UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-09161
---------------------
Nuveen California Dividend Advantage Municipal Fund
------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
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(Address of principal executive offices) (Zip code)
Jessica R. Droeger
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
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(Name and address of agent for service)
Registrant's telephone number, including area code: (312) 917-7700
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Date of fiscal year end: August 31
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Date of reporting period: August 31, 2005
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
ANNUAL REPORT August 31, 2005
Nuveen Investments
Municipal Closed-End
Exchange-Traded
Funds
NUVEEN INSURED CALIFORNIA PREMIUM INCOME MUNICIPAL FUND, INC.
NPC
NUVEEN INSURED CALIFORNIA PREMIUM INCOME MUNICIPAL FUND 2, INC.
NCL
NUVEEN CALIFORNIA PREMIUM INCOME MUNICIPAL FUND
NCU
NUVEEN CALIFORNIA DIVIDEND ADVANTAGE MUNICIPAL FUND
NAC
NUVEEN CALIFORNIA DIVIDEND ADVANTAGE MUNICIPAL FUND 2
NVX
NUVEEN CALIFORNIA DIVIDEND ADVANTAGE MUNICIPAL FUND 3
NZH
NUVEEN INSURED CALIFORNIA DIVIDEND ADVANTAGE MUNICIPAL FUND
NKL
NUVEEN INSURED CALIFORNIA TAX-FREE ADVANTAGE MUNICIPAL FUND
NKX
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Photo of: Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
Chairman's
LETTER TO SHAREHOLDERS
Once again, I am pleased to report that over the 12-month period covered by this
report your Fund continued to provide you with monthly income free from federal
and state income taxes, as well as with an attractive total return. For more
details about the management strategy and performance of your Fund, please see
the Portfolio Manager's Comments and Performance Overview sections of this
report.
Given the continued strength of the California economy, some market commentators
are speculating about whether longer-term interest rates will soon begin to rise
substantially, mirroring the rise that has taken place in shorter-term rates. If
longer-term rates do begin to rise significantly, some have suggested that this
would be a signal to begin adjusting your holdings of fixed-income investments.
"IN FACT, A WELL-DIVERSIFIED PORTFOLIO MAY ACTUALLY HELP TO REDUCE YOUR OVERALL
INVESTMENT RISK OVER THE LONG TERM."
Nobody knows what the market will do in the future or what investments will turn
out to be tomorrow's best performers. But from our experience, we do know that a
well-balanced portfolio, structured and carefully monitored with the help of a
trusted investment professional, can be an important component in helping you
achieve your long-term financial goals. In fact, a well-diversified portfolio
may actually help to reduce your overall investment risk over the long term.
That is one reason why we believe that a municipal bond investment like your
Fund can be an important building block in a comprehensive investment program
designed to perform well in a variety of market conditions.
As an added convenience for you, I urge you to consider receiving future Fund
reports and other Fund information by e-mail and the Internet. Not only will you
be able to receive the information faster, but this also may help lower your
Fund's expenses. Sign up is quick and easy - see the inside front cover of this
report for instructions.
Earlier in 2005, The St. Paul Travelers Companies, Inc., which owned 79% of
Nuveen Investments, Inc. (the parent of your Fund's investment adviser), sold a
substantial portion of its stake in Nuveen. More recently, St. Paul sold the
balance of its shares Nuveen Investments or to others. Please be assured that
these transactions only affect Nuveen's corporate structure, and they do not
have any impact on the investment objectives or management of your Fund.
At Nuveen Investments, our mission continues to be to assist you and your
financial advisor by offering investment services and products that can help you
to secure your financial objectives. We are grateful that you have chosen us as
a partner as you pursue your financial goals, and we look forward to continuing
to earn your trust in the months and years ahead.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
October 15, 2005
Nuveen California Municipal Closed-End Exchange-Traded Funds
(NPC, NCL, NCU, NAC, NVX, NZH, NKL, NKX)
Portfolio Manager's
COMMENTS
Portfolio manager Scott Romans discusses the economic and municipal market
environments, key investment strategies, and the Funds' annual performance.
Scott, who joined Nuveen in 2000, has managed NCU, NAC, NVX, NZH, NKL and NKX
since 2003. He assumed portfolio management responsibility for NPC and NCL in
May 2005.
WHAT FACTORS AFFECTED THE U.S. ECONOMY AND MUNICIPAL MARKET DURING THE ANNUAL
REPORTING PERIOD ENDED AUGUST 31, 2005?
Between September 1, 2004 and August 31, 2005, the Federal Reserve implemented
eight separate one-quarter-point increases in the closely-watched fed funds
rate. These increases, which were aimed at controlling economic growth as well
as the pace of inflation, raised this short-term target rate to 3.50% from
1.50%. (On September 20, 2005, following the close of this reporting period, the
fed funds rate was increased by another 0.25% to 3.75%.) As the fed funds rate
rose during this reporting period, shorter-term municipal market interest rates
showed a corresponding increase.
At the same time, longer-term interest rates remained steady or slightly
declined over this 12-month period. The yield on the benchmark 10-year U.S.
Treasury note ended August 2005 at 4.02%, compared with 4.12% one year earlier.
In the municipal market, with the yield on the Bond Buyer 25 Revenue Bond Index,
a widely followed measure of longer-term municipal market rates, declined by
approximately 25 basis points to 4.83% during this period. Together, the rise in
shorter-term rates and decline in longer rates produced an overall flattening of
the yield curve, which generally helped the performance of bonds with longer
effective maturities while hindering the total return of bonds with shorter
maturities or short call dates.
Despite a surge in energy prices over this reporting period, the ongoing
national economic expansion managed to maintain fairly solid footing. After
expanding at an annualized rate of 4.0% in the third quarter of 2004, the U.S.
gross domestic product (GDP) grew by 3.3% (annualized) in the fourth quarter of
2004, 3.8% (annualized) in the first three months of 2005 and 3.3% (annualized)
in the second quarter of 2005.
Over the 12 months ended August 31, 2005, municipal bond supply nationwide
remained strong, with $392.8 billion in new securities coming to market. A major
factor behind the increase in supply was the flatter yield curve, which made
advance refundings
4
economically attractive for many issuers. During January-August 2005, advance
refundings were 62% higher than during the same period in 2004, as issuers
sought to take advantage of the relatively low rates prevalent at the longer-end
of the yield curve. (Advance refundings, also called pre-refundings, occur when
an issuer sells new bonds and uses the proceeds to purchase U.S. Government
securities that are pledged to discharge the remaining principal and interest
payments of older, existing bonds. This process generally results in lower net
borrowing costs for bond issuers and higher credit quality for the older bonds
that are pre-refunded.)
HOW ABOUT ECONOMIC AND MARKET CONDITIONS IN CALIFORNIA?
During this reporting period, California's economy experienced continued job
growth that outpaced the national rate. Gains in professional and business
services, construction, leisure and hospitality, education and health services
led the way, overshadowing small losses in the government sector and in natural
resources and mining. As of August 2005, California's unemployment rate was
5.2%, down from 6.1% in August 2004. The state's recent economic expansion has
led to strong growth in both personal and corporate income, which in turn
generated higher tax revenues. While this revenue increase helped California
reduce its budget deficit, the state continued to face a structural budget gap
estimated at $5 billion for fiscal 2006.
In July 2005, both Moody's and Fitch upgraded their ratings on California's
general obligation debt--to A2 from A3 and to A from A-, respectively. (Standard
and Poor's had upgraded its California GO rating to A from BBB in August 2004.)
In announcing the upgrades, both Moody's and Fitch cited the improvements in
revenue generation and the resolution of the state's liquidity problems
following California's issuance of economic recovery bonds in May 2004.
For the 12 months ended August 2005, municipal issuance in California totaled
$49.8 billion, a decrease of 15% from the previous 12 months. Despite the
decrease, California issuance continued to lead all states over this time
period.
WHAT KEY STRATEGIES WERE USED TO MANAGE THE CALIFORNIA FUNDS DURING THE 12
MONTHS ENDED AUGUST 31, 2005?
One of our top priorities during this reporting period was careful duration
management. Duration is a measure of a bond's price sensitivity as interest
rates change, with longer
5
duration bonds being more sensitive to changes and thereby presenting greater
interest rate risk. Our duration management was tailored to meet the differing
needs of the insured and uninsured Funds, as well as the needs of the older
Funds that generally had more exposure to shorter duration bonds and the newer
funds that typically had more bonds with longer durations.
Duration management became increasingly important for the uninsured Funds (NCU,
NAC, NVX and NZH) during the first half of 2005, as the flattening yield curve
over this period resulted in a dramatic rise in advance refundings. (The yield
curve is said to flatten when shorter-term interest rates more closely approach
the levels of longer-term interest rates.)
Advance refundings of bonds held by the Funds generally had an immediate,
positive impact on their performances, as well as a shortening effect on the
Funds' durations. In order to maintain the Funds' durations within our preferred
strategic range, we sold some of our holdings with shorter durations, including
short-dated pre-refunded bonds, bonds that were currently callable, and bonds
priced to short calls, all of which tended to underperform in the interest rate
environment of the past 12 months. This was especially true for NAC, one of the
older Funds. The relatively newer NZH had fewer advance refundings and less need
to adjust its portfolio to offset them.
The proceeds from the sale of these holdings were then reinvested in longer
duration bonds, including zero coupon non-callable bonds, fixed-rate
non-callable bonds, and 25- to 30-year bonds with at least 8-10 years of call
protection. The longer durations of these bonds enabled us to counteract some of
the duration shortening caused by the advance refundings and also contributed to
the Funds' performance during this period. The purchase of these types of bonds
also allowed us to improve the Funds' call protection.
In the insured Funds (NPC, NCL, NKL and NKX), we began this 12-month period by
looking for value opportunities in insured, AAA rated bonds with about 20 years
to maturity. As the period progressed, we began to extend our time horizon to
the 30-year part of the yield curve in order to maintain the Funds' durations
within our targeted range. This approach applied particularly to NPC and NCL,
relatively older Funds that had shorter durations than the two newer Funds. As
examples, we purchased insured, AAA
6
rated bonds issued by Oakland Unified School District and insured, AAA rated
bonds issued by Riverside County for all four insured Funds. As with the
uninsured Funds, we sold pre-refunded bonds and other securities with short
durations to finance these longer duration purchases. During this period, we
also worked to enhance and diversify the call exposure of all of the insured
Funds by looking for bonds with at least 10 years of call protection.
In NKL and NKX, we continued to manage their durations through the use of
forward interest rate swaps, a type of derivative financial instrument. As
discussed in our last shareholder report, in late 2004 we began using these
swaps in an effort to reduce some of the interest rate risk in these two Funds.
It is important to note that these hedges did not represent an attempt to profit
from correctly predicting the timing and direction of interest rate movements.
Instead, our sole objective was to reduce the duration of these Funds without
having a negative impact on the Funds' income streams or common share dividends
over the short term. The gain or loss from each Fund's hedging activity is
reflected as an addition or subtraction to the Fund's net asset value (NAV) as
the market value of each hedge fluctuates. Over the course of this reporting
period, the hedges were effective in achieving their intended goal of helping to
reduce the NAV volatility of these Funds. However, they also had negative
impacts on each Fund's total return for the period because declining long-term
interest rates caused the value of the hedges to decline as the value of each
Fund's portfolio rose.
In the four uninsured Funds and in NKL and NKX, which are insured but can invest
up to 20% of their assets in uninsured investment-grade quality securities, we
also continued to emphasize maintaining some exposure to lower-rated credits.
Some of these securities were pre-refunded during this period, enabling us to
capture price gains. In addition, lower-rated bonds generally performed very
well during this period. However, given increased demand, we did not find many
attractive opportunities among lower rated securities during this period. One
example of a lower-rated credit that did meet our purchase criteria during this
period was a BBB+ rated issue by the California Statewide Community Development
Authority for the Daughters of Charity Health System, which was added to NAC,
NVX and NZH.
7
HOW DID THE FUNDS PERFORM?
Individual results for these Funds, as well as for comparative indexes and peer
group averages, are presented in the accompanying table.
ANNUALIZED TOTAL RETURNS ON NET ASSET VALUE
For periods ended 8/31/05
UNINSURED FUNDS 1-YEAR 5-YEAR 10-YEAR
--------------------------------------------------------------------------------
NCU 9.75% 8.66% 7.98%
--------------------------------------------------------------------------------
NAC 9.41% 9.41% NA
--------------------------------------------------------------------------------
NVX 10.80% NA NA
--------------------------------------------------------------------------------
NZH 10.69% NA NA
--------------------------------------------------------------------------------
Lehman Brothers CA
Tax-Exempt
Bond Index1 5.67% 6.30% 6.50%
--------------------------------------------------------------------------------
Lipper CA
Municipal Debt
Funds Average2 10.50% 7.80% 7.08%
--------------------------------------------------------------------------------
INSURED FUNDS
--------------------------------------------------------------------------------
NPC 6.74% 7.77% 7.16%
--------------------------------------------------------------------------------
NCL 7.42% 7.73% 7.52%
--------------------------------------------------------------------------------
NKL 9.46% NA NA
--------------------------------------------------------------------------------
NKX 9.84% NA NA
--------------------------------------------------------------------------------
Lehman Brothers Insured
CA Tax-Exempt
Bond Index3 6.24% 6.29% 6.40%
--------------------------------------------------------------------------------
Lipper Insured
CA Municipal Debt
Funds Average4 9.87% 7.28% 6.96%
--------------------------------------------------------------------------------
Past performance is not predictive of future results. Current performance may be
higher or lower than the data shown. Returns do not reflect the deduction of
taxes that shareholders may have to pay on Fund distributions or upon the sale
of Fund shares.
For additional information, see the individual Performance Overview for your
Fund in this report.
For the 12 months ended August 31, 2005, the total returns on NAV for all four
of the uninsured Funds exceeded the return on the Lehman Brothers California
Tax-Exempt Bond Index. NVX and NZH also outperformed the average return for the
Lipper California Fund peer group, while NCU and NAC trailed this measure. Among
the insured Funds, all four Funds outperformed the return on the Lehman Brothers
Insured California Tax-Exempt Bond Index. All of the Funds trailed the average
return for the Lipper Insured California Fund peer group.
1 The Lehman Brothers California Tax-Exempt Bond Index is an unleveraged,
unmanaged index comprising a broad range of investment-grade California
municipal bonds. Results for the Lehman index do not reflect any expenses.
2 The Lipper California Municipal Debt Funds category average is calculated
using the returns of all closed-end exchange-traded funds in this category
for each period as follows: 1 year, 27 funds; 5 years, 16 funds; and 10
years, 14 funds. Fund and Lipper returns assume reinvestment of dividends.
3 The Lehman Brothers Insured California Tax-Exempt Bond Index is an
unleveraged, unmanaged index containing a broad range of insured California
municipal bonds. Results for the Lehman index do not reflect any expenses.
4 The Lipper Insured California Municipal Debt Funds average is calculated
using the returns of all closed-end exchange-traded funds in its category
for each period as follows: 1 year, 13 funds; 5 years, 8 funds; and 10
years, 6 funds. Fund and Lipper returns assume reinvestment of dividends.
8
One of the primary factors benefiting the 12-month performance of these Funds
relative to that of the unleveraged Lehman Brothers indexes was the Funds' use
of financial leverage. While leveraging can add volatility to a Fund's NAV and
share price, especially during periods when interest rates rise, this strategy
can also provide opportunities for additional income and total return for common
shareholders when short-term interest rates remain relatively low and long-term
rates fall or remain relatively constant.
As noted earlier, the municipal market yield curve flattened over the course of
this 12-month period as longer-term interest rates declined as short-term rates
rose. Since falling bond yields mean rising bond prices, longer maturity bonds
generally performed better over this time than securities with shorter
maturities. Relatively greater exposure to the longer end of the yield curve
helped the performances of NVX and NZH during this period, while the
performances of NPC and NCL were hindered by their relatively greater exposure
to the shorter end of the yield curve. One of the intended results of the
duration management strategy discussed earlier is to more closely align the
yield curve positioning of all of these Funds in the future.
The uninsured Funds (NCU, NAC, NVX, and NZH) as well as NKL and NKX, which can
invest up to 20% of their portfolios in uninsured bonds, also benefited from
their allocations of lower-quality bonds during this period, with bonds rated
BBB and lower and non-rated bonds generally outperforming other credit quality
sectors. Among the lower-rated bonds making significant contributions to these
six Funds' total returns for this period were bonds backed by the 1998 master
tobacco settlement agreement. Some of these California tobacco bonds posted
annual returns of more than 20% over this 12-month time horizon as the
litigation environment improved and increased demand drove tobacco bond prices
higher. As of August 31, 2005, tobacco bonds represented approximately 3% to 6%
of the portfolios of NCU, NAC, NVX and NZH. Bonds issued by Golden State Tobacco
Securitization Corporation, which made up approximately 2% of the portfolios of
NKL and NKX, were the top performing credits in both of these Funds for the
period. Neither NPC nor NCL held any uninsured tobacco bonds - another reason
for their relatively smaller total returns over this period.
9
Another factor affecting the Funds' performances during this period was the
amount and timing of advance refundings within their portfolios. Generally, a
bond that was advance refunded tended to benefit from an immediate price
increase as its credit quality was upgraded (because the bond is now backed by
U.S. Government securities). However, that same bond - now priced as a high
quality issue to a shorter final maturity - might then have underperformed lower
quality issues and issues with longer final maturities over the balance of the
reporting period. Therefore, the size of the holding, the credit quality benefit
caused by the pre-refunding and the amount of time remaining before the end of
the reporting period all had an impact on the overall performance of a
pre-refunded bond.
Generally, the older Funds experienced more advance refundings over this period
than the newer Funds, largely because of differences in the interest rate
environments at the times these Funds were initially introduced. Among the
insured Funds, approximately 12% of NCL's holdings and more than 9% of NPC were
pre-refunded as of August 31, 2005, while NKL and NKX had 5% and 2%,
respectively, of their portfolios advance refunded. Overall, bonds that were
pre-refunded during the period tended to help these Funds' total return over
this period. This was especially true of bonds issued by California Health
Facilities Financing Authority for Cedars-Sinai Medical Center, which were held
by NCU, NAC, NKL and NKX.
Conversely, significant holdings of bonds that had been pre-refunded/
escrowed-to-maturity in prior periods acted as a drag on the performance of NPC,
which held 30% of its portfolio in refunded bonds as of August 31, 2005. In
addition, NCU experienced calls on some of its higher-yielding multifamily
housing bonds, which impacted the income component of the Fund's total return.
10
HOW WERE THE FUNDS POSITIONED IN TERMS OF CREDIT QUALITY AND BOND CALLS AS OF
AUGUST 31, 2005?
We continued to believe that maintaining strong credit quality was an important
requirement. As of August 31, 2005, the four uninsured Funds continued to offer
excellent credit quality, with allocations of bonds rated AAA/U.S. guaranteed
and AA ranging from 65% in NZH, 66% in NAC and 70% in NVX and NCU. NPC and NCL
continued to be 100% invested in insured and/or U.S. guaranteed securities,
while NKL and NKX, which can invest up to 20% of their assets in uninsured
investment-grade quality securities, had allocated 81% and 82% of their
portfolios, respectively, to insured bonds as of August 31, 2005.
On August 31, 2005, potential call exposure for the period from September 2005
through the end of 2006 ranged from 0%in NZH and NKL to 3% in NAC, 4% in NVX and
NKX, 8% in NCU, 11% in NPC and 16% in NCL. The number of actual bond calls in
all of these Funds depends largely on future market interest rates.
11
Dividend and Share Price
INFORMATION
Each of the Funds in this report uses leverage to enhance opportunities for
additional income for common shareholders. The extent of this benefit is tied in
part to the short-term rates the Funds pay their MuniPreferred(R) shareholders.
During periods of low short-term rates, leveraged Funds generally pay lower
dividends to their MuniPreferred shareholders, which can leave more earnings to
support common share dividends. However, when short-term interest rates rise, as
they did during this reporting period, the Funds' borrowing costs also rise.
While leveraging still provided benefits for common shareholders over this
12-month period, the extent of these benefits was reduced. In addition, older
Funds such as NPC, NCL and NCU had a greater number of older, higher-yielding
bonds that matured or were called during this period, and the proceeds from
these bonds were reinvested in the current lower-yield environment, thereby
reducing their income streams. The decline in interest rates at the longer end
of the yield curve during this period also had an impact on the newest Funds
such as NKL and NKX, which had fewer opportunities to build reserves. These
factors combined to produce one monthly dividend reduction in NPC, NCU and NKL,
two in NCL, and three in NKX over the 12-month period ended August 31, 2005. The
dividends of NAC, NVX and NZH remained stable throughout this reporting period.
In addition, due to normal portfolio activity, common shareholders of the
following Funds received capital gains and net ordinary income distributions at
the end of December 2004 as follows:
LONG-TERM CAPITAL GAINS ORDINARY INCOME
(PER SHARE) (PER SHARE)
--------------------------------------------------------------------------------
NPC $0.1157 $0.0557
--------------------------------------------------------------------------------
NAC $0.0464 $ --
--------------------------------------------------------------------------------
NKL $0.0426 $0.0072
--------------------------------------------------------------------------------
12
The relatively large distributions from NPC represented an important part of
this Fund's total return for this period. For the most part, this distribution
was generated by bond calls or by sales of appreciated securities. The proceeds
of these calls or sales then were reinvested in bonds paying lower, current
interest rates. This had a slight negative impact on the Fund's earning power
and was a minor factor in the dividend reduction noted above.
All of the Funds in this report seek to pay stable dividends at rates that
reflect each Fund's past results and projected future performance. During
certain periods, each Fund may pay dividends at a rate that may be more or less
than the amount of net investment income actually earned by the Fund during the
period. If a Fund has cumulatively earned more than it has paid in dividends, it
holds the excess in reserve as undistributed net investment income (UNII) as
part of the Fund's NAV. Conversely, if a Fund has cumulatively paid dividends in
excess of its earnings, the excess constitutes negative UNII that is likewise
reflected in the Fund's NAV. Each Fund will, over time, pay all of its net
investment income as dividends to shareholders. As of August 31, 2005, all of
the Funds in this report except NKX had positive UNII balances for both
financial statement and tax purposes. NKX had a positive UNII balance for tax
purposes and a negative UNII balance for financial statement purposes.
At the end of the reporting period, the Funds' share prices were trading at
premiums or discounts to their NAVs as shown in the accompanying chart:
8/31/05 12-MONTH AVERAGE
PREMIUM/DISCOUNT PREMIUM/DISCOUNT
--------------------------------------------------------------------------------
NPC -1.91% -2.54%
--------------------------------------------------------------------------------
NCL -1.83% -1.19%
--------------------------------------------------------------------------------
NCU -4.39% -6.32%
--------------------------------------------------------------------------------
NAC +0.56% -3.81%
--------------------------------------------------------------------------------
NVX -2.82% -7.29%
--------------------------------------------------------------------------------
NZH -5.36% -8.86%
--------------------------------------------------------------------------------
NKL -5.12% -5.40%
--------------------------------------------------------------------------------
NKX -5.21% -3.58%
--------------------------------------------------------------------------------
13
Nuveen Insured California Premium Income Municipal Fund, Inc.
NPC
Performance
OVERVIEW As of August 31, 2005
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
Insured 70%
U.S. Guaranteed 30%
Bar Chart:
2004-2005 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Sep 0.077
Oct 0.077
Nov 0.077
Dec 0.077
Jan 0.077
Feb 0.077
Mar 0.074
Apr 0.074
May 0.074
Jun 0.074
Jul 0.074
Aug 0.074
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
9/1/04 15.96
15.91
15.68
15.7
15.68
15.63
15.65
15.94
15.88
15.8
15.8
15.89
15.84
15.76
15.95
15.94
15.78
15.95
15.95
15.99
16.01
15.93
15.84
15.88
15.88
15.75
15.89
16.1
16.1
15.82
15.85
15.68
15.64
15.62
15.69
15.73
15.72
15.75
15.73
15.71
15.69
15.69
15.6
15.8
15.74
15.75
15.62
15.46
15.48
15.25
15.1
15.19
15.3
15.29
15.3
15.31
15.44
15.4
15.44
15.54
15.53
15.42
15.33
15.23
15.16
15.24
15.33
15.36
15.49
15.43
15.65
15.25
15.18
15.2
15.26
15.82
15.8
15.85
15.44
15.44
15.49
15.7
15.8
15.99
16.06
16.1
16.05
16.25
16.38
16.41
16.15
16.27
16.27
16.23
16.23
16.19
16.21
16.17
16.22
16.24
16.27
16.39
16.28
16.28
16.57
16.56
16.3
16.41
16.45
16.43
16.5
16.57
16.56
16.45
16.45
16.57
16.49
16.49
16.4
16.54
16.47
16.57
16.58
16.46
16.41
16.32
16.26
16.24
16.24
16.04
15.77
15.65
15.35
15.16
14.99
14.97
15.01
15
15.01
15.01
15.13
15.23
15.1
15.14
15.1
15.19
15.16
15.3
15.18
15.2
15.08
15.01
15.09
15.1
14.95
14.95
14.99
14.98
14.97
15.07
15.05
15.06
15.08
15.08
15.05
15.12
15.17
15.17
15.17
15.3
15.32
15.43
15.35
15.25
15.43
15.44
15.35
15.49
15.39
15.33
15.35
15.42
15.45
15.59
16
15.78
15.75
15.9
15.63
15.67
15.8
15.94
15.93
15.89
15.94
15.82
15.79
15.84
15.9
15.9
15.73
15.79
15.79
15.7
15.68
15.72
15.62
15.63
15.6
15.66
15.7
15.7
15.69
15.64
15.71
15.72
15.79
15.79
15.79
15.91
15.94
15.96
16.1
16.12
15.86
15.93
16.04
16.04
16.04
16.04
16.39
16.39
16.45
16.25
16.59
16.8
16.5
16.47
16.28
16.1
16.06
16.31
16.19
16.14
15.93
15.86
15.89
15.89
15.96
15.87
15.86
15.88
15.96
15.81
8/31/05 15.9
FUND SNAPSHOT
------------------------------------
Common Share Price $15.90
------------------------------------
Common Share
Net Asset Value $16.21
------------------------------------
Premium/(Discount) to NAV -1.91%
------------------------------------
Market Yield 5.58%
------------------------------------
Taxable-Equivalent Yield1 8.52%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $104,510
------------------------------------
Average Effective
Maturity on Securities (Years) 16.05
------------------------------------
Leverage-Adjusted Duration 7.97
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 11/19/92)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 7.58% 6.74%
------------------------------------
5-Year 8.27% 7.77%
------------------------------------
10-Year 8.47% 7.16%
------------------------------------
SECTORS
(as a % of total investments)
------------------------------------
U.S. Guaranteed 30.0%
------------------------------------
Tax Obligation/General 22.4%
------------------------------------
Tax Obligation/Limited 16.5%
------------------------------------
Water and Sewer 15.7%
------------------------------------
Education and Civic
Organizations 7.5%
------------------------------------
Other 7.9%
------------------------------------
1 Taxable-equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 34.5%. When comparing this Fund to investments that generate
qualified dividend income, the taxable-equivalent yield is lower.
2 The Fund also paid shareholders capital gains and net ordinary income
distributions in December 2004 of $0.1714 per share.
14
Nuveen Insured California Premium Income Municipal Fund 2, Inc.
NCL
Performance
OVERVIEW As of August 31, 2005
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
Insured 83%
U.S. Guaranteed 17%
Bar Chart:
2004-2005 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Sep 0.076
Oct 0.076
Nov 0.076
Dec 0.076
Jan 0.076
Feb 0.076
Mar 0.073
Apr 0.073
May 0.073
Jun 0.069
Jul 0.069
Aug 0.069
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
9/1/04 15.15
15.12
15.15
15.05
15.15
15.1
15.11
15.14
15.15
15.1
15.11
15.15
15.17
15.22
15.23
15.28
15.3
15.3
15.33
15.37
15.35
15.36
15.45
15.33
15.29
15.26
15.35
15.38
15.42
15.28
15.27
15.27
15.3
15.26
15.29
15.3
15.3
15.3
15.26
15.35
15.41
15.3
15.4
15.5
15.5
15.5
15.4
15.35
15.25
15.25
15.29
15.3
15.3
15.33
15.25
15.24
15.34
15.5
15.34
15.31
15.35
15.38
15.45
15.41
15.27
15.3
15.31
15.32
15.52
15.44
15.49
15.47
15.52
15.61
15.53
15.37
15.29
15.27
15.14
15.1
15
14.94
15.05
15.17
15.25
15.27
15.3
15.24
15.44
15.39
14.95
15.03
14.91
14.9
14.72
14.68
14.69
14.74
14.69
14.57
14.55
14.62
14.67
14.77
14.92
14.93
14.92
14.97
15.06
15.09
15
15.02
15.04
14.97
15.01
14.98
15.01
14.97
14.91
14.7
14.7
14.84
14.89
14.99
14.89
14.9
14.96
15
15.05
14.92
14.9
14.79
14.67
14.68
14.72
14.68
14.695
14.63
14.58
14.64
14.65
14.55
14.4
14.33
14.25
14.42
14.45
14.528
14.58
14.56
14.54
14.51
14.61
14.55
14.5
14.53
14.63
14.57
14.55
14.5
14.5
14.55
14.62
14.57
14.6
14.87
14.99
14.99
15
15.08
15.08
15.04
15.02
15.05
15.22
15.29
15.35
15.33
15.34
15.38
15.37
15.29
15.31
15.38
15.38
15.35
15.45
15.5
15.34
15.3
15.3
15.2
15.25
15.21
15.15
15.05
15.01
14.87
14.89
14.76
14.73
14.65
14.6
14.57
14.66
14.76
14.77
14.78
14.83
14.87
14.86
14.86
14.9
14.94
14.97
14.85
14.85
14.96
14.86
14.9
15
14.91
14.78
14.88
14.8
14.8
14.95
14.86
14.95
15.15
15.1
15.1
14.96
15
15
15.08
15
15
15
15.03
14.85
14.85
14.85
14.84
14.87
14.89
14.95
14.9
14.87
14.96
14.96
14.94
14.94
15.07
8/31/05 15.05
FUND SNAPSHOT
------------------------------------
Common Share Price $15.05
------------------------------------
Common Share
Net Asset Value $15.33
------------------------------------
Premium/(Discount) to NAV -1.83%
------------------------------------
Market Yield 5.50%
------------------------------------
Taxable-Equivalent Yield1 8.40%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $194,895
------------------------------------
Average Effective
Maturity on Securities (Years) 16.54
------------------------------------
Leverage-Adjusted Duration 7.60
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 3/18/93)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 5.10% 7.42%
------------------------------------
5-Year 7.54% 7.73%
------------------------------------
10-Year 8.81% 7.52%
------------------------------------
SECTORS
(as a % of total investments)
------------------------------------
Tax Obligation/Limited 28.3%
------------------------------------
U.S. Guaranteed 17.2%
------------------------------------
Water and Sewer 17.0%
------------------------------------
Tax Obligation/General 13.7%
------------------------------------
Education and Civic
Organizations 8.3%
------------------------------------
Utilities 7.5%
------------------------------------
Other 8.0%
------------------------------------
1 Taxable-equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 34.5%. When comparing this Fund to investments that generate
qualified dividend income, the taxable-equivalent yield is lower.
15
Nuveen California Premium Income Municipal Fund
NCU
Performance
OVERVIEW As of August 31, 2005
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 64%
AA 6%
A 11%
BBB 14%
BB or Lower 4%
NR 1%
Bar Chart:
2004-2005 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Sep 0.073
Oct 0.073
Nov 0.073
Dec 0.073
Jan 0.073
Feb 0.073
Mar 0.07
Apr 0.07
May 0.07
Jun 0.07
Jul 0.07
Aug 0.07
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
9/1/04 13.7
13.67
13.55
13.6
13.7
13.53
13.62
13.7
13.81
13.73
13.88
13.93
13.85
13.94
13.95
13.95
13.9
13.95
14.22
14.1
14
13.82
13.75
13.88
13.85
13.8
13.85
13.99
14
14.02
13.92
14.05
14
13.94
13.94
14.01
14.1
13.95
13.85
13.9
13.91
13.9
13.9
13.92
13.91
13.84
13.55
13.34
13.36
13.3
13.38
13.42
13.5
13.6
13.65
13.6
13.55
13.6
13.5
13.6
13.65
13.65
13.7
13.59
13.51
13.52
13.61
13.56
13.5
13.63
13.73
13.58
13.5
13.54
13.42
13.31
13.3
13.279
13.32
13.31
13.27
13.1
13.18
13.14
13.18
13.22
13.33
13.38
13.44
13.42
13.49
13.5
13.4
13.43
13.54
13.53
13.53
13.48
13.71
14.25
14.13
14.18
13.9
14.03
14.02
13.83
13.78
13.75
13.83
14.1
14.05
14.06
14.03
13.93
14.3
14.3
14.17
14
13.96
14
14.35
14.15
14.21
14.2
14.07
14.07
14.1
14.16
14.15
14.06
13.84
13.74
13.64
13.64
13.64
13.64
13.52
13.64
13.54
13.26
13.17
13.06
13.06
13.03
13.07
13.1
13.02
13.09
13.08
13.09
13.03
13.21
13.22
13.29
13.5
13.63
13.9
13.81
13.82
13.8
13.76
13.67
13.85
13.85
13.86
13.97
13.97
13.97
14
13.99
13.98
13.99
13.97
13.83
13.92
13.9
13.77
13.89
13.97
13.89
14
13.92
13.91
13.93
13.94
13.99
14.13
14.06
14.1
13.99
14.22
14.33
14.74
14.7
14.49
14.47
14.4
14.3
14.18
14
14.24
14.2
14.12
14.11
14.12
14.12
14.16
14.03
14.1
14.14
14.13
14.15
14.23
14.32
14.31
14.25
14.3
14.2
14.13
14.25
14.13
14.1
14.1
14.0705
14.14
14.15
14.2
14.15
14.14
14.34
14.26
14.26
14.26
14.39
14.58
14.37
14.23
14.03
14.18
14.21
14.08
14.08
14.14
14.2
14.14
14.21
14.26
14.34
14.5
14.37
14.35
14.24
14.32
14.45
8/31/05 14.37
FUND SNAPSHOT
------------------------------------
Common Share Price $14.37
------------------------------------
Common Share
Net Asset Value $15.03
------------------------------------
Premium/(Discount) to NAV -4.39%
------------------------------------
Market Yield 5.85%
------------------------------------
Taxable-Equivalent Yield1 8.93%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $86,785
------------------------------------
Average Effective
Maturity on Securities (Years) 15.61
------------------------------------
Leverage-Adjusted Duration 7.87
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 6/18/93)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 11.76% 9.75%
------------------------------------
5-Year 7.98% 8.66%
------------------------------------
10-Year 9.28% 7.98%
------------------------------------
SECTORS
(as a % of total investments)
------------------------------------
Tax Obligation/Limited 34.5%
------------------------------------
Tax Obligation/General 17.3%
------------------------------------
Water and Sewer 10.9%
------------------------------------
Healthcare 9.2%
------------------------------------
Utilities 8.7%
------------------------------------
U.S. Guaranteed 7.3%
------------------------------------
Transportation 5.4%
------------------------------------
Other 6.7%
------------------------------------
1 Taxable-equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 34.5%. When comparing this Fund to investments that generate
qualified dividend income, the taxable-equivalent yield is lower.
16
Nuveen California Dividend Advantage Municipal Fund
NAC
Performance
OVERVIEW As of August 31, 2005
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 62%
AA 4%
A 12%
BBB 14%
NR 8%
Bar Chart:
2004-2005 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Sep 0.082
Oct 0.082
Nov 0.082
Dec 0.082
Jan 0.082
Feb 0.082
Mar 0.082
Apr 0.082
May 0.082
Jun 0.082
Jul 0.082
Aug 0.082
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
9/1/04 15.06
14.98
14.92
15.02
15.09
15
15.14
15.02
14.96
14.94
14.95
14.98
14.99
14.97
15.04
15.04
15.04
15
15
15.04
14.96
14.81
14.85
14.91
14.9
14.9
14.99
15.05
15.05
15
15.01
15.05
15.12
15.18
15.24
15.19
15.27
15.28
15.27
15.31
15.27
15.32
15.47
15.4
15.5
15.48
15.23
14.89
15.04
14.96
15.12
15.14
15.14
15.17
15.18
15.28
15.05
15.11
15.09
15
14.98
14.9
14.76
14.75
14.7
14.81
14.82
14.81
14.89
14.83
14.83
14.83
14.86
14.9
14.86
14.95
14.93
14.85
14.84
14.83
14.76
14.9
14.84
14.89
14.9
14.9
14.82
14.75
14.81
14.88
14.76
14.75
14.57
14.46
14.4
14.5
14.53
14.59
14.57
14.53
14.61
14.52
14.61
14.69
14.74
14.8
14.89
14.98
15.07
15.19
15.15
15.23
15.21
15.11
15.11
15.04
14.98
15
14.83
14.79
14.82
14.9
15.06
15.01
14.98
14.97
14.94
15.01
15
14.95
14.76
14.78
14.68
14.61
14.62
14.55
14.59
14.58
14.61
14.59
14.33
14.4
14.29
14.4
14.42
14.51
14.6
14.6
14.68
14.7
14.71
14.659
14.72
14.79
14.78
14.73
14.8
14.83
14.88
14.88
14.89
14.86
14.89
14.85
14.82
14.86
14.93
14.93
14.96
15.01
15
15.02
15
15.11
15.27
15.28
15.22
15.29
15.37
15.35
15.45
15.4
15.35
15.39
15.3
15.25
15.31
15.25
15.39
15.53
15.51
15.59
15.6
15.58
15.55
15.55
15.502
15.38
15.34
15.43
15.64
15.67
15.53
15.53
15.5
15.5
15.59
15.51
15.54
15.61
15.5
15.69
15.78
15.7
15.81
15.82
15.9
15.9
15.82
15.81
15.85
15.8
15.88
15.77
15.8
15.9
15.89
15.95
15.99
16.08
16.06
16.06
15.93
16.08
16.15
16.12
15.9
15.95
15.96
15.94
15.9
16
16.13
16.12
16.15
16.15
16.1
16.02
16.04
15.98
16.12
16.051
16.02
16.08
8/31/05 16.07
FUND SNAPSHOT
------------------------------------
Common Share Price $16.07
------------------------------------
Common Share
Net Asset Value $15.98
------------------------------------
Premium/(Discount) to NAV 0.56%
------------------------------------
Market Yield 6.12%
------------------------------------
Taxable-Equivalent Yield1 9.34%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $374,265
------------------------------------
Average Effective
Maturity on Securities (Years) 17.20
------------------------------------
Leverage-Adjusted Duration 7.21
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 5/26/99)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 14.62% 9.41%
------------------------------------
5-Year 9.93% 9.41%
------------------------------------
Since
Inception 7.63% 8.14%
------------------------------------
SECTORS
(as a % of total investments)
------------------------------------
Tax Obligation/Limited 25.0%
------------------------------------
Tax Obligation/General 13.8%
------------------------------------
Transportation 13.4%
------------------------------------
U.S. Guaranteed 12.6%
------------------------------------
Utilities 7.8%
------------------------------------
Education and Civic
Organizations 7.1%
------------------------------------
Housing/Multifamily 5.5%
------------------------------------
Healthcare 4.8%
------------------------------------
Other 10.0%
------------------------------------
1 Taxable-equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 34.5%. When comparing this Fund to investments that generate
qualified dividend income, the taxable-equivalent yield is lower.
2 The Fund also paid shareholders a capital gains distribution in December
2004 of $0.0464 per share.
17
Nuveen California Dividend Advantage Municipal Fund 2
NVX
Performance
OVERVIEW As of August 31, 2005
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 69%
AA 1%
A 12%
BBB 12%
NR 6%
Bar Chart:
2004-2005 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Sep 0.076
Oct 0.076
Nov 0.076
Dec 0.076
Jan 0.076
Feb 0.076
Mar 0.076
Apr 0.076
May 0.076
Jun 0.076
Jul 0.076
Aug 0.076
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
9/1/04 14.15
14.12
14
14
14.09
14.13
14.2
14.01
13.98
13.97
13.95
14.02
14
14.01
13.99
14.14
14.03
14.11
14.17
14.08
14.05
13.95
13.95
13.95
13.9
13.9
14.04
14.09
14.03
14.04
14.04
14.05
14.04
14.12
14.11
14.13
14.16
14.19
14.16
14.06
14.04
14.08
14.11
14.18
14.25
14.22
14.04
13.65
13.7
13.65
13.74
13.76
14.03
14.06
14.1
14.04
13.96
14.08
13.94
13.96
13.99
13.87
13.72
13.66
13.62
13.68
13.76
13.76
13.79
13.73
13.84
13.69
13.69
13.7
13.6
13.72
13.54
13.55
13.66
13.57
13.44
13.41
13.45
13.46
13.45
13.58
13.62
13.61
13.62
13.67
13.7
13.74
13.63
13.66
13.65
13.8
13.71
13.77
13.8
13.83
13.95
13.96
13.917
14.05
14.13
14.1
14.1
14.18
14.17
14.24
14.24
14.35
14.3
14.35
14.15
14.17
14.21
14.11
13.99
13.9
14.01
14
14.12
14.09
14.09
14.04
14.11
14.18
14.15
14.16
14.16
14.09
14.06
13.95
14
14.01
13.92
13.9
13.83
13.88
13.64
13.73
13.56
13.56
13.77
13.77
13.71
13.71
13.68
13.76
13.76
13.69
13.72
13.81
13.79
13.68
13.78
13.88
13.98
13.86
13.76
13.84
13.86
13.81
13.86
13.97
14.05
14.05
14
14
14.05
14.16
14.1
14.08
14.07
14.18
14.17
14.24
14.22
14.24
14.24
14.26
14.29
14.24
14.25
14.26
14.32
14.37
14.37
14.42
14.55
14.59
14.69
14.7
14.66
14.7
14.68
14.5
14.47
14.39
14.4
14.43
14.38
14.38
14.37
14.47
14.59
14.59
14.56
14.63
14.7
14.93
14.9
14.97
14.9
14.89
14.83
14.93
14.84
14.73
14.82
14.79
14.82
14.77
14.82
14.84
14.88
14.83
14.93
15
14.97
14.97
14.93
14.96
14.9
15.09
14.79
14.8
15.02
15.14
15.05
15
14.98
15.12
15.16
15.09
15.05
15.04
14.96
14.91
15.05
14.97
15.13
14.98
8/31/05 15.19
FUND SNAPSHOT
------------------------------------
Common Share Price $15.19
------------------------------------
Common Share
Net Asset Value $15.63
------------------------------------
Premium/(Discount) to NAV -2.82%
------------------------------------
Market Yield 6.00%
------------------------------------
Taxable-Equivalent Yield1 9.16%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $231,140
------------------------------------
Average Effective
Maturity on Securities (Years) 15.89
------------------------------------
Leverage-Adjusted Duration 8.06
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 3/27/01)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 14.98% 10.80%
------------------------------------
Since
Inception 6.72% 8.20%
------------------------------------
SECTORS
(as a % of total investments)
------------------------------------
Tax Obligation/Limited 19.0%
------------------------------------
Tax Obligation/General 17.4%
------------------------------------
U.S. Guaranteed 13.3%
------------------------------------
Education and Civic
Organizations 10.1%
------------------------------------
Water and Sewer 9.3%
------------------------------------
Housing/Multifamily 7.5%
------------------------------------
Healthcare 6.1%
------------------------------------
Transportation 6.1%
------------------------------------
Utilities 6.0%
------------------------------------
Other 5.2%
------------------------------------
1 Taxable-equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 34.5%. When comparing this Fund to investments that generate
qualified dividend income, the taxable-equivalent yield is lower.
18
Nuveen California Dividend Advantage Municipal Fund 3
NZH
Performance
OVERVIEW As of August 31, 2005
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 63%
AA 2%
A 15%
BBB 13%
NR 7%
Bar Chart:
2004-2005 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Sep 0.072
Oct 0.072
Nov 0.072
Dec 0.072
Jan 0.072
Feb 0.072
Mar 0.072
Apr 0.072
May 0.072
Jun 0.072
Jul 0.072
Aug 0.072
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
9/1/04 13.4
13.35
13.34
13.34
13.35
13.25
13.35
13.25
13.25
13.27
13.4
13.4
13.48
13.51
13.45
13.55
13.5
13.5
13.5
13.51
13.42
13.4
13.43
13.46
13.4
13.47
13.51
13.54
13.44
13.37
13.42
13.46
13.43
13.41
13.5
13.5
13.48
13.55
13.58
13.51
13.59
13.68
13.75
13.83
13.74
13.78
13.47
13.3
13.33
13.26
13.31
13.36
13.35
13.35
13.42
13.44
13.44
13.34
13.27
13.26
13.25
13.2
13.21
13.15
13.04
13.18
13.23
13.25
13.35
13.23
13.34
13.19
13.19
13.27
13.15
13.17
13.15
13.12
13.1
13.09
13.02
13.05
13.05
13.14
13.14
13.18
13.15
13.17
13.23
13.32
13.36
13.42
13.34
13.35
13.31
13.37
13.42
13.4
13.5
13.5
13.46
13.62
13.65
13.7
13.74
13.78
13.8
13.8
13.76
13.89
13.88
13.84
13.87
13.79
13.8
13.79
13.72
13.67
13.5
13.45
13.5
13.53
13.63
13.65
13.65
13.65
13.65
13.72
13.81
13.76
13.59
13.53
13.46
13.41
13.37
13.31
13.41
13.43
13.45
13.44
13.16
13.2
13.07
13.17
13.23
13.31
13.33
13.37
13.4
13.44
13.41
13.37
13.41
13.38
13.4
13.32
13.42
13.46
13.45
13.47
13.43
13.43
13.43
13.34
13.44
13.43
13.54
13.54
13.62
13.62
13.76
13.68
13.56
13.59
13.74
13.77
13.7
13.8
13.82
13.81
13.8
13.86
13.86
13.92
13.95
13.92
13.9
13.91
13.96
13.99
14
14.02
13.95
14.08
14.01
14.02
14.05
13.95
13.91
13.88
13.96
13.98
13.99
13.99
13.9
13.9
13.96
14.05
14.02
14.01
14.03
14.07
14.08
14.03
14.06
14.17
14.13
14.16
14.12
14.04
13.96
13.93
14.01
14.03
13.95
14.08
14.12
14.01
14.16
14.14
14.15
14.15
14.26
14.39
14.41
14.47
14.38
14.42
14.4
14.5
14.34
14.32
14.38
14.4
14.4
14.35
14.34
14.37
14.33
14.38
14.36
14.35
14.41
14.44
8/31/05 14.49
FUND SNAPSHOT
------------------------------------
Common Share Price $14.49
------------------------------------
Common Share
Net Asset Value $15.31
------------------------------------
Premium/(Discount) to NAV -5.36%
------------------------------------
Market Yield 5.96%
------------------------------------
Taxable-Equivalent Yield1 9.10%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $369,262
------------------------------------
Average Effective
Maturity on Securities (Years) 17.82
------------------------------------
Leverage-Adjusted Duration 8.69
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 9/25/01)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 15.75% 10.69%
------------------------------------
Since
Inception 5.48% 7.80%
------------------------------------
SECTORS
(as a % of total investments)
------------------------------------
Tax Obligation/Limited 28.2%
------------------------------------
Tax Obligation/General 21.7%
------------------------------------
Water and Sewer 8.9%
------------------------------------
Utilities 8.6%
------------------------------------
Healthcare 8.6%
------------------------------------
Housing/Multifamily 6.6%
------------------------------------
Transportation 6.2%
------------------------------------
Education and Civic
Organizations 5.1%
------------------------------------
Other 6.1%
------------------------------------
1 Taxable-equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 34.5%. When comparing this Fund to investments that generate
qualified dividend income, the taxable-equivalent yield is lower.
19
Nuveen Insured California Dividend Advantage Municipal Fund
NKL
Performance
OVERVIEW As of August 31, 2005
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
Insured 81%
AAA (uninsured) 2%
AA (uninsured) 3%
A (uninsured) 8%
BBB (uninsured) 6%
Bar Chart:
2004-2005 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Sep 0.076
Oct 0.076
Nov 0.076
Dec 0.076
Jan 0.076
Feb 0.076
Mar 0.076
Apr 0.076
May 0.076
Jun 0.072
Jul 0.072
Aug 0.072
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
9/1/04 14.69
14.67
14.47
14.47
14.51
14.6
14.8
14.65
14.65
14.66
14.71
14.69
14.92
14.76
14.92
14.86
14.75
14.86
14.9
14.85
14.8
14.68
14.77
14.74
14.71
14.65
14.69
14.85
14.95
14.86
14.68
14.66
14.61
14.65
14.77
14.76
14.75
14.85
14.89
14.85
14.73
14.71
14.75
14.9
14.77
14.78
14.4
14.25
14.42
14.38
14.29
14.38
14.38
14.5
14.54
14.75
14.47
14.55
14.84
14.75
14.75
14.58
14.28
14.55
14.24
14.34
14.5
14.48
14.71
14.7
14.75
14.26
14.24
14.3
14.29
14.17
14.17
14.26
14.37
14.27
14.37
14.29
14.39
14.4
14.32
14.4
14.45
14.54
14.62
14.84
14.68
14.7
14.58
14.51
14.4
14.75
14.65
14.7
14.75
14.84
14.84
14.83
15
14.83
14.98
14.88
14.97
14.69
14.8
14.7
14.72
14.8
14.75
14.64
14.78
14.77
14.75
14.76
14.53
14.45
14.4
14.5
14.6
14.61
14.58
14.55
14.61
14.62
14.62
14.75
14.75
14.62
14.66
14.59
14.58
14.7
14.47
14.64
14.65
14.5
14.46
14.45
14.38
14.57
14.45
14.65
14.64
14.72
14.69
14.75
14.83
14.62
14.72
14.67
14.46
14.53
14.64
14.68
14.54
14.44
14.5
14.45
14.41
14.39
14.4
14.43
14.59
14.59
14.58
14.61
14.74
14.71
14.73
14.69
14.7
14.72
14.58
14.73
14.79
14.77
14.85
14.82
14.88
14.89
15.25
14.95
15
15.2
15.14
15.23
15.2
15.13
15.06
14.91
14.96
14.88
14.89
14.91
14.82
14.9
14.8
14.66
14.58
14.66
14.67
14.8
14.77
14.84
14.76
14.79
14.88
14.88
14.89
14.94
14.94
15.04
15.06
15.05
15
15.13
15.04
14.89
15
14.9
14.8
14.88
14.88
14.93
15
15.08
15.12
15.12
15.15
15.18
15.12
15.11
15.23
15.2
15.17
15
15.05
15.02
15.01
14.93
14.89
14.89
14.99
14.96
14.92
15
15.01
14.98
15.07
15.13
8/31/05 15
FUND SNAPSHOT
------------------------------------
Common Share Price $15.00
------------------------------------
Common Share
Net Asset Value $15.81
------------------------------------
Premium/(Discount) to NAV -5.12%
------------------------------------
Market Yield 5.76%
------------------------------------
Taxable-Equivalent Yield1 8.79%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $241,254
------------------------------------
Average Effective
Maturity on Securities (Years) 19.59
------------------------------------
Leverage-Adjusted Duration 7.01
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 3/25/02)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 9.00% 9.46%
------------------------------------
Since
Inception 6.64% 9.45%
------------------------------------
SECTORS
(as a % of total investments)
------------------------------------
Tax Obligation/Limited 28.4%
------------------------------------
Tax Obligation/General 22.6%
------------------------------------
Utilities 13.0%
------------------------------------
Water and Sewer 11.3%
------------------------------------
Education and Civic
Organizations 5.8%
------------------------------------
U.S. Guaranteed 5.5%
------------------------------------
Transportation 3.8%
------------------------------------
Other 9.6%
------------------------------------
1 Taxable-equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 34.5%. When comparing this Fund to investments that generate
qualified dividend income, the taxable-equivalent yield is lower.
2 The Fund also paid shareholders capital gains and net ordinary income
distributions in December 2004 of $0.0498 per share.
20
Nuveen Insured California Tax-Free Advantage Municipal Fund
NKX
Performance
OVERVIEW As of August 31, 2005
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
Insured 82%
AAA (uninsured) 2%
A (uninsured) 10%
BBB (uninsured) 6%
Bar Chart:
2004-2005 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Sep 0.0755
Oct 0.0755
Nov 0.0755
Dec 0.0725
Jan 0.0725
Feb 0.0725
Mar 0.0695
Apr 0.0695
May 0.0695
Jun 0.066
Jul 0.066
Aug 0.066
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
9/1/04 14.25
14.33
14.35
14.45
14.35
14.43
14.35
14.45
14.47
14.4
14.44
14.55
14.75
14.82
14.75
14.67
14.7
14.69
14.75
14.79
14.7
14.55
14.5
14.52
14.45
14.45
14.35
14.5
14.55
14.49
14.4
14.35
14.32
14.28
14.38
14.29
14.17
14.16
14.31
14.31
14.51
14.79
14.51
14.62
14.51
14.64
14.57
14.4
14.35
14.04
14.08
14.14
14.1
14.08
14.22
14.25
14.27
14.22
14.32
14.74
14.5
14.39
14.11
14.19
14.37
14.25
14.27
14.18
14.12
14.13
14.14
14.01
14.01
13.9
13.86
13.76
13.84
13.81
14.35
14.34
14.25
14.13
14
14.21
14.4
14.4
14.46
14.45
14.5
14.32
14.34
14.37
14.4
14.6
14.62
14.5
14.62
14.64
14.63
14.63
14.59
14.57
14.52
14.54
14.61
14.61
14.67
14.67
14.61
14.61
14.77
14.72
14.72
14.58
14.53
14.63
14.79
14.57
14.59
14.66
14.65
14.69
14.77
14.74
14.75
14.66
14.7
14.8
14.8
14.75
14.65
14.65
14.7
14.8
14.56
14.4
14.4
14.24
14.24
14.04
14.24
13.96
13.96
14
13.9
13.96
13.93
13.8
13.83
13.92
13.92
14
14.04
13.93
13.9
13.95
13.88
13.89
13.93
13.97
13.9
13.95
13.91
13.91
13.86
14.02
13.88
13.88
13.91
14.26
14.32
14.25
14.226
14.24
14.11
14.11
14.1
14.28
14.28
14.34
14.3
14.16
14.28
14.34
14.46
14.48
14.54
14.62
15.08
14.93
14.78
14.69
14.53
14.53
14.45
14.4
14.39
14.38
14.38
14.4
14.28
14.26
14.32
14.24
14.18
14.21
14.17
14.23
14.26
14.18
14.26
14.25
14.26
14.28
14.18
14.35
14.3
14.42
14.25
14.33
14.25
14.22
14.5
14.5
14.55
14.32
14.28
14.27
14.4
14.36
14.47
14.47
14.44
14.45
14.33
14.5
14.42
14.53
14.69
14.52
14.21
14.2
14.23
14.22
14.22
14.28
14.338
14.36
14.35
14.46
14.68
14.54
14.62
14.62
8/31/05 14.38
FUND SNAPSHOT
------------------------------------
Common Share Price $14.38
------------------------------------
Common Share
Net Asset Value $15.17
------------------------------------
Premium/(Discount) to NAV -5.21%
------------------------------------
Market Yield 5.51%
------------------------------------
Taxable-Equivalent Yield1 8.41%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $89,272
------------------------------------
Average Effective
Maturity on Securities (Years) 19.76
------------------------------------
Leverage-Adjusted Duration 7.34
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 11/21/02)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 7.46% 9.84%
------------------------------------
Since
Inception 4.47% 8.17%
------------------------------------
SECTORS
(as a % of total investments)
------------------------------------
Tax Obligation/General 32.4%
------------------------------------
Tax Obligation/Limited 28.6%
------------------------------------
Healthcare 10.2%
------------------------------------
Transportation 9.2%
------------------------------------
Water and Sewer 7.6%
------------------------------------
Other 12.0%
------------------------------------
1 Taxable-equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 34.5%. When comparing this Fund to investments that generate
qualified dividend income, the taxable-equivalent yield is lower.
21
Shareholder
MEETING REPORT
The Special Shareholder Meeting was held at The Northern Trust Bank,
50 S. LaSalle St., Chicago, IL on July 26, 2005.
NPC NCL NCU NAC
------------------------------------------------------------------------------------------------------------------------------------
APPROVAL OF THE NEW INVESTMENT MANAGEMENT
AGREEMENT WAS REACHED AS FOLLOWS:
Common and Common and Common and Common and
MuniPreferred shares MuniPreferred shares MuniPreferred shares MuniPreferred shares
voting together voting together voting together voting together
as a class as a class as a class as a class
------------------------------------------------------------------------------------------------------------------------------------
For 5,858,714 11,958,747 5,420,477 22,472,938
Against 25,324 70,201 33,834 103,803
Abstain 127,385 85,987 44,779 119,998
------------------------------------------------------------------------------------------------------------------------------------
Total 6,011,423 12,114,935 5,499,090 22,696,739
====================================================================================================================================
22
NVX NZH NKL NKX
------------------------------------------------------------------------------------------------------------------------------------
APPROVAL OF THE NEW INVESTMENT MANAGEMENT
AGREEMENT WAS REACHED AS FOLLOWS:
Common and Common and Common and Common and
MuniPreferred shares MuniPreferred shares MuniPreferred shares MuniPreferred shares
voting together voting together voting together voting together
as a class as a class as a class as a class
------------------------------------------------------------------------------------------------------------------------------------
For 14,463,409 23,545,685 14,907,808 5,701,375
Against 109,646 104,732 76,783 44,745
Abstain 64,472 100,941 112,324 24,124
------------------------------------------------------------------------------------------------------------------------------------
Total 14,637,527 23,751,358 15,096,915 5,770,244
====================================================================================================================================
23
Report of
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
THE BOARDS OF DIRECTORS, TRUSTEES AND SHAREHOLDERS
NUVEEN INSURED CALIFORNIA PREMIUM INCOME MUNICIPAL FUND, INC.
NUVEEN INSURED CALIFORNIA PREMIUM INCOME MUNICIPAL FUND 2, INC.
NUVEEN CALIFORNIA PREMIUM INCOME MUNICIPAL FUND
NUVEEN CALIFORNIA DIVIDEND ADVANTAGE MUNICIPAL FUND
NUVEEN CALIFORNIA DIVIDEND ADVANTAGE MUNICIPAL FUND 2
NUVEEN CALIFORNIA DIVIDEND ADVANTAGE MUNICIPAL FUND 3
NUVEEN INSURED CALIFORNIA DIVIDEND ADVANTAGE MUNICIPAL FUND
NUVEEN INSURED CALIFORNIA TAX-FREE ADVANTAGE MUNICIPAL FUND
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Nuveen Insured California Premium Income
Municipal Fund, Inc., Nuveen Insured California Premium Income Municipal Fund 2,
Inc., Nuveen California Premium Income Municipal Fund, Nuveen California
Dividend Advantage Municipal Fund, Nuveen California Dividend Advantage
Municipal Fund 2, Nuveen California Dividend Advantage Municipal Fund 3, Nuveen
Insured California Dividend Advantage Municipal Fund and Nuveen Insured
California Tax-Free Advantage Municipal Fund as of August 31, 2005, and the
related statements of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for the periods indicated therein. These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Funds' internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Funds' internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of August 31, 2005, by correspondence with the custodian and
brokers or other appropriate auditing procedures where replies from brokers were
not received. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of
Nuveen Insured California Premium Income Municipal Fund, Inc., Nuveen Insured
California Premium Income Municipal Fund 2, Inc., Nuveen California Premium
Income Municipal Fund, Nuveen California Dividend Advantage Municipal Fund,
Nuveen California Dividend Advantage Municipal Fund 2, Nuveen California
Dividend Advantage Municipal Fund 3, Nuveen Insured California Dividend
Advantage Municipal Fund and Nuveen Insured California Tax-Free Advantage
Municipal Fund at August 31, 2005, and the results of their operations for the
year then ended, changes in their net assets for each of the two years in the
period then ended, and their financial highlights for the periods indicated
therein, in conformity with U.S. generally accepted accounting principles.
/s/ Ernst & Young LLP
Chicago, Illinois
October 17, 2005
24
Nuveen Insured California Premium Income Municipal Fund, Inc. (NPC)
Portfolio of
INVESTMENTS August 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 10.3% (7.5% OF TOTAL INVESTMENTS)
$ 2,000 California Educational Facilities Authority, Revenue Bonds, 9/06 at 102.00 AAA $ 2,092,560
Santa Clara University, Series 1996, 5.750%, 9/01/26 -
MBIA Insured
2,125 California Educational Facilities Authority, Student Loan 3/08 at 102.00 Aaa 2,234,438
Revenue Bonds, Cal Loan Program, Series 2001A,
5.400%, 3/01/21 (Alternative Minimum Tax) - MBIA Insured
2,500 California State University, Systemwide Revenue Bonds, 5/14 at 100.00 AAA 2,728,325
Series 2004A, 5.000%, 11/01/18 - FSA Insured
1,500 California State University, Systemwide Revenue Bonds, 5/15 at 100.00 AAA 1,618,575
Series 2005A, 5.000%, 11/01/25 - AMBAC Insured
2,000 University of California, Revenue Bonds, Multi-Purpose 9/10 at 101.00 AAA 2,108,620
Projects, Series 2002O, 5.125%, 9/01/31 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 4.6% (3.3% OF TOTAL INVESTMENTS)
3,000 California Health Facilities Financing Authority, Insured 8/08 at 101.00 AAA 3,195,000
Revenue Bonds, Sutter Health, Series 1998A, 5.375%, 8/15/30 -
MBIA Insured
1,500 California Statewide Community Development Authority, 8/09 at 101.00 AAA 1,638,390
Certificates of Participation, Sutter Health Obligated Group,
Series 1999, 5.500%, 8/15/19 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 0.2% (0.1% OF TOTAL INVESTMENTS)
180 California Housing Finance Agency, Single Family Mortgage 2/07 at 102.00 AAA 186,799
Bonds II, Series 1997A-1, 6.000%, 8/01/20 (Alternative
Minimum Tax) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 30.9% (22.4% OF TOTAL INVESTMENTS)
Bonita Unified School District, San Diego County, California,
General Obligation Bonds, Series 2004A:
1,890 5.250%, 8/01/23 - MBIA Insured 8/14 at 100.00 AAA 2,088,790
1,250 5.250%, 8/01/25 - MBIA Insured 8/14 at 100.00 AAA 1,376,513
2,000 California, General Obligation Veterans Welfare Bonds, 6/07 at 101.00 AAA 2,045,420
Series 2001BZ, 5.375%, 12/01/24 (Alternative Minimum
Tax) - MBIA Insured
El Segundo Unified School District, Los Angeles County,
California, General Obligation Bonds, Series 2004:
2,580 5.250%, 9/01/21 - FGIC Insured 9/14 at 100.00 AAA 2,863,955
1,775 5.250%, 9/01/22 - FGIC Insured 9/14 at 100.00 AAA 1,966,061
1,225 Fresno Unified School District, Fresno County, California, 2/13 at 103.00 AAA 1,490,151
General Obligation Refunding Bonds, Series 1998A,
6.550%, 8/01/20 - MBIA Insured
1,180 Jurupa Unified School District, Riverside County, California, 8/13 at 100.00 AAA 1,281,787
General Obligation Bonds, Series 2004, 5.000%, 8/01/21 -
FGIC Insured
1,130 Los Angeles Community College District, Los Angeles County, 8/15 at 100.00 AAA 1,225,090
California, General Obligation Bonds, Series 2005A,
5.000%, 8/01/24 - FSA Insured
Oakland Unified School District, Alameda County, California,
General Obligation Bonds, Series 2005:
205 5.000%, 8/01/25 - MBIA Insured 8/15 at 100.00 AAA 221,029
215 5.000%, 8/01/26 - MBIA Insured 8/15 at 100.00 AAA 230,901
3,000 Pomona Unified School District, Los Angeles County, 8/11 at 103.00 AAA 3,581,730
California, General Obligation Refunding Bonds, Series 1997A,
6.500%, 8/01/19 - MBIA Insured
San Diego Unified School District, San Diego County, California,
General Obligation Bonds, Election of 1998, Series 2001C:
1,335 5.000%, 7/01/21 - FSA Insured 7/11 at 102.00 AAA 1,473,907
3,500 5.000%, 7/01/22 - FSA Insured 7/11 at 102.00 AAA 3,864,175
4,895 5.000%, 7/01/23 - FSA Insured 7/11 at 102.00 AAA 5,404,325
25
Nuveen Insured California Premium Income Municipal Fund, Inc. (NPC) (continued)
Portfolio of INVESTMENTS August 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 2,525 San Joaquin Delta Community College District, California, 8/15 at 100.00 AAA $ 2,709,628
General Obligation Bonds, Series 2005A, 5.000%, 8/01/29 -
FSA Insured
San Jose-Evergreen Community College District, Santa Clara
County, California, General Obligation Bonds, Series 2005A:
165 5.000%, 9/01/25 - MBIA Insured 9/15 at 100.00 AAA 178,419
240 5.000%, 9/01/27 - MBIA Insured 9/15 at 100.00 AAA 258,288
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 22.7% (16.5% OF TOTAL INVESTMENTS)
1,000 Brea and Olinda Unified School District, Orange County, 8/11 at 101.00 AAA 1,060,840
California, Certificates of Participation Refunding,
Series 2002A, 5.125%, 8/01/26 - FSA Insured
California Infrastructure Economic Development Bank, Revenue
Bonds, North County Center for Self-Sufficiency Corporation,
Series 2004:
1,215 5.000%, 12/01/19 - AMBAC Insured 12/13 at 100.00 AAA 1,310,657
1,615 5.000%, 12/01/21 - AMBAC Insured 12/13 at 100.00 AAA 1,733,896
2,000 California State Public Works Board, Lease Revenue Bonds, 11/09 at 101.00 AAA 2,203,360
Department of Health Services, Series 1999A,
5.750%, 11/01/24 - MBIA Insured
1,900 Corona-Norco Unified School District, Riverside County, 9/12 at 100.00 AAA 2,050,575
California, Special Tax Bonds, Community Facilities
District 98-1, Series 2002, 5.100%, 9/01/25 - AMBAC Insured
5,000 El Monte, California, Senior Lien Certificates of Participation, 1/11 at 100.00 AAA 5,278,800
Department of Public Services Facility Phase II, Series 2001,
5.250%, 1/01/34 - AMBAC Insured
150 Hesperia Community Redevelopment Agency, California, 9/15 at 100.00 AAA 162,456
Tax Allocation Bonds, Series 2005A, 5.000%, 9/01/20 -
XLCA Insured
1,400 Indian Wells Redevelopment Agency, California, Tax Allocation 9/13 at 100.00 AAA 1,503,474
Bonds, Consolidated Whitewater Project Area, Series 2003A,
5.000%, 9/01/20 - AMBAC Insured
895 Los Angeles Community Redevelopment Agency, California, 12/14 at 100.00 AAA 969,697
Tax Allocation Bonds, Bunker Hill Project, Series 2004A,
5.000%, 12/01/20 - FSA Insured
1,000 Los Angeles County Metropolitan Transportation Authority, 7/13 at 100.00 AAA 1,092,350
California, Proposition A First Tier Senior Sales Tax Revenue
Bonds, Series 2003B, 5.000%, 7/01/19 - MBIA Insured
165 Rialto Redevelopment Agency, California, Tax Allocation Bonds, 9/15 at 100.00 AAA 174,101
Merged Project Area, Series 2005A, 5.000%, 9/01/35 -
XLCA Insured
110 Riverside County Public Financing Authority, California, 10/15 at 100.00 AAA 116,381
Tax Allocation Bonds, Multiple Projects, Series 2005A,
5.000%, 10/01/35 (WI, settling 9/08/05) - XLCA Insured
3,000 Santa Clara County Financing Authority, California, Lease 11/07 at 102.00 AAA 3,164,220
Revenue Bonds, VMC Facility Replacement Project,
Series 1994A, 5.000%, 11/15/22 - AMBAC Insured
2,805 Yucaipa-Calimesa Joint Unified School District, 10/11 at 100.00 AAA 2,925,026
San Bernardino County, California, General Obligation
Refunding Bonds, Series 2001A, 5.000%, 10/01/31 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 3.5% (2.5% OF TOTAL INVESTMENTS)
3,400 San Diego Unified Port District, California, Revenue Bonds, 9/14 at 100.00 AAA 3,606,040
Series 2004B, 5.000%, 9/01/29 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED *** - 41.4% (30.0% OF TOTAL INVESTMENTS)
California, Various Purpose General Obligation Bonds, Series 2000:
7,995 5.750%, 3/01/22 (Pre-refunded to 3/01/10) - MBIA Insured 3/10 at 101.00 AAA 8,967,832
2,000 5.750%, 3/01/27 (Pre-refunded to 3/01/10) - MBIA Insured 3/10 at 101.00 AAA 2,237,100
2,500 Fresno Unified School District, Fresno County, California, 8/09 at 102.00 AAA 2,645,400
General Obligation Bonds, Series 2001A, 5.125%, 8/01/26 -
FSA Insured
6,000 Huntington Park Redevelopment Agency, California, No Opt. Call AAA 8,706,720
Single Family Residential Mortgage Revenue Refunding
Bonds, Series 1986A, 8.000%, 12/01/19
2,000 Los Angeles Unified School District, California, General 7/08 at 102.00 AAA 2,150,520
Obligation Bonds, Series 1997A, 5.000%, 7/01/21
(Pre-refunded to 7/01/08) - FGIC Insured
5,135 Palmdale Community Redevelopment Agency, California, No Opt. Call AAA 6,953,355
Single Family Restructured Mortgage Revenue Bonds,
Series 1986A, 8.000%, 3/01/16 (Alternative Minimum Tax)
26
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED *** (continued)
$ 6,220 Riverside County, California, GNMA Mortgage-Backed No Opt. Call AAA $ 9,578,676
Securities Program Single Family Mortgage Revenue Bonds,
Series 1987A, 9.000%, 5/01/21 (Alternative Minimum Tax)
1,485 San Jose, California, Single Family Mortgage Revenue Bonds, No Opt. Call AAA 2,095,959
Series 1985A, 9.500%, 10/01/13
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 2.8% (2.0% OF TOTAL INVESTMENTS)
2,600 Sacramento Municipal Utility District, California, Electric No Opt. Call AAA 2,887,690
Revenue Refunding Bonds, Series 2003S, 5.000%, 11/15/13 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 21.7% (15.7% OF TOTAL INVESTMENTS)
5,255 El Dorado Irrigation District, California, Water and Sewer 3/13 at 100.00 AAA 5,622,482
Certificates of Participation, Series 2003A, 5.000%, 3/01/20 -
FGIC Insured
1,230 El Dorado Irrigation District, California, Water and Sewer 3/14 at 100.00 AAA 1,322,939
Certificates of Participation, Series 2004A, 5.000%, 3/01/21 -
FGIC Insured
1,000 Los Angeles, California, Wastewater System Revenue Bonds, 11/05 at 100.00 AAA 1,001,230
Series 1993D, 4.700%, 11/01/19 - FGIC Insured
750 Sacramento County Sanitation District Financing Authority, 12/14 at 100.00 AAA 815,633
California, Revenue Bonds, Series 2004A, 5.000%, 12/01/21 -
AMBAC Insured
3,400 San Diego Public Facilities Financing Authority, California, 5/07 at 101.00 AAA 3,546,778
Sewerage Revenue Bonds, Series 1997A, 5.250%, 5/15/22 -
FGIC Insured
2,150 Santa Clara Valley Water District, California, Water Utility 6/10 at 100.00 AAA 2,283,170
System Revenue Bonds, Series 2000A, 5.125%, 6/01/31 -
FGIC Insured
1,310 Santa Fe Springs Public Financing Authority, California, 5/13 at 100.00 AAA 1,384,617
Water Revenue Bonds, Series 2003A, 5.000%, 5/01/33 -
MBIA Insured
1,345 West Basin Municipal Water District, California, Revenue 8/13 at 100.00 AAA 1,443,480
Certificates of Participation, Series 2003A, 5.000%, 8/01/20 -
MBIA Insured
5,000 Wheeler Ridge-Maricopa Water District, Kern County, 11/06 at 102.00 AAA 5,264,900
California, Water Revenue Refunding Bonds, Series 1996,
5.700%, 11/01/15 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
$ 126,945 Total Long-Term Investments (cost $131,157,277) - 138.1% 144,323,230
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 5.0% 5,186,552
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (43.1)% (45,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 104,509,782
====================================================================================================================
All of the bonds in the portfolio are either covered by
Original Issue Insurance, Secondary Market Insurance or
Portfolio Insurance, or are backed by an escrow or trust
containing sufficient U.S. Government or U.S. Government
agency securities, any of which ensure the timely payment of
principal and interest.
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares unless
otherwise noted.
* Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates (month
and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying
prices at later dates. Certain mortgage-backed securities
may be subject to periodic principal paydowns.
** Ratings (not covered by the report of independent registered
public accounting firm): Using the higher of Standard &
Poor's or Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of principal and
interest.
(WI) Security purchased on a when-issued basis.
See accompanying notes to financial statements.
27
Nuveen Insured California Premium Income Municipal Fund 2, Inc. (NCL)
Portfolio of
INVESTMENTS August 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 12.3% (8.3% OF TOTAL INVESTMENTS)
California Educational Facilities Authority, Revenue Bonds,
Santa Clara University, Series 1996:
$ 2,400 5.750%, 9/01/21 - MBIA Insured 9/06 at 102.00 AAA $ 2,517,984
3,000 5.750%, 9/01/26 - MBIA Insured 9/06 at 102.00 AAA 3,138,840
2,000 California Educational Facilities Authority, Revenue Bonds, 11/10 at 100.00 Aaa 2,232,640
University of the Pacific, Series 2000, 5.875%, 11/01/20 -
MBIA Insured
2,125 California Educational Facilities Authority, Student Loan 3/08 at 102.00 Aaa 2,234,438
Revenue Bonds, Cal Loan Program, Series 2001A,
5.400%, 3/01/21 (Alternative Minimum Tax) - MBIA Insured
5,380 California State University, Systemwide Revenue Bonds, 5/14 at 100.00 AAA 5,913,104
Series 2004A, 5.000%, 11/01/16 - FSA Insured
1,500 California State University, Systemwide Revenue Bonds, 5/15 at 100.00 AAA 1,618,575
Series 2005A, 5.000%, 11/01/25 - AMBAC Insured
6,000 University of California, Revenue Bonds, Multi-Purpose Projects, 5/13 at 100.00 AAA 6,367,560
Series 2003A, 5.000%, 5/15/27 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 4.5% (3.0% OF TOTAL INVESTMENTS)
1,450 California Health Facilities Financing Authority, Insured 7/06 at 102.00 AAA 1,514,800
Health Facility Revenue Refunding Bonds, Mark Twain
St. Joseph's Healthcare Corporation, Series 1996A, 6.000%,
7/01/19 - MBIA Insured
5,000 California Health Facilities Financing Authority, Insured 7/06 at 102.00 AAA 5,213,700
Health Facility Revenue Refunding Bonds, Catholic
Healthcare West, Series 1996A, 6.000%, 7/01/25 -
MBIA Insured
1,755 University of California, Hospital Revenue Bonds, UCLA 5/12 at 101.00 AAA 1,974,182
Medical Center, Series 2004A, 5.500%, 5/15/18 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 0.6% (0.4% OF TOTAL INVESTMENTS)
1,100 California Housing Finance Agency, Single Family Mortgage 8/07 at 101.50 AAA 1,139,743
Bonds, Series 1997C-2-II, 5.625%, 8/01/20 (Alternative
Minimum Tax) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 20.3% (13.7% OF TOTAL INVESTMENTS)
1,460 ABC Unified School District, Los Angeles County, California, 8/10 at 101.00 AAA 1,636,689
General Obligation Bonds, Series 2000B, 5.750%, 8/01/16 -
FGIC Insured
4,400 California, General Obligation Bonds, Series 2003, 2/13 at 100.00 AAA 4,635,092
5.000%, 2/01/31 - MBIA Insured
3,000 California, General Obligation Veterans Welfare Bonds, 6/07 at 101.00 AAA 3,068,130
Series 2001BZ, 5.375%, 12/01/24 (Alternative Minimum Tax) -
MBIA Insured
California, General Obligation Bonds, Series 2004:
1,000 5.000%, 2/01/18 - AMBAC Insured 2/14 at 100.00 AAA 1,085,340
2,250 5.000%, 4/01/31 - AMBAC Insured 4/14 at 100.00 AAA 2,386,013
1,910 Fresno Unified School District, Fresno County, California, No Opt. Call AAA 2,427,285
General Obligation Bonds, Series 2002A, 6.000%, 8/01/26 -
MBIA Insured
Kern Community College District, California, General Obligation
Bonds, Series 2003A:
3,655 5.000%, 11/01/20 - FGIC Insured 11/13 at 100.00 AAA 3,981,428
2,665 5.000%, 11/01/21 - FGIC Insured 11/13 at 100.00 AAA 2,897,548
1,750 Lake Tahoe Unified School District, El Dorado County, 8/09 at 100.00 AAA 1,876,368
California, General Obligation Bonds, Series 1999A,
5.250%, 8/01/24 - FGIC Insured
1,255 Los Angeles Community College District, Los Angeles County, 8/15 at 100.00 AAA 1,360,608
California, General Obligation Bonds, Series 2005A,
5.000%, 8/01/24 - FSA Insured
2,200 Los Angeles Unified School District, California, General 7/13 at 100.00 AAA 2,413,224
Obligation Bonds, Series 2003F, 5.000%, 7/01/17 -
FSA Insured
Manteca Unified School District, San Joaquin County,
California, General Obligation Bonds, Series 2004:
1,000 5.250%, 8/01/21 - FSA Insured 8/14 at 100.00 AAA 1,109,160
1,000 5.250%, 8/01/22 - FSA Insured 8/14 at 100.00 AAA 1,106,770
28
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 1,270 Merced City School District, Merced County, California, 8/13 at 100.00 AAA $ 1,377,836
General Obligation Bonds, Series 2004, 5.000%, 8/01/22 -
FGIC Insured
Oakland Unified School District, Alameda County, California,
General Obligation Bonds, Series 2005:
405 5.000%, 8/01/25 - MBIA Insured 8/15 at 100.00 AAA 436,667
430 5.000%, 8/01/26 - MBIA Insured 8/15 at 100.00 AAA 461,803
1,125 San Diego Unified School District, California, General Obligation No Opt. Call AAA 563,895
Bonds, Election of 1998, Series 1999A, 0.000%, 7/01/21 -
FGIC Insured
2,000 San Francisco Community College District, California, General 6/10 at 102.00 Aaa 2,112,280
Obligation Bonds, Series 2002A, 5.000%, 6/15/26 -
FGIC Insured
San Jose-Evergreen Community College District, Santa Clara
County, California, General Obligation Bonds, Series 2005A:
320 5.000%, 9/01/25 - MBIA Insured 9/15 at 100.00 AAA 346,026
465 5.000%, 9/01/27 - MBIA Insured 9/15 at 100.00 AAA 500,433
1,000 San Ramon Valley Unified School District, Contra Costa 8/14 at 100.00 AAA 1,077,070
County, California, General Obligation Bonds, Series 2004,
5.000%, 8/01/24 - FSA Insured
2,445 Washington Unified School District, Yolo County, California, 8/13 at 100.00 AAA 2,655,906
General Obligation Bonds, Series 2004A, 5.000%, 8/01/21 -
FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 41.8% (28.3% OF TOTAL INVESTMENTS)
Anaheim Public Finance Authority, California, Subordinate
Lease Revenue Bonds, Public Improvement Project, Series 1997C:
5,130 0.000%, 9/01/18 - FSA Insured No Opt. Call AAA 2,969,501
8,000 0.000%, 9/01/21 - FSA Insured No Opt. Call AAA 3,993,360
California Infrastructure Economic Development Bank, Revenue
Bonds, North County Center for Self-Sufficiency Corporation,
Series 2004:
1,535 5.000%, 12/01/20 - AMBAC Insured 12/13 at 100.00 AAA 1,651,368
1,780 5.000%, 12/01/23 - AMBAC Insured 12/13 at 100.00 AAA 1,901,983
3,500 California Department of Transportation, Federal Highway No Opt. Call AAA 3,895,710
Grant Anticipation Bonds, Series 2004A, 5.000%, 2/01/15 -
FGIC Insured
3,450 California State Public Works Board, Lease Revenue Bonds, 11/09 at 101.00 AAA 3,800,796
Department of Health Services, Series 1999A,
5.750%, 11/01/24 - MBIA Insured
5,000 Compton Community Redevelopment Agency, California, 2/06 at 102.00 AAA 5,114,900
Tax Allocation Refunding Bonds, Merged Area Redevelopment
Projects, Series 1995A, 6.500%, 8/01/13 - FSA Insured
4,000 Contra Costa County, California, Certificates of Participation 11/07 at 102.00 AAA 4,271,280
Refunding, Merrithew Memorial Hospital Replacement,
Series 1997, 5.500%, 11/01/22 - MBIA Insured
6,000 El Monte, California, Senior Lien Certificates of Participation, 1/11 at 100.00 AAA 6,292,620
Department of Public Services Facility Phase II, Series 2001,
5.000%, 1/01/21 - AMBAC Insured
3,000 Galt Schools Joint Powers Authority, Sacramento County, 11/07 at 102.00 AAA 3,233,430
California, Revenue Refunding Bonds, High School and
Elementary School Facilities, Series 1997A,
5.875%, 11/01/24 - MBIA Insured
285 Hesperia Community Redevelopment Agency, California, 9/15 at 100.00 AAA 308,666
Tax Allocation Bonds, Series 2005A, 5.000%, 9/01/20 -
XLCA Insured
5,000 Kern County Board of Education, California, Certificates of 5/08 at 102.00 AAA 5,311,100
Participation Refunding, Series 1998A, 5.200%, 5/01/28 -
MBIA Insured
5,000 La Quinta Redevelopment Agency, California, Tax Allocation 9/07 at 102.00 AAA 5,262,100
Refunding Bonds, Redevelopment Project Area 1,
Series 1998, 5.200%, 9/01/28 - AMBAC Insured
2,300 Long Beach Bond Finance Authority, Multiple Project Tax 8/15 at 100.00 AAA 2,454,629
Allocation Bonds, Housing and Gas Utility Financing Project
Areas, Series 2005A-1, 5.000%, 8/01/25 - AMBAC Insured
4,000 Los Angeles, California, Certificates of Participation, 6/13 at 100.00 AAA 4,208,200
Municipal Improvement Corporation, Series 2003AW,
5.000%, 6/01/33 - AMBAC Insured
1,000 Los Angeles Community Redevelopment Agency, California, 12/14 at 100.00 AAA 1,083,460
Tax Allocation Bonds, Bunker Hill Project, Series 2004A,
5.000%, 12/01/20 - FSA Insured
3,865 Los Angeles County Metropolitan Transportation Authority, 7/10 at 101.00 AAA 4,177,910
California, Proposition C Second Senior Lien Sales Tax
Revenue Bonds, Series 2000A, 5.250%, 7/01/30 - FGIC Insured
29
Nuveen Insured California Premium Income Municipal Fund 2, Inc. (NCL) (continued)
Portfolio of INVESTMENTS August 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 1,250 Los Angeles County Metropolitan Transportation Authority, 7/13 at 100.00 AAA $ 1,365,438
California, Proposition A First Tier Senior Sales Tax
Revenue Bonds, Series 2003B, 5.000%, 7/01/19 -
MBIA Insured
2,690 Norwalk Community Facilities Financing Authority, 9/05 at 102.00 AAA 2,750,740
Los Angeles County, California, Tax Allocation Revenue
Refunding Bonds, Series 1995A, 6.000%, 9/01/15 -
FSA Insured
2,780 Pittsburg Redevelopment Agency, California, Tax Allocation No Opt. Call AAA 3,053,830
Refunding Bonds, Los Medanos Community Development
Project, Series 2003A, 5.000%, 8/01/12 - MBIA Insured
4,140 Plumas County, California, Certificates of Participation, 6/13 at 101.00 AAA 4,387,945
Capital Improvement Program, Series 2003A,
5.000%, 6/01/28 - AMBAC Insured
2,000 Poway Redevelopment Agency, California, Tax Allocation 12/10 at 102.00 AAA 2,257,040
Refunding Bonds, Paguay Redevelopment Project,
Series 2000, 5.750%, 6/15/33 - MBIA Insured
325 Rialto Redevelopment Agency, California, Tax Allocation 9/15 at 100.00 AAA 342,927
Bonds, Merged Project Area, Series 2005A, 5.000%, 9/01/35 -
XLCA Insured
220 Riverside County Public Financing Authority, California, 10/15 at 100.00 AAA 232,762
Tax Allocation Bonds, Multiple Projects, Series 2005A,
5.000%, 10/01/35 (WI, settling 9/08/05) - XLCA Insured
1,000 Rocklin Unified School District, Placer County, California, 9/13 at 100.00 AAA 1,079,320
Special Tax Bonds, Community Facilities District 1,
Series 2004, 5.000%, 9/01/25 - MBIA Insured
520 Sacramento City Financing Authority, California, Capital 12/09 at 102.00 AAA 584,444
Improvement Revenue Bonds, Solid Waste and Redevelopment
Projects, Series 1999, 5.800%, 12/01/19 - AMBAC Insured
5,000 San Bernardino Joint Powers Financing Authority, California, 9/09 at 102.00 AAA 5,496,800
Certificates of Participation Refunding, Police Station
Financing Project, Series 1999, 5.500%, 9/01/20 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 6.8% (4.6% OF TOTAL INVESTMENTS)
6,500 Foothill/Eastern Transportation Corridor Agency, California, 1/10 at 65.32 AAA 3,578,445
Toll Road Revenue Refunding Bonds, Series 1999,
0.000%, 1/15/18 - MBIA Insured
4,000 Orange County Transportation Authority, California, Toll Road 8/13 at 100.00 AAA 4,390,160
Revenue Bonds, 91 Express Lanes Project, Series 2003A,
5.000%, 8/15/18 - AMBAC Insured
5,000 San Francisco Airports Commission, California, Revenue 5/11 at 100.00 AAA 5,227,400
Refunding Bonds, San Francisco International Airport,
Second Series 2001, Issue 27A, 5.250%, 5/01/31
(Alternative Minimum Tax) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED *** - 25.4% (17.2% OF TOTAL INVESTMENTS)
California Infrastructure Economic Development Bank, Revenue
Bonds, Asian Art Museum of San Francisco, Series 2000:
1,295 5.500%, 6/01/19 (Pre-refunded to 6/01/10) - MBIA Insured 6/10 at 101.00 AAA 1,444,728
1,000 5.500%, 6/01/20 (Pre-refunded to 6/01/10) - MBIA Insured 6/10 at 101.00 AAA 1,115,620
2,500 California, Various Purpose General Obligation Bonds, 9/09 at 101.00 AAA 2,757,625
Series 1999, 5.500%, 9/01/24 (Pre-refunded to 9/01/09) -
FSA Insured
California, Various Purpose General Obligation Bonds,
Series 2000:
7,995 5.750%, 3/01/22 (Pre-refunded to 3/01/10) - MBIA Insured 3/10 at 101.00 AAA 8,967,832
1,900 5.750%, 3/01/27 (Pre-refunded to 3/01/10) - MBIA Insured 3/10 at 101.00 AAA 2,125,245
2,725 Central Unified School District, Fresno County, California, 9/05 at 100.00 AAA 2,780,209
General Obligation Bonds, Series 1993, 5.625%, 3/01/18 -
AMBAC Insured
3,000 Escondido Union High School District, San Diego County, 11/06 at 102.00 AAA 3,156,210
California, General Obligation Bonds, Series 1996,
5.700%, 11/01/10 - MBIA Insured
Fresno Unified School District, Fresno County, California,
General Obligation Bonds, Series 2001F:
1,065 5.125%, 8/01/21 - FSA Insured 8/09 at 102.00 AAA 1,132,691
1,160 5.125%, 8/01/22 - FSA Insured 8/09 at 102.00 AAA 1,233,730
1,220 5.125%, 8/01/23 - FSA Insured 8/09 at 102.00 AAA 1,297,543
1,500 Hacienda La Puente Unified School District, Los Angeles 8/10 at 101.00 AAA 1,661,190
County, California, General Obligation Bonds, Series 2000A,
5.250%, 8/01/25 (Pre-refunded to 8/01/10) - MBIA Insured
1,840 Menifee Union School District, Riverside County, California, 9/06 at 102.00 AAA 1,936,563
Certificates of Participation, School Projects, Series 1996,
6.125%, 9/01/24 (Pre-refunded to 9/01/06) - FSA Insured
2,500 Oakland, California, Insured Revenue Bonds, 1800 Harrison 1/10 at 100.00 AAA 2,799,825
Foundation - Kaiser Permanente, Series 1999A,
6.000%, 1/01/29 (Pre-refunded to 1/01/10) - AMBAC Insured
30
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED *** (continued)
$ 4,320 Riverside County, California, GNMA Mortgage-Backed No Opt. Call AAA $ 6,006,744
Securities Program Single Family Mortgage Revenue Bonds,
Series 1987B, 8.625%, 5/01/16 (Alternative Minimum Tax)
1,270 Sacramento City Financing Authority, California, Capital 12/09 at 102.00 AAA 1,433,106
Improvement Revenue Bonds, Solid Waste and Redevelopment
Projects, Series 1999, 5.800%, 12/01/19 (Pre-refunded
to 12/01/09) - AMBAC Insured
1,000 Sacramento County Sanitation District Financing Authority, 12/10 at 101.00 AAA 1,124,540
California, Revenue Bonds, Series 2000A, 5.500%, 12/01/20
(Pre-refunded to 12/01/10) - AMBAC Insured
3,500 San Francisco Bay Area Rapid Transit District, California, 7/09 at 101.00 AAA 3,850,385
Sales Tax Revenue Bonds, Series 1999, 5.500%, 7/01/34
(Pre-refunded to 7/01/09) - FGIC Insured
4,450 Visalia, California, Certificates of Participation Refunding, 12/06 at 102.00 AAA 4,677,529
Motor Vehicle License Fee Enhancement, Series 1996A,
5.375%, 12/01/26 (Pre-refunded to 12/01/06) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 11.1% (7.5% OF TOTAL INVESTMENTS)
3,740 California Pollution Control Financing Authority, Revenue 9/09 at 101.00 AAA 4,032,094
Refunding Bonds, Southern California Edison Company,
Series 1999B, 5.450%, 9/01/29 - MBIA Insured (a)
3,215 Modesto Irrigation District, California, Revenue Refunding 10/06 at 102.00 AAA 3,388,289
Bonds, Series 1996A, 6.000%, 10/01/15 - MBIA Insured
3,500 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/12 at 101.00 AAA 3,781,260
Series 2002II, 5.125%, 7/01/26 - FSA Insured
1,950 Salinas Valley Solid Waste Authority, California, Revenue 8/12 at 100.00 AAA 2,069,925
Bonds, Series 2002, 5.250%, 8/01/27 (Alternative
Minimum Tax) - AMBAC Insured
Santa Clara, California, Subordinate Electric Revenue Bonds,
Series 2003A:
2,800 5.000%, 7/01/24 - MBIA Insured 7/13 at 100.00 AAA 3,026,632
5,000 5.000%, 7/01/28 - MBIA Insured 7/13 at 100.00 AAA 5,303,800
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 25.1% (17.0% OF TOTAL INVESTMENTS)
1,700 Castaic Lake Water Agency, California, Revenue Certificates 8/14 at 100.00 AAA 1,837,649
of Participation, Series 2004A, 5.000%, 8/01/20 -
AMBAC Insured
2,975 Chino Basin Regional Finance Authority, California, Sewerage 2/06 at 101.00 AAA 3,012,574
System Revenue Bonds, Inland Empire Utilities Agency,
Series 1994, 6.000%, 8/01/16 - AMBAC Insured
2,000 El Dorado Irrigation District, California, Water and Sewer 3/14 at 100.00 AAA 2,151,120
Certificates of Participation, Series 2004A,
5.000%, 3/01/21 - FGIC Insured
2,700 Los Angeles County Sanitation Districts Financing Authority, 10/13 at 100.00 AAA 2,934,765
California, Senior Revenue Bonds, Capital Projects,
Series 2003A, 5.000%, 10/01/21 - FSA Insured
12,000 Orange County Sanitation District, California, Certificates 8/13 at 100.00 AAA 12,611,640
of Participation, Series 2003, 5.000%, 2/01/33 -
FGIC Insured
2,775 Pomona Public Financing Authority, California, Revenue Bonds, 5/09 at 101.00 AAA 2,992,699
Water Facilities Project, Series 1999AC, 5.500%, 5/01/29 -
FGIC Insured
750 Sacramento County Sanitation District Financing Authority, 12/14 at 100.00 AAA 815,633
California, Revenue Bonds, Series 2004A, 5.000%, 12/01/21 -
AMBAC Insured
1,520 San Buenaventura, California, Water Revenue Certificates 10/14 at 100.00 AAA 1,624,606
of Participation, Series 2004, 5.000%, 10/01/25 -
AMBAC Insured
3,675 San Dieguito Water District, California, Water Revenue Bonds, 10/14 at 100.00 AAA 3,971,389
Series 2004, 5.000%, 10/01/23 - FGIC Insured
Santa Clara Valley Water District, California, Certificates of
Participation, Series 2004A:
1,400 5.000%, 2/01/19 - FGIC Insured 2/14 at 100.00 AAA 1,512,154
445 5.000%, 2/01/20 - FGIC Insured 2/14 at 100.00 AAA 479,323
465 5.000%, 2/01/21 - FGIC Insured 2/14 at 100.00 AAA 499,828
2,130 Santa Rosa, Sonoma County, California, Wastewater Revenue 9/14 at 100.00 AAA 2,330,944
Bonds, Series 2004B, 5.000%, 9/01/18 - FGIC Insured
2,500 West Basin Municipal Water District, California, Revenue 8/13 at 100.00 AAA 2,636,025
Certificates of Participation, Series 2003A, 5.000%, 8/01/30 -
MBIA Insured
4,500 Westlands Water District, California, Revenue Certificates of 3/15 at 100.00 AAA 4,777,830
Participation, Series 2005A, 5.000%, 9/01/30 - MBIA Insured
31
Nuveen Insured California Premium Income Municipal Fund 2, Inc. (NCL) (continued)
Portfolio of INVESTMENTS August 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER (continued)
Yorba Linda Water District, California, Certificates of
Participation, Highland Reservoir Renovation, Series 2003:
$ 2,010 5.000%, 10/01/28 - FGIC Insured 10/13 at 100.00 AAA $ 2,135,462
2,530 5.000%, 10/01/33 - FGIC Insured 10/13 at 100.00 AAA 2,680,762
------------------------------------------------------------------------------------------------------------------------------------
$ 277,505 Total Long-Term Investments (cost $269,190,580) - 147.9% 288,167,119
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.8% 1,727,713
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (48.7)% (95,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 194,894,832
====================================================================================================================
All of the bonds in the portfolio are either covered by
Original Issue Insurance, Secondary Market Insurance or
Portfolio Insurance, or are backed by an escrow or trust
containing sufficient U.S. Government or U.S. Government
agency securities, any of which ensure the timely payment of
principal and interest.
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares unless
otherwise noted.
* Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates (month
and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying
prices at later dates. Certain mortgage-backed securities
may be subject to periodic principal paydowns.
** Ratings (not covered by the report of independent registered
public accounting firm): Using the higher of Standard &
Poor's or Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of principal and
interest.
(a) The issuer has received a preliminary adverse determination
from the Internal Revenue Service (the "IRS") regarding the
tax-exempt status of the bonds' coupon payments. The Fund
will continue to treat coupon payments as tax-exempt income
until such time that it is formally determined that the
interest on the bonds should be treated as taxable.
(WI) Security purchased on a when-issued basis.
See accompanying notes to financial statements.
32
Nuveen California Premium Income Municipal Fund (NCU)
Portfolio of
INVESTMENTS August 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 6.1% (4.0% OF TOTAL INVESTMENTS)
$ 1,500 California County Tobacco Securitization Agency, Tobacco 6/12 at 100.00 Baa3 $ 1,577,235
Settlement Asset-Backed Bonds, Alameda County Tobacco
Asset Securitization Corporation, Series 2002, 5.750%, 6/01/29
3,580 California Statewide Financing Authority, Tobacco Settlement 5/12 at 100.00 Baa3 3,737,198
Asset-Backed Bonds, Pooled Tobacco Securitization Program,
Series 2002A, 5.625%, 5/01/29
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 1.9% (1.2% OF TOTAL INVESTMENTS)
1,500 University of California, Revenue Bonds, Multi-Purpose Projects, 5/13 at 100.00 AAA 1,655,835
Series 2003A, 5.125%, 5/15/17 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 14.2% (9.2% OF TOTAL INVESTMENTS)
325 California Health Facilities Financing Authority, Revenue 11/15 at 100.00 A3 336,518
Bonds, Cedars-Sinai Medical Center, Series 2005,
5.000%, 11/15/34
5,150 California Health Facilities Financing Authority, Hospital 11/05 at 100.00 BB 5,151,133
Revenue Bonds, Downey Community Hospital, Series 1993,
5.750%, 5/15/15
1,500 California Infrastructure Economic Development Bank, Revenue 8/11 at 102.00 A+ 1,609,035
Bonds, Kaiser Hospital Assistance LLC, Series 2001A,
5.550%, 8/01/31
California Statewide Community Development Authority,
Revenue Bonds, Daughters of Charity Health System,
Series 2005A:
125 5.250%, 7/01/24 7/15 at 100.00 BBB+ 132,529
260 5.250%, 7/01/35 7/15 at 100.00 BBB+ 272,350
3,100 California Statewide Community Development Authority, No Opt. Call AAA 3,398,065
Revenue Bonds, Sherman Oaks Health System,
Series 1998A, 5.000%, 8/01/22 - AMBAC Insured
1,370 Loma Linda, California, Hospital Revenue Bonds, Loma Linda 12/05 at 100.00 BBB- 1,400,496
University Medical Center, Series 1993A, 6.000%, 12/01/06
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 1.9% (1.2% OF TOTAL INVESTMENTS)
1,600 California Statewide Community Development Authority, 7/08 at 101.00 BBB 1,665,184
Revenue Refunding Bonds, Irvine Apartment Communities
Development, Series 1998A, 5.250%, 5/15/25
(Mandatory put 5/15/13)
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 0.5% (0.3% OF TOTAL INVESTMENTS)
340 California Housing Finance Agency, Single Family Mortgage 2/07 at 102.00 AAA 352,842
Bonds II, Series 1997A-1, 6.000%, 8/01/20 (Alternative
Minimum Tax) - MBIA Insured
60 California Rural Home Mortgage Finance Authority, No Opt. Call AAA 61,026
Mortgage-Backed Securities Program Single Family
Mortgage Revenue Bonds, Series 1996C, 7.500%, 8/01/27
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 26.8% (17.3% OF TOTAL INVESTMENTS)
4,000 California, General Obligation Veterans Welfare Bonds, 12/05 at 100.00 A 4,015,760
Series 1999BR, 5.300%, 12/01/29 (Alternative Minimum Tax)
California, General Obligation Bonds, Series 2003:
1,000 5.250%, 11/01/19 - RAAI Insured 11/13 at 100.00 AA 1,107,220
1,055 5.250%, 2/01/21 8/13 at 100.00 A 1,161,059
1,500 5.000%, 2/01/31 - MBIA Insured 2/13 at 100.00 AAA 1,580,145
California, General Obligation Bonds, Series 2004:
1,750 5.000%, 4/01/22 4/14 at 100.00 A 1,872,745
1,750 5.000%, 2/01/23 2/14 at 100.00 A 1,865,588
1,400 5.200%, 4/01/26 4/14 at 100.00 A 1,525,986
1,000 Fremont Unified School District, Alameda County, California, 8/12 at 101.00 AAA 1,086,170
General Obligation Bonds, Series 2002A,
5.000%, 8/01/21 - FGIC Insured
550 Los Angeles Community College District, Los Angeles County, 8/15 at 100.00 AAA 592,543
California, General Obligation Bonds, Series 2005A,
5.000%, 6/01/26 - FSA Insured
33
Nuveen California Premium Income Municipal Fund (NCU) (continued)
Portfolio of INVESTMENTS August 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 1,570 Los Angeles Unified School District, California, General 7/15 at 100.00 AAA $ 1,695,867
Obligation Bonds, Series 2005A-1, 5.000%, 7/01/25 -
FGIC Insured
2,250 Los Angeles Unified School District, California, General 7/13 at 100.00 AAA 2,440,373
Obligation Bonds, Series 2003A, 5.000%, 7/01/22 -
FSA Insured
Oakland Unified School District, Alameda County, California,
General Obligation Bonds, Series 2005:
190 5.000%, 8/01/25 - MBIA Insured 8/15 at 100.00 AAA 204,856
200 5.000%, 8/01/26 - MBIA Insured 8/15 at 100.00 AAA 214,792
3,000 Pomona Unified School District, Los Angeles County, 8/11 at 103.00 AAA 3,532,890
California, General Obligation Refunding Bonds,
Series 1997A, 6.150%, 8/01/15 - MBIA Insured
15 Riverside Community College District, California, General 8/14 at 100.00 AAA 16,602
Obligation Bonds, Series 2004A, 5.250%, 8/01/22 -
MBIA Insured
San Jose-Evergreen Community College District, Santa Clara
County, California, General Obligation Bonds, Series 2005A:
140 5.000%, 9/01/25 - MBIA Insured 9/15 at 100.00 AAA 151,386
210 5.000%, 9/01/27 - MBIA Insured 9/15 at 100.00 AAA 226,002
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 48.7% (31.5% OF TOTAL INVESTMENTS)
1,000 Bell Community Redevelopment Agency, California, Tax 10/13 at 100.00 AA 1,088,200
Allocation Bonds, Bell Project Area, Series 2003,
5.625%, 10/01/33 - RAAI Insured
985 Beverly Hills Public Financing Authority, California, Lease 6/13 at 100.00 Aaa 1,100,363
Revenue Refunding Bonds, Series 2003A, 5.250%, 6/01/15 -
MBIA Insured
California Infrastructure Economic Development Bank, Revenue
Bonds, North County Center for Self-Sufficiency Corporation,
Series 2004:
1,695 5.000%, 12/01/22 - AMBAC Insured 12/13 at 100.00 AAA 1,816,091
1,865 5.000%, 12/01/24 - AMBAC Insured 12/13 at 100.00 AAA 1,988,761
California, Economic Recovery Revenue Bonds, Series 2004A:
1,720 5.000%, 7/01/15 7/14 at 100.00 AA- 1,898,691
1,000 5.000%, 7/01/16 7/11 at 100.00 AA- 1,079,300
5,920 California State Public Works Board, Lease Revenue Bonds, 11/09 at 101.00 AAA 6,513,184
Department of Veterans Affairs, Southern California Veterans
Home - Chula Vista Facility, Series 1999A, 5.600%, 11/01/19 -
AMBAC Insured
130 Hesperia Community Redevelopment Agency, California, 9/15 at 100.00 AAA 140,795
Tax Allocation Bonds, Series 2005A, 5.000%, 9/01/20 -
XLCA Insured
3,500 Livermore Redevelopment Agency, California, Tax Allocation 8/11 at 100.00 AAA 3,659,215
Revenue Bonds, Livermore Redevelopment Project Area,
Series 2001A, 5.000%, 8/01/26 - MBIA Insured
1,745 Los Angeles Community Redevelopment Agency, California, 12/05 at 100.00 BBB- 1,747,269
Tax Allocation Multifamily Housing Bonds, Grand Central
Square/Bunker Hill Project, Series 1993A, 5.750%, 12/01/13
(Alternative Minimum Tax)
2,000 Los Angeles County Metropolitan Transportation Authority, 7/13 at 100.00 AAA 2,184,700
California, Proposition A First Tier Senior Sales Tax Revenue
Bonds, Series 2003B, 5.000%, 7/01/19 - MBIA Insured
2,000 Oakland Redevelopment Agency, California, Subordinate Lien 3/13 at 100.00 AAA 2,241,140
Tax Allocation Bonds, Central District Redevelopment Project,
Series 2003, 5.500%, 9/01/15 - FGIC Insured
1,000 Poway, California, Community Facilities District 88-1, Special 8/08 at 102.00 N/R 1,096,670
Tax Refunding Bonds, Parkway Business Centre, Series 1998,
6.500%, 8/15/09
155 Rialto Redevelopment Agency, California, Tax Allocation Bonds, 9/15 at 100.00 AAA 163,550
Merged Project Area, Series 2005A, 5.000%, 9/01/35 -
XLCA Insured
100 Riverside County Public Financing Authority, California, 10/15 at 100.00 AAA 105,801
Tax Allocation Bonds, Multiple Projects, Series 2005A,
5.000%, 10/01/35 (WI, settling 9/08/05) - XLCA Insured
3,000 Sacramento City Financing Authority, California, Lease Revenue No Opt. Call AA- 3,385,110
Refunding Bonds, Series 1993B, 5.400%, 11/01/20
1,500 Sacramento City Financing Authority, California, Lease Revenue No Opt. Call AAA 1,726,620
Refunding Bonds, Series 1993A, 5.400%, 11/01/20 -
MBIA Insured
5,000 San Francisco Bay Area Rapid Transit District, California, 7/15 at 100.00 AAA 5,417,750
Sales Tax Revenue Bonds, Series 2005A, 5.000%, 7/01/24
(WI, settling 9/07/05) - MBIA Insured
San Marcos Public Facilities Authority, California, Revenue
Refunding Bonds, Series 1998:
1,500 5.800%, 9/01/18 9/08 at 101.00 Baa3 1,594,410
1,000 5.800%, 9/01/27 9/08 at 101.00 Baa3 1,052,480
34
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 2,050 Santa Barbara County, California, Certificates of Participation, 12/11 at 102.00 AAA $ 2,280,871
Series 2001, 5.250%, 12/01/19 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 8.4% (5.4% OF TOTAL INVESTMENTS)
3,000 California Infrastructure Economic Development Bank, 7/13 at 100.00 AAA 3,253,830
First Lien Revenue Bonds, San Francisco Bay Area Toll
Bridge, Series 2003A, 5.000%, 7/01/22 - FSA Insured
2,000 Foothill/Eastern Transportation Corridor Agency, California, 1/10 at 100.00 BBB- 1,932,700
Toll Road Revenue Bonds, Series 1995A, 5.000%, 1/01/35
2,000 San Francisco Airports Commission, California, Revenue Bonds, 5/06 at 102.00 AAA 2,069,820
San Francisco International Airport, Second Series Issue 10A,
5.700%, 5/01/26 (Alternative Minimum Tax) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED *** - 11.2% (7.3% OF TOTAL INVESTMENTS)
1,500 California Health Facilities Financing Authority, Revenue 12/09 at 101.00 A3*** 1,695,525
Bonds, Cedars-Sinai Medical Center, Series 1999A,
6.125%, 12/01/30 (Pre-refunded to 12/01/09)
Golden State Tobacco Securitization Corporation, California,
Enhanced Tobacco Settlement Asset-Backed Bonds,
Series 2003B:
1,000 5.625%, 6/01/33 (Pre-refunded to 6/01/13) 6/13 at 100.00 Aaa 1,144,410
1,000 5.500%, 6/01/33 (Pre-refunded to 6/01/13) 6/13 at 100.00 Aaa 1,135,980
2,000 Puerto Rico, General Obligation and Public Improvement 7/10 at 100.00 AAA 2,223,300
Bonds, Series 2000, 5.750%, 7/01/21 (Pre-refunded to
7/01/10) - MBIA Insured
1,185 Riverside Community College District, California, General 8/14 at 100.00 AAA 1,343,115
Obligation Bonds, Series 2004A, 5.250%, 8/01/22
(Pre-refunded to 8/01/14) - MBIA Insured
2,000 Vista, California, Mobile Home Park Revenue Bonds, 3/24 at 100.00 N/R*** 2,203,660
Vista Manor Mobile Home Park Project, Series 1999A,
5.750%, 3/15/29 (Pre-refunded to 3/15/24)
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 11.2% (7.2% OF TOTAL INVESTMENTS)
California Department of Water Resources, Power Supply
Revenue Bonds, Series 2002A:
400 5.375%, 5/01/17 - XLCA Insured 5/12 at 101.00 AAA 443,000
2,250 5.125%, 5/01/18 5/12 at 101.00 A2 2,424,263
275 Los Angeles Department of Water and Power, California, 7/13 at 100.00 AAA 298,639
Power System Revenue Bonds, Series 2003A-2,
5.000%, 7/01/21 - MBIA Insured
1,500 Merced Irrigation District, California, Revenue Refunding 9/05 at 102.00 Baa3 1,532,205
Bonds, Electric System Project, Series 2001, 6.500%, 9/01/22
4,580 Sacramento Municipal Utility District, California, Electric 8/12 at 100.00 AAA 5,014,734
Revenue Refunding Bonds, Series 2002Q, 5.250%, 8/15/20 -
FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 17.0% (10.9% OF TOTAL INVESTMENTS)
1,125 Burbank, California, Wastewater System Revenue Bonds, 6/14 at 100.00 AAA 1,208,588
Series 2004A, 5.000%, 6/01/23 - AMBAC Insured
1,095 California Statewide Community Development Authority, 10/13 at 100.00 AAA 1,197,010
Water and Wastewater Revenue Bonds, Pooled Financing
Program, Series 2003A, 5.250%, 10/01/23 - FSA Insured
5,000 Culver City, California, Wastewater Facilities Revenue 9/09 at 102.00 AAA 5,514,500
Refunding Bonds, Series 1999A, 5.700%, 9/01/29 -
FGIC Insured
3,495 Orange County Sanitation District, California, Certificates 8/13 at 100.00 AAA 3,812,344
of Participation, Series 2003, 5.250%, 2/01/21 - FGIC Insured
1,000 Sacramento County Water Financing Authority, California, 6/13 at 100.00 AAA 1,084,320
Revenue Bonds, Agency Zones 40-41 System Projects,
Series 2003, 5.000%, 6/01/22 - AMBAC Insured
1,795 Woodbridge Irrigation District, California, Certificates 7/13 at 100.00 BBB+ 1,893,490
of Participation, Water Systems Project, Series 2003,
5.500%, 7/01/33
------------------------------------------------------------------------------------------------------------------------------------
$ 119,055 Total Long-Term Investments (cost $120,473,344) - 147.9% 128,345,834
=============-----------------------------------------------------------------------------------------------------------------------
35
Nuveen California Premium Income Municipal Fund (NCU) (continued)
Portfolio of INVESTMENTS August 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 6.9% (4.5% OF TOTAL INVESTMENTS)
$ 2,000 California Department of Water Resources, Power Supply A-1+ $ 2,000,000
Revenue Bonds, Variable Rate Demand Obligations,
Series 2002C-7, 2.420%, 5/01/22 - FSA Insured +
2,000 Oxnard Financing Authority, California, Lease Revenue Bonds, A-1+ 2,000,000
Variable Rate Demand Obligations, Series 2003B,
2.430%, 6/01/33 - AMBAC Insured +
2,000 Pittsburg Redevelopment Agency, California, Tax Allocation A-1+ 2,000,000
Bonds, Los Medanos Community Development Project,
Variable Rate Demand Obligations, Series 2004A,
2.220%, 9/01/35 - AMBAC Insured +
------------------------------------------------------------------------------------------------------------------------------------
$ 6,000 Total Short-Term Investments (cost $6,000,000) 6,000,000
=============-----------------------------------------------------------------------------------------------------------------------
Total Investments (cost $126,473,344) - 154.8% 134,345,834
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - (5.3)% (4,561,033)
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (49.5)% (43,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 86,784,801
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares unless
otherwise noted.
* Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates (month
and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying
prices at later dates. Certain mortgage-backed securities
may be subject to periodic principal paydowns.
** Ratings (not covered by the report of independent registered
public accounting firm): Using the higher of Standard &
Poor's or Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of principal and
interest. Such securities are normally considered to be
equivalent to AAA rated securities.
N/R Investment is not rated.
(WI) Security purchased on a when-issued basis.
+ Security has a maturity of more than one year, but has
variable rate and demand features which qualify it as a
short-term security. The rate disclosed is that in effect at
the end of the reporting period. This rate changes
periodically based on market conditions or a specified
market index.
See accompanying notes to financial statements.
36
Nuveen California Dividend Advantage Municipal Fund (NAC)
Portfolio of
INVESTMENTS August 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 5.7% (3.9% OF TOTAL INVESTMENTS)
$ 5,000 California Statewide Community Development Authority, 11/09 at 102.00 N/R $ 5,284,150
Certificates of Participation, Pride Industries and Pride
One Inc., Series 1999, 7.250%, 11/01/29
5,200 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 BBB 5,809,232
Tobacco Settlement Asset-Backed Bonds, Series 2003A-1,
6.250%, 6/01/33
Northern California Tobacco Securitization Authority, Tobacco
Settlement Asset-Backed Bonds, Series 2001A:
2,500 5.250%, 6/01/31 6/11 at 100.00 BBB 2,535,675
4,500 5.375%, 6/01/41 6/11 at 100.00 BBB 4,619,925
3,135 Tobacco Securitization Authority of Southern California, 6/12 at 100.00 BBB 3,225,288
Tobacco Settlement Asset-Backed Bonds, San Diego County
Tobacco Asset Securitization Corporation, Senior Series 2001A,
5.250%, 6/01/27
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 10.3% (7.1% OF TOTAL INVESTMENTS)
615 California Statewide Community Development Authority, 10/13 at 100.00 N/R 638,216
Revenue Bonds, Notre Dame de Namur University,
Series 2003, 6.500%, 10/01/23
3,000 Long Beach Bond Financing Authority, California, Lease 11/11 at 100.00 AAA 3,350,310
Revenue Refunding Bonds, Long Beach Aquarium of the
South Pacific, Series 2001, 5.500%, 11/01/17 -
AMBAC Insured
700 University of California, Certificates of Participation, 1/10 at 101.00 Aa2 741,069
San Diego and Sacramento Campus Projects, Series 2002A,
5.250%, 1/01/22
6,000 University of California, Revenue Bonds, Multiple Purpose 9/08 at 101.00 AA 6,379,260
Projects, Series 2000K, 5.000%, 9/01/12
University of California, Revenue Bonds, Multi-Purpose Projects,
Series 2002O:
10,770 5.000%, 9/01/20 - FGIC Insured 9/10 at 101.00 AAA 11,544,471
11,305 5.000%, 9/01/21 - FGIC Insured 9/10 at 101.00 AAA 12,117,943
3,500 University of California, Revenue Bonds, Multi-Purpose Projects, 5/13 at 100.00 AAA 3,863,615
Series 2003A, 5.125%, 5/15/17 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 7.0% (4.8% OF TOTAL INVESTMENTS)
2,160 California Health Facilities Financing Authority, Health 3/13 at 100.00 A 2,291,868
Facility Revenue Bonds, Adventist Health System/West,
Series 2003A, 5.000%, 3/01/15
1,325 California Health Facilities Financing Authority, Revenue 11/15 at 100.00 A3 1,371,958
Bonds, Cedars-Sinai Medical Center, Series 2005,
5.000%, 11/15/34
530 California Statewide Community Development Authority, 7/15 at 100.00 BBB+ 561,922
Revenue Bonds, Daughters of Charity Health System,
Series 2005A, 5.250%, 7/01/24
8,000 Central California Joint Powers Health Finance Authority, 2/10 at 101.00 Baa2 8,457,200
Certificates of Participation, Community Hospitals of Central
California Obligated Group, Series 2000, 6.000%, 2/01/30
10,500 Duarte, California, Certificates of Participation, City of Hope 4/09 at 101.00 BBB+ 10,720,815
National Medical Center, Series 1999A, 5.250%, 4/01/31
2,500 Whittier, California, Health Facility Revenue Bonds, 6/12 at 101.00 A 2,699,775
Presbyterian Intercommunity Hospital, Series 2002,
5.600%, 6/01/22
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 7.9% (5.5% OF TOTAL INVESTMENTS)
7,250 California Statewide Community Development Authority, 7/08 at 101.00 BBB 7,488,235
Revenue Refunding Bonds, Irvine Apartment Communities
Development, Series 1998A, 4.900%, 5/15/25 (Mandatory
put 5/15/08)
5,215 California Statewide Community Development Authority, 8/12 at 105.00 Aaa 5,873,655
GNMA Collateralized Housing Revenue Refunding Bonds,
Crowne Pointe Project, Series 2002F, 6.750%, 8/20/37
5,000 Contra Costa County, California, Multifamily Housing Revenue 6/09 at 102.00 N/R 5,178,250
Bonds, Delta View Apartments Project, Series 1999C,
6.750%, 12/01/30 (Alternative Minimum Tax)
1,725 Rohnert Park Finance Authority, California, Senior Lien 9/13 at 100.00 BBB 1,761,087
Revenue Bonds, Rancho Feliz Mobile Home Park,
Series 2003A, 5.750%, 9/15/38
37
Nuveen California Dividend Advantage Municipal Fund (NAC) (continued)
Portfolio of INVESTMENTS August 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY (continued)
$ 1,120 Rohnert Park Finance Authority, California, Subordinate Lien 9/13 at 100.00 N/R $ 1,179,763
Revenue Bonds, Rancho Feliz Mobile Home Park,
Series 2003B, 6.625%, 9/15/38
7,500 San Bernardino County Housing Authority, California, No Opt. Call BBB+ 7,919,700
Multifamily Housing Revenue Refunding Bonds, Equity
Residential Properties/Redlands Lawn and Tennis
Apartments, Series 1999A, 5.200%, 6/15/29
(Mandatory put 6/15/09)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 2.4% (1.6% OF TOTAL INVESTMENTS)
8,500 Riverside County Public Financing Authority, California, 5/09 at 101.00 BBB- 8,852,750
Certificates of Participation, Air Force Village West,
Series 1999, 5.800%, 5/15/29
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 20.0% (13.8% OF TOTAL INVESTMENTS)
California, General Obligation Refunding Bonds, Series 2002:
8,000 5.000%, 2/01/12 No Opt. Call A 8,704,240
4,435 6.000%, 4/01/16 - AMBAC Insured No Opt. Call AAA 5,340,849
California, General Obligation Bonds, Series 2003:
2,000 5.250%, 11/01/19 - RAAI Insured 11/13 at 100.00 AA 2,214,440
5,200 5.250%, 2/01/20 8/13 at 100.00 A 5,723,484
California, General Obligation Bonds, Series 2004:
5,000 5.125%, 4/01/23 4/14 at 100.00 A 5,395,650
4,150 5.125%, 4/01/25 4/14 at 100.00 A 4,462,827
5,000 Fresno Unified School District, Fresno County, California, No Opt. Call AAA 6,354,150
General Obligation Bonds, Series 2002A, 6.000%, 8/01/26 -
MBIA Insured
2,335 Los Angeles Community College District, Los Angeles County, 8/15 at 100.00 AAA 2,515,612
California, General Obligation Bonds, Series 2005A,
5.000%, 6/01/26 - FSA Insured
10,845 Los Angeles Unified School District, California, General 7/12 at 100.00 AAA 11,774,091
Obligation Bonds, Series 2002E, 5.000%, 7/01/19 -
MBIA Insured
3,335 Moreno Valley Unified School District, Riverside County, 8/14 at 100.00 AAA 3,699,049
California, General Obligation Bonds, Series 2004A,
5.250%, 8/01/21 - FSA Insured
1,750 Oakland Unified School District, Alameda County, California, 8/08 at 101.00 AAA 1,850,468
General Obligation Bonds, Series 2001, 5.125%, 8/01/21 -
FSA Insured
Oakland Unified School District, Alameda County, California,
General Obligation Bonds, Series 2005:
770 5.000%, 8/01/25 - MBIA Insured 8/15 at 100.00 AAA 830,206
810 5.000%, 8/01/26 - MBIA Insured 8/15 at 100.00 AAA 869,908
5,000 San Diego Unified School District, San Diego County, 7/13 at 101.00 AAA 5,605,450
California, General Obligation Bonds, Series 2003E,
5.250%, 7/01/20 - FSA Insured
San Jose-Evergreen Community College District, Santa Clara
County, California, General Obligation Bonds, Series 2005A:
600 5.000%, 9/01/25 - MBIA Insured 9/15 at 100.00 AAA 648,798
880 5.000%, 9/01/27 - MBIA Insured 9/15 at 100.00 AAA 947,056
2,560 Southwestern Community College District, San Diego County, 8/14 at 100.00 AAA 2,763,290
California, General Obligation Bonds, Series 2004,
5.000%, 8/01/23 - FGIC Insured
1,300 Ventura County Community College District, California, 8/12 at 101.00 AAA 1,420,263
General Obligation Bonds, Series 2002A, 5.000%, 8/01/15 -
MBIA Insured
3,605 West Contra Costa Unified School District, Contra Costa 8/11 at 101.00 AAA 3,881,107
County, California, General Obligation Bonds,
Series 2003B, 5.000%, 8/01/21 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 36.5% (25.0% OF TOTAL INVESTMENTS)
Beaumont Financing Authority, California, Local Agency
Revenue Bonds, Series 2004D:
1,000 5.500%, 9/01/24 9/14 at 102.00 N/R 1,052,730
615 5.800%, 9/01/35 9/14 at 102.00 N/R 652,232
Brentwood Infrastructure Financing Authority, Contra Costa
County, California, Capital Improvement Revenue Bonds,
Series 2001:
1,110 5.375%, 11/01/18 - FSA Insured 11/11 at 100.00 AAA 1,227,405
1,165 5.375%, 11/01/19 - FSA Insured 11/11 at 100.00 AAA 1,288,222
38
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 1,990 Brentwood Infrastructure Financing Authority, California, 9/12 at 100.00 AAA $ 2,123,688
Infrastructure Revenue Refunding Bonds, Series 2002A,
5.125%, 9/02/24 - FSA Insured
7,400 California, Economic Recovery Revenue Bonds, Series 2004A, 7/14 at 100.00 AA- 8,168,786
5.000%, 7/01/15
2,000 Capistrano Unified School District, Orange County, California, 9/13 at 100.00 N/R 2,147,580
Special Tax Bonds, Community Facilities District 90-2 -
Talega, Series 2003, 6.000%, 9/01/33
3,490 Fontana, California, Senior Special Tax Refunding Bonds, 9/08 at 102.00 AAA 3,766,513
Heritage Village Community Facilities District 2, Series 1998A,
5.250%, 9/01/17 - MBIA Insured
1,125 Fontana, California, Special Tax Bonds, Sierra Community 9/14 at 100.00 N/R 1,166,535
Facilities District 22, Series 2004, 6.000%, 9/01/34
3,980 Garden Grove, California, Certificates of Participation, Financing 3/12 at 101.00 AAA 4,436,546
Project, Series 2002A, 5.500%, 3/01/22 - AMBAC Insured
540 Hesperia Community Redevelopment Agency, California, 9/15 at 100.00 AAA 584,842
Tax Allocation Bonds, Series 2005A, 5.000%, 9/01/20 -
XLCA Insured
4,500 Inglewood Redevelopment Agency, California, Tax Allocation No Opt. Call AAA 5,146,920
Refunding Bonds, Merged Area Redevelopment Project,
Series 1998A, 5.250%, 5/01/23 - AMBAC Insured
2,000 Lee Lake Water District, Riverside County, California, Special 9/13 at 102.00 N/R 2,177,740
Tax Bonds, Community Facilities District 1 of Sycamore
Creek, Series 2003, 6.500%, 9/01/24
2,200 Lincoln, California, Special Tax Bonds, Lincoln Crossing 9/13 at 102.00 N/R 2,448,908
Community Facilities District 03-1, Series 2003A,
6.500%, 9/01/25
1,500 Lincoln, California, Special Tax Bonds, Lincoln Crossing 9/13 at 102.00 N/R 1,595,670
Community Facilities District 03-1, Series 2004,
6.000%, 9/01/34
5,000 Los Angeles County Metropolitan Transportation Authority, 7/08 at 101.00 AAA 5,247,100
California, Proposition C Second Senior Lien Sales Tax
Revenue Refunding Bonds, Series 1998A, 5.000%, 7/01/23 -
AMBAC Insured
3,555 Los Angeles County Public Works Financing Authority, 10/07 at 101.00 AA 3,728,875
California, Revenue Bonds, Regional Park and Open Space
District, Series 1997A, 5.000%, 10/01/16
1,530 Moreno Valley Unified School District, Riverside County, 3/14 at 100.00 AAA 1,634,224
California, Certificates of Participation, Series 2005,
5.000%, 3/01/24 - FSA Insured
9,200 Norco Redevelopment Agency, California, Tax Allocation 3/11 at 102.00 AAA 9,857,248
Refunding Bonds, Project Area 1, Series 2001,
5.000%, 3/01/19 - MBIA Insured
5,545 Oakland Joint Power Financing Authority, California, No Opt. Call AAA 6,368,821
Lease Revenue Refunding Bonds, Oakland Convention
Centers, Series 2001, 5.500%, 10/01/14 - AMBAC Insured
3,290 Oakland Redevelopment Agency, California, Subordinate 3/13 at 100.00 AAA 3,673,614
Lien Tax Allocation Bonds, Central District Redevelopment
Project, Series 2003, 5.500%, 9/01/16 - FGIC Insured
4,000 Orange County Local Transportation Authority, California, No Opt. Call AAA 4,265,800
Limited Sales Tax Revenue Refunding Bonds, Measure M,
Series 1997A, 5.700%, 2/15/08 - AMBAC Insured
5,600 Palm Springs Financing Authority, California, Lease Revenue 11/11 at 101.00 AAA 5,954,816
Refunding Bonds, Convention Center Project, Series 2001A,
5.000%, 11/01/22 - MBIA Insured
1,000 Palmdale Community Redevelopment Agency, California, 12/14 at 100.00 AAA 1,073,020
Tax Allocation Bonds, Merged Redevelopment Project Areas,
Series 2004, 5.000%, 12/01/24 - AMBAC Insured
8,100 Poway Redevelopment Agency, California, Tax Allocation 12/10 at 102.00 AAA 9,141,012
Refunding Bonds, Paguay Redevelopment Project, Series 2000,
5.750%, 6/15/33 - MBIA Insured
1,055 Poway Redevelopment Agency, California, Tax Allocation Bonds, 12/11 at 101.00 AAA 1,177,707
Paguay Redevelopment Project, Series 2001,
5.375%, 12/15/16 - AMBAC Insured
620 Rialto Redevelopment Agency, California, Tax Allocation 9/15 at 100.00 AAA 654,199
Bonds, Merged Project Area, Series 2005A,
5.000%, 9/01/35 - XLCA Insured
1,860 Riverside Redevelopment Agency, California, Tax Allocation 8/13 at 100.00 AAA 2,028,888
Refunding Bonds, Merged Project Areas, Series 2003,
5.250%, 8/01/22 - MBIA Insured
2,515 Riverside County Public Financing Authority, California, No Opt. Call N/R 2,559,063
Junior Lien Reassessment Revenue Bonds, Rancho Villages
Project, Series 1999B, 6.000%, 9/02/07
410 Riverside County Public Financing Authority, California, Tax 10/15 at 100.00 AAA 433,784
Allocation Bonds, Multiple Projects, Series 2005A,
5.000%, 10/01/35 (WI, settling 9/08/05) - XLCA Insured
39
Nuveen California Dividend Advantage Municipal Fund (NAC) (continued)
Portfolio of INVESTMENTS August 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 2,500 Sacramento City Financing Authority, California, Lease No Opt. Call AAA $ 2,924,575
Revenue Refunding Bonds, Series 1993A,
5.400%, 11/01/20 - AMBAC Insured
1,150 Sacramento, California, Special Tax Bonds, North Natomas 9/14 at 100.00 N/R 1,230,385
Community Facilities District 4, Series 2003C, 6.000%, 9/01/33
24,060 San Jose Redevelopment Agency, California, Tax Allocation 8/08 at 102.00 A 25,029,859
Bonds, Merged Area Redevelopment Project, Series 1998,
5.250%, 8/01/29
2,695 San Jose Financing Authority, California, Lease Revenue 6/12 at 100.00 AAA 2,960,053
Refunding Bonds, Civic Center Project, Series 2002B,
5.250%, 6/01/19 - AMBAC Insured
1,595 San Marcos Public Facilities Authority, California, Special 9/09 at 102.00 N/R 1,657,971
Tax Bonds, Community Facilities District 99-1, Series 2003B,
6.000%, 9/01/24
2,810 West Patterson Financing Authority, California, Special 9/13 at 103.00 N/R 3,109,265
Tax Bonds, Community Facilities District 01-1, Series 2003B,
7.000%, 9/01/38
1,350 West Patterson Financing Authority, California, Special 9/13 at 103.00 N/R 1,458,311
Tax Bonds, Community Facilities District 2001-1,
Series 2004A, 6.125%, 9/01/39
2,000 West Patterson Financing Authority, California, Special Tax 9/13 at 102.00 N/R 2,127,560
Bonds, Community Facilities District 01-1, Series 2004B,
6.000%, 9/01/39
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 19.5% (13.4% OF TOTAL INVESTMENTS)
8,150 Foothill/Eastern Transportation Corridor Agency, California, 1/10 at 101.00 BBB- 8,405,584
Toll Road Revenue Refunding Bonds, Series 1999,
5.750%, 1/15/40
8,515 Los Angeles Harbors Department, California, Revenue Refunding 8/11 at 100.00 AAA 9,268,237
Bonds, Series 2001B, 5.500%, 8/01/18 (Alternative Minimum
Tax) - AMBAC Insured
23,000 Port of Oakland, California, Revenue Bonds, Series 2000K, 5/10 at 100.00 AAA 24,843,910
5.750%, 11/01/29 (Alternative Minimum Tax) - FGIC Insured
5,000 San Francisco Airports Commission, California, Revenue Bonds, 5/06 at 101.00 AAA 5,121,850
San Francisco International Airport, Second Series Issue 13B,
5.625%, 5/01/21 (Alternative Minimum Tax) - MBIA Insured
23,275 San Francisco Airports Commission, California, Revenue Bonds, 5/10 at 101.00 AAA 25,335,769
San Francisco International Airport, Second Series 2000,
Issue 24A, 5.750%, 5/01/30 (Alternative Minimum Tax) -
FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED *** - 18.3% (12.6% OF TOTAL INVESTMENTS)
8,400 California Health Facilities Financing Authority, Revenue Bonds, 10/08 at 101.00 AAA 9,002,028
Kaiser Permanente System, Series 1998B, 5.250%, 10/01/14
(Optional put 10/01/08)
15,000 California Health Facilities Financing Authority, Revenue Bonds, 12/09 at 101.00 A3*** 16,955,250
Cedars-Sinai Medical Center, Series 1999A, 6.125%, 12/01/30
(Pre-refunded to 12/01/09)
1,835 California Department of Water Resources, Water System 12/11 at 100.00 AAA 2,047,016
Revenue Bonds, Central Valley Project, Series 2001W,
5.250%, 12/01/22 (Pre-refunded to 12/01/11) - FSA Insured
18,500 Los Angeles Unified School District, California, General 7/09 at 101.00 AAA 20,185,535
Obligation Bonds, Series 1999C, 5.250%, 7/01/24
(Pre-refunded to 7/01/09) - MBIA Insured
Orange County Water District, California, Revenue Certificates
of Participation, Series 1999A:
5,840 5.375%, 8/15/29 8/09 at 101.00 AA+*** 6,774,867
8,160 5.375%, 8/15/29 (Pre-refunded to 8/15/09) 8/09 at 101.00 AA+*** 8,956,579
4,000 Puerto Rico, General Obligation and Public Improvement 7/10 at 100.00 AAA 4,446,600
Bonds, Series 2000, 5.750%, 7/01/16 (Pre-refunded to
7/01/10) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 11.3% (7.8% OF TOTAL INVESTMENTS)
California Department of Water Resources, Power Supply
Revenue Bonds, Series 2002A:
2,500 5.375%, 5/01/17 - XLCA Insured 5/12 at 101.00 AAA 2,768,750
9,750 5.125%, 5/01/18 5/12 at 101.00 A2 10,505,138
3,630 Imperial Irrigation District, California, Certificates of 11/13 at 100.00 AAA 3,963,089
Participation, Electric System Revenue Bonds, Series 2003,
5.250%, 11/01/23 - FSA Insured
7,000 Los Angeles Department of Water and Power, California, 7/11 at 100.00 AAA 7,571,900
Power System Revenue Bonds, Series 2001A-1,
5.250%, 7/01/21 - FSA Insured
40
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES (continued)
$ 8,370 Los Angeles Department of Water and Power, California, 7/11 at 100.00 AAA $ 9,193,524
Power System Revenue Refunding Bonds, Series 2001A-2,
5.375%, 7/01/19 - MBIA Insured
1,200 Los Angeles Department of Water and Power, California, 7/13 at 100.00 AAA 1,303,150
Power System Revenue Bonds, Series 2003A-2,
5.000%, 7/01/21 - MBIA Insured
7,000 Merced Irrigation District, California, Revenue Refunding 9/05 at 102.00 Baa3 7,151,200
Bonds, Electric System Project, Series 2001, 6.750%, 9/01/31
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 6.5% (4.5% OF TOTAL INVESTMENTS)
9,165 California Department of Water Resources, Water System 12/11 at 100.00 AAA 9,993,422
Revenue Bonds, Central Valley Project, Series 2001W,
5.250%, 12/01/22 - FSA Insured
8,250 Pico Rivera Water Authority, California, Revenue Bonds, 12/11 at 102.00 N/R 8,943,660
Series 2001A, 6.250%, 12/01/32
5,115 San Francisco City and County Public Utilities Commission, 11/12 at 100.00 AAA 5,566,244
California, Water Revenue Bonds, Series 2002A,
5.000%, 11/01/18 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
$ 502,835 Total Long-Term Investments (cost $505,744,666) - 145.4% 544,050,839
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.4% 5,213,904
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (46.8)% (175,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 374,264,743
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares unless
otherwise noted.
* Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates (month
and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying
prices at later dates. Certain mortgage-backed securities
may be subject to periodic principal paydowns.
** Ratings (not covered by the report of independent registered
public accounting firm): Using the higher of Standard &
Poor's or Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of principal and
interest. Such securities are normally considered to be
equivalent to AAA rated securities.
N/R Investment is not rated.
(WI) Security purchased on a when-issued basis.
See accompanying notes to financial statements.
41
Nuveen California Dividend Advantage Municipal Fund 2 (NVX)
Portfolio of
INVESTMENTS August 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 6.2% (4.3% OF TOTAL INVESTMENTS)
$ 4,625 California County Tobacco Securitization Agency, Tobacco 6/12 at 100.00 Baa3 $ 4,797,281
Settlement Asset-Backed Bonds, Stanislaus County Tobacco
Funding Corporation, Series 2002A, 5.500%, 6/01/33
3,200 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 BBB 3,574,912
Tobacco Settlement Asset-Backed Bonds, Series 2003A-1,
6.250%, 6/01/33
3,000 Northern California Tobacco Securitization Authority, Tobacco 6/11 at 100.00 BBB 3,079,950
Settlement Asset-Backed Bonds, Series 2001A, 5.375%, 6/01/41
2,800 Tobacco Securitization Authority of Southern California, 6/12 at 100.00 BBB 2,885,596
Tobacco Settlement Asset-Backed Bonds, San Diego County
Tobacco Asset Securitization Corporation, Senior Series 2001A,
5.500%, 6/01/36
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 14.8% (10.1% OF TOTAL INVESTMENTS)
2,000 California Educational Facilities Authority, Revenue Bonds, 6/11 at 101.00 AAA 2,149,160
Stanford University, Series 2001Q, 5.250%, 12/01/32
6,375 California Educational Facilities Authority, Student Loan 3/08 at 102.00 Aaa 6,703,313
Revenue Bonds, Cal Loan Program, Series 2001A,
5.400%, 3/01/21 (Alternative Minimum Tax) - MBIA Insured
California State Public Works Board, Lease Revenue Bonds,
University of California System, Series 2002A:
8,880 5.375%, 10/01/16 - FSA Insured 10/12 at 100.00 AAA 9,813,643
10,570 5.375%, 10/01/18 - FSA Insured 10/12 at 100.00 AAA 11,626,049
620 California Statewide Community Development Authority, 10/13 at 100.00 N/R 643,405
Revenue Bonds, Notre Dame de Namur University,
Series 2003, 6.500%, 10/01/23
3,000 Long Beach Bond Financing Authority, California, Lease 11/11 at 101.00 AAA 3,218,820
Revenue Refunding Bonds, Long Beach Aquarium of the
South Pacific, Series 2001, 5.250%, 11/01/30 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 8.9% (6.1% OF TOTAL INVESTMENTS)
2,000 California Health Facilities Financing Authority, Revenue Bonds, 4/12 at 100.00 BBB+ 2,169,800
Casa Colina Inc., Series 2001, 6.000%, 4/01/22
825 California Health Facilities Financing Authority, Revenue Bonds, 11/15 at 100.00 A3 854,238
Cedars-Sinai Medical Center, Series 2005, 5.000%, 11/15/34
500 California Infrastructure Economic Development Bank, Revenue 8/11 at 102.00 A+ 536,345
Bonds, Kaiser Hospital Assistance LLC, Series 2001A,
5.550%, 8/01/31
955 California State Public Works Board, Revenue Bonds, 11/14 at 100.00 AAA 1,024,228
University of California - Davis Medical Center,
Series 2004II-A, 5.000%, 11/01/22 - MBIA Insured
California Statewide Community Development Authority,
Revenue Bonds, Daughters of Charity Health System,
Series 2005A:
330 5.250%, 7/01/24 7/15 at 100.00 BBB+ 349,876
190 5.250%, 7/01/35 7/15 at 100.00 BBB+ 199,025
5,355 California Statewide Community Development Authority, No Opt. Call A+ 5,561,542
Revenue Bonds, Kaiser Permanente System, Series 2002E,
4.700%, 11/01/36 (Mandatory put 5/31/09)
2,185 California Statewide Community Development Authority, No Opt. Call A 2,464,418
Health Facility Revenue Refunding Bonds, Memorial Health
Services, Series 2003A, 6.000%, 10/01/11
2,500 California Statewide Community Development Authority, 6/13 at 100.00 AAA 2,733,325
Hospital Revenue Bonds, Monterey Peninsula Hospital,
Series 2003B, 5.250%, 6/01/18 - FSA Insured
3,000 Central California Joint Powers Health Finance Authority, 2/10 at 101.00 Baa2 3,171,450
Certificates of Participation, Community Hospitals of Central
California Obligated Group, Series 2000, 6.000%, 2/01/30
1,500 Whittier, California, Health Facility Revenue Bonds, 6/12 at 101.00 A 1,619,865
Presbyterian Intercommunity Hospital, Series 2002,
5.600%, 6/01/22
42
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 11.0% (7.5% OF TOTAL INVESTMENTS)
$ 2,450 ABAG Finance Authority for Non-Profit Corporations, No Opt. Call Baa2 $ 2,619,295
California, Multifamily Housing Revenue Refunding Bonds,
United Dominion/2000 Post Apartments, Series 2000B,
6.250%, 8/15/30 (Mandatory put 8/15/08)
3,250 California Statewide Community Development Authority, 7/08 at 101.00 BBB 3,356,795
Revenue Refunding Bonds, Irvine Apartment Communities
Development, Series 1998A, 4.900%, 5/15/25 (Mandatory
put 5/15/08)
5,962 California Statewide Community Development Authority, 6/11 at 102.00 AAA 6,160,773
Multifamily Housing Revenue Refunding Bonds, Claremont
Village Apartments, Series 2001D, 5.500%, 6/01/31
(Alternative Minimum Tax) (Mandatory put 6/01/16)
3,475 California Statewide Community Development Authority, 8/12 at 105.00 Aaa 3,913,893
GNMA Collateralized Housing Revenue Refunding Bonds,
Crowne Pointe Project, Series 2002F, 6.750%, 8/20/37
4,000 Daly City Housing Development Finance Agency, California, 12/13 at 102.00 A- 4,210,000
Mobile Home Park Revenue Bonds, Franciscan Mobile Home
Park Project, Series 2002A, 5.850%, 12/15/32
1,055 Rohnert Park Finance Authority, California, Senior Lien Revenue 9/13 at 100.00 BBB 1,077,071
Bonds, Rancho Feliz Mobile Home Park, Series 2003A,
5.750%, 9/15/38
700 Rohnert Park Finance Authority, California, Subordinate Lien 9/13 at 100.00 N/R 737,352
Revenue Bonds, Rancho Feliz Mobile Home Park, Series 2003B,
6.625%, 9/15/38
3,045 Yucaipa Redevelopment Agency, California, Mobile Home Park 5/11 at 102.00 N/R 3,315,061
Revenue Bonds, Rancho del Sol and Grandview, Series 2001A,
6.750%, 5/15/36
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 0.6% (0.4% OF TOTAL INVESTMENTS)
1,405 California Rural Home Mortgage Finance Authority, 6/11 at 102.00 AAA 1,477,048
Mortgage-Backed Securities Program Single Family Mortgage
Revenue Bonds, Series 2001A, 5.650%, 12/01/31 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 0.7% (0.5% OF TOTAL INVESTMENTS)
1,550 California Health Facilities Financing Authority, Cal-Mortgage 1/13 at 100.00 A 1,638,102
Insured Revenue Bonds, Northern California Retired Officers
Community Corporation - Paradise Valley Estates, Series
2002, 5.125%, 1/01/22
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 25.6% (17.4% OF TOTAL INVESTMENTS)
5,000 California, General Obligation Refunding Bonds, Series 2002, No Opt. Call A 5,440,150
5.000%, 2/01/12
5,225 California, General Obligation Veterans Welfare Bonds, 6/06 at 101.00 AAA 5,368,270
Series 2001BV, 5.600%, 12/01/32 - FSA Insured
California, General Obligation Bonds, Series 2003:
3,000 5.250%, 2/01/20 8/13 at 100.00 A 3,302,010
1,400 5.250%, 2/01/21 8/13 at 100.00 A 1,540,742
1,350 California, General Obligation Bonds, Series 2004, 4/14 at 100.00 A 1,451,763
5.125%, 4/01/25
3,615 Colton Joint Unified School District, San Bernardino County, 8/12 at 102.00 AAA 4,105,302
California, General Obligation Bonds, Series 2002A,
5.500%, 8/01/22 - FGIC Insured
Contra Costa County Community College District, California,
General Obligation Bonds, Series 2002:
3,005 5.000%, 8/01/21 - FGIC Insured 8/12 at 100.00 AAA 3,235,694
3,300 5.000%, 8/01/22 - FGIC Insured 8/12 at 100.00 AAA 3,553,341
1,325 Golden West Schools Financing Authority, California, General No Opt. Call AAA 1,613,625
Obligation Revenue Refunding Bonds, School District Program,
Series 1998A, 6.650%, 8/01/13 - MBIA Insured
1,445 Los Angeles Community College District, Los Angeles County, 8/15 at 100.00 AAA 1,556,771
California, General Obligation Bonds, Series 2005A,
5.000%, 6/01/26 - FSA Insured
10,840 Los Angeles Unified School District, California, General 7/12 at 100.00 AAA 11,768,663
Obligation Bonds, Series 2002E, 5.000%, 7/01/19 -
MBIA Insured
1,250 Los Angeles Unified School District, California, General 7/13 at 100.00 AAA 1,390,537
Obligation Bonds, Series 2003A, 5.250%, 7/01/20 -
FSA Insured
1,375 Lucia Mar Unified School District, San Luis Obispo County, 8/14 at 100.00 Aaa 1,525,095
California, General Obligation Bonds, Series 2004A,
5.250%, 8/01/21 - FGIC Insured
43
Nuveen California Dividend Advantage Municipal Fund 2 (NVX) (continued)
Portfolio of INVESTMENTS August 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
Oakland Unified School District, Alameda County, California,
General Obligation Bonds, Series 2005:
$ 475 5.000%, 8/01/25 - MBIA Insured 8/15 at 100.00 AAA $ 512,140
500 5.000%, 8/01/26 - MBIA Insured 8/15 at 100.00 AAA 536,980
2,000 Puerto Rico, General Obligation and Public Improvement No Opt. Call AAA 2,381,460
Bonds, Series 2001A, 5.500%, 7/01/20 - MBIA Insured
San Jose-Evergreen Community College District, Santa Clara
County, California, General Obligation Bonds, Series 2005A:
370 5.000%, 9/01/25 - MBIA Insured 9/15 at 100.00 AAA 400,092
545 5.000%, 9/01/27 - MBIA Insured 9/15 at 100.00 AAA 586,529
4,050 Santa Rosa High School District, Sonoma County, California, 5/11 at 101.00 AAA 4,416,849
General Obligation Bonds, Series 2001, 5.300%, 5/01/26 -
FGIC Insured
1,160 Saugus Union School District, Los Angeles County, California, 8/12 at 100.00 AAA 1,249,053
General Obligation Bonds, Series 2002A, 5.000%, 8/01/21 -
FGIC Insured
2,710 Southwestern Community College District, San Diego County, 8/14 at 100.00 AAA 2,940,052
California, General Obligation Bonds, Series 2004,
5.000%, 8/01/21 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 27.8% (19.0% OF TOTAL INVESTMENTS)
Beaumont Financing Authority, California, Local Agency Revenue
Bonds, Series 2004D:
650 5.500%, 9/01/24 9/14 at 102.00 N/R 684,275
385 5.800%, 9/01/35 9/14 at 102.00 N/R 408,308
4,500 California, Economic Recovery Revenue Bonds, Series 2004A, 7/14 at 100.00 AA- 4,967,505
5.000%, 7/01/15
4,900 California State Public Works Board, Lease Revenue Bonds, 12/13 at 100.00 A- 5,472,026
Department of Corrections, Series 2003C, 5.500%, 6/01/16
1,200 Capistrano Unified School District, Orange County, California, 9/13 at 100.00 N/R 1,288,548
Special Tax Bonds, Community Facilities District 90-2 -
Talega, Series 2003, 6.000%, 9/01/33
4,845 Encinitas Public Financing Authority, California, Lease Revenue 4/08 at 102.00 AAA 5,157,309
Bonds, Acquisition Project, Series 2001A, 5.250%, 4/01/31 -
MBIA Insured
750 Fontana, California, Special Tax Bonds, Sierra Community 9/14 at 100.00 N/R 777,690
Facilities District 22, Series 2004, 6.000%, 9/01/34
335 Hesperia Community Redevelopment Agency, California, 9/15 at 100.00 AAA 362,818
Tax Allocation Bonds, Series 2005A, 5.000%, 9/01/20 -
XLCA Insured
4,000 Industry Urban Development Agency, California, Tax Allocation 5/07 at 101.50 AAA 4,223,360
Refunding Bonds, Civic, Recreational and Industrial
Redevelopment Project 1, Series 2002, 5.500%, 5/01/19 -
MBIA Insured
2,000 Lake Elsinore Public Financing Authority, California, Local 10/13 at 102.00 N/R 2,146,620
Agency Revenue Refunding Bonds, Series 2003H,
6.000%, 10/01/20
1,265 Lee Lake Water District, Riverside County, California, Special 9/13 at 102.00 N/R 1,377,421
Tax Bonds, Community Facilities District 1 of Sycamore Creek,
Series 2003, 6.500%, 9/01/24
1,320 Lincoln, California, Special Tax Bonds, Lincoln Crossing 9/13 at 102.00 N/R 1,469,345
Community Facilities District 03-1, Series 2003A,
6.500%, 9/01/25
1,000 Lincoln, California, Special Tax Bonds, Lincoln Crossing 9/13 at 102.00 N/R 1,063,780
Community Facilities District 03-1, Series 2004,
6.000%, 9/01/34
8,000 Los Angeles County Metropolitan Transportation Authority, 7/08 at 101.00 AAA 8,395,360
California, Proposition C Second Senior Lien Sales Tax
Revenue Refunding Bonds, Series 1998A,
5.000%, 7/01/23 - AMBAC Insured
5,000 Los Angeles County Metropolitan Transportation Authority, No Opt. Call AAA 5,622,050
California, Proposition C Second Senior Lien Sales Tax
Revenue Refunding Bonds, Series 2003A, 5.250%, 7/01/13 -
MBIA Insured
3,295 Oakland Redevelopment Agency, California, Subordinate 3/13 at 100.00 AAA 3,679,197
Lien Tax Allocation Bonds, Central District Redevelopment
Project, Series 2003, 5.500%, 9/01/16 - FGIC Insured
2,000 Orange County, California, Special Tax Bonds, Community 8/11 at 101.00 N/R 2,078,780
Facilities District 02-1 of Ladera Ranch, Series 2003A,
5.550%, 8/15/33
2,000 Puerto Rico Public Finance Corporation, Commonwealth No Opt. Call BBB- 2,461,140
Appropriation Bonds, Series 2002E, 6.000%, 8/01/26
44
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 385 Rialto Redevelopment Agency, California, Tax Allocation 9/15 at 100.00 AAA $ 406,237
Bonds, Merged Project Area, Series 2005A, 5.000%, 9/01/35 -
XLCA Insured
6,000 Riverside County Redevelopment Agency, California, Tax 10/11 at 102.00 AAA 6,470,160
Allocation Bonds, Jurupa Valley Project Area, Series 2001,
5.250%, 10/01/35 - AMBAC Insured
255 Riverside County Public Financing Authority, California, 10/15 at 100.00 AAA 269,793
Tax Allocation Bonds, Multiple Projects, Series 2005A,
5.000%, 10/01/35 (WI, settling 9/08/05) - XLCA Insured
700 Sacramento, California, Special Tax Bonds, North Natomas 9/14 at 100.00 N/R 748,930
Community Facilities District 4, Series 2003C, 6.000%, 9/01/33
975 San Marcos Public Facilities Authority, California, Special 9/09 at 102.00 N/R 1,013,493
Tax Bonds, Community Facilities District 99-1, Series 2003B,
6.000%, 9/01/24
1,930 West Patterson Financing Authority, California, Special Tax 9/13 at 103.00 N/R 2,099,744
Bonds, Community Facilities District 01-1, Series 2003B,
6.750%, 9/01/30
850 West Patterson Financing Authority, California, Special Tax 9/13 at 103.00 N/R 918,196
Bonds, Community Facilities District 2001-1, Series 2004A,
6.125%, 9/01/39
500 West Patterson Financing Authority, California, Special Tax 9/13 at 102.00 N/R 531,890
Bonds, Community Facilities District 01-1, Series 2004B,
6.000%, 9/01/39
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 8.9% (6.1% OF TOTAL INVESTMENTS)
7,000 Foothill/Eastern Transportation Corridor Agency, California, 1/14 at 101.00 BBB- 6,048,140
Toll Road Revenue Refunding Bonds, Series 1999,
0.000%, 1/15/27
5,585 Port of Oakland, California, Revenue Bonds, Series 2002N, 11/12 at 100.00 AAA 5,956,626
5.000%, 11/01/16 (Alternative Minimum Tax) - MBIA Insured
2,000 San Francisco Airports Commission, California, Revenue 5/12 at 100.00 AAA 2,146,740
Refunding Bonds, San Francisco International Airport,
Second Series 2002, Issue 28A, 5.250%, 5/01/17 (Alternative
Minimum Tax) - MBIA Insured
San Francisco Airports Commission, California, Revenue Bonds,
San Francisco International Airport, Second Series 2003, Issue
29A:
2,430 5.250%, 5/01/18 (Alternative Minimum Tax) - FGIC Insured 5/13 at 100.00 AAA 2,624,546
2,555 5.250%, 5/01/19 (Alternative Minimum Tax) - FGIC Insured 5/13 at 100.00 AAA 2,754,316
1,000 San Francisco Airports Commission, California, Revenue Bonds, 5/13 at 100.00 AAA 1,089,090
San Francisco International Airport, Second Series 2003,
Issue 29B, 5.125%, 5/01/17 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED *** - 19.4% (13.3% OF TOTAL INVESTMENTS)
9,000 Anitoch Area Public Facilities Financing Agency, California, 8/11 at 100.00 AAA 10,006,560
Special Tax Bonds, Community Facilities District 1989-1,
Series 2001, 5.250%, 8/01/25 (Pre-refunded to 8/01/11) -
MBIA Insured
8,330 Los Angeles Unified School District, California, General 7/10 at 100.00 AAA 9,187,990
Obligation Bonds, Series 2000D, 5.375%, 7/01/25
(Pre-refunded to 7/01/10) - FGIC Insured
Santa Clara Valley Transportation Authority, California, Sales
Tax Revenue Bonds, Series 2001A:
15,090 5.000%, 6/01/25 (Pre-refunded to 6/01/11) - MBIA Insured 6/11 at 100.00 AAA 16,548,750
2,000 5.000%, 6/01/26 (Pre-refunded to 6/01/11) - MBIA Insured 6/11 at 100.00 AAA 2,193,340
6,200 Southwestern Community College District, San Diego County, 8/11 at 101.00 AAA 6,986,408
California, General Obligation Bonds, Series 2001,
5.375%, 8/01/25 (Pre-refunded to 8/01/11) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 8.7% (6.0% OF TOTAL INVESTMENTS)
5,000 Anaheim Public Finance Authority, California, Second Lien 10/14 at 100.00 AAA 5,522,050
Electric Distribution Revenue Bonds, Series 2004,
5.250%, 10/01/21 - MBIA Insured
6,000 California Department of Water Resources, Power Supply 5/12 at 101.00 A2 6,464,700
Revenue Bonds, Series 2002A, 5.125%, 5/01/18
Los Angeles Department of Water and Power, California, Power
System Revenue Bonds, Series 2003A-2:
750 5.000%, 7/01/21 - MBIA Insured 7/13 at 100.00 AAA 814,470
1,000 5.000%, 7/01/23 - MBIA Insured 7/13 at 100.00 AAA 1,082,710
3,000 Merced Irrigation District, California, Revenue Refunding 9/05 at 102.00 Baa3 3,065,040
Bonds, Electric System Project, Series 2001, 6.850%, 9/01/36
45
Nuveen California Dividend Advantage Municipal Fund 2 (NVX) (continued)
Portfolio of INVESTMENTS August 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES (continued)
$ 1,000 Merced Irrigation District, California, Revenue Certificates 9/05 at 103.00 Baa3 $ 1,031,510
of Participation, Electric System Project, Series 2002,
6.500%, 9/01/34
2,000 Santa Clara, California, Subordinate Electric Revenue Bonds, 7/13 at 100.00 AAA 2,224,860
Series 2003A, 5.250%, 7/01/20 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 13.5% (9.3% OF TOTAL INVESTMENTS)
2,740 California Department of Water Resources, Water System 12/12 at 100.00 AAA 2,982,901
Revenue Bonds, Central Valley Project, Series 2002Z,
5.000%, 12/01/18 - FGIC Insured
4,900 East Bay Municipal Utility District, Alameda and Contra 6/11 at 100.00 AAA 5,137,650
Costa Counties, California, Water System Subordinated
Revenue Bonds, Series 2001, 5.000%, 6/01/26 - MBIA Insured
2,655 El Dorado Irrigation District, California, Water and Sewer 3/14 at 100.00 AAA 2,861,584
Certificates of Participation, Series 2004A, 5.000%, 3/01/20 -
FGIC Insured
1,700 San Buenaventura, California, Wastewater Revenue 3/14 at 100.00 AAA 1,815,803
Certificates of Participation, Series 2004, 5.000%, 3/01/24 -
MBIA Insured
6,885 San Diego Public Facilities Financing Authority, California, 8/12 at 100.00 AAA 7,413,560
Subordinate Lien Water Revenue Bonds, Series 2002,
5.000%, 8/01/21 - MBIA Insured
10,000 San Francisco City and County Public Utilities Commission, 4/13 at 100.00 AAA 11,093,200
California, Clean Water Revenue Refunding Bonds,
Series 2003A, 5.250%, 10/01/20 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
$ 313,102 Total Long-Term Investments (cost $316,942,756) - 146.1% 337,703,268
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.5% 3,437,143
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (47.6)% (110,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 231,140,411
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares unless
otherwise noted.
* Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates (month
and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying
prices at later dates. Certain mortgage-backed securities
may be subject to periodic principal paydowns.
** Ratings (not covered by the report of independent registered
public accounting firm): Using the higher of Standard &
Poor's or Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of principal and
interest.
N/R Investment is not rated.
(WI) Security purchased on a when-issued basis.
See accompanying notes to financial statements.
46
Nuveen California Dividend Advantage Municipal Fund 3 (NZH)
Portfolio of
INVESTMENTS August 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 6.2% (4.1% OF TOTAL INVESTMENTS)
$ 11,240 California County Tobacco Securitization Agency, Tobacco 6/12 at 100.00 Baa3 $ 11,658,690
Settlement Asset-Backed Bonds, Merced County Tobacco
Funding Corporation, Series 2002A, 5.500%, 6/01/33
6,100 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 BBB 6,814,676
Tobacco Settlement Asset-Backed Bonds, Series 2003A-1,
6.250%, 6/01/33
4,200 Tobacco Securitization Authority of Southern California, 6/12 at 100.00 BBB 4,328,394
Tobacco Settlement Asset-Backed Bonds, San Diego County
Tobacco Asset Securitization Corporation, Senior Series 2001A,
5.500%, 6/01/36
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 7.6% (5.1% OF TOTAL INVESTMENTS)
3,825 California Educational Facilities Authority, Student Loan Revenue 3/08 at 102.00 Aaa 4,021,988
Bonds, Cal Loan Program, Series 2001A, 5.400%, 3/01/21
(Alternative Minimum Tax) - MBIA Insured
3,600 California State Public Works Board, Lease Revenue Bonds, 10/12 at 100.00 AAA 3,969,072
University of California System, Series 2002A,
5.375%, 10/01/17 - FSA Insured
620 California Statewide Community Development Authority, 10/13 at 100.00 N/R 643,405
Revenue Bonds, Notre Dame de Namur University,
Series 2003, 6.500%, 10/01/23
7,595 San Francisco State University Foundation Inc., California, 9/11 at 100.00 AAA 8,033,383
Auxiliary Organization Student Housing Revenue Bonds,
Series 2001, 5.000%, 9/01/26 - MBIA Insured
2,990 University of California, Revenue Bonds, Multiple Purpose 9/08 at 101.00 AA 3,093,843
Projects, Series 2000K, 5.000%, 9/01/23
3,820 University of California, Revenue Bonds, Research Facilities, 9/09 at 101.00 AAA 3,986,055
Series 2001E, 5.000%, 9/01/26 - AMBAC Insured
4,000 University of California, Revenue Bonds, Multi-Purpose 5/13 at 100.00 AAA 4,329,200
Projects, Series 2003A, 5.000%, 5/15/23 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 12.8% (8.6% OF TOTAL INVESTMENTS)
California Health Facilities Financing Authority, Revenue Bonds,
Casa Colina Inc., Series 2001:
4,000 6.000%, 4/01/22 4/12 at 100.00 BBB+ 4,339,600
2,000 6.125%, 4/01/32 4/12 at 100.00 BBB+ 2,156,160
1,345 California Health Facilities Financing Authority, Revenue 11/15 at 100.00 A3 1,392,667
Bonds, Cedars-Sinai Medical Center, Series 2005,
5.000%, 11/15/34
9,000 California Infrastructure Economic Development Bank, Revenue 8/11 at 102.00 A+ 9,654,210
Bonds, Kaiser Hospital Assistance LLC, Series 2001A,
5.550%, 8/01/31
540 California Statewide Community Development Authority, 7/15 at 100.00 BBB+ 572,524
Revenue Bonds, Daughters of Charity Health System,
Series 2005A, 5.250%, 7/01/24
7,665 California Statewide Community Development Authority, 11/09 at 102.00 A 8,166,368
Insured Mortgage Hospital Revenue Bonds, Mission
Community Hospital, Series 2001, 5.375%, 11/01/21
6,525 California Statewide Community Development Authority, No Opt. Call A 7,448,027
Health Facility Revenue Refunding Bonds, Memorial Health
Services, Series 2003A, 6.000%, 10/01/12
6,450 California Statewide Community Development Authority, 6/13 at 100.00 AAA 7,051,979
Hospital Revenue Bonds, Monterey Peninsula Hospital,
Series 2003B, 5.250%, 6/01/18 - FSA Insured
Central California Joint Powers Health Finance Authority,
Certificates of Participation, Community Hospitals of Central
California Obligated Group, Series 2000:
1,770 6.000%, 2/01/20 2/10 at 101.00 Baa2 1,896,714
1,740 6.000%, 2/01/30 2/10 at 101.00 Baa2 1,839,441
2,500 Whittier, California, Health Facility Revenue Bonds, 6/12 at 101.00 A 2,699,775
Presbyterian Intercommunity Hospital, Series 2002,
5.600%, 6/01/22
47
Nuveen California Dividend Advantage Municipal Fund 3 (NZH) (continued)
Portfolio of INVESTMENTS August 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 9.9% (6.6% OF TOTAL INVESTMENTS)
ABAG Finance Authority for Non-Profit Corporations, California,
Multifamily Housing Revenue Refunding Bonds, United
Dominion/2000 Post Apartments, Series 2000B:
$ 4,750 6.400%, 8/15/30 (Alternative Minimum Tax) No Opt. Call Baa2 $ 5,073,998
(Mandatory put 8/15/08)
4,000 6.250%, 8/15/30 (Mandatory put 8/15/08) No Opt. Call Baa2 4,276,400
5,210 California Statewide Community Development Authority, 8/12 at 105.00 Aaa 5,868,023
GNMA Collateralized Housing Revenue Refunding Bonds,
Crowne Pointe Project, Series 2002F, 6.750%, 8/20/37
2,000 Daly City Housing Development Finance Agency, California, 12/13 at 102.00 A- 2,137,940
Mobile Home Park Revenue Bonds, Franciscan Mobile Home
Park Project, Series 2002A, 5.800%, 12/15/25
1,735 Rohnert Park Finance Authority, California, Senior Lien Revenue 9/13 at 100.00 BBB 1,771,296
Bonds, Rancho Feliz Mobile Home Park, Series 2003A,
5.750%, 9/15/38
1,125 Rohnert Park Finance Authority, California, Subordinate Lien 9/13 at 100.00 N/R 1,185,030
Revenue Bonds, Rancho Feliz Mobile Home Park, Series 2003B,
6.625%, 9/15/38
7,500 San Bernardino County Housing Authority, California, No Opt. Call BBB+ 7,919,700
Multifamily Housing Revenue Refunding Bonds, Equity
Residential Properties/Redlands Lawn and Tennis Apartments,
Series 1999A, 5.200%, 6/15/29 (Mandatory put 6/15/09)
3,610 San Bernardino County Housing Authority, California, 11/11 at 105.00 Aaa 3,933,961
GNMA Collateralized Multifamily Mortgage Revenue Bonds,
Pacific Palms Mobile Home Park, Series 2001A,
6.700%, 12/20/41
San Jose, California, Multifamily Housing Revenue Bonds, GNMA
Mortgage-Backed Securities Program, Lenzen Housing, Series
2001B:
1,250 5.350%, 2/20/26 (Alternative Minimum Tax) 8/11 at 102.00 AAA 1,312,875
2,880 5.450%, 2/20/43 (Alternative Minimum Tax) 8/11 at 102.00 AAA 3,010,666
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 1.5% (1.0% OF TOTAL INVESTMENTS)
California Health Facilities Financing Authority, Insured Senior
Living Revenue Bonds, Aldersly Project, Series 2002A:
1,500 5.125%, 3/01/22 3/12 at 101.00 A 1,587,000
1,315 5.250%, 3/01/32 3/12 at 101.00 A 1,392,033
2,450 California Health Facilities Financing Authority, Cal-Mortgage 1/13 at 100.00 A 2,589,258
Insured Revenue Bonds, Northern California Retired Officers
Community Corporation - Paradise Valley Estates, Series 2002,
5.125%, 1/01/22
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 32.4% (21.7% OF TOTAL INVESTMENTS)
10 California, General Obligation Veterans Welfare Bonds, 12/06 at 102.00 AA- 10,365
Series 1997BJ, 5.500%, 12/01/18 (Alternative Minimum Tax)
9,335 California, General Obligation Bonds, Series 2002, No Opt. Call AAA 11,216,936
6.000%, 2/01/16 - FSA Insured
California, General Obligation Refunding Bonds, Series 2002:
8,450 5.000%, 2/01/12 No Opt. Call A 9,193,854
2,780 6.000%, 4/01/16 - AMBAC Insured No Opt. Call AAA 3,347,815
14,300 California, General Obligation Veterans Welfare Bonds, 6/07 at 101.00 AAA 14,661,790
Series 2001BZ, 5.350%, 12/01/21 (Alternative Minimum Tax) -
MBIA Insured
9,000 California, General Obligation Bonds, Series 2004, 4/14 at 100.00 A 9,712,170
5.125%, 4/01/23
1,840 Compton Unified School District, Los Angeles County, 9/13 at 100.00 AAA 2,054,838
California, General Obligation Bonds, Series 2003A,
5.250%, 9/01/18 - MBIA Insured
3,000 Contra Costa County Community College District, California, 8/12 at 100.00 AAA 3,230,310
General Obligation Bonds, Series 2002, 5.000%, 8/01/23 -
FGIC Insured
2,500 Fullerton Joint Union High School District, Orange County, 8/12 at 100.00 Aaa 2,679,450
California, General Obligation Bonds, Series 2002A,
5.000%, 8/01/23 - FSA Insured
2,260 Jurupa Unified School District, Riverside County, California, 8/11 at 101.00 AAA 2,451,625
General Obligation Bonds, Series 2002, 5.125%, 8/01/22 -
FGIC Insured
2,345 Los Angeles Community College District, Los Angeles County, 8/15 at 100.00 AAA 2,526,386
California, General Obligation Bonds, Series 2005A,
5.000%, 6/01/26 - FSA Insured
48
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 3,145 Los Angeles Unified School District, California, General 7/15 at 100.00 AAA $ 3,397,135
Obligation Bonds, Series 2005A-1, 5.000%, 7/01/25 -
FGIC Insured
Los Angeles Unified School District, California, General
Obligation Bonds, Series 2003A:
3,750 5.250%, 7/01/20 - FSA Insured 7/13 at 100.00 AAA 4,171,612
7,200 5.000%, 7/01/22 - FSA Insured 7/13 at 100.00 AAA 7,809,192
1,525 Lucia Mar Unified School District, San Luis Obispo County, 8/14 at 100.00 Aaa 1,687,824
California, General Obligation Bonds, Series 2004A,
5.250%, 8/01/22 - FGIC Insured
Oakland Unified School District, Alameda County, California,
General Obligation Bonds, Series 2005:
780 5.000%, 8/01/25 - MBIA Insured 8/15 at 100.00 AAA 840,988
820 5.000%, 8/01/26 - MBIA Insured 8/15 at 100.00 AAA 880,647
870 Puerto Rico, General Obligation and Public Improvement 7/11 at 100.00 AAA 934,954
Bonds, Series 2001, 5.000%, 7/01/24 - FSA Insured
Riverside Community College District, California, General
Obligation Bonds, Series 2005:
2,675 5.000%, 8/01/21 - FSA Insured 8/15 at 100.00 AAA 2,923,053
5,000 5.000%, 8/01/24 - FSA Insured 8/15 at 100.00 AAA 5,420,750
5,000 Riverside Unified School District, Riverside County, California, 2/12 at 101.00 AAA 5,296,600
General Obligation Bonds, Series 2002A,
5.000%, 2/01/27 - FGIC Insured
10,810 San Diego Unified School District, San Diego County, 7/11 at 102.00 AAA 11,934,781
California, General Obligation Bonds, Election of 1998,
Series 2001C, 5.000%, 7/01/26 - FSA Insured
4,000 San Diego Unified School District, San Diego County, 7/12 at 101.00 AAA 4,462,560
California, General Obligation Bonds, Election of 1998,
Series 2002D, 5.250%, 7/01/21 - FGIC Insured
San Jose-Evergreen Community College District, Santa Clara
County, California, General Obligation Bonds, Series 2005A:
605 5.000%, 9/01/25 - MBIA Insured 9/15 at 100.00 AAA 654,205
875 5.000%, 9/01/27 - MBIA Insured 9/15 at 100.00 AAA 941,675
1,000 Saugus Union School District, Los Angeles County, California, 8/12 at 100.00 AAA 1,076,770
General Obligation Bonds, Series 2002A, 5.000%, 8/01/24 -
FGIC Insured
3,905 Southwestern Community College District, San Diego County, 8/14 at 100.00 AAA 4,227,319
California, General Obligation Bonds, Series 2004,
5.000%, 8/01/22 - FGIC Insured
1,630 West Contra Costa Unified School District, Contra Costa 8/11 at 101.00 AAA 1,754,842
County, California, General Obligation Bonds, Series 2003C,
5.000%, 8/01/22 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 42.1% (28.2% OF TOTAL INVESTMENTS)
4,000 Beaumont Financing Authority, California, Local Agency 9/12 at 102.00 N/R 4,501,240
Revenue Bonds, Series 2002A, 6.750%, 9/01/25
7,135 Brentwood Infrastructure Financing Authority, Contra Costa 11/11 at 100.00 AAA 7,609,478
County, California, Capital Improvement Revenue Bonds,
Series 2001, 5.000%, 11/01/25 - FSA Insured
7,350 California, Economic Recovery Revenue Bonds, Series 2004A, 7/14 at 100.00 AA- 8,113,592
5.000%, 7/01/15
3,350 California State Public Works Board, Lease Revenue Bonds, 12/12 at 100.00 AAA 3,691,901
Department of General Services, Capital East End Project,
Series 2002A, 5.250%, 12/01/17 - AMBAC Insured
8,210 California State Public Works Board, Lease Revenue Bonds, 12/13 at 100.00 A- 9,168,435
Department of Corrections, Series 2003C, 5.500%, 6/01/16
4,510 California State Public Works Board, Lease Revenue Bonds, 12/11 at 102.00 AAA 4,793,048
Department of Mental Health, Hospital Addition,
Series 2001A, 5.000%, 12/01/26 - AMBAC Insured
9,000 California State Public Works Board, Lease Revenue Bonds, 3/12 at 100.00 AAA 9,450,270
Department of General Services, Series 2002B,
5.000%, 3/01/27 - AMBAC Insured
Capistrano Unified School District, Orange County, California,
Special Tax Bonds, Community Facilities District 90-2 - Talega,
Series 2003:
1,750 5.875%, 9/01/23 9/13 at 100.00 N/R 1,885,205
550 6.000%, 9/01/33 9/13 at 100.00 N/R 590,585
1,810 Cerritos Public Financing Authority, California, Tax Allocation No Opt. Call AAA 2,004,485
Revenue Bonds, Los Cerritos Redevelopment Projects,
Series 2002A, 5.000%, 11/01/14 - AMBAC Insured
49
Nuveen California Dividend Advantage Municipal Fund 3 (NZH) (continued)
Portfolio of INVESTMENTS August 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 1,270 Coalinga Public Financing Authority, California, Local Obligation No Opt. Call AAA $ 1,541,272
Senior Lien Revenue Bonds, Series 1998A, 6.000%, 9/15/18 -
AMBAC Insured
1,125 Fontana, California, Special Tax Bonds, Sierra Community 9/14 at 100.00 N/R 1,166,535
Facilities District 22, Series 2004, 6.000%, 9/01/34
1,000 Fullerton Community Facilities District 1, California, Special 9/12 at 100.00 N/R 1,070,210
Tax Bonds, Amerige Heights, Series 2002, 6.100%, 9/01/22
550 Hesperia Community Redevelopment Agency, California, 9/15 at 100.00 AAA 595,672
Tax Allocation Bonds, Series 2005A, 5.000%, 9/01/20 -
XLCA Insured
3,000 Lake Elsinore Public Financing Authority, California, Local 10/13 at 102.00 N/R 3,219,930
Agency Revenue Refunding Bonds, Series 2003H,
6.000%, 10/01/20
5,250 Lammersville School District, San Joaquin County, California, 9/12 at 101.00 N/R 5,656,770
Special Tax Bonds, Community Facilities District of
Mountain House, Series 2002, 6.300%, 9/01/24
2,000 Lee Lake Water District, Riverside County, California, 9/13 at 102.00 N/R 2,177,740
Special Tax Bonds, Community Facilities District 1 of
Sycamore Creek, Series 2003, 6.500%, 9/01/24
2,200 Lincoln, California, Special Tax Bonds, Lincoln Crossing 9/13 at 102.00 N/R 2,448,908
Community Facilities District 03-1, Series 2003A,
6.500%, 9/01/25
1,500 Lincoln, California, Special Tax Bonds, Lincoln Crossing 9/13 at 102.00 N/R 1,595,670
Community Facilities District 03-1, Series 2004,
6.000%, 9/01/34
5,425 Lodi, California, Certificates of Participation, Public 10/12 at 100.00 AAA 5,713,827
Improvement Financing Project, Series 2002,
5.000%, 10/01/26 - MBIA Insured
4,075 Los Angeles County Metropolitan Transportation Authority, No Opt. Call AAA 4,581,971
California, Proposition C Second Senior Lien Sales Tax
Revenue Refunding Bonds, Series 2003A, 5.250%, 7/01/13 -
MBIA Insured
1,000 Monterey County, California, Certificates of Participation, 8/11 at 100.00 Aaa 1,090,810
Master Plan Financing, Series 2001, 5.250%, 8/01/15 -
MBIA Insured
1,675 Moreno Valley Unified School District, Riverside County, 3/14 at 100.00 AAA 1,779,185
California, Certificates of Participation, Series 2005,
5.000%, 3/01/26 - FSA Insured
3,000 Oakland Redevelopment Agency, California, Subordinate 3/13 at 100.00 AAA 3,331,140
Lien Tax Allocation Bonds, Central District Redevelopment
Project, Series 2003, 5.500%, 9/01/19 - FGIC Insured
4,520 Ontario Redevelopment Financing Authority, California, Lease 8/11 at 101.00 AAA 4,886,482
Revenue Bonds, Capital Projects, Series 2001,
5.000%, 8/01/24 - AMBAC Insured
2,000 Orange County, California, Special Tax Bonds, Community 8/11 at 101.00 N/R 2,078,780
Facilities District 02-1 of Ladera Ranch, Series 2003A,
5.550%, 8/15/33
11,165 Palm Desert Financing Authority, California, Tax Allocation 4/12 at 102.00 AAA 11,908,142
Revenue Refunding Bonds, Project Area 1, Series 2002,
5.100%, 4/01/30 - MBIA Insured
3,250 Pomoma Public Financing Authority, California, Revenue 2/11 at 100.00 AAA 3,381,885
Refunding Bonds, Merged Redevelopment Projects,
Series 2001AD, 5.000%, 2/01/27 - MBIA Insured
5,500 Puerto Rico Highway and Transportation Authority, Highway 7/12 at 100.00 A 5,917,285
Revenue Bonds, Series 2002D, 5.375%, 7/01/36
625 Rialto Redevelopment Agency, California, Tax Allocation 9/15 at 100.00 AAA 659,475
Bonds, Merged Project Area, Series 2005A, 5.000%, 9/01/35 -
XLCA Insured
420 Riverside County Public Financing Authority, California, Tax 10/15 at 100.00 AAA 444,364
Allocation Bonds, Multiple Projects, Series 2005A,
5.000%, 10/01/35 (WI, settling 9/08/05) - XLCA Insured
1,700 Roseville, California, Special Tax Bonds, Community Facilities 9/09 at 103.00 N/R 1,813,373
District 1 - Crocker, Series 2003, 6.000%, 9/01/27
1,150 Sacramento, California, Special Tax Bonds, North Natomas 9/14 at 100.00 N/R 1,230,385
Community Facilities District 4, Series 2003C, 6.000%, 9/01/33
14,505 San Diego Redevelopment Agency, California, Subordinate 9/11 at 101.00 AAA 15,287,110
Lien Tax Allocation Bonds, Centre City Project, Series 2001A,
5.000%, 9/01/26 - FSA Insured
8,725 San Francisco Bay Area Rapid Transit District, California, Sales 7/11 at 100.00 AAA 9,153,659
Tax Revenue Bonds, Series 2001, 5.000%, 7/01/26 -
AMBAC Insured
1,595 San Marcos Public Facilities Authority, California, Special 9/09 at 102.00 N/R 1,657,971
Tax Bonds, Community Facilities District 99-1, Series 2003B,
6.000%, 9/01/24
50
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 2,810 West Patterson Financing Authority, California, Special Tax 9/13 at 103.00 N/R $ 3,109,265
Bonds, Community Facilities District 01-1, Series 2003B,
7.000%, 9/01/38
1,375 West Patterson Financing Authority, California, Special Tax 9/13 at 103.00 N/R 1,485,316
Bonds, Community Facilities District 2001-1, Series 2004A,
6.125%, 9/01/39
2,000 West Patterson Financing Authority, California, Special Tax 9/13 at 102.00 N/R 2,127,560
Bonds, Community Facilities District 01-1, Series 2004B,
6.000%, 9/01/39
2,500 Yucaipa-Calimesa Joint Unified School District, San Bernardino 10/11 at 100.00 AAA 2,616,550
County, California, General Obligation Refunding Bonds,
Series 2001A, 5.000%, 10/01/26 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 9.3% (6.2% OF TOTAL INVESTMENTS)
11,750 Foothill/Eastern Transportation Corridor Agency, California, 1/14 at 101.00 BBB- 10,120,980
Toll Road Revenue Refunding Bonds, Series 1999,
1.000%, 1/15/28
1,500 Port of Oakland, California, Revenue Refunding Bonds, 11/07 at 102.00 AAA 1,612,245
Series 1997I, 5.600%, 11/01/19 - MBIA Insured
1,000 Port of Oakland, California, Revenue Bonds, Series 2002M, 11/12 at 100.00 AAA 1,094,770
5.250%, 11/01/20 - FGIC Insured
San Francisco Airports Commission, California, Revenue Bonds,
San Francisco International Airport, Second Series 2003, Issue
29B:
4,110 5.125%, 5/01/17 - FGIC Insured 5/13 at 100.00 AAA 4,476,160
10,625 5.125%, 5/01/18 - FGIC Insured 5/13 at 100.00 AAA 11,542,150
5,140 5.125%, 5/01/19 - FGIC Insured 5/13 at 100.00 AAA 5,572,994
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED *** - 1.5% (1.0% OF TOTAL INVESTMENTS)
1,380 Puerto Rico, General Obligation and Public Improvement Bonds, 7/11 at 100.00 AAA 1,510,783
Series 2001, 5.000%, 7/01/24 (Pre-refunded to 7/01/11) -
FSA Insured
2,085 San Marcos Public Facilities Authority, California, Special 9/07 at 102.00 N/R*** 2,254,677
Tax Revenue Bonds, Community Facilities District 99-1,
Series 2002, 6.300%, 9/01/20 (Pre-refunded to 9/01/07)
1,595 Santa Clara Valley Transportation Authority, California, Sales 6/11 at 100.00 AAA 1,749,189
Tax Revenue Bonds, Series 2001A, 5.000%, 6/01/22
(Pre-refunded to 6/01/11) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 12.8% (8.6% OF TOTAL INVESTMENTS)
15,000 California Pollution Control Financing Authority, Remarketed 4/11 at 102.00 AAA 16,353,150
Revenue Bonds, Pacific Gas and Electric Company,
Series 1996A, 5.350%, 12/01/16 (Alternative Minimum Tax) -
MBIA Insured
California Department of Water Resources, Power Supply
Revenue Bonds, Series 2002A:
3,500 5.375%, 5/01/17 - XLCA Insured 5/12 at 101.00 AAA 3,876,250
9,000 5.125%, 5/01/18 5/12 at 101.00 A2 9,697,050
1,200 Los Angeles Department of Water and Power, California, 7/13 at 100.00 AAA 1,303,152
Power System Revenue Bonds, Series 2003A-2,
5.000%, 7/01/21 - MBIA Insured
1,600 Merced Irrigation District, California, Revenue Certificates 9/05 at 103.00 Baa3 1,650,416
of Participation, Electric System Project, Series 2002,
6.500%, 9/01/34
5,000 Merced Irrigation District, California, Revenue Certificates 9/13 at 102.00 Baa3 5,308,000
of Participation, Electric System Project, Series 2003,
5.700%, 9/01/36
2,250 Salinas Valley Solid Waste Authority, California, Revenue 8/12 at 100.00 AAA 2,374,290
Bonds, Series 2002, 5.125%, 8/01/22 (Alternative Minimum
Tax) - AMBAC Insured
6,085 Southern California Public Power Authority, Revenue Bonds, 7/13 at 100.00 AAA 6,799,927
Magnolia Power Project, Series 2003-1A, 5.250%, 7/01/16 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 13.3% (8.9% OF TOTAL INVESTMENTS)
1,070 Burbank, California, Wastewater System Revenue Bonds, 6/14 at 100.00 AAA 1,152,786
Series 2004A, 5.000%, 6/01/22 - AMBAC Insured
7,000 California Department of Water Resources, Water System 6/13 at 100.00 AAA 7,854,140
Revenue Bonds, Central Valley Project, Series 2003Y,
5.250%, 12/01/13 - FGIC Insured
7,000 Carmichael Water District, Sacramento County, California, 9/09 at 102.00 AAA 7,357,350
Water Revenue Certificates of Participation, Series 1999,
5.125%, 9/01/29 - MBIA Insured
51
Nuveen California Dividend Advantage Municipal Fund 3 (NZH) (continued)
Portfolio of INVESTMENTS August 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER (continued)
$ 2,000 El Dorado Irrigation District, California, Water and Sewer 3/14 at 100.00 AAA $ 2,155,620
Certificates of Participation, Series 2004A,
5.000%, 3/01/20 - FGIC Insured
1,000 Pico Rivera Water Authority, California, Revenue Bonds, 12/11 at 102.00 N/R 1,084,080
Series 2001A, 6.250%, 12/01/32
1,000 San Buenaventura, California, Wastewater Revenue 3/14 at 100.00 AAA 1,068,120
Certificates of Participation, Series 2004, 5.000%, 3/01/24 -
MBIA Insured
San Diego Public Facilities Financing Authority, California,
Subordinate Lien Water Revenue Bonds, Series 2002:
2,500 5.000%, 8/01/23 - MBIA Insured 8/12 at 100.00 AAA 2,691,923
6,260 5.000%, 8/01/24 - MBIA Insured 8/12 at 100.00 AAA 6,740,580
San Francisco City and County Public Utilities Commission,
California, Clean Water Revenue Refunding Bonds, Series 2003A:
3,315 5.250%, 10/01/18 - MBIA Insured 4/13 at 100.00 AAA 3,684,355
12,000 5.250%, 10/01/19 - MBIA Insured 4/13 at 100.00 AAA 13,320,240
1,955 Westlands Water District, California, Revenue Certificates 3/15 at 100.00 AAA 2,101,056
of Participation, Series 2005A, 5.000%, 9/01/23 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
$ 512,755 Total Long-Term Investments (cost $523,212,751) - 149.4% 551,696,711
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.2% 4,564,961
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (50.6)% (187,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 369,261,672
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares unless
otherwise noted.
* Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates (month
and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying
prices at later dates. Certain mortgage-backed securities
may be subject to periodic principal paydowns.
** Ratings (not covered by the report of independent registered
public accounting firm): Using the higher of Standard &
Poor's or Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of principal and
interest. Such securities are normally considered to be
equivalent to AAA rated securities.
N/R Investment is not rated.
(WI) Security purchased on a when-issued basis.
See accompanying notes to financial statements.
52
Nuveen Insured California Dividend Advantage Municipal Fund (NKL)
Portfolio of
INVESTMENTS August 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 2.3% (1.6% OF TOTAL INVESTMENTS)
$ 4,500 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 BBB $ 5,667,750
Tobacco Settlement Asset-Backed Revenue Bonds,
Series 2003A-2, 7.900%, 6/01/42
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 8.6% (5.8% OF TOTAL INVESTMENTS)
1,675 California Educational Facilities Authority, Revenue Bonds, 10/12 at 100.00 A2 1,775,936
University of San Diego, Series 2002A, 5.250%, 10/01/30
9,000 California State University, Systemwide Revenue Bonds, 11/12 at 100.00 AAA 9,599,040
Series 2002A, 5.125%, 11/01/26 - AMBAC Insured
9,000 University of California, Revenue Bonds, Multiple Purpose 9/08 at 101.00 AA 9,379,350
Projects, Series 2000K, 5.300%, 9/01/30
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 5.5% (3.7% OF TOTAL INVESTMENTS)
5,000 ABAG Finance Authority for Non-Profit Corporations, 4/12 at 100.00 A 5,421,200
California, Cal-Mortgage Insured Revenue Bonds,
Sansum-Santa Barbara Medical Foundation Clinic,
Series 2002A, 5.600%, 4/01/26
2,815 California Health Facilities Financing Authority, Revenue 8/13 at 100.00 AAA 3,010,108
Bonds, Lucile Salter Packard Children's Hospital,
Series 2003C, 5.000%, 8/15/20 - AMBAC Insured
1,090 California State Public Works Board, Revenue Bonds, 11/14 at 100.00 AAA 1,171,597
University of California - Davis Medical Center,
Series 2004II-A, 5.000%, 11/01/21 - MBIA Insured
3,380 Rancho Mirage Joint Powers Financing Authority, 7/14 at 100.00 A3 3,688,425
California, Revenue Bonds, Eisenhower Medical Center,
Series 2004, 5.875%, 7/01/26
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 1.3% (0.9% OF TOTAL INVESTMENTS)
1,000 California Statewide Community Development Authority, 8/12 at 100.00 A 1,064,640
Student Housing Revenue Bonds, EAH - Irvine East Campus
Apartments, LLC Project, Series 2002A, 5.500%, 8/01/22 -
ACA Insured
1,905 Los Angeles, California, GNMA Mortgage-Backed Securities 7/11 at 102.00 AAA 2,021,891
Program Multifamily Housing Revenue Bonds, Park Plaza
West Senior Apartments, Series 2001B, 5.300%, 1/20/21
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 1.3% (1.0% OF TOTAL INVESTMENTS)
3,000 California Pollution Control Financing Authority, Solid Waste No Opt. Call BBB+ 3,246,690
Disposal Revenue Bonds, Republic Services Inc., Series 2002C,
5.250%, 6/01/23 (Alternative Minimum Tax) (Mandatory
put 12/01/17)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 3.5% (2.4% OF TOTAL INVESTMENTS)
3,000 ABAG Finance Authority for Non-Profit Corporations, 11/12 at 100.00 A 3,189,840
California, Insured Senior Living Revenue Bonds, Odd Fellows
Home of California, Series 2003A, 5.200%, 11/15/22
5,000 California Statewide Community Development Authority, 11/13 at 100.00 A 5,312,350
Revenue Bonds, Jewish Home for the Aging, Series 2003,
5.000%, 11/15/18
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 33.4% (22.6% OF TOTAL INVESTMENTS)
5,920 Cajon Valley Union School District, San Diego County, 8/10 at 102.00 AAA 6,279,462
California, General Obligation Bonds, Series 2002B,
5.125%, 8/01/32 - MBIA Insured
9,000 California, General Obligation Refunding Bonds, Series 2002, 2/12 at 100.00 AAA 9,533,340
5.000%, 2/01/22 - MBIA Insured
2,900 California, General Obligation Bonds, Series 2003, 5.000%, 2/01/21 8/13 at 100.00 A 3,098,070
Compton Community College District, Los Angeles County,
California, General Obligation Bonds, Series 2004A:
1,315 5.250%, 7/01/22 - MBIA Insured 7/14 at 100.00 AAA 1,454,272
2,560 5.250%, 7/01/23 - MBIA Insured 7/14 at 100.00 AAA 2,827,085
2,415 El Monte Union High School District, Los Angeles County, 6/13 at 100.00 AAA 2,557,099
California, General Obligation Bonds, Series 2003A,
5.000%, 6/01/28 - FSA Insured
10,000 Fremont Unified School District, Alameda County, California, 8/12 at 101.00 AAA 10,789,200
General Obligation Bonds, Series 2002A, 5.000%, 8/01/25 -
FGIC Insured
53
Nuveen Insured California Dividend Advantage Municipal Fund (NKL) (continued)
Portfolio of INVESTMENTS August 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 1,520 Los Angeles Community College District, Los Angeles County, 8/15 at 100.00 AAA $ 1,637,572
California, General Obligation Bonds, Series 2005A,
5.000%, 6/01/26 - FSA Insured
5,000 Los Angeles Unified School District, California, General 7/12 at 100.00 AAA 5,319,300
Obligation Bonds, Series 2002E, 5.125%, 1/01/27 -
MBIA Insured
Los Angeles Unified School District, California, General
Obligation Bonds, Series 2003A:
3,700 5.000%, 7/01/22 - FSA Insured 7/13 at 100.00 AAA 4,013,057
3,500 5.000%, 1/01/28 - MBIA Insured 7/13 at 100.00 AAA 3,727,150
1,500 Madera Unified School District, Madera County, California, 8/12 at 100.00 AAA 1,581,930
General Obligation Bonds, Series 2002, 5.000%, 8/01/28 -
FSA Insured
2,500 Oakland Unified School District, Alameda County, California, 8/12 at 100.00 AAA 2,736,100
General Obligation Bonds, Series 2002, 5.250%, 8/01/21 -
FGIC Insured
Oakland Unified School District, Alameda County, California,
General Obligation Bonds, Series 2005:
505 5.000%, 8/01/25 - MBIA Insured 8/15 at 100.00 AAA 544,486
530 5.000%, 8/01/26 - MBIA Insured 8/15 at 100.00 AAA 569,199
3,300 Peralta Community College District, Alameda County, 8/09 at 102.00 AAA 3,451,866
California, General Obligation Bonds, Election of 2000,
Series 2001A, 5.000%, 8/01/31 - FGIC Insured
3,250 San Diego Unified School District, San Diego County, 7/11 at 102.00 AAA 3,588,163
California, General Obligation Bonds, Election of 1998,
Series 2001C, 5.000%, 7/01/22 - FSA Insured
1,160 San Gabriel Unified School District, Los Angeles County, 8/15 at 100.00 AAA 1,264,574
California, General Obligation Bonds, Series 2005,
5.000%, 8/01/22 - FSA Insured
San Jose-Evergreen Community College District, Santa Clara
County, California, General Obligation Bonds, Series 2005A:
395 5.000%, 9/01/25 - MBIA Insured 9/15 at 100.00 AAA 427,125
575 5.000%, 9/01/27 - MBIA Insured 9/15 at 100.00 AAA 618,815
3,500 San Mateo County Community College District, California, 9/12 at 100.00 AAA 3,702,020
General Obligation Bonds, Series 2002A, 5.000%, 9/01/26 -
FGIC Insured
10,000 Vista Unified School District, San Diego County, California, 8/12 at 100.00 AAA 10,767,700
General Obligation Bonds, Series 2002A, 5.000%, 8/01/23 -
FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 42.1% (28.4% OF TOTAL INVESTMENTS)
1,450 Baldwin Park Public Financing Authority, California, Sales 8/13 at 102.00 BBB 1,530,635
Tax and Tax Allocation Bonds, Puente Merced Redevelopment
Project, Series 2003, 5.250%, 8/01/21
6,895 Brea and Olinda Unified School District, Orange County, 8/11 at 101.00 AAA 7,314,492
California, Certificates of Participation Refunding,
Series 2002A, 5.125%, 8/01/26 - FSA Insured
2,290 Burbank Public Financing Authority, California, Revenue 12/13 at 100.00 AAA 2,522,275
Refunding Bonds, Golden State Redevelopment Project,
Series 2003A, 5.250%, 12/01/19 - AMBAC Insured
2,200 California Infrastructure Economic Development Bank, 9/13 at 101.00 AAA 2,343,506
Los Angeles County, Revenue Bonds, Department of
Public Social Services, Series 2003, 5.000%, 9/01/28 -
AMBAC Insured
3,100 California State Public Works Board, Lease Revenue Bonds, 11/15 at 100.00 AAA 3,294,091
Department of Health Services, Richmond Lab, Series 2005B,
5.000%, 11/01/30 - XLCA Insured
7,035 Corona-Norco Unified School District, Riverside County, 9/13 at 100.00 AAA 7,450,839
California, Special Tax Bonds, Community Facilities
District 98-1, Series 2003, 5.000%, 9/01/28 - MBIA Insured
3,145 Culver City Redevelopment Agency, California, Tax Allocation 5/11 at 101.00 AAA 3,337,097
Revenue Bonds, Redevelopment Project, Series 2002A,
5.125%, 11/01/25 - MBIA Insured
1,020 Desert Sands Unified School District, Riverside County, 3/12 at 101.00 AAA 1,097,000
California, Certificates of Participation Refunding,
Series 2002, 5.000%, 3/01/20 - MBIA Insured
8,720 El Monte, California, Senior Lien Certificates of Participation, 1/11 at 100.00 AAA 9,145,274
Department of Public Services Facility Phase II, Series 2001,
5.000%, 1/01/21 - AMBAC Insured
4,000 Folsom Public Financing Authority, California, Special Tax 9/12 at 102.00 AAA 4,316,800
Revenue Bonds, Series 2004A, 5.000%, 9/01/21 -
AMBAC Insured
355 Hesperia Community Redevelopment Agency, California, 9/15 at 100.00 AAA 384,479
Tax Allocation Bonds, Series 2005A, 5.000%, 9/01/20 -
XLCA Insured
2,115 Inglewood Redevelopment Agency, California, Tax Allocation No Opt. Call AAA 2,419,052
Refunding Bonds, Merged Area Redevelopment Project,
Series 1998A, 5.250%, 5/01/23 - AMBAC Insured
54
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 3,500 La Quinta Redevelopment Agency, California, Tax Allocation 9/11 at 102.00 AAA $ 3,717,280
Bonds, Redevelopment Project Area 1, Series 2001,
5.100%, 9/01/31 - AMBAC Insured
3,400 La Quinta Redevelopment Agency, California, Tax Allocation 9/12 at 102.00 AAA 3,661,528
Bonds, Redevelopment Project Area 1, Series 2002,
5.000%, 9/01/22 - AMBAC Insured
1,460 Los Angeles, California, Certificates of Participation, 6/13 at 100.00 AAA 1,535,993
Municipal Improvement Corporation, Series 2003AW,
5.000%, 6/01/33 - AMBAC Insured
7,000 Los Angeles, California, Certificates of Participation, Real 4/12 at 100.00 AAA 7,452,970
Property Acquisition Program, Series 2002, 5.200%, 4/01/27 -
AMBAC Insured
4,690 Los Angeles County Metropolitan Transportation Authority, 7/08 at 101.00 AAA 4,921,780
California, Proposition C Second Senior Lien Sales Tax Revenue
Refunding Bonds, Series 1998A, 5.000%, 7/01/23 -
AMBAC Insured
8,470 Ontario Redevelopment Financing Authority, California, Lease 8/11 at 101.00 AAA 9,073,572
Revenue Bonds, Capital Projects, Series 2001, 5.200%, 8/01/29 -
AMBAC Insured
5,000 Palm Desert Financing Authority, California, Tax Allocation 4/12 at 102.00 AAA 5,328,250
Revenue Refunding Bonds, Project Area 1, Series 2002,
5.000%, 4/01/25 - MBIA Insured
405 Rialto Redevelopment Agency, California, Tax Allocation Bonds, 9/15 at 100.00 AAA 427,340
Merged Project Area, Series 2005A, 5.000%, 9/01/35 -
XLCA Insured
4,475 Riverside County, California, Asset Leasing Corporate Leasehold 6/12 at 101.00 AAA 4,789,235
Revenue Bonds, Riverside County Hospital Project,
Series 1997B, 5.000%, 6/01/19 - MBIA Insured
270 Riverside County Public Financing Authority, California, 10/15 at 100.00 AAA 285,663
Tax Allocation Bonds, Multiple Projects, Series 2005A,
5.000%, 10/01/35 (WI, settling 9/08/05) - XLCA Insured
3,175 San Buenaventura, California, Certificates of Participation, 2/11 at 101.00 AAA 3,383,280
Series 2001C, 5.250%, 2/01/31 - AMBAC Insured
3,730 San Diego Redevelopment Agency, California, Subordinate 9/09 at 101.00 Baa2 3,857,753
Lien Tax Increment and Parking Revenue Bonds, Centre City
Project, Series 2003B, 5.250%, 9/01/26
4,000 San Jose Financing Authority, California, Lease Revenue 9/11 at 100.00 AAA 4,323,320
Refunding Bonds, Convention Center Project, Series 2001F,
5.000%, 9/01/19 - MBIA Insured
1,000 Shasta Joint Powers Financing Authority, California, Lease 4/13 at 100.00 AAA 1,086,150
Revenue Bonds, County Administration Building Project,
Series 2003A, 5.250%, 4/01/23 - MBIA Insured
2,160 Temecula Redevelopment Agency, California, Tax Allocation 8/08 at 102.00 AAA 2,289,427
Revenue Bonds, Redevelopment Project 1, Series 2002,
5.125%, 8/01/27 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 5.7% (3.8% OF TOTAL INVESTMENTS)
2,250 California Infrastructure Economic Development Bank, First 7/13 at 100.00 AAA 2,382,053
Lien Revenue Bonds, San Francisco Bay Area Toll Bridge,
Series 2003A, 5.000%, 7/01/36 - AMBAC Insured
7,500 Foothill/Eastern Transportation Corridor Agency, California, 1/14 at 101.00 BBB- 6,445,275
Toll Road Revenue Refunding Bonds, Series 1999,
0.000%, 1/15/29
San Francisco Airports Commission, California, Revenue Bonds,
San Francisco International Airport, Second Series 2003, Issue 29A:
2,185 5.250%, 5/01/16 (Alternative Minimum Tax) - FGIC Insured 5/13 at 100.00 AAA 2,370,441
2,300 5.250%, 5/01/17 (Alternative Minimum Tax) - FGIC Insured 5/13 at 100.00 AAA 2,490,463
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED *** - 8.1% (5.5% OF TOTAL INVESTMENTS)
California Health Facilities Financing Authority, Revenue Bonds,
Cedars-Sinai Medical Center, Series 1999A:
2,500 6.125%, 12/01/30 (Pre-refunded to 12/01/09) 12/09 at 101.00 A3*** 2,825,875
3,000 6.250%, 12/01/34 (Pre-refunded to 12/01/09) 12/09 at 101.00 A3*** 3,405,900
2,070 Fresno Unified School District, Fresno County, California, 8/10 at 102.00 AAA 2,196,891
General Obligation Bonds, Series 2002G, 5.125%, 8/01/26 -
FSA Insured
Fresno Unified School District, Fresno County, California,
General Obligation Bonds, Series 2002B:
1,135 5.125%, 8/01/23 - FGIC Insured 8/10 at 102.00 AAA 1,215,097
1,190 5.125%, 8/01/24 - FGIC Insured 8/10 at 102.00 AAA 1,270,277
1,245 5.125%, 8/01/25 - FGIC Insured 8/10 at 102.00 AAA 1,325,166
1,255 5.125%, 8/01/26 - FGIC Insured 8/10 at 102.00 AAA 1,335,809
2,980 Santa Clarita Community College District, Los Angeles County, 8/11 at 101.00 AAA 3,318,081
California, General Obligation Bonds, Series 2002,
5.125%, 8/01/26 (Pre-refunded to 8/01/11) - FGIC Insured
55
Nuveen Insured California Dividend Advantage Municipal Fund (NKL) (continued)
Portfolio of INVESTMENTS August 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED *** (continued)
$ 2,460 Vacaville Unified School District, Solano County, California, 8/11 at 101.00 AAA $ 2,722,605
General Obligation Bonds, Series 2002, 5.000%, 8/01/26
(Pre-refunded to 8/01/11) - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 19.2% (13.0% OF TOTAL INVESTMENTS)
9,000 Anaheim Public Finance Authority, California, Revenue 10/12 at 100.00 AAA 9,479,160
Bonds, Electric System Distribution Facilities, Series 2002A,
5.000%, 10/01/27 - FSA Insured
10,000 California Pollution Control Financing Authority, Remarketed 4/11 at 102.00 AAA 10,902,100
Revenue Bonds, Pacific Gas and Electric Company,
Series 1996A, 5.350%, 12/01/16 (Alternative Minimum Tax) -
MBIA Insured
6,000 California Department of Water Resources, Power Supply 5/12 at 101.00 A2 6,464,700
Revenue Bonds, Series 2002A, 5.125%, 5/01/18
3,000 Los Angeles Department of Water and Power, California, 7/11 at 100.00 AAA 3,245,100
Power System Revenue Bonds, Series 2001A-1,
5.250%, 7/01/21 - FSA Insured
775 Los Angeles Department of Water and Power, California, 7/13 at 100.00 AAA 841,619
Power System Revenue Bonds, Series 2003A-2,
5.000%, 7/01/21 - MBIA Insured
6,000 Northern California Power Agency, Revenue Refunding Bonds, 7/08 at 101.00 AAA 6,343,980
Hydroelectric Project 1, Series 1998A, 5.200%, 7/01/32 -
MBIA Insured
3,000 Sacramento Municipal Utility District, California, Electric 8/11 at 100.00 AAA 3,143,760
Revenue Bonds, Series 2001N, 5.000%, 8/15/28 -
MBIA Insured
5,630 Southern California Public Power Authority, Subordinate 7/12 at 100.00 AAA 5,898,889
Revenue Refunding Bonds, Transmission Project,
Series 2002A, 4.750%, 7/01/19 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 16.6% (11.3% OF TOTAL INVESTMENTS)
3,000 California Department of Water Resources, Water System 12/12 at 100.00 AAA 3,271,440
Revenue Bonds, Central Valley Project, Series 2002X,
5.150%, 12/01/23 - FGIC Insured
6,100 East Bay Municipal Utility District, Alameda and Contra 6/11 at 100.00 AAA 6,395,850
Costa Counties, California, Water System Subordinated
Revenue Bonds, Series 2001, 5.000%, 6/01/26 -
MBIA Insured
9,000 Eastern Municipal Water District, California, Water and 7/11 at 100.00 AAA 9,375,660
Sewerage System Revenue Certificates of Participation,
Series 2001B, 5.000%, 7/01/30 - FGIC Insured
4,500 Los Angeles County Sanitation Districts Financing 10/13 at 100.00 AAA 4,875,930
Authority, California, Senior Revenue Bonds, Capital Projects,
Series 2003A, 5.000%, 10/01/23 - FSA Insured
3,475 Manteca Financing Authority, California, Sewerage Revenue 12/13 at 100.00 Aaa 3,517,150
Bonds, Series 2003B, 5.000%, 12/01/33 - MBIA Insured
9,185 Orange County Sanitation District, California, Certificates of 8/13 at 100.00 AAA 9,653,158
Participation, Series 2003, 5.000%, 2/01/33 - FGIC Insured
Semitropic Water Storage District, Kern County, California,
Water Banking Revenue Bonds, Series 2004A:
1,315 5.500%, 12/01/20 - XLCA Insured 12/14 at 100.00 AAA 1,473,194
1,415 5.500%, 12/01/21 - XLCA Insured 12/14 at 100.00 AAA 1,584,050
------------------------------------------------------------------------------------------------------------------------------------
$ 333,935 Total Long-Term Investments (cost $329,844,400) - 147.6% 356,095,156
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.3% 3,158,935
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (48.9)% (118,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 241,254,091
====================================================================================================================
56
FORWARD SWAPS OUTSTANDING AT AUGUST 31, 2005:
FLOATING RATE
FIXED RATE FIXED RATE RECEIVED BY FLOATING RATE UNREALIZED
NOTIONAL PAID BY THE FUND PAYMENT THE FUND PAYMENT EFFECTIVE TERMINATION APPRECIATION
COUNTERPARTY AMOUNT (ANNUALIZED) FREQUENCY BASED ON FREQUENCY DATE (2) DATE (DEPRECIATION)
------------------------------------------------------------------------------------------------------------------------------------
Citigroup 5,000,000 4.699% Semi-annually 3-month USD-LIBOR Quarterly 2/27/06 2/27/26 $ (15,711)
JPMorgan 5,000,000 4.833% Semi-annually 3-month USD-LIBOR Quarterly 2/09/06 2/09/36 (97,800)
Morgan Stanley 5,200,000 4.816% Semi-annually 3-month USD-LIBOR Quarterly 2/15/06 2/15/36 (78,162)
------------------------------------------------------------------------------------------------------------------------------------
$(191,673)
====================================================================================================================================
USD-LIBOR (United States Dollar-London Inter-Bank Offered Rates)
At least 80% of the Fund's net assets (including net assets
attributable to Preferred shares) are invested in municipal
securities that are either covered by Original Issue
Insurance, Secondary Market Insurance or Portfolio Insurance
which ensures the timely payment of principal and interest.
Up to 20% of the Fund's net assets (including net assets
attributable to Preferred shares) may be invested in
municipal securities that are (i) either backed by an escrow
or trust containing sufficient U.S. Government or U.S.
Government agency securities (also ensuring the timely
payment of principal and interest), or (ii) rated, at the
time of investment, within the four highest grades (Baa or
BBB or better by Moody's, S&P or Fitch) or unrated but
judged to be of comparable quality by the Adviser.
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares unless
otherwise noted.
(2) Effective date represents the date on which both the Fund
and counterparty commence interest payment accruals on each
forward swap contract.
* Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates (month
and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying
prices at later dates. Certain mortgage-backed securities
may be subject to periodic principal paydowns.
** Ratings (not covered by the report of independent registered
public accounting firm): Using the higher of Standard &
Poor's or Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of principal and
interest. Such securities are normally considered to be
equivalent to AAA rated securities.
(WI) Security purchased on a when-issued basis.
See accompanying notes to financial statements.
57
Nuveen Insured California Tax-Free Advantage Municipal Fund (NKX)
Portfolio of
INVESTMENTS August 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 2.3% (1.5% OF TOTAL INVESTMENTS)
$ 1,625 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 BBB $ 2,046,688
Tobacco Settlement Asset-Backed Revenue Bonds,
Series 2003A-2, 7.900%, 6/01/42
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 15.3% (10.2% OF TOTAL INVESTMENTS)
1,500 California Health Facilities Financing Authority, Revenue Bonds, 11/08 at 101.00 AAA 1,577,745
UCSF - Stanford Healthcare, Series 1998A, 5.000%, 11/15/31 -
FSA Insured
1,800 California Infrastructure Economic Development Bank, Revenue 8/11 at 102.00 A+ 1,930,842
Bonds, Kaiser Hospital Assistance LLC, Series 2001A,
5.550%, 8/01/31
6,000 California Statewide Community Development Authority, No Opt. Call AAA 6,576,900
Revenue Bonds, Sherman Oaks Health System, Series 1998A,
5.000%, 8/01/22 - AMBAC Insured
2,000 California Statewide Community Development Authority, 6/13 at 100.00 AAA 2,167,140
Hospital Revenue Bonds, Monterey Peninsula Hospital,
Series 2003B, 5.250%, 6/01/23 - FSA Insured
1,260 Rancho Mirage Joint Powers Financing Authority, California, 7/14 at 100.00 A3 1,374,975
Revenue Bonds, Eisenhower Medical Center, Series 2004,
5.875%, 7/01/26
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 5.7% (3.8% OF TOTAL INVESTMENTS)
1,000 ABAG Finance Authority for Non-Profit Corporations, California, 11/12 at 100.00 A 1,063,280
Insured Senior Living Revenue Bonds, Odd Fellows Home of
California, Series 2003A, 5.200%, 11/15/22
2,000 California Health Facilities Financing Authority, Cal-Mortgage 1/13 at 100.00 A 2,128,000
Insured Revenue Bonds, Northern California Retired Officers
Community Corporation - Paradise Valley Estates, Series 2002,
5.250%, 1/01/26
1,815 California Statewide Community Development Authority, 11/13 at 100.00 A 1,928,383
Revenue Bonds, Jewish Home for the Aging, Series 2003,
5.000%, 11/15/18
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 1.3% (0.9% OF TOTAL INVESTMENTS)
1,165 Poway, California, Housing Revenue Bonds, Revenue Bonds, 5/13 at 102.00 BBB+ 1,185,935
Poinsettia Mobile Home Park, Series 2003, 5.000%, 5/01/23
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 48.6% (32.4% OF TOTAL INVESTMENTS)
1,000 Berryessa Union School District, Santa Clara County, California, 8/12 at 100.00 AAA 1,076,770
General Obligation Bonds, Series 2003C, 5.000%, 8/01/21 -
FSA Insured
2,000 Butte-Glenn Community College District, Butte and Glenn 8/12 at 101.00 Aaa 2,128,220
Counties, California, General Obligation Bonds, Series 2002A,
5.000%, 8/01/26 - MBIA Insured
California, General Obligation Refunding Bonds, Series 2002:
1,500 5.000%, 2/01/12 No Opt. Call A 1,632,045
3,750 5.000%, 4/01/27 - AMBAC Insured 4/12 at 100.00 AAA 3,939,563
3,000 5.250%, 4/01/30 - XLCA Insured 4/12 at 100.00 AAA 3,215,970
500 California, General Obligation Bonds, Series 2004, 4/14 at 100.00 A 551,120
5.250%, 4/01/34
450 Fremont Unified School District, Alameda County, California, 8/12 at 101.00 AAA 485,514
General Obligation Bonds, Series 2002A, 5.000%, 8/01/25 -
FGIC Insured
Hacienda La Puente Unified School District, Los Angeles County,
California, General Obligation Bonds, Series 2003B:
4,500 5.000%, 8/01/26 - FSA Insured 8/13 at 100.00 AAA 4,788,495
2,030 5.000%, 8/01/27 - FSA Insured 8/13 at 100.00 AAA 2,157,322
2,000 Los Angeles, California, General Obligation Bonds, 9/12 at 100.00 AAA 2,155,220
Series 2002A, 5.000%, 9/01/22 - MBIA Insured
565 Los Angeles Community College District, Los Angeles County, 8/15 at 100.00 AAA 608,703
California, General Obligation Bonds, Series 2005A,
5.000%, 6/01/26 - FSA Insured
10,500 Los Angeles Unified School District, California, General 7/13 at 100.00 AAA 11,388,405
Obligation Bonds, Series 2003A, 5.000%, 7/01/22 -
FSA Insured
58
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 1,000 Murrieta Valley Unified School District, Riverside County, 9/13 at 100.00 AAA $ 1,064,720
California, General Obligation Bonds, Series 2003A,
5.000%, 9/01/26 - FGIC Insured
Oakland Unified School District, Alameda County, California,
General Obligation Bonds, Series 2005:
190 5.000%, 8/01/25 - MBIA Insured 8/15 at 100.00 AAA 204,856
200 5.000%, 8/01/26 - MBIA Insured 8/15 at 100.00 AAA 214,792
3,000 San Diego Unified School District, California, General 7/10 at 100.00 AAA 3,260,070
Obligation Bonds, Election of 1998, Series 2000B,
5.125%, 7/01/22 - MBIA Insured
San Jose-Evergreen Community College District, Santa Clara
County, California, General Obligation Bonds, Series 2005A:
145 5.000%, 9/01/25 - MBIA Insured 9/15 at 100.00 AAA 156,793
215 5.000%, 9/01/27 - MBIA Insured 9/15 at 100.00 AAA 231,383
3,855 San Rafael City High School District, Marin County, California, 8/12 at 100.00 AAA 4,065,560
General Obligation Bonds, Series 2003A, 5.000%, 8/01/28 -
FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 42.8% (28.6% OF TOTAL INVESTMENTS)
550 Baldwin Park Public Financing Authority, California, Sales 8/13 at 102.00 BBB 580,586
Tax and Tax Allocation Bonds, Puente Merced Redevelopment
Project, Series 2003, 5.250%, 8/01/21
2,025 Burbank Public Financing Authority, California, Revenue 12/13 at 100.00 AAA 2,215,391
Refunding Bonds, Golden State Redevelopment Project,
Series 2003A, 5.250%, 12/01/22 - AMBAC Insured
4,000 California State Public Works Board, Lease Revenue Bonds, 12/12 at 100.00 AAA 4,209,480
Department of General Services, Capital East End Project,
Series 2002A, 5.000%, 12/01/27 - AMBAC Insured
2,000 California State Public Works Board, Lease Revenue Bonds, 12/13 at 100.00 A- 2,233,480
Department of Corrections, Series 2003C, 5.500%, 6/01/16
1,610 Folsom Public Financing Authority, California, Special Tax 9/12 at 102.00 AAA 1,737,512
Revenue Bonds, Series 2004A, 5.000%, 9/01/21 -
AMBAC Insured
130 Hesperia Community Redevelopment Agency, California, Tax 9/15 at 100.00 AAA 140,795
Allocation Bonds, Series 2005A, 5.000%, 9/01/20 -
XLCA Insured
5,540 Irvine Public Facilities and Infrastructure Authority, California, 9/05 at 103.00 AAA 5,754,343
Assessment Revenue Bonds, Series 2003C, 5.000%, 9/02/21 -
AMBAC Insured
2,000 Los Angeles, California, Certificates of Participation, 6/13 at 100.00 AAA 2,104,100
Municipal Improvement Corporation, Series 2003AW,
5.000%, 6/01/33 - AMBAC Insured
1,770 Los Angeles Unified School District, California, Certificates 10/12 at 100.00 AAA 1,860,907
of Participation, Administration Building Project II,
Series 2002C, 5.000%, 10/01/27 - AMBAC Insured
1,500 Los Osos, California, Improvement Bonds, Community Services 9/10 at 103.00 AAA 1,576,050
Wastewater Assessment District 1, Series 2002,
5.000%, 9/02/33 - MBIA Insured
825 Paramount Redevelopment Agency, California, Tax Allocation 8/13 at 100.00 AAA 887,733
Bonds, Redevelopment Project Area 1, Series 2003,
5.000%, 8/01/19 - MBIA Insured
150 Rialto Redevelopment Agency, California, Tax Allocation Bonds, 9/15 at 100.00 AAA 158,274
Merged Project Area, Series 2005A, 5.000%, 9/01/35 -
XLCA Insured
100 Riverside County Public Financing Authority, California, Tax 10/15 at 100.00 AAA 105,801
Allocation Bonds, Multiple Projects, Series 2005A,
5.000%, 10/01/35 (WI, settling 9/08/05) - XLCA Insured
San Buenaventura, California, Certificates of Participation,
Golf Course Financing Project, Series 2002D:
3,000 5.000%, 2/01/27 - AMBAC Insured 2/12 at 100.00 AAA 3,141,390
3,300 5.000%, 2/01/32 - AMBAC Insured 2/12 at 100.00 AAA 3,447,774
1,200 San Diego Redevelopment Agency, California, Subordinate 9/09 at 101.00 Baa2 1,241,100
Lien Tax Increment and Parking Revenue Bonds, Centre City
Project, Series 2003B, 5.250%, 9/01/26
1,220 San Jose Redevelopment Agency, California, Tax Allocation 8/10 at 101.00 AAA 1,270,557
Bonds, Merged Area Redevelopment Project, Series 2002,
5.000%, 8/01/32 - MBIA Insured
2,770 San Jose Financing Authority, California, Lease Revenue 6/12 at 100.00 AAA 2,899,054
Refunding Bonds, Civic Center Project, Series 2002B,
5.000%, 6/01/32 - AMBAC Insured
2,390 Solano County, California, Certificates of Participation, 11/12 at 100.00 AAA 2,613,346
Series 2002, 5.250%, 11/01/24 - MBIA Insured
59
Nuveen Insured California Tax-Free Advantage Municipal Fund (NKX) (continued)
Portfolio of INVESTMENTS August 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 13.8% (9.2% OF TOTAL INVESTMENTS)
$ 5,480 Bay Area Governments Association, California, BART SFO 8/12 at 100.00 AAA $ 5,765,782
Extension, Airport Premium Fare Revenue Bonds,
Series 2002A, 5.000%, 8/01/26 - AMBAC Insured
2,000 Foothill/Eastern Transportation Corridor Agency, California, 1/10 at 100.00 BBB- 1,932,700
Toll Road Revenue Bonds, Series 1995A, 5.000%, 1/01/35
3,135 San Francisco Airports Commission, California, Revenue 5/08 at 101.00 AAA 3,282,972
Bonds, San Francisco International Airport, Second Series
Issue 16B, 5.000%, 5/01/24 - FSA Insured
1,300 San Francisco Airports Commission, California, Revenue 5/10 at 101.00 AAA 1,376,973
Bonds, San Francisco International Airport, Second
Series 2000, Issue 26B, 5.000%, 5/01/25 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED *** - 3.4% (2.3% OF TOTAL INVESTMENTS)
2,700 California Health Facilities Financing Authority, Revenue 12/09 at 101.00 A3*** 3,065,310
Bonds, Cedars-Sinai Medical Center, Series 1999A,
6.250%, 12/01/34 (Pre-refunded to 12/01/09)
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 5.3% (3.5% OF TOTAL INVESTMENTS)
1,000 Anaheim Public Finance Authority, California, Second Lien 10/14 at 100.00 AAA 1,104,410
Electric Distribution Revenue Bonds, Series 2004,
5.250%, 10/01/21 - MBIA Insured
3,055 Los Angeles Department of Water and Power, California, 7/11 at 100.00 AAA 3,304,594
Power System Revenue Bonds, Series 2001A-1,
5.250%, 7/01/22 - FSA Insured
275 Los Angeles Department of Water and Power, California, 7/13 at 100.00 AAA 298,639
Power System Revenue Bonds, Series 2003A-2,
5.000%, 7/01/21 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 11.3% (7.6% OF TOTAL INVESTMENTS)
1,285 Manteca Financing Authority, California, Sewerage Revenue 12/13 at 100.00 Aaa 1,300,587
Bonds, Series 2003B, 5.000%, 12/01/33 - MBIA Insured
San Diego Public Facilities Financing Authority, California,
Subordinate Lien Water Revenue Bonds, Series 2002:
3,000 5.000%, 8/01/22 - MBIA Insured 8/12 at 100.00 AAA 3,230,310
2,500 5.000%, 8/01/23 - MBIA Insured 8/12 at 100.00 AAA 2,691,923
1,180 South Feather Water and Power Agency, California, Water 4/13 at 100.00 BBB 1,198,290
Revenue Certificates of Participation, Solar Photovoltaic
Project, Series 2003, 5.375%, 4/01/24
1,600 Sunnyvale Financing Authority, California, Water and 10/11 at 100.00 AAA 1,678,095
Wastewater Revenue Bonds, Series 2001, 5.000%, 10/01/26 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
$ 125,155 Total Long-Term Investments (cost $126,060,718) - 149.8% 133,713,667
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.6% 558,158
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (50.4)% (45,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 89,271,825
====================================================================================================================
60
FORWARD SWAPS OUTSTANDING AT AUGUST 31, 2005:
FLOATING RATE
FIXED RATE FIXED RATE RECEIVED BY FLOATING RATE UNREALIZED
NOTIONAL PAID BY THE FUND PAYMENT THE FUND PAYMENT EFFECTIVE TERMINATION APPRECIATION
COUNTERPARTY AMOUNT (ANNUALIZED) FREQUENCY BASED ON FREQUENCY DATE (2) DATE (DEPRECIATION)
------------------------------------------------------------------------------------------------------------------------------------
Citigroup 1,900,000 4.699% Semi-annually 3-month USD-LIBOR Quarterly 2/27/06 2/27/26 $ (5,970)
JPMorgan 1,700,000 4.833% Semi-annually 3-month USD-LIBOR Quarterly 2/09/06 2/09/36 (30,229)
Morgan Stanley 2,400,000 4.816% Semi-annually 3-month USD-LIBOR Quarterly 2/15/06 2/15/36 (36,075)
------------------------------------------------------------------------------------------------------------------------------------
$(72,274)
====================================================================================================================================
USD-LIBOR (United States Dollar-London Inter-Bank Offered Rates)
At least 80% of the Fund's net assets (including net assets
attributable to Preferred shares) are invested in municipal
securities that are either covered by Original Issue
Insurance, Secondary Market Insurance or Portfolio Insurance
which ensures the timely payment of principal and interest.
Up to 20% of the Fund's net assets (including net assets
attributable to Preferred shares) may be invested in
municipal securities that are (i) either backed by an escrow
or trust containing sufficient U.S. Government or U.S.
Government agency securities (also ensuring the timely
payment of principal and interest), or (ii) rated, at the
time of investment, within the four highest grades (Baa or
BBB or better by Moody's, S&P or Fitch) or unrated but
judged to be of comparable quality by the Adviser.
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares unless
otherwise noted.
(2) Effective date represents the date on which both the Fund
and counterparty commence interest payment accruals on each
forward swap contract.
* Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates (month
and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying
prices at later dates. Certain mortgage-backed securities
may be subject to periodic principal paydowns.
** Ratings (not covered by the report of independent registered
public accounting firm): Using the higher of Standard &
Poor's or Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of principal and
interest. Such securities are normally considered to be
equivalent to AAA rated securities.
(WI) Security purchased on a when-issued basis.
See accompanying notes to financial statements.
61
Statement of
ASSETS AND LIABILITIES August 31, 2005
INSURED
INSURED CALIFORNIA CALIFORNIA CALIFORNIA
CALIFORNIA PREMIUM PREMIUM DIVIDEND
PREMIUM INCOME INCOME 2 INCOME ADVANTAGE
(NPC) (NCL) (NCU) (NAC)
------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at market value (cost $131,157,277,
$269,190,580, $126,473,344 and
$505,744,666, respectively) $144,323,230 $288,167,119 $134,345,834 $544,050,839
Receivables:
Interest 2,311,809 3,760,509 1,552,639 7,699,800
Investments sold 4,068,978 546,889 -- 3,331,625
Other assets 8,559 33,518 1,107 42,760
------------------------------------------------------------------------------------------------------------------------------------
Total assets 150,712,576 292,508,035 135,899,580 555,125,024
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft 511,737 1,253,216 152,625 3,369,421
Payable for investments purchased 563,809 1,122,265 5,835,900 2,117,016
Forward swaps, at value -- -- -- --
Accrued expenses:
Management fees 80,380 154,158 69,911 195,658
Other 43,934 61,076 51,159 124,679
Preferred share dividends payable 2,934 22,488 5,184 53,507
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 1,202,794 2,613,203 6,114,779 5,860,281
------------------------------------------------------------------------------------------------------------------------------------
Preferred shares, at liquidation value 45,000,000 95,000,000 43,000,000 175,000,000
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $104,509,782 $194,894,832 $ 86,784,801 $374,264,743
====================================================================================================================================
Common shares outstanding 6,448,935 12,716,370 5,774,216 23,416,862
====================================================================================================================================
Net asset value per Common share outstanding
(net assets applicable to Common shares,
divided by Common shares outstanding) $ 16.21 $ 15.33 $ 15.03 $ 15.98
====================================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF:
------------------------------------------------------------------------------------------------------------------------------------
Common shares, $.01 par value per share $ 64,489 $ 127,164 $ 57,742 $ 234,169
Paid-in surplus 89,255,103 176,226,615 78,298,267 332,580,230
Undistributed (Over-distribution of) net investment income 1,022,294 935,376 556,302 2,641,354
Accumulated net realized gain (loss) from investments and
forward swaps 1,001,943 (1,370,862) -- 502,817
Net unrealized appreciation of investments and forward swaps 13,165,953 18,976,539 7,872,490 38,306,173
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $104,509,782 $194,894,832 $86,784,801 $374,264,743
====================================================================================================================================
Authorized shares:
Common 200,000,000 200,000,000 Unlimited Unlimited
Preferred 1,000,000 1,000,000 Unlimited Unlimited
====================================================================================================================================
See accompanying notes to financial statements.
62
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND TAX-FREE
ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE ADVANTAGE
(NVX) (NZH) (NKL) (NKX)
------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at market value (cost $316,942,756,
$523,212,751, $329,844,400 and
$126,060,718 respectively) $337,703,268 $551,696,711 $356,095,156 $133,713,667
Receivables:
Interest 4,417,910 7,700,289 4,039,336 1,453,507
Investments sold 1,044,778 1,911,885 1,492,075 --
Other assets 25,004 16,222 23,840 3,634
------------------------------------------------------------------------------------------------------------------------------------
Total assets 343,190,960 561,325,107 361,650,407 135,170,808
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft 572,170 2,598,763 646,825 223,339
Payable for investments purchased 1,308,466 2,148,833 1,388,267 521,300
Forward swaps, at value -- -- 191,673 72,274
Accrued expenses:
Management fees 94,452 150,856 99,355 41,114
Other 58,059 114,161 56,702 22,458
Preferred share dividends payable 17,402 50,822 13,494 18,498
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 2,050,549 5,063,435 2,396,316 898,983
------------------------------------------------------------------------------------------------------------------------------------
Preferred shares, at liquidation value 110,000,000 187,000,000 118,000,000 45,000,000
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $231,140,411 $369,261,672 $241,254,091 $ 89,271,825
====================================================================================================================================
Common shares outstanding 14,790,660 24,112,833 15,259,759 5,883,302
====================================================================================================================================
Net asset value per Common share outstanding
(net assets applicable to Common shares,
divided by Common shares outstanding) $ 15.63 $ 15.31 $ 15.81 $ 15.17
====================================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF:
------------------------------------------------------------------------------------------------------------------------------------
Common shares, $.01 par value per share $ 147,907 $ 241,128 $ 152,598 $ 58,833
Paid-in surplus 210,049,075 342,513,152 216,622,492 83,000,891
Undistributed (Over-distribution of) net investment income 1,278,398 2,278,927 899,990 (178,221)
Accumulated net realized gain (loss) from investments and
forward swaps (1,095,481) (4,255,495) (2,480,072) (1,190,353)
Net unrealized appreciation of investments and forward swaps 20,760,512 28,483,960 26,059,083 7,580,675
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $231,140,411 $369,261,672 $241,254,091 $ 89,271,825
====================================================================================================================================
Authorized shares:
Common Unlimited Unlimited Unlimited Unlimited
Preferred Unlimited Unlimited Unlimited Unlimited
====================================================================================================================================
See accompanying notes to financial statements.
63
Statement of
OPERATIONS Year Ended August 31, 2005
INSURED
INSURED CALIFORNIA CALIFORNIA CALIFORNIA
CALIFORNIA PREMIUM PREMIUM DIVIDEND
PREMIUM INCOME INCOME 2 INCOME ADVANTAGE
(NPC) (NCL) (NCU) (NAC)
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $7,280,519 $13,924,111 $6,226,117 $27,079,471
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 954,202 1,825,656 823,669 3,396,904
Preferred shares - auction fees 112,500 237,500 107,500 437,500
Preferred shares - dividend disbursing agent fees 10,000 20,000 10,000 20,000
Shareholders' servicing agent fees and expenses 10,023 16,230 8,302 6,869
Custodian's fees and expenses 34,126 65,136 29,939 111,960
Directors'/Trustees' fees and expenses 2,551 5,067 2,119 9,488
Professional fees 13,830 19,555 14,182 22,984
Shareholders' reports - printing and mailing expenses 10,629 19,743 10,260 26,687
Stock exchange listing fees 10,565 10,648 491 10,555
Investor relations expense 14,004 34,067 14,221 62,748
Other expenses 12,338 17,313 11,999 24,314
------------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit and
expense reimbursement 1,184,768 2,270,915 1,032,682 4,130,009
Custodian fee credit (7,622) (9,144) (8,441) (16,389)
Expense reimbursement -- -- -- (1,336,696)
------------------------------------------------------------------------------------------------------------------------------------
Net expenses 1,177,146 2,261,771 1,024,241 2,776,924
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 6,103,373 11,662,340 5,201,876 24,302,547
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain from investments 1,025,239 572,385 986,152 480,737
Net realized gain (loss) from forward swaps -- -- -- --
Change in net unrealized appreciation (depreciation)
of investments 347,962 3,008,579 2,456,342 11,381,369
Change in net unrealized appreciation (depreciation)
of forward swaps -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain 1,373,201 3,580,964 3,442,494 11,862,106
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
From net investment income (659,626) (1,431,484) (676,918) (2,855,101)
From accumulated net realized gains from investments (53,379) -- -- (64,137)
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to Common shares
from distributions to Preferred shareholders (713,005) (1,431,484) (676,918) (2,919,238)
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable to Common shares
from operations $6,763,569 $13,811,820 $7,967,452 $33,245,415
====================================================================================================================================
See accompanying notes to financial statements.
64
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND TAX-FREE
ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE ADVANTAGE
(NVX) (NZH) (NKL) (NKX)
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $16,044,820 $26,042,254 $17,155,453 $ 6,276,368
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 2,119,509 3,420,287 2,239,771 850,412
Preferred shares - auction fees 275,000 467,500 295,000 112,500
Preferred shares - dividend disbursing agent fees 20,000 20,000 20,000 10,000
Shareholders' servicing agent fees and expenses 2,998 5,125 2,953 1,426
Custodian's fees and expenses 71,177 117,386 80,033 32,249
Directors'/Trustees' fees and expenses 6,123 9,576 6,313 2,229
Professional fees 21,310 31,088 23,389 14,049
Shareholders' reports - printing and mailing expenses 27,062 38,249 28,439 13,685
Stock exchange listing fees 1,259 2,052 1,299 501
Investor relations expense 42,451 67,419 44,538 13,973
Other expenses 24,129 30,904 24,088 13,605
------------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit and
expense reimbursement 2,611,018 4,209,586 2,765,823 1,064,629
Custodian fee credit (17,969) (32,579) (13,084) (6,217)
Expense reimbursement (1,007,945) (1,643,435) (1,066,424) (419,429)
------------------------------------------------------------------------------------------------------------------------------------
Net expenses 1,585,104 2,533,572 1,686,315 638,983
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 14,459,716 23,508,682 15,469,138 5,637,385
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain from investments 383,423 462,942 750,281 161,272
Net realized gain (loss) from forward swaps -- -- (2,892,459) (1,073,407)
Change in net unrealized appreciation (depreciation)
of investments 10,159,524 15,832,228 9,357,072 4,006,973
Change in net unrealized appreciation (depreciation)
of forward swaps -- -- 809,703 288,851
------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain 10,542,947 16,295,170 8,024,597 3,383,689
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
From net investment income (1,768,569) (3,098,457) (1,886,679) (753,416)
From accumulated net realized gains from investments -- -- (45,704) --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to Common shares
from distributions to Preferred shareholders (1,768,569) (3,098,457) (1,932,383) (753,416)
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable to Common shares
from operations $23,234,094 $36,705,395 $21,561,352 $ 8,267,658
====================================================================================================================================
See accompanying notes to financial statements.
65
Statement of
CHANGES IN NET ASSETS
INSURED CALIFORNIA INSURED CALIFORNIA CALIFORNIA
PREMIUM INCOME (NPC) PREMIUM INCOME 2 (NCL) PREMIUM INCOME (NCU)
---------------------------- ------------------------------ ---------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
8/31/05 8/31/04 8/31/05 8/31/04 8/31/05 8/31/04
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 6,103,373 $ 6,380,123 $ 11,662,340 $ 12,155,986 $ 5,201,876 $ 5,443,316
Net realized gain (loss)
from investments 1,025,239 1,060,439 572,385 6,591,551 986,152 262,244
Net realized gain (loss) from
forward swaps -- -- -- -- -- --
Change in net unrealized
appreciation (depreciation)
of investments 347,962 3,379,499 3,008,579 127,122 2,456,342 4,594,174
Change in net unrealized
appreciation (depreciation)
of forward swaps -- -- -- -- -- --
Distributions to
Preferred Shareholders:
From net investment income (659,626) (324,673) (1,431,484) (727,279) (676,918) (329,173)
From accumulated net realized
gains from investments (53,379) (18,045) -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
applicable to Common shares
from operations 6,763,569 10,477,343 13,811,820 18,147,380 7,967,452 9,970,561
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (5,939,147) (5,990,256) (11,212,178) (11,576,056) (4,954,280) (5,058,214)
From accumulated net
realized gains
from investments (1,006,068) (339,859) -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from
distributions to
Common shareholders (6,945,215) (6,330,115) (11,212,178) (11,576,056) (4,954,280) (5,058,214)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Common shares:
Net proceeds from sale of shares -- -- -- -- -- --
Net proceeds from shares issued
to shareholders due to
reinvestment of
distributions 73,727 43,490 260,359 282,847 -- --
Preferred shares offering costs -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in
net assets applicable
to Common shares from
capital share transactions 73,727 43,490 260,359 282,847 -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
applicable to Common shares (107,919) 4,190,718 2,860,001 6,854,171 3,013,172 4,912,347
Net assets applicable to Common
shares at the beginning
of year 104,617,701 100,426,983 192,034,831 185,180,660 83,771,629 78,859,282
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of year $104,509,782 $104,617,701 $194,894,832 $192,034,831 $86,784,801 $83,771,629
====================================================================================================================================
Undistributed (Over-distribution of)
net investment income
at the end of year $ 1,022,294 $ 1,521,582 $ 935,376 $ 1,960,798 $ 556,302 $ 986,193
====================================================================================================================================
See accompanying notes to financial statements.
66
CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND ADVANTAGE (NAC) DIVIDEND ADVANTAGE 2 (NVX) DIVIDEND ADVANTAGE 3 (NZH)
----------------------------- ------------------------------ ----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
8/31/05 8/31/04 8/31/05 8/31/04 8/31/05 8/31/04
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 24,302,547 $ 24,522,028 $ 14,459,716 $ 14,625,012 $ 23,508,682 $ 23,526,062
Net realized gain (loss)
from investments 480,737 3,065,461 383,423 734,631 462,942 (325,341)
Net realized gain (loss) from
forward swaps -- -- -- -- -- --
Change in net unrealized
appreciation (depreciation)
of investments 11,381,369 14,927,705 10,159,524 10,663,642 15,832,228 21,760,890
Change in net unrealized
appreciation (depreciation)
of forward swaps -- -- -- -- -- --
Distributions to
Preferred Shareholders:
From net investment income (2,855,101) (1,400,301) (1,768,569) (861,160) (3,098,457) (1,597,236)
From accumulated net realized
gains from investments (64,137) -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
applicable to Common shares
from operations 33,245,415 41,114,893 23,234,094 25,162,125 36,705,395 43,364,375
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (23,037,818) (22,967,185) (13,489,083) (13,489,082) (20,833,488) (20,833,489)
From accumulated net
realized gains
from investments (1,086,300) -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from
distributions to
Common shareholders (24,124,118) (22,967,185) (13,489,083) (13,489,082) (20,833,488) (20,833,489)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Common shares:
Net proceeds from sale of shares -- -- -- -- -- --
Net proceeds from shares issued
to shareholders due to
reinvestment of distributions 77,239 -- -- -- -- --
Preferred shares offering costs -- -- -- -- 29,546 --
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares from
capital share transactions 77,239 -- -- -- 29,546 --
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
applicable to
Common shares 9,198,536 18,147,708 9,745,011 11,673,043 15,901,453 22,530,886
Net assets applicable to Common
shares at the beginning
of year 365,066,207 346,918,499 221,395,400 209,722,357 353,360,219 330,829,333
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of year $374,264,743 $365,066,207 $231,140,411 $221,395,400 $369,261,672 $353,360,219
====================================================================================================================================
Undistributed (Over-distribution of)
net investment income
at the end of year $ 2,641,354 $ 4,254,915 $ 1,278,398 $ 2,094,498 $ 2,278,927 $ 2,702,190
====================================================================================================================================
See accompanying notes to financial statements.
67
Statement of
CHANGES IN NET ASSETS (continued)
INSURED CALIFORNIA INSURED CALIFORNIA
DIVIDEND ADVANTAGE (NKL) TAX-FREE ADVANTAGE (NKX)
------------------------------ ---------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
8/31/05 8/31/04 8/31/05 8/31/04
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 15,469,138 $ 15,590,731 $ 5,637,385 $ 5,658,576
Net realized gain (loss) from investments 750,281 657,530 161,272 40,760
Net realized gain (loss) from
forward swaps (2,892,459) -- (1,073,407) --
Change in net unrealized appreciation
(depreciation) of investments 9,357,072 13,017,888 4,006,973 5,191,150
Change in net unrealized appreciation
(depreciation) of forward swaps 809,703 (1,001,377) 288,851 (361,125)
Distributions to Preferred Shareholders:
From net investment income (1,886,679) (854,403) (753,416) (347,495)
From accumulated net realized
gains from investments (45,704) (143,985) -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable
to Common shares from operations 21,561,352 27,266,384 8,267,658 10,181,866
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (13,733,781) (13,916,900) (5,003,747) (5,329,761)
From accumulated net realized gains
from investments (759,922) (1,910,520) -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions to
Common shareholders (14,493,703) (15,827,420) (5,003,747) (5,329,761)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Common shares:
Net proceeds from sale of shares -- (1,575) -- --
Net proceeds from shares issued
to shareholders due to
reinvestment of distributions -- -- -- 15,233
Preferred shares offering costs (54) (1,401) -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares from
capital share transactions (54) (2,976) -- 15,233
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares 7,067,595 11,435,988 3,263,911 4,867,338
Net assets applicable to Common
shares at the beginning of year 234,186,496 222,750,508 86,007,914 81,140,576
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of year $241,254,091 $234,186,496 $89,271,825 $86,007,914
====================================================================================================================================
Undistributed (Over-distribution of)
net investment income
at the end of year $ 899,990 $ 1,051,760 $ (178,221) $ (58,110)
====================================================================================================================================
See accompanying notes to financial statements.
68
Notes to
FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The California funds (the "Funds") covered in this report and their
corresponding Common share stock exchange symbols are Nuveen Insured California
Premium Income Municipal Fund, Inc. (NPC), Nuveen Insured California Premium
Income Municipal Fund 2, Inc. (NCL), Nuveen California Premium Income Municipal
Fund (NCU), Nuveen California Dividend Advantage Municipal Fund (NAC), Nuveen
California Dividend Advantage Municipal Fund 2 (NVX), Nuveen California Dividend
Advantage Municipal Fund 3 (NZH), Nuveen Insured California Dividend Advantage
Municipal Fund (NKL) and Nuveen Insured California Tax-Free Advantage Municipal
Fund (NKX). Common shares of Insured California Premium Income (NPC), Insured
California Premium Income 2 (NCL) and California Dividend Advantage (NAC) are
traded on the New York Stock Exchange while Common shares of California Premium
Income (NCU), California Dividend Advantage 2 (NVX), California Dividend
Advantage 3 (NZH), Insured California Dividend Advantage (NKL) and Insured
California Tax-Free Advantage (NKX) are traded on the American Stock Exchange.
The Funds are registered under the Investment Company Act of 1940, as amended,
as closed-end management investment companies.
Each Fund seeks to provide current income exempt from both regular federal and
California state income taxes, and in the case of Insured California Tax-Free
Advantage (NKX) the alternative minimum tax applicable to individuals, by
investing primarily in a diversified portfolio of municipal obligations issued
by state and local government authorities within the state of California or
certain U.S. territories.
Effective January 1, 2005, Nuveen Advisory Corp. ("NAC"), the Funds' previous
Adviser, and its affiliate, Nuveen Institutional Advisory Corp. ("NIAC"), were
merged into Nuveen Asset Management ("NAM"), each wholly owned subsidiaries of
Nuveen Investments, Inc. ("Nuveen"). As a result of the merger, NAM is now the
Adviser to all funds previously advised by either NAC or NIAC.
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements in accordance with U.S.
generally accepted accounting principles.
Investment Valuation
The prices of municipal bonds in each Fund's investment portfolio are provided
by a pricing service approved by the Fund's Board of Directors/Trustees. When
market price quotes are not readily available (which is usually the case for
municipal securities), the pricing service establishes fair market value based
on yields or prices of municipal bonds of comparable quality, type of issue,
coupon, maturity and rating, indications of value from securities dealers,
evaluations of anticipated cash flows or collateral and general market
conditions. Prices of derivative investments are also provided by an independent
pricing service approved by each Fund's Board of Directors/Trustees. If the
pricing service is unable to supply a price for a municipal bond or derivative
investment, each Fund may use a market price or fair market value quote provided
by a major broker/dealer in such investments. If it is determined that the
market price or fair market value for an investment are unavailable or
inappropriate, the Board of Directors/Trustees of the Funds, or its designee,
may establish a fair value for the investment. Temporary investments in
securities that have variable rate and demand features qualifying them as
short-term securities are valued at amortized cost, which approximates market
value.
Investment Transactions
Investment transactions are recorded on a trade date basis. Realized gains and
losses from transactions are determined on the specific identification method.
Investments purchased on a when-issued or delayed delivery basis may have
extended settlement periods. Any investments so purchased are subject to market
fluctuation during this period. The Funds have instructed the custodian to
segregate assets with a current value at least equal to the amount of the
when-issued and delayed delivery purchase commitments. At August 31, 2005,
Insured California Premium Income (NPC), Insured California Premium Income 2
(NCL), California Premium Income (NCU), California Dividend Advantage (NAC),
California Dividend Advantage 2 (NVX), California Dividend Advantage 3 (NZH),
Insured California Dividend Advantage (NKL) and Insured California Tax-Free
Advantage (NKX) had outstanding when-issued purchase commitments of $114,771,
$229,541, $5,418,937, $427,782, $266,059, $438,215, $281,710 and $104,337,
respectively.
Investment Income
Interest income, which includes the amortization of premiums and accretion of
discounts for financial reporting purposes, is recorded on an accrual basis.
Investment income also includes paydown gains and losses, if any.
Income Taxes
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund
intends to distribute substantially all net investment income and net capital
gains to shareholders and to otherwise comply with the requirements of
Subchapter M of the Internal Revenue Code applicable to regulated investment
companies. Therefore, no federal income tax provision is required. Furthermore,
each Fund intends to satisfy conditions which will enable interest from
municipal securities, which is exempt from regular federal
69
Notes to
FINANCIAL STATEMENTS (continued)
and California state income taxes, and in the case of Insured California
Tax-Free Advantage (NKX) the alternative minimum tax applicable to individuals,
to retain such tax-exempt status when distributed to shareholders of the Funds.
All monthly tax-exempt income dividends paid during the fiscal year ended August
31, 2005, have been designated Exempt Interest Dividends. Net realized capital
gains and ordinary income distributions paid by the Funds are subject to federal
taxation.
Dividends and Distributions to Common Shareholders
Dividends from tax-exempt net investment income are declared monthly. Net
realized capital gains and/or market discount from investment transactions, if
any, are distributed to shareholders not less frequently than annually.
Furthermore, capital gains are distributed only to the extent they exceed
available capital loss carryforwards.
Distributions to Common shareholders of tax-exempt net investment income, net
realized capital gains and/or market discount, if any, are recorded on the
ex-dividend date. The amount and timing of distributions are determined in
accordance with federal income tax regulations, which may differ from U.S.
generally accepted accounting principles.
Preferred Shares
The Funds have issued and outstanding Preferred shares, $25,000 stated value per
share, as a means of effecting financial leverage. Each Fund's Preferred shares
are issued in one or more Series. The dividend rate paid by the Funds on each
Series is determined every seven days, pursuant to a dutch auction process
overseen by the auction agent, and is payable at the end of each rate period.
The number of Preferred shares outstanding, by Series and in total, for each
Fund is as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE
(NPC) (NCL) (NCU) (NAC)
---------------------------------------------------------------------------------------------------------
Number of shares:
Series M -- -- 1,720 --
Series T 1,800 1,900 -- --
Series TH -- 1,900 -- 3,500
Series F -- -- -- 3,500
---------------------------------------------------------------------------------------------------------
Total 1,800 3,800 1,720 7,000
=========================================================================================================
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND TAX-FREE
ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE ADVANTAGE
(NVX) (NZH) (NKL) (NKX)
---------------------------------------------------------------------------------------------------------
Number of shares:
Series M 2,200 3,740 -- --
Series T -- -- 2,360 --
Series TH -- 3,740 -- 1,800
Series F 2,200 -- 2,360 --
---------------------------------------------------------------------------------------------------------
Total 4,400 7,480 4,720 1,800
=========================================================================================================
Insurance
Insured California Premium Income (NPC) and Insured California Premium Income 2
(NCL) invest only in municipal securities which are either covered by insurance
or are backed by an escrow or trust account containing sufficient U.S.
Government or U.S. Government agency securities, both of which ensure the timely
payment of principal and interest.
Insured California Dividend Advantage (NKL) and Insured California Tax-Free
Advantage (NKX) invest at least 80% of their net assets (including net assets
attributable to Preferred shares) in municipal securities that are covered by
insurance. Each Fund may also invest up to 20% of its net assets (including net
assets attributable to Preferred shares) in municipal securities which are
either (i) backed by an
70
escrow or trust containing sufficient U.S. Government or U.S. Government agency
securities, or (ii) rated, at the time of investment, within the four highest
grades (Baa or BBB or better by Moody's, S&P or Fitch) or unrated but judged to
be of comparable quality by the Adviser.
Each insured municipal security is covered by Original Issue Insurance,
Secondary Market Insurance or Portfolio Insurance. Such insurance does not
guarantee the market value of the municipal securities or the value of the
Funds' Common shares. Original Issue Insurance and Secondary Market Insurance
remain in effect as long as the municipal securities covered thereby remain
outstanding and the insurer remains in business, regardless of whether the Funds
ultimately dispose of such municipal securities. Consequently, the market value
of the municipal securities covered by Original Issue Insurance or Secondary
Market Insurance may reflect value attributable to the insurance. Portfolio
Insurance, in contrast, is effective only while the municipal securities are
held by the Funds. Accordingly, neither the prices used in determining the
market value of the underlying municipal securities nor the Common share net
asset value of the Funds include value, if any, attributable to the Portfolio
Insurance. Each policy of the Portfolio Insurance does, however, give the Funds
the right to obtain permanent insurance with respect to the municipal security
covered by the Portfolio Insurance policy at the time of its sale.
Forward Swap Transactions
The Funds may invest in certain derivative financial instruments. The Funds' use
of forward interest rate swap transactions is intended to mitigate the negative
impact that an increase in long-term interest rates could have on Common share
net asset value. Forward interest rate swap transactions involve each Fund's
agreement with the counterparty to pay, in the future, a fixed rate payment in
exchange for the counterparty paying the Fund a variable rate payment, the
accruals for which would begin at a specified date in the future (the "effective
date"). The amount of the payment obligation is based on the notional amount of
the forward swap contract, and would increase or decrease in value based
primarily on the extent to which long-term interest rates for bonds having a
maturity of the swaps' termination date were to increase or decrease. The Funds
may close out a contract prior to the effective date, at which point a realized
gain or loss would be recognized. When a forward swap is terminated, it
ordinarily does not involve the delivery of securities or other underlying
assets or principal, but rather is settled in cash on a net basis. Each Fund
intends, but is not obligated to, terminate its forward swaps before the
effective date. Accordingly, the risk of loss with respect to the swap
counterparty on such transactions is limited to the credit risk associated with
a counterparty failing to honor its commitment to pay any realized gain to the
Fund upon termination. To minimize such credit risk, all counterparties are
required to pledge collateral daily (based on the daily valuation of each swap)
on behalf of each Fund with a value approximately equal to the amount of any
unrealized gain above a pre-determined threshold. Reciprocally, when any of the
Funds have an unrealized loss on a swap contract, the Funds have instructed the
custodian to pledge assets of the Funds as collateral with a value approximately
equal to the amount of the unrealized loss above a pre-determined threshold.
Collateral pledges are monitored and subsequently adjusted if and when the swap
valuations fluctuate, either up or down, by at least the predetermined threshold
amount.
Custodian Fee Credit
Each Fund has an arrangement with the custodian bank whereby certain custodian
fees and expenses are reduced by credits earned on each Fund's cash on deposit
with the bank. Such deposit arrangements are an alternative to overnight
investments.
Indemnifications
Under the Funds' organizational documents, its Officers and Directors/Trustees
are indemnified against certain liabilities arising out of the performance of
their duties to the Funds. In addition, in the normal course of business, the
Funds enter into contracts that provide general indemnifications to other
parties. The Funds' maximum exposure under these arrangements is unknown as this
would involve future claims that may be made against the Funds that have not yet
occurred. However, the Funds have not had prior claims or losses pursuant to
these contracts and expect the risk of loss to be remote.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of increases and
decreases in net assets applicable to Common shares from operations during the
reporting period. Actual results may differ from those estimates.
2. FUND SHARES
Transactions in Common shares were as follows:
INSURED CALIFORNIA INSURED CALIFORNIA CALIFORNIA
PREMIUM INCOME (NPC) PREMIUM INCOME 2 (NCL) PREMIUM INCOME (NCU)
----------------------- ----------------------- -----------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
8/31/05 8/31/04 8/31/05 8/31/04 8/31/05 8/31/04
---------------------------------------------------------------------------------------------------------
Common shares issued
to shareholders
due to reinvestment
of distributions 4,473 2,632 16,994 18,275 -- --
=========================================================================================================
CALIFORNIA DIVIDEND CALIFORNIA DIVIDEND CALIFORNIA DIVIDEND
ADVANTAGE (NAC) ADVANTAGE 2 (NVX) ADVANTAGE 3 (NZH)
----------------------- ----------------------- -----------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
8/31/05 8/31/04 8/31/05 8/31/04 8/31/05 8/31/04
---------------------------------------------------------------------------------------------------------
Common shares issued
to shareholders
due to reinvestment
of distributions 4,849 -- -- -- -- --
=========================================================================================================
71
Notes to
FINANCIAL STATEMENTS (continued)
INSURED INSURED
CALIFORNIA DIVIDEND CALIFORNIA TAX-FREE
ADVANTAGE (NKL) ADVANTAGE (NKX)
----------------------- -----------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
8/31/05 8/31/04 8/31/05 8/31/04
---------------------------------------------------------------------------------------------------------
Common shares issued to shareholders
due to reinvestment of distributions -- -- -- 1,017
=========================================================================================================
3. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of investments in long-term municipal
securities during the fiscal year ended August 31, 2005, were as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE
(NPC) (NCL) (NCU) (NAC)
---------------------------------------------------------------------------------------------------------
Purchases $13,706,747 $24,393,146 $17,719,115 $24,512,416
Sales and maturities 16,206,687 19,462,974 16,727,310 21,612,407
=========================================================================================================
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND TAX-FREE
ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE ADVANTAGE
(NVX) (NZH) (NKL) (NKX)
---------------------------------------------------------------------------------------------------------
Purchases $17,356,363 $33,179,426 $13,807,542 $3,754,677
Sales and maturities 10,494,329 25,727,787 16,779,324 3,915,932
=========================================================================================================
4. INCOME TAX INFORMATION
The following information is presented on an income tax basis. Differences
between amounts for financial statement and federal income tax purposes are
primarily due to the treatment of paydown gains and losses, timing differences
in recognizing taxable market discount and timing differences in recognizing
certain gains and losses on investment transactions.
At August 31, 2005, the cost of investments was as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE
(NPC) (NCL) (NCU) (NAC)
---------------------------------------------------------------------------------------------------------
Cost of investments $131,070,013 $269,049,677 $126,415,591 $505,556,047
=========================================================================================================
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND TAX-FREE
ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE ADVANTAGE
(NVX) (NZH) (NKL) (NKX)
---------------------------------------------------------------------------------------------------------
Cost of investments $316,931,650 $523,203,484 $331,924,967 $127,026,789
=========================================================================================================
72
Gross unrealized appreciation and gross unrealized depreciation of investments
at August 31, 2005, were as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE
(NPC) (NCL) (NCU) (NAC)
---------------------------------------------------------------------------------------------------------
Gross unrealized:
Appreciation $13,253,217 $19,146,900 $7,934,099 $38,510,240
Depreciation -- (29,458) (3,856) (15,448)
---------------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments $13,253,217 $19,117,442 $7,930,243 $38,494,792
=========================================================================================================
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND TAX-FREE
ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE ADVANTAGE
(NVX) (NZH) (NKL) (NKX)
---------------------------------------------------------------------------------------------------------
Gross unrealized:
Appreciation $20,862,281 $28,597,109 $26,390,927 $7,671,668
Depreciation (90,663) (103,882) (2,220,738) (984,790)
---------------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments $20,771,618 $28,493,227 $24,170,189 $6,686,878
=========================================================================================================
The tax components of undistributed net investment income and net realized gains
at August 31, 2005, were as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE
(NPC) (NCL) (NCU) (NAC)
---------------------------------------------------------------------------------------------------------
Undistributed net tax-exempt income * $1,335,929 $1,691,142 $907,928 $4,426,425
Undistributed net ordinary income ** 79,252 3,248 -- --
Undistributed net long-term capital gains 1,001,943 -- -- 502,817
=========================================================================================================
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND TAX-FREE
ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE ADVANTAGE
(NVX) (NZH) (NKL) (NKX)
---------------------------------------------------------------------------------------------------------
Undistributed net tax-exempt income * $2,408,781 $4,056,605 $1,872,014 $221,141
Undistributed net ordinary income ** -- -- -- --
Undistributed net long-term capital gains -- -- -- --
=========================================================================================================
* Undistributed net tax-exempt income (on a tax basis) has not been reduced
for the dividend declared on August 1, 2005, paid on September 1, 2005.
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
The tax character of distributions paid during the fiscal years ended August 31,
2005 and August 31, 2004, was designated for purposes of the dividends paid
deduction as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE
2005 (NPC) (NCL) (NCU) (NAC)
---------------------------------------------------------------------------------------------------------
Distributions from tax-exempt income $6,520,209 $12,725,281 $5,644,396 $25,851,246
Distributions from net ordinary income ** 377,496 -- -- --
Distributions from net long-term capital gains 785,476 -- -- 1,150,437
=========================================================================================================
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND TAX-FREE
ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE ADVANTAGE
2005 (NVX) (NZH) (NKL) (NKX)
---------------------------------------------------------------------------------------------------------
Distributions from tax-exempt income $15,245,298 $23,895,351 $15,677,229 $5,801,023
Distributions from net ordinary income ** -- -- 116,229 --
Distributions from net long-term capital gains -- -- 689,397 --
=========================================================================================================
73
Notes to
FINANCIAL STATEMENTS (continued)
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE
2004 (NPC) (NCL) (NCU) (NAC)
---------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt income $6,242,243 $12,293,836 $5,391,619 $24,320,851
Distributions from net ordinary income ** 59,796 -- -- --
Distributions from net long-term capital gains 357,419 -- -- --
=========================================================================================================
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND TAX-FREE
ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE ADVANTAGE
2004 (NVX) (NZH) (NKL) (NKX)
---------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt income $14,342,456 $22,428,037 $14,773,957 $5,673,304
Distributions from net ordinary income ** -- -- 1,816,883 --
Distributions from net long-term capital gains -- -- 237,622 --
=========================================================================================================
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
At August 31, 2005, the following Funds had unused capital loss carryforwards
available for federal income tax purposes to be applied against future capital
gains, if any. If not applied, the carryforwards will expire as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM DIVIDEND DIVIDEND TAX-FREE
INCOME 2 ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE
(NCL) (NVX) (NZH) (NKX)
---------------------------------------------------------------------------------------------------------
Expiration year:
2009 $930,352 $ -- $ -- $ --
2010 440,510 -- -- --
2011 -- -- 3,931,655 216,849
2012 -- 1,095,481 323,840 --
---------------------------------------------------------------------------------------------------------
Total $1,370,862 $1,095,481 $4,255,495 $216,849
=========================================================================================================
Insured California Dividend Advantage (NKL) elected to defer net realized losses
from investments incurred from November 1, 2004 through August 31, 2005
("post-October losses"), in accordance with Federal income tax regulations.
Post-October losses of $259,334 were treated as having arisen on the first day
of the following fiscal year.
5. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Each Fund's management fee is separated into two components - a complex-level
component, based on the aggregate amount of all fund assets managed by the
Adviser, and a specific fund-level component, based only on the amount of assets
within each individual fund. This pricing structure enables Nuveen fund
shareholders to benefit from growth in the assets within each individual fund as
well as from growth in the amount of complex-wide assets managed by the Adviser.
74
The annual fund-level fee, payable monthly, for each Fund is based upon the
average daily net assets (including net assets attributable to Preferred shares)
of each Fund as follows:
INSURED CALIFORNIA PREMIUM INCOME (NPC)
AVERAGE DAILY NET ASSETS INSURED CALIFORNIA PREMIUM INCOME 2 (NCL)
(INCLUDING NET ASSETS CALIFORNIA PREMIUM INCOME (NCU)
ATTRIBUTABLE TO PREFERRED SHARES) FUND-LEVEL FEE RATE
--------------------------------------------------------------------------------
For the first $125 million .4500%
For the next $125 million .4375
For the next $250 million .4250
For the next $500 million .4125
For the next $1 billion .4000
For the next $3 billion .3875
For net assets over $5 billion .3750
================================================================================
CALIFORNIA DIVIDEND ADVANTAGE (NAC)
CALIFORNIA DIVIDEND ADVANTAGE 2 (NVX)
CALIFORNIA DIVIDEND ADVANTAGE 3 (NZH)
AVERAGE DAILY NET ASSETS INSURED CALIFORNIA DIVIDEND ADVANTAGE (NKL)
(INCLUDING NET ASSETS INSURED CALIFORNIA TAX-FREE ADVANTAGE (NKX)
ATTRIBUTABLE TO PREFERRED SHARES) FUND-LEVEL FEE RATE
--------------------------------------------------------------------------------
For the first $125 million .4500%
For the next $125 million .4375
For the next $250 million .4250
For the next $500 million .4125
For the next $1 billion .4000
For net assets over $2 billion .3750
================================================================================
The annual complex-level fee, payable monthly, which is additive to the
fund-level fee, for all Nuveen sponsored funds in the U.S., is based on the
aggregate amount of total fund assets managed as stated in the table below. As
of August 31, 2005, the complex-level fee rate was .1896%.
COMPLEX-LEVEL
COMPLEX-LEVEL ASSETS(1) FEE RATE
--------------------------------------------------------------------------------
For the first $55 billion .2000%
For the next $1 billion .1800
For the next $1 billion .1600
For the next $3 billion .1425
For the next $3 billion .1325
For the next $3 billion .1250
For the next $5 billion .1200
For the next $5 billion .1175
For the next $15 billion .1150
For Managed Assets over $91 billion (2) .1400
================================================================================
(1) The complex-level fee component of the management fee for the funds is
calculated based upon the aggregate Managed Assets ("Managed Assets" means
the average daily net assets of each fund including assets attributable to
all types of leverage used by the Nuveen funds) of Nuveen-sponsored funds
in the U.S.
(2) With respect to the complex-wide Managed Assets over $91 billion, the fee
rate or rates that will apply to such assets will be determined at a later
date. In the unlikely event that complex-wide Managed Assets reach $91
billion prior to a determination of the complex-level fee rate or rates to
be applied to Managed Assets in excess of $91 billion, the complex-level
fee rate for such complex-wide Managed Assets shall be .1400% until such
time as a different rate or rates is determined.
The management fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Funds pay no
compensation directly to those of its Directors/Trustees who are affiliated with
the Adviser or to their officers, all of whom receive remuneration for their
services to the Funds from the Adviser or its affiliates. The Board of
Directors/Trustees has adopted a deferred compensation plan for independent
Directors/Trustees that enables Directors/Trustees to elect to defer receipt of
all or a portion of the annual compensation they are entitled to receive from
certain Nuveen advised Funds. Under the plan, deferred amounts are treated as
though equal dollar amounts had been invested in shares of select Nuveen advised
Funds.
75
Notes to
FINANCIAL STATEMENTS (continued)
For the first ten years of California Dividend Advantage's (NAC) operations, the
Adviser has agreed to reimburse the Fund, as a percentage of average daily net
assets (including net assets attributable to Preferred shares), for fees and
expenses in the amounts and for the time periods set forth below:
YEAR ENDING YEAR ENDING
JULY 31, JULY 31,
--------------------------------------------------------------------------------
1999* .30% 2005 .25%
2000 .30 2006 .20
2001 .30 2007 .15
2002 .30 2008 .10
2003 .30 2009 .05
2004 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse California Dividend Advantage (NAC) for
any portion of its fees and expenses beyond July 31, 2009.
For the first ten years of California Dividend Advantage 2's (NVX) operations,
the Adviser has agreed to reimburse the Fund, as a percentage of average daily
net assets (including net assets attributable to Preferred shares), for fees and
expenses in the amounts and for the time periods set forth below:
YEAR ENDING YEAR ENDING
MARCH 31, MARCH 31,
--------------------------------------------------------------------------------
2001* .30% 2007 .25%
2002 .30 2008 .20
2003 .30 2009 .15
2004 .30 2010 .10
2005 .30 2011 .05
2006 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse California Dividend Advantage 2 (NVX)
for any portion of its fees and expenses beyond March 31, 2011.
For the first ten years of California Dividend Advantage 3's (NZH) operations,
the Adviser has agreed to reimburse the Fund, as a percentage of average daily
net assets (including net assets attributable to Preferred shares), for fees and
expenses in the amounts and for the time periods set forth below:
YEAR ENDING YEAR ENDING
SEPTEMBER 30, SEPTEMBER 30,
--------------------------------------------------------------------------------
2001* .30% 2007 .25%
2002 .30 2008 .20
2003 .30 2009 .15
2004 .30 2010 .10
2005 .30 2011 .05
2006 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse California Dividend Advantage 3 (NZH)
for any portion of its fees and expenses beyond September 30, 2011.
76
For the first ten years of Insured California Dividend Advantage's (NKL)
operations, the Adviser has agreed to reimburse the Fund, as a percentage of
average daily net assets (including net assets attributable to Preferred
shares), for fees and expenses in the amounts and for the time periods set forth
below:
YEAR ENDING YEAR ENDING
MARCH 31, MARCH 31,
--------------------------------------------------------------------------------
2002* .30% 2008 .25%
2003 .30 2009 .20
2004 .30 2010 .15
2005 .30 2011 .10
2006 .30 2012 .05
2007 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Insured California Dividend Advantage
(NKL) for any portion of its fees and expenses beyond March 31, 2012.
For the first eight years of Insured California Tax-Free Advantage's (NKX)
operations, the Adviser has agreed to reimburse the Fund, as a percentage of
average daily net assets (including net assets attributable to Preferred
shares), for fees and expenses in the amounts and for the time periods set forth
below:
YEAR ENDING YEAR ENDING
NOVEMBER 30, NOVEMBER 30,
--------------------------------------------------------------------------------
2002* .32% 2007 .32%
2003 .32 2008 .24
2004 .32 2009 .16
2005 .32 2010 .08
2006 .32
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Insured California Tax-Free Advantage
(NKX) for any portion of its fees and expenses beyond November 30, 2010.
6. ANNOUNCEMENT REGARDING PARENT COMPANY OF ADVISER
In early April, 2005, The St. Paul Travelers Companies, Inc. ("St. Paul
Travelers"), which owned 79% of Nuveen, (A) completed a public offering of a
substantial portion of its equity stake in Nuveen, (B) sold Nuveen $200 million
of its Nuveen shares, (C) entered into an agreement with Nuveen to sell an
additional $400 million of its Nuveen shares on a "forward" basis with payment
for and settlement of these shares delayed for several months, and (D) entered
into agreements with two unaffiliated investment banking firms to sell an amount
equal to most or all of its remaining Nuveen shares for current payment but for
future settlement. Transactions (C) and (D) above were settled in late July,
which effectively reduced St. Paul Travelers' controlling stake in Nuveen and
was deemed an "assignment" (as defined in the 1940 Act) of the investment
management agreements between the Funds and the Adviser, which resulted in the
automatic termination of each agreement under the 1940 Act. In anticipation of
such deemed assignment, the Board of Directors/Trustees had approved new ongoing
investment management agreements for each Fund and the submission of those
agreements for approval by each respective Fund's shareholders, which
shareholder approval was received prior to the settlement of transactions (C)
and (D). The new ongoing management agreements took effect upon such settlement.
7. SUBSEQUENT EVENT - DISTRIBUTIONS TO COMMON SHAREHOLDERS
The Funds declared Common share dividend distributions from their tax-exempt net
investment income which were paid on October 3, 2005, to shareholders of record
on September 15, 2005, as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE
(NPC) (NCL) (NCU) (NAC)
--------------------------------------------------------------------------------
Dividend per share $.0705 $.0660 $.0670 $.0785
================================================================================
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND TAX-FREE
ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE ADVANTAGE
(NVX) (NZH) (NKL) (NKX)
--------------------------------------------------------------------------------
Dividend per share $.0725 $.0720 $.0720 $.0630
================================================================================
77
Financial
HIGHLIGHTS
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
------------------------------------------------------------------- --------------------------------
Distributions Distributions
from Net from Net
Beginning Investment Capital Investment Capital
Common Net Income to Gains to Income to Gains to
Share Net Realized/ Preferred Preferred Common Common
Net Asset Investment Unrealized Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
====================================================================================================================================
INSURED CALIFORNIA
PREMIUM INCOME (NPC)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2005 $16.23 $ .95 $ .22 $(.10) $(.01) $1.06 $(.92) $(.16) $(1.08)
2004 15.59 .99 .68 (.05) -- 1.62 (.93) (.05) (.98)
2003 16.17 .99 (.45) (.06) (.01) .47 (.97) (.08) (1.05)
2002 16.04 1.05 .03 (.09) -- .99 (.86) -- (.86)
2001 15.08 1.04 .99 (.21) -- 1.82 (.86) -- (.86)
INSURED CALIFORNIA
PREMIUM INCOME 2 (NCL)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2005 15.12 .91 .29 (.11) -- 1.09 (.88) -- (.88)
2004 14.60 .96 .53 (.06) -- 1.43 (.91) -- (.91)
2003 15.08 .99 (.51) (.07) -- .41 (.89) -- (.89)
2002 15.01 1.02 (.02) (.10) -- .90 (.83) -- (.83)
2001 14.09 1.01 .91 (.22) -- 1.70 (.78) -- (.78)
CALIFORNIA PREMIUM
INCOME (NCU)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2005 14.51 .90 .60 (.12) -- 1.38 (.86) -- (.86)
2004 13.66 .94 .85 (.06) -- 1.73 (.88) -- (.88)
2003 14.42 .96 (.78) (.07) -- .11 (.87) -- (.87)
2002 14.22 .99 .13 (.10) -- 1.02 (.82) -- (.82)
2001 13.34 1.00 .90 (.23) -- 1.67 (.79) -- (.79)
====================================================================================================================================
Total Returns
--------------------
Based
Offering on
Costs and Ending Common
Preferred Common Based Share
Share Share Ending on Net
Underwriting Net Asset Market Market Asset
Discounts Value Value Value* Value*
==========================================================================================
INSURED CALIFORNIA
PREMIUM INCOME (NPC)
------------------------------------------------------------------------------------------
Year Ended 8/31:
2005 $ -- $16.21 $15.90 7.58% 6.74%
2004 -- 16.23 15.81 11.80 10.64
2003 -- 15.59 15.07 1.55 2.82
2002 -- 16.17 15.85 6.73 6.47
2001 -- 16.04 15.69 14.12 12.43
INSURED CALIFORNIA
PREMIUM INCOME 2 (NCL)
------------------------------------------------------------------------------------------
Year Ended 8/31:
2005 -- 15.33 15.05 5.10 7.42
2004 -- 15.12 15.18 12.71 10.02
2003 -- 14.60 14.32 2.69 2.71
2002 -- 15.08 14.80 5.57 6.29
2001 -- 15.01 14.83 11.99 12.45
CALIFORNIA PREMIUM
INCOME (NCU)
------------------------------------------------------------------------------------------
Year Ended 8/31:
2005 -- 15.03 14.37 11.76 9.75
2004 -- 14.51 13.67 12.04 12.94
2003 -- 13.66 13.02 (.91) .69
2002 -- 14.42 14.00 4.84 7.48
2001 -- 14.22 14.17 12.84 12.92
==========================================================================================
Ratios/Supplemental Data
--------------------------------------------------------------------------------------------------
Before Credit/Reimbursement After Credit/Reimbursement**
------------------------------ --------------------------------
Ratio of Net Ratio of Net
Ratio of Investment Ratio of Investment
Ending Expenses Income to Expenses Income to
Net to Average Average to Average Average
Assets Net Assets Net Assets Net Assets Net Assets
Applicable Applicable Applicable Applicable Applicable Portfolio
to Common to Common to Common to Common to Common Turnover
Shares (000) Shares++ Shares++ Shares++ Shares++ Rate
===============================================================================================================================
INSURED CALIFORNIA
PREMIUM INCOME (NPC)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2005 $104,510 1.14% 5.85% 1.13% 5.86% 9%
2004 104,618 1.17 6.17 1.16 6.17 25
2003 100,427 1.17 6.13 1.16 6.14 26
2002 104,137 1.21 6.65 1.19 6.66 30
2001 103,068 1.22 6.77 1.21 6.79 21
INSURED CALIFORNIA
PREMIUM INCOME 2 (NCL)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2005 194,895 1.17 6.03 1.17 6.03 7
2004 192,035 1.19 6.38 1.19 6.38 35
2003 185,181 1.20 6.53 1.19 6.54 22
2002 190,870 1.23 6.83 1.22 6.84 6
2001 189,633 1.24 7.01 1.24 7.02 18
CALIFORNIA PREMIUM
INCOME (NCU)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2005 86,785 1.21 6.08 1.20 6.09 13
2004 83,772 1.23 6.62 1.22 6.63 19
2003 78,859 1.24 6.72 1.24 6.72 24
2002 83,249 1.27 7.07 1.26 7.08 10
2001 82,067 1.32 7.36 1.30 7.38 18
===============================================================================================================================
Preferred Shares at End of Period
---------------------------------------------
Aggregate Liquidation
Amount and Market Asset
Outstanding Value Coverage
(000) Per Share Per Share
============================================================================
INSURED CALIFORNIA
PREMIUM INCOME (NPC)
----------------------------------------------------------------------------
Year Ended 8/31:
2005 $45,000 $25,000 $83,061
2004 45,000 25,000 83,121
2003 45,000 25,000 80,793
2002 45,000 25,000 82,854
2001 45,000 25,000 82,260
INSURED CALIFORNIA
PREMIUM INCOME 2 (NCL)
----------------------------------------------------------------------------
Year Ended 8/31:
2005 95,000 25,000 76,288
2004 95,000 25,000 75,535
2003 95,000 25,000 73,732
2002 95,000 25,000 75,229
2001 95,000 25,000 74,903
CALIFORNIA PREMIUM
INCOME (NCU)
----------------------------------------------------------------------------
Year Ended 8/31:
2005 43,000 25,000 75,456
2004 43,000 25,000 73,704
2003 43,000 25,000 70,848
2002 43,000 25,000 73,400
2001 43,000 25,000 72,714
============================================================================
* Total Investment Return on Market Value is the combination of changes in
the market price per share and the effect of reinvested dividend income and
reinvested capital gains distributions, if any, at the average price paid
per share at the time of reinvestment. Total Return on Common Share Net
Asset Value is the combination of changes in Common Share net asset value,
reinvested dividend income at net asset value and reinvested capital gains
distributions at net asset value, if any. Total returns are not annualized.
** After custodian fee credit and expense reimbursement, where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
See accompanying notes to financial statements.
78-79 SPREAD
Financial HIGHLIGHTS (continued)
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
------------------------------------------------------------------- --------------------------------
Distributions Distributions
from Net from Net
Beginning Investment Capital Investment Capital
Common Net Income to Gains to Income to Gains to
Share Net Realized/ Preferred Preferred Common Common
Net Asset Investment Unrealized Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
====================================================================================================================================
CALIFORNIA DIVIDEND
ADVANTAGE (NAC)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2005 $15.59 $1.04 $ .50 $(.12) $ -- $1.42 $(.98) $(.05) $(1.03)
2004 14.82 1.05 .76 (.06) -- 1.75 (.98) -- (.98)
2003 15.24 1.06 (.47) (.07) -- .52 (.94) -- (.94)
2002 15.13 1.07 -- (.10) -- .97 (.86) -- (.86)
2001 13.82 1.07 1.28 (.23) -- 2.12 (.81) -- (.81)
CALIFORNIA DIVIDEND
ADVANTAGE 2 (NVX)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2005 14.97 .98 .71 (.12) -- 1.57 (.91) -- (.91)
2004 14.18 .99 .77 (.06) -- 1.70 (.91) -- (.91)
2003 14.79 1.00 (.62) (.07) -- .31 (.89) (.03) (.92)
2002 15.11 1.06 (.40) (.11) -- .55 (.87) -- (.87)
2001(a) 14.33 .34 .90 (.05) -- 1.19 (.29) -- (.29)
CALIFORNIA DIVIDEND
ADVANTAGE 3 (NZH)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2005 14.65 .97 .68 (.13) -- 1.52 (.86) -- (.86)
2004 13.72 .98 .88 (.07) -- 1.79 (.86) -- (.86)
2003 14.33 .98 (.66) (.08) -- .24 (.86) -- (.86)
2002(b) 14.33 .83 .09 (.08) -- .84 (.72) -- (.72)
INSURED CALIFORNIA
DIVIDEND ADVANTAGE (NKL)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2005 15.35 1.01 .52 (.12) -- 1.41 (.90) (.05) (.95)
2004 14.60 1.02 .84 (.06) (.01) 1.79 (.91) (.13) (1.04)
2003 15.14 .99 (.49) (.07) (.01) .42 (.91) (.05) (.96)
2002(c) 14.33 .34 .92 (.03) -- 1.23 (.30) -- (.30)
INSURED CALIFORNIA
TAX-FREE ADVANTAGE (NKX)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2005 14.62 .96 .57 (.13) -- 1.40 (.85) -- (.85)
2004 13.79 .96 .84 (.06) -- 1.74 (.91) -- (.91)
2003(d) 14.33 .64 (.33) (.04) -- .27 (.60) -- (.60)
====================================================================================================================================
Total Returns
--------------------
Based
Offering on
Costs and Ending Common
Preferred Common Based Share
Share Share Ending on Net
Underwriting Net Asset Market Market Asset
Discounts Value Value Value* Value*
==========================================================================================
CALIFORNIA DIVIDEND
ADVANTAGE (NAC)
------------------------------------------------------------------------------------------
Year Ended 8/31:
2005 $ -- $15.98 $16.07 14.62% 9.41%
2004 -- 15.59 15.00 12.07 12.11
2003 -- 14.82 14.30 4.79 3.37
2002 -- 15.24 14.55 3.67 6.75
2001 -- 15.13 14.89 15.06 15.85
CALIFORNIA DIVIDEND
ADVANTAGE 2 (NVX)
------------------------------------------------------------------------------------------
Year Ended 8/31:
2005 -- 15.63 15.19 14.98 10.80
2004 -- 14.97 14.08 13.60 12.11
2003 -- 14.18 13.24 (.95) 2.16
2002 -- 14.79 14.28 (.27) 3.90
2001(a) (.12) 15.11 15.21 3.40 7.55
CALIFORNIA DIVIDEND
ADVANTAGE 3 (NZH)
------------------------------------------------------------------------------------------
Year Ended 8/31:
2005 -- 15.31 14.49 15.75 10.69
2004 -- 14.65 13.33 11.97 13.36
2003 .01 13.72 12.71 (3.20) 1.68
2002(b) (.12) 14.33 14.00 (1.68) 5.32
INSURED CALIFORNIA
DIVIDEND ADVANTAGE (NKL)
------------------------------------------------------------------------------------------
Year Ended 8/31:
2005 -- 15.81 15.00 9.00 9.46
2004 -- 15.35 14.67 12.54 12.53
2003 -- 14.60 14.00 (.35) 2.70
2002(c) (.12) 15.14 15.00 2.05 7.84
INSURED CALIFORNIA
TAX-FREE ADVANTAGE (NKX)
------------------------------------------------------------------------------------------
Year Ended 8/31:
2005 -- 15.17 14.38 7.46 9.84
2004 -- 14.62 14.19 11.54 12.86
2003(d) (.21) 13.79 13.56 (5.79) .34
==========================================================================================
Ratios/Supplemental Data
--------------------------------------------------------------------------------------------------
Before Credit/Reimbursement After Credit/Reimbursement**
------------------------------ --------------------------------
Ratio of Net Ratio of Net
Ratio of Investment Ratio of Investment
Ending Expenses Income to Expenses Income to
Net to Average Average to Average Average
Assets Net Assets Net Assets Net Assets Net Assets
Applicable Applicable Applicable Applicable Applicable Portfolio
to Common to Common to Common to Common to Common Turnover
Shares (000) Shares++ Shares++ Shares++ Shares++ Rate
=================================================================================================================================
CALIFORNIA DIVIDEND
ADVANTAGE (NAC)
---------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2005 $374,265 1.12% 6.22% .75% 6.59% 4%
2004 365,066 1.14 6.38 .70 6.83 12
2003 346,918 1.15 6.44 .70 6.88 11
2002 356,821 1.18 6.76 .72 7.22 33
2001 354,197 1.19 7.03 .72 7.50 17
CALIFORNIA DIVIDEND
ADVANTAGE 2 (NVX)
---------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2005 231,140 1.16 5.94 .70 6.40 3
2004 221,395 1.18 6.24 .72 6.70 13
2003 209,722 1.18 6.30 .73 6.75 40
2002 218,814 1.19 6.82 .73 7.28 32
2001(a) 223,440 1.05* 5.23* .62* 5.65* 40
CALIFORNIA DIVIDEND
ADVANTAGE 3 (NZH)
---------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2005 369,262 1.17 6.05 .70 6.51 5
2004 353,360 1.20 6.32 .73 6.78 13
2003 330,829 1.20 6.33 .73 6.79 48
2002(b) 345,470 1.15* 6.01* .69* 6.47* 49
INSURED CALIFORNIA
DIVIDEND ADVANTAGE (NKL)
---------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2005 241,254 1.16 6.06 .71 6.51 4
2004 234,186 1.18 6.28 .72 6.74 14
2003 222,751 1.18 6.00 .72 6.46 71
2002(c) 231,062 1.10* 4.98* .60* 5.47* 12
INSURED CALIFORNIA
TAX-FREE ADVANTAGE (NKX)
---------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2005 89,272 1.21 5.95 .73 6.43 3
2004 86,008 1.23 6.17 .73 6.67 20
2003(d) 81,141 1.14* 5.25* .67* 5.72* 45
=================================================================================================================================
Preferred Shares at End of Period
---------------------------------------------
Aggregate Liquidation
Amount and Market Asset
Outstanding Value Coverage
(000) Per Share Per Share
===========================================================================
CALIFORNIA DIVIDEND
ADVANTAGE (NAC)
---------------------------------------------------------------------------
Year Ended 8/31:
2005 $175,000 $25,000 $78,466
2004 175,000 25,000 77,152
2003 175,000 25,000 74,560
2002 175,000 25,000 75,974
2001 175,000 25,000 75,600
CALIFORNIA DIVIDEND
ADVANTAGE 2 (NVX)
---------------------------------------------------------------------------
Year Ended 8/31:
2005 110,000 25,000 77,532
2004 110,000 25,000 75,317
2003 110,000 25,000 72,664
2002 110,000 25,000 74,731
2001(a) 110,000 25,000 75,782
CALIFORNIA DIVIDEND
ADVANTAGE 3 (NZH)
---------------------------------------------------------------------------
Year Ended 8/31:
2005 187,000 25,000 74,367
2004 187,000 25,000 72,241
2003 187,000 25,000 69,229
2002(b) 187,000 25,000 71,186
INSURED CALIFORNIA
DIVIDEND ADVANTAGE (NKL)
---------------------------------------------------------------------------
Year Ended 8/31:
2005 118,000 25,000 76,113
2004 118,000 25,000 74,616
2003 118,000 25,000 72,193
2002(c) 118,000 25,000 73,954
INSURED CALIFORNIA
TAX-FREE ADVANTAGE (NKX)
---------------------------------------------------------------------------
Year Ended 8/31:
2005 45,000 25,000 74,595
2004 45,000 25,000 72,782
2003(d) 45,000 25,000 70,078
===========================================================================
* Annualized.
** Total Investment Return on Market Value is the combination of changes in
the market price per share and the effect of reinvested dividend income and
reinvested capital gains distributions, if any, at the average price paid
per share at the time of reinvestment. Total Return on Common Share Net
Asset Value is the combination of changes in Common Share net asset value,
reinvested dividend income at net asset value and reinvested capital gains
distributions at net asset value, if any. Total returns are not annualized.
*** After custodian fee credit and expense reimbursement, where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
(a) For the period March 27, 2001 (commencement of operations) through August
31, 2001.
(b) For the period September 25, 2001 (commencement of operations) through
August 31, 2002.
(c) For the period March 25, 2002 (commencement of operations) through August
31, 2002.
(d) For the period November 21, 2002 (commencement of operations) through
August 31, 2003.
See accompanying notes to financial statements.
80-81 SPREAD
Board Members
AND OFFICERS
The management of the Funds, including general supervision of the duties
performed for the Funds by the Adviser, is the responsibility of the Board
Members of the Funds. The number of board members of the Fund is currently set
at nine. None of the board members who are not "interested" persons of the Funds
has ever been a director or employee of, or consultant to, Nuveen or its
affiliates. The names and business addresses of the board members and officers
of the Funds, their principal occupations and other affiliations during the past
five years, the number of portfolios each oversees and other directorships they
hold are set forth below.
NUMBER OF
PORTFOLIOS IN
POSITION(S) YEAR FIRST PRINCIPAL OCCUPATION(S) FUND COMPLEX
NAME, BIRTHDATE HELD WITH ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY
AND ADDRESS THE FUNDS APPOINTED(2) DURING PAST 5 YEARS BOARD MEMBER
------------------------------------------------------------------------------------------------------------------------------------
BOARD MEMBER WHO IS AN INTERESTED PERSON OF THE FUNDS:
------------------------------------------------------------------------------------------------------------------------------------
Timothy R. Schwertfeger(1) Chairman of 1994 Chairman (since 1996) and Director of Nuveen Investments, 155
3/28/49 the Board Inc., Nuveen Investments, LLC, Nuveen Advisory Corp. and
333 W. Wacker Drive and Trustee Nuveen Institutional Advisory Corp.(3); Director (since 1996)
Chicago, IL 60606 of Institutional Capital Corporation; Chairman and Director
(since 1997) of Nuveen Asset Management; Chairman and
Director of Rittenhouse Asset Management, Inc. (since 1999);
Chairman of Nuveen Investments Advisers Inc. (since 2002).
BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS:
------------------------------------------------------------------------------------------------------------------------------------
Robert P. Bremner Board member 1997 Private Investor and Management Consultant. 155
8/22/40
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Lawrence H. Brown Board member 1993 Retired (since 1989) as Senior Vice President of The 155
7/29/34 Northern Trust Company; Director (since 2002) Community
333 W. Wacker Drive Advisory Board for Highland Park and Highwood, United
Chicago, IL 60606 Way of the North Shore.
------------------------------------------------------------------------------------------------------------------------------------
Jack B. Evans Board member 1999 President, The Hall-Perrine Foundation, a private philanthropic 155
10/22/48 corporation (since 1996); Director and Vice Chairman, United
333 W. Wacker Drive Fire Group, a publicly held company; Adjunct Faculty Member,
Chicago, IL 60606 University of Iowa; Director, Gazette Companies; Life Trustee
of Coe College; Director, Iowa College Foundation; formerly,
Director, Alliant Energy; formerly, Director, Federal Reserve
Bank of Chicago; formerly, President and Chief Operating Officer,
SCI Financial Group, Inc., a regional financial services firm.
------------------------------------------------------------------------------------------------------------------------------------
William C. Hunter Board member 2004 Dean and Distinguished Professor of Finance, School of 155
3/6/48 Business at the University of Connecticut (since 2002);
333 W. Wacker Drive previously, Senior Vice President and Director of Research
Chicago, IL 60606 at the Federal Reserve Bank of Chicago (1995-2003); Director
(since 1997), Credit Research Center at Georgetown University;
Director (since 2004) of Xerox Corporation.
------------------------------------------------------------------------------------------------------------------------------------
David J. Kundert Board member 2005 Retired (since 2004) as Chairman, JPMorgan Fleming Asset 153
10/28/42 Management, President and CEO, Banc One Investment
333 W. Wacker Drive Advisors Corporation, and President, One Group Mutual
Chicago, IL 60606 Funds; prior thereto, Executive Vice President, Banc One
Corporation and Chairman and CEO, Banc One Investment
Management Group; Board of Regents, Luther College;
currently a member of the American and Wisconsin Bar
Associations.
82
NUMBER OF
PORTFOLIOS IN
POSITION(S) YEAR FIRST PRINCIPAL OCCUPATION(S) FUND COMPLEX
NAME, BIRTHDATE HELD WITH ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY
AND ADDRESS THE FUNDS APPOINTED(2) DURING PAST 5 YEARS BOARD MEMBER
------------------------------------------------------------------------------------------------------------------------------------
BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
William J. Schneider Board member 1997 Chairman, formerly, Senior Partner and Chief Operating 155
9/24/44 Officer (retired, December 2004), Miller-Valentine Partners
333 W. Wacker Drive Ltd., a real estate investment company; formerly, Vice
Chicago, IL 60606 President, Miller-Valentine Realty, a construction company;
Chair of the Finance Committee and member of the Audit
Committee of Premier Health Partners, the not-for-profit
company of Miami Valley Hospital; President, Dayton
Philharmonic Orchestra Association; Board Member,
Regional Leaders Forum, which promotes cooperation on
economic development issues; Director and Immediate
Past Chair, Dayton Development Coalition; formerly, Member,
Community Advisory Board, National City Bank, Dayton,
Ohio and Business Advisory Council, Cleveland Federal
Reserve Bank.
------------------------------------------------------------------------------------------------------------------------------------
Judith M. Stockdale Board member 1997 Executive Director, Gaylord and Dorothy Donnelley 155
12/29/47 Foundation (since 1994); prior thereto, Executive Director,
333 W. Wacker Drive Great Lakes Protection Fund (from 1990 to 1994).
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Eugene S. Sunshine Board member 2005 Senior Vice President for Business and Finance, 155
1/22/50 Northwestern University (since 1997); Director (since 2003),
333 W. Wacker Drive Chicago Board of Options Exchange; Director (since 2003),
Chicago, IL 60606 National Mentor Holdings, a privately-held, national provider
of home and community-based services; Chairman (since
1997), Board of Directors, Rubicon, a pure captive insurance
company owned by Northwestern University; Director (since
1997), Evanston Chamber of Commerce and Evanston
Inventure, a business development organization.
NUMBER OF
PORTFOLIOS IN
POSITION(S) YEAR FIRST FUND COMPLEX
NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) OVERSEEN BY
AND ADDRESS THE FUNDS APPOINTED(4) DURING PAST 5 YEARS OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUND:
------------------------------------------------------------------------------------------------------------------------------------
Gifford R. Zimmerman Chief 1988 Managing Director (since 2002), Assistant Secretary and 155
9/9/56 Administrative Associate General Counsel, formerly, Vice President and
333 W. Wacker Drive Officer Assistant General Counsel, of Nuveen Investments, LLC;
Chicago, IL 60606 Managing Director (2002-2004), General Counsel (1998-2004)
and Assistant Secretary, formerly, Vice President of Nuveen
Advisory Corp. and Nuveen Institutional Advisory Corp.(3);
Managing Director (since 2002) and Assistant Secretary and
Associate General Counsel, formerly, Vice President (since
1997), of Nuveen Asset Management; Managing Director
(since 2004) and Assistant Secretary (since 1994) of Nuveen
Investments, Inc.; Assistant Secretary of NWQ Investment
Management Company, LLC. (since 2002); Vice President and
Assistant Secretary of Nuveen Investments Advisers Inc.
(since 2002); Managing Director, Associate General Counsel
and Assistant Secretary of Rittenhouse Asset Management,
Inc. (since 2003); Chartered Financial Analyst.
83
Board Members
AND OFFICERS (CONTINUED)
NUMBER OF
PORTFOLIOS IN
POSITION(S) YEAR FIRST FUND COMPLEX
NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) OVERSEEN BY
AND ADDRESS THE FUNDS APPOINTED(4) DURING PAST 5 YEARS OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
Julia L. Antonatos Vice President 2004 Managing Director (since 2005), formerly Vice President 155
9/22/63 (since 2002); formerly, Assistant Vice President (since 2000)
333 W. Wacker Drive of Nuveen Investments, LLC; Chartered Financial Analyst.
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Michael T. Atkinson Vice President 2000 Vice President (since 2002), formerly, Assistant Vice 155
2/3/66 and Assistant President (since 2000) of Nuveen Investments, LLC.
333 W. Wacker Drive Secretary
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Peter H. D'Arrigo Vice President 1999 Vice President of Nuveen Investments, LLC (since 1999); Vice 155
11/28/67 and Treasurer President and Treasurer (since 1999) of Nuveen Investments,
333 W. Wacker Drive Inc.; Vice President and Treasurer (1999-2004) of Nuveen
Chicago, IL 60606 Advisory Corp. and Nuveen Institutional Advisory Corp.(3);
Vice President and Treasurer of Nuveen Asset Management
(since 2002) and of Nuveen Investments Advisers Inc. (since
2002); Assistant Treasurer of NWQ Investment Management
Company, LLC. (since 2002); Vice President and Treasurer of
Nuveen Rittenhouse Asset Management, Inc. (since 2003);
Chartered Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
Jessica R. Droeger Vice President 1998 Vice President (since 2002), Assistant Secretary and 155
9/24/64 and Secretary Assistant General Counsel (since 1998) formerly, Assistant
333 W. Wacker Drive Vice President (since 1998) of Nuveen Investments, LLC;
Chicago, IL 60606 Vice President (2002-2004) and Assistant Secretary (1998-2004)
formerly, Assistant Vice President of Nuveen Advisory Corp.
and Nuveen Institutional Advisory Corp.(3); Vice President and
Assistant Secretary (since 2005) of Nuveen Asset Management.
------------------------------------------------------------------------------------------------------------------------------------
Lorna C. Ferguson Vice President 1998 Managing Director (since 2004), formerly, Vice President of 155
10/24/45 Nuveen Investments, LLC, Managing Director (2004) formerly,
333 W. Wacker Drive Vice President (1998-2004) of Nuveen Advisory Corp. and
Chicago, IL 60606 Nuveen Institutional Advisory Corp.(3); Managing Director
(since 2005) of Nuveen Asset Management.
------------------------------------------------------------------------------------------------------------------------------------
William M. Fitzgerald Vice President 1995 Managing Director (since 2002), formerly, Vice President of 155
3/2/64 Nuveen Investments; Managing Director (1997-2004) of
333 W. Wacker Drive Nuveen Advisory Corp. and Nuveen Institutional Advisory
Chicago, IL 60606 Corp.(3); Managing Director of Nuveen Asset Management
(since 2001); Vice President of Nuveen Investments Advisers
Inc. (since 2002); Chartered Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
Stephen D. Foy Vice President 1998 Vice President (since 1993) and Funds Controller (since 1998) 155
5/31/54 and Controller of Nuveen Investments, LLC; formerly, Vice President and
333 W. Wacker Drive Funds Controller (1998-2004) of Nuveen Investments, Inc.;
Chicago, IL 60606 Certified Public Accountant.
------------------------------------------------------------------------------------------------------------------------------------
James D. Grassi Vice President 2004 Vice President and Deputy Director of Compliance (since 2004) 155
4/13/56 and Chief of Nuveen Investments, LLC, Nuveen Investments Advisers Inc.,
333 W. Wacker Drive Compliance Nuveen Asset Management and Rittenhouse Asset Management,
Chicago, IL 60606 Officer Inc.; previously, Vice President and Deputy Director of Compliance
(2004) of Nuveen Advisory Corp. and Nuveen Institutional Advisory
Corp.(3); formerly, Senior Attorney (1994-2004), The Northern
Trust Company.
84
NUMBER OF
PORTFOLIOS IN
POSITION(S) YEAR FIRST FUND COMPLEX
NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) OVERSEEN BY
AND ADDRESS THE FUNDS APPOINTED(4) DURING PAST 5 YEARS OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
David J. Lamb Vice President 2000 Vice President (since 2000) of Nuveen Investments, 155
3/22/63 LLC; Certified Public Accountant.
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Tina M. Lazar Vice President 2002 Vice President of Nuveen Investments, LLC (since 1999). 155
8/27/61
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Larry W. Martin Vice President 1988 Vice President, Assistant Secretary and Assistant General 155
7/27/51 and Assistant Counsel of Nuveen Investments, LLC; Vice President and
333 W. Wacker Drive Secretary Assistant Secretary of Nuveen Advisory Corp. and Nuveen
Chicago, IL 60606 Institutional Advisory Corp.(3); Vice President (since 2005)
and Assistant Secretary of Nuveen Investments, Inc.; Vice
President (since 2005) and Assistant Secretary (since 1997)
of Nuveen Asset Management; Vice President (since 2000),
Assistant Secretary and Assistant General Counsel (since
1998) of Rittenhouse Asset Management, Inc.; Vice President
and Assistant Secretary of Nuveen Investments Advisers Inc.
(since 2002); Assistant Secretary of NWQ Investment
Management Company, LLC (since 2002).
(1) Mr. Schwertfeger is an "interested person'' of the Funds, as defined in the
Investment Company Act of 1940, because he is an officer and board member of
the Adviser.
(2) Board members serve an indefinite term until his/her successor is elected.
The year first elected or appointed represents the year in which the board
member was first elected or appointed to any fund in the Nuveen Complex.
(3) Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp. were
reorganized into Nuveen Asset Management, effective January 1, 2005.
(4) Officers serve one year terms through July of each year. The year first
elected or appointed represents the year in which the Officer was first
elected or appointed to any fund in the Nuveen Complex.
85
ANNUAL INVESTMENT
MANAGEMENT AGREEMENT
APPROVAL PROCESS
At a meeting held on May 10-12, 2005, the Board of Trustees of the Funds,
including the independent Trustees, unanimously approved the Investment
Management Agreement between each Fund and NAM.
THE APPROVAL PROCESS
To assist the Board in its evaluation of an advisory contract with NAM, the
independent Trustees received a report in adequate time in advance of their
meeting which outlined, among other things, the services provided by NAM; the
organization of NAM, including the responsibilities of various departments and
key personnel; the Fund's past performance as well as the Fund's performance
compared to funds of similar investment objectives compiled by an independent
third party (a "Peer Group") and if available, with recognized or, in certain
cases, customized benchmarks; the profitability of NAM and certain industry
profitability analyses for advisers to unaffiliated investment companies; the
expenses of NAM in providing the various services; the management fees of NAM,
including comparisons of such fees with the management fees of comparable funds
in its Peer Group as well as comparisons of NAM's management fees with the fees
NAM assesses to other types of investment products or accounts, if any; the soft
dollar practices of NAM; and the expenses of each Fund, including comparisons of
the Fund's expense ratios (after any fee waivers) with the expense ratios of its
Peer Group. This information supplements that received by the Board throughout
the year regarding Fund performance, expense ratios, portfolio composition,
trade execution and sales activity.
In addition to the foregoing materials, independent legal counsel to the
independent Trustees provided, in advance of the meeting, a legal memorandum
outlining, among other things, the duties of the Trustees under the 1940 Act as
well as the general principles of relevant state law in reviewing and approving
advisory contracts; the requirements of the 1940 Act in such matters; an
adviser's fiduciary duty with respect to advisory agreements and compensation;
the standards used by courts in determining whether investment company boards of
directors have fulfilled their duties and factors to be considered by the board
in voting on advisory agreements.
At the Board meeting, NAM made a presentation to and responded to questions from
the Board. After the presentations and after reviewing the written materials,
the independent Trustees met privately with their legal counsel to review the
Board's duties in reviewing advisory contracts and consider the renewal of the
advisory contract. It is with this background that the Trustees considered each
Investment Management Agreement with NAM. The independent Trustees, in
consultation with independent counsel, reviewed the factors set out in judicial
decisions and SEC directives relating to the renewal of advisory contracts. As
outlined in more detail below, the Trustees considered all factors they believed
relevant with respect to each Fund, including the following: (a) the nature,
extent and quality of the services to be provided by NAM; (b) the investment
performance of the Fund and NAM; (c) the costs of the services to be provided
and profits to be realized by NAM and its affiliates from the relationship with
the Fund; (d) the extent to which economies of scale would be realized as the
Fund grows; and (e) whether fee levels reflect these economies of scale for the
benefit of Fund investors.
A. NATURE, EXTENT AND QUALITY OF SERVICES
In evaluating the nature, extent and quality of NAM's services, the Trustees
reviewed information concerning the types of services that NAM or its affiliates
provide and are expected to provide to the Nuveen Funds; narrative and
statistical information concerning the Fund's performance record and how such
performance compares to the Fund's Peer Group and, if available, recognized
benchmarks or, in certain cases, customized benchmarks (as described in further
detail in Section B below); information describing NAM's organization and its
various departments, the experience and responsibilities of key personnel, and
available resources. In the discussion of key personnel, the Trustees received
materials regarding the changes or additions in personnel of NAM. The Trustees
further noted the willingness of the personnel of NAM to engage in open, candid
discussions with the Board. The Trustees further considered the quality of NAM's
investment process in making portfolio management decisions, including any
refinements or improvements to the portfolio management processes, enhancements
to technology and systems that are available to portfolio managers, and any
additions of new personnel which may strengthen or expand the research and
investment capabilities of NAM. In their review of advisory contracts for the
fixed income funds, such as the Funds, the Trustees also noted that Nuveen won
the Lipper Award for Best Fund Family: Fixed Income-Large Asset Class, for 2004.
Given the Trustees' experience with the Funds, other Nuveen funds and NAM, the
Trustees noted that they were familiar with and continue to have a good
understanding of the organization, operations and personnel of NAM.
In addition to advisory services, the independent Trustees considered the
quality of the administrative or non-advisory services provided. In this regard,
NAM provides the Fund with such administrative and other services (exclusive of,
and in addition to, any such services provided by others for the Funds) and
officers and other personnel as are necessary for the operations of the
respective Fund. In addition to investment management services, NAM and its
affiliates provide each Fund with a wide range of services, including:
86
preparing shareholder reports; providing daily accounting; providing quarterly
financial statements; overseeing and coordinating the activities of other
service providers; administering and organizing Board meetings and preparing the
Board materials for such meetings; providing legal support (such as helping to
prepare registration statements, amendments thereto and proxy statements and
responding to regulatory inquiries); and performing other Fund administrative
tasks necessary for the operation of the respective Fund (such as tax reporting
and fulfilling regulatory filing requirements). In addition, in evaluating the
administrative services, the Trustees considered, in particular, NAM's policies
and procedures for assuring compliance with applicable laws and regulations in
light of the new SEC regulations governing compliance. The Trustees noted NAM's
focus on compliance and its compliance systems. In their review, the Trustees
considered, among other things, the additions of experienced personnel to NAM's
compliance group and modifications and other enhancements to NAM's computer
systems. In addition to the foregoing, the Trustees also noted that NAM
outsources certain services that cannot be replicated without significant costs
or at the same level of expertise. Such outsourcing has been a beneficial and
efficient use of resources by keeping expenses low while obtaining quality
services.
In addition to the above, in reviewing the variety of additional services that
NAM or its affiliates must provide to closed-end funds, such as the Funds, the
independent Trustees determined that Nuveen's commitment to supporting the
secondary market for the common shares of its closed-end funds is particularly
noteworthy. In this regard, the Trustees noted Nuveen's efforts to sponsor
numerous forums for analysts and specialists regarding the various Nuveen
closed-end funds, its creation of a new senior position dedicated to providing
secondary market support services and enhancing communications with investors
and analysts, and its advertising and media relations efforts designed to raise
investor and analyst awareness of the closed-end funds.
With respect to services provided to municipal funds, such as the Funds, the
Trustees also noted, among other things, the enhancements NAM implemented to its
municipal portfolio management processes (e.g., the increased use of benchmarks
to guide and assess the performance of its portfolio managers); the
implementation of a risk management program; and the various initiatives being
undertaken to enhance or modify NAM's computer systems as necessary to support
the innovations of the municipal investment team (such as, the ability to assess
certain historical data in order to create customized benchmarks, perform
attribution analysis and facilitate the use of derivatives as hedging
instruments). With respect to certain of the Funds with a less seasoned
portfolio, the Trustees also noted the hedging program implemented for such
Funds and the team responsible for developing, implementing and monitoring the
hedging procedures. The hedging program was designed to help maintain the
applicable Fund's duration within certain benchmarks.
Based on their review, the Trustees found that, overall, the nature, extent and
quality of services provided (and expected to be provided) to the Funds under
the Investment Management Agreements were of a high level and were quite
satisfactory.
B. THE INVESTMENT PERFORMANCE OF THE FUND AND ADVISER
As previously noted, the Board received a myriad of performance information
regarding each Fund and its Peer Group, if available. Among other things, the
Board received materials reflecting a Fund's historic performance, the Fund's
performance compared to its Peer Group and, if available, its performance
compared to recognized and, in certain cases, customized benchmarks. Further, in
evaluating the performance information, in certain limited instances, the
Trustees noted that the closest Peer Group for a Fund still would not adequately
reflect such Fund's investment objectives and strategies, thereby limiting the
usefulness of the comparisons of such Fund's performance with that of the Peer
Group.
For state municipal funds, such as the Funds, the performance data included,
among other things, the respective Fund's performance relative to its peers.
More specifically, a Fund's one-, three- and five-year total returns (as
available) for the periods ending December 31, 2004 were evaluated relative to
the unaffiliated funds in its respective Peer Group (including the returns of
individual peers as well as the Peer Group average) as well as additional
performance information with respect to all the funds in the Peer Group, subject
to the following. Certain state municipal Funds do not have a corresponding Peer
Group in which case their performance is measured against a state-specific
municipal index compiled by an independent third party. Such indices measure
bond performance rather than fund performance. The closed-end Funds that utilize
such indices are from Connecticut, Georgia, Maryland, Missouri, North Carolina,
Texas and Virginia. Based on their review, the Trustees determined that each
Fund's absolute and relative investment performance over time had been
satisfactory.
C. FEES, EXPENSES AND PROFITABILITY
1. FEES AND EXPENSES
In evaluating the management fees and expenses that a Fund is expected to
bear, the Trustees considered the Fund's current management fee structure and
the Fund's expected expense ratios in absolute terms as well as compared with
the fees and expense ratios of the unaffiliated funds in its Peer Group. The
Trustees reviewed the financial information of NAM, including its respective
revenues, expenses and profitability. In reviewing fees, the Trustees, among
other things, reviewed comparisons of the Fund's gross management fees (fees
after fund-level and complex-wide level breakpoints but before reimbursements
and fee waivers), net management fees (after breakpoints and reimbursements
and fee waivers) and total expense ratios (before and after waivers) with
those of the unaffiliated funds in the Peer Group and peer averages. In this
regard, the Trustees noted that the relative ranking of the Nuveen Funds on
fees and expenses was aided by the significant level of fee reductions
provided by the fund-level and complex-wide breakpoint schedules, and the fee
waivers and reimbursements provided by Nuveen for certain Funds launched
since 1999. The complex-wide breakpoint schedule was instituted in 2004 and
is described in further detail below in Section D entitled "Economies of
Scale and Whether Fee Levels Reflect these Economies of Scale." In their
review of the fee and expense information provided, including, in particular,
the expense ratios of the unaffiliated funds in the respective Peer Group,
the Trustees determined that each Fund's net total expense ratio was within
an acceptable range compared to such peers.
87
ANNUAL INVESTMENT MANAGEMENT
AGREEMENT APPROVAL PROCESS (continued)
2. COMPARISONS WITH THE FEES OF OTHER CLIENTS
The Trustees further compared the fees of NAM to the fees NAM assessed for
other types of clients investing in municipal funds (such as municipal
managed accounts). With respect to such separately managed accounts, the
advisory fees for such accounts are generally lower than those charged to the
comparable Fund. The Trustees noted, however, the additional services that
are provided and the costs incurred by Nuveen in managing and operating
registered investment companies, such as the Funds, compared to individually
managed separate accounts. For instance, as described above, NAM and its
affiliates provide numerous services to the Funds including, but not limited
to, preparing shareholder reports; providing daily accounting; preparing
quarterly financial statements; overseeing and coordinating the activities of
other service providers; administering and organizing Board meetings and
preparing the Board materials for such meetings; providing legal support; and
administering all other aspects of the Fund's operations. Further, the
Trustees noted the increased compliance requirements for funds in light of
new SEC regulations and other legislation. These services are generally not
required to the same extent, if at all, for separate accounts. In addition to
the differences in services, the Trustees also considered, among other
things, the differences in product distribution, investment policies,
investor profiles and account sizes. Accordingly, the Trustees believe that
the nature and number of services provided to operate a Fund merit the higher
fees than those to separate managed accounts.
3. PROFITABILITY OF ADVISER
In conjunction with its review of fees, the Trustees also considered NAM's
profitability. The Trustees reviewed NAM's revenues, expenses and
profitability margins (on both a pre-tax and after-tax basis). In reviewing
profitability, the Trustees recognized that one of the most difficult issues
in determining profitability is establishing a method of allocating expenses.
Accordingly, the Trustees reviewed NAM's assumptions and methodology of
allocating expenses. In this regard, the methods of allocation used appeared
reasonable but the Board noted the inherent limitations in allocating costs
among various advisory products. The Trustees also recognized that individual
fund or product line profitability of other advisers is generally not
publicly available. Further, profitability may be affected by numerous
factors including the types of funds managed, expense allocations, business
mix, etc. and therefore comparability of profitability is somewhat limited.
Nevertheless, to the extent available, the Trustees considered NAM's profit
margin compared to the profitability of various publicly-traded investment
management companies and/or investment management companies that publicly
disclose some or all of their financial results compiled by three independent
third-party service providers. The Trustees also reviewed the revenues,
expenses and profit margins of various unaffiliated advisory firms with
similar amounts of assets under management for the last year prepared by NAM.
Based on their review, the Trustees were satisfied that NAM's level of
profitability from its relationship with each Fund was reasonable in light of
the services provided.
In evaluating the reasonableness of the compensation, the Trustees also
considered any other revenues paid to NAM as well as any indirect benefits
(such as soft dollar arrangements, if any) NAM and its affiliates are
expected to receive that are directly attributable to their management of the
Funds, if any. See Section E below for additional information. Based on their
review of the overall fee arrangements of the applicable Fund, the Trustees
determined that the advisory fees and expenses of the respective Fund were
reasonable.
D. ECONOMIES OF SCALE AND WHETHER FEE LEVELS REFLECT THESE ECONOMIES OF SCALE
In reviewing the compensation, the Trustees have long understood the benefits of
economies of scale as the assets of a fund grow and have sought to ensure that
shareholders share in these benefits. One method for shareholders to share in
economies of scale is to include breakpoints in the advisory fee schedules that
reduce fees as fund assets grow. Accordingly, the Trustees received and reviewed
the schedules of advisory fees for each Fund, including fund-level breakpoints
thereto. In addition, after lengthy negotiations with management, the Board in
May 2004 approved a complex-wide fee arrangement pursuant to which fees of the
funds in the Nuveen complex, including the Funds, are reduced as the assets in
the fund complex reach certain levels. The complex-wide fee arrangement was
introduced on August 1, 2004 and the Trustees reviewed data regarding the
reductions of fees for the Funds for the period of August 1, 2004 to December
31, 2004. In evaluating the complex-wide fee arrangement, the Trustees
considered, among other things, the historic and expected fee savings to
shareholders as assets grow, the amount of fee reductions at various asset
levels, and that the arrangement would extend to all Funds in the Nuveen
complex. The Trustees also considered the impact, if any, the complex-wide fee
arrangement may have on the level of services provided. Based on their review,
the Trustees concluded that the breakpoint schedule and complex-wide fee
arrangement currently was acceptable and desirable in providing benefits from
economies of scale to shareholders.
88
E. INDIRECT BENEFITS
In evaluating fees, the Trustees also considered any indirect benefits or
profits NAM or its affiliates may receive as a result of its relationship with
each Fund. In this regard, the Trustees considered any benefits from soft dollar
arrangements. The Trustees noted that although NAM manages a large amount of
assets, it has very little, if any, brokerage to allocate. This is due to the
fact that NAM typically manages the portfolios of the municipal funds in the
Nuveen complex and municipal bonds generally trade on a principal basis.
Accordingly, NAM does not currently have any soft dollar arrangements and does
not pay excess brokerage commissions (or spreads on principal transactions) in
order to receive research services. In addition to soft dollar arrangements, the
Trustees also considered any other revenues, if any, received by NAM or its
affiliates. With respect to Funds with outstanding preferred shares and new
Funds, the Trustees considered revenues received by Nuveen for serving as agent
for broker-dealers at its preferred trading desk and for acting as co-manager in
the initial public offering of new closed-end exchange-traded funds.
F. OTHER CONSIDERATIONS
Nuveen, until recently, was a majority-owned subsidiary of St. Paul Travelers
Companies, Inc. ("St. Paul"). As noted, St. Paul earlier this year announced its
intention to divest its equity stake in Nuveen. Nuveen is the parent of NAM.
Pursuant to a series of transactions, St. Paul had begun to reduce its interest
in Nuveen which would ultimately result in a change of control of Nuveen and
therefore NAM. As mandated by the 1940 Act, such a change in control would
result in an assignment of the advisory agreement with NAM and the automatic
termination of such agreement. Accordingly, the Board also considered for each
Fund the approval of a New Investment Management Agreement with each Fund in
light of, and which would take effect upon, the anticipated change of control.
More specifically, the Board considered for each Fund a New Investment
Management Agreement on substantially identical terms to the existing Investment
Management Agreement, to take effect after the change of control has occurred
and the contract has been approved by Fund shareholders. In its review, the
Board considered whether the various transactions necessary to divest St. Paul's
interest will have an impact on the various factors they considered in approving
NAM, such as the scope and quality of services to be provided following the
change of control. In reviewing the St. Paul transactions, the Board considered,
among other things, the impact, if any, on the operations and organizational
structure of NAM; the possible benefits and costs of the transactions to the
respective Fund; the potential implications of any arrangements used by Nuveen
to finance certain of the transactions; the ability of NAM to perform its duties
after the transactions; whether a Fund's fee structure or expense ratio would
change; any changes to the current practices of the respective Fund; any changes
to the terms of the advisory agreement; and any anticipated changes to the
operations of NAM. Based on its review, the Board determined that St. Paul's
divestiture would not affect the nature and quality of services provided by NAM,
the terms of the Investment Management Agreement, including the fees thereunder,
and would not materially affect the organization or operations of NAM.
Accordingly, the Board determined that their analysis of the various factors
regarding their approval of NAM would continue to apply after the change of
control.
G. APPROVAL
The Trustees did not identify any single factor discussed previously as
all-important or controlling. The Trustees, including a majority of independent
Trustees, concluded that the terms of the Investment Management Agreements were
fair and reasonable, that the respective Fund Adviser's fees are reasonable in
light of the services provided to each Fund, that the renewal of the NAM
Investment Management Agreements should be approved, and that the new,
post-change of control NAM Investment Management Agreements be approved and
recommended to shareholders.
89
Reinvest Automatically
EASILY AND CONVENIENTLY
Sidebar text: NUVEEN MAKES REINVESTING EASY. A PHONE CALL IS ALL IT TAKES TO SET
UP YOUR REINVESTMENT ACCOUNT.
NUVEEN CLOSED-END EXCHANGE-TRADED FUNDS
DIVIDEND REINVESTMENT PLAN
Your Nuveen Closed-End Exchange-Traded Fund allows you to conveniently reinvest
dividends and/or capital gains distributions in additional fund shares.
By choosing to reinvest, you'll be able to invest money regularly and
automatically, and watch your investment grow through the power of tax-free
compounding. Just like dividends or distributions in cash, there may be times
when income or capital gains taxes may be payable on dividends or distributions
that are reinvested.
It is important to note that an automatic reinvestment plan does not ensure a
profit, nor does it protect you against loss in a declining market.
EASY AND CONVENIENT
To make recordkeeping easy and convenient, each month you'll receive a statement
showing your total dividends and distributions, the date of investment, the
shares acquired and the price per share, and the total number of shares you own.
HOW SHARES ARE PURCHASED
The shares you acquire by reinvesting will either be purchased on the open
market or newly issued by the Fund. If the shares are trading at or above net
asset value at the time of valuation, the Fund will issue new shares at the
then-current market price. If the shares are trading at less than net asset
value, shares for your account will be purchased on the open market. Dividends
and distributions received to purchase shares in the open market will normally
be invested shortly after the dividend payment date. No interest will be paid on
dividends and distributions awaiting reinvestment. Because the market price of
the shares may increase before purchases are completed, the average purchase
price per share may exceed the market price at the time of valuation, resulting
in the acquisition of fewer shares than if the dividend or distribution had been
paid in shares issued by the Fund. A pro rata portion of any applicable
brokerage commissions on open market purchases will be paid by Plan
participants. These commissions usually will be lower than those charged on
individual transactions.
FLEXIBLE
You may change your distribution option or withdraw from the Plan at any time,
should your needs or situation change. Should you withdraw, you can receive a
certificate for all whole shares credited to your reinvestment account and cash
payment for fractional shares, or cash payment for all reinvestment account
shares, less brokerage commissions and a $2.50 service fee.
You can reinvest whether your shares are registered in your name, or in the name
of a brokerage firm, bank, or other nominee. Ask your investment advisor if his
or her firm will participate on your behalf. Participants whose shares are
registered in the name of one firm may not be able to transfer the shares to
another firm and continue to participate in the Plan.
The Fund reserves the right to amend or terminate the Plan at any time. Although
the Fund reserves the right to amend the Plan to include a service charge
payable by the participants, there is no direct service charge to participants
in the Plan at this time.
CALL TODAY TO START REINVESTING DIVIDENDS AND/OR DISTRIBUTIONS
For more information on the Nuveen Automatic Reinvestment Plan or to enroll in
or withdraw from the Plan, speak with your financial advisor or call us at (800)
257-8787.
90
Other Useful
INFORMATION
In April, 2005, The St. Paul Travelers Companies, Inc. (``St. Paul Travelers'')
sold the majority of its controlling equity interest in Nuveen Investments, Inc.
(``Nuveen'') to the general public. Nuveen is the parent of Nuveen Asset
Management ("NAM"), which is each Fund's investment manager. This sale was
deemed to be an "assignment" of the investment management agreement between each
Fund and NAM and, if applicable, of the sub-advisory agreement between NAM and
the Fund's sub-adviser. As required by law, the shareholders of each Fund were
asked to approve a new investment management agreement and, if applicable, a new
subadvisory agreement that reflected this change in ownership. The shareholders
of each Fund voted this approval at a Shareholders' Meeting on July 26. 2005.
There were no changes to the investment objectives or management of any Fund as
a result of these actions.
QUARTERLY PORTFOLIO OF INVESTMENTS AND PROXY VOTING INFORMATION
Each Fund's (i) quarterly portfolio of investments, (ii) information regarding
how the Funds voted proxies relating to portfolio securities held during the
12-month period ended June 30, 2005, and (iii) a description of the policies and
procedures that the Funds used to determine how to vote proxies relating to
portfolio securities are available without charge, upon request, by calling
Nuveen Investments toll-free at (800) 257-8787 or on Nuveen's website at
www.nuveen.com.
You may also obtain this and other Fund information directly from the Securities
and Exchange Commission ("SEC"). The SEC may charge a copying fee for this
information. Visit the SEC on-line at http://www.sec.gov or in person at the
SEC's Public Reference Room in Washington, D.C. Call the SEC at 1-202-942-8090
for room hours and operation. You may also request Fund information by sending
an e-mail request to publicinfo@sec.gov or by writing to the SEC's Public
References Section at 450 Fifth Street NW, Washington, D.C. 20549.
CEO CERTIFICATION DISCLOSURE
Each Fund's Chief Executive Officer has submitted to the New York Stock Exchange
the annual CEO certification as required by Section 303A.12(a) of the NYSE
Listed Company Manual.
Each Fund has filed with the Securities and Exchange Commission the
certification of its Chief Executive Officer and Chief Financial Officer
required by Section 302 of the Sarbanes-Oxley Act.
GLOSSARY OF TERMS USED IN THIS REPORT
AVERAGE ANNUAL TOTAL RETURN: This is a commonly used method to express an
investment's performance over a particular, usually multi-year time period. It
expresses the return that would have been necessary each year to equal the
investment's actual cumulative performance (including change in NAV or market
price and reinvested dividends and capital gains distributions, if any) over the
time period being considered.
AVERAGE EFFECTIVE MATURITY: The average of all the maturities of the bonds in a
Fund's portfolio, computed by weighting each maturity date (the date the
security comes due) by the market value of the security. This figure does not
account for the likelihood of prepayments or the exercise of call provisions.
LEVERAGE-ADJUSTED DURATION: Duration is a measure of the expected period over
which a bond's principal and interest will be paid, and consequently is a
measure of the sensitivity of a bond's or bond Fund's value to changes when
market interest rates change. Generally, the longer a bond's or Fund's duration,
the more the price of the bond or Fund will change as interest rates change.
Leverage-adjusted duration takes into account the leveraging process for a Fund
and therefore is longer than the duration of the Fund's portfolio of bonds.
MARKET YIELD (ALSO KNOWN AS DIVIDEND YIELD OR CURRENT YIELD): An investment's
current annualized dividend divided by its current market price.
NET ASSET VALUE (NAV): A Fund's common share NAV per share is calculated by
subtracting the liabilities of the Fund (including any MuniPreferred shares
issued in order to leverage the Fund) from its total assets and then dividing
the remainder by the number of shares outstanding. Fund NAVs are calculated at
the end of each business day.
TAXABLE-EQUIVALENT YIELD: The yield necessary from a fully taxable investment to
equal, on an after-tax basis, the yield of a municipal bond investment.
BOARD OF DIRECTORS/TRUSTEES
Robert P. Bremner
Lawrence H. Brown
Jack B. Evans
William C. Hunter
David J. Kundert
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
Eugene S. Sunshine
FUND MANAGER
Nuveen Asset Management
333 West Wacker Drive
Chicago, IL 60606
CUSTODIAN
State Street Bank & Trust
Boston, MA
TRANSFER AGENT AND
SHAREHOLDER SERVICES
State Street Bank & Trust
Nuveen Funds
P.O. Box 43071
Providence, RI 02940-3071
(800) 257-8787
LEGAL COUNSEL
Chapman and Cutler LLP
Chicago, IL
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Ernst & Young LLP
Chicago, IL
Each Fund intends to repurchase shares of its own common or preferred stock in
the future at such times and in such amounts as is deemed advisable. No shares
were repurchased during the period covered by this report. Any future
repurchases will be reported to shareholders in the next annual or semiannual
report.
91
Nuveen Investments:
SERVING Investors
For GENERATIONS
Photo of: 2 women looking at a photo album.
Since 1898, financial advisors and their clients have relied on Nuveen
Investments to provide dependable investment solutions. For the past century,
Nuveen Investments has adhered to the belief that the best approach to investing
is to apply conservative risk-management principles to help minimize volatility.
Building on this tradition, we today offer a range of high quality equity and
fixed-income solutions that are integral to a well-diversified core portfolio.
Our clients have come to appreciate this diversity, as well as our continued
adherence to proven, long-term investing principles.
WE OFFER MANY DIFFERENT INVESTING SOLUTIONS FOR OUR CLIENTS' DIFFERENT NEEDS.
Managing more than $120 billion in assets, Nuveen Investments offers access to a
number of different asset classes and investing solutions through a variety of
products. Nuveen Investments markets its capabilities under four distinct
brands: Nuveen, a leader in fixed-income investments; NWQ, a leader in
value-style equities; Rittenhouse, a leader in growth-style equities; and
Symphony, a leading institutional manager of market-neutral alternative
investment portfolios.
FIND OUT HOW WE CAN HELP YOU REACH YOUR FINANCIAL GOALS.
To learn more about the products and services Nuveen Investments offers, talk to
your financial advisor, or call us at (800) 257-8787. Please read the
information provided carefully before you invest.
Be sure to obtain a prospectus, where applicable. Investors should consider the
investment objective and policies, risk considerations, charges and expenses of
the Fund carefully before investing. The prospectus contains this and other
information relevant to an investment in the Fund. For a prospectus, please
contact your securities representative or Nuveen Investments, 333 W. Wacker Dr.,
Chicago, IL 60606. Please read the prospectus carefully before you invest or
send money.
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WWW.NUVEEN.COM/ETF o Interactive planning tools
Logo: NUVEEN Investments
EAN-B-0805D
ITEM 2. CODE OF ETHICS.
As of the end of the period covered by this report, the registrant has adopted a
code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions. There were no amendments to or waivers
from the Code during the period covered by this report. The registrant has
posted the code of ethics on its website at www.nuveen.com/etf. (To view the
code, click on the Investor Resources drop down menu box, click on Fund
Governance and then click on Code of Conduct.)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Directors or Trustees determined that the registrant
has at least one "audit committee financial expert" (as defined in Item 3 of
Form N-CSR) serving on its Audit Committee. The registrant's audit committee
financial expert is Jack B. Evans, Chairman of the Audit Committee, who is
"independent" for purposes of Item 3 of Form N-CSR.
Mr. Evans was formerly President and Chief Operating Officer of SCI Financial
Group, Inc., a full service registered broker-dealer and registered investment
adviser ("SCI"). As part of his role as President and Chief Operating Officer,
Mr. Evans actively supervised the Chief Financial Officer (the "CFO") and
actively supervised the CFO's preparation of financial statements and other
filings with various regulatory authorities. In such capacity, Mr. Evans was
actively involved in the preparation of SCI's financial statements and the
resolution of issues raised in connection therewith. Mr. Evans has also served
on the audit committee of various reporting companies. At such companies, Mr.
Evans was involved in the oversight of audits, audit plans, and the preparation
of financial statements. Mr. Evans also formerly chaired the audit committee of
the Federal Reserve Bank of Chicago.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Nuveen California Dividend Advantage Municipal Fund
The following tables show the amount of fees that Ernst & Young LLP, the Fund's
auditor, billed to the Fund during the Fund's last two full fiscal years. For
engagements with Ernst & Young LLP entered into on or after May 6, 2003, the
Audit Committee approved in advance all audit services and non-audit services
that Ernst & Young LLP provided to the Fund, except for those non-audit services
that were subject to the pre-approval exception under Rule 2-01 of Regulation
S-X (the "pre-approval exception"). The pre-approval exception for services
provided directly to the Fund waives the pre-approval requirement for services
other than audit, review or attest services if: (A) the aggregate amount of all
such services provided constitutes no more than 5% of the total amount of
revenues paid by the Fund to its accountant during the fiscal year in which the
services are provided; (B) the Fund did not recognize the services as non-audit
services at the time of the engagement; and (C) the services are promptly
brought to the Audit Committee's attention, and the Committee (or its delegate)
approves the services before the audit is completed.
The Audit Committee has delegated certain pre-approval responsibilities to its
Chairman (or, in his absence, any other member of the Audit Committee).
SERVICES THAT THE FUND'S AUDITOR BILLED TO THE FUND
AUDIT FEES BILLED AUDIT-RELATED FEES TAX FEES ALL OTHER FEES
FISCAL YEAR ENDED TO FUND BILLED TO FUND BILLED TO FUND BILLED TO FUND
------------------------------------------------------------------------------------------------------------------------------------
August 31, 2005 $ 18,320 $ 0 $ 1,009 $ 2,700
------------------------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0% 0%
pursuant to
pre-approval
exception
------------------------------------------------------------------------------------------------------------------------------------
August 31, 2004 $ 17,374 $ 0 $ 450 $ 2,500
------------------------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0% 0%
pursuant to
pre-approval
exception
------------------------------------------------------------------------------------------------------------------------------------
The above "All Other Fees" are fees paid to audit firms to perform agreed upon
procedures required by the rating agencies to rate fund preferred shares. The
above "Tax Fees" were billed for professional services for tax advice, tax
compliance, and tax planning.
SERVICES THAT THE FUND'S AUDITOR BILLED TO THE
ADVISER AND AFFILIATED FUND SERVICE PROVIDERS
The following tables show the amount of fees billed by Ernst & Young LLP to
Nuveen Asset Management ("NAM" or the "Adviser"), and any entity controlling,
controlled by or under common control with NAM ("Control Affiliate") that
provides ongoing services to the Fund ("Affiliated Fund Service Provider"), for
engagements directly related to the Fund's operations and financial reporting,
during the Fund's last two full fiscal years.
The tables also show the percentage of fees subject to the pre-approval
exception. The pre-approval exception for services provided to the Adviser and
any Affiliated Fund Service Provider (other than audit, review or attest
services) waives the pre-approval requirement if: (A) the aggregate amount of
all such services provided constitutes no more than 5% of the total amount of
revenues paid to Ernst & Young LLP by the Fund, the Adviser and Affiliated Fund
Service Providers during the fiscal year in which the services are provided that
would have to be pre-approved by the Audit Committee; (B) the Fund did not
recognize the services as non-audit services at the time of the engagement; and
(C) the services are promptly brought to the Audit Committee's attention, and
the Committee (or its delegate) approves the services before the Fund's audit is
completed.
FISCAL YEAR ENDED AUDIT-RELATED FEES TAX FEES BILLED TO ALL OTHER FEES
BILLED TO ADVISER AND ADVISER AND BILLED TO ADVISER
AFFILIATED FUND AFFILIATED FUND AND AFFILIATED FUND
SERVICE PROVIDERS SERVICE PROVIDERS SERVICE PROVIDERS
---------------------------------------------------------------------------------------------------------------------
August 31, 2005 $ 0 $ 282,575 $ 0
---------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
---------------------------------------------------------------------------------------------------------------------
August 31, 2004 $ 0 $ 0 $ 0
---------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
---------------------------------------------------------------------------------------------------------------------
The above "Tax Fees" are primarily fees billed to the Adviser for Fund tax
return preparation.
NON-AUDIT SERVICES
The following table shows the amount of fees that Ernst & Young LLP billed
during the Fund's last two full fiscal years for non-audit services. For
engagements entered into on or after May 6, 2003, the Audit Committee is
required to pre-approve non-audit services that Ernst & Young LLP provides to
the Adviser and any Affiliated Fund Services Provider, if the engagement related
directly to the Fund's operations and financial reporting (except for those
subject to the de minimis exception described above). The Audit Committee
requested and received information from Ernst & Young LLP about any non-audit
services that Ernst & Young LLP rendered during the Fund's last fiscal year to
the Adviser and any Affiliated Fund Service Provider. The Committee considered
this information in evaluating Ernst & Young LLP's independence.
FISCAL YEAR ENDED TOTAL NON-AUDIT FEES
BILLED TO ADVISER AND
AFFILIATED FUND SERVICE TOTAL NON-AUDIT FEES
PROVIDERS (ENGAGEMENTS BILLED TO ADVISER AND
RELATED DIRECTLY TO THE AFFILIATED FUND SERVICE
TOTAL NON-AUDIT FEES OPERATIONS AND FINANCIAL PROVIDERS (ALL OTHER
BILLED TO FUND REPORTING OF THE FUND) ENGAGEMENTS) TOTAL
------------------------------------------------------------------------------------------------------------------------------------
August 31, 2005 $ 3,709 $ 282,575 $ 0 $ 286,284
August 31, 2004 $ 2,950 $ 0 $ 0 $ 2,950
The above "Non-Audit Fees billed to Adviser" for 2005 include "Tax-Fees" billed
to Adviser in the amount of $282,575 from previous table.
Audit Committee Pre-Approval Policies and Procedures. Generally, the audit
committee must approve (i) all non-audit services to be performed for the Fund
by the Fund's independent accountants and (ii) all audit and non-audit services
to be performed by the Fund's independent accountants for the Affiliated Fund
Service Providers with respect to operations and financial reporting of the
Fund. Regarding tax and research projects conducted by the independent
accountants for the Fund and Affiliated Fund Service Providers (with respect to
operations and financial reports of the Fund) such engagements will be (i)
pre-approved by the audit committee if they are expected to be for amounts
greater than $10,000; (ii) reported to the audit committee chairman for his
verbal approval prior to engagement if they are expected to be for amounts under
$10,000 but greater than $5,000; and (iii) reported to the audit committee at
the next audit committee meeting if they are expected to be for an amount under
$5,000.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The registrant's Board of Directors or Trustees has a separately designated
audit committee established in accordance with Section 3(a)(58)(A) of the
Securities Exchange Act of 1934, as amended (15 U.S.C. 78c(a)(58)(A)). The
members of the audit committee are Robert P. Bremner, Lawrence H. Brown, Jack B.
Evans, William J. Schneider and Eugene S. Sunshine.
ITEM 6. SCHEDULE OF INVESTMENTS.
See Portfolio of Investments in Item 1.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
In the rare event that a municipal issuer held by the Fund were to issue a proxy
or that the Fund were to receive a proxy issued by a cash management security,
the Adviser would either engage an independent third party to determine how the
proxy should be voted or vote the proxy with the consent, or based on the
instructions, of the Fund's Board of Directors or Trustees or its
representative. In the case of a conflict of interest, the proxy would be
submitted to the applicable Fund's Board to determine how the proxy should be
voted. A member of the Adviser's legal department would oversee the
administration of the voting, and ensure that records were maintained in
accordance with Rule 204-2(c)(2) under the Investment Advisers Act of 1940 (17
CFR 275.204-2(c)(2)), reports were filed with the SEC on Form N-PX, and the
results were provided to the Board of Directors or Trustees and made available
to shareholders as required by applicable rules.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable at this time.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the registrant's Board implemented after the registrant
last provided disclosure in response to this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of this report that includes the disclosure
required by this paragraph, based on their evaluation of the controls
and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")
(17 CFR 240.13a-15(b) or 240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter
of the period covered by this report that has materially affected, or
is reasonably likely to materially affect, the registrant's internal
control over financial reporting.
ITEM 12. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit: Not applicable
because the code is posted on registrant's website at www.nuveen.com/etf and
there were no amendments during the period covered by this report. (To view the
code, click on the Investor Resources drop down menu box, click on Fund
Governance and then Code of Conduct.)
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2(a) under
the 1940 Act (17 CFR 270.30a-2(a)) in the exact form set forth below: Ex-99.CERT
Attached hereto.
(a)(3) Any written solicitation to purchase securities under Rule 23c-1 under
the 1940 Act (17 CFR 270.23c-1) sent or given during the period covered by the
report by or on behalf of the registrant to 10 or more persons. Not applicable.
(b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act,
provide the certifications required by Rule 30a-2(b) under the 1940 Act (17 CFR
270.30a-2(b)); Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR
240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of
the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished
pursuant to this paragraph will not be deemed "filed" for purposes of Section 18
of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of
that section. Such certification will not be deemed to be incorporated by
reference into any filing under the Securities Act of 1933 or the Exchange Act,
except to the extent that the registrant specifically incorporates it by
reference. Ex-99.906 CERT attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Nuveen California Dividend Advantage Municipal Fund
-----------------------------------------------------------
By (Signature and Title)* /s/ Jessica R. Droeger
----------------------------------------------
Jessica R. Droeger
Vice President and Secretary
Date: November 8, 2005
-------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Gifford R. Zimmerman
----------------------------------------------
Gifford R. Zimmerman
Chief Administrative Officer
(principal executive officer)
Date: November 8, 2005
-------------------------------------------------------------------
By (Signature and Title)* /s/ Stephen D. Foy
----------------------------------------------
Stephen D. Foy
Vice President and Controller
(principal financial officer)
Date: November 8, 2005
-------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.