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 811-10345
---------------------
Nuveen Dividend Advantage Municipal Fund 3
------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Jessica R. Droeger
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (312) 917-7700
-------------------
Date of fiscal year end: October 31
------------------
Date of reporting period: October 31, 2004
------------------
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
ANNUAL REPORT October 31, 2004
Nuveen Investments
Municipal Closed-End
Exchange-Traded
Funds
NUVEEN PERFORMANCE PLUS MUNICIPAL FUND, INC.
NPP
NUVEEN MUNICIPAL ADVANTAGE FUND, INC.
NMA
NUVEEN MUNICIPAL MARKET OPPORTUNITY FUND, INC.
NMO
NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND
NAD
NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND 2
NXZ
NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND 3
NZF
Photo of: Man and woman sitting on porch.
Photo of: 2 children sitting in the grass.
DEPENDABLE, TAX-FREE INCOME BECAUSE
IT'S NOT WHAT YOU EARN,
IT'S WHAT YOU KEEP.(R)
Logo: NUVEEN Investments
Photo of: Woman
Photo of: Man and child
Photo of: Woman
NOW YOU CAN RECEIVE YOUR NUVEEN FUND REPORTS FASTER.
NO MORE WAITING.
SIGN UP TODAY TO RECEIVE NUVEEN FUND INFORMATION BY E-MAIL.
It only takes a minute to sign up for E-Reports. Once enrolled, you'll receive
an e-mail as soon as your Nuveen Investments Fund information is ready -- no
more waiting for delivery by regular mail. Just click on the link within the
e-mail to see the report, and save it on your computer if you wish.
------------------
DELIVERY DIRECT TO
YOUR E-MAIL INBOX
------------------
IT'S FAST, EASY & FREE:
WWW.INVESTORDELIVERY.COM
if you get your Nuveen Fund dividends
and statements from your financial
advisor or brokerage account.
OR
WWW.NUVEEN.COM/ACCOUNTACCESS
if you get your Nuveen Fund dividends
and statements directly from Nuveen.
(Be sure to have the address sheet that accompanied this report handy. You'll
need it to complete the enrollment process.)
Logo: NUVEEN Investments
Photo of:Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
Chairman's
LETTER TO SHAREHOLDERS
Once again, I am pleased to report that over the most recent fiscal year your
Fund continued to provide you with monthly tax-free income and an attractive
total return. For more specific information about the performance of your Fund,
please see the Portfolio Manager's Perspective and Performance Overview sections
of this report.
With longer-term interest rates still relatively low, many investors have begun
to wonder whether these rates will soon begin to rise, and whether that makes
this the time to adjust their holdings of fixed-income investments. No one knows
what the future will bring, which is why we think a well-balanced portfolio that
is structured and carefully monitored with the help of an investment
professional
"OUR MISSION CONTINUES TO BE TO ASSIST YOU AND YOUR FINANCIAL ADVISOR BY
OFFERING THE INVESTMENT SERVICES AND PRODUCTS THAT CAN HELP YOU TO SECURE YOUR
FINANCIAL OBJECTIVES."
can be an important component in achieving your long-term financial goals. A
well-diversified portfolio may actually help to reduce your overall investment
risk, and we believe that a municipal bond investment like your Nuveen Fund can
be an important building block in a portfolio designed to perform well through a
variety of market conditions.
As in past reports, I'd also like to direct your attention to the inside front
cover, which explains the quick and easy process to begin receiving these Fund
reports via e-mail and the internet. Thousands of Nuveen Fund shareholders
already have signed-up, and they are getting their Fund information faster and
more conveniently than ever. I urge you to consider joining them.
At Nuveen Investments, our mission continues to be to assist you and your
financial advisor by offering the investment services and products that can help
you to secure your financial objectives. We are grateful that you have chosen us
as a partner as you pursue your financial goals, and we look forward to
continuing to earn your trust in the months and years ahead.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
December 15, 2004
Nuveen Municipal Closed-End Exchange-Traded Funds
NPP, NMA, NMO, NAD, NXZ, NZF
Portfolio Manager's
PERSPECTIVE
Portfolio manager Tom Spalding discusses the economic and market environment,
key investment strategies, and the fiscal year performance of these six Funds.
With 27 years of investment experience at Nuveen, Tom has managed NXZ since its
inception in 2001, and NPP, NMA, NMO, NAD, and NZF since 2003.
WHAT FACTORS AFFECTED THE U.S. ECONOMY AND MUNICIPAL MARKET DURING THE ANNUAL
REPORTING PERIOD ENDED OCTOBER 31, 2004?
During this fiscal year, the U.S. economy demonstrated improvement in a number
of key areas, although the pace of the recovery slowed over the last six months
of the period. The gross domestic product (GDP) expanded at annualized rates of
4.2% in the fourth quarter of 2003 and 4.5% in the first quarter of 2004.
However, sharply higher energy prices restrained consumer spending during the
second and third quarters of 2004, which in turn impacted economic momentum.
Over this period, GDP growth moderated to 3.3% annualized in the second quarter
and 3.9% annualized in the third quarter.
Higher energy costs also continued to fuel lingering concerns about inflation.
Although monthly gains in consumer prices were generally tame, by the end of
October 2004 inflation was running well ahead of the 2003 pace. The Consumer
Price Index (CPI) rose at a 3.9% annualized rate for the first 10 months of
2004, more than double the 1.9% rate for all of 2003. Excluding energy and food,
the CPI increased at an annual rate of 2.4% for the first 10 months of 2004.
During the second quarter of 2004 in particular, inflation worries, the slowing
pace of economic recovery and continued geopolitical uncertainty acted as
catalysts for heightened volatility in the fixed-income markets. As one example,
the yield on the Bond Buyer 25 Revenue Bond Index (BB25), a widely followed
municipal bond index, began this reporting period at 5.24%. The BB25 yield then
dropped steadily over the next five months to 4.73% by mid-March 2004. As a
series of improved employment reports sparked increased anticipation of action
by the Federal Reserve, the index yield began to climb again, rising more than
70 basis points over the next 8 weeks to 5.45%, where it hovered through the end
of June. However, more bond-friendly news--including indications of relatively
slow growth of wages and employment--prompted a retreat to 4.97% by the end of
October 2004.
While intermediate and long-term bond yields generally fell over most of the
second half of the Funds' fiscal years, short-term rates slowly rose. The
Federal Reserve instituted three different one-quarter-point increases in the
fed funds rate between June and
4
September 2004. (On both November 10 and December 14, following the end of this
reporting period, the Fed added additional quarter-point increases, bringing the
fed funds rate to 2.25%.)
Over the 12 month period, municipal new issue supply nationwide remained
relatively strong, with $363.4 billion in new bonds coming to market. This
represented a decrease of about 5% from the preceding 12-month period, as the
improving economy and higher tax revenues lessened the need for some issuers to
borrow.
IN THIS ENVIRONMENT, WHAT KEY STRATEGIES WERE USED TO MANAGE THESE FUNDS DURING
THE 12 MONTHS ENDED OCTOBER 31, 2004?
As the market continued to anticipate increased interest rates, our focus during
this fiscal year remained on purchasing bonds that we believed had the potential
to add value and perform well under a variety of market scenarios. In general,
our purchase activity for all six of these Funds centered on trying to find
attractive securities in the long-intermediate part of the yield curve, that is,
bonds that mature in 20 to 25 years.
One of our longer-term goals was to work to position all of these Funds so that
they produce less volatile, roughly equivalent returns over time. As one
strategy to reach this goal for some of the newer Funds, we have attempted to
reduce some of NXZ's interest rate risk by hedging in the derivatives markets.
(Interest rate risk is the risk that the value of a Fund's portfolio will
decline if market interest rates rise, since bond prices move in the opposite
direction of interest rates.) Our only objective with these hedges is to reduce
the Fund's interest rate risk, and not to potentially enhance its return by
making a prediction about future interest rates. This hedge does not affect
NXZ's income stream or dividend-paying capabilities over the short-term.
Instead, the costs of the hedge are reflected as an addition or subtraction to
the Fund's net asset value as the market value of the hedge fluctuates. Although
the hedge had a negative market value as of October 31, 2004, it succeeded in
reducing some of the volatility of NXZ's net asset value over the course of the
reporting period.
In NZF, we sought to shorten the Fund's duration1 to mitigate some of its
interest rate risk. To accomplish this goal, we sold some of NZF's holdings with
the longest maturities and reinvested the proceeds in bonds from the
intermediate part of the yield curve.
Demand for municipal securities remained firm through most of this reporting
period, which limited our ability to find bonds with attractive prices, yields
and structures. Since insured bonds accounted for about 50% of new municipal
bond issuance during this period, we often looked to this area for buying
opportunities.
1 Duration is a measure of a Fund's net asset value (NAV) volatility in
reaction to interest rate movements. Fund duration, also known as
leverage-adjusted duration, takes into account the leveraging process for a
Fund and therefore is generally longer than the duration of the actual
portfolio of individual bonds that make up the Fund. References to duration
in this commentary are intended to indicate Fund duration unless otherwise
noted.
5
We also sought to purchase higher-coupon bonds that we believed could help
support the Funds' dividends, and we worked to enhance the Funds' call
protection by selling several bonds with short call dates and reinvesting the
proceeds in longer-term securities with better call protection.
HOW DID THE FUNDS PERFORM?
Individual results for these Funds, as well as for relevant comparative indexes,
are presented in the accompanying table.
TOTAL RETURNS ON NET ASSET VALUE
For periods ended 10/31/04
(Annualized)
1-YEAR 5-YEAR 10-YEAR
--------------------------------------------------------------------------------
NPP 9.30% 9.40% 7.57%
--------------------------------------------------------------------------------
NMA 9.57% 9.78% 7.87%
--------------------------------------------------------------------------------
NMO 9.00% 8.47% 7.27%
--------------------------------------------------------------------------------
NAD 10.06% 11.02% NA
--------------------------------------------------------------------------------
NXZ 10.67% NA NA
--------------------------------------------------------------------------------
NZF 11.10% NA NA
--------------------------------------------------------------------------------
Lehman Brothers
Municipal Bond Index2 6.03% 7.19% 7.05%
--------------------------------------------------------------------------------
Lipper General Leveraged
Municipal Debt Funds
Average3 8.93% 8.78% 7.86%
--------------------------------------------------------------------------------
Past performance is not predictive of future results.
For additional information, see the individual Performance Overview for your
Fund in this report.
For the 12 months ended October 31, 2004, the total returns on net asset value
(NAV) for all six Funds in this report outperformed the return on the Lehman
Brothers Index. All of the Funds also outperformed the average return for their
Lipper peer group for this period.
One of the primary factors benefiting the 12-month performances of these six
Funds relative to that of the unleveraged Lehman Brothers index was the Funds'
use of financial leverage. While leverage can add volatility to the Funds' NAVs
and share prices, especially when substantial shifts in interest rates occur,
this strategy also can provide opportunities for additional income and total
returns for common shareholders when short-term interest rates remain low, as
they did during this period.
All six Funds also benefited from their holdings of lower quality bonds, which
generally outperformed higher credit quality sectors as the economy improved and
demand for
2 The Lehman Brothers Municipal Bond Index is an unleveraged, unmanaged
national index comprising a broad range of investment-grade municipal
bonds. Results for the Lehman index do not reflect any expenses.
3 The Lipper General Leveraged Municipal Debt Funds category average is
calculated using the returns of all national closed-end exchange-traded
funds in this category for each period as follows: 1 year, 65 funds; 5
years, 51 funds; and 10 years, 46 funds. Fund and Lipper returns assume
reinvestment of dividends.
6
lower-rated bonds increased. Among the lower-rated bonds making positive
contributions to the Funds' total returns during this period were those issued
by the healthcare sector, especially hospital bonds. The performance of the
healthcare sector as a whole ranked second among the Lehman Brothers Index's
revenue sectors for the 12-month period. As of October 31, 2004, NXZ had 25% of
its portfolio in healthcare bonds, while NMA and NZF each had 17%, NAD had 16%,
and NPP and NMO had 10%. In particular, NMA and NXZ benefited from their
holdings of bonds issued by the Michigan State Hospital Finance Authority for
Detroit Medical Center, which appreciated in price as the center's financial
situation continued to improve.
The Funds' returns were also helped by the strong performance of their holdings
of uninsured bonds backed by the 1998 master tobacco settlement agreement. Over
this period, NPP, NMA, NMO, NAD and NZF maintained exposures of approximately 5%
in tobacco bonds, while NXZ continued to allocate about 3% to this sector.
One sector that did not perform well during this period was housing, both
multifamily and single family. The housing sector as a whole ranked at the
bottom of the Lehman Brothers Index revenue sectors for the 12-month period. The
sector's below-market performance stemmed largely from the increase in mortgage
prepayments as interest rates remained low, which resulted in a number of bond
calls. In general, the Funds' housing exposure had a negative impact on their
performance, with NMA and NZF having the heaviest weightings in housing bonds.
In addition, the annual performance of NMO was negatively affected by the
continued deterioration of its holding of bonds issued by the Indianapolis
Airport Authority and backed by United Airlines. These bonds declined in value
to $0.11 on the dollar as of October 31, 2004.
HOW ABOUT THE FUNDS' DIVIDENDS AND SHARE PRICES?
With short-term interest rates remaining relatively low throughout this
reporting period, the leveraged structures of these six Funds continued to
support their dividend-paying capabilities. The extent of this benefit is tied
in part to the short-term rates these Funds pay their MuniPreferred(R)
shareholders. During periods of low short-term rates, leveraged Funds generally
pay relatively lower dividends to their MuniPreferred shareholders, which can
leave more earnings to support common share dividends. This strategy enabled us
to increase the dividend of NZF in December 2003 and helped us to maintain the
dividends of NPP, NMA, NMO, NAD and NXZ throughout the reporting period.
7
All of these Funds seek to pay stable dividends at rates that reflect each
Fund's past results and projected future performance. During certain periods,
each Fund may pay dividends at a rate that may be more or less than the amount
of net investment income actually earned by the Fund during the period. If a
Fund has cumulatively earned more than it has paid in dividends, it holds the
excess in reserve as undistributed net investment income (UNII) as part of the
Fund's NAV. Conversely, if a Fund has cumulatively paid dividends in excess of
its earnings, the excess constitutes negative UNII that is likewise reflected in
the Fund's NAV. Each Fund will, over time, pay all of its net investment income
as dividends to shareholders. As of October 31, 2004, all six of these Funds had
positive UNII balances for both financial statement and tax purposes.
As of October 31, 2004, all six of these Funds were trading at discounts to
their NAVs. These discounts were generally in line with the Funds' average
discounts over the entire 12-month reporting period.
HOW WERE THE FUNDS POSITIONED IN TERMS OF CREDIT QUALITY AND BOND CALLS AS OF
OCTOBER 31, 2004?
Given the current geopolitical and economic climate, we continued to believe
that maintaining strong credit quality was an important requirement for the
Funds. As of October 31, 2004, these six Funds continued to offer excellent
credit quality, with allocations of bonds rated AAA/U.S. guaranteed and AA
ranging from 68% in NXZ to 74% in NMA, 80% in NMO and NAD, and 82% in NPP and
NZF.
As of October 31, 2004, potential call exposure for these Funds during 2004-2006
ranged from 4% in NXZ, to 5% in NZF, 9% in NMO, 10% in NAD, 14% in NPP and 16%
in NMA. The number of actual bond calls in all of these Funds depends largely on
market interest rates in the future.
8
Nuveen Performance Plus Municipal Fund, Inc.
NPP
Performance
OVERVIEW As of October 31, 2004
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 71%
AA 11%
A 5%
BBB 9%
NR 3%
BB or Lower 1%
Bar Chart:
2003-2004 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Nov 0.081
Dec 0.081
Jan 0.081
Feb 0.081
Mar 0.081
Apr 0.081
May 0.081
Jun 0.081
Jul 0.081
Aug 0.081
Sep 0.081
Oct 0.081
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
11/1/03 14.72
14.63
14.58
14.77
14.89
14.77
14.93
14.92
15.02
15.25
15.38
15.43
15.15
15.35
15.37
15.36
15.55
15.67
15.64
15.82
15.57
15.16
14.2
13.97
13.55
13.23
13.24
13.34
13.47
13.57
13.58
13.59
13.9
14.15
14.06
13.96
14.11
14.32
14.34
14.53
14.65
14.65
14.79
14.89
14.89
14.64
14.82
14.74
14.85
10/31/04 14.95
FUND SNAPSHOT
------------------------------------
Share Price $14.95
------------------------------------
Common Share
Net Asset Value $15.87
------------------------------------
Premium/(Discount) to NAV -5.80%
------------------------------------
Market Yield 6.50%
------------------------------------
Taxable-Equivalent Yield1 9.03%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $950,993
------------------------------------
Average Effective Maturity
on Securities (Years) 16.34
------------------------------------
Leverage-Adjusted Duration 9.02
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 6/22/89)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 9.10% 9.30%
------------------------------------
5-Year 9.86% 9.40%
------------------------------------
10-Year 7.98% 7.57%
------------------------------------
STATES
(as a % of total investments)
------------------------------------
Illinois 13.2%
------------------------------------
New York 11.2%
------------------------------------
California 9.0%
------------------------------------
New Jersey 4.7%
------------------------------------
Michigan 4.4%
------------------------------------
Louisiana 4.2%
------------------------------------
Indiana 4.0%
------------------------------------
Texas 3.7%
------------------------------------
Ohio 3.2%
------------------------------------
Florida 3.0%
------------------------------------
Colorado 3.0%
------------------------------------
Utah 3.0%
------------------------------------
Washington 2.9%
------------------------------------
Minnesota 2.8%
------------------------------------
Pennsylvania 2.8%
------------------------------------
Massachusetts 2.5%
------------------------------------
South Carolina 2.4%
------------------------------------
Georgia 2.3%
------------------------------------
Nevada 2.1%
------------------------------------
Other 15.6%
------------------------------------
SECTORS
(as a % of total investments)
------------------------------------
U.S. Guaranteed 18.2%
------------------------------------
Tax Obligation/Limited 15.9%
------------------------------------
Tax Obligation/General 15.6%
------------------------------------
Utilities 10.6%
------------------------------------
Healthcare 9.7%
------------------------------------
Transportation 8.3%
------------------------------------
Consumer Staples 5.1%
------------------------------------
Water and Sewer 4.9%
------------------------------------
Other 11.7%
------------------------------------
1 Taxable-equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a federal income tax rate of 28%. For
investments that generate qualified dividend income, the taxable-equivalent
yield is lower.
9
Nuveen Municipal Advantage Fund, Inc.
NMA
Performance
OVERVIEW As of October 31, 2004
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 61%
AA 13%
A 7%
BBB 17%
BB or Lower 2%
Bar Chart:
2003-2004 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Nov 0.086
Dec 0.086
Jan 0.086
Feb 0.086
Mar 0.086
Apr 0.086
May 0.086
Jun 0.086
Jul 0.086
Aug 0.086
Sep 0.086
Oct 0.086
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
11/1/03 15.55
15.45
15.53
15.7
15.83
15.51
15.57
15.52
15.68
15.93
16.05
16.1
16.09
16.26
16.25
16.08
16.27
16.23
16.3
16.27
16.21
16.07
14.81
14.45
14.25
13.81
13.76
13.82
14.13
14.24
13.87
14.02
14.58
14.85
14.9
14.71
14.88
15.11
15.05
15.22
15.27
15.24
15.41
15.42
15.39
15.46
15.61
15.6
15.64
10/31/04 15.7
FUND SNAPSHOT
------------------------------------
Share Price $15.70
------------------------------------
Common Share
Net Asset Value $16.02
------------------------------------
Premium/(Discount) to NAV -2.00%
------------------------------------
Market Yield 6.57%
------------------------------------
Taxable-Equivalent Yield1 9.13%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $689,190
------------------------------------
Average Effective Maturity
on Securities (Years) 17.82
------------------------------------
Leverage-Adjusted Duration 7.48
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 12/19/89)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 8.82% 9.57%
------------------------------------
5-Year 10.28% 9.78%
------------------------------------
10-Year 8.67% 7.87%
------------------------------------
STATES
(as a % of total investments)
------------------------------------
Texas 11.0%
------------------------------------
New York 10.1%
------------------------------------
Washington 9.6%
------------------------------------
Illinois 9.5%
------------------------------------
California 6.4%
------------------------------------
Wisconsin 5.2%
------------------------------------
Louisiana 4.2%
------------------------------------
Ohio 4.0%
------------------------------------
Tennessee 3.8%
------------------------------------
Indiana 3.1%
------------------------------------
South Carolina 2.9%
------------------------------------
Nevada 2.6%
------------------------------------
North Carolina 2.4%
------------------------------------
Colorado 2.3%
------------------------------------
New Jersey 2.2%
------------------------------------
Alabama 2.1%
------------------------------------
Other 18.6%
------------------------------------
SECTORS
(as a % of total investments)
------------------------------------
Healthcare 16.8%
------------------------------------
Utilities 16.7%
------------------------------------
U.S. Guaranteed 15.7%
------------------------------------
Transportation 11.0%
------------------------------------
Tax Obligation/Limited 10.5%
------------------------------------
Housing/Single Family 8.1%
------------------------------------
Tax Obligation/General 7.2%
------------------------------------
Consumer Staples 4.8%
------------------------------------
Water and Sewer 4.7%
------------------------------------
Other 4.5%
------------------------------------
1 Taxable-equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a federal income tax rate of 28%. For
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 2003 of $0.0142 per share.
10
Nuveen Municipal Market Opportunity Fund, Inc.
NMO
Performance
OVERVIEW As of October 31, 2004
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 68%
AA 12%
A 9%
BBB 8%
NR 1%
BB or Lower 2%
Bar Chart:
2003-2004 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Nov 0.086
Dec 0.086
Jan 0.086
Feb 0.086
Mar 0.086
Apr 0.086
May 0.086
Jun 0.086
Jul 0.086
Aug 0.086
Sep 0.086
Oct 0.086
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
11/1/03 14.44
14.27
14.27
14.44
14.46
14.36
14.46
14.48
14.45
14.7
14.98
15.04
14.89
15.05
15.03
15.03
15.07
15.2
15.35
15.26
15.2
14.86
13.84
13.55
13.23
12.93
13
13.04
13.16
13.26
13.22
13.46
13.76
13.79
13.88
13.64
13.82
14.02
14.04
14.14
14.31
14.23
14.28
14.47
14.38
14.26
14.44
14.37
14.36
10/31/04 14.44
FUND SNAPSHOT
------------------------------------
Share Price $14.44
------------------------------------
Common Share
Net Asset Value $15.48
------------------------------------
Premium/(Discount) to NAV -6.72%
------------------------------------
Market Yield 6.57%
------------------------------------
Taxable-Equivalent Yield1 9.13%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $704,760
------------------------------------
Average Effective Maturity
on Securities (Years) 16.27
------------------------------------
Leverage-Adjusted Duration 7.85
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 3/21/90)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 7.97% 9.00%
------------------------------------
5-Year 8.21% 8.47%
------------------------------------
10-Year 7.83% 7.27%
------------------------------------
STATES
(as a % of total investments)
------------------------------------
New York 15.5%
------------------------------------
Texas 15.5%
------------------------------------
Washington 11.8%
------------------------------------
Illinois 7.0%
------------------------------------
Minnesota 5.2%
------------------------------------
Pennsylvania 4.1%
------------------------------------
South Carolina 4.1%
------------------------------------
Georgia 4.0%
------------------------------------
California 3.7%
------------------------------------
Nevada 3.5%
------------------------------------
North Dakota 2.8%
------------------------------------
Colorado 2.6%
------------------------------------
New Jersey 2.6%
------------------------------------
Massachusetts 2.2%
------------------------------------
Other 15.4%
------------------------------------
SECTORS
(as a % of total investments)
------------------------------------
U.S. Guaranteed 20.9%
------------------------------------
Tax Obligation/General 16.0%
------------------------------------
Transportation 15.7%
------------------------------------
Tax Obligation/Limited 15.2%
------------------------------------
Healthcare 10.3%
------------------------------------
Utilities 8.8%
------------------------------------
Consumer Staples 4.8%
------------------------------------
Other 8.3%
------------------------------------
1 Taxable-equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a federal income tax rate of 28%. For
investments that generate qualified dividend income, the taxable-equivalent
yield is lower.
11
Nuveen Dividend Advantage Municipal Fund
NAD
Performance
OVERVIEW As of October 31, 2004
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 71%
AA 9%
A 2%
BBB 9%
NR 6%
BB or Lower 3%
Bar Chart:
2003-2004 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Nov 0.0855
Dec 0.0855
Jan 0.0855
Feb 0.0855
Mar 0.0855
Apr 0.0855
May 0.0855
Jun 0.0855
Jul 0.0855
Aug 0.0855
Sep 0.0855
Oct 0.0855
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
11/1/03 15.05
15.07
14.99
15.15
15.17
15.3
15.44
15.44
15.54
15.97
16.01
16.1
15.85
15.87
16.01
15.88
16.03
16.17
16.19
16.14
16.02
15.73
14.59
14.21
13.94
13.52
13.82
14
14.27
14.25
14.13
14.13
14.47
14.55
14.67
14.47
14.43
14.78
14.77
15.02
15.18
15.1
15.18
15.13
15.2
15.16
15.24
15.2
15.25
10/31/04 15.31
FUND SNAPSHOT
------------------------------------
Share Price $15.31
------------------------------------
Common Share
Net Asset Value $15.62
------------------------------------
Premium/(Discount) to NAV -1.98%
------------------------------------
Market Yield 6.70%
------------------------------------
Taxable-Equivalent Yield1 9.31%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $613,328
------------------------------------
Average Effective Maturity
on Securities (Years) 15.61
------------------------------------
Leverage-Adjusted Duration 7.75
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 5/26/99)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 8.37% 10.06%
------------------------------------
5-Year 9.24% 11.02%
------------------------------------
Since
Inception 6.98% 8.24%
------------------------------------
STATES
(as a % of total investments)
------------------------------------
Illinois 23.6%
------------------------------------
New York 13.6%
------------------------------------
Texas 9.8%
------------------------------------
Washington 7.3%
------------------------------------
New Jersey 5.3%
------------------------------------
Wisconsin 4.5%
------------------------------------
Pennsylvania 3.3%
------------------------------------
Ohio 2.7%
------------------------------------
Indiana 2.5%
------------------------------------
Colorado 2.1%
------------------------------------
Florida 2.0%
------------------------------------
Other 23.3%
------------------------------------
SECTORS
(as a % of total investments)
------------------------------------
Healthcare 16.0%
------------------------------------
U.S. Guaranteed 15.6%
------------------------------------
Tax Obligation/General 14.7%
------------------------------------
Tax Obligation/Limited 13.8%
------------------------------------
Transportation 10.6%
------------------------------------
Utilities 9.3%
------------------------------------
Education and
Civic Organizations 4.7%
------------------------------------
Consumer Staples 4.5%
------------------------------------
Other 10.8%
------------------------------------
1 Taxable-equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a federal income tax rate of 28%. For
investments that generate qualified dividend income, the taxable-equivalent
yield is lower.
12
Nuveen Dividend Advantage Municipal Fund 2
NXZ
Performance
OVERVIEW As of October 31, 2004
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 58%
AA 10%
A 13%
BBB 8%
NR 3%
BB or Lower 8%
Bar Chart:
2003-2004 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Nov 0.086
Dec 0.086
Jan 0.086
Feb 0.086
Mar 0.086
Apr 0.086
May 0.086
Jun 0.086
Jul 0.086
Aug 0.086
Sep 0.086
Oct 0.086
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
11/1/03 14.86
14.98
15
14.97
15.09
15.01
15.02
15.09
15.12
15.62
15.5
15.56
15.27
15.51
15.61
15.56
15.66
15.78
15.75
15.73
15.76
15.44
14.45
14.28
14.13
13.51
13.78
13.63
14.06
14
13.9
13.86
14.39
14.6
14.48
14.31
14.46
14.97
14.92
15.01
15.08
15.01
15.12
15.25
15.3
15.08
15.4
15.35
15.32
10/31/04 15.38
FUND SNAPSHOT
------------------------------------
Share Price $15.38
------------------------------------
Common Share
Net Asset Value $15.63
------------------------------------
Premium/(Discount) to NAV -1.60%
------------------------------------
Market Yield 6.71%
------------------------------------
Taxable-Equivalent Yield1 9.32%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $457,552
------------------------------------
Average Effective Maturity
on Securities (Years) 24.22
------------------------------------
Leverage-Adjusted Duration 6.85
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 3/27/01)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 11.16% 10.67%
------------------------------------
Since
Inception 7.47% 9.16%
------------------------------------
STATES
(as a % of total investments)
------------------------------------
Texas 16.5%
------------------------------------
Michigan 9.8%
------------------------------------
Illinois 7.6%
------------------------------------
California 7.6%
------------------------------------
New York 4.1%
------------------------------------
Washington 4.0%
------------------------------------
Colorado 4.0%
------------------------------------
New Mexico 3.6%
------------------------------------
Florida 3.5%
------------------------------------
Indiana 3.3%
------------------------------------
Missouri 3.3%
------------------------------------
Nevada 3.1%
------------------------------------
Alabama 2.9%
------------------------------------
Massachusetts 2.7%
------------------------------------
Kansas 2.7%
------------------------------------
Oregon 2.7%
------------------------------------
Pennsylvania 2.5%
------------------------------------
Louisiana 2.2%
------------------------------------
Minnesota 2.2%
------------------------------------
Other 11.7%
------------------------------------
SECTORS
(as a % of total investments)
------------------------------------
Healthcare 25.1%
------------------------------------
Tax Obligation/Limited 17.2%
------------------------------------
Transportation 13.2%
------------------------------------
Water and Sewer 8.9%
------------------------------------
Tax Obligation/General 8.0%
------------------------------------
Utilities 7.8%
------------------------------------
Housing/Single Family 5.2%
------------------------------------
Other 14.6%
------------------------------------
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 federal income tax rate of 28%. For
investments that generate qualified dividend income, the taxable-equivalent
yield is lower.
2 The Fund also paid shareholders a capital gains distribution in December
2003 of $0.0291 per share.
13
Nuveen Dividend Advantage Municipal Fund 3
NZF
Performance
OVERVIEW As of October 31, 2004
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 71%
AA 11%
A 2%
BBB 9%
NR 5%
BB or Lower 2%
Bar Chart:
2003-2004 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Nov 0.079
Dec 0.0805
Jan 0.0805
Feb 0.0805
Mar 0.0805
Apr 0.0805
May 0.0805
Jun 0.0805
Jul 0.0805
Aug 0.0805
Sep 0.0805
Oct 0.0805
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
11/1/03 13.95
13.96
13.93
14.02
14.22
14.14
14.22
14.31
14.29
14.67
14.79
14.76
14.65
14.65
14.91
14.75
14.9
15.09
15.02
14.98
14.94
14.66
13.9
13.66
13.34
12.82
13.02
13.15
13.42
13.31
13.09
13.17
13.67
13.88
13.83
13.84
13.83
14.01
14.01
14.16
14.3
14.3
14.57
14.48
14.39
14.41
14.49
14.44
14.43
10/31/04 14.5
FUND SNAPSHOT
------------------------------------
Share Price $14.50
------------------------------------
Common Share
Net Asset Value $15.36
------------------------------------
Premium/(Discount) to NAV -5.60%
------------------------------------
Market Yield 6.66%
------------------------------------
Taxable-Equivalent Yield1 9.25%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $619,118
------------------------------------
Average Effective Maturity
on Securities (Years) 19.81
------------------------------------
Leverage-Adjusted Duration 8.27
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 9/25/01)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 12.45% 11.10%
------------------------------------
Since
Inception 5.46% 8.74%
------------------------------------
STATES
(as a % of total investments)
------------------------------------
Texas 12.3%
------------------------------------
Illinois 11.0%
------------------------------------
Washington 10.9%
------------------------------------
California 7.0%
------------------------------------
Michigan 5.8%
------------------------------------
Colorado 5.3%
------------------------------------
Nevada 5.2%
------------------------------------
New York 3.6%
------------------------------------
Wisconsin 3.4%
------------------------------------
Indiana 3.2%
------------------------------------
Iowa 3.2%
------------------------------------
Louisiana 2.6%
------------------------------------
Kentucky 2.1%
------------------------------------
Other 24.4%
------------------------------------
SECTORS
(as a % of total investments)
------------------------------------
Healthcare 17.3%
------------------------------------
Transportation 17.1%
------------------------------------
Tax Obligation/Limited 12.8%
------------------------------------
Water and Sewer 9.8%
------------------------------------
Tax Obligation/General 9.6%
------------------------------------
Utilities 8.2%
------------------------------------
Housing/Single Family 5.3%
------------------------------------
Consumer Staples 4.8%
------------------------------------
U.S. Guaranteed 4.8%
------------------------------------
Education and
Civic Organizations 4.7%
------------------------------------
Other 5.6%
------------------------------------
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 federal income tax rate of 28%. For
investments that generate qualified dividend income, the taxable-equivalent
yield is lower.
14
Shareholder
MEETING REPORT
The annual shareholder meeting was held on August 3, 2004, at the Northern Trust
Bank, Chicago, Illinois.
NPP NMA NMO
------------------------------------------------------------------------------------------------------------------------------------
APPROVAL OF THE BOARD MEMBERS WAS
REACHED AS FOLLOWS:
Common and Common and Common and
MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred
shares voting shares voting shares voting shares voting shares voting shares voting
together together together together together together
as a class as a class as a class as a class as a class as a class
====================================================================================================================================
Robert P. Bremner
For 52,749,399 -- 37,176,579 -- 40,022,344 --
Withhold 669,550 -- 434,374 -- 398,907 --
------------------------------------------------------------------------------------------------------------------------------------
Total 53,418,949 -- 37,610,953 -- 40,421,251 --
====================================================================================================================================
Lawrence H. Brown
For 52,728,879 -- 37,161,834 -- 40,029,397 --
Withhold 690,070 -- 449,119 -- 391,854 --
------------------------------------------------------------------------------------------------------------------------------------
Total 53,418,949 -- 37,610,953 -- 40,421,251 --
====================================================================================================================================
Jack B. Evans
For 52,742,453 -- 37,173,411 -- 40,016,645 --
Withhold 676,496 -- 437,542 -- 404,606 --
------------------------------------------------------------------------------------------------------------------------------------
Total 53,418,949 -- 37,610,953 -- 40,421,251 --
====================================================================================================================================
William C. Hunter
For 52,740,229 -- 37,157,034 -- 40,016,355 --
Withhold 678,720 -- 453,919 -- 404,896 --
------------------------------------------------------------------------------------------------------------------------------------
Total 53,418,949 -- 37,610,953 -- 40,421,251 --
====================================================================================================================================
William J. Schneider
For -- 17,378 -- 13,069 -- 14,662
Withhold -- 30 -- 24 -- 3
------------------------------------------------------------------------------------------------------------------------------------
Total -- 17,408 -- 13,093 -- 14,665
====================================================================================================================================
Timothy R. Schwertfeger
For -- 17,382 -- 13,069 -- 14,663
Withhold -- 26 -- 24 -- 2
------------------------------------------------------------------------------------------------------------------------------------
Total -- 17,408 -- 13,093 -- 14,665
====================================================================================================================================
Judith M. Stockdale
For 52,730,673 -- 37,167,105 -- 40,006,795 --
Withhold 688,276 -- 443,848 -- 414,456 --
------------------------------------------------------------------------------------------------------------------------------------
Total 53,418,949 -- 37,610,953 -- 40,421,251 --
====================================================================================================================================
15
Shareholder
MEETING REPORT (continued)
NAD NXZ NZF
------------------------------------------------------------------------------------------------------------------------------------
APPROVAL OF THE BOARD MEMBERS WAS
REACHED AS FOLLOWS:
Common and Common and Common and
MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred
shares voting shares voting shares voting shares voting shares voting shares voting
together together together together together together
as a class as a class as a class as a class as a class as a class
====================================================================================================================================
Robert P. Bremner
For 38,156,295 -- 28,637,978 -- 39,057,880 --
Withhold 337,975 -- 176,661 -- 356,674 --
------------------------------------------------------------------------------------------------------------------------------------
Total 38,494,270 -- 28,814,639 -- 39,414,554 --
====================================================================================================================================
Lawrence H. Brown
For 38,165,614 -- 28,635,958 -- 39,041,712 --
Withhold 328,656 -- 178,681 -- 372,842 --
------------------------------------------------------------------------------------------------------------------------------------
Total 38,494,270 -- 28,814,639 -- 39,414,554 --
====================================================================================================================================
Jack B. Evans
For 38,150,308 -- 28,635,211 -- 39,053,128 --
Withhold 343,962 -- 179,428 -- 361,426 --
------------------------------------------------------------------------------------------------------------------------------------
Total 38,494,270 -- 28,814,639 -- 39,414,554 --
====================================================================================================================================
William C. Hunter
For 38,155,774 -- 28,629,560 -- 39,036,120 --
Withhold 338,496 -- 185,079 -- 378,434 --
------------------------------------------------------------------------------------------------------------------------------------
Total 38,494,270 -- 28,814,639 -- 39,414,554 --
====================================================================================================================================
William J. Schneider
For -- 11,456 -- 8,725 -- 11,981
Withhold -- 65 -- 28 -- 67
------------------------------------------------------------------------------------------------------------------------------------
Total -- 11,521 -- 8,753 -- 12,048
====================================================================================================================================
Timothy R. Schwertfeger
For -- 11,456 -- 8,725 -- 11,981
Withhold -- 65 -- 28 -- 67
------------------------------------------------------------------------------------------------------------------------------------
Total -- 11,521 -- 8,753 -- 12,048
====================================================================================================================================
Judith M. Stockdale
For 38,184,952 -- 28,633,156 -- 39,059,481 --
Withhold 309,318 -- 181,483 -- 355,073 --
------------------------------------------------------------------------------------------------------------------------------------
Total 38,494,270 -- 28,814,639 -- 39,414,554 --
====================================================================================================================================
16
Report of
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
THE BOARD OF DIRECTORS, TRUSTEES AND SHAREHOLDERS
NUVEEN PERFORMANCE PLUS MUNICIPAL FUND, INC.
NUVEEN MUNICIPAL ADVANTAGE FUND, INC.
NUVEEN MUNICIPAL MARKET OPPORTUNITY FUND, INC.
NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND
NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND 2
NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND 3
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Nuveen Performance Plus Municipal Fund, Inc.,
Nuveen Municipal Advantage Fund, Inc., Nuveen Municipal Market Opportunity Fund,
Inc., Nuveen Dividend Advantage Municipal Fund, Nuveen Dividend Advantage
Municipal Fund 2 and Nuveen Dividend Advantage Municipal Fund 3 as of October
31, 2004, 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. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements and financial highlights. Our procedures
included confirmation of investments owned as of October 31, 2004, by
correspondence with the custodian and brokers or by other appropriate auditing
procedures where replies from brokers were not received. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of
Nuveen Performance Plus Municipal Fund, Inc., Nuveen Municipal Advantage Fund,
Inc., Nuveen Municipal Market Opportunity Fund, Inc., Nuveen Dividend Advantage
Municipal Fund, Nuveen Dividend Advantage Municipal Fund 2 and Nuveen Dividend
Advantage Municipal Fund 3 at October 31, 2004, the results of their operations
for the year then ended, the changes in their net assets for each of the two
years in the period then ended, and the financial highlights for the periods
indicated therein in conformity with U.S. generally accepted accounting
principles.
/s/Ernst & Young LLP
Chicago, Illinois
December 15, 2004
17
Nuveen Performance Plus Municipal Fund, Inc. (NPP)
Portfolio of
INVESTMENTS October 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 1.6% (1.1% OF TOTAL INVESTMENTS)
$ 3,615 Alabama Water Pollution Control Authority, Revolving Fund 8/05 at 100.00 AAA $ 3,756,419
Loan Bonds, Series 1994A, 6.750%, 8/15/17 (Pre-refunded
to 8/15/05) - AMBAC Insured
Jefferson County, Alabama, Sewer Revenue Refunding
Warrants, Series 1997A:
3,640 5.625%, 2/01/22 (Pre-refunded to 2/01/07) - FGIC Insured 2/07 at 101.00 AAA 3,960,138
1,435 5.625%, 2/01/22 - FGIC Insured 2/07 at 101.00 AAA 1,543,988
3,820 5.375%, 2/01/27 (Pre-refunded to 2/01/07) - FGIC Insured 2/07 at 100.00 AAA 4,098,516
1,505 5.375%, 2/01/27 - FGIC Insured 2/07 at 100.00 AAA 1,577,315
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 1.3% (0.9% OF TOTAL INVESTMENTS)
1,000 Arizona State Transportation Board, Highway Revenue Bonds, 7/12 at 100.00 AAA 1,080,110
Series 2002B, 5.250%, 7/01/22
Phoenix, Arizona, Civic Improvement Corporation, Senior Lien
Airport Revenue Bonds, Series 2002B:
5,365 5.750%, 7/01/15 (Alternative Minimum Tax) - FGIC Insured 7/12 at 100.00 AAA 6,034,391
5,055 5.750%, 7/01/16 (Alternative Minimum Tax) - FGIC Insured 7/12 at 100.00 AAA 5,686,420
------------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 0.5% (0.4% OF TOTAL INVESTMENTS)
5,080 Independence County, Arkansas, Hydroelectric Power Revenue 5/13 at 100.00 A 5,167,782
Bonds, Series 2003, 5.350%, 5/01/28 - ACA Insured
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 13.2% (9.0% OF TOTAL INVESTMENTS)
3,500 Alameda Corridor Transportation Authority, California, 10/17 at 100.00 AAA 2,434,705
Subordinate Lien Revenue Bonds, Series 2004A,
0.000%, 10/01/25 - AMBAC Insured
11,000 Anaheim Public Finance Authority, California, Subordinate No Opt. Call AAA 5,217,520
Lease Revenue Bonds, Public Improvement Project,
Series 1997C, 0.000%, 9/01/20 - FSA Insured
2,000 California Health Facilities Financing Authority, Health 3/13 at 100.00 A 2,005,960
Facility Revenue Bonds, Adventist Health System/West,
Series 2003A, 5.000%, 3/01/33
6,435 California, General Obligation Refunding Bonds, No Opt. Call AAA 7,820,134
Series 2002, 6.000%, 4/01/16 - AMBAC Insured
4,500 California, General Obligation Bonds, Series 2004, 2/09 at 100.00 A 4,568,535
5.100%, 2/01/34
California Department of Water Resources, Power Supply
Revenue Bonds, Series 2002A:
4,000 6.000%, 5/01/15 5/12 at 101.00 A2 4,682,720
2,750 5.375%, 5/01/22 5/12 at 101.00 A2 2,972,613
6,925 East Bay Municipal Utility District, Alameda and Contra 6/06 at 100.00 AAA 6,982,200
Costa Counties, California, Subordinated Water System
Revenue Refunding Bonds, Series 1996, 4.750%, 6/01/21 -
FGIC Insured
10,000 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 BBB 9,821,900
Tobacco Settlement Asset-Backed Bonds, Series 2003A-1,
6.750%, 6/01/39
1,000 Mt. Diablo Hospital District, California, Insured Hospital 12/04 at 101.00 AAA 1,055,320
Revenue Bonds, Series 1993A, 5.125%, 12/01/23 -
AMBAC Insured
13,450 Ontario Redevelopment Financing Authority, San Bernardino No Opt. Call AAA 17,805,514
County, California, Revenue Refunding Bonds, Redevelopment
Project 1, Series 1995, 7.200%, 8/01/17 - MBIA Insured
20,420 Palmdale Community Redevelopment Agency, California, No Opt. Call AAA 22,840,587
Residential Mortgage Revenue Refunding Bonds,
Series 1991A, 7.150%, 2/01/10
2,325 Palmdale Community Redevelopment Agency, California, No Opt. Call AAA 3,242,724
Restructured Single Family Mortgage Revenue Bonds,
Series 1986D, 8.000%, 4/01/16 (Alternative Minimum Tax)
10,000 San Bernardino County, California, Certificates of 8/05 at 102.00 AAA 10,480,300
Participation, Medical Center Financing Project,
Series 1995, 5.500%, 8/01/15 (Pre-refunded to 8/01/05) -
MBIA Insured
2,000 San Francisco Airports Commission, California, Revenue 5/09 at 101.00 AAA 2,060,640
Bonds, San Francisco International Airport, Second
Series 1999, Issue 23B, 5.125%, 5/01/30 - FGIC Insured
18
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (continued)
$ 2,000 San Francisco Airports Commission, California, Revenue 5/11 at 100.00 AAA $ 2,077,240
Refunding Bonds, San Francisco International Airport,
Second Series 2001, Issue 27B, 5.125%, 5/01/26 -
FGIC Insured
15,745 Walnut Valley Unified School District, Los Angeles County, 8/11 at 103.00 AAA 19,846,730
California, General Obligation Refunding Bonds,
Series 1997A, 7.200%, 2/01/16 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 4.5% (3.0% OF TOTAL INVESTMENTS)
3,000 Colorado Educational and Cultural Facilities Authority, 8/14 at 100.00 AAA 3,142,770
Charter School Revenue Bonds, Peak-to-Peak Charter
School, Series 2004, 5.250%, 8/15/34 - XLCA Insured
3,760 Colorado Health Facilities Authority, Revenue Refunding 9/11 at 100.00 AA 3,963,792
Bonds, Catholic Health Initiatives, Series 2001,
5.250%, 9/01/21
7,575 Denver City and County, Colorado, Airport System Revenue 11/07 at 101.00 AAA 8,160,093
Bonds, Series 1997E, 5.250%, 11/15/23 - MBIA Insured
20,000 Denver Convention Center Hotel Authority, Colorado, Senior 12/13 at 100.00 AAA 20,476,000
Revenue Bonds, Convention Center Hotel, Series 2003A,
5.000%, 12/01/33 - XLCA Insured
10,000 E-470 Public Highway Authority, Colorado, Senior Revenue No Opt. Call AAA 4,513,900
Bonds, Series 1997B, 0.000%, 9/01/21 - MBIA Insured
10,000 E-470 Public Highway Authority, Colorado, Senior Revenue No Opt. Call AAA 2,293,500
Bonds, Series 2000B, 0.000%, 9/01/32 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 1.3% (0.9% OF TOTAL INVESTMENTS)
5,590 District of Columbia, General Obligation Bonds, 6/09 at 101.00 AAA 6,229,720
Series 1999B, 5.500%, 6/01/13 - FSA Insured
6,720 District of Columbia Tobacco Settlement Corporation, 5/11 at 101.00 BBB 6,517,258
Tobacco Settlement Asset-Backed Bonds, Series 2001,
6.250%, 5/15/24
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 4.4% (2.9% OF TOTAL INVESTMENTS)
1,700 Miami-Dade County, Florida, Beacon Tradeport Community 5/12 at 102.00 AA 1,832,957
Development District, Special Assessment Bonds,
Commercial Project, Series 2002A, 5.625%, 5/01/32 -
RAAI Insured
Broward County Housing Finance Authority, Florida, Multifamily
Housing Revenue Bonds, Venice Homes Apartments, Series 2001A:
1,545 5.700%, 1/01/32 (Alternative Minimum Tax) - FSA Insured 7/11 at 100.00 AAA 1,582,621
1,805 5.800%, 1/01/36 (Alternative Minimum Tax) - FSA Insured 7/11 at 100.00 AAA 1,856,136
3,530 Florida Housing Finance Corporation, Homeowner Mortgage 1/10 at 100.00 AAA 3,729,622
Revenue Bonds, Series 2000-11, 5.850%, 1/01/22
(Alternative Minimum Tax) - FSA Insured
10,050 Florida State Board of Education, Full Faith and Credit 6/10 at 101.00 AA+ 11,380,721
Public Education Capital Outlay Refunding Bonds,
Series 1999D, 5.750%, 6/01/22
7,000 Hillsborough County Aviation Authority, Florida, Revenue 10/13 at 100.00 AAA 7,593,530
Bonds, Tampa International Airport, Series 2003A,
5.250%, 10/01/17 (Alternative Minimum Tax) - MBIA Insured
10,750 Martin County Industrial Development Authority, Florida, 12/04 at 102.00 BBB- 11,031,328
Industrial Development Revenue Bonds, Indiantown
Cogeneration LP Project, Series 1994A, 7.875%, 12/15/25
(Alternative Minimum Tax)
2,570 Miami-Dade County Housing Finance Authority, Florida, 6/11 at 100.00 AAA 2,695,185
Multifamily Mortgage Revenue Bonds, Country Club Villas II
Project, Series 2001-1A, 5.850%, 1/01/37 (Alternative
Minimum Tax) - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 3.2% (2.1% OF TOTAL INVESTMENTS)
4,920 Atlanta, Georgia, Airport General Revenue Refunding Bonds, 1/10 at 101.00 AAA 5,625,282
Series 2000A, 5.600%, 1/01/30 (Pre-refunded to 1/01/10) -
FGIC Insured
5,000 Atlanta, Georgia, Water and Wastewater Revenue Bonds, No Opt. Call AAA 5,846,650
Series 1999A, 5.500%, 11/01/22 - FGIC Insured
2,000 George L. Smith II World Congress Center Authority, 7/10 at 101.00 AAA 2,181,640
Atlanta, Georgia, Revenue Refunding Bonds, Domed
Stadium Project, Series 2000, 5.500%, 7/01/20 (Alternative
Minimum Tax) - MBIA Insured
15,000 Private Colleges and Universities Authority, Georgia, 11/09 at 101.00 AA 16,418,850
Revenue Bonds, Emory University, Series 1999A,
5.500%, 11/01/25
19
Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued)
Portfolio of INVESTMENTS October 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
IDAHO - 0.2% (0.2% OF TOTAL INVESTMENTS)
$ 965 Idaho Housing and Finance Association, Single Family 7/10 at 100.00 Aa2 $ 1,021,375
Mortgage Bonds, Series 2000G-2, 5.950%, 7/01/25
(Alternative Minimum Tax)
1,075 Idaho Housing and Finance Association, Single Family 1/10 at 100.00 A1 1,145,606
Mortgage Bonds, Series 2000D, 6.200%, 7/01/14
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 19.5% (13.2% OF TOTAL INVESTMENTS)
3,000 Chicago, Illinois, General Obligation Bonds, Library Projects, 1/08 at 102.00 AAA 3,331,860
Series 1997, 5.750%, 1/01/17 - FGIC Insured
Chicago, Illinois, General Obligation Bonds, City Colleges of
Chicago Capital Improvement Project, Series 1999:
32,170 0.000%, 1/01/21 - FGIC Insured No Opt. Call AAA 14,940,713
32,670 0.000%, 1/01/22 - FGIC Insured No Opt. Call AAA 14,282,344
10,000 Chicago Board of Education, Illinois, Unlimited Tax General No Opt. Call AAA 4,997,700
Obligation Bonds, Dedicated Tax Revenues, Series 1998B-1,
0.000%, 12/01/19 - FGIC Insured
10,000 Chicago Board of Education, Illinois, Unlimited Tax General No Opt. Call AAA 4,698,800
Obligation Bonds, Dedicated Tax Revenues, Series 1999A,
0.000%, 12/01/20 - FGIC Insured
9,145 Chicago, Illinois, Revenue Bonds, Midway Airport, 1/07 at 101.00 AAA 9,699,644
Series 1996A, 5.500%, 1/01/29 - MBIA Insured
DuPage County Forest Preserve District, Illinois, General
Obligation Bonds, Series 2000:
8,000 0.000%, 11/01/18 No Opt. Call AAA 4,289,520
15,285 0.000%, 11/01/19 No Opt. Call AAA 7,736,197
3,500 Illinois Development Finance Authority, Pollution Control 3/05 at 102.00 AAA 3,625,685
Revenue Refunding Bonds, Commonwealth Edison Company,
Series 1994D, 6.750%, 3/01/15 - AMBAC Insured
3,085 Illinois Health Facilities Authority, Revenue Bonds, 8/09 at 101.00 A- 3,220,432
Silver Cross Hospital and Medical Centers, Series 1999,
5.250%, 8/15/15
4,580 Illinois Health Facilities Authority, Revenue Bonds, Midwest 8/10 at 102.00 Aaa 4,978,643
Care Center IX, Inc., Series 2000, 6.250%, 8/20/35
3,000 Illinois Health Facilities Authority, Revenue Bonds, 7/13 at 100.00 A- 3,192,480
Lake Forest Hospital, Series 2003, 6.000%, 7/01/33
4,000 Illinois Health Facilities Authority, FHA-Insured Mortgage 8/13 at 100.00 AAA 4,060,760
Revenue Refunding Bonds, Sinai Health System,
Series 2003, 5.150%, 2/15/37
4,415 Illinois Health Facilities Authority, Revenue Refunding Bonds, 1/05 at 100.00 BB+ 4,416,280
Proctor Community Hospital, Series 1991, 7.375%, 1/01/23
5,000 Kane, McHenry, Cook and DeKalb Counties Community 12/11 at 100.00 AAA 5,639,550
Unit School District 300, Carpentersville, Illinois, General
Obligation Bonds, Series 2000, 5.500%, 12/01/19 -
MBIA Insured
3,700 Libertyville, Illinois, Affordable Housing Revenue Bonds, 11/09 at 100.00 A2 3,813,701
Liberty Towers Project, Series 1999A, 7.000%, 11/01/29
(Alternative Minimum Tax)
6,000 McHenry County Conservation District, Illinois, General 2/11 at 100.00 AAA 6,742,680
Obligation Bonds, Series 2001A, 5.625%, 2/01/21 -
FGIC Insured
Metropolitan Pier and Exposition Authority, Illinois, Revenue
Refunding Bonds, McCormick Place Expansion Project, Series 1996A:
9,400 0.000%, 12/15/18 - MBIA Insured No Opt. Call AAA 5,007,286
16,570 0.000%, 12/15/20 - MBIA Insured No Opt. Call AAA 7,850,369
23,550 0.000%, 12/15/22 - MBIA Insured No Opt. Call AAA 9,886,055
13,000 0.000%, 12/15/24 - MBIA Insured No Opt. Call AAA 4,811,170
Metropolitan Pier and Exposition Authority, Illinois, Revenue
Refunding Bonds, McCormick Place Expansion Project, Series 1998A:
5,180 5.500%, 12/15/23 - FGIC Insured No Opt. Call AAA 6,040,346
5,100 5.500%, 12/15/23 - FGIC Insured No Opt. Call AAA 5,925,027
10,650 Metropolitan Pier and Exposition Authority, Illinois, Revenue No Opt. Call AAA 14,174,404
Bonds, McCormick Place Hospitality Facility, Series 1996A,
7.000%, 7/01/26
20
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS (continued)
$ 17,865 Regional Transportation Authority, Cook, DuPage, Kane, No Opt. Call AAA $ 21,374,043
Lake, McHenry and Will Counties, Illinois, General Obligation
Bonds, Series 1999, 5.750%, 6/01/23 - FSA Insured
6,090 Sherman, Illinois, GNMA Mortgage Revenue Refunding 10/09 at 102.00 AAA 6,623,971
Bonds, Villa Vianney, Series 1999A, 6.450%, 10/01/29
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 5.9% (4.0% OF TOTAL INVESTMENTS)
2,465 Danville Multi-School Building Corporation, Indiana, First 7/11 at 100.00 AAA 2,723,998
Mortgage Refunding Bonds, Series 2001, 5.250%, 7/15/18 -
AMBAC Insured
14,000 Indiana Health Facility Financing Authority, Hospital 8/10 at 101.50 AAA 14,970,620
Revenue Bonds, Clarian Health Obligated Group,
Series 2000A, 5.500%, 2/15/30 - MBIA Insured
Indiana Health Facility Financing Authority, Revenue Bonds,
Ancilla Systems Inc. Obligated Group, Series 1997:
15,380 5.250%, 7/01/17 - MBIA Insured 7/07 at 101.00 AAA 16,838,639
2,250 5.250%, 7/01/22 - MBIA Insured 7/07 at 101.00 AAA 2,463,390
4,320 5.250%, 7/01/22 - MBIA Insured 7/07 at 101.00 AAA 4,729,709
Indiana Transportation Finance Authority, Highway Revenue
Bonds, Series 2000:
1,285 5.375%, 12/01/25 (Pre-refunded to 12/01/10) 12/10 at 100.00 Aa2*** 1,457,550
6,715 5.375%, 12/01/25 12/10 at 100.00 Aa2 7,268,182
5,730 Michigan City School Building Corporation, Indiana, First 12/04 at 102.00 AAA 5,876,115
Mortgage Bonds, Series 1994A, 6.125%, 12/15/09
(Pre-refunded to 12/15/04) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 0.4% (0.3% OF TOTAL INVESTMENTS)
5,000 Iowa Tobacco Settlement Authority, Tobacco Settlement 6/11 at 101.00 BBB 4,156,750
Asset-Backed Revenue Bonds, Series 2001B, 5.600%, 6/01/35
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 1.3% (0.9% OF TOTAL INVESTMENTS)
3,790 Kansas Department of Transportation, Highway Revenue 3/14 at 100.00 AA+ 4,014,520
Bonds, Series 2004A, 5.000%, 3/01/23
5,790 Sedgwick County Unified School District 259, Wichita, 9/10 at 100.00 AA 5,554,752
Kansas, General Obligation Bonds, Series 2000,
3.500%, 9/01/17
3,200 Wyandotte County Unified School District 500, Kansas, 9/11 at 100.00 AAA 3,121,248
General Obligation Bonds, Series 2001,
4.000%, 9/01/21 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 0.4% (0.3% OF TOTAL INVESTMENTS)
3,700 Louisville and Jefferson County Metropolitan Sewer District, 5/07 at 101.00 AAA 4,057,605
Kentucky, Sewer and Drainage System Revenue Bonds,
Series 1997A, 6.250%, 5/15/26 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 6.2% (4.2% OF TOTAL INVESTMENTS)
1,750 East Baton Rouge Mortgage Finance Authority, Louisiana, 10/07 at 102.00 Aaa 1,832,075
GNMA/FNMA Mortgage-Backed Securities Program Single
Family Mortgage Revenue Refunding Bonds, Series 1997B-1,
5.750%, 10/01/26
4,000 Lafayette City and Parish, Louisiana, Utilities Revenue Bonds, 11/14 at 100.00 AAA 4,321,560
Series 2004, 5.250%, 11/01/25 - MBIA Insured
35,700 Louisiana Stadium and Exposition District, Hotel Occupancy 7/06 at 102.00 AAA 38,645,607
Tax Bonds, Series 1996, 5.750%, 7/01/26 (Pre-refunded to
7/01/06) - FGIC Insured
Tobacco Settlement Financing Corporation, Louisiana, Tobacco
Settlement Asset-Backed Bonds, Series 2001B:
10,000 5.500%, 5/15/30 5/11 at 101.00 BBB 8,938,000
6,250 5.875%, 5/15/39 5/11 at 101.00 BBB 5,436,000
------------------------------------------------------------------------------------------------------------------------------------
MAINE - 0.6% (0.4% OF TOTAL INVESTMENTS)
5,680 Portland, Maine, General Airport Revenue Bonds, 7/13 at 100.00 AAA 5,836,541
Series 2003A, 5.000%, 7/01/32 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 2.7% (1.7% OF TOTAL INVESTMENTS)
1,130 Maryland Community Development Administration, 9/10 at 100.00 Aa2 1,154,781
Residential Revenue Bonds, Series 2000H, 5.800%, 9/01/32
(Alternative Minimum Tax)
21
Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued)
Portfolio of INVESTMENTS October 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
MARYLAND (continued)
$ 7,720 Maryland Transportation Authority, Airport Parking Revenue 3/12 at 101.00 AAA $ 8,150,776
Bonds, Baltimore-Washington International Airport Passenger
Facility, Series 2002B, 5.125%, 3/01/20 (Alternative
Minimum Tax) - AMBAC Insured
7,475 Montgomery County Housing Opportunities Commission, 1/05 at 102.00 Aa2 7,626,070
Maryland, GNMA/FHA-Insured Multifamily Housing Revenue
Bonds, Series 1994A, 6.250%, 7/01/28
7,090 Takoma Park, Maryland, Hospital Facilities, Revenue No Opt. Call AAA 8,444,615
Refunding and Improvement Bonds, Washington Adventist
Hospital Project, Series 1995, 6.500%, 9/01/12 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 3.7% (2.5% OF TOTAL INVESTMENTS)
1,630 Massachusetts Educational Finance Authority, Student Loan 12/09 at 101.00 AAA 1,688,403
Revenue Refunding Bonds, Series 2000G, 5.700%, 12/01/11
(Alternative Minimum Tax) - MBIA Insured
Massachusetts Municipal Wholesale Electric Company, Power Supply
System Revenue Bonds, Nuclear Project 6, Series 1987A:
35 8.750%, 7/01/18 (Pre-refunded to 1/01/05) 1/05 at 100.00 Aaa 35,417
35 8.750%, 7/01/18 (Pre-refunded to 7/01/05) 7/05 at 100.00 Aaa 36,614
Massachusetts, General Obligation Bonds, Consolidated Loan,
Series 2002E:
1,255 5.250%, 1/01/22 - FGIC Insured 1/13 at 100.00 AAA 1,415,088
3,745 5.250%, 1/01/22 (Pre-refunded to 1/01/13) - FGIC Insured 1/13 at 100.00 AAA 4,222,712
890 Massachusetts, General Obligation Bonds, Consolidated Loan, 11/12 at 100.00 Aa2 1,002,024
Series 2002C, 5.250%, 11/01/30 (Pre-refunded to 11/01/12)
Massachusetts Development Finance Authority, Revenue Bonds, 100
Cambridge Street Redevelopment, M/SRBC Project, Series 2002A:
4,000 5.125%, 8/01/28 - MBIA Insured 2/12 at 100.00 AAA 4,138,240
5,625 5.125%, 2/01/34 - MBIA Insured 2/12 at 100.00 AAA 5,800,500
1,420 Massachusetts Health and Educational Facilities Authority, 7/08 at 101.00 Aaa 1,421,661
Revenue Bonds, Southcoast Health System Obligated Group,
Series 1998A, 4.750%, 7/01/27 - MBIA Insured
5,745 Massachusetts Industrial Finance Agency, Resource Recovery 12/08 at 102.00 BBB 5,741,208
Revenue Refunding Bonds, Ogden Haverhill Project,
Series 1998A, 5.600%, 12/01/19 (Alternative Minimum Tax)
8,500 Route 3 North Transportation Improvements Association, 6/10 at 100.00 AAA 9,608,400
Massachusetts, Lease Revenue Bonds, Series 2000,
5.375%, 6/15/33 (Pre-refunded to 6/15/10) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 6.6% (4.4% OF TOTAL INVESTMENTS)
17,000 Birmingham City School District, Oakland County, Michigan, 11/07 at 100.00 AAA 17,149,090
School Building and Site Bonds, Series 1998,
4.750%, 11/01/24 - FSA Insured
3,000 Detroit, Michigan, Senior Lien Water Supply System Revenue 7/07 at 101.00 AAA 3,179,760
Bonds, Series 1997A, 5.000%, 7/01/21 - MBIA Insured
3,785 Grand Rapids Housing Corporation, Michigan, FHA-Insured 1/05 at 103.00 AAA 3,940,034
Mortgage Loan Section 8 Assisted Multifamily Revenue
Refunding Bonds, Elderly Project Series 1992,
7.375%, 7/15/41
4,030 Hancock Hospital Finance Authority, Michigan, FHA-Insured 8/08 at 100.00 AAA 4,139,334
Mortgage Hospital Revenue Bonds, Portage Health System
Inc., Series 1998, 5.450%, 8/01/47 - MBIA Insured
1,500 Michigan State Building Authority, Revenue Refunding 10/11 at 100.00 AA 1,562,100
Bonds, Facilities Program, Series 2001I, 5.000%, 10/15/24
5,000 Michigan State Building Authority, Revenue Refunding 10/13 at 100.00 AAA 5,158,400
Bonds, Facilities Program, Series 2003II, 5.000%, 10/15/29 -
MBIA Insured
7,115 Michigan State Hospital Finance Authority, Hospital 3/13 at 100.00 A1 7,762,252
Revenue Refunding Bonds, Henry Ford Health System,
Series 2003A, 5.500%, 3/01/16
5,000 Michigan State Hospital Finance Authority, Hospital Revenue No Opt. Call AAA 5,619,150
Refunding Bonds, Sisters of Mercy Health Corporation,
Series 1993P, 5.375%, 8/15/14 - MBIA Insured
3,000 Michigan Strategic Fund, Collateralized Limited Obligation 9/09 at 102.00 AAA 3,156,780
Pollution Control Revenue Refunding Bonds, Detroit Edison
Company, Series 1999A, 5.550%, 9/01/29 (Alternative
Minimum Tax) - MBIA Insured
10,000 Wayne County, Michigan, Airport Revenue Bonds, Detroit 12/08 at 101.00 AAA 10,693,500
Metropolitan Airport, Series 1998A, 5.375%, 12/01/16
(Alternative Minimum Tax) - MBIA Insured
22
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 4.1% (2.8% OF TOTAL INVESTMENTS)
$ 7,475 Dakota County Community Development Agency, Minnesota, 2/12 at 102.00 Aaa $ 7,858,468
GNMA Collateralized Mortgage Loan Multifamily Senior
Housing Revenue Bonds, Wingate Project, Series 2002A,
5.625%, 8/20/43
160 Dakota County Housing and Redevelopment Authority, 4/05 at 101.00 AAA 163,394
Minnesota, FNMA Collateralized Single Family Mortgage
Revenue Bonds, Series 1994A, 6.900%, 10/01/27 (Alternative
Minimum Tax)
3,000 Minneapolis-St. Paul Metropolitan Airports Commission, 1/11 at 100.00 AAA 3,177,210
Minnesota, Subordinate Airport Revenue Bonds,
Series 2001C, 5.250%, 1/01/26 - FGIC Insured
21,335 St. Paul Housing and Redevelopment Authority, Minnesota, 11/15 at 103.00 AAA 26,932,024
Sales Tax Revenue Refunding Bonds, Civic Center Project,
Series 1996, 7.100%, 11/01/23 - FSA Insured
1,175 St. Paul Housing and Redevelopment Authority, Minnesota, 3/05 at 102.60 Aaa 1,212,377
FNMA Mortgage-Backed Securities Middle Income Program
Phase II Single Family Mortgage Revenue Refunding Bonds,
Series 1995, 6.800%, 3/01/28
------------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 1.3% (0.9% OF TOTAL INVESTMENTS)
9,750 Mississippi Business Finance Corporation, Pollution Control 4/05 at 101.00 BBB- 9,784,125
Revenue Refunding Bonds, System Energy Resources Inc.
Project, Series 1998, 5.875%, 4/01/22
2,475 Mississippi Hospital Equipment and Facilities Authority, 9/14 at 100.00 N/R 2,495,518
Revenue Bonds, Baptist Memorial Health Care,
Series 2004B-1, 5.000%, 9/01/24
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 1.6% (1.0% OF TOTAL INVESTMENTS)
2,000 Missouri-Illinois Metropolitan District Bi-State Development 10/13 at 100.00 AAA 2,062,060
Agency, Mass Transit Sales Tax Appropriation Bonds,
Metrolink Cross County Extension Project, Series 2002B,
5.000%, 10/01/32 - FSA Insured
6,350 Kansas City, Missouri, General Improvement Airport Revenue 9/12 at 100.00 AAA 7,021,830
Bonds, Series 2003B, 5.250%, 9/01/17 - FGIC Insured
3,740 Missouri Health and Educational Facilities Authority, Revenue 6/11 at 101.00 AAA 3,910,432
Bonds, SSM Healthcare System, Series 2001A,
5.250%, 6/01/28 - AMBAC Insured
1,845 Missouri Health and Educational Facilities Authority, Revenue 5/13 at 100.00 AA 1,995,220
Bonds, BJC Health System, Series 2003, 5.250%, 5/15/18
------------------------------------------------------------------------------------------------------------------------------------
MONTANA - 0.8% (0.5% OF TOTAL INVESTMENTS)
1,175 Montana Board of Housing, Single Family Mortgage Bonds, 6/07 at 101.50 AA+ 1,195,398
Series 1997A, 6.150%, 6/01/30 (Alternative Minimum Tax)
1,330 Montana Board of Housing, Single Family Mortgage Bonds, 12/09 at 100.00 AA+ 1,373,970
Series 2000A-2, 6.450%, 6/01/29 (Alternative Minimum Tax)
4,795 Montana Higher Education Student Assistance Corporation, 12/08 at 101.00 A2 4,924,369
Student Loan Revenue Bonds, Subordinate Series 1998B,
5.500%, 12/01/31 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 0.2% (0.2% OF TOTAL INVESTMENTS)
2,115 Nebraska Investment Finance Authority, Single Family 9/10 at 100.00 AAA 2,185,768
Housing Revenue Bonds, Series 2000E, 5.850%, 9/01/20
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 3.1% (2.1% OF TOTAL INVESTMENTS)
5,000 Clark County, Nevada, General Obligation Bank Bonds, 6/11 at 100.00 AAA 5,537,750
Southern Nevada Water Authority Loan, Series 2001,
5.300%, 6/01/19 - FGIC Insured
10,900 Clark County School District, Nevada, General Obligation 6/12 at 100.00 AAA 12,324,521
Bonds, Series 2002C, 5.500%, 6/15/19 - MBIA Insured
10,465 Nevada, General Obligation Bonds, Municipal Bond Bank 5/06 at 101.00 AAA 11,222,561
Project 52, Series 1996A, 6.000%, 5/15/21 (Pre-refunded
to 5/15/06)
------------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 1.2% (0.8% OF TOTAL INVESTMENTS)
New Hampshire Housing Finance Authority, FHLMC Multifamily
Housing Revenue Remarketed Bonds, Countryside LP Project,
Series 1994:
3,725 6.000%, 7/01/18 (Alternative Minimum Tax) 7/10 at 101.00 Aaa 3,991,040
6,945 6.100%, 7/01/24 (Alternative Minimum Tax) 7/10 at 101.00 Aaa 7,373,368
23
Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued)
Portfolio of INVESTMENTS October 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 7.0% (4.7% OF TOTAL INVESTMENTS)
$ 3,360 New Jersey Higher Education Assistance Authority, Student 6/10 at 101.00 AAA $ 3,426,528
Loan Revenue Bonds, Series 2000A, 6.000%, 6/01/13
(Alternative Minimum Tax) - MBIA Insured
3,000 New Jersey Economic Development Authority, Transportation 5/09 at 100.00 AAA 3,339,330
Sublease Revenue Bonds, Light Rail Transit System,
Series 1999A, 5.250%, 5/01/17 (Pre-refunded to 5/01/09) -
FSA Insured
8,750 New Jersey Transportation Trust Fund Authority, 6/07 at 102.00 A+*** 9,616,513
Transportation System Bonds, Series 1996B,
5.250%, 6/15/16 (Pre-refunded to 6/15/07)
9,250 New Jersey Transportation Trust Fund Authority, 6/13 at 100.00 A+ 10,143,920
Transportation System Bonds, Series 2003C,
5.500%, 6/15/23
4,500 New Jersey Transportation Trust Fund Authority, No Opt. Call AAA 5,273,505
Transportation System Bonds, Series 2001C,
5.500%, 12/15/18 - FSA Insured
10,000 New Jersey Turnpike Authority, Revenue Bonds, 7/13 at 100.00 AAA 10,737,500
Series 2003A, 5.000%, 1/01/20 - FSA Insured
14,560 Tobacco Settlement Financing Corporation, New Jersey, 6/12 at 100.00 BBB 13,544,440
Tobacco Settlement Asset-Backed Bonds, Series 2002,
5.750%, 6/01/32
3,125 Tobacco Settlement Financing Corporation, New Jersey, 6/13 at 100.00 BBB 3,065,313
Tobacco Settlement Asset-Backed Bonds, Series 2003,
6.750%, 6/01/39
West Deptford Township, Gloucester County, New Jersey,
General Obligation Bonds, Series 2000:
3,150 5.500%, 9/01/21 (Pre-refunded to 9/01/10) - FGIC Insured 9/10 at 100.00 Aaa 3,591,945
3,335 5.500%, 9/01/22 (Pre-refunded to 9/01/10) - FGIC Insured 9/10 at 100.00 Aaa 3,802,901
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 16.5% (11.2% OF TOTAL INVESTMENTS)
1,500 Hempstead Industrial Development Agency, New York, No Opt. Call A3 1,601,340
Resource Recovery Revenue Refunding Bonds, American
Ref-Fuel Company of Hempstead, Series 2001,
5.000%, 12/01/10 (Mandatory put 6/01/10)
12,500 Metropolitan Transportation Authority, New York, 11/12 at 100.00 AAA 13,754,250
Dedicated Tax Fund Bonds, Series 2002A,
5.500%, 11/15/26 - FSA Insured
5 New York City, New York, General Obligation Bonds, 2/05 at 100.00 A 5,080
Fiscal Series 1987D, 8.500%, 8/01/08
12,500 New York City, New York, General Obligation Bonds, No Opt. Call A 12,965,000
Fiscal Series 1997A, 7.000%, 8/01/05
6,300 New York City, New York, General Obligation Bonds, 5/10 at 101.00 AAA 7,333,389
Fiscal Series 2000A, 6.250%, 5/15/26 - FSA Insured
New York City, New York, General Obligation Bonds,
Fiscal Series 1996F:
13,060 5.750%, 2/01/15 (Pre-refunded to 2/01/06) 2/06 at 101.50 A*** 13,894,665
3,235 5.750%, 2/01/15 2/06 at 101.50 A 3,404,838
4,875 New York City Municipal Water Finance Authority, New York, 6/06 at 101.00 AAA 5,160,626
Water and Sewerage System Revenue Bonds, Fiscal
Series 1997A, 5.500%, 6/15/24 - MBIA Insured
10,000 New York City Municipal Water Finance Authority, New York, 6/09 at 101.00 AA+ 11,039,200
Water and Sewerage System Revenue Bonds, Fiscal
Series 2000A, 5.750%, 6/15/30
New York City Municipal Water Finance Authority, New York, Water
and Sewerage System Revenue Bonds, Fiscal Series 1996B:
7,270 5.750%, 6/15/26 (Pre-refunded to 6/15/06) - MBIA Insured 6/06 at 101.00 AAA 7,800,492
13,380 5.750%, 6/15/26 - MBIA Insured 6/06 at 101.00 AAA 14,299,875
7,810 New York City Transitional Finance Authority, New York, 8/09 at 101.00 AA+*** 9,009,538
Future Tax Secured Bonds, Fiscal Series 2000A,
5.750%, 8/15/24 (Pre-refunded to 8/15/09)
2,250 Dormitory Authority of the State of New York, Lease 7/09 at 101.00 AAA 2,565,315
Revenue Bonds, State University Dormitory Facilities,
Series 1999C, 5.500%, 7/01/29 (Pre-refunded to
7/01/09) - MBIA Insured
4,000 Dormitory Authority of the State of New York, Revenue 11/04 at 100.00 AA- 4,095,600
Bonds, State University Educational Facilities, Series
1990B, 6.000%, 5/15/17
1,500 Dormitory Authority of the State of New York, Revenue 8/07 at 101.00 AAA 1,604,595
Bonds, St. Barnabas Hospital, Series 1997,
5.450%, 8/01/35 - AMBAC Insured
2,070 Dormitory Authority of the State of New York, Insured 7/08 at 101.00 AAA 2,297,307
Revenue Bonds, 853 Schools Program, Gateway-Longview
Inc., Series 1998A, 5.500%, 7/01/18 - AMBAC Insured
5,500 Dormitory Authority of the State of New York, FHA-Insured 2/14 at 100.00 AAA 5,710,815
Mortgage Hospital Revenue Bonds, Kaleida Health,
Series 2004, 5.050%, 2/15/25
24
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK (continued)
Dormitory Authority of the State of New York, Improvement
Revenue Bonds, Mental Health Services Facilities, Series 1996B:
$ 1,930 5.375%, 2/15/26 (Pre-refunded to 2/15/06) - MBIA Insured 2/06 at 102.00 AAA $ 2,057,110
70 5.375%, 2/15/26 - MBIA Insured 2/06 at 102.00 AAA 73,606
17,000 Dormitory Authority of the State of New York, Third General 7/09 at 101.00 AAA 19,382,380
Resolution Consolidated Revenue Bonds, City University
System, Series 1999-1, 5.500%, 7/01/29 (Pre-refunded
to 7/01/09) - FSA Insured
3,000 Dormitory Authority of the State of New York, Third General 1/08 at 102.00 AAA 3,353,580
Resolution Consolidated Revenue Bonds, City University
System, Series 1997-1, 5.375%, 7/01/24 (Pre-refunded
to 1/01/08) - FSA Insured
Dormitory Authority of the State of New York, Revenue Bonds,
Marymount Manhattan College, Series 1999:
1,580 6.375%, 7/01/13 - RAAI Insured 7/09 at 101.00 AA 1,779,917
9,235 6.125%, 7/01/21 - RAAI Insured 7/09 at 101.00 AA 10,152,313
3,000 New York State Energy Research and Development 9/08 at 102.00 AAA 3,288,150
Authority, Pollution Control Revenue Bonds, Rochester Gas
and Electric Corporation, Series 1998A, 5.950%, 9/01/33
(Alternative Minimum Tax) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 0.2% (0.2% OF TOTAL INVESTMENTS)
2,000 North Carolina Municipal Power Agency 1, Catawba Electric 1/08 at 102.00 AAA 2,139,020
Revenue Bonds, Series 1998A, 5.000%, 1/01/20 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 4.7% (3.2% OF TOTAL INVESTMENTS)
7,500 Cleveland, Ohio, Airport System Revenue Bonds, 1/10 at 101.00 AAA 7,653,075
Series 2000A, 5.000%, 1/01/31 - FSA Insured
3,650 Montgomery County, Ohio, Revenue Bonds, Catholic 5/14 at 100.00 AA 3,707,962
Health Initiatives, Series 2004A, 5.000%, 5/01/30
(WI, settling 11/18/04)
11,870 Ohio Housing Finance Agency, GNMA Mortgage-Backed 7/09 at 100.00 Aaa 12,123,899
Securities Program Residential Mortgage Revenue Bonds,
Series 1999C, 5.750%, 9/01/30 (Alternative Minimum Tax)
6,800 Ohio Water Development Authority, Solid Waste Disposal 9/08 at 102.00 N/R 6,701,604
Revenue Bonds, Bay Shore Power, Series 1998A,
5.875%, 9/01/20 (Alternative Minimum Tax)
13,900 Ohio Water Development Authority, Solid Waste Disposal 9/09 at 102.00 N/R 14,260,010
Revenue Bonds, Bay Shore Power, Series 1998B,
6.625%, 9/01/20 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 0.3% (0.2% OF TOTAL INVESTMENTS)
3,400 Tulsa Municipal Airport Trust, Oklahoma, Revenue Refunding 6/09 at 100.00 B- 3,191,172
Bonds, American Airlines Inc., Series 2000B,
6.000%, 6/01/35 (Alternative Minimum Tax) (Mandatory
put 12/01/08)
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 1.0% (0.7% OF TOTAL INVESTMENTS)
9,150 Port of St. Helens, Oregon, Pollution Control Revenue No Opt. Call BBB 9,170,038
Bonds, Portland General Electric Company, Series 1985B,
4.800%, 6/01/10
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 3.9% (2.7% OF TOTAL INVESTMENTS)
Bethlehem Authority, Northampton and Lehigh Counties,
Pennsylvania, Guaranteed Water Revenue Bonds, Series 1998:
3,125 0.000%, 5/15/22 - FSA Insured No Opt. Call AAA 1,355,969
3,125 0.000%, 5/15/23 - FSA Insured No Opt. Call AAA 1,276,656
3,135 0.000%, 5/15/24 - FSA Insured No Opt. Call AAA 1,199,169
3,155 0.000%, 5/15/26 - FSA Insured No Opt. Call AAA 1,071,028
4,145 0.000%, 11/15/26 - FSA Insured No Opt. Call AAA 1,372,244
2,800 0.000%, 5/15/28 - FSA Insured No Opt. Call AAA 841,456
3,000 0.000%, 11/15/28 - FSA Insured No Opt. Call AAA 878,820
4,355 Carbon County Industrial Development Authority, No Opt. Call BBB- 4,726,090
Pennsylvania, Resource Recovery Revenue Refunding
Bonds, Panther Creek Partners Project, Series 2000,
6.650%, 5/01/10 (Alternative Minimum Tax)
11,000 Delaware County Authority, Pennsylvania, Health System 11/08 at 102.00 AAA 11,440,110
Revenue Bonds, Catholic Health East Issue, Series 1998A,
4.875%, 11/15/18 - AMBAC Insured
Pennsylvania Economic Development Financing Authority, Senior
Lien Resource Recovery Revenue Bonds, Northampton Generating
Project, Series 1994A:
2,100 6.400%, 1/01/09 (Alternative Minimum Tax) 1/05 at 101.00 BBB- 2,141,769
4,500 6.500%, 1/01/13 (Alternative Minimum Tax) 1/05 at 101.00 BBB- 4,561,200
25
Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued)
Portfolio of INVESTMENTS October 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA (continued)
$ 800 Pennsylvania Economic Development Financing Authority, 1/05 at 101.00 N/R $ 800,360
Subordinate Resource Recovery Revenue Bonds,
Northampton Generating Project, Series 1994C,
6.875%, 1/01/11 (Alternative Minimum Tax)
5,275 Pennsylvania Economic Development Financing Authority, No Opt. Call N/R 5,459,467
Senior Lien Resource Recovery Revenue Bonds,
Northampton Generating Project, Series 1994B,
6.750%, 1/01/07 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 0.2% (0.1% OF TOTAL INVESTMENTS)
1,250 Puerto Rico Highway and Transportation Authority, 7/10 at 101.00 AAA 1,433,275
Highway Revenue Bonds, Series 2000B, 5.875%, 7/01/21 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 0.5% (0.3% OF TOTAL INVESTMENTS)
2,000 Kent County Water Authority, Rhode Island, General Revenue 7/12 at 100.00 AAA 2,100,980
Bonds, Series 2002A, 5.000%, 7/15/23 - MBIA Insured
Rhode Island Health and Educational Building Corporation,
Revenue Refunding Bonds, Salve Regina University, Series 2002:
1,260 5.250%, 3/15/17 - RAAI Insured 3/12 at 101.00 AA 1,354,891
1,080 5.250%, 3/15/18 - RAAI Insured 3/12 at 101.00 AA 1,157,069
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 3.5% (2.4% OF TOTAL INVESTMENTS)
22,855 Piedmont Municipal Power Agency, South Carolina, Electric No Opt. Call AAA 5,681,296
Revenue Bonds, Series 2004A-2, 0.000%, 1/01/31 -
AMBAC Insured
6,925 South Carolina, General Obligation Bonds, Series 1999A, 10/09 at 101.00 AAA 7,138,498
4.000%, 10/01/14
21,000 Tobacco Settlement Revenue Management Authority, 5/11 at 101.00 BBB 20,153,280
South Carolina, Tobacco Settlement Asset-Backed Bonds,
Series 2001B, 6.000%, 5/15/22
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 1.7% (1.1% OF TOTAL INVESTMENTS)
2,260 Johnson City Health and Educational Facilities Board, 1/09 at 101.00 AAA 2,452,484
Tennessee, Hospital Revenue Refunding and Improvement
Bonds, Johnson City Medical Center, Series 1998C,
5.125%, 7/01/25 - MBIA Insured
1,700 Memphis-Shelby County Airport Authority, Tennessee, 3/10 at 101.00 AAA 1,884,297
Airport Revenue Bonds, Series 1999D, 6.000%, 3/01/24
(Alternative Minimum Tax) - AMBAC Insured
6,000 Metropolitan Government of Nashville and Davidson 12/17 at 100.00 AAA 7,276,860
Counties, Tennessee, Revenue Refunding and Improvement
Bonds, Meharry Medical College, Series 1996,
6.000%, 12/01/19 - AMBAC Insured
4,400 Tennessee Housing Development Agency, Homeownership 7/10 at 101.00 AA 4,571,864
Program Bonds, Series 2000-1, 6.375%, 7/01/25 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 5.5% (3.7% OF TOTAL INVESTMENTS)
3,740 Austin, Texas, Subordinate Lien Hotel Occupancy Tax 11/09 at 100.00 AAA 4,206,602
Revenue Refunding Bonds, Series 1999, 5.625%, 11/15/17 -
AMBAC Insured
3,975 Bell County Health Facilities Development Corporation, 2/10 at 101.00 AAA 4,532,971
Texas, Revenue Bonds, Scott and White Memorial Hospital
and Scott, Sherwood and Brindley Foundation, Series 2000A,
6.125%, 8/15/23 - MBIA Insured
5,690 Dallas-Ft. Worth International Airport Facility Improvement 11/05 at 100.00 CCC 5,301,487
Corporation, Texas, Revenue Refunding Bonds, American
Airlines Inc., Series 2000B, 6.050%, 5/01/29 (Alternative
Minimum Tax) (Mandatory put 11/01/05)
220 Ft. Worth Housing Finance Corporation, Texas, Home 4/05 at 100.00 Aa2 220,724
Mortgage Revenue Refunding Bonds, Series 1991A,
8.500%, 10/01/11
1,000 Fort Worth, Texas, Water and Sewerage Revenue Bonds, 2/08 at 100.00 AA 1,074,430
Series 1998, 5.250%, 2/15/15
1,000 Harlingen Independent School District, Cameron County, 8/09 at 100.00 AAA 1,096,350
Texas, Unlimited Tax School Building Bonds, Series 1999,
5.650%, 8/15/29
1,625 Harris County Health Facilities Development Corporation, 7/09 at 101.00 AAA 1,706,998
Texas, Revenue Bonds, Christus Health, Series 1999A,
5.375%, 7/01/24 - MBIA Insured
140 Hidalgo County Housing Finance Corporation, Texas, 4/05 at 101.00 Aaa 140,976
GNMA/FNMA Collateralized Single Family Mortgage
Revenue Bonds, Series 1994A, 6.750%, 10/01/15 (Alternative
Minimum Tax)
4,000 Houston Community College, Texas, Limited Tax General 2/13 at 100.00 AAA 4,127,960
Obligation Bonds, Series 2003, 5.000%, 2/15/27 -
AMBAC Insured
26
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS (continued)
$ 3,885 Houston Independent School District, Public Facility No Opt. Call AAA $ 1,963,401
Corporation, Harris County, Texas, Lease Revenue Bonds,
Cesar E. Chavez High School, Series 1998A,
0.000%, 9/15/19 - AMBAC Insured
1,690 Webb County, Laredo, Texas, Combination Tax and Sewer 2/08 at 100.00 AAA 1,712,359
System, Revenue Certificates of Obligation, Series 1998A,
4.500%, 2/15/18 - MBIA Insured
Leander Independent School District, Williamson and Travis
Counties, Texas, Unlimited Tax School Building and Refunding
Bonds, Series 1998:
4,930 0.000%, 8/15/20 8/06 at 46.47 AAA 2,103,532
3,705 0.000%, 8/15/22 8/06 at 41.33 AAA 1,401,750
540 Lubbock Housing Finance Corporation, Texas, GNMA 6/07 at 102.00 AAA 546,626
Mortgage-Backed Securities Program Single Family
Mortgage Revenue Refunding Bonds, Series 1997A,
6.125%, 12/01/17
3,480 Pearland, Texas, General Obligation Bonds, Series 2002, 3/12 at 100.00 AAA 3,580,085
5.000%, 3/01/27 - FGIC Insured
6,290 San Antonio, Texas, Electric and Gas System Revenue 2/09 at 100.00 AA+ 6,349,063
Refunding Bonds, New Series 1998A, 4.500%, 2/01/21
6,000 Spring Branch Independent School District, Harris County, 2/11 at 100.00 AAA 6,201,420
Texas, Limited Tax Schoolhouse and Refunding Bonds,
Series 2001, 5.125%, 2/01/26
4,000 Tarrant Regional Water District, Texas, Water Revenue 3/13 at 100.00 AAA 4,221,520
Refunding and Improvement Bonds, Series 1999,
5.000%, 3/01/22 - FSA Insured
1,440 Texas, General Obligation Bonds, Water Financial Assistance, 8/09 at 100.00 AAA 1,560,557
State Participation Program, Series 1999C,
5.500%, 8/01/29 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
UTAH - 4.4% (3.0% OF TOTAL INVESTMENTS)
10,000 Intermountain Power Agency, Utah, Power Supply Revenue 7/07 at 102.00 AAA 11,053,500
Refunding Bonds, Series 1997B, 5.750%, 7/01/19 -
MBIA Insured
Utah County, Utah, Hospital Revenue Bonds, IHC Health
Services Inc., Series 1997:
12,500 5.250%, 8/15/21 - MBIA Insured 8/07 at 101.00 AAA 13,407,625
3,900 5.250%, 8/15/26 - MBIA Insured 8/07 at 101.00 AAA 4,002,102
4,165 Utah Housing Corporation, Single Family Mortgage Bonds, 1/12 at 100.00 AA- 4,372,250
Series 2002A-1, 5.300%, 7/01/18 (Alternative Minimum Tax)
45 Utah Housing Finance Agency, Single Family Mortgage Bonds, 1/10 at 100.00 AA 45,056
Series 2000B, 6.250%, 7/01/22 (Alternative Minimum Tax)
2,555 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/10 at 100.00 AA- 2,699,536
Series 2000D-1, 6.050%, 7/01/14 (Alternative Minimum Tax)
2,910 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/10 at 100.00 Aa1 3,098,743
Series 2000E-1, Class III, 6.000%, 1/01/15
(Alternative Minimum Tax)
685 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/10 at 100.00 AA 685,897
Series 2000E-1, Class II, 6.150%, 1/01/27
(Alternative Minimum Tax)
1,065 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/11 at 100.00 AA 1,096,055
Series 2001A-2, 5.650%, 7/01/27 (Alternative Minimum Tax)
900 Utah Housing Finance Agency, Single Family Mortgage Bonds, 1/11 at 100.00 Aa2 958,482
Series 2001B-1, 5.750%, 7/01/19 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
VERMONT - 0.4% (0.3% OF TOTAL INVESTMENTS)
3,510 Vermont Housing Finance Agency, Single Family Housing 11/04 at 102.00 A+ 3,554,612
Bonds, Series 1994-5, 7.000%, 11/01/27 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
VIRGIN ISLANDS - 0.8% (0.5% OF TOTAL INVESTMENTS)
2,500 Virgin Islands Public Finance Authority, Refinery Revenue 1/14 at 100.00 BBB- 2,689,250
Bonds, Hovensa LLC, Series 2003, 6.125%, 7/01/22
(Alternative Minimum Tax)
4,700 Virgin Islands Public Finance Authority, Gross Receipts Taxes 10/14 at 100.00 AA 4,803,118
Loan Notes, Series 2003, 5.000%, 10/01/33 - RAAI Insured
27
Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued)
Portfolio of INVESTMENTS October 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 4.2% (2.9% OF TOTAL INVESTMENTS)
$ 12,235 Chelan County Public Utility District 1, Washington, No Opt. Call AAA $ 4,005,250
Columbia River-Rock Island Hydro-Electric System Revenue
Refunding Bonds, Series 1997A, 0.000%, 6/01/26 -
MBIA Insured
3,100 Cowlitz County Public Utilities District 1, Washington, 9/14 at 100.00 AAA 3,187,172
Electric Production Revenue Bonds, Series 2004,
5.000%, 9/01/28 - FGIC Insured
5,000 Energy Northwest, Washington, Electric Revenue Refunding 7/13 at 100.00 Aaa 5,624,700
Bonds, Nuclear Project 1, Series 2003A, 5.500%, 7/01/16
1,815 Grant County Public Utility District 2, Washington, Revenue 1/06 at 102.00 AAA 1,914,226
Bonds, Master Lease Program, Wanapum Hydroelectric
Development, Series 1997A, 5.625%, 1/01/26 - MBIA Insured
2,295 King County School District 414, Lake Washington, 12/10 at 100.00 Aa1*** 2,605,926
Washington, General Obligation Bonds, Series 2000,
5.375%, 12/01/16 (Pre-refunded to 12/01/10)
12,000 Washington, Motor Vehicle Fuel Tax General Obligation 1/11 at 100.00 Aa1 12,535,440
Bonds, Series 2001D, 5.250%, 1/01/26
5,000 Washington State Housing Finance Commission, 7/09 at 101.00 AA 5,440,350
Non-Profit Housing Revenue Bonds, Kline Galland Center,
Series 1999, 6.000%, 7/01/29 - RAAI Insured
4,500 Washington State Healthcare Facilities Authority, Revenue 12/09 at 101.00 AAA 4,954,090
Bonds, Providence Services, Series 1999, 5.375%, 12/01/19 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 0.5% (0.4% OF TOTAL INVESTMENTS)
5,000 Mason County, West Virginia, Pollution Control Revenue 10/11 at 100.00 BBB 5,107,900
Bonds, Appalachian Power Company, Series 2003L,
5.500%, 10/01/22
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 2.1% (1.3% OF TOTAL INVESTMENTS)
11,620 Wisconsin Health and Educational Facilities Authority, 2/10 at 101.00 AA 13,063,320
Revenue Bonds, Marshfield Clinic, Series 1999,
6.250%, 2/15/29 - RAAI Insured
7,490 Wisconsin Health and Educational Facilities Authority, 7/08 at 103.00 N/R 6,837,242
Revenue Bonds, Millennium Housing Foundation Inc.,
Series 1998, 6.100%, 1/01/28
------------------------------------------------------------------------------------------------------------------------------------
$ 1,469,515 Total Long-Term Investments (cost $1,297,975,376) - 147.2% 1,399,487,231
=============-----------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 0.6% (0.4% OF TOTAL INVESTMENTS)
2,100 Chester County Industrial Development Authority, VMIG-1 2,100,000
Pennsylvania, Secured Revenue Bonds, Variable Rate
Demand Obligations, Archdiocese of Philadelphia,
Series 2001, 1.750%, 7/01/31+
2,300 Fulton County Residential Care Facilities Authority, Georgia, A-1+ 2,300,000
Revenue Refunding Bonds, Lenbrook Square Foundation
Inc., Variable Rate Demand Obligations, Series 1996,
1.790%, 1/01/18+
1,000 Palm Beach County Health Facilities Authority, Florida, VMIG-1 1,000,000
Variable Revenue Bonds, Bethesda Healthcare System,
Series 2001, 1.740%, 12/01/31+
------------------------------------------------------------------------------------------------------------------------------------
$ 5,400 Total Short-Term Investments (cost $5,400,000) 5,400,000
=============-----------------------------------------------------------------------------------------------------------------------
Total Investments (cost $1,303,375,376) - 147.8% 1,404,887,231
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.6% 25,106,076
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (50.4)% (479,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 950,993,307
====================================================================================================================
(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.
** 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
currently in effect. This rate changes periodically
based on market conditions or a specified market index.
See accompanying notes to financial statements.
28
Nuveen Municipal Advantage Fund, Inc. (NMA)
Portfolio of
INVESTMENTS October 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 3.2% (2.1% OF TOTAL INVESTMENTS)
$ 10,000 Jefferson County, Alabama, Sewer Revenue Capital 2/09 at 101.00 AAA $ 11,219,600
Improvement Warrants, Series 1999A, 5.375%, 2/01/36
(Pre-refunded to 2/01/09) - FGIC Insured
5,075 Lauderdale County and Florence Healthcare Authority, 7/09 at 101.00 AAA 5,307,435
Alabama, Revenue Bonds, Coffee Health Group,
Series 1999A, 5.250%, 7/01/24 - MBIA Insured
5,155 Phenix City Industrial Development Board, Alabama, 5/12 at 100.00 BBB 5,419,194
Environmental Improvement Revenue Bonds,
MeadWestvaco Corporation, Series 2002A,
6.350%, 5/15/35 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 0.7% (0.5% OF TOTAL INVESTMENTS)
5,000 Maricopa County Pollution Control Corporation, Arizona, 5/06 at 101.00 BBB 5,143,350
Remarketed Revenue Refunding Bonds, Public Service
Company of New Mexico, Series 1992A, 5.750%, 11/01/22
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 9.5% (6.4% OF TOTAL INVESTMENTS)
2,500 Alameda Corridor Transportation Authority, California, 10/17 at 100.00 AAA 1,739,075
Subordinate Lien Revenue Bonds, Series 2004A,
0.000%, 10/01/25 - AMBAC Insured
3,000 California Health Facilities Financing Authority, Health 3/13 at 100.00 A 3,008,940
Facility Revenue Bonds, Adventist Health System/West,
Series 2003A, 5.000%, 3/01/33
3,300 California Department of Water Resources, Power Supply 5/12 at 101.00 A2 3,567,135
Revenue Bonds, Series 2002A, 5.375%, 5/01/22
7,500 California State Public Works Board, Lease Revenue Bonds, 4/14 at 100.00 A- 7,717,200
Department of Mental Health, Coalinga State Hospital,
Series 2004A, 5.125%, 6/01/29
7,535 Contra Costa County, California, GNMA Mortgage-Backed No Opt. Call AAA 10,267,492
Securities Program Home Mortgage Revenue Bonds,
Series 1989, 7.750%, 5/01/22 (Alternative Minimum Tax)
6,925 East Bay Municipal Utility District, Alameda and Contra 6/06 at 100.00 AAA 6,982,200
Costa Counties, California, Subordinated Water System
Revenue Refunding Bonds, Series 1996, 4.750%, 6/01/21 -
FGIC Insured
2,500 Los Angeles County Metropolitan Transportation Authority, 7/05 at 100.00 AAA 2,554,775
California, Proposition C Second Senior Lien Sales Tax
Revenue Bonds, Series 1995A, 5.000%, 7/01/25
(Pre-refunded to 7/01/05) - AMBAC Insured
North Orange County Community College District, California,
General Obligation Bonds, Series 2003B:
7,735 0.000%, 8/01/25 - FGIC Insured No Opt. Call AAA 2,684,122
4,000 0.000%, 8/01/26 - FGIC Insured No Opt. Call AAA 1,302,320
5,000 Palmdale Community Redevelopment Agency, California, No Opt. Call AAA 6,147,350
Residential Mortgage Revenue Refunding Bonds,
Series 1991B, 7.375%, 2/01/12
5,000 Palmdale Community Redevelopment Agency, California, No Opt. Call AAA 6,961,850
Single Family Restructured Mortgage Revenue Bonds,
Series 1986A, 8.000%, 3/01/16 (Alternative Minimum Tax)
9,315 Perris, California, GNMA Mortgage-Backed Securities No Opt. Call AAA 12,837,002
Program, Single Family Mortgage Revenue Bonds,
Series 1989A, 7.600%, 1/01/23 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 3.5% (2.3% OF TOTAL INVESTMENTS)
8,350 Colorado Health Facilities Authority, Remarketed Revenue 7/06 at 102.00 AAA 8,949,029
Bonds, Kaiser Permanente, Series 1994A, 5.350%, 11/01/16
2,650 E-470 Public Highway Authority, Colorado, Senior Revenue No Opt. Call AAA 1,595,857
Bonds, Series 1997B, 0.000%, 9/01/16 - MBIA Insured
1,000 E-470 Public Highway Authority, Colorado, Senior Revenue 9/10 at 102.00 AAA 1,123,480
Bonds, Series 2000A, 5.750%, 9/01/35 - MBIA Insured
4,125 Municipal Subdistrict Northern Colorado Water District, 12/07 at 101.00 AAA 4,506,686
Revenue Bonds, Series 1997G, 5.250%, 12/01/15 -
AMBAC Insured
29
Nuveen Municipal Advantage Fund, Inc. (NMA) (continued)
Portfolio of INVESTMENTS October 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
COLORADO (continued)
Platte River Power Authority, Colorado, Power Revenue
Refunding Bonds, Series 2002EE:
$ 2,000 5.375%, 6/01/17 6/12 at 100.00 AA- $ 2,252,220
5,000 5.375%, 6/01/18 6/12 at 100.00 AA- 5,621,700
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 0.8% (0.5% OF TOTAL INVESTMENTS)
2,500 District of Columbia Housing Finance Agency, GNMA 12/04 at 103.00 AAA 2,577,525
Collateralized Single Family Mortgage Revenue Bonds,
Series 1988F-1, 6.375%, 6/01/26 (Alternative Minimum Tax)
2,815 District of Columbia Housing Finance Agency, GNMA/FNMA 6/07 at 102.00 AAA 2,860,631
Single Family Mortgage Revenue Bonds, Series 1997B,
5.900%, 12/01/28 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 2.2% (1.4% OF TOTAL INVESTMENTS)
2,770 Florida Housing Finance Corporation, Housing Revenue 12/10 at 100.00 AAA 2,902,046
Bonds, Stratford Point Apartments, Series 2000O-1,
5.850%, 12/01/31 (Alternative Minimum Tax) - FSA Insured
1,075 Orange County, Florida, Tourist Development Tax Revenue 10/09 at 100.00 AAA 1,185,155
Bonds, Series 2000, 5.250%, 10/01/16 - AMBAC Insured
9,990 Tampa, Florida, Healthcare System Revenue Bonds, 12/04 at 101.00 AAA 10,842,047
Allegany Health System - St. Mary's Hospital, Series 1993,
5.125%, 12/01/23 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
HAWAII - 0.7% (0.5% OF TOTAL INVESTMENTS)
2,290 Hawaii Housing Finance and Development Corporation, 7/07 at 102.00 AAA 2,316,404
Single Family Mortgage Purchase Revenue Bonds,
Series 1997A, 5.750%, 7/01/30 (Alternative Minimum Tax)
2,215 Hawaii Housing and Community Development Corporation, 7/10 at 102.00 AAA 2,342,806
GNMA Collateralized Multifamily Housing Revenue Bonds,
Sunset Villas, Series 2000, 5.700%, 7/20/31
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 14.3% (9.5% OF TOTAL INVESTMENTS)
5,865 Chicago, Illinois, General Obligation Bonds, Neighborhoods 7/10 at 101.00 AAA 7,026,857
Alive 21 Program, Series 2000A, 6.500%, 1/01/35
(Pre-refunded to 7/01/10) - FGIC Insured
4,000 Chicago Board of Education, Illinois, Unlimited Tax General 12/07 at 102.00 AAA 4,503,040
Obligation Bonds, Dedicated Tax Revenues, Series 1997,
5.750%, 12/01/20 (Pre-refunded to 12/01/07) -
AMBAC Insured
12,500 Chicago Board of Education, Illinois, Unlimited Tax General 12/07 at 102.00 AAA 13,094,125
Obligation Bonds, Dedicated Tax Revenues, Series 1997A,
5.250%, 12/01/27 - AMBAC Insured
5,000 Chicago, Illinois, Special Facility Revenue Bonds, O'Hare No Opt. Call N/R 1,800,000
International Airport, United Air Lines Inc. Project,
Series 2001A, 6.375%, 11/01/35 (Alternative Minimum Tax)
(Mandatory put 5/01/13) #
5,000 Chicago, Illinois, Second Lien Passenger Facility Charge 1/11 at 101.00 AAA 5,173,900
Revenue Bonds, O'Hare International Airport, Series 2001A,
5.375%, 1/01/32 (Alternative Minimum Tax) - AMBAC Insured
5,000 Chicago, Illinois, Second Lien Wastewater Transmission 1/08 at 102.00 AAA 5,553,850
Revenue Bonds, Series 1997, 5.250%, 1/01/28 (Pre-refunded
to 1/01/08) - AMBAC Insured
10,115 Illinois Health Facilities Authority, Revenue Refunding Bonds, 11/06 at 102.00 AAA 11,125,691
Rush-Presbyterian-St. Luke's Medical Center Obligated Group,
Series 1996A, 6.250%, 11/15/20 - MBIA Insured
6,165 Illinois Health Facilities Authority, Revenue Bonds, Sarah 2/07 at 102.00 A 6,373,685
Bush Lincoln Health Center, Series 1996B, 5.750%, 2/15/22
3,935 Illinois Health Facilities Authority, Revenue Bonds, Victory 8/07 at 101.00 Baa2 3,830,172
Health Services, Series 1997A, 5.375%, 8/15/16
6,000 Illinois Health Facilities Authority, Revenue Bonds, Condell 5/12 at 100.00 Baa2 6,160,320
Medical Center, Series 2002, 5.750%, 5/15/22
Metropolitan Pier and Exposition Authority, Illinois, Revenue
Bonds, McCormick Place Expansion Project, Series 1999A:
13,455 5.500%, 12/15/24 - FGIC Insured 12/09 at 101.00 AAA 14,895,627
10,000 5.250%, 12/15/28 - FGIC Insured 12/09 at 101.00 AAA 10,515,700
4,600 Regional Transportation Authority, Cook, DuPage, Kane, Lake, No Opt. Call AAA 6,133,364
McHenry and Will Counties, Illinois, General Obligation
Bonds, Series 1990A, 7.200%, 11/01/20 - AMBAC Insured
1,940 University of Illinois, Auxiliary Facilities Systems Revenue 4/13 at 100.00 AAA 2,037,136
Bonds, Series 2003A, 5.000%, 4/01/23 - AMBAC Insured
30
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 4.6% (3.1% OF TOTAL INVESTMENTS)
$ 7,425 Ft. Wayne International Airport Building Corporation, 1/05 at 100.00 Aa3 $ 7,443,414
Indiana, General Obligation Airport Bonds, Series 1994,
5.900%, 1/01/14 (Alternative Minimum Tax)
5,205 Indiana Health Facility Financing Authority, Hospital 8/10 at 101.50 AAA 5,565,863
Revenue Bonds, Clarian Health Obligated Group,
Series 2000A, 5.500%, 2/15/30 - MBIA Insured
9,000 Indiana Health Facility Financing Authority, Hospital Revenue 5/06 at 102.00 AAA 9,621,630
Refunding and Improvement Bonds, Community Hospitals
of Indiana, Series 1995, 5.700%, 5/15/22 - MBIA Insured
6,075 LaGrange County Jail Building Corporation, Indiana, First 10/09 at 101.00 A3 6,403,536
Mortgage Jail Bonds, Series 1998, 5.400%, 10/01/21
2,725 St. Joseph County Hospital Authority, Indiana, Revenue 2/09 at 102.00 BBB 2,823,618
Bonds, Madison Center Inc., Series 1999, 5.450%, 2/15/12
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 0.7% (0.5% OF TOTAL INVESTMENTS)
1,135 Iowa Finance Authority, GNMA/FNMA Mortgage-Backed 1/05 at 102.00 AAA 1,160,685
Securities Program Single Family Mortgage Bonds,
Series 1995C, 6.450%, 1/01/24
3,500 Marshalltown, Iowa, Pollution Control Revenue Refunding 11/04 at 101.00 AAA 3,544,170
Bonds, Iowa Electric Light and Power Company Project,
Series 1993, 5.500%, 11/01/23 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 1.8% (1.2% OF TOTAL INVESTMENTS)
5,000 Burlington, Kansas, Environmental Improvement Revenue No Opt. Call A3 5,241,950
Bonds, Kansas City Power and Light Company Project,
Series 1998A, 4.750%, 9/01/15 (Mandatory put 10/01/07)
4,935 Kansas Department of Transportation, Highway Revenue 3/14 at 100.00 AA+ 5,262,684
Bonds, Series 2004A, 5.000%, 3/01/22
1,750 Wamego, Kansas, Pollution Control Revenue Bonds, Kansas 6/14 at 100.00 AAA 1,860,373
Gas and Electric Company, Series 2004, 5.300%, 6/01/31 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 1.6% (1.1% OF TOTAL INVESTMENTS)
5,500 Louisville and Jefferson County Metropolitan Sewer 5/07 at 101.00 AAA 5,802,170
District, Kentucky, Sewer and Drainage System Revenue
Bonds, Series 1997A, 5.250%, 5/15/27 - MBIA Insured
4,950 Louisville and Jefferson County Metropolitan Sewer District, 11/07 at 101.00 AAA 5,120,230
Kentucky, Sewer and Drainage System Revenue Bonds,
Series 1997B, 5.200%, 5/15/25 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 6.3% (4.2% OF TOTAL INVESTMENTS)
13,500 De Soto Parish, Louisiana, Pollution Control Revenue 9/09 at 102.00 AAA 15,251,355
Refunding Bonds, Cleco Utility Group Inc. Project,
Series 1999, 5.875%, 9/01/29 - AMBAC Insured
10,000 Louisiana Public Facilities Authority, Extended Care No Opt. Call BBB 12,803,200
Facilities Revenue Bonds, Comm-Care Corporation Project,
Series 1994, 11.000%, 2/01/14
Tobacco Settlement Financing Corporation, Louisiana,
Tobacco Settlement Asset-Backed Bonds, Series 2001B:
6,000 5.500%, 5/15/30 5/11 at 101.00 BBB 5,362,800
11,750 5.875%, 5/15/39 5/11 at 101.00 BBB 10,219,680
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 1.2% (0.8% OF TOTAL INVESTMENTS)
1,750 Massachusetts Health and Educational Facilities Authority, 1/09 at 101.00 AAA 1,787,328
Revenue Bonds, UMass Memorial Healthcare, Series 1998A,
5.000%, 7/01/28 - AMBAC Insured
5,870 Massachusetts Housing Finance Agency, Single Family 12/09 at 100.00 AAA 5,987,107
Housing Revenue Bonds, Series 77, 5.950%, 6/01/25
(Alternative Minimum Tax) - FSA Insured
515 Massachusetts Housing Finance Agency, Single Family 12/09 at 100.00 AAA 539,282
Housing Revenue Bonds, Series 79, 5.950%, 12/01/27
(Alternative Minimum Tax) - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 1.4% (0.9% OF TOTAL INVESTMENTS)
3,275 Michigan State Hospital Finance Authority, Revenue 2/05 at 101.00 Ba3 3,089,799
Refunding Bonds, Detroit Medical Center Obligated Group,
Series 1993A, 6.500%, 8/15/18
Michigan State Hospital Finance Authority, Hospital Revenue
Bonds, Detroit Medical Center Obligated Group, Series 1998A:
4,995 5.250%, 8/15/23 8/08 at 101.00 Ba3 3,999,646
3,000 5.250%, 8/15/28 8/08 at 101.00 Ba3 2,338,140
31
Nuveen Municipal Advantage Fund, Inc. (NMA) (continued)
Portfolio of INVESTMENTS October 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 2.1% (1.4% OF TOTAL INVESTMENTS)
$ 5,000 Minneapolis-St. Paul Metropolitan Airports Commission, 1/11 at 100.00 AAA $ 5,274,200
Minnesota, Subordinate Airport Revenue Bonds,
Series 2001C, 5.250%, 1/01/32 - FGIC Insured
5,890 Minnesota Housing Finance Agency, Single Family Mortgage 7/09 at 100.00 AA+ 5,896,715
Revenue Bonds, Series 2000C, 5.550%, 7/01/24 (Alternative
Minimum Tax)
3,040 Minnesota Housing Finance Agency, Single Family Mortgage 1/10 at 100.00 AA+ 3,159,259
Revenue Bonds, Series 2000J, 5.400%, 1/01/23 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 0.7% (0.5% OF TOTAL INVESTMENTS)
2,085 Coahoma-Clarksdale Housing Development Corporation, 2/05 at 100.00 AAA 2,089,233
Mississippi, FHA-Insured Section 8 Assisted Multifamily
Mortgage Revenue Refunding Bonds, Gooden Estates
and McLaurin Arms, Series 1990A, 8.000%, 8/01/24
2,595 Coahoma-Clarksdale Housing Development Corporation, 2/05 at 100.00 AAA 2,600,268
Mississippi, FHA-Insured Section 8 Assisted Multifamily
Mortgage Revenue Refunding Bonds, Gooden Estates and
McLaurin Arms, Series 1990B, 8.000%, 8/01/24
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 0.3% (0.2% OF TOTAL INVESTMENTS)
1,500 Missouri-Illinois Metropolitan District Bi-State Development 10/13 at 100.00 AAA 1,546,545
Agency, Mass Transit Sales Tax Appropriation Bonds,
Metrolink Cross County Extension Project, Series 2002B,
5.000%, 10/01/32 - FSA Insured
430 Missouri Housing Development Commission, Single 9/09 at 102.00 AAA 445,712
Family Mortgage Revenue Bonds, Homeownership
Loan Program, Series 2000A-1, 7.500%, 3/01/31
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
MONTANA - 1.9% (1.3% OF TOTAL INVESTMENTS)
6,025 Montana Board of Housing, Single Family Program Bonds, 12/05 at 102.00 AA+ 6,218,282
Series 1995B, 6.400%, 12/01/27 (Alternative Minimum Tax)
6,920 Montana Board of Housing, Single Family Mortgage Bonds, 6/07 at 101.50 AA+ 7,208,010
Series 1997A, 6.050%, 12/01/37
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 3.8% (2.6% OF TOTAL INVESTMENTS)
7,310 Clark County, Nevada, Limited Tax General Obligation Bank 7/10 at 100.00 AA 8,161,396
Bonds, Series 2000, 5.500%, 7/01/19
7,500 Clark County, Nevada, Subordinate Lien Airport Revenue 7/10 at 101.00 AAA 8,782,050
Bonds, Series 1999A, 6.000%, 7/01/29 (Pre-refunded to
7/01/10) - MBIA Insured
7,910 Director of Nevada State Department of Business and 1/10 at 100.00 AAA 8,205,359
Industry, Revenue Bonds, Las Vegas Monorail Project,
First Tier, Series 2000, 5.375%, 1/01/40 - AMBAC Insured
1,085 Nevada Housing Division, Single Family Mortgage Bonds, 4/07 at 102.00 Aaa 1,112,342
Senior Series 1997C-2, 5.750%, 4/01/29
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 0.6% (0.4% OF TOTAL INVESTMENTS)
2,480 New Hampshire Business Finance Authority, Water Facility 12/04 at 102.00 AAA 2,538,454
Revenue Bonds, Pennichuck Water Works Inc.,
Series 1994A, 6.350%, 12/01/19 - AMBAC Insured
1,320 New Hampshire Business Finance Authority, Revenue Bonds, 12/04 at 102.00 AAA 1,351,244
Pennichuck Water Works Inc., Series 1994B,
6.450%, 12/01/16 (Alternative Minimum Tax) -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 3.3% (2.2% OF TOTAL INVESTMENTS)
3,000 New Jersey Turnpike Authority, Revenue Bonds, No Opt. Call A 3,450,030
Series 1991C, 6.500%, 1/01/09
Tobacco Settlement Financing Corporation, New Jersey,
Tobacco Settlement Asset-Backed Bonds, Series 2002:
15,735 5.750%, 6/01/32 6/12 at 100.00 BBB 14,637,484
5,000 6.125%, 6/01/42 6/12 at 100.00 BBB 4,442,600
------------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 1.1% (0.7% OF TOTAL INVESTMENTS)
7,500 Farmington, New Mexico, Pollution Control Revenue 4/06 at 101.00 BBB 7,584,075
Refunding Bonds, Public Service Company of New Mexico -
San Juan Project, Series 1997B, 5.800%, 4/01/22
32
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 15.0% (10.1% OF TOTAL INVESTMENTS)
$ 7,000 Metropolitan Transportation Authority, New York, State 7/12 at 100.00 AA- $ 7,209,790
Service Contract Refunding Bonds, Series 2002A,
5.125%, 1/01/29
Nassau County, New York, General Obligation Improvement
Bonds, Series 2000F:
3,980 7.000%, 3/01/11 (Pre-refunded to 3/01/10) - FSA Insured 3/10 at 100.00 AAA 4,765,214
4,070 7.000%, 3/01/12 (Pre-refunded to 3/01/10) - FSA Insured 3/10 at 100.00 AAA 4,872,970
3,925 7.000%, 3/01/15 (Pre-refunded to 3/01/10) - FSA Insured 3/10 at 100.00 AAA 4,699,363
New York City, New York, General Obligation Bonds, Fiscal
Series 1997G:
2,750 6.000%, 10/15/26 (Pre-refunded to 10/15/07) 10/07 at 101.00 Aaa 3,088,690
7,250 6.000%, 10/15/26 10/07 at 101.00 A 7,940,708
7,435 New York City, New York, General Obligation Bonds, 5/10 at 101.00 A 8,327,869
Fiscal Series 2000E, 5.750%, 5/15/20
9,850 New York City Municipal Water Finance Authority, New York, 6/09 at 101.00 AAA 10,942,759
Water and Sewerage System Revenue Bonds, Fiscal
Series 2000A, 5.750%, 6/15/31 - FGIC Insured
5,000 New York City Municipal Water Finance Authority, New York, 6/07 at 101.00 AAA 5,412,850
Water and Sewerage System Revenue Bonds, Fiscal
Series 1997B, 5.750%, 6/15/29 - FGIC Insured
10,000 New York City Transitional Finance Authority, New York, 5/10 at 101.00 AA+*** 11,735,300
Future Tax Secured Bonds, Fiscal Series 2000B,
6.000%, 11/15/29 (Pre-refunded to 5/15/10)
4,975 New York City Industrial Development Agency, New York, 12/08 at 102.00 Ba2 3,666,277
Special Facilities Revenue Bonds, British Airways PLC,
Series 1998, 5.250%, 12/01/32 (Alternative Minimum Tax)
3,000 New York City Industrial Development Agency, New York, 12/12 at 101.00 Ba2 2,991,750
Special Facilities Revenue Bonds, British Airways PLC,
Series 2002, 7.625%, 12/01/32 (Alternative Minimum Tax)
3,655 Dormitory Authority of the State of New York, Revenue 5/08 at 101.00 AA-*** 4,054,053
Bonds, State University Educational Facilities, Series 1997,
5.125%, 5/15/27 (Pre-refunded to 5/15/08)
Dormitory Authority of the State of New York, Revenue Bonds,
Mental Health Services Facilities Improvements, Series 1997B:
2,965 5.625%, 2/15/21 (Pre-refunded to 2/15/07) 2/07 at 102.00 AA-*** 3,264,613
4,395 5.625%, 2/15/21 2/07 at 102.00 AA- 4,738,118
9,495 New York State Mortgage Agency, Homeowner Mortgage 4/10 at 100.00 Aa1 10,116,068
Revenue Bonds, Series 94, 5.800%, 10/01/20
(Alternative Minimum Tax)
5,000 New York State Urban Development Corporation, 1/09 at 101.00 AAA 5,745,950
Correctional Facilities Service Contract Revenue Bonds,
Series 1999C, 6.000%, 1/01/29 (Pre-refunded to
1/01/09) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 3.5% (2.4% OF TOTAL INVESTMENTS)
8,450 North Carolina Housing Finance Agency, Home Ownership 7/09 at 100.00 AA 8,857,713
Revenue Bonds, 1998 Trust Agreement, Series 7A,
6.250%, 1/01/29 (Alternative Minimum Tax)
7,755 North Carolina Housing Finance Agency, Home Ownership 1/10 at 100.00 AA 8,060,392
Revenue Bonds, 1998 Trust Agreement, Series 8A,
5.950%, 1/01/27 (Alternative Minimum Tax)
5,945 North Carolina Housing Finance Agency, Home Ownership 1/10 at 100.00 AA 6,194,155
Revenue Bonds, 1998 Trust Agreement, Series 9A,
5.875%, 7/01/31 (Alternative Minimum Tax)
1,320 North Carolina Housing Finance Agency, Home Ownership 7/10 at 100.00 AAA 1,351,390
Revenue Bonds, 1998 Trust Agreement, Series 10A,
5.400%, 7/01/32 (Alternative Minimum Tax) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
NORTH DAKOTA - 0.5% (0.4% OF TOTAL INVESTMENTS)
3,490 North Dakota Housing Finance Agency, Home Mortgage 7/08 at 102.00 Aaa 3,586,254
Finance Program Bonds, Series 1998B, 5.500%, 7/01/29
(Alternative Minimum Tax) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 5.9% (4.0% OF TOTAL INVESTMENTS)
5,000 Akron, Bath and Copley Joint Township Hospital District, 11/09 at 101.00 Baa1 5,043,450
Ohio, Hospital Facilities Revenue Bonds, Summa Health
System Project, Series 1998A, 5.375%, 11/15/18
6,000 Cuyahoga County, Ohio, Hospital Revenue Bonds, University 7/09 at 101.00 AAA 6,441,180
Hospitals Health System, Series 1999, 5.500%, 1/15/30 -
AMBAC Insured
Montgomery County, Ohio, Hospital Facilities Revenue Bonds,
Kettering Medical Center, Series 1999:
7,840 6.750%, 4/01/18 4/10 at 101.00 A3 8,715,650
5,000 6.750%, 4/01/22 4/10 at 101.00 A3 5,487,750
33
Nuveen Municipal Advantage Fund, Inc. (NMA) (continued)
Portfolio of INVESTMENTS October 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
OHIO (continued)
$ 2,355 Ohio Housing Finance Agency, GNMA Mortgage-Backed 8/10 at 100.00 Aaa $ 2,358,132
Securities Program Residential Mortgage Revenue Bonds,
Series 2000D, 5.450%, 9/01/31 (Alternative Minimum Tax)
2,650 Ohio, General Obligation Bonds, Higher Education, 5/13 at 100.00 AA+ 2,816,871
Series 2003A, 5.000%, 5/01/22
10,000 Ohio Air Quality Development Authority, Pollution Control 12/04 at 100.00 Baa2 10,029,100
Revenue Refunding Bonds, Ohio Edison Company Project,
Series 1999C, 5.800%, 6/01/16 (Mandatory put 12/01/04)
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 2.1% (1.4% OF TOTAL INVESTMENTS)
5,000 Oklahoma State Industries Authority, Health System Revenue 8/09 at 101.00 AAA 5,518,550
Refunding Bonds, Baptist Medical Center, Series 1999A,
5.750%, 8/15/29 - MBIA Insured
10,000 Tulsa Municipal Airport Trust, Oklahoma, Revenue Refunding 12/08 at 100.00 B- 9,257,400
Bonds, American Airlines Inc., Series 2001B,
5.650%, 12/01/35 (Alternative Minimum Tax)
(Mandatory put 12/01/08)
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 2.9% (1.8% OF TOTAL INVESTMENTS)
2,460 Carbon County Industrial Development Authority, No Opt. Call BBB- 2,669,617
Pennsylvania, Resource Recovery Revenue Refunding
Bonds, Panther Creek Partners Project, Series 2000,
6.650%, 5/01/10 (Alternative Minimum Tax)
2,600 Pennsylvania Turnpike Commission, Turnpike Revenue Bonds, 12/14 at 100.00 AAA 2,838,628
Series 2004A, 5.500%, 12/01/31 - AMBAC Insured
2,500 Philadelphia School District, Pennsylvania, General Obligation 2/12 at 100.00 AAA 2,877,925
Bonds, Series 2002A, 5.500%, 2/01/31 (Pre-refunded to
2/01/12) - FSA Insured
4,195 Venango Housing Corporation, Pennsylvania, FHA-Insured 2/05 at 100.00 AAA 4,218,240
Multifamily Mortgage Revenue Bonds, Evergreen Arbors
Project, Series 1990A, 8.000%, 2/01/24
6,750 Washington County Authority, Pennsylvania, Capital Funding No Opt. Call AAA 7,082,843
Revenue Bonds, Capital Projects and Equipment Acquisition
Program, Series 1999, 6.150%, 12/01/29 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 0.7% (0.4% OF TOTAL INVESTMENTS)
4,000 Puerto Rico, General Obligation Bonds, Series 2000B, 7/10 at 100.00 AAA 4,538,160
5.625%, 7/01/19 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 1.9% (1.3% OF TOTAL INVESTMENTS)
12,250 Rhode Island Health and Educational Building Corporation, 5/07 at 102.00 AAA 13,365,975
Hospital Financing Revenue Bonds, Lifespan Obligated Group,
Series 1996, 5.500%, 5/15/16 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 4.4% (2.9% OF TOTAL INVESTMENTS)
10,000 Greenville County School District, South Carolina, Installment 12/12 at 101.00 AA- 11,353,600
Purchase Revenue Bonds, Series 2002, 6.000%, 12/01/20
2,500 Lexington County Health Service District, South Carolina, 11/13 at 100.00 A 2,637,775
Hospital Revenue Refunding and Improvement Bonds,
Series 2003, 5.750%, 11/01/28
3,000 Myrtle Beach, South Carolina, Hospitality and Accommodation 6/14 at 100.00 AAA 3,063,840
Fee Revenue Bonds, Series 2004A, 5.000%, 6/01/36 -
FGIC Insured
South Carolina Public Service Authority, Revenue Refunding
Bonds, Santee Cooper Electric System, Series 2003A:
3,560 5.000%, 1/01/20 - AMBAC Insured 7/13 at 100.00 AAA 3,819,880
2,125 5.000%, 1/01/21 - AMBAC Insured 7/13 at 100.00 AAA 2,267,269
7,500 Tobacco Settlement Revenue Management Authority, 5/11 at 101.00 BBB 7,115,400
South Carolina, Tobacco Settlement Asset-Backed Bonds,
Series 2001B, 6.375%, 5/15/28
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 5.1% (3.5% OF TOTAL INVESTMENTS)
6,000 Knox County Health, Educational and Housing Facilities 4/12 at 101.00 Baa3 6,093,240
Board, Tennessee, Hospital Revenue Bonds, Baptist Health
System of East Tennessee Inc., Series 2002, 6.500%, 4/15/31
20,415 Knox County Health, Educational and Housing Facilities Board, 1/13 at 75.87 AAA 10,672,145
Tennessee, Hospital Revenue Refunding Bonds, Covenant
Health, Series 2002A, 0.000%, 1/01/18 - FSA Insured
1,750 Metropolitan Government of Nashville and Davidson County, 5/11 at 100.00 AA 1,818,198
Tennessee, Electric System Revenue Bonds,
Series 2001A, 5.125%, 5/15/26
14,385 Metropolitan Government Nashville-Davidson County Health 11/09 at 101.00 AAA 16,613,956
and Educational Facilities Board, Tennessee, Revenue
Bonds, Ascension Health Credit Group, Series 1999A,
5.875%, 11/15/28 (Pre-refunded to 11/15/09) -
AMBAC Insured
34
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 16.3% (11.0% OF TOTAL INVESTMENTS)
$ 11,810 Brazos River Authority, Texas, Pollution Control Revenue No Opt. Call BBB $ 12,814,086
Refunding Bonds, TXU Electric Company Project,
Series 2001C, 5.750%, 5/01/36 (Alternative Minimum
Tax) (Mandatory put 11/01/11)
6,000 Brazos River Authority, Texas, Revenue Refunding Bonds, No Opt. Call AAA 6,585,960
Houston Lighting and Power Company, Series 1998,
5.050%, 11/01/18 (Alternative Minimum Tax) -
AMBAC Insured
8,400 Gulf Coast Waste Disposal Authority, Texas, Waste 4/09 at 101.00 BBB 8,498,532
Disposal Revenue Bonds, Valero Energy Corporation,
Series 1999, 5.700%, 4/01/32 (Alternative Minimum Tax)
10,000 Harris County Health Facilities Development Corporation, 5/06 at 102.00 AAA 10,745,500
Texas, Special Facilities Revenue Bonds, Texas Medical
Center Project, Series 1996, 5.900%, 5/15/16 - MBIA Insured
5,000 Harris County Health Facilities Development Corporation, 11/13 at 100.00 AAA 5,098,300
Texas, Thermal Utility Revenue Bonds, TECO Project,
Series 2003, 5.000%, 11/15/30 - MBIA Insured
12,500 Houston, Texas, Subordinate Lien Airport System Revenue 7/10 at 100.00 AAA 13,543,875
Bonds, Series 2000B, 5.500%, 7/01/30 - FSA Insured
5,000 Houston Community College, Texas, Limited Tax General 2/13 at 100.00 AAA 5,141,150
Obligation Bonds, Series 2003, 5.000%, 2/15/28 -
AMBAC Insured
Houston, Texas, Water Conveyance System Contract,
Certificates of Participation, Series 1993A-J:
5,490 6.800%, 12/15/10 - AMBAC Insured No Opt. Call AAA 6,594,094
2,000 6.800%, 12/15/11 - AMBAC Insured No Opt. Call AAA 2,432,620
16,305 Matagorda County Navigation District 1, Texas, Revenue 5/09 at 101.00 BBB- 16,400,873
Bonds, Reliant Energy Inc., Series 1999B, 5.950%, 5/01/30
(Alternative Minimum Tax)
3,425 Sabine River Authority, Texas, Pollution Control Revenue No Opt. Call BBB 3,699,274
Refunding Bonds, TXU Electric Company, Series 2001A,
5.500%, 5/01/22 (Mandatory put 11/01/11)
4,700 Sam Rayburn Municipal Power Agency, Texas, Power Supply 10/12 at 100.00 Baa2 5,066,224
System Revenue Refunding Bonds, Series 2002A,
6.000%, 10/01/21
4,000 Texas, General Obligation Bonds, Water Financial 8/09 at 100.00 Aa1 4,338,520
Assistance, State Participation Program, Series 1999C,
5.500%, 8/01/35
6,840 Travis County Health Facilities Development Corporation, 11/09 at 101.00 AAA 7,889,393
Texas, Revenue Bonds, Ascension Health Credit Group,
Series 1999A, 5.875%, 11/15/24 (Pre-refunded
to 11/15/09) - AMBAC Insured
2,500 Trinity River Authority of Texas, Pollution Control Revenue No Opt. Call Baa2 2,582,300
Refunding Bonds, TXU Electric Company, Series 2001A,
5.000%, 5/01/27 (Alternative Minimum Tax) (Mandatory
put 11/01/06)
245 Wood Glen Housing Finance Corporation, Texas, FHA-Insured 1/05 at 100.00 AAA 245,938
Section 8 Assisted Mortgage Revenue Bonds, Copperwood I
Project, Series 1990A, 7.625%, 1/01/10 - MBIA Insured
Wood Glen Housing Finance Corporation, Texas, FHA-Insured
Section 8 Assisted Mortgage Revenue Refunding Bonds, Copperwood
II Project, Series 1990C:
75 7.625%, 1/01/10 - MBIA Insured 1/05 at 100.00 AAA 75,218
1,250 7.650%, 7/01/23 - MBIA Insured 1/05 at 100.00 AAA 1,258,963
------------------------------------------------------------------------------------------------------------------------------------
UTAH - 0.4% (0.2% OF TOTAL INVESTMENTS)
2,200 Intermountain Power Agency, Utah, Power Supply Revenue 7/07 at 102.00 AAA 2,431,770
Refunding Bonds, Series 1997B, 5.750%, 7/01/19 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 1.0% (0.7% OF TOTAL INVESTMENTS)
6,380 Capital Region Airport Authority, Richmond, Virginia, Airport 7/05 at 102.00 AAA 6,647,450
Revenue Bonds, International Airport Projects, Series 1995A,
5.625%, 7/01/20 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 14.4% (9.6% OF TOTAL INVESTMENTS)
8,810 Chelan County Public Utility District 1, Washington, Hydro 7/11 at 101.00 AAA 9,345,472
Consolidated System Revenue Bonds, Series 2001A,
5.600%, 1/01/36 (Alternative Minimum Tax) - MBIA Insured
10,730 Chelan County Public Utility District 1, Washington, Hydro 7/11 at 101.00 AAA 11,459,640
Consolidated System Revenue Refunding Bonds,
Series 2001C, 5.650%, 7/01/32 (Alternative Minimum Tax) -
MBIA Insured
5,665 Chelan County Public Utility District 1, Washington, Hydro 7/12 at 100.00 AAA 5,819,655
Consolidated System Revenue Bonds, Series 2002B,
5.250%, 7/01/37 (Alternative Minimum Tax) - AMBAC Insured
10,730 Pierce County School District 320, Sumner, Washington, 12/10 at 100.00 Aaa 12,601,741
Unlimited Tax General Obligation Bonds, Series 2000,
6.250%, 12/01/17 - FSA Insured
35
Nuveen Municipal Advantage Fund, Inc. (NMA) (continued)
Portfolio of INVESTMENTS October 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON (continued)
$ 10,550 Port of Seattle, Washington, Limited Tax General Obligation 12/10 at 100.00 AA+ $ 11,443,691
Bonds, Series 2000B, 5.750%, 12/01/25 (Alternative
Minimum Tax)
5,315 Port of Seattle, Washington, Revenue Bonds, Series 2000B, No Opt. Call AAA 5,997,287
6.000%, 2/01/10 (Alternative Minimum Tax) - MBIA Insured
19,295 Port of Seattle, Washington, Special Facility Revenue Bonds, 3/10 at 101.00 AAA 21,895,773
Terminal 18, Series 1999A, 6.000%, 9/01/29 - MBIA Insured
5,000 Port of Seattle, Washington, Special Facility Revenue Bonds, 3/10 at 101.00 AAA 5,584,850
Terminal 18, Series 1999B, 6.000%, 9/01/20 (Alternative
Minimum Tax) - MBIA Insured
5,000 Washington State Healthcare Facilities Authority, Revenue 12/09 at 101.00 AAA 5,504,550
Bonds, Providence Services, Series 1999,
5.375%, 12/01/19 - MBIA Insured
8,750 Washington Public Power Supply System, Revenue Refunding 7/08 at 102.00 Aaa 9,250,937
Bonds, Nuclear Project 3, Series 1998A, 5.125%, 7/01/18
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 0.7% (0.5% OF TOTAL INVESTMENTS)
5,000 Mason County, West Virginia, Pollution Control Revenue 10/11 at 100.00 BBB 5,107,900
Bonds, Appalachian Power Company, Series 2003L,
5.500%, 10/01/22
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 7.8% (5.2% OF TOTAL INVESTMENTS)
7,515 Badger Tobacco Asset Securitization Corporation, Wisconsin, 6/12 at 100.00 BBB 7,299,921
Tobacco Settlement Asset-Backed Bonds, Series 2002,
6.125%, 6/01/27
2,250 Green Bay, Wisconsin, Water System Revenue Bonds, 11/14 at 100.00 Aaa 2,322,425
Series 2004, 5.000%, 11/01/29 - FSA Insured
5,000 Madison, Wisconsin, Industrial Development Revenue 4/12 at 100.00 AA- 5,372,100
Refunding Bonds, Madison Gas and Electric Company
Projects, Series 2002A, 5.875%, 10/01/34 (Alternative
Minimum Tax)
3,000 Southeast Wisconsin Professional Baseball Park District, No Opt. Call AAA 3,527,490
Sales Tax Revenue Refunding Bonds, Series 1998A,
5.500%, 12/15/19 - MBIA Insured
2,935 Wisconsin Housing and Economic Development Authority, 3/10 at 100.00 AA 3,030,001
Home Ownership Revenue Bonds, Series 2000B,
5.750%, 3/01/22 (Alternative Minimum Tax)
Wisconsin Health and Educational Facilities Authority,
Revenue Bonds, Aurora Medical Group Inc., Series 1996:
10,000 5.600%, 11/15/16 - FSA Insured 5/06 at 102.00 AAA 10,695,100
20,000 5.750%, 11/15/25 - FSA Insured 5/06 at 102.00 AAA 21,176,000
------------------------------------------------------------------------------------------------------------------------------------
$ 981,280 Total Long-Term Investments (cost $948,216,119) - 148.9% 1,025,951,604
=============-----------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 0.5% (0.3% OF TOTAL INVESTMENTS)
3,510 Montgomery County Public Building Authority, Tennessee, VMIG-1 3,510,000
Tennessee County Loan Pool Program Bonds, Variable Rate
Demand Obligations, Series 2002, 1.750%, 4/01/32+
------------------------------------------------------------------------------------------------------------------------------------
$ 3,510 Total Short-Term Investments (cost $3,510,000) 3,510,000
=============-----------------------------------------------------------------------------------------------------------------------
Total Investments (cost $951,726,119) - 149.4% 1,029,461,604
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.5% 17,728,778
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (51.9)% (358,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 689,190,382
====================================================================================================================
(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.
** Ratings (not covered by the report of independent
registered public accounting firm): Using the higher of
Standard & Poor's or Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of
principal and interest. Such securities are normally
considered to be equivalent to AAA rated securities.
N/R Investment is not rated.
# On December 9, 2002, UAL Corporation, the holding
company of United Air Lines, Inc., filed for federal
bankruptcy protection. The Adviser determined that it
was likely United would not remain current on their
interest payment obligations with respect to these
bonds and thus has stopped accruing interest.
+ Security has a maturity of more than one year, but has
variable rate and demand features which qualify it as a
short-term security. The rate disclosed is that
currently in effect. This rate changes periodically
based on market conditions or a specified market index.
See accompanying notes to financial statements.
36
Nuveen Municipal Market Opportunity Fund, Inc. (NMO)
Portfolio of
INVESTMENTS October 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 0.5% (0.4% OF TOTAL INVESTMENTS)
$ 3,000 Arizona State Transportation Board, Highway Revenue 7/11 at 100.00 AAA $ 3,297,300
Bonds, Series 2001, 5.250%, 7/01/20
400 Pima County Industrial Development Authority, Arizona, 5/07 at 105.85 AAA 400,868
FNMA/GNMA Single Family Mortgage Revenue Bonds,
Series 1997A, 7.100%, 11/01/29 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 1.8% (1.2% OF TOTAL INVESTMENTS)
5,000 Arkansas Development Finance Authority, Hospital Revenue 2/10 at 100.00 BBB- 5,572,100
Bonds, Washington Regional Medical Center, Series 2000,
7.000%, 2/01/15
3,480 Cabot School District 4, Lonoke County, Arkansas, General 8/08 at 100.00 Aaa 3,596,093
Obligation Refunding Bonds, Series 2003, 5.000%, 2/01/27 -
AMBAC Insured
2,865 University of Arkansas, Fayetteville, Various Facilities 12/12 at 100.00 Aaa 3,240,544
Revenue Bonds, Series 2002, 5.500%, 12/01/20 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 5.5% (3.7% OF TOTAL INVESTMENTS)
3,225 California Health Facilities Financing Authority, Revenue 3/13 at 100.00 A 3,234,611
Bonds, Adventist Health System/West, Series 2003A,
5.000%, 3/01/33
1,000 California Department of Water Resources, Power Supply 5/12 at 101.00 A2 1,135,590
Revenue Bonds, Series 2002A, 5.750%, 5/01/17
5,000 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 AAA 5,099,500
Enhanced Tobacco Settlement Asset-Backed Bonds,
Series 2003B, 5.000%, 6/01/38 - AMBAC Insured
2,500 Los Angeles Community Redevelopment Agency, California, 1/05 at 100.00 BBB*** 2,559,000
Tax Allocation Refunding Bonds, Central Business District
Redevelopment Project, Series 1987G, 6.750%, 7/01/10
Los Angeles Department of Water and Power, California, Electric
Plant Revenue Bonds, Second Series 1993:
490 4.750%, 10/15/20 4/05 at 101.00 AA-*** 500,574
5,510 4.750%, 10/15/20 4/05 at 101.00 Aaa 5,628,906
995 Los Angeles Department of Water and Power, California, 2/05 at 101.00 AA-*** 1,017,915
Electric Plant Revenue Bonds, Series 1994, 5.375%, 2/15/34
Orange County, California, Recovery Certificates of
Participation, Series 1996A:
13,100 5.875%, 7/01/19 - MBIA Insured 7/06 at 102.00 AAA 14,176,951
690 6.000%, 7/01/26 - MBIA Insured 7/06 at 102.00 AAA 745,442
5,000 San Joaquin Hills Transportation Corridor Agency, Orange 1/14 at 102.00 AAA 4,946,450
County, California, Toll Road Revenue Refunding Bonds,
Series 1997A, 0.000%, 1/15/17 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 4.0% (2.6% OF TOTAL INVESTMENTS)
3,000 Broomfield, Colorado, Master Facilities Lease Purchase 12/09 at 100.00 AAA 3,374,820
Agreement, Certificates of Participation, Series 1999,
5.750%, 12/01/24 - AMBAC Insured
6,285 Broomfield, Colorado, Sales and Use Tax Revenue Refunding 12/12 at 100.00 Aaa 7,033,041
and Improvement Bonds, Series 2002A, 5.500%, 12/01/22 -
AMBAC Insured
11,465 Denver City and County, Colorado, Airport System Revenue 11/10 at 100.00 AAA 12,809,615
Refunding Bonds, Series 2000A, 6.000%, 11/15/18
(Alternative Minimum Tax) - AMBAC Insured
20,000 E-470 Public Highway Authority, Colorado, Senior Revenue 9/10 at 31.42 AAA 5,001,600
Bonds, Series 2000A, 0.000%, 9/01/28 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 6.1% (4.0% OF TOTAL INVESTMENTS)
15,000 Atlanta, Georgia, Airport General Revenue Refunding Bonds, 1/10 at 101.00 AAA 17,150,250
Series 2000A, 5.600%, 1/01/30 (Pre-refunded to 1/01/10) -
FGIC Insured
14,330 Fulton County Facilities Corporation, Georgia, Certificates 11/10 at 101.00 AAA 16,173,411
of Participation, Public Purpose Project, Series 1999,
5.500%, 11/01/18 - AMBAC Insured
37
Nuveen Municipal Market Opportunity Fund, Inc. (NMO) (continued)
Portfolio of INVESTMENTS October 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA (continued)
$ 8,000 Georgia, General Obligation Bonds, Series 1995C, 7.250%, 7/01/08 No Opt. Call AAA $ 9,344,320
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 10.6% (7.0% OF TOTAL INVESTMENTS)
6,500 Chicago, Illinois, Gas Supply Revenue Refunding Bonds, Peoples 6/05 at 102.00 Aa2 6,757,010
Gas Light and Coke Company Project, Series 1995A,
6.100%, 6/01/25
5,250 Chicago, Illinois, Revenue Bonds, Midway Airport, 1/09 at 101.00 AAA 5,369,910
Series 1998B, 5.000%, 1/01/28 - MBIA Insured
2,300 Chicago, Illinois, Motor Fuel Tax Revenue Refunding Bonds, No Opt. Call AAA 2,621,218
Series 1993, 5.375%, 1/01/14 - AMBAC Insured
4,000 Chicago, Illinois, Motor Fuel Tax Revenue Bonds, Series 2003A, 7/13 at 100.00 AAA 4,094,440
5.000%, 1/01/33 - AMBAC Insured
5,210 Illinois Housing Development Authority, Section 8 Elderly 1/05 at 100.00 A- 5,224,171
Housing Revenue Bonds, Garden House of River Oaks West
Development, Series 1992A, 6.875%, 1/01/20
38,645 Illinois, General Obligation Bonds, Illinois FIRST Program, 4/10 at 100.00 AAA 42,092,520
Series 2000, 5.500%, 4/01/25 - MBIA Insured
1,975 Lake County Community High School District 127, Grayslake, No Opt. Call AAA 2,752,656
Illinois, General Obligation Bonds, Series 2002A,
9.000%, 2/01/13 - FGIC Insured
Metropolitan Pier and Exposition Authority, Illinois, Revenue
Bonds, McCormick Place Expansion Project, Series 2002A:
3,250 0.000%, 6/15/25 - MBIA Insured 6/22 at 101.00 AAA 1,852,630
2,270 5.000%, 12/15/28 - MBIA Insured 6/12 at 101.00 AAA 2,330,359
10,000 0.000%, 12/15/38 - MBIA Insured No Opt. Call AAA 1,644,500
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 1.2% (0.8% OF TOTAL INVESTMENTS)
4,695 Indiana Educational Facilities Authority, Revenue Bonds, Butler 2/11 at 100.00 AAA 5,121,729
University, Series 2001, 5.500%, 2/01/26 - MBIA Insured
13,949 Indianapolis Airport Authority, Indiana, Specialty Facility 11/05 at 102.00 N/R 1,534,437
Revenue Bonds, United Air Lines Inc., Indianapolis
Maintenance Center Project, Series 1995A, 6.500%, 11/15/31
(Alternative Minimum Tax)#
2,000 Petersburg, Indiana, Pollution Control Revenue Refunding 8/11 at 102.00 Baa2 2,076,860
Bonds, Indianapolis Power and Light Company, Series 1991,
5.750%, 8/01/21
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 0.6% (0.4% OF TOTAL INVESTMENTS)
4,215 Iowa Finance Authority, Solid Waste Disposal Revenue No Opt. Call N/R 4,159,320
Bonds, IPSCO Project, Series 1997, 6.000%, 6/01/27
(Alternative Minimum Tax) (Mandatory put 6/01/07)
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 1.6% (1.1% OF TOTAL INVESTMENTS)
Jefferson County School District Finance Corporation,
Kentucky, School Building Revenue Bonds, Series 2000A:
3,045 5.250%, 7/01/17 - FSA Insured 1/10 at 101.00 AAA 3,371,942
7,490 5.250%, 7/01/20 - FSA Insured 1/10 at 101.00 AAA 8,200,951
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 1.1% (0.7% OF TOTAL INVESTMENTS)
7,415 Louisiana Local Government Environmental Facilities and 12/12 at 100.00 AAA 7,591,032
Community Development Authority, Revenue Bonds, Baton
Rouge Community College Facilities Corporation, Series 2002,
5.000%, 12/01/32 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 1.6% (1.1% OF TOTAL INVESTMENTS)
Frederick County, Maryland, General Obligation Public Facilities
Bonds, Series 2002:
3,710 5.000%, 11/01/18 11/12 at 101.00 AA 4,054,362
3,890 5.000%, 11/01/19 11/12 at 101.00 AA 4,231,348
2,500 Maryland Department of Transportation, County Transportation No Opt. Call AA 2,940,050
Revenue Bonds, Series 2002, 5.500%, 2/01/16
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 3.3% (2.2% OF TOTAL INVESTMENTS)
5,250 Massachusetts Bay Transportation Authority, Assessment 7/10 at 100.00 AAA 5,537,543
Bonds, Series 2000A, 5.250%, 7/01/30
10,000 Massachusetts Water Resources Authority, General Revenue 8/10 at 101.00 AAA 11,197,800
Bonds, Series 2000A, 5.750%, 8/01/39 - FGIC Insured
6,195 University of Massachusetts Building Authority, Facilities 11/10 at 100.00 AAA 6,542,168
Revenue Bonds, Senior Series 2000A, 5.125%, 11/01/25 -
MBIA Insured
38
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 1.4% (0.9% OF TOTAL INVESTMENTS)
$ 6,635 Detroit, Michigan, Senior Lien Water Supply System Revenue 7/11 at 101.00 AAA $ 7,765,206
Bonds, Series 2001A, 5.750%, 7/01/28 (Pre-refunded
to 7/01/11) - FGIC Insured
2,090 Grand Rapids Building Authority, Kent County, Michigan, 8/10 at 100.00 AAA 2,317,267
Limited Tax General Obligation Bonds, Series 2000,
5.375%, 8/01/17 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 7.9% (5.2% OF TOTAL INVESTMENTS)
13,675 Minnesota, General Obligation Bonds, Series 2000, 11/10 at 100.00 AAA 15,193,609
5.125%, 11/01/16
3,705 Minnesota Housing Finance Agency, Single Family Remarketed 1/11 at 101.00 AA+ 3,905,737
Mortgage Bonds, Series 1998H-2, 6.050%, 7/01/31
(Alternative Minimum Tax)
30,000 Minnesota Agricultural and Economic Development Board, 11/10 at 101.00 A 32,653,200
Healthcare System Revenue Bonds, Fairview Hospital and
Healthcare Services, Series 2000A, 6.375%, 11/15/29
3,310 St. Paul Housing and Redevelopment Authority, Minnesota, 11/15 at 103.00 AAA 4,178,345
Sales Tax Revenue Refunding Bonds, Civic Center Project,
Series 1996, 7.100%, 11/01/23 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 1.1% (0.7% OF TOTAL INVESTMENTS)
5,900 Mississippi Business Finance Corporation, Pollution Control 4/05 at 101.00 BBB- 5,920,650
Revenue Refunding Bonds, System Energy Resources Inc.
Project, Series 1998, 5.875%, 4/01/22
1,675 Mississippi Home Corporation, GNMA Mortgage-Backed 7/07 at 105.00 Aaa 1,726,774
Securities Program Single Family Mortgage Revenue Bonds,
Series 1997D-5, 6.750%, 7/01/29 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 5.2% (3.5% OF TOTAL INVESTMENTS)
9,555 Clark County, Nevada, General Obligation Bank Bonds, 6/11 at 100.00 AAA 10,533,528
Southern Nevada Water Authority Loan, Series 2001,
5.300%, 6/01/20 - FGIC Insured
Director of Nevada State Department of Business and Industry,
Revenue Bonds, Las Vegas Monorail Project, First Tier, Series 2000:
8,500 0.000%, 1/01/26 - AMBAC Insured No Opt. Call AAA 2,827,950
5,315 0.000%, 1/01/27 - AMBAC Insured No Opt. Call AAA 1,653,922
21,000 5.375%, 1/01/40 - AMBAC Insured 1/10 at 100.00 AAA 21,784,140
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 3.9% (2.6% OF TOTAL INVESTMENTS)
400 Camden County Pollution Control Financing Authority, 12/04 at 100.00 B2 399,940
New Jersey, Solid Waste Disposal and Resource Recovery
System Revenue Bonds, Series 1991D, 7.250%, 12/01/10
21,000 New Jersey Transportation Trust Fund Authority, Transportation 6/10 at 100.00 AAA 24,156,930
System Bonds, Series 2000B, 5.750%, 6/15/17
(Pre-refunded to 6/15/10)
3,165 Tobacco Settlement Financing Corporation, New Jersey, 6/12 at 100.00 BBB 2,812,166
Tobacco Settlement Asset-Backed Bonds, Series 2002,
6.125%, 6/01/42
------------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 1.9% (1.2% OF TOTAL INVESTMENTS)
5,925 New Mexico Hospital Equipment Loan Council, Hospital 8/11 at 101.00 Aa3 6,329,915
Revenue Bonds, Presbyterian Healthcare Services,
Series 2001A, 5.500%, 8/01/21
5,675 University of New Mexico, System Revenue Refunding No Opt. Call AA 6,805,347
Bonds, Series 1992A, 6.250%, 6/01/12
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 23.5% (15.5% OF TOTAL INVESTMENTS)
5,000 Long Island Power Authority, New York, Electric System 6/08 at 101.00 AAA 5,321,700
General Revenue Bonds, Series 1998A, 5.250%, 12/01/26 -
MBIA Insured
11,000 Nassau County Tobacco Settlement Corporation, New York, 7/09 at 101.00 BBB- 11,216,810
Tobacco Settlement Asset-Backed Bonds, Series 1999A,
6.400%, 7/15/33
New York City, New York, General Obligation Bonds, Fiscal
Series 2002G:
1,000 5.000%, 8/01/17 8/12 at 100.00 A 1,063,650
10,500 5.750%, 8/01/18 8/12 at 100.00 A 11,717,895
5,000 New York City, New York, General Obligation Bonds, 8/12 at 100.00 A 5,611,800
Fiscal Series 2003A, 5.750%, 8/01/16
New York City, New York, General Obligation Bonds,
Fiscal Series 1997H:
280 6.125%, 8/01/25 (Pre-refunded to 8/01/07) 8/07 at 101.00 A*** 313,552
9,720 6.125%, 8/01/25 8/07 at 101.00 A 10,642,136
39
Nuveen Municipal Market Opportunity Fund, Inc. (NMO) (continued)
Portfolio of INVESTMENTS October 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK (continued)
New York City, New York, General Obligation Bonds,
Fiscal Series 1996I:
$ 3,980 5.875%, 3/15/18 3/06 at 101.50 A $ 4,211,596
17,735 5.750%, 3/15/18 (Pre-refunded to 3/15/06) 3/06 at 101.50 A*** 18,986,204
17,870 New York City Transitional Finance Authority, New York, Future 8/09 at 101.00 AA+*** 20,614,653
Tax Secured Bonds, Fiscal Series 2000A, 5.750%, 8/15/24
(Pre-refunded to 8/15/09)
Dormitory Authority of the State of New York, Improvement
Revenue Bonds, Mental Health Services Facilities, Series 1997A:
19,290 5.750%, 2/15/27 (Pre-refunded to 2/15/07) 2/07 at 102.00 AA-*** 21,293,074
710 5.750%, 2/15/27 2/07 at 102.00 AA- 768,426
4,500 New York State Energy Research and Development Authority, 1/05 at 101.50 AAA 4,577,535
Gas Facilities Revenue Bonds, Brooklyn Union Gas Company,
Series 1989C, 5.600%, 6/01/25 (Alternative Minimum Tax) -
MBIA Insured
3,000 New York State Medical Care Facilities Finance Agency, 2/05 at 102.00 AAA 3,104,790
Secured Hospital Revenue Bonds, Brookdale Hospital Medical
Center, Series 1995A, 6.850%, 2/15/17 (Pre-refunded
to 2/15/05)
4,785 New York State Medical Care Facilities Finance Agency, 11/05 at 102.00 Aa1 5,082,340
Secured Mortgage Revenue Bonds, Brookdale Family Care
Centers Inc., Series 1995A, 6.375%, 11/15/19
7,805 New York State Power Authority, General Revenue Bonds, 11/12 at 100.00 Aa2 8,312,325
Series 2002A, 5.000%, 11/15/21
10,000 Port Authority of New York and New Jersey, Special Project 12/07 at 102.00 AAA 10,899,000
Bonds, JFK International Air Terminal LLC, Sixth Series 1997,
5.750%, 12/01/22 (Alternative Minimum Tax) - MBIA Insured
5,400 New York State Tobacco Settlement Financing Corporation, 6/10 at 100.00 AA- 5,890,806
Tobacco Settlement Asset-Backed and State Contingency
Contract-Backed Bonds, Series 2003A-1, 5.500%, 6/01/16
7,000 Triborough Bridge and Tunnel Authority, New York, General 1/22 at 100.00 AAA 8,156,610
Purpose Revenue Bonds, Series 1999B, 5.500%, 1/01/30
(Pre-refunded to 1/01/22)
8,000 TSASC Inc., New York, Tobacco Flexible Amortization Bonds, 7/09 at 101.00 BBB 8,088,800
Series 1999-1, 6.250%, 7/15/34
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 1.2% (0.8% OF TOTAL INVESTMENTS)
7,500 North Carolina Municipal Power Agency 1, Catawba Electric 1/13 at 100.00 AAA 8,188,575
Revenue Bonds, Series 2003A, 5.250%, 1/01/19 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
NORTH DAKOTA - 4.3% (2.8% OF TOTAL INVESTMENTS)
22,905 Fargo, North Dakota, Health System Revenue Bonds, 6/10 at 101.00 AAA 24,949,729
MeritCare Obligated Group, Series 2000A, 5.625%, 6/01/31 -
FSA Insured
North Dakota Water Commission, Water Development and
Management Program Bonds, Series 2000A:
2,230 5.700%, 8/01/18 - MBIA Insured 8/10 at 100.00 AAA 2,526,456
2,450 5.750%, 8/01/19 - MBIA Insured 8/10 at 100.00 AAA 2,784,866
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 2.6% (1.7% OF TOTAL INVESTMENTS)
16,140 Montgomery County, Ohio, Hospital Facilities Revenue Bonds, No Opt. Call A3 18,384,106
Kettering Medical Center, Series 1999,6.300%, 4/01/12
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 0.0% (0.0% OF TOTAL INVESTMENTS)
300 Tulsa Municipal Airport Trust, Oklahoma, Revenue Refunding 6/09 at 100.00 B- 281,574
Bonds, American Airlines Inc., Series 2000B, 6.000%, 6/01/35
(Alternative Minimum Tax) (Mandatory put 12/01/08)
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 2.4% (1.6% OF TOTAL INVESTMENTS)
5,000 Oregon Health Sciences University, Revenue Bonds, 1/13 at 100.00 AAA 5,404,600
Series 2002A, 5.250%, 7/01/22 - MBIA Insured
Portland, Oregon, Water System Revenue Bonds, Series 2000A:
6,780 5.375%, 8/01/18 8/10 at 100.00 Aa1 7,502,273
3,880 5.500%, 8/01/20 8/10 at 100.00 Aa1 4,321,777
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 6.3% (4.1% OF TOTAL INVESTMENTS)
5,000 Delaware County Industrial Development Authority, 1/08 at 102.00 BBB 5,283,100
Pennsylvania, Resource Recovery Revenue Refunding Bonds,
Series 1997A, 6.200%, 7/01/19
15,000 Delaware River Port Authority, New Jersey and Pennsylvania, No Opt. Call AAA 16,381,800
Revenue Refunding Bonds, Series 1998B, 5.250%, 1/01/08 -
AMBAC Insured
40
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA (continued)
$ 15,050 Pennsylvania, General Obligation Bonds, Second Series 2001, 9/11 at 101.00 AA $ 16,685,333
5.000%, 9/15/14
5,000 Pennsylvania Higher Education Assistance Agency, Capital 12/10 at 100.00 AAA 5,821,500
Acquisition Revenue Bonds, Series 2000, 5.875%, 12/15/30
(Pre-refunded to 12/15/10) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 2.8% (1.8% OF TOTAL INVESTMENTS)
7,940 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 7,270,737
Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33
12,500 Puerto Rico Housing Finance Authority, Capital Fund Program No Opt. Call AA*** 12,531,875
Revenue Bonds, Series 2003, 4.500%, 12/01/23
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 6.2% (4.1% OF TOTAL INVESTMENTS)
24,730 Greenville County School District, South Carolina, Installment 12/12 at 101.00 AA- 26,545,429
Purchase Revenue Bonds, Series 2002, 5.500%, 12/01/22
21,570 Piedmont Municipal Power Agency, South Carolina, Electric No Opt. Call AAA 5,668,596
Revenue Bonds, Series 2004A-2, 0.000%, 1/01/30 -
AMBAC Insured
1,640 Three Rivers Solid Waste Authority, South Carolina, Solid 1/07 at 102.00 AAA 1,771,708
Waste Disposal Facilities Revenue Bonds, Series 1997,
5.300%, 1/01/27 - MBIA Insured
10,000 Tobacco Settlement Revenue Management Authority, 5/11 at 101.00 BBB 9,487,200
South Carolina, Tobacco Settlement Asset-Backed Bonds,
Series 2001B, 6.375%, 5/15/28
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 0.9% (0.6% OF TOTAL INVESTMENTS)
5,000 Knox County Health, Educational and Housing Facilities Board, 7/13 at 100.00 AA 5,155,800
Tennessee, Hospital Revenue Bonds, East Tennessee
Children's Hospital, Series 2003A, 5.000%, 7/01/23 -
RAAI Insured
1,200 Metropolitan Government of Nashville-Davidson County 1/05 at 101.00 N/R 1,200,636
Health and Educational Facilities Board, Tennessee, Revenue
Refunding Bonds, Blakeford at Green Hills, Series 1998,
5.650%, 7/01/16
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 23.5% (15.5% OF TOTAL INVESTMENTS)
5,000 Alliance Airport Authority, Texas, Special Facilities Revenue 12/04 at 100.00 CCC 3,208,000
Bonds, American Airlines Inc., Series 1990, 7.500%, 12/01/29
(Alternative Minimum Tax)
Arlington Independent School District, Tarrant County, Texas,
General Obligation Bonds, Series 1995:
3,710 0.000%, 2/15/12 (Pre-refunded to 2/15/05) 2/05 at 67.33 Aaa 2,484,958
3,710 0.000%, 2/15/13 (Pre-refunded to 2/15/05) 2/05 at 62.94 Aaa 2,323,091
12,250 Austin, Texas, Subordinate Lien Hotel Occupancy Tax Revenue 11/09 at 100.00 AAA 13,616,488
Refunding Bonds, Series 1999, 5.800%, 11/15/29 -
AMBAC Insured
11,255 Brazos River Authority, Texas, Pollution Control Revenue No Opt. Call BBB 12,211,900
Refunding Bonds, TXU Electric Company Project,
Series 2001C, 5.750%, 5/01/36 (Alternative Minimum
Tax) (Mandatory put 11/01/11)
Brownsville Independent School District, Cameron County,
Texas, General Obligation Bonds, Series 1999:
5,015 5.625%, 8/15/25 8/09 at 100.00 AAA 5,488,065
8,825 5.625%, 8/15/29 8/09 at 100.00 AAA 9,657,462
Clear Creek Independent School District, Galveston and Harris
Counties, Texas, Unlimited Tax Schoolhouse and Refunding Bonds,
Series 2000:
16,740 5.400%, 2/15/18 (Pre-refunded to 2/15/10) 2/10 at 100.00 AAA 18,858,280
585 5.400%, 2/15/18 2/10 at 100.00 AAA 644,348
9,660 5.650%, 2/15/19 (Pre-refunded to 2/15/10) 2/10 at 100.00 AAA 11,000,422
340 5.650%, 2/15/19 2/10 at 100.00 AAA 380,344
6,645 5.700%, 2/15/20 (Pre-refunded to 2/15/10) 2/10 at 100.00 AAA 7,583,340
235 5.700%, 2/15/20 2/10 at 100.00 AAA 262,180
7,750 5.700%, 2/15/21 (Pre-refunded to 2/15/10) 2/10 at 100.00 AAA 8,844,378
270 5.700%, 2/15/21 2/10 at 100.00 AAA 301,228
6,000 Dallas-Ft. Worth International Airport Facility Improvement 11/09 at 101.00 CCC 3,339,840
Corporation, Texas, Revenue Bonds, American Airlines Inc.,
Series 1999, 6.375%, 5/01/35 (Alternative Minimum Tax)
41
Nuveen Municipal Market Opportunity Fund, Inc. (NMO) (continued)
Portfolio of INVESTMENTS October 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS (continued)
$ 11,750 Dallas-Ft. Worth International Airport Facility Improvement 11/07 at 100.00 CCC $ 10,212,395
Corporation, Texas, Revenue Refunding Bonds, American
Airlines Inc., Series 2000C, 6.150%, 5/01/29 (Alternative
Minimum Tax) (Mandatory put 11/01/07)
21,500 Houston, Texas, Subordinate Lien Airport System Revenue 7/10 at 100.00 AAA 23,295,465
Bonds, Series 2000B, 5.500%, 7/01/30 - FSA Insured
4,500 Houston, Texas, Junior Lien Water and Sewerage System 12/10 at 100.00 AAA 5,073,120
Revenue Refunding Bonds, Series 2000B, 5.250%, 12/01/30
(Pre-refunded to 12/01/10) - FGIC Insured
1,250 Houston, Texas, Junior Lien Water and Sewerage System 12/11 at 100.00 AAA 1,332,888
Revenue Refunding Bonds, Series 2001A, 5.000%, 12/01/20 -
FSA Insured
15,000 San Antonio Independent School District, Bexar County, 8/09 at 100.00 AAA 17,109,900
Texas, General Obligation Bonds, Series 1999,
5.800%, 8/15/29 (Pre-refunded to 8/15/09)
4,150 Texas General Services Commission, Certificates of 3/05 at 100.50 A 4,217,064
Participation, Series 1992, 7.500%, 9/01/22
3,970 Wichita Falls, Wichita County, Texas, Priority Lien Water 8/11 at 100.00 AAA 4,177,512
and Sewerage System Revenue Bonds, Series 2001,
5.000%, 8/01/21 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 17.9% (11.8% OF TOTAL INVESTMENTS)
5,500 Clark County Public Utility District 1, Washington, Generating 1/11 at 100.00 AAA 5,927,295
System Revenue Refunding Bonds, Series 2000,
5.125%, 1/01/20 - FSA Insured
2,755 Cowlitz County, Washington, Special Sewerage Revenue No Opt. Call AAA 3,230,155
Refunding Bonds, CSOB Wastewater Treatment Facilities,
Series 2002, 5.500%, 11/01/16 - FGIC Insured
10,000 Energy Northwest, Washington, Electric Revenue Refunding 7/11 at 101.00 AAA 11,240,700
Bonds, Nuclear Project 3, Series 2001A, 5.500%, 7/01/17 -
FSA Insured
2,500 King County, Washington, Sewer Revenue Bonds, 1/12 at 100.00 AAA 2,606,100
Series 2001, 5.000%, 1/01/23 - FGIC Insured
33,490 Port of Seattle, Washington, Revenue Bonds, Series 2000A, 8/10 at 100.00 AAA 36,813,213
5.625%, 2/01/30 - MBIA Insured
6,950 Port of Seattle, Washington, Revenue Bonds, Series 2000B, 8/10 at 100.00 AAA 7,545,893
5.625%, 2/01/24 (Alternative Minimum Tax) - MBIA Insured
Seattle, Washington, General Obligation Refunding and
Improvement Bonds, Series 2002:
6,165 4.400%, 12/01/19 12/12 at 100.00 AAA 6,301,678
6,445 4.500%, 12/01/20 12/12 at 100.00 AAA 6,596,200
Tacoma, Washington, Electric System Revenue Refunding
Bonds, Series 2001A:
6,630 5.750%, 1/01/17 - FSA Insured 1/11 at 101.00 AAA 7,532,476
3,500 5.750%, 1/01/18 - FSA Insured 1/11 at 101.00 AAA 3,976,420
12,600 Washington State Tobacco Settlement Authority, Tobacco 6/13 at 100.00 BBB 12,577,320
Settlement Asset-Backed Revenue Bonds, Series 2002,
6.500%, 6/01/26
9,000 Washington, Motor Vehicle Fuel Tax General Obligation Bonds, 1/12 at 100.00 AAA 9,484,110
Series 2002C, 5.000%, 1/01/21 - FSA Insured
7,890 Washington State Higher Education Facilities Authority, 11/09 at 101.00 AA 8,540,767
Revenue Bonds, Pacific Lutheran University, Series 1999,
5.950%, 11/01/29 - RAAI Insured
3,520 Washington State Healthcare Facilities Authority, Revenue 10/11 at 100.00 Aaa 3,668,192
Bonds, Children's Hospital and Regional Medical Center,
Series 2001, 5.000%, 10/01/21 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 0.2% (0.1% OF TOTAL INVESTMENTS)
1,250 Wisconsin Health and Educational Facilities Authority, 3/08 at 101.00 N/R 1,127,288
Revenue Bonds, United Lutheran Program for the Aging Inc.,
Series 1998, 5.700%, 3/01/28
42
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
WYOMING - 0.4% (0.3% OF TOTAL INVESTMENTS)
$ 2,800 Jackson National Rural Utilities Cooperative Financing 5/07 at 101.00 A $ 2,907,403
Corporation, Wyoming, Guaranteed Gas Supply Revenue
Bonds, Lower Valley Power and Light Inc., Series 1997B,
5.875%, 5/01/26 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
$ 1,057,109 Total Long-Term Investments (cost $991,461,689) - 151.5% 1,068,021,733
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.4% 16,737,892
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (53.9)% (380,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 704,759,625
====================================================================================================================
(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.
** 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.
# On December 9, 2002, UAL Corporation, the holding
company of United Air Lines, Inc., filed for federal
bankruptcy protection. The Adviser determined that it
was likely United would not remain current on their
interest payment obligations with respect to these
bonds and thus has stopped accruing interest.
N/R Investment is not rated.
See accompanying notes to financial statements.
43
Nuveen Dividend Advantage Municipal Fund (NAD)
Portfolio of
INVESTMENTS October 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 0.2% (0.2% OF TOTAL INVESTMENTS)
$ 1,500 Alabama 21st Century Authority, Tobacco Settlement 6/10 at 102.00 A- $ 1,477,500
Revenue Bonds, Series 2000, 5.750%, 12/01/20
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 2.5% (1.7% OF TOTAL INVESTMENTS)
15,000 Maricopa County Pollution Control Corporation, Arizona, No Opt. Call BBB- 15,382,500
Remarketed Revenue Bonds, El Paso Electric Company,
Series 1994A, 6.375%, 7/01/14 (Mandatory put 8/01/05)
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 2.5% (1.7% OF TOTAL INVESTMENTS)
2,605 California, General Obligation Bonds, Series 1997, 10/07 at 101.00 AAA 2,802,251
5.000%, 10/01/18 - AMBAC Insured
2,475 Los Angeles Department of Water and Power, California, 7/06 at 100.00 AA- 2,580,584
Power System Revenue Bonds, Series 2001A-3,
5.375%, 7/01/20
9,375 Sacramento County Sanitation District Financing Authority, 12/05 at 101.00 AA 9,850,125
California, Revenue Bonds, Series 2000A, 5.875%, 12/01/27
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 3.1% (2.1% OF TOTAL INVESTMENTS)
10,250 Denver City and County, Colorado, Airport System Revenue 11/06 at 101.00 AAA 10,907,435
Bonds, Series 1996D, 5.500%, 11/15/25 - MBIA Insured
2,950 Denver Convention Center Hotel Authority, Colorado, Senior 12/13 at 100.00 AAA 3,105,023
Revenue Bonds, Convention Center Hotel, Series 2003A,
5.000%, 12/01/22 - XLCA Insured
1,475 Denver City and County, Colorado, FHA-Insured Mortgage 10/07 at 102.00 AAA 1,523,646
Loan, Multifamily Housing Revenue Bonds, Boston Lofts
Project, Series 1997A, 5.750%, 10/01/27 (Alternative
Minimum Tax)
3,205 Denver City and County, Colorado, Airport Special Facilities 1/09 at 101.00 AAA 3,582,805
Revenue Bonds, Rental Car Projects, Series 1999A,
6.000%, 1/01/12 (Alternative Minimum Tax) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
CONNECTICUT - 0.4% (0.3% OF TOTAL INVESTMENTS)
2,700 Connecticut Development Authority, Health Facilities Revenue 2/05 at 102.00 N/R 2,701,161
Refunding Bonds, Alzheimer's Resource Center of
Connecticut Inc., Series 1994A, 7.125%, 8/15/14
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 3.0% (2.0% OF TOTAL INVESTMENTS)
1,630 Florida Housing Finance Agency, Housing Revenue Bonds, 12/07 at 102.00 AAA 1,720,807
Mar Lago Village Apartments, Series 1997F, 5.800%, 12/01/17
(Alternative Minimum Tax) - AMBAC Insured
13,625 Martin County Industrial Development Authority, Florida, 12/04 at 102.00 BBB- 13,981,566
Industrial Development Revenue Bonds, Indiantown
Cogeneration LP Project, Series 1994A, 7.875%, 12/15/25
(Alternative Minimum Tax)
2,405 Venice, Florida, Revenue Bonds, Bon Secours System, 8/06 at 102.00 AAA 2,594,442
Revenue Bonds, Series 1996, 5.600%, 8/15/16 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 1.4% (0.9% OF TOTAL INVESTMENTS)
4,000 Forsyth County Water and Sewerage Authority, Georgia, 4/10 at 102.00 AA*** 4,653,240
Revenue Bonds, Series 2000, 6.000%, 4/01/25 (Pre-refunded
to 4/01/10)
3,500 Gainesville and Hall County Hospital Authority, Georgia, 5/09 at 101.00 AAA 3,759,070
Revenue Anticipation Certificates, Northeast Georgia
Health Services Inc., Series 1999, 5.500%, 5/15/29 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
IDAHO - 0.4% (0.3% OF TOTAL INVESTMENTS)
710 Idaho Housing and Finance Association, Single Family 7/09 at 101.00 Aa2 722,198
Mortgage Bonds, Series 1999E, 5.750%, 1/01/21
(Alternative Minimum Tax)
865 Idaho Housing and Finance Association, Single Family 1/10 at 100.00 Aa2 922,557
Mortgage Bonds, Series 2000D, 6.350%, 7/01/22
(Alternative Minimum Tax)
850 Idaho Housing and Finance Association, Single Family 7/10 at 100.00 Aaa 854,743
Mortgage Bonds, Series 2000E, 5.950%, 7/01/20
(Alternative Minimum Tax)
44
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 35.3% (23.6% OF TOTAL INVESTMENTS)
$ 3,635 Channahon, Illinois, Revenue Refunding Bonds, Morris 12/09 at 102.00 BBB+ $ 3,874,437
Hospital, Series 1999, 5.750%, 12/01/12
22,750 Chicago, Illinois, General Obligation Refunding Bonds, No Opt. Call AAA 26,402,513
Emergency Telephone System, Series 1999,
5.500%, 1/01/23 - FGIC Insured
7,250 Chicago Board of Education, Illinois, Unlimited Tax General No Opt. Call AAA 8,318,867
Obligation Bonds, Dedicated Tax Revenues, Series 1999A,
5.500%, 12/01/26 - FGIC Insured
2,300 Chicago, Illinois, Motor Fuel Tax Revenue Refunding Bonds, No Opt. Call AAA 2,621,218
Series 1993, 5.375%, 1/01/14 - AMBAC Insured
Chicago, Illinois, FHA/GNMA Multifamily Housing Revenue
Bonds, Archer Court Apartments, Series 1999A:
905 5.500%, 12/20/19 (Alternative Minimum Tax) 10/10 at 101.00 AAA 964,015
1,210 5.600%, 12/20/29 (Alternative Minimum Tax) 10/10 at 101.00 AAA 1,245,622
1,925 5.650%, 12/20/40 (Alternative Minimum Tax) 10/10 at 101.00 AAA 1,977,476
Chicago, Illinois, Wastewater Transmission Revenue Bonds,
Series 1995:
3,795 5.125%, 1/01/25 (Pre-refunded to 1/01/06) - FGIC Insured 1/06 at 102.00 AAA 4,013,782
1,145 5.125%, 1/01/25 - FGIC Insured 1/06 at 102.00 AAA 1,194,453
5,100 Chicago, Illinois, Water Revenue Bonds, Series 1997, 11/07 at 102.00 AAA 5,656,257
5.250%, 11/01/27 (Pre-refunded to 11/01/07) - FGIC Insured
1,000 DuPage County Community School District 200, Wheaton, 11/13 at 100.00 Aaa 1,093,350
Illinois, General Obligation Bonds, Series 2003B,
5.250%, 11/01/20 - FSA Insured
24,835 Illinois Development Finance Authority, Revenue Bonds, 9/07 at 102.00 AAA 27,068,163
Presbyterian Home of Lake Forest Project, Series 1999,
5.625%, 9/01/31 - FSA Insured
3,935 Illinois Development Finance Authority, Local Government No Opt. Call Aaa 2,564,400
Program Revenue Bonds, Round Lake Community Unit
School District 116 Project, Series 1999, 0.000%, 1/01/15 -
MBIA Insured
5,570 Illinois Finance Authority, Revenue Bonds, University of 7/14 at 100.00 Aa1 5,700,059
Chicago, Series 2004A, 5.000%, 7/01/34 (WI, settling 11/10/04)
Illinois Health Facilities Authority, Revenue Bonds, Loyola
University Health System, Series 1997A:
1,600 5.000%, 7/01/24 (Pre-refunded to 7/01/07) - MBIA Insured 7/07 at 101.00 AAA 1,734,832
5,400 5.000%, 7/01/24 - MBIA Insured 7/07 at 101.00 AAA 5,525,010
5,490 Illinois Health Facilities Authority, Revenue Bonds, Sarah 2/07 at 102.00 A 5,724,807
Bush Lincoln Health Center, Series 1996B, 5.500%, 2/15/16
17,280 Illinois Health Facilities Authority, Converted Adjustable 10/07 at 102.00 AAA 19,481,472
Rate Revenue Bonds, Highland Park Hospital, Series 1991A,
6.000%, 10/01/15 (Pre-refunded to 10/01/07) - FGIC Insured
9,920 Illinois Health Facilities Authority, Remarketed Revenue 8/11 at 103.00 Aa1 10,979,654
Bonds, University of Chicago Project, Series 1985A,
5.500%, 8/01/20
7,245 Illinois Health Facilities Authority, Revenue Refunding Bonds, 1/05 at 100.00 BB+ 7,247,101
Proctor Community Hospital, Series 1991, 7.375%, 1/01/23
5,000 Kane, McHenry, Cook and DeKalb Counties Community 12/11 at 100.00 AAA 5,639,550
Unit School District 300, Carpentersville, Illinois, General
Obligation Bonds, Series 2000, 5.500%, 12/01/19 -
MBIA Insured
Metropolitan Pier and Exposition Authority, Illinois, Revenue
Refunding Bonds, McCormick Place Expansion Project, Series 1996A:
9,750 0.000%, 12/15/22 - MBIA Insured No Opt. Call AAA 4,092,953
13,000 0.000%, 12/15/23 - MBIA Insured No Opt. Call AAA 5,136,560
20,500 Metropolitan Pier and Exposition Authority, Illinois, Revenue 12/09 at 101.00 AAA 22,694,935
Bonds, McCormick Place Expansion Project, Series 1999A,
5.500%, 12/15/24 - FGIC Insured
Regional Transportation Authority, Cook, DuPage, Kane, Lake,
McHenry and Will Counties, Illinois, General Obligation Bonds,
Series 1999:
22,650 5.750%, 6/01/19 - FSA Insured No Opt. Call AAA 27,263,352
3,500 5.750%, 6/01/23 - FSA Insured No Opt. Call AAA 4,187,470
1,300 Schaumburg, Illinois, General Obligation Bonds, 12/14 at 100.00 AAA 1,375,504
Series 2004B, 5.250%, 12/01/34 - FGIC Insured
4,500 Will County School District 122, New Lenox, Illinois, No Opt. Call Aaa 2,406,240
General Obligation Bonds, Series 2000B, 0.000%, 11/01/18 -
FSA Insured
45
Nuveen Dividend Advantage Municipal Fund (NAD) (continued)
Portfolio of INVESTMENTS October 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 3.8% (2.5% OF TOTAL INVESTMENTS)
$ 8,000 Indiana Health Facility Financing Authority, Hospital Revenue 8/10 at 101.50 AAA $ 8,593,760
Bonds, Clarian Health Obligated Group, Series 2000A,
5.500%, 2/15/26 - MBIA Insured
8,755 Indiana Health Facility Financing Authority, Hospital Revenue 11/09 at 101.00 AAA 9,949,094
Bonds, Charity Obligated Group, Series 1999D,
5.500%, 11/15/24 (Pre-refunded to 11/15/09) - MBIA Insured
4,190 Indianapolis, Indiana, Economic Development Revenue Bonds, 6/09 at 101.00 Aa3 4,482,504
Park Tudor Foundation Inc., Project, Series 1999,
5.700%, 6/01/24
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 1.9% (1.2% OF TOTAL INVESTMENTS)
11,095 Iowa Higher Education Loan Authority, Private College 10/10 at 102.00 N/R 11,353,957
Facility Revenue Bonds, Waldorf College, Series 1999,
7.375%, 10/01/19
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 0.6% (0.4% OF TOTAL INVESTMENTS)
3,825 Wichita, Kansas, Water and Sewer Utility Revenue Bonds, 10/06 at 101.00 AAA 3,825,574
Series 1999, 4.000%, 10/01/18 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 1.6% (1.1% OF TOTAL INVESTMENTS)
3,030 Hardin County School District Finance Corporation, Kentucky, 2/10 at 101.00 Aa3 3,410,841
School Building Revenue Bonds, Series 2000, 5.750%, 2/01/20
Kentucky Economic Development Finance Authority, Hospital
System Revenue Refunding and Improvement Bonds,
Appalachian Regional Healthcare Inc. Project, Series 1997:
1,850 5.850%, 10/01/17 4/08 at 102.00 BB- 1,806,044
5,000 5.875%, 10/01/22 4/08 at 102.00 BB- 4,736,950
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 2.1% (1.4% OF TOTAL INVESTMENTS)
2,245 Lafayette, Louisiana, Sales Tax Revenue Bonds, Public 5/10 at 101.50 AAA 2,501,469
Improvements, Series 2000B, 5.625%, 5/01/25 - FGIC Insured
1,750 Louisiana Local Government Environmental Facilities and 6/12 at 105.00 Aaa 1,948,555
Community Development Authority, GNMA Collateralized
Mortgage Revenue Refunding Bonds, Sharlo Apartments
Project, Series 2002A, 6.500%, 6/20/37
9,545 Tobacco Settlement Financing Corporation, Louisiana, 5/11 at 101.00 BBB 8,531,321
Tobacco Settlement Asset-Backed Bonds, Series 2001B,
5.500%, 5/15/30
------------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 0.9% (0.6% OF TOTAL INVESTMENTS)
5,000 Maryland Community Development Administration, 9/09 at 100.00 Aa2 5,223,150
Residential Revenue Bonds, Series 2000G, 5.950%, 9/01/29
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 1.7% (1.1% OF TOTAL INVESTMENTS)
1,500 Boston Industrial Development Financing Authority, 9/12 at 102.00 N/R 1,550,460
Massachusetts, Subordinate Revenue Bonds, Crosstown
Center Project, Series 2002, 8.000%, 9/01/35 (Alternative
Minimum Tax)
785 Massachusetts Port Authority, Special Facilities Revenue 9/06 at 102.00 AAA 813,872
Bonds, US Airways Group Inc., Series 1996A,
5.875%, 9/01/23 (Alternative Minimum Tax) - MBIA Insured
7,000 Massachusetts Port Authority, Special Facilities Revenue 7/07 at 102.00 AAA 7,508,480
Bonds, BOSFUEL Corporation, Series 1997, 5.500%, 7/01/18
(Alternative Minimum Tax) - MBIA Insured
555 Massachusetts Housing Finance Agency, Single Family 12/04 at 102.00 AA 566,733
Housing Revenue Bonds, Series 32, 6.600%, 12/01/26
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 1.6% (1.1% OF TOTAL INVESTMENTS)
Detroit, Michigan, Senior Lien Water Supply System Revenue
Bonds, Series 2001A:
2,565 5.250%, 7/01/33 (Pre-refunded to 7/01/11) - FGIC Insured 7/11 at 100.00 AAA 2,904,067
2,435 5.250%, 7/01/33 - FGIC Insured 7/11 at 100.00 AAA 2,572,139
4,000 Wayne County, Michigan, Airport Revenue Bonds, Detroit 12/08 at 101.00 AAA 4,277,400
Metropolitan Airport, Series 1998A, 5.375%, 12/01/16
(Alternative Minimum Tax) - MBIA Insured
46
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 0.6% (0.4% OF TOTAL INVESTMENTS)
$ 2,250 Minneapolis-St. Paul Metropolitan Airports Commission, 4/11 at 101.00 N/R $ 1,883,633
Minnesota, Special Facilities Revenue Bonds, Northwest
Airlines Inc. Project, Series 2001A, 7.000%, 4/01/25
(Alternative Minimum Tax)
1,685 Minnesota Housing Finance Agency, Single Family Mortgage 1/10 at 101.00 AA+ 1,726,687
Bonds, Series 1998H-1, 5.650%, 7/01/31 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 1.4% (0.9% OF TOTAL INVESTMENTS)
Missouri Health and Educational Facilities Authority, Revenue
Bonds, SSM Healthcare System, Series 2001A:
4,370 5.250%, 6/01/21 - AMBAC Insured 6/11 at 101.00 AAA 4,679,134
3,670 5.250%, 6/01/28 - AMBAC Insured 6/11 at 101.00 AAA 3,837,242
------------------------------------------------------------------------------------------------------------------------------------
MONTANA - 0.5% (0.3% OF TOTAL INVESTMENTS)
1,800 Montana Board of Housing, Single Family Mortgage Bonds, 12/09 at 100.00 AA+ 1,859,508
Series 2000A-2, 6.450%, 6/01/29 (Alternative Minimum Tax)
1,000 Montana Higher Education Student Assistance Corporation, 12/09 at 100.00 A2 1,048,850
Student Loan Revenue Bonds, Subordinate Series 1999B,
6.400%, 12/01/32 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 0.3% (0.2% OF TOTAL INVESTMENTS)
1,800 Nebraska Higher Education Loan Program Incorporated, Senior No Opt. Call AAA 1,892,898
Subordinate Bonds, Series 1993A-5A, 6.200%, 6/01/13
(Alternative Minimum Tax) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 0.9% (0.5% OF TOTAL INVESTMENTS)
2,115 Clark County, Nevada, General Obligation Bank Bonds, 6/11 at 100.00 AAA 2,342,468
Southern Nevada Water Authority Loan, Series 2001,
5.300%, 6/01/19 - FGIC Insured
6,000 Director of Nevada State Department of Business and No Opt. Call AAA 3,110,400
Industry, Revenue Bonds, Las Vegas Monorail Project,
First Tier, Series 2000, 0.000%, 1/01/19 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 0.3% (0.2% OF TOTAL INVESTMENTS)
2,105 New Hampshire Housing Finance Agency, Single Family 7/05 at 102.00 Aa2 2,112,094
Mortgage Acquisition Revenue Bonds, Series 1995D,
6.550%, 7/01/26 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 7.9% (5.3% OF TOTAL INVESTMENTS)
2,910 New Jersey Higher Education Assistance Authority, Student 6/10 at 101.00 AAA 2,967,618
Loan Revenue Bonds, Series 2000A, 6.000%, 6/01/13
(Alternative Minimum Tax) - MBIA Insured
2,000 New Jersey Health Care Facilities Financing Authority, 8/11 at 100.00 AAA 2,042,320
FHA-Insured Mortgage Revenue Bonds, Jersey City Medical
Center, Series 2001, 4.800%, 8/01/21 - AMBAC Insured
15,600 New Jersey Economic Development Authority, Solid Waste No Opt. Call N/R 9,313,200
Facilities Revenue Bonds, Bridgewater Resources Inc.
Project, Series 1999B, 8.250%, 6/01/19 (Alternative
Minimum Tax) #
675 New Jersey Economic Development Authority, Solid Waste No Opt. Call N/R 402,975
Revenue Bonds, Bridgewater Resources Inc. Project,
Series 2003C, 0.000%, 6/30/05#
4,130 New Jersey Transit Corporation, Certificates of Participation, No Opt. Call AAA 4,737,812
Federal Transit Administration Grants, Series 2002A,
5.500%, 9/15/13 - AMBAC Insured
4,000 New Jersey Transportation Trust Fund Authority, No Opt. Call A+ 4,736,640
Transportation System Bonds, Series 1999A, 5.750%, 6/15/18
10,000 Port Authority of New York and New Jersey, Special Project 12/07 at 102.00 AAA 10,998,700
Bonds, JFK International Air Terminal LLC, Sixth Series 1997,
5.900%, 12/01/17 (Alternative Minimum Tax) - MBIA Insured
Tobacco Settlement Financing Corporation, New Jersey,
Tobacco Settlement Asset-Backed Bonds, Series 2002:
11,085 5.750%, 6/01/32 6/12 at 100.00 BBB 10,311,821
3,165 6.125%, 6/01/42 6/12 at 100.00 BBB 2,812,166
------------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 0.7% (0.4% OF TOTAL INVESTMENTS)
4,000 University of New Mexico, FHA-Insured Mortgage Hospital Revenue
Bonds, Series 2004, 5.000%, 7/01/32 (WI, settling 11/18/04) - 7/14 at 100.00 AAA 4,067,240
FSA Insured
47
Nuveen Dividend Advantage Municipal Fund (NAD) (continued)
Portfolio of INVESTMENTS October 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 19.5% (13.1% OF TOTAL INVESTMENTS)
$ 5,000 Long Island Power Authority, New York, Electric System 6/08 at 101.00 AAA $ 5,321,700
General Revenue Bonds, Series 1998A, 5.250%, 12/01/26 -
FSA Insured
Nassau County, New York, General Obligation Improvement
Bonds, Series 1999B:
4,005 5.250%, 6/01/19 (Pre-refunded to 6/01/09) - AMBAC Insured 6/09 at 102.00 AAA 4,552,003
7,005 5.250%, 6/01/20 (Pre-refunded to 6/01/09) - AMBAC Insured 6/09 at 102.00 AAA 7,961,743
7,005 5.250%, 6/01/21 - AMBAC Insured 6/09 at 102.00 AAA 7,841,397
2,000 New York City, New York, General Obligation Bonds, 2/08 at 101.00 AAA 2,183,900
Fiscal Series 1998E, 5.250%, 8/01/14 - AMBAC Insured
14,000 New York City, New York, General Obligation Bonds, 2/08 at 101.00 AAA 15,275,820
Fiscal Series 1998F, 5.375%, 8/01/19 - MBIA Insured
12,350 New York City Transitional Finance Authority, New York, 5/10 at 101.00 AA+*** 14,170,143
Future Tax Secured Bonds, Fiscal Series 2000C,
5.500%, 11/01/29 (Pre-refunded to 5/01/10)
10,000 New York City Transitional Finance Authority, New York, 8/09 at 101.00 AA+*** 11,535,900
Future Tax Secured Bonds, Fiscal Series 2000A,
5.750%, 8/15/24 (Pre-refunded to 8/15/09)
4,600 Dormitory Authority of the State of New York, Improvement 2/07 at 102.00 AAA 4,978,442
Revenue Bonds, Mental Health Services Facilities,
Series 1996E, 5.250%, 2/15/18 - AMBAC Insured
2,170 Dormitory Authority of the State of New York, Insured Revenue 7/07 at 102.00 AA 2,369,206
Bonds, Franciscan Health Partnership Obligated Group -
Frances Shervier Home and Hospital, Series 1997,
5.500%, 7/01/17 - RAAI Insured
Dormitory Authority of the State of New York, Improvement
Revenue Bonds, Mental Health Services Facilities, Series 1996B:
4,305 5.125%, 8/15/21 (Pre-refunded to 2/15/06) - MBIA Insured 2/06 at 100.00 AAA 4,573,072
165 5.125%, 8/15/21 - MBIA Insured 2/06 at 102.00 AAA 173,168
7,500 Dormitory Authority of the State of New York, Secured 2/08 at 101.50 AAA 8,140,875
Hospital Revenue Refunding Bonds, Wyckoff Heights Medical
Center, Series 1998H, 5.300%, 8/15/21 - MBIA Insured
10,000 Dormitory Authority of the State of New York, Third General 7/09 at 101.00 AAA 11,401,400
Resolution Consolidated Revenue Bonds, City University
System, Series 1999-1, 5.500%, 7/01/29 (Pre-refunded to
7/01/09) - FSA Insured
2,000 Dormitory Authority of the State of New York, Third General 1/08 at 102.00 AAA 2,235,720
Resolution Consolidated Revenue Bonds, City University
System, Series 1997-1, 5.375%, 7/01/24 (Pre-refunded
to 1/01/08) - FSA Insured
7,500 New York State Urban Development Corporation, Correctional 1/06 at 102.00 AAA 7,963,125
Facilities Revenue Bonds, Series 1995-6, 5.375%, 1/01/25
(Pre-refunded to 1/01/06) - AMBAC Insured
8,800 New York City Sales Tax Asset Receivable Corporation, 10/14 at 100.00 AAA 9,110,640
New York, Local Government Assistance Corporation
Dedicated Revenue Bonds, Series 2004A, 5.000%, 10/15/32 (WI,
settling 11/04/04) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 0.5% (0.4% OF TOTAL INVESTMENTS)
3,000 Wake County, North Carolina, General Obligation School 2/11 at 102.00 AAA 3,321,990
Bonds, Series 2001B, 5.250%, 2/01/17
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 4.0% (2.7% OF TOTAL INVESTMENTS)
2,300 Amherst Exempted Village School District, Ohio, Unlimited 12/11 at 100.00 Aaa 2,487,312
Tax General Obligation School Improvement Bonds,
Series 2001, 5.125%, 12/01/21 - FGIC Insured
3,635 Franklin County, Ohio, FHA-Insured Multifamily Housing 1/05 at 103.00 Aa 3,714,170
Mortgage Revenue Bonds, Hamilton Creek Apartments
Project, Series 1994A, 5.550%, 7/01/24 (Alternative
Minimum Tax)
3,650 Montgomery County, Ohio, Revenue Bonds, Catholic Health 5/14 at 100.00 AA 3,707,962
Initiatives, Series 2004A, 5.000%, 5/01/30 (WI, settling
11/18/04)
13,300 Ohio Water Development Authority, Solid Waste Disposal 9/09 at 102.00 N/R 13,644,470
Revenue Bonds, Bay Shore Power, Series 1998B,
6.625%, 9/01/20 (Alternative Minimum Tax)
1,115 Warren County, Ohio, Special Assessment Bonds, Waterstone 12/07 at 101.00 Aa2 1,227,470
Boulevard Project, Series 1997, 5.500%, 12/01/17
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 0.4% (0.3% OF TOTAL INVESTMENTS)
2,355 Portland, Oregon, Downtown Waterfront Urban Renewal 6/10 at 101.00 Aaa 2,637,317
and Redevelopment Revenue Bonds, Series 2000A,
5.500%, 6/15/20 - AMBAC Insured
48
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 4.9% (3.3% OF TOTAL INVESTMENTS)
$ 3,480 Allegheny County Hospital Development Authority, 11/10 at 102.00 B1 $ 4,014,319
Pennsylvania, Revenue Bonds, West Penn Allegheny
Health System, Series 2000B, 9.250%, 11/15/22
2,180 Carbon County Industrial Development Authority, No Opt. Call BBB- 2,365,758
Pennsylvania, Resource Recovery Revenue Refunding
Bonds, Panther Creek Partners Project, Series 2000,
6.650%, 5/01/10 (Alternative Minimum Tax)
18,900 Philadelphia Airport System, Pennsylvania, Revenue 6/08 at 102.00 AAA 20,368,341
Refunding Bonds, Series 1998A, 5.500%, 6/15/18
(Alternative Minimum Tax) - FGIC Insured
3,205 Philadelphia School District, Pennsylvania, General Obligation 8/12 at 100.00 AAA 3,607,099
Bonds, Series 2002B, 5.625%, 8/01/16 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 2.0% (1.4% OF TOTAL INVESTMENTS)
12,500 Puerto Rico Housing Finance Authority, Capital Fund Program No Opt. Call AA*** 12,531,875
Revenue Bonds, Series 2003, 4.500%, 12/01/23
------------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 2.8% (1.8% OF TOTAL INVESTMENTS)
2,015 Central Falls, Rhode Island, General Obligation School Bonds, 5/09 at 102.00 AA 2,281,061
Series 1999, 6.250%, 5/15/20 - RAAI Insured
3,500 Providence Redevelopment Agency, Rhode Island, Revenue 4/10 at 101.00 Aaa 3,913,840
Bonds, Public Safety and Municipal Building Projects,
Series 1999A, 5.750%, 4/01/29 - AMBAC Insured
12,000 Rhode Island Tobacco Settlement Financing Corporation, 6/12 at 100.00 BBB 10,989,240
Tobacco Settlement Asset-Backed Bonds, Series 2002A,
6.125%, 6/01/32
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 2.2% (1.5% OF TOTAL INVESTMENTS)
6,400 Memphis-Shelby County Airport Authority, Tennessee, Airport 3/10 at 101.00 AAA 7,093,824
Revenue Bonds, Series 1999D, 6.000%, 3/01/24
(Alternative Minimum Tax) - AMBAC Insured
2,425 Memphis-Shelby County Airport Authority, Tennessee, Airport 3/11 at 100.00 AAA 2,512,785
Revenue Bonds, Series 2001B, 5.125%, 3/01/26 -
FSA Insured
2,210 Tennessee Housing Development Agency, Homeownership 7/10 at 101.00 AA 2,296,323
Program Bonds, Series 2000-1, 6.375%, 7/01/25
(Alternative Minimum Tax)
1,335 Tennessee Housing Development Agency, Homeownership 7/10 at 100.00 AA 1,362,074
Program Bonds, Series 2000-2B, 6.250%, 1/01/20
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 14.7% (9.8% OF TOTAL INVESTMENTS)
1,000 Alliance Airport Authority, Texas, Special Facilities Revenue 12/04 at 100.00 CCC 641,600
Bonds, American Airlines Inc., Series 1990, 7.500%, 12/01/29
(Alternative Minimum Tax)
Austin, Texas, Prior Lien Airport System Revenue Bonds,
Series 1995A:
1,660 6.125%, 11/15/25 (Alternative Minimum Tax) 11/05 at 102.00 AAA 1,757,724
(Pre-refunded to 11/15/05) - MBIA Insured
8,340 6.125%, 11/15/25 (Alternative Minimum Tax) - MBIA Insured 11/05 at 102.00 AAA 8,817,131
2,560 Brazos River Authority, Texas, Pollution Control Revenue 4/13 at 101.00 BBB 3,043,226
Refunding Bonds, TXU Electric Company Project,
Series 1999C, 7.700%, 3/01/32 (Alternative Minimum Tax)
4,675 Carrollton-Farmers Branch Independent School District, 2/09 at 100.00 AAA 5,318,748
Dallas County, Texas, Unlimited Tax School Building Bonds,
Series 1999, 6.000%, 2/15/20 (Pre-refunded to 2/15/09)
Coppell Independent School District, Dallas County, Texas,
Unlimited Tax School Building and Refunding Bonds, Series 1999:
5,130 0.000%, 8/15/20 8/09 at 52.47 AAA 2,242,682
7,000 0.000%, 8/15/21 8/09 at 49.48 AAA 2,885,960
7,345 0.000%, 8/15/23 8/09 at 44.01 AAA 2,693,118
7,000 0.000%, 8/15/24 8/09 at 41.50 AAA 2,420,460
7,350 0.000%, 8/15/25 8/09 at 39.14 AAA 2,249,100
7,000 0.000%, 8/15/26 8/09 at 36.91 AAA 2,011,520
2,000 Dallas-Ft. Worth International Airport Facility Improvement 11/05 at 100.00 CCC 1,863,440
Corporation, Texas, Revenue Refunding Bonds, American
Airlines Inc., Series 2000B, 6.050%, 5/01/29 (Alternative
Minimum Tax) (Mandatory put 11/01/05)
6,000 Dallas-Ft. Worth International Airport Facility Improvement 11/07 at 100.00 CCC 5,214,840
Corporation, Texas, Revenue Refunding Bonds, American
Airlines Inc., Series 2000C, 6.150%, 5/01/29 (Alternative
Minimum Tax) (Mandatory put 11/01/07)
49
Nuveen Dividend Advantage Municipal Fund (NAD) (continued)
Portfolio of INVESTMENTS October 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS (continued)
$ 820 Dallas Area Rapid Transit, Texas, Senior Lien Sales Tax 12/11 at 100.00 AAA $ 836,884
Revenue Bonds, Series 2001A, 5.000%, 12/01/31 -
AMBAC Insured
Harris County Health Facilities Development Corporation,
Texas, Revenue Bonds, Christus Health, Series 1999A:
12,240 5.375%, 7/01/24 - MBIA Insured 7/09 at 101.00 AAA 12,857,630
11,000 5.375%, 7/01/29 - MBIA Insured 7/09 at 101.00 AAA 11,437,360
2,205 Harris County-Houston Sports Authority, Texas, Senior No Opt. Call AAA 1,039,878
Lien Revenue Refunding Bonds, Series 2001A,
0.000%, 11/15/20 - MBIA Insured
2,500 Houston, Texas, Hotel Occupancy Tax and Special Revenue No Opt. Call AAA 638,950
Bonds, Convention and Entertainment Project, Series 2001B,
0.000%, 9/01/30 - AMBAC Insured
2,500 Jefferson County, Texas, Certificates of Obligation, 8/10 at 100.00 AAA 2,909,700
Series 2000, 6.000%, 8/01/25 (Pre-refunded to 8/01/10) -
FSA Insured
4,245 Laredo Independent School District, Webb County, Texas, 8/09 at 100.00 AAA 4,535,570
Unlimited Tax School Building Bonds, Series 1999,
5.250%, 8/01/24
2,000 Laredo, Texas, Sports Venue Sales Tax Revenue Bonds, 3/09 at 100.00 AAA 2,135,660
Series 2001, 5.300%, 3/15/26 - FGIC Insured
1,500 Port Arthur, Texas, Jefferson County, General Obligation 2/07 at 100.00 AAA 1,566,240
Bonds, Series 1997, 5.000%, 2/15/21 - MBIA Insured
10,000 Tarrant County Health Facilities Development Corporation, 2/08 at 102.00 AAA 10,873,400
Texas, Revenue Bonds, Texas Health Resources System,
Series 1997A, 5.250%, 2/15/17 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
UTAH - 0.6% (0.4% OF TOTAL INVESTMENTS)
40 Utah Housing Finance Agency, FHA-Insured Single Family 1/05 at 102.00 AAA 40,430
Mortgage Senior Bonds, Series 1994F-2, 7.000%, 7/01/27
(Alternative Minimum Tax)
Utah Housing Finance Agency, Single Family Mortgage Bonds,
Series 1999C-2, Class II:
940 5.700%, 7/01/19 (Alternative Minimum Tax) 1/10 at 101.50 AAA 1,004,512
315 5.750%, 7/01/21 (Alternative Minimum Tax) 1/10 at 101.50 AA 334,845
345 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/09 at 101.00 AA 350,699
Series 1999D, 5.850%, 7/01/21 (Alternative Minimum Tax)
150 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/09 at 101.50 Aa2 150,891
Series 1999F, 6.300%, 7/01/21 (Alternative Minimum Tax)
1,705 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/10 at 100.00 AA- 1,788,596
Series 2000F-2, Class III, 6.000%, 1/01/15
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 0.5% (0.4% OF TOTAL INVESTMENTS)
3,395 Virginia Small Business Financing Authority, Industrial 11/09 at 102.00 N/R 3,360,371
Development Water Revenue Bonds, S.I.L. Clean Water,
LLC Project, Series 1999, 7.250%, 11/01/24 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 11.0% (7.3% OF TOTAL INVESTMENTS)
4,000 Energy Northwest, Washington, Electric Revenue Refunding 7/13 at 100.00 Aaa 4,480,920
Bonds, Nuclear Project 3, Series 2003A, 5.500%, 7/01/17
Port of Seattle, Washington, Special Facility Revenue
Bonds, Terminal 18, Series 1999B:
1,755 6.000%, 9/01/15 (Alternative Minimum Tax) - MBIA Insured 3/10 at 101.00 AAA 1,960,282
2,590 6.000%, 9/01/16 (Alternative Minimum Tax) - MBIA Insured 3/10 at 101.00 AAA 2,892,952
Port of Seattle, Washington, Special Facility Revenue
Bonds, Terminal 18, Series 1999C:
875 6.000%, 9/01/15 (Alternative Minimum Tax) - MBIA Insured 3/10 at 101.00 AAA 977,349
1,260 6.000%, 9/01/16 (Alternative Minimum Tax) - MBIA Insured 3/10 at 101.00 AAA 1,407,382
9,760 Tacoma, Washington, Electric System Revenue Refunding 1/11 at 101.00 AAA 11,021,187
Bonds, Series 2001A, 5.625%, 1/01/21 - FSA Insured
7,530 Washington State Tobacco Settlement Authority, Tobacco 6/13 at 100.00 BBB 7,516,446
Settlement Asset-Backed Revenue Bonds, Series 2002,
6.500%, 6/01/26
11,605 Washington, Certificates of Participation, Washington 7/09 at 100.00 AAA 12,700,512
Convention and Trade Center, Series 1999,
5.250%, 7/01/16 - MBIA Insured
3,350 Washington, General Obligation Compound Interest Bonds, No Opt. Call AAA 1,859,317
Series 1999S-2, 0.000%, 1/01/18 - FSA Insured
50
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON (continued)
Washington, General Obligation Compound Interest Bonds,
Series 1999S-3:
$ 17,650 0.000%, 1/01/20 No Opt. Call Aa1 $ 8,670,739
18,470 0.000%, 1/01/21 No Opt. Call Aa1 8,549,578
4,800 Washington Public Power Supply System, Nuclear Project 3 7/07 at 102.00 AAA 5,224,224
Revenue Refunding Bonds, Series 1997A, 5.250%, 7/01/16 -
FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 6.7% (4.5% OF TOTAL INVESTMENTS)
2,250 Green Bay, Wisconsin, Water System Revenue Bonds, 11/14 at 100.00 Aaa 2,322,427
Series 2004, 5.000%, 11/01/29 - FSA Insured
3,810 La Crosse, Wisconsin, Industrial Development Revenue 12/08 at 102.00 AAA 4,166,121
Refunding Bonds, Dairyland Power Cooperative,
Series 1997C, 5.550%, 2/01/15 - AMBAC Insured
4,180 Wisconsin Health and Educational Facilities Authority, 5/09 at 101.00 A 4,251,436
Revenue Bonds, Kenosha Hospital and Medical Center
Inc., Series 1999, 5.625%, 5/15/29
Wisconsin Health and Educational Facilities Authority,
Revenue Bonds, FH Healthcare Development Inc., Series 1999:
8,375 6.250%, 11/15/20 11/09 at 101.00 N/R 9,040,729
5,000 6.250%, 11/15/28 11/09 at 101.00 N/R 5,304,350
12,700 Wisconsin Health and Educational Facilities Authority, 8/09 at 101.00 Aaa 13,683,234
Revenue Bonds, Mercy Health System Corporation,
Series 1999, 5.500%, 8/15/25 - AMBAC Insured
2,200 Wisconsin Health and Educational Facilities Authority, 8/13 at 100.00 A 2,204,467
Revenue Bonds, Wheaton Franciscan Services Inc.,
Series 2003A, 5.125%, 8/15/33
------------------------------------------------------------------------------------------------------------------------------------
$ 912,125 Total Long-Term Investments (cost $822,982,975) - 145.4% 891,865,782
=============-----------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 4.0% (2.7% OF TOTAL INVESTMENTS)
1,050 Carbon County, Utah, Pollution Control Revenue Refunding A-1 1,050,000
Bonds, Pacificorp Projects, Variable Rate Demand Obligations,
Series 1994 1.750%, 11/01/24 - AMBAC Insured+
12,000 Clark County School District, Nevada, General Obligation A-1+ 12,000,000
Bonds, Variable Rate Demand Obligations, Series 2001B,
1.630%, 6/15/21 - FSA Insured+
2,500 Connecticut Health and Educational Facilities Authority, A-1+ 2,500,000
Revenue Bonds, Yale University, Variable Rate Demand
Obligations, Series 1997, 1.630%, 7/01/29+
1,850 Massachusetts Development Finance Authority, Revenue A-1+ 1,850,000
Bonds, Boston University, Variable Rate Demand Obligations,
Series 2002R-4, 1.690%, 10/01/42 - XLCA Insured+
3,000 New York City, New York, General Obligation Bonds, A-1+ 3,000,000
Variable Rate Demand Obligations, Fiscal Series 2002A-7,
1.660%, 11/01/24 - AMBAC Insured+
2,000 New York City Municipal Water Finance Authority, New York, A-1+ 2,000,000
Water and Sewerage System Revenue Bonds, Variable Rate
Demand Obligations, Fiscal Series 1993C, 1.700%, 6/15/22 -
FGIC Insured+
2,100 Power County, Idaho, Variable Rate Demand Pollution Control VMIG-1 2,100,000
Revenue Bonds, FMC Corporation Project, Variable Rate
Demand Bonds, Series 1985, 1.750%, 12/01/10+
------------------------------------------------------------------------------------------------------------------------------------
$ 24,500 Total Short-Term Investments (cost $24,500,000) 24,500,000
=============-----------------------------------------------------------------------------------------------------------------------
Total Investments (cost $847,482,975) - 149.4% 916,365,782
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - (1.3)% (8,037,586)
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (48.1)% (295,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 613,328,196
====================================================================================================================
(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.
** 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.
# Non-income producing security. In June 2003, Waste
Solutions Group, Inc. (an entity formed for the benefit
of Nuveen Dividend Advantage Municipal Fund (NAD) which
owns various interests in the Bridgewater Resources
Inc. project) took possession of 45% of the Bridgewater
Resources Inc. assets on behalf of the Fund.
Bridgewater Resources Inc. emerged from bankruptcy in
June 2003. NAD, via Waste Solutions Group Inc., has
agreed to allow debt service reserve monies to be used
for capital expenses, and has also agreed to a debt
service moratorium until December 2004. Nuveen Advisory
Corp. will continue to actively monitor the Bridgewater
Resources, Inc. project, and to cause NAD and Waste
Solutions Group Inc. to act in what it believes is in
the best interests of fund shareholders.
(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
currently in effect. This rate changes periodically
based on market conditions or a specified market index.
See accompanying notes to financial statements.
51
Nuveen Dividend Advantage Municipal Fund 2 (NXZ)
Portfolio of
INVESTMENTS October 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 4.2% (2.9% OF TOTAL INVESTMENTS)
$ 18,500 Huntsville Healthcare Authority, Alabama, Revenue Bonds, 6/11 at 101.00 A2 $ 19,312,890
Series 2001A, 5.750%, 6/01/31
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 0.6% (0.4% OF TOTAL INVESTMENTS)
2,500 Phoenix, Arizona, Civic Improvement Corporation, Senior 7/12 at 100.00 AAA 2,581,050
Lien Airport Revenue Bonds, Series 2002B, 5.250%, 7/01/32
(Alternative Minimum Tax) - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 0.6% (0.4% OF TOTAL INVESTMENTS)
2,470 Arkansas Development Finance Authority, Single Family 1/12 at 100.00 AAA 2,547,830
Mortgage Revenue Bonds, GNMA Mortgage-Backed
Securities Program, Series 2002C, 5.400%, 1/01/34
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 11.1% (7.6% OF TOTAL INVESTMENTS)
6,000 California Educational Facilities Authority, Revenue Bonds, 6/11 at 101.00 AAA 6,328,140
Stanford University, Series 2001Q, 5.250%, 12/01/32
13,825 California, Department of Veterans Affairs, Home Purchase 6/06 at 101.00 AAA 14,614,407
Revenue Bonds, Series 2001A, 5.550%, 12/01/25 -
AMBAC Insured
11,200 California, General Obligation Bonds, Series 2003, 8/13 at 100.00 A 11,776,688
5.250%, 2/01/28
1,500 California Statewide Community Development Authority, 10/15 at 103.00 N/R 1,649,160
Senior Lien Revenue Bonds, East Valley Tourist Authority,
Series 2003B, 9.250%, 10/01/20
6,000 California Statewide Community Development Authority, No Opt. Call A 5,996,100
Revenue Bonds, Kaiser Permanente System, Series 2004G,
2.300%, 4/01/34 (Mandatory put 5/01/07)
5,000 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 BBB 4,910,950
Tobacco Settlement Asset-Backed Bonds, Series 2003A-1,
6.750%, 6/01/39
6,000 Los Angeles Regional Airports Improvement Corporation, 12/12 at 102.00 B- 5,442,000
California, Sublease Revenue Bonds, Los Angeles
International Airport, American Airlines Inc. Terminal 4
Project, Series 2002C, 7.500%, 12/01/24 (Alternative
Minimum Tax)
220 Yuba County Water Agency, California, Yuba River 3/05 at 100.00 Baa3 219,991
Development Revenue Bonds, Pacific Gas and Electric
Company, Series 1966A, 4.000%, 3/01/16
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 5.9% (4.0% OF TOTAL INVESTMENTS)
3,000 Colorado Educational and Cultural Facilities Authority, 8/11 at 100.00 AAA 3,739,980
Charter School Revenue Bonds, Peak-to-Peak Charter
School, Series 2001, 7.500%, 8/15/21 (Pre-refunded
to 8/15/11)
2,500 Colorado Educational and Cultural Facilities Authority, 6/14 at 100.00 N/R 2,504,775
Revenue Bonds, Colorado Lutheran High School Association,
Series 2004A, 7.625%, 6/01/34
10,000 E-470 Public Highway Authority, Colorado, Senior Revenue 9/10 at 31.42 AAA 2,500,800
Bonds, Series 2000A, 0.000%, 9/01/28 - MBIA Insured
1,885 Eagle County Air Terminal Corporation, Colorado, Airport 5/11 at 101.00 N/R 1,824,077
Terminal Revenue Bonds, Series 2001, 7.125%, 5/01/31
(Alternative Minimum Tax)
5,000 Northwest Parkway Public Highway Authority, Colorado, 6/11 at 102.00 AAA 5,187,550
Revenue Bonds, Senior Series 2001A, 5.250%, 6/15/41 -
FSA Insured
Northwest Parkway Public Highway Authority, Colorado,
Senior Lien Revenue Bonds, Series 2001B:
22,000 0.000%, 6/15/28 - FSA Insured 6/11 at 35.65 AAA 5,837,920
17,650 0.000%, 6/15/29 - AMBAC Insured 6/11 at 33.45 AAA 4,395,909
1,000 Plaza Metropolitan District 1, Lakewood, Colorado, 6/14 at 101.00 N/R 1,048,880
Tax Increment Revenue Bonds, Series 2003, 8.000%, 12/01/25
52
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 5.1% (3.5% OF TOTAL INVESTMENTS)
$ 15,000 Jacksonville, Florida, Transportation Revenue Bonds, 10/11 at 100.00 AAA $ 15,857,700
Series 2001, 5.250%, 10/01/29 - MBIA Insured
3,000 Miami-Dade County, Florida, Aviation Revenue Bonds, 10/12 at 100.00 AAA 3,120,060
Miami International Airport, Series 2002, 5.375%, 10/01/32
(Alternative Minimum Tax) - FGIC Insured
4,000 Miami-Dade County Health Facility Authority, Florida, 8/11 at 101.00 AAA 4,161,240
Hospital Revenue Refunding Bonds, Miami Children's
Hospital, Series 2001A, 5.125%, 8/15/26 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 1.3% (0.9% OF TOTAL INVESTMENTS)
5,940 DeKalb County, Georgia, General Obligation Bonds, No Opt. Call Aaa 5,953,365
Series 2003A, 3.000%, 1/01/05
------------------------------------------------------------------------------------------------------------------------------------
HAWAII - 2.2% (1.4% OF TOTAL INVESTMENTS)
Honolulu Board of Water Supply, Hawaii, Water System
Revenue Bonds, Series 2001:
3,000 5.250%, 7/01/26 - FSA Insured 7/11 at 100.00 AAA 3,179,850
6,725 5.250%, 7/01/31 - FSA Insured 7/11 at 100.00 AAA 7,101,331
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 11.1% (7.6% OF TOTAL INVESTMENTS)
15,270 Chicago, Illinois, General Obligation Refunding Bonds, 1/11 at 101.00 AAA 15,978,681
Series 2001A, 5.250%, 1/01/33 - MBIA Insured
3,690 Chicago, Illinois, FHA/GNMA Collateralized Multifamily 12/11 at 100.00 A+ 3,842,987
Housing Revenue Bonds, Stone Terrace Apartments,
Series 2001A, 5.750%, 12/20/42 (Alternative Minimum Tax)
1,755 Chicago, Illinois, Special Facility Revenue Bonds, O'Hare No Opt. Call N/R 631,800
International Airport, United Air Lines Inc. Project,
Series 2001A, 6.375%, 11/01/35 (Alternative Minimum Tax)
(Mandatory put 5/01/13)#
2,330 Chicago, Illinois, FNMA/GNMA Collateralized Single Family 4/11 at 105.00 AAA 2,471,757
Mortgage Revenue Bonds, Series 2001A, 6.250%, 10/01/32
(Alternative Minimum Tax)
3,180 Illinois Development Finance Authority, Revenue Bonds, 12/21 at 100.00 BBB 3,284,399
Chicago Charter School Foundation Project, Series 2002A,
6.250%, 12/01/32
5,000 Illinois Development Finance Authority, Revenue Bonds, 9/11 at 100.00 AAA 5,411,000
Illinois Wesleyan University, Series 2001, 5.500%, 9/01/32 -
AMBAC Insured
3,100 Illinois Development Finance Authority, Revenue Bonds, 5/11 at 101.00 A- 3,306,987
Midwestern University, Series 2001B, 6.000%, 5/15/31
5,000 Illinois Health Facilities Authority, Revenue Bonds, Edward 2/11 at 101.00 AAA 5,183,100
Hospital Obligated Group, Series 2001B, 5.250%, 2/15/34 -
FSA Insured
3,000 Illinois Educational Facilities Authority, Student Housing 5/12 at 101.00 Baa2 3,084,660
Revenue Bonds, Educational Advancement Foundation Fund,
University Center Project, Series 2002, 6.250%, 5/01/34
2,275 Illinois, Sales Tax Revenue Bonds, Series 2001, 5.500%, 6/15/16 6/11 at 100.00 AAA 2,549,115
4,980 Metropolitan Pier and Exposition Authority, Illinois, Revenue 6/06 at 102.00 AAA 5,211,122
Refunding Bonds, McCormick Place Expansion Project,
Series 1996A, 5.250%, 6/15/27 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 4.8% (3.3% OF TOTAL INVESTMENTS)
2,000 Indiana Health Facility Financing Authority, Hospital Revenue 9/11 at 100.00 A+ 2,059,240
Bonds, Methodist Hospitals Inc., Series 2001, 5.500%, 9/15/31
2,500 Indiana Health Facility Financing Authority, Hospital Revenue No Opt. Call AAA 3,108,475
Refunding Bonds, Columbus Regional Hospital, Series 1993,
7.000%, 8/15/15 - FSA Insured
Indiana Transportation Finance Authority, Highway Revenue
Bonds, Series 2003A:
4,000 5.000%, 6/01/23 - FSA Insured 6/13 at 100.00 AAA 4,206,480
6,000 5.000%, 6/01/24 - FSA Insured 6/13 at 100.00 AAA 6,283,380
2,978 Indianapolis Airport Authority, Indiana, Specialty Facility 11/05 at 102.00 N/R 327,550
Revenue Bonds, United Air Lines Inc., Indianapolis
Maintenance Center Project, Series 1995A,
6.500%, 11/15/31 (Alternative Minimum Tax)#
6,100 St. Joseph County Hospital Authority, Indiana, Revenue 2/09 at 102.00 BBB 6,056,019
Bonds, Madison Center Inc., Series 1999, 5.800%, 2/15/24
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 0.2% (0.2% OF TOTAL INVESTMENTS)
1,000 Iowa Higher Education Loan Authority, Private College 10/12 at 100.00 A 1,039,960
Facility Revenue Bonds, Wartburg College, Series 2002,
5.500%, 10/01/28 - ACA Insured
53
Nuveen Dividend Advantage Municipal Fund 2 (NXZ) (continued)
Portfolio of INVESTMENTS October 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 3.9% (2.7% OF TOTAL INVESTMENTS)
$ 17,000 Wichita, Kansas, Hospital Facilities Revenue Refunding 11/11 at 101.00 A+ $ 17,828,070
and Improvement Bonds, Via Christi Health System Inc.,
Series 2001-III, 5.625%, 11/15/31
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 3.2% (2.2% OF TOTAL INVESTMENTS)
17,060 Tobacco Settlement Financing Corporation, Louisiana, 5/11 at 101.00 BBB 14,838,106
Tobacco Settlement Asset-Backed Bonds, Series 2001B,
5.875%, 5/15/39
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 4.0% (2.7% OF TOTAL INVESTMENTS)
2,875 Massachusetts Port Authority, Special Facilities Revenue 7/07 at 102.00 AAA 3,100,285
Bonds, BOSFUEL Corporation, Series 1997, 5.750%, 7/01/39
(Alternative Minimum Tax) - MBIA Insured
15,000 Massachusetts Turnpike Authority, Metropolitan Highway 1/07 at 102.00 AAA 15,159,150
System Revenue Bonds, Senior Series 1997A,
5.000%, 1/01/37 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 14.5% (9.8% OF TOTAL INVESTMENTS)
Detroit, Michigan, Senior Lien Water Supply System Revenue
Bonds, Series 2001A:
20,000 5.500%, 7/01/33 - FGIC Insured 7/11 at 101.00 AAA 21,731,000
14,610 5.250%, 7/01/33 - FGIC Insured 7/11 at 100.00 AAA 15,432,835
15,390 5.250%, 7/01/33 (Pre-refunded to 7/01/11) - FGIC Insured 7/11 at 100.00 AAA 17,424,404
4,000 Michigan Municipal Bond Authority, Public School Academy 10/09 at 102.00 Ba1 4,161,760
Revenue Bonds, Detroit Academy of Arts and Sciences
Charter School, Series 2001A, 8.000%, 10/01/31
Michigan State Hospital Finance Authority, Revenue Refunding
Bonds, Detroit Medical Center Obligated Group, Series 1993A:
2,000 6.250%, 8/15/13 2/05 at 101.00 Ba3 1,889,940
4,000 6.500%, 8/15/18 2/05 at 101.00 Ba3 3,773,800
2,000 Michigan State Hospital Finance Authority, Hospital 8/08 at 101.00 Ba3 1,648,280
Revenue Bonds, Detroit Medical Center Obligated Group,
Series 1998A, 5.125%, 8/15/18
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 3.2% (2.2% OF TOTAL INVESTMENTS)
14,000 Minneapolis-St. Paul Metropolitan Airports Commission, 1/11 at 100.00 AAA 14,767,760
Minnesota, Airport Revenue Bonds, Series 2001A,
5.250%, 1/01/32 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 0.9% (0.6% OF TOTAL INVESTMENTS)
4,000 Mississippi, Highway Revenue Bonds, Series 1999, No Opt. Call AAA 4,081,640
5.250%, 6/01/05
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 4.8% (3.3% OF TOTAL INVESTMENTS)
21,000 Missouri Health and Educational Facilities Authority, Revenue 6/11 at 101.00 AAA 21,956,970
Bonds, SSM Healthcare System, Series 2001A,
5.250%, 6/01/28 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
MONTANA - 1.0% (0.7% OF TOTAL INVESTMENTS)
4,370 Montana Board of Housing, Single Family Program Bonds, 12/10 at 100.00 AA+ 4,523,780
Series 2001A-2, 5.700%, 6/01/32 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 4.5% (3.1% OF TOTAL INVESTMENTS)
12,275 Director of Nevada State Department of Business and Industry, 1/10 at 100.00 AAA 12,733,348
Revenue Bonds, Las Vegas Monorail Project, First Tier,
Series 2000, 5.375%, 1/01/40 - AMBAC Insured
3,500 Director of Nevada State Department of Business and Industry, 1/10 at 102.00 N/R 3,543,470
Revenue Bonds, Las Vegas Monorail Project, Second Tier,
Series 2000, 7.375%, 1/01/40
Henderson, Nevada, Healthcare Facility Revenue Bonds,
Catholic Healthcare West, Series 1998A:
1,670 5.250%, 7/01/18 (Pre-refunded to 7/01/08) 7/08 at 101.00 BBB+*** 1,833,927
2,330 5.250%, 7/01/18 7/08 at 101.00 BBB+ 2,378,464
------------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 2.4% (1.5% OF TOTAL INVESTMENTS)
8,000 New Hampshire Business Finance Authority, Pollution 10/08 at 102.00 A3 8,365,120
Control Remarketed Revenue Refunding Bonds, Connecticut
Light and Power Company, Series 1992A, 5.850%, 12/01/22
2,360 New Hampshire Housing Finance Agency, Single Family 5/11 at 100.00 Aa2 2,401,512
Mortgage Acquisition Bonds, Series 2001A, 5.700%, 1/01/31
(Alternative Minimum Tax)
54
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 1.3% (0.8% OF TOTAL INVESTMENTS)
$ 3,995 New Jersey Economic Development Authority, Special 11/10 at 101.00 B $ 3,163,641
Facilities Revenue Bonds, Continental Airlines Inc.,
Series 2000, 7.000%, 11/15/30 (Alternative Minimum Tax)
Tobacco Settlement Financing Corporation, New Jersey,
Tobacco Settlement Asset-Backed Bonds, Series 2003:
425 6.750%, 6/01/39 6/13 at 100.00 BBB 416,883
2,700 6.250%, 6/01/43 6/13 at 100.00 BBB 2,442,366
------------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 5.2% (3.6% OF TOTAL INVESTMENTS)
New Mexico Hospital Equipment Loan Council, Hospital Revenue
Bonds, Presbyterian Healthcare Services, Series 2001A:
12,000 5.500%, 8/01/25 8/11 at 101.00 Aa3 12,636,840
10,800 5.500%, 8/01/30 8/11 at 101.00 Aa3 11,230,704
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 6.0% (4.1% OF TOTAL INVESTMENTS)
6,000 Long Island Power Authority, New York, Electric System 5/11 at 100.00 A- 6,240,060
General Revenue Bonds, Series 2000L, 5.375%, 5/01/33
12,000 New York City Municipal Water Finance Authority, 6/11 at 101.00 AA+ 12,373,560
New York, Water and Sewerage System Revenue Bonds,
Fiscal Series 2001C, 5.125%, 6/15/33
5,000 New York City Industrial Development Agency, New York, 8/12 at 101.00 CCC 3,785,450
Special Facilities Revenue Bonds, JFK Airport - American
Airlines Inc., Series 2002B, 8.500%, 8/01/28 (Alternative
Minimum Tax)
4,900 Dormitory Authority of the State of New York, Revenue 7/10 at 101.00 Ba1 5,231,828
Bonds, Mount Sinai NYU Health Obligated Group,
Series 2000A, 6.625%, 7/01/19
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 1.7% (1.1% OF TOTAL INVESTMENTS)
2,950 North Carolina Capital Facilities Financing Agency, Revenue 4/13 at 100.00 AAA 3,018,057
Bonds, Johnson and Wales University, Series 2003A,
5.000%, 4/01/33 - XLCA Insured
4,500 North Carolina Eastern Municipal Power Agency, Power 1/09 at 102.00 BBB 4,824,045
System Revenue Refunding Bonds, Series 1999B,
5.600%, 1/01/15
------------------------------------------------------------------------------------------------------------------------------------
NORTH DAKOTA - 0.7% (0.5% OF TOTAL INVESTMENTS)
3,255 North Dakota Housing Finance Agency, Home Mortgage 7/10 at 100.00 Aa2 3,324,657
Finance Program Refunding Bonds, Series 2001A,
5.550%, 1/01/32 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 0.4% (0.3% OF TOTAL INVESTMENTS)
1,845 Columbus City School District, Franklin County, Ohio, 6/13 at 100.00 AAA 1,907,379
General Obligation Bonds, Series 2003,
5.000%, 12/01/28 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 0.9% (0.6% OF TOTAL INVESTMENTS)
Oklahoma Development Finance Authority, Revenue
Refunding Bonds, Hillcrest Healthcare System, Series 1999A:
2,655 5.125%, 8/15/10 (Pre-refunded to 8/15/09) 8/09 at 101.00 AAA 2,950,103
1,000 5.200%, 8/15/11 (Pre-refunded to 8/15/09) 8/09 at 101.00 AAA 1,114,490
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 3.9% (2.7% OF TOTAL INVESTMENTS)
8,000 Clackamas County Hospital Facility Authority, Oregon, 5/11 at 101.00 AA 8,472,560
Revenue Refunding Bonds, Legacy Health System,
Series 2001, 5.250%, 5/01/21
9,000 Oregon Department of Administrative Services, Certificates 5/11 at 101.00 AAA 9,298,440
of Participation, Series 2001D, 5.000%, 5/01/26 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 3.7% (2.5% OF TOTAL INVESTMENTS)
5,000 Allegheny County Hospital Development Authority, 11/10 at 102.00 B1 5,767,700
Pennsylvania, Revenue Bonds, West Penn Allegheny
Health System, Series 2000B, 9.250%, 11/15/30
2,460 Carbon County Industrial Development Authority, No Opt. Call BBB- 2,669,617
Pennsylvania, Resource Recovery Revenue Refunding
Bonds, Panther Creek Partners Project, Series 2000,
6.650%, 5/01/10 (Alternative Minimum Tax)
8,000 Pennsylvania Higher Educational Facilities Authority, Revenue 1/11 at 101.00 A 8,553,680
Bonds, UPMC Health System, Series 2001A, 6.000%, 1/15/31
55
Nuveen Dividend Advantage Municipal Fund 2 (NXZ) (continued)
Portfolio of INVESTMENTS October 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 0.1% (0.1% OF TOTAL INVESTMENTS)
$ 630 South Carolina Public Service Authority, Revenue Refunding 1/06 at 102.00 AAA $ 668,915
Bonds, Santee Cooper Electric System, Series 1996A,
5.750%, 1/01/22 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
SOUTH DAKOTA - 1.1% (0.8% OF TOTAL INVESTMENTS)
4,820 South Dakota Housing Development Authority, Remarketed 5/09 at 102.00 AAA 5,124,624
Homeownership Mortgage Bonds, Series 1997E-4,
5.450%, 5/01/18 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 24.3% (16.5% OF TOTAL INVESTMENTS)
7,500 Austin, Texas, Electric Utility System Revenue Refunding 11/10 at 100.00 AAA 7,729,575
Bonds, Series 2001, 5.000%, 11/15/30 - FSA Insured (PLG1)
Dallas-Fort Worth International Airport Public Facility
Corporation, Texas, Airport Hotel Revenue Bonds, Series 2001:
15,000 5.250%, 1/15/26 - FSA Insured 1/09 at 100.00 AAA 15,841,200
1,750 5.200%, 1/15/31 - FSA Insured 1/09 at 100.00 AAA 1,834,140
6,000 Decatur Hospital Authority, Texas, Revenue Bonds, Wise 9/14 at 100.00 N/R 6,116,340
Regional Health System, Series 2004A, 7.125%, 9/01/34
10,000 Gulf Coast Industrial Development Authority, Texas, Solid 4/12 at 100.00 Ba3 11,114,900
Waste Disposal Revenue Bonds, Citgo Petroleum
Corporation Project, Series 1998, 8.000%, 4/01/28
(Alternative Minimum Tax)
3,000 Harris County Health Facilities Development Corporation, 7/09 at 101.00 AAA 3,151,380
Texas, Revenue Bonds, Christus Health, Series 1999A,
5.375%, 7/01/24 - MBIA Insured
40,000 Harris County-Houston Sports Authority, Texas, Senior 11/30 at 54.04 AAA 5,221,200
Lien Revenue Refunding Bonds, Series 2001A,
0.000%, 11/15/40 - MBIA Insured (PLG2)
30,980 Harris County-Houston Sports Authority, Texas, Junior Lien 11/11 at 100.00 AAA 31,949,984
Revenue Refunding Bonds, Series 2001B,
5.250%, 11/15/40 - MBIA Insured
Hays Consolidated Independent School District, Hays
County, Texas, General Obligation School
Building Bonds, Series 2001:
10,715 0.000%, 8/15/25 8/11 at 43.18 AAA 3,453,444
12,940 0.000%, 8/15/26 8/11 at 40.60 AAA 3,847,191
Houston, Texas, Hotel Occupancy Tax and Special Revenue Bonds,
Convention and Entertainment Project, Series 2001B:
5,000 0.000%, 9/01/30 - AMBAC Insured No Opt. Call AAA 1,277,900
5,000 0.000%, 9/01/31 - AMBAC Insured No Opt. Call AAA 1,205,850
5,000 Metro Health Facilities Development Corporation, Texas, 1/11 at 100.00 B1 4,833,550
Hospital Revenue Bonds, Wilson N. Jones Memorial
Hospital, Series 2001, 7.250%, 1/01/31
10,500 Texas, General Obligation Bonds, Water Financial 8/11 at 100.00 Aa1 10,936,905
Assistance Program, Series 2001, 5.250%, 8/01/35
2,000 Tom Green County Health Facilities Development 5/11 at 101.00 Baa3 2,153,800
Corporation, Texas, Hospital Revenue Bonds, Shannon
Health System Project, Series 2001, 6.750%, 5/15/21
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 0.2% (0.1% OF TOTAL INVESTMENTS)
5,000 Pocahontas Parkway Association, Virginia, Senior Lien 8/08 at 23.55 BB 755,900
Revenue Bonds, Route 895 Connector Toll Road,
Series 1998B, 0.000%, 8/15/33
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 5.9% (4.0% OF TOTAL INVESTMENTS)
Seattle, Washington, Municipal Light and Power Revenue
Refunding and Improvement Bonds, Series 2001:
4,820 5.500%, 3/01/19 - FSA Insured 3/11 at 100.00 AAA 5,360,659
7,250 5.125%, 3/01/26 - FSA Insured 3/11 at 100.00 AAA 7,496,210
3,500 Tacoma, Washington, Electric System Revenue Refunding 1/11 at 101.00 AAA 3,976,420
Bonds, Series 2001A, 5.750%, 1/01/18 - FSA Insured
2,000 Washington, Certificates of Participation, Washington 7/09 at 100.00 AAA 2,192,600
Convention and Trade Center, Series 1999,
5.125%, 7/01/13 - MBIA Insured
7,500 Washington State Healthcare Facilities Authority, Revenue 10/11 at 100.00 AAA 8,022,900
Bonds, Sisters of Providence Health System,
Series 2001A, 5.250%, 10/01/21 - MBIA Insured
56
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 1.1% (0.8% OF TOTAL INVESTMENTS)
$ 5,000 Mason County, West Virginia, Pollution Control Revenue 10/11 at 100.00 BBB $ 5,107,900
Bonds, Appalachian Power Company, Series 2003L,
5.500%, 10/01/22
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 0.7% (0.5% OF TOTAL INVESTMENTS)
1,000 Wisconsin Health and Educational Facilities Authority, 5/12 at 100.00 N/R 1,045,290
Revenue Bonds, Divine Savior Healthcare,
Series 2002A, 7.375%, 5/01/26
2,100 Wisconsin Health and Educational Facilities Authority, 8/13 at 100.00 A 2,104,265
Revenue Bonds, Wheaton Franciscan Services Inc.,
Series 2003A, 5.125%, 8/15/33
------------------------------------------------------------------------------------------------------------------------------------
$ 751,003 Total Long-Term Investments (cost $632,726,167) - 146.7% 671,348,078
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.8% 8,203,625
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (48.5)% (222,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 457,551,703
====================================================================================================================
FORWARD SWAP CONTRACTS OUTSTANDING AT OCTOBER 31, 2004: SWAP UNREALIZED
EFFECTIVE TERMINATION APPRECIATION
NOTIONAL AMOUNT DATE(2) DATE (DEPRECIATION)
------------------------------------------------------------------------------------------------------------------------------------
Agreement with JPMorgan dated July 1, 2004, to pay semi-annually
the notional amount multiplied by 5.805% (annualized) and
receive quarterly the notional amount multiplied by the
three-month USD-LIBOR (United States Dollar-London
Inter-Bank Offered Rates). $20,000,000 2/02/05 2/02/25 $(1,774,484)
Agreement with Morgan Stanley dated July 15, 2004, to pay
semi-annually the notional amount multiplied by 5.717%
(annualized) and receive quarterly the notional amount
multiplied by the three-month USD-LIBOR (United States
Dollar-London Inter-Bank Offered Rates). 21,000,000 1/14/05 1/14/35 (1,757,924)
------------------------------------------------------------------------------------------------------------------------------------
$(3,532,408)
------------------------------------------------------------------------------------------------------------------------------------
(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.
** Ratings (not covered by the report of independent
registered public accounting firm): Using the higher of
Standard & Poor's or Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of
principal and interest. Such securities are normally
considered to be equivalent to AAA rated securities.
N/R Investment is not rated.
# On December 9, 2002, UAL Corporation, the holding
company of United Air Lines, Inc., filed for federal
bankruptcy protection. The Adviser determined that it
was likely United would not remain current on their
interest payment obligations with respect to these
bonds and thus has stopped accruing interest.
(PLG1) Portion of security, with an aggregate market value
of $1,772,649, has been pledged to collateralize the
net payment obligations under forward swap contracts.
(PLG2) Portion of security, with an aggregate market value
of $2,268,882, has been pledged to collateralize the
net payment obligations under forward swap contracts.
See accompanying notes to financial statements.
57
Nuveen Dividend Advantage Municipal Fund 3 (NZF)
Portfolio of
INVESTMENTS October 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 0.9% (0.6% OF TOTAL INVESTMENTS)
$ 5,655 Alabama State Port Authority, Revenue Bonds, State Docks 10/11 at 100.00 AAA $ 5,865,479
Department Facilities, Series 2001, 5.250%, 10/01/26
(Alternative Minimum Tax) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
ALASKA - 0.7% (0.5% OF TOTAL INVESTMENTS)
4,000 Alaska Student Loan Corporation, Student Loan Revenue 7/08 at 100.00 AAA 4,192,640
Bonds, Series 1998A, 5.250%, 7/01/14 (Alternative
Minimum Tax) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 0.9% (0.6% OF TOTAL INVESTMENTS)
Sebastian County Health Facilities Board, Arkansas, Hospital
Revenue Improvement Bonds, Sparks Regional Medical Center,
Series 2001A:
1,805 5.500%, 11/01/13 11/11 at 101.00 Baa1 1,942,884
1,900 5.500%, 11/01/14 11/11 at 101.00 Baa1 2,026,806
1,555 5.250%, 11/01/21 11/11 at 101.00 Baa1 1,577,827
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 10.3% (7.0% OF TOTAL INVESTMENTS)
5,000 California Infrastructure Economic Development Bank, 8/11 at 102.00 A 5,217,150
Revenue Bonds, Kaiser Hospital Assistance LLC,
Series 2001A, 5.550%, 8/01/31
18,850 California, General Obligation Veterans Welfare Bonds, 6/07 at 101.00 AAA 19,401,740
Series 2001BZ, 5.350%, 12/01/21 (Alternative Minimum
Tax) - MBIA Insured
1,500 California Statewide Community Development Authority, 10/15 at 103.00 N/R 1,649,160
Senior Lien Revenue Bonds, East Valley Tourist Authority,
Series 2003B, 9.250%, 10/01/20
5,000 California Statewide Community Development Authority, No Opt. Call A 4,996,750
Revenue Bonds, Kaiser Permanente System, Series 2004G,
2.300%, 4/01/34 (Mandatory put 5/01/07)
Los Angeles Regional Airports Improvement Corporation,
California, Lease Revenue Refunding Bonds, LAXFUEL Corporation
at Los Angeles International Airport, Series 2001:
13,955 5.750%, 1/01/16 (Alternative Minimum Tax) - AMBAC Insured 1/12 at 100.00 AAA 15,613,273
5,000 5.375%, 1/01/21 (Alternative Minimum Tax) - AMBAC Insured 1/12 at 100.00 AAA 5,238,450
1,500 5.250%, 1/01/23 (Alternative Minimum Tax) - AMBAC Insured 1/12 at 100.00 AAA 1,545,495
10,000 5.500%, 1/01/32 (Alternative Minimum Tax) - AMBAC Insured 1/12 at 100.00 AAA 10,337,100
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 7.9% (5.3% OF TOTAL INVESTMENTS)
2,250 Canterberry Crossing Metropolitan District II, Parker, 12/12 at 100.00 N/R 2,300,535
Colorado, Limited Tax General Obligation Bonds,
Series 2002, 7.375%, 12/01/32
1,775 Colorado Educational and Cultural Facilities Authority, 6/11 at 100.00 Ba1 1,843,089
Charter School Revenue Bonds, Weld County School
District 6 - Frontier Academy, Series 2001, 7.375%, 6/01/31
3,250 Colorado Educational and Cultural Facilities Authority, 5/12 at 102.00 N/R 3,404,895
Charter School Revenue Bonds, Montessori Peaks Building
Foundation, Series 2002A, 8.000%, 5/01/32
1,700 Colorado Educational and Cultural Facilities Authority, 3/12 at 100.00 N/R 1,725,466
Charter School Revenue Bonds, Belle Creek Education
Center, Series 2002A, 7.625%, 3/15/32
3,380 Colorado Housing Finance Authority, Multifamily Project 10/11 at 100.00 AAA 3,496,711
Bonds, Class I, Series 2001A-1, 5.500%, 4/01/31
(Alternative Minimum Tax)
10,100 Colorado Springs, Colorado, Utility System Revenue Refunding 11/07 at 100.00 AA 10,712,060
and Improvement Bonds, Series 1997A, 5.375%, 11/15/26
2,000 Denver City and County, Colorado, Airport System Revenue 11/11 at 100.00 AAA 2,203,820
Refunding Bonds, Series 2001A, 5.500%, 11/15/16 (Alternative
Minimum Tax) - FGIC Insured
Denver City and County, Colorado, Airport System Revenue
Bonds, Series 1996A:
19,150 5.750%, 11/15/16 - MBIA Insured 11/06 at 101.00 AAA 20,721,258
1,105 5.500%, 11/15/25 - MBIA Insured 11/06 at 101.00 AAA 1,175,875
1,000 Plaza Metropolitan District 1, Lakewood, Colorado, Tax 6/14 at 101.00 N/R 1,048,880
Increment Revenue Bonds, Series 2003, 8.000%, 12/01/25
58
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
DELAWARE - 0.6% (0.4% OF TOTAL INVESTMENTS)
$ 3,390 Delaware State Housing Authority, Multifamily Mortgage 7/12 at 100.00 Aa3 $ 3,448,274
Revenue Bonds, Series 2001A, 5.400%, 7/01/24
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 1.1% (0.7% OF TOTAL INVESTMENTS)
6,000 District of Columbia, Revenue Bonds, Catholic University of 10/09 at 101.00 AAA 6,581,760
America, Series 1999, 5.625%, 10/01/29 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 2.0% (1.4% OF TOTAL INVESTMENTS)
2,000 Dade County, Florida, Water and Sewerage System Revenue 10/07 at 102.00 AAA 2,207,520
Bonds, Series 1997, 5.375%, 10/01/16 - FGIC Insured
2,230 Florida State Board of Education, Full Faith and Credit Public 6/05 at 101.00 AA+ 2,273,017
Education Capital Outlay Refunding Bonds, Series 1995D,
4.750%, 6/01/22
Orange County Housing Finance Authority, Florida, Multifamily
Housing Revenue Bonds, Oak Glen Apartments, Series 2001G:
1,105 5.400%, 12/01/32 - FSA Insured 12/11 at 100.00 AAA 1,138,835
2,195 5.450%, 12/01/41 - FSA Insured 12/11 at 100.00 AAA 2,259,445
4,175 Pace Property Finance Authority Inc., Florida, Utility System 9/07 at 102.00 AAA 4,579,391
Improvement and Revenue Refunding Bonds, Series 1997,
5.250%, 9/01/17 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 2.3% (1.5% OF TOTAL INVESTMENTS)
5,000 Atlanta, Georgia, Airport General Revenue Bonds, 1/10 at 101.00 AAA 5,268,450
Series 2000B, 5.625%, 1/01/30 (Alternative Minimum
Tax) - FGIC Insured
2,700 Atlanta, Georgia, Tax Allocation Bonds, Atlantic Station 12/11 at 101.00 N/R 2,932,929
Project, Series 2001, 7.900%, 12/01/24
3,600 Gainesville and Hall County Hospital Authority, Georgia, 5/11 at 100.00 A- 3,702,348
Revenue Anticipation Certificates, Northeast Georgia
Health Services Inc., Series 2001, 5.500%, 5/15/31
2,000 Henry County Water and Sewerage Authority, Georgia, 2/10 at 101.00 AAA 2,207,500
Revenue Bonds, Series 2000, 5.625%, 2/01/30 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
HAWAII - 0.9% (0.6% OF TOTAL INVESTMENTS)
5,125 Hawaii, Highway Revenue Bonds, Series 2001, 7/11 at 100.00 AAA 5,665,790
5.375%, 7/01/21 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 16.3% (11.0% OF TOTAL INVESTMENTS)
3,000 Chicago, Illinois, General Obligation Bonds, Neighborhoods 1/11 at 100.00 AAA 3,253,020
Alive 21 Program, Series 2001A, 5.500%, 1/01/31 -
FGIC Insured
8,375 Chicago, Illinois, Revenue Bonds, Midway Airport, 1/11 at 101.00 AAA 9,064,765
Series 2001A, 5.500%, 1/01/19 (Alternative Minimum
Tax) - FSA Insured
4,950 Chicago, Illinois, Second Lien Passenger Facility Charge 1/11 at 101.00 AAA 5,122,161
Revenue Bonds, O'Hare International Airport,
Series 2001A, 5.375%, 1/01/32 (Alternative
Minimum Tax) - AMBAC Insured
1,750 Chicago, Illinois, Sales Tax Revenue Bonds, Series 1998, 7/08 at 102.00 AAA 1,830,990
5.250%, 1/01/28 - FGIC Insured
10,800 Chicago, Illinois, Sales Tax Revenue Bonds, Series 1999, 1/09 at 101.00 AAA 12,062,952
5.375%, 1/01/30 (Pre-refunded to 1/01/09) - FGIC Insured
Chicago, Illinois, Second Lien Wastewater Transmission
Revenue Bonds, Series 2001A:
2,220 5.500%, 1/01/16 - MBIA Insured No Opt. Call AAA 2,579,529
8,610 5.500%, 1/01/26 (Pre-refunded to 1/01/11) - AMBAC Insured 1/11 at 100.00 AAA 9,806,446
10,000 Chicago, Illinois, Senior Lien Water Revenue Bonds, 11/11 at 100.00 AAA 11,208,900
Series 2001, 5.000%, 11/01/26 (Pre-refunded to
11/01/11) - AMBAC Insured
1,100 Illinois Health Facilities Authority, Revenue Bonds, Condell 5/10 at 101.00 Baa2 1,156,969
Medical Center, Series 2000, 6.500%, 5/15/30
15,000 Illinois Health Facilities Authority, Revenue Bonds, Loyola 7/11 at 100.00 Baa1 15,444,600
University Health System, Series 2001A, 6.125%, 7/01/31
9,000 Illinois Health Facilities Authority, Revenue Bonds, Covenant 12/11 at 101.00 BBB+ 9,075,060
Retirement Communities Inc., Series 2001, 5.875%, 12/01/31
2,000 Metropolitan Pier and Exposition Authority, Illinois, Revenue No Opt. Call AAA 2,284,420
Refunding Bonds, McCormick Place Expansion Project,
Series 1998A, 5.500%, 6/15/29 - FGIC Insured
59
Nuveen Dividend Advantage Municipal Fund 3 (NZF) (continued)
Portfolio of INVESTMENTS October 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS (continued)
$ 16,900 Metropolitan Pier and Exposition Authority, Illinois, Revenue 12/09 at 101.00 AAA $ 17,771,533
Bonds, McCormick Place Expansion Project, Series 1999A,
5.250%, 12/15/28 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 4.7% (3.2% OF TOTAL INVESTMENTS)
Clark-Pleasant Community School Building Corporation,
Indiana, First Mortgage Bonds, Series 2001:
1,255 5.000%, 7/15/21 - AMBAC Insured 1/12 at 100.00 AAA 1,322,017
1,000 5.000%, 1/15/26 - AMBAC Insured 1/12 at 100.00 AAA 1,029,500
Evansville Vanderburgh Public Library Lease Corporation,
Indiana, First Mortgage Bonds, Series 2001:
2,000 5.750%, 7/15/18 - MBIA Insured 7/12 at 100.00 AAA 2,237,160
2,750 5.125%, 1/15/24 - MBIA Insured 1/12 at 100.00 AAA 2,871,880
3,455 Gary, Indiana, GNMA/FHA Mortgage Revenue Bonds, 11/11 at 102.00 AAA 3,545,210
Windsor Square Project, Series 2001A, 5.375%, 10/20/41
(Alternative Minimum Tax)
1,250 Hamilton Southeastern Cumberland Campus School Building 1/12 at 100.00 AAA 1,313,838
Corporation, Indiana, First Mortgage Bonds, Series 2001,
5.125%, 1/15/23 - AMBAC Insured
9,500 Indiana Educational Facilities Authority, Revenue Bonds, 2/11 at 100.00 AAA 10,363,455
Butler University, Series 2001, 5.500%, 2/01/26 -
MBIA Insured
2,650 Indianapolis Airport Authority, Indiana, Specialty Facility 11/05 at 102.00 N/R 291,509
Revenue Bonds, United Airlines Inc., Indianapolis Maintenance
Center Project, Series 1995A, 6.500%, 11/15/31
(Alternative Minimum Tax)#
3,500 University of Southern Indiana, Student Fee Bonds, 10/11 at 100.00 Aaa 3,689,140
Series 2001H, 5.000%, 10/01/21 - AMBAC Insured
Wayne County Jail Holding Corporation, Indiana, First
Mortgage Bonds, Series 2001:
1,150 5.625%, 7/15/18 - AMBAC Insured 1/13 at 101.00 AAA 1,322,523
1,090 5.500%, 7/15/22 - AMBAC Insured 1/13 at 101.00 AAA 1,219,405
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 4.7% (3.2% OF TOTAL INVESTMENTS)
2,000 Iowa Finance Authority, Healthcare Revenue Bonds, 5/11 at 100.00 AAA 2,067,000
Great River Medical Center, Series 2001, 5.250%, 5/15/31 -
FSA Insured
Iowa Tobacco Settlement Authority, Tobacco Settlement
Asset-Backed Revenue Bonds, Series 2001B:
28,000 5.300%, 6/01/25 6/11 at 101.00 BBB 23,723,000
3,950 5.600%, 6/01/35 6/11 at 101.00 BBB 3,283,833
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 3.1% (2.1% OF TOTAL INVESTMENTS)
18,500 Louisville and Jefferson County Metropolitan Sewer 11/11 at 101.00 AAA 19,415,380
District, Kentucky, Sewer and Drainage System Revenue
Bonds, Series 2001A, 5.125%, 5/15/27 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 3.8% (2.6% OF TOTAL INVESTMENTS)
19,890 Tobacco Settlement Financing Corporation, Louisiana, 5/11 at 101.00 BBB 17,299,526
Tobacco Settlement Asset-Backed Bonds, Series 2001B,
5.875%, 5/15/39
6,000 West Feliciana Parish, Louisiana, Remarketed Pollution 11/04 at 101.00 BB+ 6,162,120
Control Revenue Bonds, Gulf States Utilities Company,
Series 1985A, 7.500%, 5/01/15
------------------------------------------------------------------------------------------------------------------------------------
MAINE - 1.2% (0.8% OF TOTAL INVESTMENTS)
Maine State Housing Authority, Mortgage Purchase Bonds,
Series 2001B:
4,610 5.400%, 11/15/21 (Alternative Minimum Tax) 11/10 at 100.00 AA+ 4,833,539
2,285 5.500%, 11/15/32 (Alternative Minimum Tax) 11/10 at 100.00 AA+ 2,355,309
------------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 2.1% (1.4% OF TOTAL INVESTMENTS)
Maryland Community Development Administration, Multifamily
Housing Insured Mortgage Loans, Series 2001B:
715 5.250%, 5/15/21 (Alternative Minimum Tax) 5/11 at 100.00 Aa2 748,183
1,570 5.250%, 7/01/21 (Alternative Minimum Tax) 7/11 at 100.00 Aa2 1,644,026
10,600 Maryland Energy Financing Administration, Revenue Bonds, 9/05 at 102.00 N/R 10,856,414
AES Warrior Run Project, Series 1995, 7.400%, 9/01/19
(Alternative Minimum Tax)
60
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 0.9% (0.6% OF TOTAL INVESTMENTS)
$ 5,000 Massachusetts Port Authority, Special Facilities Revenue 1/11 at 101.00 AAA $ 5,223,450
Bonds, Delta Air Lines Inc., Series 2001A, 5.500%, 1/01/18
(Alternative Minimum Tax) - AMBAC Insured
405 Massachusetts Housing Finance Agency, Single Family 6/09 at 100.00 AAA 407,118
Housing Revenue Bonds, Series 71, 5.650%, 6/01/31
(Alternative Minimum Tax) - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 8.6% (5.8% OF TOTAL INVESTMENTS)
15,000 Detroit City School District, Wayne County, Michigan, No Opt. Call AAA 18,281,550
Unlimited Tax School Building and Site Improvement Bonds,
Series 2001A, 6.000%, 5/01/29 - FSA Insured
11,000 Kent Hospital Finance Authority, Michigan, Revenue Bonds, 7/11 at 101.00 AA 11,530,310
Spectrum Health, Series 2001A, 5.500%, 1/15/31
3,485 Michigan State Hospital Finance Authority, Hospital Revenue No Opt. Call AAA 3,916,548
Refunding Bonds, Sisters of Mercy Health Corporation,
Series 1993P, 5.375%, 8/15/14 - MBIA Insured
Michigan State Hospital Finance Authority, Hospital Revenue
Refunding Bonds, Sparrow Obligated Group, Series 2001:
1,400 5.500%, 11/15/21 11/11 at 101.00 A1 1,485,344
2,500 5.625%, 11/15/31 11/11 at 101.00 A1 2,601,550
12,640 Royal Oak Hospital Finance Authority, Michigan, Hospital 11/11 at 100.00 AAA 13,113,874
Revenue Bonds, William Beaumont Hospital, Series 2001M,
5.250%, 11/15/31 - MBIA Insured
2,395 Ypsilanti Community Utilities Authority, Washtenaw County, 5/11 at 100.00 AAA 2,464,790
Michigan, General Obligation Bonds, Sanitary Sewerage
System 3, Series 2001, 5.100%, 5/01/31 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 0.4% (0.3% OF TOTAL INVESTMENTS)
2,370 Dakota County Community Development Agency, Minnesota, 10/11 at 105.00 Aaa 2,457,927
GNMA Collateralized Multifamily Housing Revenue Bonds,
Rose Apartments Project, Series 2001, 6.350%, 10/20/37
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 1.4% (1.0% OF TOTAL INVESTMENTS)
2,155 Mississippi Business Finance Corporation, GNMA Collateralized 5/09 at 103.00 AAA 2,256,759
Retirement Facility Mortgage Revenue Refunding Bonds,
Aldersgate Retirement Community Inc. Project, Series 1999A,
5.450%, 5/20/34
6,420 Mississippi, Highway Revenue Bonds, Series 1999, No Opt. Call AAA 6,551,032
5.250%, 6/01/05
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 2.6% (1.6% OF TOTAL INVESTMENTS)
2,000 Fenton, Missouri, Tax Increment Refunding and Improvement 10/12 at 100.00 N/R 2,059,240
Revenue Bonds, Gravois Bluffs Redevelopment Project,
Series 2002, 6.125%, 10/01/21
Missouri Development Finance Board, Cultural Facilities
Revenue Bonds, Nelson Gallery Foundation, Series 2001A:
3,335 5.250%, 12/01/19 - MBIA Insured 12/11 at 100.00 AAA 3,696,047
3,510 5.250%, 12/01/20 - MBIA Insured 12/11 at 100.00 AAA 3,864,335
3,695 5.250%, 12/01/21 - MBIA Insured 12/11 at 100.00 AAA 4,046,247
2,040 5.250%, 12/01/22 - MBIA Insured 12/11 at 100.00 AAA 2,212,094
------------------------------------------------------------------------------------------------------------------------------------
MONTANA - 0.9% (0.6% OF TOTAL INVESTMENTS)
5,000 Montana Board of Investments, Exempt Facility Revenue 7/10 at 101.00 Ba3 5,295,100
Bonds, Stillwater Mining Company Project, Series 2000,
8.000%, 7/01/20 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 1.2% (0.8% OF TOTAL INVESTMENTS)
Nebraska Investment Finance Authority, Single Family Housing
Revenue Bonds, Series 2001D:
2,980 5.250%, 9/01/21 (Alternative Minimum Tax) 9/11 at 100.00 AAA 3,111,031
4,020 5.375%, 9/01/32 (Alternative Minimum Tax) 9/11 at 100.00 AAA 4,120,178
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 7.6% (5.2% OF TOTAL INVESTMENTS)
35,000 Clark County, Nevada, Limited Tax General Obligation Bank 7/10 at 100.00 AAA 38,137,050
Bonds, Series 2000, 5.500%, 7/01/30 - MBIA Insured
4,000 Director of Nevada State Department of Business and 1/10 at 102.00 N/R 4,049,680
Industry, Revenue Bonds, Las Vegas Monorail Project,
Second Tier, Series 2000, 7.375%, 1/01/40
570 Nevada Housing Division, Single Family Mortgage Senior 4/08 at 101.50 Aaa 595,684
Bonds, Series 1998A-1, 5.300%, 4/01/18 (Alternative
Minimum Tax)
61
Nuveen Dividend Advantage Municipal Fund 3 (NZF) (continued)
Portfolio of INVESTMENTS October 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEVADA (continued)
$ 4,290 University of Nevada, Revenue Bonds, Community College 1/12 at 100.00 AAA $ 4,547,400
System, Series 2001A, 5.250%, 7/01/26 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 0.4% (0.2% OF TOTAL INVESTMENTS)
2,000 New Hampshire Health and Education Authority, Hospital 10/11 at 101.00 Aaa 2,170,960
Revenue Bonds, Concord Hospital, Series 2001,
5.500%, 10/01/21 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 2.4% (1.7% OF TOTAL INVESTMENTS)
10,000 New Jersey Economic Development Authority, Water 11/12 at 101.00 Aaa 10,405,300
Facilities Revenue Bonds, American Water Company,
Series 2002A, 5.250%, 11/01/32 (Alternative Minimum
Tax) - AMBAC Insured
4,125 New Jersey Transit Corporation, Certificates of Participation, No Opt. Call AAA 4,732,076
Federal Transit Administration Grants, Series 2002A,
5.500%, 9/15/13 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 5.3% (3.6% OF TOTAL INVESTMENTS)
1,780 East Rochester Housing Authority, New York, GNMA Secured 10/11 at 101.00 AAA 1,853,158
Revenue Bonds, Gates Senior Housing Inc. Project,
Series 2001, 5.300%, 4/20/31
5,350 Metropolitan Transportation Authority, New York, Dedicated 11/11 at 100.00 AAA 5,488,726
Tax Fund Bonds, Series 2001A, 5.000%, 11/15/31 -
FGIC Insured
4,155 Monroe County Airport Authority, New York, Revenue No Opt. Call AAA 4,730,343
Refunding Bonds, Greater Rochester International Airport,
Series 1999, 5.750%, 1/01/13 (Alternative Minimum Tax) -
MBIA Insured
2,500 New York City, New York, General Obligation Bonds, Fiscal 8/12 at 100.00 AAA 2,861,250
Series 2002G, 5.625%, 8/01/20 - MBIA Insured
New York City Municipal Water Finance Authority, New York, Water
and Sewerage System Revenue Bonds, Fiscal Series 2001A:
8,610 5.500%, 6/15/33 - MBIA Insured 6/10 at 101.00 AAA 9,325,319
5,710 5.500%, 6/15/33 - FGIC Insured 6/10 at 101.00 AAA 6,184,387
2,000 New York Tobacco Settlement Financing Corporation, 6/11 at 100.00 AA- 2,219,220
Tobacco Settlement Asset-Backed and State Contingency
Contract-Backed Bonds, Series 2003B-1C, 5.500%, 6/01/16
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 0.3% (0.2% OF TOTAL INVESTMENTS)
1,800 North Carolina Municipal Power Agency 1, Catawba Electric No Opt. Call BBB+ 2,007,108
Revenue Bonds, Series 2003A, 5.500%, 1/01/13
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 2.8% (1.8% OF TOTAL INVESTMENTS)
5,265 Ohio Housing Finance Agency, GNMA Mortgage-Backed 3/08 at 101.50 AAA 5,488,131
Securities Program Residential Mortgage Revenue Bonds,
Series 1998A-1, 5.300%, 9/01/19 (Alternative
Minimum Tax) - FSA Insured
7,800 Ohio Water Development Authority, Solid Waste Disposal 9/09 at 102.00 N/R 8,002,020
Revenue Bonds, Bay Shore Power, Series 1998B,
6.625%, 9/01/20 (Alternative Minimum Tax)
Portage County, Ohio, General Obligation Bonds, Series 2001:
1,870 5.000%, 12/01/21 - FGIC Insured 12/11 at 100.00 AAA 1,980,237
1,775 5.000%, 12/01/23 - FGIC Insured 12/11 at 100.00 AAA 1,860,661
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 0.5% (0.3% OF TOTAL INVESTMENTS)
2,500 Oklahoma Development Finance Authority, Revenue 8/09 at 101.00 AAA 2,822,750
Refunding Bonds, Hillcrest Healthcare System,
Series 1999A, 5.625%, 8/15/29 (Pre-refunded to 8/15/09)
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 2.5% (1.7% OF TOTAL INVESTMENTS)
4,700 Oregon Health, Housing, Educational and Cultural Facilities 11/11 at 101.00 AAA 5,033,230
Authority, Revenue Bonds, PeaceHealth Project, Series 2001,
5.250%, 11/15/21 - AMBAC Insured
10,000 Oregon Housing and Community Services Department, 7/10 at 100.00 Aa2 10,381,700
Multifamily Housing Revenue Bonds, Series 2000A,
6.050%, 7/01/42 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 1.9% (1.3% OF TOTAL INVESTMENTS)
Allegheny County Hospital Development Authority, Pennsylvania,
Revenue Bonds, West Penn Allegheny Health System, Series 2000B:
2,000 9.250%, 11/15/22 11/10 at 102.00 B1 2,307,080
2,000 9.250%, 11/15/30 11/10 at 102.00 B1 2,307,080
62
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA (continued)
$ 3,500 Pennsylvania Economic Development Financing Authority, 1/05 at 101.00 BBB- $ 3,543,575
Senior Lien Resource Recovery Revenue Bonds, Northampton
Generating Project, Series 1994A, 6.600%, 1/01/19
(Alternative Minimum Tax)
3,205 Philadelphia School District, Pennsylvania, General 8/12 at 100.00 AAA 3,607,099
Obligation Bonds, Series 2002B, 5.625%, 8/01/16 -
FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 1.7% (1.1% OF TOTAL INVESTMENTS)
2,185 Greenville County, South Carolina, Special Source Revenue 4/11 at 101.00 AAA 2,447,397
Bonds, Road Improvement Project, Series 2001,
5.500%, 4/01/21 - AMBAC Insured
6,850 South Carolina Transportation Infrastructure Bank, Revenue 10/11 at 100.00 Aaa 7,892,296
Bonds, Series 2001A, 5.500%, 10/01/22 (Pre-refunded
to 10/01/11) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 1.5% (1.0% OF TOTAL INVESTMENTS)
5,210 Memphis-Shelby County Airport Authority, Tennessee, Airport 3/11 at 100.00 AAA 5,750,798
Revenue Bonds, Series 2001A, 5.500%, 3/01/14 (Alternative
Minimum Tax) - FSA Insured
1,820 Tennessee Housing Development Agency, Homeownership 1/09 at 101.00 AA 1,884,028
Program Bonds, Series 1998-2, 5.350%, 7/01/23 (Alternative
Minimum Tax)
1,870 Tennessee Housing Development Agency, Homeownership 7/11 at 100.00 AA 1,944,276
Program Bonds, Series 2001-3A, 5.200%, 7/01/22
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 18.1% (12.3% OF TOTAL INVESTMENTS)
1,125 Brushy Creek Municipal Utility District, Williamson County, 6/09 at 100.00 Aaa 1,179,371
Texas, Combination Unlimited Tax and Revenue Refunding
Bonds, Series 2001, 5.125%, 6/01/26 - FSA Insured
3,850 Dallas-Ft. Worth International Airport, Texas, Joint Revenue 11/11 at 100.00 AAA 4,020,825
Refunding and Improvement Bonds, Series 2001A,
5.500%, 11/01/35 (Alternative Minimum Tax) - FGIC Insured
5,000 Decatur Hospital Authority, Texas, Revenue Bonds, Wise 9/14 at 100.00 N/R 5,073,850
Regional Health System, Series 2004A, 7.000%, 9/01/25
Collins and Denton Counties, Frisco, Texas, General Obligation
Bonds, Series 2001:
1,910 5.000%, 2/15/20 - FGIC Insured 2/11 at 100.00 AAA 2,032,068
2,005 5.000%, 2/15/21 - FGIC Insured 2/11 at 100.00 AAA 2,103,526
4,040 Harris County, Texas, Tax and Revenue Certificates of 8/11 at 100.00 AA+ 4,137,364
Obligation, Series 2001, 5.000%, 8/15/27
7,000 Houston, Texas, Airport System Subordinate Lien Revenue 7/08 at 101.00 AAA 7,573,650
Bonds, Series 1998B, 5.250%, 7/01/14 (Alternative
Minimum Tax) - FGIC Insured
Houston, Texas, Airport System Subordinate Lien Revenue
Refunding Bonds, Series 2001A:
2,525 5.500%, 7/01/13 (Alternative Minimum Tax) - FGIC Insured 1/12 at 100.00 AAA 2,782,979
2,905 5.500%, 7/01/14 (Alternative Minimum Tax) - FGIC Insured 1/12 at 100.00 AAA 3,199,887
6,000 Houston, Texas, Junior Lien Water and Sewerage System No Opt. Call AAA 6,832,620
Revenue Refunding Bonds, Series 2001B,
5.500%, 12/01/29 - MBIA Insured
Jefferson County Health Facilities Development Corporation,
Texas, FHA-Insured Mortgage Revenue Bonds, Baptist Hospital of
Southeast Texas, Series 2001:
8,500 5.400%, 8/15/31 - AMBAC Insured 8/11 at 100.00 AAA 8,906,470
8,500 5.500%, 8/15/41 -AMBAC Insured 8/11 at 100.00 AAA 8,906,045
10,700 Laredo Independent School District, Webb County, Texas, 8/11 at 100.00 AAA 11,023,675
General Obligation Refunding Bonds, Series 2001,
5.000%, 8/01/25
2,500 Matagorda County Navigation District 1, Texas, Collateralized No Opt. Call AAA 2,640,425
Revenue Refunding Bonds, Houston Light and Power
Company, Series 1997, 5.125%, 11/01/28 (Alternative
Minimum Tax) - AMBAC Insured
1,540 Medina Valley Independent School District, Medina County, 2/11 at 100.00 Aaa 1,612,472
Texas, General Obligation Bonds, Series 2001,
5.250%, 2/15/26
5,430 Mineral Wells Independent School District, Pale Pinto 2/08 at 100.00 Aaa 5,489,839
and Parker Counties, Texas, Unlimited School Tax Building
and Refunding Bonds, Series 1998, 4.750%, 2/15/22
3,000 North Central Texas Health Facilities Development 2/08 at 102.00 AAA 3,129,420
Corporation, Revenue Bonds, Texas Health Resources
System, Series 1997B, 5.375%, 2/15/26 - MBIA Insured
3,045 Port of Houston Authority, Harris County, Texas, General 10/11 at 100.00 AAA 3,361,467
Obligation Port Improvement Bonds, Series 2001B,
5.500%, 10/01/17 (Alternative Minimum Tax) - FGIC Insured
63
Nuveen Dividend Advantage Municipal Fund 3 (NZF) (continued)
Portfolio of INVESTMENTS October 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS (continued)
$ 11,985 Texas Department of Housing and Community Affairs, 7/11 at 100.00 AAA $ 12,276,236
Residential Mortgage Revenue Bonds, Series 2001A,
5.350%, 7/01/33 (Alternative Minimum Tax)
15,700 Texas Water Development Board, Senior Lien State 1/07 at 100.00 AAA 16,554,551
Revolving Fund Revenue Bonds, Series 1996B,
5.125%, 7/15/18
------------------------------------------------------------------------------------------------------------------------------------
UTAH - 1.1% (0.7% OF TOTAL INVESTMENTS)
Utah Housing Corporation, Single Family Mortgage Bonds,
Series 2001E:
2,235 5.200%, 1/01/18 (Alternative Minimum Tax) 7/11 at 100.00 AA- 2,331,887
695 5.500%, 1/01/23 (Alternative Minimum Tax) 7/11 at 100.00 Aa2 720,235
Utah Housing Corporation, Single Family Mortgage Bonds,
Series 2001F-1:
2,765 4.950%, 7/01/18 (Alternative Minimum Tax) 7/11 at 100.00 Aa2 2,841,480
690 5.300%, 7/01/23 (Alternative Minimum Tax) 7/11 at 100.00 AA- 705,145
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 1.4% (1.0% OF TOTAL INVESTMENTS)
7,000 Pocahontas Parkway Association, Virginia, Senior Lien 8/08 at 77.58 BB 3,831,940
Revenue Bonds, Route 895 Connector Toll Road,
Series 1998B, 0.000%, 8/15/13
4,945 Virginia Housing Development Authority, Commonwealth 7/11 at 100.00 AAA 5,142,553
Mortgage Bonds, Series 2001J-1, 5.200%, 7/01/19 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 16.1% (10.9% OF TOTAL INVESTMENTS)
Bellingham Housing Authority, Washington, Housing Revenue
Bonds, Varsity Village Project, Series 2001A:
1,000 5.500%, 12/01/27 - MBIA Insured 12/11 at 100.00 Aaa 1,092,400
2,000 5.600%, 12/01/36 - MBIA Insured 12/11 at 100.00 Aaa 2,210,160
2,090 Public Utility District 1, Benton County, Washington, Electric 11/11 at 100.00 AAA 2,380,510
Revenue Refunding Bonds, Series 2001A, 5.625%, 11/01/15 -
FSA Insured
1,500 Grays Harbor County Public Utility District 1, Washington, 1/11 at 100.00 AAA 1,576,905
Electric System Revenue Bonds, Series 2001,
5.125%, 1/01/22 - AMBAC Insured
2,475 Klickitat County Public Utility District 1, Washington, 12/11 at 100.00 AAA 2,542,493
Electric Revenue Bonds, Series 2001B, 5.000%, 12/01/26 -
AMBAC Insured
12,955 Port of Seattle, Washington, Passenger Facility Charge 12/08 at 101.00 AAA 13,791,634
Revenue Bonds, Series 1998B, 5.300%, 12/01/16
(Alternative Minimum Tax) - AMBAC Insured
Port of Seattle, Washington, Revenue Bonds, Series 2001B:
2,535 5.625%, 4/01/18 (Alternative Minimum Tax) - FGIC Insured 10/11 at 100.00 AAA 2,799,755
16,000 5.100%, 4/01/24 (Alternative Minimum Tax) - FGIC Insured 10/08 at 100.00 AAA 16,245,120
5,680 Seattle, Washington, Municipal Light and Power Revenue 3/11 at 100.00 AAA 6,317,126
Refunding and Improvement Bonds, Series 2001,
5.500%, 3/01/18 - FSA Insured
4,530 Tacoma, Washington, Solid Waste Utility Revenue Refunding 12/11 at 100.00 AAA 4,915,050
Bonds, Series 2001, 5.250%, 12/01/21 - AMBAC Insured
2,250 Washington, Certificates of Participation, Washington 7/09 at 100.00 AAA 2,475,765
Convention and Trade Center, Series 1999, 5.250%, 7/01/14 -
MBIA Insured
Washington State Healthcare Facilities Authority, Revenue Bonds,
Group Health Cooperative of Puget Sound, Series 2001:
3,005 5.375%, 12/01/17 - AMBAC Insured 12/11 at 101.00 AAA 3,284,315
2,915 5.375%, 12/01/18 - AMBAC Insured 12/11 at 101.00 AAA 3,174,639
3,720 Washington State Healthcare Facilities Authority, Revenue 10/11 at 100.00 Aaa 4,107,364
Bonds, Children's Hospital and Regional Medical Center,
Series 2001, 5.375%, 10/01/18 - AMBAC Insured
Washington State Healthcare Facilities Authority, Revenue
Bonds, Good Samaritan Hospital, Series 2001:
5,480 5.500%, 10/01/21 - RAAI Insured 10/11 at 101.00 AA 5,866,559
25,435 5.625%, 10/01/31 - RAAI Insured 10/11 at 101.00 AA 27,079,118
64
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 5.1% (3.4% OF TOTAL INVESTMENTS)
Appleton, Wisconsin, Waterworks Revenue Refunding
Bonds, Series 2001:
$ 3,705 5.375%, 1/01/20 - FGIC Insured 1/12 at 100.00 Aaa $ 4,035,375
1,850 5.000%, 1/01/21 - FGIC Insured 1/12 at 100.00 Aaa 1,956,579
1,735 Evansville Community School District, Dane, Green and Rock 4/11 at 100.00 AAA 1,940,389
Counties, Wisconsin, General Obligation Refunding Bonds,
Series 2001, 5.500%, 4/01/20 - FGIC Insured
12,250 La Crosse, Wisconsin, Pollution Control Revenue 12/08 at 102.00 AAA 13,395,007
Refunding Bonds, Dairyland Power Cooperative,
Series 1997B, 5.550%, 2/01/15 - AMBAC Insured
3,180 Wisconsin, Clean Water Revenue Bonds, Series 1999-1, 6/09 at 100.00 AA+ 3,516,221
5.500%, 6/01/17
4,000 Wisconsin Health and Educational Facilities Authority, 10/11 at 101.00 A+ 4,103,520
Revenue Bonds, Froedtert and Community Health Obligated
Group, Series 2001, 5.375%, 10/01/30
2,500 Wisconsin Health and Educational Facilities Authority, 2/12 at 100.00 BBB+ 2,595,922
Revenue Bonds, Marshfield Clinic, Series 2001B,
6.000%, 2/15/25
------------------------------------------------------------------------------------------------------------------------------------
$ 876,545 Total Long-Term Investments (cost $877,468,248) - 148.2% 917,824,363
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.2% 13,293,827
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (50.4)% (312,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 619,118,190
====================================================================================================================
(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.
** Ratings (not covered by the report of independent
registered public accounting firm): Using the higher of
Standard & Poor's or Moody's rating.
N/R Investment is not rated.
# On December 9, 2002, UAL Corporation, the holding
company of United Air Lines, Inc., filed for federal
bankruptcy protection. The Adviser determined that it
was likely United would not remain current on their
interest payment obligations with respect to these
bonds and thus has stopped accruing interest.
See accompanying notes to financial statements.
65
Statement of
ASSETS AND LIABILITIES October 31, 2004
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at market value (cost
$1,303,375,376, $951,726,119,
$991,461,689, $847,482,975,
$632,726,167 and $877,468,248,
respectively) $1,404,887,231 $1,029,461,604 $1,068,021,733 $916,365,782 $671,348,078 $917,824,363
Cash 3,660,074 -- -- 1,005,900 370,960 --
Receivables:
Interest 22,415,885 19,054,156 17,614,333 13,925,385 11,543,490 15,541,438
Investments sold 3,815,906 105,738 675,820 2,066,440 126,780 162,252
Other assets 67,752 59,034 62,801 57,062 36,823 21,397
------------------------------------------------------------------------------------------------------------------------------------
Total assets 1,434,846,848 1,048,680,532 1,086,374,687 933,420,569 683,426,131 933,549,450
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft -- 657,569 732,910 -- -- 1,951,433
Payable for investments purchased 3,702,086 -- -- 24,582,900 -- --
Forward swaps, at value -- -- -- -- 3,532,408 --
Accrued expenses:
Management fees 737,096 544,982 564,005 283,074 184,954 250,100
Other 325,170 214,187 241,482 179,837 110,067 174,482
Preferred share dividends payable 89,189 73,412 76,665 46,562 46,999 55,245
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 4,853,541 1,490,150 1,615,062 25,092,373 3,874,428 2,431,260
------------------------------------------------------------------------------------------------------------------------------------
Preferred shares, at
liquidation value 479,000,000 358,000,000 380,000,000 295,000,000 222,000,000 312,000,000
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable
to Common shares $ 950,993,307 $ 689,190,382 $ 704,759,625 $613,328,196 $457,551,703 $619,118,190
====================================================================================================================================
Common shares outstanding 59,914,073 43,025,594 45,540,872 39,267,491 29,282,000 40,310,119
====================================================================================================================================
Net asset value per Common share
outstanding (net assets
applicable to Common
shares, divided by
Common shares outstanding) $ 15.87 $ 16.02 $ 15.48 $ 15.62 $ 15.63 $ 15.36
====================================================================================================================================
NET ASSETS APPLICABLE TO
COMMON SHARES CONSIST OF:
------------------------------------------------------------------------------------------------------------------------------------
Common shares, $.01
par value per share $ 599,141 $ 430,256 $ 455,409 $ 392,675 $ 292,820 $ 403,101
Paid-in surplus 836,423,631 601,030,545 635,502,550 558,053,977 416,101,525 572,812,048
Undistributed net
investment income 11,485,116 9,357,409 6,496,073 6,910,277 6,314,546 6,237,051
Accumulated net realized
gain (loss)
from investments 973,564 636,687 (14,254,451) (20,911,540) (246,691) (690,125)
Net unrealized appreciation
of investments and forward
swap transactions 101,511,855 77,735,485 76,560,044 68,882,807 35,089,503 40,356,115
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to
Common shares $ 950,993,307 $ 689,190,382 $ 704,759,625 $613,328,196 $457,551,703 $619,118,190
====================================================================================================================================
Authorized shares:
Common 200,000,000 200,000,000 200,000,000 Unlimited Unlimited Unlimited
Preferred 1,000,000 1,000,000 1,000,000 Unlimited Unlimited Unlimited
====================================================================================================================================
See accompanying notes to financial statements.
66
Statement of
OPERATIONS Year Ended October 31, 2004
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $73,552,668 $55,588,787 $55,311,914 $47,201,652 $36,014,168 $47,162,641
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 8,700,777 6,441,514 6,670,810 5,597,581 4,214,666 5,714,225
Preferred shares - auction fees 1,200,780 897,450 952,603 739,521 556,521 782,138
Preferred shares - dividend
disbursing agent fees 50,138 50,138 40,110 30,082 30,082 30,082
Shareholders' servicing
agent fees
and expenses 204,827 121,894 134,571 16,496 6,713 7,996
Custodian's fees and expenses 288,564 202,911 202,048 176,234 127,486 181,520
Directors'/Trustees'
fees and expenses 31,402 24,017 25,228 18,903 15,817 21,259
Professional fees 97,222 59,742 109,946 60,431 24,389 45,153
Shareholders' reports -
printing and
mailing expenses 146,944 95,818 106,904 83,335 57,694 72,996
Stock exchange listing fees 24,100 17,323 18,348 15,946 4,242 3,480
Investor relations expense 124,174 84,185 93,509 79,770 59,414 81,897
Other expenses 78,480 56,192 57,694 31,315 31,197 31,008
------------------------------------------------------------------------------------------------------------------------------------
Total expenses before
custodian fee
credit, and expense
reimbursement and
legal fee refund 10,947,408 8,051,184 8,411,771 6,849,614 5,128,221 6,971,754
Custodian fee credit (30,955) (20,251) (20,616) (23,733) (22,254) (25,055)
Expense reimbursement -- -- -- (2,580,489) (2,015,102) (2,751,194)
Legal fee refund -- -- (121,443) -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net expenses 10,916,453 8,030,933 8,269,712 4,245,392 3,090,865 4,195,505
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 62,636,215 47,557,854 47,042,202 42,956,260 32,923,303 42,967,136
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN (LOSS)
FROM INVESTMENTS
Net realized gain (loss)
from investments 6,618,657 687,024 (1,201,262) 1,200,358 (470,534) 530,482
Change in net unrealized
appreciation
(depreciation)
of investments 18,902,259 17,410,047 17,743,454 16,389,360 18,712,940 23,226,246
Change in net unrealized
appreciation (depreciation)
of forward
swap transactions -- -- -- -- (3,532,408) --
------------------------------------------------------------------------------------------------------------------------------------
Net gain from investments 25,520,916 18,097,071 16,542,192 17,589,718 14,709,998 23,756,728
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO
PREFERRED SHAREHOLDERS
From net investment income (4,452,180) (3,307,419) (3,607,167) (2,680,807) (2,061,411) (2,880,639)
From accumulated net
realized gains
from investments -- (42,016) -- -- (52,111) --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets
applicable to
Common shares from
distributions to
Preferred shareholders (4,452,180) (3,349,435) (3,607,167) (2,680,807) (2,113,522) (2,880,639)
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net
assets applicable
to Common shares
from operations $83,704,951 $62,305,490 $59,977,227 $57,865,171 $45,519,779 $63,843,225
====================================================================================================================================
See accompanying notes to financial statements.
67
Statement of
CHANGES IN NET ASSETS
PERFORMANCE PLUS (NPP) MUNICIPAL ADVANTAGE (NMA) MARKET OPPORTUNITY (NMO)
----------------------------- ------------------------------ -----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
10/31/04 10/31/03 10/31/04 10/31/03 10/31/04 10/31/03
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 62,636,215 $ 64,017,626 $ 47,557,854 $ 48,689,939 $ 47,042,202 $ 47,123,892
Net realized gain (loss)
from investments 6,618,657 (5,880,620) 687,024 634,285 (1,201,262) (11,663,137)
Change in net unrealized
appreciation
(depreciation)
of investments 18,902,259 8,871,335 17,410,047 9,982,884 17,743,454 34,046,066
Change in net unrealized
appreciation
(depreciation) of forward
swap transactions -- -- -- -- -- --
Distributions to Preferred
shareholders:
From net investment income (4,452,180) (4,280,974) (3,307,419) (3,175,596) (3,607,167) (3,474,652)
From accumulated net
realized gains
from investments -- (139,879) (42,016) (242,543) -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase in
net assets applicable
to Common shares
from operations 83,704,951 62,587,488 62,305,490 55,888,969 59,977,227 66,032,169
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO
COMMON SHAREHOLDERS
From net investment income (58,236,491) (56,921,521) (44,397,396) (44,027,554) (43,172,754) (42,990,586)
From accumulated net
realized gains
from investments -- (1,515,794) (599,790) (2,984,339) -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets
applicable to
Common shares from
distributions to
Common shareholders (58,236,491) (58,437,315) (44,997,186) (47,011,893) (43,172,754) (42,990,586)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common
shares issued
to shareholders due
to reinvestment
of distributions -- -- 734,804 -- -- --
Preferred shares offering costs -- (1,000) -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
applicable to
Common shares
from capital
share transactions -- (1,000) 734,804 -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase in
net assets applicable
to Common shares 25,468,460 4,149,173 18,043,108 8,877,076 16,804,473 23,041,583
Net assets applicable
to Common shares
at the beginning
of year 925,524,847 921,375,674 671,147,274 662,270,198 687,955,152 664,913,569
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable
to Common shares
at the end of year $950,993,307 $925,524,847 $689,190,382 $671,147,274 $704,759,625 $687,955,152
====================================================================================================================================
Undistributed net
investment income at
the end of year $ 11,485,116 $ 11,883,367 $ 9,357,409 $ 9,507,298 $ 6,496,073 $ 6,566,696
====================================================================================================================================
See accompanying notes to financial statements.
68
DIVIDEND ADVANTAGE (NAD) DIVIDEND ADVANTAGE 2 (NXZ) DIVIDEND ADVANTAGE 3 (NZF)
----------------------------- ------------------------------ -----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
10/31/04 10/31/03 10/31/04 10/31/03 10/31/04 10/31/03
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 42,956,260 $ 42,988,353 $ 32,923,303 $ 33,824,202 $ 42,967,136 $ 43,147,335
Net realized gain (loss)
from investments 1,200,358 (4,617,432) (470,534) 890,827 530,482 202,373
Change in net unrealized
appreciation
(depreciation)
of investments 16,389,360 12,311,762 18,712,940 4,294,735 23,226,246 3,920,609
Change in net
unrealized appreciation
(depreciation) of forward
swap transactions -- -- (3,532,408) -- -- --
Distributions to
Preferred shareholders:
From net investment income (2,680,807) (2,660,192) (2,061,411) (2,029,376) (2,880,639) (2,863,822)
From accumulated net
realized gains
from investments -- -- (52,111) (28,710) -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase in
net assets applicable
to Common shares
from operations 57,865,171 48,022,491 45,519,779 36,951,678 63,843,225 44,406,495
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO
COMMON SHAREHOLDERS
From net investment income (40,278,262) (38,956,575) (30,219,035) (29,486,976) (38,879,112) (37,528,721)
From accumulated net
realized gains
from investments -- -- (850,299) (272,342) -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets
applicable to
Common shares from
distributions to
Common shareholders (40,278,262) (38,956,575) (31,069,334) (29,759,318) (38,879,112) (37,528,721)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from
Common shares issued
to shareholders due
to reinvestment
of distributions 475,057 155,266 -- -- -- 476,145
Preferred shares offering costs -- -- -- 2,137 -- 1,199
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
applicable to
Common shares
from capital
share transactions 475,057 155,266 -- 2,137 -- 477,344
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net
assets applicable
to Common shares 18,061,966 9,221,182 14,450,445 7,194,497 24,964,113 7,355,118
Net assets applicable
to Common shares
at the beginning
of year 595,266,230 586,045,048 443,101,258 435,906,761 594,154,077 586,798,959
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable
to Common shares
at the end of year $613,328,196 $595,266,230 $457,551,703 $443,101,258 $619,118,190 $594,154,077
====================================================================================================================================
Undistributed net
investment income at
the end of year $ 6,910,277 $ 6,991,496 $ 6,314,546 $ 5,895,336 $ 6,237,051 $ 5,124,505
====================================================================================================================================
See accompanying notes to financial statements.
69
Notes to
FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The funds (the "Funds") covered in this report and their corresponding Common
share stock exchange symbols are Nuveen Performance Plus Municipal Fund, Inc.
(NPP), Nuveen Municipal Advantage Fund, Inc. (NMA), Nuveen Municipal Market
Opportunity Fund, Inc. (NMO), Nuveen Dividend Advantage Municipal Fund (NAD),
Nuveen Dividend Advantage Municipal Fund 2 (NXZ) and Nuveen Dividend Advantage
Municipal Fund 3 (NZF). Performance Plus (NPP), Municipal Advantage (NMA),
Market Opportunity (NMO) and Dividend Advantage (NAD) are traded on the New York
Stock Exchange while Dividend Advantage 2 (NXZ) and Dividend Advantage 3 (NZF)
are traded on the American Stock Exchange. The Funds are registered under the
Investment Company Act of 1940, as amended, as closed-end, diversified
management investment companies.
Each Fund seeks to provide current income exempt from regular federal income tax
by investing primarily in a diversified portfolio of municipal obligations
issued by state and local government authorities.
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.
Securities Valuation
The prices of municipal bonds in each Fund's investment portfolio are provided
by a pricing service approved by the Fund's Board of Directors/Trustees. When
price quotes are not readily available (which is usually the case for municipal
securities), the pricing service establishes fair market value based on yields
or prices of municipal bonds of comparable quality, type of issue, coupon,
maturity and rating, indications of value from securities dealers, evaluations
of anticipated cash flows or collateral and general market conditions. If it is
determined that market prices for a security are unavailable or inappropriate,
the Board of Directors/Trustees of the Funds, or its designee, may establish a
fair value for the security. Temporary investments in securities that have
variable rate and demand features qualifying them as short-term securities are
valued at amortized cost, which approximates market value.
Securities Transactions
Securities transactions are recorded on a trade date basis. Realized gains and
losses from such transactions are determined on the specific identification
method. Securities purchased or sold on a when-issued or delayed delivery basis
may have extended settlement periods. The securities so purchased are subject to
market fluctuation during this period. The Funds have instructed the custodian
to segregate assets with a current value at least equal to the amount of the
when-issued and delayed delivery purchase commitments. At October 31, 2004,
Performance Plus (NPP)and Dividend Advantage (NAD) had outstanding when-issued
purchase commitments of $3,702,086 and $24,582,900, respectively. There were no
such outstanding purchase commitments in any of the other Funds.
Investment Income
Interest income, which includes the amortization of premiums and accretion of
discounts for financial reporting purposes, is recorded on an accrual basis.
Investment income also includes paydown gains and losses, if any.
Professional Fees
Professional fees presented in the Statement of Operations consist of legal fees
incurred in the normal course of operations, audit fees, tax consulting fees
and, in some cases, workout expenditures. Workout expenditures are incurred in
an attempt to protect or enhance an investment, or to pursue other claims or
legal actions on behalf of the Fund's shareholders. Legal fee refund presented
on the Statement of Operations for Market Opportunity (NMO) reflects a refund of
workout expenditures paid in a prior reporting period.
Federal Income Taxes
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund
intends to distribute all net investment income and net capital gains to
shareholders and to otherwise comply with the requirements of Subchapter M of
the Internal Revenue Code applicable to regulated investment companies.
Therefore, no federal income tax provision is required. Furthermore, each Fund
intends to satisfy conditions which will enable interest from municipal
securities, which is exempt from regular federal income tax, to retain such
tax-exempt status when distributed to shareholders of the Funds. All monthly
tax-exempt income dividends paid during the fiscal year ended October 31, 2004,
have been designated Exempt Interest Dividends. Net realized capital gains and
ordinary income distributions made 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.
70
Distributions to Common shareholders of tax-exempt net investment income, net
realized capital gains and/or market discount, if any, are recorded on the
ex-dividend date. The amount and timing of distributions are determined in
accordance with federal income tax regulations, which may differ from U.S.
generally accepted accounting principles.
Preferred Shares
The Funds have issued and outstanding Preferred shares, $25,000 stated value per
share, as a means of effecting financial leverage. Each Fund's Preferred shares
are issued in more than one Series. The dividend rate on each Series is
determined every seven days, pursuant to a dutch auction process overseen by the
auction agent, and is payable weekly at the end of each rate period. The number
of Preferred shares outstanding, by Series and in total, for each Fund is as
follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
---------------------------------------------------------------------------------------------------------
Number of shares:
Series M 4,000 3,000 4,000 4,000 3,000 --
Series T 4,000 3,000 4,000 4,000 3,000 --
Series W 4,000 3,000 3,200 -- -- 4,160
Series TH 3,160 2,320 -- 3,800 -- 4,160
Series F 4,000 3,000 4,000 -- 2,880 4,160
---------------------------------------------------------------------------------------------------------
Total 19,160 14,320 15,200 11,800 8,880 12,480
=========================================================================================================
Forward Swap Transactions
The Funds 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 earnings. 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
amount of the payment obligation is based on the notional or nominal amount of
the forward swap contract. The Funds may close out a contract prior to the
effective date. When a forward swap is terminated, it does not involve the
delivery of securities of other underlying assets or principal, but rather is
settled in cash. Each Fund intends to, 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 minimize
such credit risk, all counterparties are required to segregate 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. Reciprocally, when any
of the Funds have an unrealized loss on a swap contract, the Funds have
instructed the custodian to segregate assets of the Funds as collateral with a
value approximately equal to the amount of the unrealized loss. The Funds help
reduce the credit risks associated with forward swap transactions by entering
into agreements only with counterparties the Adviser believes have the financial
resources to honor their obligations and by having the Adviser monitor the
financial stability of the swap counterparties.
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 Director/Trustees
are indemnified against certain liabilities arising out of the performance of
their duties to the Funds. In addition, in the normal course of business, the
Funds enter into contracts that provide general indemnifications to other
parties. The Funds' maximum exposure under these arrangements is unknown as this
would involve future claims that may be made against the Funds that have not yet
occurred. However, the Funds have not had prior claims or losses pursuant to
these contracts and expect the risk of loss to be remote.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles, requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of increases and
decreases in net assets applicable to Common shares from operations during the
reporting period. Actual results may differ from those estimates.
2. FUND SHARES
Transactions in Common and Preferred shares were as follows:
MUNICIPAL MARKET
PERFORMANCE PLUS (NPP) ADVANTAGE (NMA) OPPORTUNITY (NMO)
---------------------- ------------------- -------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
10/31/04 10/31/03 10/31/04 10/31/03 10/31/04 10/31/03
=========================================================================================================
Common shares issued to
shareholders due to
reinvestment of distributions -- -- 45,261 -- -- --
=========================================================================================================
71
Notes to
FINANCIAL STATEMENTS (continued)
DIVIDEND DIVIDEND DIVIDEND
ADVANTAGE (NAD) ADVANTAGE 2 (NXZ) ADVANTAGE 3 (NZF)
------------------- ------------------ -------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
10/31/04 10/31/03 10/31/04 10/31/03 10/31/04 10/31/03
---------------------------------------------------------------------------------------------------------
Common shares issued to
shareholders due to
reinvestment of
distributions 29,786 9,858 -- -- -- --
=========================================================================================================
3. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of investments in long-term municipal
securities during the fiscal year ended October 31, 2004, were as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
---------------------------------------------------------------------------------------------------------
Purchases $148,627,283 $54,482,751 $56,709,045 $71,281,971 $35,554,626 $30,737,825
Sales and maturities 146,856,280 43,479,650 42,114,856 62,099,848 17,194,087 23,872,970
=========================================================================================================
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 on investments,
timing differences in recognizing income on taxable market discount securities
and timing differences in recognizing certain gains and losses on security
transactions.
At October 31, 2004, the cost of investments was as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
------------------------------------------------------------------------------------------------------------------
Cost of investments $1,302,767,500 $950,806,597 $990,993,656 $846,818,150 $632,409,204 $877,386,524
==================================================================================================================
Gross unrealized appreciation and gross unrealized depreciation of investments
at October 31, 2004, were as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
--------------------------------------------------------------------------------------------------------------
Gross unrealized:
Appreciation $107,113,828 $86,517,447 $95,358,716 $78,768,538 $46,170,823 $48,381,358
Depreciation (4,994,097) (7,862,440) (18,330,639) (9,220,906) (7,231,949) (7,943,519)
--------------------------------------------------------------------------------------------------------------
Net unrealized
appreciation
of investments $102,119,731 $78,655,007 $77,028,077 $69,547,632 $38,938,874 $40,437,839
==============================================================================================================
The tax components of undistributed net investment income and net realized gains
at October 31, 2004, were as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
--------------------------------------------------------------------------------------------------------------
Undistributed net
tax-exempt income * $15,580,820 $12,161,503 $9,702,437 $9,380,605 $8,540,409 $9,414,844
Undistributed net
ordinary income ** 238,651 -- -- 138,779 22,426 40,697
Undistributed net
long-term
capital gains 973,564 686,687 -- -- -- --
==============================================================================================================
* Undistributed net tax-exempt income (on a tax basis) has not been reduced
for the dividend declared on October 1, 2004, paid on November 1, 2004.
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
72
The tax character of distributions paid during the fiscal years ended October
31, 2004 and October 31, 2003, was designated for purposes of the dividends paid
deduction as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
2004 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
---------------------------------------------------------------------------------------------------------
Distributions from
net tax-exempt
income $62,627,198 $47,642,154 $46,733,618 $42,925,745 $32,249,670 $41,658,844
Distributions from
net ordinary income ** -- 11,261 -- -- 11 --
Distributions from
net long-term
capital gains -- 641,806 -- -- 902,410 --
=========================================================================================================
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
2003 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
---------------------------------------------------------------------------------------------------------
Distributions from
net tax-exempt
income $60,990,090 $46,876,673 $46,423,461 $41,473,029 $31,323,275 $40,277,088
Distributions from
net ordinary income ** 3,729 179,625 -- -- 185,573 --
Distributions from
net long-term
capital gains 1,655,369 3,226,882 -- -- 115,479 --
=========================================================================================================
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
At October 31, 2004, the following Funds had unused capital loss carryforwards
available for federal income tax purposes to be applied against future capital
gains, if any. If not applied, the carryforwards will expire as follows:
MARKET DIVIDEND DIVIDEND DIVIDEND
OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMO) (NAD) (NXZ) (NZF)
--------------------------------------------------------------------------------
Expiration year:
2007 $ -- $ 1,724,693 $ -- $ --
2008 -- 14,462,547 -- --
2009 -- -- -- --
2010 1,622,794 -- -- 690,125
2011 11,657,833 4,594,300 -- --
2012 973,824 -- 246,691 --
--------------------------------------------------------------------------------
Total $14,254,451 $20,781,540 $246,691 $690,125
================================================================================
5. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
As approved by the Board of Directors/Trustees, effective August 1, 2004, a
complex-wide management fee structure was adopted for all funds sponsored by
Nuveen Advisory Corp. (the "Adviser"), a wholly owned subsidiary of Nuveen
Investments, Inc. and its affiliates. This fee structure separates each fund's
management fee into two components - a complex-level component, based on the
aggregate amount of all funds assets managed by the Adviser and its affiliates,
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 and its
affiliates. Under no circumstances will this pricing structure result in a fund
paying management fees at a rate higher than would otherwise have been
applicable had the complex-wide management fee structure not been implemented.
As a consequence of this new management fee structure, the funds' effective
management fees were reduced by approximately .006% as of November 30, 2004.
Effective August 1, 2004, the annual fund-level fee, payable monthly, for each
of the Funds is based upon the average daily net assets (including net assets
attributable to Preferred shares) of each Fund as follows:
PERFORMANCE PLUS (NPP)
AVERAGE DAILY NET ASSETS MUNICIPAL ADVANTAGE (NMA)
(INCLUDING NET ASSETS ATTRIBUTABLE MARKET OPPORTUNITY (NMO)
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
================================================================================
73
Notes to
FINANCIAL STATEMENTS (continued)
DIVIDEND ADVANTAGE (NAD)
AVERAGE DAILY NET ASSETS DIVIDEND ADVANTAGE 2 (NXZ)
(INCLUDING NET ASSETS ATTRIBUTABLE DIVIDEND ADVANTAGE 3 (NZF)
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
================================================================================
Effective August 1, 2004, 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 follows:
COMPLEX-LEVEL ASSETS(1) COMPLEX-LEVEL FEE RATE
--------------------------------------------------------------------------------
For the first $55 billion .2000%
For the next $1 billion .1800
For the next $1 billion .1600
For the next $3 billion .1425
For the next $3 billion .1325
For the next $3 billion .1250
For the next $5 billion .1200
For the next $5 billion .1175
For the next $15 billion .1150
For Managed Assets over $91 billion (2) .1400
================================================================================
(1) The complex-level fee component of the management fee for the funds is
calculated based upon the aggregate Managed Assets ("Managed Assets" means
the average daily net assets of each fund including assets attributable to
all types of leverage used by the Nuveen funds) of Nuveen-sponsored funds
in the U.S.
(2) With respect to the complex-wide Managed Assets over $91 billion, the fee
rate or rates that will apply to such assets will be determined at a later
date. In the unlikely event that complex-wide Managed Assets reach $91
billion prior to a determination of the complex-level fee rate or rates to
be applied to Managed Assets in excess of $91 billion, the complex-level
fee rate for such complex-wide Managed Assets shall be .1400% until such
time as a different rate or rates is determined.
Each Fund paid through July 31, 2004, an annual management fee, payable monthly,
at the rates set forth below, which were based upon the average daily net assets
(including net assets attributable to Preferred shares) of each Fund as follows:
PERFORMANCE PLUS (NPP)
AVERAGE DAILY NET ASSETS MUNICIPAL ADVANTAGE (NMA)
(INCLUDING NET ASSETS ATTRIBUTABLE MARKET OPPORTUNITY (NMO)
TO PREFERRED SHARES) MANAGEMENT FEE RATE
--------------------------------------------------------------------------------
For the first $125 million .6500%
For the next $125 million .6375
For the next $250 million .6250
For the next $500 million .6125
For the next $1 billion .6000
For the next $3 billion .5875
For net assets over $5 billion .5750
================================================================================
DIVIDEND ADVANTAGE (NAD)
AVERAGE DAILY NET ASSETS DIVIDEND ADVANTAGE 2 (NXZ)
(INCLUDING NET ASSETS ATTRIBUTABLE DIVIDEND ADVANTAGE 3 (NZF)
TO PREFERRED SHARES) MANAGEMENT FEE RATE
--------------------------------------------------------------------------------
For the first $125 million .6500%
For the next $125 million .6375
For the next $250 million .6250
For the next $500 million .6125
For the next $1 billion .6000
For net assets over $2 billion .5750
================================================================================
74
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.
For the first ten years of Dividend Advantage's (NAD) operations, the Adviser
has agreed to reimburse the Fund, as a percentage of average daily net assets
(including net assets attributable to Preferred shares), for fees and expenses
in the amounts and for the time periods set forth below:
YEAR ENDING YEAR ENDING
JULY 31, JULY 31,
--------------------------------------------------------------------------------
1999* .30% 2005 .25%
2000 .30 2006 .20
2001 .30 2007 .15
2002 .30 2008 .10
2003 .30 2009 .05
2004 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Dividend Advantage (NAD) for any portion
of its fees and expenses beyond July 31, 2009.
For the first ten years of Dividend Advantage 2's (NXZ) operations, the Adviser
has agreed to reimburse the Fund, as a percentage of average daily net assets
(including net assets attributable to Preferred shares), for fees and expenses
in the amounts and for the time periods set forth below:
YEAR ENDING YEAR ENDING
MARCH 31, MARCH 31,
--------------------------------------------------------------------------------
2001* .30% 2007 .25%
2002 .30 2008 .20
2003 .30 2009 .15
2004 .30 2010 .10
2005 .30 2011 .05
2006 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Dividend Advantage 2 (NXZ) for any
portion of its fees and expenses beyond March 31, 2011.
For the first ten years of Dividend Advantage 3's (NZF) operations, the Adviser
has agreed to reimburse the Fund, as a percentage of average daily net assets
(including net assets attributable to Preferred shares), for fees and expenses
in the amounts and for the time periods set forth below:
YEAR ENDING YEAR ENDING
SEPTEMBER 30, SEPTEMBER 30,
--------------------------------------------------------------------------------
2001* .30% 2007 .25%
2002 .30 2008 .20
2003 .30 2009 .15
2004 .30 2010 .10
2005 .30 2011 .05
2006 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Dividend Advantage 3 (NZF) for any
portion of its fees and expenses beyond September 30, 2011.
6. SUBSEQUENT EVENT - DISTRIBUTIONS TO COMMON SHAREHOLDERS
The Funds declared Common share dividend distributions from their tax-exempt net
investment income which were paid on December 1, 2004, to shareholders of record
on November 15, 2004, as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
---------------------------------------------------------------------------------------------------------
Dividend per share $.0810 $.0860 $.0790 $.0855 $.0860 $.0805
=========================================================================================================
75
Financial
HIGHLIGHTS
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
----------------------------------------------------------------- ------------------------------
Distributions Distributions
from Net from Net
Beginning Net Investment Capital Investment Capital
Common Realized/ Income to Gains to Income to Gains to
Share Net Unrealized Preferred Preferred Common Common
Net Asset Investment Investment Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
====================================================================================================================================
PERFORMANCE PLUS (NPP)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2004 $15.45 $1.04 $ .42 $(.07) $ -- $1.39 $ (.97) $ -- $ (.97)
2003 15.38 1.07 .05 (.07) -- 1.05 (.95) (.03) (.98)
2002 15.57 1.09 (.22) (.10) (.01) .76 (.90) (.04) (.94)
2001 14.36 1.10 1.17 (.23) -- 2.04 (.83) -- (.83)
2000 13.69 1.12 .69 (.29) -- 1.52 (.84) -- (.84)
MUNICIPAL ADVANTAGE (NMA)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2004 15.62 1.11 .41 (.08) -- 1.44 (1.03) (.01) (1.04)
2003 15.41 1.13 .25 (.07) (.01) 1.30 (1.02) (.07) (1.09)
2002 15.65 1.15 (.22) (.10) (.03) .80 (.94) (.10) (1.04)
2001 14.61 1.16 1.10 (.24) (.03) 1.99 (.87) (.08) (.95)
2000 13.98 1.24 .63 (.33) -- 1.54 (.91) -- (.91)
MARKET OPPORTUNITY (NMO)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2004 15.11 1.03 .37 (.08) -- 1.32 (.95) -- (.95)
2003 14.60 1.03 .50 (.08) -- 1.45 (.94) -- (.94)
2002 15.24 1.11 (.70) (.11) (.01) .29 (.91) (.02) (.93)
2001 14.45 1.16 .80 (.26) (.01) 1.69 (.87) (.03) (.90)
2000 14.11 1.24 .38 (.34) -- 1.28 (.94) -- (.94)
DIVIDEND ADVANTAGE (NAD)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2004 15.17 1.09 .46 (.07) -- 1.48 (1.03) -- (1.03)
2003 14.94 1.10 .19 (.07) -- 1.22 (.99) -- (.99)
2002 14.84 1.13 .01 (.10) -- 1.04 (.94) -- (.94)
2001 13.59 1.16 1.21 (.24) -- 2.13 (.88) -- (.88)
2000 12.78 1.15 .84 (.31) -- 1.68 (.86) -- (.86)
DIVIDEND ADVANTAGE 2 (NXZ)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2004 15.13 1.12 .51 (.07) -- 1.56 (1.03) (.03) (1.06)
2003 14.89 1.16 .17 (.07) -- 1.26 (1.01) (.01) (1.02)
2002 15.07 1.15 (.32) (.10) -- .73 (.91) (.01) (.92)
2001(a) 14.33 .52 .88 (.09) -- 1.31 (.45) -- (.45)
DIVIDEND ADVANTAGE 3 (NZF)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2004 14.74 1.06 .59 (.07) -- 1.58 (.96) -- (.96)
2003 14.56 1.07 .10 (.07) -- 1.10 (.93) -- (.93)
2002 14.47 1.03 .16 (.10) -- 1.09 (.91) -- (.91)
2001(b) 14.33 .03 .14 -- -- .17 -- -- --
====================================================================================================================================
Total Returns
----------------------
Offering Based
Costs and Ending on
Preferred Common Based Common
Share Share Ending on Share Net
Underwriting Net Asset Market Market Asset
Discounts Value Value Value** Value**
=============================================================================================
PERFORMANCE PLUS (NPP)
---------------------------------------------------------------------------------------------
Year Ended 10/31:
2004 $ -- $15.87 $14.9500 9.10% 9.30%
2003 -- 15.45 14.6400 9.58 6.97
2002 (.01) 15.38 14.2800 4.51 5.03
2001 -- 15.57 14.5800 26.96 14.51
2000 (.01) 14.36 12.1875 .90 11.47
MUNICIPAL ADVANTAGE (NMA)
---------------------------------------------------------------------------------------------
Year Ended 10/31:
2004 -- 16.02 15.7000 8.82 9.57
2003 -- 15.62 15.4400 13.17 8.71
2002 -- 15.41 14.6600 5.89 5.39
2001 -- 15.65 14.8500 23.35 13.97
2000 -- 14.61 12.8750 1.46 11.48
MARKET OPPORTUNITY (NMO)
---------------------------------------------------------------------------------------------
Year Ended 10/31:
2004 -- 15.48 14.4400 7.97 9.00
2003 -- 15.11 14.2900 10.62 10.24
2002 -- 14.60 13.8000 .49 2.03
2001 -- 15.24 14.6500 20.03 11.93
2000 -- 14.45 13.0000 2.97 9.41
DIVIDEND ADVANTAGE (NAD)
---------------------------------------------------------------------------------------------
Year Ended 10/31:
2004 -- 15.62 15.3100 8.37 10.06
2003 -- 15.17 15.1200 11.41 8.41
2002 -- 14.94 14.5000 2.01 7.26
2001 -- 14.84 15.1400 27.35 16.03
2000 (.01) 13.59 12.6250 (.79) 13.61
DIVIDEND ADVANTAGE 2 (NXZ)
---------------------------------------------------------------------------------------------
Year Ended 10/31:
2004 -- 15.63 15.3800 11.16 10.67
2003 -- 15.13 14.8500 14.39 8.67
2002 .01 14.89 13.9100 (.81) 5.16
2001(a) (.12) 15.07 14.9600 2.75 8.39
DIVIDEND ADVANTAGE 3 (NZF)
---------------------------------------------------------------------------------------------
Year Ended 10/31:
2004 -- 15.36 14.5000 12.45 11.10
2003 .01 14.74 13.8000 9.04 7.82
2002 (.09) 14.56 13.5300 (4.26) 7.20
2001(b) (.03) 14.47 15.0700 .47 .98
=============================================================================================
Ratios/Supplemental Data
------------------------------------------------------------------------------------------------------
Before Credit/Reimbursement/Refund After Credit/Reimbursement/Refund***
---------------------------------- ------------------------------------
Ratio of Net Ratio of Net
Ratio of Investment Ratio of Investment
Ending Expenses Income to Expenses Income to
Net to Average Average to Average Average
Assets Net Assets Net Assets Net Assets Net Assets
Applicable Applicable Applicable Applicable Applicable Portfolio
to Common to Common to Common to Common to Common Turnover
Shares (000) Shares++ Shares++ Shares++ Shares++ Rate
====================================================================================================================================
PERFORMANCE PLUS (NPP)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2004 $950,993 1.17% 6.69% 1.17% 6.70% 11%
2003 925,525 1.18 6.89 1.18 6.90 10
2002 921,376 1.18 7.11 1.17 7.12 11
2001 932,937 1.15 7.29 1.14 7.30 14
2000 860,556 1.17 8.09 1.16 8.10 25
MUNICIPAL ADVANTAGE (NMA)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2004 689,190 1.19 7.00 1.18 7.00 4
2003 671,147 1.21 7.27 1.20 7.27 7
2002 662,270 1.22 7.55 1.22 7.55 17
2001 672,673 1.23 7.60 1.22 7.61 18
2000 628,099 1.23 8.77 1.23 8.77 39
MARKET OPPORTUNITY (NMO)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2004 704,760 1.21 6.75 1.19 6.77 4
2003 687,955 1.25 6.94 1.25 6.94 9
2002 664,914 1.24 7.50 1.24 7.51 13
2001 694,025 1.23 7.73 1.23 7.74 11
2000 658,070 1.25 8.76 1.23 8.77 52
DIVIDEND ADVANTAGE (NAD)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2004 613,328 1.14 6.69 .70 7.12 7
2003 595,266 1.35 6.78 .89 7.24 3
2002 586,045 1.25 7.24 .80 7.70 7
2001 581,089 1.26 7.56 .78 8.04 12
2000 531,571 1.22 8.34 .73 8.83 37
DIVIDEND ADVANTAGE 2 (NXZ)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2004 457,552 1.14 6.87 .69 7.32 3
2003 443,101 1.17 7.20 .71 7.66 11
2002 435,907 1.17 7.32 .70 7.79 9
2001(a) 441,308 1.13* 5.56* .63* 6.06* 5
DIVIDEND ADVANTAGE 3 (NZF)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2004 619,118 1.15 6.64 .69 7.10 3
2003 594,154 1.17 6.80 .71 7.26 3
2002 586,799 1.17 6.78 .70 7.25 7
2001(b) 583,100 .72* 2.05* .42* 2.36* 1
====================================================================================================================================
Preferred Shares at End of Period
------------------------------------------
Aggregate Liquidation
Amount and Market Asset
Outstanding Value Coverage
(000) Per Share Per Share
=========================================================================
PERFORMANCE PLUS (NPP)
-------------------------------------------------------------------------
Year Ended 10/31:
2004 $479,000 $25,000 $74,634
2003 479,000 25,000 73,305
2002 479,000 25,000 73,089
2001 444,000 25,000 77,530
2000 444,000 25,000 73,455
MUNICIPAL ADVANTAGE (NMA)
-------------------------------------------------------------------------
Year Ended 10/31:
2004 358,000 25,000 73,128
2003 358,000 25,000 71,868
2002 358,000 25,000 71,248
2001 358,000 25,000 71,974
2000 358,000 25,000 68,862
MARKET OPPORTUNITY (NMO)
-------------------------------------------------------------------------
Year Ended 10/31:
2004 380,000 25,000 71,366
2003 380,000 25,000 70,260
2002 380,000 25,000 68,744
2001 380,000 25,000 70,660
2000 380,000 25,000 68,294
DIVIDEND ADVANTAGE (NAD)
-------------------------------------------------------------------------
Year Ended 10/31:
2004 295,000 25,000 76,977
2003 295,000 25,000 75,446
2002 295,000 25,000 74,665
2001 295,000 25,000 74,245
2000 295,000 25,000 70,048
DIVIDEND ADVANTAGE 2 (NXZ)
-------------------------------------------------------------------------
Year Ended 10/31:
2004 222,000 25,000 76,526
2003 222,000 25,000 74,899
2002 222,000 25,000 74,089
2001(a) 222,000 25,000 74,697
DIVIDEND ADVANTAGE 3 (NZF)
-------------------------------------------------------------------------
Year Ended 10/31:
2004 312,000 25,000 74,609
2003 312,000 25,000 72,608
2002 312,000 25,000 72,019
2001(b) -- -- --
=========================================================================
* Annualized.
** Total Investment Return on Market Value is the combination of changes in
the market price per share and the effect of reinvested dividend income and
reinvested capital gains distributions, if any, at the average price paid
per share at the time of reinvestment. Total Return on Common Share Net
Asset Value is the combination of changes in Common Share net asset value,
reinvested dividend income at net asset value and reinvested capital gains
distributions at net asset value, if any. Total returns are not annualized.
*** After custodian fee credit, expense reimbursement and legal fee refund,
where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares, where applicable.
(a) For the period March 27, 2001 (commencement of operations) through October
31, 2001.
(b) For the period September 25, 2001 (commencement of operations) through
October 31, 2001.
See accompanying notes to financial statements.
76-77 SREAD
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 Funds is currently set
at seven. 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 and Director (since 1996) of Nuveen Investments, 152
3/28/49 the Board Inc. and Nuveen Investments, LLC; Director (since 1992) and
333 W. Wacker Drive and Trustee Chairman (since 1996) of Nuveen Advisory Corp. and Nuveen
Chicago, IL 60606 Institutional Advisory Corp.; Chairman and Director (since
1997) of Nuveen Asset Management Inc.; Director (since
1996) of Institutional Capital Corporation; Chairman and
Director (since 1999) of Rittenhouse Asset Management, Inc.;
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. 152
8/22/40
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Lawrence H. Brown Board member 1993 Retired (1989) as Senior Vice President of The Northern 152
7/29/34 Trust Company; Director, Community Advisory Board for
333 W. Wacker Drive Highland Park and Highwood, United Way of the North
Chicago, IL 60606 Shore (since 2002).
------------------------------------------------------------------------------------------------------------------------------------
Jack B. Evans Board member 1999 President, The Hall-Perrine Foundation, a private philanthropic 152
10/22/48 corporation (since 1996); Director and Vice Chairman, United
333 W. Wacker Drive Fire & Casualty Company; formerly Director, Federal Reserve
Chicago, IL 60606 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 152
3/6/48 Business at the University of Connecticut (since 2003);
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, Credit Research Center at Georgetown University;
Director of Xerox Corporation (since 2004).
78
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 Senior Partner and Chief Operating Officer, Miller-Valentine 152
9/24/44 Group, Vice President, Miller-Valentine Realty, a construction
333 W. Wacker Drive company; Chair, Miami Valley Hospital; Chair, Dayton
Chicago, IL 60606 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 152
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
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(3) DURING PAST 5 YEARS OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS:
------------------------------------------------------------------------------------------------------------------------------------
Gifford R. Zimmerman Chief 1988 Managing Director (since 2002), Assistant Secretary and 152
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 (since 2002), General Counsel and
Assistant Secretary, formerly, Vice President of Nuveen
Advisory Corp. and Nuveen Institutional Advisory Corp.;
Managing Director (since 2002), Assistant Secretary and
Associate General Counsel, formerly, Vice President
(since 2000), of Nuveen Asset Management Inc.; 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.
------------------------------------------------------------------------------------------------------------------------------------
Julia L. Antonatos Vice President 2004 Vice President (since 2002), formerly, Assistant Vice President 152
9/22/63 (since 1999) of Nuveen Investments, LLC; Chartered
333 W. Wacker Drive Financial Analyst.
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Michael T. Atkinson Vice President 2000 Vice President (since 2002), formerly, Assistant Vice 152
2/3/66 and Assistant President (since 2000), previously, Associate of Nuveen
333 W. Wacker Drive Secretary Investments, LLC.
Chicago, IL 60606
79
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(3) DURING PAST 5 YEARS OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
Peter H. D'Arrigo Vice President 1999 Vice President of Nuveen Investments, LLC (since 1999), 152
11/28/67 and Treasurer prior thereto, Assistant Vice President (since 1997); Vice
333 W. Wacker Drive President and Treasurer of Nuveen Investments, Inc. (since
Chicago, IL 60606 1999); Vice President and Treasurer of Nuveen Advisory Corp.
and Nuveen Institutional Advisory Corp (since 1999); Vice
President and Treasurer of Nuveen Asset Management Inc.
(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 2000 Vice President (since 2002) and Assistant General Counsel 152
9/24/64 and Secretary (since 1998); formerly, Assistant Vice President (since 1998)
333 W. Wacker Drive of Nuveen Investments, LLC; Vice President (since 2002)
Chicago, IL 60606 and Assistant Secretary (since 1998), formerly Assistant
Vice President of Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp.
------------------------------------------------------------------------------------------------------------------------------------
Lorna C. Ferguson Vice President 1998 Managing Director (since 2004) formerly, Vice President of 152
10/24/45 Nuveen Investments, LLC; Managing Director (since 2004)
333 W. Wacker Drive formerly, Vice President (since 1998) of Nuveen Advisory
Chicago, IL 60606 Corp. and Nuveen Institutional Advisory Corp.
------------------------------------------------------------------------------------------------------------------------------------
William M. Fitzgerald Vice President 1995 Managing Director (since 2002) of Nuveen Investments, 152
3/2/64 LLC; Managing Director (since 2001), formerly Vice President
333 W. Wacker Drive of Nuveen Advisory Corp. and Nuveen Institutional Advisory
Chicago, IL 60606 Corp. (since 1995); Managing Director of Nuveen Asset
Management Inc. (since 2001); Vice President of Nuveen
Investment Advisers Inc. (since 2002); Chartered
Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
Stephen D. Foy Vice President 1998 Vice President (since 1993) and Funds Controller (since 1998) 152
5/31/54 and Controller of Nuveen Investments, LLC; formerly, Vice President and
333 W. Wacker Drive Funds Controller (1998-2003) of Nuveen Investments, Inc.;
Chicago, IL 60606 Certified Public Accountant.
80
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(3) DURING PAST 5 YEARS OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
James D. Grassi Vice President 2004 Vice President and Deputy Director of Compliance 152
4/13/56 and Chief (since August 2004) of Nuveen Investments, LLC,
333 W. Wacker Drive Compliance Nuveen Investments Advisers Inc., Nuveen Asset
Chicago, IL 60606 Officer Management Inc., Nuveen Advisory Corp., Nuveen
Institutional Advisory Corp. and Rittenhouse Asset
Management, Inc.; formerly, Senior Attorney
(1994-July 2004), The Northern Trust Company.
------------------------------------------------------------------------------------------------------------------------------------
David J. Lamb Vice President 2000 Vice President (since 2000) of Nuveen Investments, 152
3/22/63 LLC, previously Assistant Vice President (since 1999);
333 W. Wacker Drive prior thereto, Associate of Nuveen Investments, LLC;
Chicago, IL 60606 Certified Public Accountant.
------------------------------------------------------------------------------------------------------------------------------------
Tina M. Lazar Vice President 2002 Vice President (since 1999), previously, Assistant Vice 152
8/27/61 President (since 1993) of Nuveen Investments, LLC.
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Larry W. Martin Vice President 1988 Vice President, Assistant Secretary and Assistant General 152
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.; Assistant Secretary of Nuveen
Investments, Inc. and (since 1997) Nuveen Asset Management
Inc.; 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).
------------------------------------------------------------------------------------------------------------------------------------
Edward F. Neild, IV Vice President 1996 Managing Director (since 2002) of Nuveen Investments, LLC; 152
7/7/65 Managing Director (since 1997), formerly Vice President
333 W. Wacker Drive (since 1996) of Nuveen Advisory Corp. and Nuveen Institutional
Chicago, IL 60606 Advisory Corp.; Managing Director of Nuveen Asset Management
Inc. (since 1999). Chartered Financial Analyst.
(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) 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.
81
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
the dividends or distributions awaiting reinvestment. Because the market price
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.
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.
82
Other Useful
INFORMATION
QUARTERLY PORTFOLIO OF INVESTMENTS AND PROXY VOTING INFORMATION
Each Fund's (i) quarterly portfolio of investments and (ii) information
regarding how the Funds voted proxies relating to portfolio securities held
during the most recent 12-month period ended June 30, 2004, are available
without charge, upon request, by calling Nuveen Investments toll-free at (800)
257-8787 or on Nuveen's web site at www.nuveen.com.
You may also obtain this and other Fund information directly from the Securities
and Exchange Commission ("SEC"). The SEC may charge a copying fee for this
information. Visit the SEC on-line at http://www.sec.gov or in person at the
SEC's Public Reference Room in Washington, D.C. Call the SEC at 1-202-942-8090
for room hours and operation. You may also request Fund information by sending
an e-mail request to publicinfo@sec.gov or by writing to the SEC's Public
References Section at 450 Fifth Street NW, Washington, D.C. 20549.
GLOSSARY OF TERMS USED IN THIS REPORT
AVERAGE ANNUAL TOTAL RETURN: This is a commonly used method to express an
investment's performance over a particular, usually multi-year time period. It
expresses the return that would have been necessary each year to equal the
investment's actual cumulative performance (including change in NAV or market
price and reinvested dividends and capital gains distributions, if any) over the
time period being considered.
AVERAGE EFFECTIVE MATURITY: The average of all the maturities of the bonds in a
fund's portfolio, computed by weighting each maturity date (the date the
security comes due) by the market value of the security. This figure does not
account for the likelihood of prepayments or the exercise of call provisions.
LEVERAGE-ADJUSTED DURATION: Duration is a measure of the sensitivity of a bond
or bond fund's value to changes when interest rates change. Generally, the
longer a bond 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
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
FUND MANAGER
Nuveen Advisory Corp.
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,
where applicable, in the future at such times and in such amounts as is deemed
advisable. No shares were purchased during the period ended October 31, 2004.
Any future repurchases will be reported to shareholders in the next annual or
semiannual report.
83
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 $100 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 tax-free 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 and for
a prospectus, where applicable, talk to your financial advisor, or call us at
(800) 257-8787. Please read the information carefully before you invest.
o Share prices
Learn more o Fund details
about Nuveen Funds at o Daily financial news
WWW.NUVEEN.COM/ETF o Investor education
o Interactive planning tools
Logo: NUVEEN Investments
EAN-B-1004D
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. The registrant has posted such code of
ethics on its website at www.nuveen.com/etf.
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 has served as the
registrant's audit committee financial expert from July 26, 2004 to the end of
the reporting period on October 31, 2004.
Prior to July 26, 2004, William E. Bennett, who was "independent" for purposes
of Item 3 of Form N-CSR, served as the audit committee financial expert.
Although Mr. Bennett served as the audit committee financial expert during the
reporting period, he unexpectedly resigned from the Board effective April 30,
2004. Accordingly for this reporting period, the registrant did not have a
designated "audit committee financial expert" from May 1, 2004 to July 26, 2004.
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.
Mr. Bennett was formerly Executive Vice President and Chief Credit Officer of
First Chicago Corporation and its principal subsidiary, The First National Bank
of Chicago. As part of his role as Chief Credit Officer, Mr. Bennett set policy
as to accrual of assets/loans; designated performing/non-performing assets; set
the level of reserves against the credit portfolio; and determined the carrying
value of credit related assets and exposure. Among other things, Mr. Bennett was
also responsible for the oversight of the internal analysis function including
setting ground rules for the review and preparation of financial analysis and
financial statements for use in making credit and risk decisions for clients.
Mr. Bennett has significant experience reviewing, analyzing and evaluating
financial statements of domestic and international companies in a variety of
industries with complex accounting issues.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND 3
The following tables show the amount of fees that Ernst & Young LLP, the Fund's
auditor, billed to the Fund during the Fund's last two full fiscal years. For
engagements with Ernst & Young LLP entered into on or after May 6, 2003, the
Audit Committee approved in advance all audit services and non-audit services
that Ernst & Young LLP provided to the Fund, except for those non-audit services
that were subject to the pre-approval exception under Rule 2-01 of Regulation
S-X (the "pre-approval exception"). The pre-approval exception for services
provided directly to the Fund waives the pre-approval requirement for services
other than audit, review or attest services if: (A) the aggregate amount of all
such services provided constitutes no more than 5% of the total amount of
revenues paid by the Fund to its accountant during the fiscal year in which the
services are provided; (B) the Fund did not recognize the services as non-audit
services at the time of the engagement; and (C) the services are promptly
brought to the Audit Committee's attention, and the Committee (or its delegate)
approves the services before the audit is completed.
The Audit Committee has delegated certain pre-approval responsibilities to its
Chairman (or, in his absence, any other member of the Audit Committee).
SERVICES THAT THE FUND'S AUDITOR BILLED TO THE FUND
AUDIT FEES BILLED AUDIT-RELATED FEES TAX FEES ALL OTHER FEES
FISCAL YEAR ENDED TO FUND BILLED TO FUND BILLED TO FUND BILLED TO FUND
------------------------------------------------------------------------------------------------------------------------------------
October 31, 2004 $ 25,825 $ 0 $ 5,496 $ 2,550
------------------------------------------------------------------------------------------------------------------------------------
Percentage approved N/A 0% 0% 0%
pursuant to
pre-approval
exception
------------------------------------------------------------------------------------------------------------------------------------
October 31, 2003 $ 22,116 $ 0 $ 528 $ 2,350
------------------------------------------------------------------------------------------------------------------------------------
Percentage approved N/A 0% 0% 0%
pursuant to
pre-approval
exception
------------------------------------------------------------------------------------------------------------------------------------
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 Advisory Corp. ("NAC" or the "Adviser"), and any entity controlling,
controlled by or under common control with NAC ("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 table also shows the percentage of fees subject to the pre-approval
exception. The pre-approval exception for services provided to the Adviser and
any Affiliated Fund Service Provider (other than audit, review or attest
services) waives the pre-approval requirement if: (A) the aggregate amount of
all such services provided constitutes no more than 5% of the total amount of
revenues paid to Ernst & Young LLP by the Fund, the Adviser and Affiliated Fund
Service Providers during the fiscal year in which the services are provided that
would have to be pre-approved by the Audit Committee; (B) the Fund did not
recognize the services as non-audit services at the time of the engagement; and
(C) the services are promptly brought to the Audit Committee's attention, and
the Committee (or its delegate) approves the services before the Fund's audit is
completed.
FISCAL YEAR ENDED AUDIT-RELATED FEES TAX FEES BILLED TO ALL OTHER FEES
BILLED TO ADVISER AND ADVISER AND BILLED TO ADVISER
AFFILIATED FUND AFFILIATED FUND AND AFFILIATED FUND
SERVICE PROVIDERS SERVICE PROVIDERS SERVICE PROVIDERS
------------------------------------------------------------------------------------------------------------------------------------
October 31, 2004 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
------------------------------------------------------------------------------------------------------------------------------------
October 31, 2003 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------------------------------
Percentage approved N/A N/A N/A
pursuant to
pre-approval
exception
------------------------------------------------------------------------------------------------------------------------------------
NON-AUDIT SERVICES
The following table shows the amount of fees that Ernst & Young LLP billed
during the Fund's last two full fiscal years for non-audit services. 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 independence.
FISCAL YEAR ENDED TOTAL NON-AUDIT FEES
BILLED TO ADVISER AND
AFFILIATED FUND SERVICE TOTAL NON-AUDIT FEES
PROVIDERS (ENGAGEMENTS BILLED TO ADVISER AND
RELATED DIRECTLY TO THE AFFILIATED FUND SERVICE
TOTAL NON-AUDIT FEES OPERATIONS AND FINANCIAL PROVIDERS (ALL OTHER
BILLED TO FUND REPORTING OF THE FUND) ENGAGEMENTS) TOTAL
------------------------------------------------------------------------------------------------------------------------------------
October 31, 2004 $ 8,046 $ 0 $ 0 $ 8,046
October 31, 2003 $ 2,878 $ 0 $ 0 $ 2,878
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 (the "Exchange Act") (15 U.S.C.
78c(a)(58)(A)). The members of the audit committee are Robert P. Bremner,
Lawrence H. Brown, Jack B. Evans and William J. Schneider.
ITEM 6. SCHEDULE OF INVESTMENTS.
See Schedule I 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.
In the event of a vacancy on the Board, the nominating and governance committee
receives suggestions from various sources, including shareholders, as to
suitable candidates. Suggestions should be sent in writing to Lorna Ferguson,
Vice President for Board Relations, Nuveen Investments, 333 West Wacker Drive,
Chicago, IL 60606. The nominating and governance committee sets appropriate
standards and requirements for nominations for new directors or trustees and
reserves the right to interview all candidates and to make the final selection
of any new directors or trustees.
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 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 posted on registrant's website at www.nuveen.com/etf.
(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 Dividend Advantage Municipal Fund 3
-----------------------------------------------------------
By (Signature and Title)* /s/ Jessica R. Droeger
----------------------------------------------
Jessica R. Droeger
Vice President and Secretary
Date: January 6, 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: January 6, 2005
-------------------------------------------------------------------
By (Signature and Title)* /s/ Stephen D. Foy
----------------------------------------------
Stephen D. Foy
Vice President and Controller
(Principal Financial Officer)
Date: January 6, 2005
-------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.