -------------------------------------------------- 1 Taxable-equivalent yield represents the yield on a taxable investment nec essary to equal the yield of the Nuveen fund on an after-tax basis. The federal only rate is based on the current market yield and a federal income tax rate of 31%. The rate shown for federal and state highlights the added value of owning shares that are also exempt from state income taxes. It is based on a combined federal and state income tax rate of 34.1%. 2 Taxable-equivalent total return is based on the annualized total return and a combined federal and state income tax rate of 34.1%. It represents the return on a taxable investment necessary to equal the return of the Nuveen fund on an after-tax basis. Bar Chart: 1997-1998 Monthly Tax-Free Dividends Per Share 12/97 0.0665 1/98 0.0665 2/98 0.0665 3/98 0.0665 4/98 0.0665 5/98 0.0665 6/98 0.0665 7/98 0.0665 8/98 0.0665 9/98 0.0665 10/98 0.0665 11/98 0.0665 Line Chart: Share Price Performance 12/5/97 15.563 14.938 14.75 14.875 15 15.5 15.625 15.875 15.875 15.938 15.938 15.688 16 16.188 16.063 16.125 15.688 15.625 15.625 15.438 15.25 15.438 15 15.375 15.5 15.875 16.125 16.125 15.688 15.938 16.313 15.625 15.875 15.875 15.813 15.875 16 15.875 15.938 15.813 15.938 16.063 16.875 16.875 16.75 16.5 16.63 16.69 16.38 16.31 11/30/98 16.375 Weekly Closing Price Past performance is not predictive of future results. Nuveen Massachusetts Premium Income Municipal Fund (NMT) Portfolio Manager's Comments Portfolio manager Tom Futrell discusses the municipal market, fund performance, and key investment strategies for the Massachusetts fund. Tom assumed management responsibility for NMT on July 1, 1998, as part of Nuveen's efforts to maximize the efficient use of staff resources and portfolio manager expertise. A 15-year veteran of Nuveen, Tom manages a range of national and state municipal bond funds. WHERE DID MASSACHUSETTS RANK IN TERMS OF MUNICIPAL ISSUANCE SINCE THE BEGINNING OF THE YEAR? WHAT ECONOMIC FACTORS AFFECTED THE STATE? Continued growth has benefited the Massachusetts economy, and credit quality in the state remains very strong. During the first 11 months of 1998, Massachusetts saw an extremely good supply of new municipal issuance compared with the same period last year. As of the end of November, the state ranked seventh in the nation in new issue volume, and total issuance was up 23.8% com pared to November 30, 1997. Most of this issuance was high credit quality and insured paper from issuers in the education and health care sectors, such as the Massachusetts Health and Educational Facilities Authority. Increased supply was met by good demand, especially from retail investors. Massachusetts, long known as a high tax state, is starting to lose that reputation, with a series of tax cuts in recent years easing the tax burden of its residents. Starting in January of 1999, the tax on investment income will be lowered from 12% to 5.95%, and a reduction in personal income tax rates is also being considered. Massachusetts continues to be a knowledge-based economy, flourishing because of the growth in high-tech and financial services sectors. This growth is expected to taper off slightly in 1999, led by a reduction in manufacturing. However, the state is still expected to experience moderate growth. The service sector continued to perform well and has been the state's most important source of recent economic growth. HOW DID THE FUND PERFORM OVER THE PAST YEAR? For the 12-month period ended November 30, 1998, the Nuveen Massachusetts Premium Income Municipal Fund (NMT) produced a total return on net asset value of 9.41%, providing a taxable-equivalent total return of 13.26% for investors in the combined 39.3% federal and state income tax bracket. The total return compares with the Lehman Brothers Municipal Bond Index's(1) annual return of 7.76%. The fund also outperformed the relevant Lipper Peer Group(2) average return of 8.86%, ranking fourth among the group's 18 funds. Much of the fund's performance over the past 12 months can be tied to its duration. As of November 30, 1998, NMT had a leverage-adjusted duration(3) of 9.64 years, compared with the unleveraged Lehman index's duration of 7.22 years. Fund duration measures a bond fund's price volatility, or reaction to interest rate movements. The longer the duration, the more sensitive the fund is to changes in interest rates. During a period of falling interest rates, longer duration enables a fund to participate more fully in market gains. However, when rates rise, longer duration can make the fund more vulnerable to potential price declines. Over the past year, as interest rates trended downward, funds with durations longer than that of the index generally tended to outperform the market. HOW WERE THE FUND'S DIVIDEND AND SHARE PRICE AFFECTED? In the current low interest rate environment, good call protection helped support NMT's dividend and protect the income of this fund from erosion. As of November 30, 1998, NMT had provided shareholders with 22 consecutive months of steady income and a competitive market yield of 5.11%, equivalent to a taxable yield of 8.42% for investors in the combined 39.3% federal and state income tax bracket. As Tim mentioned in his letter to shareholders, share price performance among the Nuveen Exchange-Traded Funds has been strong over the past 12 months. As interest rates fell, active demand for these funds increased share prices. As of November 30, 1998, NMT was trading at a premium of 9.47% to its net asset value and also had a one-year total return on its share price of 11.19%. WHAT KEY STRATEGIES WERE USED TO MANAGE THE FUND DURING THE PAST YEAR? NMT is a well-structured portfolio offering high credit quality (78% of holdings rated AAA and AA), good call protection, and a stable dividend. Over the past year, heavy issuance in the Massachusetts market provided us with a number of opportunities to purchase bonds that further enhanced the fund's structure. Given Massachusetts' high concentration of colleges, universities, and secondary schools and leadership in healthcare-related issues, much of the new issuance came from the education and healthcare sectors. As of November 30, 1998, 40% of the portfolio was invested in these two sectors. Over the year, we focused on purchasing securities with longer durations in order to improve the fund's total return prospects in the current market environment. We also sold securities that were not supporting the objectives of the fund and purchased bonds that we believe will do so, including insured and investment-grade bonds in attractive sectors that were inexpensively priced. We also bought a small amount of discount bonds to pick up additional yield. With spreads between high quality bonds (AAA rated) and low rated, investment grade bonds (at least BBB rated) remaining rela tively narrow, it was difficult to find a boost in incremental yield that would have compensated us for buying lower-rated bonds. Consequently, we continued to focus on higher-quality credits. The tight credit spreads also restricted our purchase of Massachusetts housing bonds. Since these bonds can provide attractive income, we continue to watch new issuance for opportunities to buy in this sector. One such recent addition to the portfolio was an FHA-insured Boston multi-family housing issue that provided an above-market yield as well as good volatility characteristics for a lever aged fund. The ability to find bonds such as these illustrates how Nuveen's expertise and close relationships with regional firms help us select the investments that reward shareholders. WHAT IS NUVEEN'S OUTLOOK FOR THE FUTURE? Achieving the fund's primary objective of providing current income exempt from federal and state income taxes is our main goal. We will also focus on accomplishing the second objective, which is to enhance the fund portfolio's value by seeking out bonds that our investment advisers feel are undervalued by the market. To help us accomplish this goal, we will continue monitoring the new issuance market in Massachusetts for value, taking advantage of any attractive buy opportunities that arise. Finding bonds such as these is an area where Nuveen's expertise - as an experienced invest ment manager knowledgeable about the unique aspects of the Massachusetts municipal market can result in added value for our investors. The current market environment - influenced by declining interest rates, benign inflation, and strong municipal supply - has helped to position municipal bonds as one of the most compelling values in today's marketplace. We expect that the excellent munici pal-to-Treasury ratio Tim mentioned in his shareholder letter, com bined with continued volatility in the equity markets and investors' increasing awareness of the need for asset allocation rebalancing, will result in growing demand for municipal bond funds. We believe that investors who take advantage of current opportunities in the municipal market should be rewarded with healthy returns and attractive yields in the months ahead. 1 The Lehman Brothers Municipal Bond Index is an unleveraged index comprising a broad range of investment-grade municipal bonds and does not reflect any initial or ongoing expenses. 2 The Lipper Peer Group return represents the average annualized returns of the 18 funds in the Lipper State Leveraged Municipal Debt category. The return assumes reinvestment of dividends and does not reflect any applicable sales charges. 3 Leverage-adjusted duration, also known as fund duration, takes into account the leveraging process for each fund and therefore differs from the duration of the actual portfolio of individual bonds that make up the fund. Unless otherwise noted, refer ences to duration in this commentary are intended to indicate fund duration. Nuveen Massachusetts Premium Income Municipal Fund Performance Overview As of November 30, 1998 NMT Portfolio Statistics ================================================== Inception Date 3/93 - -------------------------------------------------- Share Price $16 9/16 - -------------------------------------------------- Net Asset Value Per Share $15.13 - -------------------------------------------------- Market Yield 5.11% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Only)(1) 7.41% - -------------------------------------------------- Taxable-Equivalent Yield (Federal and State)(1) 8.42% - -------------------------------------------------- Fund Net Assets ($000) $104,113 - -------------------------------------------------- Average Effective Maturity (Years) 17.53 - -------------------------------------------------- Leverage-Adjusted Duration (Years) 9.64 - -------------------------------------------------- Annualized Total Return ================================================== On Share Price On NAV - -------------------------------------------------- 1-Year 11.19% 9.41% - -------------------------------------------------- 3-Year 13.20% 8.13% - -------------------------------------------------- 5-Year 10.95% 7.66% - -------------------------------------------------- Since Inception 7.48% 7.12% - -------------------------------------------------- Taxable-Equivalent Total Return(2) ================================================== On Share Price On NAV - -------------------------------------------------- 1-Year 14.77% 13.26% - -------------------------------------------------- 3-Year 17.06% 11.99% - -------------------------------------------------- 5-Year 14.94% 11.62% - -------------------------------------------------- Since Inception 11.21% 10.90% - -------------------------------------------------- Top Five Sectors (as a % of total investments) ================================================== Education and Civic Organizations 22% - -------------------------------------------------- U.S. Guaranteed 20% - -------------------------------------------------- Health Care 18% - -------------------------------------------------- Housing (Multifamily) 14% - -------------------------------------------------- Tax Obligation (General) 9% - -------------------------------------------------- 1 Taxable-equivalent yield represents the yield on a taxable investment nec essary to equal the yield of the Nuveen fund on an after-tax basis. The federal only rate is based on the current market yield and a federal income tax rate of 31%. The rate shown for federal and state highlights the added value of owning shares that are also exempt from state income taxes. It is based on a combined federal and state income tax rate of 39.3%. 2 Taxable-equivalent total return is based on the annualized total return and a combined federal and state income tax rate of 39.3%. It represents the return on a taxable investment necessary to equal the return of the Nuveen fund on an after-tax basis. Bar Chart: 1997-1998 Monthly Tax-Free Dividends Per Share 12/97 0.0705 1/98 0.0705 2/98 0.0705 3/98 0.0705 4/98 0.0705 5/98 0.0705 6/98 0.0705 7/98 0.0705 8/98 0.0705 9/98 0.0705 10/98 0.0705 11/98 0.0705 Line Chart: Share Price Performance 12/5/97 15.563 15.5 15.75 15.938 16.125 16.375 16.688 16.25 16.188 16.625 16.563 16.25 16.25 16.625 16.5 16.563 16.313 16.313 16 15.938 16.125 16.25 16.063 16.375 16.438 16.375 16.375 16.625 16.25 16.875 16.688 16.625 16.313 16.375 16.5 16.375 16.563 16.688 16.75 16.438 16.563 16.75 17.5 16.875 16.75 16.75 16.69 16.88 16.56 16.44 11/30/98 16.5625 Weekly Closing Price Past performance is not predictive of future results. Nuveen Missouri Premium Income Municipal Fund (NOM) Portfolio Manager's Comments Portfolio manager Mike Davern discusses the municipal market, fund performance, and key investment strategies for the Missouri fund. Mike assumed management responsibility for the fund on July 1, 1998, as part of Nuveen's efforts to maximize the efficient use of staff resources and portfolio manager expertise. A six-year veteran of Nuveen, Mike has 15 years of investment experience and manages a range of state municipal bond funds for Nuveen. WHERE DID MISSOURI RANK IN TERMS OF MUNICIPAL ISSUANCE SINCE THE BEGINNING OF THE YEAR? WHAT ECONOMIC FACTORS AFFECTED THE STATE? In response to low interest rates and Missouri's continued population growth, the state's municipal bond issuance increased almost 85% over 1997 levels, which ranked the state 19th in the nation, as of November 30, 1998. Supply is expected to remain strong over the next few years due to the continuing need for infrastructure financing and increased school spending. Missouri's overall creditworthiness is reflected in its long-standing Aaa/AAA/AAA rating by Moody's, Standard & Poor's, and Fitch, respectively. Missouri maintained a diversified economy, mirroring that of the nation. Although recent industry growth has shifted to services and tourism, defense and manufacturing are important elements of the state economy. Population in Missouri has increased approximately 5.6% from 1990. The state's unemployment rate has steadily declined from a high of 6.7% in 1991. It was 3.7% in November 1998, compared to the national average of 4.4%. HOW DID THE FUND PERFORM OVER THE PAST YEAR? For the 12-month period ended November 30, 1998, the Nuveen Missouri Premium Income Municipal Fund (NOM) produced a total return on net asset value of 8.73%, providing a taxable-equivalent total return of 11.65% for investors in the combined 35.1% federal and state income tax bracket. The fund's total return outperformed the Lehman Brothers Municipal Bond Index's(1) annual return of 7.76% and compared favorably with the relevant Lipper Peer Group(2) average return of 8.86%. Much of the fund's performance over the past 12 months can be tied to its duration. As of November 30, 1998, NOM had a leverage-adjusted duration(3) of 9.55 years, compared with the unleveraged Lehman index's duration of 7.22 years. Fund duration measures a bond fund's price volatility, or reaction to interest rate movements. The longer the duration, the more sensitive the fund is to changes in interest rates. During a period of falling interest rates, longer duration enables a fund to participate more fully in market gains. However, when rates rise, longer duration can make the fund more vulnerable to potential price declines. Over the past year, as interest rates trended downward, funds with durations longer than that of the index generally tended to outperform the market. HOW WERE THE FUND'S DIVIDEND AND SHARE PRICE AFFECTED? In the current low interest rate environment, excellent call protection helped support NOM's dividend and protect the income of this fund from erosion. In addition, good dividend management strategies allowed us to increase the dividend, effective August 1998. As of November 30, 1998, the fund offered a competitive market yield of 4.92%, equivalent to a taxable yield of 7.58% for investors in the combined 35.1% federal and state income tax bracket. As Tim mentioned in his letter to shareholders, share price performance among the Nuveen Exchange-Traded Funds has been strong over the past 12 months. As interest rates fell, active demand for these funds increased NOM's share price, eliminating the slight discount of a year ago. As of November 30, 1998, NOM was trading at a premium of 4.95% to its net asset value and also had a one-year total return on its share price of 15.15%. WHAT KEY STRATEGIES WERE USED TO MANAGE THE FUND DURING THE PAST YEAR? As of November 30, 1998, one of NOM's largest sector weight ings, representing 17% of the fund's holdings, was in general tax obligation bonds, the top-performing sector over the past six months. One of the reasons behind the sector's excellent performance has been the recent economic environment, which has boosted tax receipts and credit quality in general, as the budgets of municipalities and school districts continue to improve. Over the past year, escrowed securities - that is, bonds that were prerefunded as interest rates fell also performed well. Among these bonds in NOM's portfolio are those issued by the Missouri Health and Educational Facilities Authority for Barnes-Jewish Christian Health System. Recently, some lower-rated credits became more attractive and were added to the portfolio. An example of this is the Industrial Development Authority of St. Charles County, Missouri, for Ashwood Apartments, a multi-family apartment project, maturing in 2030, which provided attractive yields for the fund. NOM is noteworthy for its excellent call protection, with no scheduled calls over the next 12 months and only 3% of fund scheduled to be called in the year 2000. Overall, the credit quality of the fund is high, with 78% of the portfolio invested in bonds rated AAA. WHAT IS NUVEEN'S OUTLOOK FOR THE FUTURE? Going forward, we will continue to examine the call structure of the portfolio. With a tight municipal supply relative to retail demand in Missouri, we will look to take advantage of the most attractive new issues that do come to market. This would allow us to sell bonds with short call provisions at good prices for the portfolio and reinvest the proceeds in well-structured new issues. Working with our research analysts gives us the ability to select lower-rated, investment grade bonds at attractive prices, if they are available, as a way to increase the incremental yield of the fund. Selecting the bonds that will help the fund meet these goals is an area where Nuveen's expertise - as an experienced investment manager knowledgeable about the unique aspects of the Missouri municipal market - can result in added value for our investors. The current market environment - influenced by declining interest rates, benign inflation, and strong municipal supply - has helped to position municipal bonds as one of the most compelling values in today's marketplace. We expect that the excellent municipal-to-Treasury ratio Tim mentioned in his shareholder letter, com bined with continued volatility in the equity markets and investors' increasing awareness of the need for asset allocation rebalancing, will result in growing demand for municipal bond funds. We believe that investors who take advantage of current opportunities in the municipal market should be rewarded with healthy returns and attractive yields in the months ahead, as the market recognizes the value of these quality investments. 1 The Lehman Brothers Municipal Bond Index is an unleveraged index comprising a broad range of investment-grade municipal bonds and does not reflect any initial or ongoing expenses. 2 The Lipper Peer Group return represents the average annualized returns of the 18 funds in the Lipper State Leveraged Municipal Debt category. The return assumes reinvestment of dividends and does not reflect any applicable sales charges. 3 Leverage-adjusted duration, also known as fund duration, takes into account the leveraging process for each fund and therefore differs from the duration of the actual portfolio of individual bonds that make up the fund. Unless otherwise noted, references to duration in this commentary are intended to indicate fund duration. Nuveen Missouri Premium Income Municipal Fund Performance Overview As of November 30, 1998 NOM Portfolio Statistics ================================================== Inception Date 5/93 - -------------------------------------------------- Share Price $15 3/8 - -------------------------------------------------- Net Asset Value Per Share $14.65 - -------------------------------------------------- Market Yield 4.92% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Only)(1) 7.13% - -------------------------------------------------- Taxable-Equivalent Yield (Federal and State)(1) 7.58% - -------------------------------------------------- Fund Net Assets ($000) $47,456 - -------------------------------------------------- Average Effective Maturity (Years) 16.35 - -------------------------------------------------- Leverage-Adjusted Duration (Years) 9.55 - -------------------------------------------------- Annualized Total Return ================================================== On Share Price On NAV - -------------------------------------------------- 1-Year 15.15% 8.73% - -------------------------------------------------- 3-Year 15.84% 7.44% - -------------------------------------------------- 5-Year 7.83% 6.90% - -------------------------------------------------- Since Inception 5.87% 6.07% - -------------------------------------------------- Taxable-Equivalent Total Return(2) ================================================== On Share Price On NAV - -------------------------------------------------- 1-Year 18.10% 11.65% - -------------------------------------------------- 3-Year 19.02% 10.33% - -------------------------------------------------- 5-Year 11.04% 9.91% - -------------------------------------------------- Since Inception 8.90% 8.95% - -------------------------------------------------- Top Five Sectors (as a % of total investments) ================================================== Tax Obligation (General) 17% - -------------------------------------------------- Tax Obligation (Limited) 17% - -------------------------------------------------- Housing (Multifamily) 14% - -------------------------------------------------- Water and Sewer 11% - -------------------------------------------------- Health Care 10% - -------------------------------------------------- 1 Taxable-equivalent yield represents the yield on a taxable investment nec essary to equal the yield of the Nuveen fund on an after-tax basis. The federal only rate is based on the current market yield and a federal income tax rate of 31%. The rate shown for federal and state highlights the added value of owning shares that are also exempt from state income taxes. It is based on a combined federal and state income tax rate of 35.1%. 2 Taxable-equivalent total return is based on the annualized total return and a combined federal and state income tax rate of 35.1%. It represents the return on a taxable investment necessary to equal the return of the Nuveen fund on an after-tax basis. Bar Chart: 1997-1998 Monthly Tax-Free Dividends Per Share 12/97 0.062 1/98 0.062 2/98 0.062 3/98 0.062 4/98 0.062 5/98 0.062 6/98 0.062 7/98 0.062 8/98 0.063 9/98 0.063 10/98 0.063 11/98 0.063 Line Chart: Share Price Performance 12/5/97 14.063 14.125 14.063 14.188 14.063 14.5 14.563 14.25 14.25 14.938 14.875 14.875 14.938 15 14.5 14.813 14.625 14.625 14.563 14.438 14.375 14.25 14.25 14.125 14.188 14.75 14.25 14.375 14.25 14.5 14.25 14.75 14.75 14.688 14.625 14.75 14.75 14.625 14.688 15 15 15.063 15.125 15.25 15.375 15.13 15.06 15.5 15.19 15.38 11/30/98 15.375 Weekly Closing Price Past performance is not predictive of future results. Nuveen Washington Premium Income Municipal Fund (NPW) Portfolio Manager's Comments Portfolio manager Mike Davern discusses the municipal market, fund performance, and key investment strategies for the Washington state fund. Mike assumed management responsibility for NPW on July 1, 1998, as part of Nuveen's efforts to maximize the efficient use of staff resources and portfolio manager expertise. A six-year veteran of Nuveen, Mike has 15 years of investment experience and manages a range of state municipal bond funds for Nuveen. WHERE DID WASHINGTON RANK IN TERMS OF MUNICIPAL ISSUANCE SINCE THE BEGINNING OF THE YEAR? WHAT ECONOMIC FACTORS AFFECTED THE STATE? Washington saw an increase in municipal supply of 12.9% over 1997's figure, which ranked the state 11th in the nation in terms of total municipal issuance for the 11 months ended November 30, 1998. Its total issuance for that period was $5.8 billion. Unemployment in the state, as of November 30, 1998, was 4.7%, compared to the national level of 4.4%. The state's economic diversification has seen a shift in its sector allocations. Boeing, a leader in aerospace technology and based in Seattle, once accounted for nearly 10% of total state employment. As of December 11, 1998, that number had been reduced to 3.5%. Furthermore, Boeing is expected to cut its workforce by 48,000 people over the next two years. However, the slack caused by these layoffs is expected to be picked up by available jobs in other sectors, such as construction, retail trade, and services industries. The growth in the construction industry is of particular interest, due to its previous six year slump. HOW DID THE FUND PERFORM OVER THE PAST YEAR? For the 12 month period ended November 30, 1998, the Nuveen Washington Premium Income Municipal Fund (NPW) produced a total return on net asset value of 9.01%, providing a taxable-equivalent total return of 11.39% for investors in the 31% federal income tax bracket. The total return compares with the Lehman Brothers Municipal Bond Index's(1) annual return of 7.76%. The fund also outperformed the relevant Lipper Peer Group(2) average return of 8.86%. Much of the fund's performance over the past 12 months can be tied to its duration. As of November 30, 1998, NPW had a leverage-adjusted duration(3) of 9.45 years, compared with the unleveraged Lehman index's duration of 7.22 years. Fund duration measures a bond fund's price volatility, or reaction to interest rate movements. The longer the duration, the more sensitive the fund is to changes in interest rates. During a period of falling interest rates, longer duration enables a fund to participate more fully in market gains. However, when rates rise, longer duration can make the fund more vulnerable to potential price declines. Over the past year, as interest rates trended downward, funds with durations longer than that of the index generally tended to outperform the market. HOW WERE THE FUND'S DIVIDEND AND SHARE PRICE AFFECTED? In the current low interest rate environment, good call protection helped support NPW's dividend and protect the income of this fund from erosion. In addition, good dividend management strategies allowed us to increase the dividend effective August 1998. As of November 30, 1998, the fund offered a competitive market yield of 5.24%, equivalent to a taxable yield of 7.59% for investors in the 31% federal income tax bracket. As Tim mentioned in his letter to shareholders, share price performance among the Nuveen exchange-traded funds has been strong over the past 12 months. As interest rates fell, active demand for these funds increased share prices. At the same time, strong bond market performance boosted NPW's net asset value, narrowing the spread between the fund's share price and net asset value by almost 500 basis points. As of November 30, 1998, NPW was trading at a discount of 2.90% to its net asset value and also had a one-year total return on its share price of 15.27%. WHAT KEY STRATEGIES WERE USED TO MANAGE THE FUND DURING THE PAST YEAR? As of November 30, 1998, NPW's largest sector - representing 21% of its holdings - - was general tax obligation bonds, which was also the top-performing sector over the past six months. One of the reasons this sector has performed so well is the strong economic environment, which has boosted tax receipts and credit quality in general, as the budgets of municipalities and school districts continue to improve. Overall, the credit quality of the fund is high, with 67% invested in bonds rated AAA. With the tight credit spreads between higher-rated (AAA) and lower-rated, investment grade bonds (at least BBB rated) of the past year, we maintained our heavy weighting in the AAA sector, while watching for opportunities in lower or non-rated bonds that would allow us to pick up additional yield for the fund. One example of this was our purchase of bonds issued by the Spokane Parking Revenue Facility Downtown Development Authority for the River Park Square project. These BBB/non-rated bonds, which mature in 2019, enabled us to add incremental yield to the fund. WHAT IS NUVEEN'S OUTLOOK FOR THE FUTURE? Going forward, we will continue to examine the call structure of the portfolio. We will also look to take advantage of the most attractive new issues that come to market. This would allow us to sell bonds with short call provisions at good prices for the portfolio and reinvest the proceeds in well-structured new issues. Working with our research analysts gives us the ability to select lower-rated, investment grade bonds at attractive prices, if they are available, as a way to increase the incremental yield of the fund. Selecting the bonds that will help the fund meet these goals is an area where Nuveen's expertise - as an experienced investment manager knowledgeable about the unique aspects of the Washington state municipal market - can result in added value for our investors. The current market environment - influenced by declining interest rates, benign inflation, and strong municipal supply - has helped to position municipal bonds as one of the most compelling values in today's marketplace. We expect that the excellent municipal-to-Treasury ratio, combined with continued volatility in the equity markets and investors' increasing awareness of the need for asset allocation rebalancing, will result in growing demand for municipal bond funds. We believe that investors who take advantage of current opportunities in the municipal market should be rewarded with healthy returns and attractive yields in the months ahead, as the market recognizes the value of these quality investments. 1 The Lehman Brothers Municipal Bond Index is an unleveraged index comprising a broad range of investment-grade municipal bonds and does not reflect any initial or ongoing expenses. 2 The Lipper Peer Group return represents the average annualized returns of the 18 funds in the Lipper State Leveraged Municipal Debt category. The return assumes reinvestment of dividends and does not reflect any applicable sales charges. 3 Leverage-adjusted duration, also known as fund duration, takes into account the leveraging process for each fund and therefore differs from the duration of the actual portfolio of individual bonds that make up the fund. Unless otherwise noted, refer ences to duration in this commentary are intended to indicate fund duration. Nuveen Washington Premium Income Municipal Fund Performance Overview As of November 30, 1998 NPW Portfolio Statistics ================================================== Inception Date 3/93 - -------------------------------------------------- Share Price $14 7/8 - -------------------------------------------------- Net Asset Value Per Share $15.32 - -------------------------------------------------- Market Yield 5.24% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Only)(1) 7.59% - -------------------------------------------------- Fund Net Assets ($000) $52,547 - -------------------------------------------------- Average Effective Maturity (Years) 17.95 - -------------------------------------------------- Leverage-Adjusted Duration (Years) 9.45 - -------------------------------------------------- Annualized Total Return ================================================== On Share Price On NAV - -------------------------------------------------- 1-Year 15.27% 9.01% - -------------------------------------------------- 3-Year 13.40% 8.06% - -------------------------------------------------- 5-Year 7.47% 6.97% - -------------------------------------------------- Since Inception 5.72% 7.01% - -------------------------------------------------- Taxable-Equivalent Total Return(2) ================================================== On Share Price On NAV - -------------------------------------------------- 1-Year 17.86% 11.39% - -------------------------------------------------- 3-Year 16.12% 10.47% - -------------------------------------------------- 5-Year 10.26% 9.53% - -------------------------------------------------- Since Inception 8.35% 9.47% - -------------------------------------------------- Top Five Sectors (as a % of total investments) ================================================== Tax Obligation (General) 21% - -------------------------------------------------- Utilities 15% - -------------------------------------------------- Water and Sewer 13% - -------------------------------------------------- Health Care 12% - -------------------------------------------------- Transportation 8% - -------------------------------------------------- 1 Taxable-equivalent yield represents the yield on a taxable investment nec essary to equal the yield of the Nuveen fund on an after-tax basis. The federal only rate is based on the current market yield and a federal income tax rate of 31%. 2 Taxable-equivalent total return is based on the annualized total return and a federal income tax rate of 31%. It represents the return on a taxable investment necessary to equal the return of the Nuveen fund on an after-tax basis. Bar Chart: 1997-1998 Monthly Tax-Free Dividends Per Share 12/97 0.063 1/98 0.063 2/98 0.063 3/98 0.063 4/98 0.063 5/98 0.063 6/98 0.063 7/98 0.063 8/98 0.065 9/98 0.065 10/98 0.065 12/98 0.065 Line Chart: Share Price Performance 12/5/97 13.875 13.938 13.688 13.563 13.75 14.625 14.063 14 14 14.375 14.125 13.688 13.875 13.938 14.125 13.75 13.75 13.625 13.5 13.813 13.5 13.5 13.5 13.5 13.625 13.625 13.563 13.563 13.688 13.875 13.813 13.938 13.75 13.625 14.125 14.063 14 14.25 14.188 14.125 14.25 14.25 14.5 14.375 14.25 14.44 14.44 14.31 14.75 14.88 11/30/98 14.875 Weekly Closing Price Past performance is not predictive of future results. Portfolio of Investments Nuveen Connecticut Premium Income Municipal Fund (NTC) November 30, 1998 (Unaudited)
Principal Optional Call Market Amount Description Provisions* Ratings** Value - ------------------------------------------------------------------------------------------------------------------------------------ Education and Civic Organizations - 18.0% $ 4,450,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Quinnipiac College Issue, Series D, 6.000%, 7/01/23 7/03 at 103 BBB- $4,587,372 Connecticut Higher Education Supplemental Loan Authority, Revenue Bonds (Family Education Loan Program), 1996 Series A: 1,570,000 5.800%, 11/15/14 (Alternative Minimum Tax) 11/06 at 102 AAA 1,691,031 995,000 5.875%, 11/15/17 (Alternative Minimum Tax) 11/06 at 102 AAA 1,030,621 2,000,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Trinity College Issue, Series E, 5.875%, 7/01/26 7/06 at 102 AAA 2,170,500 2,040,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, The Loomis Chaffee School Issue, Series C, 5.500%, 7/01/16 7/06 at 102 AAA 2,143,387 2,250,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Fairfield University Issue, Series H, 5.000%, 7/01/23 7/08 at 102 AAA 2,252,835 2,920,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Connecticut College Issue, Series C-1, 5.500%, 7/01/20 7/07 at 102 AAA 3,101,682 3,810,000 The University of Connecticut, Student Fee Revenue Bonds, 1998 Series A, 4.750%, 11/15/27 11/08 at 101 AAA 3,690,480 - ------------------------------------------------------------------------------------------------------------------------------------ Health Care - 19.5% 1,000,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Newington Childrens Hospital, Series A, 6.050%, 7/01/10 7/04 at 102 AAA 1,103,910 1,500,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Lawrence and Memorial Hospital Issue, Series D, 5.000%, 7/01/22 7/03 at 102 AAA 1,476,450 2,000,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Hospital of Saint Raphael Issue, Series H, 5.200%, 7/01/08 No Opt. Call AAA 2,157,240 2,725,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Saint Francis Hospital and Medical Center Issue, Series B, 6.200%, 7/01/22 7/02 at 102 AAA 2,967,253 2,200,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Day Kimball Hospital Issue, Series A, 5.375%, 7/01/26 7/06 at 102 AAA 2,254,538 4,160,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Yale-New Haven Hospital Issue, Series H, 5.625%, 7/01/16 7/06 at 102 AAA 4,435,850 1,000,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, The William W. Backus Hospital Issue, Series D, 5.750%, 7/01/27 7/07 at 102 AAA 1,073,360 3,000,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Middlesex Health Services Issue, Series I, 5.125%, 7/01/27 7/07 at 101 Aaa 2,986,470 2,000,000 Connecticut Development Authority, Solid Waste Disposal Facilities Revenue Bonds, Pfizer Inc. Project, 1994 Series, 7.000%, 7/01/25 (Alternative Minimum Tax) 7/05 at 102 AAA 2,338,880 1,500,000 Puerto Rico Industrial, Tourist, Educational, Medical and Environmental Control Facilities Financing Authority, Hospital Revenue Refunding Bonds, 1995 Series A (FHA Insured Mortgage Pila-Hospital Project), 6.125%, 8/01/25 8/05 at 101 1/2 AAA 1,660,740 - ------------------------------------------------------------------------------------------------------------------------------------ Housing/Multifamily - 5.9% 3,000,000 Housing Authority of the City of Waterbury (Connecticut), Mortgage Refunding Revenue Bonds, Series 1998C (FHA Insured Mortgage Loan - Waterbury NSA-II Section 8 Assisted Project), 5.450%, 7/01/23 1/02 at 100 AAA 3,032,040 1,360,000 Waterbury Nonprofit Housing Corporation, Connecticut Taxable Mortgage Revenue Refunding Bonds (FHA Insured Mortgage Loan - Fairmont Height Section 8 Assisted Project), Series 1993A, 6.500%, 7/01/07 7/02 at 101 AAA 1,459,280 Principal Optional Call Market Amount Description Provisions* Ratings** Value - ------------------------------------------------------------------------------------------------------------------------------------ Housing/Multifamily (continued) $ 1,930,000 Housing Authority of the City of Willimantic, Multi-Family Housing Revenue Bonds, Series 1995A (GNMA Collateralized Mortgage Loan - Village Heights Apartments Project), 8.000%, 10/20/30 10/05 at 105 AAA $2,233,222 - ------------------------------------------------------------------------------------------------------------------------------------ Housing/Single Family - 5.2% 3,175,000 Connecticut Housing Finance Authority, Housing Mortgage Finance Program, Series B, 6.200%, 5/15/12 5/03 at 102 AA 3,392,234 2,445,000 Connecticut Housing Finance Authority, Housing Mortgage Finance Program Bonds, 1996 Subseries E-2, 6.150%, 11/15/27 (Alternative Minimum Tax) 11/06 at 102 AA 2,627,642 - ------------------------------------------------------------------------------------------------------------------------------------ Long Term Care - 6.1% 2,000,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Nursing Home Program Issue, Series 1994, AHF/Hartford, Inc. Project, 7.125%, 11/01/24 11/04 at 102 AA- 2,316,100 2,000,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Nursing Home Program Issue, Series 1993, Mansfield Center for Nursing and Rehabilitation Project, 5.875%, 11/01/12 11/03 at 102 AAA 2,190,800 Connecticut Development Authority, Health Facility Refunding Revenue Bonds, Alzheimers Resource Center of Connecticut, Inc. Project, Series 1994: 1,300,000 6.875%, 8/15/04 No Opt. Call N/R 1,391,533 1,000,000 7.000%, 8/15/09 8/04 at 102 N/R 1,085,560 - ------------------------------------------------------------------------------------------------------------------------------------ Tax Obligation/General - 8.2% 1,750,000 State of Connecticut, General Obligation Bonds, 1993 Series D, 5.100%, 8/01/11 8/03 at 101 1/2 AA 1,820,543 2,000,000 State of Connecticut, General Obligation Bonds, 1993 Series E, 6.000%, 3/15/12 No Opt. Call AA 2,309,460 1,650,000 State of Connecticut, General Fund Obligation Bonds, 1994 Series A, Issued By Connecticut Development Authority, 6.375%, 10/15/14 10/04 at 102 AA- 1,859,501 3,500,000 Commonwealth of Puerto Rico, Public Improvement Bonds of 1998 (General Obligation Bonds), 4.875%, 7/01/23 7/08 at 101 AAA 3,480,015 - ------------------------------------------------------------------------------------------------------------------------------------ Tax Obligation/Limited - 4.8% 1,900,000 Capitol Region Education Council (Connecticut), 6.700%, 10/15/10 10/05 at 102 BBB 2,073,945 1,800,000 State of Connecticut, Special Tax Obligation Bonds, Transportation Infrastructure Purposes, 1991 Series B, 6.500%, 10/01/10 No Opt. Call AA- 2,154,006 1,250,000 City of Waterbury, Connecticut, General Obligation Tax Revenue Intercept Refunding Bonds, 1993 Issue, 5.375%, 4/15/08 4/03 at 102 AAA 1,324,013 - ------------------------------------------------------------------------------------------------------------------------------------ Transportation - 7.4% 3,000,000 State of Connecticut, Airport Revenue Refunding Bonds, Bradley International Airport, Series 1992, 7.650%, 10/01/12 10/04 at 100 AAA 3,550,140 City of New Haven, Connecticut, Air Rights Parking Facility Revenue Bonds, Series 1991: 3,000,000 6.625%, 12/01/05 12/01 at 102 AAA 3,290,340 1,500,000 6.500%, 12/01/15 12/01 at 102 AAA 1,636,890 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. Guaranteed - 8.7% 2,355,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, University of Hartford Issue, Series C, 8.000%, 7/01/18 (Pre-refunded to 7/01/03) 7/03 at 100 AAA 2,710,322 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Sacred Heart University Issue, Series B: 2,600,000 5.700%, 7/01/16 7/03 at 102 BBB-*** 2,644,772 1,000,000 5.800%, 7/01/23 7/03 at 102 BBB-*** 1,014,400 2,020,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Trinity College Issue, Series C, 6.000%, 7/01/22 (Pre-refunded to 7/01/02) 7/02 at 102 AAA 2,212,546 1,250,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Choate Rosemary Hall Issue, Series A, 7.000%, 7/01/25 (Pre-refunded to 7/01/04) 7/04 at 101 AAA 1,455,238 Principal Optional Call Market Amount Description Provisions* Ratings** Value - ------------------------------------------------------------------------------------------------------------------------------------ Utilities - 11.6% $ 3,250,000 Connecticut Municipal Electric Energy Cooperative, Power Supply System Revenue Bonds, 1993 Series A, 5.000%, 1/01/18 1/04 at 102 AAA $3,262,350 2,200,000 Connecticut Resources Recovery Authority, Bridgeport Resco Company, L.P. Project Bonds, Series A, 7.625%, 1/01/09 1/03 at 100 A 2,282,940 3,235,000 Connecticut Resources Recovery Authority, Resource Recovery Revenue Bonds, American Ref-Fuel Company of Southeastern Connecticut Project, 1989 Series A, 7.700%, 11/15/11 11/99 at 103 AA 3,426,253 2,795,000 Connecticut Development Authority, Water Facilities Revenue Bonds, Bridgeport Hydraulic Company Project, 1993 A Series, 5.600%, 6/01/28 (Alternative Minimum Tax) 6/03 at 102 AAA 2,906,772 1,400,000 Connecticut Development Authority, Water Facilities Refunding Revenue Bonds (Bridgeport Hydraulic Company Project - 1993B Series), 5.500%, 6/01/28 6/03 at 102 AAA 1,469,720 - ------------------------------------------------------------------------------------------------------------------------------------ Water and Sewer - 2.9% 1,000,000 State of Connecticut, Clean Water Fund Subordinate Revenue Refunding Bonds, 1996 Series, 5.250%, 7/01/10 1/05 at 101 AAA 1,056,700 2,000,000 South Central, Connecticut, Regional Water Authority, Water System Revenue Bonds, Eleventh Series, 5.750%, 8/01/12 8/03 at 102 AAA 2,173,258 - ------------------------------------------------------------------------------------------------------------------------------------ $ 105,785,000 Total Investments - (cost $105,757,983) - 98.3% 112,965,134 ============= Other Assets Less Liabilities - 1.7% 1,933,050 -------------------------------------------------------------------------------------------------------------------- Net Assets - 100% $114,898,184 ==================================================================================================================== * Optional Call Provisions: Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings: Using the higher of Standard & Poor's or Moody's rating. *** Securities are backed by an escrow or trust containing sufficient U.S. government or U.S. government agency securities which ensures the timely payment of principal and interest. Securities are normally considered to be equivalent to AAA rated securities. N/R Investment is not rated. See accompanying notes to financial statements.
Portfolio of Investments Nuveen Massachusetts Premium Income Municipal Fund (NMT) November 30, 1998 (Unaudited)
Principal Optional Call Market Amount Description Provisions* Ratings** Value - ------------------------------------------------------------------------------------------------------------------------------------ Education and Civic Organizations - 21.0% $ 835,000 Massachusetts Educational Financing Authority, Education Loan Revenue Bonds, Issue E, Series 1995, 6.150%, 7/01/10 (Alternative Minimum Tax) 7/04 at 102 AAA $ 887,279 1,970,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, Boston College Issue, Series K, 5.250%, 6/01/23 6/03 at 102 AAA 1,996,516 1,500,000 Massachusetts Industrial Finance Agency, Revenue Bonds (College of the Holy Cross - 1996 Issue), 5.500%, 3/01/20 3/06 at 102 AAA 1,581,600 2,645,000 Massachusetts Industrial Finance Agency, Revenue Bonds (Whitehead Institute for Biomedical Research - 1993 Issue), 5.125%, 7/01/26 7/03 at 102 Aa1 2,625,559 1,175,000 Massachusetts Industrial Finance Agency, Revenue Bonds (Brooks School Issue), Series 1993, 5.950%, 7/01/23 7/03 at 102 A3 1,235,242 3,500,000 Massachusetts Industrial Finance Agency, Revenue Bonds (Phillips Academy Issue), Series 1993, 5.375%, 9/01/23 9/08 at 102 AA+ 3,651,690 3,300,000 Massachusetts Industrial Finance Agency, Education Revenue Bonds (Belmont Hill School Issue - Series 1998), 5.250%, 9/01/28 9/08 at 101 A 3,297,261 1,765,000 The New England Education Loan Marketing Corporation, Student Loan Revenue Bonds, 1992 Subordinated Issue C, 6.750%, 9/01/02 (Alternative Minimum Tax) No Opt. Call A3 1,912,607 4,000,000 The New England Education Loan Marketing Corporation, Student Loan Revenue Bonds, 1992 Subordinated Issue H, 6.900%, 11/01/09 (Alternative Minimum Tax) No Opt. Call A3 4,648,000 - ------------------------------------------------------------------------------------------------------------------------------------ Health Care - 17.5% 4,000,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, New England Medical Center Hospitals Issue, Series G-1, 5.375%, 7/01/24 7/04 at 102 AAA 4,084,680 2,000,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds (Daughters of Charity National Health System - The Carney Hospital), Series D, 6.100%, 7/01/14 7/04 at 102 AA+ 2,178,800 1,000,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, Massachusetts General Hospital Issue, Series G, 5.375%, 7/01/11 7/00 at 100 AAA 1,049,650 3,000,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, Lahey Clinic Medical Center Issue, Series B, 5.625%, 7/01/15 7/03 at 102 AAA 3,151,170 400,000 Massachusetts Health and Educational Facilities Authority, Revenue Refunding Bonds (Cardinal Cushing General Hospital), Series 1989-A, 8.500%, 7/01/00 7/99 at 102 1/2 N/R 412,656 Massachusetts Health and Educational Facilities Authority, Revenue Refunding Bonds, Youville Hospital ssue (FHA Insured Project), Series B: 2,460,000 6.125%, 2/15/15 2/04 at 102 Aa 2,602,828 1,000,000 6.000%, 2/15/25 2/04 at 102 Aa 1,044,500 2,805,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, Caregroup Issue, Series A, 5.000%, 7/01/25 7/08 at 102 AAA 2,771,144 1,000,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, Harvard Pilgrim Health Care Issue, Series A, 4.750%, 7/01/22 7/08 at 101 AAA 958,210 - ------------------------------------------------------------------------------------------------------------------------------------ Housing/Multifamily - 13.2% 3,800,000 Massachusetts Housing Finance Agency, Housing Project Revenue Bonds, 6.300%, 10/01/13 4/03 at 102 A+ 4,045,328 4,000,000 Massachusetts Housing Finance Agency, Housing Development Bonds, 1998 Series A, 5.375%, 6/01/16 (Alternative Minimum Tax) 6/08 at 101 AAA 4,115,880 Principal Optional Call Market Amount Description Provisions* Ratings** Value - ------------------------------------------------------------------------------------------------------------------------------------ Housing/Multifamily (continued) $ 3,315,000 Massachusetts Housing Finance Agency, Rental Housing Mortgage Revenue Bonds, 1997 Series C, 5.625%, 7/01/40 (Alternative Minimum Tax) 7/07 at 101 AAA $3,414,815 1,935,000 Massachusetts Housing Finance Agency, Rental Housing Mortgage Revenue Bonds, 1995 Series A (FHA Insured Mortgage Loans), 7.350%, 1/01/35 (Alternative Minimum Tax) 1/05 at 102 AAA 2,130,919 - ------------------------------------------------------------------------------------------------------------------------------------ Long Term Care - 2.7% 1,000,000 Massachusett Health and Educational Facilities Authority, Revenue Refunding Bonds, Youville Hospital Issue (FHA Insured Project), Series A, 6.250%, 2/15/41 2/07 at 102 Aa2 1,086,310 1,125,000 Massachusetts Industrial Financial Agency, Revenue Bonds, Heights Crossing Limited Partnership Issue (FHA Insured Project), Series 1995, 6.000%, 2/01/15 (Alternative Minimum Tax) 2/06 at 102 AAA 1,191,566 500,000 Massachusetts Industrial Finance Agency, Revenue Bonds, Briscoe House Assisted Living Issue (FHA Insured Project), 6.050%, 2/01/17 (Alternative Minimum Tax) 8/07 at 105 AAA 550,715 - ------------------------------------------------------------------------------------------------------------------------------------ Tax Obligation/General - 8.8% Town of Barnstable, Massachusetts, General Obligation Bonds: 1,020,000 5.750%, 9/15/10 9/04 at 102 Aa3 1,118,716 1,020,000 5.750%, 9/15/11 9/04 at 102 Aa3 1,117,879 965,000 5.750%, 9/15/12 9/04 at 102 Aa3 1,049,785 1,000,000 City of Chelsea, Massachusetts, General Obligation Bonds, School Project Loan Act of 1948, 7.000%, 6/15/03 No Opt. Call AAA 1,125,430 4,375,000 City of Lowell, Massachusetts, General Obligation State Qualified Bonds, 5.600%, 11/01/12 11/03 at 102 AAA 4,722,944 - ------------------------------------------------------------------------------------------------------------------------------------ Transportation - 6.6% 4,000,000 Massachusetts Port Authority, Special Facilities Revenue Bonds (U.S. Air Project), Series 1996-A, 5.750%, 9/01/16 (Alternative Minimum Tax) 9/06 at 102 AAA 4,317,120 2,500,000 Massachusetts Industrial Finance Agency, Parking Facility Revenue Bonds (Avon Associates LLC Project), Series 1998A, 5.375%, 4/01/20 4/03 at 102 AAA 2,560,425 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. Guaranteed - 19.0% 2,500,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, Malden Hospital Issue (FHA Insured Project), Series A, 5.000%, 8/01/16 No Opt. Call AAA 2,551,450 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, New England Deaconess Hospital Issue, Series D: 3,310,000 6.625%, 4/01/12 (Pre-refunded to 4/01/02) 4/02 at 102 AAA 3,666,851 1,000,000 6.875%, 4/01/22 (Pre-refunded to 4/01/02) 4/02 at 102 AAA 1,115,410 1,000,000 Massachusetts Port Authority, Revenue Bonds, Series 1982, 13.000%, 7/01/13 No Opt. Call AAA 1,717,830 2,500,000 Massachusetts Industrial Finance Agency, Revenue Refunding Bonds, College of the Holy Cross, 1992 Issue II, 6.375%, 11/01/15 (Pre-refunded to 11/01/02) 11/02 at 102 AA-*** 2,782,700 1,300,000 Massachusetts Industrial Finance Agency, Revenue Bonds, Merrimack College Issue, Series 1992, 7.125%, 7/01/12 (Pre-refunded to 7/01/02) 7/02 at 102 AAA 1,470,053 3,000,000 Massachusetts Water Resources Authority, General Revenue Bonds, 1991 Series A, 5.750%, 12/01/21 (Pre-refunded to 12/01/01) 12/01 at 100 Aaa 3,180,900 3,000,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series P, 7.000%, 7/01/21 (Pre-refunded to 7/01/01) 7/01 at 102 Aaa 3,311,010 - ------------------------------------------------------------------------------------------------------------------------------------ Utilities - 5.5% 2,000,000 Massachusetts Municipal Wholesale Electric Company, Power Supply System Revenue Bonds, 1992 Series A, 6.000%, 7/01/18 7/02 at 100 AAA 2,126,480 3,275,000 Massachusetts Industrial Finance Agency, Resource Recovery Revenue Bonds, SEMASS Project, Series 1991B, 9.250%, 7/01/15 (Alternative Minimum Tax) 7/01 at 103 N/R 3,636,003 Principal Optional Call Market Amount Description Provisions* Ratings** Value - ------------------------------------------------------------------------------------------------------------------------------------ Water and Sewer - 2.8% $ 3,000,000 Massachusetts Water Resources Authority, General Revenue Refunding Bonds, 1993 Series B, 5.000%, 3/01/22 3/03 at 100 A1 $2,949,150 - ------------------------------------------------------------------------------------------------------------------------------------ $ 94,795,000 Total Investments - (cost $93,649,807) - 97.1% 101,145,061 ============= Other Assets Less Liabilities - 2.9% 2,967,494 -------------------------------------------------------------------------------------------------------------------- Net Assets - 100% $104,112,555 ==================================================================================================================== * Optional Call Provisions: Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings: Using the higher of Standard & Poor's or Moody's rating. *** Securities are backed by an escrow or trust containing sufficient U.S. government or U.S. government agency securities which ensures the timely payment of principal and interest. Securities are normally considered to be equivalent to AAA rated securities. N/R Investment is not rated. See accompanying notes to financial statements.
Portfolio of Investments Nuveen Missouri Premium Income Municipal Fund (NOM) November 30, 1998 (Unaudited)
Principal Optional Call Market Amount Description Provisions* Ratings** Value - ------------------------------------------------------------------------------------------------------------------------------------ Education and Civic Organizations - 5.7% $ 500,000 The Industrial Development Authority of the City of Kansas City, Missouri, (Ewing Marion Kauffman Foundation Project), Fixed Rate Revenue Bonds, Series 1997B, 5.700%, 4/01/27 4/07 at 100 AAA $ 531,110 1,775,000 Northwest Missouri State University, Housing System Revenue Bonds, Series 1998, 7.000%, 6/01/11 6/08 at 100 Aaa 2,135,627 - ------------------------------------------------------------------------------------------------------------------------------------ Health Care - 10.1% 1,000,000 Health and Educational Facilities Authority of the State of Missouri, Health Facilities Refunding Revenue Bonds (SSM Health Care), Series 1992AA, 6.250%, 6/01/07 6/02 at 102 AAA 1,093,720 1,000,000 Health and Educational Facilities Authority of the State of Missouri, Health Facilities Revenue Bonds (BJC Health System), Series 1994A, 6.750%, 5/15/12 No Opt. Call AA 1,212,240 1,000,000 Health and Educational Facilities Authority of the State of Missouri, Health Facilities Revenue Bonds (Lake of the Ozarks General Hospital Inc.), Series 1996, 6.500%, 2/15/21 2/06 at 102 BBB+ 1,092,300 400,000 Health and Educational Facilities Authority of the State of Missouri, Health Facilities Revenue Bonds (BJC Health System), Series 1998, 5.000%, 5/15/28 5/08 at 101 AA 391,240 1,000,000 Ray County, Missouri, Hospital Revenue Bonds (Ray County Memorial Hospital), Series 1997, 5.750%, 11/15/12 5/05 at 101 1/2 N/R 1,015,520 - ------------------------------------------------------------------------------------------------------------------------------------ Housing/Multifamily - 14.0% 650,000 The Industrial Development Authority of the City of Kansas City, Missouri, Multifamily Housing Revenue Refunding Bonds (President Gardens Apartment Project), Series 1997A, 5.550%, 8/01/25 2/08 at 102 AAA 667,934 1,550,000 Missouri Housing Development Commission, Multifamily Housing Revenue Bonds (Brookstone Village Apartments Project), 1996 Series A, 6.100%, 12/01/21 (Alternative Minimum Tax) 12/06 at 102 AAA 1,646,550 1,250,000 The Industrial Development Authority of St. Charles County, Missouri, Multifamily Housing Revenue Bonds (Ashwood Apartments Project), Series 1998A, 5.600%, 4/01/30 (Alternative Minimum Tax) 4/08 at 102 AAA 1,276,200 1,045,000 The Industrial Development Authority of the County of St. Louis, Missouri, Multifamily Housing Revenue Refunding Bonds (GNMA Collateralized - South Summit Apartments Project), Series 1997A, 5.950%, 4/20/17 4/07 at 102 AAA 1,120,240 600,000 The Industrial Development Authority of the County of St. Louis, Missouri, Multifamily Housing Revenue Refunding Bonds (GNMA Collateralized - South Summit Apartments Project), Series 1997B, 6.000%, 10/20/15 (Alternative Minimum Tax) 4/07 at 102 AAA 640,104 1,250,000 The Industrial Development Authority of University City, Missouri, Multifamily Housing Revenue Refunding Bonds (GNMA Collateralized - Canterbury Gardens Project), Series 1995A, 5.900%, 12/20/20 12/05 at 102 AAA 1,314,350 - ------------------------------------------------------------------------------------------------------------------------------------ Housing/Single Family - 8.9% 1,795,000 Missouri Housing Development Commission, Single Family Mortgage Revenue Bonds (Homeownership Loan Program), 1995 Series C, 7.250%, 9/01/26 (Alternative Minimum Tax) 3/06 at 105 AAA 2,034,938 2,075,000 Missouri Housing Development Commission, Single Family Mortgage Revenue Bonds (GNMA Mortgage-Backed Securities Program), 1991 Series A, 7.375%, 8/01/23 (Alternative Minimum Tax) 2/01 at 102 AAA 2,188,897 - ------------------------------------------------------------------------------------------------------------------------------------ Tax Obligation/General - 17.2% 2,020,000 Ritenour School District of St. Louis County, Missouri, General Obligation School Bonds, Series 1995, 7.375%, 2/01/12 No Opt. Call AAA 2,553,623 1,500,000 Francis Howell School District, St. Charles County, Missouri, General Obligation Refunding Bonds, Series 1994A, 7.800%, 3/01/08 No Opt. Call AAA 1,900,695 1,000,000 School District of the City of St. Charles, Missouri, General Obligation Bonds (Missouri Direct Deposit Program), Series 1996A, 5.625%, 3/01/14 3/06 at 100 AA 1,072,590 1,395,000 The Board of Education of the City of St. Louis (Missouri), General Obligation School Refunding Bonds, Series 1993A, 8.500%, 4/01/07 No Opt. Call AAA 1,815,383 625,000 Reorganized School District No. R-IV of Stone County, Missouri (Reeds Spring, Missouri), General Obligation School Building, Refunding and Improvement Bonds, Series 1995, 7.600%, 3/01/10 No Opt. Call AAA 808,194 Principal Optional Call Market Amount Description Provisions* Ratings** Value - ------------------------------------------------------------------------------------------------------------------------------------ Tax Obligation/Limited - 16.6% $ 1,000,000 Fort Zumwalt School District Improvement Corporation, Leasehold Revenue Bonds, Fort Zumwalt S.D., St Charles County, Series 1997, 5.600%, 3/01/17 3/07 at 100 Aaa $1,060,270 1,000,000 Land Clearance for Redevelopment Authority of Kansas City, Missouri, Lease Revenue Bonds (Municipal Auditorium and Muehlebach Hotel Redevelopment Project), Series 1995A, 5.900%, 12/01/18 12/05 at 102 AAA 1,086,290 1,000,000 Kansas City Municipal Assistance Corporation, Leasehold Revenue Capital Improvement Bonds (Kansas City, Missouri, Lessee), Series 1996B, 5.700%, 1/15/13 1/06 at 101 AAA 1,081,520 1,000,000 Regional Convention and Sports Complex Authority, Convention and Sports Facility Project and Refunding Bonds, Series A 1993 (State of Missouri Sponsor), 5.500%, 8/15/13 8/03 at 102 A+ 1,041,700 1,500,000 St. Louis Municipal Finance Corporation, Leasehold Revenue Refunding Bonds, 5.850%, 7/15/09 7/03 at 102 A1 1,608,360 1,800,000 St. Louis Municipal Finance Corporation, City Justice Center, Leasehold Revenue Improvement Bonds, Series 1996A (City of St. Louis, Missouri, Lessee), 5.750%, 2/15/11 2/06 at 102 AAA 1,977,822 - ------------------------------------------------------------------------------------------------------------------------------------ Transportation - 6.0% 1,500,000 City of Kansas City, Missouri, General Improvement Airport Bonds, Series 1994 A, 6.900%, 9/01/11 (Alternative Minimum Tax) 9/04 at 101 AAA 1,708,095 1,000,000 The City of St. Louis, Missouri, Airport Revenue Bonds, Series 1997 (1997 Capital Improvement Program), Lambert - St.Louis International Airport, 6.000%, 7/01/12 (Alternative Minimum Tax) No Opt. Call AAA 1,134,260 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. Guaranteed - 9.4% 1,290,000 Health and Educational Facilities Authority of the State of Missouri, Health Facilities Revenue Bonds (SSM Health Care Obligated Group Projects), Series 1990B, 7.000%, 6/01/15 6/00 at 102 AAA 1,391,226 1,500,000 Certificates of Receipt, Series 1993, St. Louis County, Missouri, GNMA Collateralized Mortgage Revenue Bonds (Escrowed with United States Governmental Obligations), 5.650%, 7/01/20 (Alternative Minimum Tax) No Opt. Call AAA 1,651,950 1,275,000 St. Louis Municipal Finance Corporation, Leasehold Revenue Improvement and Refunding Bonds, Series 1992 (City of St. Louis, Missouri, Lessee), 6.250%, 2/15/12 (Pre-refunded to 2/15/05) 2/05 at 100 AAA 1,433,852 - ------------------------------------------------------------------------------------------------------------------------------------ Water and Sewer - 10.3% 1,225,000 State Environmental Improvement and Energy Resources Authority (State of Missouri), Water Pollution Control Revenue Bonds (State Revolving Fund Program - City of Kansas City Project), Series 1995B, 7.750%, 1/01/08 1/05 at 102 Aa1 1,473,908 1,000,000 State Environmental Improvement and Energy Resources Authority (State of Missouri), Water Pollution Control Revenue Bonds (State Revolving Fund Program - City of Branson Project), Series 1995A, 6.050%, 7/01/16 7/04 at 102 AAA 1,106,810 1,000,000 State Environmental Improvement and Energy Resources Authority (State of Missouri), Water Pollution Control Revenue Bonds (State Revolving Fund Program - Multiple Participant Series), Series 1996D, 5.875%, 1/01/15 1/06 at 101 Aa1 1,074,460 350,000 State Environmental Improvement and Energy Resources Authority (State of Missouri), Water Pollution Control Revenue Bonds (State Revolving Fund Program - City of Kansas City Project), Series 1997C, 6.750%, 1/01/12 No Opt. Call Aa1 $ 426,642 750,000 The City of St. Louis, Missouri, Water Revenue Refunding and Improvement Bonds, Series 1994, 6.000%, 7/01/14 7/04 at 102 AAA 829,050 - ------------------------------------------------------------------------------------------------------------------------------------ $ 41,620,000 Total Investments - (cost $43,112,428) - 98.2% 46,597,670 ============= Other Assets Less Liabilities - 1.8% 858,537 -------------------------------------------------------------------------------------------------------------------- Net Assets - 100% $47,456,207 ==================================================================================================================== * Optional Call Provisions: Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings: Using the higher of Standard & Poor's or Moody's rating. N/R Investment is not rated. See accompanying notes to financial statements.
Portfolio of Investments Nuveen Washington Premium Income Municipal Fund (NPW) November 30, 1998 (Unaudited)
Principal Optional Call Market Amount Description Provisions* Ratings** Value - ------------------------------------------------------------------------------------------------------------------------------------ Education and Civic Organizations - 5.1% $ $1,000,000 University of Washington, Housing and Dining System Revenue Refunding Bonds, Junior Lien Series 1996, 5.125%, 12/01/15 12/06 at 102 AAA $1,022,860 1,400,000 Washington State University, Housing and Dining System Revenue and Refunding Bonds, Series 1994, 6.375%, 10/01/18 10/04 at 101 AAA 1,560,510 65,000 Western Washington University, Housing and Dining System Revenue Bonds, Series 1992, 6.375%, 10/01/22 10/02 at 101 AAA 70,788 - ------------------------------------------------------------------------------------------------------------------------------------ Health Care - 11.7% 1,000,000 Washington Health Care Facilities Authority, Revenue Bonds, Series 1993A (The Heart Institute of Spokane), 5.800%, 8/15/18 8/04 at 102 AA- 1,051,550 2,000,000 Washington Health Care Facilities Authority, Revenue Bonds, Series 1992 (The Childrens Hospital and Medical Center, Seattle), 6.125%, 10/01/13 10/02 at 102 AAA 2,203,960 2,000,000 Washington Health Care Facilities Authority, Revenue Bonds, Series 1998 (Highline Community Hospital), 5.000%, 8/15/21 8/08 at 102 AA 1,930,100 1,000,000 Washington Health Care Facilities Authority, Revenue Bonds, Series 1998 (Harrison Memorial Hospital), 5.000%, 8/15/28 8/13 at 102 AAA 973,520 - ------------------------------------------------------------------------------------------------------------------------------------ Housing/Multifamily - 5.9% 2,000,000 Housing Authority of the County of King Washington, Housing Revenue Bonds, Series 1995 (Woodridge Park Project), 6.350%, 5/01/25 (Alternative Minimum Tax) 5/05 at 100 AA+ 2,108,460 965,000 Washington State Housing Finance Commission, Multifamily Mortgage Revenue Bonds (GNMA Mortgage Backed Securities Program), Series 1989A, 7.700%, 7/01/32 (Alternative Minimum Tax) 1/00 at 103 AAA 1,006,360 - ------------------------------------------------------------------------------------------------------------------------------------ Housing/Single Family - 4.4% 1,610,000 Washington State Housing Finance Commission, Single-Family Mortgage Revenue Bonds (Mortgage Backed Securities Program), Series 1992D-1, 6.150%, 1/01/26 (Alternative Minimum Tax) No Opt. Call AAA 1,796,519 475,000 Washington State Housing Finance Commission, Single Family Program Bonds, 1997 Series 2A, 6.050%, 12/01/16 6/07 at 102 Aaa 504,987 - ------------------------------------------------------------------------------------------------------------------------------------ Long Term Care - 3.5% 1,640,000 Housing Authority of Skagit County, Low-Income Housing Assistance Revenue Bonds, Series 1993 (GNMA Collateralized Mortgage Loan - Sea Mar Project), 7.000%, 6/20/35 11/04 at 104 AAA 1,818,038 - ------------------------------------------------------------------------------------------------------------------------------------ Tax Obligation/General - 20.9% 1,655,000 City of Everett, Washington, Limited Tax General Obligation Bonds, Series 1997, 5.125%, 9/01/17 9/07 at 100 Aaa 1,681,828 1,000,000 Federal Way School District No. 210, King County, Washington, Unlimited Tax General Obligation and Refunding Bonds, Series 1993, 5.750%, 12/01/12 No Opt. Call AAA 1,126,040 1,360,000 Tahoma School District No. 409, King County, Washington, Unlimited Tax General Obligation Improvement and Refunding Bonds, Series 1997, 6.000%, 12/01/10 No Opt. Call Aaa 1,561,919 1,000,000 Peninsula School District No. 401, Pierce County, Washington, Unlimited Tax General Obligation Refunding Bonds, Series 1993, 5.500%, 12/01/08 No Opt. Call AAA 1,099,710 1,000,000 The City of Renton, Washington, Limited Tax General Obligation Bonds, General Purpose/Public Improvement Bonds, Series 1997B, 5.750%, 12/01/17 6/07 at 100 AAA 1,075,440 1,500,000 Mukilteo School District No. 6, Snohomish County, Washington, Unlimited Tax General Obligation and Refunding Bonds, Series 1993, 5.700%, 12/01/12 No Opt. Call AAA 1,684,665 Principal Optional Call Market Amount Description Provisions* Ratings** Value - ------------------------------------------------------------------------------------------------------------------------------------ Tax Obligation/General (continued) $ 500,000 Edmonds School District No. 15, Snohomish County, Washington, Unlimited Tax General Obligation Bonds, Series 1994, 6.500%, 12/01/08 No Opt. Call AA- $ 587,105 2,000,000 State of Washington, General Obligation Bonds, Series 1994B, 6.000%, 5/01/19 5/04 at 100 AA+ 2,144,260 - ------------------------------------------------------------------------------------------------------------------------------------ Tax Obligation/Limited - 3.6% Seattle Indian Services Commission, Special Obligation Bonds, Series 1994: 1,000,000 6.000%, 11/01/16 11/04 at 100 AA+ 1,080,650 750,000 6.150%, 11/01/24 11/04 at 100 AA+ 820,905 - ------------------------------------------------------------------------------------------------------------------------------------ Transportation - 7.9% 1,300,000 Port of Seattle, Washington, Revenue Bonds, Series 1996A, 5.500%, 9/01/21 9/06 at 101 AAA 1,366,677 1,000,000 Port of Vancouver, Clark County, Washington, Limited Tax General Obligation Bonds, 1994 Series B, 6.000%, 12/01/04 (Alternative Minimum Tax) No Opt. Call AAA 1,107,760 1,675,000 Spokane Downtown Foundation, Parking Revenue Bonds, Series 1998 (River Park Square Project), 5.600%, 8/01/19 8/08 at 102 BBB- 1,687,713 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. Guaranteed - 7.6% 1,000,000 Port of Seattle, Washington, Revenue Bonds, Series 1990A, 6.000%, 12/01/14 (Pre-refunded to 12/01/00) 12/00 at 100 AA-*** 1,048,900 1,250,000 Washington Health Care Facilities Authority, Revenue Bonds, Refunding Series 1992 (Franciscan Health System/Saint Clare Hospital, Tacoma), 6.625%, 7/01/20 (Pre-refunded to 7/01/02) 7/02 at 102 AAA 1,392,038 1,400,000 Washington Health Care Facilities Authority, Revenue Bonds, Series 1992, (Swedish Hospital Medical Center, Seattle), 6.300%, 11/15/22 (Pre-refunded to 11/15/02) 11/02 at 102 AAA 1,555,162 - ------------------------------------------------------------------------------------------------------------------------------------ Utilities - 14.3% 1,100,000 Public Utility District No. 1 of Klickitat County, Washington, Electric Revenue Bonds, Series 1995, 5.650%, 10/01/15 10/05 at 101 AAA 1,171,995 1,000,000 Lewis County Public Utility District, Cowlitz Falls Hydroelectric Project, Revenue Refunding Bonds, Series 1993, 5.500%, 10/01/22 10/03 at 102 Aa1 1,033,550 1,000,000 The City of Seattle, Washington, Municipal Light and Power Revenue Bonds, 5.625%, 10/01/21 10/06 at 102 AAA 1,066,030 500,000 The City of Seattle, Washington, Municipal Light and Power Revenue Bonds, Series 1992A, 5.750%, 8/01/12 8/02 at 102 AA 536,690 1,385,000 Public Utility District No. 1 of Snohomish County, Washington, Generation System Revenue Bonds, Series 1993B, 5.750%, 1/01/09 (Alternative Minimum Tax) 1/04 at 102 A+ 1,479,402 1,000,000 Washington Public Power Supply System, Nuclear Project No. 1 Refunding Revenue Bonds, Series 1993A, 5.700%, 7/01/17 7/03 at 102 AAA 1,045,270 1,000,000 Washington Public Power Supply System, Nuclear Project No. 3 Refunding Revenue Bonds, Series 1993B, 7.000%, 7/01/09 No Opt. Call Aa1 1,201,630 - ------------------------------------------------------------------------------------------------------------------------------------ Water and Sewer - 13.2% 1,050,000 City of Bellevue, King County, Washington, Water and Sewer Revenue Refunding Bonds, Series 1994, 5.875%, 7/01/09 7/04 at 100 Aa 1,139,985 1,035,000 Covington Water District, 6.050%, 3/01/20 3/05 at 100 AAA 1,120,046 800,000 Kitsap County, Washington, Sewer Revenue Bonds, Series 1996, 5.750%, 7/01/16 7/06 at 100 AAA 865,504 900,000 City of Richland, Washington, Water and Sewer Improvement Revenue Bonds, Series 1993, 5.625%, 4/01/12 4/03 at 100 AAA 963,918 1,200,000 Sammamish Plateau Water and Sewer District, King County, Washington, Water and Sewer Revenue Refunding Bonds, 1996, 5.500%, 12/01/16 12/06 at 100 AAA 1,250,820 Principal Optional Call Market Amount Description Provisions* Ratings** Value - ------------------------------------------------------------------------------------------------------------------------------------ Water and Sewer (continued) $ 500,000 The City of Seattle, Washington, Water System and Refunding Revenue Bonds, 1993, 5.250%, 12/01/23 6/03 at 101 AA $ 505,345 1,000,000 Yakima - Tieton Irrigation District, Yakima County, Washington, Refunding Revenue Bonds, 1992, 6.125%, 6/01/13 6/03 at 102 AAA 1,099,798 - ------------------------------------------------------------------------------------------------------------------------------------ $ 48,015,000 Total Investments - (cost $47,698,973) - 98.1% 51,548,407 ============= Other Assets Less Liabilities - 1.9% 999,041 -------------------------------------------------------------------------------------------------------------------- Net Assets - 100% $52,547,448 ==================================================================================================================== * Optional Call Provisions: Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings: Using the higher of Standard & Poor's or Moody's rating. *** Securities are backed by an escrow or trust containing sufficient U.S. government or U.S. government agency securities which ensures the timely payment of principal and interest. Securities are normally considered to be equivalent to AAA rated securities. See accompanying notes to financial statements.
Statement of Net Assets November 30, 1998 (Unaudited)
Connecticut Massachusetts Missouri Washington - ------------------------------------------------------------------------------------------------------------------------------------ Assets Investments in municipal securities, at market value (note 1) $112,965,134 $101,145,061 $46,597,670 $51,548,407 Cash 407,976 76,500 145,573 327,998 Receivables: Interest 1,978,935 1,881,649 859,177 895,701 Investments sold -- 1,438,100 40,725 -- Other assets 10,146 8,644 8,652 7,061 - ------------------------------------------------------------------------------------------------------------------------------------ Total assets 115,362,191 104,549,954 47,651,797 52,779,167 - ------------------------------------------------------------------------------------------------------------------------------------ Liabilities Accrued expenses: Management fees (note 6) 61,182 55,422 25,283 27,990 Other 47,487 44,424 30,233 46,685 Preferred share dividends payable 9,989 10,957 4,819 6,241 Common share dividends payable 345,349 326,596 135,255 150,803 - ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 464,007 437,399 195,590 231,719 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets (note 7) $114,898,184 $104,112,555 $47,456,207 $52,547,448 ==================================================================================================================================== Preferred shares, at liquidation value $ 38,300,000 $ 34,000,000 $16,000,000 $17,000,000 ==================================================================================================================================== Preferred shares outstanding 1,532 1,360 640 680 ==================================================================================================================================== Common shares outstanding 5,193,215 4,632,575 2,146,908 2,320,051 ==================================================================================================================================== Net asset value per Common share outstanding (net assets less Preferred shares at liquidation value, divided by Common shares outstanding) $ 14.75 $ 15.13 $ 14.65 $ 15.32 ==================================================================================================================================== See accompanying notes to financial statements.
Statement of Operations Six Months Ended November 30, 1998 (Unaudited)
Connecticut Massachusetts Missouri Washington - ------------------------------------------------------------------------------------------------------------------------------------ Investment Income (note 1) $3,099,304 $2,846,455 $1,272,941 $1,415,081 - ------------------------------------------------------------------------------------------------------------------------------------ Expenses Management fees (note 6) 372,005 337,135 153,744 170,294 Preferred shares - auction fees 48,006 42,617 20,055 21,309 Preferred shares - dividend disbursing agent fees 5,014 5,014 5,014 5,014 Shareholders' servicing agent fees and expenses 8,106 4,152 3,616 1,498 Custodian's fees and expenses 19,380 18,803 15,930 16,344 Trustees' fees and expenses (note 6) 536 487 223 245 Professional fees 8,660 8,647 8,570 8,577 Shareholders' reports - printing and mailing expenses 19,314 18,897 10,885 10,660 Stock exchange listing fees 8,147 8,131 1,001 1,087 Investor relations expense 5,078 4,343 2,200 2,101 Other expenses 4,672 4,546 3,180 3,228 - ------------------------------------------------------------------------------------------------------------------------------------ Total expenses 498,918 452,772 224,418 240,357 - ------------------------------------------------------------------------------------------------------------------------------------ Net investment income 2,600,386 2,393,683 1,048,523 1,174,724 - ------------------------------------------------------------------------------------------------------------------------------------ Realized and Unrealized Gain (Loss) from Investments Net realized gain (loss) from investment transactions (notes 1 and 4) 63,498 28,637 (6,830) 148,001 Net change in unrealized appreciation or depreciation of investments 1,235,664 1,054,087 482,804 461,416 - ------------------------------------------------------------------------------------------------------------------------------------ Net gain from investments 1,299,162 1,082,724 475,974 609,417 - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets from operations $3,899,548 $3,476,407 $1,524,497 $1,784,141 ==================================================================================================================================== See accompanying notes to financial statements.
Statement of Changes in Net Assets (Unaudited)
Connecticut Massachusetts - ----------------------------------------------------------------------------------------------------------------------------------- Six Months Ended Year Ended Six Months Ended Year Ended 11/30/98 5/31/98 11/30/98 5/31/98 - ----------------------------------------------------------------------------------------------------------------------------------- Operations Net investment income $ 2,600,386 $ 5,159,370 $ 2,393,683 $ 4,891,388 Net realized gain (loss) from investment transactions (notes 1 and 4) 63,498 422,013 28,637 671,439 Net change in unrealized appreciation or depreciation of investments 1,235,664 4,143,106 1,054,087 3,102,632 - ----------------------------------------------------------------------------------------------------------------------------------- Net increase in net assets from operations 3,899,548 9,724,489 3,476,407 8,665,459 - ----------------------------------------------------------------------------------------------------------------------------------- Distributions to Shareholders (note 1) From undistributed net investment income: Common shareholders (2,069,968) (4,108,452) (1,964,836) (3,905,877) Preferred shareholders (523,143) (1,169,485) (467,634) (1,096,311) - ----------------------------------------------------------------------------------------------------------------------------------- Decrease in net assets from distributions to shareholders (2,593,111) (5,277,937) (2,432,470) (5,002,188) - ----------------------------------------------------------------------------------------------------------------------------------- Capital Share Transactions (note 2) Net proceeds from Common shares issued to shareholders due to reinvestment of distributions 207,675 413,844 132,648 266,611 - ----------------------------------------------------------------------------------------------------------------------------------- Net increase in net assets 1,514,112 4,860,396 1,176,585 3,929,882 Net assets at beginning of period 113,384,072 108,523,676 102,935,970 99,006,088 - ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of period $114,898,184 $113,384,072 $104,112,555 $102,935,970 =================================================================================================================================== Balance of undistributed net investment income at end of period $ 291,378 $ 284,103 $ 175,441 $ 214,228 =================================================================================================================================== Missouri Washington - ----------------------------------------------------------------------------------------------------------------------------------- Six Months Ended Year Ended Six Months Ended Year Ended 11/30/98 5/31/98 11/30/98 5/31/98 - ----------------------------------------------------------------------------------------------------------------------------------- Operations Net investment income $ 1,048,523 $ 2,134,126 $ 1,174,724 $ 2,368,345 Net realized gain (loss) from investment transactions (notes 1 and 4) (6,830) 380,799 148,001 94,941 Net change in unrealized appreciation or depreciation of investments 482,804 1,267,040 461,416 2,195,317 - ----------------------------------------------------------------------------------------------------------------------------------- Net increase in net assets from operations 1,524,497 3,781,965 1,784,141 4,658,603 - ----------------------------------------------------------------------------------------------------------------------------------- Distributions to Shareholders (note 1) From undistributed net investment income: Common shareholders (812,903) (1,629,870) (895,539) (1,753,958) Preferred shareholders (257,887) (526,508) (289,249) (596,423) - ----------------------------------------------------------------------------------------------------------------------------------- Decrease in net assets from distributions to shareholders (1,070,790) (2,156,378) (1,184,788) (2,350,381) - ----------------------------------------------------------------------------------------------------------------------------------- Capital Share Transactions (note 2) Net proceeds from Common shares issued to shareholders due to reinvestment of distributions 67,180 85,411 -- -- - ----------------------------------------------------------------------------------------------------------------------------------- Net increase in net assets 520,887 1,710,998 599,353 2,308,222 Net assets at beginning of period 46,935,320 45,224,322 51,948,095 49,639,873 - ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of period $47,456,207 $46,935,320 $52,547,448 $51,948,095 =================================================================================================================================== Balance of undistributed net investment income at end of period $ 134,615 $ 156,882 $ 95,564 $ 105,628 =================================================================================================================================== See accompanying notes to financial statements.
Notes to Financial Statements (Unaudited) 1. General Information and Significant Accounting Policies The state Funds (the "Funds") covered in this report and their corresponding stock exchange symbols are Nuveen Connecticut Premium Income Municipal Fund (NTC), Nuveen Massachusetts Premium Income Municipal Fund (NMT), Nuveen Missouri Premium Income Municipal Fund (NOM) and Nuveen Washington Premium Income Municipal Fund (NPW). Connecticut and Massachusetts are traded on the New York Stock Exchange while Missouri and Washington are traded on the American Stock Exchange. Each Fund invests primarily in a diversified portfolio of municipal obligations issued by state and local government authorities within a single state. The Funds are registered under the Investment Company Act of 1940 as closed-end, diversified management investment companies. The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements in accordance with generally accepted accounting principles. Securities Valuation The prices of municipal bonds in each Fund's investment portfolio are provided by a pricing service approved by the Fund's Board of Trustees. When price quotes are not readily available (which is usually the case for municipal securities), the pricing service establishes fair market value based on yields or prices of municipal bonds of comparable quality, type of issue, coupon, maturity and rating, indications of value from securities dealers and general market conditions. Temporary investments in securities that have variable rate and demand features qualifying them as short-term securities are valued at amortized cost, which approximates market value. Securities Transactions Securities transactions are recorded on a trade date basis. Realized gains and losses from such transactions are determined on the specific identification method. Securities purchased or sold on a when-issued or delayed delivery basis may have extended settlement periods. The securities so purchased are subject to market fluctuation during this period. The Funds have instructed the custodian to segregate assets in a separate account with a current value at least equal to the amount of the when-issued and delayed delivery purchase commitments. At November 30, 1998, there were no such outstanding purchase commitments in any of the Funds. Investment Income Interest income is determined on the basis of interest accrued, adjusted for amortization of premiums and accretion of discounts on long-term debt securities when required for federal income tax purposes. Income Taxes Each Fund is a separate taxpayer for federal income tax purposes. Each Fund intends to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its tax-exempt net investment income, in addition to any significant amounts of net realized capital gains and/or market discount realized from investment transactions. The Funds currently consider significant net realized capital gains and/or market discount as amounts in excess of $.01 per Common share. Furthermore, each Fund intends to satisfy conditions which will enable interest from municipal securities, which is exempt from regular federal and designated state income taxes, if any, to retain such tax-exempt status when distributed to shareholders of the Funds. Net realized capital gain and market discount distributions are subject to federal taxation. Dividends and Distributions to Shareholders Tax-exempt net investment income is declared as a dividend monthly and payment is made or reinvestment is credited to shareholder accounts on the first business day after month-end. Net realized capital gains and/or market discount from investment transactions, if any, are distributed to shareholders not less frequently than annually. Furthermore, capital gains are distributed only to the extent they exceed available capital loss carryforwards. Distributions to shareholders of tax-exempt net investment income, net realized capital gains and/or market discount are recorded on the ex-dividend date. The amount and timing of distributions are determined in accordance with federal income tax regulations, which may differ from generally accepted accounting principles. Accordingly, temporary over-distributions as a result of these differences may occur and will be classified as either distributions in excess of net investment income, distributions in excess of net realized gains and/or distributions in excess of net ordinary taxable income from investment transactions, where applicable. Preferred Shares The Funds have issued and outstanding $25,000 stated value Preferred shares. Each Fund's Preferred shares are issued in one Series. The dividend rate on each Series may change every seven days, as set by the auction agent. The number of shares outstanding for each Fund is as follows:
Connecticut Massachusetts Missouri Washington - -------------------------------------------------------------------------------- Number of Shares: Series Th 1,532 1,360 640 680 ================================================================================
Derivative Financial Instruments The Funds may invest in transactions in certain derivative financial instruments including futures, forward, swap and option contracts, and other financial instruments with similar characteristics. Although the Funds are authorized to invest in such financial instruments, and may do so in the future, they did not make any such investments during the six months ended November 30, 1998. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results may differ from those estimates. 2. Fund Shares Transactions in Common shares were as follows:
Connecticut Massachusetts - --------------------------------------------------------------------------------------------------------------- Six Months Ended Year Ended Six Months Ended Year Ended 11/30/98 5/31/98 11/30/98 5/31/98 - --------------------------------------------------------------------------------------------------------------- Shares issued to shareholders due to reinvestment of distributions 13,023 27,446 8,051 17,254 =============================================================================================================== Missouri Washington - --------------------------------------------------------------------------------------------------------------- Six Months Ended Year Ended Six Months Ended Year Ended 11/30/98 5/31/98 11/30/98 5/31/98 - --------------------------------------------------------------------------------------------------------------- Shares issued to shareholders due to reinvestment of distributions 4,448 5,923 -- -- ===============================================================================================================
3. Distributions to Common Shareholders The Funds declared Common share dividend distributions from their tax-exempt net investment income which were paid on December 28, 1998, to shareholders of record on December 15, 1998, as follows:
Connecticut Massachusetts Missouri Washington - -------------------------------------------------------------------------------- Dividend per share $.0665 $.0705 $.0630 $.0650 ================================================================================
At the same time, Massachusetts and Missouri also declared taxable distributions, which include capital gains and/or market discount, of $.0051 and $.0095 per share, respectively. 4. Securities Transactions Purchases and sales (including maturities) of investments in municipal securities and temporary municipal investments for the six months ended November 30, 1998, were as follows:
Connecticut Massachusetts Missouri Washington - ----------------------------------------------------------------------------------------------------------- Purchases: Investments in municipal securities $2,205,923 $ 8,343,284 $ 389,732 $2,627,838 Temporary municipal investments 2,500,000 11,800,000 800,000 300,000 Sales and Maturities: Investments in municipal securities 2,439,755 8,940,500 155,000 2,704,045 Temporary municipal investments 2,500,000 12,100,000 1,100,000 500,000 ===========================================================================================================
At November 30, 1998, the identified cost of investments owned for federal income tax purposes was the same as the cost for financial reporting purposes for each Fund. At May 31, 1998, the Funds' last fiscal 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:
Connecticut Massachusetts Missouri Washington - ----------------------------------------------------------------------------------------------------------- Expiration year: 2003 $ 895,482 $ 615,511 $ 949,075 $469,931 2004 1,105,901 945,779 708,417 70,082 2005 847,914 195,761 -- -- - ----------------------------------------------------------------------------------------------------------- Total $2,849,297 $ 1,757,051 $1,657,492 $540,013 ===========================================================================================================
5. Unrealized Appreciation (Depreciation) Gross unrealized appreciation and gross unrealized depreciation of investments at November 30, 1998, were as follows:
Connecticut Massachusetts Missouri Washington - ----------------------------------------------------------------------------------------------------------- Gross unrealized: appreciation $7,207,151 $7,509,607 $3,485,242 $3,854,825 depreciation -- (14,353) -- (5,391) - ----------------------------------------------------------------------------------------------------------- Net unrealized appreciation $7,207,151 $7,495,254 $3,485,242 $3,849,434 ===========================================================================================================
6. Management Fee and Other Transactions with Affiliates Under the Funds' investment management agreements with Nuveen Advisory Corp. (the "Adviser"), a wholly owned subsidiary of The John Nuveen Company, each Fund pays an annual management fee, payable monthly, at the rates set forth below, which are based upon the average daily net asset value of each Fund as follows: Average Daily Net Asset Value Management Fee - -------------------------------------------------------------------------------- For the first $125 million .6500 of 1% For the next $125 million .6375 of 1 For the next $250 million .6250 of 1 For the next $500 million .6125 of 1 For the next $1 billion .6000 of 1 For net assets over $2 billion .5875 of 1 ================================================================================ The fee compensates the Adviser for overall investment advisory and administrative services and general office facilities. The Funds pay no compensation directly to those of its Trustees who are affiliated with the Adviser or to their officers, all of whom receive remuneration for their services to the Funds from the Adviser. 7. Composition of Net Assets At November 30, 1998, net assets consisted of:
Connecticut Massachusetts Missouri Washington - ----------------------------------------------------------------------------------------------------------- Preferred shares, $25,000 stated value per share, at liquidation value $ 38,300,000 $ 34,000,000 $16,000,000 $17,000,000 Common shares, $.01 par value per share 51,932 46,326 21,469 23,201 Paid-in surplus 71,832,934 64,123,948 29,479,203 31,971,262 Balance of undistributed net investment income 291,378 175,441 134,615 95,564 Accumulated net realized gain (loss) from investment transactions (2,785,211) (1,728,414) (1,664,322) (392,013) Net unrealized appreciation of investments 7,207,151 7,495,254 3,485,242 3,849,434 - ----------------------------------------------------------------------------------------------------------- Net assets $114,898,184 $104,112,555 $47,456,207 $52,547,448 =========================================================================================================== Authorized shares: Common Unlimited Unlimited Unlimited Unlimited Preferred Unlimited Unlimited Unlimited Unlimited ===========================================================================================================
Financial Highlights (Unaudited) Selected data for a Common share outstanding throughout each period is as follows:
Investment Operations --------------------------------------- Net Realized/ Beginning Net Unrealized Net Asset Investment Investment Value Income Gain (Loss) Total Connecticut Year Ended 5/31: 1999 (a) $14.49 $ .50 $ .26 $ .76 1998 13.63 1.00 .89 1.89 1997 12.99 1.00 .60 1.60 1996 13.20 .98 (.21) .77 1995 12.45 .98 .74 1.72 1994 13.96 .77 (1.40) (.63) Massachusetts Year Ended 5/31: 1999 (a) 14.91 .52 .22 .74 1998 14.11 1.06 .83 1.89 1997 13.58 1.06 .53 1.59 1996 13.76 1.05 (.19) .86 1995 12.90 1.04 .84 1.88 1994 14.08 .87 (1.01) (.14) Missouri Year Ended 5/31: 1999 (a) 14.44 .49 .22 .71 1998 13.68 .99 .78 1.77 1997 13.11 1.00 .55 1.55 1996 13.37 .96 (.30) .66 1995 12.35 .95 1.02 1.97 1994 13.90 .76 (1.40) (.64) Washington Year Ended 5/31: 1999 (a) 15.06 .51 .27 .78 1998 14.07 1.02 .99 2.01 1997 13.48 1.02 .58 1.60 1996 13.71 1.02 (.23) .79 1995 12.97 1.01 .77 1.78 1994 14.09 .91 (.93) (.02) Less Distributions -------------------------------------------------------------------------- Net Net Investment Investment Capital Capital Income Income Gain Gain To Common To Preferred To Common To Preferred Shareholders Shareholders+ Shareholders Shareholders+ Total Connecticut Year Ended 5/31: 1999 (a) $(.40) $(.10) $-- $-- $ (.50) 1998 (.80) (.23) -- -- (1.03) 1997 (.76) (.20) -- -- (.96) 1996 (.73) (.25) -- -- (.98) 1995 (.74) (.23) -- -- (.97) 1994 (.61) (.13) -- -- (.74) Massachusetts Year Ended 5/31: 1999 (a) (.42) (.10) -- -- (.52) 1998 (.85) (.24) -- -- (1.09) 1997 (.84) (.22) -- -- (1.06) 1996 (.80) (.24) -- -- (1.04) 1995 (.78) (.24) -- -- (1.02) 1994 (.74) (.15) -- -- (.89) Missouri Year Ended 5/31: 1999 (a) (.38) (.12) -- -- (.50) 1998 (.76) (.25) -- -- (1.01) 1997 (.73) (.25) -- -- (.98) 1996 (.67) (.25) -- -- (.92) 1995 (.69) (.26) -- -- (.95) 1994 (.59) (.14) -- -- (.73) Washington Year Ended 5/31: 1999 (a) (.39) (.13) -- -- (.52) 1998 (.76) (.26) -- -- (1.02) 1997 (.75) (.26) -- -- (1.01) 1996 (.74) (.28) -- -- (1.02) 1995 (.77) (.27) -- -- (1.04) 1994 (.76) (.16) (.01) -- (.93) Total Returns ------------------------------ Organization and Offering Costs and Preferred Share Ending Underwriting Net Asset Ending Based on Based on Net Discounts Value Market Value Market Value** Asset Value** Connecticut Year Ended 5/31: 1999 (a) $-- $14.75 $16.3750 8.29% 4.59% 1998 -- 14.49 15.5000 15.61 12.39 1997 -- 13.63 14.1250 9.58 11.01 1996 -- 12.99 13.6250 14.06 3.97 1995 -- 13.20 12.6250 2.22 12.74 1994 (.14) 12.45 13.1250 (8.73) (6.74) Massachusetts Year Ended 5/31: 1999 (a) -- 15.13 16.5625 2.98 4.36 1998 -- 14.91 16.5000 18.08 11.91 1997 -- 14.11 14.7500 13.76 10.28 1996 -- 13.58 13.7500 8.99 4.55 1995 -- 13.76 13.3750 14.12 13.58 1994 (.15) 12.90 12.5000 (13.64) (3.38) Missouri Year Ended 5/31: 1999 (a) -- 14.65 15.3750 11.12 4.10 1998 -- 14.44 14.1875 14.53 11.31 1997 -- 13.68 13.0625 10.53 10.09 1996 -- 13.11 12.5000 10.07 3.09 1995 -- 13.37 12.0000 6.13 14.74 1994 (.18) 12.35 12.0000 (17.26) (7.16) Washington Year Ended 5/31: 1999 (a) -- 15.32 14.8750 12.15 4.33 1998 -- 15.06 13.6250 15.26 12.64 1997 -- 14.07 12.5000 12.94 10.16 1996 -- 13.48 11.7500 7.44 3.75 1995 -- 13.71 11.6250 .41 12.36 1994 (.17) 12.97 12.3750 (16.88) (2.73) Ratios/Supplemental Data ------------------------------------------------------------------------------------------------- Ratio of Net Ratio of Net Ratio of Investment Ratio of Investment Expenses to Income to Expenses to Income to Average Average Average Total Average Total Ending Net Assets Net Assets Net Assets Net Assets Portfolio Net Assets Applicable to Applicable to Including Including Turnover (000) Common Shares++ Common Shares++ Preferred++ Preferred++ Rate Connecticut Year Ended 5/31: 1999 (a) $114,898 1.31%* 6.84%* .87%* 4.54%* 2% 1998 113,384 1.33 7.02 .88 4.61 13 1997 108,524 1.38 7.46 .89 4.79 18 1996 104,928 1.40 7.37 .89 4.71 15 1995 105,851 1.49 8.09 .92 4.99 18 1994 101,595 1.36 5.60 .95 3.95 9 Massachusetts Year Ended 5/31: 1999 (a) 104,113 1.30* 6.87* .87* 4.61* 8 1998 102,936 1.31 7.22 .88 4.81 17 1997 99,006 1.34 7.63 .88 4.99 22 1996 96,303 1.35 7.61 .88 4.95 18 1995 97,071 1.49 8.28 .94 5.20 29 1994 93,078 1.43 6.24 .97 4.26 33 Missouri Year Ended 5/31: 1999 (a) 47,456 1.44* 6.71* .95* 4.43* -- 1998 46,935 1.47 7.03 .97 4.60 25 1997 45,224 1.54 7.38 .99 4.74 36 1996 44,014 1.57 7.13 1.01 4.57 34 1995 44,566 1.75 7.88 1.08 4.86 34 1994 42,343 1.51 5.62 1.05 3.92 39 Washington Year Ended 5/31: 1999 (a) 52,547 1.36* 6.65* .92* 4.48* 5 1998 51,948 1.36 6.92 .91 4.62 10 1997 49,640 1.43 7.38 .94 4.83 11 1996 48,266 1.44 7.37 .94 4.81 20 1995 48,812 1.64 7.97 1.04 5.04 16 1994 47,095 1.58 6.45 1.08 4.42 29 * Annualized. ** Total Investment Return on Market Value is the combination of reinvested dividend income, reinvested capital gain distributions, if any, and changes in stock price per share. Total Return on Net Asset Value is the combination of reinvested dividend income, reinvested capital gain distributions, if any, and changes in net asset value per share. Total returns are not annualized. + The amounts shown are based on Common share equivalents. ++ Ratios do not reflect the effect of dividend payments to preferred shareholders; income ratios reflect income earned on assets attributable to Preferred shares. (a) For the six months ended November 30, 1998.
Building a Better Portfolio Can Make You a Successful Investor NUVEEN FAMILY OF MUTUAL FUNDS Nuveen offers a variety of funds designed to help you reach your financial goals. GROWTH Nuveen Rittenhouse Growth Fund GROWTH AND INCOME European Value Fund Growth and Income Stock Fund Balanced Stock and Bond Fund Balanced Municipal and Stock Fund TAX-FREE INCOME National Funds Long-Term Insured Intermediate-Term Limited-Term State Funds Arizona California Colorado Connecticut Florida Georgia Kansas Kentucky Louisiana Maryland Massachusetts Michigan Missouri New Jersey New Mexico New York North Carolina Ohio Pennsylvania Tennessee Virginia Wisconsin Successful investors know that a well-diversified portfolio - one that balances different types of investments, levels of risk and tax management - can be the foundation for building and sustaining wealth. That's why Nuveen offers you and your financial adviser a wide range of quality investments that can help you build a better portfolio in the pursuit of your financial goals Exchange-Traded Funds Nuveen Exchange-Traded Funds offer investors actively managed portfolios of investment-grade quality municipal bonds. The fund shares are listed and traded on the New York and American stock exchanges. Exchange-traded funds provide the investment convenience, price visibility and liquidity of common stocks. MuniPreferred(R) Nuveen MuniPreferred offers investors a AAA rated investment with an attractive tax-free yield for the cash reserves portion of an investment portfolio. MuniPreferred shares are backed 2-to-1 by the long-term portfolios of Nuveen dual-class exchange-traded funds and are available for national as well as a wide variety of state-specific portfolios. Mutual Funds Nuveen offers a family of equity, balanced and municipal bond funds featuring Premier AdvisersSM including Institutional Capital Corporation, Rittenhouse Financial Services, and Nuveen Advisory Corp. Each brings a specialized expertise in a particular investment style or asset class, time-tested investment strategies and a focus on consistent, long-term performance. With Nuveen's Premier Adviser funds, you have all the advantages of a family of funds plus the benefits of specialized investment expertise. Private Asset Management Rittenhouse Financial Services and Nuveen Asset Management offer comprehensive, customized investment management solutions to investors with assets of $250,000 or more to invest. A range of actively managed growth, balanced and municipal income-oriented portfolios are available, all based upon a disciplined investment philosophy. Defined Portfolios Nuveen Defined Portfolios are fixed portfolios of quality securities that are a convenient, attractive alternative to purchasing individual securities. They provide low-cost diversification to reduce risk, while also offering experienced, professional security selection and surveillance. In addition, Nuveen Defined Portfolios provide daily liquidity at that day's net asset value for quick access to your assets. Fund Information Board of Trustees Robert P. Bremner Lawrence H. Brown Anthony T. Dean Anne E. Impellizzeri Peter R. Sawers William J. Schneider Timothy R. Schwertfeger Judith M. Stockdale Fund Manager Nuveen Advisory Corp. 333 West Wacker Drive Chicago, IL 60606 Custodian, Transfer Agent and Shareholder Services The Chase Manhattan Bank 4 New York Plaza New York, NY 10004-2413 (800) 257-8787 Legal Counsel Morgan, Lewis & Bockius LLP Washington, D.C. Independent Auditors Ernst & Young LLP Chicago, IL Year 2000 The concern that computer systems may have problems processing date-related information in the year 2000 and beyond has challenged businesses and organizations to thoroughly review all aspects of their operations. We have undertaken just such an approach at Nuveen in preparation for the millennium. Over the last 10 years, our trading, fund management and pricing systems at Nuveen - the systems that directly affect our investors and their financial advisers - have been updated or replaced to address the Year 2000 concerns. We continue to work closely with our transfer agent, custodian and other service partners to monitor readiness and address other remaining systems issues. Our initial testing indicates we are on schedule, and we have targeted year-end 1998 to complete verification of vendor compliance and service partner readiness. However, we can give no complete assurance at this time that the steps we have taken will be sufficient to prevent any problems that would impact the Nuveen Exchange-Traded Funds. Each fund intends to repurchase shares of its own common or preferred stock in the future at such times and in such amounts as is deemed advisable. No shares were repurchased during the six-months ended November 30, 1998. Any future repurchases will be reported to shareholders in the next annual or semiannual report. Serving Investors for Generations Photo of: John Nuveen, Sr. Since our founding in 1898, John Nuveen & Co. has been synonymous with investments that withstand the test of time. Today we offer a broad range of quality investments designed for individuals seeking to build and sustain wealth. In fact, more than 1.3 million investors have trusted Nuveen to help them pursue their financial goals. The cornerstone of Nuveen's investment philosophy is a commitment to disciplined long-term investment strategies focused on providing consistent, attractive performance over time - with moderated risk. We emphasize quality securities carefully chosen through in-depth research, and we follow those securities closely over time to ensure that they continue to meet our exacting standards. Whether your focus is long-term growth, dependable current income or sustaining accumulated wealth, Nuveen offers a wide variety of investments and services to help meet your unique circumstances and financial planning needs. Our equity, balanced, and tax-free income funds, along with our defined portfolios and private asset management, can help you build a better, well-diversified portfolio. Talk with your financial adviser to learn more about how Nuveen investment products and services can help you. Or call us at (800) 257-8787 for more information, including a prospectus where applicable. Please read that information carefully before investing. FSA-3-11-98 LOGO: NUVEEN 1898 1998 OUR SECOND CENTURY helping investors sustain the wealth of a lifetime(TM). John Nuveen & Co. Incorporated 333 West Wacker Drive Chicago, IL 60606-1286 www.nuveen.com -----END PRIVACY-ENHANCED MESSAGE-----