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 811-06379
---------------------
Nuveen Insured Municipal Opportunity Fund, Inc.
--------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Jessica R. Droeger
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
--------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (312) 917-7700
-------------------
Date of fiscal year end: October 31
------------------
Date of reporting period: October 31, 2006
------------------
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, 2006
------------------------------
Nuveen Investments
Municipal Closed-End Funds
NUVEEN INSURED
QUALITY MUNICIPAL
FUND, INC.
NQI
NUVEEN INSURED
MUNICIPAL OPPORTUNITY
FUND, INC.
NIO
NUVEEN PREMIER
INSURED MUNICIPAL
INCOME FUND, INC.
NIF
NUVEEN INSURED
PREMIUM INCOME
MUNICIPAL FUND 2
NPX
NUVEEN INSURED
DIVIDEND ADVANTAGE
MUNICIPAL FUND
NVG
NUVEEN INSURED
TAX-FREE ADVANTAGE
MUNICIPAL FUND
NEA
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DEPENDABLE,
TAX-FREE INCOME BECAUSE
IT'S NOT WHAT YOU EARN,
IT'S WHAT YOU KEEP.(R)
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NUVEEN
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Chairman's
LETTER TO SHAREHOLDERS
Photo of Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
Once again, I am pleased to report that over the twelve-month period
covered by this report your Fund continued to provide you with attractive
monthly tax-free income. For more details about the management strategy
and performance of your Fund, please read the Portfolio Manager's
Comments, the Dividend and Share Price Information, and the Performance
Overview sections of this report.
For some time, I've used these letters to remind you that municipal bonds
can be an important building block in a well balanced investment
portfolio. In addition to providing attractive tax-free monthly income, a
municipal bond investment like your Fund may help you achieve and benefit
from greater portfolio diversification. Portfolio diversification is a
recognized way to try to reduce some of the risk that comes with
investing. For more information about this important investment strategy,
I encourage you to contact your personal financial advisor.
"IN ADDITION TO PROVIDING ATTRACTIVE TAX-FREE MONTHLY INCOME, A MUNICIPAL BOND
INVESTMENT LIKE YOUR FUND MAY HELP YOU ACHIEVE AND BENEFIT FROM GREATER
PORTFOLIO DIVERSIFICATION."
We also are pleased to be able to offer you a choice concerning how you
receive your shareholder reports and other Fund information. As an
alternative to mailed copies, you can sign up to receive future Fund
reports and other Fund information by e-mail and the Internet. The inside
front cover of this report contains information on how you can sign up.
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. At Nuveen Investments, our mission continues
to be to assist you and your financial advisor by offering investment
services and products that can help you to secure your financial
objectives.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
CHAIRMAN OF THE BOARD
December 15, 2006
Nuveen Investments Municipal Closed-End Funds
NQI, NIO, NIF, NPX, NVG, NEA
Portfolio Manager's
COMMENTS
PORTFOLIO MANAGER PAUL BRENNAN DISCUSSES U.S. ECONOMIC AND MUNICIPAL MARKET
CONDITIONS, KEY INVESTMENT STRATEGIES, AND THE ANNUAL PERFORMANCE OF THESE SIX
INSURED FUNDS. WITH 17 YEARS OF INVESTMENT EXPERIENCE, INCLUDING 15 YEARS AT
NUVEEN, PAUL ASSUMED PORTFOLIO MANAGEMENT RESPONSIBILITY FOR NQI, NIO, NIF, NPX,
NVG, AND NEA IN JULY 2006.
WHAT FACTORS AFFECTED THE U.S. ECONOMY AND MUNICIPAL MARKET DURING THE ANNUAL
REPORTING PERIOD ENDED OCTOBER 31, 2006?
In response to market concerns about oil prices, inflation, and the actions of
the Federal Reserve over the past 12 months, bond yields exhibited some
volatility during this reporting period, with longer-term rates hitting a peak
in June 2006 before falling sharply for the remainder of the period. For the
period as a whole, interest rates at the shorter end of the taxable yield curve
generally continued to rise, while longer rates ended the period close to where
they began it or even declined. As short-term rates approached and exceeded the
levels of long-term rates, the taxable yield curve became increasingly flat and
subsequently inverted. Consequently, bonds with longer durations 1 generally
outperformed those with shorter durations during this period.
Between November 1, 2005 and October 31, 2006, the Federal Reserve announced six
increases of 0.25% each in the fed funds rate before pausing to leave monetary
policy unchanged at the August-October 2006 sessions of its Open Market
Committee. The increases raised the short-term target by 150 basis points, from
3.75% to 5.25%, its highest level since March 2001. During this same period, the
yield on the benchmark 10-year U.S. Treasury note rose just four basis points to
end October 2006 at 4.60%. In contrast, in the municipal market, the yield on
the Bond Buyer 25 Revenue Bond Index, a widely followed measure of longer-term
municipal market rates, fell to 4.78% at the end of October 2006, a decline of
43 basis points from the end of October 2005.
Economic growth over the past year reflected the fluctuations in interest rates,
energy prices, and the effects of a softening housing market. After expanding at
a rate of 1.8% in the fourth quarter of 2005, the U.S. gross domestic product
(GDP) rebounded sharply with a 5.6% gain in the first quarter of 2006 before
moderating to a pace of 2.6% in the second quarter of 2006 (all GDP numbers
annualized). In the third quarter of 2006, the rate of GDP growth slowed to
2.2%, largely as the result of an 18% slump in residential investment, the
largest decrease in 15 years. Despite the recent slowdown in economic
1 Duration is a measure of a bond's price sensitivity as interest rates
change, with longer duration bonds displaying more sensitivity to these
changes than bonds with shorter durations.
4
growth, the markets continued to keep a close eye on inflation trends. While
declining energy prices contributed to a benign 1.3% year-over-year increase in
the Consumer Price Index as of October 2006, the core rate (which excludes food
and energy prices) rose 2.7% for the same period. In general, the jobs picture
remained positive, with national unemployment at 4.4% in October 2006, down from
4.9% in October 2005, the lowest level since May 2001.
Over the 12 months ended October 2006, municipal bond issuance nationwide
totaled $367.1 billion, down 8% from the previous 12 months. This total
reflected the general decrease in the supply of municipal paper during 2006.
After reaching record levels in calendar year 2005, municipal issuance declined
during the first 10 months of 2006, with $295.1 billion in new securities coming
to market, off 12.5% from the same period in 2005. A major factor in 2006's drop
was the sharp reduction in pre-refunding volume, which fell almost 50% from last
year's levels. Overall, demand for municipal bonds, especially those offering
higher yields, continued to be strong and broad-based, with retail investors,
institutional investors such as hedge funds and arbitragers, and foreign
participants all taking part in the market.
WHAT KEY STRATEGIES WERE USED TO MANAGE THESE FUNDS DURING THIS REPORTING
PERIOD?
As the yield curve flattened over this 12-month period, we continued to
emphasize careful management of the Funds' underlying portfolios in line with
our established targets. This included pursuing a disciplined approach to
duration management and yield curve positioning throughout the period. As part
of this approach, we generally focused on purchasing bonds that we believed
provided attractive reward opportunities without excessive risk, emphasizing
attractively priced bonds with defensive coupons at or near the 20-year part of
the yield curve. For these Funds, our purchases of defensive coupon bonds
included bonds with premium coupons 2.
In recent months, we broadened our strategic scope in these six Funds to place
additional emphasis on income strategies by purchasing bonds that offered the
potential for more income such as zero coupon bonds, discount bonds and inverse
floaters. (Inverse floaters are bonds with coupons structured to move in the
opposite direction of short-term interest rates. For example, if short-term
market interest rates decline, the interest rate
2 Premium coupon bonds are credits that, at the time of purchase, are
trading above their par values because their coupons are higher than
current coupon levels. Historically, these bonds have held their value
better than current coupon bonds when interest rates rise and bond values
consequently fall.
5
earned by the inverse floater will rise. An inverse floater increases the market
rate risk and duration of the investment.) Further, to help increase the Funds'
income-generating potential and better manage interest risk, we employed
additional tools such as interest rate swap agreements.
Although municipal bond issuance nationwide declined during this period, much of
the new paper was insured, so the reduction in supply did not have a major
impact on the implementation of this or other strategies we had planned for
these Funds, which invest entirely or predominantly in insured bonds. In
general, our new purchases centered on the essential services sectors, with an
emphasis on keeping the Funds well diversified geographically. The Funds also
continued to purchase paper issued in states such as California, New York and
Ohio. Because of the relatively higher income tax levels in specialty states,
municipal bonds issued in these states are generally in great demand by in-state
retail investors, which helps to support their value. These bonds also provide
additional liquidity, making it easier for us to execute trades as part of
implementing our strategies.
During this period, as part of our yield curve and income strategies, we were
also selling holdings with shorter durations, including pre-refunded bonds,
especially in NVG, as well as bonds with less attractive call features and
credits producing lower tax-exempt income streams. A portion of the proceeds
from these sales were reinvested out longer on the yield curve, which enabled us
to maintain the Funds' durations within our preferred strategic range and
contributed to their performance during this period.
At the beginning of this reporting period, NEA was using forward interest rate
swaps, a type of derivative financial instrument. As discussed in our last
shareholder report, we began using these swaps in late 2004 as part of our
duration management strategies in an effort to reduce some of the interest rate
risk in NEA. We believe this hedging strategy was effective in achieving the
intended goal of reducing the Funds' net asset value (NAV) volatility, and we
removed the hedges from NEA in September 2006.
HOW DID THE FUNDS PERFORM?
Individual results for these Funds, as well as relevant index and peer group
information, are presented in the accompanying table.
6
TOTAL RETURNS ON NET ASSET VALUE*
For periods ended 10/31/06
1-YEAR 5-YEAR 10-YEAR
---------------------------------------------------------------------
NQI 6.53% 6.11% 6.49%
---------------------------------------------------------------------
NIO 7.05% 6.27% 6.42%
---------------------------------------------------------------------
NIF 6.46% 6.19% 6.22%
---------------------------------------------------------------------
NPX 6.75% 6.24% 6.63%
---------------------------------------------------------------------
NVG 7.39% NA NA
---------------------------------------------------------------------
NEA 7.82% NA NA
---------------------------------------------------------------------
Lehman Brothers
Insured Municipal
Bond Index 3 6.15% 5.28% 6.06%
---------------------------------------------------------------------
Lipper Insured
Municipal Debt
Funds Average 4 7.11% 5.70% 6.10%
---------------------------------------------------------------------
* Annualized.
Past performance is not predictive of future results. Current performance may be
higher or lower than the data shown. Returns do not reflect the deduction of
taxes that shareholders may have to pay on Fund distributions or upon the sale
of Fund shares.
For additional information, see the individual Performance Overview for your
Fund in this report.
For the 12 months ended October 31, 2006, the total returns on NAV for all six
of the Funds in this report exceeded the return on the Lehman Brothers Insured
Municipal Bond Index. NVG and NEA outperformed the average return for the Funds'
insured Lipper peer group, while NIO performed in line with this return, and
NQI, NIF, and NPX trailed the peer group average for this period. For longer
periods, all the Funds outperformed the benchmark and the peer averages.
Factors that influenced the Funds' returns during this period included yield
curve positioning and duration management, implementation of income strategies,
the use of financial leverage, allocations to noninsured credits in NVG and NEA,
and advance refunding activity. 5
As longer-term municipal rates declined and the yield curve flattened over the
course of this period, yield curve and duration positioning played an important
role in the performance of these Funds. Overall, bonds with maturities between
one and four years were the most adversely impacted by changes in the interest
rate environment over this period, as interest rates in that part of the curve
rose. As a result, these shorter bonds generally underperformed longer bonds,
with the longest bonds (those with maturities of
3 The Lehman Brothers Insured Municipal Bond Index is an unleveraged,
unmanaged national index comprising a broad range of insured municipal
bonds. Results for the Lehman index do not reflect any expenses.
4 The Lipper Insured Municipal Debt Funds category average is calculated
using the returns of all closed-end funds in this category for each period
as follows: 1 year, 26; 5 years, 21; and 10 years, 18. Fund and Lipper
returns assume reinvestment of dividends.
5 Advance refundings, also known as pre-refundings or refinancings, occur
when an issuer sells new bonds and uses the proceeds to fund principal and
interest payments of older existing bonds. This process often results in
lower borrowing costs for bond issuers.
7
more than 22 years) achieving the best returns for the period. NIO, NVG, and NEA
had relatively more exposure to the longer part of the curve than NQI, NIF, and
NPX, which were hurt by their heavier exposure to the shorter end of the curve,
especially bonds with short call dates. We continued to work to strengthen the
yield curve positioning of all of these Funds.
As previously mentioned, in recent months we implemented additional income
strategies by adding zero coupon bonds, discount coupon bonds, and inverse
floaters to our portfolios, all of which had a positive impact on the Funds'
performances for this period. Zero coupon bonds, for example, typically have
very long durations and tend to be very sensitive to changes in interest rates.
With rates at the long end of the curve declining throughout much of this
12-month period, the zero coupon segment of the municipal market substantially
outperformed other similarly rated coupon bearing bonds.
Another factor in the annual performance of these Funds, especially relative to
that of the unleveraged Lehman Brothers Insured Municipal Bond Index, was the
use of financial leverage. While leveraging can add volatility to a Fund's NAV
and share price, this strategy can also provide opportunities for additional
income and total return for common shareholders. Over this 12-month reporting
period, the Funds' performances were positively impacted by the leveraging
strategy, although not to the extent we have seen in past years. Over the long
term, we firmly believe that the use of financial leverage should continue to
work to the benefit of these Funds. This is demonstrated by the total return
performance of NQI, NIO, NIF, and NPX--both absolute and relative to the Lehman
Brothers Insured Municipal Bond Index--over the 5-year and 10-year periods ended
October 31, 2006.
In addition, NEA, which can invest up to 20% of its portfolio in uninsured
investment-grade quality securities, benefited from allocations of lower-quality
credits during this period, as these bonds generally outperformed other credit
quality sectors. The performance of this sector was largely the result of
investor demand for the higher yields typically associated with lower-quality
bonds, which drove up their value and caused credit spreads (the difference in
interest rates of higher-quality and lower-quality bonds) to tighten. As of
October 31, 2006, NEA held 2% of its portfolio in bonds rated BBB and 3% in
bonds rated A. Among the lower-rated credits making contributions to NEA's total
8
return were several hospital holdings, as the health care sector ranked second
in terms of performance among the Lehman Brothers Insured Municipal Bond Index
revenue sectors for the period. NVG, which also can invest in uninsured
securities, did not hold any bonds rated below AA as of the end of this period.
We also continued to see positive contributions from advance refunding activity,
which benefited these Funds through price appreciation and enhanced credit
quality. While advance refundings generally enhanced performance for this
12-month period, the Funds' holdings of older, previously pre-refunded bonds
tended to underperform the general municipal market, due primarily to their
shorter effective maturities. During the first half of this period, NQI, NIF,
and NPX also experienced some calls affecting their holdings of higher-yielding
housing bonds, which impacted the income component of these Funds' total
returns.
HOW WERE THE FUNDS POSITIONED IN TERMS OF CREDIT QUALITY AND BOND CALLS AS OF
OCTOBER 31, 2006?
Maintaining strong credit quality remained an important requirement. As of
October 31, 2006, NQI, NIO, NIF, and NPX continued to be 100% invested in
insured and/or U.S. guaranteed securities, while NVG and NEA, which can invest
up to 20% of their portfolios in uninsured investment-grade quality securities,
had allocated 93% and 90% of their portfolios, respectively, to insured and U.S.
guaranteed bonds rated AAA.
At the end of October 2006, potential call exposure for the period November 2006
through the end of 2008 ranged from 2% in NIF, 4% in NEA, and 6% in NVG to 9% in
NQI, 10% in NPX, and 12% in NIO. The number of actual bond calls in all of these
Funds depends largely on future market interest rates.
9
Dividend and Share Price
INFORMATION
As previously noted, these six Funds use leverage to potentially enhance
opportunities for additional income for common shareholders. The benefits of
leveraging are tied in part to the short-term rates that leveraged Funds pay
their MuniPreferred(R) shareholders. During periods of low short-term rates,
these Funds generally pay lower dividends to their MuniPreferred shareholders,
which can leave more earnings to support common share dividends. Conversely,
when short-term interest rates rise, as they did during this reporting period,
the Funds' borrowing costs also rise, impacting their income streams and
reducing the extent of the benefits of leveraging. The Funds' income streams
were also impacted as the proceeds from older, higher-yielding bonds that
matured, were called or were sold were reinvested into bonds currently available
in the market, which generally offered lower yields. These factors resulted in
one monthly dividend reduction in NEA, two in NVG, three in NIO, NIF, and NPX,
and four in NQI over the 12-month period ended October 31, 2006.
Due to capital gains generated by normal portfolio activity such as the sale of
appreciated securities and bond calls, common shareholders of the following
Funds received capital gains and net ordinary income distributions at the end of
December 2005, as follows:
LONG-TERM CAPITAL GAINS ORDINARY INCOME
(PER SHARE) (PER SHARE)
--------------------------------------------------------------------------------
NQI $0.0775 --
--------------------------------------------------------------------------------
NIO $0.1394 $0.0004
--------------------------------------------------------------------------------
NIF $0.0955 --
--------------------------------------------------------------------------------
These distributions had a slight negative impact on the earning power per common
share of these three Funds and were a minor factor in the common share dividend
reductions noted above.
All of the Funds in this report seek to pay stable dividends at rates that
reflect each Fund's past results and projected future performance. During
certain periods, each Fund may pay dividends at a rate that may be more or less
than the amount of net investment income actually earned by the Fund during the
period. If a Fund has cumulatively earned more than it has paid in dividends, it
holds the excess in reserve as undistributed net investment income (UNII) as
part of the Fund's NAV. Conversely, if a Fund has cumulatively paid dividends in
excess of its earnings, the excess constitutes negative UNII that is likewise
reflected in the Fund's NAV. Each Fund will, over time, pay all of
10
its net investment income as dividends to shareholders. As of October 31, 2006,
NQI, NIO, and NPX had positive UNII balances for both financial statement and
tax purposes, while NIF, NVG, and NEA had negative UNII balances for financial
statement purposes and positive UNII balances for tax purposes.
At the end of the reporting period, the Funds' share prices were trading at
discounts to their NAVs as shown in the accompanying chart:
10/31/06 12-MONTH AVERAGE
DISCOUNT DISCOUNT
--------------------------------------------------------------------------------
NQI -3.70% -3.53%
--------------------------------------------------------------------------------
NIO -5.27% -4.74%
--------------------------------------------------------------------------------
NIF -5.19% -4.43%
--------------------------------------------------------------------------------
NPX -7.98% -8.52%
--------------------------------------------------------------------------------
NVG -3.94% -3.95%
--------------------------------------------------------------------------------
NEA -3.88% -5.58%
--------------------------------------------------------------------------------
11
Nuveen Insured Quality Municipal Fund, Inc.
NQI
Performance
OVERVIEW As of October 31, 2006
FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price $ 14.83
--------------------------------------------------------------------------------
Common Share
Net Asset Value $ 15.40
--------------------------------------------------------------------------------
Premium/(Discount) to NAV -3.70%
--------------------------------------------------------------------------------
Market Yield 4.90%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield 1 6.81%
--------------------------------------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $ 589,928
--------------------------------------------------------------------------------
Average Effective Maturity
on Securities (Years) 18.61
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 8.00
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 12/19/90)
-----------------------------------
ON SHARE PRICE ON NAV
-----------------------------------
1-Year 2.76% 6.53%
-----------------------------------
5-Year 6.51% 6.11%
-----------------------------------
10-Year 6.41% 6.49%
-----------------------------------
STATES
(as a % of total investments)
--------------------------------------------------------------------------------
California 18.9%
--------------------------------------------------------------------------------
Texas 13.0%
--------------------------------------------------------------------------------
New York 10.3%
--------------------------------------------------------------------------------
Illinois 10.1%
--------------------------------------------------------------------------------
Washington 7.5%
--------------------------------------------------------------------------------
Florida 5.0%
--------------------------------------------------------------------------------
Nevada 4.7%
--------------------------------------------------------------------------------
Hawaii 4.0%
--------------------------------------------------------------------------------
Kentucky 3.8%
--------------------------------------------------------------------------------
Ohio 2.0%
--------------------------------------------------------------------------------
Pennsylvania 2.0%
--------------------------------------------------------------------------------
Massachusetts 1.6%
--------------------------------------------------------------------------------
West Virginia 1.5%
--------------------------------------------------------------------------------
Maryland 1.2%
--------------------------------------------------------------------------------
Other 14.4%
--------------------------------------------------------------------------------
INDUSTRIES
(as a % of total investments)
--------------------------------------------------------------------------------
Transportation 22.3%
--------------------------------------------------------------------------------
U.S. Guaranteed 15.7%
--------------------------------------------------------------------------------
Tax Obligation/Limited 15.0%
--------------------------------------------------------------------------------
Tax Obligation/General 13.9%
--------------------------------------------------------------------------------
Health Care 11.4%
--------------------------------------------------------------------------------
Utilities 9.0%
--------------------------------------------------------------------------------
Other 12.7%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CREDIT QUALITY
(as a % of total investments)
[PIE CHART]
Insured 81%
U.S. Guaranteed 16%
FHA/FNMA/GNMA Guaranteed 3%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE 2
[BAR CHART]
0.0740 0.0705 0.0705 0.0705 0.067 0.067 0.067 0.0635 0.0635 0.0635 0.0605 0.0605
-----------------------------------------------------------------------------------------------------
Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SHARE PRICE PERFORMANCE
[LINE CHART]
Weekly
Date Closing Price
-------- -------------
11/01/05 15.33
15.38
15.39
15.31
15.44
15.46
15.32
15.10
15.02
14.97
14.92
14.91
14.89
14.55
14.70
14.62
14.60
14.60
14.74
14.67
14.62
14.76
14.73
14.66
14.71
14.56
14.57
14.55
14.59
14.40
14.35
14.35
14.39
14.38
14.36
14.42
14.42
14.56
14.51
14.60
14.76
14.79
14.79
14.83
14.95
14.96
15.00
15.07
15.10
15.08
14.97
14.96
15.06
15.09
15.09
15.21
15.34
15.32
15.23
15.33
15.44
15.50
15.61
15.58
15.50
15.34
15.26
15.26
15.25
15.07
15.04
15.01
14.93
14.91
14.98
14.95
15.00
15.04
15.00
14.97
15.02
15.09
15.00
15.06
15.05
14.86
14.75
14.75
14.81
14.88
14.93
14.86
14.85
15.03
15.03
14.96
14.94
14.86
14.94
15.00
15.00
14.88
14.96
15.00
14.99
15.01
14.99
14.91
14.84
14.79
14.68
14.57
14.54
14.55
14.46
14.50
14.51
14.45
14.45
14.51
14.54
14.57
14.56
14.55
14.55
14.62
14.50
14.44
14.45
14.45
14.38
14.43
14.44
14.25
14.25
14.38
14.58
14.52
14.55
14.57
14.28
14.22
14.29
14.23
14.24
14.26
14.21
14.31
14.20
14.12
14.21
14.18
14.12
14.14
13.95
13.81
13.89
13.91
13.99
13.98
13.88
13.97
13.86
13.97
13.98
13.93
13.92
13.85
13.91
14.00
13.98
14.00
14.08
14.09
14.10
14.10
14.04
13.99
13.96
13.86
13.80
13.84
13.93
14.01
14.02
14.05
14.15
14.21
14.30
14.33
14.55
14.59
14.70
14.81
14.68
14.73
14.79
14.78
14.70
14.74
14.90
14.76
14.89
14.83
14.83
14.83
14.82
14.81
14.84
14.83
14.83
14.76
14.76
14.77
14.60
14.61
14.62
14.55
14.58
14.50
14.49
14.53
14.41
14.50
14.47
14.52
14.58
14.61
14.61
14.79
14.69
14.63
14.63
14.62
14.65
14.67
14.66
14.68
14.65
14.66
14.66
14.64
14.60
14.56
14.57
14.60
14.67
14.67
14.66
14.76
14.75
14.74
14.78
14.82
10/31/06 14.83
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
--------------------------------------------------------------------------------
1 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment, in order to equal the yield of the Fund on an
after-tax basis. It is based on a federal income tax rate of 28%. When
comparing this Fund to investments that generate qualified dividend
income, the Taxable-Equivalent Yield is lower.
2 The Fund paid shareholders a capital gains distribution in December 2005
of $0.0775 per share.
12
Nuveen Insured Municipal Opportunity Fund, Inc.
NIO
Performance
OVERVIEW As of October 31, 2006
--------------------------------------------------------------------------------
CREDIT QUALITY
(as a % of total investments)
[PIE CHART]
Insured 74%
U.S. Guaranteed 25%
FHA/FNMA/GNMA Guaranteed 1%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE 2
[BAR CHART]
0.0710 0.0710 0.0710 0.0710 0.0675 0.0675 0.0675 0.0645 0.0645 0.0645 0.0615 0.0615
----------------------------------------------------------------------------------------------
Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SHARE PRICE PERFORMANCE
[LINE CHART]
Weekly
Date Closing Price
-------- -------------
11/01/05 14.51
14.55
14.52
14.43
14.42
14.45
14.35
14.20
14.32
14.22
14.21
14.23
14.24
14.20
14.23
14.25
14.23
14.28
14.35
14.37
14.24
14.29
14.34
14.20
14.25
14.27
14.22
14.20
14.22
13.94
14.02
13.96
13.95
13.94
14.03
14.08
14.06
14.03
14.14
14.31
14.42
14.44
14.44
14.72
14.84
14.89
15.00
14.96
14.80
14.83
14.94
14.91
14.92
15.03
15.06
15.14
15.14
15.23
15.21
15.10
15.12
15.12
15.24
15.24
15.20
15.15
15.12
15.02
15.20
15.19
15.16
15.10
15.12
15.13
15.10
15.14
15.16
15.15
15.15
15.23
15.31
15.29
15.36
15.20
15.21
15.14
14.95
15.02
15.06
14.95
14.95
14.91
14.80
14.85
14.85
14.85
14.79
14.81
14.85
14.95
14.98
14.90
14.98
14.95
15.02
15.11
15.03
14.97
14.91
14.73
14.70
14.60
14.55
14.44
14.35
14.38
14.39
14.37
14.43
14.51
14.46
14.47
14.54
14.57
14.57
14.61
14.57
14.51
14.55
14.62
14.56
14.58
14.50
14.40
14.44
14.42
14.45
14.37
14.39
14.46
14.41
14.45
14.41
14.43
14.50
14.45
14.41
14.51
14.58
14.50
14.38
14.43
14.40
14.36
14.41
14.19
14.24
14.25
14.19
14.14
14.04
14.01
13.94
13.90
13.94
13.90
13.98
14.04
14.03
14.10
14.07
14.06
14.09
14.08
14.14
14.11
14.11
14.15
14.26
14.24
14.18
14.35
14.45
14.46
14.49
14.54
14.65
14.68
14.86
14.94
14.90
14.85
14.90
14.82
14.82
14.78
14.84
14.76
14.78
14.85
14.88
14.83
14.89
14.88
14.83
14.83
14.85
14.85
14.86
14.87
14.88
14.88
14.91
14.85
14.64
14.74
14.81
14.81
14.80
14.75
14.71
14.72
14.65
14.64
14.62
14.65
14.74
14.73
14.73
14.80
14.85
14.80
14.80
14.85
14.76
14.78
14.70
14.68
14.72
14.70
14.64
14.61
14.48
14.50
14.47
14.59
14.61
14.59
14.60
14.61
14.68
14.70
14.73
14.70
10/31/06 14.75
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
--------------------------------------------------------------------------------
FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price $ 14.75
--------------------------------------------------------------------------------
Common Share
Net Asset Value $ 15.57
--------------------------------------------------------------------------------
Premium/(Discount) to NAV -5.27%
--------------------------------------------------------------------------------
Market Yield 5.00%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield 1 6.94%
--------------------------------------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $1,263,172
--------------------------------------------------------------------------------
Average Effective Maturity
on Securities (Years) 16.90
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 8.41
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 9/19/91)
-----------------------------------
ON SHARE PRICE ON NAV
-----------------------------------
1-Year 8.26% 7.05%
-----------------------------------
5-Year 6.66% 6.27%
-----------------------------------
10-Year 6.23% 6.42%
-----------------------------------
STATES
(as a % of total investments)
--------------------------------------------------------------------------------
California 19.6%
--------------------------------------------------------------------------------
Texas 10.3%
--------------------------------------------------------------------------------
Alabama 7.1%
--------------------------------------------------------------------------------
Nevada 5.5%
--------------------------------------------------------------------------------
New York 5.4%
--------------------------------------------------------------------------------
Illinois 4.3%
--------------------------------------------------------------------------------
Michigan 4.3%
--------------------------------------------------------------------------------
Colorado 4.2%
--------------------------------------------------------------------------------
Florida 3.7%
--------------------------------------------------------------------------------
Massachusetts 3.0%
--------------------------------------------------------------------------------
Wisconsin 2.7%
--------------------------------------------------------------------------------
South Carolina 2.6%
--------------------------------------------------------------------------------
Louisiana 2.5%
--------------------------------------------------------------------------------
Ohio 2.0%
--------------------------------------------------------------------------------
Indiana 1.8%
--------------------------------------------------------------------------------
New Jersey 1.6%
--------------------------------------------------------------------------------
Hawaii 1.6%
--------------------------------------------------------------------------------
Washington 1.5%
--------------------------------------------------------------------------------
Pennsylvania 1.4%
--------------------------------------------------------------------------------
Arizona 1.4%
--------------------------------------------------------------------------------
Kentucky 1.4%
--------------------------------------------------------------------------------
Other 12.1%
--------------------------------------------------------------------------------
INDUSTRIES
(as a % of total investments)
--------------------------------------------------------------------------------
U.S. Guaranteed 25.1%
--------------------------------------------------------------------------------
Tax Obligation/Limited 18.1%
--------------------------------------------------------------------------------
Transportation 15.0%
--------------------------------------------------------------------------------
Tax Obligation/General 12.7%
--------------------------------------------------------------------------------
Utilities 8.1%
--------------------------------------------------------------------------------
Health Care 7.7%
--------------------------------------------------------------------------------
Water and Sewer 6.2%
--------------------------------------------------------------------------------
Other 7.1%
--------------------------------------------------------------------------------
1 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment, in order to equal the yield of the Fund on an
after-tax basis. It is based on a federal income tax rate of 28%. When
comparing this Fund to investments that generate qualified dividend
income, the Taxable-Equivalent Yield is lower.
2 The Fund paid shareholders capital gains and net ordinary income
distributions in December 2005 of $0.1398 per share.
13
Nuveen Premier Insured Municipal Income Fund, Inc.
NIF
Performance
OVERVIEW As of October 31, 2006
FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price $ 14.60
--------------------------------------------------------------------------------
Common Share
Net Asset Value $ 15.40
--------------------------------------------------------------------------------
Premium/(Discount) to NAV -5.19%
--------------------------------------------------------------------------------
Market Yield 5.01%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield 1 6.96%
--------------------------------------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $ 299,001
--------------------------------------------------------------------------------
Average Effective Maturity
on Securities (Years) 15.13
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 8.51
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 12/19/91)
-----------------------------------
ON SHARE PRICE ON NAV
-----------------------------------
1-Year 7.68% 6.46%
-----------------------------------
5-Year 5.58% 6.19%
-----------------------------------
10-Year 6.22% 6.22%
-----------------------------------
STATES
(as a % of total investments)
--------------------------------------------------------------------------------
California 20.3%
--------------------------------------------------------------------------------
Washington 12.2%
--------------------------------------------------------------------------------
Illinois 10.5%
--------------------------------------------------------------------------------
Texas 6.9%
--------------------------------------------------------------------------------
Nevada 5.6%
--------------------------------------------------------------------------------
New York 5.5%
--------------------------------------------------------------------------------
Colorado 4.7%
--------------------------------------------------------------------------------
Florida 3.3%
--------------------------------------------------------------------------------
Oregon 2.8%
--------------------------------------------------------------------------------
Hawaii 2.5%
--------------------------------------------------------------------------------
Michigan 2.4%
--------------------------------------------------------------------------------
Tennessee 2.4%
--------------------------------------------------------------------------------
Missouri 2.2%
--------------------------------------------------------------------------------
Georgia 2.2%
--------------------------------------------------------------------------------
Indiana 1.9%
--------------------------------------------------------------------------------
Other 14.6%
--------------------------------------------------------------------------------
INDUSTRIES
(as a % of total investments)
--------------------------------------------------------------------------------
Tax Obligation/General 23.7%
--------------------------------------------------------------------------------
U.S. Guaranteed 19.4%
--------------------------------------------------------------------------------
Transportation 18.4%
--------------------------------------------------------------------------------
Tax Obligation/Limited 12.6%
--------------------------------------------------------------------------------
Health Care 10.0%
--------------------------------------------------------------------------------
Utilities 6.4%
--------------------------------------------------------------------------------
Other 9.5%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CREDIT QUALITY
(as a % of total investments)
[PIE CHART]
Insured 80%
U.S. Guaranteed 19%
FHA/FNMA/GNMA Guaranteed 1%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE 2
[BAR CHART]
0.0710 0.0675 0.0675 0.0675 0.0675 0.0675 0.0675 0.0640 0.0640 0.0640 0.0610 0.0610
----------------------------------------------------------------------------------------------
Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SHARE PRICE PERFORMANCE
[LINE CHART]
Weekly
Date Closing Price
-------- -------------
11/01/05 14.42
14.41
14.46
14.33
14.32
14.32
14.15
14.11
14.01
14.09
14.11
14.13
14.10
14.02
14.18
14.15
14.20
14.26
14.38
14.36
14.37
14.42
14.23
14.29
14.25
14.26
14.38
14.22
14.16
13.90
13.97
13.92
13.97
14.04
13.97
14.07
14.14
14.19
14.15
14.29
14.41
14.31
14.31
14.41
14.44
14.51
14.61
14.60
14.56
14.47
14.51
14.47
14.48
14.59
14.62
14.64
14.72
14.84
14.88
14.86
14.88
14.77
14.91
15.03
14.99
15.00
15.00
14.99
14.87
14.95
15.00
15.00
14.96
14.87
14.90
14.80
14.76
14.75
14.86
14.85
14.95
14.99
14.99
15.16
15.02
14.87
14.74
14.86
14.85
14.86
14.82
14.75
14.76
14.81
14.76
14.60
14.65
14.76
14.62
14.87
15.00
15.00
14.93
14.90
14.98
14.99
14.98
14.90
14.76
14.76
14.69
14.72
14.60
14.51
14.47
14.49
14.38
14.37
14.37
14.41
14.40
14.29
14.30
14.44
14.44
14.50
14.54
14.58
14.50
14.52
14.44
14.39
14.36
14.33
14.23
14.25
14.40
14.49
14.52
14.54
14.60
14.60
14.55
14.54
14.57
14.35
14.44
14.52
14.60
14.48
14.30
14.18
14.22
14.20
14.20
13.97
13.86
13.88
14.08
14.10
14.11
14.05
14.07
13.95
13.95
13.75
13.86
13.89
13.83
13.91
14.03
14.04
14.04
14.10
14.06
14.01
14.04
14.02
14.09
14.19
14.22
14.31
14.48
14.46
14.26
14.42
14.60
14.66
15.07
15.01
14.89
14.92
15.00
14.85
14.75
14.77
14.65
14.58
14.53
14.71
14.73
14.69
14.70
14.70
14.80
14.76
14.76
14.67
14.79
14.86
14.85
14.85
14.84
14.71
14.56
14.56
14.57
14.53
14.55
14.55
14.46
14.49
14.49
14.66
14.71
14.68
14.73
14.74
14.63
14.78
14.68
14.69
14.69
14.61
14.67
14.71
14.70
14.64
14.74
14.74
14.58
14.59
14.50
14.45
14.48
14.49
14.50
14.52
14.45
14.43
14.44
14.54
14.59
14.56
10/31/06 14.60
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
--------------------------------------------------------------------------------
1 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment, in order to equal the yield of the Fund on an
after-tax basis. It is based on a federal income tax rate of 28%. When
comparing this Fund to investments that generate qualified dividend
income, the Taxable-Equivalent Yield is lower.
2 The Fund paid shareholders a capital gains distribution in December 2005
of $0.0955 per share.
14
Nuveen Insured Premium Income Municipal Fund 2
NPX
Performance
OVERVIEW As of October 31, 2006
--------------------------------------------------------------------------------
CREDIT QUALITY
(as a % of total investments)
[PIE CHART]
Insured 85%
U.S. Guaranteed 14%
FHA/FNMA/GNMA Guaranteed 1%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE
[BAR CHART]
0.0635 0.0600 0.0600 0.0600 0.0570 0.0570 0.0570 0.0540 0.0540 0.0540 0.0540 0.0540
----------------------------------------------------------------------------------------------
Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SHARE PRICE PERFORMANCE
[LINE CHART]
Weekly
Date Closing Price
-------- -------------
11/01/05 12.88
12.83
12.75
12.81
12.80
12.86
12.75
12.61
12.65
12.58
12.50
12.53
12.54
12.47
12.44
12.48
12.51
12.53
12.61
12.60
12.65
12.63
12.65
12.57
12.54
12.51
12.56
12.55
12.51
12.42
12.44
12.47
12.47
12.44
12.46
12.43
12.43
12.52
12.54
12.58
12.61
12.65
12.65
12.67
12.79
13.03
13.08
13.18
13.00
12.85
12.89
12.95
12.96
12.99
13.00
13.06
13.07
13.14
13.11
13.05
13.10
13.08
13.09
13.13
13.08
13.05
12.96
13.04
13.04
13.15
13.20
13.14
13.14
13.14
13.13
13.14
13.11
13.16
13.09
13.15
13.15
13.22
13.19
13.14
13.06
13.00
12.86
12.82
12.85
12.87
12.91
12.90
12.92
12.96
12.95
12.92
12.95
12.93
12.95
12.91
12.93
12.92
12.94
12.91
12.99
13.08
13.08
12.94
12.93
12.90
12.82
12.72
12.74
12.69
12.64
12.62
12.62
12.53
12.55
12.54
12.52
12.58
12.60
12.66
12.66
12.67
12.75
12.70
12.68
12.68
12.67
12.77
12.85
12.70
12.71
12.75
12.71
12.72
12.71
12.88
12.75
12.65
12.63
12.60
12.59
12.55
12.55
12.58
12.68
12.62
12.65
12.64
12.59
12.56
12.55
12.36
12.31
12.32
12.32
12.32
12.30
12.24
12.23
12.22
12.14
12.15
12.18
12.17
12.28
12.32
12.27
12.29
12.26
12.29
12.42
12.32
12.28
12.25
12.26
12.22
12.29
12.25
12.33
12.38
12.38
12.38
12.38
12.44
12.50
12.58
12.63
12.65
12.71
12.65
12.64
12.61
12.57
12.52
12.58
12.68
12.68
12.72
12.76
12.72
12.78
12.71
12.77
12.79
12.84
12.88
12.88
12.97
13.03
12.99
12.90
12.87
12.90
12.90
12.86
12.81
12.85
12.86
12.83
12.84
12.89
12.87
12.91
12.91
12.91
12.97
12.93
12.96
12.96
13.00
12.98
12.97
12.97
13.00
12.98
12.97
12.93
12.96
12.92
12.85
12.91
12.96
12.98
13.07
13.05
13.05
13.03
13.05
13.06
13.01
10/31/06 13.03
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
--------------------------------------------------------------------------------
FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price $ 13.03
--------------------------------------------------------------------------------
Common Share
Net Asset Value $ 14.16
--------------------------------------------------------------------------------
Premium/(Discount) to NAV -7.98%
--------------------------------------------------------------------------------
Market Yield 4.97%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield 1 6.90%
--------------------------------------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $ 528,984
--------------------------------------------------------------------------------
Average Effective Maturity
on Securities (Years) 16.76
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 8.39
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 7/22/93)
-----------------------------------
ON SHARE PRICE ON NAV
-----------------------------------
1-Year 7.11% 6.75%
-----------------------------------
5-Year 4.98% 6.24%
-----------------------------------
10-Year 7.47% 6.63%
-----------------------------------
STATES
(as a % of total investments)
--------------------------------------------------------------------------------
California 13.6%
--------------------------------------------------------------------------------
Texas 9.8%
--------------------------------------------------------------------------------
New York 9.4%
--------------------------------------------------------------------------------
Pennsylvania 9.3%
--------------------------------------------------------------------------------
Colorado 6.0%
--------------------------------------------------------------------------------
Hawaii 5.2%
--------------------------------------------------------------------------------
Wisconsin 4.8%
--------------------------------------------------------------------------------
Washington 4.6%
--------------------------------------------------------------------------------
Georgia 2.5%
--------------------------------------------------------------------------------
North Dakota 2.5%
--------------------------------------------------------------------------------
Illinois 2.5%
--------------------------------------------------------------------------------
Oregon 2.4%
--------------------------------------------------------------------------------
Massachusetts 2.3%
--------------------------------------------------------------------------------
Nevada 2.1%
--------------------------------------------------------------------------------
New Jersey 2.1%
--------------------------------------------------------------------------------
Virginia 2.0%
--------------------------------------------------------------------------------
Louisiana 1.9%
--------------------------------------------------------------------------------
Arkansas 1.9%
--------------------------------------------------------------------------------
Arizona 1.6%
--------------------------------------------------------------------------------
Utah 1.5%
--------------------------------------------------------------------------------
Other 12.0%
--------------------------------------------------------------------------------
INDUSTRIES
(as a % of total investments)
--------------------------------------------------------------------------------
Utilities 17.8%
--------------------------------------------------------------------------------
U.S. Guaranteed 13.5%
--------------------------------------------------------------------------------
Tax Obligation/General 12.2%
--------------------------------------------------------------------------------
Transportation 11.8%
--------------------------------------------------------------------------------
Tax Obligation/Limited 11.8%
--------------------------------------------------------------------------------
Water and Sewer 11.1%
--------------------------------------------------------------------------------
Health Care 9.6%
--------------------------------------------------------------------------------
Education and Civic Organizations 8.0%
--------------------------------------------------------------------------------
Other 4.2%
--------------------------------------------------------------------------------
1 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment, in order to equal the yield of the Fund on an
after-tax basis. It is based on a federal income tax rate of 28%. When
comparing this Fund to investments that generate qualified dividend
income, the Taxable-Equivalent Yield is lower.
15
Nuveen Insured Dividend Advantage Municipal Fund
NVG
Performance
OVERVIEW As of October 31, 2006
FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price $ 14.89
--------------------------------------------------------------------------------
Common Share
Net Asset Value $ 15.50
--------------------------------------------------------------------------------
Premium/(Discount) to NAV -3.94%
--------------------------------------------------------------------------------
Market Yield 5.16%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield 1 7.17%
--------------------------------------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $ 462,037
--------------------------------------------------------------------------------
Average Effective Maturity
on Securities (Years) 15.12
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 7.82
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 3/25/02)
-----------------------------------
ON SHARE PRICE ON NAV
-----------------------------------
1-Year 11.09% 7.39%
-----------------------------------
Since
Inception 6.39% 8.08%
-----------------------------------
STATES
(as a % of total investments)
--------------------------------------------------------------------------------
Texas 18.3%
--------------------------------------------------------------------------------
Indiana 10.4%
--------------------------------------------------------------------------------
Illinois 10.4%
--------------------------------------------------------------------------------
Washington 9.1%
--------------------------------------------------------------------------------
Florida 8.7%
--------------------------------------------------------------------------------
California 8.4%
--------------------------------------------------------------------------------
Tennessee 6.2%
--------------------------------------------------------------------------------
Nevada 2.9%
--------------------------------------------------------------------------------
Alabama 2.8%
--------------------------------------------------------------------------------
Colorado 2.8%
--------------------------------------------------------------------------------
New York 2.5%
--------------------------------------------------------------------------------
Pennsylvania 2.4%
--------------------------------------------------------------------------------
Alaska 2.4%
--------------------------------------------------------------------------------
Other 12.7%
--------------------------------------------------------------------------------
INDUSTRIES
(as a % of total investments)
--------------------------------------------------------------------------------
U.S. Guaranteed 23.5%
--------------------------------------------------------------------------------
Tax Obligation/Limited 16.9%
--------------------------------------------------------------------------------
Transportation 14.4%
--------------------------------------------------------------------------------
Tax Obligation/General 13.1%
--------------------------------------------------------------------------------
Water and Sewer 8.1%
--------------------------------------------------------------------------------
Utilities 7.3%
--------------------------------------------------------------------------------
Education and Civic Organizations 7.3%
--------------------------------------------------------------------------------
Health Care 7.1%
--------------------------------------------------------------------------------
Other 2.3%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CREDIT QUALITY
(as a % of total investments)
[PIE CHART]
Insured 66%
U.S. Guaranteed 24%
FHA/FNMA/GNMA Guaranteed 3%
AAA (Uninsured) 2%
AA (Uninsured) 5%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE
[BAR CHART]
0.0705 0.0705 0.0705 0.0705 0.0705 0.0705 0.0705 0.0670 0.0670 0.0670 0.0640 0.0640
----------------------------------------------------------------------------------------------
Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SHARE PRICE PERFORMANCE
[LINE CHART]
Weekly
Date Closing Price
-------- -------------
11/01/05 14.20
14.08
14.12
14.06
14.12
14.18
14.13
14.06
14.16
14.07
14.05
14.13
14.06
13.95
14.03
14.00
13.93
14.07
14.14
14.15
14.03
14.03
14.14
14.04
14.00
14.05
14.10
14.10
14.11
13.97
13.93
13.90
13.97
14.03
14.00
13.99
14.06
14.00
14.05
14.08
14.17
14.12
14.12
14.23
14.34
14.36
14.58
14.65
14.60
14.50
14.55
14.70
14.72
14.96
14.90
14.86
14.90
14.98
14.95
15.00
14.94
14.92
15.03
15.03
14.92
14.87
14.91
15.01
14.93
14.98
14.85
14.74
14.87
14.94
14.94
15.01
14.89
15.02
15.00
15.00
15.01
15.04
14.98
15.04
15.05
15.00
14.94
15.04
15.07
15.05
14.92
14.91
14.91
14.92
15.01
15.08
15.00
14.94
14.90
14.80
14.82
14.81
14.85
14.87
14.88
14.93
14.98
14.99
15.07
14.97
14.98
14.88
14.88
14.89
14.61
14.72
14.88
14.90
15.00
14.98
14.98
15.00
14.99
15.10
15.10
15.05
15.01
15.04
14.93
14.89
14.82
14.75
14.75
14.60
14.49
14.58
14.79
14.66
14.60
14.72
14.60
14.59
14.55
14.55
14.68
14.66
14.54
14.63
14.72
14.59
14.62
14.62
14.72
14.60
14.63
14.45
14.45
14.33
14.33
14.42
14.23
14.19
14.04
14.11
14.08
14.06
14.00
14.00
14.08
14.23
14.16
14.18
14.29
14.37
14.55
14.35
14.30
14.41
14.35
14.30
14.41
14.37
14.35
14.37
14.50
14.75
14.75
14.84
14.89
14.94
14.93
15.01
15.10
15.13
15.11
15.07
15.12
14.96
14.99
15.00
15.02
14.99
15.00
15.00
15.05
14.94
15.09
15.00
15.07
15.08
15.07
15.06
15.05
15.04
14.93
14.91
14.99
14.94
14.88
14.89
14.77
14.81
14.85
14.80
14.76
14.78
14.77
14.87
14.81
14.91
14.94
14.86
14.86
14.86
14.90
14.93
14.93
14.95
14.87
14.92
14.81
14.87
14.65
14.73
14.71
14.75
14.83
14.89
14.91
14.86
14.80
14.78
14.80
14.84
10/31/06 14.89
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
--------------------------------------------------------------------------------
1 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment, in order to equal the yield of the Fund on an
after-tax basis. It is based on a federal income tax rate of 28%. When
comparing this Fund to investments that generate qualified dividend
income, the Taxable-Equivalent Yield is lower.
16
Nuveen Insured Tax-Free Advantage Municipal Fund
NEA
Performance
OVERVIEW As of October 31, 2006
--------------------------------------------------------------------------------
CREDIT QUALITY
(as a % of total investments)
[PIE CHART]
Insured 81%
U.S. Guaranteed 9%
AAA (Uninsured) 3%
AA (Uninsured) 2%
A (Uninsured) 3%
BBB (Uninsured) 2%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE
[BAR CHART]
0.0620 0.0620 0.0620 0.0620 0.0620 0.0620 0.0620 0.0620 0.0620 0.0620 0.0590 0.0590
----------------------------------------------------------------------------------------------
Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SHARE PRICE PERFORMANCE
[LINE CHART]
Weekly
Date Closing Price
-------- -------------
11/01/05 13.47
13.44
13.37
13.18
13.31
13.33
13.27
13.20
13.16
13.06
13.02
13.15
13.08
13.15
13.17
13.09
13.09
13.07
13.17
13.05
12.98
13.12
13.09
13.08
13.10
13.01
13.13
13.09
13.16
13.09
13.11
13.10
13.09
13.04
13.01
13.01
13.04
13.12
13.11
13.23
13.35
13.34
13.34
13.56
13.63
13.68
13.70
13.71
13.68
13.68
13.94
13.65
13.60
13.70
13.74
13.72
13.81
14.01
13.93
13.83
13.95
13.83
13.88
13.84
13.70
13.62
13.60
13.60
13.67
13.73
13.75
13.95
13.84
13.92
13.90
14.00
14.05
14.07
14.02
14.04
14.10
14.10
14.07
14.02
13.85
13.85
13.80
13.80
13.95
13.87
13.71
13.65
13.80
13.75
13.82
13.73
13.57
13.67
13.63
13.75
13.71
13.73
13.75
13.69
13.78
13.80
13.79
13.84
13.75
13.72
13.65
13.56
13.48
13.50
13.56
13.73
13.60
13.59
13.65
13.66
13.70
13.70
13.75
13.71
13.71
13.79
13.85
13.90
13.90
13.85
13.74
13.75
13.72
13.70
13.75
13.84
14.01
13.71
13.75
13.83
13.71
13.79
13.76
13.59
13.55
13.53
13.70
13.85
13.79
13.59
13.58
13.50
13.54
13.53
13.58
13.60
13.53
13.48
13.46
13.48
13.44
13.48
13.48
13.46
13.52
13.62
13.53
13.65
13.61
13.84
13.75
13.81
13.88
14.05
13.99
14.18
14.10
14.08
13.99
14.05
14.02
14.08
14.04
14.20
14.20
14.12
14.21
14.22
14.24
14.25
14.39
14.50
14.51
14.47
14.47
14.40
14.48
14.39
14.30
14.31
14.33
14.30
14.34
14.37
14.42
14.35
14.40
14.39
14.49
14.42
14.45
14.52
14.46
14.47
14.31
14.33
14.29
14.29
14.35
14.24
14.36
14.33
14.35
14.39
14.45
14.39
14.36
14.40
14.49
14.59
14.50
14.46
14.46
14.56
14.58
14.56
14.55
14.57
14.49
14.47
14.38
14.43
14.33
14.40
14.35
14.34
14.35
14.37
14.30
14.30
14.39
14.30
14.30
14.29
10/31/06 14.35
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
--------------------------------------------------------------------------------
FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price $ 14.35
--------------------------------------------------------------------------------
Common Share
Net Asset Value $ 14.93
--------------------------------------------------------------------------------
Premium/(Discount) to NAV -3.88%
--------------------------------------------------------------------------------
Market Yield 4.93%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield 1 6.85%
--------------------------------------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $ 276,506
--------------------------------------------------------------------------------
Average Effective Maturity
on Securities (Years) 19.81
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 7.94
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 11/21/02)
-----------------------------------
ON SHARE PRICE ON NAV
-----------------------------------
1-Year 12.82% 7.82%
-----------------------------------
Since
Inception 4.72% 6.89%
-----------------------------------
STATES
(as a % of total investments)
--------------------------------------------------------------------------------
California 19.2%
--------------------------------------------------------------------------------
Texas 8.6%
--------------------------------------------------------------------------------
Michigan 7.7%
--------------------------------------------------------------------------------
New York 6.8%
--------------------------------------------------------------------------------
Washington 6.1%
--------------------------------------------------------------------------------
Indiana 5.8%
--------------------------------------------------------------------------------
Pennsylvania 5.8%
--------------------------------------------------------------------------------
Alabama 5.5%
--------------------------------------------------------------------------------
South Carolina 4.9%
--------------------------------------------------------------------------------
Wisconsin 4.4%
--------------------------------------------------------------------------------
Massachusetts 3.3%
--------------------------------------------------------------------------------
Arizona 2.5%
--------------------------------------------------------------------------------
Colorado 2.5%
--------------------------------------------------------------------------------
Illinois 2.5%
--------------------------------------------------------------------------------
Other 14.4%
--------------------------------------------------------------------------------
INDUSTRIES
(as a % of total investments)
--------------------------------------------------------------------------------
Tax Obligation/General 27.2%
--------------------------------------------------------------------------------
Tax Obligation/Limited 26.2%
--------------------------------------------------------------------------------
Health Care 13.4%
--------------------------------------------------------------------------------
Utilities 9.5%
--------------------------------------------------------------------------------
U.S. Guaranteed 8.7%
--------------------------------------------------------------------------------
Transportation 7.0%
--------------------------------------------------------------------------------
Other 8.0%
--------------------------------------------------------------------------------
1 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment, in order to equal the yield of the Fund on an
after-tax basis. It is based on a federal income tax rate of 28%. When
comparing this Fund to investments that generate qualified dividend
income, the Taxable-Equivalent Yield is lower.
17
Shareholder
MEETING REPORT
The Annual Shareholder Meeting was held on August 1, 2006, at The Northern Trust
Company, 50 South LaSalle Street, Chicago, Illinois 60675.
NQI NIO NIF
----------------------------------------------------------------------------------------------------------------------------------
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 voting shares
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 32,238,455 -- 71,979,626 -- 17,463,741 --
Withhold 582,095 -- 716,295 -- 80,482 --
----------------------------------------------------------------------------------------------------------------------------------
Total 32,820,550 -- 72,695,921 -- 17,544,223 --
==================================================================================================================================
Lawrence H. Brown
For 32,254,410 -- 71,999,392 -- 17,458,106 --
Withhold 566,140 -- 696,529 -- 86,117 --
----------------------------------------------------------------------------------------------------------------------------------
Total 32,820,550 -- 72,695,921 -- 17,544,223 --
==================================================================================================================================
Jack B. Evans
For 32,245,601 -- 71,990,365 -- 17,463,741 --
Withhold 574,949 -- 705,556 -- 80,482 --
----------------------------------------------------------------------------------------------------------------------------------
Total 32,820,550 -- 72,695,921 -- 17,544,223 --
==================================================================================================================================
William C. Hunter
For 32,259,218 -- 72,014,623 -- 17,462,941 --
Withhold 561,332 -- 681,298 -- 81,282 --
----------------------------------------------------------------------------------------------------------------------------------
Total 32,820,550 -- 72,695,921 -- 17,544,223 --
==================================================================================================================================
David J. Kundert
For 32,251,880 -- 72,005,412 -- 17,462,381 --
Withhold 568,670 -- 690,509 -- 81,842 --
----------------------------------------------------------------------------------------------------------------------------------
Total 32,820,550 -- 72,695,921 -- 17,544,223 --
==================================================================================================================================
William J. Schneider
For -- 11,492 -- 25,195 -- 5,780
Withhold -- 29 -- 314 -- 2
----------------------------------------------------------------------------------------------------------------------------------
Total -- 11,521 -- 25,509 -- 5,782
==================================================================================================================================
Timothy R. Schwertfeger
For -- 11,491 -- 25,195 -- 5,780
Withhold -- 30 -- 314 -- 2
----------------------------------------------------------------------------------------------------------------------------------
Total -- 11,521 -- 25,509 -- 5,782
==================================================================================================================================
Judith M. Stockdale
For 32,243,979 -- 71,998,805 -- 17,460,139 --
Withhold 576,571 -- 697,116 -- 84,084 --
----------------------------------------------------------------------------------------------------------------------------------
Total 32,820,550 -- 72,695,921 -- 17,544,223 --
==================================================================================================================================
Eugene S. Sunshine
For 32,253,943 -- 72,008,705 -- 17,462,181 --
Withhold 566,607 -- 687,216 -- 82,042 --
----------------------------------------------------------------------------------------------------------------------------------
Total 32,820,550 -- 72,695,921 -- 17,544,223 --
==================================================================================================================================
18
NPX NVG NEA
----------------------------------------------------------------------------------------------------------------------------------
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 voting shares
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 34,175,124 -- 28,127,919 -- 17,801,431 --
Withhold 352,757 -- 111,800 -- 181,736 --
----------------------------------------------------------------------------------------------------------------------------------
Total 34,527,881 -- 28,239,719 -- 17,983,167 --
==================================================================================================================================
Lawrence H. Brown
For 34,168,776 -- 28,123,917 -- 17,782,900 --
Withhold 359,105 -- 115,802 -- 200,267 --
----------------------------------------------------------------------------------------------------------------------------------
Total 34,527,881 -- 28,239,719 -- 17,983,167 --
==================================================================================================================================
Jack B. Evans
For 34,159,360 -- 28,127,016 -- 17,792,731 --
Withhold 368,521 -- 112,703 -- 190,436 --
----------------------------------------------------------------------------------------------------------------------------------
Total 34,527,881 -- 28,239,719 -- 17,983,167 --
==================================================================================================================================
William C. Hunter
For 34,169,095 -- 28,128,777 -- 17,791,124 --
Withhold 358,786 -- 110,942 -- 192,043 --
----------------------------------------------------------------------------------------------------------------------------------
Total 34,527,881 -- 28,239,719 -- 17,983,167 --
==================================================================================================================================
David J. Kundert
For 34,175,624 -- 28,126,977 -- 17,783,567 --
Withhold 352,257 -- 112,742 -- 199,600 --
----------------------------------------------------------------------------------------------------------------------------------
Total 34,527,881 -- 28,239,719 -- 17,983,167 --
==================================================================================================================================
William J. Schneider
For -- 9,872 -- 8,641 -- 5,202
Withhold -- 4 -- 36 -- 5
----------------------------------------------------------------------------------------------------------------------------------
Total -- 9,876 -- 8,677 -- 5,207
==================================================================================================================================
Timothy R. Schwertfeger
For -- 9,872 -- 8,641 -- 5,202
Withhold -- 4 -- 36 -- 5
----------------------------------------------------------------------------------------------------------------------------------
Total -- 9,876 -- 8,677 -- 5,207
==================================================================================================================================
Judith M. Stockdale
For 34,174,404 -- 28,127,919 -- 17,788,695 --
Withhold 353,477 -- 111,800 -- 194,472 --
----------------------------------------------------------------------------------------------------------------------------------
Total 34,527,881 -- 28,239,719 -- 17,983,167 --
==================================================================================================================================
Eugene S. Sunshine
For 34,169,387 -- 28,129,633 -- 17,789,861 --
Withhold 358,494 -- 110,086 -- 193,306 --
----------------------------------------------------------------------------------------------------------------------------------
Total 34,527,881 -- 28,239,719 -- 17,983,167 --
==================================================================================================================================
19
Report of
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
THE BOARD OF DIRECTORS/TRUSTEES AND SHAREHOLDERS
NUVEEN INSURED QUALITY MUNICIPAL FUND, INC.
NUVEEN INSURED MUNICIPAL OPPORTUNITY FUND, INC.
NUVEEN PREMIER INSURED MUNICIPAL INCOME FUND, INC.
NUVEEN INSURED PREMIUM INCOME MUNICIPAL FUND 2
NUVEEN INSURED DIVIDEND ADVANTAGE MUNICIPAL FUND
NUVEEN INSURED TAX-FREE ADVANTAGE MUNICIPAL FUND
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Nuveen Insured Quality Municipal Fund, Inc.,
Nuveen Insured Municipal Opportunity Fund, Inc., Nuveen Premier Insured
Municipal Income Fund, Inc., Nuveen Insured Premium Income Municipal Fund 2,
Nuveen Insured Dividend Advantage Municipal Fund and Nuveen Insured Tax-Free
Advantage Municipal Fund (the "Funds") as of October 31, 2006, and the related
statements of operations for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended, and the financial
highlights for each of the periods indicated therein. These financial statements
and financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Funds' internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Funds' internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of October 31, 2006, by correspondence with the custodian
and brokers or by other appropriate auditing procedures where replies from
brokers were not received. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of
Nuveen Insured Quality Municipal Fund, Inc., Nuveen Insured Municipal
Opportunity Fund, Inc., Nuveen Premier Insured Municipal Income Fund, Inc.,
Nuveen Insured Premium Income Municipal Fund 2, Nuveen Insured Dividend
Advantage Municipal Fund and Nuveen Insured Tax-Free Advantage Municipal Fund at
October 31, 2006, the results of their operations for the year then ended,
changes in their net assets for each of the two years in the period then ended,
and the financial highlights for each of the periods indicated therein in
conformity with U.S. generally accepted accounting principles.
/s/ Ernst & Young LLP
Chicago, Illinois
December 14, 2006
20
Nuveen Insured Quality Municipal Fund, Inc. (NQI)
Portfolio of
INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 1.5% (1.0% OF TOTAL INVESTMENTS)
$ 1,135 Birmingham Waterworks and Sewerage Board, Alabama, Water and 1/13 at 100.00 AAA $ 1,226,277
Sewerage Revenue Bonds, Series 2002B, 5.250%, 1/01/20 -
MBIA Insured
7,500 Huntsville Healthcare Authority, Alabama, Revenue Bonds, 6/15 at 100.00 AAA 7,909,050
Series 2005A, 5.000%, 6/01/24 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
8,635 Total Alabama 9,135,327
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 1.6% (1.1% OF TOTAL INVESTMENTS)
9,200 Phoenix, Arizona, Civic Improvement Corporation, Senior Lien 7/12 at 100.00 AAA 9,618,416
Airport Revenue Bonds, Series 2002B, 5.250%, 7/01/32 - FGIC
Insured (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 0.8% (0.5% OF TOTAL INVESTMENTS)
4,250 University of Arkansas, Fayetteville, Revenue Bonds, Medical 11/14 at 100.00 Aaa 4,504,192
Sciences Campus, Series 2004B, 5.000%, 11/01/24 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 28.5% (18.9% OF TOTAL INVESTMENTS)
1,500 Acalanes Union High School District, Contra Costa County, 8/15 at 100.00 AAA 1,606,875
California, General Obligation Bonds, Series 2005, 5.000%,
8/01/24 - FGIC Insured
California Department of Water Resources, Water System Revenue
Bonds, Central Valley Project, Series 2005AC:
4,045 5.000%, 12/01/24 - MBIA Insured 12/14 at 100.00 AAA 4,330,253
4,000 5.000%, 12/01/26 - MBIA Insured 12/14 at 100.00 AAA 4,249,680
1,275 California Educational Facilities Authority, Revenue Bonds, 10/15 at 100.00 Aaa 1,398,012
Occidental College, Series 2005A, 5.250%, 10/01/23 - MBIA
Insured
2,370 California Infrastructure Economic Development Bank, First Lien 1/28 at 100.00 AAA 3,351,014
Revenue Bonds, San Francisco Bay Area Toll Bridge, Series
2003A. Residuals Series 1485, 7.327%, 7/01/33 (Pre-refunded
1/01/28) - AMBAC Insured (IF)
13,175 California Pollution Control Financing Authority, Revenue 9/09 at 101.00 AAA 13,893,960
Refunding Bonds, Southern California Edison Company, Series
1999A, 5.450%, 9/01/29 - MBIA Insured
8,000 California, General Obligation Bonds, Series 2002, 5.000%, 10/12 at 100.00 AAA 8,336,160
10/01/32 - MBIA Insured
3,750 California, General Obligation Bonds, Series 2004, 5.000%, 4/14 at 100.00 AAA 3,945,450
4/01/31 - AMBAC Insured
20,500 California, General Obligation Refunding Bonds, Series 2002, 4/12 at 100.00 AAA 21,509,215
5.000%, 4/01/27 - AMBAC Insured
2,340 Cerritos Public Financing Authority, California, Tax Allocation 11/17 at 102.00 AAA 2,549,360
Revenue Bonds, Los Cerritos Redevelopment Projects, Series
2002A, 5.000%, 11/01/24 - AMBAC Insured
5,000 Clovis Unified School District, Fresno County, California, No Opt. Call AAA 2,206,800
General Obligation Bonds, Series 2001A, 0.000%, 8/01/25 - FGIC
Insured
Foothill/Eastern Transportation Corridor Agency, California, Toll
Road Revenue Refunding Bonds, Series 1999:
22,985 0.000%, 1/15/24 - MBIA Insured 1/10 at 44.52 AAA 8,979,090
22,000 0.000%, 1/15/31 - MBIA Insured 1/10 at 29.11 AAA 5,590,420
50,000 0.000%, 1/15/37 - MBIA Insured 1/10 at 20.19 AAA 8,811,000
5,000 Garden Grove, California, Certificates of Participation, 3/12 at 101.00 AAA 5,264,100
Financing Project, Series 2002A, 5.125%, 3/01/32 - AMBAC Insured
5,500 Golden State Tobacco Securitization Corporation, California, 6/15 at 100.00 AAA 5,803,985
Tobacco Settlement Asset-Backed Revenue Bonds, Series 2005A,
5.000%, 6/01/35 - FGIC Insured
3,795 Kern Community College District, California, General Obligation 11/15 at 100.00 AAA 4,122,812
Bonds, Series 2005, 5.000%, 11/01/20 - FSA Insured
5,795 Kern Community College District, California, General Obligation No Opt. Call AAA 2,528,069
Bonds, Series 2006, 0.000%, 11/01/25 - FSA Insured
21
Nuveen Insured Quality Municipal Fund, Inc. (NQI) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (continued)
$ 5,423 Moreno Valley Public Finance Authority, California, GNMA 1/12 at 105.00 Aaa $ 5,707,924
Collateralized Assisted Living Housing Revenue Bonds, CDC
Assisted Living Project, Series 2000A, 7.500%, 1/20/42
5,650 Ontario Redevelopment Financing Authority, San Bernardino County, 2/07 at 100.00 AAA 5,911,086
California, Revenue Bonds, Redevelopment Project 1, Series
1993, 5.850%, 8/01/22 - MBIA Insured (ETM)
3,615 Pasadena Unified School District, Los Angeles County, California, 5/13 at 100.00 AAA 3,928,240
General Obligation Bonds, Series 2003D, 5.000%, 5/01/24
(Pre-refunded 5/01/13) - MBIA Insured
2,590 Riverside County Public Financing Authority, California, Tax 10/14 at 100.00 AAA 2,730,922
Allocation Bonds, Multiple Projects, Series 2004, 5.000%,
10/01/25 - XLCA Insured
2,000 San Diego Redevelopment Agency, California, Subordinate Lien Tax 9/14 at 100.00 AAA 2,146,460
Allocation Bonds, Centre City Project, Series 2004A, 5.000%,
9/01/21 - XLCA Insured
San Francisco Airports Commission, California, Revenue Refunding
Bonds, San Francisco International Airport, Second Series 2001,
Issue 27A:
7,200 5.125%, 5/01/21 - MBIA Insured (Alternative Minimum Tax) 5/11 at 100.00 AAA 7,538,112
12,690 5.250%, 5/01/31 - MBIA Insured (Alternative Minimum Tax) 5/11 at 100.00 AAA 13,178,438
San Francisco Bay Area Rapid Transit District, California, Sales
Tax Revenue Bonds, Series 2005A:
2,000 5.000%, 7/01/21 - MBIA Insured 7/15 at 100.00 AAA 2,161,140
3,655 5.000%, 7/01/22 - MBIA Insured 7/15 at 100.00 AAA 3,935,521
3,840 5.000%, 7/01/23 - MBIA Insured 7/15 at 100.00 AAA 4,120,166
3,500 Saugus Union School District, Los Angeles County, California, No Opt. Call AAA 1,691,130
General Obligation Bonds, Series 2006, 0.000%, 8/01/23 - FGIC
Insured
1,000 Sierra Joint Community College District, Tahoe Truckee, 8/14 at 100.00 AAA 1,058,840
California, General Obligation Bonds, School Facilities
Improvement District 1, Series 2005A, 5.000%, 8/01/27 - FGIC
Insured
1,575 Sierra Joint Community College District, Western Nevada, 8/14 at 100.00 AAA 1,665,531
California, General Obligation Bonds, School Facilities
Improvement District 2, Series 2005A, 5.000%, 8/01/27 - FGIC
Insured
3,600 Ventura County Community College District, California, General 8/15 at 100.00 AAA 3,831,912
Obligation Bonds, Series 2005B, 5.000%, 8/01/28 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
239,368 Total California 168,081,677
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 1.7% (1.1% OF TOTAL INVESTMENTS)
2,015 Board of Trustees of the University of Northern Colorado, Revenue 6/15 at 100.00 AAA 2,163,888
Bonds, Series 2005, 5.000%, 6/01/22 - FSA Insured
4,335 Denver City and County, Colorado, Airport Revenue Bonds, Series 11/16 at 100.00 AAA 5,244,830
2006, 7.281%, 11/15/25 - FGIC Insured (IF)
1,250 Jefferson County School District R1, Colorado, General Obligation 12/14 at 100.00 AAA 1,331,888
Bonds, Series 2004, 5.000%, 12/15/24 - FSA Insured
1,000 University of Colorado, Enterprise System Revenue Bonds, Series 6/15 at 100.00 AAA 1,063,420
2005, 5.000%, 6/01/30 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
8,600 Total Colorado 9,804,026
------------------------------------------------------------------------------------------------------------------------------------
CONNECTICUT - 0.4% (0.2% OF TOTAL INVESTMENTS)
2,000 Connecticut, General Obligation Bonds, Series 2004D, 5.000%, 12/14 at 100.00 AAA 2,147,620
12/01/22 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 1.4% (0.9% OF TOTAL INVESTMENTS)
8,000 Washington Convention Center Authority, District of Columbia, 10/08 at 101.00 AAA 8,262,800
Senior Lien Dedicated Tax Revenue Bonds, Series 1998, 5.000%,
10/01/21 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 7.5% (5.0% OF TOTAL INVESTMENTS)
3,450 Collier County, Florida, Capital Improvement Revenue Bonds, 10/14 at 100.00 AAA 3,666,384
Series 2005, 5.000%, 10/01/24 - MBIA Insured
3,250 Florida State Board of Education, Full Faith and Credit Public 6/13 at 101.00 AAA 3,479,938
Education Capital Outlay Bonds, Series 2003J, 5.000%, 6/01/22 -
AMBAC Insured
20,000 Lee County, Florida, Airport Revenue Bonds, Series 2000A, 5.750%, 10/10 at 101.00 AAA 21,537,000
10/01/25 - FSA Insured (Alternative Minimum Tax)
22
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA (continued)
$ 4,115 Miami-Dade County Housing Finance Authority, Florida, Multifamily 7/11 at 100.00 AAA $ 4,294,661
Housing Revenue Bonds, Monterey Pointe Apartments, Series
2001-2A, 5.850%, 7/01/37 - FSA Insured (Alternative Minimum
Tax)
7,000 Miami-Dade County, Florida, Aviation Revenue Bonds, Miami 10/12 at 100.00 AAA 7,404,880
International Airport, Series 2002, 5.375%, 10/01/32 - FGIC
Insured (Alternative Minimum Tax)
3,780 Palm Beach County School Board, Florida, Certificates of 8/13 at 100.00 AAA 4,058,548
Participation, Series 2003A, 5.000%, 8/01/16 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
41,595 Total Florida 44,441,411
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 0.3% (0.1% OF TOTAL INVESTMENTS)
1,000 Atlanta, Georgia, Water and Wastewater Revenue Bonds, Series 11/14 at 100.00 AAA 1,066,830
2004, 5.000%, 11/01/22 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
HAWAII - 6.0% (4.0% OF TOTAL INVESTMENTS)
1,620 Hawaii County, Hawaii, General Obligation Bonds, Series 2003A, 7/13 at 100.00 AAA 1,733,530
5.000%, 7/15/21 - FSA Insured
16,180 Hawaii Department of Budget and Finance, Special Purpose Revenue 11/06 at 101.00 AAA 16,373,836
Bonds, Hawaiian Electric Company Inc., Series 1996A, 6.200%,
5/01/26 - MBIA Insured (Alternative Minimum Tax)
Hawaii Department of Transportation, Airport System Revenue
Refunding Bonds, Series 2000B:
8,785 6.625%, 7/01/18 - FGIC Insured (Alternative Minimum Tax) 7/10 at 101.00 AAA 9,691,788
7,000 6.000%, 7/01/19 - FGIC Insured (Alternative Minimum Tax) 7/10 at 101.00 AAA 7,581,770
------------------------------------------------------------------------------------------------------------------------------------
33,585 Total Hawaii 35,380,924
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 15.2% (10.1% OF TOTAL INVESTMENTS)
9,500 Chicago, Illinois, Second Lien General Airport Revenue Refunding 1/10 at 101.00 AAA 10,035,135
Bonds, O'Hare International Airport, Series 1999, 5.500%,
1/01/15 - AMBAC Insured (Alternative Minimum Tax)
2,875 Chicago, Illinois, Third Lien General Airport Revenue Bonds, 1/16 at 100.00 AAA 3,131,076
O'Hare International Airport, Series 2005A, 5.250%, 1/01/24 -
MBIA Insured
25,000 Illinois Health Facilities Authority, Revenue Bonds, Iowa Health 2/10 at 101.00 AAA 26,986,250
System, Series 2000, 5.875%, 2/15/30 - AMBAC Insured (ETM)
13,275 Illinois, General Obligation Bonds, Illinois FIRST Program, 5/11 at 100.00 AAA 14,024,905
Series 2001, 5.250%, 5/01/26 - FSA Insured
15,785 Illinois, General Obligation Bonds, Illinois FIRST Program, 4/12 at 100.00 AAA 16,800,133
Series 2002, 5.250%, 4/01/27 - FSA Insured
18,000 Metropolitan Pier and Exposition Authority, Illinois, Revenue No Opt. Call AAA 8,223,120
Bonds, McCormick Place Expansion Project, Series 2002A, 0.000%,
12/15/24 - MBIA Insured
10,000 University of Illinois, Certificates of Participation, Utility 8/11 at 100.00 AAA 10,744,400
Infrastructure Projects, Series 2001B, 5.250%, 8/15/21
(Pre-refunded 8/15/11) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
94,435 Total Illinois 89,945,019
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 1.6% (1.1% OF TOTAL INVESTMENTS)
7,790 Indiana Transportation Finance Authority, Highway Revenue Bonds, No Opt. Call AAA 9,402,140
Series 1990A, 7.250%, 6/01/15 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 0.5% (0.4% OF TOTAL INVESTMENTS)
3,000 Wichita, Kansas, Water and Sewerage Utility Revenue Bonds, Series 10/13 at 100.00 AAA 3,216,120
2003, 5.000%, 10/01/21 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 5.7% (3.8% OF TOTAL INVESTMENTS)
3,015 Kentucky Asset/Liability Commission, General Fund Revenue Project 5/15 at 100.00 AAA 3,209,196
Notes, First Series 2005, 5.000%, 5/01/25 - MBIA Insured
Kentucky Economic Development Finance Authority, Health System
Revenue Bonds, Norton Healthcare Inc., Series 2000C:
2,530 6.150%, 10/01/27 - MBIA Insured 10/13 at 101.00 AAA 2,904,718
12,060 6.150%, 10/01/28 - MBIA Insured 10/13 at 101.00 AAA 13,846,207
23
Nuveen Insured Quality Municipal Fund, Inc. (NQI) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY (continued)
Kentucky Economic Development Finance Authority, Health System
Revenue Bonds, Norton Healthcare Inc., Series 2000C:
$ 3,815 6.150%, 10/01/27 (Pre-refunded 10/01/13) - MBIA Insured 10/13 at 101.00 AAA $ 4,419,105
6,125 6.150%, 10/01/28 (Pre-refunded 10/01/13) - MBIA Insured 10/13 at 101.00 Aaa 7,094,894
2,230 Kentucky State Property and Buildings Commission, Revenue Bonds, 8/15 at 100.00 AAA 2,392,277
Project 85, Series 2005, 5.000%, 8/01/23 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
29,775 Total Kentucky 33,866,397
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 1.4% (0.9% OF TOTAL INVESTMENTS)
2,040 Louisiana State, Gas Tax Revenue Bonds, Series 2006, 4.500%, 5/16 at 100.00 AAA 2,024,088
5/01/41 (WI/DD, Settling 11/02/06) - FGIC Insured
2,310 Louisiana State, Gasoline Tax Revenue Bonds, Series 2006, 5/16 at 100.00 AAA 2,255,992
Residuals 660-1, 5.850%, 5/01/41 (WI/DD, Settling 11/02/06) -
FGIC Insured (IF)
275 Louisiana State, Gasoline Tax Revenue Bonds, Series 2006, 5/16 at 100.00 AAA 299,486
Residuals 661, 6.597%, 5/01/39 (WI/DD, Settling 11/02/06) - FSA
Insured (IF)
3,515 Orleans Levee District, Louisiana, Levee District General 12/06 at 102.50 AAA 3,625,969
Obligation Bonds, Series 1986, 5.950%, 11/01/15 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
8,140 Total Louisiana 8,205,535
------------------------------------------------------------------------------------------------------------------------------------
MAINE - 1.4% (1.0% OF TOTAL INVESTMENTS)
8,000 Maine Health and Higher Educational Facilities Authority, Revenue 7/09 at 101.00 AAA 8,545,760
Bonds, Series 1999B, 6.000%, 7/01/29 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 1.8% (1.2% OF TOTAL INVESTMENTS)
2,100 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 AAA 2,159,745
Revenue Bonds, Western Maryland Health, Series 2006A, 4.750%,
7/01/36 (WI/DD, Settling 11/16/06) - MBIA Insured
7,535 Maryland Transportation Authority, Airport Parking Revenue Bonds, 3/12 at 101.00 AAA 8,165,680
Baltimore-Washington International Airport Passenger Facility,
Series 2002B, 5.500%, 3/01/18 - AMBAC Insured (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
9,635 Total Maryland 10,325,425
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 2.4% (1.6% OF TOTAL INVESTMENTS)
5,000 Massachusetts Bay Transportation Authority, Senior Sales Tax 7/12 at 100.00 AAA 5,359,650
Revenue Refunding Bonds, Series 2002A, 5.000%, 7/01/27
(Pre-refunded 7/01/12) - FGIC Insured
1,680 Massachusetts College Building Authority, Project Revenue Bonds, 5/16 at 100.00 AAA 1,785,067
Series 2006A, 5.000%, 5/01/36 - AMBAC Insured
1,100 Massachusetts Water Resources Authority, General Revenue Bonds, 8/17 at 100.00 AAA 1,218,613
Series 2005A, 5.250%, 8/01/26 - MBIA Insured
Massachusetts, Special Obligation Dedicated Tax Revenue Bonds,
Series 2004:
1,250 5.250%, 1/01/21 (Pre-refunded 1/01/14) - FGIC Insured 1/14 at 100.00 AAA 1,371,337
1,000 5.250%, 1/01/22 (Pre-refunded 1/01/14) - FGIC Insured 1/14 at 100.00 AAA 1,097,070
1,195 5.250%, 1/01/23 (Pre-refunded 1/01/14) - FGIC Insured 1/14 at 100.00 AAA 1,310,999
2,000 5.250%, 1/01/24 (Pre-refunded 1/01/14) - FGIC Insured 1/14 at 100.00 AAA 2,194,140
------------------------------------------------------------------------------------------------------------------------------------
13,225 Total Massachusetts 14,336,876
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 0.8% (0.6% OF TOTAL INVESTMENTS)
4,750 Michigan Strategic Fund, Collateralized Limited Obligation 9/09 at 102.00 AAA 5,012,295
Pollution Control Revenue Refunding Bonds, Detroit Edison
Company, Series 1999A, 5.550%, 9/01/29 - MBIA Insured
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 0.0% (0.0% OF TOTAL INVESTMENTS)
12 St. Louis Park, Minnesota, GNMA Mortgage-Backed Securities 4/07 at 100.00 Aaa 12,174
Program Single Family Residential Mortgage Revenue Bonds,
Series 1991A, 7.250%, 4/20/23
------------------------------------------------------------------------------------------------------------------------------------
24
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 1.4% (0.9% OF TOTAL INVESTMENTS)
$ 2,715 Harrison County Wastewater Management District, Mississippi, No Opt. Call AAA $ 3,389,406
Revenue Refunding Bonds, Wastewater Treatment Facilities,
Series 1991B, 7.750%, 2/01/14 - FGIC Insured
2,545 Harrison County Wastewater Management District, Mississippi, No Opt. Call AAA 3,206,751
Wastewater Treatment Facilities Revenue Refunding Bonds, Series
1991A, 8.500%, 2/01/13 - FGIC Insured
1,440 Mississippi Home Corporation, GNMA Collateralized Single Family 12/06 at 105.00 Aaa 1,456,488
Mortgage Revenue Bonds, Series 1996C, 7.600%, 6/01/29
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
6,700 Total Mississippi 8,052,645
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 7.0% (4.7% OF TOTAL INVESTMENTS)
33,700 Director of Nevada State Department of Business and Industry, 1/10 at 100.00 AAA 35,124,496
Revenue Bonds, Las Vegas Monorail Project, First Tier, Series
2000, 5.375%, 1/01/40 - AMBAC Insured
5,720 Reno, Nevada, Senior Lien Sales and Room Tax Revenue Bonds, Reno 6/12 at 100.00 AAA 6,150,888
Transportation Rail Access Corridor Project, Series 2002,
5.125%, 6/01/32 (Pre-refunded 6/01/12) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
39,420 Total Nevada 41,275,384
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 1.1% (0.7% OF TOTAL INVESTMENTS)
New Jersey Economic Development Authority, Revenue Bonds,
Motor Vehicle Surcharge, Series 2004A:
1,700 5.000%, 7/01/22 - MBIA Insured 7/14 at 100.00 AAA 1,827,466
1,700 5.000%, 7/01/23 - MBIA Insured 7/14 at 100.00 AAA 1,802,561
2,500 New Jersey Turnpike Authority, Revenue Bonds, Series 2003A,
5.000%, 1/01/19 - FGIC Insured 7/13 at 100.00 AAA 2,674,325
------------------------------------------------------------------------------------------------------------------------------------
5,900 Total New Jersey 6,304,352
------------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 1.1% (0.7% OF TOTAL INVESTMENTS)
New Mexico Finance Authority, Public Project Revolving Fund
Revenue Bonds, Series 2004C:
1,420 5.000%, 6/01/22 - AMBAC Insured 6/14 at 100.00 AAA 1,513,479
3,290 5.000%, 6/01/23 - AMBAC Insured 6/14 at 100.00 AAA 3,497,731
1,530 New Mexico State University, Revenue Bonds, Series 2004, 5.000%, 4/14 at 100.00 AAA 1,624,783
4/01/23 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
6,240 Total New Mexico 6,635,993
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 15.5% (10.3% OF TOTAL INVESTMENTS)
11,760 Dormitory Authority of the State of New York, New York City, 5/10 at 101.00 AAA 12,745,488
Lease Revenue Bonds, Court Facilities, Series 1999, 5.750%,
5/15/30 (Pre-refunded 5/15/10) - AMBAC Insured
1,100 Dormitory Authority of the State of New York, Revenue Bonds, 2/15 at 100.00 AAA 1,170,103
Mental Health Services Facilities Improvements, Series 2005A,
5.000%, 2/15/24 - AMBAC Insured
15,000 Dormitory Authority of the State of New York, Revenue Bonds, 10/12 at 100.00 AAA 16,577,700
School Districts Financing Program, Series 2002D, 5.500%,
10/01/17 - MBIA Insured
5,000 Long Island Power Authority, New York, Electric System General 6/16 at 100.00 AAA 5,355,550
Revenue Bonds, Series 2006A, 5.000%, 12/01/25 - FGIC Insured
8,000 Metropolitan Transportation Authority, New York, State Service 7/12 at 100.00 AAA 8,484,880
Contract Refunding Bonds, Series 2002A, 5.000%, 7/01/25 - FGIC
Insured
1,630 New York City Sales Tax Asset Receivable Corporation, New York, 10/14 at 100.00 AAA 1,740,677
Dedicated Revenue Bonds, Local Government Assistance
Corporation, Series 2004A, 5.000%, 10/15/24 - MBIA Insured
10,255 New York State Housing Finance Agency, Mortgage Revenue Refunding 11/06 at 102.00 AAA 10,480,918
Bonds, Housing Project, Series 1996A, 6.125%, 11/01/20 - FSA
Insured
4,200 New York State Mortgage Agency, Homeowner Mortgage Revenue Bonds, 10/09 at 100.00 AAA 4,330,578
Series 82, 5.550%, 10/01/19 - MBIA Insured (Alternative Minimum
Tax)
10,120 New York State Thruway Authority, General Revenue Bonds, Series 7/15 at 100.00 AAA 10,789,539
2005G, 5.000%, 1/01/26 - FSA Insured
1,950 New York State Thruway Authority, Highway and Bridge Trust Fund 10/15 at 100.00 AAA 2,103,329
Bonds, Second Generation, Series 2005B, 5.000%, 4/01/21 - AMBAC
Insured
6,595 New York State Thruway Authority, State Personal Income Tax 3/15 at 100.00 AAA 7,028,555
Revenue Bonds, Series 2005A, 5.000%, 3/15/25 - FSA Insured
25
Nuveen Insured Quality Municipal Fund, Inc. (NQI) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK (continued)
New York State Urban Development Corporation, Service Contract
Revenue Bonds, Series 2005B:
$ 2,460 5.000%, 3/15/24 - FSA Insured 3/15 at 100.00 AAA $ 2,625,337
2,465 5.000%, 3/15/25 - FSA Insured 3/15 at 100.00 AAA 2,627,049
5,000 Triborough Bridge and Tunnel Authority, New York, Subordinate 11/13 at 100.00 AAA 5,261,700
Lien General Purpose Revenue Bonds, Series 2003A, 5.000%,
11/15/32 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
85,535 Total New York 91,321,403
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 3.1% (2.0% OF TOTAL INVESTMENTS)
1,585 Cincinnati City School District, Hamilton County, Ohio, General No Opt. Call AAA 1,827,394
Obligation Bonds, Series 2006, 5.250%, 12/01/23 - FGIC Insured
7,000 Cleveland State University, Ohio, General Receipts Bonds, Series 6/14 at 100.00 AAA 7,653,450
2004, 5.250%, 6/01/19 - FGIC Insured
5,000 Lorain County, Ohio, Health Facilities Revenue Bonds, Catholic 9/09 at 102.00 AAA 5,320,050
Healthcare Partners, Series 1999A, 5.500%, 9/01/29 - AMBAC
Insured
3,065 Oak Hills Local School District, Hamilton County, Ohio, General 12/15 at 100.00 AAA 3,278,324
Obligation Bonds, Series 2005, 5.000%, 12/01/24 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
16,650 Total Ohio 18,079,218
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 0.4% (0.3% OF TOTAL INVESTMENTS)
2,250 Oklahoma Capitol Improvement Authority, State Facilities Revenue 7/15 at 100.00 AAA 2,403,945
Bonds, Series 2005F, 5.000%, 7/01/24 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 3.0% (2.0% OF TOTAL INVESTMENTS)
3,000 Allegheny County Sanitary Authority, Pennsylvania, Sewerage 12/15 at 100.00 AAA 3,211,170
Revenue Bonds, Series 2005A, 5.000%, 12/01/23 - MBIA Insured
7,000 Allegheny County, Pennsylvania, Airport Revenue Refunding Bonds, 1/08 at 101.00 AAA 7,168,840
Pittsburgh International Airport, Series 1997A, 5.250%, 1/01/16
- MBIA Insured (Alternative Minimum Tax)
Delaware County Authority, Pennsylvania, Revenue Bonds, Villanova
University, Series 2006:
3,260 5.000%, 8/01/23 - AMBAC Insured 8/16 at 100.00 AAA 3,516,758
1,600 5.000%, 8/01/24 - AMBAC Insured 8/16 at 100.00 AAA 1,722,000
2,000 Pittsburgh Public Parking Authority, Pennsylvania, Parking 12/15 at 100.00 AAA 2,143,920
Revenue Bonds, Series 2005B, 5.000%, 12/01/23 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
16,860 Total Pennsylvania 17,762,688
------------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 1.4% (1.0% OF TOTAL INVESTMENTS)
2,500 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series 7/15 at 100.00 AAA 2,701,425
2005RR, 5.000%, 7/01/22 - FGIC Insured
5,000 Puerto Rico, Highway Revenue Bonds, Highway and Transportation No Opt. Call AAA 5,732,150
Authority, Series 2003AA, 5.500%, 7/01/16 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
7,500 Total Puerto Rico 8,433,575
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 0.5% (0.4% OF TOTAL INVESTMENTS)
3,000 Charleston County School District, South Carolina, General 2/14 at 100.00 AAA 3,197,700
Obligation Bonds, Series 2004A, 5.000%, 2/01/22 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 1.0% (0.7% OF TOTAL INVESTMENTS)
Knox County Health, Educational and Housing Facilities Board,
Tennessee, Hospital Revenue Refunding Bonds, Covenant Health,
Series 2002A:
7,500 0.000%, 1/01/24 - FSA Insured 1/13 at 52.75 AAA 2,986,875
5,000 0.000%, 1/01/25 - FSA Insured 1/13 at 49.71 AAA 1,874,350
2,750 0.000%, 1/01/26 - FSA Insured 1/13 at 46.78 AAA 966,598
------------------------------------------------------------------------------------------------------------------------------------
15,250 Total Tennessee 5,827,823
------------------------------------------------------------------------------------------------------------------------------------
26
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 19.6% (13.0% OF TOTAL INVESTMENTS)
$ 8,000 Abilene Health Facilities Development Corporation, Texas, 3/07 at 101.00 AAA $ 8,095,920
Hospital Revenue Refunding and Improvement Bonds, Hendrick
Medical Center Project, Series 1995C, 6.150%, 9/01/25 - MBIA
Insured
5,275 Austin, Texas, Combined Utility System Revenue Refunding Bonds, 11/07 at 100.00 AAA 5,348,956
Series 1997, 5.125%, 11/15/20 11/15/20 - FSA Insured
3,135 Corpus Christi, Texas, Utility System Revenue Bonds, Series 2004, 7/14 at 100.00 AAA 3,414,172
5.250%, 7/15/20 - FSA Insured
3,000 Dallas-Ft. Worth International Airport, Texas, Joint Revenue 11/11 at 100.00 AAA 3,255,600
Refunding and Improvement Bonds, Series 2001A, 5.750%, 11/01/13
- FGIC Insured (Alternative Minimum Tax)
3,735 Grand Prairie Independent School District, Dallas County, Texas, 2/13 at 100.00 AAA 3,923,543
General Obligation Bonds, Series 2003, 5.125%, 2/15/31 - FSA
Insured
1,865 Harris County Hospital District, Texas, Revenue Refunding Bonds, No Opt. Call AAA 1,984,062
Series 1990, 7.400%, 2/15/10 - AMBAC Insured
715 Harris County Hospital District, Texas, Revenue Refunding Bonds, No Opt. Call AAA 750,678
Series 1990, 7.400%, 2/15/10 - AMBAC Insured (ETM)
5,000 Houston, Texas, First Lien Combined Utility System Revenue Bonds, 5/14 at 100.00 AAA 5,433,750
Series 2004A, 5.250%, 5/15/24 - FGIC Insured
4,500 Houston, Texas, General Obligation Public Improvement Bonds, 3/11 at 100.00 AAA 4,702,680
Series 2001A, 5.000%, 3/01/22 - FSA Insured
17,000 Houston, Texas, Junior Lien Water and Sewerage System Revenue No Opt. Call AAA 21,333,810
Refunding Bonds, Series 2002A, 5.750%, 12/01/32 - FSA Insured
(ETM)
4,685 Houston, Texas, Subordinate Lien Airport System Revenue Bonds, 7/10 at 100.00 AAA 4,916,486
Series 2000A, 5.500%, 7/01/19 - FSA Insured (Alternative
Minimum Tax)
19,200 Jefferson County Health Facilities Development Corporation, 8/11 at 100.00 AAA 20,364,864
Texas, FHA-Insured Mortgage Revenue Bonds, Baptist Hospital of
Southeast Texas, Series 2001, 5.400%, 8/15/31 - AMBAC Insured
6,000 Laredo Community College District, Texas, Limited Tax General 8/10 at 100.00 AAA 6,375,540
Obligation Bonds, Series 2001, 5.375%, 8/01/31 (Pre-refunded
8/01/10) - AMBAC Insured
2,000 Laredo Independent School District Public Facilities Corporation, 8/11 at 100.00 AAA 2,069,440
Texas, Lease Revenue Bonds, Series 2004A, 5.000%, 8/01/24 -
AMBAC Insured
22,045 North Central Texas Health Facilities Development Corporation, 8/12 at 101.00 AAA 23,382,691
Revenue Bonds, Children's Medical Center of Dallas, Series
2002, 5.250%, 8/15/32 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
106,155 Total Texas 115,352,192
------------------------------------------------------------------------------------------------------------------------------------
UTAH - 0.3% (0.2% OF TOTAL INVESTMENTS)
1,660 Salt Lake City, Utah, Hospital Revenue Refunding Bonds, IHC 12/06 at 100.00 AAA 1,698,993
Hospitals Inc., Series 1988A, 8.000%, 5/15/07 (ETM)
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 11.3% (7.5% OF TOTAL INVESTMENTS)
10,730 Chelan County Public Utility District 1, Washington, Hydro 7/11 at 101.00 AAA 11,578,314
Consolidated System Revenue Refunding Bonds, Series 2001C,
5.650%, 7/01/32 - MBIA Insured (Alternative Minimum Tax)
15,025 Seattle Housing Authority, Washington, GNMA Collateralized 11/11 at 105.00 AAA 17,016,414
Mortgage Loan Low Income Housing Assistance Revenue Bonds, Park
Place Project, Series 2000A, 7.000%, 5/20/42
4,610 Seattle Housing Authority, Washington, GNMA Collateralized 9/11 at 102.00 AAA 5,026,882
Mortgage Loan Low Income Housing Assistance Revenue Bonds,
RHF/Esperanza Apartments Project, Series 2000A, 6.125%, 3/20/42
(Alternative Minimum Tax)
5,000 Seattle, Washington, Municipal Light and Power Revenue Bonds, 12/10 at 100.00 AAA 5,292,050
Series 2000, 5.250%, 12/01/21 - FSA Insured
11,750 Washington Public Power Supply System, Revenue Refunding Bonds, 7/08 at 102.00 AAA 12,220,235
Nuclear Project 1, Series 1998A, 5.125%, 7/01/17 - MBIA Insured
2,500 Washington State Healthcare Facilities Authority, Revenue Bonds, 12/09 at 101.00 AAA 2,652,600
Providence Services, Series 1999, 5.375%, 12/01/19
(Pre-refunded 12/01/09) - MBIA Insured
10,000 Washington State, General Obligation Bonds, Series R-2003A, 1/12 at 100.00 AAA 10,569,600
5.000%, 1/01/19 - MBIA Insured
27
Nuveen Insured Quality Municipal Fund, Inc. (NQI) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON (continued)
$ 2,250 Washington, Certificates of Participation, Washington Convention 7/09 at 100.00 AAA $ 2,334,488
and Trade Center, Series 1999, 5.250%, 7/01/14 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
61,865 Total Washington 66,690,583
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 2.3% (1.5% OF TOTAL INVESTMENTS)
12,845 West Virginia Water Development Authority, Infrastructure Revenue 10/10 at 100.00 AAA 13,755,454
Bonds, Infrastructure and Jobs Development Council Program,
Series 2000A, 5.500%, 10/01/39 (Pre-refunded 10/01/10) - FSA
Insured
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 0.7% (0.5% OF TOTAL INVESTMENTS)
2,180 Green Bay, Wisconsin, Water System Revenue Bonds, Series 2004, 11/14 at 100.00 Aaa 2,310,386
5.000%, 11/01/26 - FSA Insured
1,675 Wisconsin Public Power Incorporated System, Power Supply System 7/15 at 100.00 AAA 1,774,528
Revenue Bonds, Series 2005A, 5.000%, 7/01/30 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
3,855 Total Wisconsin 4,084,914
------------------------------------------------------------------------------------------------------------------------------------
$ 926,680 Total Long-Term Investments (cost $831,476,418) - 150.2% 886,187,826
============------------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 0.2% (0.1% OF TOTAL INVESTMENTS)
1,000 Idaho Health Facilities Authority, Revenue Bonds, St. Luke's A-1+ 1,000,000
Regional Medical Center, Variable Rate Demand Obligations,
Series 2000, 3.640%, 7/01/30 - FSA Insured (4)
300 New York City, New York, General Obligation Bonds, Variable Rate A-1+ 300,000
Demand Obligations, Fiscal Series 2002A-7, 3.550%, 11/01/24 -
AMBAC Insured (4)
------------------------------------------------------------------------------------------------------------------------------------
$ 1,300 Total Short-Term Investments (cost $1,300,000) 1,300,000
============------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $832,776,418) - 150.4% 887,487,826
---------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 3.5% 20,440,250
---------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (53.9)% (318,000,000)
---------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 589,928,076
=====================================================================================================================
All of the bonds in the Portfolio of Investments, excluding temporary
investments in short-term municipal securities, are either covered by
Original Issue Insurance, Secondary Market Insurance or Portfolio
Insurance, or are backed by an escrow or trust containing sufficient
U.S. Government or U.S. Government agency securities, any of which
ensure the timely payment of principal and interest.
(1) All percentages shown in the Portfolio of Investments are based on net
assets applicable to Common shares unless otherwise noted.
(2) Optional Call Provisions (not covered by the report of independent
registered public accounting firm): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other call
provisions at varying prices at later dates. Certain mortgage-backed
securities may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered public
accounting firm): Using the higher of Standard & Poor's or Moody's
rating. Ratings below BBB by Standard & Poor's Group or Baa by Moody's
Investor Service, Inc. are considered to be below investment grade.
(4) Investment has a maturity of more than one year, but has variable rate
and demand features which qualify it as a short-term investment. The
rate disclosed is that in effect at the end of the reporting period.
This rate changes periodically based on market conditions or a specified
market index.
WI/DD Purchased on a when-issued or delayed delivery basis.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
28
Nuveen Insured Municipal Opportunity Fund, Inc. (NIO)
Portfolio of
INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 10.7% (7.1% OF TOTAL INVESTMENTS)
Birmingham Special Care Facilities Financing Authority, Alabama,
Revenue Bonds, Baptist Health System Inc., Series 1996A:
$ 7,465 5.875%, 11/15/19 (Pre-refunded 11/15/06) - MBIA Insured 11/06 at 102.00 AAA $ 7,620,645
1,750 5.875%, 11/15/26 (Pre-refunded 11/15/06) - MBIA Insured 11/06 at 102.00 AAA 1,786,487
11,175 Hoover Board of Education, Alabama, Capital Outlay Tax 2/11 at 100.00 AAA 11,819,127
Anticipation Warrants, Series 2001, 5.250%, 2/15/22 - MBIA
Insured
Jefferson County, Alabama, Sewer Revenue Capital Improvement
Warrants, Series 1999A:
10,815 5.000%, 2/01/33 (Pre-refunded 2/01/09) - FGIC Insured 2/09 at 101.00 AAA 11,244,572
9,790 5.000%, 2/01/33 (Pre-refunded 2/01/09) - FGIC Insured 2/09 at 101.00 AAA 10,189,726
29,860 5.750%, 2/01/38 (Pre-refunded 2/01/09) - FGIC Insured 2/09 at 101.00 AAA 31,559,333
2,500 Jefferson County, Alabama, Sewer Revenue Capital Improvement 8/12 at 100.00 AAA 2,698,300
Warrants, Series 2002B, 5.125%, 2/01/42 (Pre-refunded 8/01/12)
- FGIC Insured
Jefferson County, Alabama, Sewer Revenue Capital Improvement
Warrants, Series 2002D:
425 5.000%, 2/01/38 (Pre-refunded 8/01/12) - FGIC Insured 8/12 at 100.00 AAA 455,065
14,800 5.000%, 2/01/42 (Pre-refunded 8/01/12) - FGIC Insured 8/12 at 100.00 AAA 15,878,624
18,760 Jefferson County, Alabama, Sewer Revenue Capitol Improvement 2/11 at 101.00 AAA 19,950,510
Warrants, Series 2001A, 5.000%, 2/01/41 (Pre-refunded 2/01/11)
- FGIC Insured
10,195 Jefferson County, Alabama, Sewer Revenue Refunding Warrants, 2/07 at 100.00 AAA 10,235,576
Series 1997A, 5.375%, 2/01/27 - FGIC Insured
5,240 Jefferson County, Alabama, Sewer Revenue Refunding Warrants, 2/11 at 101.00 AAA 5,583,220
Series 2003B, 5.000%, 2/01/41 (Pre-refunded 2/01/11) - FGIC
Insured
6,000 University of Alabama, Tuscaloosa, General Revenue Bonds, 7/14 at 100.00 AAA 6,345,780
Series 2004A, 5.000%, 7/01/29 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
128,775 Total Alabama 135,366,965
------------------------------------------------------------------------------------------------------------------------------------
ALASKA - 1.4% (0.9% OF TOTAL INVESTMENTS)
3,190 Alaska Housing Finance Corporation, Collateralized Veterans 12/09 at 100.00 AAA 3,321,556
Mortgage Program Bonds, First Series 1999A-1, 6.150%, 6/01/39
11,245 Alaska Housing Finance Corporation, General Mortgage Revenue 6/09 at 100.00 AAA 11,587,635
Bonds, Series 1999A, 6.050%, 6/01/39 - MBIA Insured
3,000 Alaska Student Loan Corporation, Student Loan Revenue Bonds, 7/08 at 100.00 AAA 3,057,780
Series 1998A, 5.250%, 7/01/14 - AMBAC Insured (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
17,435 Total Alaska 17,966,971
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 2.1% (1.4% OF TOTAL INVESTMENTS)
Arizona State University, Certificates of Participation, Resh
Infrastructure Projects, Series 2005A:
2,000 5.000%, 9/01/25 - AMBAC Insured 3/15 at 100.00 AAA 2,120,800
2,000 5.000%, 9/01/27 - AMBAC Insured 3/15 at 100.00 AAA 2,116,460
1,000 Arizona State University, System Revenue Bonds, Series 2005, 7/15 at 100.00 AAA 1,064,660
5.000%, 7/01/27 - AMBAC Insured
1,000 Maricopa County Union High School District 210, Phoenix, Arizona, 7/14 at 100.00 AAA 1,068,480
General Obligation Bonds, Series 2004A, 5.000%, 7/01/22 - FSA
Insured
1,150 Phoenix Civic Improvement Corporation, Arizona, Junior Lien 7/14 at 100.00 AAA 1,218,598
Wastewater System Revenue Bonds, Series 2004, 5.000%, 7/01/27 -
MBIA Insured
13,490 Phoenix Civic Improvement Corporation, Arizona, Junior Lien Water 7/15 at 100.00 AAA 14,038,503
System Revenue Bonds, Series 2005, 4.750%, 7/01/25 - MBIA
Insured
29
Nuveen Insured Municipal Opportunity Fund, Inc. (NIO) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA (continued)
$ 4,815 Pima County Industrial Development Authority, Arizona, Lease 1/07 at 100.50 AAA $ 4,833,056
Obligation Revenue Refunding Bonds, Tucson Electric Power
Company, Series 1988A, 7.250%, 7/15/10 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
25,455 Total Arizona 26,460,557
------------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 0.7% (0.5% OF TOTAL INVESTMENTS)
3,660 Arkansas State University, Student Fee Revenue Bonds, Beebe 9/15 at 100.00 Aaa 3,878,173
Campus, Series 2006, 5.000%, 9/01/35 - AMBAC Insured
Pulaski County, Arkansas, Hospital Revenue Bonds, Arkansas
Children's Hospital, Series 2005:
2,000 5.000%, 3/01/25 - AMBAC Insured 3/15 at 100.00 AAA 2,110,680
3,000 5.000%, 3/01/30 - AMBAC Insured 3/15 at 100.00 AAA 3,168,180
------------------------------------------------------------------------------------------------------------------------------------
8,660 Total Arkansas 9,157,033
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 29.6% (19.6% OF TOTAL INVESTMENTS)
5,600 Alameda Corridor Transportation Authority, California, No Opt. Call AAA 3,110,464
Subordinate Lien Revenue Bonds, Series 2004A, 0.000%, 10/01/20
- AMBAC Insured
10,000 California Department of Veterans Affairs, Home Purchase Revenue 6/12 at 101.00 AAA 10,758,400
Bonds, Series 2002A, 5.300%, 12/01/21 - AMBAC Insured
California Department of Water Resources, Power Supply Revenue
Bonds, Series 2002A:
30,000 5.375%, 5/01/17 (Pre-refunded 5/01/12) - XLCA Insured 5/12 at 101.00 AAA 33,079,498
25,000 5.375%, 5/01/18 (Pre-refunded 5/01/12) - AMBAC Insured 5/12 at 101.00 AAA 27,566,250
California Department of Water Resources, Water System Revenue
Bonds, Central Valley Project, Series 2005AC:
3,700 5.000%, 12/01/24 - MBIA Insured 12/14 at 100.00 AAA 3,960,924
2,820 5.000%, 12/01/27 - MBIA Insured 12/14 at 100.00 AAA 2,990,046
6,000 California Infrastructure Economic Development Bank, First Lien 1/28 at 100.00 AAA 8,483,580
Revenue Bonds, San Francisco Bay Area Toll Bridge, Series
2003A. Residuals Series 1485, 7.327%, 7/01/33 (Pre-refunded
1/01/28) - AMBAC Insured (IF)
California Rural Home Mortgage Finance Authority, GNMA
Mortgage-Backed Securities Program Single Family Mortgage Revenue
Bonds, Series 1996A:
5 7.550%, 11/01/26 (Alternative Minimum Tax) No Opt. Call AAA 5,088
10 7.750%, 5/01/27 (Alternative Minimum Tax) No Opt. Call AAA 10,185
4,500 California, General Obligation Bonds, Series 1998, 5.000%, 10/08 at 101.00 AAA 4,650,345
10/01/19 - FGIC Insured
10,150 California, General Obligation Bonds, Series 2004, 5.000%, 12/14 at 100.00 AAA 10,719,111
6/01/31 - AMBAC Insured
3,500 Coachella Valley Unified School District, Riverside County, 8/15 at 100.00 AAA 3,736,075
California, General Obligation Bonds, Series 2005A, 5.000%,
8/01/26 - FGIC Insured
20,000 Cucamonga County Water District, San Bernardino County, 9/11 at 101.00 AAA 21,188,400
California, Certificates of Participation, Water Shares
Purchase, Series 2000, 5.125%, 9/01/35 - FGIC Insured
5,750 East Bay Municipal Utility District, Alameda and Contra Costa 6/15 at 100.00 AAA 6,118,920
Counties, California, Water System Subordinated Revenue Bonds,
Series 2005A, 5.000%, 6/01/27 - MBIA Insured
10,000 Golden State Tobacco Securitization Corporation, California, 6/15 at 100.00 AAA 10,552,700
Tobacco Settlement Asset-Backed Revenue Bonds, Series 2005A,
5.000%, 6/01/38 - FGIC Insured
1,520 Hayward Redevelopment Agency, California, Downtown Redevelopment 3/16 at 100.00 AAA 1,599,207
Project Tax Allocation Bonds, Series 2006, 5.000%, 3/01/36 -
XLCA Insured
4,000 Kern Community College District, California, General Obligation 11/15 at 100.00 AAA 4,345,520
Bonds, Series 2005, 5.000%, 11/01/20 - FSA Insured
5,600 Kern Community College District, California, General Obligation No Opt. Call AAA 2,555,616
Bonds, Series 2006, 0.000%, 11/01/24 - FSA Insured
5,000 Long Beach Bond Financing Authority, California, Lease Revenue 11/11 at 101.00 AAA 5,308,900
Refunding Bonds, Long Beach Aquarium of the South Pacific,
Series 2001, 5.250%, 11/01/30 - AMBAC Insured
1,875 Los Angeles Department of Water and Power, California, Waterworks 7/16 at 100.00 AAA 2,004,600
Revenue Bonds, Series 2006A-1, 5.000%, 7/01/36 - AMBAC Insured
2,740 Los Angeles Harbors Department, California, Revenue Bonds, Series 8/16 at 102.00 AAA 2,946,760
2006A, 5.000%, 8/01/22 - FGIC Insured (Alternative Minimum Tax)
30
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (continued)
$ 20,000 Los Angeles Unified School District, California, General 7/13 at 100.00 AAA $ 21,504,400
Obligation Bonds, Series 2003A, 5.000%, 7/01/21 - FSA Insured
2,000 Los Angeles Unified School District, California, General 7/15 at 100.00 AAA 2,145,920
Obligation Bonds, Series 2005A-2, 5.000%, 7/01/23 - MBIA
Insured
3,000 Los Angeles Unified School District, California, General 7/16 at 100.00 AAA 3,232,170
Obligation Bonds, Series 2006F, 5.000%, 7/01/24 - FGIC Insured
6,205 Port of Oakland, California, Revenue Bonds, Series 2002L, 5.000%, 11/12 at 100.00 AAA 6,465,858
11/01/22 - FGIC Insured (Alternative Minimum Tax)
Poway Redevelopment Agency, California, Tax Allocation Bonds,
Paguay Redevelopment Project, Series 2001:
15,000 5.200%, 6/15/30 - AMBAC Insured 12/11 at 101.00 AAA 15,885,750
5,000 5.125%, 6/15/33 - AMBAC Insured 12/11 at 101.00 AAA 5,256,800
2,035 Redding, California, Electric System Revenue Certificates of 6/15 at 100.00 AAA 2,145,989
Participation, Series 2005, 5.000%, 6/01/30 - FGIC Insured
6,000 Redlands Unified School District, San Bernardino County, 7/13 at 100.00 AAA 6,320,820
California, General Obligation Bonds, Series 2003, 5.000%,
7/01/26 - FSA Insured
2,285 Rio Hondo Community College District, California, General 8/15 at 100.00 AAA 2,477,626
Obligation Bonds, Series 2005A, 5.000%, 8/01/20 - FGIC Insured
2,970 Riverside Community College District, California, General 8/15 at 100.00 AAA 3,199,789
Obligation Bonds, Series 2005, 5.000%, 8/01/22 - FSA Insured
2,500 Sacramento County Sanitation District Financing Authority, 12/15 at 100.00 AAA 2,646,425
California, Revenue Bonds, Series 2005B, 4.750%, 12/01/21 -
FGIC Insured
13,710 San Francisco Airports Commission, California, Revenue 5/11 at 100.00 AAA 14,266,215
Refunding Bonds, San Francisco International Airport, Second
Series 2001, Issue 27A, 5.250%, 5/01/26 - MBIA Insured
(Alternative Minimum Tax)
11,500 San Francisco Bay Area Rapid Transit District, California, 7/11 at 100.00 AAA 12,090,180
Sales Tax Revenue Bonds, Series 2001, 5.125%, 7/01/36 - AMBAC
Insured
San Francisco Bay Area Rapid Transit District, California,
Sales Tax Revenue Bonds, Series 2005A:
1,220 5.000%, 7/01/22 - MBIA Insured 7/15 at 100.00 AAA 1,313,635
1,280 5.000%, 7/01/23 - MBIA Insured 7/15 at 100.00 AAA 1,373,389
66,685 San Joaquin Hills Transportation Corridor Agency, Orange No Opt. Call AAA 36,701,421
County, California, Senior Lien Toll Road Revenue Bonds, Series
1993, 0.000%, 1/01/21 (ETM)
San Joaquin Hills Transportation Corridor Agency, Orange County,
California, Toll Road Revenue Refunding Bonds, Series 1997A:
31,615 5.250%, 1/15/30 - MBIA Insured 1/07 at 102.00 AAA 32,335,504
21,500 0.000%, 1/15/32 - MBIA Insured No Opt. Call AAA 6,951,595
12,525 San Jose Redevelopment Agency, California, Tax Allocation 8/10 at 101.00 AAA 13,191,956
Bonds, Merged Area Redevelopment Project, Series 2002, 5.000%,
8/01/20 - MBIA Insured
11,000 Santa Ana Financing Authority, California, Lease Revenue Bonds, No Opt. Call AAA 13,871,440
Police Administration and Housing Facility, Series 1994A,
6.250%, 7/01/24 - MBIA Insured
5,000 Walnut Energy Center Authority, California, Electric Revenue 1/14 at 100.00 AAA 5,234,050
Bonds, Turlock Irrigation District, Series 2004A, 5.000%,
1/01/34 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
400,800 Total California 374,301,521
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 6.4% (4.2% OF TOTAL INVESTMENTS)
1,080 Arkansas River Power Authority, Colorado, Power Revenue Bonds, 10/16 at 100.00 AAA 1,164,348
Series 2006, 5.250%, 10/01/40 - XLCA Insured
1,900 Aspen, Colorado, Sales Tax Revenue Bonds, Parks and Open Space, 11/15 at 100.00 AAA 2,080,291
Series 2005B, 5.250%, 11/01/24 - FSA Insured
1,000 Colorado Department of Transportation, Certificates of 6/14 at 100.00 AAA 1,056,010
Participation, Series 2004, 5.000%, 6/15/25 - MBIA Insured
31
Nuveen Insured Municipal Opportunity Fund, Inc. (NIO) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
COLORADO (continued)
$ 4,950 Denver Convention Center Hotel Authority, Colorado, Senior 12/13 at 100.00 AAA $ 5,356,593
Revenue Bonds, Convention Center Hotel, Series 2003A, 5.000%,
12/01/33 (Pre-refunded 12/01/13) - XLCA Insured
1,740 Douglas County School District RE1, Douglas and Elbert Counties, 12/14 at 100.00 Aaa 1,846,558
Colorado, General Obligation Bonds, Series 2005B, 5.000%,
12/15/28 - FSA Insured
35,995 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, No Opt. Call AAA 17,357,869
Series 1997B, 0.000%, 9/01/23 - MBIA Insured
30,800 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, 9/10 at 102.00 AAA 33,750,946
Series 2000A, 5.750%, 9/01/35 (Pre-refunded 9/01/10) - MBIA
Insured
11,800 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, 9/10 at 74.80 AAA 7,651,946
Series 2000B, 0.000%, 9/01/15 (Pre-refunded 9/01/10) - MBIA
Insured
10,000 E-470 Public Highway Authority, Colorado, Toll Revenue Bonds, No Opt. Call AAA 3,989,300
Series 2004A, 0.000%, 9/01/27 - MBIA Insured
2,750 Jefferson County School District R1, Colorado, General Obligation 12/14 at 100.00 AAA 2,930,153
Bonds, Series 2004, 5.000%, 12/15/24 - FSA Insured
2,500 Summit County School District RE-1, Summit, Colorado, General 12/14 at 100.00 Aaa 2,666,700
Obligation Bonds, Series 2004B, 5.000%, 12/01/24 - FGIC Insured
1,000 University of Colorado, Enterprise System Revenue Bonds, Series 6/15 at 100.00 AAA 1,063,420
2005, 5.000%, 6/01/30 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
105,515 Total Colorado 80,914,134
------------------------------------------------------------------------------------------------------------------------------------
CONNECTICUT - 0.3% (0.2% OF TOTAL INVESTMENTS)
4,000 Connecticut, General Obligation Bonds, Series 2004D, 5.000%, 12/14 at 100.00 AAA 4,278,080
12/01/24 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 0.8% (0.6% OF TOTAL INVESTMENTS)
District of Columbia Water and Sewerage Authority, Subordinate
Lien Public Utility Revenue Bonds, Series 2003:
5,000 5.125%, 10/01/24 - FGIC Insured 10/13 at 100.00 AAA 5,368,050
5,000 5.125%, 10/01/25 - FGIC Insured 10/13 at 100.00 AAA 5,368,050
------------------------------------------------------------------------------------------------------------------------------------
10,000 Total District of Columbia 10,736,100
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 5.6% (3.7% OF TOTAL INVESTMENTS)
1,000 Hillsborough County School Board, Florida, Certificates of 7/15 at 100.00 AAA 1,057,930
Participation, Master Lease Program, Series 2005A, 5.000%,
7/01/26 - MBIA Insured
Indian Trace Development District, Florida, Water Management
Special Benefit Assessment Bonds, Series 2005:
645 5.000%, 5/01/25 - MBIA Insured 5/15 at 102.00 Aaa 693,839
1,830 5.000%, 5/01/27 - MBIA Insured 5/15 at 102.00 Aaa 1,960,497
4,425 Jacksonville Economic Development Commission, Florida, Healthcare 11/12 at 100.00 AAA 4,801,435
Facilities Revenue Bonds, Mayo Clinic, Series 2001C, 5.500%,
11/15/36 - MBIA Insured
1,505 Lee County, Florida, Transportation Facilities Revenue Bonds, 10/14 at 100.00 AAA 1,612,021
Series 2004B, 5.000%, 10/01/21 - AMBAC Insured
2,000 Marco Island, Florida, Water Utility System Revenue Bonds, Series 10/13 at 100.00 AAA 2,105,540
2003, 5.000%, 10/01/27 - MBIA Insured
2,150 Miami-Dade County, Florida, Aviation Revenue Bonds, Miami 10/12 at 100.00 AAA 2,234,775
International Airport, Series 2002A, 5.125%, 10/01/35 - FSA
Insured (Alternative Minimum Tax)
35,920 Miami-Dade County, Florida, Aviation Revenue Bonds, Miami 10/12 at 100.00 AAA 37,997,611
International Airport, Series 2002, 5.375%, 10/01/32 - FGIC
Insured (Alternative Minimum Tax)
5,320 Miami-Dade County, Florida, Public Facilities Revenue Bonds, 6/15 at 100.00 AAA 5,629,784
Jackson Health System, Series 2005B, 5.000%, 6/01/25 - MBIA
Insured
Northern Palm Beach County Improvement District, Florida, Revenue
Bonds, Water Control and Improvement Development Unit 9B, Series
2005:
1,290 5.000%, 8/01/23 - MBIA Insured 8/15 at 102.00 AAA 1,394,116
2,145 5.000%, 8/01/29 - MBIA Insured 8/15 at 102.00 AAA 2,296,887
32
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA (continued)
Ocala, Florida, Utility System Revenue Bonds, Series 2005B:
$ 1,025 5.250%, 10/01/24 - FGIC Insured 10/15 at 100.00 Aaa $ 1,123,892
2,590 5.000%, 10/01/27 - FGIC Insured 10/15 at 100.00 Aaa 2,749,622
2,320 Osceola County, Florida, Transportation Revenue Bonds, Osceola 4/14 at 100.00 Aaa 2,463,724
Parkway, Series 2004, 5.000%, 4/01/23 - MBIA Insured
2,225 Plantation, Florida, Non-Ad Valorem Revenue Refunding and 8/13 at 100.00 Aaa 2,382,641
Improvement Bonds, Series 2003, 5.000%, 8/15/18 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
66,390 Total Florida 70,504,314
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 0.9% (0.6% OF TOTAL INVESTMENTS)
1,000 Atlanta, Georgia, Water and Wastewater Revenue Bonds, Series 11/14 at 100.00 AAA 1,066,830
2004, 5.000%, 11/01/22 - FSA Insured
1,520 College Park Business and Industrial Development Authority, 9/14 at 102.00 AAA 1,676,484
Georgia, Revenue Bonds, Public Safety Project, Series 2004,
5.250%, 9/01/23 - MBIA Insured
Fulton County Development Authority, Georgia, Revenue Bonds,
Georgia Tech Molecular Science Building, Series 2004:
1,695 5.250%, 5/01/19 - MBIA Insured 5/14 at 100.00 AAA 1,851,771
1,135 5.250%, 5/01/20 - MBIA Insured 5/14 at 100.00 AAA 1,237,661
4,500 5.000%, 5/01/36 - MBIA Insured 5/14 at 100.00 AAA 4,736,970
1,250 Glynn-Brunswick Memorial Hospital Authority, Georgia, Revenue 2/07 at 102.00 AAA 1,276,400
Bonds, Southeast Georgia Health Systems, Series 1996, 5.250%,
8/01/13 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
11,100 Total Georgia 11,846,116
------------------------------------------------------------------------------------------------------------------------------------
HAWAII - 2.4% (1.6% OF TOTAL INVESTMENTS)
24,250 Hawaii Department of Budget and Finance, Special Purpose Revenue 11/06 at 101.00 AAA 24,540,515
Bonds, Hawaiian Electric Company Inc., Series 1996A, 6.200%,
5/01/26 - MBIA Insured (Alternative Minimum Tax)
5,000 Hawaii, General Obligation Bonds, Series 2005DF, 5.000%, 7/01/25 7/15 at 100.00 AAA 5,334,600
- AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
29,250 Total Hawaii 29,875,115
------------------------------------------------------------------------------------------------------------------------------------
IDAHO - 0.3% (0.2% OF TOTAL INVESTMENTS)
495 Idaho Housing Agency, Single Family Mortgage Senior Bonds, Series No Opt. Call Aa1 508,712
1994B-1, 6.750%, 7/01/22
440 Idaho Housing Agency, Single Family Mortgage Senior Bonds, Series No Opt. Call Aa1 452,896
1994B-2, 6.900%, 7/01/26 (Alternative Minimum Tax)
550 Idaho Housing Agency, Single Family Mortgage Senior Bonds, Series 1/07 at 100.00 Aaa 563,173
1995B, 6.600%, 7/01/27 (Alternative Minimum Tax)
Idaho Housing and Finance Association, Grant and Revenue
Anticipation Bonds, Federal Highway Trust Funds, Series 2006:
1,000 5.000%, 7/15/23 - MBIA Insured 7/16 at 100.00 Aaa 1,076,800
1,065 5.000%, 7/15/24 - MBIA Insured 7/16 at 100.00 Aaa 1,144,140
------------------------------------------------------------------------------------------------------------------------------------
3,550 Total Idaho 3,745,721
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 6.5% (4.3% OF TOTAL INVESTMENTS)
1,050 Bedford Park, Illinois, General Obligation Bonds, Series 2004A, 12/14 at 100.00 AAA 1,150,118
5.250%, 12/15/20 - FSA Insured
Chicago, Illinois, Second Lien Passenger Facility Charge Revenue
Refunding Bonds, O'Hare International Airport, Series 2001E:
4,615 5.500%, 1/01/17 - AMBAC Insured (Alternative Minimum Tax) 1/11 at 101.00 AAA 4,919,867
4,870 5.500%, 1/01/18 - AMBAC Insured (Alternative Minimum Tax) 1/11 at 101.00 AAA 5,191,712
7,200 Chicago, Illinois, Third Lien General Airport Revenue Bonds, 1/16 at 100.00 AAA 7,841,304
O'Hare International Airport, Series 2005A, 5.250%, 1/01/24 -
MBIA Insured
10,000 Illinois Development Finance Authority, Revenue Bonds, Provena 5/08 at 101.00 AAA 10,326,200
Health, Series 1998A, 5.500%, 5/15/21 - MBIA Insured
2,095 Illinois Educational Facilities Authority, Revenue Bonds, Robert 12/07 at 100.00 Aaa 2,141,677
Morris College, Series 2000, 5.800%, 6/01/30 - MBIA Insured
33
Nuveen Insured Municipal Opportunity Fund, Inc. (NIO) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS (continued)
$ 4,500 Illinois Health Facilities Authority, Revenue Bonds, Alexian 1/09 at 101.00 AAA $ 4,674,015
Brothers Health System, Series 1999, 5.000%, 1/01/19
(Pre-refunded 1/01/09) - FSA Insured
7,000 Illinois Health Facilities Authority, Revenue Bonds, Hospital 6/08 at 101.00 Aaa 7,178,920
Sisters Services Inc. Obligated Group, Series 1998A, 5.000%,
6/01/18 - MBIA Insured
6,000 Illinois Toll Highway Authority, State Toll Highway Authority 7/16 at 100.00 AAA 6,414,720
Revenue Bonds, Series 2006, 5.000%, 1/01/26 - FSA Insured
22,410 Illinois, General Obligation Bonds, Illinois FIRST Program, 2/12 at 100.00 AAA 23,591,903
Series 2002, 5.125%, 2/01/27 - FGIC Insured
Schaumburg, Illinois, General Obligation Bonds, Series 2004B:
4,260 5.000%, 12/01/22 - FGIC Insured 12/14 at 100.00 AAA 4,537,965
2,365 5.000%, 12/01/23 - FGIC Insured 12/14 at 100.00 AAA 2,512,623
4,000 Southwestern Illinois Development Authority, School Revenue No Opt. Call AAA 1,739,720
Bonds, Triad School District 2, Madison County, Illinois,
Series 2006, 0.000%, 10/01/25 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
80,365 Total Illinois 82,220,744
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 2.8% (1.8% OF TOTAL INVESTMENTS)
2,030 Decatur Township-Marion County Multi-School Building Corporation, 7/13 at 100.00 AAA 2,167,309
Indiana, First Mortgage Bonds, Series 2003, 5.000%, 7/15/20 -
FGIC Insured
20,000 Indianapolis Local Public Improvement Bond Bank, Indiana, Series No Opt. Call AAA 7,866,000
1999E, 0.000%, 2/01/28 - AMBAC Insured
3,250 Indianapolis Local Public Improvement Bond Bank, Indiana, 7/12 at 100.00 AAA 3,525,113
Waterworks Project, Series 2002A, 5.250%, 7/01/33 (Pre-refunded
7/01/12) - MBIA Insured
1,340 Monroe-Gregg Grade School Building Corporation, Morgan County, 1/14 at 100.00 AAA 1,409,801
Indiana, First Mortgage Bonds, Series 2004, 5.000%, 1/15/25 -
FSA Insured
5,000 Noblesville Redevelopment Authority, Indiana, Economic 7/13 at 100.00 AAA 5,235,800
Development Lease Rental Bonds, Exit 10 Project, Series 2003,
5.000%, 1/15/28 - AMBAC Insured
10,000 Purdue University, Indiana, Student Fee Bonds, Series 2002O, 1/12 at 100.00 AAA 10,564,800
5.000%, 7/01/19 - MBIA Insured
3,705 Whitley County Middle School Building Corporation, Columbia City, 7/13 at 100.00 AAA 3,990,804
Indiana, First Mortgage Bonds, Series 2003, 5.000%, 7/15/16 -
FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
45,325 Total Indiana 34,759,627
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 1.2% (0.8% OF TOTAL INVESTMENTS)
2,055 Kansas Turnpike Authority, Revenue Bonds, Series 2004A-2, 5.000%, 9/14 at 101.00 AAA 2,207,707
9/01/23 - FSA Insured
Neosho County Unified School District 413, Kansas, General
Obligation Bonds, Series 2006:
2,145 5.000%, 9/01/27 - FSA Insured 9/14 at 100.00 Aaa 2,276,810
4,835 5.000%, 9/01/29 - FSA Insured 9/14 at 100.00 Aaa 5,125,438
5,000 University of Kansas Hospital Authority, Health Facilities 9/09 at 100.00 AAA 5,247,900
Revenue Bonds, KU Health System, Series 1999A, 5.650%, 9/01/29
- AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
14,035 Total Kansas 14,857,855
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 2.1% (1.4% OF TOTAL INVESTMENTS)
3,870 Kenton County School District Finance Corporation, Kentucky, 6/14 at 100.00 Aaa 4,145,699
School Building Revenue Bonds, Series 2004, 5.000%, 6/01/20 -
MBIA Insured
7,500 Kentucky Turnpike Authority, Economic Development Road Revenue 7/16 at 100.00 AAA 8,055,525
Bonds, Revitalization Project, Series 2006B, 5.000%, 7/01/25 -
AMBAC Insured
12,980 Louisville and Jefferson County Metropolitan Sewer District, 11/11 at 101.00 AAA 14,115,361
Kentucky, Sewer and Drainage System Revenue Bonds, Series
2001A, 5.500%, 5/15/34 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
24,350 Total Kentucky 26,316,585
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 3.8% (2.5% OF TOTAL INVESTMENTS)
5,000 DeSoto Parish, Louisiana, Pollution Control Revenue Refunding 9/09 at 102.00 AAA 5,379,800
Bonds, Cleco Utility Group Inc. Project, Series 1999, 5.875%,
9/01/29 - AMBAC Insured
34
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA (continued)
$ 3,025 Lafayette City and Parish, Louisiana, Utilities Revenue Bonds, 11/14 at 100.00 AAA $ 3,301,183
Series 2004, 5.250%, 11/01/22 - MBIA Insured
1,640 Louisiana Public Facilities Authority, Revenue Bonds, Baton Rouge 7/14 at 100.00 AAA 1,758,998
General Hospital, Series 2004, 5.250%, 7/01/24 - MBIA Insured
8,150 Louisiana State, Gas Tax Revenue Bonds, Series 2006, 4.500%, 5/16 at 100.00 AAA 8,086,430
5/01/41 (WI/DD, Settling 11/02/06) - FGIC Insured
9,235 Louisiana State, Gasoline Tax Revenue Bonds, Series 2006, 5/16 at 100.00 AAA 9,019,086
Residuals 660-1, 5.850%, 5/01/41 (WI/DD, Settling 11/02/06) -
FGIC Insured (IF)
1,100 Louisiana State, Gasoline Tax Revenue Bonds, Series 2006, 5/16 at 100.00 AAA 1,197,944
Residuals 661, 6.597%, 5/01/39 (WI/DD, Settling 11/02/06) - FSA
Insured (IF)
Louisiana, Gasoline and Fuels Tax Revenue Bonds, Series 2005A:
2,400 5.000%, 5/01/25 - FGIC Insured 5/15 at 100.00 AAA 2,549,280
4,415 5.000%, 5/01/26 - FGIC Insured 5/15 at 100.00 AAA 4,683,123
5,000 5.000%, 5/01/27 - FGIC Insured 5/15 at 100.00 AAA 5,303,650
5,985 Orleans Levee District, Louisiana, Levee District General 12/06 at 102.50 AAA 6,173,946
Obligation Bonds, Series 1986, 5.950%, 11/01/15 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
45,950 Total Louisiana 47,453,440
------------------------------------------------------------------------------------------------------------------------------------
MAINE - 0.3% (0.1% OF TOTAL INVESTMENTS)
3,000 Maine Health and Higher Educational Facilities Authority, Revenue 7/13 at 100.00 AAA 3,153,270
Bonds, Series 2003B, 5.000%, 7/01/28 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 0.5% (0.3% OF TOTAL INVESTMENTS)
5,345 Baltimore, Maryland, Senior Lien Convention Center Hotel Revenue 9/16 at 100.00 AAA 5,862,984
Bonds, Series 2006A, 5.250%, 9/01/28 - XLCA Insured
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 4.5% (3.0% OF TOTAL INVESTMENTS)
22,500 Massachusetts Development Finance Authority, Revenue Bonds, WGBH 1/12 at 101.00 AAA 24,603,750
Educational Foundation, Series 2002A, 5.375%, 1/01/42
(Pre-refunded 1/01/12) - AMBAC Insured
11,000 Massachusetts School Building Authority, Dedicated Sales Tax 8/15 at 100.00 AAA 11,778,250
Revenue Bonds, Series 2005A, 5.000%, 8/15/23 - FSA Insured
15,000 Massachusetts, Special Obligation Dedicated Tax Revenue Bonds, 1/14 at 100.00 AAA 16,456,050
Series 2004, 5.250%, 1/01/23 (Pre-refunded 1/01/14) - FGIC
Insured
University of Massachusetts Building Authority, Senior Lien
Project Revenue Bonds, Series 2004-1:
1,500 5.375%, 11/01/20 (Pre-refunded 11/01/14) - AMBAC Insured 11/14 at 100.00 AAA 1,676,130
2,500 5.375%, 11/01/21 (Pre-refunded 11/01/14) - AMBAC Insured 11/14 at 100.00 AAA 2,793,550
------------------------------------------------------------------------------------------------------------------------------------
52,500 Total Massachusetts 57,307,730
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 6.4% (4.3% OF TOTAL INVESTMENTS)
5,490 Detroit City School District, Wayne County, Michigan, Unlimited No Opt. Call AAA 6,884,131
Tax School Building and Site Improvement Bonds, Series 2001A,
6.000%, 5/01/29 - FSA Insured
6,000 Detroit, Michigan, General Obligation Bonds, Series 2001A-1, 10/11 at 100.00 AAA 6,454,800
5.375%, 4/01/18 - MBIA Insured
7,420 Detroit, Michigan, Senior Lien Water Supply System Revenue Bonds, 7/07 at 101.00 AAA 7,548,589
Series 1997A, 5.000%, 7/01/27 - MBIA Insured
Detroit, Michigan, Sewerage Disposal System Revenue Bonds, Series
1999A:
15,825 5.750%, 7/01/26 (Pre-refunded 1/01/10) - FGIC Insured 1/10 at 101.00 AAA 17,007,128
20,000 5.875%, 7/01/27 (Pre-refunded 1/01/10) - FGIC Insured 1/10 at 101.00 AAA 21,565,200
8,000 Gaylord Community Schools, Otsego and Antrim Counties, Michigan, 5/07 at 37.75 AAA 2,966,960
School Building and Site Refunding Bonds, Series 1992, 0.000%,
5/01/21 (Pre-refunded 5/01/07) - MBIA Insured
1,085 Grand Rapids Community College, Kent County, Michigan, General 5/13 at 100.00 AAA 1,176,487
Obligation Refunding Bonds, Series 2003, 5.250%, 5/01/20 -
AMBAC Insured
6,850 Wayne County, Michigan, Airport Revenue Bonds, Detroit 12/08 at 101.00 AAA 7,119,548
Metropolitan Wayne County Airport, Series 1998A, 5.375%,
12/01/15 - MBIA Insured (Alternative Minimum Tax)
35
Nuveen Insured Municipal Opportunity Fund, Inc. (NIO) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN (continued)
$ 10,000 Wayne County, Michigan, Limited Tax General Obligation Airport 12/11 at 101.00 AAA $ 10,711,800
Hotel Revenue Bonds, Detroit Metropolitan Wayne County Airport,
Series 2001A, 5.250%, 12/01/25 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
80,670 Total Michigan 81,434,643
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 1.1% (0.7% OF TOTAL INVESTMENTS)
13,020 St. Paul Housing and Redevelopment Authority, Minnesota, GNMA 12/11 at 102.00 Aaa 13,990,120
Collateralized Multifamily Housing Revenue Bonds, Marian Center
Project, Series 2001A, 6.450%, 6/20/43
------------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 0.2% (0.1% OF TOTAL INVESTMENTS)
Nebraska Public Power District, General Revenue Bonds, Series
2005A:
1,000 5.000%, 1/01/24 - FSA Insured 1/15 at 100.00 AAA 1,064,370
1,000 5.000%, 1/01/25 - FSA Insured 1/15 at 100.00 AAA 1,063,660
------------------------------------------------------------------------------------------------------------------------------------
2,000 Total Nebraska 2,128,030
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 8.3% (5.5% OF TOTAL INVESTMENTS)
12,105 Clark County, Nevada, General Obligation Bank Bonds, Southern 12/12 at 100.00 AAA 12,629,631
Nevada Water Authority Loan, Series 2002, 5.000%, 6/01/32 -
MBIA Insured
7,370 Clark County, Nevada, Subordinate Lien Airport Revenue Bonds, 7/14 at 100.00 AAA 7,835,858
Series 2004A-2, 5.125%, 7/01/25 - FGIC Insured
Director of Nevada State Department of Business and Industry,
Revenue Bonds, Las Vegas Monorail Project, First Tier, Series 2000:
15,000 5.625%, 1/01/34 - AMBAC Insured 1/10 at 102.00 AAA 16,079,550
13,000 5.375%, 1/01/40 - AMBAC Insured 1/10 at 100.00 AAA 13,549,510
14,985 Reno, Nevada, Capital Improvement Revenue Bonds, Series 2002, 6/12 at 100.00 AAA 16,076,058
5.375%, 6/01/32 - FGIC Insured
25,300 Reno, Nevada, Capital Improvement Revenue Bonds, Series 2002, 6/12 at 100.00 AAA 27,576,241
5.375%, 6/01/32 (Pre-refunded 6/01/12) - FGIC Insured
10,000 Reno, Nevada, Senior Lien Sales and Room Tax Revenue Bonds, Reno 6/12 at 100.00 AAA 10,753,300
Transportation Rail Access Corridor Project, Series 2002,
5.125%, 6/01/27 (Pre-refunded 6/01/12) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
97,760 Total Nevada 104,500,148
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 2.4% (1.6% OF TOTAL INVESTMENTS)
Essex County Improvement Authority, New Jersey, Guaranteed
Revenue Bonds, Project Consolidation, Series 2004:
2,000 5.125%, 10/01/21 - MBIA Insured 10/14 at 100.00 Aaa 2,160,480
2,250 5.125%, 10/01/22 - MBIA Insured 10/14 at 100.00 Aaa 2,424,195
New Jersey Economic Development Authority, Revenue Bonds, Motor
Vehicle Surcharge, Series 2004A:
3,850 5.000%, 7/01/22 - MBIA Insured 7/14 at 100.00 AAA 4,138,673
3,850 5.000%, 7/01/23 - MBIA Insured 7/14 at 100.00 AAA 4,082,271
New Jersey Turnpike Authority, Revenue Bonds, Series 2003A:
8,250 5.000%, 1/01/19 - FGIC Insured 7/13 at 100.00 AAA 8,825,273
2,000 5.000%, 1/01/23 - FSA Insured 7/13 at 100.00 AAA 2,125,540
3,320 New Jersey Turnpike Authority, Revenue Bonds, Series 2005A, 1/15 at 100.00 AAA 3,557,546
5.000%, 1/01/21 - FSA Insured
2,795 Rutgers State University, New Jersey, Revenue Bonds, Series 5/14 at 100.00 AAA 3,000,796
2004E, 5.000%, 5/01/22 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
28,315 Total New Jersey 30,314,774
------------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 0.3% (0.2% OF TOTAL INVESTMENTS)
3,660 San Juan County, New Mexico, Subordinate Gross Receipts Tax 6/15 at 100.00 AAA 3,895,667
Revenue Bonds, Series 2005, 5.000%, 6/15/25 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 8.2% (5.4% OF TOTAL INVESTMENTS)
1,880 Dormitory Authority of the State of New York, FHA-Insured 2/15 at 100.00 AAA 2,002,050
Mortgage Revenue Bonds, Montefiore Hospital, Series 2004,
5.000%, 8/01/23 - FGIC Insured
36
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK (continued)
$ 3,335 Dormitory Authority of the State of New York, State Personal 3/15 at 100.00 AAA $ 3,559,145
Income Tax Revenue Bonds, Series 2005F, 5.000%, 3/15/24 - AMBAC
Insured
8,685 Long Island Power Authority, New York, Electric System General 6/08 at 101.00 AAA 9,009,124
Revenue Bonds, Series 1998A, 5.300%, 12/01/19 (Pre-refunded
6/01/08) - FSA Insured
12,500 Long Island Power Authority, New York, Electric System General 6/16 at 100.00 AAA 13,388,875
Revenue Bonds, Series 2006A, 5.000%, 12/01/25 - FGIC Insured
Metropolitan Transportation Authority, New York, State Service
Contract Refunding Bonds, Series 2002A:
2,500 5.000%, 7/01/21 - FGIC Insured 7/12 at 100.00 AAA 2,669,250
5,000 5.000%, 7/01/25 - FGIC Insured 7/12 at 100.00 AAA 5,303,050
4,825 New York City Sales Tax Asset Receivable Corporation, New York, 10/14 at 100.00 AAA 5,152,618
Dedicated Revenue Bonds, Local Government Assistance
Corporation, Series 2004A, 5.000%, 10/15/24 - MBIA Insured
10,525 New York City, New York, General Obligation Bonds, Fiscal Series 4/15 at 100.00 AAA 11,181,655
2005M, 5.000%, 4/01/26 - FGIC Insured
5,000 New York City, New York, General Obligation Bonds, Fiscal Series 9/15 at 100.00 AAA 5,374,500
2006F-1, 5.000%, 9/01/21 - AMBAC Insured
5,000 New York State Thruway Authority, General Revenue Bonds, Series 1/15 at 100.00 AAA 5,314,700
2005F, 5.000%, 1/01/26 - AMBAC Insured
3,000 New York State Thruway Authority, General Revenue Bonds, Series 7/15 at 100.00 AAA 3,106,530
2005G, 4.750%, 1/01/29 - FSA Insured
New York State Thruway Authority, Highway and Bridge Trust Fund
Bonds, Second Generation, Series 2005B:
3,770 5.000%, 4/01/21 - AMBAC Insured 10/15 at 100.00 AAA 4,066,435
7,000 5.000%, 4/01/22 - AMBAC Insured 10/15 at 100.00 AAA 7,528,570
3,650 New York State Urban Development Corporation, Service Contract 3/15 at 100.00 AAA 3,889,951
Revenue Bonds, Series 2005B, 5.000%, 3/15/25 - FSA Insured
New York State Urban Development Corporation, State Personal
Income Tax Revenue Bonds, Series 2004A-1:
1,000 5.000%, 3/15/23 - FGIC Insured 3/14 at 100.00 AAA 1,060,960
5,000 5.000%, 3/15/25 - FGIC Insured 3/14 at 100.00 AAA 5,295,000
15,000 Triborough Bridge and Tunnel Authority, New York, Subordinate 11/12 at 100.00 AAA 15,686,850
Lien General Purpose Revenue Refunding Bonds, Series 2002E,
5.000%, 11/15/32 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
97,670 Total New York 103,589,263
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 1.4% (0.9% OF TOTAL INVESTMENTS)
Mooresville, North Carolina, Enterprise System Revenue Bonds,
Series 2004:
2,115 5.000%, 5/01/22 - FGIC Insured 5/14 at 100.00 AAA 2,254,400
2,575 5.000%, 5/01/26 - FGIC Insured 5/14 at 100.00 AAA 2,727,595
5,000 North Carolina Municipal Power Agency 1, Catawba Electric Revenue 1/13 at 100.00 AAA 5,417,850
Bonds, Series 2003A, 5.250%, 1/01/16 - FSA Insured
Raleigh Durham Airport Authority, North Carolina, Airport Revenue
Bonds, Series 2005A:
3,205 5.000%, 5/01/23 - AMBAC Insured 5/15 at 100.00 Aaa 3,418,549
3,295 5.000%, 5/01/24 - AMBAC Insured 5/15 at 100.00 Aaa 3,507,231
------------------------------------------------------------------------------------------------------------------------------------
16,190 Total North Carolina 17,325,625
------------------------------------------------------------------------------------------------------------------------------------
NORTH DAKOTA - 0.6% (0.4% OF TOTAL INVESTMENTS)
Grand Forks, North Dakota, Sales Tax Revenue Bonds, Alerus
Project, Series 2005A:
2,195 5.000%, 12/15/22 - MBIA Insured 12/15 at 100.00 Aaa 2,362,171
1,355 5.000%, 12/15/23 - MBIA Insured 12/15 at 100.00 Aaa 1,453,901
3,000 5.000%, 12/15/24 - MBIA Insured 12/15 at 100.00 Aaa 3,211,890
------------------------------------------------------------------------------------------------------------------------------------
6,550 Total North Dakota 7,027,962
------------------------------------------------------------------------------------------------------------------------------------
37
Nuveen Insured Municipal Opportunity Fund, Inc. (NIO) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 3.0% (2.0% OF TOTAL INVESTMENTS)
$ 3,485 Cincinnati City School District, Hamilton County, Ohio, General No Opt. Call AAA $ 4,017,961
Obligation Bonds, Series 2006, 5.250%, 12/01/23 - FGIC Insured
2,650 Cleveland State University, Ohio, General Receipts Bonds, Series 6/14 at 100.00 AAA 2,890,090
2004, 5.250%, 6/01/24 - FGIC Insured
2,000 Columbus City School District, Franklin County, Ohio, General 12/14 at 100.00 AAA 2,218,940
Obligation Bonds, Series 2004, 5.250%, 12/01/25 (Pre-refunded
12/01/14) - FSA Insured
2,385 Columbus, Ohio, Tax Increment Financing Bonds, Easton Project, 6/14 at 100.00 AAA 2,524,403
Series 2004A, 5.000%, 12/01/22 - AMBAC Insured
2,205 Hamilton City School District, Ohio, General Obligation Bonds, 6/15 at 100.00 Aaa 2,358,005
Series 2005, 5.000%, 12/01/24 - MBIA Insured
20,100 Lucas County, Ohio, Hospital Revenue Bonds, ProMedica Healthcare 11/09 at 101.00 AAA 21,155,652
Obligated Group, Series 1999, 5.375%, 11/15/39 - AMBAC Insured
3,000 Ross Local School District, Butler County, Ohio, General 12/13 at 100.00 Aaa 3,165,360
Obligation Bonds, Series 2003, 5.000%, 12/01/28 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
35,825 Total Ohio 38,330,411
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 1.7% (1.1% OF TOTAL INVESTMENTS)
3,500 Oklahoma Capitol Improvement Authority, State Facilities Revenue 7/15 at 100.00 AAA 3,739,470
Bonds, Series 2005F, 5.000%, 7/01/24 - AMBAC Insured
4,655 Oklahoma Housing Finance Agency, GNMA Collateralized Single No Opt. Call AAA 4,846,507
Family Mortgage Revenue Bonds, Series 1987A, 7.997%, 8/01/18
(Alternative Minimum Tax)
5,245 Oklahoma State Industries Authority, Revenue Bonds, Oklahoma 2/11 at 100.00 Aaa 5,523,719
Medical Research Foundation, Series 2001, 5.250%, 2/01/21 -
AMBAC Insured
2,515 Oklahoma State University, Athletic Facilities Revenue Bonds, 8/14 at 100.00 AAA 2,653,099
Series 2004, 5.000%, 8/01/34 - AMBAC Insured
4,880 University of Oklahoma, Student Housing Revenue Bonds, Series 7/14 at 100.00 Aaa 5,204,178
2004, 5.000%, 7/01/22 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
20,795 Total Oklahoma 21,966,973
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 0.8% (0.5% OF TOTAL INVESTMENTS)
Oregon Department of Administrative Services, Certificates of
Participation, Series 2005A:
2,535 5.000%, 5/01/25 - FSA Insured 5/15 at 100.00 AAA 2,690,826
2,115 5.000%, 5/01/30 - FSA Insured 5/15 at 100.00 AAA 2,234,138
3,470 Oregon Department of Administrative Services, Certificates of 11/15 at 100.00 AAA 3,759,294
Participation, Series 2005B, 5.000%, 11/01/18 - FGIC Insured
1,315 Oregon Housing and Community Services Department, Single Family 1/07 at 101.00 Aa2 1,328,702
Mortgage Revenue Bonds, Series 1995A, 6.450%, 7/01/26
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
9,435 Total Oregon 10,012,960
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 2.2% (1.4% OF TOTAL INVESTMENTS)
7,925 Commonwealth Financing Authority, Pennsylvania, State 6/16 at 100.00 AAA 8,501,544
Appropriation Lease Bonds, Series 2006A, 5.000%, 6/01/26 - FSA
Insured
1,800 Pennsylvania Higher Educational Facilities Authority, Revenue 5/15 at 100.00 AAA 1,914,624
Bonds, Drexel University, Series 2005A, 5.000%, 5/01/28 - MBIA
Insured
2,625 Pennsylvania Turnpike Commission, Turnpike Revenue Bonds, Series 6/16 at 100.00 AAA 2,818,121
2006A, 5.000%, 12/01/26 - AMBAC Insured
6,335 Radnor Township School District, Delaware County, Pennsylvania, 8/15 at 100.00 Aaa 6,744,621
General Obligation Bonds, Series 2005B, 5.000%, 2/15/30 - FSA
Insured
Reading School District, Berks County, Pennsylvania, General
Obligation Bonds, Series 2005:
3,285 5.000%, 1/15/22 - FSA Insured 1/16 at 100.00 AAA 3,542,281
3,450 5.000%, 1/15/23 - FSA Insured 1/16 at 100.00 AAA 3,709,164
------------------------------------------------------------------------------------------------------------------------------------
25,420 Total Pennsylvania 27,230,355
------------------------------------------------------------------------------------------------------------------------------------
38
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 0.5% (0.3% OF TOTAL INVESTMENTS)
$ 2,500 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series 7/15 at 100.00 AAA $ 2,652,300
2005RR, 5.000%, 7/01/30 - XLCA Insured
2,000 Puerto Rico Highway and Transportation Authority, Highway Revenue 7/13 at 100.00 AAA 2,178,480
Bonds, Series 2003G, 5.250%, 7/01/19 - FGIC Insured
1,550 Puerto Rico Municipal Finance Agency, Series 2005C, 5.250%, No Opt. Call AAA 1,772,596
8/01/21 - CIFG Insured
------------------------------------------------------------------------------------------------------------------------------------
6,050 Total Puerto Rico 6,603,376
------------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 2.0% (1.3% OF TOTAL INVESTMENTS)
2,195 Providence Housing Development Corporation, Rhode Island, 1/07 at 100.00 AAA 2,198,578
FHA-Insured Section 8 Assisted Mortgage Revenue Refunding
Bonds, Barbara Jordan Apartments, Series 1994A, 6.750%, 7/01/25
- MBIA Insured
20,475 Rhode Island Depositors Economic Protection Corporation, Special 2/11 at 100.00 AAA 21,839,864
Obligation Refunding Bonds, Series 1993B, 5.250%, 8/01/21
(Pre-refunded 2/01/11) - MBIA Insured
1,405 Rhode Island Health and Educational Building Corporation, Higher 9/14 at 100.00 Aaa 1,556,557
Education Auxiliary Enterprise Revenue Bonds, Series 2004A,
5.500%, 9/15/24 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
24,075 Total Rhode Island 25,594,999
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 4.0% (2.6% OF TOTAL INVESTMENTS)
10,000 Beaufort County, South Carolina, Tax Increment Bonds, New River 12/12 at 100.00 AAA 10,460,700
Redevelopment Project, Series 2002, 5.000%, 6/01/27 - MBIA
Insured
Medical University Hospital Authority, South Carolina,
FHA-Insured Mortgage Revenue Bonds, Series 2004A:
2,000 5.250%, 8/15/22 - MBIA Insured 8/14 at 100.00 AAA 2,160,900
2,105 5.250%, 8/15/23 - MBIA Insured 8/14 at 100.00 AAA 2,269,969
4,855 Piedmont Municipal Power Agency, South Carolina, Electric Revenue No Opt. Call AAA 3,668,778
Bonds, Series 1988A, 0.000%, 1/01/13 - AMBAC Insured (ETM)
9,190 Piedmont Municipal Power Agency, South Carolina, Electric Revenue 7/09 at 76.63 AAA 6,393,391
Bonds, Series 1988A, 0.000%, 1/01/13 (Pre-refunded 7/01/09) -
AMBAC Insured
7,955 Piedmont Municipal Power Agency, South Carolina, Electric Revenue No Opt. Call AAA 5,968,716
Bonds, Series 1988A, 0.000%, 1/01/13 - AMBAC Insured
8,000 South Carolina JOBS Economic Development Authority, Industrial 11/12 at 100.00 AAA 8,528,720
Revenue Bonds, South Carolina Electric and Gas Company, Series
2002A, 5.200%, 11/01/27 - AMBAC Insured
10,000 South Carolina JOBS Economic Development Authority, Industrial 11/12 at 100.00 AAA 10,642,200
Revenue Bonds, South Carolina Electric and Gas Company, Series
2002B, 5.450%, 11/01/32 - AMBAC Insured (Alternative Minimum
Tax)
------------------------------------------------------------------------------------------------------------------------------------
54,105 Total South Carolina 50,093,374
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 0.5% (0.4% OF TOTAL INVESTMENTS)
6,455 Memphis-Shelby County Airport Authority, Tennessee, Airport 3/11 at 100.00 AAA 6,850,885
Revenue Bonds, Series 2001A, 5.500%, 3/01/18 - FSA Insured
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 15.6% (10.3% OF TOTAL INVESTMENTS)
22,650 Brazos River Authority, Texas, Revenue Refunding Bonds, Houston 5/08 at 102.00 AAA 23,499,828
Industries Inc., Series 1998C, 5.125%, 5/01/19 - AMBAC Insured
521 Capital Area Housing Finance Corporation, Texas, FNMA Backed 4/12 at 106.00 AAA 533,545
Single Family Mortgage Revenue Refunding Bonds, Series 2002A-2,
6.300%, 4/01/35 - AMBAC Insured (Alternative Minimum Tax)
12,500 Dallas-Ft. Worth International Airport, Texas, Joint Revenue 11/09 at 100.00 AAA 13,315,625
Bonds, Series 2000A, 6.125%, 11/01/35 - FGIC Insured
(Alternative Minimum Tax)
Harris County, Texas, Toll Road Senior Lien Revenue Bonds,
Series 1989:
9,000 0.000%, 8/15/18 (Pre-refunded 8/15/09) - AMBAC Insured 8/09 at 53.84 AAA 4,376,700
39,000 0.000%, 8/15/19 (Pre-refunded 8/15/09) - AMBAC Insured 8/09 at 50.26 AAA 17,704,440
7,280 0.000%, 8/15/20 (Pre-refunded 8/15/09) - AMBAC Insured 8/09 at 46.91 AAA 3,085,118
5,085 0.000%, 8/15/21 (Pre-refunded 8/15/09) - AMBAC Insured 8/09 at 43.80 AAA 2,011,626
39
Nuveen Insured Municipal Opportunity Fund, Inc. (NIO) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS (continued)
$ 25,000 Harris County-Houston Sports Authority, Texas, Junior Lien 11/11 at 100.00 AAA $ 26,518,250
Revenue Refunding Bonds, Series 2001B, 5.250%, 11/15/40 - MBIA
Insured
4,671 Houston Housing Finance Corporation, Texas, GNMA Collateralized 9/11 at 105.00 Aaa 5,001,240
Mortgage Multifamily Housing Revenue Bonds, RRG Apartments
Project, Series 2001, 6.350%, 3/20/42
Houston, Texas, First Lien Combined Utility System Revenue Bonds,
Series 2004A:
4,000 5.250%, 5/15/24 - FGIC Insured 5/14 at 100.00 AAA 4,347,000
5,000 5.250%, 5/15/25 - MBIA Insured 5/14 at 100.00 AAA 5,433,750
6,570 Houston, Texas, General Obligation Public Improvement Bonds, 3/11 at 100.00 AAA 7,043,237
Series 2001A, 5.375%, 3/01/19 (Pre-refunded 3/01/11) - FSA
Insured
17,500 Houston, Texas, Hotel Occupancy Tax and Special Revenue Bonds, 9/11 at 100.00 AAA 18,522,700
Convention and Entertainment Project, Series 2001B, 5.250%,
9/01/33 - AMBAC Insured
4,170 Houston, Texas, Subordinate Lien Airport System Revenue Bonds, 7/10 at 100.00 AAA 4,417,615
Series 2000B, 5.500%, 7/01/30 - FSA Insured
23,865 Jefferson County Health Facilities Development Corporation, 8/11 at 100.00 AAA 25,441,761
Texas, FHA-Insured Mortgage Revenue Bonds, Baptist Hospital of
Southeast Texas, Series 2001, 5.500%, 8/15/41 - AMBAC Insured
140 Lower Colorado River Authority, Texas, Revenue Refunding and 5/11 at 100.00 Aaa 148,348
Improvement Bonds, Series 2001A, 5.000%, 5/15/21 (Pre-refunded
5/15/11) - MBIA Insured
8,065 Lower Colorado River Authority, Texas, Revenue Refunding and 5/11 at 100.00 AAA 8,476,880
Improvement Bonds, Series 2001A, 5.000%, 5/15/21 - MBIA Insured
Port of Houston Authority, Harris County, Texas, General
Obligation Port Improvement Bonds, Series 2001B:
3,205 5.500%, 10/01/18 - FGIC Insured (Alternative Minimum Tax) 10/11 at 100.00 AAA 3,413,870
3,375 5.500%, 10/01/19 - FGIC Insured (Alternative Minimum Tax) 10/11 at 100.00 AAA 3,594,949
7,205 San Antonio, Texas, Airport System Improvement Revenue Bonds, 7/11 at 101.00 AAA 7,699,839
Series 2001, 5.375%, 7/01/15 - FGIC Insured (Alternative
Minimum Tax)
Tarrant County Health Facilities Development Corporation, Texas,
Revenue Bonds, Texas Health Resources System, Series 1997A:
2,900 5.250%, 2/15/22 - MBIA Insured 2/08 at 102.00 AAA 3,004,139
6,655 5.000%, 2/15/26 - MBIA Insured 2/08 at 101.00 AAA 6,798,948
165 Tarrant County Health Facilities Development Corporation, Texas, 2/08 at 101.00 Aaa 169,567
Revenue Bonds, Texas Health Resources System, Series 1997A,
5.000%, 2/15/26 (Pre-refunded 2/15/08) - MBIA Insured
1,840 Ysleta Independent School District Public Facility Corporation, 11/09 at 100.00 AAA 1,919,709
Texas, Lease Revenue Refunding Bonds, Series 2001, 5.375%,
11/15/24 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
220,362 Total Texas 196,478,684
------------------------------------------------------------------------------------------------------------------------------------
UTAH - 0.3% (0.2% OF TOTAL INVESTMENTS)
2,000 Clearfield City, Utah, Sales Tax Revenue Bonds, Series 2003, 7/13 at 100.00 AAA 2,099,800
5.000%, 7/01/28 - FGIC Insured
1,625 Utah Housing Finance Agency, FHA-Insured Section 8 Assisted 1/07 at 100.00 AA 1,628,006
Multifamily Housing Revenue Bonds, Series 1992A, 7.400%,
7/01/24
------------------------------------------------------------------------------------------------------------------------------------
3,625 Total Utah 3,727,806
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 2.0% (1.3% OF TOTAL INVESTMENTS)
8,000 Greater Richmond Convention Center Authority, Virginia, Hotel Tax 6/15 at 100.00 AAA 8,485,360
Revenue Bonds, Series 2005, 5.000%, 6/15/30 - MBIA Insured
1,035 Loudoun County Industrial Development Authority, Virginia, Lease 6/14 at 100.00 AAA 1,130,603
Revenue Bonds, Public Safety Facilities, Series 2003A, 5.250%,
12/15/20 - FSA Insured
4,840 Metropolitan Washington D.C. Airports Authority, Airport System 10/11 at 101.00 AAA 5,195,208
Revenue Bonds, Series 2001A, 5.500%, 10/01/19 - MBIA Insured
(Alternative Minimum Tax)
10,000 Virginia Housing Development Authority, Commonwealth Mortgage 7/11 at 100.00 AAA 10,577,300
Bonds, Series 2001H-1, 5.375%, 7/01/36 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
23,875 Total Virginia 25,388,471
------------------------------------------------------------------------------------------------------------------------------------
40
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 2.2% (1.5% OF TOTAL INVESTMENTS)
$ 2,500 Grant County Public Utility District 2, Washington, Revenue 1/15 at 100.00 AAA $ 2,636,025
Bonds, Wanapum Hydroelectric Development, Series 2005A, 5.000%,
1/01/29 - FGIC Insured
3,500 King County School District 401, Highline, Washington, General 12/14 at 100.00 AAA 3,715,985
Obligation Bonds, Series 2004, 5.000%, 10/01/24 - FGIC Insured
3,195 Kitsap County, Washington, Limited Tax General Obligation Bonds, 7/10 at 100.00 AAA 3,407,819
Series 2000, 5.500%, 7/01/25 (Pre-refunded 7/01/10) - AMBAC
Insured
4,250 Snohomish County Public Utility District 1, Washington, No Opt. Call AAA 5,025,200
Generation System Revenue Bonds, Series 1989, 6.650%, 1/01/16 -
FGIC Insured (ETM)
Tacoma, Washington, Solid Waste Utility Revenue Refunding Bonds,
Series 2006:
3,890 5.000%, 12/01/24 - XLCA Insured 12/16 at 100.00 AAA 4,155,103
4,085 5.000%, 12/01/25 - XLCA Insured 12/16 at 100.00 AAA 4,359,921
4,290 5.000%, 12/01/26 - XLCA Insured 12/16 at 100.00 AAA 4,571,424
------------------------------------------------------------------------------------------------------------------------------------
25,710 Total Washington 27,871,477
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 0.8% (0.5% OF TOTAL INVESTMENTS)
10,000 Harrison County Commission, West Virginia, Solid Waste Disposal 11/06 at 100.00 AAA 10,119,100
Revenue Bonds, West Penn Power Company - Harrison Station,
Series 1993B, 6.300%, 5/01/23 - MBIA Insured (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 4.0% (2.7% OF TOTAL INVESTMENTS)
18,000 Wisconsin Health and Educational Facilities Authority, Revenue 8/07 at 102.00 AAA 18,534,420
Bonds, Aurora Healthcare Inc., Series 1997, 5.250%, 8/15/17 -
MBIA Insured
15,000 Wisconsin Health and Educational Facilities Authority, Revenue 2/07 at 102.00 AAA 15,382,500
Bonds, Marshfield Clinic, Series 1997, 5.750%, 2/15/27 - MBIA
Insured
550 Wisconsin Housing and Economic Development Authority, Housing 1/07 at 100.00 AAA 550,952
Revenue Bonds, Series 1992A, 6.850%, 11/01/12 - MBIA Insured
1,675 Wisconsin Public Power Incorporated System, Power Supply System 7/15 at 100.00 AAA 1,774,528
Revenue Bonds, Series 2005A, 5.000%, 7/01/30 - AMBAC Insured
2,890 Wisconsin, General Obligation Bonds, Series 2004-3, 5.250%, 5/14 at 100.00 AAA 3,149,435
5/01/20 - FGIC Insured
10,945 Wisconsin, General Obligation Bonds, Series 2004-4, 5.000%, 5/14 at 100.00 AAA 11,703,051
5/01/20 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
49,060 Total Wisconsin 51,094,886
------------------------------------------------------------------------------------------------------------------------------------
$ 1,942,427 Total Investments (cost $1,786,083,730) - 151.4% 1,912,654,851
============------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.4% 30,516,883
---------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (53.8)% (680,000,000)
---------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $1,263,171,734
=====================================================================================================================
All of the bonds in the Portfolio of Investments, excluding temporary
investments in short-term municipal securities, are either covered by
Original Issue Insurance, Secondary Market Insurance or Portfolio
Insurance, or are backed by an escrow or trust containing sufficient
U.S. Government or U.S. Government agency securities, any of which
ensure the timely payment of principal and interest.
(1) All percentages shown in the Portfolio of Investments are based on net
assets applicable to Common shares unless otherwise noted.
(2) Optional Call Provisions (not covered by the report of independent
registered public accounting firm): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other call
provisions at varying prices at later dates. Certain mortgage-backed
securities may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered public
accounting firm): Using the higher of Standard & Poor's or Moody's
rating. Ratings below BBB by Standard & Poor's Group or Baa by Moody's
Investor Service, Inc. are considered to be below investment grade.
WI/DD Purchased on a when-issued or delayed delivery basis.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
41
Nuveen Premier Insured Municipal Income Fund, Inc. (NIF)
Portfolio of
INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 1.1% (0.8% OF TOTAL INVESTMENTS)
$ 3,200 Auburn, Alabama, General Obligation Warrants, Series 2005, 8/15 at 100.00 AAA $ 3,386,848
5.000%, 8/01/30 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 1.5% (1.0% OF TOTAL INVESTMENTS)
4,370 Phoenix Civic Improvement Corporation, Arizona, Junior Lien Water 7/15 at 100.00 AAA 4,547,684
System Revenue Bonds, Series 2005, 4.750%, 7/01/25 - MBIA
Insured
------------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 1.4% (0.9% OF TOTAL INVESTMENTS)
4,020 Northwest Community College District, Arkansas, General 5/15 at 100.00 AAA 4,297,782
Obligation Bonds, Series 2005, 5.000%, 5/15/23 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 30.8% (20.3% OF TOTAL INVESTMENTS)
ABAG Finance Authority for Non-Profit Corporations, California,
Insured Certificates of Participation, Children's Hospital
Medical Center of Northern California, Series 1999:
6,750 5.875%, 12/01/19 - AMBAC Insured 12/09 at 101.00 AAA 7,243,358
10,000 6.000%, 12/01/29 - AMBAC Insured 12/09 at 101.00 AAA 10,768,500
1,000 California Department of Water Resources, Water System Revenue 12/14 at 100.00 AAA 1,062,420
Bonds, Central Valley Project, Series 2005AC, 5.000%, 12/01/26
- MBIA Insured
1,250 California Pollution Control Financing Authority, Remarketed 4/11 at 102.00 AAA 1,346,088
Revenue Bonds, Pacific Gas and Electric Company, Series 1996A,
5.350%, 12/01/16 - MBIA Insured (Alternative Minimum Tax)
4,775 Clovis Unified School District, Fresno County, California, No Opt. Call AAA 2,107,494
General Obligation Bonds, Series 2001A, 0.000%, 8/01/25 - FGIC
Insured
1,005 Folsom Cordova Unified School District, Sacramento County, 10/14 at 100.00 AAA 1,067,330
California, General Obligation Bonds, School Facilities
Improvement District 2, Series 2004B, 5.000%, 10/01/26 - FSA
Insured
1,150 Kern Community College District, California, General Obligation No Opt. Call AAA 549,194
Bonds, Series 2006, 0.000%, 11/01/23 - FSA Insured
85 Kern County Housing Authority, California, GNMA Guaranteed No Opt. Call AAA 87,718
Tax-Exempt Mortgage Obligation Bonds, Series 1994A-I, 7.150%,
12/30/24 (Alternative Minimum Tax)
55 Kern County Housing Authority, California, GNMA Guaranteed No Opt. Call AAA 56,906
Tax-Exempt Mortgage Obligation Bonds, Series 1994A-III, 7.450%,
6/30/25 (Alternative Minimum Tax)
4,750 La Verne-Grand Terrace Housing Finance Agency, California, No Opt. Call AAA 6,384,095
Single Family Residential Mortgage Revenue Bonds, Series 1984A,
10.250%, 7/01/17 (ETM)
5,000 Ontario Redevelopment Financing Authority, San Bernardino No Opt. Call AAA 6,912,250
County, California, Revenue Refunding Bonds, Redevelopment
Project 1, Series 1995, 7.400%, 8/01/25 - MBIA Insured
8,880 Pomona, California, GNMA/FHLMC Collateralized Single Family No Opt. Call AAA 11,855,066
Mortgage Revenue Refunding Bonds, Series 1990B, 7.500%, 8/01/23
(ETM)
12,655 San Bernardino County, California, GNMA Mortgage-Backed No Opt. Call AAA 14,895,568
Securities Program Single Family Home Mortgage Revenue Bonds,
Series 1988A, 8.300%, 9/01/14 (Alternative Minimum Tax) (ETM)
10,005 San Bernardino, California, GNMA Mortgage-Backed Securities No Opt. Call AAA 12,885,439
Program Single Family Mortgage Revenue Refunding Bonds, Series
1990A, 7.500%, 5/01/23 (ETM)
4,300 San Francisco Airports Commission, California, Revenue Refunding 5/11 at 100.00 AAA 4,501,928
Bonds, San Francisco International Airport, Second Series 2001,
Issue 27A, 5.125%, 5/01/19 - MBIA Insured (Alternative Minimum
Tax)
2,000 San Jose Redevelopment Agency, California, Tax Allocation Bonds, 8/14 at 100.00 AAA 2,185,820
Merged Area Redevelopment Project, Series 2004A, 5.250%,
8/01/19 - MBIA Insured
4,455 San Mateo County Community College District, California, General No Opt. Call AAA 2,366,719
Obligation Bonds, Series 2006B, 0.000%, 9/01/21 - MBIA Insured
1,815 University of California, General Revenue Bonds, Series 2005G, 5/13 at 101.00 AAA 1,870,031
4.750%, 5/15/31 - MBIA Insured
42
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (continued)
$ 3,600 Ventura County Community College District, California, General 8/15 at 100.00 AAA $ 3,831,912
Obligation Bonds, Series 2005B, 5.000%, 8/01/28 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
83,530 Total California 91,977,836
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 7.2% (4.7% OF TOTAL INVESTMENTS)
1,500 Adams and Arapahoe Counties Joint School District 28J, Aurora, 12/13 at 100.00 AAA 1,622,850
Colorado, General Obligation Bonds, Series 2003A, 5.125%,
12/01/21 - FSA Insured
2,500 Denver City and County, Colorado, Airport System Revenue 11/12 at 100.00 AAA 2,701,475
Refunding Bonds, Series 2002E, 5.500%, 11/15/18 - FGIC Insured
(Alternative Minimum Tax)
6,000 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, 9/10 at 102.00 AAA 6,574,860
Series 2000A, 5.750%, 9/01/29 (Pre-refunded 9/01/10) - MBIA
Insured
4,405 Garfield, Eagle and Pitkin Counties School District RE-1, 12/14 at 100.00 AAA 4,693,572
Roaring Fork, Colorado, General Obligation Bonds, Series 2005A,
5.000%, 12/15/24 - FSA Insured
2,065 Jefferson County School District R1, Colorado, General Obligation 12/14 at 100.00 AAA 2,200,278
Bonds, Series 2004, 5.000%, 12/15/24 - FSA Insured
1,390 Teller County School District RE-2, Woodland Park, Colorado, 12/14 at 100.00 AAA 1,487,634
General Obligation Bonds, Series 2004, 5.000%, 12/01/22 - MBIA
Insured
1,000 University of Colorado, Enterprise System Revenue Bonds, Series 6/12 at 100.00 AAA 1,061,640
2002A, 5.000%, 6/01/19 - FGIC Insured
1,000 University of Colorado, Enterprise System Revenue Bonds, Series 6/15 at 100.00 AAA 1,063,420
2005, 5.000%, 6/01/30 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
19,860 Total Colorado 21,405,729
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 5.1% (3.3% OF TOTAL INVESTMENTS)
2,285 Florida Municipal Loan Council, Revenue Bonds, Series 2005A, 2/15 at 100.00 AAA 2,431,697
5.000%, 2/01/23 - MBIA Insured
1,500 JEA, Florida, Water and Sewerage System Revenue Bonds, Series 10/13 at 100.00 AAA 1,608,060
2004A, 5.000%, 10/01/19 - FGIC Insured
4,145 Miami, Florida, General Obligation Bonds, Series 2002, 5.000%, 1/12 at 100.00 AAA 4,360,250
1/01/22 - MBIA Insured
4,240 Reedy Creek Improvement District, Florida, Utility Revenue Bonds, 10/13 at 100.00 AAA 4,622,830
Series 2003-1, 5.250%, 10/01/17 - MBIA Insured
2,000 Tallahassee, Florida, Energy System Revenue Bonds, Series 2005, 10/15 at 100.00 AAA 2,123,260
5.000%, 10/01/28 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
14,170 Total Florida 15,146,097
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 3.4% (2.2% OF TOTAL INVESTMENTS)
2,950 Atlanta, Georgia, Airport General Revenue Bonds, Series 2004G, 1/15 at 100.00 AAA 3,123,077
5.000%, 1/01/25 - FSA Insured
6,500 Medical Center Hospital Authority, Georgia, Revenue Anticipation 8/09 at 102.00 AAA 6,925,685
Certificates, Columbus Regional Healthcare System, Inc.
Project, Series 1999, 5.500%, 8/01/25 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
9,450 Total Georgia 10,048,762
------------------------------------------------------------------------------------------------------------------------------------
HAWAII - 3.7% (2.5% OF TOTAL INVESTMENTS)
2,250 Hawaii Department of Budget and Finance, Special Purpose Revenue 1/09 at 101.00 AAA 2,381,760
Bonds, Hawaiian Electric Company Inc., Series 1999D, 6.150%,
1/01/20 - AMBAC Insured (Alternative Minimum Tax)
8,030 Hawaii Department of Transportation, Airport System Revenue 7/10 at 101.00 AAA 8,824,809
Refunding Bonds, Series 2000B, 6.500%, 7/01/15 - FGIC Insured
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
10,280 Total Hawaii 11,206,569
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 15.9% (10.5% OF TOTAL INVESTMENTS)
4,000 Bridgeview, Illinois, General Obligation Bonds, Series 2002, 12/12 at 100.00 AAA 4,231,680
5.000%, 12/01/22 - FGIC Insured
8,200 Chicago Board of Education, Illinois, General Obligation Lease No Opt. Call AAA 9,441,972
Certificates, Series 1992A, 6.250%, 1/01/15 - MBIA Insured
10,000 Chicago, Illinois, General Obligation Refunding Bonds, 1/10 at 101.00 AAA 10,612,500
Series 2000D, 5.500%, 1/01/35 - FGIC Insured
43
Nuveen Premier Insured Municipal Income Fund, Inc. (NIF) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS (continued)
$ 1,450 Chicago, Illinois, Third Lien General Airport Revenue Bonds, 1/16 at 100.00 AAA $ 1,579,152
O'Hare International Airport, Series 2005A, 5.250%, 1/01/24 -
MBIA Insured
23,110 Illinois Development Finance Authority, Local Government Program No Opt. Call Aaa 15,296,737
Revenue Bonds, Kane, Cook and DuPage Counties School District
U46 - Elgin, Series 2002, 0.000%, 1/01/17 - FSA Insured
5,010 Metropolitan Pier and Exposition Authority, Illinois, Revenue No Opt. Call AAA 2,640,671
Refunding Bonds, McCormick Place Expansion Project, Series
1996A, 0.000%, 12/15/21 - MBIA Insured
3,225 Regional Transportation Authority, Cook, DuPage, Kane, Lake, No Opt. Call AAA 3,646,346
McHenry and Will Counties, Illinois, General Obligation Bonds,
Series 1992A, 9.000%, 6/01/09 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
54,995 Total Illinois 47,449,058
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 2.9% (1.9% OF TOTAL INVESTMENTS)
Indiana University, Parking Facility Revenue Bonds, Series 2004:
1,015 5.250%, 11/15/19 - AMBAC Insured 11/14 at 100.00 AAA 1,114,643
1,060 5.250%, 11/15/20 - AMBAC Insured 11/14 at 100.00 AAA 1,161,749
1,100 5.250%, 11/15/21 - AMBAC Insured 11/14 at 100.00 AAA 1,204,797
9,255 Indianapolis Local Public Improvement Bond Bank, Indiana, Series No Opt. Call AAA 4,174,838
1999E, 0.000%, 2/01/25 - AMBAC Insured
1,000 Metropolitan School District Steuben County K-5 Building 7/14 at 102.00 AAA 1,096,520
Corporation, Indiana, First Mortgage Bonds, Series 2003,
5.250%, 1/15/21 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
13,430 Total Indiana 8,752,547
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 1.2% (0.8% OF TOTAL INVESTMENTS)
3,345 Ames, Iowa, Hospital Revenue Refunding Bonds, Mary Greeley 6/13 at 100.00 Aaa 3,552,959
Medical Center, Series 2003, 5.000%, 6/15/17 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 1.4% (0.9% OF TOTAL INVESTMENTS)
1,245 Kansas Development Finance Authority, Board of Regents, Revenue 4/15 at 100.00 AAA 1,329,984
Bonds, Kansas State University Housing System, Series 2005A,
5.000%, 4/01/23 - MBIA Insured
2,760 Neosho County Unified School District 413, Kansas, General 9/14 at 100.00 Aaa 2,918,203
Obligation Bonds, Series 2006, 5.000%, 9/01/31 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
4,005 Total Kansas 4,248,187
------------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 2.2% (1.4% OF TOTAL INVESTMENTS)
1,200 Maryland Economic Development Corporation, Student Housing 6/16 at 100.00 AAA 1,281,408
Revenue Refunding Bonds, University of Maryland College Park
Projects, Series 2006, 5.000%, 6/01/28 - CIFG Insured
5,000 Maryland Transportation Authority, Airport Parking Revenue Bonds, 3/12 at 101.00 AAA 5,268,250
Baltimore-Washington International Airport Passenger Facility,
Series 2002B, 5.125%, 3/01/21 - AMBAC Insured (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
6,200 Total Maryland 6,549,658
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 1.6% (1.0% OF TOTAL INVESTMENTS)
4,400 Massachusetts School Building Authority, Dedicated Sales Tax 8/15 at 100.00 AAA 4,711,300
Revenue Bonds, Series 2005A, 5.000%, 8/15/23 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 3.6% (2.4% OF TOTAL INVESTMENTS)
6,500 Michigan Higher Education Student Loan Authority, Revenue Bonds, No Opt. Call AAA 6,847,230
Series 2000 XII-T, 5.300%, 9/01/10 - AMBAC Insured (Alternative
Minimum Tax)
3,810 Michigan Housing Development Authority, GNMA Collateralized 8/12 at 102.00 Aaa 4,005,605
Limited Obligation Multifamily Housing Revenue Bonds, Cranbrook
Apartments, Series 2001A, 5.500%, 2/20/43 (Alternative Minimum
Tax)
------------------------------------------------------------------------------------------------------------------------------------
10,310 Total Michigan 10,852,835
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 1.8% (1.2% OF TOTAL INVESTMENTS)
4,860 Minneapolis-St. Paul Metropolitan Airports Commission, Minnesota, 1/11 at 100.00 AAA 5,214,974
Airport Revenue Bonds, Series 2001B, 5.750%, 1/01/15 - FGIC
Insured (Alternative Minimum Tax)
44
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA (continued)
$ 145 Minnesota Housing Finance Agency, Rental Housing Bonds, Series 2/07 at 100.00 AAA $ 145,806
1995D, 5.950%, 2/01/18 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
5,005 Total Minnesota 5,360,780
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 3.4% (2.2% OF TOTAL INVESTMENTS)
7,495 Jefferson County Industrial Development Authority, Missouri, 8/07 at 100.00 AAA 7,918,393
Housing Revenue Bonds, Richardson Road Apartments Project,
Series 1985, 11.000%, 12/15/15 (Pre-refunded 8/15/07)
2,000 Missouri Western State College, Auxiliary System Revenue Bonds, 10/13 at 100.00 AAA 2,146,600
Series 2003, 5.000%, 10/01/21 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
9,495 Total Missouri 10,064,993
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 8.5% (5.6% OF TOTAL INVESTMENTS)
3,000 Clark County, Nevada, General Obligation Bank Bonds, Southern 12/12 at 100.00 AAA 3,130,020
Nevada Water Authority Loan, Series 2002, 5.000%, 6/01/32 -
MBIA Insured
8,000 Clark County, Nevada, Subordinate Lien Airport Revenue Bonds, 7/11 at 100.00 AAA 8,538,880
Series 2001B, 5.125%, 7/01/21 (Pre-refunded 7/01/11) - FGIC
Insured
7,990 Reno, Nevada, Senior Lien Sales and Room Tax Revenue Bonds, Reno 6/12 at 100.00 AAA 8,641,984
Transportation Rail Access Corridor Project, Series 2002,
5.250%, 6/01/41 (Pre-refunded 6/01/12) - AMBAC Insured
5,050 Washoe County, Nevada, Gas and Water Facilities Remarketed 12/14 at 100.00 AAA 5,124,993
Revenue Refunding Bonds, Sierra Pacific Power Company, Series
1987, 6.300%, 12/01/14 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
24,040 Total Nevada 25,435,877
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 1.1% (0.8% OF TOTAL INVESTMENTS)
New Jersey Economic Development Authority, Revenue Bonds, Motor
Vehicle Surcharge, Series 2004A:
1,200 5.000%, 7/01/22 - MBIA Insured 7/14 at 100.00 AAA 1,289,976
1,200 5.000%, 7/01/23 - MBIA Insured 7/14 at 100.00 AAA 1,272,396
800 Rutgers State University, New Jersey, Certificates of 1/14 at 100.00 AAA 843,008
Participation, Lower Georges Street University Redevelopment
Associates LLC, Series 2004, 5.000%, 1/01/24 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
3,200 Total New Jersey 3,405,380
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 8.3% (5.5% OF TOTAL INVESTMENTS)
1,000 Dormitory Authority of the State of New York, FHA-Insured 2/15 at 100.00 AAA 1,064,920
Mortgage Revenue Bonds, Montefiore Hospital, Series 2004,
5.000%, 8/01/23 - FGIC Insured
5,000 Long Island Power Authority, New York, Electric System General 6/16 at 100.00 AAA 5,355,550
Revenue Bonds, Series 2006A, 5.000%, 12/01/25 - FGIC Insured
10,000 Metropolitan Transportation Authority, New York, Transportation 11/12 at 100.00 AAA 10,736,700
Revenue Refunding Bonds, Series 2002F, 5.250%, 11/15/27 - MBIA
Insured
5,700 New York State Thruway Authority, General Revenue Bonds, Series 7/15 at 100.00 AAA 6,077,112
2005G, 5.000%, 1/01/26 - FSA Insured
1,450 New York State Thruway Authority, Highway and Bridge Trust Fund 10/15 at 100.00 AAA 1,564,014
Bonds, Second Generation, Series 2005B, 5.000%, 4/01/21 - AMBAC
Insured
------------------------------------------------------------------------------------------------------------------------------------
23,150 Total New York 24,798,296
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 2.1% (1.5% OF TOTAL INVESTMENTS)
3,100 North Carolina Medical Care Commission, FHA-Insured Mortgage 10/13 at 100.00 AAA 3,273,910
Revenue Bonds, Betsy Johnson Regional Hospital Project, Series
2003, 5.125%, 10/01/32 - FSA Insured
3,050 Raleigh Durham Airport Authority, North Carolina, Airport Revenue 5/15 at 100.00 Aaa 3,262,280
Bonds, Series 2005A, 5.000%, 5/01/22 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
6,150 Total North Carolina 6,536,190
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 0.3% (0.2% OF TOTAL INVESTMENTS)
820 Cincinnati City School District, Hamilton County, Ohio, General No Opt. Call AAA 944,394
Obligation Bonds, Series 2006, 5.250%, 12/01/22 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
45
Nuveen Premier Insured Municipal Income Fund, Inc. (NIF) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 1.6% (1.1% OF TOTAL INVESTMENTS)
$ 3,500 Oklahoma Capitol Improvement Authority, State Facilities 7/15 at 100.00 AAA $ 3,739,470
Revenue Bonds, Series 2005F, 5.000%, 7/01/24 - AMBAC Insured
980 Oklahoma Housing Finance Agency, GNMA Collateralized Single No Opt. Call AAA 1,020,317
Family Mortgage Revenue Bonds, Series 1987A, 7.997%, 8/01/18
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
4,480 Total Oklahoma 4,759,787
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 4.2% (2.8% OF TOTAL INVESTMENTS)
Oregon Health Sciences University, Revenue Bonds, Series 2002A:
5,000 5.000%, 7/01/26 - MBIA Insured 1/13 at 100.00 AAA 5,255,250
7,000 5.000%, 7/01/32 - MBIA Insured 1/13 at 100.00 AAA 7,330,120
------------------------------------------------------------------------------------------------------------------------------------
12,000 Total Oregon 12,585,370
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 2.3% (1.6% OF TOTAL INVESTMENTS)
1,500 Allegheny County Sanitary Authority, Pennsylvania, Sewerage 12/15 at 100.00 AAA 1,605,585
Revenue Bonds, Series 2005A, 5.000%, 12/01/23 - MBIA Insured
4,000 Commonwealth Financing Authority, Pennsylvania, State 6/16 at 100.00 AAA 4,291,000
Appropriation Lease Bonds, Series 2006A, 5.000%, 6/01/26 - FSA
Insured
1,050 Pennsylvania Turnpike Commission, Turnpike Revenue Bonds, Series 6/16 at 100.00 AAA 1,127,249
2006A, 5.000%, 12/01/26 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
6,550 Total Pennsylvania 7,023,834
------------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 2.1% (1.4% OF TOTAL INVESTMENTS)
2,500 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series 7/15 at 100.00 AAA 2,701,425
2005RR, 5.000%, 7/01/22 - FGIC Insured
1,000 Puerto Rico Municipal Finance Agency, Series 2005C, 5.250%, No Opt. Call AAA 1,143,610
8/01/21 - CIFG Insured
2,000 Puerto Rico, Highway Revenue Bonds, Highway and Transportation No Opt. Call AAA 2,296,720
Authority, Series 2003AA, 5.500%, 7/01/17 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
5,500 Total Puerto Rico 6,141,755
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 3.6% (2.4% OF TOTAL INVESTMENTS)
3,000 Blount County Public Building Authority, Tennessee, Local 6/15 at 100.00 Aaa 3,203,670
Government Public Improvement Lease Bonds, Oak Ridge, Series
2005B-9-A, 5.000%, 6/01/24 - AMBAC Insured
2,055 Memphis, Tennessee, Sanitary Sewerage System Revenue Bonds, 10/14 at 100.00 AAA 2,199,672
Series 2004, 5.000%, 10/01/22 - FSA Insured
5,000 Metropolitan Government of Nashville-Davidson County Health and 11/09 at 101.00 AAA 5,385,050
Educational Facilities Board, Tennessee, Revenue Bonds,
Ascension Health Credit Group, Series 1999A, 6.000%, 11/15/30
(Pre-refunded 11/15/09) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
10,055 Total Tennessee 10,788,392
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 10.5% (6.9% OF TOTAL INVESTMENTS)
12,500 Dallas-Ft. Worth International Airport, Texas, Joint Revenue 11/09 at 100.00 AAA 13,031,250
Refunding and Improvement Bonds, Series 2001A, 5.500%, 11/01/35
- FGIC Insured (Alternative Minimum Tax)
North Harris County Regional Water Authority, Texas, Senior Water
Revenue Bonds, Series 2003:
4,565 5.250%, 12/15/20 - FGIC Insured 12/13 at 100.00 AAA 4,964,072
4,800 5.250%, 12/15/21 - FGIC Insured 12/13 at 100.00 AAA 5,199,360
7,600 San Antonio, Texas, Airport System Improvement Revenue Bonds, 7/11 at 101.00 AAA 8,098,560
Series 2001, 5.375%, 7/01/16 - FGIC Insured (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
29,465 Total Texas 31,293,242
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 18.5% (12.2% OF TOTAL INVESTMENTS)
5,000 Chelan County Public Utility District 1, Washington, Hydro 7/11 at 101.00 AAA 5,382,050
Consolidated System Revenue Bonds, Series 2001B, 5.600%,
1/01/36 - MBIA Insured (Alternative Minimum Tax)
King County School District 405, Bellevue, Washington, General
Obligation Bonds, Series 2002:
12,060 5.000%, 12/01/19 - FGIC Insured 12/12 at 100.00 AAA 12,855,960
12,785 5.000%, 12/01/20 - FGIC Insured 12/12 at 100.00 AAA 13,628,810
46
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON (continued)
Pierce County School District 343, Dieringer, Washington, General
Obligation Refunding Bonds, Series 2003:
$ 2,755 5.250%, 12/01/18 - FGIC Insured 6/13 at 100.00 Aaa $ 2,984,822
2,990 5.250%, 12/01/19 - FGIC Insured 6/13 at 100.00 Aaa 3,239,426
4,715 Port of Seattle, Washington, Revenue Bonds, Series 2001B, 5.625%, 10/11 at 100.00 AAA 5,065,702
4/01/17 - FGIC Insured (Alternative Minimum Tax)
895 Port of Seattle, Washington, Special Facility Revenue Bonds, 3/10 at 101.00 AAA 961,463
Terminal 18, Series 1999C, 6.000%, 9/01/29 - MBIA Insured
(Alternative Minimum Tax)
1,265 Tacoma, Washington, General Obligation Bonds, Series 2002, 12/12 at 100.00 AAA 1,348,490
5.000%, 12/01/18 - FGIC Insured
4,200 Tacoma, Washington, Solid Waste Utility Revenue Refunding Bonds, 12/11 at 100.00 AAA 4,530,288
Series 2001, 5.250%, 12/01/20 (Pre-refunded 12/01/11) -
AMBAC Insured
5,000 Washington, General Obligation Bonds, Series 2001C, 5.250%, 1/11 at 100.00 AAA 5,262,900
1/01/26 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
51,665 Total Washington 55,259,911
------------------------------------------------------------------------------------------------------------------------------------
$ 437,140 Total Investments (cost $422,929,142) - 151.3% 452,532,052
============------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.5% 7,468,984
---------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (53.8)% (161,000,000)
---------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 299,001,036
=====================================================================================================================
All of the bonds in the Portfolio of Investments, excluding temporary
investments in short-term municipal securities, are either covered by
Original Issue Insurance, Secondary Market Insurance or Portfolio
Insurance, or are backed by an escrow or trust containing sufficient
U.S. Government or U.S. Government agency securities, any of which
ensure the timely payment of principal and interest.
(1) All percentages shown in the Portfolio of Investments are based on net
assets applicable to Common shares unless otherwise noted.
(2) Optional Call Provisions (not covered by the report of independent
registered public accounting firm): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other call
provisions at varying prices at later dates. Certain mortgage-backed
securities may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered public
accounting firm): Using the higher of Standard & Poor's or Moody's
rating. Ratings below BBB by Standard & Poor's Group or Baa by Moody's
Investor Service, Inc. are considered to be below investment grade.
(ETM) Escrowed to maturity.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
47
Nuveen Insured Premium Income Municipal Fund 2 (NPX)
Portfolio of
INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 2.2% (1.5% OF TOTAL INVESTMENTS)
$ 3,750 Huntsville Healthcare Authority, Alabama, Revenue Bonds, Series 6/15 at 100.00 AAA $ 3,954,525
2005A, 5.000%, 6/01/24 - MBIA Insured
Jefferson County, Alabama, General Obligation Warrants,
Series 2004A:
1,395 5.000%, 4/01/22 - MBIA Insured 4/14 at 100.00 AAA 1,484,182
1,040 5.000%, 4/01/23 - MBIA Insured 4/14 at 100.00 AAA 1,103,742
Montgomery Water and Sewerage Board, Alabama, Water and Sewerage
Revenue Bonds, Series 2005:
2,220 5.000%, 3/01/24 - FSA Insured 3/15 at 100.00 AAA 2,365,366
2,590 5.000%, 3/01/25 - FSA Insured 3/15 at 100.00 AAA 2,757,702
------------------------------------------------------------------------------------------------------------------------------------
10,995 Total Alabama 11,665,517
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 2.4% (1.6% OF TOTAL INVESTMENTS)
12,365 Phoenix Civic Improvement Corporation, Arizona, Junior Lien Water 7/15 at 100.00 AAA 12,822,258
System Revenue Bonds, Series 2005, 4.750%, 7/01/27 - MBIA
Insured
------------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 2.9% (1.9% OF TOTAL INVESTMENTS)
7,745 Arkansas Development Finance Authority, State Facility Revenue 6/14 at 100.00 AAA 8,446,697
Bonds, Donaghey Plaza Project, Series 2004, 5.250%, 6/01/25 -
FSA Insured
University of Arkansas, Fayetteville, Revenue Bonds, Medical
Sciences Campus, Series 2004B:
2,000 5.000%, 11/01/27 - MBIA Insured 11/14 at 100.00 Aaa 2,121,020
2,000 5.000%, 11/01/28 - MBIA Insured 11/14 at 100.00 Aaa 2,119,620
2,480 University of Arkansas, Monticello Campus, Revenue Bonds, Series 12/13 at 100.00 Aaa 2,602,710
2005, 5.000%, 12/01/35 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
14,225 Total Arkansas 15,290,047
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 20.3% (13.6% OF TOTAL INVESTMENTS)
2,000 California Department of Water Resources, Water System Revenue 12/14 at 100.00 AAA 2,141,040
Bonds, Central Valley Project, Series 2005AC, 5.000%,
12/01/24 - MBIA Insured
1,800 California Educational Facilities Authority, Revenue Bonds, 10/15 at 100.00 Aaa 1,909,548
Occidental College, Series 2005A, 5.000%, 10/01/33 -
MBIA Insured
2,335 California Infrastructure Economic Development Bank, First Lien 1/28 at 100.00 AAA 3,301,527
Revenue Bonds, San Francisco Bay Area Toll Bridge, Series
2003A. Residuals Series 1485, 7.327%, 7/01/33 (Pre-refunded
1/01/28) - AMBAC Insured (IF)
31,200 Foothill/Eastern Transportation Corridor Agency, California, 1/10 at 24.23 AAA 6,597,552
Toll Road Revenue Refunding Bonds, Series 1999, 0.000%,
1/15/34 - MBIA Insured
1,735 Fullerton Public Financing Authority, California, Tax Allocation 9/15 at 100.00 AAA 1,837,105
Revenue Bonds, Series 2005, 5.000%, 9/01/27 - AMBAC Insured
7,000 Golden State Tobacco Securitization Corporation, California, 6/15 at 100.00 AAA 7,386,890
Tobacco Settlement Asset-Backed Revenue Bonds, Series 2005A,
5.000%, 6/01/35 - FGIC Insured
1,870 Kern Community College District, California, General Obligation No Opt. Call AAA 893,037
Bonds, Series 2006, 0.000%, 11/01/23 - FSA Insured
6,520 Los Angeles Unified School District, California, General 7/15 at 100.00 AAA 7,020,410
Obligation Bonds, Series 2005E, 5.000%, 7/01/22 - AMBAC Insured
4,000 Los Angeles Unified School District, California, General 7/16 at 100.00 AAA 4,309,560
Obligation Bonds, Series 2006F, 5.000%, 7/01/24 - FGIC Insured
15,000 Orange County Sanitation District, California, Certificates of 8/13 at 100.00 AAA 16,048,200
Participation, Series 2003, 5.250%, 2/01/30 - FGIC Insured
10,000 Orange County Water District, California, Revenue Certificates of 8/13 at 100.00 AAA 10,473,100
Participation, Series 2003B, 5.000%, 8/15/34 - MBIA Insured
48
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (continued)
$ 1,000 Orange County Water District, California, Revenue Certificates of 2/15 at 100.00 AAA $ 1,060,120
Participation, Series 2005B, 5.000%, 8/15/24 - MBIA Insured
1,435 Pasadena Area Community College District, Los Angeles County, 6/13 at 100.00 AAA 1,560,376
California, General Obligation Bonds, Series 2003A, 5.000%,
6/01/22 (Pre-refunded 6/01/13) - FGIC Insured
12,265 Sacramento City Financing Authority, California, Capital 12/09 at 102.00 AAA 13,334,017
Improvement Revenue Bonds, Solid Waste and Redevelopment
Projects, Series 1999, 5.800%, 12/01/19 (Pre-refunded 12/01/09)
- AMBAC Insured
735 Sacramento City Financing Authority, California, Capital 12/09 at 102.00 AAA 795,946
Improvement Revenue Bonds, Solid Waste and Redevelopment
Projects, Series 1999, 5.800%, 12/01/19 - AMBAC Insured
San Diego County, California, Certificates of Participation,
Edgemoor Facility Project and Regional System, Series 2005:
1,675 5.000%, 2/01/24 - AMBAC Insured 2/15 at 100.00 AAA 1,775,299
720 5.000%, 2/01/25 - AMBAC Insured 2/15 at 100.00 AAA 761,054
4,725 San Diego Unified School District, San Diego County, California, 7/15 at 100.00 AAA 5,641,650
General Obligation Bonds, Series 2006, Residuals Series 1499,
7.326%, 7/01/29 - FSA Insured (IF)
2,000 San Jose Redevelopment Agency, California, Tax Allocation Bonds, 8/14 at 100.00 AAA 2,185,820
Merged Area Redevelopment Project, Series 2004A, 5.250%,
8/01/19 - MBIA Insured
5,000 Torrance, California, Certificates of Participation, Series No Opt. Call AAA 5,288,900
2005B, 5.000%, 6/01/24 - AMBAC Insured
12,500 University of California, Revenue Bonds, Multi-Purpose Projects, 5/13 at 100.00 AAA 13,106,500
Series 2003A, 5.000%, 5/15/33 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
125,515 Total California 107,427,651
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 8.9% (6.0% OF TOTAL INVESTMENTS)
1,940 Colorado Educational and Cultural Facilities Authority, Charter 6/13 at 100.00 AAA 2,077,333
School Revenue Bonds, Adams School District 12 - Pinnacle
School, Series 2003, 5.250%, 6/01/23 - XLCA Insured
3,405 Colorado Educational and Cultural Facilities Authority, Charter 12/13 at 100.00 AAA 3,661,907
School Revenue Bonds, Classical Academy, Series 2003, 5.250%,
12/01/23 - XLCA Insured
3,500 Colorado Health Facilities Authority, Revenue Bonds, Poudre 12/09 at 101.00 Aaa 3,748,465
Valley Healthcare Inc., Series 1999A, 5.750%, 12/01/23
(Pre-refunded 12/01/09) - FSA Insured
17,145 Denver Convention Center Hotel Authority, Colorado, Senior 12/13 at 100.00 AAA 18,553,290
Revenue Bonds, Convention Center Hotel, Series 2003A, 5.000%,
12/01/33 (Pre-refunded 12/01/13) - XLCA Insured
6,100 Denver School District 1, Colorado, General Obligation Bonds, 12/13 at 100.00 AAA 6,548,716
Series 2004, 5.000%, 12/01/18 - FSA Insured
1,325 El Paso County, Colorado, Certificates of Participation, 12/12 at 100.00 AAA 1,383,870
Detention Facility Project, Series 2002B, 5.000%, 12/01/27 -
AMBAC Insured
Jefferson County School District R1, Colorado, General Obligation
Bonds, Series 2004:
2,500 5.000%, 12/15/22 - FSA Insured 12/14 at 100.00 AAA 2,676,275
5,125 5.000%, 12/15/23 - FSA Insured 12/14 at 100.00 AAA 5,471,706
2,000 5.000%, 12/15/24 - FSA Insured 12/14 at 100.00 AAA 2,131,020
1,000 University of Colorado, Enterprise System Revenue Bonds, Series 6/15 at 100.00 AAA 1,063,420
2005, 5.000%, 6/01/30 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
44,040 Total Colorado 47,316,002
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 0.8% (0.5% OF TOTAL INVESTMENTS)
4,000 Florida State Board of Education, Full Faith and Credit Public 6/13 at 101.00 AAA 4,283,000
Education Capital Outlay Bonds, Series 2003J, 5.000%, 6/01/22 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 3.8% (2.5% OF TOTAL INVESTMENTS)
4,000 Cobb County Development Authority, Georgia, Parking Revenue 7/14 at 100.00 Aaa 4,239,640
Bonds, Kennesaw State University, Series 2004, 5.000%, 7/15/24
- MBIA Insured
2,925 Columbus, Georgia, Water and Sewerage Revenue Bonds, Series 2005, 5/14 at 100.00 AAA 3,111,937
5.000%, 5/01/23 - MBIA Insured
49
Nuveen Insured Premium Income Municipal Fund 2 (NPX) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA (continued)
Municipal Electric Authority of Georgia, Combustion Turbine
Revenue Bonds, Series 2003A:
$ 1,775 5.000%, 11/01/21 - MBIA Insured 11/13 at 100.00 AAA $ 1,889,133
2,580 5.000%, 11/01/22 - MBIA Insured 11/13 at 100.00 AAA 2,745,894
4,500 South Fulton Municipal Regional Water and Sewerage Authority, 1/13 at 100.00 Aaa 4,704,750
Georgia, Water and Sewerage Revenue Bonds, Series 2003, 5.000%,
1/01/33 - MBIA Insured
3,000 Valdosta and Lowndes County Hospital Authority, Georgia, Revenue 10/12 at 101.00 AAA 3,205,920
Certificates, South Georgia Medical Center, Series 2002,
5.200%, 10/01/22 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
18,780 Total Georgia 19,897,274
------------------------------------------------------------------------------------------------------------------------------------
HAWAII - 7.8% (5.2% OF TOTAL INVESTMENTS)
2,375 Hawaii County, Hawaii, General Obligation Bonds, Series 2003A, 7/13 at 100.00 AAA 2,541,440
5.000%, 7/15/19 - FSA Insured
20,000 Hawaii Department of Budget and Finance, Special Purpose Revenue 7/10 at 101.00 AAA 21,391,997
Refunding Bonds, Hawaiian Electric Company Inc., Series 2000,
5.700%, 7/01/20 - AMBAC Insured (Alternative Minimum Tax)
Hawaii Department of Transportation, Airport System Revenue
Refunding Bonds, Series 2000B:
6,105 6.100%, 7/01/16 - FGIC Insured (Alternative Minimum Tax) 7/10 at 101.00 AAA 6,638,760
9,500 6.625%, 7/01/17 - FGIC Insured (Alternative Minimum Tax) 7/10 at 101.00 AAA 10,480,590
------------------------------------------------------------------------------------------------------------------------------------
37,980 Total Hawaii 41,052,787
------------------------------------------------------------------------------------------------------------------------------------
IDAHO - 0.1% (0.1% OF TOTAL INVESTMENTS)
475 Idaho Housing and Finance Association, Single Family Mortgage 1/08 at 101.50 AAA 476,235
Bonds, Series 1998E, 5.450%, 7/01/18 - AMBAC Insured
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 3.7% (2.5% OF TOTAL INVESTMENTS)
1,015 Chicago Park District, Illinois, Limited Tax General Obligation 7/11 at 100.00 AAA 1,091,013
Park Bonds, Series 2001C, 5.500%, 1/01/18 - FGIC Insured
Illinois Health Facilities Authority, Revenue Bonds, Lutheran
General Health System, Series 1993A:
3,230 6.125%, 4/01/12 - FSA Insured (ETM) No Opt. Call AAA 3,441,662
5,000 6.250%, 4/01/18 - FSA Insured (ETM) No Opt. Call AAA 5,940,850
1,950 Illinois Health Facilities Authority, Revenue Refunding Bonds, No Opt. Call AAA 2,292,907
SSM Healthcare System, Series 1992AA, 6.550%, 6/01/14 -
MBIA Insured
6,000 Illinois Toll Highway Authority, State Toll Highway Authority 7/16 at 100.00 AAA 6,414,720
Revenue Bonds, Series 2006, 5.000%, 1/01/26 - FSA Insured
255 Peoria, Moline and Freeport, Illinois, GNMA Collateralized Single 4/07 at 104.00 AAA 259,358
Family Mortgage Revenue Bonds, Series 1995A, 7.600%, 4/01/27
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
17,450 Total Illinois 19,440,510
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 0.9% (0.6% OF TOTAL INVESTMENTS)
Hamilton County Public Building Corporation, Indiana, First
Mortgage Bonds, Series 2004:
2,105 5.000%, 8/01/23 - FSA Insured 8/14 at 100.00 AAA 2,227,427
2,215 5.000%, 8/01/24 - FSA Insured 8/14 at 100.00 AAA 2,339,306
------------------------------------------------------------------------------------------------------------------------------------
4,320 Total Indiana 4,566,733
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 0.3% (0.2% OF TOTAL INVESTMENTS)
1,500 Kansas Turnpike Authority, Revenue Bonds, Series 2004A-2, 5.000%, 9/14 at 101.00 AAA 1,603,110
9/01/27 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 1.1% (0.7% OF TOTAL INVESTMENTS)
6,010 Kentucky Economic Development Finance Authority, Health System No Opt. Call AAA 2,115,159
Revenue Bonds, Norton Healthcare Inc., Series 2000B, 0.000%,
10/01/28 - MBIA Insured
3,575 Kentucky Turnpike Authority, Economic Development Road Revenue 7/15 at 100.00 AAA 3,816,920
Bonds, Revitalization Project, Series 2005B, 5.000%, 7/01/25 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
9,585 Total Kentucky 5,932,079
------------------------------------------------------------------------------------------------------------------------------------
50
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 2.9% (1.9% OF TOTAL INVESTMENTS)
$ 1,640 Louisiana Public Facilities Authority, Revenue Bonds, Baton Rouge 7/14 at 100.00 AAA $ 1,758,998
General Hospital, Series 2004, 5.250%, 7/01/24 - MBIA Insured
3,400 Louisiana State, Gas Tax Revenue Bonds, Series 2006, 4.500%, 5/16 at 100.00 AAA 3,373,480
5/01/41 (WI/DD, Settling 11/02/06) - FGIC Insured
3,630 Louisiana State, Gasoline Tax Revenue Bonds, Series 2006, 5/16 at 100.00 AAA 3,545,131
Residuals 660-1, 5.850%, 5/01/41 (WI/DD, Settling 11/02/06) -
FGIC Insured (IF)
440 Louisiana State, Gasoline Tax Revenue Bonds, Series 2006, 5/16 at 100.00 AAA 479,178
Residuals 661, 6.597%, 5/01/39 (WI/DD, Settling 11/02/06) -
FSA Insured (IF)
Louisiana, Gasoline and Fuels Tax Revenue Bonds, Series 2005A:
1,200 5.000%, 5/01/25 - FGIC Insured 5/15 at 100.00 AAA 1,274,640
2,210 5.000%, 5/01/26 - FGIC Insured 5/15 at 100.00 AAA 2,344,213
2,500 5.000%, 5/01/27 - FGIC Insured 5/15 at 100.00 AAA 2,651,825
------------------------------------------------------------------------------------------------------------------------------------
15,020 Total Louisiana 15,427,465
------------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 0.9% (0.6% OF TOTAL INVESTMENTS)
1,865 Baltimore, Maryland, Senior Lien Convention Center Hotel Revenue 9/16 at 100.00 AAA 2,048,908
Bonds, Series 2006A, 5.250%, 9/01/26 - XLCA Insured
2,580 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 AAA 2,653,401
Revenue Bonds, Western Maryland Health, Series 2006A, 4.750%,
7/01/36 (WI/DD, Settling 11/16/06) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
4,445 Total Maryland 4,702,309
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 3.5% (2.3% OF TOTAL INVESTMENTS)
3,000 Massachusetts Development Finance Authority, Revenue Bonds, WGBH No Opt. Call AAA 3,814,050
Educational Foundation, Series 2002A, 5.750%, 1/01/42 -
AMBAC Insured
2,600 Massachusetts Health and Educational Facilities Authority, 10/13 at 100.00 AAA 2,729,220
Revenue Bonds, Simmons College, Series 2003F, 5.000%,
10/01/33 - FGIC Insured
4,910 Massachusetts, General Obligation Bonds, Consolidated Loan, No Opt. Call AAA 5,564,454
Series 2002C, 5.500%, 11/01/15 - MBIA Insured
Massachusetts, Special Obligation Dedicated Tax Revenue Bonds,
Series 2004:
3,650 5.250%, 1/01/22 (Pre-refunded 1/01/14) - FGIC Insured 1/14 at 100.00 AAA 4,004,305
2,000 5.250%, 1/01/24 (Pre-refunded 1/01/14) - FGIC Insured 1/14 at 100.00 AAA 2,194,140
------------------------------------------------------------------------------------------------------------------------------------
16,160 Total Massachusetts 18,306,169
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 1.9% (1.3% OF TOTAL INVESTMENTS)
10,000 Michigan Housing Development Authority, Rental Housing Revenue 4/07 at 102.00 AAA 10,287,000
Bonds, Series 1997A, 6.000%, 4/01/16 - AMBAC Insured
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 0.2% (0.1% OF TOTAL INVESTMENTS)
885 Minnesota Housing Finance Agency, Rental Housing Bonds, Series 2/07 at 100.00 AAA 889,921
1995D, 5.950%, 2/01/18 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 0.6% (0.4% OF TOTAL INVESTMENTS)
945 Hazelwood Industrial Development Authority, Missouri, GNMA 3/07 at 102.00 AAA 975,769
Collateralized Project Multifamily Housing Revenue Refunding
Bonds, Lakes Apartments Project, Series 1996, 6.000%, 9/20/16
1,000 Jackson County Reorganized School District R-7, Lees Summit, 3/16 at 100.00 Aaa 1,098,560
Missouri, General Obligation Bonds, Series 2006, 5.250%,
3/01/25 - MBIA Insured
535 Missouri Housing Development Commission, Multifamily Housing 12/06 at 102.00 AAA 546,165
Revenue Bonds, Brookstone Village Apartments, Series 1996A,
6.000%, 12/01/16 - FSA Insured (Alternative Minimum Tax)
750 Missouri Western State College, Auxiliary System Revenue Bonds, 10/13 at 100.00 AAA 787,733
Series 2003, 5.000%, 10/01/33 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
3,230 Total Missouri 3,408,227
------------------------------------------------------------------------------------------------------------------------------------
51
Nuveen Insured Premium Income Municipal Fund 2 (NPX) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 0.7% (0.5% OF TOTAL INVESTMENTS)
Nebraska Public Power District, General Revenue Bonds, Series
2005A:
$ 1,000 5.000%, 1/01/24 - FSA Insured 1/15 at 100.00 AAA $ 1,064,370
1,000 5.000%, 1/01/25 - FSA Insured 1/15 at 100.00 AAA 1,063,660
1,290 Omaha Public Power District, Nebraska, Electric System Revenue 2/17 at 100.00 AAA 1,502,231
Bonds, Nebraska City 2, Series 2006A, Residuals 1508-2, 7.530%,
2/01/49 (WI/DD, Settling 11/02/06) - AMBAC Insured (IF)
------------------------------------------------------------------------------------------------------------------------------------
3,290 Total Nebraska 3,630,261
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 3.2% (2.1% OF TOTAL INVESTMENTS)
5,000 Clark County, Nevada, Industrial Development Revenue Bonds, 7/10 at 102.00 AAA 5,444,100
Southwest Gas Corporation, Series 2000C, 5.950%, 12/01/38 -
AMBAC Insured (Alternative Minimum Tax)
3,280 Clark County, Nevada, Subordinate Lien Airport Revenue Bonds, 7/14 at 100.00 AAA 3,491,757
Series 2004A-2, 5.125%, 7/01/24 - FGIC Insured
Director of Nevada State Department of Business and Industry,
Revenue Bonds, Las Vegas Monorail Project, First Tier,
Series 2000:
5,000 0.000%, 1/01/27 - AMBAC Insured No Opt. Call AAA 2,034,050
5,500 5.625%, 1/01/32 - AMBAC Insured 1/10 at 102.00 AAA 5,895,835
------------------------------------------------------------------------------------------------------------------------------------
18,780 Total Nevada 16,865,742
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 3.1% (2.1% OF TOTAL INVESTMENTS)
Essex County Improvement Authority, New Jersey, Guaranteed
Revenue Bonds, Project Consolidation, Series 2004:
2,000 5.125%, 10/01/21 - MBIA Insured 10/14 at 100.00 Aaa 2,160,480
2,250 5.125%, 10/01/22 - MBIA Insured 10/14 at 100.00 Aaa 2,424,195
1,560 Mount Olive Township Board of Education, Morris County, New 1/15 at 100.00 Aaa 1,665,300
Jersey, General Obligation Bonds, Series 2004, 5.000%, 1/15/22
- MBIA Insured
New Jersey Economic Development Authority, Revenue Bonds, Motor
Vehicle Surcharge, Series 2004A:
1,475 5.000%, 7/01/22 - MBIA Insured 7/14 at 100.00 AAA 1,585,596
1,475 5.000%, 7/01/23 - MBIA Insured 7/14 at 100.00 AAA 1,563,987
3,075 New Jersey Transit Corporation, Certificates of Participation No Opt. Call AAA 3,462,173
Refunding, Series 2003, 5.500%, 10/01/15 - FSA Insured
3,315 New Jersey Turnpike Authority, Revenue Bonds, Series 2005A, 1/15 at 100.00 AAA 3,526,033
5.000%, 1/01/25 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
15,150 Total New Jersey 16,387,764
------------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 0.9% (0.6% OF TOTAL INVESTMENTS)
New Mexico Finance Authority, Public Project Revolving Fund
Revenue Bonds, Series 2004C:
1,415 5.000%, 6/01/22 - AMBAC Insured 6/14 at 100.00 AAA 1,508,149
1,050 5.000%, 6/01/24 - AMBAC Insured 6/14 at 100.00 AAA 1,113,483
2,000 New Mexico Finance Authority, Public Project Revolving Fund 6/15 at 100.00 Aaa 2,133,280
Revenue Bonds, Series 2005E, 5.000%, 6/15/25 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
4,465 Total New Mexico 4,754,912
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 14.0% (9.4% OF TOTAL INVESTMENTS)
1,120 Dormitory Authority of the State of New York, FHA-Insured 2/15 at 100.00 AAA 1,192,710
Mortgage Revenue Bonds, Montefiore Hospital, Series 2004,
5.000%, 8/01/23 - FGIC Insured
Dormitory Authority of the State of New York, Insured Revenue
Bonds, New Island Hospital, Series 1999B:
3,400 5.750%, 7/01/19 (Pre-refunded 7/01/09) - MBIA Insured 7/09 at 101.00 AAA 3,627,120
5,750 6.000%, 7/01/24 (Pre-refunded 7/01/09) - MBIA Insured 7/09 at 101.00 AAA 6,168,888
1,785 Dormitory Authority of the State of New York, Revenue Bonds, 2/15 at 100.00 AAA 1,898,758
Mental Health Services Facilities Improvements, Series 2005A,
5.000%, 2/15/24 - AMBAC Insured
1,000 Dormitory Authority of the State of New York, State Personal 3/15 at 100.00 AAA 1,067,210
Income Tax Revenue Bonds, Series 2005F, 5.000%, 3/15/24 -
AMBAC Insured
52
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK (continued)
Long Island Power Authority, New York, Electric System General
Revenue Bonds, Series 2006A:
$ 10,675 5.000%, 12/01/23 - FGIC Insured 6/16 at 100.00 AAA $ 11,477,867
5,000 5.000%, 12/01/25 - FGIC Insured 6/16 at 100.00 AAA 5,355,550
1,755 Nassau County, New York, General Obligation Improvement Bonds, 3/10 at 100.00 AAA 1,892,680
Series 2000E, 6.000%, 3/01/16 (Pre-refunded 3/01/10) - FSA
Insured
7,500 Nassau Health Care Corporation, New York, County Guaranteed 8/09 at 102.00 AAA 8,081,850
Revenue Bonds, Series 1999, 5.750%, 8/01/29 (Pre-refunded
8/01/09) - FSA Insured
3,225 New York City Sales Tax Asset Receivable Corporation, New York, 10/14 at 100.00 AAA 3,443,978
Dedicated Revenue Bonds, Local Government Assistance
Corporation, Series 2004A, 5.000%, 10/15/24 - MBIA Insured
5,000 New York City, New York, General Obligation Bonds, Fiscal Series 11/14 at 100.00 AAA 5,344,750
2004E, 5.000%, 11/01/21 - FSA Insured
8,580 New York State Housing Finance Agency, Mortgage Revenue Refunding 11/06 at 102.00 AAA 8,769,017
Bonds, Housing Project, Series 1996A, 6.125%, 11/01/20 -
FSA Insured
New York State Thruway Authority, General Revenue Bonds,
Series 2005G:
3,770 5.000%, 1/01/25 - FSA Insured 7/15 at 100.00 AAA 4,025,116
5,980 5.000%, 1/01/26 - FSA Insured 7/15 at 100.00 AAA 6,375,637
5,000 New York State Thruway Authority, Highway and Bridge Trust Fund 10/15 at 100.00 AAA 5,393,150
Bonds, Second Generation, Series 2005B, 5.000%, 4/01/21 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
69,540 Total New York 74,114,281
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 1.8% (1.2% OF TOTAL INVESTMENTS)
1,250 Appalachian State University, North Carolina, Revenue Bonds, 7/15 at 100.00 Aaa 1,330,188
Series 2005, 5.000%, 7/15/30 - MBIA Insured
Mooresville, North Carolina, Enterprise System Revenue Bonds,
Series 2004:
2,225 5.000%, 5/01/23 - FGIC Insured 5/14 at 100.00 AAA 2,365,731
2,335 5.000%, 5/01/24 - FGIC Insured 5/14 at 100.00 AAA 2,478,019
2,900 Raleigh Durham Airport Authority, North Carolina, Airport Revenue 5/15 at 100.00 Aaa 3,108,307
Bonds, Series 2005A, 5.000%, 5/01/21 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
8,710 Total North Carolina 9,282,245
------------------------------------------------------------------------------------------------------------------------------------
NORTH DAKOTA - 3.7% (2.5% OF TOTAL INVESTMENTS)
10,715 Fargo, North Dakota, Health System Revenue Bonds, MeritCare 6/10 at 101.00 AAA 11,416,833
Obligated Group, Series 2000A, 5.600%, 6/01/21 - FSA Insured
8,000 North Dakota, Student Loan Trust Revenue Bonds, Series 2000B, 12/10 at 100.00 AAA 8,398,400
5.850%, 12/01/25 - AMBAC Insured (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
18,715 Total North Dakota 19,815,233
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 0.9% (0.6% OF TOTAL INVESTMENTS)
1,430 Cincinnati City School District, Hamilton County, Ohio, No Opt. Call AAA 1,646,931
General Obligation Bonds, Series 2006, 5.250%, 12/01/22 -
FGIC Insured
1,930 Marysville Exempted Village School District, Ohio, Certificates 6/15 at 100.00 AAA 2,141,470
of Participation, School Facilities Project, Series 2005,
5.250%, 12/01/22 (Pre-refunded 6/01/15) - MBIA Insured
700 Shaker Heights, Ohio, General Obligation Bonds, Series 2003, 12/13 at 100.00 AAA 755,279
5.250%, 12/01/26 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
4,060 Total Ohio 4,543,680
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 1.4% (0.9% OF TOTAL INVESTMENTS)
1,500 Oklahoma Capitol Improvement Authority, State Facilities Revenue 7/15 at 100.00 AAA 1,602,630
Bonds, Series 2005F, 5.000%, 7/01/24 - AMBAC Insured
Oklahoma City Airport Trust, Oklahoma, Junior Lien Tax Exempt
Bonds, Twenty Seventh Series 2000A:
1,320 5.125%, 7/01/20 - FSA Insured 7/10 at 100.00 AAA 1,369,975
4,040 5.250%, 7/01/21 - FSA Insured 7/10 at 100.00 AAA 4,229,355
------------------------------------------------------------------------------------------------------------------------------------
6,860 Total Oklahoma 7,201,960
------------------------------------------------------------------------------------------------------------------------------------
53
Nuveen Insured Premium Income Municipal Fund 2 (NPX) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 3.5% (2.4% OF TOTAL INVESTMENTS)
$ 2,110 Oregon Department of Administrative Services, Certificates of 5/15 at 100.00 AAA $ 2,228,856
Participation, Series 2005A, 5.000%, 5/01/30 - FSA Insured
1,520 Portland Housing Authority, Oregon, Multifamily Housing Revenue 7/10 at 100.00 Aaa 1,576,149
Bonds, Lovejoy Station Apartments, Series 2000, 6.000%, 7/01/33
- MBIA Insured (Alternative Minimum Tax)
Portland, Oregon, Airport Way Urban Renewal and Redevelopment
Bonds, Series 2000A:
4,405 5.700%, 6/15/17 (Pre-refunded 6/15/10) - AMBAC Insured 6/10 at 101.00 Aaa 4,765,505
3,665 5.750%, 6/15/18 (Pre-refunded 6/15/10) - AMBAC Insured 6/10 at 101.00 Aaa 3,971,101
4,265 5.750%, 6/15/19 (Pre-refunded 6/15/10) - AMBAC Insured 6/10 at 101.00 Aaa 4,621,213
1,375 5.750%, 6/15/20 (Pre-refunded 6/15/10) - AMBAC Insured 6/10 at 101.00 Aaa 1,489,840
------------------------------------------------------------------------------------------------------------------------------------
17,340 Total Oregon 18,652,664
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 13.9% (9.3% OF TOTAL INVESTMENTS)
12,620 Allegheny County Hospital Development Authority, Pennsylvania, 11/10 at 102.00 AAA 14,113,829
Insured Revenue Bonds, West Penn Allegheny Health System,
Series 2000A, 6.500%, 11/15/30 - MBIA Insured
2,000 Allegheny County Sanitary Authority, Pennsylvania, Sewerage 12/15 at 100.00 AAA 2,140,780
Revenue Bonds, Series 2005A, 5.000%, 12/01/23 - MBIA Insured
9,485 Berks County Municipal Authority, Pennsylvania, Hospital Revenue 11/09 at 102.00 AAA 10,315,791
Bonds, Reading Hospital and Medical Center, Series 1999,
6.000%, 11/01/19 (Pre-refunded 11/01/09) - FSA Insured
725 Central Dauphin School District, Dauphin County, Pennsylvania, 2/16 at 100.00 AAA 891,395
General Obligation Bonds, Series 2006, 6.750%, 2/01/24
(Pre-refunded 2/01/16) - MBIA Insured
4,235 Delaware County Authority, Pennsylvania, Revenue Bonds, Villanova 8/16 at 100.00 AAA 4,557,919
University, Series 2006, 5.000%, 8/01/24 - AMBAC Insured
5,780 Pennsylvania Higher Educational Facilities Authority, Revenue 5/15 at 100.00 AAA 6,148,070
Bonds, Drexel University, Series 2005A, 5.000%, 5/01/28 -
MBIA Insured
1,050 Pennsylvania Turnpike Commission, Turnpike Revenue Bonds, Series 6/16 at 100.00 AAA 1,127,249
2006A, 5.000%, 12/01/26 - AMBAC Insured
Philadelphia Gas Works, Pennsylvania, Revenue Bonds, General
Ordinance, Fifth Series 2004A-1:
5,235 5.000%, 9/01/24 - FSA Insured 9/14 at 100.00 AAA 5,527,898
3,000 5.000%, 9/01/25 - FSA Insured 9/14 at 100.00 AAA 3,165,810
2,360 Philadelphia, Pennsylvania, Water and Wastewater Revenue Bonds, 8/07 at 102.00 AAA 2,429,903
Series 1997A, 5.125%, 8/01/27 - AMBAC Insured (ETM)
10,370 Philadelphia, Pennsylvania, Water and Wastewater Revenue Bonds, 8/07 at 102.00 AAA 10,669,278
Series 1997A, 5.125%, 8/01/27 - AMBAC Insured
3,785 Reading School District, Berks County, Pennsylvania, General 1/16 at 100.00 AAA 4,057,293
Obligation Bonds, Series 2005, 5.000%, 1/15/25 - FSA Insured
2,500 Seneca Valley School District, Butler County, Pennsylvania, 7/14 at 100.00 Aaa 2,699,400
General Obligation Bonds, Series 2004, 5.125%, 1/01/23 -
FGIC Insured
1,705 Solebury Township, Pennsylvania, General Obligation Bonds, Series 6/15 at 100.00 Aaa 1,821,179
2005, 5.000%, 12/15/25 - AMBAC Insured
3,650 State Public School Building Authority, Pennsylvania, Lease 6/13 at 100.00 AAA 3,834,508
Revenue Bonds, Philadelphia School District, Series 2003,
5.000%, 6/01/29 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
68,500 Total Pennsylvania 73,500,302
------------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 0.5% (0.3% OF TOTAL INVESTMENTS)
2,500 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series 7/15 at 100.00 AAA 2,701,425
2005RR, 5.000%, 7/01/22 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 0.4% (0.3% OF TOTAL INVESTMENTS)
1,955 Greenville County School District, South Carolina, Installment 12/16 at 100.00 AAA 2,083,248
Purchase Revenue Bonds, Series 2006, 5.000%, 12/01/28 -
FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
54
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 14.7% (9.8% OF TOTAL INVESTMENTS)
Brazos River Authority, Texas, Revenue Refunding Bonds,
Houston Industries Inc., Series 1998C:
$ 10,000 5.125%, 5/01/19 - AMBAC Insured 5/08 at 102.00 AAA $ 10,375,200
9,000 5.125%, 11/01/20 - AMBAC Insured 11/08 at 102.00 AAA 9,388,350
Corpus Christi, Texas, Utility System Revenue Bonds, Series 2004:
3,475 5.000%, 7/15/22 - FSA Insured 7/14 at 100.00 AAA 3,687,879
3,645 5.000%, 7/15/23 - FSA Insured 7/14 at 100.00 AAA 3,858,415
12,500 Dallas-Ft. Worth International Airport, Texas, Joint Revenue 11/09 at 100.00 AAA 13,031,250
Refunding and Improvement Bonds, Series 2001A, 5.500%,
11/01/35 - FGIC Insured (Alternative Minimum Tax)
4,485 Lower Colorado River Authority, Texas, Contract Revenue Refunding 5/12 at 100.00 AAA 4,754,907
Bonds, Transmission Services Corporation, Series 2003B, 5.000%,
5/15/21 - FSA Insured
10,000 Lower Colorado River Authority, Texas, Contract Revenue Refunding 5/13 at 100.00 AAA 10,427,000
Bonds, Transmission Services Corporation, Series 2003C, 5.000%,
5/15/33 - AMBAC Insured
4,151 Panhandle Regional Housing Finance Corporation, Texas, GNMA 7/12 at 105.00 Aaa 4,559,043
Collateralized Multifamily Housing Mortgage Revenue Bonds,
Renaissance of Amarillo Apartments, Series 2001A, 6.650%,
7/20/42
Tarrant County Health Facilities Development Corporation, Texas,
Hospital Revenue Bonds, Cook Children's Healthcare System,
Series 2000A:
6,725 5.750%, 12/01/17 - FSA Insured 12/10 at 101.00 AAA 7,262,193
7,500 5.750%, 12/01/24 - FSA Insured 12/10 at 101.00 AAA 8,112,075
2,300 Texas State University System, Financing Revenue Refunding Bonds, 3/12 at 100.00 AAA 2,432,296
Series 2002, 5.000%, 3/15/18 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
73,781 Total Texas 77,888,608
------------------------------------------------------------------------------------------------------------------------------------
UTAH - 2.2% (1.5% OF TOTAL INVESTMENTS)
8,600 Intermountain Power Agency, Utah, Power Supply Revenue Refunding 7/13 at 100.00 AAA 9,199,678
Bonds, Series 2003A, 5.000%, 7/01/18 - FSA Insured
2,385 Mountain Regional Water Special Service District, Utah, Water 12/13 at 100.00 AAA 2,503,535
Revenue Bonds, Series 2003, 5.000%, 12/15/33 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
10,985 Total Utah 11,703,213
------------------------------------------------------------------------------------------------------------------------------------
VERMONT - 0.2% (0.1% OF TOTAL INVESTMENTS)
1,320 Vermont Educational and Health Buildings Financing Agency, 12/10 at 101.00 AAA 1,441,678
Revenue Bonds, Fletcher Allen Health Care Inc., Series 2000A,
6.000%, 12/01/23 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 3.0% (2.0% OF TOTAL INVESTMENTS)
Greater Richmond Convention Center Authority, Virginia, Hotel Tax
Revenue Bonds, Series 2005:
5,880 5.000%, 6/15/20 - MBIA Insured 6/15 at 100.00 AAA 6,333,877
5,000 5.000%, 6/15/22 - MBIA Insured 6/15 at 100.00 AAA 5,363,250
Loudoun County Industrial Development Authority, Virginia, Lease
Revenue Bonds, Public Safety Facilities, Series 2003A:
1,150 5.250%, 12/15/22 - FSA Insured 6/14 at 100.00 AAA 1,255,432
500 5.250%, 12/15/23 - FSA Insured 6/14 at 100.00 AAA 545,840
2,250 Virginia Housing Development Authority, Multifamily Housing 1/08 at 102.00 AAA 2,325,915
Bonds, Series 1997B, 6.050%, 5/01/17 - MBIA Insured
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
14,780 Total Virginia 15,824,314
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 6.9% (4.6% OF TOTAL INVESTMENTS)
10,000 Chelan County Public Utility District 1, Washington, Hydro 7/11 at 101.00 AAA 10,764,100
Consolidated System Revenue Bonds, Series 2001B, 5.600%,
1/01/36 - MBIA Insured (Alternative Minimum Tax)
1,370 Clark County School District 101, La Center, Washington, General 12/12 at 100.00 Aaa 1,451,625
Obligation Bonds, Series 2002, 5.000%, 12/01/22 - FSA Insured
5,230 Douglas County Public Utility District 1, Washington, Revenue 9/09 at 102.00 AAA 5,653,002
Bonds, Wells Hydroelectric, Series 1999A, 6.125%, 9/01/29 -
MBIA Insured (Alternative Minimum Tax)
1,545 Tacoma, Washington, General Obligation Bonds, Series 2004, 12/14 at 100.00 AAA 1,655,838
5.000%, 12/01/19 - MBIA Insured
55
Nuveen Insured Premium Income Municipal Fund 2 (NPX) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON (continued)
$ 3,950 Washington State Healthcare Facilities Authority, Revenue Bonds, 11/08 at 101.00 Aaa $ 4,074,899
Swedish Health Services, Series 1998, 5.125%, 11/15/22 -
AMBAC Insured
6,200 Washington State, General Obligation Purpose Bonds, Series 2003A, 7/12 at 100.00 AAA 6,583,904
5.000%, 7/01/20 - FGIC Insured
10,855 Washington, General Obligation Bonds, Series 2000S-5, 0.000%, No Opt. Call AAA 6,223,497
1/01/20 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
39,150 Total Washington 36,406,865
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 1.5% (1.0% OF TOTAL INVESTMENTS)
8,000 Pleasants County, West Virginia, Pollution Control Revenue Bonds, 11/06 at 101.00 AAA 8,146,000
Monongahela Power Company Pleasants Station Project, Series
1995C, 6.150%, 5/01/15 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 7.2% (4.8% OF TOTAL INVESTMENTS)
7,000 La Crosse, Wisconsin, Resource Recovery Revenue Refunding Bonds, No Opt. Call AAA 8,396,080
Northern States Power Company Project, Series 1996, 6.000%,
11/01/21 - MBIA Insured (Alternative Minimum Tax)
12,750 Milwaukee County, Wisconsin, Airport Revenue Bonds, Series 2000A, 12/10 at 100.00 Aaa 13,614,578
5.750%, 12/01/25 - FGIC Insured (Alternative Minimum Tax)
5,000 Wisconsin Health and Educational Facilities Authority, Revenue 2/07 at 101.00 AAA 5,059,250
Bonds, Mercy Health System Corporation, Series 1995, 6.125%,
8/15/13 - AMBAC Insured
6,250 Wisconsin Health and Educational Facilities Authority, Revenue 2/07 at 102.00 AAA 6,385,000
Bonds, Sinai Samaritan Medical Center Inc., Series 1996,
5.750%, 8/15/16 - MBIA Insured
4,225 Wisconsin State, General Obligation Bonds, Series 2006A, 4.750%, 5/16 at 100.00 AAA 4,403,802
5/01/25 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
35,225 Total Wisconsin 37,858,710
------------------------------------------------------------------------------------------------------------------------------------
$ 774,076 Total Long-Term Investments (cost $750,029,995) - 148.9% 787,597,399
============------------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 0.7% (0.5% OF TOTAL INVESTMENTS)
1,000 Idaho Health Facilities Authority, Revenue Bonds, St. Luke's A-1+ 1,000,000
Regional Medical Center, Variable Rate Demand Obligations,
Series 2000, 3.640%, 7/01/30 - FSA Insured (4)
2,700 Puerto Rico Government Development Bank, Adjustable Refunding A-1+ 2,700,000
Bonds, Variable Rate Demand Obligations, Series 1985, 3.410%,
12/01/15 - MBIA Insured (4)
------------------------------------------------------------------------------------------------------------------------------------
$ 3,700 Total Short-Term Investments (cost $3,700,000) 3,700,000
============------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $753,729,995) - 149.6% 791,297,399
---------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.2% 6,586,564
---------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (50.8)% (268,900,000)
---------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 528,983,963
=====================================================================================================================
All of the bonds in the Portfolio of Investments, excluding temporary
investments in short-term municipal securities, are either covered by
Original Issue Insurance, Secondary Market Insurance or Portfolio
Insurance, or are backed by an escrow or trust containing sufficient
U.S. Government or U.S. Government agency securities, any of which
ensure the timely payment of principal and interest.
(1) All percentages shown in the Portfolio of Investments are based on net
assets applicable to Common shares unless otherwise noted.
(2) Optional Call Provisions (not covered by the report of independent
registered public accounting firm): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other call
provisions at varying prices at later dates. Certain mortgage-backed
securities may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered public
accounting firm): Using the higher of Standard & Poor's or Moody's
rating. Ratings below BBB by Standard & Poor's Group or Baa by Moody's
Investor Service, Inc. are considered to be below investment grade.
(4) Investment has a maturity of more than one year, but has variable rate
and demand features which qualify it as a short-term investment. The
rate disclosed is that in effect at the end of the reporting period.
This rate changes periodically based on market conditions or a specified
market index.
WI/DD Purchased on a when-issued or delayed delivery basis.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
56
Nuveen Insured Dividend Advantage Municipal Fund (NVG)
Portfolio of
INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 4.2% (2.8% OF TOTAL INVESTMENTS)
$ 5,310 Athens, Alabama, Water and Sewerage Revenue Warrants, Series 2002, 5/12 at 101.00 AAA $ 5,710,905
5.300%, 5/01/32 - MBIA Insured
3,045 Hoover, Alabama, General Obligation Bonds, Series 2003, 5.000%, 3/12 at 101.00 AAA 3,247,249
3/01/20 - MBIA Insured
10,000 Jefferson County, Alabama, Sewer Revenue Capital Improvement 2/09 at 101.00 AAA 10,488,700
Warrants, Series 1999A, 5.375%, 2/01/36 (Pre-refunded 2/01/09)
- FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
18,355 Total Alabama 19,446,854
------------------------------------------------------------------------------------------------------------------------------------
ALASKA - 3.5% (2.4% OF TOTAL INVESTMENTS)
15,000 Alaska, International Airport System Revenue Bonds, Series 2002B, 10/12 at 100.00 AAA 16,320,450
5.250%, 10/01/27 (Pre-refunded 10/01/12) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 1.1% (0.8% OF TOTAL INVESTMENTS)
5,000 Phoenix, Arizona, Civic Improvement Corporation, Senior Lien 7/12 at 100.00 AAA 5,227,400
Airport Revenue Bonds, Series 2002B, 5.250%, 7/01/32 - FGIC
Insured (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 12.5% (8.4% OF TOTAL INVESTMENTS)
2,000 Alameda Corridor Transportation Authority, California, No Opt. Call AAA 1,110,880
Subordinate Lien Revenue Bonds, Series 2004A, 0.000%, 10/01/20
- AMBAC Insured
California Educational Facilities Authority, Revenue Bonds,
Occidental College, Series 2005A:
1,485 5.000%, 10/01/26 - MBIA Insured 10/15 at 100.00 Aaa 1,589,084
1,565 5.000%, 10/01/27 - MBIA Insured 10/15 at 100.00 Aaa 1,671,060
2,000 California Infrastructure Economic Development Bank, First Lien 1/28 at 100.00 AAA 2,827,860
Revenue Bonds, San Francisco Bay Area Toll Bridge, Series
2003A. Residuals Series 1485, 7.327%, 7/01/33 (Pre-refunded
1/01/28) - AMBAC Insured (IF)
California, General Obligation Bonds, Series 2000:
375 5.250%, 9/01/17 (Pre-refunded 9/01/10) - MBIA Insured 9/10 at 100.00 AAA 398,539
2,635 5.250%, 9/01/17 (Pre-refunded 9/01/10) - MBIA Insured 9/10 at 100.00 AAA 2,800,399
190 5.250%, 9/01/17 (Pre-refunded 9/01/10) - MBIA Insured 9/10 at 100.00 AAA 202,278
10,000 California, General Obligation Refunding Bonds, Series 2002, No Opt. Call AAA 10,541,400
5.000%, 2/01/23 - MBIA Insured
8,890 California, General Obligation Veterans Welfare Bonds, 12/08 at 101.00 AA- 9,138,742
Series 1997BH, 5.400%, 12/01/14 (Alternative Minimum Tax)
3,000 California, General Obligation Veterans Welfare Bonds, Series 6/07 at 101.00 AAA 3,047,070
2001BZ, 5.375%, 12/01/24 - MBIA Insured (Alternative Minimum
Tax)
2,425 Fullerton Public Financing Authority, California, Tax Allocation 9/15 at 100.00 AAA 2,567,711
Revenue Bonds, Series 2005, 5.000%, 9/01/27 - AMBAC Insured
1,990 Kern Community College District, California, General Obligation No Opt. Call AAA 868,138
Bonds, Series 2006, 0.000%, 11/01/25 - FSA Insured
625 Los Angeles Department of Water and Power, California, Waterworks 7/16 at 100.00 AAA 668,200
Revenue Bonds, Series 2006A-1, 5.000%, 7/01/36 - AMBAC Insured
7,935 Los Angeles, California, Certificates of Participation, 4/12 at 100.00 AAA 8,414,036
Series 2002, 5.300%, 4/01/32 - AMBAC Insured
7,500 Northern California Power Agency, Revenue Refunding Bonds, 7/08 at 101.00 AAA 7,745,700
Hydroelectric Project 1, Series 1998A, 5.200%, 7/01/32 -
MBIA Insured
2,320 Sacramento Municipal Utility District, California, Electric 8/11 at 100.00 AAA 2,485,300
Revenue Bonds, Series 2001P, 5.250%, 8/15/18 - FSA Insured
1,690 Ventura County Community College District, California, General 8/15 at 100.00 AAA 1,798,870
Obligation Bonds, Series 2005B, 5.000%, 8/01/28 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
56,625 Total California 57,875,267
------------------------------------------------------------------------------------------------------------------------------------
57
Nuveen Insured Dividend Advantage Municipal Fund (NVG) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 4.2% (2.8% OF TOTAL INVESTMENTS)
$ 17,300 Adams County, Colorado, FHA-Insured Mortgage Revenue Bonds, 8/15 at 100.00 AAA $ 18,375,195
Platte Valley Medical Center, Series 2005, 5.000%, 8/01/24 -
MBIA Insured
750 Arkansas River Power Authority, Colorado, Power Revenue Bonds, 10/16 at 100.00 AAA 814,898
Series 2006, 5.250%, 10/01/32 - XLCA Insured
------------------------------------------------------------------------------------------------------------------------------------
18,050 Total Colorado 19,190,093
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 12.9% (8.7% OF TOTAL INVESTMENTS)
Florida Municipal Loan Council, Revenue Bonds, Series 2003B:
2,305 5.250%, 12/01/17 - MBIA Insured 12/13 at 100.00 AAA 2,511,528
1,480 5.250%, 12/01/18 - MBIA Insured 12/13 at 100.00 AAA 1,610,684
11,600 Greater Orlando Aviation Authority, Florida, Airport Facilities 10/12 at 100.00 AAA 12,162,136
Revenue Bonds, Series 2002B, 5.125%, 10/01/21 - FSA Insured
(Alternative Minimum Tax)
6,000 JEA, Florida, Water and Sewerage System Revenue Bonds, 4/07 at 100.00 AAA 6,040,560
Series 2002A, 5.500%, 10/01/41 - MBIA Insured
8,155 Lee County, Florida, Solid Waste System Revenue Refunding Bonds, 10/11 at 100.00 Aaa 8,767,277
Series 2001, 5.625%, 10/01/13 - MBIA Insured (Alternative
Minimum Tax)
Miami-Dade County, Florida, Aviation Revenue Bonds, Miami
International Airport, Series 2002:
7,165 5.625%, 10/01/15 - FGIC Insured (Alternative Minimum Tax) 10/12 at 100.00 AAA 7,796,380
5,600 5.750%, 10/01/16 - FGIC Insured (Alternative Minimum Tax) 10/12 at 100.00 AAA 6,137,824
10,000 5.125%, 10/01/21 - FGIC Insured (Alternative Minimum Tax) 10/12 at 100.00 AAA 10,506,000
2,000 5.250%, 10/01/22 - FGIC Insured (Alternative Minimum Tax) 10/12 at 100.00 AAA 2,114,300
1,000 Orange County, Florida, Sales Tax Revenue Bonds, Series 2002B, 1/13 at 100.00 AAA 1,058,600
5.000%, 1/01/25 - FGIC Insured
1,000 Tallahassee, Florida, Energy System Revenue Bonds, Series 2005, 10/15 at 100.00 AAA 1,061,630
5.000%, 10/01/28 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
56,305 Total Florida 59,766,919
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 2.2% (1.5% OF TOTAL INVESTMENTS)
6,925 Atlanta and Fulton County Recreation Authority, Georgia, 12/15 at 100.00 AAA 7,369,170
Guaranteed Revenue Bonds, Park Improvement, Series 2005A,
5.000%, 12/01/30 - MBIA Insured
1,000 Atlanta, Georgia, Water and Wastewater Revenue Bonds, Series 11/14 at 100.00 AAA 1,066,830
2004, 5.000%, 11/01/22 - FSA Insured
1,695 Georgia Housing and Finance Authority, Single Family Mortgage 12/11 at 100.00 AAA 1,758,325
Bonds, Series 2002B-2, 5.500%, 6/01/32 (Alternative Minimum
Tax)
------------------------------------------------------------------------------------------------------------------------------------
9,620 Total Georgia 10,194,325
------------------------------------------------------------------------------------------------------------------------------------
IDAHO - 1.0% (0.6% OF TOTAL INVESTMENTS)
Idaho Housing and Finance Association, Grant and Revenue
Anticipation Bonds, Federal Highway Trust Funds, Series 2006:
3,000 5.000%, 7/15/23 - MBIA Insured 7/16 at 100.00 Aaa 3,230,400
1,130 5.000%, 7/15/24 - MBIA Insured 7/16 at 100.00 Aaa 1,213,970
------------------------------------------------------------------------------------------------------------------------------------
4,130 Total Idaho 4,444,370
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 15.4% (10.4% OF TOTAL INVESTMENTS)
10,000 Bolingbrook, Illinois, General Obligation Bonds, Series 2002A, 1/12 at 100.00 AAA 10,851,600
5.375%, 1/01/38 (Pre-refunded 1/01/12) - FGIC Insured
1,305 Chicago, Illinois, General Obligation Bonds, Series 2001A, 1/11 at 101.00 AAA 1,401,870
5.500%, 1/01/38 - MBIA Insured
Chicago, Illinois, General Obligation Bonds, Series 2001A:
50 5.500%, 1/01/38 (Pre-refunded 1/01/11) - MBIA Insured 1/11 at 101.00 AAA 54,185
3,645 5.500%, 1/01/38 (Pre-refunded 1/01/11) - MBIA Insured 1/11 at 101.00 AAA 3,950,087
11,765 Chicago, Illinois, Revenue Bonds, Skyway Toll Bridge, Series 1/07 at 102.00 AAA 12,036,772
1996, 5.500%, 1/01/23 (Pre-refunded 1/01/07) - MBIA Insured
58
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS (continued)
Chicago, Illinois, Second Lien Passenger Facility Charge Revenue
Bonds, O'Hare International Airport, Series 2001C:
$ 4,250 5.500%, 1/01/16 - AMBAC Insured (Alternative Minimum Tax) 1/11 at 101.00 AAA $ 4,539,213
4,485 5.500%, 1/01/17 - AMBAC Insured (Alternative Minimum Tax) 1/11 at 101.00 AAA 4,781,279
4,730 5.500%, 1/01/18 - AMBAC Insured (Alternative Minimum Tax) 1/11 at 101.00 AAA 5,042,464
2,930 5.500%, 1/01/19 - AMBAC Insured (Alternative Minimum Tax) 1/11 at 101.00 AAA 3,118,897
3,600 Chicago, Illinois, Third Lien General Airport Revenue Bonds, 1/16 at 100.00 AAA 3,920,652
O'Hare International Airport, Series 2005A, 5.250%, 1/01/24 -
MBIA Insured
3,000 Chicago, Illinois, Third Lien General Airport Revenue Refunding 1/12 at 100.00 AAA 3,249,240
Bonds, O'Hare International Airport, Series 2002A, 5.750%,
1/01/17 - MBIA Insured (Alternative Minimum Tax)
4,000 Cicero, Cook County, Illinois, General Obligation Corporate 12/12 at 101.00 AAA 4,254,320
Purpose Bonds, Series 2002, 5.000%, 12/01/21 - MBIA Insured
730 DuPage County Community School District 200, Wheaton, Illinois, 10/13 at 100.00 Aaa 790,597
General Obligation Bonds, Series 2003C, 5.250%, 10/01/22 -
FSA Insured
770 DuPage County Community School District 200, Wheaton, Illinois, 10/13 at 100.00 Aaa 845,922
General Obligation Bonds, Series 2003C, 5.250%, 10/01/22
(Pre-refunded 10/01/13) - FSA Insured
4,000 Illinois Toll Highway Authority, State Toll Highway Authority 7/16 at 100.00 AAA 4,276,480
Revenue Bonds, Series 2006, 5.000%, 1/01/26 - FSA Insured
5,000 Illinois, General Obligation Bonds, Illinois FIRST Program, 4/12 at 100.00 AAA 5,344,200
Series 2002, 5.250%, 4/01/23 - FSA Insured
2,700 University of Illinois, Certificates of Participation, Utility 8/11 at 100.00 AAA 2,871,504
Infrastructure Projects, Series 2001A, 5.000%, 8/15/20
(Pre-refunded 8/15/11) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
66,960 Total Illinois 71,329,282
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 15.5% (10.4% OF TOTAL INVESTMENTS)
3,380 Evansville, Indiana, Sewerage Works Revenue Refunding Bonds, 7/13 at 100.00 AAA 3,607,474
Series 2003A, 5.000%, 7/01/20 - AMBAC Insured
Indiana Bond Bank, Special Program Bonds, Hendricks County
Redevelopment District, Series 2002D:
2,500 5.375%, 4/01/23 - AMBAC Insured 4/12 at 100.00 AAA 2,678,400
7,075 5.250%, 4/01/26 - AMBAC Insured 4/12 at 100.00 AAA 7,529,993
7,000 5.250%, 4/01/30 - AMBAC Insured 4/12 at 100.00 AAA 7,450,170
10,000 Indiana Health Facility Financing Authority, Hospital Revenue 7/12 at 100.00 AAA 10,524,000
Bonds, Marion General Hospital, Series 2002, 5.250%, 7/01/32 -
AMBAC Insured
25,000 Indianapolis Local Public Improvement Bond Bank, Indiana, 7/12 at 100.00 AAA 27,116,249
Waterworks Project, Series 2002A, 5.250%, 7/01/33 (Pre-refunded
7/01/12) - MBIA Insured
Northern Wells Community School Building Corporation, Wells
County, Indiana, First Mortgage Bonds, Series 2001:
420 5.250%, 1/15/19 - FGIC Insured 7/12 at 100.00 AAA 449,505
430 5.250%, 7/15/19 - FGIC Insured 7/12 at 100.00 AAA 460,208
1,675 5.400%, 7/15/23 - FGIC Insured 7/12 at 100.00 AAA 1,802,484
6,960 Valparaiso Middle School Building Corporation, Indiana, First 1/13 at 100.00 AAA 7,354,423
Mortgage Refunding Bonds, Series 2002, 5.000%, 7/15/24 -
MBIA Insured
2,490 Whitley County Middle School Building Corporation, Columbia City, 7/13 at 100.00 AAA 2,658,424
Indiana, First Mortgage Bonds, Series 2003, 5.000%, 1/15/18 -
FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
66,930 Total Indiana 71,631,330
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 1.6% (1.1% OF TOTAL INVESTMENTS)
2,030 Louisiana State, Gas Tax Revenue Bonds, Series 2006, 4.500%, 5/16 at 100.00 AAA 2,014,166
5/01/41 (WI/DD, Settling 11/02/06) - FGIC Insured
2,080 Louisiana State, Gasoline Tax Revenue Bonds, Series 2006, 5/16 at 100.00 AAA 2,031,370
Residuals 660-1, 5.850%, 5/01/41 (WI/DD, Settling 11/02/06) -
FGIC Insured (IF)
260 Louisiana State, Gasoline Tax Revenue Bonds, Series 2006, 5/16 at 100.00 AAA 283,150
Residuals 661, 6.597%, 5/01/39 (WI/DD, Settling 11/02/06) -
FSA Insured (IF)
59
Nuveen Insured Dividend Advantage Municipal Fund (NVG) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA (continued)
$ 3,085 New Orleans, Louisiana, General Obligation Refunding Bonds, 9/12 at 100.00 AAA $ 3,251,837
Series 2002, 5.125%, 9/01/21 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
7,455 Total Louisiana 7,580,523
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 1.0% (0.7% OF TOTAL INVESTMENTS)
2,630 Massachusetts College Building Authority, Project Revenue Bonds, 5/16 at 100.00 AAA 2,802,975
Series 2006A, 5.000%, 5/01/31 - AMBAC Insured
1,550 Massachusetts Water Resources Authority, General Revenue Bonds, 8/17 at 100.00 AAA 1,717,137
Series 2005A, 5.250%, 8/01/26 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
4,180 Total Massachusetts 4,520,112
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 2.4% (1.6% OF TOTAL INVESTMENTS)
1,600 St. Louis County Pattonville School District R3, Missouri, 3/14 at 100.00 AAA 1,747,184
General Obligation Bonds, Series 2004, 5.250%, 3/01/19 -
FSA Insured
8,735 St. Louis, Missouri, Airport Revenue Bonds, Airport Development 7/11 at 100.00 AAA 9,369,947
Program, Series 2001A, 5.250%, 7/01/31 (Pre-refunded 7/01/11)
- MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
10,335 Total Missouri 11,117,131
------------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 1.9% (1.3% OF TOTAL INVESTMENTS)
6,360 Lincoln, Nebraska, Electric System Revenue Bonds, Series 2005, 9/15 at 100.00 AA 6,724,682
5.000%, 9/01/32
Municipal Energy Agency of Nebraska, Power Supply System Revenue
Bonds, Series 2003A:
1,000 5.250%, 4/01/20 - FSA Insured 4/13 at 100.00 AAA 1,082,140
1,000 5.250%, 4/01/21 - FSA Insured 4/13 at 100.00 AAA 1,078,890
------------------------------------------------------------------------------------------------------------------------------------
8,360 Total Nebraska 8,885,712
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 4.3% (2.9% OF TOTAL INVESTMENTS)
9,810 Clark County School District, Nevada, General Obligation Bonds, 6/12 at 100.00 AAA 10,511,807
Series 2002C, 5.000%, 6/15/21 (Pre-refunded 6/15/12) -
MBIA Insured
8,750 Truckee Meadows Water Authority, Nevada, Water Revenue Bonds, 7/11 at 100.00 AAA 9,386,038
Series 2001A, 5.250%, 7/01/34 (Pre-refunded 7/01/11) -
FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
18,560 Total Nevada 19,897,845
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 0.5% (0.4% OF TOTAL INVESTMENTS)
2,150 New Jersey Transportation Trust Fund Authority, Transportation No Opt. Call AA- 2,431,521
System Bonds, Series 2006A, 5.250%, 12/15/20
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 3.7% (2.5% OF TOTAL INVESTMENTS)
1,120 Dormitory Authority of the State of New York, FHA-Insured 2/15 at 100.00 AAA 1,192,710
Mortgage Revenue Bonds, Montefiore Hospital, Series 2004,
5.000%, 8/01/23 - FGIC Insured
3,660 Dormitory Authority of the State of New York, Revenue Bonds, 2/15 at 100.00 AAA 3,903,866
Mental Health Services Facilities Improvements, Series 2005B,
5.000%, 2/15/23 - AMBAC Insured
1,500 Metropolitan Transportation Authority, New York, Transportation 11/15 at 100.00 AAA 1,599,330
Revenue Bonds, Series 2005B, 5.000%, 11/15/30 - AMBAC Insured
10,000 Metropolitan Transportation Authority, New York, Transportation 11/12 at 100.00 AAA 10,544,200
Revenue Refunding Bonds, Series 2002A, 5.000%, 11/15/30 -
FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
16,280 Total New York 17,240,106
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 0.6% (0.4% OF TOTAL INVESTMENTS)
2,435 North Carolina Medical Care Commission, FHA-Insured Mortgage 10/13 at 100.00 AAA 2,650,814
Revenue Bonds, Betsy Johnson Regional Hospital Project,
Series 2003, 5.375%, 10/01/24 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
60
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 1.8% (1.2% OF TOTAL INVESTMENTS)
Oregon, General Obligation Veterans Welfare Bonds, Series 82:
$ 5,560 5.375%, 12/01/31 12/11 at 100.00 AA- $ 5,742,924
2,590 5.500%, 12/01/42 12/11 at 100.00 AA- 2,672,699
------------------------------------------------------------------------------------------------------------------------------------
8,150 Total Oregon 8,415,623
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 3.6% (2.4% OF TOTAL INVESTMENTS)
4,500 Allegheny County, Pennsylvania, Airport Revenue Refunding Bonds, No Opt. Call AAA 4,939,200
Pittsburgh International Airport, Series 1997A, 5.750%, 1/01/13
- MBIA Insured (Alternative Minimum Tax)
5,000 Pennsylvania Higher Educational Facilities Authority, Revenue 7/08 at 100.00 AAA 5,162,650
Bonds, University of Pennsylvania, Series 1998, 5.500%, 7/15/38
(Pre-refunded 7/15/08) - MBIA Insured
1,050 Pennsylvania Turnpike Commission, Turnpike Revenue Bonds, 6/16 at 100.00 AAA 1,127,249
Series 2006A, 5.000%, 12/01/26 - AMBAC Insured
2,000 Philadelphia Municipal Authority, Pennsylvania, Lease Revenue 11/13 at 100.00 AAA 2,159,140
Bonds, Series 2003B, 5.250%, 11/15/18 - FSA Insured
2,000 Reading School District, Berks County, Pennsylvania, General 1/16 at 100.00 AAA 2,172,700
Obligation Bonds, Series 2005, 5.000%, 1/15/19 - FSA Insured
1,000 State Public School Building Authority, Pennsylvania, Lease 6/13 at 100.00 AAA 1,060,910
Revenue Bonds, Philadelphia School District, Series 2003,
5.000%, 6/01/23 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
15,550 Total Pennsylvania 16,621,849
------------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 0.4% (0.2% OF TOTAL INVESTMENTS)
1,225 Puerto Rico Municipal Finance Agency, Series 2005C, 5.250%, No Opt. Call AAA 1,400,922
8/01/21 - CIFG Insured
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 1.5% (1.0% OF TOTAL INVESTMENTS)
1,950 Greenville County School District, South Carolina, Installment 12/16 at 100.00 AAA 2,077,920
Purchase Revenue Bonds, Series 2006, 5.000%, 12/01/28 -
FSA Insured
Greenville, South Carolina, Tax Increment Revenue Improvement
Bonds, Series 2003:
1,000 5.500%, 4/01/17 - MBIA Insured 4/13 at 100.00 AAA 1,101,050
2,300 5.000%, 4/01/21 - MBIA Insured 4/13 at 100.00 AAA 2,455,112
1,000 Scago Educational Facilities Corporation, South Carolina, 10/15 at 100.00 AAA 1,069,320
Spartanburg County School District 5, Series 2005, 5.000%,
4/01/21 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
6,250 Total South Carolina 6,703,402
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 9.2% (6.2% OF TOTAL INVESTMENTS)
Memphis, Tennessee, Sanitary Sewerage System Revenue Bonds,
Series 2004:
1,495 5.000%, 10/01/19 - FSA Insured 10/14 at 100.00 AAA 1,609,936
1,455 5.000%, 10/01/20 - FSA Insured 10/14 at 100.00 AAA 1,563,587
1,955 5.000%, 10/01/21 - FSA Insured 10/14 at 100.00 AAA 2,096,757
10,000 Memphis-Shelby County Sports Authority, Tennessee, Revenue Bonds, 11/12 at 100.00 AAA 10,567,600
Memphis Arena, Series 2002A, 5.125%, 11/01/28 - AMBAC Insured
10,000 Memphis-Shelby County Sports Authority, Tennessee, Revenue Bonds, 11/12 at 100.00 AAA 10,567,600
Memphis Arena, Series 2002B, 5.125%, 11/01/29 - AMBAC Insured
15,195 Tennessee State School Bond Authority, Higher Educational 5/12 at 100.00 AAA 16,186,170
Facilities Second Program Bonds, Series 2002A, 5.250%, 5/01/32
- FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
40,100 Total Tennessee 42,591,650
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 27.3% (18.3% OF TOTAL INVESTMENTS)
3,500 Dallas-Ft. Worth International Airport, Texas, Joint Revenue 11/11 at 100.00 AAA 3,798,200
Refunding and Improvement Bonds, Series 2001A, 5.750%, 11/01/13
- FGIC Insured (Alternative Minimum Tax)
10,000 Gainesville Hospital District, Texas, Limited Tax General 8/11 at 100.00 Aaa 10,508,200
Obligation Bonds, Series 2002, 5.375%, 8/15/32 - MBIA Insured
1,210 Galveston, Texas, General Obligation Bonds, Series 2001, 5.250%, 5/11 at 100.00 AAA 1,280,410
5/01/21 - AMBAC Insured
2,435 Galveston, Texas, General Obligation Bonds, Series 2001, 5.250%, 5/11 at 100.00 AAA 2,604,208
5/01/21 (Pre-refunded 5/01/11) - AMBAC Insured
61
Nuveen Insured Dividend Advantage Municipal Fund (NVG) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS (continued)
Harris County Health Facilities Development Corporation, Texas,
Thermal Utility Revenue Bonds, TECO Project, Series 2003:
$ 2,240 5.000%, 11/15/16 - MBIA Insured 11/13 at 100.00 AAA $ 2,387,235
2,355 5.000%, 11/15/17 - MBIA Insured 11/13 at 100.00 AAA 2,502,352
13,000 Houston Area Water Corporation, Texas, Contract Revenue Bonds, 3/12 at 100.00 AAA 13,695,500
Northeast Water Purification Plant, Series 2002, 5.125%,
3/01/32 - FGIC Insured
2,500 Houston Higher Education Finance Corporation, Texas, Revenue 11/09 at 101.00 AAA 2,652,400
Bonds, Rice University, Series 1999A, 5.375%, 11/15/29
(Pre-refunded 11/15/09)
1,000 Houston, Texas, First Lien Combined Utility System Revenue Bonds, 5/14 at 100.00 AAA 1,086,750
Series 2004A, 5.250%, 5/15/24 - FGIC Insured
4,345 San Antonio, Texas, Water System Senior Lien Revenue Refunding 5/12 at 100.00 AAA 4,734,529
Bonds, Series 2002, 5.500%, 5/15/17 - FSA Insured
5,970 Texas Department of Housing and Community Affairs, Residential 7/11 at 100.00 AAA 6,186,651
Mortgage Revenue Bonds, Series 2001A, 5.350%, 7/01/33
(Alternative Minimum Tax)
8,635 Texas Department of Housing and Community Affairs, Single Family 3/12 at 100.00 AAA 8,965,116
Mortgage Bonds, Series 2002B, 5.550%, 9/01/33 - MBIA Insured
(Alternative Minimum Tax)
Texas Public Finance Authority, Revenue Bonds, Texas Southern
University Financing System, Series 2002:
3,520 5.125%, 11/01/20 - MBIA Insured 5/12 at 100.00 Aaa 3,752,214
3,520 5.125%, 11/01/21 - MBIA Insured 5/12 at 100.00 Aaa 3,752,214
Texas Student Housing Authority, Revenue Bonds, Austin Project,
Senior Series 2001A:
9,400 5.375%, 1/01/23 - MBIA Insured 1/12 at 102.00 Aaa 10,205,862
11,665 5.500%, 1/01/33 - MBIA Insured 1/12 at 102.00 Aaa 12,761,393
5,000 Texas Water Development Board, Senior Lien State Revolving Fund 1/10 at 100.00 AAA 5,234,250
Revenue Bonds, Series 1999B, 5.250%, 7/15/17
9,145 Texas, General Obligation Bonds, Veterans Housing Assistance 6/12 at 100.00 Aa1 9,632,154
Program Fund II, Series 2002A-1, 5.250%, 12/01/22
(Alternative Minimum Tax)
Williamson County, Texas, General Obligation Bonds, Series 2002:
3,500 5.200%, 2/15/21 (Pre-refunded 2/15/12) - FSA Insured 2/12 at 100.00 AAA 3,769,920
3,000 5.250%, 2/15/22 (Pre-refunded 2/15/12) - FSA Insured 2/12 at 100.00 AAA 3,238,530
7,340 5.250%, 2/15/23 (Pre-refunded 2/15/12) - FSA Insured 2/12 at 100.00 AAA 7,923,603
5,000 5.250%, 2/15/25 (Pre-refunded 2/15/12) - FSA Insured 2/12 at 100.00 AAA 5,397,550
------------------------------------------------------------------------------------------------------------------------------------
118,280 Total Texas 126,069,241
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 13.6% (9.1% OF TOTAL INVESTMENTS)
6,600 Energy Northwest, Washington, Electric Revenue Refunding Bonds, 7/12 at 100.00 AAA 7,105,956
Columbia Generating Station - Nuclear Project 2, Series 2002B,
5.350%, 7/01/18 - FSA Insured
7,675 Energy Northwest, Washington, Electric Revenue Refunding Bonds, 7/12 at 100.00 AAA 8,334,129
Nuclear Project 1, Series 2002A, 5.500%, 7/01/15 - MBIA Insured
2,500 Port of Seattle, Washington, Revenue Refunding Bonds, Series 11/12 at 100.00 AAA 2,743,200
2002D, 5.750%, 11/01/15 - FGIC Insured (Alternative
Minimum Tax)
2,200 Snohomish County School District 2, Everett, Washington, General 12/13 at 100.00 AAA 2,360,424
Obligation Bonds, Series 2003B, 5.000%, 6/01/17 - FSA Insured
3,255 Thurston and Pierce Counties School District, Washington, General 6/13 at 100.00 Aaa 3,551,270
Obligation Bonds, Yelm Community Schools, Series 2003, 5.250%,
12/01/16 - FSA Insured
Washington State Economic Development Finance Authority,
Wastewater Revenue Bonds, LOTT Project, Series 2002:
2,000 5.500%, 6/01/17 - AMBAC Insured 6/12 at 100.00 Aaa 2,181,620
4,325 5.125%, 6/01/22 - AMBAC Insured 6/12 at 100.00 Aaa 4,597,302
10,000 Washington State Healthcare Facilities Authority, Revenue Bonds, 10/11 at 100.00 Aaa 10,683,600
Children's Hospital and Regional Medical Center, Series 2001,
5.125%, 10/01/31 (Pre-refunded 10/01/11) - AMBAC Insured
15,000 Washington State Healthcare Facilities Authority, Revenue Bonds, 8/13 at 102.00 AAA 15,788,850
Harrison Memorial Hospital, Series 1998, 5.000%, 8/15/28 -
AMBAC Insured
62
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON (continued)
$ 5,170 Whitman County School District 267, Pullman, Washington, General 6/12 at 100.00 Aaa $ 5,485,990
Obligation Bonds, Series 2002, 5.000%, 12/01/20 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
58,725 Total Washington 62,832,341
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 2.8% (1.9% OF TOTAL INVESTMENTS)
11,950 Wisconsin, Transportation Revenue Refunding Bonds, Series 2002-1, 7/12 at 100.00 AAA 12,778,016
5.125%, 7/01/18 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
$ 646,960 Total Investments (cost $643,773,825) - 148.7% 687,163,098
============------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.7% 7,873,722
---------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (50.4)% (233,000,000)
---------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 462,036,820
=====================================================================================================================
At least 80% of the Fund's net assets (including net assets attributable
to Preferred shares) are invested in municipal securities that are
either covered by Original Issue Insurance, Secondary Market Insurance
or Portfolio Insurance which ensures the timely payment of principal and
interest. Up to 20% of the Fund's net assets (including net assets
attributable to Preferred shares) may be invested in municipal
securities that are (i) either backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency securities (also
ensuring the timely payment of principal and interest), or (ii) rated,
at the time of investment, within the four highest grades (Baa or BBB or
better by Moody's, S&P or Fitch) or unrated but judged to be of
comparable quality by the Adviser.
(1) All percentages shown in the Portfolio of Investments are based on net
assets applicable to Common shares unless otherwise noted.
(2) Optional Call Provisions (not covered by the report of independent
registered public accounting firm): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other call
provisions at varying prices at later dates. Certain mortgage-backed
securities may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered public
accounting firm): Using the higher of Standard & Poor's or Moody's
rating. Ratings below BBB by Standard & Poor's Group or Baa by Moody's
Investor Service, Inc. are considered to be below investment grade.
WI/DD Purchased on a when-issued or delayed delivery basis.
(IF) Inverse floating rate investment.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
63
Nuveen Insured Tax-Free Advantage Municipal Fund (NEA)
Portfolio of
INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 8.3% (5.5% OF TOTAL INVESTMENTS)
$ 5,655 Colbert County-Northwest Health Care Authority, Alabama, Revenue 6/13 at 101.00 Baa3 $ 5,939,729
Bonds, Helen Keller Hospital, Series 2003, 5.750%, 6/01/27
3,100 Huntsville Healthcare Authority, Alabama, Revenue Bonds, Series 5/12 at 102.00 AAA 3,386,378
1998A, 5.400%, 6/01/22 - MBIA Insured
6,280 Jefferson County, Alabama, Sewer Revenue Capital Improvement 8/12 at 100.00 AAA 6,737,686
Warrants, Series 2002D, 5.000%, 2/01/32 (Pre-refunded 8/01/12)
- FGIC Insured
1,750 Montgomery, Alabama, General Obligation Warrants, Series 2003, 5/12 at 101.00 AAA 1,869,105
5.000%, 5/01/21 - AMBAC Insured
4,500 Sheffield, Alabama, Electric Revenue Bonds, Series 2003, 5.500%, 7/13 at 100.00 Aaa 4,896,135
7/01/29 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
21,285 Total Alabama 22,829,033
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 3.8% (2.5% OF TOTAL INVESTMENTS)
10,000 Maricopa County Pollution Control Corporation, Arizona, Revenue 11/12 at 100.00 AAA 10,437,500
Bonds, Arizona Public Service Company - Palo Verde Project,
Series 2002A, 5.050%, 5/01/29 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 28.9% (19.2% OF TOTAL INVESTMENTS)
26,300 California State Public Works Board, Lease Revenue Bonds, 12/12 at 100.00 AAA 27,497,175
Department of General Services, Capital East End Project,
Series 2002A, 5.000%, 12/01/27 - AMBAC Insured
7,500 California, General Obligation Bonds, Series 2004, 5.000%, 4/14 at 100.00 AAA 7,890,900
4/01/31 - AMBAC Insured
13,500 California, General Obligation Refunding Bonds, Series 2002, 4/12 at 100.00 AAA 14,388,435
5.250%, 4/01/30 - XLCA Insured
2,910 Cathedral City Public Financing Authority, California, Tax 8/12 at 102.00 AAA 3,071,330
Allocation Bonds, Housing Set-Aside, Series 2002D, 5.000%,
8/01/26 - MBIA Insured
2,500 Irvine Public Facilities and Infrastructure Authority, 3/07 at 103.00 AAA 2,581,125
California, Assessment Revenue Bonds, Series 2003C, 5.000%,
9/02/23 - AMBAC Insured
4,000 Montara Sanitation District, California, General Obligation 8/11 at 101.00 AAA 4,184,040
Bonds, Series 2003, 5.000%, 8/01/28 - FGIC Insured
Plumas County, California, Certificates of Participation, Capital
Improvement Program, Series 2003A:
1,130 5.250%, 6/01/19 - AMBAC Insured 6/13 at 101.00 AAA 1,230,050
1,255 5.250%, 6/01/21 - AMBAC Insured 6/13 at 101.00 AAA 1,360,320
1,210 Redding Joint Powers Financing Authority, California, Lease 3/13 at 100.00 AAA 1,263,107
Revenue Bonds, Capital Improvement Projects, Series 2003A,
5.000%, 3/01/23 - AMBAC Insured
3,750 Sacramento Municipal Utility District, California, Electric 8/13 at 100.00 AAA 3,949,163
Revenue Bonds, Series 2003R, 5.000%, 8/15/28 - MBIA Insured
1,500 San Diego Community College District, California, General 5/13 at 100.00 AAA 1,575,045
Obligation Bonds, Series 2003A, 5.000%, 5/01/28 - FSA Insured
3,000 San Jose Redevelopment Agency, California, Tax Allocation Bonds, 8/10 at 101.00 AAA 3,101,400
Merged Area Redevelopment Project, Series 2002, 5.000%, 8/01/32
- MBIA Insured
1,055 Turlock Irrigation District, California, Certificates of 1/13 at 100.00 AAA 1,103,003
Participation, Series 2003A, 5.000%, 1/01/28 - MBIA Insured
6,300 University of California, Revenue Bonds, Multi-Purpose Projects, 5/13 at 100.00 AAA 6,605,676
Series 2003A, 5.000%, 5/15/33 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
75,910 Total California 79,800,769
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 3.8% (2.5% OF TOTAL INVESTMENTS)
Bowles Metropolitan District, Colorado, General Obligation Bonds,
Series 2003:
4,300 5.500%, 12/01/23 - FSA Insured 12/13 at 100.00 AAA 4,747,286
3,750 5.500%, 12/01/28 - FSA Insured 12/13 at 100.00 AAA 4,122,975
64
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
COLORADO (continued)
$ 1,450 Colorado Educational and Cultural Facilities Authority, Charter 8/14 at 100.00 AAA $ 1,562,636
School Revenue Bonds, Peak-to-Peak Charter School, Series 2004,
5.250%, 8/15/24 - XLCA Insured
------------------------------------------------------------------------------------------------------------------------------------
9,500 Total Colorado 10,432,897
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 1.2% (0.8% OF TOTAL INVESTMENTS)
3,000 Pinellas County Health Facilities Authority, Florida, Revenue 5/13 at 100.00 Aa3 (4) 3,305,550
Bonds, Baycare Health System, Series 2003, 5.500%, 11/15/27
(Pre-refunded 5/15/13)
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 2.0% (1.3% OF TOTAL INVESTMENTS)
1,410 DeKalb County, Georgia, Water and Sewer Revenue Bonds, Series 10/16 at 100.00 AAA 1,504,794
2006A, 5.000%, 10/01/35 - FSA Insured
3,825 Metropolitan Atlanta Rapid Transit Authority, Georgia, Sales Tax 1/13 at 100.00 AAA 4,001,141
Revenue Bonds, Second Indenture Series 2002, 5.000%, 7/01/32 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
5,235 Total Georgia 5,505,935
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 3.7% (2.5% OF TOTAL INVESTMENTS)
905 Cook County School District 100, Berwyn South, Illinois, General 12/13 at 100.00 Aaa 995,699
Obligation Refunding Bonds, Series 2003B, 5.250%, 12/01/21
(Pre-refunded 12/01/13) - FSA Insured
Cook County School District 145, Arbor Park, Illinois, General
Obligation Bonds, Series 2004:
3,285 5.125%, 12/01/20 - FSA Insured 12/14 at 100.00 Aaa 3,546,716
2,940 5.125%, 12/01/23 - FSA Insured 12/14 at 100.00 Aaa 3,153,209
2,500 Illinois Health Facilities Authority, Revenue Bonds, Lake Forest 7/13 at 100.00 A- 2,615,600
Hospital, Series 2003, 5.250%, 7/01/23
------------------------------------------------------------------------------------------------------------------------------------
9,630 Total Illinois 10,311,224
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 8.8% (5.8% OF TOTAL INVESTMENTS)
2,500 Evansville, Indiana, Sewerage Works Revenue Refunding Bonds, 7/13 at 100.00 AAA 2,650,900
Series 2003A, 5.000%, 7/01/23 - AMBAC Insured
2,190 Indiana Bond Bank, Advance Purchase Funding Bonds, Common School 8/13 at 100.00 AAA 2,327,488
Fund, Series 2003B, 5.000%, 8/01/19 - MBIA Insured
1,000 Indiana University, Student Fee Revenue Bonds, Series 2003O, 8/13 at 100.00 AAA 1,062,230
5.000%, 8/01/22 - FGIC Insured
IPS Multi-School Building Corporation, Indiana, First Mortgage
Revenue Bonds, Series 2003:
11,020 5.000%, 7/15/19 - MBIA Insured 7/13 at 100.00 AAA 11,765,393
6,000 5.000%, 7/15/20 - MBIA Insured 7/13 at 100.00 AAA 6,405,840
------------------------------------------------------------------------------------------------------------------------------------
22,710 Total Indiana 24,211,851
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 2.4% (1.6% OF TOTAL INVESTMENTS)
6,250 Kansas Development Finance Authority, Board of Regents, Revenue 4/13 at 102.00 AAA 6,699,250
Bonds, Scientific Research and Development Facilities Projects,
Series 2003C, 5.000%, 10/01/22 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 0.3% (0.3% OF TOTAL INVESTMENTS)
985 Kentucky State Property and Buildings Commission, Revenue 8/13 at 100.00 AAA 1,065,829
Refunding Bonds, Project 77, Series 2003, 5.000%, 8/01/23
(Pre-refunded 8/01/13) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 2.2% (1.5% OF TOTAL INVESTMENTS)
5,785 New Orleans, Louisiana, General Obligation Refunding Bonds, 12/12 at 100.00 AAA 6,151,711
Series 2002, 5.300%, 12/01/27 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 5.0% (3.3% OF TOTAL INVESTMENTS)
9,000 Massachusetts Bay Transportation Authority, Senior Sales Tax 7/12 at 100.00 AAA 9,647,370
Revenue Refunding Bonds, Series 2002A, 5.000%, 7/01/27
(Pre-refunded 7/01/12) - FGIC Insured
1,125 Massachusetts Development Finance Authority, Revenue Bonds, 9/13 at 100.00 A1 1,187,910
Middlesex School, Series 2003, 5.125%, 9/01/23
65
Nuveen Insured Tax-Free Advantage Municipal Fund (NEA) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS (continued)
$ 3,000 Massachusetts Turnpike Authority, Metropolitan Highway System 1/07 at 102.00 AAA $ 3,065,010
Revenue Bonds, Senior Series 1997A, 5.000%, 1/01/37 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
13,125 Total Massachusetts 13,900,290
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 11.6% (7.7% OF TOTAL INVESTMENTS)
6,130 Detroit, Michigan, Senior Lien Water Supply System Revenue Bonds, 7/13 at 100.00 AAA 6,628,676
Series 2003A, 5.000%, 7/01/23 (Pre-refunded 7/01/13) -
MBIA Insured
4,465 Detroit, Michigan, Senior Lien Water Supply System Revenue 7/13 at 100.00 AAA 4,745,268
Refunding Bonds, Series 2003C, 5.000%, 7/01/22 - MBIA Insured
10,800 Michigan Strategic Fund, Limited Obligation Resource Recovery 12/12 at 100.00 AAA 11,421,000
Revenue Refunding Bonds, Detroit Edison Company, Series 2002D,
5.250%, 12/15/32 - XLCA Insured
2,250 Romulus Community Schools, Wayne County, Michigan, General 5/11 at 100.00 AA 2,379,015
Obligation Refunding Bonds, Series 2001, 5.250%, 5/01/25
6,500 Wayne County, Michigan, Limited Tax General Obligation Airport 12/11 at 101.00 AAA 6,803,030
Hotel Revenue Bonds, Detroit Metropolitan Wayne County Airport,
Series 2001A, 5.000%, 12/01/30 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
30,145 Total Michigan 31,976,989
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 1.1% (0.7% OF TOTAL INVESTMENTS)
240 Clay County Public School District 53, Liberty, Missouri, General 3/14 at 100.00 AAA 261,437
Obligation Bonds, Series 2004, 5.250%, 3/01/24 - FSA Insured
215 Clay County Public School District 53, Liberty, Missouri, General 3/14 at 100.00 AAA 234,204
Obligation Bonds, Series 2004, 5.250%, 3/01/23 - FSA Insured
Clay County Public School District 53, Liberty, Missouri,
General Obligation Bonds, Series 2004:
1,110 5.250%, 3/01/23 (Pre-refunded 3/01/14) - FSA Insured 3/14 at 100.00 AAA 1,222,931
1,260 5.250%, 3/01/24 (Pre-refunded 3/01/14) - FSA Insured 3/14 at 100.00 AAA 1,388,192
------------------------------------------------------------------------------------------------------------------------------------
2,825 Total Missouri 3,106,764
------------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 1.9% (1.3% OF TOTAL INVESTMENTS)
5,000 Lincoln, Nebraska, Sanitary Sewerage System Revenue Refunding 6/13 at 100.00 AAA 5,256,950
Bonds, Series 2003, 5.000%, 6/15/28 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 0.9% (0.6% OF TOTAL INVESTMENTS)
2,315 Clark County, Nevada, Subordinate Lien Airport Revenue Bonds, 7/11 at 100.00 AAA 2,478,346
Series 2001B, 5.200%, 7/01/31 (Pre-refunded 7/01/11) -
FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 0.8% (0.5% OF TOTAL INVESTMENTS)
1,975 New Mexico State University, Revenue Bonds, Series 2004, 5.000%, 4/14 at 100.00 AAA 2,115,403
4/01/19 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 10.2% (6.8% OF TOTAL INVESTMENTS)
25,000 Metropolitan Transportation Authority, New York, Transportation 11/12 at 100.00 AAA 26,158,500
Revenue Refunding Bonds, Series 2002F, 5.000%, 11/15/31 -
MBIA Insured
1,850 New York State Urban Development Corporation, Service Contract 3/15 at 100.00 AAA 1,971,619
Revenue Bonds, Series 2005B, 5.000%, 3/15/25 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
26,850 Total New York 28,130,119
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 3.4% (2.2% OF TOTAL INVESTMENTS)
8,700 North Carolina Medical Care Commission, Revenue Bonds, Maria 10/13 at 100.00 AA 9,272,895
Parham Medical Center, Series 2003, 5.375%, 10/01/33 - RAAI
Insured
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 0.3% (0.3% OF TOTAL INVESTMENTS)
1,000 Oklahoma Capitol Improvement Authority, State Facilities Revenue 7/15 at 100.00 AAA 1,068,420
Bonds, Series 2005F, 5.000%, 7/01/24 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 3.2% (2.1% OF TOTAL INVESTMENTS)
8,350 Oregon Health Sciences University, Revenue Bonds, Series 2002A, 1/13 at 100.00 AAA 8,743,786
5.000%, 7/01/32 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
66
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 8.7% (5.8% OF TOTAL INVESTMENTS)
$ 3,000 Lehigh County General Purpose Authority, Pennsylvania, Hospital 8/13 at 100.00 Baa1 $ 3,163,560
Revenue Bonds, St. Luke's Hospital of Bethlehem, Series 2003,
5.375%, 8/15/33
2,000 Philadelphia Gas Works, Pennsylvania, Revenue Bonds, General 8/13 at 100.00 AAA 2,094,860
Ordinance, Fourth Series 1998, 5.000%, 8/01/32 - FSA Insured
925 Philadelphia, Pennsylvania, Water and Wastewater Revenue Bonds, 8/07 at 102.00 AAA 952,399
Series 1997A, 5.125%, 8/01/27 - AMBAC Insured (ETM)
4,075 Philadelphia, Pennsylvania, Water and Wastewater Revenue Bonds, 8/07 at 102.00 AAA 4,192,604
Series 1997A, 5.125%, 8/01/27 - AMBAC Insured
13,000 State Public School Building Authority, Pennsylvania, Lease 6/13 at 100.00 AAA 13,634,270
Revenue Bonds, Philadelphia School District, Series 2003,
5.000%, 6/01/33 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
23,000 Total Pennsylvania 24,037,693
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 7.3% (4.9% OF TOTAL INVESTMENTS)
5,000 Florence County, South Carolina, Hospital Revenue Bonds, McLeod 11/14 at 100.00 AAA 5,401,200
Regional Medical Center, Series 2004A, 5.250%, 11/01/23 -
FSA Insured
Greenville County School District, South Carolina, Installment
Purchase Revenue Bonds, Series 2003:
3,000 5.000%, 12/01/22 12/13 at 100.00 AA- 3,159,720
1,785 5.000%, 12/01/23 12/13 at 100.00 AA- 1,875,553
1,365 Myrtle Beach, South Carolina, Water and Sewerage System Revenue 3/13 at 100.00 AAA 1,500,886
Refunding Bonds, Series 2003, 5.375%, 3/01/19 (Pre-refunded
3/01/13) - FGIC Insured
8,000 South Carolina Transportation Infrastructure Bank, Revenue Bonds, 10/12 at 100.00 Aaa 8,342,560
Series 2002A, 5.000%, 10/01/33 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
19,150 Total South Carolina 20,279,919
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 12.9% (8.6% OF TOTAL INVESTMENTS)
7,975 Fort Bend Independent School District, Fort Bend County, Texas, 8/10 at 100.00 AAA 8,279,645
General Obligation Bonds, Series 2000, 5.000%, 8/15/25
12,500 Grand Prairie Independent School District, Dallas County, Texas, 2/13 at 100.00 AAA 13,131,000
General Obligation Bonds, Series 2003, 5.125%, 2/15/31 - FSA
Insured
2,000 Houston, Texas, First Lien Combined Utility System Revenue Bonds, 5/14 at 100.00 AAA 2,173,500
Series 2004A, 5.250%, 5/15/25 - MBIA Insured
5,515 Houston, Texas, General Obligation Refunding Bonds, Series 2002, 3/12 at 100.00 AAA 5,907,117
5.250%, 3/01/20 - MBIA Insured
5,850 Katy Independent School District, Harris, Fort Bend and Waller 2/12 at 100.00 AAA 6,219,311
Counties, Texas, General Obligation Bonds, Series 2002A,
5.125%, 2/15/18
------------------------------------------------------------------------------------------------------------------------------------
33,840 Total Texas 35,710,573
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 0.6% (0.4% OF TOTAL INVESTMENTS)
1,500 Hampton, Virginia, Revenue Bonds, Convention Center Project, 1/13 at 100.00 AAA 1,582,380
Series 2002, 5.125%, 1/15/28 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 9.1% (6.1% OF TOTAL INVESTMENTS)
4,945 Broadway Office Properties, King County, Washington, Lease 12/12 at 100.00 AAA 5,148,536
Revenue Bonds, Washington Project, Series 2002, 5.000%,
12/01/31 - MBIA Insured
5,250 Chelan County Public Utility District 1, Washington, Hydro 7/12 at 100.00 AAA 5,483,730
Consolidated System Revenue Bonds, Series 2002C, 5.125%,
7/01/33 - AMBAC Insured
2,135 Kitsap County Consolidated Housing Authority, Washington, Revenue 7/13 at 100.00 Aaa 2,244,077
Bonds, Bremerton Government Center, Series 2003, 5.000%,
7/01/23 - MBIA Insured
1,935 Pierce County School District 343, Dieringer, Washington, General 6/13 at 100.00 Aaa 2,098,759
Obligation Refunding Bonds, Series 2003, 5.250%, 12/01/17 -
FGIC Insured
9,670 Washington State, General Obligation Bonds, Series 2003D, 5.000%, 6/13 at 100.00 AAA 10,247,492
12/01/21 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
23,935 Total Washington 25,222,594
------------------------------------------------------------------------------------------------------------------------------------
67
Nuveen Insured Tax-Free Advantage Municipal Fund (NEA) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 1.2% (0.8% OF TOTAL INVESTMENTS)
$ 3,000 West Virginia State Building Commission, Lease Revenue Refunding No Opt. Call AAA $ 3,427,230
Bonds, Regional Jail and Corrections Facility, Series 1998A,
5.375%, 7/01/21 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 6.7% (4.4% OF TOTAL INVESTMENTS)
1,190 Sun Prairie Area School District, Dane County, Wisconsin, General 3/14 at 100.00 Aaa 1,293,911
Obligation Bonds, Series 2004C, 5.250%, 3/01/24 - FSA Insured
4,605 Wisconsin Health and Educational Facilities Authority, Revenue 9/13 at 100.00 A- 4,993,340
Bonds, Franciscan Sisters of Christian Charity Healthcare
Ministry, Series 2003A, 5.875%, 9/01/33
3,000 Wisconsin Health and Educational Facilities Authority, Revenue No Opt. Call AAA 3,491,460
Bonds, Meriter Hospital Inc., Series 1992A, 6.000%, 12/01/22 -
FGIC Insured
3,600 Wisconsin Health and Educational Facilities Authority, Revenue 8/13 at 100.00 A- 3,735,468
Bonds, Wheaton Franciscan Services Inc., Series 2003A, 5.125%,
8/15/33
4,750 Wisconsin Health and Educational Facilities Authority, Revenue 8/08 at 102.00 AAA 4,941,758
Refunding Bonds, Wausau Hospital Inc., Series 1998A, 5.125%,
8/15/20 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
17,145 Total Wisconsin 18,455,937
------------------------------------------------------------------------------------------------------------------------------------
$ 392,145 Total Investments (cost $392,947,524) - 150.3% 415,517,837
============------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.8% 4,988,140
---------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (52.1)% (144,000,000)
---------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 276,505,977
=====================================================================================================================
At least 80% of the Fund's net assets (including net assets attributable
to Preferred shares) are invested in municipal securities that are
either covered by Original Issue Insurance, Secondary Market Insurance
or Portfolio Insurance which ensures the timely payment of principal and
interest. Up to 20% of the Fund's net assets (including net assets
attributable to Preferred shares) may be invested in municipal
securities that are (i) either backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency securities (also
ensuring the timely payment of principal and interest), or (ii) rated,
at the time of investment, within the four highest grades (Baa or BBB or
better by Moody's, S&P or Fitch) or unrated but judged to be of
comparable quality by the Adviser.
(1) All percentages shown in the Portfolio of Investments are based on net
assets applicable to Common shares unless otherwise noted.
(2) Optional Call Provisions (not covered by the report of independent
registered public accounting firm): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other call
provisions at varying prices at later dates. Certain mortgage-backed
securities may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered public
accounting firm): Using the higher of Standard & Poor's or Moody's
rating. Ratings below BBB by Standard & Poor's Group or Baa by Moody's
Investor Service, Inc. are considered to be below investment grade.
(4) Backed by an escrow or trust containing sufficient U.S. Government or
U.S. Government agency securities which ensure the timely payment of
principal and interest. Such investments are normally considered to be
equivalent to AAA rated securities.
(ETM) Escrowed to maturity.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
68
Statement of
ASSETS AND LIABILITIES October 31, 2006
INSURED INSURED PREMIER
QUALITY OPPORTUNITY INSURED INCOME
(NQI) (NIO) (NIF)
-------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $832,776,418,
$1,786,083,730, $422,929,142,
$753,729,995, $643,773,825 and
$392,947,524, respectively) $ 887,487,826 $ 1,912,654,851 $ 452,532,052
Cash 6,868,159 2,987,045 --
Receivables:
Interest 12,389,343 29,498,809 7,461,524
Investments sold 23,200,090 46,681,207 1,234,254
Other assets 85,299 150,080 48,206
-------------------------------------------------------------------------------------------------------------
Total assets 930,030,717 1,991,971,992 461,276,036
-------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft -- -- 876,425
Payable for investments purchased 21,326,727 47,134,132 --
Accrued expenses:
Management fees 467,789 980,925 241,253
Other 190,376 393,480 101,524
Preferred share dividends payable 117,749 291,721 55,798
-------------------------------------------------------------------------------------------------------------
Total liabilities 22,102,641 48,800,258 1,275,000
-------------------------------------------------------------------------------------------------------------
Preferred shares, at liquidation value 318,000,000 680,000,000 161,000,000
-------------------------------------------------------------------------------------------------------------
Net assets applicable to
Common shares $ 589,928,076 $ 1,263,171,734 $ 299,001,036
=============================================================================================================
Common shares outstanding 38,295,278 81,138,036 19,419,608
=============================================================================================================
Net asset value per Common share
outstanding (net assets applicable to
Common shares, divided by Common
shares outstanding) $ 15.40 $ 15.57 $ 15.40
=============================================================================================================
NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF:
-------------------------------------------------------------------------------------------------------------
Common shares, $.01 par value
per share $ 382,953 $ 811,380 $ 194,196
Paid-in surplus 534,535,198 1,128,874,275 269,465,714
Undistributed (Over-distribution of)
net investment income 1,459,534 4,886,834 (97,094)
Accumulated net realized gain (loss)
from investments and
derivative transactions (1,161,017) 2,028,124 (164,690)
Net unrealized appreciation
(depreciation) of investments 54,711,408 126,571,121 29,602,910
-------------------------------------------------------------------------------------------------------------
Net assets applicable to
Common shares $ 589,928,076 $ 1,263,171,734 $ 299,001,036
=============================================================================================================
Authorized shares:
Common 200,000,000 200,000,000 200,000,000
Preferred 1,000,000 1,000,000 1,000,000
=============================================================================================================
INSURED INSURED
INSURED DIVIDEND TAX-FREE
PREMIUM INCOME 2 ADVANTAGE ADVANTAGE
(NPX) (NVG) (NEA)
-------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $832,776,418,
$1,786,083,730, $422,929,142,
$753,729,995, $643,773,825 and
$392,947,524, respectively) $ 791,297,399 $ 687,163,098 $ 415,517,837
Cash 3,219,135 2,606,591 --
Receivables:
Interest 13,732,856 9,704,955 6,352,739
Investments sold 24,038,789 6,974,848 --
Other assets 65,383 40,288 19,668
-------------------------------------------------------------------------------------------------------------
Total assets 832,353,562 706,489,780 421,890,244
-------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft -- -- 1,121,965
Payable for investments purchased 33,689,805 11,061,979 --
Accrued expenses:
Management fees 412,117 184,313 107,116
Other 262,833 112,824 71,559
Preferred share dividends payable 104,844 93,844 83,627
-------------------------------------------------------------------------------------------------------------
Total liabilities 34,469,599 11,452,960 1,384,267
-------------------------------------------------------------------------------------------------------------
Preferred shares, at liquidation value 268,900,000 233,000,000 144,000,000
-------------------------------------------------------------------------------------------------------------
Net assets applicable to
Common shares $ 528,983,963 $ 462,036,820 $ 276,505,977
=============================================================================================================
Common shares outstanding 37,353,512 29,807,822 18,515,282
=============================================================================================================
Net asset value per Common share
outstanding (net assets applicable to
Common shares, divided by Common
shares outstanding) $ 14.16 $ 15.50 $ 14.93
=============================================================================================================
NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF:
-------------------------------------------------------------------------------------------------------------
Common shares, $.01 par value
per share $ 373,535 $ 298,078 $ 185,153
Paid-in surplus 491,941,518 423,484,088 261,528,621
Undistributed (Over-distribution of)
net investment income 86,758 (273,743) (315,778)
Accumulated net realized gain (loss)
from investments and
derivative transactions (985,252) (4,860,876) (7,462,332)
Net unrealized appreciation
(depreciation) of investments 37,567,404 43,389,273 22,570,313
-------------------------------------------------------------------------------------------------------------
Net assets applicable to
Common shares $ 528,983,963 $ 462,036,820 $ 276,505,977
=============================================================================================================
Authorized shares:
Common Unlimited Unlimited Unlimited
Preferred Unlimited Unlimited Unlimited
=============================================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
69
Statement of
OPERATIONS Year Ended October 31, 2006
INSURED INSURED PREMIER
QUALITY OPPORTUNITY INSURED INCOME
(NQI) (NIO) (NIF)
-------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $ 44,710,515 $ 94,025,460 $ 22,577,285
-------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 5,512,363 11,560,935 2,843,056
Preferred shares - auction fees 795,381 1,700,880 402,631
Preferred shares - dividend disbursing
agent fees 50,000 70,000 30,000
Shareholders' servicing agent fees
and expenses 89,770 147,734 38,197
Custodian's fees and expenses 220,966 462,352 100,834
Directors'/Trustees' fees and expenses 20,030 42,814 9,672
Professional fees 41,439 78,142 27,366
Shareholders' reports - printing and
mailing expenses 84,376 169,305 45,435
Stock exchange listing fees 14,821 29,977 9,965
Investor relations expense 86,989 181,019 45,652
Portfolio insurance expense -- 28,903 --
Other expenses 56,074 81,839 31,689
-------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit
and expense reimbursement 6,972,209 14,553,900 3,584,497
Custodian fee credit (18,796) (28,725) (17,786)
Expense reimbursement -- -- --
-------------------------------------------------------------------------------------------------------------
Net expenses 6,953,413 14,525,175 3,566,711
-------------------------------------------------------------------------------------------------------------
Net investment income 37,757,102 79,500,285 19,010,574
-------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from investments (1,191,796) 1,907,145 (164,691)
Net realized gain (loss) from forward swaps -- -- --
Net increase from payments by the Adviser
for losses realized on the disposal of
investments purchased in violation of
investment restrictions 27,762 42,338 --
Change in net unrealized appreciation
(depreciation) of investments 10,625,581 25,620,352 4,920,062
Change in net unrealized appreciation
(depreciation) of forward swaps -- -- --
-------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) 9,461,547 27,569,835 4,755,371
-------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
From net investment income (9,396,258) (19,724,590) (4,829,477)
From accumulated net realized gains (565,042) (2,314,744) (363,000)
-------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Preferred shareholders (9,961,300) (22,039,334) (5,192,477)
-------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from operations $ 37,257,349 $ 85,030,786 $ 18,573,468
=============================================================================================================
INSURED INSURED
INSURED DIVIDEND TAX-FREE
PREMIUM INCOME 2 ADVANTAGE ADVANTAGE
(NPX) (NVG) (NEA)
-------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $ 38,022,632 $ 33,211,012 $ 19,822,942
-------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 4,851,178 4,242,846 2,593,376
Preferred shares - auction fees 672,572 582,859 360,222
Preferred shares - dividend disbursing
agent fees 50,000 30,000 20,000
Shareholders' servicing agent fees
and expenses 52,067 9,025 5,219
Custodian's fees and expenses 169,020 159,547 94,846
Directors'/Trustees' fees and expenses 17,430 15,304 9,059
Professional fees 33,534 35,151 24,862
Shareholders' reports - printing and
mailing expenses 77,206 63,798 38,731
Stock exchange listing fees 13,808 2,536 1,575
Investor relations expense 75,275 67,131 41,252
Portfolio insurance expense -- -- --
Other expenses 31,587 34,363 25,577
-------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit
and expense reimbursement 6,043,677 5,242,560 3,214,719
Custodian fee credit (12,509) (11,548) (2,937)
Expense reimbursement -- (2,063,912) (1,328,639)
-------------------------------------------------------------------------------------------------------------
Net expenses 6,031,168 3,167,100 1,883,143
-------------------------------------------------------------------------------------------------------------
Net investment income 31,991,464 30,043,912 17,939,799
-------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from investments 287,636 (1,161,908) 70,087
Net realized gain (loss) from forward swaps -- -- 1,283,477
Net increase from payments by the Adviser
for losses realized on the disposal of
investments purchased in violation of
investment restrictions -- -- --
Change in net unrealized appreciation
(depreciation) of investments 10,227,465 11,104,043 7,086,220
Change in net unrealized appreciation
(depreciation) of forward swaps -- -- (1,430,007)
-------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) 10,515,101 9,942,135 7,009,777
-------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
From net investment income (8,461,641) (7,450,053) (4,393,243)
From accumulated net realized gains -- -- --
-------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Preferred shareholders (8,461,641) (7,450,053) (4,393,243)
-------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from operations $ 34,044,924 $ 32,535,994 $ 20,556,333
=============================================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
70
Statement of
CHANGES IN NET ASSETS
INSURED QUALITY (NQI)
-----------------------------------
YEAR YEAR
ENDED ENDED
10/31/06 10/31/05
-------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 37,757,102 $ 39,418,327
Net realized gain (loss) from investments (1,191,796) 3,528,017
Net realized gain (loss) from forward swaps -- --
Net increase from payments by the Adviser for losses realized
on the disposal of investments purchased in violation of
investment restrictions 27,762 --
Change in net unrealized appreciation (depreciation) of investments 10,625,581 (18,408,001)
Change in net unrealized appreciation (depreciation) of forward swaps -- --
Distributions to Preferred Shareholders:
From net investment income (9,396,258) (6,065,197)
From accumulated net realized gains (565,042) (159,181)
-------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable
to Common shares from operations 37,257,349 18,313,965
-------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (30,556,817) (36,927,040)
From accumulated net realized gains (2,966,866) (2,090,966)
-------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to Common shares
from distributions to Common shareholders (33,523,683) (39,018,006)
-------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares issued to shareholders
due to reinvestment of distributions 417,197 1,453,639
-------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable to Common
shares from capital share transactions 417,197 1,453,639
-------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable to Common shares 4,150,863 (19,250,402)
Net assets applicable to Common shares at the beginning of year 585,777,213 605,027,615
-------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares at the end of year $ 589,928,076 $ 585,777,213
=============================================================================================================
Undistributed (Over-distribution of) net investment income
at the end of year $ 1,459,534 $ 3,658,654
=============================================================================================================
INSURED OPPORTUNITY (NIO)
-----------------------------------
YEAR YEAR
ENDED ENDED
10/31/06 10/31/05
-------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 79,500,285 $ 81,917,886
Net realized gain (loss) from investments 1,907,145 14,031,164
Net realized gain (loss) from forward swaps -- --
Net increase from payments by the Adviser for losses realized
on the disposal of investments purchased in violation of
investment restrictions 42,338 --
Change in net unrealized appreciation (depreciation) of investments 25,620,352 (53,551,554)
Change in net unrealized appreciation (depreciation) of forward swaps -- --
Distributions to Preferred Shareholders:
From net investment income (19,724,590) (13,081,165)
From accumulated net realized gains (2,314,744) (217,348)
-------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable
to Common shares from operations 85,030,786 29,098,983
-------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (65,186,316) (74,809,273)
From accumulated net realized gains (11,310,643) (2,636,993)
-------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to Common shares
from distributions to Common shareholders (76,496,959) (77,446,266)
-------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares issued to shareholders
due to reinvestment of distributions -- --
-------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable to Common
shares from capital share transactions -- --
-------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable to Common shares 8,533,827 (48,347,283)
Net assets applicable to Common shares at the beginning of year 1,254,637,907 1,302,985,190
-------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares at the end of year $ 1,263,171,734 $ 1,254,637,907
=============================================================================================================
Undistributed (Over-distribution of) net investment income
at the end of year $ 4,886,834 $ 10,377,919
=============================================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
71
Statement of
CHANGES IN NET ASSETS (continued)
PREMIER INSURED
INCOME (NIF)
-----------------------------------
YEAR YEAR
ENDED ENDED
10/31/06 10/31/05
-------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 19,010,574 $ 19,566,875
Net realized gain (loss) from investments (164,691) 2,211,037
Net realized gain (loss) from forward swaps -- --
Net increase from payments by the Adviser for losses realized
on the disposal of investments purchased in violation of
investment restrictions -- --
Change in net unrealized appreciation (depreciation) of investments 4,920,062 (12,070,538)
Change in net unrealized appreciation (depreciation) of forward swaps -- --
Distributions to Preferred Shareholders:
From net investment income (4,829,477) (3,104,665)
From accumulated net realized gains (363,000) (127,563)
-------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable
to Common shares from operations 18,573,468 6,475,146
-------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (15,341,495) (17,999,191)
From accumulated net realized gains (1,854,574) (1,655,759)
-------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to Common shares
from distributions to Common shareholders (17,196,069) (19,654,950)
-------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares issued to shareholders
due to reinvestment of distributions -- 136,954
-------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable to Common
shares from capital share transactions -- 136,954
-------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable to Common shares 1,377,399 (13,042,850)
Net assets applicable to Common shares at the beginning of year 297,623,637 310,666,487
-------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares at the end of year $ 299,001,036 $ 297,623,637
=============================================================================================================
Undistributed (Over-distribution of) net investment income
at the end of year $ (97,094) $ 1,063,304
=============================================================================================================
INSURED PREMIUM
INCOME 2 (NPX)
-----------------------------------
YEAR YEAR
ENDED ENDED
10/31/06 10/31/05
-------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 31,991,464 $ 33,147,615
Net realized gain (loss) from investments 287,636 10,740,879
Net realized gain (loss) from forward swaps -- --
Net increase from payments by the Adviser for losses realized
on the disposal of investments purchased in violation of
investment restrictions -- --
Change in net unrealized appreciation (depreciation) of investments 10,227,465 (26,834,953)
Change in net unrealized appreciation (depreciation) of forward swaps -- --
Distributions to Preferred Shareholders:
From net investment income (8,461,641) (5,295,715)
From accumulated net realized gains -- --
-------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable
to Common shares from operations 34,044,924 11,757,826
-------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (25,568,479) (30,947,388)
From accumulated net realized gains -- --
-------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to Common shares
from distributions to Common shareholders (25,568,479) (30,947,388)
-------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares issued to shareholders
due to reinvestment of distributions -- --
-------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable to Common
shares from capital share transactions -- --
-------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable to Common shares 8,476,445 (19,189,562)
Net assets applicable to Common shares at the beginning of year 520,507,518 539,697,080
-------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares at the end of year $ 528,983,963 $ 520,507,518
=============================================================================================================
Undistributed (Over-distribution of) net investment income
at the end of year $ 86,758 $ 2,128,188
=============================================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
72
INSURED DIVIDEND
ADVANTAGE (NVG)
-----------------------------------
YEAR YEAR
ENDED ENDED
10/31/06 10/31/05
-------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 30,043,912 $ 29,839,906
Net realized gain (loss) from investments (1,161,908) (174,429)
Net realized gain (loss) from forward swaps -- (3,525,412)
Net increase from payments by the Adviser for losses realized
on the disposal of investments purchased in violation of
investment restrictions -- --
Change in net unrealized appreciation (depreciation) of investments 11,104,043 (10,512,717)
Change in net unrealized appreciation (depreciation) of forward swaps -- 2,750,245
Distributions to Preferred Shareholders:
From net investment income (7,450,053) (4,486,974)
From accumulated net realized gains -- (278,326)
-------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable
to Common shares from operations 32,535,994 13,612,293
-------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (24,516,934) (26,409,732)
From accumulated net realized gains -- (3,573,972)
-------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to Common shares
from distributions to Common shareholders (24,516,934) (29,983,704)
-------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares issued to shareholders
due to reinvestment of distributions -- --
-------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable to Common
shares from capital share transactions -- --
-------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable to Common shares 8,019,060 (16,371,411)
Net assets applicable to Common shares at the beginning of year 454,017,760 470,389,171
-------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares at the end of year $ 462,036,820 $ 454,017,760
=============================================================================================================
Undistributed (Over-distribution of) net investment income
at the end of year $ (273,743) $ 1,649,541
=============================================================================================================
INSURED TAX-FREE
ADVANTAGE (NEA)
-----------------------------------
YEAR YEAR
ENDED ENDED
10/31/06 10/31/05
-------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 17,939,799 $ 17,988,913
Net realized gain (loss) from investments 70,087 299,519
Net realized gain (loss) from forward swaps 1,283,477 (9,115,854)
Net increase from payments by the Adviser for losses realized
on the disposal of investments purchased in violation of
investment restrictions -- --
Change in net unrealized appreciation (depreciation) of investments 7,086,220 (2,445,575)
Change in net unrealized appreciation (depreciation) of forward swaps (1,430,007) 7,736,635
Distributions to Preferred Shareholders:
From net investment income (4,393,243) (2,741,233)
From accumulated net realized gains -- (14,037)
-------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable
to Common shares from operations 20,556,333 11,708,368
-------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (13,664,277) (15,062,183)
From accumulated net realized gains -- (179,616)
-------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to Common shares
from distributions to Common shareholders (13,664,277) (15,241,799)
-------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares issued to shareholders
due to reinvestment of distributions -- 35,393
-------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable to Common
shares from capital share transactions -- 35,393
-------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable to Common shares 6,892,056 (3,498,038)
Net assets applicable to Common shares at the beginning of year 269,613,921 273,111,959
-------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares at the end of year $ 276,505,977 $ 269,613,921
=============================================================================================================
Undistributed (Over-distribution of) net investment income
at the end of year $ (315,778) $ (198,057)
=============================================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
73
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 Insured Quality Municipal Fund, Inc.
(NQI), Nuveen Insured Municipal Opportunity Fund, Inc. (NIO), Nuveen Premier
Insured Municipal Income Fund, Inc. (NIF), Nuveen Insured Premium Income
Municipal Fund 2 (NPX), Nuveen Insured Dividend Advantage Municipal Fund (NVG)
and Nuveen Insured Tax-Free Advantage Municipal Fund (NEA). Common shares of
Insured Quality (NQI), Insured Opportunity (NIO), Premier Insured Income (NIF)
and Insured Premium Income 2 (NPX) are traded on the New York Stock Exchange
while Common shares of Insured Dividend Advantage (NVG) and Insured Tax-Free
Advantage (NEA) are traded on the American Stock Exchange. The Funds are
registered under the Investment Company Act of 1940, as amended, as closed-end,
diversified management investment companies.
Each Fund seeks to provide current income exempt from regular federal income
tax, and in the case of Insured Tax-Free Advantage (NEA) the alternative minimum
tax applicable to individuals, by investing primarily in a diversified portfolio
of municipal obligations issued by state and local government authorities or
certain U.S. territories.
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements in accordance with U.S.
generally accepted accounting principles.
INVESTMENT VALUATION
The prices of municipal bonds in each Fund's investment portfolio are provided
by a pricing service approved by the Fund's Board of Directors/Trustees. When
market price quotes are not readily available (which is usually the case for
municipal securities), the pricing service establishes fair value based on
yields or prices of municipal bonds of comparable quality, type of issue,
coupon, maturity and rating, indications of value from securities dealers,
evaluations of anticipated cash flows or collateral and general market
conditions. Prices of forward swap contracts are also provided by an independent
pricing service approved by each Fund's Board of Directors/ Trustees. If the
pricing service is unable to supply a price for a municipal bond or forward swap
contract, each Fund may use a market price or fair market value quote provided
by a major broker/dealer in such investments. If it is determined that the
market price or fair market value for an investment is unavailable or
inappropriate, the Board of Directors/Trustees of the Funds, or its designee,
may establish a fair value for the investment. Temporary investments in
securities that have variable rate and demand features qualifying them as
short-term investments are valued at amortized cost, which approximates market
value.
INVESTMENT TRANSACTIONS
Investment transactions are recorded on a trade date basis. Realized gains and
losses from transactions are determined on the specific identification method.
Investments purchased on a when-issued or delayed delivery basis may have
extended settlement periods. Any investments so purchased are subject to market
fluctuation during this period. The Funds have instructed the custodian to
segregate assets with a current value at least equal to the amount of the
when-issued/delayed delivery purchase commitments. At October 31, 2006, Insured
Quality (NQI), Insured Opportunity (NIO), Insured Premium Income 2 (NPX) and
Insured Dividend Advantage (NVG) had outstanding when-issued/delayed delivery
purchase commitments of $6,434,647, $17,251,556, $11,061,616 and $4,087,131,
respectively. There were no such outstanding purchase commitments in either
Premier Insured Income (NIF) or Insured Tax-Free Advantage (NEA) at October 31,
2006.
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.
FEDERAL INCOME TAXES
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund
intends to distribute substantially all net investment income and net capital
gains to shareholders and to otherwise comply with the requirements of
Subchapter M of the Internal Revenue Code applicable to regulated investment
companies. Therefore, no federal income tax provision is required. Furthermore,
each Fund intends to satisfy conditions which will enable interest from
municipal securities, which is exempt from regular federal income tax, and in
the case of Insured Tax-Free Advantage (NEA) the alternative minimum tax
applicable to individuals, to retain such tax-exempt status when distributed to
shareholders of the Funds. All monthly tax-exempt income dividends paid during
the fiscal year ended October 31, 2006, have been designated Exempt Interest
Dividends. Net realized capital gains and ordinary income distributions paid by
the Funds are subject to federal taxation.
DIVIDENDS AND DISTRIBUTIONS TO COMMON SHAREHOLDERS
Dividends from tax-exempt net investment income are declared monthly. Net
realized capital gains and/or market discount from investment transactions, if
any, are distributed to shareholders not less frequently than annually.
Furthermore, capital gains are distributed only to the extent they exceed
available capital loss carryforwards.
74
Distributions to Common shareholders of tax-exempt net investment income, net
realized capital gains and/or market discount, if any, are recorded on the
ex-dividend date. The amount and timing of distributions are determined in
accordance with federal income tax regulations, which may differ from U.S.
generally accepted accounting principles.
PREFERRED SHARES
The Funds have issued and outstanding Preferred shares, $25,000 stated value per
share, as a means of effecting financial leverage. Each Fund's Preferred shares
are issued in more than one Series. The dividend rate paid by the Funds on each
Series is determined every seven days, pursuant to a dutch auction process
overseen by the auction agent, and is payable at the end of each rate period.
The number of Preferred shares outstanding, by Series and in total, for each
Fund is as follows:
PREMIER INSURED INSURED INSURED
INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE
QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE
(NQI) (NIO) (NIF) (NPX) (NVG) (NEA)
-----------------------------------------------------------------------------------------
Number of shares:
Series M 2,600 4,000 -- 2,080 3,160 --
Series T 2,600 4,000 -- 2,200 3,080 2,880
Series W 2,600 4,000 840 2,080 -- 2,880
Series W2 -- 3,200 -- -- -- --
Series TH 2,320 4,000 2,800 2,200 3,080 --
Series TH2 -- 4,000 -- -- -- --
Series F 2,600 4,000 2,800 2,196 -- --
-----------------------------------------------------------------------------------------
Total 12,720 27,200 6,440 10,756 9,320 5,760
=========================================================================================
INSURANCE
Insured Quality (NQI), Insured Opportunity (NIO), Premier Insured Income (NIF)
and Insured Premium Income 2 (NPX) invest only in municipal securities which are
either covered by insurance or are backed by an escrow or trust account
containing sufficient U.S. Government or U.S. Government agency securities, both
of which ensure the timely payment of principal and interest.
Insured Dividend Advantage (NVG) and Insured Tax-Free Advantage (NEA) invest at
least 80% of their net assets (including net assets attributable to Preferred
shares) in municipal securities that are covered by insurance. Each Fund may
also invest up to 20% of its net assets (including net assets attributable to
Preferred shares) in municipal securities which are either (i) backed by an
escrow or trust containing sufficient U.S. Government or U.S. Government agency
securities, or (ii) rated, at the time of investment, within the four highest
grades (Baa or BBB or better by Moody's, S&P or Fitch) or unrated but judged to
be of comparable quality by the Adviser.
Each insured municipal security is covered by Original Issue Insurance,
Secondary Market Insurance or Portfolio Insurance. Such insurance does not
guarantee the market value of the municipal securities or the value of the
Funds' Common shares. Original Issue Insurance and Secondary Market Insurance
remain in effect as long as the municipal securities covered thereby remain
outstanding and the insurer remains in business, regardless of whether the Funds
ultimately dispose of such municipal securities. Consequently, the market value
of the municipal securities covered by Original Issue Insurance or Secondary
Market Insurance may reflect value attributable to the insurance. Portfolio
Insurance, in contrast, is effective only while the municipal securities are
held by the Funds. Accordingly, neither the prices used in determining the
market value of the underlying municipal securities nor the Common share net
asset value of the Funds include value, if any, attributable to the Portfolio
Insurance. Each policy of the Portfolio Insurance does, however, give the Funds
the right to obtain permanent insurance with respect to the municipal security
covered by the Portfolio Insurance policy at the time of its sale.
INVERSE FLOATING RATE SECURITIES
The Funds are authorized to invest in inverse floating rate securities. During
the fiscal year ended October 31, 2006, Insured Quality (NQI), Insured
Opportunity (NIO), Insured Premium Income 2 (NPX) and Insured Dividend Advantage
(NVG) invested in inverse floating rate securities for the purpose of enhancing
portfolio yield. Inverse floating rate securities are identified in the
Portfolio of Investments and are valued daily. The interest rate of an inverse
floating rate security has an inverse relationship to the interest rate of a
short-term floating rate security. Consequently, as the interest rate of the
floating rate security rises, the interest rate on the inverse floating rate
security declines. Conversely, as the interest rate of the floating rate
security declines, the interest rate on the inverse floating rate security
rises. The price of an inverse floating rate security will be more volatile than
that of an otherwise comparable fixed rate security since the interest rate is
dependent on an underlying fixed coupon rate or the general level of long-term
interest rates as well as the short-term interest paid on the floating rate
security, and because the inverse floating rate security typically bears the
risk of loss of a greater face value of an underlying bond. There were no such
securities in either Premier Insured Income (NIF) or Insured Tax-Free Advantage
(NEA) during the fiscal year ended October 31, 2006.
FORWARD SWAP TRANSACTIONS
The Funds are authorized to invest in certain derivative financial instruments.
The Funds' use of forward interest rate swap transactions is intended to help
the Fund manage its overall interest rate sensitivity, either shorter or longer,
generally to more closely align the Fund's interest rate sensitivity with that
of the broader municipal market. Forward interest rate swap transactions involve
each Fund's agreement with a counterparty to pay, in the future, a fixed or
variable rate payment in exchange for the counterparty paying the Fund a
variable or fixed rate payment, the accruals for which would begin at a
specified date in the future (the "effective date"). The amount of the payment
obligation is based on the notional amount of the forward swap contract and the
termination date of the swap (which is akin to a bond's maturity). The value of
the Fund's swap commitment would increase or decrease based primarily on the
extent to which long-term interest rates for bonds having a maturity of the
swap's termination date increases or decreases. The Funds may terminate a swap
contract prior to the effective date, at which point a realized gain or loss is
recognized. When a forward
75
Notes to
FINANCIAL STATEMENTS (continued)
swap is terminated, it ordinarily does not involve the delivery of securities or
other underlying assets or principal, but rather is settled in cash on a net
basis. Each Fund intends, but is not obligated, to terminate its forward swaps
before the effective date. Accordingly, the risk of loss with respect to the
swap counterparty on such transactions is limited to the credit risk associated
with a counterparty failing to honor its commitment to pay any realized gain to
the Fund upon termination. To reduce such credit risk, all counterparties are
required to pledge collateral daily (based on the daily valuation of each swap)
on behalf of each Fund with a value approximately equal to the amount of any
unrealized gain above a pre-determined threshold. Reciprocally, when any of the
Funds have an unrealized loss on a swap contract, the Funds have instructed the
custodian to pledge assets of the Funds as collateral with a value approximately
equal to the amount of the unrealized loss above a pre-determined threshold.
Collateral pledges are monitored and subsequently adjusted if and when the swap
valuations fluctuate, either up or down, by at least the predetermined threshold
amount. At October 31, 2006, the Funds did not have any forward swap contracts
outstanding.
CUSTODIAN FEE CREDIT
Each Fund has an arrangement with the custodian bank whereby certain custodian
fees and expenses are reduced by credits earned on each Fund's cash on deposit
with the bank. Such deposit arrangements are an alternative to overnight
investments.
INDEMNIFICATIONS
Under the Funds' organizational documents, their Officers and Directors/Trustees
are indemnified against certain liabilities arising out of the performance of
their duties to the Funds. In addition, in the normal course of business, the
Funds enter into contracts that provide general indemnifications to other
parties. The Funds' maximum exposure under these arrangements is unknown as this
would involve future claims that may be made against the Funds that have not yet
occurred. However, the Funds have not had prior claims or losses pursuant to
these contracts and expect the risk of loss to be remote.
USE OF ESTIMATES
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of increases and
decreases in net assets applicable to Common shares from operations during the
reporting period. Actual results may differ from those estimates.
2. FUND SHARES
Transactions in Common shares were as follows:
INSURED INSURED PREMIER INSURED
QUALITY (NQI) OPPORTUNITY (NIO) INCOME (NIF)
---------------------- ------------------------ ------------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
10/31/06 10/31/05 10/31/06 10/31/05 10/31/06 10/31/05
------------------------------------------------------------------------------------------------------------------------
Common shares issued to shareholders
due to reinvestment of distributions 27,000 91,214 -- -- -- 8,559
========================================================================================================================
INSURED INSURED INSURED
PREMIUM INCOME 2 (NPX) DIVIDEND ADVANTAGE (NVG) TAX-FREE ADVANTAGE (NEA)
---------------------- ------------------------ ------------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
10/31/06 10/31/05 10/31/06 10/31/05 10/31/06 10/31/05
------------------------------------------------------------------------------------------------------------------------
Common shares issued to shareholders
due to reinvestment of distributions -- -- -- -- -- 2,359
========================================================================================================================
76
3. INVESTMENT TRANSACTIONS
Purchases and sales (including maturities but excluding short-term investments
and derivative transactions) during the fiscal year ended October 31, 2006, were
as follows:
PREMIER INSURED INSURED INSURED
INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE
QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE
(NQI) (NIO) (NIF) (NPX) (NVG) (NEA)
-------------------------------------------------------------------------------------------------------------------------------
Purchases $113,637,479 $ 257,102,495 $ 38,238,892 $117,323,779 $100,483,060 $ 4,414,520
Sales and maturities 124,675,966 287,709,620 42,378,851 118,611,170 101,025,153 1,403,536
===============================================================================================================================
4. INCOME TAX INFORMATION
The following information is presented on an income tax basis. Differences
between amounts for financial statement and federal income tax purposes are
primarily due to the treatment of paydown gains and losses, timing differences
in recognizing taxable market discount and timing differences in recognizing
certain gains and losses on investment transactions. To the extent that
differences arise that are permanent in nature, such amounts are reclassified
within the capital accounts on the Statement of Assets and Liabilities presented
in the annual report, based on their Federal tax basis treatment; temporary
differences do not require reclassification. Temporary and permanent differences
do not impact the net asset values of the Funds.
At October 31, 2006, the cost of investments was as follows:
PREMIER INSURED INSURED INSURED
INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE
QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE
(NQI) (NIO) (NIF) (NPX) (NVG) (NEA)
-------------------------------------------------------------------------------------------------------------------------------
Cost of investments $832,311,969 $1,784,548,341 $422,863,541 $753,692,128 $645,547,749 $395,696,355
===============================================================================================================================
Gross unrealized appreciation and gross unrealized depreciation of investments
at October 31, 2006, were as follows:
PREMIER INSURED INSURED INSURED
INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE
QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE
(NQI) (NIO) (NIF) (NPX) (NVG) (NEA)
-------------------------------------------------------------------------------------------------------------------------------
Gross unrealized:
Appreciation $ 55,501,724 $ 128,269,344 $ 29,668,511 $ 37,616,143 $ 43,573,834 $ 22,608,131
Depreciation (325,867) (162,834) -- (10,872) (1,958,485) (2,786,649)
-------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation
(depreciation) of investments $ 55,175,857 $ 128,106,510 $ 29,668,511 $ 37,605,271 $ 41,615,349 $ 19,821,482
===============================================================================================================================
The tax components of undistributed net tax-exempt income, net ordinary income
and net long-term capital gains at October 31, 2006, the Funds' tax year end,
were as follows:
PREMIER INSURED INSURED INSURED
INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE
QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE
(NQI) (NIO) (NIF) (NPX) (NVG) (NEA)
-------------------------------------------------------------------------------------------------------------------------------
Undistributed net tax-exempt
income * $ 3,429,697 $ 8,633,157 $ 1,077,692 $ 2,170,823 $ 1,543,240 $ 822,436
Undistributed net ordinary
income ** -- -- -- -- -- --
Undistributed net long-term
capital gains -- 2,028,125 -- -- -- --
===============================================================================================================================
* Undistributed net tax-exempt income (on a tax basis) has not been reduced
for the dividend declared on October 2, 2006, paid on November 1, 2006.
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
The tax character of distributions paid during the tax years ended October 31,
2006 and October 31, 2005, was designated for purposes of the dividends paid
deduction as follows:
PREMIER INSURED INSURED INSURED
INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE
QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE
2006 (NQI) (NIO) (NIF) (NPX) (NVG) (NEA)
-------------------------------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt
income $ 40,449,144 $ 85,552,575 $ 20,340,320 $ 34,358,230 $ 32,151,520 $ 18,082,303
Distributions from net
ordinary income ** -- 36,367 -- -- -- --
Distributions from net long-term
capital gains *** 3,529,489 13,627,650 2,216,110 -- -- --
===============================================================================================================================
77
Notes to
FINANCIAL STATEMENTS (continued)
PREMIER INSURED INSURED INSURED
INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE
QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE
2005 (NQI) (NIO) (NIF) (NPX) (NVG) (NEA)
-------------------------------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt
income $ 43,231,354 $ 88,622,431 $ 21,307,834 $ 36,572,931 $ 31,059,072 $ 18,006,667
Distributions from net
ordinary income ** 425,383 -- 801,863 -- 320,955 --
Distributions from net
long-term capital gains 1,943,044 2,854,341 981,459 -- 3,528,645 193,086
===============================================================================================================================
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
*** The Funds designated as a long-term capital gain dividend, pursuant to
Internal Revenue Code Section 852(b)(3), the amount necessary to reduce
the earnings and profits of the Funds related to net capital gain to zero
for the tax year ended October 31, 2006.
At October 31, 2006, 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:
PREMIER INSURED INSURED INSURED
INSURED INSURED PREMIUM DIVIDEND TAX-FREE
QUALITY INCOME INCOME 2 ADVANTAGE ADVANTAGE
(NQI) (NIF) (NPX) (NVG) (NEA)
------------------------------------------------------------------------------------------------------------------------
Expiration year:
2008 $ -- $ -- $ 985,195 $ -- $ --
2009 -- -- -- -- --
2010 -- -- -- -- --
2011 -- -- -- -- --
2012 -- -- -- -- --
2013 -- -- -- 1,715,199 4,675,683
2014 1,161,017 164,690 -- 1,187,192 --
------------------------------------------------------------------------------------------------------------------------
Total $ 1,161,017 $ 164,690 $ 985,195 $ 2,902,391 $ 4,675,683
========================================================================================================================
5. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Each Fund's management fee is separated into two components - a complex-level
component, based on the aggregate amount of all fund assets managed by Nuveen
Asset Management (the "Adviser"), a wholly owned subsidiary of Nuveen
Investments, Inc., ("Nuveen"), and a specific fund-level component, based only
on the amount of assets within each individual fund. This pricing structure
enables Nuveen fund shareholders to benefit from growth in the assets within
each individual fund as well as from growth in the amount of complex-wide assets
managed by the Adviser.
The annual fund-level fee, payable monthly, for each Fund is based upon the
average daily net assets (including net assets attributable to Preferred shares)
of each Fund as follows:
INSURED QUALITY (NQI)
INSURED OPPORTUNITY (NIO)
PREMIER INSURED INCOME (NIF)
INSURED PREMIUM INCOME 2 (NPX)
AVERAGE DAILY NET ASSETS (INCLUDING NET ASSETS ATTRIBUTABLE TO PREFERRED SHARES) FUND-LEVEL FEE RATE
-------------------------------------------------------------------------------------------------------------------------------
For the first $125 million .4500%
For the next $125 million .4375
For the next $250 million .4250
For the next $500 million .4125
For the next $1 billion .4000
For the next $3 billion .3875
For net assets over $5 billion .3750
===============================================================================================================================
78
INSURED DIVIDEND ADVANTAGE (NVG)
INSURED TAX-FREE ADVANTAGE (NEA)
AVERAGE DAILY NET ASSETS (INCLUDING NET ASSETS ATTRIBUTABLE TO PREFERRED SHARES) FUND-LEVEL FEE RATE
-------------------------------------------------------------------------------------------------------------------------------
For the first $125 million .4500%
For the next $125 million .4375
For the next $250 million .4250
For the next $500 million .4125
For the next $1 billion .4000
For net assets over $2 billion .3750
===============================================================================================================================
The annual complex-level fee, payable monthly, which is additive to the
fund-level fee, for all Nuveen sponsored funds in the U.S., is based on the
aggregate amount of total fund assets managed as stated in the table below. As
of October 31, 2006, the complex-level fee rate was .1852%.
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.
The management fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Funds pay no
compensation directly to those of its Directors/Trustees who are affiliated with
the Adviser or to its Officers, all of whom receive remuneration for their
services to the Funds from the Adviser or its affiliates. The Board of
Directors/Trustees has adopted a deferred compensation plan for independent
Directors/Trustees that enables Directors/Trustees to elect to defer receipt of
all or a portion of the annual compensation they are entitled to receive from
certain Nuveen advised funds. Under the plan, deferred amounts are treated as
though equal dollar amounts had been invested in shares of select Nuveen advised
funds.
For the first ten years of Insured Dividend Advantage's (NVG) operations, the
Adviser has agreed to reimburse the Fund, as a percentage of average daily net
assets (including net assets attributable to Preferred shares), for fees and
expenses in the amounts and for the time periods set forth below:
YEAR ENDING YEAR ENDING
MARCH 31, MARCH 31,
--------------------------------------------------------------------------------
2002* .30% 2008 .25%
2003 .30 2009 .20
2004 .30 2010 .15
2005 .30 2011 .10
2006 .30 2012 .05
2007 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Insured Dividend Advantage (NVG) for any
portion of its fees and expenses beyond March 31, 2012.
For the first eight years of Insured Tax-Free Advantage's (NEA) operations, the
Adviser has agreed to reimburse the Fund, as a percentage of average daily net
assets (including net assets attributable to Preferred shares), for fees and
expenses in the amounts and for the time periods set forth below:
YEAR ENDING YEAR ENDING
NOVEMBER 30, NOVEMBER 30,
--------------------------------------------------------------------------------
2002* .32% 2007 .32%
2003 .32 2008 .24
2004 .32 2009 .16
2005 .32 2010 .08
2006 .32
================================================================================
* From the commencement of operations.
79
Notes to
FINANCIAL STATEMENTS (continued)
The Adviser has not agreed to reimburse Insured Tax-Free Advantage (NEA) for any
portion of its fees and expenses beyond November 30, 2010.
As a result of certain trading errors that occurred during the fiscal year ended
October 31, 2006, Insured Quality (NQI) and Insured Opportunity (NIO) were
reimbursed $27,762 and $42,338, respectively, by the Adviser to offset losses
realized on the disposal of investments in violation of investment guidelines.
6. NEW ACCOUNTING PRONOUNCEMENTS
FINANCIAL ACCOUNTING STANDARDS BOARD INTERPRETATION NO. 48
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES (FIN 48). FIN
48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Fund's tax returns to determine whether the tax positions are
"more-likely-than-not" of being sustained by the applicable tax authority. Tax
positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is
required for fiscal years beginning after December 15, 2006 and is to be applied
to all open tax years as of the effective date. At this time, management is
evaluating the implications of FIN 48 and does not expect the adoption of FIN 48
will have a significant impact on the net assets or results of operations of the
Funds.
FINANCIAL ACCOUNTING STANDARDS BOARD STATEMENT ON FINANCIAL ACCOUNTING STANDARDS
NO. 157
In September 2006, the Financial Accounting Standards Board (FASB) issued
Statement on Financial Accounting Standards (SFAS) No. 157, "Fair Value
Measurements." This standard establishes a single authoritative definition of
fair value, sets out a framework for measuring fair value and requires
additional disclosures about fair value measurements. SFAS No. 157 applies to
fair value measurements already required or permitted by existing standards.
SFAS No. 157 is effective for financial statements issued for fiscal years
beginning after November 15, 2007 and interim periods within those fiscal years.
The changes to current generally accepted accounting principles from the
application of this standard relate to the definition of fair value, the methods
used to measure fair value, and the expanded disclosures about fair value
measurements. As of October 31, 2006, the Funds do not believe the adoption of
SFAS No. 157 will impact the financial statement amounts; however, additional
disclosures may be required about the inputs used to develop the measurements
and the effect of certain of the measurements included within the Statement of
Operations for the period.
7. SUBSEQUENT EVENT
DISTRIBUTIONS TO COMMON SHAREHOLDERS
The Funds declared Common share dividend distributions from their tax-exempt net
investment income which were paid on December 1, 2006, to shareholders of record
on November 15, 2006, as follows:
PREMIER INSURED INSURED INSURED
INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE
QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE
(NQI) (NIO) (NIF) (NPX) (NVG) (NEA)
-------------------------------------------------------------------------------------------------------------------------------
Dividend per share $.0605 $.0615 $.0610 $.0540 $.0640 $.0590
===============================================================================================================================
80
Financial
HIGHLIGHTS
81
Financial
HIGHLIGHTS
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
--------------------------------------------------------------- --------------------------------
Distributions Distributions
from Net from Net
Beginning Investment Capital Investment Capital
Common Net Income to Gains to Income to Gains to
Share Net Realized/ Preferred Preferred Common Common
Net Asset Investment Unrealized Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
------------------------------------------------------------------------------------------------------------------------------------
INSURED QUALITY (NQI)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2006 $ 15.31 $ .99 $ .24 $ (.25) $ (.01) $ .97 $ (.80) $ (.08) $ (.88)
2005 15.85 1.03 (.39) (.16) -- .48 (.97) (.05) (1.02)
2004 15.72 1.08 .20 (.08) -- 1.20 (1.02) (.05) (1.07)
2003 15.87 1.10 (.05) (.07) (.01) .97 (1.00) (.12) (1.12)
2002 15.78 1.12 .03 (.11) (.01) 1.03 (.92) (.02) (.94)
INSURED OPPORTUNITY (NIO)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2006 15.46 .98 .34 (.24) (.03) 1.05 (.80) (.14) (.94)
2005 16.06 1.01 (.50) (.16) -- .35 (.92) (.03) (.95)
2004 15.89 1.05 .20 (.08) -- 1.17 (.97) (.03) (1.00)
2003 15.83 1.06 .17 (.07) (.01) 1.15 (.97) (.12) (1.09)
2002 15.72 1.15 .03 (.11) (.01) 1.06 (.93) (.02) (.95)
PREMIER INSURED INCOME (NIF)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2006 15.33 .98 .25 (.25) (.02) .96 (.79) (.10) (.89)
2005 16.00 1.01 (.49) (.16) (.01) .35 (.93) (.09) (1.02)
2004 15.69 1.03 .36 (.08) -- 1.31 (.98) (.02) (1.00)
2003 15.59 1.05 .13 (.07) -- 1.11 (.98) (.03) (1.01)
2002 15.55 1.14 (.05) (.11) -- .98 (.94) -- (.94)
====================================================================================================================================
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*
-------------------------------------------------------------------------------------
INSURED QUALITY (NQI)
-------------------------------------------------------------------------------------
Year Ended 10/31:
2006 $ -- $ 15.40 $ 14.83 2.76% 6.53%***
2005 -- 15.31 15.31 2.11 3.09
2004 -- 15.85 16.00 4.37 7.90
2003 -- 15.72 16.39 12.92 6.27
2002 -- 15.87 15.55 10.82 6.83
INSURED OPPORTUNITY (NIO)
-------------------------------------------------------------------------------------
Year Ended 10/31:
2006 -- 15.57 14.75 8.26 7.05***
2005 -- 15.46 14.52 (3.72) 2.21
2004 -- 16.06 16.05 9.47 7.64
2003 -- 15.89 15.64 10.22 7.51
2002 -- 15.83 15.21 9.80 7.01
PREMIER INSURED INCOME (NIF)
-------------------------------------------------------------------------------------
Year Ended 10/31:
2006 -- 15.40 14.60 7.68 6.46
2005 -- 15.33 14.40 (1.66) 2.16
2004 -- 16.00 15.64 7.55 8.62
2003 -- 15.69 15.51 7.84 7.28
2002 -- 15.59 15.33 6.84 6.57
=====================================================================================
Ratios/Supplemental Data
-----------------------------------------------------------------------------------------
Before Credit/Reimbursement After Credit/Reimbursement**
--------------------------- ----------------------------
Ratio of Net Ratio of Net
Ratio of Investment Ratio of Investment
Ending Expenses Income to Expenses Income to
Net to Average Average to Average Average
Assets Net Assets Net Assets Net Assets Net Assets
Applicable Applicable Applicable Applicable Applicable Portfolio
to Common to Common to Common to Common to Common Turnover
Shares (000) Shares++ Shares++ Shares++ Shares++ Rate
---------------------------------------------------------------------------------------------------------------
INSURED QUALITY (NQI)
---------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2006 $ 589,928 1.20% 6.49% 1.20% 6.49% 13%
2005 585,777 1.19 6.58 1.19 6.58 21
2004 605,028 1.19 6.88 1.19 6.88 8
2003 598,102 1.20 6.93 1.20 6.94 14
2002 601,495 1.23 7.22 1.21 7.24 44
INSURED OPPORTUNITY (NIO)
---------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2006 1,263,172 1.17 6.38 1.17 6.38 13
2005 1,254,638 1.16 6.35 1.16 6.35 25
2004 1,302,985 1.16 6.59 1.16 6.59 8
2003 1,288,087 1.17 6.67 1.16 6.68 21
2002 1,283,353 1.20 7.42 1.19 7.42 37
PREMIER INSURED INCOME (NIF)
---------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2006 299,001 1.22 6.44 1.21 6.44 8
2005 297,624 1.20 6.39 1.20 6.40 20
2004 310,666 1.21 6.53 1.20 6.53 13
2003 303,912 1.22 6.66 1.21 6.68 25
2002 301,121 1.25 7.40 1.23 7.42 43
===============================================================================================================
Preferred Shares at End of Period
---------------------------------------
Aggregate Liquidation
Amount and Market Asset
Outstanding Value Coverage
(000) Per Share Per Share
-------------------------------------------------------------
INSURED QUALITY (NQI)
-------------------------------------------------------------
Year Ended 10/31:
2006 $ 318,000 $ 25,000 $ 71,378
2005 318,000 25,000 71,052
2004 318,000 25,000 72,565
2003 318,000 25,000 72,021
2002 318,000 25,000 72,287
INSURED OPPORTUNITY (NIO)
-------------------------------------------------------------
Year Ended 10/31:
2006 680,000 25,000 71,440
2005 680,000 25,000 71,126
2004 680,000 25,000 72,904
2003 680,000 25,000 72,356
2002 680,000 25,000 72,182
PREMIER INSURED INCOME (NIF)
-------------------------------------------------------------
Year Ended 10/31:
2006 161,000 25,000 71,429
2005 161,000 25,000 71,215
2004 161,000 25,000 73,240
2003 161,000 25,000 72,191
2002 161,000 25,000 71,758
=============================================================
* Total Return on Market Value is the combination of changes in the market
price per share and the effect of reinvested dividend income and
reinvested capital gains distributions, if any, at the average price paid
per share at the time of reinvestment. Total Return on Common Share Net
Asset Value is the combination of changes in Common share net asset value,
reinvested dividend income at net asset value and reinvested capital gains
distributions at net asset value, if any. Total returns are not
annualized.
** After custodian fee credit and expense reimbursement, where applicable.
*** During the fiscal year ended October 31, 2006, Insured Quality (NQI) and
Insured Opportunity (NIO) received payments from the Adviser of $27,762
and $42,338, respectively, to offset losses realized on the disposal of
investments purchased in violation of each Fund's investment restrictions.
This reimbursement did not have an impact on the Funds' Total Return on
Common Share Net Asset Value.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable
to Preferred shares.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
Spread 82-83
Financial HIGHLIGHTS (continued)
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
--------------------------------------------------------------- --------------------------------
Distributions Distributions
from Net from Net
Beginning Investment Capital Investment Capital
Common Net Income to Gains to Income to Gains to
Share Net Realized/ Preferred Preferred Common Common
Net Asset Investment Unrealized Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
------------------------------------------------------------------------------------------------------------------------------------
INSURED PREMIUM INCOME 2 (NPX)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2006 $ 13.93 $ .86 $ .28 $ (.23) $ -- $ .91 $ (.68) $ -- $ (.68)
2005 14.45 .89 (.44) (.14) -- .31 (.83) -- (.83)
2004 14.24 .93 .23 (.07) -- 1.09 (.88) -- (.88)
2003 14.17 .96 .03 (.06) -- .93 (.86) -- (.86)
2002 13.94 .99 .16 (.10) -- 1.05 (.82) -- (.82)
INSURED DIVIDEND ADVANTAGE (NVG)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2006 15.23 1.01 .33 (.25) -- 1.09 (.82) -- (.82)
2005 15.78 1.00 (.38) (.15) (.01) .46 (.89) (.12) (1.01)
2004 15.41 1.02 .42 (.07) -- 1.37 (.93) (.07) (1.00)
2003 15.35 1.03 .15 (.07) (.01) 1.10 (.93) (.11) (1.04)
2002(a) 14.33 .55 1.10 (.05) -- 1.60 (.47) -- (.47)
INSURED TAX-FREE ADVANTAGE (NEA)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2006 14.56 .97 .38 (.24) -- 1.11 (.74) -- (.74)
2005 14.75 .97 (.19) (.15) -- .63 (.81) (.01) (.82)
2004 14.54 .99 .21 (.07) -- 1.13 (.92) (.01) (.93)
2003(b) 14.33 .82 .42 (.05) -- 1.19 (.78) -- (.78)
====================================================================================================================================
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**
-----------------------------------------------------------------------------------
INSURED PREMIUM INCOME 2 (NPX)
-----------------------------------------------------------------------------------
Year Ended 10/31:
2006 $ -- $ 14.16 $ 13.03 7.11% 6.75%
2005 -- 13.93 12.83 (3.32) 2.14
2004 -- 14.45 14.11 6.42 7.89
2003 -- 14.24 14.12 8.84 6.70
2002 -- 14.17 13.77 6.32 7.83
INSURED DIVIDEND ADVANTAGE (NVG)
-----------------------------------------------------------------------------------
Year Ended 10/31:
2006 -- 15.50 14.89 11.09 7.39
2005 -- 15.23 14.17 2.00 2.93
2004 -- 15.78 14.89 7.61 9.19
2003 -- 15.41 14.81 6.10 7.37
2002(a) (.11) 15.35 14.96 2.84 10.44
INSURED TAX-FREE ADVANTAGE (NEA)
-----------------------------------------------------------------------------------
Year Ended 10/31:
2006 -- 14.93 14.35 12.82 7.82
2005 -- 14.56 13.41 (4.68) 4.33
2004 .01 14.75 14.91 7.41 8.07
2003(b) (.20) 14.54 14.79 3.87 6.98
===================================================================================
Ratios/Supplemental Data
-----------------------------------------------------------------------------------------
Before Credit/Reimbursement After Credit/Reimbursement***
--------------------------- -----------------------------
Ratio of Net Ratio of Net
Ratio of Investment Ratio of Investment
Ending Expenses Income to Expenses Income to
Net to Average Average to Average Average
Assets Net Assets Net Assets Net Assets Net Assets
Applicable Applicable Applicable Applicable Applicable Portfolio
to Common to Common to Common to Common to Common Turnover
Shares (000) Shares++ Shares++ Shares++ Shares++ Rate
---------------------------------------------------------------------------------------------------------------
INSURED PREMIUM INCOME 2 (NPX)
---------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2006 $ 528,984 1.16% 6.14% 1.16% 6.15% 15%
2005 520,508 1.16 6.20 1.16 6.20 23
2004 539,697 1.16 6.52 1.16 6.53 14
2003 530,975 1.17 6.68 1.16 6.69 31
2002 527,800 1.20 7.13 1.19 7.14 26
INSURED DIVIDEND ADVANTAGE (NVG)
---------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2006 462,037 1.15 6.15 .70 6.60 15
2005 454,018 1.15 5.96 .70 6.42 2
2004 470,389 1.15 6.09 .70 6.54 11
2003 459,368 1.17 6.22 .72 6.67 25
2002(a) 457,432 1.10* 5.71* .61* 6.20* 22
INSURED TAX-FREE ADVANTAGE (NEA)
---------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2006 276,506 1.19 6.12 .69 6.61 --
2005 269,614 1.19 6.06 .70 6.55 1
2004 273,112 1.20 6.24 .71 6.73 13
2003(b) 269,112 1.12* 5.52* .65* 6.00* 72
===============================================================================================================
Preferred Shares at End of Period
---------------------------------------
Aggregate Liquidation
Amount and Market Asset
Outstanding Value Coverage
(000) Per Share Per Share
-------------------------------------------------------------
INSURED PREMIUM INCOME 2 (NPX)
-------------------------------------------------------------
Year Ended 10/31:
2006 $ 268,900 $ 25,000 $ 74,180
2005 268,900 25,000 73,392
2004 268,900 25,000 75,176
2003 268,900 25,000 74,365
2002 268,900 25,000 74,070
INSURED DIVIDEND ADVANTAGE (NVG)
-------------------------------------------------------------
Year Ended 10/31:
2006 233,000 25,000 74,575
2005 233,000 25,000 73,714
2004 233,000 25,000 75,471
2003 233,000 25,000 74,288
2002(a) 233,000 25,000 74,081
INSURED TAX-FREE ADVANTAGE (NEA)
-------------------------------------------------------------
Year Ended 10/31:
2006 144,000 25,000 73,005
2005 144,000 25,000 71,808
2004 144,000 25,000 72,415
2003(b) 144,000 25,000 71,721
=============================================================
* Annualized.
** Total Return on Market Value is the combination of changes in the market
price per share and the effect of reinvested dividend income and
reinvested capital gains distributions, if any, at the average price paid
per share at the time of reinvestment. Total Return on Common Share Net
Asset Value is the combination of changes in Common share net asset value,
reinvested dividend income at net asset value and reinvested capital gains
distributions at net asset value, if any. Total returns are not
annualized.
*** After custodian fee credit and expense reimbursement, where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable
to Preferred shares.
(a) For the period March 25, 2002 (commencement of operations) through October
31, 2002.
(b) For the period November 21, 2002 (commencement of operations) through
October 31, 2003.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
Spread 84-85
Board Members
AND OFFICERS
The management of the Funds, including general supervision of the duties
performed for the Funds by the Adviser, is the responsibility of the Board
Members of the Funds. The number of board members of the Fund is currently set
at nine. None of the board members who are not "interested" persons of the Funds
has ever been a director or employee of, or consultant to, Nuveen or its
affiliates. The names and business addresses of the board members and officers
of the Funds, their principal occupations and other affiliations during the past
five years, the number of portfolios each oversees and other directorships they
hold are set forth below.
NUMBER OF PORTFOLIOS
PRINCIPAL OCCUPATION(S) IN FUND COMPLEX
NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY
AND ADDRESS WITH THE FUNDS OR APPOINTED(2) DURING PAST 5 YEARS BOARD MEMBER
----------------------------------------------------------------------------------------------------------------------------------
BOARD MEMBER WHO IS AN INTERESTED PERSON OF THE FUNDS:
----------------------------------------------------------------------------------------------------------------------------------
Timothy R. Schwertfeger(1) Chairman of 1994 Chairman (since 1996) and Director of 171
3/28/49 the Board Nuveen Investments, Inc., Nuveen
333 W. Wacker Drive and Board Investments, LLC, Nuveen Advisory
Chicago, IL 60606 Member Corp. and Nuveen Institutional
Advisory Corp.(3); formerly, Director
(1996-2006) of Institutional Capital
Corporation; Chairman and Director
(since 1997) of Nuveen Asset
Management; Chairman and Director of
Rittenhouse Asset Management, Inc.
(since 1999); Chairman of Nuveen
Investments Advisers Inc. (since
2002).
BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS:
----------------------------------------------------------------------------------------------------------------------------------
Robert P. Bremner Lead Independent 1997 Private Investor and Management 171
8/22/40 Board member Consultant.
333 W. Wacker Drive
Chicago, IL 60606
----------------------------------------------------------------------------------------------------------------------------------
Lawrence H. Brown Board member 1993 Retired (since 1989) as Senior Vice 171
7/29/34 President of The Northern Trust
333 W. Wacker Drive Company; Director (since 2002)
Chicago, IL 60606 Community Advisory Board for Highland
Park and Highwood, United Way of the
North Shore; Director (since 2006) of
the Michael Rolfe Pancreatic Cancer
Foundation.
----------------------------------------------------------------------------------------------------------------------------------
Jack B. Evans Board member 1999 President, The Hall-Perrine 171
10/22/48 Foundation, a private philanthropic
333 W. Wacker Drive corporation (since 1996); Director and
Chicago, IL 60606 Vice Chairman, United Fire Group, a
publicly held company; Adjunct Faculty
Member, University of Iowa; Director,
Gazette Companies; Life Trustee of Coe
College and Iowa College Foundation;
formerly, Director, Alliant Energy;
formerly, Director, Federal Reserve
Bank of Chicago; formerly, President
and Chief Operating Officer, SCI
Financial Group, Inc., a regional
financial services firm.
----------------------------------------------------------------------------------------------------------------------------------
William C. Hunter Board member 2004 Dean, Tippie College of Business, 171
3/6/48 University of Iowa (since June 2006);
333 W. Wacker Drive formerly, Dean and Distinguished
Chicago, IL 60606 Professor of Finance, School of
Business at the University of
Connecticut (2003-2006); previously,
Senior Vice President and Director of
Research at the Federal Reserve Bank
of Chicago (1995-2003); Director
(since 1997), Credit Research Center
at Georgetown University; Director
(since 2004) of Xerox Corporation;
Director, SS&C Technologies, Inc. (May
2005 - October 2005).
----------------------------------------------------------------------------------------------------------------------------------
David J. Kundert Board member 2005 Retired (since 2004) as Chairman, 169
10/28/42 JPMorgan Fleming Asset Management,
333 W. Wacker Drive President and CEO, Banc One Investment
Chicago, IL 60606 Advisors Corporation, and President,
One Group Mutual Funds; prior thereto,
Executive Vice President, Banc One
Corporation and Chairman and CEO, Banc
One Investment Management Group; Board
of Regents, Luther College; member of
the Wisconsin Bar Association; member
of Board of Directors, Friends of
Boerner Botanical Gardens.
86
NUMBER OF PORTFOLIOS
PRINCIPAL OCCUPATION(S) IN FUND COMPLEX
NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY
AND ADDRESS WITH THE FUNDS OR APPOINTED(2) DURING PAST 5 YEARS BOARD MEMBER
----------------------------------------------------------------------------------------------------------------------------------
BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS (CONTINUED):
----------------------------------------------------------------------------------------------------------------------------------
William J. Schneider Board member 1997 Chairman of Miller-Valentine Partners 171
9/24/44 Ltd., a real estate investment
333 W. Wacker Drive company; formerly, Senior Partner and
Chicago, IL 60606 Chief Operating Officer (retired,
2004) of Miller-Valentine Group;
formerly, Vice President,
Miller-Valentine Realty; Board Member,
Chair of the Finance Committee and
member of the Audit Committee of
Premier Health Partners, the
not-for-profit company of Miami Valley
Hospital; Vice President, Dayton
Philharmonic Orchestra Association;
Board Member, Regional Leaders Forum,
which promotes cooperation on economic
development issues; Director, Dayton
Development Coalition; formerly,
Member, Community Advisory Board,
National City Bank, Dayton, Ohio and
Business Advisory Council, Cleveland
Federal Reserve Bank.
----------------------------------------------------------------------------------------------------------------------------------
Judith M. Stockdale Board member 1997 Executive Director, Gaylord and 171
12/29/47 Dorothy Donnelley Foundation (since
333 W. Wacker Drive 1994); prior thereto, Executive
Chicago, IL 60606 Director, Great Lakes Protection Fund
(from 1990 to 1994).
----------------------------------------------------------------------------------------------------------------------------------
Eugene S. Sunshine Board member 2005 Senior Vice President for Business and 171
1/22/50 Finance, Northwestern University
333 W. Wacker Drive (since 1997); Director (since 2003),
Chicago, IL 60606 Chicago Board Options Exchange;
formerly, Director (2003-2006),
National Mentor Holdings, a
privately-held, national provider of
home and community-based services;
Chairman (since 1997), Board of
Directors, Rubicon, a pure captive
insurance company owned by
Northwestern University; Director
(since 1997), Evanston Chamber of
Commerce and Evanston Inventure, a
business development organization.
NUMBER OF PORTFOLIOS
NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED PRINCIPAL OCCUPATION(S) IN FUND COMPLEX
AND ADDRESS WITH THE FUNDS OR APPOINTED(4) DURING PAST 5 YEARS OVERSEEN BY OFFICER
----------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUND:
----------------------------------------------------------------------------------------------------------------------------------
Gifford R. Zimmerman Chief 1988 Managing Director (since 2002), 171
9/9/56 Administrative Assistant Secretary and Associate
333 W. Wacker Drive Officer General Counsel, formerly, Vice
Chicago, IL 60606 President and Assistant General
Counsel, of Nuveen Investments, LLC;
Managing Director (2002-2004), General
Counsel (1998-2004) and Assistant
Secretary, formerly, Vice President of
Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp.(3);
Managing Director (since 2002) and
Assistant Secretary and Associate
General Counsel, formerly, Vice
President (since 1997), of Nuveen
Asset Management; Managing Director
(since 2004) and Assistant Secretary
(since 1994) of Nuveen Investments,
Inc.; Assistant Secretary of NWQ
Investment Management Company, LLC.
(since 2002); Vice President and
Assistant Secretary of Nuveen
Investments Advisers Inc. (since
2002); Managing Director, Associate
General Counsel and Assistant
Secretary of Rittenhouse Asset
Management, Inc.; Assistant Secretary
of Symphony Asset Management LLC
(since 2003), Tradewinds NWQ Global
Investors, LLC and Santa Barbara Asset
Management, LLC; (since 2006);
Chartered Financial Analyst.
87
Board Members
AND OFFICERS (CONTINUED)
NUMBER OF PORTFOLIOS
NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED PRINCIPAL OCCUPATION(S) IN FUND COMPLEX
AND ADDRESS WITH THE FUNDS OR APPOINTED(4) DURING PAST 5 YEARS OVERSEEN BY OFFICER
----------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS (CONTINUED):
----------------------------------------------------------------------------------------------------------------------------------
Julia L. Antonatos Vice President 2004 Managing Director (since 2005), 171
9/22/63 formerly Vice President (since 2002);
333 W. Wacker Drive formerly, Assistant Vice President
Chicago, IL 60606 (since 2000) of Nuveen Investments,
LLC; Chartered Financial Analyst.
----------------------------------------------------------------------------------------------------------------------------------
Michael T. Atkinson Vice President 2000 Vice President (since 2002), formerly, 171
2/3/66 and Assistant Assistant Vice President (since 2000)
333 W. Wacker Drive Secretary of Nuveen Investments, LLC.
Chicago, IL 60606
----------------------------------------------------------------------------------------------------------------------------------
Peter H. D'Arrigo Vice President 1999 Vice President and Treasurer of Nuveen 171
11/28/67 Investments, LLC and of Nuveen
333 W. Wacker Drive Investments, Inc. (since 1999); Vice
Chicago, IL 60606 President and Treasurer of Nuveen
Asset Management (since 2002) and of
Nuveen Investments Advisers Inc.
(since 2002); Assistant Treasurer of
NWQ Investment Management Company,
LLC. (since 2002); Vice President and
Treasurer of Nuveen Rittenhouse Asset
Management, Inc. (since 2003);
Treasurer of Symphony Asset Management
LLC (since 2003) and Santa Barbara
Asset Management, LLC (since 2006);
Assistant Treasurer, Tradewinds NWQ
Global Investors, LLC (since 2006);
formerly, Vice President and Treasurer
(1999-2004) of Nuveen Advisory Corp.
and Nuveen Institutional Advisory
Corp.(3); Chartered Financial Analyst.
----------------------------------------------------------------------------------------------------------------------------------
John N. Desmond Vice President 2005 Vice President, Director of Investment 171
8/24/61 Operations, Nuveen Investments, LLC
333 W. Wacker Drive (since January 2005); formerly,
Chicago, IL 60606 Director, Business Manager, Deutsche
Asset Management (2003-2004),
Director, Business Development and
Transformation, Deutsche Trust Bank
Japan (2002-2003); previously, Senior
Vice President, Head of Investment
Operations and Systems, Scudder
Investments Japan, (2000-2002), Senior
Vice President, Head of Plan
Administration and Participant
Services, Scudder Investments
(1995-2002).
----------------------------------------------------------------------------------------------------------------------------------
Jessica R. Droeger Vice President 1998 Vice President (since 2002), Assistant 171
9/24/64 and Secretary Secretary and Assistant General
333 W. Wacker Drive Counsel (since 1998) formerly,
Chicago, IL 60606 Assistant Vice President (since 1998)
of Nuveen Investments, LLC; Vice
President (2002-2004) and Assistant
Secretary (1998-2004) formerly,
Assistant Vice President of Nuveen
Advisory Corp. and Nuveen
Institutional Advisory Corp.(3); Vice
President and Assistant Secretary
(since 2005) of Nuveen Asset
Management.
----------------------------------------------------------------------------------------------------------------------------------
Lorna C. Ferguson Vice President 1998 Managing Director (since 2004), 171
10/24/45 formerly, Vice President of Nuveen
333 W. Wacker Drive Investments, LLC, Managing Director
Chicago, IL 60606 (2004) formerly, Vice President
(1998-2004) of Nuveen Advisory Corp.
and Nuveen Institutional Advisory
Corp.(3); Managing Director (since
2005) of Nuveen Asset Management.
----------------------------------------------------------------------------------------------------------------------------------
William M. Fitzgerald Vice President 1995 Managing Director (since 2002), 171
3/2/64 formerly, Vice President of Nuveen
333 W. Wacker Drive Investments; Managing Director
Chicago, IL 60606 (1997-2004) of Nuveen Advisory Corp.
and Nuveen Institutional Advisory
Corp.(3); Managing Director (since
2001) of Nuveen Asset Management; Vice
President (since 2002) of Nuveen
Investments Advisers Inc.; Chartered
Financial Analyst.
88
NUMBER OF PORTFOLIOS
NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED PRINCIPAL OCCUPATION(S) IN FUND COMPLEX
AND ADDRESS WITH THE FUNDS OR APPOINTED(4) DURING PAST 5 YEARS OVERSEEN BY OFFICER
----------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS (CONTINUED):
----------------------------------------------------------------------------------------------------------------------------------
Stephen D. Foy Vice President 1998 Vice President (since 1993) and Funds 171
5/31/54 and Controller Controller (since 1998) of Nuveen
333 W. Wacker Drive Investments, LLC; formerly, Vice
Chicago, IL 60606 President and Funds Controller
(1998-2004) of Nuveen Investments,
Inc.; Certified Public Accountant.
----------------------------------------------------------------------------------------------------------------------------------
Walter M. Kelly Chief 2003 Vice President and Assistant Secretary 171
2/24/70 Officer and (since 2006) formerly, Assistant Vice
333 West Wacker Drive Vice President President and Assistant General
Chicago, IL 60606 Counsel (since 2003) of Nuveen
Investments, LLC; Vice President
(since 2006) and Assistant Secretary
(since 2003) formerly, Assistant Vice
President of Nuveen Asset Management;
previously, Associate (2001-2003) at
the law firm of Vedder, Price, Kaufman
& Kammholz.
----------------------------------------------------------------------------------------------------------------------------------
David J. Lamb Vice President 2000 Vice President (since 2000) of Nuveen 171
3/22/63 Investments, LLC; Certified Public
333 W. Wacker Drive Accountant.
Chicago, IL 60606
----------------------------------------------------------------------------------------------------------------------------------
Tina M. Lazar Vice President 2002 Vice President of Nuveen Investments, 171
8/27/61 LLC (since 1999).
333 W. Wacker Drive
Chicago, IL 60606
----------------------------------------------------------------------------------------------------------------------------------
Larry W. Martin Vice President 1988 Vice President, Assistant Secretary 171
7/27/51 and Assistant and Assistant General Counsel of
333 W. Wacker Drive Secretary Nuveen Investments, LLC; formerly,
Chicago, IL 60606 Vice President and Assistant Secretary
of Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp.(3); Vice
President (since 2005) and Assistant
Secretary of Nuveen Investments, Inc.;
Vice President (since 2005) and
Assistant Secretary (since 1997) of
Nuveen Asset Management; Vice
President (since 2000), Assistant
Secretary and Assistant General
Counsel (since 1998) of Rittenhouse
Asset Management, Inc.; Vice President
and Assistant Secretary of Nuveen
Investments Advisers Inc. (since
2002); Assistant Secretary of NWQ
Investment Management Company, LLC
(since 2002), Symphony Asset
Management LLC (since 2003) and
Tradewinds NWQ Global Investors, LLC
and Santa Barbara Asset Management,
LLC (since 2006).
(1) Mr. Schwertfeger is an "interested person" of the Funds, as defined in the
Investment Company Act of 1940, because he is an officer and board member
of the Adviser.
(2) Board members serve an indefinite term until his/her successor is elected.
The year first elected or appointed represents the year in which the board
member was first elected or appointed to any fund in the Nuveen Complex.
(3) Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp. were
reorganized into Nuveen Asset Management, effective January 1, 2005.
(4) Officers serve one year terms through July of each year. The year first
elected or appointed represents the year in which the Officer was first
elected or appointed to any fund in the Nuveen Complex.
89
ANNUAL INVESTMENT
MANAGEMENT AGREEMENT
APPROVAL PROCESS
The Board of Trustees is responsible for overseeing the performance of the
investment adviser to the Funds and determining whether to continue the advisory
arrangements. At a meeting held on May 23-25, 2006 (the "MAY MEETING"), the
Board of Trustees of the Funds, including the independent Trustees, unanimously
approved the continuance of the Investment Management Agreement between each
Fund and NAM (the "FUND ADVISER").
THE APPROVAL PROCESS
During the course of the year, the Board received a wide variety of materials
relating to the services provided by the Fund Adviser and the performance of
each Fund. To assist the Board in its evaluation of the advisory contract with
the Fund Adviser at the May Meeting, the independent Trustees received extensive
materials in advance of their meeting which outlined, among other things:
o the nature, extent and quality of services provided by the Fund
Adviser;
o the organization and business operations of the Fund Adviser,
including the responsibilities of various departments and key
personnel;
o the Fund's past performance, the Fund's performance compared to
funds of similar investment objectives compiled by an independent
third party and to customized benchmarks;
o the profitability of the Fund Adviser and certain industry
profitability analyses for unaffiliated advisers;
o the expenses of the Fund Adviser in providing the various services;
o the advisory fees (gross and net management fees) and total expense
ratios of the Fund, including comparisons of such fees and expenses
with those of comparable, unaffiliated funds based on information
and data provided by Lipper (the "PEER UNIVERSE") as well as
compared to a subset of funds within the Peer Universe (the "PEER
GROUP") to the respective Fund (as applicable);
o the advisory fees the Fund Adviser assesses to other types of
investment products or clients;
o the soft dollar practices of the Fund Adviser, if any; and
o from independent legal counsel, a legal memorandum describing, among
other things, the duties of the Trustees under the Investment
Company Act of 1940 (the "1940 ACT") as well as the general
principles of relevant state law in reviewing and approving advisory
contracts; the requirements of the 1940 Act in such matters; an
adviser's fiduciary duty with respect to advisory agreements and
compensation; the standards used by courts in determining whether
investment company boards of directors have fulfilled their duties;
and factors to be considered by the Board in voting on advisory
agreements.
At the May Meeting, the Fund Adviser made a presentation to and responded to
questions from the Board. After the presentations and after reviewing the
written materials, the independent Trustees met privately with their legal
counsel to review the Board's duties in reviewing advisory contracts and
consider the renewal of the advisory contracts. It is with this background that
the Trustees considered the advisory contract with the Fund Adviser. The
independent Trustees, in consultation with independent counsel, reviewed the
factors set out in judicial decisions and SEC directives relating to the renewal
of advisory contracts. As outlined in more detail below, the Trustees considered
all factors they believed relevant with respect to each Fund, including the
following: (a) the nature, extent and quality of the services to be provided by
the Fund Adviser; (b) the investment performance of the Fund and the Fund
Adviser; (c) the costs of the services to be provided and profitability of the
Fund Adviser and its affiliates; (d) the extent to which economies of scale
would be realized as the Fund grows; and (e) whether fee levels reflect these
economies of scale for the benefit of Fund investors.
A. NATURE, EXTENT AND QUALITY OF SERVICES
In reviewing the Fund Adviser, the Trustees considered the nature, extent and
quality of the Fund Adviser's services. The Trustees reviewed materials
outlining, among other things, the Fund Adviser's organization and business; the
types of services that the Fund Adviser or its affiliates provide and are
expected to provide to the Funds; the performance record of the applicable Fund
(as described in further detail below); and any initiatives and enhancements
Nuveen has taken for its municipal fund product line. In connection with their
continued service as Trustees, the Trustees also have a good understanding of
the Fund Adviser's organization, operations and personnel. In this regard, the
Trustees are familiar with and have evaluated the professional experience,
qualifications and credentials of the Fund Adviser's personnel. The Trustees
further reviewed materials describing, among other things, the teams and
90
personnel involved in the investment, research, risk-management and operational
processes involved in managing municipal funds and their respective functions.
Given the Trustees' experience with the Funds and Fund Adviser, the Trustees
recognized the demonstrated history of care and depth of experience of the
respective personnel in managing these Funds. In this regard, the Trustees
considered the continued quality of the Fund Adviser's investment process in
making portfolio management decisions as well as additional refinements and
improvements adopted to the portfolio management processes noted below. With
respect to the services provided to municipal funds, including the Funds, the
Trustees noted that the Fund Adviser continues to make refinements to its
portfolio management process including, among other things, the increased use of
derivatives to enhance management of risk, additional analytical software for
research staff and improved municipal pricing processes.
In addition to advisory services, the independent Trustees considered the
quality of any administrative or non-advisory services provided. The Fund
Adviser provides the Funds with such administrative and other services
(exclusive of, and in addition to, any such services provided by others for the
Funds) and officers and other personnel as are necessary for the operations of
the respective Fund. In connection with the review of the Investment Management
Agreement, the Trustees considered the extent and quality of these other
services which include, among other things, providing: product management (E.G.,
product positioning, performance benchmarking, risk management); fund
administration (E.G., daily net asset value pricing and reconciliation, tax
reporting, fulfilling regulatory filing requirements); oversight of third party
service providers; administration of board relations (E.G., organizing board
meetings and preparing related materials); compliance (E.G., monitoring
compliance with investment policies and guidelines and regulatory requirements);
and legal support (E.G., helping prepare and file registration statements,
amendments thereto, proxy statements and responding to regulatory requests
and/or inquiries). As the Funds operate in a highly regulated industry and given
the importance of compliance, the Trustees considered, in particular, the
additions of experienced personnel to the compliance teams and the enhancements
to technology and related systems to support the compliance activities for the
Funds (including a new reporting system for quarterly portfolio holdings).
In addition to the foregoing, the Trustees also noted the additional services
that the Fund Adviser or its affiliates provide to closed-end funds, including,
in particular, secondary market support activities. The Trustees recognized
Nuveen's continued commitment to supporting the secondary market for the common
shares of its closed-end funds through a variety of initiatives designed to
raise investor and analyst awareness and understanding of closed-end funds.
These efforts include providing advertising and other media relations programs,
continued contact with analysts, maintaining and enhancing its website for
closed-end funds, and targeted advisor communication programs. With respect to
funds that utilize leverage through the issuance of preferred shares, the
Trustees noted Nuveen's continued support for the preferred shares by
maintaining, among other things, an in-house preferred trading desk; designating
a product manager whose responsibilities include creating and disseminating
product information and managing relations in connection with the preferred
share auction; and maintaining systems necessary to test compliance with rating
agency requirements.
Based on their review, the Trustees found that, overall, the nature, extent and
quality of services provided (and expected to be provided) to the respective
Funds under the Investment Management Agreement were of a high level and were
satisfactory.
B. THE INVESTMENT PERFORMANCE OF THE FUND AND FUND ADVISER
The Board considered the investment performance for each Fund, including the
Fund's historic performance as well as its performance compared to funds with
similar investment objectives identified by an independent third party (the
"PERFORMANCE PEER GROUP") and portfolio level performance against customized
benchmarks, as described below. In evaluating the performance information, in
certain instances, the Trustees noted that the closest Performance Peer Group
for a fund still may not adequately reflect such fund's investment objectives,
strategies and portfolio duration, thereby limiting the usefulness of the
comparisons of such fund's performance with that of the Performance Peer Group.
With respect to state specific municipal funds, the Trustees recognized that
certain state municipal funds do not have a corresponding state specific
Performance Peer Group in which case their performance is measured against a
more general municipal category for various states. The closed-end state
municipal funds that do not have corresponding state-specific Performance Peer
Groups are from Arizona, Connecticut, Georgia, Maryland, Massachusetts,
Missouri, North Carolina, Ohio, Texas, and Virginia. Further, due to a lack of
state-specific unleveraged categories, certain unleveraged state municipal funds
are included in their leveraged state category (such as, the Nuveen California
Select Tax-Free Income Fund, Nuveen California Municipal Value Fund, Nuveen New
York Select Tax-Free Income Fund and Nuveen New York Municipal Value Fund).
In reviewing performance, the Trustees reviewed performance information
including, among other things, total return information compared with the Fund's
Performance Peer Group for the one-, three- and five-year periods (as
applicable) ending December 31, 2005. The Trustees also reviewed the Fund's
portfolio level performance (which does not reflect fund level fees and
expenses) compared to customized portfolio-level benchmarks for the one- and
three-year periods ending December 31, 2005 (as applicable). This analysis is
designed to assess the efficacy of investment decisions against appropriate
measures of risk and total return, within specific market segments. This
information supplements the Fund performance information provided to the Board
at each of their quarterly meetings. Based on their review, the Trustees
determined that the respective Fund's absolute and relative investment
performance over time had been satisfactory.
C. FEES, EXPENSES AND PROFITABILITY
1. FEES AND EXPENSES
In evaluating the management fees and expenses of a Fund, the Board
reviewed, among other things, the Fund's advisory fees (net and gross
management fees) and total expense ratios (before and after expense
reimbursements and/or waivers) in absolute terms as well as comparisons to
the gross management fees (before waivers), net management fees (after
waivers) and total expense ratios (before and after waivers) of comparable
funds in the Peer Universe and the Peer Group. The Trustees reviewed data
regarding the construction of Peer Groups as well as the methods of
measurement for the fee and expense analysis and the performance analysis.
In certain cases, due to the small number of peers in the Peer Universe,
the Peer Universe and Peer Group
91
ANNUAL INVESTMENT MANAGEMENT
AGREEMENT APPROVAL PROCESS (continued)
may be the same. Further, the Trustees recognized that in certain cases
the closest Peer Universe and/or Peer Group did not adequately reflect a
fund's investment objectives and strategies limiting the usefulness of
comparisons. In reviewing comparisons, the Trustees also considered the
size of the Peer Universe and/or Peer Group, the composition of the Peer
Group (including differences in the use of leverage and insurance) as well
as differing levels of fee waivers and/or expense reimbursements. In this
regard, the Trustees considered the fund-level and complex-wide breakpoint
schedules (described in further detail below) and any fee waivers and
reimbursements provided by Nuveen (applicable, in particular, for certain
funds launched since 1999). Based on their review of the fee and expense
information provided, the Trustees determined that each Fund's net total
expense ratio was within an acceptable range compared to peers.
2. COMPARISONS WITH THE FEES OF OTHER CLIENTS
The Trustees further reviewed data comparing the advisory fees of the Fund
Adviser with fees the Fund Adviser charges to other clients, including
municipal managed accounts. In general, the fees charged for separate
accounts are somewhat lower than the fees assessed to the Funds. The
Trustees recognized that the differences in fees are attributable to a
variety of factors, including the differences in services provided,
product distribution, portfolio investment policies, investor profiles,
account sizes and regulatory requirements. The Trustees noted, in
particular, that the range of services provided to the Funds is more
extensive than that provided to managed separate accounts. As described in
further detail above, such additional services include, but are not
limited to, providing: product management, fund administration, oversight
of third party service providers, administration of board relations, and
legal support. Funds further operate in a highly regulated industry
requiring extensive compliance functions compared to the other investment
products. In addition to the costs of the additional services,
administrative costs may also be greater for funds as the average account
size for separate accounts is notably larger than the retail accounts of
funds. Given the differences in the product structures, particularly the
extensive services provided to closed-end municipal funds, the Trustees
believe such facts justify the different levels of fees.
3. PROFITABILITY OF FUND ADVISER
In conjunction with its review of fees, the Trustees also considered the
profitability of Nuveen Investments for advisory activities (which
incorporated Nuveen's wholly-owned affiliated sub-advisers). The Trustees
reviewed data comparing Nuveen's profitability with other fund sponsors
prepared by three independent third party service providers as well as
comparisons of the revenues, expenses and profits margins of various
unaffiliated management firms with similar amounts of assets under
management prepared by Nuveen. The Trustees further reviewed the 2005
Annual Report for Nuveen Investments. In considering profitability, the
Trustees recognized the inherent limitations in determining profitability
as well as the difficulties in comparing the profitability of other
unaffiliated advisers. Profitability may be affected by numerous factors,
including the methodology for allocating expenses, the adviser's business
mix, the types of funds managed, the adviser's capital structure and cost
of capital. Further, individual fund or product line profitability of
other sponsors is generally not publicly available. Accordingly, the
profitability information that is publicly available from various
investment advisory or management firms may not be representative of the
industry.
Notwithstanding the foregoing, in reviewing profitability, the Trustees reviewed
Nuveen's methodology and assumptions for allocating expenses across product
lines to determine profitability. In this regard, the methods of allocation used
appeared reasonable. The Trustees also, to the extent available, compared
Nuveen's profitability margins (including pre- and post-marketing profit
margins) with the profitability of various unaffiliated management firms. The
Trustees noted that Nuveen's profitability is enhanced due to its efficient
internal business model. The Trustees also recognized that while a number of
factors affect profitability, Nuveen's profitability may change as fee waivers
and/or expense reimbursement commitments of Nuveen to various funds in the
Nuveen complex expire. To keep apprised of profitability and developments that
may affect profitability, the Trustees have requested profitability analysis be
provided periodically during the year. Based on their review, the Trustees were
satisfied that the Fund Adviser's level of profitability was reasonable in light
of the services provided.
In evaluating the reasonableness of the compensation, the Trustees also
considered any other revenues paid to the Fund Adviser as well as any indirect
benefits (such as soft dollar arrangements, if any) the Fund Adviser and its
affiliates are expected to receive that are directly attributable to their
management of the Funds, if any. See Section E below for additional information.
Based on their review of the overall fee arrangements of the applicable Fund,
the Trustees determined that the advisory fees and expenses of the respective
Fund were reasonable.
92
D. ECONOMIES OF SCALE AND WHETHER FEE LEVELS REFLECT THESE ECONOMIES OF SCALE
With respect to economies of scale, the Trustees recognized the potential
benefits resulting from the costs of a fund being spread over a larger asset
base as a fund grows. To help ensure the shareholders share in these benefits,
the Trustees have reviewed and considered the breakpoints in the advisory fee
schedules that reduce advisory fees as the applicable Fund's assets grow. In
addition to advisory fee breakpoints as assets in a respective Fund rise, after
lengthy discussions with management, the Board also approved a complex-wide fee
arrangement that was introduced on August 1, 2004. Pursuant to the complex-wide
fee arrangement, the fees of the funds in the Nuveen complex, including the
Funds, are reduced as the assets in the fund complex reach certain levels. In
evaluating the complex-wide fee arrangement, the Trustees considered, among
other things, the historic and expected fee savings to shareholders as assets
grow, the amount of fee reductions at various asset levels, and that the
arrangement would extend to all funds in the Nuveen complex. The Trustees noted
that 2005 was the first full year to reflect the fee reductions from the complex
wide fee arrangement. The Trustees also considered the impact, if any, the
complex-wide fee arrangement may have on the level of services provided. Based
on their review, the Trustees concluded that the breakpoint schedule and
complex-wide fee arrangement currently was acceptable and desirable in providing
benefits from economies of scale to shareholders.
E. INDIRECT BENEFITS
In evaluating fees, the Trustees also considered any indirect benefits or
profits the Fund Adviser or its affiliates may receive as a result of its
relationship with each Fund. In this regard, the Trustees considered revenues
received by affiliates of the Fund Adviser for serving as agent at Nuveen's
preferred trading desk and for serving as a co-manager in the initial public
offering of new closed-end exchange traded funds.
In addition to the above, the Trustees considered whether the Fund Adviser
received any benefits from soft dollar arrangements. With respect to NAM, the
Trustees noted that NAM does not currently have any soft dollar arrangements and
does not pay excess brokerage commissions (or spreads on principal transactions)
in order to receive research services; however, the Fund Adviser may from time
to time receive and have access to research generally provided to institutional
clients.
F. APPROVAL
The Trustees did not identify any single factor discussed previously as
all-important or controlling. The Trustees, including a majority of independent
Trustees, concluded that the terms of the Investment Management Agreements were
fair and reasonable, that the Fund Adviser's fees are reasonable in light of the
services provided to each Fund, and that the renewal of the Investment
Management Agreements should be approved.
93
Reinvest Automatically
EASILY AND CONVENIENTLY
Sidebar text: NUVEEN MAKES REINVESTING EASY. A PHONE CALL IS ALL IT TAKES TO SET
UP YOUR REINVESTMENT ACCOUNT.
NUVEEN CLOSED-END FUNDS
DIVIDEND REINVESTMENT PLAN
Your Nuveen Closed-End Fund allows you to conveniently reinvest dividends and/or
capital gains distributions in additional fund shares.
By choosing to reinvest, you'll be able to invest money regularly and
automatically, and watch your investment grow through the power of tax-free
compounding. Just like dividends or distributions in cash, there may be times
when income or capital gains taxes may be payable on dividends or distributions
that are reinvested.
It is important to note that an automatic reinvestment plan does not ensure a
profit, nor does it protect you against loss in a declining market.
EASY AND CONVENIENT
To make recordkeeping easy and convenient, each month you'll receive
a statement showing your total dividends and distributions, the date of
investment, the shares acquired and the price per share, and the total number of
shares you own.
HOW SHARES ARE PURCHASED
The shares you acquire by reinvesting will either be purchased on the open
market or newly issued by the Fund. If the shares are trading at or above net
asset value at the time of valuation, the Fund will issue new shares at the
then-current market price. If the shares are trading at less than net asset
value, shares for your account will be purchased on the open market. Dividends
and distributions received to purchase shares in the open market will normally
be invested shortly after the dividend payment date. No interest will be paid on
dividends and distributions awaiting reinvestment. Because the market price of
the shares may increase before purchases are completed, the average purchase
price per share may exceed the market price at the time of valuation, resulting
in the acquisition of fewer shares than if the dividend or distribution had been
paid in shares issued by the Fund. A pro rata portion of any applicable
brokerage commissions on open market purchases will be paid by Plan
participants. These commissions usually will be lower than those charged on
individual transactions.
FLEXIBLE
You may change your distribution option or withdraw from the Plan at any time,
should your needs or situation change. Should you withdraw, you can receive a
certificate for all whole shares credited to your reinvestment account and cash
payment for fractional shares, or cash payment for all reinvestment account
shares, less brokerage commissions and a $2.50 service fee.
You can reinvest whether your shares are registered in your name, or in the name
of a brokerage firm, bank, or other nominee. Ask your investment advisor if his
or her firm will participate on your behalf. Participants whose shares are
registered in the name of one firm may not be able to transfer the shares to
another firm and continue to participate in the Plan.
The Fund reserves the right to amend or terminate the Plan at any time. Although
the Fund reserves the right to amend the Plan to include a service charge
payable by the participants, there is no direct service charge to participants
in the Plan at this time.
CALL TODAY TO START REINVESTING DIVIDENDS AND/OR DISTRIBUTIONS
For more information on the Nuveen Automatic Reinvestment Plan or to enroll in
or withdraw from the Plan, speak with your financial advisor or call us at (800)
257-8787.
94
Automatic Dividend
REINVESTMENT PLAN
NOTICE OF AMENDMENT TO THE TERMS AND CONDITIONS
These Funds are amending the terms and conditions of their Automatic Dividend
Reinvestment Plan (the "Plan") as further described below effective with the
close of business on February 1st, 2007. THESE CHANGES ARE INTENDED TO ENABLE
PLAN PARTICIPANTS UNDER CERTAIN CIRCUMSTANCES TO REINVEST FUND DISTRIBUTIONS AT
A LOWER AGGREGATE COST THAN IS POSSIBLE UNDER THE EXISTING PLAN. Shareholders
who do not wish to continue as participants under the amended Plan may withdraw
from the Plan by notifying the Plan Agent prior to the effective date of the
amendments. Participants should refer to their Plan document for notification
instructions, or may simply call Nuveen at (800) 257-8787.
Fund shareholders who elect to participate in the Plan are able to have Fund
distributions consisting of income dividends, realized capital gains and returns
of capital automatically reinvested in additional Fund shares. Under the Plan's
existing terms, the Plan Agent purchases Fund shares in the open market if the
Fund's shares are trading at a discount to their net asset value on the payable
date for the distribution. If the Fund's shares are trading at or above their
net asset value on the payable date for the distribution, the Plan Agent
purchases newly-issued Fund shares directly from the Fund at a price equal to
the greater of the shares' net asset value or 95% of the shares' market value.
Under the Plan's amended terms, if the Plan Agent begins purchasing Fund shares
on the open market while shares are trading below net asset value, but the
Fund's shares subsequently trade at or above their net asset value before the
Plan Agent is able to complete its purchases, the Plan Agent may cease
open-market purchases and may invest the uninvested portion of the distribution
in newly-issued Fund shares at a price equal to the greater of the shares' net
asset value or 95% of the shares' market value. This change will permit Plan
participants under these circumstances to reinvest Fund distributions at a lower
aggregate cost than is possible under the existing Plan.
95
Notes
96
Notes
97
Notes
98
Other Useful
INFORMATION
QUARTERLY PORTFOLIO OF INVESTMENTS AND PROXY VOTING INFORMATION
Each Fund's (i) quarterly portfolio of investments, (ii) information regarding
how the Funds voted proxies relating to portfolio securities held during the
12-month period ended June 30, 2006, and (iii) a description of the policies and
procedures that the Funds used to determine how to vote proxies relating to
portfolio securities are available without charge, upon request, by calling
Nuveen Investments toll-free at (800) 257-8787 or on Nuveen's website at
www.nuveen.com.
You may also obtain this and other Fund information directly from the Securities
and Exchange Commission ("SEC"). The SEC may charge a copying fee for this
information. Visit the SEC on-line at http://www.sec.gov or in person at the
SEC's Public Reference Room in Washington, D.C. Call the SEC at 1-202-942-8090
for room hours and operation. You may also request Fund information by sending
an e-mail request to publicinfo@sec.gov or by writing to the SEC's Public
References Section at 450 Fifth Street NW, Washington, D.C. 20549.
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.
MODIFIED DURATION: Duration is a measure of the expected period over which a
bond's principal and interest will be paid, and consequently is a measure of the
sensitivity of a bond's or bond Fund's value to changes when market interest
rates change. Generally, the longer a bond's or Fund's duration, the more the
price of the bond or Fund will change as interest rates change.
MARKET YIELD (ALSO KNOWN AS DIVIDEND YIELD OR CURRENT YIELD): An investment's
current annualized dividend divided by its current market price.
NET ASSET VALUE (NAV): A Fund's common share NAV per share is calculated by
subtracting the liabilities of the Fund (including any MuniPreferred shares
issued in order to leverage the Fund) from its total assets and then dividing
the remainder by the number of shares outstanding. Fund NAVs are calculated at
the end of each business day.
TAXABLE-EQUIVALENT YIELD: The yield necessary from a fully taxable investment to
equal, on an after-tax basis, the yield of a municipal bond investment.
BOARD OF DIRECTORS/TRUSTEES
Robert P. Bremner
Lawrence H. Brown
Jack B. Evans
William C. Hunter
David J. Kundert
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
Eugene S. Sunshine
FUND MANAGER
Nuveen Asset Management
333 West Wacker Drive
Chicago, IL 60606
CUSTODIAN
State Street Bank & Trust Company
Boston, MA
TRANSFER AGENT AND SHAREHOLDER SERVICES
State Street Bank & Trust Company
Nuveen Funds
P.O. Box 43071
Providence, RI 02940-3071
(800) 257-8787
LEGAL COUNSEL
Chapman and Cutler LLP
Chicago, IL
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Ernst & Young LLP
Chicago, IL
EACH FUND INTENDS TO REPURCHASE SHARES OF ITS OWN COMMON OR PREFERRED STOCK
IN THE FUTURE AT SUCH TIMES AND IN SUCH AMOUNTS AS IS DEEMED ADVISABLE. NO
SHARES WERE REPURCHASED DURING THE PERIOD COVERED BY THIS REPORT. ANY FUTURE
REPURCHASES WILL BE REPORTED TO SHAREHOLDERS IN THE NEXT ANNUAL OR SEMIANNUAL
REPORT.
99
Nuveen Investments:
SERVING Investors
For GENERATIONS
Photo of: 2 women looking at a photo album.
Since 1898, financial advisors and their clients have relied on Nuveen
Investments to provide dependable investment solutions. For the past century,
Nuveen Investments has adhered to the belief that the best approach to investing
is to apply conservative risk-management principles to help minimize volatility.
Building on this tradition, we today offer a range of high quality equity and
fixed-income solutions that are integral to a well-diversified core portfolio.
Our clients have come to appreciate this diversity, as well as our continued
adherence to proven, long-term investing principles.
WE OFFER MANY DIFFERENT INVESTING SOLUTIONS FOR OUR CLIENTS' DIFFERENT NEEDS.
Managing more than $154 billion in assets, Nuveen Investments offers access to a
number of different asset classes and investing solutions through a variety of
products. Nuveen Investments markets its capabilities under four distinct
brands: Nuveen, a leader in fixed-income investments; NWQ, a leader in
value-style equities; Rittenhouse, a leader in growth-style equities; and
Symphony, a leading institutional manager of market-neutral alternative
investment portfolios.
FIND OUT HOW WE CAN HELP YOU REACH YOUR FINANCIAL GOALS.
To learn more about the products and services Nuveen Investments offers, talk to
your financial advisor, or call us at (800) 257-8787. Please read the
information provided carefully before you invest.
BE SURE TO OBTAIN A PROSPECTUS, WHERE APPLICABLE. INVESTORS SHOULD CONSIDER THE
INVESTMENT OBJECTIVE AND POLICIES, RISK CONSIDERATIONS, CHARGES AND EXPENSES OF
THE FUND CAREFULLY BEFORE INVESTING. THE PROSPECTUS CONTAINS THIS AND OTHER
INFORMATION RELEVANT TO AN INVESTMENT IN THE FUND. FOR A PROSPECTUS, PLEASE
CONTACT YOUR SECURITIES REPRESENTATIVE OR NUVEEN INVESTMENTS, 333 W. WACKER DR.,
CHICAGO, IL 60606. PLEASE READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST OR
SEND MONEY.
o Share prices
Learn more o Fund details
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www.nuveen.com/cef o Investor education
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[LOGO]
NUVEEN
INVESTMENTS
EAN-D-1006D
ITEM 2. CODE OF ETHICS.
As of the end of the period covered by this report, the registrant has adopted a
code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions. There were no amendments to or waivers
from the Code during the period covered by this report. The registrant has
posted the code of ethics on its website at www.nuveen.com/etf. (To view the
code, click on the Investor Resources drop down menu box, click on Fund
Governance and then click on Code of Conduct.)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Directors or Trustees determined that the registrant
has at least one "audit committee financial expert" (as defined in Item 3 of
Form N-CSR) serving on its Audit Committee. The registrant's audit committee
financial expert is Jack B. Evans, Chairman of the Audit Committee, who is
"independent" for purposes of Item 3 of Form N-CSR.
Mr. Evans was formerly President and Chief Operating Officer of SCI Financial
Group, Inc., a full service registered broker-dealer and registered investment
adviser ("SCI"). As part of his role as President and Chief Operating Officer,
Mr. Evans actively supervised the Chief Financial Officer (the "CFO") and
actively supervised the CFO's preparation of financial statements and other
filings with various regulatory authorities. In such capacity, Mr. Evans was
actively involved in the preparation of SCI's financial statements and the
resolution of issues raised in connection therewith. Mr. Evans has also served
on the audit committee of various reporting companies. At such companies, Mr.
Evans was involved in the oversight of audits, audit plans, and the preparation
of financial statements. Mr. Evans also formerly chaired the audit committee of
the Federal Reserve Bank of Chicago.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Nuveen Insured Municipal Opportunity Fund, Inc.
The following tables show the amount of fees that Ernst & Young LLP, the Fund's
auditor, billed to the Fund during the Fund's last two full fiscal years. For
engagements with Ernst & Young LLP the Audit Committee approved in advance all
audit services and non-audit services that Ernst & Young LLP provided to the
Fund, except for those non-audit services that were subject to the pre-approval
exception under Rule 2-01 of Regulation S-X (the "pre-approval exception"). The
pre-approval exception for services provided directly to the Fund waives the
pre-approval requirement for services other than audit, review or attest
services if: (A) the aggregate amount of all such services provided constitutes
no more than 5% of the total amount of revenues paid by the Fund to its
accountant during the fiscal year in which the services are provided; (B) the
Fund did not recognize the services as non-audit services at the time of the
engagement; and (C) the services are promptly brought to the Audit Committee's
attention, and the Committee (or its delegate) approves the services before the
audit is completed.
The Audit Committee has delegated certain pre-approval responsibilities to its
Chairman (or, in his absence, any other member of the Audit Committee).
SERVICES THAT THE FUND'S AUDITOR BILLED TO THE FUND
AUDIT FEES BILLED AUDIT-RELATED FEES TAX FEES ALL OTHER FEES
FISCAL YEAR ENDED TO FUND (1) BILLED TO FUND (2) BILLED TO FUND (3) BILLED TO FUND (4)
----------------------------------------------------------------------------------------------------------------------
October 31, 2006 $ 54,258 $ 0 $ 400 $ 2,950
----------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0% 0%
pursuant to
pre-approval
exception
----------------------------------------------------------------------------------------------------------------------
October 31, 2005 $ 51,443 $ 0 $ 619 $ 2,750
----------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0% 0%
pursuant to
pre-approval
exception
----------------------------------------------------------------------------------------------------------------------
(1) "Audit Fees" are the aggregate fees billed for professional services for
the audit of the Fund's annual financial statements and services provided
in connection with statutory and regulatory filings or engagements.
(2) "Audit Related Fees" are the aggregate fees billed for assurance and
related services reasonably related to the performance of the audit or
review of financial statements and are not reported under "Audit Fees".
(3) "Tax Fees" are the aggregate fees billed for professional services for tax
advice, tax compliance, and tax planning.
(4) "All Other Fees" are the aggregate fees billed for products and services
other than "Audit Fees", "Audit Related Fees", and "Tax Fees".
SERVICES THAT THE FUND'S AUDITOR BILLED TO THE
ADVISER AND AFFILIATED FUND SERVICE PROVIDERS
The following tables show the amount of fees billed by Ernst & Young LLP to
Nuveen Asset Management ("NAM" or the "Adviser"), and any entity controlling,
controlled by or under common control with NAM ("Control Affiliate") that
provides ongoing services to the Fund ("Affiliated Fund Service Provider"), for
engagements directly related to the Fund's operations and financial reporting,
during the Fund's last two full fiscal years.
The tables also show the percentage of fees subject to the pre-approval
exception. The pre-approval exception for services provided to the Adviser and
any Affiliated Fund Service Provider (other than audit, review or attest
services) waives the pre-approval requirement if: (A) the aggregate amount of
all such services provided constitutes no more than 5% of the total amount of
revenues paid to Ernst & Young LLP by the Fund, the Adviser and Affiliated Fund
Service Providers during the fiscal year in which the services are provided that
would have to be pre-approved by the Audit Committee; (B) the Fund did not
recognize the services as non-audit services at the time of the engagement; and
(C) the services are promptly brought to the Audit Committee's attention, and
the Committee (or its delegate) approves the services before the Fund's audit is
completed.
FISCAL YEAR ENDED AUDIT-RELATED FEES TAX FEES BILLED TO ALL OTHER FEES
BILLED TO ADVISER AND ADVISER AND BILLED TO ADVISER
AFFILIATED FUND AFFILIATED FUND AND AFFILIATED FUND
SERVICE PROVIDERS SERVICE PROVIDERS (1) SERVICE PROVIDERS
-----------------------------------------------------------------------------------------------------
October 31, 2006 $ 0 $ 2,200 $ 0
-----------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
-----------------------------------------------------------------------------------------------------
October 31, 2005 $ 0 $ 2,200 $ 0
-----------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
-----------------------------------------------------------------------------------------------------
(1) The amounts reported for the Fund under the column heading "Tax Fees"
represents amounts billed to the Adviser exclusively for the preparation
for the Fund's tax return, the cost of which is borne by the Adviser. In
the aggregate, for all Nuveen funds for which Ernst & Young LLP serves as
independent registered public accounting firm, these fees amounted to
$275,000 in 2006 and $282,575 in 2005.
NON-AUDIT SERVICES
The following table shows the amount of fees that Ernst & Young LLP billed
during the Fund's last two full fiscal years for non-audit services. The Audit
Committee is required to pre-approve non-audit services that Ernst & Young LLP
provides to the Adviser and any Affiliated Fund Services Provider, if the
engagement related directly to the Fund's operations and financial reporting
(except for those subject to the de minimis exception described above). The
Audit Committee requested and received information from Ernst & Young LLP about
any non-audit services that Ernst & Young LLP rendered during the Fund's last
fiscal year to the Adviser and any Affiliated Fund Service Provider. The
Committee considered this information in evaluating Ernst & Young LLP's
independence.
FISCAL YEAR ENDED TOTAL NON-AUDIT FEES
BILLED TO ADVISER AND
AFFILIATED FUND SERVICE TOTAL NON-AUDIT FEES
PROVIDERS (ENGAGEMENTS BILLED TO ADVISER AND
RELATED DIRECTLY TO THE AFFILIATED FUND SERVICE
TOTAL NON-AUDIT FEES OPERATIONS AND FINANCIAL PROVIDERS (ALL OTHER
BILLED TO FUND REPORTING OF THE FUND) ENGAGEMENTS) TOTAL
-----------------------------------------------------------------------------------------------------------------------
October 31, 2006 $ 3,350 $ 2,200 $ 0 $ 5,550
October 31, 2005 $ 3,369 $ 2,200 $ 0 $ 5,569
"Non-Audit Fees billed to Adviser" for both fiscal year ends represent "Tax
Fees" billed to Adviser in their respective amounts from the previous table.
Audit Committee Pre-Approval Policies and Procedures. Generally, the Audit
Committee must approve (i) all non-audit services to be performed for the Fund
by the Fund's independent accountants and (ii) all audit and non-audit services
to be performed by the Fund's independent accountants for the Affiliated Fund
Service Providers with respect to operations and financial reporting of the
Fund. Regarding tax and research projects conducted by the independent
accountants for the Fund and Affiliated Fund Service Providers (with respect to
operations and financial reports of the Fund) such engagements will be (i)
pre-approved by the Audit Committee if they are expected to be for amounts
greater than $10,000; (ii) reported to the Audit Committee chairman for his
verbal approval prior to engagement if they are expected to be for amounts under
$10,000 but greater than $5,000; and (iii) reported to the Audit Committee at
the next Audit Committee meeting if they are expected to be for an amount under
$5,000.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The registrant's Board of Directors or Trustees has a separately designated
Audit Committee established in accordance with Section 3(a)(58)(A) of the
Securities Exchange Act of 1934, as amended (15 U.S.C. 78c(a)(58)(A)). The
members of the audit committee are Robert P. Bremner, Lawrence H. Brown, Jack B.
Evans, William J. Schneider and Eugene S. Sunshine.
ITEM 6. SCHEDULE OF INVESTMENTS.
See Portfolio of Investments in Item 1.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
The registrant invests its assets primarily in municipal bonds and cash
management securities. On rare occasions the registrant may acquire, directly or
through a special purpose vehicle, equity securities of a municipal bond issuer
whose bonds the registrant already owns when such bonds have deteriorated or are
expected shortly to deteriorate significantly in credit quality. The purpose of
acquiring equity securities generally will be to acquire control of the
municipal bond issuer and to seek to prevent the credit deterioration or
facilitate the liquidation or other workout of the distressed issuer's credit
problem. In the course of exercising control of a distressed municipal issuer,
NAM may pursue the registrant's interests in a variety of ways, which may entail
negotiating and executing consents, agreements and other arrangements, and
otherwise influencing the management of the issuer. NAM does not consider such
activities proxy voting for purposes of Rule 206(4)-6 under the 1940 Act, but
nevertheless provides reports to the registrant's Board of Trustees on its
control activities on a quarterly basis.
In the rare event that a municipal issuer were to issue a proxy or that the
registrant were to receive a proxy issued by a cash management security, NAM
would either engage an independent third party to determine how the proxy should
be voted or vote the proxy with the consent, or based on the instructions, of
the registrant's Board of Trustees or its representative. A member of NAM's
legal department would oversee the administration of the voting, and ensure that
records were maintained in accordance with Rule 206(4)-6, reports were filed
with the SEC on Form N-PX, and the results provided to the registrant's Board of
Trustees and made available to shareholders as required by applicable rules.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
THE PORTFOLIO MANAGER
The following individual has primary responsibility for the day-to-day
implementation of the registrant's investment strategies:
NAME FUND
Paul Brennan Nuveen Insured Municipal Opportunity Fund, Inc.
Other Accounts Managed. In addition to managing the registrant, the portfolio
manager is also primarily responsible for the day-to-day portfolio management of
the following accounts:
NUMBER OF
PORTFOLIO MANAGER TYPE OF ACCOUNT MANAGED ACCOUNTS ASSETS
--------------------------------------------------------------------------------
Paul Brennan Registered Investment Company 14 $10.642 billion
Other Pooled Investment Vehicles 0 $0.00
Other Accounts 1 $.6 million
* Assets are as of October 31, 2006. None of the assets in these accounts are
subject to an advisory fee based on performance.
Compensation. Each portfolio manager's compensation consists of three basic
elements--base salary, cash bonus and long-term incentive compensation. The
compensation strategy is to annually compare overall compensation, including
these three elements, to the market in order to create a compensation structure
that is competitive and consistent with similar financial services companies. As
discussed below, several factors are considered in determining each portfolio
manager's total compensation. In any year these factors may include, among
others, the effectiveness of the investment strategies recommended by the
portfolio manager's investment team, the investment performance of the accounts
managed by the portfolio manager, and the overall performance of Nuveen
Investments, Inc. (the parent company of NAM). Although investment performance
is a factor in determining the portfolio manager's compensation, it is not
necessarily a decisive factor. The portfolio manager's performance is evaluated
in part by comparing manager's performance against a specified investment
benchmark. This fund-specific benchmark is a customized subset (limited to bonds
in each Fund's specific state and with certain maturity parameters) of the
S&P/Investortools Municipal Bond index, an index comprised of bonds held by
managed municipal bond fund customers of Standard & Poor's Securities Pricing,
Inc. that are priced daily and whose fund holdings aggregate at least $2
million. As of October 31, 2006, the S&P/Investortools Municipal Bond index was
comprised of 48,513 securities with an aggregate current market value of $
923,532 billion.
Base salary. Each portfolio manager is paid a base salary that is set at a level
determined by NAM in accordance with its overall compensation strategy discussed
above. NAM is not under any current contractual obligation to increase a
portfolio manager's base salary.
Cash bonus. Each portfolio manager is also eligible to receive an annual cash
bonus. The level of this bonus is based upon evaluations and determinations made
by each portfolio manager's supervisors, along with reviews submitted by his
peers. These reviews and evaluations often take into account a number of
factors, including the effectiveness of the investment strategies recommended to
the NAM's investment team, the performance of the accounts for which he serves
as portfolio manager relative to any benchmarks established for those accounts,
his effectiveness in communicating investment performance to stockholders and
their representatives, and his contribution to the NAM's investment process and
to the execution of investment strategies. The cash bonus component is also
impacted by the overall performance of Nuveen Investments, Inc. in achieving its
business objectives.
Long-term incentive compensation. Each portfolio manager is eligible to receive
bonus compensation in the form of equity-based awards issued in securities
issued by Nuveen Investments, Inc. The amount of such compensation is dependent
upon the same factors articulated for cash bonus awards but also factors in his
long-term potential with the firm.
Material Conflicts of Interest. Each portfolio manager's simultaneous management
of the registrant and the other accounts noted above may present actual or
apparent conflicts of interest with respect to the allocation and aggregation of
securities orders placed on behalf of the Registrant and the other account. NAM,
however, believes that such potential conflicts are mitigated by the fact that
the NAM has adopted several policies that address potential conflicts of
interest, including best execution and trade allocation policies that are
designed to ensure (1) that portfolio management is seeking the best price for
portfolio securities under the circumstances, (2) fair and equitable allocation
of investment opportunities among accounts over time and (3) compliance with
applicable regulatory requirements. All accounts are to be treated in a
non-preferential manner, such that allocations are not based upon account
performance, fee structure or preference of the portfolio manager. In addition,
NAM has adopted a Code of Conduct that sets forth policies regarding conflicts
of interest.
Beneficial Ownership of Securities. As of the October 31, 2006, the portfolio
manager beneficially owned the following dollar range of equity securities
issued by the Registrant and other Nuveen Funds managed by NAM's municipal
investment team.
---------------------------------------------------------------------------------------------------------------------------
DOLLAR
RANGE OF
DOLLAR EQUITY
RANGE OF SECURITIES
EQUITY BENEFICIALLY
SECURITIES OWNED IN
BENEFICIALLY THE
OWNED IN REMAINDER
FUND OF NUVEEN
FUNDS
MANAGED BY
NAM'S
MUNICIPAL
NAME OF PORTFOLIO INVESTMENT
MANAGER FUND TEAM
---------------------------------------------------------------------------------------------------------------------------
Paul Brennan Nuveen Insured Municipal Opportunity Fund, Inc. $0 $10,001 - $50,000
---------------------------------------------------------------------------------------------------------------------------
PORTFOLIO MANAGER BIO:
Paul Brennan, CFA, CPA, became a portfolio manager of Flagship Financial Inc. in
1994, and subsequently became an Assistant Vice President of NAM upon the
acquisition of Flagship Resources Inc. by Nuveen in 1997. He became Vice
President of NAM in 2002. He currently manages investments for 15
Nuveen-sponsored investment companies.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the registrants Board implemented after the registrant
last provided disclosure in response to this item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of this report that includes the disclosure
required by this paragraph, based on their evaluation of the controls
and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")
(17 CFR 240.13a-15(b) or 240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter
of the period covered by this report that has materially affected, or
is reasonably likely to materially affect, the registrant's internal
control over financial reporting.
ITEM 12. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit: Not applicable
because the code is posted on registrant's website at www.nuveen.com/etf and
there were no amendments during the period covered by this report. (To view the
code, click on the Investor Resources drop down menu box, click on Fund
Governance and then Code of Conduct.)
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2(a) under
the 1940 Act (17 CFR 270.30a-2(a)) in the exact form set forth below: Ex-99.CERT
Attached hereto.
(a)(3) Any written solicitation to purchase securities under Rule 23c-1 under
the 1940 Act (17 CFR 270.23c-1) sent or given during the period covered by the
report by or on behalf of the registrant to 10 or more persons. Not applicable.
(b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act,
provide the certifications required by Rule 30a-2(b) under the 1940 Act (17 CFR
270.30a-2(b)); Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR
240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of
the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished
pursuant to this paragraph will not be deemed "filed" for purposes of Section 18
of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of
that section. Such certification will not be deemed to be incorporated by
reference into any filing under the Securities Act of 1933 or the Exchange Act,
except to the extent that the registrant specifically incorporates it by
reference. Ex-99.906 CERT attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Nuveen Insured Municipal Opportunity Fund, Inc.
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By (Signature and Title)* /s/ Jessica R. Droeger
----------------------------------------------
Jessica R. Droeger
Vice President and Secretary
Date: January 5, 2007
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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 5, 2007
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By (Signature and Title)* /s/ Stephen D. Foy
----------------------------------------------
Stephen D. Foy
Vice President and Controller
(principal financial officer)
Date: January 5, 2007
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* Print the name and title of each signing officer under his or her signature.