UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-10345
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Nuveen Dividend Advantage Municipal Fund 3
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(Exact name of registrant as specified in charter)
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
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(Address of principal executive offices) (Zip code)
Kevin J. McCarthy
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
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(Name and address of agent for service)
Registrant's telephone number, including area code: (312) 917-7700
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Date of fiscal year end: October 31
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Date of reporting period: October 31, 2009
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
LOGO: NUVEEN INVESTMENTS
Closed-End Funds
Nuveen Investments
Municipal Closed-End Funds
IT'S NOT WHAT YOU EARN, IT'S WHAT YOU KEEP.(R)
Annual Report October 31, 2009
------------------ ---------------- ------------------ -------------------
NUVEEN PERFORMANCE NUVEEN MUNICIPAL NUVEEN MUNICIPAL NUVEEN DIVIDEND
PLUS MUNICIPAL ADVANTAGE MARKET OPPORTUNITY ADVANTAGE
FUND, INC. FUND, INC. FUND, INC. MUNICIPAL FUND
NPP NMA NMO NAD
------------------ ----------------
NUVEEN DIVIDEND NUVEEN DIVIDEND
ADVANTAGE ADVANTAGE
MUNICIPAL FUND 2 MUNICIPAL FUND 3
NXZ NZF
OCTOBER 09
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LOGO: NUVEEN INVESTMENTS
Chairman's
Letter to Shareholders
[PHOTO OF ROBERT P. BREMNER]
DEAR SHAREHOLDER,
The financial markets in which your Fund operates continue to reflect the larger
economic crosscurrents. The illiquidity that infected global credit markets over
the last year continues to recede but there is concern about the impact of a
reduction in official liquidity support programs. The major institutions that
are the linchpin of the international financial system have strengthened their
capital structures, but many still struggle with losses in their various
portfolios. Global trends include increasing trade and concern about the ability
of the U.S. government to address its substantial budgetary deficits.
While the fixed-income and equity markets have recovered from the lows recorded
in the first quarter of 2009, identifying those developments that will define
the future is never easy, and rarely is it more difficult than at present. A
fundamental component of a successful investment program is a commitment to
remain focused on long-term investment goals even during periods of heightened
market uncertainty. Another component is to re-evaluate investment disciplines
and tactics and to confirm their validity following periods of extreme
volatility and market dislocation, such as we have recently experienced. Your
Board carried out an intensive review of investment performance with these
objectives in mind during April and May of 2009 as part of the annual management
contract renewal process. I encourage you to read the description of this
process in the Annual Investment Management Agreement Approval Process section
of this report. Confirming the appropriateness of a long term investment
strategy is as important for our shareholders as it is for our professional
investment managers. For that reason, I again encourage you to remain in
communication with your financial consultant on this subject.
In September 2009, Nuveen completed the refinancing at par of all the auction
rate preferred shares issued by its taxable closed-end funds. On October 15,
Nuveen announced the first successful offering of an issue of MuniFund Term
Preferred Shares. This new form of preferred securities joins the Variable Rate
Demand Preferred securities as vehicles for refinancing existing municipal fund
auction rate preferred shares (ARPS). By the beginning of December 2009, six of
the leveraged municipal closed-end funds had redeemed all of their outstanding
ARPS. Nuveen remains committed to resolving the issues connected with
outstanding auction rate preferred shares. Please consult the Nuveen web site
for the most recent information on this issue and all recent developments on
your Nuveen Funds at: www.nuveen.com.
On behalf of the other members of your Fund's Board, we look forward to
continuing to earn your trust in the months and years ahead.
Sincerely,
/s/ Robert P. Bremner
-----------------------------
Robert P. Bremner
Chairman of the Board
December 21, 2009
Nuveen Investments 1
Portfolio Managers' Comments
Nuveen Performance Plus Municipal Fund, Inc. (NPP)
Nuveen Municipal Advantage Fund, Inc. (NMA)
Nuveen Municipal Market Opportunity Fund, Inc. (NMO)
Nuveen Dividend Advantage Municipal Fund (NAD)
Nuveen Dividend Advantage Municipal Fund 2 (NXZ)
Nuveen Dividend Advantage Municipal Fund 3 (NZF)
Portfolio managers Tom Spalding and Paul Brennan discuss U.S. economic and
municipal market conditions, key investment strategies, and the twelve-month
performance of these six national Funds. A 33-year veteran of Nuveen, Tom has
managed NXZ since its inception in 2001 and NPP, NMA, NMO and NAD since 2003.
With 20 years of industry experience, including twelve years at Nuveen, Paul
assumed portfolio management responsibility for NZF in 2006.
WHAT FACTORS AFFECTED THE U.S. ECONOMY AND MUNICIPAL MARKET DURING THE
TWELVE-MONTH REPORTING PERIOD ENDED OCTOBER 31, 2009?
During this reporting period, municipal bond prices generally rose as strong
cash flows into municipal bond funds combined with tighter supply of new
tax-exempt issuance to provide favorable supply and demand conditions. As the
period began, there continued to be considerable downward pressure on the
economy. In an effort to improve conditions, the Federal Reserve (Fed) lowered
the fed funds rate to a target range of zero to 0.25% in December 2008, the
lowest level on record. In February 2009, the federal government augmented its
efforts to boost the economy by passing a $787 billion stimulus package, which
joined the $700 billion financial industry rescue package it had passed in late
2008. In March 2009, the Fed announced that, in addition to maintaining the
current rate, it would buy $300 billion in long-term Treasury securities in an
effort to support private credit markets and up to an additional $750 billion in
agency mortgage-backed securities to bolster the credit and housing markets.
In recent months, the measures taken by the Fed and others to ease the economic
recession have produced some incipient signs of improvement. In the third
quarter of 2009, the U.S. economy, as measured by the U.S. gross domestic
product (GDP) posted positive growth (2.8% annualized) for the first time since
the second quarter of 2008. Housing prices also provided a bright spot between
June and September 2009 by recording four consecutive months of positive
returns, the first following three years of decline. At the same time, inflation
remained muted, as the Consumer Price Index (CPI), reflecting a 14% drop in
energy prices, fell 0.2% year-over-year as of October 2009. This marked the
seventh straight month that consumer prices dropped from their levels of a year
earlier, the longest such decline since 1954-1955. The core CPI (which excludes
CERTAIN STATEMENTS IN THIS REPORT ARE FORWARD-LOOKING STATEMENTS.
DISCUSSIONS OF SPECIFIC INVESTMENTS ARE FOR ILLUSTRATION ONLY AND ARE NOT
INTENDED AS RECOMMENDATIONS OF INDIVIDUAL INVESTMENTS. THE FORWARD-LOOKING
STATEMENTS AND OTHER VIEWS EXPRESSED HEREIN ARE THOSE OF THE PORTFOLIO
MANAGERS AS OF THE DATE OF THIS REPORT. ACTUAL FUTURE RESULTS OR
OCCURRENCES MAY DIFFER SIGNIFICANTLY FROM THOSE ANTICIPATED IN ANY
FORWARD-LOOKING STATEMENTS, AND THE VIEWS EXPRESSED HEREIN ARE SUBJECT TO
CHANGE AT ANY TIME, DUE TO NUMEROUS MARKET AND OTHER FACTORS. THE FUNDS
DISCLAIM ANY OBLIGATION TO UPDATE PUBLICLY OR REVISE ANY FORWARD-LOOKING
STATEMENTS OR VIEWS EXPRESSED HEREIN.
2 Nuveen Investments
food and energy) rose 1.7% over the year, within the Fed's unofficial objective
of 2.0% or lower for this measure. However, the economy continued to be stressed
by weakness in the labor markets. October 2009 marked the 22nd consecutive month
of net job losses, with a total of 7.3 million jobs lost since the recession
began in December 2007. This is the biggest decline since the Great Depression.
The national unemployment rate for October 2009 was 10.2%, a 26-year high, up
from 6.6% in October 2008.
Municipal market conditions began to show general signs of improvement in
mid-December 2008 and municipal bonds continued to improve throughout most of
2009. This trend was bolstered by the reduced supply of tax-exempt municipal
debt in the marketplace, due in part to the introduction of the Build America
Bond program in April 2009. Build America Bonds are a new class of taxable
municipal debt created as part of the February 2009 economic stimulus package.
These bonds offer municipal issuers a federal subsidy equal to 35% of the
security's interest payments, and therefore provide issuers with an attractive
alternative to traditional tax-exempt debt. As of October 31, 2009, taxable
Build America Bonds issuance totaled $48.5 billion, accounting for almost 20% of
new bonds issued in the municipal market during the period since their
introduction.
Over the twelve months ended October 31, 2009, tax-exempt municipal bond
issuance nationwide totaled $404.5 billion, a drop of approximately 10% compared
with the twelve-month period ended October 31, 2008. As mentioned earlier,
demand for tax-exempt bonds was strong, especially on the part of individual
investors and broker/dealers. The combination of lower tax-exempt supply and
increased demand provided support for municipal bond prices.
WHAT KEY STRATEGIES WERE USED TO MANAGE THESE FUNDS DURING THIS REPORTING
PERIOD?
During the majority of this twelve-month period, the tax-exempt municipal bond
market was characterized by strong demand, constrained supply of new tax-exempt
bonds and generally improving valuations.
In this environment, our trading activity continued to focus on finding relative
value by taking a bottom-up approach to discover undervalued sectors and
individual credits with the potential to perform well over the long term. In
NPP, NMA, NMO, NAD and NXZ, we generally were purchasing investment-grade
quality bonds offering good call protection. Many of the additions to the
portfolios were in the health care sector, primarily bonds rated AA, A or BBB.
While the overall supply of new tax-exempt bonds declined, supply was more
plentiful in the health care sector because hospitals generally do not qualify
for the Build America Bond program and so must continue to issue bonds in the
tax-exempt municipal market. In addition, many hospitals were issuing fixed rate
bonds during this period in order to refinance and retire outstanding debt that
had initially been issued as variable rate debt.
In NZF, our focus was on purchasing bonds with longer maturities in two
categories: essential services and health care. In essential services, our
purchases included bonds backing water and sewer projects, utilities, schools
and roads. We also bought bonds in the health care sector, most of which were
rated AA or A.
Nuveen Investments 3
Cash for new purchases during this period was generated largely by maturing or
called bonds. NZF also sold some bonds with shorter maturities, including
pre-refunded holdings. While there was considerable issuance of Build America
Bonds over the last half of this period, these bonds do not represent good
investment opportunities for all these Funds because their interest payments are
considered taxable income.
All of these Funds continued to use inverse floating rate securities.(1) as a
form of leverage for a variety of reasons, including duration management, income
enhancement and total return enhancements. During the first part of the period,
NZF also invested in additional types of derivative instruments(2) designed to
help lengthen its duration. These derivatives were removed before the end of the
reporting period.
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.
AVERAGE ANNUAL TOTAL RETURNS ON COMMON SHARE NET ASSET VALUE
FOR PERIODS ENDED 10/31/09
1-YEAR 5-YEAR 10-YEAR
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NPP 21.20% 3.75% 6.54%
NMA 23.89% 3.40% 6.54%
NMO 18.30% 3.03% 5.71%
NAD 25.78% 3.58% 7.24%
NXZ 21.41% 4.72% N/A
NZF 25.08% 4.42% N/A
Standard & Poor's (S&P) National Municipal Bond Index(3) 14.15% 4.04% 5.61%
Lipper General Leveraged Municipal Debt Funds Average(4) 26.02% 3.32% 6.02%
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For the twelve months ended October 31, 2009, the total returns on common share
net asset value (NAV) for all six of these Funds exceeded the returns for the
Standard & Poor's (S&P) National Municipal Bond Index. All of the Funds
underperformed the Lipper General Leveraged Municipal Debt Funds Average.
Key management factors that influenced the Funds' returns during this period
included yield curve and duration positioning, credit exposure and sector
allocation. In addition, leverage was an important positive factor affecting the
Funds' performances over this period. The impact of leverage is discussed in
more detail on page six.
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.
(1) An inverse floating rate security, also known as an inverse floater, is a
financial instrument designed to pay long-term tax-exempt interest at a
rate that varies inversely with a short-term tax-exempt interest rate
index. For the Nuveen Funds, the index typically used is the Securities
Industry and Financial Markets (SIFM) Municipal Swap Index (previously
referred to as the Bond Market Association Index or BMA). Inverse
floaters, including those inverse floating rate securities in which the
Funds invested during this reporting period, are further defined within
the Notes to Financial Statements and Glossary of Terms Used in this
Report sections of this report.
(2) Each Fund may invest in derivative instruments such as forwards, futures,
options and swap transactions. For additional information on the
derivative instruments in which each Fund was invested during and at the
end of the reporting period, see the Portfolio of Investments, Financial
Statements and Notes to Financial Statements sections of this report.
(3) The Standard & Poor's (S&P) National Municipal Bond Index is an
unleveraged, market value-weighted index designed to measure the
performance of the investment-grade U.S. municipal bond market. This index
does not reflect any initial or ongoing expenses and is not available for
direct investment.
(4) The Lipper General Leveraged Municipal Debt Funds Average is calculated
using the returns of all closed-end funds in this category for each period
as follows: 1-year, 54 funds; 5-year, 52 funds; and 10-year, 38 funds.
Fund and Lipper returns assume reinvestment of dividends. You cannot
invest directly in a Lipper Average.
4 Nuveen Investments
During this period, yields on tax-exempt bonds generally declined and bond
prices rose, especially at the longer end of the municipal yield curve. As a
result, longer-term bonds generally outperformed credits with shorter
maturities. In general, the greater a Fund's exposure to the longer part of the
yield curve, the greater the positive impact on the Fund's return. Among these
six Funds, NAD benefited from being the most heavily weighted in the longer part
of the curve, while NMO's duration was slightly short of our target, which
hampered its performance.
As mentioned earlier, our duration strategies in NZF included using derivative
positions during the first part of this period to synthetically extend its
duration. These derivative positions performed well and had a positive impact on
NZF's total return performance.
While yield curve positioning and duration played important roles in
performance, credit exposure was also a significant factor. As noted earlier,
demand for municipal bonds increased among both institutional and individual
investors during this period. This increase was driven by a variety of factors,
including concerns about potential tax increases, the need to rebalance
portfolio allocations and a growing appetite for additional risk. At the same
time, the supply of new tax-exempt municipal securities declined. As investors
bid up municipal bond prices, bonds rated BBB or below and non-rated bonds
generally outperformed those rated AAA. In this environment, allocations of
bonds rated BBB or below and non-rated bonds generally made positive relative
contributions to the Funds' performances.
Holdings that generally contributed positively to the Funds' performances
included industrial development revenue (IDR), housing and health care bonds, as
well as education, water and sewer, transportation and special tax bonds. Zero
coupon bonds and credits backed by the 1998 master tobacco settlement agreement
also posted strong returns.
Pre-refunded bonds, which are often backed by U.S. Treasury securities and which
had been one of the top performing segments of the municipal bond market over
the past two years, performed especially poorly during this period. This
underperformance can be attributed primarily to these bonds' shorter effective
maturities and higher credit quality. As of October 31, 2009, NXZ and NMO had
the heaviest weightings in pre-refunded bonds, while NAD had the smallest. Other
market segments that detracted from relative performance included resource
recovery, leasing and electric utility bonds. These were the only three revenue
sectors that failed to outperform the overall municipal market during this
period. Many general obligation bonds also failed to keep pace with the overall
municipal market.
All six Funds' returns were negatively impacted to varying degrees by their
holdings of AMBAC-Insured bonds issued for the Las Vegas monorail project, that
links various casinos on the Las Vegas strip. The project has struggled to build
ridership and turn a profit, and proposals to extend the monorail to McCarran
International Airport remained on hold.
Nuveen Investments 5
IMPACT OF THE FUNDS' CAPITAL STRUCTURES AND LEVERAGE STRATEGIES ON PERFORMANCE
One important factor impacting the returns of these Funds relative to the
comparative index was the Funds' use of financial leverage. The Funds use
leverage because their managers believe that, over time, leveraging provides
opportunities for additional income and total returns for common shareholders.
However, use of leverage also can expose common shareholders to additional
risk-- especially when market conditions are unfavorable. For example, as the
prices of securities held by a Fund decline, the negative impact of these
valuation changes on common share net asset value and common shareholder total
return is magnified by the use of leverage. Conversely, leverage may enhance
common share returns during periods when bond prices generally are rising.
Over the early part of this period, leverage hampered the performance of the
Funds using this strategy. However, leverage made a significant positive
contribution to those Funds returns over much of 2009, which can be seen in
their twelve-month performance shown on page four.
RECENT DEVELOPMENTS REGARDING THE FUNDS' LEVERAGED CAPITAL STRUCTURE
As noted in the last several shareholder reports, the auction rate preferred
shares issued by many closed-end funds, including these Nuveen Funds, have been
hampered by a lack of liquidity since February 2008. Since that time, more
auction rate preferred shares have been submitted for sale in their regularly
scheduled auctions than there have been offers to buy. In fact, offers to buy
have been almost completely non-existent since late February 2008. This means
that these auctions have "failed to clear," and that many, or all, of the
auction rate preferred shareholders who wanted to sell their shares in these
auctions were unable to do so. This lack of liquidity in auction rate preferred
shares did not lower the credit quality of these shares, and auction rate
preferred shareholders unable to sell their shares received distributions at the
"maximum rate" applicable to failed auctions, as calculated in accordance with
the pre-established terms of the auction rate preferred shares. In the recent
market, with short-term rates at multi-generational lows, those maximum rates
also have been low.
One continuing implication for common shareholders from the auction failures is
that each Fund's cost of leverage likely has been incrementally higher at times
than it otherwise might have been had the auctions continued to be successful.
As a result, each Fund's common share earnings likely have been incrementally
lower at times than they otherwise might have been.
6 Nuveen Investments
As noted in past shareholder reports, the Funds' Board of Directors/Trustees
authorized a plan to use tender option bonds (TOBs), also known as floating rate
securities, to refinance a portion of the Funds' outstanding auction rate
preferred shares. The amount of TOBs that a Fund may use varies according to the
composition of each Fund's portfolio. Some Funds have a greater ability to use
TOBs than others. As of October 31, 2009, some Funds have issued Variable Rate
Demand Preferred Shares (VRDP), but these issuances have been limited since it
has been difficult to find liquidity facilities on economically viable terms
given the constrained credit environment. Some Funds also have issued MuniFund
Term Preferred (MTP), a fixed-rate form of preferred stock with a mandatory
redemption period of five years. However, the Funds cannot provide any assurance
on when the remaining outstanding auction rate preferred shares might be
redeemed.
As of October 31, 2009, the amount of auction rate preferred securities redeemed
by the Funds are as shown in the accompanying table.
AUCTION RATE % OF ORIGINAL
PREFERRED SHARES AUCTION RATE
FUND REDEEMED PREFERRED SHARES
--------------------------------------------------------------------------------
NPP $ 59,100,000 12.3%
NMA $ 64,800,000 18.1%
NMO $ 33,325,000 8.8%
NAD $ 33,200,000 11.3%
NXZ $ 222,000,000 100.0%
NZF $ 75,050,000 24.1%
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As noted in the past shareholder reports, all of NXZ's redemptions were achieved
through the issuance of VRDP in conjunction with the proceeds from the creation
of TOBs. VRDP is a new instrument designed to replace the auction rate preferred
shares used as leverage in Nuveen closed-end funds. VRDP is offered only to
qualified institutional buyers, defined pursuant to Rule 144A under the
Securities Act of 1933. As of October 31, 2009, NXZ had issued $196 million of
VRDP.
As of October 31, 2009, 75 out of the 88 Nuveen closed-end municipal funds that
had issued auction rate preferred shares have redeemed, at par, all or a portion
of these shares. These redemptions bring the total amount of Nuveen's municipal
closed-end funds' auction rate preferred share redemptions to approximately $2.4
billion of the original $11 billion outstanding.
For up-to-date information, please visit the Nuveen CEF Auction Rate Preferred
Resource Center at:
http://www.nuveen.com/ResourceCenter/AuctionRatePreferred.aspx.
Nuveen Investments 7
Common Share Dividend and Share Price Information
During the twelve-month reporting period ended October 31, 2009, NPP, NMA, NMO
and NZF each had three monthly dividend increases, NAD had two increases and NXZ
had one monthly dividend increase.
Due to normal portfolio activity, common shareholders of the following Funds
received net ordinary income distributions at the end of December 2008 as
follows:
NET ORDINARY INCOME
FUND (PER SHARE)
--------------------------------------------------------------------------------
NPP $ 0.0007
NMA $ 0.0021
NZF $ 0.0057
--------------------------------------------------------------------------------
All of the Funds in this report seek to pay stable dividends at rates that
reflect each Fund's past results and projected future performance. During
certain periods, each Fund may pay dividends at a rate that may be more or less
than the amount of net investment income actually earned by the Fund during the
period. If a Fund has cumulatively earned more than it has paid in dividends, it
holds the excess in reserve as undistributed net investment income (UNII) as
part of the Fund's NAV. Conversely, if a Fund has cumulatively paid dividends in
excess of its earnings, the excess constitutes negative UNII that is likewise
reflected in the Fund's NAV. Each Fund will, over time, pay all of its net
investment income as dividends to shareholders. As of October 31, 2009, all of
the Funds in this report had positive UNII balances for both tax and financial
statement purposes.
COMMON SHARE REPURCHASES AND SHARE PRICE INFORMATION
Since the inception of the Funds' repurchase program, the Funds have not
repurchased any of their outstanding common shares.
8 Nuveen Investments
As of October 31, 2009, the Funds' common share prices were trading at discounts
(-) to their common share NAVs as shown in the accompanying table.
10/31/09 TWELVE-MONTH AVERAGE
FUND (-) DISCOUNT (-) DISCOUNT
--------------------------------------------------------------------------------
NPP -7.16% -8.98%
NMA -4.76% -4.93%
NMO -1.99% -7.85%
NAD -7.20% -7.60%
NXZ -2.15% -5.90%
NZF -5.71% -8.70%
--------------------------------------------------------------------------------
Nuveen Investments 9
NPP Performance OVERVIEW | Nuveen Performance Plus Municipal Fund, Inc. as of
October 31, 2009
FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price $ 13.48
--------------------------------------------------------------------------------
Common Share Net Asset Value $ 14.52
--------------------------------------------------------------------------------
Premium/(Discount) to NAV -7.16%
--------------------------------------------------------------------------------
Market Yield 6.41%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield(1) 8.90%
--------------------------------------------------------------------------------
Net Assets Applicable to Common Shares ($000) $ 869,873
--------------------------------------------------------------------------------
Average Effective Maturity on Securities (Years) 14.85
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 10.08
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 6/22/89)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
1-Year 24.78% 21.20%
--------------------------------------------------------------------------------
5-Year 3.86% 3.75%
--------------------------------------------------------------------------------
10-Year 6.82% 6.54%
--------------------------------------------------------------------------------
STATES
(as a % of total investments)
--------------------------------------------------------------------------------
Illinois 15.9%
--------------------------------------------------------------------------------
California 10.5%
--------------------------------------------------------------------------------
Colorado 5.4%
--------------------------------------------------------------------------------
Ohio 5.1%
--------------------------------------------------------------------------------
Florida 5.0%
--------------------------------------------------------------------------------
New Jersey 5.0%
--------------------------------------------------------------------------------
New York 4.4%
--------------------------------------------------------------------------------
Texas 4.4%
--------------------------------------------------------------------------------
Massachusetts 4.0%
--------------------------------------------------------------------------------
Indiana 3.7%
--------------------------------------------------------------------------------
Washington 3.5%
--------------------------------------------------------------------------------
Michigan 3.2%
--------------------------------------------------------------------------------
Pennsylvania 2.3%
--------------------------------------------------------------------------------
Utah 2.2%
--------------------------------------------------------------------------------
Wisconsin 2.0%
--------------------------------------------------------------------------------
Louisiana 1.9%
--------------------------------------------------------------------------------
South Carolina 1.9%
--------------------------------------------------------------------------------
Minnesota 1.9%
--------------------------------------------------------------------------------
Nevada 1.7%
--------------------------------------------------------------------------------
Iowa 1.6%
--------------------------------------------------------------------------------
Other 14.4%
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
(as a % of total investments)
--------------------------------------------------------------------------------
U.S. Guaranteed 21.7%
--------------------------------------------------------------------------------
Tax Obligation/Limited 16.0%
--------------------------------------------------------------------------------
Tax Obligation/General 13.9%
--------------------------------------------------------------------------------
Transportation 11.9%
--------------------------------------------------------------------------------
Health Care 10.6%
--------------------------------------------------------------------------------
Utilities 9.2%
--------------------------------------------------------------------------------
Consumer Staples 6.3%
--------------------------------------------------------------------------------
Other 10.4%
--------------------------------------------------------------------------------
CREDIT QUALITY (AS A % OF TOTAL INVESTMENTS)
[PIE CHART]
AAA/U.S.
Guaranteed 43%
AA 16%
A 25%
BBB 12%
BB or Lower 1%
N/R 3%
2008-2009 MONTHLY TAX-FREE DIVIDENDS PER COMMON SHARE(2)
[BAR CHART]
Nov $ 0.0605
Dec 0.0605
Jan 0.0605
Feb 0.0605
Mar 0.0645
Apr 0.0645
May 0.0680
Jun 0.0680
Jul 0.0680
Aug 0.0680
Sep 0.0720
Oct 0.0720
COMMON SHARE PRICE PERFORMANCE -- WEEKLY CLOSING PRICE
[LINE CHART]
11/01/08 $ 11.68
11.86
11.50
10.08
11.10
10.39
9.40
10.39
10.49
11.55
12.29
12.30
12.17
12.17
12.15
12.06
11.39
11.75
11.12
11.68
11.79
12.03
12.02
11.96
12.11
12.20
12.52
12.88
12.84
12.84
12.82
12.78
12.35
12.32
12.70
12.80
12.95
12.99
13.06
13.07
13.22
13.12
13.28
13.38
13.67
13.90
14.02
14.14
14.30
14.02
13.48
13.70
10/31/09 13.48
(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 net ordinary income distribution in December
2008 of $0.007 per share.
10 Nuveen Investments
NMA Performance OVERVIEW | Nuveen Municipal Advantage Fund, Inc. as of October
31, 2009
CREDIT QUALITY (AS A % OF TOTAL INVESTMENTS)
[PIE CHART]
AAA/U.S.
Guaranteed 38%
AA 23%
A 20%
BBB 14%
BB or Lower 4%
N/R 1%
2008-2009 MONTHLY TAX-FREE DIVIDENDS PER COMMON SHARE(2)
[BAR CHART]
Nov $ 0.0660
Dec 0.0660
Jan 0.0660
Feb 0.0660
Mar 0.0680
Apr 0.0680
May 0.0715
Jun 0.0715
Jul 0.0715
Aug 0.0715
Sep 0.0760
Oct 0.0760
COMMON SHARE PRICE PERFORMANCE -- WEEKLY CLOSING PRICE
[LINE CHART]
11/01/08 $ 11.60
12.09
11.45
10.07
10.45
9.60
8.88
10.31
10.15
10.95
12.20
11.96
11.84
12.12
12.75
12.33
11.15
12.12
11.19
11.60
11.79
11.92
11.70
11.86
12.01
12.35
12.32
12.62
12.80
12.91
12.79
12.95
12.69
12.80
12.64
12.79
13.00
13.18
13.21
13.38
12.89
12.83
13.17
13.24
13.67
13.81
14.23
14.24
14.37
14.30
13.53
13.80
10/31/09 13.41
FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price $ 13.41
--------------------------------------------------------------------------------
Common Share Net Asset Value $ 14.08
--------------------------------------------------------------------------------
Premium/(Discount) to NAV -4.76%
--------------------------------------------------------------------------------
Market Yield 6.80%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield(1) 9.44%
--------------------------------------------------------------------------------
Net Assets Applicable to Common Shares ($000) $ 608,813
--------------------------------------------------------------------------------
Average Effective Maturity on Securities (Years) 16.44
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 11.30
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 12/19/89)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
1-Year 25.70% 23.89%
--------------------------------------------------------------------------------
5-Year 3.00% 3.40%
--------------------------------------------------------------------------------
10-Year 6.58% 6.54%
--------------------------------------------------------------------------------
STATES
(as a % of total investments)
--------------------------------------------------------------------------------
California 11.6%
--------------------------------------------------------------------------------
Illinois 10.1%
--------------------------------------------------------------------------------
Louisiana 8.9%
--------------------------------------------------------------------------------
Washington 8.9%
--------------------------------------------------------------------------------
Texas 8.8%
--------------------------------------------------------------------------------
New York 5.7%
--------------------------------------------------------------------------------
Colorado 5.2%
--------------------------------------------------------------------------------
Ohio 4.9%
--------------------------------------------------------------------------------
Puerto Rico 3.1%
--------------------------------------------------------------------------------
Florida 2.8%
--------------------------------------------------------------------------------
Tennessee 2.5%
--------------------------------------------------------------------------------
Nevada 2.3%
--------------------------------------------------------------------------------
New Jersey 2.3%
--------------------------------------------------------------------------------
Indiana 2.2%
--------------------------------------------------------------------------------
South Carolina 2.1%
--------------------------------------------------------------------------------
Wisconsin 1.8%
--------------------------------------------------------------------------------
Massachusetts 1.6%
--------------------------------------------------------------------------------
North Carolina 1.6%
--------------------------------------------------------------------------------
Other 13.6%
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
(as a % of total investments)
--------------------------------------------------------------------------------
U.S. Guaranteed 25.9%
--------------------------------------------------------------------------------
Health Care 17.2%
--------------------------------------------------------------------------------
Utilities 14.0%
--------------------------------------------------------------------------------
Tax Obligation/Limited 11.3%
--------------------------------------------------------------------------------
Tax Obligation/General 9.3%
--------------------------------------------------------------------------------
Transportation 8.4%
--------------------------------------------------------------------------------
Other 13.9%
--------------------------------------------------------------------------------
(1) Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a 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 net ordinary income distribution in December
2008 of $0.0021 per share.
Nuveen Investments 11
NMO Performance OVERVIEW | Nuveen Municipal Market Opportunity Fund, Inc. as of
October 31, 2009
FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price $ 13.32
--------------------------------------------------------------------------------
Common Share Net Asset Value $ 13.59
--------------------------------------------------------------------------------
Premium/(Discount) to NAV -1.99%
--------------------------------------------------------------------------------
Market Yield 6.67%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield(1) 9.26%
--------------------------------------------------------------------------------
Net Assets Applicable to Common Shares ($000) $ 619,319
--------------------------------------------------------------------------------
Average Effective Maturity on Securities (Years) 14.41
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 10.72
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 3/21/90)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
1-Year 23.67% 18.30%
--------------------------------------------------------------------------------
5-Year 4.41% 3.03%
--------------------------------------------------------------------------------
10-Year 6.29% 5.71%
--------------------------------------------------------------------------------
STATES
(as a % of total investments)
--------------------------------------------------------------------------------
Texas 9.8%
--------------------------------------------------------------------------------
Washington 9.7%
--------------------------------------------------------------------------------
California 9.1%
--------------------------------------------------------------------------------
Illinois 9.1%
--------------------------------------------------------------------------------
Minnesota 5.2%
--------------------------------------------------------------------------------
Ohio 4.7%
--------------------------------------------------------------------------------
Colorado 4.4%
--------------------------------------------------------------------------------
New Jersey 4.3%
--------------------------------------------------------------------------------
South Carolina 3.9%
--------------------------------------------------------------------------------
Puerto Rico 3.4%
--------------------------------------------------------------------------------
Georgia 3.1%
--------------------------------------------------------------------------------
Pennsylvania 2.9%
--------------------------------------------------------------------------------
North Dakota 2.8%
--------------------------------------------------------------------------------
New York 2.7%
--------------------------------------------------------------------------------
Massachusetts 2.7%
--------------------------------------------------------------------------------
Indiana 1.7%
--------------------------------------------------------------------------------
Oregon 1.6%
--------------------------------------------------------------------------------
North Carolina 1.6%
--------------------------------------------------------------------------------
Michigan 1.6%
--------------------------------------------------------------------------------
Louisiana 1.5%
--------------------------------------------------------------------------------
Other 14.2%
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
(as a % of total investments)
--------------------------------------------------------------------------------
U.S. Guaranteed 28.6%
--------------------------------------------------------------------------------
Tax Obligation/General 14.5%
--------------------------------------------------------------------------------
Transportation 13.4%
--------------------------------------------------------------------------------
Health Care 11.2%
--------------------------------------------------------------------------------
Tax Obligation/Limited 11.2%
--------------------------------------------------------------------------------
Utilities 7.2%
--------------------------------------------------------------------------------
Other 13.9%
--------------------------------------------------------------------------------
CREDIT QUALITY (AS A % OF TOTAL INVESTMENTS)
[PIE CHART]
AAA/U.S.
Guaranteed 46%
AA 19%
A 24%
BBB 8%
BB or Lower 3%
2008-2009 MONTHLY TAX-FREE DIVIDENDS PER COMMON SHARE
[BAR CHART]
Nov $ 0.0630
Dec 0.0630
Jan 0.0630
Feb 0.0630
Mar 0.0645
Apr 0.0645
May 0.0690
Jun 0.0690
Jul 0.0690
Aug 0.0690
Sep 0.0740
Oct 0.0740
COMMON SHARE PRICE PERFORMANCE -- WEEKLY CLOSING PRICE
[LINE CHART]
11/01/08 $ 11.37
11.63
11.15
9.86
10.15
9.50
9.03
9.71
9.94
10.87
11.35
11.27
11.32
11.54
11.78
11.75
10.83
11.36
10.59
10.96
11.23
11.27
11.20
11.25
11.43
11.69
11.79
11.97
12.10
12.26
12.22
12.10
11.84
11.84
11.89
11.90
11.99
12.11
12.37
12.56
12.79
12.84
12.82
12.84
13.25
13.30
13.40
13.32
13.54
13.63
12.92
13.38
10/31/09 13.32
(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.
12 Nuveen Investments
NAD Performance OVERVIEW | Nuveen Dividend Advantage Municipal Fund as of
October 31, 2009
CREDIT QUALITY (AS A % OF MUNICIPAL BONDS)
[PIE CHART]
AAA/U.S.
Guaranteed 28%
AA 27%
A 27%
BBB 9%
BB or Lower 6%
N/R 3%
2008-2009 MONTHLY TAX-FREE DIVIDENDS PER COMMON SHARE
[BAR CHART]
Nov $ 0.0655
Dec 0.0655
Jan 0.0655
Feb 0.0655
Mar 0.0655
Apr 0.0655
May 0.0715
Jun 0.0715
Jul 0.0715
Aug 0.0715
Sep 0.0740
Oct 0.0740
COMMON SHARE PRICE PERFORMANCE -- WEEKLY CLOSING PRICE
[LINE CHART]
11/01/08 $ 10.68
11.23
10.71
9.36
10.30
8.94
8.46
9.75
9.73
10.46
11.39
11.25
11.07
11.30
11.60
11.53
10.81
11.30
10.35
10.74
10.86
11.22
11.01
10.98
11.25
11.49
11.80
12.11
12.20
12.50
12.50
12.44
12.13
12.28
12.24
12.32
12.50
12.58
12.67
12.64
12.73
12.54
12.75
12.84
13.41
13.63
13.96
13.89
13.94
13.65
13.04
13.19
10/31/09 12.89
FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price $ 12.89
--------------------------------------------------------------------------------
Common Share Net Asset Value $ 13.89
--------------------------------------------------------------------------------
Premium/(Discount) to NAV -7.20%
--------------------------------------------------------------------------------
Market Yield 6.89%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield(1) 9.57%
--------------------------------------------------------------------------------
Net Assets Applicable to Common Shares ($000) $ 545,534
--------------------------------------------------------------------------------
Average Effective Maturity on Securities (Years) 16.74
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 11.96
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL
RETURN (Inception 5/26/99)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
1-Year 28.86% 25.78%
--------------------------------------------------------------------------------
5-Year 2.75% 3.58%
--------------------------------------------------------------------------------
10-Year 5.95% 7.24%
--------------------------------------------------------------------------------
STATES
(as a % of municipal bonds)
--------------------------------------------------------------------------------
Illinois 20.1%
--------------------------------------------------------------------------------
Washington 7.2%
--------------------------------------------------------------------------------
Florida 7.1%
--------------------------------------------------------------------------------
New York 5.5%
--------------------------------------------------------------------------------
Louisiana 5.0%
--------------------------------------------------------------------------------
Wisconsin 4.6%
--------------------------------------------------------------------------------
New Jersey 4.6%
--------------------------------------------------------------------------------
Pennsylvania 4.6%
--------------------------------------------------------------------------------
California 4.3%
--------------------------------------------------------------------------------
Texas 4.2%
--------------------------------------------------------------------------------
Colorado 3.7%
--------------------------------------------------------------------------------
Indiana 3.5%
--------------------------------------------------------------------------------
Ohio 3.3%
--------------------------------------------------------------------------------
Puerto Rico 3.3%
--------------------------------------------------------------------------------
Michigan 2.7%
--------------------------------------------------------------------------------
Rhode Island 2.4%
--------------------------------------------------------------------------------
Other 13.9%
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
(as a % of total investments)
--------------------------------------------------------------------------------
Tax Obligation/Limited 19.6%
--------------------------------------------------------------------------------
Health Care 19.2%
--------------------------------------------------------------------------------
Tax Obligation/General 14.9%
--------------------------------------------------------------------------------
Transportation 13.2%
--------------------------------------------------------------------------------
U.S. Guaranteed 7.7%
--------------------------------------------------------------------------------
Utilities 6.4%
--------------------------------------------------------------------------------
Consumer Staples 6.0%
--------------------------------------------------------------------------------
Other 13.0%
--------------------------------------------------------------------------------
(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.
Nuveen Investments 13
NXZ Performance OVERVIEW | Nuveen Dividend Advantage Municipal Fund 2 as of
October 31, 2009
FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price $ 14.14
--------------------------------------------------------------------------------
Common Share Net Asset Value $ 14.45
--------------------------------------------------------------------------------
Premium/(Discount) to NAV -2.15%
--------------------------------------------------------------------------------
Market Yield 6.62%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield(1) 9.19%
--------------------------------------------------------------------------------
Net Assets Applicable to Common Shares ($000) $ 425,253
--------------------------------------------------------------------------------
Average Effective Maturity on Securities (Years) 15.82
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 8.62
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 3/27/01)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
1-Year 22.63% 21.41%
--------------------------------------------------------------------------------
5-Year 4.63% 4.72%
--------------------------------------------------------------------------------
Since Inception 5.81% 6.55%
--------------------------------------------------------------------------------
STATES
(as a % of total investments)
--------------------------------------------------------------------------------
Texas 17.7%
--------------------------------------------------------------------------------
Illinois 9.0%
--------------------------------------------------------------------------------
California 8.2%
--------------------------------------------------------------------------------
Michigan 7.8%
--------------------------------------------------------------------------------
Colorado 6.7%
--------------------------------------------------------------------------------
New York 6.4%
--------------------------------------------------------------------------------
New Mexico 3.9%
--------------------------------------------------------------------------------
Louisiana 3.3%
--------------------------------------------------------------------------------
Minnesota 3.2%
--------------------------------------------------------------------------------
Alabama 3.2%
--------------------------------------------------------------------------------
Florida 2.9%
--------------------------------------------------------------------------------
Washington 2.8%
--------------------------------------------------------------------------------
Kansas 2.7%
--------------------------------------------------------------------------------
Massachusetts 2.4%
--------------------------------------------------------------------------------
Pennsylvania 2.3%
--------------------------------------------------------------------------------
Indiana 2.2%
--------------------------------------------------------------------------------
Oregon 2.1%
--------------------------------------------------------------------------------
Other 13.2%
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
(as a % of total investments)
--------------------------------------------------------------------------------
U.S. Guaranteed 30.8%
--------------------------------------------------------------------------------
Tax Obligation/Limited 18.5%
--------------------------------------------------------------------------------
Health Care 14.5%
--------------------------------------------------------------------------------
Transportation 12.6%
--------------------------------------------------------------------------------
Consumer Staples 6.7%
--------------------------------------------------------------------------------
Utilities 5.2%
--------------------------------------------------------------------------------
Other 11.7%
--------------------------------------------------------------------------------
CREDIT QUALITY (AS A % OF TOTAL INVESTMENTS)
[PIE CHART]
AAA/U.S.
Guaranteed 45%
AA 11%
A 24%
BBB 10%
BB or Lower 8%
N/R 2%
2008-2009 MONTHLY TAX-FREE DIVIDENDS PER COMMON SHARE
[BAR CHART]
Nov $ 0.0730
Dec 0.0730
Jan 0.0730
Feb 0.0730
Mar 0.0730
Apr 0.0730
May 0.0730
Jun 0.0730
Jul 0.0730
Aug 0.0730
Sep 0.0780
Oct 0.0780
COMMON SHARE PRICE PERFORMANCE -- WEEKLY CLOSING PRICE
[LINE CHART]
11/01/08 $ 12.10
12.40
11.45
10.42
11.20
10.19
9.62
10.78
11.75
11.90
12.66
12.63
12.53
12.96
13.07
12.71
11.69
12.57
11.60
11.69
11.70
11.97
12.24
12.45
12.46
12.39
12.76
12.96
13.08
12.91
12.98
13.15
12.85
12.66
12.67
12.76
12.75
12.86
12.96
13.13
13.13
12.89
13.24
13.43
13.79
14.09
14.25
14.19
14.37
14.30
13.75
14.45
10/31/09 14.14
(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.
14 Nuveen Investments
NZF Performance OVERVIEW | Nuveen Dividend Advantage Municipal Fund 3 as of
October 31, 2009
CREDIT QUALITY (AS A % OF MUNICIPAL BONDS)
[PIE CHART]
AAA/U.S.
Guaranteed 41%
AA 19%
A 21%
BBB 7%
BB or Lower 3%
N/R 9%
2008-2009 MONTHLY TAX-FREE DIVIDENDS PER COMMON SHARE(2)
[BAR CHART]
Nov $ 0.0665
Dec 0.0665
Jan 0.0665
Feb 0.0665
Mar 0.0680
Apr 0.0680
May 0.0735
Jun 0.0735
Jul 0.0735
Aug 0.0735
Sep 0.0745
Oct 0.0745
COMMON SHARE PRICE PERFORMANCE -- WEEKLY CLOSING PRICE
[LINE CHART]
11/01/08 $ 10.72
11.39
10.64
9.25
10.20
9.26
8.86
9.80
9.77
10.59
11.56
11.67
11.37
11.95
12.42
11.95
10.71
11.40
10.74
11.14
11.09
11.37
11.33
11.50
11.80
11.92
12.25
12.46
12.50
12.70
12.61
12.66
12.29
12.42
12.52
12.51
12.60
12.67
12.80
13.04
12.99
12.99
13.16
13.44
13.59
13.83
13.86
13.78
13.97
13.74
13.26
13.54
10/31/09 13.38
FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price $ 13.38
--------------------------------------------------------------------------------
Common Share Net Asset Value $ 14.19
--------------------------------------------------------------------------------
Premium/(Discount) to NAV -5.71%
--------------------------------------------------------------------------------
Market Yield 6.68%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield(1) 9.28%
--------------------------------------------------------------------------------
Net Assets Applicable to Common Shares ($000) $ 573,088
--------------------------------------------------------------------------------
Average Effective Maturity on Securities (Years) 14.56
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 9.33
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 9/25/01)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
1-Year 33.89% 25.08%
--------------------------------------------------------------------------------
5-Year 4.71% 4.42%
--------------------------------------------------------------------------------
Since Inception 5.00% 6.05%
--------------------------------------------------------------------------------
STATES
(as a % of municipal bonds)
--------------------------------------------------------------------------------
Texas 13.3%
--------------------------------------------------------------------------------
Washington 10.9%
--------------------------------------------------------------------------------
Illinois 10.0%
--------------------------------------------------------------------------------
California 8.9%
--------------------------------------------------------------------------------
Michigan 6.4%
--------------------------------------------------------------------------------
Colorado 4.4%
--------------------------------------------------------------------------------
Iowa 4.1%
--------------------------------------------------------------------------------
Indiana 3.9%
--------------------------------------------------------------------------------
Wisconsin 3.0%
--------------------------------------------------------------------------------
Louisiana 2.8%
--------------------------------------------------------------------------------
New York 2.7%
--------------------------------------------------------------------------------
New Jersey 2.6%
--------------------------------------------------------------------------------
Kentucky 2.3%
--------------------------------------------------------------------------------
Missouri 2.0%
--------------------------------------------------------------------------------
Maryland 2.0%
--------------------------------------------------------------------------------
Oregon 1.7%
--------------------------------------------------------------------------------
Massachusetts 1.6%
--------------------------------------------------------------------------------
Georgia 1.6%
--------------------------------------------------------------------------------
Ohio 1.5%
--------------------------------------------------------------------------------
Other 14.3%
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
(as a % of total investments)
--------------------------------------------------------------------------------
U.S. Guaranteed 23.0%
--------------------------------------------------------------------------------
Transportation 16.4%
--------------------------------------------------------------------------------
Health Care 15.1%
--------------------------------------------------------------------------------
Tax Obligation/General 9.8%
--------------------------------------------------------------------------------
Tax Obligation/Limited 7.0%
--------------------------------------------------------------------------------
Utilities 5.5%
--------------------------------------------------------------------------------
Education and Civic Organizations 4.8%
--------------------------------------------------------------------------------
Water and Sewer 4.5%
--------------------------------------------------------------------------------
Other 13.9%
--------------------------------------------------------------------------------
(1) Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a 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 net ordinary income distribution in December
2008 of $0.0057 per share.
Nuveen Investments 15
NPP NMA NMO | Shareholder Meeting Report
The annual meeting of shareholders was held on July 28, 2009, in the Lobby
Conference Room, 333 West Wacker Drive, Chicago, IL 60606; at this meeting the
shareholders were asked to vote on the election of Board Members, the
elimination of Fundamental Investment Policies and the approval of new
Fundamental Investment Policies. The meeting was subsequently adjourned to
September 1, 2009, and then adjourned to October 13, 2009, for NPP, NMO, NAD and
NZF; NPP and NMO additionally adjourned to November 24, 2009.
NPP NMA NMO
----------------------------------------------------------------------------------------------------------------------------------
Common and Common and Common and
Preferred Preferred Preferred Preferred Preferred Preferred
shares voting shares voting shares voting shares voting shares voting shares voting
together together together together together together
as a class as a class as a class as a class as a class as a class
----------------------------------------------------------------------------------------------------------------------------------
TO APPROVE THE ELIMINATION OF THE FUND'S
FUNDAMENTAL POLICY RELATING TO
INVESTMENTS IN MUNICIPAL SECURITIES AND
BELOW INVESTMENT GRADE SECURITIES.
For 31,433,513 6,796 21,719,305 5,474 22,525,244 5,444
Against 2,478,919 1,559 1,364,528 552 1,805,774 1,058
Abstain 1,145,311 76 725,135 49 823,954 117
Broker Non-Votes 9,426,679 2,217 5,479,006 713 6,932,141 2,588
----------------------------------------------------------------------------------------------------------------------------------
Total 44,484,422 10,648 29,287,974 6,788 32,087,113 9,207
==================================================================================================================================
TO APPROVE THE NEW FUNDAMENTAL POLICY
RELATING TO INVESTMENTS IN MUNICIPAL
SECURITIES FOR THE FUND.
For 31,582,135 6,806 21,848,736 5,484 22,665,729 5,498
Against 2,348,702 1,545 1,200,988 542 1,661,673 1,004
Abstain 1,126,906 80 759,244 49 827,570 117
Broker Non-Votes 9,426,679 2,217 5,479,006 713 6,932,141 2,588
----------------------------------------------------------------------------------------------------------------------------------
Total 44,484,422 10,648 29,287,974 6,788 32,087,113 9,207
==================================================================================================================================
TO APPROVE THE ELIMINATION OF THE
FUNDAMENTAL POLICY RELATING TO INVESTING
IN OTHER INVESTMENT COMPANIES.
For 30,959,042 6,932 21,153,600 5,477 22,336,739 5,485
Against 2,910,753 1,419 1,406,742 549 1,807,293 1,017
Abstain 1,187,948 80 1,248,626 49 1,010,940 117
Broker Non-Votes 9,426,679 2,217 5,479,006 713 6,932,141 2,588
----------------------------------------------------------------------------------------------------------------------------------
Total 44,484,422 10,648 29,287,974 6,788 32,087,113 9,207
==================================================================================================================================
TO APPROVE THE ELIMINATION OF THE
FUNDAMENTAL POLICY RELATING TO
DERIVATIVES AND SHORT SALES.
For 30,884,377 6,787 21,164,190 5,495 22,343,721 5,498
Against 2,987,051 1,549 1,471,801 531 1,878,626 1,004
Abstain 1,186,315 95 1,172,977 49 932,625 117
Broker Non-Votes 9,426,679 2,217 5,479,006 713 6,932,141 2,588
----------------------------------------------------------------------------------------------------------------------------------
Total 44,484,422 10,648 29,287,974 6,788 32,087,113 9,207
==================================================================================================================================
TO APPROVE THE ELIMINATION OF THE
FUNDAMENTAL POLICY RELATING TO
COMMODITIES.
For 30,507,444 6,809 21,045,007 5,479 22,253,938 5,483
Against 3,326,433 1,542 1,487,869 547 1,904,764 1,019
Abstain 1,223,866 80 1,276,092 49 996,270 117
Broker Non-Votes 9,426,679 2,217 5,479,006 713 6,932,141 2,588
----------------------------------------------------------------------------------------------------------------------------------
Total 44,484,422 10,648 29,287,974 6,788 32,087,113 9,207
==================================================================================================================================
TO APPROVE THE NEW FUNDAMENTAL POLICY
RELATING TO COMMODITIES.
For 30,491,998 6,732 21,032,759 5,479 22,208,659 5,494
Against 3,317,878 1,550 1,496,433 547 1,930,067 1,008
Abstain 1,247,867 149 1,279,776 49 1,016,246 117
Broker Non-Votes 9,426,679 2,217 5,479,006 713 6,932,141 2,588
----------------------------------------------------------------------------------------------------------------------------------
Total 44,484,422 10,648 29,287,974 6,788 32,087,113 9,207
==================================================================================================================================
16 Nuveen Investments
NPP NMA NMO
----------------------------------------------------------------------------------------------------------------------------------
Common and Common and Common and
Preferred Preferred Preferred Preferred Preferred Preferred
shares voting shares voting shares voting shares voting shares voting shares voting
together together together together together together
as a class as a class as a class as a class as a class as a class
----------------------------------------------------------------------------------------------------------------------------------
APPROVAL OF THE BOARD MEMBERS WAS
REACHED AS FOLLOWS:
John P. Amboian
For 41,964,332 -- 28,092,357 -- 30,393,214 --
Withhold 2,074,388 -- 1,195,617 -- 1,515,329 --
----------------------------------------------------------------------------------------------------------------------------------
Total 44,038,720 -- 29,287,974 -- 31,908,543 --
==================================================================================================================================
Robert P. Bremner
For 41,949,476 -- 28,079,352 -- 30,378,336 --
Withhold 2,089,244 -- 1,208,622 -- 1,530,207 --
----------------------------------------------------------------------------------------------------------------------------------
Total 44,038,720 -- 29,287,974 -- 31,908,543 --
==================================================================================================================================
Jack B. Evans
For 41,938,440 -- 28,089,629 -- 30,372,691 --
Withhold 2,100,280 -- 1,198,345 -- 1,535,852 --
----------------------------------------------------------------------------------------------------------------------------------
Total 44,038,720 -- 29,287,974 -- 31,908,543 --
==================================================================================================================================
William C. Hunter
For -- 9,292 -- 6,354 -- 8,287
Withhold -- 1,316 -- 434 -- 819
----------------------------------------------------------------------------------------------------------------------------------
Total -- 10,608 -- 6,788 -- 9,106
==================================================================================================================================
David J. Kundert
For 41,962,180 -- 28,084,949 -- 30,369,255 --
Withhold 2,076,540 -- 1,203,025 -- 1,539,288 --
----------------------------------------------------------------------------------------------------------------------------------
Total 44,038,720 -- 29,287,974 -- 31,908,543 --
==================================================================================================================================
William J. Schneider
For -- 9,305 -- 6,354 -- 8,287
Withhold -- 1,303 -- 434 -- 819
----------------------------------------------------------------------------------------------------------------------------------
Total -- 10,608 -- 6,788 -- 9,106
==================================================================================================================================
Judith M. Stockdale
For 41,970,976 -- 28,045,115 -- 30,335,174 --
Withhold 2,067,744 -- 1,242,859 -- 1,573,369 --
----------------------------------------------------------------------------------------------------------------------------------
Total 44,038,720 -- 29,287,974 -- 31,908,543 --
==================================================================================================================================
Carole E. Stone
For 41,956,447 -- 28,077,114 -- 30,371,410 --
Withhold 2,082,273 -- 1,210,860 -- 1,537,133 --
----------------------------------------------------------------------------------------------------------------------------------
Total 44,038,720 -- 29,287,974 -- 31,908,543 --
==================================================================================================================================
Terence J. Toth
For 41,982,487 -- 28,088,649 -- 30,395,734 --
Withhold 2,056,233 -- 1,199,325 -- 1,512,809 --
----------------------------------------------------------------------------------------------------------------------------------
Total 44,038,720 -- 29,287,974 -- 31,908,543 --
==================================================================================================================================
Nuveen Investments 17
NAD NXZ NZF | Shareholder Meeting Report (continued)
NAD NXZ NZF
----------------------------------------------------------------------------------------------------------------------------------
Common and Common and Common and
Preferred Preferred Preferred Preferred Preferred Preferred
shares voting shares voting shares voting shares voting shares voting shares voting
together together together together together together
as a class as a class as a class as a class as a class as a class
----------------------------------------------------------------------------------------------------------------------------------
TO APPROVE THE ELIMINATION OF THE FUND'S
FUNDAMENTAL POLICY RELATING TO
INVESTMENTS IN MUNICIPAL SECURITIES AND
BELOW INVESTMENT GRADE SECURITIES.
For 19,459,793 4,867 14,582,404 1,870 19,480,124 5,458
Against 1,129,444 482 773,999 -- 1,351,389 811
Abstain 626,016 280 413,083 -- 662,571 206
Broker Non-Votes 5,740,623 1,401 4,706,237 -- 6,694,239 --
----------------------------------------------------------------------------------------------------------------------------------
Total 26,955,876 7,030 20,475,723 1,870 28,188,323 6,475
==================================================================================================================================
TO APPROVE THE NEW FUNDAMENTAL POLICY
RELATING TO INVESTMENTS IN MUNICIPAL
SECURITIES FOR THE FUND.
For 19,543,191 4,910 14,633,866 1,870 19,608,162 5,506
Against 1,041,082 435 697,157 -- 1,239,829 764
Abstain 630,980 284 438,463 -- 646,096 205
Broker Non-Votes 5,740,623 1,401 4,706,237 -- 6,694,236 --
----------------------------------------------------------------------------------------------------------------------------------
Total 26,955,876 7,030 20,475,723 1,870 28,188,323 6,475
==================================================================================================================================
TO APPROVE THE ELIMINATION OF THE
FUNDAMENTAL POLICY RELATING TO INVESTING
IN OTHER INVESTMENT COMPANIES.
For -- -- -- -- -- --
Against -- -- -- -- -- --
Abstain -- -- -- -- -- --
Broker Non-Votes -- -- -- -- -- --
----------------------------------------------------------------------------------------------------------------------------------
Total -- -- -- -- -- --
==================================================================================================================================
TO APPROVE THE ELIMINATION OF THE
FUNDAMENTAL POLICY RELATING TO
DERIVATIVES AND SHORT SALES.
For -- -- -- -- -- --
Against -- -- -- -- -- --
Abstain -- -- -- -- -- --
Broker Non-Votes -- -- -- -- -- --
----------------------------------------------------------------------------------------------------------------------------------
Total -- -- -- -- -- --
==================================================================================================================================
TO APPROVE THE ELIMINATION OF THE
FUNDAMENTAL POLICY RELATING TO
COMMODITIES.
For -- -- -- -- -- --
Against -- -- -- -- -- --
Abstain -- -- -- -- -- --
Broker Non-Votes -- -- -- -- -- --
----------------------------------------------------------------------------------------------------------------------------------
Total -- -- -- -- -- --
==================================================================================================================================
TO APPROVE THE NEW FUNDAMENTAL POLICY
RELATING TO COMMODITIES.
For -- -- -- -- -- --
Against -- -- -- -- -- --
Abstain -- -- -- -- -- --
Broker Non-Votes -- -- -- -- -- --
----------------------------------------------------------------------------------------------------------------------------------
Total -- -- -- -- -- --
==================================================================================================================================
18 Nuveen Investments
NAD NXZ NZF
----------------------------------------------------------------------------------------------------------------------------------
Common and Common and Common and
Preferred Preferred Preferred Preferred Preferred Preferred
shares voting shares voting shares voting shares voting shares voting shares voting
together together together together together together
as a class as a class as a class s a class as a class as a class
----------------------------------------------------------------------------------------------------------------------------------
APPROVAL OF THE BOARD MEMBERS WAS
REACHED AS FOLLOWS:
John P. Amboian
For -- -- -- -- -- --
Withhold -- -- -- -- -- --
----------------------------------------------------------------------------------------------------------------------------------
Total -- -- -- -- -- --
==================================================================================================================================
Robert P. Bremner
For 25,649,027 -- 19,764,333 -- 26,675,210 --
Withhold 1,127,346 -- 711,390 -- 1,367,751 --
----------------------------------------------------------------------------------------------------------------------------------
Total 26,776,373 -- 20,475,723 -- 28,042,961 --
==================================================================================================================================
Jack B. Evans
For 25,641,454 -- 19,777,740 -- 26,713,383 --
Withhold 1,134,919 -- 697,983 -- 1,329,578 --
----------------------------------------------------------------------------------------------------------------------------------
Total 26,776,373 -- 20,475,723 -- 28,042,961 --
==================================================================================================================================
William C. Hunter
For -- 6,122 -- 1,870 -- 5,919
Withhold -- 875 -- -- -- 548
----------------------------------------------------------------------------------------------------------------------------------
Total -- 6,997 -- 1,870 -- 6,467
==================================================================================================================================
David J. Kundert
For -- -- -- -- -- --
Withhold -- -- -- -- -- --
----------------------------------------------------------------------------------------------------------------------------------
Total -- -- -- -- -- --
==================================================================================================================================
William J. Schneider
For -- 6,122 -- 1,870 -- 5,919
Withhold -- 875 -- -- -- 548
----------------------------------------------------------------------------------------------------------------------------------
Total -- 6,997 -- 1,870 -- 6,467
==================================================================================================================================
Judith M. Stockdale
For -- -- -- -- -- --
Withhold -- -- -- -- -- --
----------------------------------------------------------------------------------------------------------------------------------
Total -- -- -- -- -- --
==================================================================================================================================
Carole E. Stone
For -- -- -- -- -- --
Withhold -- -- -- -- -- --
----------------------------------------------------------------------------------------------------------------------------------
Total -- -- -- -- -- --
==================================================================================================================================
Terence J. Toth
For -- -- -- -- -- --
Withhold -- -- -- -- -- --
----------------------------------------------------------------------------------------------------------------------------------
Total -- -- -- -- -- --
==================================================================================================================================
Nuveen Investments 19
Report of Independent Registered Public Accounting Firm
THE BOARD OF DIRECTORS/TRUSTEES AND SHAREHOLDERS
NUVEEN PERFORMANCE PLUS MUNICIPAL FUND, INC.
NUVEEN MUNICIPAL ADVANTAGE FUND, INC.
NUVEEN MUNICIPAL MARKET OPPORTUNITY FUND, INC.
NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND
NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND 2
NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND 3
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Nuveen Performance Plus Municipal Fund, Inc.,
Nuveen Municipal Advantage Fund, Inc., Nuveen Municipal Market Opportunity Fund,
Inc., Nuveen Dividend Advantage Municipal Fund, Nuveen Dividend Advantage
Municipal Fund 2, and Nuveen Dividend Advantage Municipal Fund 3 (the "Funds")
as of October 31, 2009, and the related statements of operations and cash flows
(Nuveen Performance Plus Municipal Fund, Inc., Nuveen Dividend Advantage
Municipal Fund, Nuveen Dividend Advantage Municipal Fund 2 and Nuveen Dividend
Advantage Municipal Fund 3 only) for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the five years in the period then ended.
These financial statements and financial highlights are the responsibility of
the Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Funds' internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Funds' internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of October 31, 2009, 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 Performance Plus Municipal Fund, Inc., Nuveen Municipal Advantage Fund,
Inc., Nuveen Municipal Market Opportunity Fund, Inc., Nuveen Dividend Advantage
Municipal Fund, Nuveen Dividend Advantage Municipal Fund 2, and Nuveen Dividend
Advantage Municipal Fund 3 at October 31, 2009, the results of their operations
and cash flows (Nuveen Performance Plus Municipal Fund, Inc., Nuveen Dividend
Advantage Municipal Fund, Nuveen Dividend Advantage Municipal Fund 2 and Nuveen
Dividend Advantage Municipal Fund 3 only) for the year then ended, changes in
their net assets for each of the two years in the period then ended, and the
financial highlights for each of the five years in the period then ended in
conformity with US generally accepted accounting principles.
Ernst & Young LLP
Chicago, Illinois
December 28, 2009
20 Nuveen Investments
NPP | Nuveen Performance Plus Municipal Fund, Inc.
| Portfolio of Investments October 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 0.1% (0.1% OF TOTAL INVESTMENTS)
Jefferson County, Alabama, Sewer Revenue Refunding
Warrants, Series 1997A:
$ 1,435 5.625%, 2/01/22 - FGIC Insured 1/10 at 100.00 Caa3 $ 500,184
1,505 5.375%, 2/01/27 - FGIC Insured 1/10 at 100.00 Caa3 521,573
------------------------------------------------------------------------------------------------------------------------------
2,940 Total Alabama 1,021,757
------------------------------------------------------------------------------------------------------------------------------
ALASKA - 0.2% (0.1% OF TOTAL INVESTMENTS)
2,440 Northern Tobacco Securitization Corporation, Alaska, 6/14 at 100.00 Baa3 1,621,380
Tobacco Settlement Asset-Backed Bonds, Series 2006A,
5.000%, 6/01/46
------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 1.4% (0.9% OF TOTAL INVESTMENTS)
1,000 Arizona State Transportation Board, Highway Revenue 7/12 at 100.00 AAA 1,112,080
Bonds, Series 2002B, 5.250%, 7/01/22(Pre-refunded
7/01/12)
Phoenix, Arizona, Civic Improvement Corporation, Senior
Lien Airport Revenue Bonds, Series 2002B:
5,365 5.750%, 7/01/15 - FGIC Insured (Alternative Minimum Tax) 7/12 at 100.00 AA- 5,685,988
5,055 5.750%, 7/01/16 - FGIC Insured (Alternative Minimum Tax) 7/12 at 100.00 AA- 5,307,295
------------------------------------------------------------------------------------------------------------------------------
11,420 Total Arizona 12,105,363
------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 0.4% (0.3% OF TOTAL INVESTMENTS)
5,080 Independence County, Arkansas, Hydroelectric Power 5/13 at 100.00 N/R 2,738,120
Revenue Bonds, Series 2003, 5.350%, 5/01/28 - ACA
Insured
1,000 Washington County, Arkansas, Hospital Revenue Bonds, 2/15 at 100.00 Baa1 877,750
Washington Regional Medical Center, Series 2005A,
5.000%, 2/01/35
------------------------------------------------------------------------------------------------------------------------------
6,080 Total Arkansas 3,615,870
------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 15.8% (10.5% OF TOTAL INVESTMENTS)
3,500 Alameda Corridor Transportation Authority, California, 10/17 at 100.00 A- 2,652,895
Subordinate Lien Revenue Bonds, Series 2004A, 0.000%,
10/01/25 - AMBAC Insured
11,000 Anaheim Public Finance Authority, California, No Opt. Call AAA 6,258,340
Subordinate Lease Revenue Bonds, Public Improvement
Project, Series 1997C, 0.000%, 9/01/20 - FSA Insured
California Department of Water Resources, Power Supply
Revenue Bonds, Series 2002A:
4,000 6.000%, 5/01/15 (Pre-refunded 5/01/12) 5/12 at 101.00 Aaa 4,533,440
3,175 5.375%, 5/01/22 (Pre-refunded 5/01/12) 5/12 at 101.00 Aaa 3,549,460
3,365 California Health Facilities Financing Authority, Health 3/13 at 100.00 A 3,124,234
Facility Revenue Bonds, Adventist Health System/West,
Series 2003A, 5.000%, 3/01/33
California Health Facilities Financing Authority,
Revenue Bonds, Kaiser Permanante System, Series 2006:
5,000 5.000%, 4/01/37 4/16 at 100.00 A+ 4,647,900
7,000 5.250%, 4/01/39 4/16 at 100.00 A+ 6,696,900
2,380 California Infrastructure Economic Development Bank, 10/11 at 101.00 A- 2,247,363
Revenue Bonds, J. David Gladstone Institutes, Series
2001, 5.250%, 10/01/34
3,500 California Pollution Control Financing Authority, 6/17 at 100.00 A3 3,327,135
Revenue Bonds, Pacific Gas and Electric Company,
Series 2004C, 4.750%, 12/01/23 - FGIC Insured
(Alternative Minimum Tax)
5,000 California, General Obligation Bonds, Series 2005, 3/16 at 100.00 A 4,778,550
5.000%, 3/01/31
6,435 California, General Obligation Refunding Bonds, Series No Opt. Call A 7,191,048
2002, 6.000%, 4/01/16 - AMBAC Insured
16,000 California, Various Purpose General Obligation Bonds, 6/17 at 100.00 A 14,977,920
Series 2007, 5.000%, 6/01/37
5,000 Coast Community College District, Orange County, 8/18 at 100.00 AAA 4,087,550
California, General Obligation Bonds, Series 2006C,
5.000%, 8/01/32 - FSA Insured
1,500 Golden State Tobacco Securitization Corporation, 6/17 at 100.00 BBB 996,585
California, Enhanced Tobacco Settlement Asset-Backed
Bonds, Series 2007A-1, 5.125%, 6/01/47
10,000 Golden State Tobacco Securitization Corporation, 6/22 at 100.00 BBB 6,143,300
California, Enhanced Tobacco Settlement Asset-Backed
Bonds, Series 2007A-2, 0.000%, 6/01/37
10,000 Golden State Tobacco Securitization Corporation, 6/13 at 100.00 AAA 11,701,900
California, Tobacco Settlement Asset-Backed Bonds,
Series 2003A-1, 6.750%, 6/01/39 (Pre-refunded 6/01/13)
Nuveen Investments 21
NPP | Nuveen Performance Plus Municipal Fund, Inc. (continued)
| Portfolio of Investments October 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (continued)
$ 3,300 M-S-R Energy Authority, California, Gas Revenue Bonds, No Opt. Call A $ 3,523,509
Citigroup Prepay Contracts, Series 2009B, 6.500%,
11/01/39
1,000 Mt. Diablo Hospital District, California, Insured 12/09 at 100.00 N/R (4) 1,097,680
Hospital Revenue Bonds, Series 1993A, 5.125%,
12/01/23 - AMBAC Insured (ETM)
13,450 Ontario Redevelopment Financing Authority, San No Opt. Call A 15,121,432
Bernardino County, California, Revenue Refunding
Bonds, Redevelopment Project 1, Series 1995, 7.200%,
8/01/17 - NPFG Insured
4,020 Palmdale Community Redevelopment Agency, California, No Opt. Call AAA 4,078,451
Residential Mortgage Revenue Refunding Bonds, Series
1991A, 7.150%, 2/01/10 (ETM)
2,325 Palmdale Community Redevelopment Agency, California, No Opt. Call AAA 3,068,465
Restructured Single Family Mortgage Revenue Bonds,
Series 1986D, 8.000%, 4/01/16 (Alternative Minimum
Tax) (ETM)
1,830 San Diego Public Facilities Financing Authority, 8/19 at 100.00 AA- 2,306,971
California, Water Utility Revenue Bonds, Tender
Option Bond Trust 3504, 19.428%, 8/01/39 (IF)
2,000 San Francisco Airports Commission, California, Revenue 5/11 at 100.00 A1 2,013,340
Refunding Bonds, San Francisco International Airport,
Second Series 2001, Issue 27B, 5.125%, 5/01/26 - FGIC
Insured
3,000 San Joaquin Hills Transportation Corridor Agency, Orange No Opt. Call A 467,400
County, California, Toll Road Revenue Refunding
Bonds, Series 1997A, 0.000%, 1/15/35 - NPFG Insured
2,610 Tobacco Securitization Authority of Northern California, 6/15 at 100.00 BBB 2,405,454
Tobacco Settlement Asset-Backed Bonds, Series
2005A-1, 4.750%, 6/01/23
14,160 Walnut Valley Unified School District, Los Angeles 8/11 at 103.00 AA- 16,052,342
County, California, General Obligation Refunding
Bonds, Series 1997A, 7.200%, 2/01/16 - NPFG Insured
------------------------------------------------------------------------------------------------------------------------------
144,550 Total California 137,049,564
------------------------------------------------------------------------------------------------------------------------------
COLORADO - 8.1% (5.4% OF TOTAL INVESTMENTS)
5,240 Adams 12 Five Star Schools, Adams County, Colorado, 12/15 at 100.00 AAA 5,608,896
General Obligation Bonds, Series 2005, 5.000%,
12/15/24 - FSA Insured
3,000 Colorado Educational and Cultural Facilities Authority, 8/14 at 100.00 A 2,867,640
Charter School Revenue Bonds, Peak-to-Peak Charter
School, Series 2004, 5.250%, 8/15/34 - SYNCORA GTY
Insured
7,660 Colorado Health Facilities Authority, Revenue Refunding 1/10 at 100.00 A2 7,663,524
and Improvement Bonds, Boulder Community Hospital,
Series 1994B, 5.875%, 10/01/23 - NPFG Insured
5,860 Colorado Health Facilities Authority, Revenue Refunding 9/11 at 100.00 AA (4) 6,324,639
Bonds, Catholic Health Initiatives, Series 2001,
5.250%, 9/01/21 (Pre-refunded 9/01/11)
4,500 Denver City and County, Colorado, Airport System Revenue 11/11 at 100.00 A+ 4,593,330
Refunding Bonds, Series 2001A, 5.500%, 11/15/16 -
FGIC Insured (Alternative Minimum Tax)
20,000 Denver Convention Center Hotel Authority, Colorado, 12/13 at 100.00 N/R (4) 22,435,400
Senior Revenue Bonds, Convention Center Hotel, Series
2003A, 5.000%, 12/01/33 (Pre-refunded 12/01/13) -
SYNCORA GTY Insured
12,855 E-470 Public Highway Authority, Colorado, Senior Revenue No Opt. Call A 6,154,974
Bonds, Series 1997B, 0.000%,9/01/21 - NPFG Insured
E-470 Public Highway Authority, Colorado, Senior Revenue
Bonds, Series 2000B:
15,700 0.000%, 9/01/32 - NPFG Insured No Opt. Call A 3,327,929
33,120 0.000%, 9/01/33 - NPFG Insured No Opt. Call A 6,514,042
18,500 E-470 Public Highway Authority, Colorado, Toll Revenue No Opt. Call A 3,006,250
Bonds, Series 2004A, 0.000%, 3/01/36 - NPFG Insured
755 Jefferson County School District R1, Colorado, General 12/14 at 100.00 AAA 810,213
Obligation Bonds, Series 2004, 5.000%, 12/15/22 - FSA
Insured (UB)
1,330 University of Colorado Hospital Authority, Revenue 11/09 at 101.00 A3 1,240,637
Bonds, Series 1999A, 5.000%, 11/15/29 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------
128,520 Total Colorado 70,547,474
------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 1.7% (1.2% OF TOTAL INVESTMENTS)
4,870 District of Columbia Tobacco Settlement Corporation, 5/11 at 101.00 BBB 4,882,272
Tobacco Settlement Asset-Backed Bonds, Series 2001,
6.250%, 5/15/24
5,590 District of Columbia, General Obligation Bonds, Series 6/11 at 100.00 AAA 5,666,359
1999B, 5.500%, 6/01/13 - FSA Insured
5,000 Washington Convention Center Authority, District of 10/16 at 100.00 A 4,627,600
Columbia, Senior Lien Dedicated Tax Revenue Bonds,
Series 2007A, 4.500%, 10/01/30 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------
15,460 Total District of Columbia 15,176,231
------------------------------------------------------------------------------------------------------------------------------
22 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 7.6% (5.0% OF TOTAL INVESTMENTS)
Broward County Housing Finance Authority, Florida,
Multifamily Housing Revenue Bonds, Venice Homes
Apartments, Series 2001A:
$ 1,545 5.700%, 1/01/32 - FSA Insured (Alternative Minimum Tax) 7/11 at 100.00 AAA $ 1,551,195
1,805 5.800%, 1/01/36 - FSA Insured (Alternative Minimum Tax) 7/11 at 100.00 AAA 1,817,364
5,300 Escambia County Health Facilities Authority, Florida, No Opt. Call Aa1 5,882,841
Revenue Bonds, Ascension Health Credit Group, Series
2003A, 5.250%, 11/15/14
2,065 Florida Housing Finance Corporation, Homeowner Mortgage 1/10 at 100.00 AAA 2,068,738
Revenue Bonds, Series 2000-11, 5.850%, 1/01/22 - FSA
Insured (Alternative Minimum Tax)
5,340 Florida Housing Finance Corporation, Homeowner Mortgage 1/16 at 100.00 AA+ 5,213,816
Revenue Bonds, Series 2006-2, 4.950%, 7/01/37
(Alternative Minimum Tax)
10,050 Florida State Board of Education, Full Faith and Credit 6/10 at 101.00 AAA 10,412,303
Public Education Capital Outlay Refunding Bonds,
Series 2000D, 5.750%, 6/01/22
7,000 Hillsborough County Aviation Authority, Florida, Revenue 10/13 at 100.00 Aa3 7,224,000
Bonds, Tampa International Airport, Series 2003A,
5.250%, 10/01/17 - NPFG Insured (Alternative Minimum
Tax)
10,000 JEA, Florida, Electric System Revenue Bonds, Series 4/15 at 100.00 AAA 10,091,200
2006-3A, 5.000%, 10/01/41 - FSA Insured (UB)
10,750 Martin County Industrial Development Authority, Florida, 12/09 at 100.00 BB+ 10,752,688
Industrial Development Revenue Bonds, Indiantown
Cogeneration LP, Series 1994A, 7.875%, 12/15/25
(Alternative Minimum Tax)
2,570 Miami-Dade County Housing Finance Authority, Florida, 6/11 at 100.00 AAA 2,590,714
Multifamily Mortgage Revenue Bonds, Country Club
Villas II Project, Series 2001-1A, 5.850%, 1/01/37 -
FSA Insured (Alternative Minimum Tax)
3,500 Miami-Dade County, Florida, Aviation Revenue Bonds, 10/15 at 100.00 A2 3,159,520
Miami International Airport, Series 2005A, 5.000%,
10/01/37 - SYNCORA GTY Insured (Alternative Minimum
Tax)
1,700 Miami-Dade County, Florida, Beacon Tradeport Community 5/12 at 102.00 BBB- 1,570,630
Development District, Special Assessment Bonds,
Commercial Project, Series 2002A, 5.625%, 5/01/32 -
RAAI Insured
4,500 Port Saint Lucie. Florida, Special Assessment Revenue 7/17 at 100.00 A 3,876,480
Bonds, Southwest Annexation District 1B, Series 2007,
5.000%, 7/01/40 - NPFG Insured
------------------------------------------------------------------------------------------------------------------------------
66,125 Total Florida 66,211,489
------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 0.8% (0.6% OF TOTAL INVESTMENTS)
5,000 Atlanta, Georgia, Water and Wastewater Revenue Bonds, No Opt. Call A 5,266,300
Series 1999A, 5.500%, 11/01/22 - FGIC Insured
2,000 George L. Smith II World Congress Center Authority, 7/10 at 101.00 A 2,002,520
Atlanta, Georgia, Revenue Refunding Bonds, Domed
Stadium Project, Series 2000, 5.500%, 7/01/20 - NPFG
Insured (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------
7,000 Total Georgia 7,268,820
------------------------------------------------------------------------------------------------------------------------------
IDAHO - 0.1% (0.0% OF TOTAL INVESTMENTS)
320 Idaho Housing and Finance Association, Single Family 1/10 at 100.00 Aa3 326,333
Mortgage Bonds, Series 2000D, 6.200%, 7/01/14
(Alternative Minimum Tax)
275 Idaho Housing and Finance Association, Single Family 7/10 at 100.00 Aa2 277,602
Mortgage Bonds, Series 2000G-2, 5.950%, 7/01/25
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------
595 Total Idaho 603,935
------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 23.9% (15.9% OF TOTAL INVESTMENTS)
10,000 Chicago Board of Education, Illinois, Unlimited Tax No Opt. Call AA- 6,282,500
General Obligation Bonds, Dedicated Tax Revenues,
Series 1998B-1, 0.000%, 12/01/19 - FGIC Insured
10,000 Chicago Board of Education, Illinois, Unlimited Tax No Opt. Call AA- 5,908,600
General Obligation Bonds, Dedicated Tax Revenues,
Series 1999A, 0.000%, 12/01/20 - FGIC Insured
Chicago, Illinois, General Obligation Bonds, City
Colleges, Series 1999:
32,170 0.000%, 1/01/21 - FGIC Insured No Opt. Call AA- 18,795,001
32,670 0.000%, 1/01/22 - FGIC Insured No Opt. Call AA- 17,933,216
9,240 Chicago, Illinois, Revenue Bonds, Midway Airport, Series 1/10 at 100.00 A 9,243,973
1996A, 5.500%, 1/01/29 - NPFG Insured
1,665 Chicago, Illinois, Third Lien General Airport Revenue 1/16 at 100.00 A1 1,668,397
Bonds, O'Hare International Airport, Series 2005A,
5.000%, 1/01/33 - FGIC Insured
Nuveen Investments 23
NPP | Nuveen Performance Plus Municipal Fund, Inc. (continued)
| Portfolio of Investments October 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
ILLINOIS (continued)
DuPage County Forest Preserve District, Illinois,
General Obligation Bonds, Series 2000:
$ 8,000 0.000%, 11/01/18 No Opt. Call AAA $ 5,734,800
15,285 0.000%, 11/01/19 No Opt. Call AAA 10,362,160
2,000 Illinois Finance Authority, Revenue Bonds, Children's 8/18 at 100.00 AAA 1,997,880
Memorial Hospital, Series 2008A, 5.250%, 8/15/47 -
AGC Insured (UB)
5,245 Illinois Finance Authority, Revenue Bonds, Loyola 7/17 at 100.00 Aa1 5,387,716
University of Chicago, Tender Option Bond Trust 1137,
9.072%, 7/01/46 (IF)
1,000 Illinois Finance Authority, Revenue Bonds, University of 7/14 at 100.00 Aa1 1,016,150
Chicago, Series 2004A, 5.000%, 7/01/34
4,590 Illinois Health Facilities Authority, FHA-Insured 8/13 at 100.00 AAA 4,563,011
Mortgage Revenue Refunding Bonds, Sinai Health
System, Series 2003, 5.150%, 2/15/37
1,180 Illinois Health Facilities Authority, Revenue Bonds, 7/12 at 100.00 A- 1,181,628
Lake Forest Hospital, Series 2002A, 5.750%, 7/01/29
3,500 Illinois Health Facilities Authority, Revenue Bonds, 7/13 at 100.00 A- 3,516,765
Lake Forest Hospital, Series 2003, 6.000%, 7/01/33
4,580 Illinois Health Facilities Authority, Revenue Bonds, 8/10 at 102.00 Aaa 4,707,874
Midwest Care Center IX Inc., Series 2000, 6.250%,
8/20/35
2,225 Illinois Health Facilities Authority, Revenue Bonds, 1/10 at 101.00 BBB 2,282,138
Silver Cross Hospital and Medical Centers, Series
1999, 5.250%, 8/15/15 (Mandatory put 8/15/11)
7,250 Kane, Kendall, LaSalle, and Will Counties, Illinois, 12/13 at 57.71 AA- 3,355,010
Community College District 516, General Obligation
Bonds, Series 2005E, 0.000%, 12/15/24 - FGIC Insured
6,000 McHenry County Conservation District, Illinois, General 2/11 at 100.00 Aa1 (4) 6,378,120
Obligation Bonds, Series 2001A, 5.625%, 2/01/21
(Pre-refunded 2/01/11) - FGIC Insured
5,000 Metropolitan Pier and Exposition Authority, Illinois, 6/12 at 101.00 AAA 5,042,300
Revenue Bonds, McCormick Place Expansion Project,
Series 2002A, 5.250%, 6/15/42 - NPFG Insured
10,650 Metropolitan Pier and Exposition Authority, Illinois, No Opt. Call AAA 14,101,985
Revenue Bonds, McCormick Place Hospitality Facility,
Series 1996A, 7.000%, 7/01/26 (ETM)
Metropolitan Pier and Exposition Authority, Illinois,
Revenue Refunding Bonds, McCormick Place Expansion
Project, Series 1996A:
9,400 0.000%, 12/15/18 - NPFG Insured No Opt. Call A 6,299,316
16,570 0.000%, 12/15/20 - NPFG Insured No Opt. Call A 9,779,945
23,550 0.000%, 12/15/22 - NPFG Insured No Opt. Call A 12,209,733
13,000 0.000%, 12/15/24 - NPFG Insured No Opt. Call A 5,919,030
5,100 Metropolitan Pier and Exposition Authority, Illinois, No Opt. Call AAA 5,621,832
Revenue Refunding Bonds, McCormick Place Expansion
Project, Series 1998A, 5.500%, 12/15/23 - FGIC Insured
5,180 Metropolitan Pier and Exposition Authority, Illinois, No Opt. Call AAA 6,073,964
Revenue Refunding Bonds, McCormick Place Expansion
Project, Series 1998A, 5.500%, 12/15/23 - FGIC
Insured (ETM)
17,865 Regional Transportation Authority, Cook, DuPage, Kane, No Opt. Call AAA 21,249,346
Lake, McHenry and Will Counties, Illinois, General
Obligation Bonds, Series 1999, 5.750%, 6/01/23 - FSA
Insured
6,090 Sherman, Illinois, GNMA Mortgage Revenue Refunding 4/10 at 102.00 AAA 6,218,682
Bonds, Villa Vianney, Series 1999A, 6.450%, 10/01/29
10,000 Will County Community High School District 210 No Opt. Call Aa3 5,138,700
Lincoln-Way, Illinois, General Obligation Bonds,
Series 2006, 0.000%, 1/01/23 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------
279,005 Total Illinois 207,969,772
------------------------------------------------------------------------------------------------------------------------------
INDIANA - 5.6% (3.7% OF TOTAL INVESTMENTS)
2,465 Danville Multi-School Building Corporation, Indiana, 7/11 at 100.00 A 2,580,535
First Mortgage Refunding Bonds, Series2001, 5.250%,
7/15/18 - AMBAC Insured
3,000 Hospital Authority of Delaware County, Indiana, Hospital 8/16 at 100.00 Baa3 2,411,460
Revenue Bonds, Cardinal Health System, Series 2006,
5.250%, 8/01/36
14,000 Indiana Health Facility Financing Authority, Hospital 8/10 at 101.50 A+ (4) 14,770,700
Revenue Bonds, Clarian Health Obligated Group, Series
2000A, 5.500%, 2/15/30 (Pre-refunded 8/15/10) - NPFG
Insured
750 Indiana Health Facility Financing Authority, Hospital 2/16 at 100.00 A+ 728,670
Revenue Bonds, Clarian Health Obligation Group,
Series 2006B, 5.000%, 2/15/23
2,210 Indiana Health Facility Financing Authority, Hospital No Opt. Call AAA 2,524,284
Revenue Refunding Bonds, Columbus Regional Hospital,
Series 1993, 7.000%, 8/15/15 - FSA Insured
24 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
INDIANA (continued)
$ 4,320 Indiana Health Facility Financing Authority, Revenue 1/10 at 100.00 A (4) $ 4,335,163
Bonds, Ancilla Systems Inc. Obligated Group, Series
1997, 5.250%, 7/01/22 - NPFG Insured (ETM)
3,000 Indiana Health Facility Financing Authority, Revenue 3/17 at 100.00 BBB 2,861,280
Bonds, Community Foundation of Northwest Indiana,
Series 2007, 5.500%, 3/01/37
2,000 Indiana Health Facility Financing Authority, Revenue 5/15 at 100.00 A 1,742,820
Bonds, Community Hospitals of Indiana, Series 2005A,
5.000%, 5/01/35 - AMBAC Insured
Indiana Transportation Finance Authority, Highway
Revenue Bonds, Series 2000:
1,285 5.375%, 12/01/25 (Pre-refunded 12/01/10) 12/10 at 100.00 AA+ (4) 1,354,608
6,715 5.375%, 12/01/25 (Pre-refunded 12/01/10) 12/10 at 100.00 AA+ (4) 7,078,752
3,105 Indiana University, Student Fee Revenue Bonds, Series 8/13 at 100.00 Aa1 3,354,518
2003O, 5.250%, 8/01/20 - FGIC Insured
1,000 Marion County Convention and Recreational Facilities 6/11 at 100.00 A 1,006,180
Authority, Indiana, Excise Taxes Lease Rental Revenue
Refunding Senior Bonds, Series 2001A, 5.000%, 6/01/21 -
NPFG Insured
2,395 Shelbyville Central Renovation School Building 7/15 at 100.00 AA+ 2,403,862
Corporation, Indiana, First Mortgage Bonds, Series
2005, 4.375%, 7/15/26 - NPFG Insured
1,800 Sunman Dearborn High School Building Corporation, 1/15 at 100.00 AA+ 1,882,476
Indiana, First Mortgage Bonds, Series 2005, 5.000%,
7/15/25 - NPFG Insured
------------------------------------------------------------------------------------------------------------------------------
48,045 Total Indiana 49,035,308
------------------------------------------------------------------------------------------------------------------------------
IOWA - 2.5% (1.6% OF TOTAL INVESTMENTS)
1,500 Iowa Finance Authority, Health Facility Revenue Bonds, 7/16 at 100.00 BB+ 1,250,745
Care Initiatives Project, Series 2006A, 5.500%,
7/01/21
Iowa Tobacco Settlement Authority, Asset Backed
Settlement Revenue Bonds, Series 2005C:
5,000 5.375%, 6/01/38 6/15 at 100.00 BBB 3,673,500
4,365 5.500%, 6/01/42 6/15 at 100.00 BBB 3,183,918
5,400 5.625%, 6/01/46 6/15 at 100.00 BBB 3,970,458
4,500 Iowa Tobacco Settlement Authority, Tobacco Asset-Backed 6/17 at 100.00 BBB 3,878,100
Revenue Bonds, Series 2005B, 5.600%, 6/01/34
5,000 Iowa Tobacco Settlement Authority, Tobacco Settlement 6/11 at 101.00 AAA 5,391,000
Asset-Backed Revenue Bonds, Series 2001B, 5.600%,
6/01/35 (Pre-refunded 6/01/11)
------------------------------------------------------------------------------------------------------------------------------
25,765 Total Iowa 21,347,721
------------------------------------------------------------------------------------------------------------------------------
KANSAS - 1.5% (1.0% OF TOTAL INVESTMENTS)
3,790 Kansas Department of Transportation, Highway Revenue 3/14 at 100.00 AAA 4,097,672
Bonds, Series 2004A, 5.000%, 3/01/23 (UB)
5,790 Sedgwick County Unified School District 259, Wichita, 9/10 at 100.00 AA 5,815,592
Kansas, General Obligation Bonds, Series 2000,
3.500%, 9/01/17
3,200 Wyandotte County Unified School District 500, Kansas, 9/11 at 100.00 AAA 3,220,992
General Obligation Bonds, Series 2001, 4.000%,
9/01/21 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------
12,780 Total Kansas 13,134,256
------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 2.9% (1.9% OF TOTAL INVESTMENTS)
600 East Baton Rouge Mortgage Finance Authority, Louisiana, 4/10 at 101.00 Aaa 600,462
GNMA/FNMA Mortgage-Backed Securities Program Single
Family Mortgage Revenue Refunding Bonds, Series
1997B-1, 5.750%, 10/01/26
4,000 Lafayette City and Parish, Louisiana, Utilities Revenue 11/14 at 100.00 A1 4,174,920
Bonds, Series 2004, 5.250%, 11/01/25 - NPFG Insured
4,650 Louisiana Public Facilities Authority, Revenue Bonds, 7/14 at 100.00 A 4,563,138
Baton Rouge General Hospital, Series 2004, 5.250%,
7/01/33 - NPFG Insured
Tobacco Settlement Financing Corporation, Louisiana,
Tobacco Settlement Asset-Backed Bonds, Series 2001B:
10,000 5.500%, 5/15/30 5/11 at 101.00 BBB 10,038,500
6,680 5.875%, 5/15/39 5/11 at 101.00 BBB 6,045,734
------------------------------------------------------------------------------------------------------------------------------
25,930 Total Louisiana 25,422,754
------------------------------------------------------------------------------------------------------------------------------
MAINE - 0.7% (0.4% OF TOTAL INVESTMENTS)
5,680 Portland, Maine, Airport Revenue Bonds, Series 2003A, 7/13 at 100.00 AAA 5,742,196
5.000%, 7/01/32 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------
Nuveen Investments 25
NPP | Nuveen Performance Plus Municipal Fund, Inc. (continued)
| Portfolio of Investments October 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 1.4% (1.0% OF TOTAL INVESTMENTS)
$ 7,720 Maryland Transportation Authority, Airport Parking 3/12 at 101.00 A2 $ 7,736,366
Revenue Bonds, Baltimore-Washington International
Airport Passenger Facility, Series 2002B, 5.125%,
3/01/20 - AMBAC Insured (Alternative Minimum Tax)
4,380 Takoma Park, Maryland, Hospital Facilities Revenue No Opt. Call AAA 4,808,233
Refunding and Improvement Bonds, Washington Adventist
Hospital, Series 1995, 6.500%, 9/01/12 - FSA Insured
(ETM)
------------------------------------------------------------------------------------------------------------------------------
12,100 Total Maryland 12,544,599
------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 6.1% (4.0% OF TOTAL INVESTMENTS)
Massachusetts Development Finance Authority, Revenue
Bonds, 100 Cambridge Street Redevelopment, M/SRBC
Project, Series 2002A:
4,000 5.125%, 8/01/28 - NPFG Insured 2/12 at 100.00 A 3,870,960
5,625 5.125%, 2/01/34 - NPFG Insured 2/12 at 100.00 A 5,195,306
940 Massachusetts Educational Finance Authority, Student 12/09 at 101.00 AA 951,186
Loan Revenue Refunding Bonds, Series 2000G, 5.700%,
12/01/11 - NPFG Insured (Alternative Minimum Tax)
8,730 Massachusetts Health and Educational Facilities 10/15 at 100.00 AAA 8,892,989
Authority, Revenue Bonds, Berkshire Health System,
Series 2005F, 5.000%, 10/01/19 - AGC Insured
500 Massachusetts Health and Educational Facilities 7/18 at 100.00 A3 454,360
Authority, Revenue Bonds, CareGroup Inc., Series
2008E-1, 5.125%, 7/01/38
1,530 Massachusetts Health and Educational Facilities 1/10 at 100.50 A2 1,347,593
Authority, Revenue Bonds, Southcoast Health System
Obligated Group, Series 1998A, 4.750%, 7/01/27 - NPFG
Insured
5,745 Massachusetts Industrial Finance Agency, Resource 12/09 at 101.00 BBB 5,146,658
Recovery Revenue Refunding Bonds, Ogden Haverhill
Project, Series 1998A, 5.600%, 12/01/19 (Alternative
Minimum Tax)
12,580 Massachusetts Turnpike Authority, Metropolitan Highway 1/10 at 100.00 A 11,866,337
System Revenue Bonds, Senior Series 1997A, 5.000%,
1/01/37 - NPFG Insured
890 Massachusetts, General Obligation Bonds, Consolidated 11/12 at 100.00 AA (4) 995,465
Loan, Series 2002C, 5.250%, 11/01/30 (Pre-refunded
11/01/12)
Massachusetts, General Obligation Bonds, Consolidated
Loan, Series 2002E:
1,255 5.250%, 1/01/22 (Pre-refunded 1/01/13) - FGIC Insured 1/13 at 100.00 AA (4) 1,397,430
3,745 5.250%, 1/01/22 (Pre-refunded 1/01/13) - FGIC Insured 1/13 at 100.00 AA (4) 4,170,020
8,500 Route 3 North Transportation Improvements Association, 6/10 at 100.00 A (4) 8,769,620
Massachusetts, Lease Revenue Bonds, Series 2000,
5.375%, 6/15/33 (Pre-refunded 6/15/10) - NPFG Insured
------------------------------------------------------------------------------------------------------------------------------
54,040 Total Massachusetts 53,057,924
------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 4.9% (3.2% OF TOTAL INVESTMENTS)
6,155 Birmingham City School District, Oakland County, 5/10 at 100.00 AAA 6,221,843
Michigan, School Building and Site Bonds, Series
1998, 4.750%, 11/01/24 - FSA Insured
5,000 Detroit, Michigan, Second Lien Sewerage Disposal System 7/15 at 100.00 A 4,587,300
Revenue Bonds, Series 2005A, 5.000%, 7/01/35 - NPFG
Insured
1,430 Michigan State Building Authority, Revenue Bonds, 10/11 at 100.00 A+ 1,442,169
Facilities Program, Series 2001I, 5.000%, 10/15/24
70 Michigan State Building Authority, Revenue Bonds, 10/11 at 100.00 A+ (4) 75,754
Facilities Program, Series 2001I, 5.000%, 10/15/24
(Pre-refunded 10/15/11)
5,000 Michigan State Building Authority, Revenue Refunding 10/13 at 100.00 A+ 5,019,450
Bonds, Facilities Program, Series 2003II,
5.000%, 10/15/29 - NPFG Insured
7,115 Michigan State Hospital Finance Authority, Hospital 3/13 at 100.00 A1 (4) 8,049,769
Revenue Refunding Bonds, Henry Ford Health System,
Series 2003A, 5.500%, 3/01/16 (Pre-refunded 3/01/13)
3,000 Michigan Strategic Fund, Collateralized Limited 3/10 at 102.00 A 2,943,210
Obligation Pollution Control Revenue Refunding
Bonds, Detroit Edison Company, Series 1999A, 5.550%,
9/01/29 - NPFG Insured (Alternative Minimum Tax)
3,050 Michigan Tobacco Settlement Finance Authority, Tobacco 6/18 at 100.00 Baa3 2,692,052
Settlement Asset-Backed Revenue Bonds, Series 2008A,
6.875%, 6/01/42
1,150 Royal Oak Hospital Finance Authority, Michigan, Hospital 9/18 at 100.00 A1 1,339,923
Revenue Bonds, William Beaumont Hospital, Refunding
Series 2009V, 8.250%, 9/01/39
26 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
MICHIGAN (continued)
$ 10,000 Wayne County, Michigan, Airport Revenue Bonds, Detroit 12/09 at 100.50 A $ 10,081,800
Metropolitan Wayne County Airport, Series 1998A,
5.375%, 12/01/16 - NPFG Insured (Alternative Minimum
Tax)
------------------------------------------------------------------------------------------------------------------------------
41,970 Total Michigan 42,453,270
------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 2.9% (1.9% OF TOTAL INVESTMENTS)
3,000 Minneapolis-St. Paul Metropolitan Airports Commission, 1/11 at 100.00 A (4) 3,165,030
Minnesota, Subordinate Airport Revenue Bonds, Series
2001C, 5.250%, 1/01/26 (Pre-refunded 1/01/11) - FGIC
Insured
18,075 St. Paul Housing and Redevelopment Authority, Minnesota, 11/15 at 103.00 AAA 21,734,465
Sales Tax Revenue Refunding Bonds, Civic Center
Project, Series 1996, 7.100%, 11/01/23 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------
21,075 Total Minnesota 24,899,495
------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 1.4% (0.9% OF TOTAL INVESTMENTS)
9,750 Mississippi Business Finance Corporation, Pollution 4/10 at 100.00 BBB 9,760,530
Control Revenue Refunding Bonds, System Energy
Resources Inc. Project, Series 1998, 5.875%, 4/01/22
2,475 Mississippi Hospital Equipment and Facilities Authority, 9/14 at 100.00 AA 2,520,565
Revenue Bonds, Baptist Memorial Healthcare, Series
2004B-1, 5.000%, 9/01/24 (UB)
------------------------------------------------------------------------------------------------------------------------------
12,225 Total Mississippi 12,281,095
------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 1.7% (1.1% OF TOTAL INVESTMENTS)
6,350 Kansas City, Missouri, Airport Revenue Bonds, General 9/12 at 100.00 A+ 6,627,495
Improvement Projects, Series 2003B, 5.250%, 9/01/17 -
FGIC Insured
1,845 Missouri Health and Educational Facilities Authority, 5/13 at 100.00 AA 1,921,660
Revenue Bonds, BJC Health System, Series 2003,
5.250%, 5/15/18
3,815 Missouri Health and Educational Facilities Authority, 6/11 at 101.00 AA- (4) 4,131,416
Revenue Bonds, SSM Healthcare System, Series 2001A,
5.250%, 6/01/28 (Pre-refunded 6/01/11) - AMBAC Insured
2,000 Missouri-Illinois Metropolitan District Bi-State 10/13 at 100.00 AAA 2,009,100
Development Agency, Mass Transit Sales Tax
Appropriation Bonds, Metrolink Cross County Extension
Project, Series 2002B, 5.000%, 10/01/32 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------
14,010 Total Missouri 14,689,671
------------------------------------------------------------------------------------------------------------------------------
MONTANA - 0.5% (0.4% OF TOTAL INVESTMENTS)
545 Montana Board of Housing, Single Family Mortgage Bonds, 12/09 at 100.00 AA+ 554,025
Series 2000A-2, 6.450%, 6/01/29 (Alternative Minimum
Tax)
4,795 Montana Higher Education Student Assistance Corporation, 12/09 at 100.50 A2 4,119,480
Student Loan Revenue Bonds, Subordinate Series 1998B,
5.500%, 12/01/31 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------
5,340 Total Montana 4,673,505
------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 0.1% (0.1% OF TOTAL INVESTMENTS)
1,055 Nebraska Investment Finance Authority, Single Family 9/10 at 100.00 AAA 1,086,428
Housing Revenue Bonds, Series 2000E, 5.850%, 9/01/20
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------
NEVADA - 2.5% (1.7% OF TOTAL INVESTMENTS)
10,900 Clark County School District, Nevada, General Obligation 6/12 at 100.00 AA (4) 12,151,538
Bonds, Series 2002C, 5.500%, 6/15/19 (Pre-refunded
6/15/12) - NPFG Insured
Director of Nevada State Department of Business and
Industry, Revenue Bonds, Las Vegas Monorail Project, First
Tier, Series 2000:
3,500 0.000%, 1/01/21 - AMBAC Insured No Opt. Call Caa2 326,445
2,780 0.000%, 1/01/28 - AMBAC Insured No Opt. Call Caa2 143,865
6,980 5.375%, 1/01/40 - AMBAC Insured 1/10 at 100.00 Caa2 1,430,970
5,000 Reno, Nevada, Health Facilities Revenue Bonds, Catholic 7/17 at 100.00 A 4,923,300
Healthcare West, Series 2007A, 5.250%, 7/01/31
2,500 Reno, Nevada, Health Facility Revenue Bonds, Catholic 7/17 at 100.00 AAA 2,688,850
Healthcare West, Trust 2634, 18.374%, 7/01/31 - BHAC
Insured (IF)
------------------------------------------------------------------------------------------------------------------------------
31,660 Total Nevada 21,664,968
------------------------------------------------------------------------------------------------------------------------------
Nuveen Investments 27
NPP | Nuveen Performance Plus Municipal Fund, Inc. (continued)
| Portfolio of Investments October 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 1.2% (0.8% OF TOTAL INVESTMENTS)
New Hampshire Housing Finance Authority, FHLMC Multifamily
Housing Remarketed Revenue Bonds, Countryside LP, Series
1994:
$ 3,725 6.000%, 7/01/18 (Alternative Minimum Tax) 7/10 at 101.00 Aaa $ 3,794,360
6,945 6.100%, 7/01/24 (Alternative Minimum Tax) 7/10 at 101.00 Aaa 7,061,745
------------------------------------------------------------------------------------------------------------------------------
10,670 Total New Hampshire 10,856,105
------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 7.6% (5.0% OF TOTAL INVESTMENTS)
2,110 New Jersey Higher Education Assistance Authority, 6/10 at 101.00 Aaa 2,165,535
Student Loan Revenue Bonds, Series 2000A,
6.000%, 6/01/13 - NPFG Insured (Alternative Minimum
Tax)
4,500 New Jersey Transportation Trust Fund Authority, No Opt. Call AAA 5,135,715
Transportation System Bonds, Series 2001C,
5.500%, 12/15/18 - FSA Insured
9,250 New Jersey Transportation Trust Fund Authority, 6/13 at 100.00 AAA 10,578,670
Transportation System Bonds, Series 2003C,
5.500%, 6/15/23 (Pre-refunded 6/15/13)
New Jersey Transportation Trust Fund Authority,
Transportation System Bonds, Series 2006C:
35,000 0.000%, 12/15/29 - FSA Insured No Opt. Call AAA 11,708,200
10,000 0.000%, 12/15/30 - FGIC Insured No Opt. Call AA- 2,734,000
10,000 New Jersey Turnpike Authority, Revenue Bonds, Series 7/13 at 100.00 AAA 10,501,300
2003A, 5.000%, 1/01/20 - FSA Insured (UB)
10,055 Tobacco Settlement Financing Corporation, New Jersey, 6/12 at 100.00 AAA 10,930,992
Tobacco Settlement Asset-Backed Bonds,
Series 2002, 5.750%, 6/01/32 (Pre-refunded 6/01/12)
4,450 Tobacco Settlement Financing Corporation, New Jersey, 6/13 at 100.00 AAA 5,244,681
Tobacco Settlement Asset-Backed Bonds,
Series 2003, 6.750%, 6/01/39 (Pre-refunded 6/01/13)
West Deptford Township, Gloucester County, New Jersey,
General Obligation Bonds, Series 2000:
3,150 5.500%, 9/01/21 (Pre-refunded 9/01/10) - FGIC Insured 9/10 at 100.00 Baa1 (4) 3,286,458
3,335 5.500%, 9/01/22 (Pre-refunded 9/01/10) - FGIC Insured 9/10 at 100.00 Baa1 (4) 3,479,472
------------------------------------------------------------------------------------------------------------------------------
91,850 Total New Jersey 65,765,023
------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 6.6% (4.4% OF TOTAL INVESTMENTS)
5,500 Dormitory Authority of the State of New York, 2/14 at 100.00 AAA 5,677,375
FHA-Insured Mortgage Revenue Bonds, Kaleida Health,
Series 2004, 5.050%, 2/15/25
1,910 Dormitory Authority of the State of New York, Insured 1/10 at 100.50 N/R 1,924,841
Revenue Bonds, 853 Schools Program, Gateway-Longview
Inc., Series 1998A, 5.500%, 7/01/18 - AMBAC Insured
Dormitory Authority of the State of New York, Revenue
Bonds, Marymount Manhattan College, Series 1999:
1,580 6.375%, 7/01/13 - RAAI Insured 1/10 at 101.00 BBB- 1,599,876
9,235 6.125%, 7/01/21 - RAAI Insured 1/10 at 101.00 BBB- 9,335,107
1,500 Dormitory Authority of the State of New York, Revenue 2/10 at 100.00 N/R 1,548,690
Bonds, St. Barnabas Hospital, Series
1997, 5.450%, 8/01/35 - AMBAC Insured
1,500 Hempstead Industrial Development Agency, New York, No Opt. Call Baa2 1,503,900
Resource Recovery Revenue Refunding
Bonds, American Ref-Fuel Company of Hempstead LP,
Series 2001, 5.000%, 12/01/10 (Mandatory put 6/01/10)
13,220 Metropolitan Transportation Authority, New York, 11/12 at 100.00 AAA 13,755,410
Dedicated Tax Fund Bonds, Series 2002A,
5.500%, 11/15/26 - FSA Insured
13,600 Metropolitan Transportation Authority, New York, 11/16 at 100.00 AAA 12,835,408
Transportation Revenue Bonds, Series 2006B,
4.500%, 11/15/32 - FSA Insured (UB)
6,300 New York City, New York, General Obligation Bonds, 5/10 at 101.00 AAA 6,550,803
Fiscal Series 2000A, 6.250%, 5/15/26 -
FSA Insured
3,000 New York State Energy Research and Development 3/10 at 101.00 A 2,980,830
Authority, Pollution Control Revenue Bonds,
Rochester Gas and Electric Corporation, Series 1998A,
5.950%, 9/01/33 - NPFG Insured
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------
57,345 Total New York 57,712,240
------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 1.9% (1.3% OF TOTAL INVESTMENTS)
4,900 Charlotte-Mecklenburg Hospital Authority, North 1/15 at 100.00 AAA 5,586,784
Carolina, Healthcare System Revenue Bonds, DBA
Carolinas Healthcare System, Series 2005A, 5.000%,
1/15/45 (Pre-refunded 1/15/15)
3,500 North Carolina Medical Care Commission, Healthcare 6/19 at 100.00 AA 3,460,975
Facilities Revenue Bonds, Duke University
Health System, Series 2009A, 5.000%, 6/01/42 (WI/DD,
Settling 11/10/09)
28 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA (continued)
$ 2,000 North Carolina Municipal Power Agency 1, Catawba Electric 1/10 at 100.00 A $ 2,015,160
Revenue Bonds, Series 1998A, 5.000%, 1/01/20 -
NPFG Insured
5,500 The Charlotte-Mecklenberg Hospital Authority (North 1/18 at 100.00 AA- 5,408,315
Carolina), Doing Business as Carolinas HealthCare
System, Health Care Refunding Revenue Bonds, Series
2008A, 5.000%, 1/15/39
------------------------------------------------------------------------------------------------------------------------------
15,900 Total North Carolina 16,471,234
------------------------------------------------------------------------------------------------------------------------------
OHIO - 7.7% (5.1% OF TOTAL INVESTMENTS)
10,000 American Municipal Power Ohio Inc., General Revenue 2/18 at 100.00 A1 10,048,600
Bonds, Series 2008, 5.250%, 2/15/43
Buckeye Tobacco Settlement Financing Authority, Ohio,
Tobacco Settlement Asset-Backed Revenue Bonds, Senior
Lien, Series 2007A-2:
5,710 5.125%, 6/01/24 6/17 at 100.00 BBB 5,085,669
3,570 5.875%, 6/01/30 6/17 at 100.00 BBB 3,107,221
4,875 5.750%, 6/01/34 6/17 at 100.00 BBB 4,099,631
3,000 6.000%, 6/01/42 6/17 at 100.00 BBB 2,313,510
14,830 5.875%, 6/01/47 6/17 at 100.00 BBB 10,987,844
5,150 Buckeye Tobacco Settlement Financing Authority, Ohio, 6/22 at 100.00 BBB 3,378,143
Tobacco Settlement Asset-Backed Revenue Bonds, Senior
Lien, Series 2007A-3, 0.000%, 6/01/37
6,720 Cleveland, Ohio, Airport System Revenue Bonds, Series 1/10 at 101.00 AAA 6,724,838
2001A, 5.000%, 1/01/31 - FSA Insured
780 Cleveland, Ohio, Airport System Revenue Bonds, Series 1/10 at 101.00 AAA 794,009
2001A, 5.000%, 1/01/31 (Pre-refunded 1/01/10) - FSA
Insured
3,650 Montgomery County, Ohio, Revenue Bonds, Catholic Health 5/14 at 100.00 AA 3,645,365
Initiatives, Series 2004A, 5.000%, 5/01/30
5,500 Ohio Water Development Authority, Solid Waste Disposal 3/10 at 101.00 N/R 4,972,880
Revenue Bonds, Bay Shore Power, Series 1998A, 5.875%,
9/01/20 (Alternative Minimum Tax)
11,900 Ohio Water Development Authority, Solid Waste Disposal 3/10 at 102.00 N/R 11,424,238
Revenue Bonds, Bay Shore Power, Series 1998B, 6.625%,
9/01/20 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------
75,685 Total Ohio 66,581,948
------------------------------------------------------------------------------------------------------------------------------
OREGON - 1.1% (0.7% OF TOTAL INVESTMENTS)
9,150 Port of St. Helens, Oregon, Pollution Control Revenue No Opt. Call BBB+ 9,298,322
Bonds, Portland General Electric Company, Series
1985B, 4.800%, 6/01/10
------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 3.5% (2.3% OF TOTAL INVESTMENTS)
1,250 Allegheny County Hospital Development Authority, No Opt. Call Aa3 1,275,500
Pennsylvania, University of Pittsburgh Medical Center
Revenue Bonds, Series 2009A, 5.500%, 8/15/34
Bethlehem Authority, Northampton and Lehigh Counties,
Pennsylvania, Guaranteed Water Revenue Bonds,
Series 1998:
3,125 0.000%, 5/15/22 - FSA Insured No Opt. Call AAA 1,774,188
3,125 0.000%, 5/15/23 - FSA Insured No Opt. Call AAA 1,670,063
3,135 0.000%, 5/15/24 - FSA Insured No Opt. Call AAA 1,580,886
3,155 0.000%, 5/15/26 - FSA Insured No Opt. Call AAA 1,428,016
4,145 0.000%, 11/15/26 - FSA Insured No Opt. Call AAA 1,831,717
2,800 0.000%, 5/15/28 - FSA Insured No Opt. Call AAA 1,130,052
3,000 0.000%, 11/15/28 - FSA Insured No Opt. Call AAA 1,181,490
1,035 Carbon County Industrial Development Authority, No Opt. Call BBB- 1,045,640
Pennsylvania, Resource Recovery Revenue Refunding
Bonds, Panther Creek Partners Project, Series 2000,
6.650%, 5/01/10 (Alternative Minimum Tax)
11,000 Delaware County Authority, Pennsylvania, Revenue Bonds, 11/09 at 101.00 A1 11,026,180
Catholic Health East, Series 1998A, 4.875%,
11/15/18 - AMBAC Insured
4,500 Pennsylvania Economic Development Financing Authority, 1/10 at 100.00 CC 2,926,935
Senior Lien Resource Recovery Revenue Bonds,
Northampton Generating Project, Series 1994A, 6.500%,
1/01/13 (Alternative Minimum Tax)
300 Pennsylvania Economic Development Financing Authority, 1/10 at 100.00 N/R 105,000
Subordinate Resource Recovery Revenue Bonds,
Northampton Generating Project, Series 1994C, 6.875%,
1/01/11 (Alternative Minimum Tax)
5,000 Pennsylvania Turnpike Commission, Turnpike Subordinate 6/26 at 100.00 AAA 3,641,400
Revenue Bonds, Series 2009C, 0.000%, 6/01/33 - FSA
Insured
------------------------------------------------------------------------------------------------------------------------------
45,570 Total Pennsylvania 30,617,067
------------------------------------------------------------------------------------------------------------------------------
Nuveen Investments 29
NPP | Nuveen Performance Plus Municipal Fund, Inc. (continued)
| Portfolio of Investments October 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 0.9% (0.6% OF TOTAL INVESTMENTS)
$ 1,250 Puerto Rico Highway and Transportation Authority, 7/10 at 101.00 AAA $ 1,307,513
Highway Revenue Bonds, Series 2000B, 5.875%, 7/01/21
(Pre-refunded 7/01/10) - NPFG Insured
25,000 Puerto Rico Sales Tax Financing Corporation, Sales Tax No Opt. Call AA- 2,575,250
Revenue Bonds, Series 2007A, 0.000%, 8/01/47 - AMBAC
Insured
3,750 Puerto Rico Sales Tax Financing Corporation, Sales Tax 8/17 at 100.00 AA- 3,997,050
Revenue Bonds, Tender Option Bonds Trust 3101,
17.924%, 8/01/57 (IF)
------------------------------------------------------------------------------------------------------------------------------
30,000 Total Puerto Rico 7,879,813
------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 0.7% (0.5% OF TOTAL INVESTMENTS)
2,000 Kent County Water Authority, Rhode Island, General 7/12 at 100.00 A 2,010,920
Revenue Bonds, Series 2002A, 5.000%, 7/15/23 - NPFG
Insured
Rhode Island Health and Educational Building
Corporation, Revenue Refunding Bonds, Salve Regina
University, Series 2002:
1,260 5.250%, 3/15/17 - RAAI Insured 3/12 at 101.00 BBB- 1,293,188
1,080 5.250%, 3/15/18 - RAAI Insured 3/12 at 101.00 BBB- 1,103,792
1,600 Rhode Island Tobacco Settlement Financing Corporation, 6/12 at 100.00 BBB 1,513,632
Tobacco Settlement Asset-Backed Bonds, Series 2002A,
6.125%, 6/01/32
------------------------------------------------------------------------------------------------------------------------------
5,940 Total Rhode Island 5,921,532
------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 2.9% (1.9% OF TOTAL INVESTMENTS)
2,625 Medical University Hospital Authority, South Carolina, 8/14 at 100.00 A 2,688,368
FHA-Insured Mortgage Revenue Bonds, Series 2004A,
5.250%, 2/15/25 - NPFG Insured
26,955 Piedmont Municipal Power Agency, South Carolina, No Opt. Call A- 7,743,093
Electric Revenue Bonds, Series 2004A-2, 0.000%,
1/01/31 - AMBAC Insured
13,790 Tobacco Settlement Revenue Management Authority, South 5/12 at 100.00 BBB (4) 14,470,674
Carolina, Tobacco Settlement Asset-Backed Bonds,
Series 2001B, 6.000%, 5/15/22 (Pre-refunded 5/15/12)
------------------------------------------------------------------------------------------------------------------------------
43,370 Total South Carolina 24,902,135
------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 1.5% (1.0% OF TOTAL INVESTMENTS)
2,860 Johnson City Health and Educational Facilities Board, 7/23 at 100.00 A (4) 2,898,038
Tennessee, Hospital Revenue Refunding and Improvement
Bonds, Johnson City Medical Center, Series 1998C,
5.125%, 7/01/25 (Pre-refunded 7/01/23) - NPFG Insured
1,700 Memphis-Shelby County Airport Authority, Tennessee, 3/10 at 101.00 A2 1,715,011
Airport Revenue Bonds, Series 1999D, 6.000%, 3/01/24 -
AMBAC Insured (Alternative Minimum Tax)
6,000 Metropolitan Government of Nashville-Davidson County 12/17 at 100.00 N/R 6,766,080
Health and Educational Facilities Board, Tennessee,
Revenue Refunding and Improvement Bonds, Meharry
Medical College, Series 1996, 6.000%, 12/01/19 -
AMBAC Insured
2,000 Sullivan County Health Educational and Housing 3/13 at 100.00 N/R 1,719,860
Facilities Board, Tennessee, Revenue Bonds, Wellmont
Health System, Refunding Series 200A, 5.486%, 9/01/32
------------------------------------------------------------------------------------------------------------------------------
12,560 Total Tennessee 13,098,989
------------------------------------------------------------------------------------------------------------------------------
TEXAS - 6.5% (4.4% OF TOTAL INVESTMENTS)
3,975 Bell County Health Facilities Development Corporation, 2/10 at 101.00 AAA 4,081,172
Texas, Revenue Bonds, Scott and White Memorial
Hospital and Scott, Sherwood and Brindley Foundation,
Series 2000A, 6.125%, 8/15/23 (Pre-refunded 2/15/10) -
NPFG Insured
5,000 Bexar Metropolitan Water District, Texas, Waterworks 5/16 at 100.00 A 4,929,100
System Revenue Bonds, Series 2006, 5.000%, 5/01/35 -
NPFG Insured
Central Texas Regional Mobility Authority, Travis and
Williamson Counties, Toll Road Revenue Bonds, Series
2005:
4,000 5.000%, 1/01/35 - FGIC Insured 1/15 at 100.00 A 3,451,080
13,000 5.000%, 1/01/45 - FGIC Insured 1/15 at 100.00 A 11,086,530
4,000 Houston Community College, Texas, Limited Tax General 2/13 at 100.00 AA+ 4,107,080
Obligation Bonds, Series 2003, 5.000%, 2/15/27 -
AMBAC Insured (UB)
3,885 Houston Independent School District, Public Facility No Opt. Call AA 2,614,527
Corporation, Harris County, Texas, Lease Revenue
Bonds, Cesar E. Chavez High School, Series 1998A,
0.000%, 9/15/19 - AMBAC Insured
1,600 Houston, Texas, Senior Lien Airport System Revenue 7/18 at 100.00 AA- 1,664,160
Bonds, Refunding Series 2009A, 5.500%, 7/01/39
30 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
TEXAS (continued)
$ 33,855 Leander Independent School District, Williamson and 8/14 at 23.67 AAA $ 6,154,839
Travis Counties, Texas, General Obligation Bonds,
Series 2006, 0.000%, 8/15/40
Leander Independent School District, Williamson and Travis
Counties, Texas, Unlimited Tax School Building and
Refunding Bonds, Series 1998:
4,930 0.000%, 8/15/20 1/10 at 55.91 AAA 2,740,488
3,705 0.000%, 8/15/22 1/10 at 49.80 AAA 1,829,640
3,480 Pearland, Texas, General Obligation Bonds, Series 2002, 3/12 at 100.00 Aaa 3,804,406
5.000%, 3/01/27 (Pre-refunded 3/01/12) - FGIC Insured
6,000 Spring Branch Independent School District, Harris 2/11 at 100.00 AAA 6,333,720
County, Texas, Limited Tax Schoolhouse and Refunding
Bonds, Series 2001, 5.125%, 2/01/26 (Pre-refunded
2/01/11)
4,000 Tarrant Regional Water District, Texas, Water Revenue 3/13 at 100.00 AAA 4,238,160
Refunding and Improvement Bonds, Series 1999, 5.000%,
3/01/22 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------
91,430 Total Texas 57,034,902
------------------------------------------------------------------------------------------------------------------------------
UTAH - 3.3% (2.2% OF TOTAL INVESTMENTS)
3,000 Riverton, Utah, Hospital Revenue Bonds, IHC Health 8/19 at 100.00 AA+ 2,929,740
Services, Inc., Series 2009, 5.000%, 8/15/41 (WI/DD,
Settling 11/05/09)
Utah County, Utah, Hospital Revenue Bonds, IHC Health
Services Inc., Series 1997:
12,885 5.250%, 8/15/21 - NPFG Insured (ETM) 2/10 at 100.00 A (4) 12,934,223
3,900 5.250%, 8/15/26 - NPFG Insured (ETM) 2/10 at 100.00 A (4) 3,914,899
1,960 Utah Housing Corporation, Single Family Mortgage Bonds, 1/12 at 100.00 AA- 1,921,604
Series 2002A-1, 5.300%, 7/01/18 (Alternative Minimum
Tax)
5 Utah Housing Finance Agency, Single Family Mortgage 1/10 at 100.00 AA 5,067
Bonds, Series 2000B, 6.250%, 7/01/22 (Alternative
Minimum Tax)
620 Utah Housing Finance Agency, Single Family Mortgage 7/10 at 100.00 AA- 631,812
Bonds, Series 2000D-1, 6.050%, 7/01/14 (Alternative
Minimum Tax)
530 Utah Housing Finance Agency, Single Family Mortgage 7/10 at 100.00 AA 529,995
Bonds, Series 2000E-1, Class II, 6.150%, 1/01/27
(Alternative Minimum Tax)
840 Utah Housing Finance Agency, Single Family Mortgage 7/10 at 100.00 AA- 855,733
Bonds, Series 2000E-1, Class III, 6.000%, 1/01/15
(Alternative Minimum Tax)
785 Utah Housing Finance Agency, Single Family Mortgage 7/11 at 100.00 AA 792,261
Bonds, Series 2001A-2, 5.650%, 7/01/27 (Alternative
Minimum Tax)
545 Utah Housing Finance Agency, Single Family Mortgage 1/11 at 100.00 Aaa 559,497
Bonds, Series 2001B-1, 5.750%, 7/01/19 (Alternative
Minimum Tax)
3,000 Utah Water Finance Agency, Revenue Bonds, Pooled Loan 10/12 at 100.00 N/R (4) 3,354,390
Financing Program, Series 2002C, 5.250%, 10/01/28
(Pre-refunded 10/01/12) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------
28,070 Total Utah 28,429,221
------------------------------------------------------------------------------------------------------------------------------
VIRGIN ISLANDS - 0.8% (0.5% OF TOTAL INVESTMENTS)
4,700 Virgin Islands Public Finance Authority, Gross Receipts 10/14 at 100.00 BBB+ 4,534,560
Taxes Loan Note, Series 2003, 5.000%, 10/01/33 - RAAI
Insured
2,500 Virgin Islands Public Finance Authority, Revenue Bonds, 1/14 at 100.00 BBB 2,545,175
Refinery Project - Hovensa LLC, Series 2003, 6.125%,
7/01/22 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------
7,200 Total Virgin Islands 7,079,735
------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 0.8% (0.5% OF TOTAL INVESTMENTS)
10,500 Metropolitan Washington DC Airports Authority, Virginia, 10/26 at 100.00 AAA 7,174,020
Dulles Toll Road Revenue Bonds, Series 2009C.,
0.000%, 10/01/41 - AGC Insured
------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 5.3% (3.5% OF TOTAL INVESTMENTS)
12,235 Chelan County Public Utility District 1, Washington, No Opt. Call AA 5,289,802
Columbia River-Rock Island Hydro-Electric System
Revenue Refunding Bonds, Series 1997A, 0.000%,
6/01/26 - NPFG Insured
Cowlitz County Public Utilities District 1, Washington,
Electric Production Revenue Bonds, Series 2004:
465 5.000%, 9/01/22 - FGIC Insured 9/14 at 100.00 A 478,029
3,100 5.000%, 9/01/28 - FGIC Insured 9/14 at 100.00 A 3,131,589
Nuveen Investments 31
NPP | Nuveen Performance Plus Municipal Fund, Inc. (continued)
| Portfolio of Investments October 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
WASHINGTON (continued)
$ 5,000 Energy Northwest, Washington, Electric Revenue Refunding 7/13 at 100.00 Aaa $ 5,571,900
Bonds, Nuclear Project 1, Series 2003A, 5.500%,
7/01/16 (UB)
10,000 Washington State Healthcare Facilities Authority, 10/16 at 100.00 AA 9,551,000
Revenue Bonds, Providence Health Care Services,
Series 2006A, 4.625%, 10/01/34 - FGIC Insured (UB)
4,685 Washington State Healthcare Facilities Authority, 12/09 at 101.00 A (4) 4,752,370
Revenue Bonds, Providence Services, Series 1999,
5.375%, 12/01/19 (Pre-refunded 12/01/09) - NPFG
Insured
5,000 Washington State Housing Finance Commission, Non-Profit 1/10 at 101.00 BBB- 5,003,400
Housing Revenue Bonds, Kline Galland Center, Series
1999, 6.000%, 7/01/29 - RAAI Insured
12,000 Washington, Motor Vehicle Fuel Tax General Obligation 1/11 at 100.00 AA+ 12,184,800
Bonds, Series 2001D, 5.250%, 1/01/26
------------------------------------------------------------------------------------------------------------------------------
52,485 Total Washington 45,962,890
------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 0.6% (0.4% OF TOTAL INVESTMENTS)
5,000 Mason County, West Virginia, Pollution Control Revenue 10/11 at 100.00 BBB 5,045,000
Bonds, Appalachian Power Company, Series 2003L,
5.500%, 10/01/22
------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 3.0% (2.0% OF TOTAL INVESTMENTS)
11,620 Wisconsin Health and Educational Facilities Authority, 2/10 at 101.00 BBB+ 11,649,982
Revenue Bonds, Marshfield Clinic, Series 1999,
6.250%, 2/15/29 - RAAI Insured
7,315 Wisconsin Health and Educational Facilities Authority, 1/10 at 102.00 N/R 6,242,623
Revenue Bonds, Millennium Housing Foundation Inc.,
Series 1998, 6.100%, 1/01/28
8,875 Wisconsin Housing and Economic Development Authority, 9/14 at 100.00 AA 8,188,519
Home Ownership Revenue Bonds, Series 2005C, 4.875%,
3/01/36 (Alternative Minimum Tax) (UB)
------------------------------------------------------------------------------------------------------------------------------
27,810 Total Wisconsin 26,081,124
------------------------------------------------------------------------------------------------------------------------------
$ 1,596,345 Total Investments (cost $1,286,419,790) - 150.7% 1,311,136,145
===============---------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (4.9)% (42,945,000)
-----------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.5% 21,581,567
----------------------------------------------------------------------------------------------------------
Auction Rate Preferred Shares, at Liquidation Value - (48.3)% (5) (419,900,000)
-----------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 869,872,712
===========================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net
assets applicable to Common shares unless otherwise noted.
(2) Optional Call Provisions (not covered by the report of independent
registered public accounting firm): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other call
provisions at varying prices at later dates. Certain mortgage-backed
securities may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered public
accounting firm): Using the higher of Standard & Poor's Group ("Standard &
Poor's") or Moody's Investor Service, Inc. ("Moody's") rating. Ratings
below BBB by Standard & Poor's or Baa by Moody's are considered to be
below investment grade.
(4) Backed by an escrow or trust containing sufficient U.S. Government or U.S.
Government agency securities which ensure the timely payment of principal
and interest. Such investments are normally considered to be equivalent to
AAA rated securities.
(5) Auction Rate Preferred Shares, at Liquidation Value as a percentage of
Total Investments is 32.0%
N/R Not rated.
WI/DD Purchased on a when-issued or delayed delivery basis.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected as a financing
transaction. See Notes to Financial Statements, Footnote 1 - Inverse
Floating Rate Securities for more information.
See accompanying notes to financial statements.
32 Nuveen Investments
NMA | Nuveen Municipal Advantage Fund, Inc.
| Portfolio of Investments October 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 1.4% (0.9% OF TOTAL INVESTMENTS)
$ 5,075 Lauderdale County and Florence Healthcare Authority, 1/10 at 101.00 A $ 4,467,320
Alabama, Revenue Bonds, Coffee Health Group, Series
1999A, 5.250%, 7/01/24 - NPFG Insured
5,155 Phenix City Industrial Development Board, Alabama, 5/12 at 100.00 BBB 4,342,108
Environmental Improvement Revenue Bonds, MeadWestvaco
Corporation, Series 2002A, 6.350%, 5/15/35
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------
10,230 Total Alabama 8,809,428
------------------------------------------------------------------------------------------------------------------------------
ALASKA - 0.9% (0.6% OF TOTAL INVESTMENTS)
Alaska Housing Finance Corporation, General Housing
Purpose Bonds, Series 2005A:
1,125 5.250%, 12/01/34 - FGIC Insured (UB) 12/14 at 100.00 AA 1,147,556
1,280 5.250%, 12/01/41 - FGIC Insured (UB) 12/14 at 100.00 AA 1,299,315
Northern Tobacco Securitization Corporation, Alaska,
Tobacco Settlement Asset-Backed Bonds, Series 2006A:
920 4.625%, 6/01/23 6/14 at 100.00 Baa3 845,278
3,250 5.000%, 6/01/46 6/14 at 100.00 Baa3 2,159,625
------------------------------------------------------------------------------------------------------------------------------
6,575 Total Alaska 5,451,774
------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 2.0% (1.2% OF TOTAL INVESTMENTS)
4,905 Maricopa County Industrial Development Authority, 7/17 at 100.00 A 4,840,646
Arizona, Health Facility Revenue Bonds, Catholic
Healthcare West, Series 2007A, 5.250%, 7/01/32
5,000 Maricopa County Pollution Control Corporation, Arizona, 1/10 at 100.00 Baa3 4,956,250
Remarketed Revenue Refunding Bonds, Public Service
Company of New Mexico, Series 1992A, 5.750%, 11/01/22
2,500 Phoenix, Arizona, Civic Improvement Corporation, Senior 7/18 at 100.00 AA- 2,492,275
Lien Airport Revenue Bonds, Series 2008A, 5.000%,
7/01/38
------------------------------------------------------------------------------------------------------------------------------
12,405 Total Arizona 12,289,171
------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 18.0% (11.6% OF TOTAL INVESTMENTS)
3,500 Alameda Corridor Transportation Authority, California, 10/17 at 100.00 A- 2,652,895
Subordinate Lien Revenue Bonds, Series 2004A, 0.000%,
10/01/25 - AMBAC Insured
Calexico Unified School District, Imperial County,
California, General Obligation Bonds, Series 2005B:
4,070 0.000%, 8/01/32 - FGIC Insured No Opt. Call A 982,783
6,410 0.000%, 8/01/34 - FGIC Insured No Opt. Call A 1,361,484
3,000 California Health Facilities Financing Authority, Health 3/13 at 100.00 A 2,785,350
Facility Revenue Bonds, Adventist
Health System/West, Series 2003A, 5.000%, 3/01/33
7,500 California State Public Works Board, Lease Revenue 6/14 at 100.00 A- 7,147,650
Bonds, Department of Mental Health, Coalinga State
Hospital, Series 2004A, 5.125%, 6/01/29
2,750 California Statewide Community Development Authority, 8/19 at 100.00 AA 2,950,668
Revenue Bonds, Methodist Hospital Project, Series
2009, 6.750%, 2/01/38
11,200 California, General Obligation Bonds, Series 2003, 8/13 at 100.00 A 11,214,112
5.250%, 2/01/28
16,000 California, Various Purpose General Obligation Bonds, 6/17 at 100.00 A 14,977,920
Series 2007, 5.000%, 6/01/37
9,955 Capistrano Unified School District, Orange County, No Opt. Call A 2,532,552
California, Special Tax Bonds, Community Facilities
District, Series 2005, 0.000%, 9/01/31 - FGIC Insured
Colton Joint Unified School District, San Bernardino
County, California, General Obligation Bonds, Series
2006C:
3,800 0.000%, 2/01/33 - FGIC Insured 2/15 at 38.73 A+ 788,120
3,795 0.000%, 2/01/37 - FGIC Insured No Opt. Call A+ 584,240
7,535 Contra Costa County, California, GNMA Mortgage-Backed No Opt. Call AAA 9,675,166
Securities Program Home Mortgage Revenue Bonds,
Series 1989, 7.750%, 5/01/22 (Alternative Minimum
Tax) (ETM)
8,145 Cupertino Union School District, Santa Clara County, 8/13 at 55.54 AA 3,314,363
California, General Obligation Bonds, Series 2003B,
0.000%, 8/01/25 - FGIC Insured
2,510 Folsom Cordova Unified School District, Sacramento No Opt. Call A+ 832,366
County, California, General Obligation Bonds, School
Facilities Improvement District 1, Series 2004B,
0.000%, 10/01/28 - NPFG Insured
3,360 Folsom Cordova Unified School District, Sacramento No Opt. Call A+ 1,206,778
County, California, General Obligation Bonds, School
Facilities Improvement District 2, Series 2002A,
0.000%, 7/01/27 - NPFG Insured
2,315 Gateway Unified School District, California, General No Opt. Call A 587,709
Obligation Bonds, Series 2004B, 0.000%, 8/01/32 -
FGIC Insured
Nuveen Investments 33
NMA | Nuveen Municipal Advantage Fund, Inc. (continued)
| Portfolio of Investments October 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (continued)
$ 1,000 Golden State Tobacco Securitization Corporation, 6/17 at 100.00 BBB $ 664,390
California, Enhanced Tobacco Settlement Asset-Backed
Bonds, Series 2007A-1, 5.125%, 6/01/47
3,000 Golden State Tobacco Securitization Corporation, No Opt. Call AAA 1,124,970
California, Tobacco Settlement Asset-Backed Revenue
Bonds, Series 2005A, 0.000%, 6/01/26 - FSA Insured
1,275 Madera Unified School District, Madera County, 8/12 at 100.00 AAA 1,354,356
California, General Obligation Bonds, Series 2002,
5.250%, 8/01/23 - FSA Insured
2,200 M-S-R Energy Authority, California, Gas Revenue Bonds, No Opt. Call A 2,349,006
Citigroup Prepay Contracts, Series 2009C, 6.500%,
11/01/39
North Orange County Community College District,
California, General Obligation Bonds, Series 2003B:
7,735 0.000%, 8/01/25 - FGIC Insured No Opt. Call AA 3,201,052
4,000 0.000%, 8/01/26 - FGIC Insured No Opt. Call AA 1,549,960
5,000 Palmdale Community Redevelopment Agency, California, No Opt. Call AAA 5,519,050
Residential Mortgage Revenue Refunding Bonds, Series
1991B, 7.375%, 2/01/12 (ETM)
5,000 Palmdale Community Redevelopment Agency, California, No Opt. Call AAA 6,254,800
Single Family Restructured Mortgage Revenue Bonds,
Series 1986A, 8.000%, 3/01/16 (Alternative Minimum
Tax) (ETM)
9,315 Perris, California, GNMA Mortgage-Backed Securities No Opt. Call AAA 11,741,930
Program Single Family Mortgage Revenue Bonds, Series
1989A, 7.600%, 1/01/23 (Alternative Minimum Tax) (ETM)
1,830 San Diego Public Facilities Financing Authority, 8/19 at 100.00 AA- 2,306,971
California, Water Utility Revenue Bonds, Tender
Option Bond Trust 3504, 19.428%, 8/01/39 (IF)
7,660 San Joaquin Hills Transportation Corridor Agency, Orange No Opt. Call AAA 4,186,190
County, California, Senior Lien Toll Road Revenue
Bonds, Series 1993, 0.000%, 1/01/24 (ETM)
23,000 San Joaquin Hills Transportation Corridor Agency, Orange No Opt. Call A 3,583,400
County, California, Toll Road Revenue Refunding
Bonds, Series 1997A, 0.000%, 1/15/35 - NPFG Insured
7,250 San Jose-Evergreen Community College District, Santa 9/15 at 47.82 Aa2 2,240,685
Clara County, California, General Obligation Bonds,
Series 2005A, 0.000%, 9/01/29 - NPFG Insured
------------------------------------------------------------------------------------------------------------------------------
174,110 Total California 109,670,916
------------------------------------------------------------------------------------------------------------------------------
COLORADO - 8.1% (5.2% OF TOTAL INVESTMENTS)
1,600 Arkansas River Power Authority, Colorado, Power Revenue 10/16 at 100.00 BBB 1,433,296
Bonds, Series 2006, 5.250%, 10/01/40 - SYNCORA GTY
Insured
9,440 Colorado Health Facilities Authority, Colorado, Revenue 9/16 at 100.00 AA 8,167,488
Bonds, Catholic Health Initiatives, Series 2006A,
4.500%, 9/01/38
3,335 Colorado Health Facilities Authority, Colorado, Revenue 7/19 at 100.00 AA 3,410,004
Bonds, Catholic Health Initiatives, Series 2009A,
5.500%, 7/01/34 (WI/DD, Settling 11/10/09)
1,150 Colorado Health Facilities Authority, Revenue Bonds, 9/18 at 102.00 AAA 1,151,990
Poudre Valley Health System, Series 2005C, 5.250%,
3/01/40 - FSA Insured
3,300 Denver City and County, Colorado, Airport Revenue Bonds, 11/16 at 100.00 A+ 3,382,566
Series 2006, 5.000%, 11/15/24 - FGIC Insured
2,000 Denver Convention Center Hotel Authority, Colorado, 11/16 at 100.00 BBB- 1,579,720
Senior Revenue Bonds, Convention Center Hotel, Series
2006, 4.750%, 12/01/35 - SYNCORA GTY Insured
Denver, Colorado, Airport Revenue Bonds, Series 2006:
5,365 5.000%, 11/15/23 - FGIC Insured (UB) 11/16 at 100.00 A+ 5,531,798
4,335 5.000%, 11/15/25 - FGIC Insured (UB) 11/16 at 100.00 A+ 4,422,524
E-470 Public Highway Authority, Colorado, Senior Revenue
Bonds, Series 1997B:
2,650 0.000%, 9/01/16 - NPFG Insured No Opt. Call A 1,825,506
8,645 0.000%, 9/01/26 - NPFG Insured No Opt. Call A 2,878,353
1,000 E-470 Public Highway Authority, Colorado, Senior Revenue 9/10 at 102.00 AAA 1,064,610
Bonds, Series 2000A, 5.750%, 9/01/35 (Pre-refunded
9/01/10) - NPFG Insured
E-470 Public Highway Authority, Colorado, Senior Revenue
Bonds, Series 2000B:
7,500 0.000%, 9/01/29 - NPFG Insured No Opt. Call A 1,994,475
10,000 0.000%, 9/01/31 - NPFG Insured No Opt. Call A 2,278,300
10,000 0.000%, 9/01/32 - NPFG Insured No Opt. Call A 2,119,700
Platte River Power Authority, Colorado, Power Revenue
Refunding Bonds, Series 2002EE:
1,030 5.375%, 6/01/17 (Pre-refunded 6/01/12) 6/12 at 100.00 Aa2 (4) 1,144,979
4,890 5.375%, 6/01/18 (Pre-refunded 6/01/12) 6/12 at 100.00 Aa2 (4) 5,435,871
34 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
COLORADO (continued)
Platte River Power Authority, Colorado, Power Revenue
Refunding Bonds, Series 2002EE:
$ 970 5.375%, 6/01/17 6/12 at 100.00 AA $ 1,057,358
110 5.375%, 6/01/18 6/12 at 100.00 AA 118,890
------------------------------------------------------------------------------------------------------------------------------
77,320 Total Colorado 48,997,428
------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 0.2% (0.1% OF TOTAL INVESTMENTS)
1,270 District of Columbia Housing Finance Agency, GNMA/FNMA 12/09 at 100.00 AAA 1,267,905
Single Family Mortgage Revenue Bonds, Series 1997B,
5.900%, 12/01/28 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 4.4% (2.8% OF TOTAL INVESTMENTS)
2,770 Florida Housing Finance Corporation, Housing Revenue 12/10 at 100.00 AAA 2,789,501
Bonds, Stratford Point Apartments, Series 2000O-1,
5.850%, 12/01/31 - FSA Insured (Alternative Minimum
Tax)
14,730 South Miami Health Facilities Authority, Florida, 8/17 at 100.00 AA- 13,827,788
Hospital Revenue, Baptist Health System Obligation
Group, Series 2007, 5.000%, 8/15/42 (UB)
10,130 Tampa, Florida, Healthcare System Revenue Bonds, 12/09 at 100.00 A (4) 10,288,231
Allegany Health System - St. Mary's Hospital, Series
1993, 5.125%, 12/01/23 - NPFG Insured (ETM)
------------------------------------------------------------------------------------------------------------------------------
27,630 Total Florida 26,905,520
------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 1.1% (0.7% OF TOTAL INVESTMENTS)
4,000 Augusta, Georgia, Water and Sewerage Revenue Bonds, 10/14 at 100.00 AAA 4,130,040
Series 2004, 5.250%, 10/01/39 - FSA Insured
2,900 Coffee County Hospital Authority, Georgia, Revenue 12/14 at 100.00 BBB- 2,489,766
Bonds, Coffee County Regional Medical Center, Series
2004, 5.000%, 12/01/26
------------------------------------------------------------------------------------------------------------------------------
6,900 Total Georgia 6,619,806
------------------------------------------------------------------------------------------------------------------------------
HAWAII - 0.4% (0.3% OF TOTAL INVESTMENTS)
2,215 Hawaii Housing and Community Development Corporation, 7/10 at 102.00 N/R (4) 2,335,673
GNMA Collateralized Multifamily Housing Revenue
Bonds, Sunset Villas, Series 2000, 5.700%, 7/20/31
(Pre-refunded 7/20/10)
290 Hawaii Housing Finance and Development Corporation, 1/10 at 100.00 AAA 297,589
Single Family Mortgage Purchase Revenue Bonds, Series
1997A, 5.750%, 7/01/30 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------
2,505 Total Hawaii 2,633,262
------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 15.7% (10.1% OF TOTAL INVESTMENTS)
4,345 Chicago Board of Education, Illinois, Unlimited Tax No Opt. Call AA- 1,555,814
General Obligation Bonds, Dedicated Tax Revenues,
Series 1998B-1, 0.000%, 12/01/28 - FGIC Insured
4,260 Chicago Board of Education, Illinois, Unlimited Tax No Opt. Call AA- 1,248,734
General Obligation Bonds, Dedicated Tax Revenues,
Series 1999A, 0.000%, 12/01/31 - FGIC Insured
5,865 Chicago, Illinois, General Obligation Bonds, 7/10 at 101.00 AAA 6,165,464
Neighborhoods Alive 21 Program, Series 2000A, 6.500%,
1/01/35 (Pre-refunded 7/01/10) - FGIC Insured
5,000 Chicago, Illinois, Second Lien Passenger Facility Charge 1/11 at 101.00 A1 4,730,400
Revenue Bonds, O'Hare International Airport, Series
2001A, 5.375%, 1/01/32 - AMBAC Insured (Alternative
Minimum Tax)
2,000 Illinois Finance Authority, Revenue Bonds, Children's 8/18 at 100.00 AAA 1,997,880
Memorial Hospital, Series 2008A, 5.250%, 8/15/47 -
AGC Insured (UB)
8,395 Illinois Finance Authority, Revenue Bonds, Loyola 7/17 at 100.00 Aa1 8,623,428
University of Chicago, Tender Option Bond Trust 1137,
9.072%, 7/01/46 (IF)
2,500 Illinois Finance Authority, Revenue Bonds, Silver Cross 8/19 at 100.00 BBB 2,627,775
Hospital and Medical Centers, Series 2009, 6.875%,
8/15/38
6,000 Illinois Health Facilities Authority, Revenue Bonds, 5/12 at 100.00 Aaa 6,688,380
Condell Medical Center, Series 2002, 5.750%, 5/15/22
(Pre-refunded 5/15/12)
6,165 Illinois Health Facilities Authority, Revenue Bonds, 2/10 at 100.00 A 6,166,665
Sarah Bush Lincoln Health Center, Series1996B,
5.750%, 2/15/22
10,740 Lake and McHenry Counties Community Unit School District 1/15 at 66.94 Aa3 5,583,833
118, Wauconda, Illinois, General Obligation Bonds,
Series 2005B, 0.000%, 1/01/23 - FSA Insured
1,090 Metropolitan Pier and Exposition Authority, Illinois, No Opt. Call A2 619,000
Revenue Bonds, McCormick Place Expansion Project,
Series 1993A, 0.000%, 6/15/21 - FGIC Insured
Metropolitan Pier and Exposition Authority, Illinois,
Revenue Bonds, McCormick Place Expansion Project, Series
1999A:
13,455 5.500%, 12/15/24 - FGIC Insured 12/09 at 101.00 AAA 13,653,461
10,430 5.250%, 12/15/28 - FGIC Insured 12/09 at 101.00 AAA 10,544,000
Nuveen Investments 35
NMA | Nuveen Municipal Advantage Fund, Inc. (continued)
| Portfolio of Investments October 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
ILLINOIS (continued)
$ 3,175 Metropolitan Pier and Exposition Authority, Illinois, No Opt. Call AAA $ 533,527
Revenue Bonds, McCormick Place Expansion Project,
Series 2002A, 0.000%, 6/15/41 - NPFG Insured
6,000 Metropolitan Pier and Exposition Authority, Illinois, No Opt. Call A 2,805,900
Revenue Refunding Bonds, McCormick Place Expansion
Project, Series 1996A, 0.000%, 6/15/24 - NPFG Insured
4,600 Regional Transportation Authority, Cook, DuPage, Kane, No Opt. Call Aa3 5,639,738
Lake, McHenry and Will Counties, Illinois, General
Obligation Bonds, Series 1990A, 7.200%, 11/01/20 -
AMBAC Insured
1,940 University of Illinois, Auxiliary Facilities Systems 4/13 at 100.00 AA- 1,995,930
Revenue Bonds, Series 2003A, 5.000%, 4/01/23 - AMBAC
Insured
7,500 Valley View Public Schools, Community Unit School No Opt. Call AA 3,339,675
District 365U of Will County, Illinois, General
Obligation Bonds, Series 2005, 0.000%, 11/01/25 -
NPFG Insured
23,125 Will County Community High School District 210 No Opt. Call Aa3 11,131,681
Lincoln-Way, Illinois, General Obligation Bonds,
Series 2006, 0.000%, 1/01/24 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------
126,585 Total Illinois 95,651,285
------------------------------------------------------------------------------------------------------------------------------
INDIANA - 3.5% (2.2% OF TOTAL INVESTMENTS)
2,025 Hospital Authority of Delaware County, Indiana, Hospital 8/10 at 100.00 N/R 1,969,475
Revenue Refunding Bonds, Cardinal Health System,
Series 1997, 5.000%, 8/01/16 - AMBAC Insured
4,030 Indiana Finance Authority Health System Revenue Bonds 11/19 at 100.00 Aa3 3,934,811
Series 2009A (Sisters of St. Francis Health Services,
Inc. Obligated Group), 5.250%, 11/01/39 (WI/DD,
Settling 11/05/09)
6,000 Indiana Finance Authority, Revenue and Refunding Bonds, 12/19 at 100.00 AA 5,859,840
Trinity Health Credit Group, Series 2009A, 5.250%,
12/01/38 (WI/DD, Settling 11/16/09)
5,205 Indiana Health Facility Financing Authority, Hospital 8/10 at 101.50 A+ (4) 5,491,535
Revenue Bonds, Clarian Health Obligated Group, Series
2000A, 5.500%, 2/15/30 (Pre-refunded 8/15/10) - NPFG
Insured
2,435 Indiana Health Facility Financing Authority, Revenue 3/17 at 100.00 BBB 2,322,406
Bonds, Community Foundation of Northwest Indiana,
Series 2007, 5.500%, 3/01/37
1,475 St. Joseph County Hospital Authority, Indiana, Revenue 2/10 at 101.00 BB+ 1,454,630
Bonds, Madison Center Inc., Series 1999, 5.450%,
2/15/12
------------------------------------------------------------------------------------------------------------------------------
21,170 Total Indiana 21,032,697
------------------------------------------------------------------------------------------------------------------------------
IOWA - 0.8% (0.5% OF TOTAL INVESTMENTS)
6,050 Iowa Tobacco Settlement Authority, Asset Backed 6/15 at 100.00 BBB 4,444,935
Settlement Revenue Bonds, Series 2005C, 5.375%,
6/01/38
250 Iowa Tobacco Settlement Authority, Tobacco Asset-Backed 6/17 at 100.00 BBB 215,450
Revenue Bonds, Series 2005B, 5.600%, 6/01/34
------------------------------------------------------------------------------------------------------------------------------
6,300 Total Iowa 4,660,385
------------------------------------------------------------------------------------------------------------------------------
KANSAS - 0.3% (0.2% OF TOTAL INVESTMENTS)
1,750 Wamego, Kansas, Pollution Control Revenue Bonds, Kansas 6/14 at 100.00 A 1,767,623
Gas and Electric Company, Series 2004, 5.300%,
6/01/31 - NPFG Insured
------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 0.4% (0.3% OF TOTAL INVESTMENTS)
1,500 Kentucky Economic Development Finance Authority, 8/19 at 100.00 Aa3 1,601,070
Hospital Revenue Bonds, Baptist Healthcare System,
Series 2009A, 5.375%, 8/15/24
1,000 Kentucky Economic Development Finance Authority, 6/18 at 100.00 AAA 1,071,950
Louisville Arena Project Revenue Bonds,
Louisville Arena Authority, Inc., Series 2008A-1,
6.000%, 12/01/33 - AGC Insured
------------------------------------------------------------------------------------------------------------------------------
2,500 Total Kentucky 2,673,020
------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 13.9% (8.9% OF TOTAL INVESTMENTS)
13,500 DeSoto Parish, Louisiana, Pollution Control Revenue 3/10 at 102.00 BBB 13,504,590
Refunding Bonds, Cleco Utility Group Inc. Project,
Series 1999, 5.875%, 9/01/29 - AMBAC Insured
Louisiana Public Facilities Authority, Extended Care
Facilities Revenue Bonds, Comm-Care Corporation Project,
Series 1994:
625 11.000%, 2/01/14 (ETM) No Opt. Call N/R (4) 754,406
5,650 11.000%, 2/01/14 (ETM) No Opt. Call N/R (4) 6,818,646
6,650 Louisiana Public Facilities Authority, Revenue Bonds, 7/14 at 100.00 A 6,525,778
Baton Rouge General Hospital, Series 2004, 5.250%,
7/01/33 - NPFG Insured
9,000 Louisiana Public Facilities Authority, Revenue Bonds, 5/17 at 100.00 A3 8,462,160
Ochsner Clinic Foundation Project, Series 2007A,
5.500%, 5/15/47
36 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
LOUISIANA (continued)
$ 28 Louisiana State, Gasoline Tax Revenue Bonds, Series 5/16 at 100.00 AA $ 21,269
2006, Residuals 660-1, 15.601%, 5/01/41 - FGIC
Insured (IF)
Louisiana State, Gasoline Tax Revenue Bonds, Series
2006A:
20,690 4.500%, 5/01/41 - FGIC Insured (UB) 5/16 at 100.00 AA 19,399,979
10,000 5.000%, 5/01/41 - FGIC Insured (UB) 5/16 at 100.00 AA 9,937,200
Tobacco Settlement Financing Corporation, Louisiana,
Tobacco Settlement Asset-Backed Bonds, Series 2001B:
8,205 5.500%, 5/15/30 5/11 at 101.00 BBB 8,236,589
11,855 5.875%, 5/15/39 5/11 at 101.00 BBB 10,729,368
------------------------------------------------------------------------------------------------------------------------------
86,203 Total Louisiana 84,389,985
------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 2.4% (1.6% OF TOTAL INVESTMENTS)
620 Massachusetts Health and Educational Facilities 7/18 at 100.00 A3 572,427
Authority, Revenue Bonds, CareGroup Inc., Series
2008E-1, 5.125%, 7/01/33
1,750 Massachusetts Health and Educational Facilities 1/10 at 100.50 BBB+ 1,610,210
Authority, Revenue Bonds, UMass Memorial Healthcare,
Series 1998A, 5.000%, 7/01/28 - AMBAC Insured
55 Massachusetts Housing Finance Agency, Single Family 12/09 at 100.00 AAA 55,232
Housing Revenue Bonds, Series 77, 5.950%, 6/01/25 -
FSA Insured (Alternative Minimum Tax)
Massachusetts Turnpike Authority, Metropolitan Highway
System Revenue Bonds, Senior Series 1997A:
1,975 5.000%, 1/01/12 1/10 at 100.00 A- 1,979,701
2,000 5.125%, 1/01/17 - NPFG Insured 1/10 at 100.00 A 2,001,780
875 5.000%, 1/01/27 - NPFG Insured 1/10 at 100.00 A 870,949
5,320 5.000%, 1/01/37 - NPFG Insured 1/10 at 100.00 A 5,018,196
2,690 Massachusetts Turnpike Authority, Metropolitan Highway 1/10 at 100.00 AA 2,690,430
System Revenue Bonds, Subordinate Series 1997B,
5.250%, 1/01/29 - NPFG Insured
------------------------------------------------------------------------------------------------------------------------------
15,285 Total Massachusetts 14,798,925
------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 2.0% (1.3% OF TOTAL INVESTMENTS)
Michigan State Hospital Finance Authority, Hospital
Revenue Bonds, Detroit Medical Center Obligated Group,
Series 1998A:
4,995 5.250%, 8/15/23 2/10 at 100.00 Ba3 4,174,671
3,000 5.250%, 8/15/28 2/10 at 100.00 BB- 2,315,250
3,275 Michigan State Hospital Finance Authority, Revenue 2/10 at 100.00 BB- 3,201,902
Refunding Bonds, Detroit Medical Center Obligated
Group, Series 1993A, 6.500%, 8/15/18
3,050 Michigan Tobacco Settlement Finance Authority, Tobacco 6/18 at 100.00 Baa3 2,692,052
Settlement Asset-Backed Revenue Bonds, Series 2008A,
6.875%, 6/01/42
------------------------------------------------------------------------------------------------------------------------------
14,320 Total Michigan 12,383,875
------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 1.0% (0.6% OF TOTAL INVESTMENTS)
5,000 Minneapolis-St. Paul Metropolitan Airports Commission, 1/11 at 100.00 A (4) 5,275,050
Minnesota, Subordinate Airport Revenue Bonds, Series
2001C, 5.250%, 1/01/32 (Pre-refunded 1/01/11) - FGIC
Insured
565 Minnesota Housing Finance Agency, Single Family Mortgage 1/10 at 100.00 AA+ 573,718
Revenue Bonds, Series 2000J, 5.400%, 1/01/23
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------
5,565 Total Minnesota 5,848,768
------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 0.9% (0.6% OF TOTAL INVESTMENTS)
12,005 Kansas City Municipal Assistance Corporation, Missouri, No Opt. Call AA- 3,870,292
Leasehold Revenue Bonds, Series 2004B-1, 0.000%,
4/15/29 - AMBAC Insured
105 Missouri Housing Development Commission, Single Family 3/10 at 102.00 AAA 112,330
Mortgage Revenue Bonds, Homeownership Loan Program,
Series 2000A-1, 7.500%, 3/01/31 (Alternative Minimum
Tax)
1,500 Missouri-Illinois Metropolitan District Bi-State 10/13 at 100.00 AAA 1,506,825
Development Agency, Mass Transit Sales Tax
Appropriation Bonds, Metrolink Cross County Extension
Project, Series 2002B, 5.000%, 10/01/32 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------
13,610 Total Missouri 5,489,447
------------------------------------------------------------------------------------------------------------------------------
NEVADA - 3.6% (2.3% OF TOTAL INVESTMENTS)
7,310 Clark County, Nevada, Limited Tax General Obligation 7/10 at 100.00 AA+ (4) 7,564,242
Bank Bonds, Series 2000, 5.500%, 7/01/19
(Pre-refunded 7/01/10)
Nuveen Investments 37
NMA | Nuveen Municipal Advantage Fund, Inc. (continued)
| Portfolio of Investments October 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
NEVADA (continued)
$ 7,500 Clark County, Nevada, Subordinate Lien Airport Revenue 7/10 at 101.00 Aa3 (4) $ 7,857,075
Bonds, Series 1999A, 6.000%, 7/01/29 (Pre-refunded
7/01/10) - NPFG Insured
Director of Nevada State Department of Business and
Industry, Revenue Bonds, Las Vegas Monorail Project, First
Tier, Series 2000:
3,025 0.000%, 1/01/16 - AMBAC Insured No Opt. Call Caa2 515,097
7,910 5.375%, 1/01/40 - AMBAC Insured 1/10 at 100.00 Caa2 1,621,629
3,750 Henderson, Nevada, Healthcare Facility Revenue Refunding 7/17 at 100.00 AAA 4,333,875
Bonds, Catholic Healthcare West, Series 2007B, Trust
2633, 18.647%, 7/01/31 - BHAC Insured (IF)
250 Nevada Housing Division, Single Family Mortgage Bonds, 4/10 at 100.00 Aaa 246,908
Senior Series 1997C-2, 5.750%, 4/01/29 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------
29,745 Total Nevada 22,138,826
------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 3.6% (2.3% OF TOTAL INVESTMENTS)
15,000 New Jersey Transportation Trust Fund Authority, No Opt. Call AA- 4,101,000
Transportation System Bonds, Series 2006C, 0.000%,
12/15/30 - FGIC Insured
Tobacco Settlement Financing Corporation, New Jersey,
Tobacco Settlement Asset-Backed Bonds, Series 2002:
10,970 5.750%, 6/01/32 (Pre-refunded 6/01/12) 6/12 at 100.00 AAA 11,925,706
5,050 6.125%, 6/01/42 (Pre-refunded 6/01/12) 6/12 at 100.00 AAA 5,700,440
------------------------------------------------------------------------------------------------------------------------------
31,020 Total New Jersey 21,727,146
------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 1.2% (0.8% OF TOTAL INVESTMENTS)
7,500 Farmington, New Mexico, Pollution Control Revenue 4/10 at 100.00 Baa3 7,453,725
Refunding Bonds, Public Service Company of New
Mexico - San Juan Project, Series 1997B, 5.800%,
4/01/22
------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 8.9% (5.7% OF TOTAL INVESTMENTS)
7,000 Metropolitan Transportation Authority, New York, State 7/12 at 100.00 AA- 7,112,000
Service Contract Refunding Bonds, Series 2002A,
5.125%, 1/01/29
Nassau County, New York, General Obligation Improvement
Bonds, Series 2000F:
3,980 7.000%, 3/01/11 (Pre-refunded 3/01/10) - FSA Insured 3/10 at 100.00 AAA 4,067,122
4,070 7.000%, 3/01/12 (Pre-refunded 3/01/10) - FSA Insured 3/10 at 100.00 AAA 4,159,092
3,925 7.000%, 3/01/15 (Pre-refunded 3/01/10) - FSA Insured 3/10 at 100.00 AAA 4,010,918
4,975 New York City Industrial Development Agency, New York, 12/09 at 101.00 BB 3,464,789
Special Facilities Revenue Bonds, British Airways
PLC, Series 1998, 5.250%, 12/01/32 (Alternative
Minimum Tax)
3,000 New York City Industrial Development Agency, New York, 12/12 at 101.00 BB 2,822,220
Special Facilities Revenue Bonds, British Airways
PLC, Series 2002, 7.625%, 12/01/32 (Alternative
Minimum Tax)
10,000 New York City Municipal Water Finance Authority, New 12/14 at 100.00 AAA 10,180,300
York, Water and Sewerage System Revenue Bonds, Series
2004B, 5.000%, 6/15/36 - FSA Insured (UB)
10,000 New York City Transitional Finance Authority, New York, 5/10 at 101.00 AAA 10,408,900
Future Tax Secured Bonds, Fiscal Series 2000B,
6.000%, 11/15/29 (Pre-refunded 5/15/10)
7,435 New York City, New York, General Obligation Bonds, 5/10 at 101.00 AA (4) 7,728,980
Fiscal Series 2000A, 5.750%, 5/15/20 (Pre-refunded
5/15/10)
------------------------------------------------------------------------------------------------------------------------------
54,385 Total New York 53,954,321
------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 2.4% (1.6% OF TOTAL INVESTMENTS)
1,070 North Carolina Housing Finance Agency, Home Ownership 7/10 at 100.00 AA 1,071,380
Revenue Bonds, 1998 Trust Agreement, Series 10A,
5.400%, 7/01/32 - AMBAC Insured (Alternative Minimum
Tax)
4,305 North Carolina Housing Finance Agency, Home Ownership 1/10 at 100.00 AA 4,308,616
Revenue Bonds, 1998 Trust Agreement, Series 7A,
6.250%, 1/01/29 (Alternative Minimum Tax)
4,005 North Carolina Housing Finance Agency, Home Ownership 1/10 at 100.00 AA 4,009,285
Revenue Bonds, 1998 Trust Agreement, Series 9A,
5.875%, 7/01/31 (Alternative Minimum Tax)
3,500 North Carolina Medical Care Commission, Healthcare 6/19 at 100.00 AA 3,460,975
Facilities Revenue Bonds, Duke University
Health System, Series 2009A, 5.000%, 6/01/42 (WI/DD,
Settling 11/10/09)
1,900 North Carolina Turnpike Authority, Triangle Expressway 1/19 at 100.00 AAA 1,997,926
System Senior Lien Revenue Bonds, Series 2009A,
5.750%, 1/01/39 - AGC Insured
------------------------------------------------------------------------------------------------------------------------------
14,780 Total North Carolina 14,848,182
------------------------------------------------------------------------------------------------------------------------------
38 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
NORTH DAKOTA - 0.3% (0.2% OF TOTAL INVESTMENTS)
$ 2,250 Ward County Health Care, North Dakota, Revenue Bonds, 7/16 at 100.00 BBB+ $ 2,105,865
Trinity Obligated Group, Series 2006,
5.125%, 7/01/25
------------------------------------------------------------------------------------------------------------------------------
OHIO - 7.7% (4.9% OF TOTAL INVESTMENTS)
4,630 Akron, Bath and Copley Joint Township Hospital District, 11/09 at 101.00 Baa1 4,638,473
Ohio, Hospital Facilities Revenue Bonds, Summa Health
System, Series 1998A, 5.375%, 11/15/18
10,000 American Municipal Power Ohio Inc., General Revenue 2/18 at 100.00 A1 10,048,600
Bonds, Series 2008, 5.250%, 2/15/43
Buckeye Tobacco Settlement Financing Authority, Ohio,
Tobacco Settlement Asset-Backed Revenue
Bonds, Senior Lien, Series 2007A-2:
855 5.125%, 6/01/24 6/17 at 100.00 BBB 761,514
2,700 5.875%, 6/01/30 6/17 at 100.00 BBB 2,349,999
2,635 5.750%, 6/01/34 6/17 at 100.00 BBB 2,215,903
2,520 6.000%, 6/01/42 6/17 at 100.00 BBB 1,943,348
5,895 5.875%, 6/01/47 6/17 at 100.00 BBB 4,367,723
5,150 Buckeye Tobacco Settlement Financing Authority, Ohio, 6/22 at 100.00 BBB 3,378,143
Tobacco Settlement Asset-Backed Revenue Bonds, Senior
Lien, Series 2007A-3, 0.000%, 6/01/37
Montgomery County, Ohio, Hospital Facilities Revenue
Bonds, Kettering Medical Center, Series 1999:
7,840 6.750%, 4/01/18 (Pre-refunded 4/01/10) 4/10 at 101.00 A (4) 8,127,179
5,000 6.750%, 4/01/22 (Pre-refunded 4/01/10) 4/10 at 101.00 A (4) 5,183,150
1,090 Ohio Housing Finance Agency, GNMA Mortgage-Backed 8/10 at 100.00 Aaa 1,095,581
Securities Program Residential Mortgage
Revenue Bonds, Series 2000D, 5.450%, 9/01/31
(Alternative Minimum Tax)
2,650 Ohio, General Obligation Bonds, Higher Education, Series 5/13 at 100.00 AA+ 2,769,727
2003A, 5.000%, 5/01/22
------------------------------------------------------------------------------------------------------------------------------
50,965 Total Ohio 46,879,340
------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 2.4% (1.6% OF TOTAL INVESTMENTS)
1,675 Oklahoma Development Finance Authority, Health System 8/18 at 100.00 AA- 1,709,137
Revenue Bonds, Integris Baptist Medical Center, Series
2008B, 5.250%, 8/15/38
12,000 Oklahoma Development Finance Authority, Revenue Bonds, 2/17 at 100.00 A 11,321,640
Saint John Health System, Series 2007, 5.000%, 2/15/42
2,000 Oklahoma Municipal Power Authority, Power Supply System 1/17 at 100.00 A 1,745,240
Revenue Bonds, Series 2007, 4.500%, 1/01/47 - FGIC
Insured
------------------------------------------------------------------------------------------------------------------------------
15,675 Total Oklahoma 14,776,017
------------------------------------------------------------------------------------------------------------------------------
OREGON - 0.5% (0.3% OF TOTAL INVESTMENTS)
3,000 Oregon State Facilities Authority, Revenue Bonds, 10/17 at 100.00 A 2,770,680
Willamette University, Series 2007A, 5.000%, 10/01/36
------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 1.8% (1.1% OF TOTAL INVESTMENTS)
5,000 Allegheny County Hospital Development Authority, No Opt. Call Aa3 5,122,450
Pennsylvania, University of Pittsburgh Medical Center
Revenue Bonds, Series 2009A, 5.625%, 8/15/39
585 Carbon County Industrial Development Authority, No Opt. Call BBB- 591,014
Pennsylvania, Resource Recovery Revenue Refunding
Bonds, Panther Creek Partners Project, Series 2000,
6.650%, 5/01/10 (Alternative Minimum Tax)
1,250 Erie, Pennsylvania, Water Authority, Water Revenue 12/18 at 100.00 AAA 1,259,025
Bonds, Series 2008, 5.000%, 12/01/43 - FSA Insured
1,500 Pennsylvania Housing Finance Agency, Single Family 10/16 at 100.00 AA+ 1,397,235
Mortgage Revenue Bonds, Series 2006A, 4.650%, 10/01/31
(Alternative Minimum Tax) (UB)
2,600 Pennsylvania Turnpike Commission, Turnpike Revenue 12/14 at 100.00 Aa3 2,668,172
Bonds, Series 2004A, 5.500%, 12/01/31 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------
10,935 Total Pennsylvania 11,037,896
------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 4.8% (3.1% OF TOTAL INVESTMENTS)
5,000 Puerto Rico Electric Power Authority, Power Revenue 7/15 at 100.00 A3 4,966,150
Bonds, Series 2005RR, 5.000%, 7/01/26 - SYNCORA GTY
Insured
10,070 Puerto Rico Highway and Transportation Authority, No Opt. Call BBB 9,548,173
Highway Revenue Bonds, Series 2007N, 5.250%, 7/01/39 -
FGIC Insured
10,000 Puerto Rico Sales Tax Financing Corporation, Sales Tax 8/19 at 100.00 A+ 10,503,500
Revenue Bonds, First Subordinate Series 2009A, 6.000%,
8/01/42
Nuveen Investments 39
NMA | Nuveen Municipal Advantage Fund, Inc. (continued)
| Portfolio of Investments October 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO (continued)
$ 4,000 Puerto Rico, General Obligation Bonds, Series 2000B, 7/10 at 100.00 A $ 4,017,000
5.625%, 7/01/19 - NPFG Insured
------------------------------------------------------------------------------------------------------------------------------
29,070 Total Puerto Rico 29,034,823
------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 1.3% (0.8% OF TOTAL INVESTMENTS)
1,235 Rhode Island Health and Educational Building 1/10 at 100.00 A 1,236,198
Corporation, Hospital Financing Revenue Bonds,
Lifespan Obligated Group, Series 1996, 5.500%,
5/15/16 - NPFG Insured
7,000 Rhode Island Housing and Mortgage Finance Corporation, 10/14 at 100.00 AA+ 6,558,160
Homeownership Opportunity Bond Program, Series 50A,
4.650%, 10/01/34
------------------------------------------------------------------------------------------------------------------------------
8,235 Total Rhode Island 7,794,358
------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 3.3% (2.1% OF TOTAL INVESTMENTS)
10,000 Greenville County School District, South Carolina, 12/12 at 101.00 AA (4) 11,588,700
Installment Purchase Revenue Bonds, Series 2002,
6.000%, 12/01/20 (Pre-refunded 12/01/12)
2,500 Lexington County Health Service District, South 11/13 at 100.00 A+ (4) 2,893,150
Carolina, Hospital Revenue Refunding and Improvement
Bonds, Series 2003, 5.750%, 11/01/28 (Pre-refunded
11/01/13)
3,000 Myrtle Beach, South Carolina, Hospitality and 6/14 at 100.00 A+ 2,855,910
Accommodation Fee Revenue Bonds, Series 2004A,
5.000%, 6/01/36 - FGIC Insured
1,220 Piedmont Municipal Power Agency, South Carolina, No Opt. Call A 594,042
Electric Revenue Bonds, Series 2004A-2, 0.000%,
1/01/23 - FGIC Insured
2,125 South Carolina Public Service Authority, Revenue 7/13 at 100.00 Aa2 2,252,181
Refunding Bonds, Santee Cooper Electric System,
Series 2003A, 5.000%, 1/01/21 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------
18,845 Total South Carolina 20,183,983
------------------------------------------------------------------------------------------------------------------------------
SOUTH DAKOTA - 0.5% (0.3% OF TOTAL INVESTMENTS)
2,945 South Dakota Health and Educational Facilities 5/17 at 100.00 AA- 2,837,242
Authority, Revenue Bonds, Sanford Health, Series
2007, 5.000%, 11/01/40
------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 3.9% (2.5% OF TOTAL INVESTMENTS)
6,000 Knox County Health, Educational and Housing Facilities 4/12 at 101.00 A1 6,139,140
Board, Tennessee, Hospital Revenue Bonds, Baptist
Health System of East Tennessee Inc., Series 2002,
6.500%, 4/15/31
20,415 Knox County Health, Educational and Housing Facilities 1/13 at 75.87 AAA 13,430,212
Board, Tennessee, Hospital Revenue Refunding Bonds,
Covenant Health, Series 2002A, 0.000%, 1/01/18 - FSA
Insured
1,750 Metropolitan Government of Nashville-Davidson County, 5/11 at 100.00 AA+ 1,779,120
Tennessee, Electric System Revenue Bonds, Series
2001A, 5.125%, 5/15/26
2,000 Sullivan County Health Educational and Housing 3/13 at 100.00 N/R 1,719,860
Facilities Board, Tennessee, Revenue Bonds, Wellmont
Health System, Refunding Series 200A, 5.486%, 9/01/32
1,500 Sumner County Health, Educational, and Housing 11/17 at 100.00 N/R 570,150
Facilities Board, Tennessee, Revenue Refunding Bonds,
Sumner Regional Health System Inc., Series 2007,
5.500%, 11/01/46
------------------------------------------------------------------------------------------------------------------------------
31,665 Total Tennessee 23,638,482
------------------------------------------------------------------------------------------------------------------------------
TEXAS - 13.7% (8.8% OF TOTAL INVESTMENTS)
2,000 Abilene Higher Education Authority, Inc., Texas, Student 11/09 at 100.00 Aa3 2,002,300
Loan Revenue Bonds, Subordinate Series 1998B, 5.050%,
7/01/13 (Alternative Minimum Tax)
11,810 Brazos River Authority, Texas, Pollution Control Revenue No Opt. Call CCC 10,648,250
Refunding Bonds, TXU Electric Company, Series 2001C,
5.750%, 5/01/36 (Mandatory put 11/01/11) (Alternative
Minimum Tax)
6,000 Brazos River Authority, Texas, Revenue Refunding Bonds, No Opt. Call BBB+ 5,433,060
Houston Lighting and Power Company, Series 1998,
5.050%, 11/01/18 - AMBAC Insured (Alternative Minimum
Tax)
4,250 Ennis Independent School District, Ellis County, Texas, 8/16 at 60.73 Aaa 1,866,218
General Obligation Bonds, Series 2006, 0.000%, 8/15/26
8,400 Gulf Coast Waste Disposal Authority, Texas, Waste 4/10 at 100.50 BBB 7,875,084
Disposal Revenue Bonds, Valero Energy Corporation,
Series 1999, 5.700%, 4/01/32 (Alternative Minimum Tax)
7,500 Harris County Health Facilities Development Corporation, 11/13 at 100.00 AA 7,557,075
Texas, Thermal Utility Revenue Bonds, TECO Project,
Series 2003, 5.000%, 11/15/30 - NPFG Insured
1,540 Houston Community College, Texas, Limited Tax General 2/13 at 100.00 AA+ 1,577,884
Obligation Bonds, Series 2003, 5.000%, 2/15/28 -
AMBAC Insured (UB)
3,460 Houston Community College, Texas, Limited Tax General 2/13 at 100.00 AA+ (4) 3,859,872
Obligation Bonds, Series 2003, 5.000%, 2/15/28
(Pre-refunded 2/15/13) - AMBAC Insured
40 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
TEXAS (continued)
Houston, Texas, Water Conveyance System Contract,
Certificates of Participation, Series 1993A-J:
$ 5,490 6.800%, 12/15/10 - AMBAC Insured No Opt. Call N/R $ 5,764,280
2,000 6.800%, 12/15/11 - AMBAC Insured No Opt. Call N/R 2,136,840
9,345 Leander Independent School District, Williamson and 8/15 at 35.34 AA- 2,424,560
Travis Counties, Texas, General Obligation Bonds,
Series 2005, 0.000%, 8/15/34 - FGIC Insured
16,305 Matagorda County Navigation District 1, Texas, Revenue 11/09 at 101.00 BBB- 15,418,497
Bonds, Reliant Energy Inc., Series 1999B, 5.950%,
5/01/30 (Alternative Minimum Tax)
North Texas Thruway Authority, First Tier System Revenue
Refunding Bonds, Capital Appreciation Series 2008I:
2,555 0.000%, 1/01/42 - AGC Insured 1/25 at 100.00 AAA 1,908,023
7,000 0.000%, 1/01/43 1/25 at 100.00 A2 5,148,570
3,425 Sabine River Authority, Texas, Pollution Control Revenue No Opt. Call CCC 3,088,083
Refunding Bonds, TXU Electric Company, Series 2001A,
5.500%, 5/01/22 (Mandatory put 11/01/11)
4,700 Sam Rayburn Municipal Power Agency, Texas, Power Supply 10/12 at 100.00 Baa2 4,833,668
System Revenue Refunding Bonds, Series 2002A, 6.000%,
10/01/21
245 Wood Glen Housing Finance Corporation, Texas, 12/09 at 100.00 A (4) 246,431
FHA-Insured Section 8 Assisted Mortgage Revenue
Bonds, Copperwood I Project, Series 1990A, 7.625%,
1/01/10 - NPFG Insured (ETM)
3,000 Wylie Independent School District, Taylor County, Texas, 8/15 at 74.57 AAA 1,746,930
General Obligation Bonds, Series 2005, 0.000%, 8/15/21
------------------------------------------------------------------------------------------------------------------------------
99,025 Total Texas 83,535,625
------------------------------------------------------------------------------------------------------------------------------
UTAH - 0.5% (0.3% OF TOTAL INVESTMENTS)
3,000 Riverton, Utah, Hospital Revenue Bonds, IHC Health 8/19 at 100.00 AA+ 2,929,740
Services, Inc., Series 2009, 5.000%, 8/15/41 (WI/DD,
Settling 11/05/09)
------------------------------------------------------------------------------------------------------------------------------
VIRGIN ISLANDS - 0.3% (0.2% OF TOTAL INVESTMENTS)
1,480 Virgin Islands Public Finance Authority, Matching Fund 10/19 at 100.00 BBB 1,560,956
Revenue Loan Note - Diageo Project, Series 2009A,
6.750%, 10/01/37
------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 0.3% (0.2% OF TOTAL INVESTMENTS)
2,855 Tobacco Settlement Financing Corporation of Virginia, 6/17 at 100.00 BBB 1,715,741
Tobacco Settlement Asset-Backed Bonds, Series 2007B2,
0.000%, 6/01/46
------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 13.9% (8.9% OF TOTAL INVESTMENTS)
1,260 Central Puget Sound Regional Transit Authority, 2/10 at 100.00 AAA 1,261,348
Washington, Sales Tax and Motor Vehicle Excise Tax
Bonds, Series 1999, 4.750%, 2/01/28 - FGIC Insured
5,665 Chelan County Public Utility District 1, Washington, 7/12 at 100.00 AA 5,311,731
Hydro Consolidated System Revenue Bonds, Series
2002B, 5.250%, 7/01/37 (Mandatory put 7/01/12) -
AMBAC Insured (Alternative Minimum Tax)
Chelan County Public Utility District 1, Washington, Hydro
Consolidated System Revenue Bonds, Series 2001:
10,730 5.650%, 7/01/32 - NPFG Insured (Alternative Minimum 7/11 at 101.00 AA 10,771,203
Tax) (UB)
8,810 5.600%, 1/01/36 - NPFG Insured (Alternative Minimum 7/11 at 101.00 AA 8,811,410
Tax) (UB)
10,730 Pierce County School District 320, Sumner, Washington, 12/10 at 100.00 Aa1 (4) 11,412,965
Unlimited Tax General Obligation Bonds, Series 2000,
6.250%, 12/01/17 (Pre-refunded 12/01/10) - FSA Insured
10,550 Port of Seattle, Washington, Limited Tax General 12/10 at 100.00 AAA 10,628,809
Obligation Bonds, Series 2000B, 5.750%, 12/01/25
(Alternative Minimum Tax) (UB)
5,315 Port of Seattle, Washington, Revenue Bonds, Series No Opt. Call Aa2 5,378,036
2000B, 6.000%, 2/01/10 - NPFG Insured
(Alternative Minimum Tax)
19,475 Port of Seattle, Washington, Special Facility Revenue 3/10 at 101.00 A (4) 20,011,341
Bonds, Terminal 18, Series 1999A, 6.000%, 9/01/29
(Pre-refunded 3/01/10) - NPFG Insured
5,000 Port of Seattle, Washington, Special Facility Revenue 3/10 at 101.00 A 5,057,450
Bonds, Terminal 18, Series 1999B, 6.000%, 9/01/20 -
NPFG Insured (Alternative Minimum Tax)
5,000 Washington State Healthcare Facilities Authority, 12/09 at 101.00 A (4) 5,071,900
Revenue Bonds, Providence Services, Series 1999,
5.375%, 12/01/19 (Pre-refunded 12/01/09) - NPFG
Insured
1,270 Washington State, Motor Vehicle Fuel Tax General No Opt. Call AA+ 646,227
Obligation Bonds, Series 2003F, 0.000%, 12/01/24 -
NPFG Insured
------------------------------------------------------------------------------------------------------------------------------
83,805 Total Washington 84,362,420
------------------------------------------------------------------------------------------------------------------------------
Nuveen Investments 41
NMA | Nuveen Municipal Advantage Fund, Inc. (continued)
| Portfolio of Investments October 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 0.8% (0.5% OF TOTAL INVESTMENTS)
$ 5,000 Mason County, West Virginia, Pollution Control Revenue 10/11 at 100.00 BBB $ 5,045,000
Bonds, Appalachian Power Company, Series 2003L,
5.500%, 10/01/22
------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 2.7% (1.8% OF TOTAL INVESTMENTS)
535 Badger Tobacco Asset Securitization Corporation, No Opt. Call AAA 593,149
Wisconsin, Tobacco Settlement Asset-Backed Bonds,
Series 2002, 5.750%, 6/01/12 (ETM)
Badger Tobacco Asset Securitization Corporation,
Wisconsin, Tobacco Settlement Asset-Backed Bonds,
Series 2002:
1,440 6.000%, 6/01/17 (Pre-refunded 6/01/12) 6/12 at 100.00 AAA 1,601,727
4,920 6.125%, 6/01/27 (Pre-refunded 6/01/12) 6/12 at 100.00 AAA 5,376,134
565 Green Bay, Wisconsin, Water System Revenue Bonds, Series 11/14 at 100.00 Aa3 582,374
2004, 5.000%, 11/01/29 - FSA Insured
5,000 Madison, Wisconsin, Industrial Development Revenue 4/12 at 100.00 AA- 5,051,250
Refunding Bonds, Madison Gas and Electric Company
Projects, Series 2002A, 5.875%, 10/01/34 (Alternative
Minimum Tax)
3,000 Southeast Wisconsin Professional Baseball Park District, No Opt. Call AA- 3,586,590
Sales Tax Revenue Refunding Bonds, Series 1998A,
5.500%, 12/15/19 - NPFG Insured
325 Wisconsin Housing and Economic Development Authority, 3/10 at 100.00 AA 334,022
Home Ownership Revenue Bonds, Series 2000B, 5.750%,
3/01/22 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------
15,785 Total Wisconsin 17,125,246
------------------------------------------------------------------------------------------------------------------------------
$ 1,134,198 Total Investments (cost $951,929,964) - 155.8% 948,796,834
===============---------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (11.1)% (67,694,983)
-----------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 3.5% 20,911,314
-----------------------------------------------------------------------------------------------------------
Auction Rate Preferred Shares, at Liquidation Value - (48.2)% (5) (293,200,000)
-----------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 608,813,165
===========================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net
assets applicable to Common shares unless otherwise noted.
(2) Optional Call Provisions (not covered by the report of independent
registered public accounting firm): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other call
provisions at varying prices at later dates. Certain mortgage-backed
securities may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered public
accounting firm): Using the higher of Standard & Poor's Group ("Standard &
Poor's") or Moody's Investor Service, Inc. ("Moody's") rating. Ratings
below BBB by Standard & Poor's or Baa by Moody's are considered to be
below investment grade.
(4) Backed by an escrow or trust containing sufficient U.S. Government or U.S.
Government agency securities which ensure the timely payment of principal
and interest. Such investments are normally considered to be equivalent to
AAA rated securities.
(5) Auction Rate Preferred Shares, at Liquidation Value as a percentage of
Total Investments is 30.9%
N/R Not rated.
WI/DD Purchased on a when-issued or delayed delivery basis.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected as a financing
transaction. See Notes to Financial Statements, Footnote 1 - Inverse
Floating Rate Securities for more information.
See accompanying notes to financial statements.
42 Nuveen Investments
NMO | Nuveen Municipal Market Opportunity Fund, Inc.
| Portfolio of Investments October 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 0.6% (0.4% OF TOTAL INVESTMENTS)
Henry County Water Authority, Alabama, Water Revenue
Bonds, Series 2006:
$ 1,935 5.000%, 1/01/36 - RAAI Insured 1/16 at 100.00 BBB- $ 1,605,721
2,485 5.000%, 1/01/41 - RAAI Insured 1/16 at 100.00 BBB- 2,008,998
------------------------------------------------------------------------------------------------------------------------------
4,420 Total Alabama 3,614,719
------------------------------------------------------------------------------------------------------------------------------
ALASKA - 1.8% (1.1% OF TOTAL INVESTMENTS)
Alaska Housing Finance Corporation, General Housing
Purpose Bonds, Series 2005A:
1,125 5.250%, 12/01/34 - FGIC Insured (UB) 12/14 at 100.00 AA 1,147,556
1,275 5.250%, 12/01/41 - FGIC Insured (UB) 12/14 at 100.00 AA 1,294,240
13,025 Northern Tobacco Securitization Corporation, Alaska, 6/14 at 100.00 Baa3 8,655,113
Tobacco Settlement Asset-Backed Bonds, Series 2006A,
5.000%, 6/01/46
------------------------------------------------------------------------------------------------------------------------------
15,425 Total Alaska 11,096,909
------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 1.2% (0.8% OF TOTAL INVESTMENTS)
5,000 Arkansas Development Finance Authority, Hospital Revenue 2/10 at 100.00 Baa1 (4) 5,078,600
Bonds, Washington Regional Medical Center, Series
2000, 7.000%, 2/01/15 (Pre-refunded 2/01/10)
2,480 Cabot School District 4, Lonoke County, Arkansas, 1/10 at 100.00 A1 2,480,868
General Obligation Refunding Bonds, Series 2003,
5.000%, 2/01/27 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------
7,480 Total Arkansas 7,559,468
------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 14.7% (9.1% OF TOTAL INVESTMENTS)
12,500 Anaheim Public Finance Authority, California, No Opt. Call AAA 2,620,250
Subordinate Lease Revenue Bonds, Public Improvement
Project, Series 1997C, 0.000%, 9/01/35 - FSA Insured
1,350 Antelope Valley Union High School District, Los Angeles No Opt. Call A+ 419,945
County, California, General Obligation Bonds, Series
2004B, 0.000%, 8/01/29 - NPFG Insured
Bay Area Toll Authority, San Francisco Bay Area,
California, Toll Bridge Revenue Bonds, Series 2009F-1:
2,500 5.125%, 4/01/39 4/19 at 100.00 AA 2,574,250
2,500 5.625%, 4/01/44 4/19 at 100.00 AA 2,698,350
8,000 Beverly Hills Unified School District, Los Angeles No Opt. Call AA 2,277,440
County, California, General Obligation Bonds, Series
2009, 0.000%, 8/01/33
7,800 California County Tobacco Securitization Agency, Tobacco 12/18 at 100.00 Baa3 5,305,950
Settlement Asset-Backed Bonds, Los Angeles County
Securitization Corporation, Series 2006A, 0.000%,
6/01/36
1,350 California Educational Facilities Authority, Revenue No Opt. Call A2 220,415
Refunding Bonds, Loyola Marymount University, Series
2001A, 0.000%, 10/01/39 - NPFG Insured
4,295 California Health Facilities Financing Authority, Health 3/13 at 100.00 A 3,987,693
Facility Revenue Bonds, Adventist Health System/West,
Series 2003A, 5.000%, 3/01/33
9,000 California Health Facilities Financing Authority, 3/16 at 100.00 A+ 8,490,330
Revenue Bonds, Kaiser Permanante System, Series 2006,
5.250%, 3/01/45
1,550 California Statewide Community Development Authority, 7/18 at 100.00 AA- 1,599,259
Revenue Bonds, St. Joseph Health System, Series
2007A, 5.750%, 7/01/47 - FGIC Insured
25,000 California, Various Purpose General Obligation Bonds, 3/16 at 100.00 A 22,266,750
Series 2005, 4.750%, 3/01/35 - NPFG Insured (UB)
10,445 Castaic Lake Water Agency, California, Certificates of No Opt. Call AA 3,175,280
Participation, Water System Improvement Project,
Series 1999, 0.000%, 8/01/29 - AMBAC Insured
8,365 Cupertino Union School District, Santa Clara County, 8/13 at 52.66 AA 3,176,525
California, General Obligation Bonds, Series 2003B,
0.000%, 8/01/26 - FGIC Insured
5,000 Golden State Tobacco Securitization Corporation, 6/13 at 100.00 AAA 5,548,550
California, Enhanced Tobacco Settlement Asset-Backed
Bonds, Series 2003B, 5.000%, 6/01/38 (Pre-refunded
6/01/13) - AMBAC Insured
1,000 Golden State Tobacco Securitization Corporation, 6/17 at 100.00 BBB 664,390
California, Enhanced Tobacco Settlement Asset-Backed
Bonds, Series 2007A-1, 5.125%, 6/01/47
Golden State Tobacco Securitization Corporation,
California, Tobacco Settlement Asset-Backed Revenue Bonds,
Series 2005A:
3,500 0.000%, 6/01/26 - FSA Insured No Opt. Call AAA 1,312,465
3,000 5.000%, 6/01/45 6/15 at 100.00 A- 2,584,230
Nuveen Investments 43
NMO | Nuveen Municipal Market Opportunity Fund, Inc. (continued)
| Portfolio of Investments October 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (continued)
$ 1,500 Lincoln Unified School District, Placer County, No Opt. Call N/R $ 457,410
California, Community Facilities District 1, Special
Tax Bonds, Series 2005, 0.000%, 9/01/26 - AMBAC
Insured
490 Los Angeles Department of Water and Power, California, 1/10 at 100.00 AA- (4) 491,470
Electric Plant Revenue Bonds, Second Series 1993,
4.750%, 10/15/20 (ETM)
995 Los Angeles Department of Water and Power, California, 1/10 at 100.00 AA- (4) 998,592
Electric Plant Revenue Bonds, Series 1994, 5.375%,
2/15/34 (ETM)
2,200 M-S-R Energy Authority, California, Gas Revenue Bonds, No Opt. Call A 2,349,006
Citigroup Prepay Contracts, Series 2009B, 6.500%,
11/01/39
14,000 New Haven Unified School District, California, General No Opt. Call AAA 3,073,700
Obligation Refunding Bonds, Series 2009, 0.000%,
8/01/34 - AGC Insured
1,000 Pajaro Valley Unified School District, Santa Cruz No Opt. Call AAA 306,980
County, California, General Obligation Bonds, Series
2005B, 0.000%, 8/01/29 - FSA Insured
8,040 Placentia-Yorba Linda Unified School District, Orange No Opt. Call A+ 1,712,198
County, California, Certificates of Participation,
Series 2006, 0.000%, 10/01/34 - FGIC Insured
San Joaquin Hills Transportation Corridor Agency, Orange
County, California, Toll Road Revenue Refunding Bonds,
Series 1997A:
5,000 5.650%, 1/15/17 - NPFG Insured 1/14 at 102.00 A 4,917,500
26,000 0.000%, 1/15/35 - NPFG Insured No Opt. Call A 4,050,800
5,000 San Jose-Evergreen Community College District, Santa 9/15 at 50.47 Aa2 1,664,050
Clara County, California, General Obligation Bonds,
Series 2005A, 0.000%, 9/01/28 - NPFG Insured
4,825 Santa Monica Community College District, Los Angeles 8/15 at 61.27 AA 1,946,936
County, California, General Obligation Bonds, Series
2005C, 0.000%, 8/01/25 - NPFG Insured
------------------------------------------------------------------------------------------------------------------------------
176,205 Total California 90,890,714
------------------------------------------------------------------------------------------------------------------------------
COLORADO - 7.0% (4.4% OF TOTAL INVESTMENTS)
1,085 Arkansas River Power Authority, Colorado, Power Revenue 10/16 at 100.00 BBB 971,954
Bonds, Series 2006, 5.250%, 10/01/40 - SYNCORA GTY
Insured
3,000 Broomfield, Colorado, Master Facilities Lease Purchase 12/09 at 100.00 A1 3,008,580
Agreement, Certificates of Participation, Series
1999, 5.750%, 12/01/24 - AMBAC Insured
6,285 Broomfield, Colorado, Sales and Use Tax Revenue 12/12 at 100.00 A1 6,437,600
Refunding and Improvement Bonds, Series 2002A,
5.500%, 12/01/22 - AMBAC Insured
11,465 Denver City and County, Colorado, Airport System Revenue 11/10 at 100.00 A+ 11,594,669
Refunding Bonds, Series 2000A, 6.000%, 11/15/18 -
AMBAC Insured (Alternative Minimum Tax)
E-470 Public Highway Authority, Colorado, Senior Revenue
Bonds, Series 2000B:
6,200 0.000%, 9/01/22 - NPFG Insured No Opt. Call A 2,766,316
9,000 0.000%, 9/01/30 - NPFG Insured No Opt. Call A 2,216,340
15,960 0.000%, 9/01/33 - NPFG Insured No Opt. Call A 3,139,013
20,000 E-470 Public Highway Authority, Colorado, Senior Revenue 9/10 at 31.42 Aaa 6,245,000
Bonds, Series 2000B, 0.000%, 9/01/28 (Pre-refunded
9/01/10) - NPFG Insured
E-470 Public Highway Authority, Colorado, Toll Revenue
Bonds, Series 2004B:
3,800 0.000%, 9/01/27 - NPFG Insured 9/20 at 67.94 A 1,179,102
13,300 0.000%, 9/01/31 - NPFG Insured 9/20 at 53.77 A 3,030,139
6,250 0.000%, 9/01/32 - NPFG Insured 9/20 at 50.83 A 1,321,875
10,000 0.000%, 3/01/36 - NPFG Insured 9/20 at 41.72 A 1,647,000
------------------------------------------------------------------------------------------------------------------------------
106,345 Total Colorado 43,557,588
------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 1.5% (0.8% OF TOTAL INVESTMENTS)
10,000 Washington Convention Center Authority, District of 10/16 at 100.00 A 9,255,200
Columbia, Senior Lien Dedicated Tax Revenue Bonds,
Series 2007A, 4.500%, 10/01/30 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 1.2% (0.7% OF TOTAL INVESTMENTS)
8,550 Florida Housing Finance Corporation, Homeowner Mortgage 1/17 at 100.00 AA+ 7,428,582
Revenue Bonds, Series 2008, Trust 1191, 5.695%,
7/01/32 (Alternative Minimum Tax) (IF)
------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 4.9% (3.1% OF TOTAL INVESTMENTS)
15,000 Atlanta, Georgia, Airport General Revenue Refunding 1/10 at 101.00 A+ (4) 15,284,550
Bonds, Series 2000A, 5.600%, 1/01/30 (Pre-refunded
1/01/10) - FGIC Insured
44 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
GEORGIA (continued)
$ 14,330 Fulton County Facilities Corporation, Georgia, 11/10 at 101.00 AA- $ 15,211,582
Certificates of Participation, Public Purpose
Project, Series 1999, 5.500%, 11/01/18 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------
29,330 Total Georgia 30,496,132
------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 14.6% (9.1% OF TOTAL INVESTMENTS)
4,595 Bolingbrook, Illinois, General Obligation Refunding No Opt. Call A 1,347,668
Bonds, Series 2002B, 0.000%, 1/01/32 - FGIC Insured
4,600 Chicago Board of Education, Illinois, Unlimited Tax No Opt. Call AA- 2,717,956
General Obligation Bonds, Dedicated Tax Revenues,
Series 1999A, 0.000%, 12/01/20 - FGIC Insured
4,000 Chicago, Illinois, Motor Fuel Tax Revenue Bonds, Series 7/13 at 100.00 AA+ 4,026,360
2003A, 5.000%, 1/01/33 - AMBAC Insured
2,300 Chicago, Illinois, Motor Fuel Tax Revenue Refunding No Opt. Call AA+ 2,486,507
Bonds, Series 1993, 5.375%, 1/01/14 - AMBAC Insured
5,250 Chicago, Illinois, Revenue Bonds, Midway Airport, Series 1/10 at 100.50 A 5,267,378
1998B, 5.000%, 1/01/28 - NPFG Insured
10,000 Illinois Finance Authority, Illinois, Northwestern 12/15 at 100.00 AAA 10,167,400
University, Revenue Bonds, 5.000%, Series 2006,
12/01/42 (UB)
38,645 Illinois, General Obligation Bonds, Illinois FIRST 4/10 at 100.00 AA- 39,031,836
Program, Series 2000, 5.500%, 4/01/25 - NPFG Insured
Lake and McHenry Counties Community Unit School District
118, Wauconda, Illinois, General Obligation Bonds, Series
2005B:
10,230 0.000%, 1/01/22 - FSA Insured 1/15 at 70.63 Aa3 5,668,341
6,780 0.000%, 1/01/24 - FSA Insured 1/15 at 63.44 Aa3 3,203,889
1,975 Lake County Community High School District 127, No Opt. Call AAA 2,418,072
Grayslake, Illinois, General Obligation Bonds, Series
2002A, 9.000%, 2/01/13 - FGIC Insured
Metropolitan Pier and Exposition Authority, Illinois,
Revenue Bonds, McCormick Place Expansion Project, Series
2002A:
6,500 0.000%, 6/15/25 - NPFG Insured 6/22 at 101.00 AAA 4,938,895
3,270 5.000%, 12/15/28 - NPFG Insured 6/12 at 101.00 AAA 3,339,324
3,700 0.000%, 6/15/30 - NPFG Insured No Opt. Call AAA 1,196,321
3,280 0.000%, 6/15/37 - NPFG Insured No Opt. Call AAA 692,506
11,715 0.000%, 12/15/38 - NPFG Insured No Opt. Call AAA 2,273,061
9,170 0.000%, 6/15/39 - NPFG Insured No Opt. Call AAA 1,729,829
------------------------------------------------------------------------------------------------------------------------------
126,010 Total Illinois 90,505,343
------------------------------------------------------------------------------------------------------------------------------
INDIANA - 2.7% (1.7% OF TOTAL INVESTMENTS)
4,695 Indiana Educational Facilities Authority, Revenue Bonds, 2/11 at 100.00 A 4,775,285
Butler University, Series 2001, 5.500%, 2/01/26 -
NPFG Insured
4,030 Indiana Finance Authority Health System Revenue Bonds 11/19 at 100.00 Aa3 3,934,811
Series 2009A (Sisters of St. Francis Health Services,
Inc. Obligated Group), 5.250%, 11/01/39 (WI/DD,
Settling 11/05/09)
6,000 Indiana Finance Authority, Revenue and Refunding Bonds, 12/19 at 100.00 AA 5,859,840
Trinity Health Credit Group, Series 2009A, 5.250%,
12/01/38 (WI/DD, Settling 11/16/09)
2,000 Petersburg, Indiana, Pollution Control Revenue Refunding 8/11 at 102.00 A3 2,037,980
Bonds, Indianapolis Power and Light Company, Series
1991, 5.750%, 8/01/21
------------------------------------------------------------------------------------------------------------------------------
16,725 Total Indiana 16,607,916
------------------------------------------------------------------------------------------------------------------------------
IOWA - 0.8% (0.5% OF TOTAL INVESTMENTS)
970 Iowa Finance Authority, Health Facility Revenue Bonds, 7/16 at 100.00 BB+ 800,541
Care Initiatives Project, Series 2006A, 5.000%,
7/01/19
5,000 Iowa Tobacco Settlement Authority, Tobacco Asset-Backed 6/17 at 100.00 BBB 4,309,000
Revenue Bonds, Series 2005B, 5.600%, 6/01/34
------------------------------------------------------------------------------------------------------------------------------
5,970 Total Iowa 5,109,541
------------------------------------------------------------------------------------------------------------------------------
KANSAS - 0.5% (0.3% OF TOTAL INVESTMENTS)
2,500 Kansas Development Finance Authority, Water Pollution 11/12 at 100.00 AAA 2,763,800
Control Revolving Fund Leveraged Bonds, Series
2002-II, 5.500%, 11/01/21
500 Salina, Kansas, Hospital Revenue Bonds, Salina Regional 4/16 at 100.00 A1 472,700
Medical Center, Series 2006, 4.625%, 10/01/31
------------------------------------------------------------------------------------------------------------------------------
3,000 Total Kansas 3,236,500
------------------------------------------------------------------------------------------------------------------------------
Nuveen Investments 45
NMO | Nuveen Municipal Market Opportunity Fund, Inc. (continued)
| Portfolio of Investments October 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 1.9% (1.2% OF TOTAL INVESTMENTS)
Jefferson County School District Finance Corporation,
Kentucky, School Building Revenue Bonds,
Series 2000A:
$ 3,045 5.250%, 7/01/17 (Pre-refunded 1/01/10) - FSA Insured 1/10 at 101.00 AAA $ 3,101,119
7,490 5.250%, 7/01/20 (Pre-refunded 1/01/10) - FSA Insured 1/10 at 101.00 AAA 7,628,041
1,000 Kentucky Economic Development Finance Authority, 6/18 at 100.00 AAA 1,062,610
Louisville Arena Project Revenue Bonds,
Louisville Arena Authority, Inc., Series 2008A-1,
6.000%, 12/01/38 - AGC Insured
------------------------------------------------------------------------------------------------------------------------------
11,535 Total Kentucky 11,791,770
------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 2.5% (1.5% OF TOTAL INVESTMENTS)
7,415 Louisiana Local Government Environmental Facilities and 12/12 at 100.00 A 7,364,504
Community Development Authority,
Revenue Bonds, Baton Rouge Community College Facilities
Corporation, Series 2002, 5.000%,
12/01/32 - NPFG Insured
3,350 Louisiana Public Facilities Authority, Revenue Bonds, 7/14 at 100.00 A 3,287,422
Baton Rouge General Hospital, Series
2004, 5.250%, 7/01/33 - NPFG Insured
5,000 Tobacco Settlement Financing Corporation, Louisiana, 5/11 at 101.00 BBB 4,525,250
Tobacco Settlement Asset-Backed Bonds,
Series 2001B, 5.875%, 5/15/39
------------------------------------------------------------------------------------------------------------------------------
15,765 Total Louisiana 15,177,176
------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 1.1% (0.7% OF TOTAL INVESTMENTS)
4,410 Maryland Community Development Administration, 3/17 at 100.00 Aa2 4,136,580
Department of Housing and Community
Development, Residential Revenue Bonds, Series 2007D,
4.900%, 9/01/42 (Alternative Minimum Tax)
2,500 Maryland Department of Transportation, Consolidated No Opt. Call AAA 2,919,725
Transportation Revenue Bonds, Series 2002,
5.500%, 2/01/16
------------------------------------------------------------------------------------------------------------------------------
6,910 Total Maryland 7,056,305
------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 4.3% (2.7% OF TOTAL INVESTMENTS)
440 Massachusetts Bay Transportation Authority, Assessment 7/10 at 100.00 AAA 446,464
Bonds, Series 2000A, 5.250%, 7/01/30
Massachusetts Bay Transportation Authority, Assessment
Bonds, Series 2000A:
4,150 5.250%, 7/01/30 (Pre-refunded 7/01/10) 7/10 at 100.00 Aa1 (4) 4,287,407
660 5.250%, 7/01/30 (Pre-refunded 7/01/10) 7/10 at 100.00 Aa1 (4) 681,853
11,505 Massachusetts Turnpike Authority, Metropolitan Highway 1/10 at 100.00 A 10,852,321
System Revenue Bonds, Senior Series
1997A, 5.000%, 1/01/37 - NPFG Insured
10,000 Massachusetts Water Resources Authority, General Revenue 8/10 at 101.00 AA+ (4) 10,480,800
Bonds, Series 2000A, 5.750%, 8/01/39
(Pre-refunded 8/01/10) - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------
26,755 Total Massachusetts 26,748,845
------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 2.5% (1.6% OF TOTAL INVESTMENTS)
5,000 Detroit Water Supply System, Michigan, Water Supply 7/16 at 100.00 AAA 4,701,900
System Revenue Bonds, Series 2006D,
4.625%, 7/01/32 - FSA Insured
2,090 Grand Rapids Building Authority, Kent County, Michigan, 8/10 at 100.00 AA (4) 2,167,811
Limited Tax General Obligation Bonds,
Series 2000, 5.375%, 8/01/17 (Pre-refunded 8/01/10) -
AMBAC Insured
5,000 Michigan State Hospital Finance Authority, Hospital 11/19 at 100.00 A1 4,826,800
Revenue Bonds, Henry Ford Health System,
Refunding Series 2009, 5.750%, 11/15/39 (WI/DD,
Settling 11/03/09)
3,050 Michigan Tobacco Settlement Finance Authority, Tobacco 6/18 at 100.00 Baa3 2,692,052
Settlement Asset-Backed Revenue Bonds,
Series 2008A, 6.875%, 6/01/42
1,150 Royal Oak Hospital Finance Authority, Michigan, Hospital 9/18 at 100.00 A1 1,339,923
Revenue Bonds, William Beaumont
Hospital, Refunding Series 2009V, 8.250%, 9/01/39
------------------------------------------------------------------------------------------------------------------------------
16,290 Total Michigan 15,728,486
------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 8.3% (5.2% OF TOTAL INVESTMENTS)
930 Minnesota Agricultural and Economic Development Board, 11/10 at 101.00 A 948,879
Healthcare System Revenue Bonds,
Fairview Hospital and Healthcare Services, Series
2000A, 6.375%, 11/15/29
29,070 Minnesota Agricultural and Economic Development Board, 11/10 at 101.00 A (4) 31,171,180
Healthcare System Revenue Bonds,
Fairview Hospital and Healthcare Services, Series
2000A, 6.375%, 11/15/29 (Pre-refunded 11/15/10)
1,730 Minnesota Housing Finance Agency, Single Family 1/11 at 101.00 AA+ 1,754,099
Remarketed Mortgage Bonds, Series 1998H-2,
6.050%, 7/01/31 (Alternative Minimum Tax)
13,675 Minnesota, General Obligation Bonds, Series 2000, 11/10 at 100.00 AAA 14,320,323
5.125%, 11/01/16
46 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
MINNESOTA (continued)
$ 2,810 St. Paul Housing and Redevelopment Authority, Minnesota, 11/15 at 103.00 AAA $ 3,378,913
Sales Tax Revenue Refunding Bonds, Civic Center
Project, Series 1996, 7.100%, 11/01/23 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------
48,215 Total Minnesota 51,573,394
------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 1.0% (0.6% OF TOTAL INVESTMENTS)
5,900 Mississippi Business Finance Corporation, Pollution 4/10 at 100.00 BBB 5,906,372
Control Revenue Refunding Bonds, System Energy
Resources Inc. Project, Series 1998, 5.875%, 4/01/22
------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 0.7% (0.4% OF TOTAL INVESTMENTS)
Kansas City Municipal Assistance Corporation, Missouri,
Leasehold Revenue Bonds, Series 2004B-1:
8,000 0.000%, 4/15/27 - AMBAC Insured No Opt. Call AA- 2,963,440
5,000 0.000%, 4/15/31 - AMBAC Insured No Opt. Call AA- 1,400,900
------------------------------------------------------------------------------------------------------------------------------
13,000 Total Missouri 4,364,340
------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 1.8% (1.1% OF TOTAL INVESTMENTS)
11,690 Omaha Convention Hotel Corporation, Nebraska, Convention 2/17 at 100.00 A1 11,188,265
Center Revenue Bonds, Series 2007, 5.000%, 2/01/35 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------
NEVADA - 1.5% (0.9% OF TOTAL INVESTMENTS)
Director of Nevada State Department of Business and
Industry, Revenue Bonds, Las Vegas Monorail Project,
First Tier, Series 2000:
6,125 0.000%, 1/01/17 - AMBAC Insured No Opt. Call Caa2 937,738
8,500 0.000%, 1/01/26 - AMBAC Insured No Opt. Call Caa2 604,010
7,860 0.000%, 1/01/27 - AMBAC Insured No Opt. Call Caa2 508,856
21,000 5.375%, 1/01/40 - AMBAC Insured 1/10 at 100.00 Caa2 4,305,210
2,135 Reno, Nevada, Capital Improvement Revenue Bonds, Series 6/15 at 33.61 A 296,253
2005B, 0.000%, 6/01/37 - FGIC Insured
2,500 Reno, Nevada, Health Facilities Revenue Bonds, Catholic 7/17 at 100.00 AAA 2,688,850
Healthcare West, Trust 2634, 18.374%, 7/01/31 - BHAC
Insured (IF)
------------------------------------------------------------------------------------------------------------------------------
48,120 Total Nevada 9,340,917
------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 6.9% (4.3% OF TOTAL INVESTMENTS)
18,400 New Jersey Health Care Facilities Financing Authority, 1/17 at 35.47 BB+ 1,918,568
Revenue Bonds, Saint Barnabas Health Care System,
Series 2006A, 0.000%, 7/01/37
18,000 New Jersey Transportation Trust Fund Authority, 6/10 at 100.00 AAA 18,613,080
Transportation System Bonds, Series 2000B, 5.750%,
6/15/17 (Pre-refunded 6/15/10)
35,000 New Jersey Transportation Trust Fund Authority, No Opt. Call AAA 8,132,600
Transportation System Bonds, Series 2006C, 0.000%,
12/15/34 - FSA Insured
5,000 New Jersey Turnpike Authority, Revenue Bonds, Growth and 1/17 at 100.00 A+ 3,865,250
Income Securities, Series 2004B, 5.150%, 1/01/35 -
AMBAC Insured
3,000 Rahway Valley Sewerage Authority, New Jersey, Sewer No Opt. Call A1 1,287,630
Revenue Bonds, Series 2005A, 0.000%, 9/01/25 - NPFG
Insured
3,525 Tobacco Settlement Financing Corporation, New Jersey, 6/12 at 100.00 AAA 3,979,020
Tobacco Settlement Asset-Backed Bonds, Series 2002,
6.125%, 6/01/42 (Pre-refunded 6/01/12)
2,100 Tobacco Settlement Financing Corporation, New Jersey, 6/13 at 100.00 AAA 2,380,728
Tobacco Settlement Asset-Backed Bonds, Series 2003,
6.375%, 6/01/32 (Pre-refunded 6/01/13)
4,000 Tobacco Settlement Financing Corporation, New Jersey, 6/17 at 100.00 BBB 2,699,360
Tobacco Settlement Asset-Backed Bonds, Series
2007-1A, 5.000%, 6/01/41
------------------------------------------------------------------------------------------------------------------------------
89,025 Total New Jersey 42,876,236
------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 1.7% (1.0% OF TOTAL INVESTMENTS)
5,925 New Mexico Hospital Equipment Loan Council, Hospital 8/11 at 101.00 AA- (4) 6,461,094
Revenue Bonds, Presbyterian Healthcare Services,
Series 2001A, 5.500%, 8/01/21 (Pre-refunded 8/01/11)
3,610 University of New Mexico, Revenue Refunding Bonds, No Opt. Call AA 3,845,733
Series 1992A, 6.250%, 6/01/12
------------------------------------------------------------------------------------------------------------------------------
9,535 Total New Mexico 10,306,827
------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 4.3% (2.7% OF TOTAL INVESTMENTS)
3,000 Long Island Power Authority, New York, Electric System 6/16 at 100.00 A- 3,035,100
General Revenue Bonds, Series 2006B, 5.000%, 12/01/35
5 New York City, New York, General Obligation Bonds, 1/10 at 100.00 AA 5,019
Fiscal Series 1997H, 6.125%, 8/01/25
Nuveen Investments 47
NMO | Nuveen Municipal Market Opportunity Fund, Inc. (continued)
| Portfolio of Investments October 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
NEW YORK (continued)
New York City, New York, General Obligation Bonds,
Fiscal Series 2002G:
$ 1,000 5.000%, 8/01/17 8/12 at 100.00 AA $ 1,039,920
6,530 5.750%, 8/01/18 8/12 at 100.00 AA 7,117,308
5,000 New York City, New York, General Obligation Bonds, 8/12 at 100.00 AA 5,470,700
Fiscal Series 2003A, 5.750%, 8/01/16
10,000 Port Authority of New York and New Jersey, Special 12/09 at 100.00 A 10,163,100
Project Bonds, JFK International Air Terminal LLC,
Sixth Series 1997, 5.750%, 12/01/22 - NPFG Insured
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------
25,535 Total New York 26,831,147
------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 2.6% (1.6% OF TOTAL INVESTMENTS)
1,900 Charlotte-Mecklenburg Hospital Authority, North 1/15 at 100.00 AAA 2,166,304
Carolina, Healthcare System Revenue Bonds, DBA
Carolinas Healthcare System, Series 2005A, 5.000%,
1/15/45 (Pre-refunded 1/15/15)
4,000 North Carolina Medical Care Commission, Health System 10/17 at 100.00 AA 3,786,320
Revenue Bonds, Mission St. Joseph's Health System,
Series 2007, 4.500%, 10/01/31 (UB)
7,500 North Carolina Municipal Power Agency 1, Catawba 1/13 at 100.00 A 7,810,050
Electric Revenue Bonds, Series 2003A, 5.250%,
1/01/19 - NPFG Insured
1,900 North Carolina Turnpike Authority, Triangle Expressway 1/19 at 100.00 AAA 1,997,926
System Senior Lien Revenue Bonds, Series 2009A,
5.750%, 1/01/39 - AGC Insured
------------------------------------------------------------------------------------------------------------------------------
15,300 Total North Carolina 15,760,600
------------------------------------------------------------------------------------------------------------------------------
NORTH DAKOTA - 4.6% (2.8% OF TOTAL INVESTMENTS)
23,035 Fargo, North Dakota, Health System Revenue Bonds, 6/10 at 101.00 AAA 23,247,383
MeritCare Obligated Group, Series 2000A, 5.625%,
6/01/31 - FSA Insured
North Dakota Water Commission, Water Development and
Management Program Bonds, Series 2000A:
2,230 5.700%, 8/01/18 (Pre-refunded 8/01/10) - NPFG Insured 8/10 at 100.00 AA (4) 2,320,382
2,450 5.750%, 8/01/19 (Pre-refunded 8/01/10) - NPFG Insured 8/10 at 100.00 AA (4) 2,550,230
------------------------------------------------------------------------------------------------------------------------------
27,715 Total North Dakota 28,117,995
------------------------------------------------------------------------------------------------------------------------------
OHIO - 7.6% (4.7% OF TOTAL INVESTMENTS)
Buckeye Tobacco Settlement Financing Authority, Ohio,
Tobacco Settlement Asset-Backed Revenue Bonds, Senior
Lien, Series 2007A-2:
3,670 5.375%, 6/01/24 6/17 at 100.00 BBB 3,355,518
110 5.125%, 6/01/24 6/17 at 100.00 BBB 97,973
1,250 5.875%, 6/01/30 6/17 at 100.00 BBB 1,087,963
1,215 5.750%, 6/01/34 6/17 at 100.00 BBB 1,021,754
4,300 6.000%, 6/01/42 6/17 at 100.00 BBB 3,316,031
4,750 5.875%, 6/01/47 6/17 at 100.00 BBB 3,519,370
10,000 Columbus City School District, Franklin County, Ohio, 12/16 at 100.00 AAA 9,369,800
General Obligation Bonds, Series 2006, 4.250%,
12/01/32 - FSA Insured (UB)
16,140 Montgomery County, Ohio, Hospital Facilities Revenue No Opt. Call A 17,218,152
Bonds, Kettering Medical Center, Series 1999, 6.300%,
4/01/12
7,500 Ohio State, Hospital Revenue Refunding Bonds, Cleveland 1/19 at 100.00 Aa2 7,767,000
Clinic Health System Obligated Group, Series 2009A,
5.500%, 1/01/39
------------------------------------------------------------------------------------------------------------------------------
48,935 Total Ohio 46,753,561
------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 0.3% (0.2% OF TOTAL INVESTMENTS)
1,675 Oklahoma Development Finance Authority, Health System 8/18 at 100.00 AA- 1,709,137
Revenue Bonds, Integris Baptist Medical Center,
Series 2008B, 5.250%, 8/15/38
------------------------------------------------------------------------------------------------------------------------------
OREGON - 2.6% (1.6% OF TOTAL INVESTMENTS)
5,000 Oregon Health Sciences University, Revenue Bonds, Series 1/13 at 100.00 A 5,073,900
2002A, 5.250%, 7/01/22 - NPFG Insured
Portland, Oregon, Water System Revenue Bonds, Series
2000A:
6,780 5.375%, 8/01/18 (Pre-refunded 8/01/10) 8/10 at 100.00 Aa1 (4) 7,038,250
3,880 5.500%, 8/01/20 (Pre-refunded 8/01/10) 8/10 at 100.00 Aa1 (4) 4,031,436
------------------------------------------------------------------------------------------------------------------------------
15,660 Total Oregon 16,143,586
------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 4.6% (2.9% OF TOTAL INVESTMENTS)
3,000 Allegheny County Hospital Development Authority, No Opt. Call Aa3 3,073,470
Pennsylvania, University of Pittsburgh Medical Center
Revenue Bonds, Series 2009A, 5.625%, 8/15/39
48 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA (continued)
$ 5,000 Delaware County Industrial Development Authority, 1/10 at 100.00 BB+ $ 4,748,650
Pennsylvania, Resource Recovery Revenue Refunding
Bonds, Series 1997A, 6.200%, 7/01/19
5,000 Pennsylvania Higher Education Assistance Agency, Capital 12/10 at 100.00 N/R (4) 5,235,350
Acquisition Revenue Bonds, Series 2000, 5.875%,
12/15/30 (Pre-refunded 12/15/10) - NPFG Insured
10,000 Pennsylvania Turnpike Commission, Turnpike Subordinate 6/26 at 100.00 AAA 7,282,800
Revenue Bonds, Series 2009C, 0.000%, 6/01/33 - FSA
Insured
7,550 Pennsylvania, General Obligation Bonds, Second Series 9/11 at 101.00 AA (4) 8,226,782
2001, 5.000%, 9/15/14 (Pre-refunded 9/15/11)
------------------------------------------------------------------------------------------------------------------------------
30,550 Total Pennsylvania 28,567,052
------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 5.4% (3.4% OF TOTAL INVESTMENTS)
3,330 Puerto Rico Aqueduct and Sewerage Authority, Revenue 7/18 at 100.00 BBB- 3,404,126
Bonds, Senior Lien Series 2008A, 6.000%, 7/01/44
Puerto Rico Housing Finance Authority, Capital Fund
Program Revenue Bonds, Series 2003:
8,200 4.500%, 12/01/23 (UB) 12/13 at 100.00 AAA 9,038,040
4,300 4.500%, 12/01/23 (UB) 12/13 at 100.00 AA+ 4,265,299
10,000 Puerto Rico Sales Tax Financing Corporation, Sales Tax 8/19 at 100.00 A+ 10,503,500
Revenue Bonds, First Subordinate Series 2009A,
6.000%, 8/01/42
6,555 Puerto Rico, The Children's Trust Fund, Tobacco 5/12 at 100.00 BBB 6,256,092
Settlement Asset-Backed Refunding Bonds, Series 2002,
5.375%, 5/15/33
------------------------------------------------------------------------------------------------------------------------------
32,385 Total Puerto Rico 33,467,057
------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 0.4% (0.2% OF TOTAL INVESTMENTS)
2,960 Rhode Island Tobacco Settlement Financing Corporation, 6/12 at 100.00 BBB 2,690,314
Tobacco Settlement Asset-Backed Bonds, Series 2002A,
6.250%, 6/01/42
------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 6.3% (3.9% OF TOTAL INVESTMENTS)
24,730 Greenville County School District, South Carolina, 12/12 at 101.00 Aaa 28,284,443
Installment Purchase Revenue Bonds, Series 2002,
5.500%, 12/01/22 (Pre-refunded 12/01/12)
21,570 Piedmont Municipal Power Agency, South Carolina, No Opt. Call A- 6,623,931
Electric Revenue Bonds, Series 2004A-2, 0.000%,
1/01/30 - AMBAC Insured
3,560 South Carolina Public Service Authority, Revenue 7/13 at 100.00 Aa2 3,797,345
Refunding Bonds, Santee Cooper Electric System,
Series 2003A, 5.000%, 1/01/20 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------
49,860 Total South Carolina 38,705,719
------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 0.7% (0.5% OF TOTAL INVESTMENTS)
5,000 Knox County Health, Educational and Housing Facilities 7/13 at 100.00 BBB+ 4,625,600
Board, Tennessee, Hospital Revenue Bonds, East
Tennessee Children's Hospital, Series 2003A, 5.000%,
7/01/23 - RAAI Insured
------------------------------------------------------------------------------------------------------------------------------
TEXAS - 15.8% (9.8% OF TOTAL INVESTMENTS)
2,500 Alliance Airport Authority, Texas, Special Facilities 12/12 at 100.00 CCC+ 1,494,125
Revenue Bonds, American Airlines Inc., Series 2007,
5.250%, 12/01/29 (Alternative Minimum Tax)
11,255 Brazos River Authority, Texas, Pollution Control Revenue 11/11 at 100.00 CCC 10,147,846
Refunding Bonds, TXU Electric Company, Series 2001C,
5.750%, 5/01/36 (Mandatory put 11/01/11) (Alternative
Minimum Tax)
1,000 Cedar Hill Independent School District, Dallas County, No Opt. Call AA- 290,370
Texas, General Obligation Bonds, Series 2002, 0.000%,
8/15/32 - FGIC Insured
15,000 Central Texas Regional Mobility Authority, Travis and 1/15 at 100.00 A 12,792,150
Williamson Counties, Toll Road Revenue Bonds, Series
2005, 5.000%, 1/01/45 - FGIC Insured
Clear Creek Independent School District, Galveston and
Harris Counties, Texas, Unlimited Tax Schoolhouse and
Refunding Bonds, Series 2000:
585 5.400%, 2/15/18 2/10 at 100.00 AAA 588,902
340 5.650%, 2/15/19 2/10 at 100.00 AAA 344,182
235 5.700%, 2/15/20 2/10 at 100.00 AAA 238,093
270 5.700%, 2/15/21 2/10 at 100.00 AAA 273,553
Nuveen Investments 49
NMO | Nuveen Municipal Market Opportunity Fund, Inc. (continued)
| Portfolio of Investments October 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
TEXAS (continued)
Clear Creek Independent School District, Galveston and
Harris Counties, Texas, Unlimited Tax Schoolhouse and
Refunding Bonds, Series 2000:
$ 16,740 5.400%, 2/15/18 (Pre-refunded 2/15/10) 2/10 at 100.00 AAA $ 16,990,095
9,660 5.650%, 2/15/19 (Pre-refunded 2/15/10) 2/10 at 100.00 AAA 9,811,370
6,645 5.700%, 2/15/20 (Pre-refunded 2/15/10) 2/10 at 100.00 AAA 6,750,123
7,750 5.700%, 2/15/21 (Pre-refunded 2/15/10) 2/10 at 100.00 AAA 7,872,604
2,500 Comal Independent School District, Comal, Bexar, No Opt. Call Aaa 1,409,150
Guadalupe, Hays, and Kendall Counties, Texas, General
Obligation Bonds, Series 2005A, 0.000%, 2/01/23
6,000 Dallas-Ft. Worth International Airport Facility 11/09 at 101.00 CCC+ 4,025,400
Improvement Corporation, Texas, Revenue Bonds,
American Airlines Inc., Series 1999, 6.375%, 5/01/35
(Alternative Minimum Tax)
Ennis Independent School District, Ellis County, Texas,
General Obligation Bonds, Series 2006:
3,950 0.000%, 8/15/30 8/16 at 49.21 Aaa 1,337,706
4,000 0.000%, 8/15/31 8/16 at 46.64 Aaa 1,275,600
1,440 Houston, Texas, Hotel Occupancy Tax and Special Revenue No Opt. Call A- 337,146
Bonds, Convention and Entertainment Project, Series
2001B, 0.000%, 9/01/32 - AMBAC Insured
1,250 Houston, Texas, Junior Lien Water and Sewerage System 12/11 at 100.00 AAA 1,323,374
Revenue Refunding Bonds, Series 2001A, 5.000%,
12/01/20 - FSA Insured
2,400 Houston, Texas, Senior Lien Airport System Revenue 7/18 at 100.00 AA- 2,496,240
Bonds, Refunding Series 2009A, 5.500%, 7/01/39
9,350 Leander Independent School District, Williamson and 8/15 at 39.50 AA- 2,711,220
Travis Counties, Texas, General Obligation Bonds,
Series 2005, 0.000%, 8/15/32 - FGIC Insured
6,000 Leander Independent School District, Williamson and 8/14 at 35.28 AAA 1,649,100
Travis Counties, Texas, General Obligation Bonds,
Series 2006, 0.000%, 8/15/33
4,000 North Texas Thruway Authority, First Tier System Revenue 1/25 at 100.00 A2 2,942,040
Refunding Bonds, Capital Appreciation Series 2008I,
0.000%, 1/01/43
3,295 Tarrant County, Texas, Cultural & Educational Facilities 2/17 at 100.00 AA- 2,827,439
Financing Corporation, Revenue Bonds, Series 2007,
Residuals 1760-3, 16.864%, 2/15/36 (IF)
5,000 White Settlement Independent School District, Tarrant 8/15 at 36.81 AAA 1,337,250
County, Texas, General Obligation Bonds, Series 2005,
0.000%, 8/15/34
3,970 Wichita Falls, Wichita County, Texas, Priority Lien 8/11 at 100.00 AA- (4) 4,265,725
Water and Sewerage System Revenue Bonds, Series 2001,
5.000%, 8/01/21 (Pre-refunded 8/01/11) - AMBAC Insured
Wylie Independent School District, Taylor County, Texas,
General Obligation Bonds, Series 2005:
3,000 0.000%, 8/15/23 8/15 at 67.10 AAA 1,552,200
2,000 0.000%, 8/15/24 8/15 at 63.56 AAA 975,660
------------------------------------------------------------------------------------------------------------------------------
130,135 Total Texas 98,058,663
------------------------------------------------------------------------------------------------------------------------------
UTAH - 0.5% (0.3% OF TOTAL INVESTMENTS)
3,000 Riverton, Utah, Hospital Revenue Bonds, IHC Health 8/19 at 100.00 AA+ 2,929,740
Services, Inc., Series 2009, 5.000%, 8/15/41 (WI/DD,
Settling 11/05/09)
------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 2.4% (1.5% OF TOTAL INVESTMENTS)
21,500 Metropolitan Washington DC Airports Authority, Virginia, 10/26 at 100.00 AAA 14,689,660
Dulles Toll Road Revenue Bonds, Series 2009C.,
0.000%, 10/01/41 - AGC Insured
------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 15.7% (9.7% OF TOTAL INVESTMENTS)
5,500 Clark County Public Utility District 1, Washington, 1/11 at 100.00 AAA 5,528,985
Generating System Revenue Refunding Bonds, Series
2000, 5.125%, 1/01/20 - FSA Insured
2,755 Cowlitz County, Washington, Special Sewerage Revenue No Opt. Call A 3,010,692
Refunding Bonds, CSOB Wastewater Treatment
Facilities, Series 2002, 5.500%, 11/01/16 - FGIC
Insured
10,000 Energy Northwest, Washington, Electric Revenue Refunding 7/11 at 101.00 AAA 10,737,900
Bonds, Nuclear Project 3, Series 2001A, 5.500%,
7/01/17 - FSA Insured
2,500 King County, Washington, Sewer Revenue Bonds, Series 1/12 at 100.00 AA+ 2,614,525
2001, 5.000%, 1/01/23 - FGIC Insured
33,490 Port of Seattle, Washington, Revenue Bonds, Series 8/10 at 100.00 Aa2 (4) 34,828,595
2000A, 5.625%, 2/01/30 (Pre-refunded 8/01/10) - NPFG
Insured
6,950 Port of Seattle, Washington, Revenue Bonds, Series 8/10 at 100.00 Aa2 6,971,406
2000B, 5.625%, 2/01/24 - NPFG Insured (Alternative
Minimum Tax) (UB)
2,150 Seattle, Washington, General Obligation Refunding and 12/12 at 100.00 AAA 2,213,662
Improvement Bonds, Series 2002, 4.500%, 12/01/20
50 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
WASHINGTON (continued)
$ 3,000 Spokane County School District 81, Spokane, Washington, 6/15 at 100.00 AA $ 3,162,870
General Obligation Bonds, Series 2005, 5.000%,
6/01/24 - NPFG Insured
3,520 Washington State Healthcare Facilities Authority, 10/11 at 100.00 Aa3 (4) 3,804,205
Revenue Bonds, Children's Hospital and Regional
Medical Center, Series 2001, 5.000%, 10/01/21
(Pre-refunded 10/01/11) - AMBAC Insured
10,895 Washington State Tobacco Settlement Authority, Tobacco 6/13 at 100.00 BBB 11,029,988
Settlement Asset-Backed Revenue Bonds, Series 2002,
6.500%, 6/01/26
9,000 Washington State, Motor Vehicle Fuel Tax General No Opt. Call AA+ 3,774,780
Obligation Bonds, Series 2003C, 0.000%, 6/01/28 -
FGIC Insured
9,000 Washington, Motor Vehicle Fuel Tax General Obligation 1/12 at 100.00 AAA 9,584,010
Bonds, Series 2002C, 5.000%, 1/01/21 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------
98,760 Total Washington 97,261,618
------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 0.9% (0.6% OF TOTAL INVESTMENTS)
2,800 Badger Tobacco Asset Securitization Corporation, 6/12 at 100.00 AAA 3,059,587
Wisconsin, Tobacco Settlement Asset-Backed Bonds,
Series 2002, 6.125%, 6/01/27 (Pre-refunded 6/01/12)
1,755 Wisconsin Health and Educational Facilities Authority, 5/16 at 100.00 BBB 1,479,043
Revenue Bonds, Divine Savior Healthcare, Series 2006,
4.750%, 5/01/25
1,250 Wisconsin Health and Educational Facilities Authority, 3/10 at 100.00 N/R 1,051,687
Revenue Bonds, United Lutheran Program for the Aging
Inc., Series 1998, 5.700%, 3/01/28
------------------------------------------------------------------------------------------------------------------------------
5,805 Total Wisconsin 5,590,317
------------------------------------------------------------------------------------------------------------------------------
WYOMING - 0.7% (0.4% OF TOTAL INVESTMENTS)
4,080 Campbell County, Wyoming Solid Waste Facilities Revenue 7/19 at 100.00 A+ 4,296,689
Bonds, Basin Electric Power Cooperative - Dry Fork
Station Facilities, Series 2009A, 5.750%, 7/15/39
------------------------------------------------------------------------------------------------------------------------------
$ 1,331,055 Total Investments (cost $1,011,308,429) - 161.1% 997,616,000
===============---------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (7.9)% (48,745,000)
-----------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.8% 17,122,916
----------------------------------------------------------------------------------------------------------
Auction Rate Preferred Shares, at Liquidation Value - (56.0)% (5) (346,675,000)
-----------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 619,318,916
===========================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net
assets applicable to Common shares unless otherwise noted.
(2) Optional Call Provisions (not covered by the report of independent
registered public accounting firm): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other call
provisions at varying prices at later dates. Certain mortgage-backed
securities may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered public
accounting firm): Using the higher of Standard & Poor's Group ("Standard &
Poor's") or Moody's Investor Service, Inc. ("Moody's") rating. Ratings
below BBB by Standard & Poor's or Baa by Moody's are considered to be
below investment grade.
(4) Backed by an escrow or trust containing sufficient U.S. Government or U.S.
Government agency securities which ensure the timely payment of principal
and interest. Such investments are normally considered to be equivalent to
AAA rated securities.
(5) Auction Rate Preferred Shares, at Liquidation Value as a percentage of
Total Investments is 34.8%
N/R Not rated.
WI/DD Purchased on a when-issued or delayed delivery basis.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected as a financing
transaction. See Notes to Financial Statements, Footnote 1 - Inverse
Floating Rate Securities for more information.
See accompanying notes to financial statements.
Nuveen Investments 51
NAD | Nuveen Dividend Advantage Municipal Fund
| Portfolio of Investments October 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS - 153.2% (99.9% OF TOTAL INVESTMENTS)
ALABAMA - 0.3% (0.2% OF TOTAL INVESTMENTS)
$ 1,600 Alabama 21st Century Authority, Tobacco Settlement 6/10 at 102.00 A- $ 1,606,384
Revenue Bonds, Series 2000, 5.750%, 12/01/20
------------------------------------------------------------------------------------------------------------------------------
ALASKA - 0.1% (0.1% OF TOTAL INVESTMENTS)
750 Alaska Housing Finance Corporation, General Housing 12/14 at 100.00 AA 765,038
Purpose Bonds, Series 2005A, 5.250%, 12/01/34 - FGIC
Insured (UB)
------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 1.2% (0.8% OF TOTAL INVESTMENTS)
2,350 Phoenix, Arizona, Civic Improvement Corporation, Senior 7/18 at 100.00 AA- 2,366,286
Lien Airport Revenue Bonds, Series 2008A, 5.000%,
7/01/33
5,000 Salt Verde Financial Corporation, Arizona, Senior Gas No Opt. Call A 4,276,750
Revenue Bonds, Series 2007, 5.000%, 12/01/37
------------------------------------------------------------------------------------------------------------------------------
7,350 Total Arizona 6,643,036
------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 6.6% (4.3% OF TOTAL INVESTMENTS)
1,535 Alameda Corridor Transportation Authority, California, No Opt. Call A 274,227
Senior Lien Revenue Bonds, Series 1999A, 0.000%,
10/01/37 - NPFG Insured
6,000 Anaheim Public Finance Authority, California, No Opt. Call AAA 1,999,380
Subordinate Lease Revenue Bonds, Public Improvement
Project, Series 1997C, 0.000%, 9/01/28 - FSA Insured
6,750 California Statewide Community Development Authority, 8/19 at 100.00 AA 7,242,547
Revenue Bonds, Methodist Hospital Project, Series
2009, 6.750%, 2/01/38
65 California, General Obligation Bonds, Series 1997, 1/10 at 100.00 A 65,058
5.000%, 10/01/18 - AMBAC Insured
5,000 California, General Obligation Bonds, Series 2005, 3/16 at 100.00 A 4,778,550
5.000%, 3/01/31
Golden State Tobacco Securitization Corporation,
California, Enhanced Tobacco Settlement Asset-Backed
Bonds, Series 2007A-1:
5,700 5.000%, 6/01/33 6/17 at 100.00 BBB 4,349,555
1,000 5.125%, 6/01/47 6/17 at 100.00 BBB 664,390
Golden State Tobacco Securitization Corporation,
California, Tobacco Settlement Asset-Backed Revenue
Bonds, Series 2005A:
3,500 0.000%, 6/01/26 - FSA Insured No Opt. Call AAA 1,312,464
9,925 5.000%, 6/01/45 6/15 at 100.00 AAA 8,815,781
2,200 M-S-R Energy Authority, California, Gas Revenue Bonds, No Opt. Call A 2,349,005
Citigroup Prepay Contracts, Series 2009C, 6.500%,
11/01/39
1,495 Palmdale Civic Authority, California, Revenue 1/10 at 100.00 A 1,498,677
Refinancing Bonds, Civic Center Project, Series
1997A, 5.375%, 7/01/12 - NPFG Insured
17,000 San Joaquin Hills Transportation Corridor Agency, Orange No Opt. Call A 2,648,600
County, California, Toll Road Revenue Refunding Bonds,
Series 1997A, 0.000%, 1/15/35 - NPFG Insured
------------------------------------------------------------------------------------------------------------------------------
60,170 Total California 35,998,234
------------------------------------------------------------------------------------------------------------------------------
COLORADO - 5.6% (3.7% OF TOTAL INVESTMENTS)
1,125 Antelope Heights Metropolitan District, Colorado, 12/17 at 100.00 BBB- 959,590
Limited Tax General Obligation Bonds, Series 2007,
5.000%, 12/01/37 - RAAI Insured
3,330 Colorado Health Facilities Authority, Colorado, Revenue 7/19 at 100.00 AA 3,404,891
Bonds, Catholic Health Initiatives, Series 2009A,
5.500%, 7/01/34 (WI/DD, Settling 11/10/09)
Denver City and County, Colorado, Airport Special
Facilities Revenue Bonds, Rental Car Projects, Series
1999A:
2,170 6.000%, 1/01/12 - NPFG Insured (Alternative Minimum 1/10 at 100.50 A 2,197,688
Tax)
675 6.000%, 1/01/13 - NPFG Insured (Alternative Minimum 1/10 at 100.50 A 683,403
Tax)
1,475 Denver, Colorado, FHA-Insured Multifamily Housing 4/10 at 100.00 BB+ 1,409,834
Revenue Bonds, Boston Lofts Project, Series 1997A,
5.750%, 10/01/27 (Alternative Minimum Tax)
8,515 E-470 Public Highway Authority, Colorado, Senior Revenue No Opt. Call A 3,059,098
Bonds, Series 1997B, 0.000%, 9/01/25 - NPFG Insured
25,000 E-470 Public Highway Authority, Colorado, Senior Revenue No Opt. Call A 5,695,750
Bonds, Series 2000B, 0.000%, 9/01/31 - NPFG Insured
60,000 E-470 Public Highway Authority, Colorado, Toll Revenue No Opt. Call A 9,750,000
Bonds, Series 2004A, 0.000%, 3/01/36 - NPFG Insured
52 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
COLORADO (continued)
$ 12,500 E-470 Public Highway Authority, Colorado, Toll Revenue 9/26 at 54.77 A $ 1,656,000
Bonds, Series 2006B, 0.000%, 9/01/38 - NPFG Insured
2,000 Metropolitan Football Stadium District, Colorado, Sales No Opt. Call A 1,913,440
Tax Revenue Bonds, Series 1999A, 0.000%, 1/01/12 -
NPFG Insured
------------------------------------------------------------------------------------------------------------------------------
116,790 Total Colorado 30,729,694
------------------------------------------------------------------------------------------------------------------------------
CONNECTICUT - 0.4% (0.3% OF TOTAL INVESTMENTS)
4,335 Mashantucket Western Pequot Tribe, Connecticut, 11/17 at 100.00 N/R 2,316,927
Subordinate Special Revenue Bonds, Series 2007A,
5.750%, 9/01/34
------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 10.9% (7.1% OF TOTAL INVESTMENTS)
1,455 Florida Housing Finance Agency, Housing Revenue Bonds, 12/09 at 100.00 N/R 1,416,617
Mar Lago Village Apartments, Series 1997F, 5.800%,
12/01/17 - AMBAC Insured (Alternative Minimum Tax)
15,000 Florida State Board of Education, Public Education 6/15 at 101.00 AAA 14,640,750
Capital Outlay Bonds, Series 2005E, 4.500%, 6/01/35
(UB)
2,500 Marion County Hospital District, Florida, Revenue Bonds, 10/17 at 100.00 A3 2,138,550
Munroe Regional Medical Center, Series 2007, 5.000%,
10/01/34
13,625 Martin County Industrial Development Authority, Florida, 12/09 at 100.00 BB+ 13,628,406
Industrial Development Revenue Bonds, Indiantown
Cogeneration LP, Series 1994A, 7.875%, 12/15/25
(Alternative Minimum Tax)
South Miami Health Facilities Authority, Florida,
Hospital Revenue, Baptist Health System Obligation
Group, Series 2007:
22,000 5.000%, 8/15/37 (UB) 8/17 at 100.00 AA- 20,921,340
7,370 5.000%, 8/15/42 (UB) 8/17 at 100.00 AA- 6,918,588
------------------------------------------------------------------------------------------------------------------------------
61,950 Total Florida 59,664,251
------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 1.6% (1.0% OF TOTAL INVESTMENTS)
5,000 Cobb County Development Authority, Georgia, Student 7/17 at 100.00 Baa3 4,324,350
Housing Revenue Bonds, KSU Village II Real Estate
Foundation LLC Project, Series 2007A, 5.250%,
7/15/38 - AMBAC Insured
4,000 Forsyth County Water and Sewerage Authority, Georgia, 4/10 at 101.00 AA+ (4) 4,135,880
Revenue Bonds, Series 2000, 6.000%, 4/01/25
(Pre-refunded 4/01/10)
------------------------------------------------------------------------------------------------------------------------------
9,000 Total Georgia 8,460,230
------------------------------------------------------------------------------------------------------------------------------
IDAHO - 0.1% (0.1% OF TOTAL INVESTMENTS)
115 Idaho Housing and Finance Association, Single Family 1/10 at 101.00 Aa2 115,059
Mortgage Bonds, Series 1999E, 5.750%, 1/01/21
(Alternative Minimum Tax)
160 Idaho Housing and Finance Association, Single Family 1/10 at 100.00 Aa2 163,315
Mortgage Bonds, Series 2000D, 6.350%, 7/01/22
(Alternative Minimum Tax)
235 Idaho Housing and Finance Association, Single Family 7/10 at 100.00 Aaa 242,762
Mortgage Bonds, Series 2000E, 5.950%, 7/01/20
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------
510 Total Idaho 521,136
------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 30.8% (20.1% OF TOTAL INVESTMENTS)
2,020 Channahon, Illinois, Revenue Refunding Bonds, Morris 12/09 at 102.00 BBB+ 2,063,126
Hospital, Series 1999, 5.750%, 12/01/12
2,205 Chicago Board of Education, Illinois, Unlimited Tax No Opt. Call AA- 737,594
General Obligation Bonds, Dedicated Tax Revenues,
Series 1998B-1, 0.000%, 12/01/29 - FGIC Insured
7,250 Chicago Board of Education, Illinois, Unlimited Tax No Opt. Call AA- 7,961,660
General Obligation Bonds, Dedicated Tax Revenues,
Series 1999A, 5.500%, 12/01/26 - FGIC Insured
Chicago, Illinois, FHA/GNMA Multifamily Housing Revenue
Bonds, Archer Court Apartments, Series 1999A:
705 5.500%, 12/20/19 (Alternative Minimum Tax) 10/10 at 101.00 AA- 716,554
1,210 5.600%, 12/20/29 (Alternative Minimum Tax) 10/10 at 101.00 AA- 1,222,994
1,925 5.650%, 12/20/40 (Alternative Minimum Tax) 10/10 at 101.00 AA- 1,939,572
22,750 Chicago, Illinois, General Obligation Refunding Bonds, No Opt. Call AA- 25,399,010
Emergency Telephone System, Series 1999, 5.500%,
1/01/23 - FGIC Insured
2,620 Chicago, Illinois, Motor Fuel Tax Revenue Refunding No Opt. Call AA+ 2,832,455
Bonds, Series 1993, 5.375%, 1/01/14 - AMBAC Insured
3,340 Chicago, Illinois, Third Lien General Airport Revenue 1/16 at 100.00 A1 3,346,813
Bonds, O'Hare International Airport, Series 2005A,
5.000%, 1/01/33 - FGIC Insured
Nuveen Investments 53
NAD | Nuveen Dividend Advantage Municipal Fund (continued)
| Portfolio of Investments October 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
ILLINOIS (continued)
$ 190 DuPage County Community School District 200, Wheaton, 11/13 at 100.00 Aa3 $ 208,492
Illinois, General Obligation Bonds, Series 2003B,
5.250%, 11/01/20 - FSA Insured
810 DuPage County Community School District 200, Wheaton, 11/13 at 100.00 Aa3 (4) 921,082
Illinois, General Obligation Bonds, Series 2003B,
5.250%, 11/01/20 (Pre-refunded 11/01/13) - FSA Insured
500 Hoffman Estates Park District, Cook County, Illinois, 12/09 at 102.00 AA 510,934
General Obligation Bonds, Series 1999, 5.375%,
12/01/29 - NPFG Insured
3,935 Illinois Development Finance Authority, Local Government No Opt. Call Baa1 3,216,232
Program Revenue Bonds, Lake County School District
116 - Round Lake, Series 1999A, 0.000%, 1/01/15 -
NPFG Insured
2,000 Illinois Finance Authority, Revenue Bonds, Children's 8/18 at 100.00 AAA 1,997,880
Memorial Hospital, Series 2008A, 5.250%, 8/15/47 -
AGC Insured (UB)
1,000 Illinois Finance Authority, Revenue Bonds, Edward Health 2/18 at 100.00 A+ 962,860
Services Corporation, Series 2008A, 5.500%, 2/01/40 -
AMBAC Insured
5,570 Illinois Finance Authority, Revenue Bonds, University of 7/14 at 100.00 Aa1 5,659,955
Chicago, Series 2004A, 5.000%, 7/01/34
9,820 Illinois Health Facilities Authority, Remarketed Revenue 8/11 at 103.00 Aa1 10,272,505
Bonds, University of Chicago Project, Series 1985A,
5.500%, 8/01/20
5,595 Illinois Health Facilities Authority, Revenue Bonds, 1/10 at 100.00 A 5,261,705
Loyola University Health System, Series 1997A,
5.000%, 7/01/24 - NPFG Insured
5,490 Illinois Health Facilities Authority, Revenue Bonds, 2/10 at 100.00 A 5,493,293
Sarah Bush Lincoln Health Center, Series 1996B,
5.500%, 2/15/16
1,500 Illinois Housing Development Authority, Housing Finance 1/15 at 100.00 A+ 1,412,580
Bonds, Series 2005E, 4.800%, 1/01/36 - FGIC Insured
2,000 Kane & DeKalb Counties, Illinois, Community United No Opt. Call A3 1,087,520
School District 301, General Obligation Bonds, Series
2006, 0.000%, 12/01/21 - NPFG Insured
11,345 Lake and McHenry Counties Community Unit School District 1/15 at 60.14 Aa3 5,155,167
118, Wauconda, Illinois, General Obligation Bonds,
Series 2005B, 0.000%, 1/01/25 - FSA Insured
3,000 Lombard Public Facilities Corporation, Illinois, First 1/16 at 100.00 N/R 2,552,670
Tier Conference Center and Hotel Revenue Bonds,
Series 2005A-1, 7.125%, 1/01/36
22,500 Metropolitan Pier and Exposition Authority, Illinois, 12/09 at 101.00 AAA 22,831,875
Revenue Bonds, McCormick Place Expansion Project,
Series 1999A, 5.500%, 12/15/24 - FGIC Insured
Metropolitan Pier and Exposition Authority, Illinois,
Revenue Refunding Bonds, McCormick Place Expansion
Project, Series 1996A:
12,250 0.000%, 12/15/22 - NPFG Insured No Opt. Call A 6,351,134
13,000 0.000%, 12/15/23 - NPFG Insured No Opt. Call A 6,313,710
1,840 Oak Park, Illinois, General Obligation Bonds, Series 11/15 at 54.14 AA- 720,285
2005B, 0.000%, 11/01/27 - SYNCORA GTY Insured
Regional Transportation Authority, Cook, DuPage, Kane,
Lake, McHenry and Will Counties, Illinois, General
Obligation Bonds, Series 1999:
22,650 5.750%, 6/01/19 - FSA Insured No Opt. Call AAA 26,864,485
3,500 5.750%, 6/01/23 - FSA Insured No Opt. Call AAA 4,163,040
1,300 Schaumburg, Illinois, General Obligation Bonds, Series 12/14 at 100.00 AA+ 1,336,685
2004B, 5.250%, 12/01/34 - FGIC Insured
10,000 Will County Community High School District 210 No Opt. Call Aa3 5,138,700
Lincoln-Way, Illinois, General Obligation Bonds,
Series 2006, 0.000%, 1/01/23 - FSA Insured
4,500 Will County School District 122, New Lenox, Illinois, No Opt. Call Aa3 3,122,145
General Obligation Bonds, Series 2000B, 0.000%,
11/01/18 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------
188,320 Total Illinois 167,774,712
------------------------------------------------------------------------------------------------------------------------------
INDIANA - 5.4% (3.5% OF TOTAL INVESTMENTS)
2,025 Hospital Authority of Delaware County, Indiana, Hospital 8/10 at 100.00 N/R 1,969,475
Revenue Refunding Bonds, Cardinal Health System,
Series 1997, 5.000%, 8/01/16 - AMBAC Insured
4,000 Indiana Finance Authority, Revenue and Refunding Bonds, 12/19 at 100.00 AA 3,906,560
Trinity Health Credit Group, Series 2009A, 5.250%,
12/01/38 (WI/DD, Settling 11/16/09)
8,000 Indiana Health Facility Financing Authority, Hospital 8/10 at 101.50 A+ (4) 8,440,400
Revenue Bonds, Clarian Health Obligated Group, Series
2000A, 5.500%, 2/15/26 (Pre-refunded 8/15/10) - NPFG
Insured
2,000 Indiana Health Facility Financing Authority, Revenue 3/17 at 100.00 BBB 1,907,520
Bonds, Community Foundation of Northwest Indiana,
Series 2007, 5.500%, 3/01/37
54 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
INDIANA (continued)
$ 6,830 Indiana Housing and Community Development Authority, 1/17 at 100.00 Aaa $ 6,417,537
Single Family Mortgage Revenue Bonds, Series 2007A-1,
Drivers 1847, 7.713%, 7/01/32 (Alternative Minimum
Tax) (IF)
6,675 Indiana Municipal Power Agency, Power Supply Revenue 1/17 at 100.00 A+ 6,632,213
Bonds, Series 2007A, 5.000%, 1/01/42 - NPFG Insured
------------------------------------------------------------------------------------------------------------------------------
29,530 Total Indiana 29,273,705
------------------------------------------------------------------------------------------------------------------------------
IOWA - 0.9% (0.6% OF TOTAL INVESTMENTS)
7,000 Iowa Tobacco Settlement Authority, Asset Backed 6/15 at 100.00 BBB 5,146,890
Settlement Revenue Bonds, Series 2005C, 5.625%,
6/01/46
------------------------------------------------------------------------------------------------------------------------------
KANSAS - 1.3% (0.8% OF TOTAL INVESTMENTS)
3,825 Wichita, Kansas, Water and Sewerage Utility Revenue 4/10 at 100.00 A1 3,826,224
Bonds, Series 1999, 4.000%, 10/01/18 - FGIC Insured
3,000 Wyandotte County-Kansas City Unified Government, Kansas, 12/15 at 100.00 N/R 3,034,380
Sales Tax Special Obligation Bonds, Redevelopment
Project Area B, Series 2005, 5.000%, 12/01/20
------------------------------------------------------------------------------------------------------------------------------
6,825 Total Kansas 6,860,604
------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 1.7% (1.1% OF TOTAL INVESTMENTS)
3,030 Hardin County School District Finance Corporation, 2/10 at 101.00 Aa3 (4) 3,102,205
Kentucky, School Building Revenue Bonds, Series 2000,
5.750%, 2/01/20 (Pre-refunded 2/01/10)
Kentucky Economic Development Finance Authority,
Hospital System Revenue Refunding and Improvement Bonds,
Appalachian Regional Healthcare Inc., Series 1997:
1,850 5.850%, 10/01/17 4/10 at 100.00 BB- 1,706,459
5,000 5.875%, 10/01/22 4/10 at 100.00 BB- 4,296,600
------------------------------------------------------------------------------------------------------------------------------
9,880 Total Kentucky 9,105,264
------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 7.7% (5.0% OF TOTAL INVESTMENTS)
2,245 Lafayette, Louisiana, Sales Tax Revenue Bonds, Public 5/10 at 101.50 AA (4) 2,338,841
Improvements, Series 2000B, 5.625%, 5/01/25
(Pre-refunded 5/01/10) - FGIC Insured
1,750 Louisiana Local Government Environmental Facilities and 6/12 at 105.00 Aaa 1,883,928
Community Development Authority, GNMA Collateralized
Mortgage Revenue Refunding Bonds, Sharlo Apartments,
Series 2002A, 6.500%, 6/20/37
5,350 Louisiana Public Facilities Authority, Revenue Bonds, 7/14 at 100.00 A 5,250,062
Baton Rouge General Hospital, Series 2004, 5.250%,
7/01/33 - NPFG Insured
9,000 Louisiana Public Facilities Authority, Revenue Bonds, 5/17 at 100.00 A3 8,462,160
Ochsner Clinic Foundation Project, Series 2007A,
5.500%, 5/15/47
5,445 Louisiana State, Gasoline and Fuels Tax Revenue Bonds, 5/16 at 100.00 AA 5,105,504
Series 2006A, 4.500%, 5/01/41 - FGIC Insured (UB)
13,570 Louisiana Transportation Authority, Senior Lien Toll 12/10 at 38.73 A+ 4,830,242
Road Revenue Bonds, Series 2005B, 0.000%, 12/01/28 -
AMBAC Insured
Tobacco Settlement Financing Corporation, Louisiana,
Tobacco Settlement Asset-Backed Bonds, Series 2001B:
9,545 5.500%, 5/15/30 5/11 at 101.00 BBB 9,581,748
5,000 5.875%, 5/15/39 5/11 at 101.00 BBB 4,525,250
------------------------------------------------------------------------------------------------------------------------------
51,905 Total Louisiana 41,977,735
------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 2.7% (1.7% OF TOTAL INVESTMENTS)
1,440 Boston Industrial Development Financing Authority, 9/12 at 102.00 N/R 1,038,254
Massachusetts, Subordinate Revenue Bonds, Crosstown
Center Project, Series 2002, 8.000%, 9/01/35
(Alternative Minimum Tax)
4,365 Massachusetts Health and Educational Facilities 10/15 at 100.00 AAA 4,446,495
Authority, Revenue Bonds, Berkshire Health System,
Series 2005F, 5.000%, 10/01/19 - AGC Insured
620 Massachusetts Health and Educational Facilities 7/18 at 100.00 A3 572,427
Authority, Revenue Bonds, CareGroup Inc., Series
2008E-1, 5.125%, 7/01/33
3,000 Massachusetts Housing Finance Agency, Housing Bonds, 12/18 at 100.00 AA- 3,012,480
Series 2009F, 5.700%, 6/01/40
785 Massachusetts Port Authority, Special Facilities Revenue 3/10 at 100.00 A 681,592
Bonds, US Airways Group Inc., Series 1996A, 5.875%,
9/01/23 - NPFG Insured (Alternative Minimum Tax)
Nuveen Investments 55
NAD | Nuveen Dividend Advantage Municipal Fund (continued)
| Portfolio of Investments October 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS (continued)
Massachusetts Turnpike Authority, Metropolitan Highway
System Revenue Bonds, Senior Series 1997A:
$ 1,975 5.000%, 1/01/12 1/10 at 100.00 A- $ 1,979,701
2,200 5.125%, 1/01/17 - NPFG Insured 1/10 at 100.00 A 2,201,958
1,000 0.000%, 1/01/24 - NPFG Insured No Opt. Call A 444,190
205 Massachusetts Turnpike Authority, Metropolitan Highway 1/10 at 100.00 AA 205,021
System Revenue Bonds, Subordinate Series 1999A,
5.250%, 1/01/29 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------
15,590 Total Massachusetts 14,582,118
------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 4.2% (2.7% OF TOTAL INVESTMENTS)
6,000 Detroit, Michigan, Second Lien Sewerage Disposal System 7/15 at 100.00 A 5,504,760
Revenue Bonds, Series 2005A, 5.000%, 7/01/35 - NPFG
Insured
15,255 Michigan State Hospital Finance Authority, Hospital 2/10 at 100.00 BB- 11,773,046
Revenue Bonds, Detroit Medical Center Obligated
Group, Series 1998A, 5.250%, 8/15/28
1,150 Royal Oak Hospital Finance Authority, Michigan, Hospital 9/18 at 100.00 A1 1,339,923
Revenue Bonds, William Beaumont Hospital, Refunding
Series 2009V, 8.250%, 9/01/39
4,000 Wayne County, Michigan, Airport Revenue Bonds, Detroit 12/09 at 100.50 A 4,032,720
Metropolitan Wayne County Airport, Series 1998A,
5.375%, 12/01/16 - NPFG Insured (Alternative Minimum
Tax)
------------------------------------------------------------------------------------------------------------------------------
26,405 Total Michigan 22,650,449
------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 1.4% (0.9% OF TOTAL INVESTMENTS)
6,375 Minneapolis Health Care System, Minnesota, Revenue 11/18 at 100.00 A 7,195,208
Bonds, Fairview Hospital and Healthcare Services,
Series 2008A, 6.625%, 11/15/28
615 Minnesota Housing Finance Agency, Single Family Mortgage 1/10 at 101.00 AA+ 623,807
Bonds, Series 1998H-1, 5.650%, 7/01/31 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------
6,990 Total Minnesota 7,819,015
------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 2.3% (1.5% OF TOTAL INVESTMENTS)
Kansas City Municipal Assistance Corporation, Missouri,
Leasehold Revenue Bonds, Series 2004B-1:
7,000 0.000%, 4/15/27 - AMBAC Insured No Opt. Call AA- 2,593,010
5,000 0.000%, 4/15/29 - AMBAC Insured No Opt. Call AA- 1,611,950
1,885 Missouri Health and Educational Facilities Authority, 6/11 at 101.00 AA- 1,927,394
Revenue Bonds, SSM Healthcare System, Series 2001A,
5.250%, 6/01/21 - AMBAC Insured
Missouri Health and Educational Facilities Authority,
Revenue Bonds, SSM Healthcare System, Series 2001A:
300 5.250%, 6/01/21 (Pre-refunded 6/01/11) - AMBAC Insured 6/11 at 101.00 AA- (4) 324,882
2,185 5.250%, 6/01/21 (Pre-refunded 6/01/11) - AMBAC Insured 6/11 at 101.00 AA- (4) 2,366,224
3,670 5.250%, 6/01/28 (Pre-refunded 6/01/11) - AMBAC Insured 6/11 at 101.00 AA- (4) 3,974,390
------------------------------------------------------------------------------------------------------------------------------
20,040 Total Missouri 12,797,850
------------------------------------------------------------------------------------------------------------------------------
MONTANA - 0.3% (0.2% OF TOTAL INVESTMENTS)
750 Montana Board of Housing, Single Family Mortgage Bonds, 12/09 at 100.00 AA+ 762,420
Series 2000A-2, 6.450%, 6/01/29 (Alternative Minimum
Tax)
1,000 Montana Higher Education Student Assistance Corporation, 12/09 at 100.00 A2 979,400
Student Loan Revenue Bonds, Subordinate Series 1999B,
6.400%, 12/01/32 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------
1,750 Total Montana 1,741,820
------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 0.2% (0.1% OF TOTAL INVESTMENTS)
800 NebHelp Inc., Nebraska, Senior Subordinate Bonds, No Opt. Call Aa2 828,600
Student Loan Program, Series 1993A-5A, 6.200%,
6/01/13 - NPFG Insured (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------
NEVADA - 1.5% (1.0% OF TOTAL INVESTMENTS)
Director of Nevada State Department of Business and
Industry, Revenue Bonds, Las Vegas Monorail Project,
First Tier, Series 2000:
8,000 0.000%, 1/01/19 - AMBAC Insured No Opt. Call Caa2 1,001,520
4,000 5.625%, 1/01/32 - AMBAC Insured 1/10 at 102.00 Caa2 820,040
3,000 5.375%, 1/01/40 - AMBAC Insured 1/10 at 100.00 Caa2 615,030
3,750 Henderson, Nevada, Healthcare Facility Revenue Refunding 7/17 at 100.00 AAA 4,333,875
Bonds, Catholic Healthcare West, Series 2007B, Trust
2633, 18.647%, 7/01/31 - BHAC Insured (IF)
56 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
NEVADA (continued)
$ 1,500 Las Vegas Redevelopment Agency, Nevada, Tax Increment 6/19 at 100.00 A $ 1,684,095
Revenue Bonds, Series 2009A, 8.000%, 6/15/30
------------------------------------------------------------------------------------------------------------------------------
20,250 Total Nevada 8,454,560
------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 7.1% (4.6% OF TOTAL INVESTMENTS)
6,850 New Jersey Educational Facilities Authority Revenue No Opt. Call Baa2 7,198,117
Refunding Bonds, University of Medicine and Dentistry
of New Jersey Issue, Series 2009 B, 5.750%, 12/01/15
1,830 New Jersey Higher Education Assistance Authority, 6/10 at 101.00 Aaa 1,878,166
Student Loan Revenue Bonds, Series 2000A, 6.000%,
6/01/13 - NPFG Insured (Alternative Minimum Tax)
4,130 New Jersey Transit Corporation, Certificates of No Opt. Call A1 4,584,094
Participation, Federal Transit Administration Grants,
Series 2002A, 5.500%, 9/15/13 - AMBAC Insured
4,000 New Jersey Transportation Trust Fund Authority, No Opt. Call AA- 4,613,680
Transportation System Bonds, Series 1999A, 5.750%,
6/15/18
20,000 New Jersey Transportation Trust Fund Authority, No Opt. Call AA- 6,529,000
Transportation System Bonds, Series 2006C, 0.000%,
12/15/28 - AMBAC Insured
Tobacco Settlement Financing Corporation, New Jersey,
Tobacco Settlement Asset-Backed Bonds, Series 2002:
7,825 5.750%, 6/01/32 (Pre-refunded 6/01/12) 6/12 at 100.00 AAA 8,506,714
3,165 6.125%, 6/01/42 (Pre-refunded 6/01/12) 6/12 at 100.00 AAA 3,572,652
1,365 Tobacco Settlement Financing Corporation, New Jersey, 6/13 at 100.00 AAA 1,608,762
Tobacco Settlement Asset-Backed Bonds, Series 2003,
6.750%, 6/01/39 (Pre-refunded 6/01/13)
------------------------------------------------------------------------------------------------------------------------------
49,165 Total New Jersey 38,491,185
------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 0.7% (0.4% OF TOTAL INVESTMENTS)
3,730 University of New Mexico, FHA-Insured Mortgage Hospital 7/14 at 100.00 AAA 3,745,144
Revenue Bonds, Series 2004, 5.000%, 7/01/32 - FSA
Insured
------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 8.4% (5.5% OF TOTAL INVESTMENTS)
2,170 Dormitory Authority of the State of New York, Insured 1/10 at 100.00 A3 2,171,758
Revenue Bonds, Franciscan Health Partnership
Obligated Group - Frances Shervier Home and Hospital,
Series 1997, 5.500%, 7/01/17 - RAAI Insured
7,500 Dormitory Authority of the State of New York, Secured 2/10 at 100.00 A1 7,519,800
Hospital Revenue Refunding Bonds, Wyckoff Heights
Medical Center, Series 1998H, 5.300%, 8/15/21 - NPFG
Insured
6,000 New York City Industrial Development Agency, New York, 8/16 at 101.00 B- 5,827,380
American Airlines-JFK International Airport Special
Facility Revenue Bonds, Series 2005, 7.750%, 8/01/31
(Alternative Minimum Tax)
4,755 New York City Industrial Development Agency, New York, 3/19 at 100.00 AAA 5,665,107
Revenue Bonds, Yankee Stadium Project Pilot, Series
2009A, 7.000%, 3/01/49 - AGC Insured
5,000 New York City Municipal Water Finance Authority, New 12/14 at 100.00 AAA 5,090,150
York, Water and Sewerage System Revenue Bonds, Series
2004B, 5.000%, 6/15/36 - FSA Insured (UB)
8,800 New York City Sales Tax Asset Receivable Corporation, 10/14 at 100.00 AAA 9,078,256
New York, Dedicated Revenue Bonds, Local Government
Assistance Corporation, Series 2004A, 5.000%,
10/15/32 - AMBAC Insured (UB)
10,000 Port Authority of New York and New Jersey, Special 12/09 at 100.00 A 10,483,000
Project Bonds, JFK International Air Terminal LLC,
Sixth Series 1997, 5.900%, 12/01/17 - NPFG Insured
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------
44,225 Total New York 45,835,451
------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 1.1% (0.7% OF TOTAL INVESTMENTS)
3,830 Charlotte-Mecklenburg Hospital Authority, North 1/15 at 100.00 AAA 4,366,813
Carolina, Healthcare System Revenue Bonds, DBA
Carolinas Healthcare System, Series 2005A, 5.000%,
1/15/45 (Pre-refunded 1/15/15)
1,500 The Charlotte-Mecklenberg Hospital Authority (North 1/18 at 100.00 AA- 1,553,475
Carolina), Doing Business as Carolinas HealthCare
System, Health Care Refunding Revenue Bonds, Series
2008A, 5.250%, 1/15/24 - AGC Insured
------------------------------------------------------------------------------------------------------------------------------
5,330 Total North Carolina 5,920,288
------------------------------------------------------------------------------------------------------------------------------
OHIO - 5.1% (3.3% OF TOTAL INVESTMENTS)
2,300 Amherst Exempted Village School District, Ohio, 12/11 at 100.00 A1 (4) 2,505,919
Unlimited Tax General Obligation School Improvement
Bonds, Series 2001, 5.125%, 12/01/21 (Pre-refunded
12/01/11) - FGIC Insured
Nuveen Investments 57
NAD | Nuveen Dividend Advantage Municipal Fund (continued)
| Portfolio of Investments October 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
OHIO (continued)
Buckeye Tobacco Settlement Financing Authority, Ohio,
Tobacco Settlement Asset-Backed Revenue Bonds, Senior
Lien, Series 2007A-2:
$ 160 5.125%, 6/01/24 6/17 at 100.00 BBB $ 142,506
1,800 5.875%, 6/01/30 6/17 at 100.00 BBB 1,566,666
1,740 5.750%, 6/01/34 6/17 at 100.00 BBB 1,463,253
3,930 5.875%, 6/01/47 6/17 at 100.00 BBB 2,911,816
3,635 Franklin County, Ohio, FHA-Insured Multifamily Housing 1/10 at 100.00 Aa2 3,636,309
Mortgage Revenue Bonds, Hamilton Creek Apartments
Project, Series 1994A, 5.550%, 7/01/24 (Alternative
Minimum Tax)
3,650 Montgomery County, Ohio, Revenue Bonds, Catholic Health 5/14 at 100.00 AA 3,645,365
Initiatives, Series 2004A, 5.000%, 5/01/30
11,400 Ohio Water Development Authority, Solid Waste Disposal 3/10 at 102.00 N/R 10,944,228
Revenue Bonds, Bay Shore Power, Series 1998B, 6.625%,
9/01/20 (Alternative Minimum Tax)
935 Warren County, Ohio, Limited Tax General Obligations, 12/09 at 100.00 Aa2 938,609
Series 1997, 5.500%, 12/01/17
------------------------------------------------------------------------------------------------------------------------------
29,550 Total Ohio 27,754,671
------------------------------------------------------------------------------------------------------------------------------
OREGON - 0.4% (0.3% OF TOTAL INVESTMENTS)
2,355 Portland, Oregon, Downtown Waterfront Urban Renewal and 6/10 at 101.00 Aa3 2,422,800
Redevelopment Revenue Bonds, Series 2000A, 5.500%,
6/15/20 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 7.0% (4.6% OF TOTAL INVESTMENTS)
3,480 Allegheny County Hospital Development Authority, 11/10 at 102.00 AAA 3,867,359
Pennsylvania, Revenue Bonds, West Penn Allegheny
Health System, Series 2000B, 9.250%, 11/15/22
(Pre-refunded 11/15/10)
520 Carbon County Industrial Development Authority, No Opt. Call BBB- 525,346
Pennsylvania, Resource Recovery Revenue Refunding
Bonds, Panther Creek Partners Project, Series 2000,
6.650%, 5/01/10 (Alternative Minimum Tax)
1,250 Erie, Pennsylvania, Water Authority, Water Revenue 12/18 at 100.00 AAA 1,259,025
Bonds, Series 2008, 5.000%, 12/01/43 - FSA Insured
1,500 Pennsylvania Housing Finance Agency, Single Family 10/16 at 100.00 AA+ 1,397,235
Mortgage Revenue Bonds, Series 2006A, 4.650%,
10/01/31 (Alternative Minimum Tax) (UB)
8,200 Pennsylvania Turnpike Commission, Turnpike Revenue 12/27 at 100.00 A2 5,108,518
Bonds, Capital Appreciation Series 2009E, 0.000%,
12/01/38
5,000 Pennsylvania Turnpike Commission, Turnpike Subordinate 6/26 at 100.00 AAA 3,641,400
Revenue Bonds, Series 2009C, 0.000%, 6/01/33 - FSA
Insured
18,900 Philadelphia Airport System, Pennsylvania, Revenue 12/09 at 101.00 A+ 18,981,837
Bonds, Series 1998A, 5.500%, 6/15/18 - FGIC Insured
(Alternative Minimum Tax)
3,205 Philadelphia School District, Pennsylvania, General 8/12 at 100.00 Aa3 (4) 3,607,548
Obligation Bonds, Series 2002B, 5.625%, 8/01/16
(Pre-refunded 8/01/12) - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------
42,055 Total Pennsylvania 38,388,268
------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 5.1% (3.3% OF TOTAL INVESTMENTS)
2,500 Puerto Rico Aqueduct and Sewerage Authority, Revenue 7/18 at 100.00 BBB- 2,555,650
Bonds, Senior Lien Series 2008A, 6.000%, 7/01/44
Puerto Rico Housing Finance Authority, Capital Fund
Program Revenue Bonds, Series 2003:
4,300 4.500%, 12/01/23 (UB) 12/13 at 100.00 AA+ 4,265,299
8,200 4.500%, 12/01/23 (UB) 12/13 at 100.00 AAA 9,038,040
12,845 Puerto Rico Infrastructure Financing Authority, Special No Opt. Call BBB+ 1,220,789
Tax Revenue Bonds, Series 2005A, 0.000%, 7/01/42 -
FGIC Insured
10,000 Puerto Rico Sales Tax Financing Corporation, Sales Tax 8/19 at 100.00 A+ 10,503,500
Revenue Bonds, First Subordinate Series 2009A,
6.000%, 8/01/42
------------------------------------------------------------------------------------------------------------------------------
37,845 Total Puerto Rico 27,583,278
------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 3.7% (2.4% OF TOTAL INVESTMENTS)
2,015 Central Falls, Rhode Island, General Obligation School 11/09 at 102.00 BBB 2,054,293
Bonds, Series 1999, 6.250%, 5/15/20 - RAAI Insured
58 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND (continued)
$ 3,500 Providence Redevelopment Agency, Rhode Island, Revenue 4/10 at 101.00 Baa2 (4) $ 3,609,760
Bonds, Public Safety and Municipal Building Projects,
Series 1999A, 5.750%, 4/01/29 (Pre-refunded
4/01/10) - AMBAC Insured
Rhode Island Housing & Mortgage Finance Corporation,
Homeownership Opportunity 57-B Bond Program, Series
2008, Trust 1177:
1,500 9.524%, 10/01/27 (Alternative Minimum Tax) (IF) 4/17 at 100.00 AA+ 1,534,770
1,000 9.624%, 10/01/32 (Alternative Minimum Tax) (IF) 4/17 at 100.00 AA+ 1,012,090
12,500 Rhode Island Tobacco Settlement Financing Corporation, 6/12 at 100.00 BBB 11,825,250
Tobacco Settlement Asset-Backed Bonds, Series 2002A,
6.125%, 6/01/32
------------------------------------------------------------------------------------------------------------------------------
20,515 Total Rhode Island 20,036,163
------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 0.3% (0.2% OF TOTAL INVESTMENTS)
1,500 Greenville, South Carolina, Hospital Facilities Revenue 5/11 at 101.00 AA- 1,498,035
Bonds, Series 2001, 5.000%, 5/01/31 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 2.1% (1.4% OF TOTAL INVESTMENTS)
6,400 Memphis-Shelby County Airport Authority, Tennessee, 3/10 at 101.00 A2 6,456,512
Airport Revenue Bonds, Series 1999D, 6.000%, 3/01/24 -
AMBAC Insured (Alternative Minimum Tax)
2,425 Memphis-Shelby County Airport Authority, Tennessee, 3/11 at 100.00 AAA 2,454,027
Airport Revenue Bonds, Series 2001B, 5.125%, 3/01/26 -
FSA Insured
2,310 Sullivan County Health Educational and Housing 9/16 at 100.00 BBB+ 1,932,615
Facilities Board, Tennessee, Revenue Bonds, Wellmont
Health System, Series 2006C, 5.250%, 9/01/36
1,500 Sumner County Health, Educational, and Housing 11/17 at 100.00 N/R 570,150
Facilities Board, Tennessee, Revenue Refunding Bonds,
Sumner Regional Health System Inc., Series 2007,
5.500%, 11/01/46
------------------------------------------------------------------------------------------------------------------------------
12,635 Total Tennessee 11,413,304
------------------------------------------------------------------------------------------------------------------------------
TEXAS - 6.4% (4.2% OF TOTAL INVESTMENTS)
2,560 Brazos River Authority, Texas, Pollution Control Revenue 4/13 at 101.00 Caa3 1,494,554
Refunding Bonds, TXU Electric Company, Series 1999C,
7.700%, 3/01/32 (Alternative Minimum Tax)
2,820 Central Texas Regional Mobility Authority, Travis and 1/15 at 100.00 A 2,404,924
Williamson Counties, Toll Road Revenue Bonds, Series
2005, 5.000%, 1/01/45 - FGIC Insured
820 Dallas Area Rapid Transit, Texas, Senior Lien Sales Tax 12/11 at 100.00 AAA 891,660
Revenue Bonds, Series 2001, 5.000%,
12/01/31 (Pre-refunded 12/01/11) - AMBAC Insured
2,205 Harris County-Houston Sports Authority, Texas, Senior No Opt. Call A 1,191,869
Lien Revenue Refunding Bonds, Series 2001A, 0.000%,
11/15/20 - NPFG Insured
3,130 Houston, Texas, Hotel Occupancy Tax and Special Revenue No Opt. Call A- 849,169
Bonds, Convention and Entertainment Project, Series
2001B, 0.000%, 9/01/30 - AMBAC Insured
2,500 Jefferson County, Texas, Certificates of Obligation, 8/10 at 100.00 AAA 2,602,025
Series 2000, 6.000%, 8/01/25 (Pre-refunded 8/01/10) -
FSA Insured
30,095 Leander Independent School District, Williamson and 8/12 at 27.94 AAA 7,275,165
Travis Counties, Texas, General Obligation Bonds,
Series 2004, 0.000%, 8/15/34
9,345 Leander Independent School District, Williamson and 8/15 at 37.33 AA- 2,555,203
Travis Counties, Texas, General Obligation Bonds,
Series 2005, 0.000%, 8/15/33 - FGIC Insured
33,160 Leander Independent School District, Williamson and 8/14 at 26.50 AAA 6,788,847
Travis Counties, Texas, General Obligation Bonds,
Series 2006, 0.000%, 8/15/38
1,000 San Antonio, Texas, Water System Revenue Bonds, Series 5/15 at 100.00 AA 993,900
2005, 4.750%, 5/15/37 - NPFG Insured
3,295 Tarrant County, Texas, Cultural & Educational Facilities 2/17 at 100.00 AA- 2,827,440
Financing Corporation, Revenue Bonds, Series 2007,
Residuals 1761, 16.864%, 2/15/36 (IF)
7,000 White Settlement Independent School District, Tarrant 8/15 at 34.92 AAA 1,766,240
County, Texas, General Obligation Bonds, Series 2005,
0.000%, 8/15/35
Wylie Independent School District, Taylor County, Texas,
General Obligation Bonds, Series 2005:
3,000 0.000%, 8/15/20 8/15 at 78.46 AAA 1,852,380
3,000 0.000%, 8/15/22 8/15 at 70.77 AAA 1,648,710
------------------------------------------------------------------------------------------------------------------------------
103,930 Total Texas 35,142,086
------------------------------------------------------------------------------------------------------------------------------
Nuveen Investments 59
NAD | Nuveen Dividend Advantage Municipal Fund (continued)
| Portfolio of Investments October 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
UTAH - 0.1% (0.1% OF TOTAL INVESTMENTS)
Utah Housing Finance Agency, Single Family Mortgage
Bonds, Series 1999C-2, Class II:
$ 195 5.700%, 7/01/19 (Alternative Minimum Tax) 1/10 at 101.50 Aaa $ 199,785
60 5.750%, 7/01/21 (Alternative Minimum Tax) 1/10 at 101.50 AA 60,040
20 Utah Housing Finance Agency, Single Family Mortgage 1/10 at 101.00 AA 20,095
Bonds, Series 1999D, 5.850%, 7/01/21 (Alternative
Minimum Tax)
10 Utah Housing Finance Agency, Single Family Mortgage 1/10 at 101.50 Aa3 10,160
Bonds, Series 1999F, 6.300%, 7/01/21 (Alternative
Minimum Tax)
485 Utah Housing Finance Agency, Single Family Mortgage 7/10 at 100.00 AA- 488,177
Bonds, Series 2000F-2, Class III, 6.000%, 1/01/15
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------
770 Total Utah 778,257
------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 0.5% (0.3% OF TOTAL INVESTMENTS)
3,000 Fairfax County Economic Development Authority, Virginia, 10/17 at 100.00 N/R 2,553,060
Residential Care Facilities Mortgage Revenue Bonds,
Goodwin House, Inc., Series 2007A, 5.125%, 10/01/42
------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 11.0% (7.2% OF TOTAL INVESTMENTS)
4,000 Energy Northwest, Washington, Electric Revenue Refunding 7/13 at 100.00 Aaa 4,457,520
Bonds, Nuclear Project 3, Series 2003A, 5.500%,
7/01/17 - SYNCORA GTY Insured
Port of Seattle, Washington, Special Facility Revenue
Bonds, Terminal 18, Series 1999B:
1,755 6.000%, 9/01/15 - NPFG Insured (Alternative Minimum 3/10 at 101.00 A 1,782,852
Tax)
2,590 6.000%, 9/01/16 - NPFG Insured (Alternative Minimum 3/10 at 101.00 A 2,628,617
Tax)
Port of Seattle, Washington, Special Facility Revenue
Bonds, Terminal 18, Series 1999C:
875 6.000%, 9/01/15 - NPFG Insured (Alternative Minimum 3/10 at 101.00 A 888,886
Tax)
1,260 6.000%, 9/01/16 - NPFG Insured (Alternative Minimum 3/10 at 101.00 A 1,278,787
Tax)
4,820 Seattle, Washington, Municipal Light and Power Revenue 3/11 at 100.00 AAA 5,020,030
Refunding and Improvement Bonds, Series 2001, 5.500%,
3/01/19 - FSA Insured
6,195 Washington State Tobacco Settlement Authority, Tobacco 6/13 at 100.00 BBB 6,271,756
Settlement Asset-Backed Revenue Bonds, Series 2002,
6.500%, 6/01/26
11,605 Washington, Certificates of Participation, Washington 1/10 at 100.00 AA 11,641,904
Convention and Trade Center, Series 1999, 5.250%,
7/01/16 - NPFG Insured
3,350 Washington, General Obligation Compound Interest Bonds, No Opt. Call AAA 2,486,940
Series 1999S-2, 0.000%, 1/01/18 - FSA Insured
Washington, General Obligation Compound Interest Bonds,
Series 1999S-3:
17,650 0.000%, 1/01/20 No Opt. Call AA+ 11,751,547
18,470 0.000%, 1/01/21 No Opt. Call AA+ 11,622,986
------------------------------------------------------------------------------------------------------------------------------
72,570 Total Washington 59,831,825
------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 7.0% (4.6% OF TOTAL INVESTMENTS)
1,390 Badger Tobacco Asset Securitization Corporation, 6/12 at 100.00 AAA 1,546,111
Wisconsin, Tobacco Settlement Asset-Backed Bonds,
Series 2002, 6.000%, 6/01/17 (Pre-refunded 6/01/12)
1,690 Green Bay, Wisconsin, Water System Revenue Bonds, Series 11/14 at 100.00 Aa3 (4) 1,943,348
2004, 5.000%, 11/01/29 (Pre-refunded 11/01/14) - FSA
Insured
560 Green Bay, Wisconsin, Water System Revenue Bonds, Series 11/14 at 100.00 Aa3 577,220
2004, 5.000%, 11/01/29 - FSA Insured
3,810 La Crosse, Wisconsin, Industrial Development Revenue 12/09 at 101.00 A3 3,898,316
Refunding Bonds, Dairyland Power Cooperative, Series
1997C, 5.550%, 2/01/15 - AMBAC Insured
7,410 Wisconsin Health and Educational Facilities Authority, 11/16 at 100.00 Aa1 7,436,009
Revenue Bonds, Ascension Health, Series 2006A,
5.000%, 11/15/36
4,330 Wisconsin Health and Educational Facilities Authority, 2/20 at 100.00 AA- 4,470,509
Revenue Bonds, Childrens Hospital of Wisconsin Inc.,
Series 2008B, 5.500%, 8/15/29
4,380 Wisconsin Health and Educational Facilities Authority, 11/09 at 101.00 A 4,386,439
Revenue Bonds, Kenosha Hospital and Medical Center
Inc., Series 1999, 5.625%, 5/15/29
60 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
WISCONSIN (continued)
$ 12,700 Wisconsin Health and Educational Facilities Authority, 2/10 at 101.00 A2 $ 12,733,147
Revenue Bonds, Mercy Health System Corporation,
Series 1999, 5.500%, 8/15/25 - AMBAC Insured
2,200 Wisconsin Health and Educational Facilities Authority, 8/13 at 100.00 BBB+ 1,850,002
Revenue Bonds, Wheaton Franciscan Services Inc.,
Series 2003A, 5.125%, 8/15/33
------------------------------------------------------------------------------------------------------------------------------
38,470 Total Wisconsin 38,841,101
------------------------------------------------------------------------------------------------------------------------------
$ 1,115,385 Total Municipal Bonds (cost $843,165,116) 835,953,168
===============---------------------------------------------------------------------------------------------------------------
SHARES DESCRIPTION (1) VALUE
------------------------------------------------------------------------------------------------------------------------------
INVESTMENT COMPANIES - 0.1% (0.1% OF TOTAL INVESTMENTS)
8,765 BlackRock MuniHoldings Fund Inc. $ 128,495
32,332 Morgan Stanley Quality Municipal Income Trust 381,518
------------------------------------------------------------------------------------------------------------------------------
Total Investment Companies (cost $527,634) 510,013
-----------------------------------------------------------------------------------------------------------
Total Investments (cost $843,692,750) - 153.3% 836,463,181
-----------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (9.5)% (51,605,000)
-----------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 4.2% 22,475,969
-----------------------------------------------------------------------------------------------------------
Auction Rate Preferred Shares, at Liquidation Value - (48.0)% (5) (261,800,000)
-----------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 545,534,150
===========================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net
assets applicable to Common shares unless otherwise noted.
(2) Optional Call Provisions (not covered by the report of independent
registered public accounting firm): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other call
provisions at varying prices at later dates. Certain mortgage-backed
securities may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered public
accounting firm): Using the higher of Standard & Poor's Group ("Standard &
Poor's") or Moody's Investor Service, Inc. ("Moody's") rating. Ratings
below BBB by Standard & Poor's or Baa by Moody's are considered to be
below investment grade.
(4) Backed by an escrow or trust containing sufficient U.S. Government or U.S.
Government agency securities which ensure the timely payment of principal
and interest. Such investments are normally considered to be equivalent to
AAA rated securities.
(5) Auction Rate Preferred Shares, at Liquidation Value as a percentage of
Total Investments is 31.3%
N/R Not rated.
WI/DD Purchased on a when-issued or delayed delivery basis.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected as a financing
transaction. See Notes to Financial Statements, Footnote 1 - Inverse
Floating Rate Securities for more information.
See accompanying notes to financial statements.
Nuveen Investments 61
NXZ | Nuveen Dividend Advantage Municipal Fund 2
| Portfolio of Investments October 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 4.7% (3.2% OF TOTAL INVESTMENTS)
$ 18,500 Huntsville Healthcare Authority, Alabama, Revenue Bonds, 6/11 at 101.00 A2 (4) $ 20,143,910
Series 2001A, 5.750%, 6/01/31 (Pre-refunded 6/01/11)
------------------------------------------------------------------------------------------------------------------------------
ALASKA - 0.3% (0.2% OF TOTAL INVESTMENTS)
2,200 Northern Tobacco Securitization Corporation, Alaska, 6/14 at 100.00 Baa3 1,461,900
Tobacco Settlement Asset-Backed Bonds, Series 2006A,
5.000%, 6/01/46
------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 0.7% (0.5% OF TOTAL INVESTMENTS)
3,120 Phoenix, Arizona, Civic Improvement Corporation, Senior 7/12 at 100.00 AA- 3,107,458
Lien Airport Revenue Bonds, Series 2002B, 5.250%,
7/01/32 - FGIC Insured (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 0.2% (0.2% OF TOTAL INVESTMENTS)
1,015 Arkansas Development Finance Authority, Single Family 1/12 at 100.00 AAA 1,019,659
Mortgage Revenue Bonds, GNMA Mortgage-Backed
Securities Program, Series 2002C, 5.400%, 1/01/34
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 12.2% (8.2% OF TOTAL INVESTMENTS)
9,000 California County Tobacco Securitization Agency, Tobacco 12/18 at 100.00 Baa3 6,122,250
Settlement Asset-Backed Bonds, Los Angeles County
Securitization Corporation, Series 2006A, 0.000%,
6/01/36
6,000 California Educational Facilities Authority, Revenue 6/11 at 101.00 AAA 6,227,640
Bonds, Stanford University, Series 2001Q, 5.250%,
12/01/32
4,080 California Health Facilities Financing Authority, 4/16 at 100.00 AAA 4,131,204
Revenue Bonds, Kaiser Permanante System, Series 2006,
5.000%, 4/01/37 - BHAC Insured
Golden State Tobacco Securitization Corporation,
California, Enhanced Tobacco Settlement Asset-Backed
Bonds, Series 2007A-1:
1,000 5.000%, 6/01/33 6/17 at 100.00 BBB 763,080
1,000 5.125%, 6/01/47 6/17 at 100.00 BBB 664,390
5,000 Golden State Tobacco Securitization Corporation, 6/13 at 100.00 AAA 5,850,950
California, Tobacco Settlement Asset-Backed Bonds,
Series 2003A-1, 6.750%, 6/01/39 (Pre-refunded 6/01/13)
20,000 Golden State Tobacco Securitization Corporation, 6/15 at 100.00 A- 17,228,200
California, Tobacco Settlement Asset-Backed Revenue
Bonds, Series 2005A, 5.000%, 6/01/45 - FGIC Insured
6,000 Los Angeles Regional Airports Improvement Corporation, 12/12 at 102.00 B- 5,744,280
California, Sublease Revenue Bonds, Los Angeles
International Airport, American Airlines Inc.
Terminal 4 Project, Series 2002C, 7.500%, 12/01/24
(Alternative Minimum Tax)
5,000 San Jose, California, Airport Revenue Bonds, Series 3/17 at 100.00 A 5,120,950
2007A, 6.000%, 3/01/47 - AMBAC Insured (Alternative
Minimum Tax)
80 Yuba County Water Agency, California, Yuba River 3/10 at 100.00 Baa3 77,855
Development Revenue Bonds, Pacific Gas and Electric
Company, Series 1966A, 4.000%, 3/01/16
------------------------------------------------------------------------------------------------------------------------------
57,160 Total California 51,930,799
------------------------------------------------------------------------------------------------------------------------------
COLORADO - 10.1% (6.7% OF TOTAL INVESTMENTS)
2,380 Colorado Educational and Cultural Facilities Authority, 8/11 at 100.00 AAA 2,645,322
Charter School Revenue Bonds, Peak-to-Peak Charter
School, Series 2001, 7.500%, 8/15/21 (Pre-refunded
8/15/11)
3,300 Denver City and County, Colorado, Airport Revenue Bonds, 11/16 at 100.00 A+ 3,382,566
Series 2006, 5.000%, 11/15/24 - FGIC Insured
2,000 Denver City and County, Colorado, Airport System Revenue 11/10 at 100.00 A+ 2,022,620
Refunding Bonds, Series 2000A, 6.000%, 11/15/18 -
AMBAC Insured (Alternative Minimum Tax)
Denver, Colorado, Airport Revenue Bonds, Series 2006:
5,365 5.000%, 11/15/23 - FGIC Insured (UB) 11/16 at 100.00 A+ 5,531,798
4,335 5.000%, 11/15/25 - FGIC Insured (UB) 11/16 at 100.00 A+ 4,422,524
10,000 E-470 Public Highway Authority, Colorado, Senior Revenue 9/10 at 31.42 Aaa 3,122,500
Bonds, Series 2000B, 0.000%, 9/01/28 (Pre-refunded
9/01/10) - NPFG Insured
1,280 Eagle County Air Terminal Corporation, Colorado, Airport 5/11 at 101.00 N/R 1,109,760
Terminal Revenue Bonds, Series 2001, 7.125%, 5/01/31
(Alternative Minimum Tax)
755 Jefferson County School District R1, Colorado, General 12/14 at 100.00 AAA 810,213
Obligation Bonds, Series 2004, 5.000%, 12/15/22 - FSA
Insured (UB)
62 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
COLORADO (continued)
$ 5,000 Northwest Parkway Public Highway Authority, Colorado, 6/11 at 102.00 AAA $ 5,449,600
Revenue Bonds, Senior Series 2001A, 5.250%, 6/15/41
(Pre-refunded 6/15/11) - FSA Insured
Northwest Parkway Public Highway Authority, Colorado,
Senior Lien Revenue Bonds, Series 2001B:
22,000 0.000%, 6/15/28 (Pre-refunded 6/15/11) - FSA Insured 6/11 at 35.65 AAA 7,659,520
17,650 0.000%, 6/15/29 (Pre-refunded 6/15/11) - AMBAC Insured 6/11 at 33.46 N/R (4) 5,766,255
1,000 Plaza Metropolitan District 1, Lakewood, Colorado, Tax 6/14 at 101.00 N/R 981,320
Increment Revenue Bonds, Series 2003, 8.000%, 12/01/25
------------------------------------------------------------------------------------------------------------------------------
75,065 Total Colorado 42,903,998
------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 1.3% (0.9% OF TOTAL INVESTMENTS)
895 District of Columbia Tobacco Settlement Corporation, 5/11 at 101.00 BBB 897,255
Tobacco Settlement Asset-Backed Bonds, Series 2001,
6.250%, 5/15/24
5,000 Washington Convention Center Authority, District of 10/16 at 100.00 A 4,627,600
Columbia, Senior Lien Dedicated Tax Revenue Bonds,
Series 2007A, 4.500%, 10/01/30 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------
5,895 Total District of Columbia 5,524,855
------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 4.3% (2.9% OF TOTAL INVESTMENTS)
15,000 Jacksonville, Florida, Transportation Revenue Bonds, 10/11 at 100.00 AA- 15,324,750
Series 2001, 5.250%, 10/01/29 - NPFG Insured
3,000 Miami-Dade County, Florida, Aviation Revenue Bonds, 10/12 at 100.00 A 2,974,470
Miami International Airport, Series 2002, 5.375%,
10/01/32 - FGIC Insured (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------
18,000 Total Florida 18,299,220
------------------------------------------------------------------------------------------------------------------------------
HAWAII - 2.5% (1.6% OF TOTAL INVESTMENTS)
Honolulu Board of Water Supply, Hawaii, Water System
Revenue Bonds, Series 2001:
3,000 5.250%, 7/01/26 (Pre-refunded 7/01/11) - FSA Insured 7/11 at 100.00 AAA 3,227,430
6,725 5.250%, 7/01/31 (Pre-refunded 7/01/11) - FSA Insured 7/11 at 100.00 AAA 7,234,822
------------------------------------------------------------------------------------------------------------------------------
9,725 Total Hawaii 10,462,252
------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 13.5% (9.0% OF TOTAL INVESTMENTS)
3,560 Chicago, Illinois, FHA/GNMA Collateralized Multifamily 12/11 at 100.00 AAA 3,600,335
Housing Revenue Bonds, Stone Terrace Apartments,
Series 2001A, 5.750%, 12/20/42 (Alternative Minimum
Tax)
730 Chicago, Illinois, FNMA/GNMA Collateralized Single 4/11 at 105.00 AAA 760,083
Family Mortgage Revenue Bonds, Series 2001A, 6.250%,
10/01/32 (Alternative Minimum Tax)
5,000 Chicago, Illinois, General Obligation Bonds, City No Opt. Call AA- 1,300,550
Colleges, Series 1999, 0.000%, 1/01/34 - FGIC Insured
3,985 Chicago, Illinois, General Obligation Bonds, Series 1/11 at 101.00 AA- 4,026,165
2001A, 5.250%, 1/01/33 - NPFG Insured
5,285 Chicago, Illinois, General Obligation Bonds, Series 1/11 at 101.00 AA- (4) 5,624,350
2001A, 5.250%, 1/01/33 (Pre-refunded 1/01/11) - NPFG
Insured
3,180 Illinois Development Finance Authority, Revenue Bonds, 12/12 at 100.00 N/R (4) 3,636,712
Chicago Charter School Foundation, Series 2002A,
6.250%, 12/01/32 (Pre-refunded 12/01/12)
910 Illinois Development Finance Authority, Revenue Bonds, 9/11 at 100.00 BBB+ 906,406
Illinois Wesleyan University, Series 2001, 5.500%,
9/01/32 - AMBAC Insured
4,090 Illinois Development Finance Authority, Revenue Bonds, 9/11 at 100.00 BBB+ (4) 4,415,687
Illinois Wesleyan University, Series 2001, 5.500%,
9/01/32 (Pre-refunded 9/01/11) - AMBAC Insured
3,100 Illinois Development Finance Authority, Revenue Bonds, 5/11 at 101.00 AAA 3,365,856
Midwestern University, Series 2001B, 6.000%, 5/15/31
(Pre-refunded 5/15/11)
9,450 Illinois Finance Authority, Revenue Bonds, Palos 5/17 at 100.00 A 8,279,618
Community Hospital, Series 2007A, 5.000%, 5/15/32 -
NPFG Insured
2,500 Illinois Finance Authority, Revenue Bonds, Silver Cross 8/19 at 100.00 BBB 2,627,775
Hospital and Medical Centers, Series 2009, 6.875%,
8/15/38
5,000 Illinois Health Facilities Authority, Revenue Bonds, 2/11 at 101.00 AAA 5,337,150
Edward Hospital Obligated Group, Series 2001B,
5.250%, 2/15/34 (Pre-refunded 2/15/11) - FSA Insured
2,500 Illinois Housing Development Authority, Homeowner 2/16 at 100.00 AA 2,496,900
Mortgage Revenue Bonds, Series 2006C2, 5.050%,
8/01/27 (Alternative Minimum Tax)
2,275 Illinois, Sales Tax Revenue Bonds, Series 2001, 5.500%, 6/11 at 100.00 AAA 2,429,973
6/15/16
Nuveen Investments 63
NXZ | Nuveen Dividend Advantage Municipal Fund 2 (continued)
| Portfolio of Investments October 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
ILLINOIS (continued)
$ 2,500 Kane & DeKalb Counties, Illinois, Community United No Opt. Call A3 $ 1,195,250
School District 301, General Obligation Bonds, Series
2006, 0.000%, 12/01/23 - NPFG Insured
4,980 Metropolitan Pier and Exposition Authority, Illinois, 12/09 at 100.00 A2 4,982,141
Revenue Refunding Bonds, McCormick Place Expansion
Project, Series 1996A, 5.250%, 6/15/27 - AMBAC Insured
958 Montgomery, Illinois, Lakewood Creek Project Special 3/16 at 100.00 BBB- 803,819
Assessment Bonds, Series 2007, 4.700%, 3/01/30 - RAAI
Insured
3,360 Northfield Township High School District 225, Cook 12/16 at 69.01 AAA 1,621,334
County, Illinois, Glenbrook, General Obligation
School Bonds, Series 2007B, 0.000%, 12/01/24
------------------------------------------------------------------------------------------------------------------------------
63,363 Total Illinois 57,410,104
------------------------------------------------------------------------------------------------------------------------------
INDIANA - 3.2% (2.2% OF TOTAL INVESTMENTS)
2,000 Indiana Health Facility Financing Authority, Hospital 9/11 at 100.00 BBB 1,562,340
Revenue Bonds, Methodist Hospitals Inc., Series 2001,
5.500%, 9/15/31
2,210 Indiana Health Facility Financing Authority, Hospital No Opt. Call AAA 2,524,284
Revenue Refunding Bonds, Columbus Regional Hospital,
Series 1993, 7.000%, 8/15/15 - FSA Insured
4,000 Indiana Transportation Finance Authority, Highway 6/13 at 100.00 AAA 4,145,520
Revenue Bonds, Series 2003A, 5.000%, 6/01/23 - FSA
Insured
6,100 St. Joseph County Hospital Authority, Indiana, Revenue 2/10 at 101.00 BB+ 5,470,114
Bonds, Madison Center Inc., Series 1999, 5.800%,
2/15/24
------------------------------------------------------------------------------------------------------------------------------
14,310 Total Indiana 13,702,258
------------------------------------------------------------------------------------------------------------------------------
IOWA - 1.6% (0.9% OF TOTAL INVESTMENTS)
1,000 Iowa Higher Education Loan Authority, Private College 10/12 at 100.00 N/R (4) 1,124,680
Facility Revenue Bonds, Wartburg College, Series
2002, 5.500%, 10/01/28 (Pre-refunded 10/01/12) - ACA
Insured
6,340 Iowa Tobacco Settlement Authority, Tobacco Asset-Backed 6/17 at 100.00 BBB 5,463,812
Revenue Bonds, Series 2005B, 5.600%, 6/01/34
------------------------------------------------------------------------------------------------------------------------------
7,340 Total Iowa 6,588,492
------------------------------------------------------------------------------------------------------------------------------
KANSAS - 4.0% (2.7% OF TOTAL INVESTMENTS)
17,000 Wichita, Kansas, Hospital Facilities Revenue Refunding 11/11 at 101.00 A+ 17,152,320
and Improvement Bonds, Via Christi Health System
Inc., Series 2001-III, 5.625%, 11/15/31
------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 0.2% (0.1% OF TOTAL INVESTMENTS)
1,000 Kentucky Economic Development Finance Authority, 6/18 at 100.00 AAA 1,062,610
Louisville Arena Project Revenue Bonds, Louisville
Arena Authority, Inc., Series 2008A-1, 6.000%,
12/01/38 - AGC Insured
------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 4.9% (3.3% OF TOTAL INVESTMENTS)
3,960 Louisiana State, Gasoline and Fuels Tax Revenue Bonds, 5/16 at 100.00 AA 3,713,094
Series 2006A, 4.500%, 5/01/41 - FGIC Insured (UB)
18,825 Tobacco Settlement Financing Corporation, Louisiana, 5/11 at 101.00 BBB 17,037,566
Tobacco Settlement Asset-Backed Bonds, Series 2001B,
5.875%, 5/15/39
------------------------------------------------------------------------------------------------------------------------------
22,785 Total Louisiana 20,750,660
------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 3.5% (2.4% OF TOTAL INVESTMENTS)
15,880 Massachusetts Turnpike Authority, Metropolitan Highway 1/10 at 100.00 A 14,979,128
System Revenue Bonds, Senior Series 1997A, 5.000%,
1/01/37 - NPFG Insured
------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 11.7% (7.8% OF TOTAL INVESTMENTS)
Detroit, Michigan, Senior Lien Water Supply System
Revenue Bonds, Series 2001A:
20,000 5.500%, 7/01/33 (Pre-refunded 7/01/11) - FGIC Insured 7/11 at 101.00 A (4) 21,744,000
15,390 5.250%, 7/01/33 (Pre-refunded 7/01/11) - FGIC Insured 7/11 at 100.00 A+ (4) 16,391,735
4,000 Michigan Municipal Bond Authority, Public School Academy 4/10 at 102.00 Ba1 3,764,560
Revenue Bonds, Detroit Academy of Arts and Sciences
Charter School, Series 2001A, 8.000%, 10/01/31
2,000 Michigan State Hospital Finance Authority, Hospital 2/10 at 100.00 BB- 1,775,940
Revenue Bonds, Detroit Medical Center Obligated
Group, Series 1998A, 5.125%, 8/15/18
64 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
MICHIGAN (continued)
Michigan State Hospital Finance Authority, Revenue
Refunding Bonds, Detroit Medical Center Obligated
Group, Series 1993A:
$ 2,000 6.250%, 8/15/13 2/10 at 100.00 BB- $ 1,999,920
4,000 6.500%, 8/15/18 2/10 at 100.00 BB- 3,910,720
------------------------------------------------------------------------------------------------------------------------------
47,390 Total Michigan 49,586,875
------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 4.8% (3.2% OF TOTAL INVESTMENTS)
5,000 City of Minneapolis, Minnesota, Health Care System 11/18 at 100.00 AAA 5,644,850
Revenue Bonds, Fairview Health Services, Series
2008B, 6.500%, 11/15/38 - AGC Insured
14,000 Minneapolis-St. Paul Metropolitan Airports Commission, 1/11 at 100.00 AAA 14,770,140
Minnesota, Airport Revenue Bonds, Series 2001A,
5.250%, 1/01/32 (Pre-refunded 1/01/11) - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------
19,000 Total Minnesota 20,414,990
------------------------------------------------------------------------------------------------------------------------------
MONTANA - 0.6% (0.4% OF TOTAL INVESTMENTS)
2,345 Montana Board of Housing, Single Family Program Bonds, 12/10 at 100.00 AA+ 2,357,100
Series 2001A-2, 5.700%, 6/01/32 (Alternative Minimum
Tax)
------------------------------------------------------------------------------------------------------------------------------
NEVADA - 1.6% (1.1% OF TOTAL INVESTMENTS)
12,275 Director of Nevada State Department of Business and 1/10 at 100.00 Caa2 2,516,498
Industry, Revenue Bonds, Las Vegas Monorail Project,
First Tier, Series 2000, 5.375%, 1/01/40 - AMBAC
Insured
3,500 Director of Nevada State Department of Business and 1/10 at 102.00 N/R 31,500
Industry, Revenue Bonds, Las Vegas Monorail Project,
Second Tier, Series 2000, 7.375%, 1/01/40 (6)
2,000 Henderson, Nevada, Healthcare Facility Revenue Refunding 7/17 at 100.00 AAA 2,311,400
Bonds, Catholic Healthcare West, Series 2007B, Trust
2633, 18.647%, 7/01/31 - BHAC Insured (IF)
1,750 Reno, Nevada, Health Facilities Revenue Bonds, Catholic 7/17 at 100.00 AAA 1,882,195
Healthcare West, Trust 2634, 18.374%, 7/01/31 - BHAC
Insured (IF)
------------------------------------------------------------------------------------------------------------------------------
19,525 Total Nevada 6,741,593
------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 2.2% (1.5% OF TOTAL INVESTMENTS)
8,000 New Hampshire Business Finance Authority, Pollution 4/10 at 101.50 Baa1 8,123,120
Control Remarketed Revenue Refunding Bonds,
Connecticut Light and Power Company, Series 1992A,
5.850%, 12/01/22
1,160 New Hampshire Housing Finance Authority, Single Family 5/11 at 100.00 Aa2 1,168,967
Mortgage Acquisition Bonds, Series 2001A, 5.700%,
1/01/31 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------
9,160 Total New Hampshire 9,292,087
------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 2.5% (1.7% OF TOTAL INVESTMENTS)
3,995 New Jersey Economic Development Authority, Special 11/10 at 101.00 B 3,733,168
Facilities Revenue Bonds, Continental Airlines Inc.,
Series 2000, 7.000%, 11/15/30 (Alternative Minimum
Tax)
350 Tobacco Settlement Financing Corporation, New Jersey, 6/12 at 100.00 AAA 380,492
Tobacco Settlement Asset-Backed Bonds, Series 2002,
5.750%, 6/01/32 (Pre-refunded 6/01/12)
Tobacco Settlement Financing Corporation, New Jersey,
Tobacco Settlement Asset-Backed Bonds, Series 2003:
2,200 6.375%, 6/01/32 (Pre-refunded 6/01/13) 6/13 at 100.00 AAA 2,494,096
425 6.750%, 6/01/39 (Pre-refunded 6/01/13) 6/13 at 100.00 AAA 500,897
3,085 6.250%, 6/01/43 (Pre-refunded 6/01/13) 6/13 at 100.00 AAA 3,596,462
------------------------------------------------------------------------------------------------------------------------------
10,055 Total New Jersey 10,705,115
------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 5.9% (3.9% OF TOTAL INVESTMENTS)
New Mexico Hospital Equipment Loan Council, Hospital
Revenue Bonds, Presbyterian Healthcare Services, Series
2001A:
12,000 5.500%, 8/01/25 (Pre-refunded 8/01/11) 8/11 at 101.00 AA- (4) 13,085,760
10,800 5.500%, 8/01/30 (Pre-refunded 8/01/11) 8/11 at 101.00 AA- (4) 11,777,184
------------------------------------------------------------------------------------------------------------------------------
22,800 Total New Mexico 24,862,944
------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 9.6% (6.4% OF TOTAL INVESTMENTS)
1,300 Dormitory Authority of the State of New York, Revenue 7/10 at 101.00 A2 1,332,188
Bonds, Mount Sinai NYU Health Obligated Group, Series
2000A, 6.625%, 7/01/19
3,600 Dormitory Authority of the State of New York, Revenue 7/10 at 101.00 A2 (4) 3,767,328
Bonds, Mount Sinai NYU Health Obligated Group, Series
2000A, 6.625%, 7/01/19 (Pre-refunded 7/01/10)
Nuveen Investments 65
NXZ | Nuveen Dividend Advantage Municipal Fund 2 (continued)
| Portfolio of Investments October 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
NEW YORK (continued)
$ 6,000 Long Island Power Authority, New York, Electric System 5/11 at 100.00 AAA $ 6,433,440
General Revenue Bonds, Series 2001L, 5.375%, 5/01/33
(Pre-refunded 5/01/11)
12,800 Metropolitan Transportation Authority, New York, 11/16 at 100.00 AAA 12,080,384
Transportation Revenue Bonds, Series 2006B, 4.500%,
11/15/32 - FSA Insured (UB)
5,000 New York City Industrial Development Agency, New York, 8/12 at 101.00 B- 5,090,300
Special Facilities Revenue Bonds, JFK Airport -
American Airlines Inc., Series 2002B, 8.500%, 8/01/28
(Alternative Minimum Tax)
12,000 New York City Municipal Water Finance Authority, New 6/11 at 101.00 AAA 12,174,240
York, Water and Sewerage System Revenue Bonds, Series
2001C, 5.125%, 6/15/33 (UB)
------------------------------------------------------------------------------------------------------------------------------
40,700 Total New York 40,877,880
------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 1.7% (1.1% OF TOTAL INVESTMENTS)
2,950 North Carolina Capital Facilities Financing Agency, 4/13 at 100.00 N/R 2,541,543
Revenue Bonds, Johnson and Wales University, Series
2003A, 5.000%, 4/01/33 - SYNCORA GTY Insured
4,500 North Carolina Eastern Municipal Power Agency, Power 1/10 at 101.00 A- 4,585,140
System Revenue Refunding Bonds, Series 1999B, 5.600%,
1/01/15
------------------------------------------------------------------------------------------------------------------------------
7,450 Total North Carolina 7,126,683
------------------------------------------------------------------------------------------------------------------------------
NORTH DAKOTA - 0.4% (0.3% OF TOTAL INVESTMENTS)
1,635 North Dakota Housing Finance Agency, Home Mortgage 7/10 at 100.00 Aa1 1,668,599
Finance Program Refunding Bonds, Series 2001A,
5.550%, 1/01/32 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------
OHIO - 2.2% (1.4% OF TOTAL INVESTMENTS) Buckeye Tobacco
Settlement Financing Authority, Ohio, Tobacco Settlement
Asset-Backed Revenue Bonds, Senior Lien, Series 2007A-2:
10,000 5.750%, 6/01/34 6/17 at 100.00 BBB 8,409,500
1,000 5.875%, 6/01/47 6/17 at 100.00 BBB 740,920
------------------------------------------------------------------------------------------------------------------------------
11,000 Total Ohio 9,150,420
------------------------------------------------------------------------------------------------------------------------------
OREGON - 3.1% (2.1% OF TOTAL INVESTMENTS)
8,000 Clackamas County Hospital Facility Authority, Oregon, 5/11 at 101.00 A+ 8,198,640
Revenue Refunding Bonds, Legacy Health System, Series
2001, 5.250%, 5/01/21
5,000 Oregon Department of Administrative Services, 5/11 at 101.00 AA- 5,104,800
Certificates of Participation, Series 2001D, 5.000%,
5/01/26 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------
13,000 Total Oregon 13,303,440
------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 3.4% (2.3% OF TOTAL INVESTMENTS)
5,000 Allegheny County Hospital Development Authority, 11/10 at 102.00 AAA 5,556,550
Pennsylvania, Revenue Bonds, West Penn Allegheny
Health System, Series 2000B, 9.250%, 11/15/30
(Pre-refunded 11/15/10)
585 Carbon County Industrial Development Authority, No Opt. Call BBB- 591,014
Pennsylvania, Resource Recovery Revenue Refunding
Bonds, Panther Creek Partners Project, Series 2000,
6.650%, 5/01/10 (Alternative Minimum Tax)
8,000 Pennsylvania Higher Educational Facilities Authority, 1/11 at 101.00 Aa3 8,259,680
Revenue Bonds, UPMC Health System, Series 2001A,
6.000%, 1/15/31
------------------------------------------------------------------------------------------------------------------------------
13,585 Total Pennsylvania 14,407,244
------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 0.6% (0.3% OF TOTAL INVESTMENTS)
2,500 Puerto Rico Sales Tax Financing Corporation, Sales Tax 8/19 at 100.00 A+ 2,625,875
Revenue Bonds, First Subordinate Series 2009A,
6.000%, 8/01/42
------------------------------------------------------------------------------------------------------------------------------
TEXAS - 26.5% (17.7% OF TOTAL INVESTMENTS)
7,500 Austin, Texas, Electric Utility System Revenue Refunding 11/10 at 100.00 AAA 7,527,750
Bonds, Series 2001, 5.000%, 11/15/30 - FSA Insured
10,000 Central Texas Regional Mobility Authority, Travis and 1/15 at 100.00 A 8,528,100
Williamson Counties, Toll Road Revenue Bonds, Series
2005, 5.000%, 1/01/45 - FGIC Insured
66 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
TEXAS (continued)
Dallas-Fort Worth International Airport Public Facility
Corporation, Texas, Airport Hotel Revenue Bonds, Series
2001:
$ 15,000 5.250%, 1/15/26 - FSA Insured 1/10 at 100.00 AAA $ 15,007,200
1,750 5.200%, 1/15/31 - FSA Insured 1/10 at 100.00 AAA 1,750,350
6,000 Decatur Hospital Authority, Texas, Revenue Bonds, Wise 9/14 at 100.00 N/R 5,841,420
Regional Health System, Series 2004A, 7.125%, 9/01/34
10,000 Gulf Coast Industrial Development Authority, Texas, 4/12 at 100.00 Ba1 10,099,900
Solid Waste Disposal Revenue Bonds, Citgo Petroleum
Corporation Project, Series 1998, 8.000%, 4/01/28
(Alternative Minimum Tax)
1,500 Harris County-Houston Sports Authority, Texas, Junior 11/31 at 69.08 A 183,720
Lien Revenue Bonds, Series 2001H, 0.000%, 11/15/37 -
NPFG Insured
30,980 Harris County-Houston Sports Authority, Texas, Junior 11/11 at 100.00 A 28,151,837
Lien Revenue Refunding Bonds, Series 2001B, 5.250%,
11/15/40 - NPFG Insured
40,000 Harris County-Houston Sports Authority, Texas, Senior 11/30 at 54.04 A 4,167,200
Lien Revenue Refunding Bonds, Series 2001A, 0.000%,
11/15/40 - NPFG Insured
3,965 Harris County-Houston Sports Authority, Texas, Third 11/24 at 52.47 A 569,810
Lien Revenue Bonds, Series 2004-A3., 0.000%,
11/15/35 - NPFG Insured
Hays Consolidated Independent School District, Hays
County, Texas, General Obligation School Building Bonds,
Series 2001:
10,715 0.000%, 8/15/25 (Pre-refunded 8/15/11) 8/11 at 43.18 AAA 4,550,554
12,940 0.000%, 8/15/26 (Pre-refunded 8/15/11) 8/11 at 40.60 AAA 5,167,978
Houston, Texas, Hotel Occupancy Tax and Special Revenue
Bonds, Convention and Entertainment Project, Series
2001B:
5,000 0.000%, 9/01/30 - AMBAC Insured No Opt. Call A- 1,356,500
5,540 0.000%, 9/01/31 - AMBAC Insured No Opt. Call A- 1,390,984
5,000 Metro Health Facilities Development Corporation, Texas, 1/11 at 100.00 Ba3 4,731,250
Hospital Revenue Bonds, Wilson N. Jones Memorial
Hospital, Series 2001, 7.250%, 1/01/31
3,295 Tarrant County, Texas, Cultural & Educational Facilities 2/17 at 100.00 AA- 2,827,440
Financing Corporation, Revenue Bonds, Series 2007,
Residuals 1760-3, 16.864%, 2/15/36 (IF)
10,500 Texas, General Obligation Bonds, Water Financial 8/11 at 100.00 AA+ 10,881,676
Assistance Program, Series 2001, 5.250%, 8/01/35
------------------------------------------------------------------------------------------------------------------------------
179,685 Total Texas 112,733,669
------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 4.2% (2.8% OF TOTAL INVESTMENTS)
7,250 Seattle, Washington, Municipal Light and Power Revenue 3/11 at 100.00 AAA 7,379,340
Refunding and Improvement Bonds, Series 2001, 5.125%,
3/01/26 - FSA Insured
7,500 Washington State Healthcare Facilities Authority, 10/11 at 100.00 AA 7,567,727
Revenue Bonds, Sisters of Providence Health System,
Series 2001A, 5.250%, 10/01/21 - NPFG Insured
840 Washington State Tobacco Settlement Authority, Tobacco 6/13 at 100.00 BBB 850,409
Settlement Asset-Backed Revenue Bonds, Series 2002,
6.500%, 6/01/26
2,100 Washington, Certificates of Participation, Washington 1/10 at 100.00 AA 2,106,406
Convention and Trade Center, Series 1999, 5.125%,
7/01/13 - NPFG Insured
------------------------------------------------------------------------------------------------------------------------------
17,690 Total Washington 17,903,882
------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 1.2% (0.8% OF TOTAL INVESTMENTS)
5,000 Mason County, West Virginia, Pollution Control Revenue 10/11 at 100.00 BBB 5,045,000
Bonds, Appalachian Power Company, Series 2003L,
5.500%, 10/01/22
------------------------------------------------------------------------------------------------------------------------------
Nuveen Investments 67
NXZ | Nuveen Dividend Advantage Municipal Fund 2 (continued)
| Portfolio of Investments October 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 0.3% (0.2% OF TOTAL INVESTMENTS)
$ 1,000 Wisconsin Health and Educational Facilities Authority, 5/12 at 100.00 N/R (4) $ 1,145,430
Revenue Bonds, Divine Savior Healthcare, Series
2002A, 7.375%, 5/01/26 (Pre-refunded 5/01/12)
------------------------------------------------------------------------------------------------------------------------------
$ 755,878 Total Investments (cost $627,295,004) - 149.7% 636,448,449
===============---------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (6.3)% (26,661,650)
-----------------------------------------------------------------------------------------------------------
Variable Rate Demand Preferred Shares, at Liquidation Value - (46.1)% (5) (196,000,000)
-----------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.7% 11,466,648
-----------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 425,253,447
===========================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net
assets applicable to Common shares unless otherwise noted.
(2) Optional Call Provisions (not covered by the report of independent
registered public accounting firm): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other call
provisions at varying prices at later dates. Certain mortgage-backed
securities may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered public
accounting firm): Using the higher of Standard & Poor's Group ("Standard &
Poor's") or Moody's Investor Service, Inc. ("Moody's") rating. Ratings
below BBB by Standard & Poor's or Baa by Moody's are considered to be
below investment grade.
(4) Backed by an escrow or trust containing sufficient U.S. Government or U.S.
Government agency securities which ensure the timely payment of principal
and interest. Such investments are normally considered to be equivalent to
AAA rated securities.
(5) Variable Rate Demand Preferred Shares, at Liquidation Value as a
percentage of Total Investments is 30.8%
(6) The Fund's Adviser has concluded this issue is not likely to meet
its future interest payment obligations and has directed the Fund's
custodian to cease accruing additional income on the Fund's records.
N/R Not rated.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected as a
financing transaction. See Notes to Financial Statements, Footnote 1 -
Inverse Floating Rate Securities for more information.
See accompanying notes to financial statements.
68 Nuveen Investments
NZF | Nuveen Dividend Advantage Municipal Fund 3
| Portfolio of Investments October 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS - 150.7% (99.3% OF TOTAL INVESTMENTS)
ALABAMA - 1.7% (1.1% OF TOTAL INVESTMENTS)
$ 3,500 Alabama Special Care Facilities Financing Authority, 11/16 at 100.00 Aa1 $ 3,514,350
Revenue Bonds, Ascension Health, Series 2006C-2,
5.000%, 11/15/36 (UB)
5,655 Alabama State Port Authority, Revenue Bonds, State Docks 10/11 at 100.00 A (4) 6,084,328
Department Facilities, Series 2001, 5.250%, 10/01/26
(Pre-refunded 10/01/11) - AMBAC Insured (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------
9,155 Total Alabama 9,598,678
------------------------------------------------------------------------------------------------------------------------------
ALASKA - 0.1% (0.1% OF TOTAL INVESTMENTS)
1,000 Northern Tobacco Securitization Corporation, Alaska, 6/14 at 100.00 Baa3 664,500
Tobacco Settlement Asset-Backed Bonds, Series 2006A,
5.000%, 6/01/46
------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 1.0% (0.7% OF TOTAL INVESTMENTS)
3,390 Arizona State Transportation Board, Highway Revenue 7/18 at 100.00 AAA 3,807,038
Bonds, Series 2006, Trust 3151, 13.299%, 7/01/33 (IF)
2,200 Salt Verde Financial Corporation, Arizona, Senior Gas No Opt. Call A 1,881,770
Revenue Bonds, Series 2007, 5.000%, 12/01/37
------------------------------------------------------------------------------------------------------------------------------
5,590 Total Arizona 5,688,808
------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 0.6% (0.4% OF TOTAL INVESTMENTS)
Sebastian County Health Facilities Board, Arkansas,
Hospital Revenue Improvement Bonds, Sparks Regional
Medical Center, Series 2001A:
1,805 5.500%, 11/01/13 11/11 at 101.00 Caa1 1,683,307
1,900 5.500%, 11/01/14 11/11 at 101.00 Caa1 1,726,929
------------------------------------------------------------------------------------------------------------------------------
3,705 Total Arkansas 3,410,236
------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 13.5% (8.9% OF TOTAL INVESTMENTS)
California Health Facilities Financing Authority,
Health Facility Revenue Bonds, Adventist Health
System/West, Series 2003A:
855 5.000%, 3/01/28 3/13 at 100.00 A 826,058
140 5.000%, 3/01/33 3/13 at 100.00 A 129,983
3,400 California Health Facilities Financing Authority, 10/19 at 100.00 AA 3,451,782
Revenue Bonds, Providence Health & Services, Series
2009B, 5.500%, 10/01/39
2,900 California Health Facilities Financing Authority, 11/16 at 100.00 Aa3 2,684,327
Revenue Bonds, Sutter Health, Series 2007C, 5.000%,
11/15/42 (UB)
5,000 California Infrastructure Economic Development Bank, 8/11 at 102.00 A+ 5,033,150
Revenue Bonds, Kaiser Hospital Assistance LLC, Series
2001A, 5.550%, 8/01/31
5,355 California Statewide Community Development Authority, 5/18 at 100.00 Aa3 5,672,873
Revenue Bonds, Sutter Health, Tender Option Bond
Trust 3175, 13.438%, 11/15/48 (IF)
18,850 California, General Obligation Veterans Welfare Bonds, 12/09 at 100.00 AA- 18,677,146
Series 2001BZ, 5.350%, 12/01/21 - NPFG Insured
(Alternative Minimum Tax)
11,865 Golden State Tobacco Securitization Corporation, 6/17 at 100.00 BBB 7,882,987
California, Enhanced Tobacco Settlement Asset-Backed
Bonds, Series 2007A-1, 5.125%, 6/01/47
Los Angeles Regional Airports Improvement Corporation,
California, Lease Revenue Refunding Bonds, LAXFUEL
Corporation at Los Angeles International Airport,
Series 2001:
13,955 5.750%, 1/01/16 - AMBAC Insured (Alternative Minimum 1/12 at 100.00 A- 14,281,687
Tax)
5,000 5.375%, 1/01/21 - AMBAC Insured (Alternative Minimum 1/12 at 100.00 A- 5,001,100
Tax)
1,500 5.250%, 1/01/23 - AMBAC Insured (Alternative Minimum 1/12 at 100.00 A- 1,447,365
Tax)
10,000 5.500%, 1/01/32 - AMBAC Insured (Alternative Minimum 1/12 at 100.00 A- 9,749,200
Tax)
10,000 San Joaquin Hills Transportation Corridor Agency, Orange No Opt. Call A 1,558,000
County, California, Toll Road Revenue Refunding
Bonds, Series 1997A, 0.000%, 1/15/35 - NPFG Insured
3,000 San Mateo County Community College District, California, No Opt. Call Aa1 951,480
General Obligation Bonds, Series 2006C, 0.000%,
9/01/30 - NPFG Insured
------------------------------------------------------------------------------------------------------------------------------
91,820 Total California 77,347,138
------------------------------------------------------------------------------------------------------------------------------
Nuveen Investments 69
NZF | Nuveen Dividend Advantage Municipal Fund 3 (continued)
| Portfolio of Investments October 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
COLORADO - 6.6% (4.4% OF TOTAL INVESTMENTS)
$ 2,250 Canterberry Crossing Metropolitan District II, Parker, 12/12 at 100.00 N/R (4) $ 2,598,278
Colorado, Limited Tax General Obligation Bonds,
Series 2002, 7.375%, 12/01/32 (Pre-refunded 12/01/12)
1,565 Colorado Educational and Cultural Facilities Authority, 3/13 at 100.00 N/R (4) 1,827,122
Charter School Revenue Bonds, Belle Creek Education
Center, Series 2002A, 7.625%, 3/15/32 (Pre-refunded
3/15/13)
3,085 Colorado Educational and Cultural Facilities Authority, 3/10 at 102.00 N/R (4) 3,218,241
Charter School Revenue Bonds, Montessori Peaks
Building Foundation, Series 2002A, 8.000%, 5/01/32
(Pre-refunded 3/01/10)
1,775 Colorado Educational and Cultural Facilities Authority, 6/11 at 100.00 Ba1 (4) 1,957,009
Charter School Revenue Bonds, Weld County School
District 6 - Frontier Academy, Series 2001, 7.375%,
6/01/31 (Pre-refunded 6/01/11)
3,345 Colorado Educational and Cultural Facilities Authority, 5/16 at 102.00 N/R 2,754,975
Revenue Bonds, Montessori Peaks Academy, Series 2006,
5.400%, 5/01/26
3,380 Colorado Housing Finance Authority, Multifamily Project 10/11 at 100.00 AAA 3,399,976
Bonds, Class I, Series 2001A-1, 5.500%, 4/01/31
(Alternative Minimum Tax)
5,000 Compark Business Campus Metropolitan District, Colorado, 12/17 at 100.00 BBB- 4,292,850
General Obligation Limited Tax Bonds, Series 2007,
5.600%, 12/01/34 - RAAI Insured
3,300 Denver City and County, Colorado, Airport Revenue Bonds, 11/16 at 100.00 A+ 3,382,566
Series 2006, 5.000%, 11/15/24 - FGIC Insured
2,000 Denver City and County, Colorado, Airport System Revenue 11/11 at 100.00 A+ 2,041,480
Refunding Bonds, Series 2001A, 5.500%, 11/15/16 -
FGIC Insured (Alternative Minimum Tax)
Denver, Colorado, Airport Revenue Bonds, Series 2006:
5,365 5.000%, 11/15/23 - FGIC Insured (UB) 11/16 at 100.00 A+ 5,531,798
4,335 5.000%, 11/15/25 - FGIC Insured (UB) 11/16 at 100.00 A+ 4,422,524
2,000 Maher Ranch Metropolitan District 4, Colorado, General 12/17 at 100.00 BBB- 1,661,260
Obligation Limited Tax Bonds, Series 2007, 5.250%,
12/01/36 - RAAI Insured
1,000 Plaza Metropolitan District 1, Lakewood, Colorado, Tax 6/14 at 101.00 N/R 981,320
Increment Revenue Bonds, Series 2003, 8.000%, 12/01/25
------------------------------------------------------------------------------------------------------------------------------
38,400 Total Colorado 38,069,399
------------------------------------------------------------------------------------------------------------------------------
DELAWARE - 0.3% (0.2% OF TOTAL INVESTMENTS)
1,535 Delaware Housing Authority, Multifamily Mortgage Revenue 7/12 at 100.00 Aa3 1,580,651
Bonds, Series 2001A, 5.400%, 7/01/24
------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 1.0% (0.7% OF TOTAL INVESTMENTS)
1,375 District of Columbia, Revenue Bonds, Catholic University 4/10 at 101.00 A 1,389,314
of America, Series 1999, 5.625%, 10/01/29 - AMBAC
Insured
1,335 Washington Convention Center Authority, District of 10/16 at 100.00 AAA 1,239,401
Columbia, Senior Lien Dedicated Tax Revenue Bonds,
Series 2007, Residuals 1606, 11.582%, 10/01/30 -
AMBAC Insured (IF)
3,335 Washington DC Convention Center Authority, Dedicated Tax 10/16 at 100.00 AAA 3,096,181
Revenue Bonds, Residual Series 1730, 1731, 1736,
11.538%, 10/01/30 - AMBAC Insured (IF)
------------------------------------------------------------------------------------------------------------------------------
6,045 Total District of Columbia 5,724,896
------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 2.1% (1.4% OF TOTAL INVESTMENTS)
Orange County Housing Finance Authority, Florida,
Multifamily Housing Revenue Bonds, Oak Glen Apartments,
Series 2001G:
1,105 5.400%, 12/01/32 - FSA Insured 12/11 at 100.00 AAA 1,109,265
2,195 5.450%, 12/01/41 - FSA Insured 12/11 at 100.00 AAA 2,199,171
2,775 Pace Property Finance Authority Inc., Florida, Utility 3/10 at 100.00 N/R 2,783,186
System Improvement and Revenue Refunding Bonds,
Series 1997, 5.250%, 9/01/17 - AMBAC Insured
5,455 South Miami Health Facilities Authority, Florida, 8/17 at 100.00 AA- 5,120,881
Hospital Revenue, Baptist Health System Obligation
Group, Series 2007, 5.000%, 8/15/42 (UB)
1,000 Tolomato Community Development District, Florida, 5/18 at 100.00 N/R 766,610
Special Assessment Bonds, Series 2007, 6.650%, 5/01/40
------------------------------------------------------------------------------------------------------------------------------
12,530 Total Florida 11,979,113
------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 2.4% (1.6% OF TOTAL INVESTMENTS)
5,000 Atlanta, Georgia, Airport General Revenue Bonds, Series 1/10 at 101.00 A+ 5,002,100
2000B, 5.625%, 1/01/30 - FGIC Insured (Alternative
Minimum Tax)
2,700 Atlanta, Georgia, Tax Allocation Bonds, Atlantic Station 12/11 at 101.00 AAA 3,122,766
Project, Series 2001, 7.900%, 12/01/24 (Pre-refunded
12/01/11)
70 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
GEORGIA (continued)
$ 2,000 Fulton County Residential Care Facilities Authority, 7/17 at 100.00 N/R $ 1,302,960
Georgia, Revenue Bonds, Elderly Care, Lenbrook Square
Project, Series 2006A, 5.125%, 7/01/42
3,740 Gainesville and Hall County Hospital Authority, Georgia, 5/11 at 100.00 N/R (4) 4,004,942
Revenue Anticipation Certificates, Northeast Georgia
Health Services Inc., Series 2001, 5.500%, 5/15/31
(Pre-refunded 5/15/11)
500 Gainesville Redevelopment Authority, Georgia, 3/17 at 100.00 N/R 312,020
Educational Facilities Revenue Bonds, Riverside
Military Academy Project, Series 2007, 5.125%, 3/01/37
------------------------------------------------------------------------------------------------------------------------------
13,940 Total Georgia 13,744,788
------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 15.2% (10.0% OF TOTAL INVESTMENTS)
8,375 Chicago, Illinois, Revenue Bonds, Midway Airport, Series 1/11 at 101.00 AAA 8,516,286
2001A, 5.500%, 1/01/19 - FSA Insured (Alternative
Minimum Tax)
4,950 Chicago, Illinois, Second Lien Passenger Facility Charge 1/11 at 101.00 A1 4,683,096
Revenue Bonds, O'Hare International Airport, Series
2001A, 5.375%, 1/01/32 - AMBAC Insured (Alternative
Minimum Tax)
2,220 Chicago, Illinois, Second Lien Wastewater Transmission No Opt. Call A+ 2,501,052
Revenue Bonds, Series 2001A, 5.500%, 1/01/16 - NPFG
Insured
10,000 Chicago, Illinois, Senior Lien Water Revenue Bonds, 11/11 at 100.00 Aa3 (4) 10,830,300
Series 2001, 5.000%, 11/01/26 (Pre-refunded 11/01/11) -
AMBAC Insured
1,165 Chicago, Illinois, Third Lien General Airport Revenue 1/16 at 100.00 A1 1,167,377
Bonds, O'Hare International Airport, Series 2005A,
5.000%, 1/01/33 - FGIC Insured
2,415 Illinois Finance Authority, General Obligation Debt 12/14 at 100.00 A3 2,445,163
Certificates, Local Government Program - Kankakee
County, Series 2005B, 5.000%, 12/01/24 - AMBAC Insured
3,385 Illinois Finance Authority, Revenue Bonds, Sherman 8/17 at 100.00 Baa1 3,097,681
Health Systems, Series 2007A, 5.500%, 8/01/37
1,130 Illinois Health Facilities Authority, Revenue Bonds, 5/10 at 101.00 Aaa 1,178,059
Condell Medical Center, Series 2000, 6.500%, 5/15/30
(Pre-refunded 5/15/10)
9,000 Illinois Health Facilities Authority, Revenue Bonds, 12/11 at 101.00 BBB- 8,434,710
Covenant Retirement Communities Inc., Series 2001,
5.875%, 12/01/31
15,000 Illinois Health Facilities Authority, Revenue Bonds, 7/11 at 100.00 Baa3 (4) 16,153,500
Loyola University Health System, Series 2001A,
6.125%, 7/01/31 (Pre-refunded 7/01/11)
5,000 Lake County School District 38, Big Hallow, Illinois, No Opt. Call N/R 2,586,350
General Obligation Bonds, Series 2005, 0.000%,
2/01/22 - AMBAC Insured
7,000 Lombard Public Facilities Corporation, Illinois, First 1/16 at 100.00 N/R 5,956,230
Tier Conference Center and Hotel Revenue Bonds,
Series 2005A-1, 7.125%, 1/01/36
16,900 Metropolitan Pier and Exposition Authority, Illinois, 12/09 at 101.00 AAA 17,084,717
Revenue Bonds, McCormick Place Expansion Project,
Series 1999A, 5.250%, 12/15/28 - FGIC Insured
2,200 Metropolitan Pier and Exposition Authority, Illinois, No Opt. Call AAA 2,413,730
Revenue Refunding Bonds, McCormick Place Expansion
Project, Series 1998A, 5.500%, 6/15/29 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------
88,740 Total Illinois 87,048,251
------------------------------------------------------------------------------------------------------------------------------
INDIANA - 5.9% (3.9% OF TOTAL INVESTMENTS)
Clark-Pleasant Community School Building Corporation,
Indiana, First Mortgage Bonds, Series 2001:
1,255 5.000%, 7/15/21 (Pre-refunded 1/15/12) - AMBAC Insured 1/12 at 100.00 AA+ (4) 1,365,503
1,000 5.000%, 1/15/26 (Pre-refunded 1/15/12) - AMBAC Insured 1/12 at 100.00 AA+ (4) 1,088,050
Evansville Vanderburgh Public Library Lease Corporation,
Indiana, First Mortgage Bonds, Series 2001:
2,000 5.750%, 7/15/18 (Pre-refunded 1/15/12) - NPFG Insured 1/12 at 100.00 A+ (4) 2,208,800
2,750 5.125%, 1/15/24 (Pre-refunded 1/15/12) - NPFG Insured 1/12 at 100.00 A+ (4) 2,999,645
1,250 Hamilton Southeastern Cumberland Campus School Building 1/12 at 100.00 A (4) 1,363,475
Corporation, Indiana, First Mortgage Bonds, Series
2001, 5.125%, 1/15/23 (Pre-refunded 1/15/12) - AMBAC
Insured
9,500 Indiana Educational Facilities Authority, Revenue Bonds, 2/11 at 100.00 A 9,662,450
Butler University, Series 2001, 5.500%, 2/01/26 -
NPFG Insured
4,230 Indiana Finance Authority, Educational Facilities 6/15 at 100.00 Aa3 4,354,320
Revenue Bonds, Tudor Park Foundation, Series 2005B,
5.000%, 6/01/24
2,800 Indiana Health Facility Financing Authority, Revenue 5/15 at 100.00 A 2,439,948
Bonds, Community Hospitals of Indiana, Series 2005A,
5.000%, 5/01/35 - AMBAC Insured
Nuveen Investments 71
NZF | Nuveen Dividend Advantage Municipal Fund 3 (continued)
| Portfolio of Investments October 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
INDIANA (continued)
$ 3,500 University of Southern Indiana, Student Fee Bonds, 10/11 at 100.00 A2 $ 3,557,330
Series 2001H, 5.000%, 10/01/21 - AMBAC Insured
Vigo County, Indiana, Hospital Authority, Union
Hospital, Revenue Bonds, Series 2007:
2,500 5.750%, 9/01/42 9/17 at 100.00 N/R 1,943,700
2,500 5.800%, 9/01/47 9/17 at 100.00 N/R 1,930,425
1,090 Wayne County Jail Holding Corporation, Indiana, First 1/13 at 101.00 A3 (4) 1,237,510
Mortgage Bonds, Series 2001, 5.500%, 7/15/22
(Pre-refunded 1/15/13) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------
34,375 Total Indiana 34,151,156
------------------------------------------------------------------------------------------------------------------------------
IOWA - 6.2% (4.1% OF TOTAL INVESTMENTS)
2,000 Iowa Finance Authority, Healthcare Revenue Bonds, Great 5/11 at 100.00 Aa3 1,994,840
River Medical Center, Series 2001, 5.250%, 5/15/31 -
FSA Insured
1,000 Iowa Tobacco Settlement Authority, Asset Backed 6/15 at 100.00 BBB 735,270
Settlement Revenue Bonds, Series 2005C, 5.625%,
6/01/46
Iowa Tobacco Settlement Authority, Tobacco Settlement
Asset-Backed Revenue Bonds, Series 2001B:
26,855 5.300%, 6/01/25 (Pre-refunded 6/01/11) 6/11 at 101.00 AAA 28,672,278
3,950 5.600%, 6/01/35 (Pre-refunded 6/01/11) 6/11 at 101.00 AAA 4,258,890
------------------------------------------------------------------------------------------------------------------------------
33,805 Total Iowa 35,661,278
------------------------------------------------------------------------------------------------------------------------------
KANSAS - 0.3% (0.2% OF TOTAL INVESTMENTS)
Manhattan Health Care Facility Revenue Bonds, Kansas,
Meadowlarks Hills Retirement, Series 2007B:
1,000 5.125%, 5/15/37 5/14 at 103.00 N/R 736,850
1,000 5.125%, 5/15/42 5/14 at 103.00 N/R 719,550
------------------------------------------------------------------------------------------------------------------------------
2,000 Total Kansas 1,456,400
------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 3.5% (2.3% OF TOTAL INVESTMENTS)
1,000 Kentucky Economic Development Finance Authority, 6/18 at 100.00 AAA 1,060,830
Louisville Arena Project Revenue Bonds, Louisville
Arena Authority, Inc., Series 2008A-1, 6.000%,
12/01/42 - AGC Insured
18,500 Louisville and Jefferson County Metropolitan Sewer 11/11 at 101.00 AA- 18,917,175
District, Kentucky, Sewer and Drainage System Revenue
Bonds, Series 2001A, 5.125%, 5/15/27 - NPFG Insured
------------------------------------------------------------------------------------------------------------------------------
19,500 Total Kentucky 19,978,005
------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 4.3% (2.8% OF TOTAL INVESTMENTS)
3,000 Louisiana Local Government Environmental Facilities & 11/17 at 100.00 BB 2,894,970
Community Development Authority, Revenue Bonds,
Westlake Chemical Corporation Project, Series 2007,
6.750%, 11/01/32
3,700 Louisiana Public Facilities Authority, Revenue Bonds, 5/17 at 100.00 A3 3,478,888
Ochsner Clinic Foundation Project, Series 2007A,
5.500%, 5/15/47
19,890 Tobacco Settlement Financing Corporation, Louisiana, 5/11 at 101.00 BBB 18,001,445
Tobacco Settlement Asset-Backed Bonds, Series 2001B,
5.875%, 5/15/39
------------------------------------------------------------------------------------------------------------------------------
26,590 Total Louisiana 24,375,303
------------------------------------------------------------------------------------------------------------------------------
MAINE - 1.1% (0.7% OF TOTAL INVESTMENTS)
Maine State Housing Authority, Single Family Mortgage
Purchase Bonds, Series 2001B:
4,610 5.400%, 11/15/21 (Alternative Minimum Tax) 11/10 at 100.00 AA+ 4,641,855
1,610 5.500%, 11/15/32 (Alternative Minimum Tax) 11/10 at 100.00 AA+ 1,614,798
------------------------------------------------------------------------------------------------------------------------------
6,220 Total Maine 6,256,653
------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 2.5% (1.7% OF TOTAL INVESTMENTS)
1,000 Howard County, Maryland, Retirement Community Revenue 4/17 at 100.00 N/R 707,970
Bonds, Vantage House, Series 2007B, 5.250%, 4/01/37
1,570 Maryland Community Development Administration, Insured 7/11 at 100.00 N/R 1,585,606
Multifamily Housing Mortgage Loan Revenue Bonds,
Series 2001B, 5.250%, 7/01/21 (Alternative Minimum
Tax)
2,000 Maryland Economic Development Corporation, Revenue 12/16 at 100.00 N/R 1,211,520
Bonds, Chesapeake Bay Hyatt Conference Center, Series
2006A, 5.000%, 12/01/31
10,600 Maryland Energy Financing Administration, Revenue Bonds, 1/07 at 100.00 N/R 10,602,756
AES Warrior Run Project, Series 1995, 7.400%, 9/01/19
(Alternative Minimum Tax)
72 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
MARYLAND (continued)
$ 555 Maryland Health and Higher Educational Facilities 7/17 at 100.00 A- $ 487,579
Authority, Revenue Bonds, Mercy Ridge Retirement
Community, Series 2007, 4.750%, 7/01/34
------------------------------------------------------------------------------------------------------------------------------
15,725 Total Maryland 14,595,431
------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 2.5% (1.6% OF TOTAL INVESTMENTS)
1,375 Massachusetts Development Finance Agency, Revenue Bonds, 10/12 at 102.00 N/R 1,084,434
Orchard Cove, Series 2007, 5.250%, 10/01/26
1,000 Massachusetts Health and Educational Facilities 7/15 at 100.00 BB- 657,560
Authority, Revenue Bonds, Milton Hospital Project,
Series 2005D, 5.250%, 7/01/30
4,860 Massachusetts Housing Finance Agency, Single Family 6/18 at 100.00 AA 5,168,368
Housing Revenue Bonds, Series 2008, Trust 3145,
15.300%, 6/01/39 (IF)
5,000 Massachusetts Port Authority, Special Facilities Revenue 1/11 at 101.00 N/R 4,120,900
Bonds, Delta Air Lines Inc., Series 2001A, 5.500%,
1/01/18 - AMBAC Insured (Alternative Minimum Tax)
3,465 Massachusetts Water Resources Authority, General Revenue 2/17 at 100.00 AAA 3,202,526
Bonds, Series 2007A, 4.500%, 8/01/46 - FSA Insured
(UB)
------------------------------------------------------------------------------------------------------------------------------
15,700 Total Massachusetts 14,233,788
------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 9.7% (6.4% OF TOTAL INVESTMENTS)
15,000 Detroit City School District, Wayne County, Michigan, No Opt. Call AAA 16,655,700
Unlimited Tax School Building and Site Improvement
Bonds, Series 2001A, 6.000%, 5/01/29 - FSA Insured
(UB)
2,000 Garden City Hospital Finance Authority, Michigan, 8/17 at 100.00 N/R 1,162,940
Revenue Bonds, Garden City Hospital Obligated Group,
Series 2007A, 5.000%, 8/15/38
11,000 Kent Hospital Finance Authority, Michigan, Revenue 7/11 at 101.00 AA (4) 11,976,140
Bonds, Spectrum Health, Series 2001A, 5.500%, 1/15/31
(Pre-refunded 7/15/11)
1,165 Michigan State Building Authority, Revenue Bonds, 10/11 at 100.00 A+ 1,190,024
Facilities Program, Series 2001I, 5.500%, 10/15/18
70 Michigan State Building Authority, Revenue Bonds, 10/11 at 100.00 A+ (4) 76,433
Facilities Program, Series 2001I, 5.500%, 10/15/18
(Pre-refunded 10/15/11)
1,355 Michigan State Hospital Finance Authority, Hospital 2/10 at 100.00 Ba3 1,132,468
Revenue Bonds, Detroit Medical Center Obligated
Group, Series 1998A, 5.250%, 8/15/23
3,485 Michigan State Hospital Finance Authority, Hospital No Opt. Call A (4) 3,828,656
Revenue Refunding Bonds, Sisters of Mercy Health
Corporation, Series 1993P, 5.375%, 8/15/14 - NPFG
Insured (ETM)
Michigan State Hospital Finance Authority, Hospital
Revenue Refunding Bonds, Sparrow Obligated Group, Series
2001:
1,400 5.500%, 11/15/21 (Pre-refunded 11/15/11) 11/11 at 101.00 A+ (4) 1,546,146
2,500 5.625%, 11/15/31 (Pre-refunded 11/15/11) 11/11 at 101.00 A+ (4) 2,767,300
3,500 Michigan State Hospital Finance Authority, Revenue 12/16 at 100.00 AA 3,495,205
Bonds, Trinity Health Care Group, Series 2006A,
5.000%, 12/01/31 (UB)
12,640 Royal Oak Hospital Finance Authority, Michigan, Hospital 11/11 at 100.00 A1 11,915,728
Revenue Bonds, William Beaumont Hospital, Series
2001M, 5.250%, 11/15/31 - NPFG Insured
------------------------------------------------------------------------------------------------------------------------------
54,115 Total Michigan 55,746,740
------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 0.6% (0.4% OF TOTAL INVESTMENTS)
2,245 Dakota County Community Development Agency, Minnesota, 10/11 at 105.00 Aaa 2,320,140
GNMA Collateralized Multifamily Housing Revenue
Bonds, Rose Apartments Project, Series 2001, 6.350%,
10/20/37 (Alternative Minimum Tax)
1,375 Saint Paul Port Authority, Minnesota, Lease Revenue 8/16 at 100.00 N/R 1,070,328
Bonds, Regions Hospital Parking Ramp Project, Series
2007-1, 5.000%, 8/01/36
------------------------------------------------------------------------------------------------------------------------------
3,620 Total Minnesota 3,390,468
------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 0.9% (0.6% OF TOTAL INVESTMENTS)
2,155 Mississippi Business Finance Corporation, GNMA 11/09 at 103.00 AAA 2,170,214
Collateralized Retirement Facility Mortgage Revenue
Refunding Bonds, Aldersgate Retirement Community Inc.
Project, Series 1999A, 5.450%, 5/20/34
3,000 Mississippi Hospital Equipment and Facilities Authority, 9/14 at 100.00 AA 3,055,230
Revenue Bonds, Baptist Memorial Healthcare, Series
2004, 5.000%, 9/01/24 (UB)
------------------------------------------------------------------------------------------------------------------------------
5,155 Total Mississippi 5,225,444
------------------------------------------------------------------------------------------------------------------------------
Nuveen Investments 73
NZF | Nuveen Dividend Advantage Municipal Fund 3 (continued)
| Portfolio of Investments October 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 3.0% (2.0% OF TOTAL INVESTMENTS)
$ 1,495 Cape Girardeau County Industrial Development Authority, 6/17 at 100.00 N/R $ 1,281,634
Missouri, Health Facilities Revenue Bonds, Southeast
Missouri Hospital Association, Series 2007, 5.000%,
6/01/36
1,000 Clinton County Industrial Development Authority, 12/17 at 100.00 N/R 728,370
Missouri, Revenue Bonds, Cameron Regional Medical
Center, Series 2007, 5.000%, 12/01/32
1,825 Fenton, Missouri, Tax Increment Refunding and 10/12 at 100.00 N/R (4) 2,067,159
Improvement Revenue Bonds, Gravois Bluffs
Redevelopment Project, Series 2002, 6.125%, 10/01/21
(Pre-refunded 10/01/12)
Missouri Development Finance Board, Cultural Facilities
Revenue Bonds, Nelson Gallery Foundation, Series 2001A:
3,335 5.250%, 12/01/19 - NPFG Insured 12/11 at 100.00 AA- 3,528,030
3,510 5.250%, 12/01/20 - NPFG Insured 12/11 at 100.00 AA- 3,713,159
3,695 5.250%, 12/01/21 - NPFG Insured 12/11 at 100.00 AA- 3,908,867
2,040 5.250%, 12/01/22 - NPFG Insured 12/11 at 100.00 AA- 2,149,936
------------------------------------------------------------------------------------------------------------------------------
16,900 Total Missouri 17,377,155
------------------------------------------------------------------------------------------------------------------------------
MONTANA - 0.6% (0.4% OF TOTAL INVESTMENTS)
5,000 Montana Board of Investments, Exempt Facility Revenue 7/10 at 101.00 B- 3,625,800
Bonds, Stillwater Mining Company, Series 2000,
8.000%, 7/01/20 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 0.9% (0.6% OF TOTAL INVESTMENTS)
Nebraska Investment Finance Authority, Single Family
Housing Revenue Bonds, Series 2001D:
1,510 5.250%, 9/01/21 (Alternative Minimum Tax) 9/11 at 100.00 AAA 1,479,150
2,005 5.375%, 9/01/32 (Alternative Minimum Tax) 9/11 at 100.00 AAA 2,013,842
1,005 Omaha Public Power District, Nebraska, Separate Electric 2/17 at 100.00 AAA 1,527,590
System Revenue Bonds, Nebraska City 2, Series 2006A,
Trust 11673, 19.714%, 2/01/49 - AMBAC Insured (IF)
------------------------------------------------------------------------------------------------------------------------------
4,520 Total Nebraska 5,020,582
------------------------------------------------------------------------------------------------------------------------------
NEVADA - 0.9% (0.6% OF TOTAL INVESTMENTS)
2,000 Director of Nevada State Department of Business and 1/10 at 100.00 Caa2 410,020
Industry, Revenue Bonds, Las Vegas Monorail Project,
First Tier, Series 2000, 5.375%, 1/01/40 - AMBAC
Insured
4,000 Director of Nevada State Department of Business and 1/10 at 102.00 N/R 36,000
Industry, Revenue Bonds, Las Vegas Monorail Project,
Second Tier, Series 2000, 7.375%, 1/01/40 (6)
170 Nevada Housing Division, Single Family Mortgage Bonds, 4/10 at 100.00 Aaa 171,627
Senior Series 1998A-1, 5.300%, 4/01/18 (Alternative
Minimum Tax)
4,290 University of Nevada, Revenue Bonds, Community College 1/12 at 100.00 AA- (4) 4,683,650
System, Series 2001A, 5.250%, 7/01/26 (Pre-refunded
1/01/12) - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------
10,460 Total Nevada 5,301,297
------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 0.4% (0.2% OF TOTAL INVESTMENTS)
2,000 New Hampshire Health and Education Authority, Hospital 10/11 at 101.00 Aa3 2,042,380
Revenue Bonds, Concord Hospital, Series 2001, 5.500%,
10/01/21 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 3.9% (2.6% OF TOTAL INVESTMENTS)
10,000 New Jersey Economic Development Authority, Water 11/12 at 101.00 A2 9,500,900
Facilities Revenue Bonds, American Water Company,
Series 2002A, 5.250%, 11/01/32 - AMBAC Insured
(Alternative Minimum Tax)
495 New Jersey Health Care Facilities Financing Authority, 7/13 at 100.00 Ba2 347,643
Revenue Bonds, Somerset Medical Center, Series 2003,
5.500%, 7/01/33
4,125 New Jersey Transit Corporation, Certificates of No Opt. Call A1 4,578,544
Participation, Federal Transit Administration Grants,
Series 2002A, 5.500%, 9/15/13 - AMBAC Insured
20,000 New Jersey Transportation Trust Fund Authority, No Opt. Call AA- 6,529,000
Transportation System Bonds, Series 2006C, 0.000%,
12/15/28 - AMBAC Insured
2,045 Tobacco Settlement Financing Corporation, New Jersey, 6/17 at 100.00 BBB 1,429,946
Tobacco Settlement Asset-Backed Bonds, Series
2007-1A, 4.750%, 6/01/34
------------------------------------------------------------------------------------------------------------------------------
36,665 Total New Jersey 22,386,033
------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 4.1% (2.7% OF TOTAL INVESTMENTS)
900 Albany Industrial Development Agency, New York, Revenue 4/17 at 100.00 N/R 717,534
Bonds, Brighter Choice Charter Schools, Series 2007A,
5.000%, 4/01/32
1,780 East Rochester Housing Authority, New York, GNMA Secured 10/11 at 101.00 AAA 1,808,605
Revenue Bonds, Gates Senior Housing Inc., Series
2001, 5.300%, 4/20/31
74 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
NEW YORK (continued)
$ 5,010 Hudson Yards Infrastructure Corporation, New York, 2/17 at 100.00 A $ 4,224,683
Revenue Bonds, Series 2006A, 4.500%, 2/15/47 - NPFG
Insured
4,155 Monroe County Airport Authority, New York, Revenue No Opt. Call A 4,378,040
Refunding Bonds, Greater Rochester International
Airport, Series 1999, 5.750%, 1/01/13 - NPFG Insured
(Alternative Minimum Tax)
8,000 New York City Industrial Development Agency, New York, 8/16 at 101.00 B- 7,769,840
American Airlines-JFK International Airport Special
Facility Revenue Bonds, Series 2005, 7.750%, 8/01/31
(Alternative Minimum Tax)
1,715 New York City, New York, General Obligation Bonds, 8/12 at 100.00 AA 1,788,711
Fiscal Series 2002G, 5.625%, 8/01/20 - NPFG Insured
785 New York City, New York, General Obligation Bonds, 8/12 at 100.00 Aa3 (4) 884,287
Fiscal Series 2002G, 5.625%, 8/01/20 (Pre-refunded
8/01/12) - NPFG Insured
2,000 New York State Tobacco Settlement Financing Corporation, 6/11 at 100.00 AA- 2,072,920
Tobacco Settlement Asset-Backed and State Contingency
Contract-Backed Bonds, Series 2003B-1C, 5.500%,
6/01/16
------------------------------------------------------------------------------------------------------------------------------
24,345 Total New York 23,644,620
------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 1.1% (0.7% OF TOTAL INVESTMENTS)
1,710 Charlotte-Mecklenberg Hospital Authority, North 1/18 at 100.00 AA- 1,525,423
Carolina, Carolinas HealthCare System Revenue Bonds,
Series 2008, Trust 1149, 14.759%, 1/15/47 (IF)
1,200 Charlotte-Mecklenburg Hospital Authority, North 1/17 at 100.00 AA- 1,198,356
Carolina, Health Care System Revenue Bonds, Carolinas
Health Care, Series 2007A, 5.000%, 1/15/31
1,750 Charlotte-Mecklenburg Hospital Authority, North 1/15 at 100.00 AAA 1,984,553
Carolina, Healthcare System Revenue Bonds, DBA
Carolinas Healthcare System, Series 2005A, 4.875%,
1/15/32 (Pre-refunded 1/15/15)
1,600 North Carolina Municipal Power Agency 1, Catawba No Opt. Call A 1,758,160
Electric Revenue Bonds, Series 2003A, 5.500%, 1/01/13
------------------------------------------------------------------------------------------------------------------------------
6,260 Total North Carolina 6,466,492
------------------------------------------------------------------------------------------------------------------------------
OHIO - 2.2% (1.5% OF TOTAL INVESTMENTS)
Buckeye Tobacco Settlement Financing Authority, Ohio,
Tobacco Settlement Asset-Backed Revenue Bonds, Senior
Lien, Series 2007A-2:
3,170 5.125%, 6/01/24 6/17 at 100.00 BBB 2,823,392
710 5.875%, 6/01/30 6/17 at 100.00 BBB 617,963
685 5.750%, 6/01/34 6/17 at 100.00 BBB 576,051
1,570 5.875%, 6/01/47 6/17 at 100.00 BBB 1,163,244
1,235 Ohio Housing Finance Agency, GNMA Mortgage-Backed 3/10 at 100.00 Aaa 1,249,301
Securities Program Residential Mortgage Revenue
Bonds, Series 1998A-1, 5.300%, 9/01/19 - FSA Insured
(Alternative Minimum Tax)
6,600 Ohio Water Development Authority, Solid Waste Disposal 3/10 at 102.00 N/R 6,336,132
Revenue Bonds, Bay Shore Power, Series 1998B, 6.625%,
9/01/20 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------
13,970 Total Ohio 12,766,083
------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 2.0% (1.3% OF TOTAL INVESTMENTS)
Oklahoma Development Finance Authority, Revenue Bonds,
Saint John Health System, Series 2007:
4,370 5.000%, 2/15/37 2/17 at 100.00 A 4,187,727
955 5.000%, 2/15/42 2/17 at 100.00 A 901,014
6,305 Tulsa County Industrial Authority, Oklahoma, Health Care 12/16 at 100.00 AA 6,078,020
Revenue Bonds, Saint Francis Health System, Series
2006, 5.000%, 12/15/36 (UB)
88 Tulsa County Industrial Authority, Oklahoma, Health Care 12/16 at 100.00 AA 82,239
Revenue Bonds, Saint Francis Health System, Series
2006, Trust 3500, 8.366%, 12/15/36 (IF)
------------------------------------------------------------------------------------------------------------------------------
11,718 Total Oklahoma 11,249,000
------------------------------------------------------------------------------------------------------------------------------
OREGON - 2.6% (1.7% OF TOTAL INVESTMENTS)
4,700 Oregon Health, Housing, Educational and Cultural 11/11 at 101.00 AA- 4,793,718
Facilities Authority, Revenue Bonds, PeaceHealth
Project, Series 2001, 5.250%, 11/15/21 - AMBAC Insured
10,000 Oregon Housing and Community Services Department, 7/10 at 100.00 Aaa 10,040,000
Multifamily Housing Revenue Bonds, Series 2000A,
6.050%, 7/01/42 (Alternative Minimum Tax) (UB)
------------------------------------------------------------------------------------------------------------------------------
14,700 Total Oregon 14,833,718
------------------------------------------------------------------------------------------------------------------------------
Nuveen Investments 75
NZF | Nuveen Dividend Advantage Municipal Fund 3 (continued)
| Portfolio of Investments October 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 1.9% (1.2% OF TOTAL INVESTMENTS)
Allegheny County Hospital Development Authority,
Pennsylvania, Revenue Bonds, West Penn Allegheny Health
System, Series 2000B:
$ 2,000 9.250%, 11/15/22 (Pre-refunded 11/15/10) 11/10 at 102.00 AAA $ 2,222,620
2,000 9.250%, 11/15/30 (Pre-refunded 11/15/10) 11/10 at 102.00 AAA 2,222,620
500 Bucks County Industrial Development Authority, 3/17 at 100.00 BBB 412,305
Pennsylvania, Charter School Revenue Bonds, School
Lane Charter School, Series 2007A, 5.000%, 3/15/37
3,500 Pennsylvania Economic Development Financing Authority, 1/10 at 100.00 CC 2,275,350
Senior Lien Resource Recovery Revenue Bonds,
Northampton Generating Project, Series 1994A, 6.600%,
1/01/19 (Alternative Minimum Tax)
3,205 Philadelphia School District, Pennsylvania, General 8/12 at 100.00 Aa3 (4) 3,607,548
Obligation Bonds, Series 2002B, 5.625%, 8/01/16
(Pre-refunded 8/01/12) - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------
11,205 Total Pennsylvania 10,740,443
------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 0.4% (0.3% OF TOTAL INVESTMENTS)
2,500 Puerto Rico Sales Tax Financing Corporation, Sales Tax 8/17 at 100.00 AA- 2,541,175
Revenue Bonds, Series 2007A, 5.250%, 8/01/57
------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 1.3% (0.9% OF TOTAL INVESTMENTS)
6,850 South Carolina Transportation Infrastructure Bank, 10/11 at 100.00 A1 (4) 7,459,924
Revenue Bonds, Series 2001A, 5.500%, 10/01/22
(Pre-refunded 10/01/11) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 1.6% (1.0% OF TOTAL INVESTMENTS)
3,680 Knox County Health, Educational and Housing Facilities 1/17 at 30.07 A- 474,941
Board, Tennessee, Hospital Revenue Refunding Bonds,
Covenant Health, Series 2006, 0.000%, 1/01/41
5,210 Memphis-Shelby County Airport Authority, Tennessee, 3/11 at 100.00 AAA 5,385,629
Airport Revenue Bonds, Series 2001A, 5.500%,
3/01/14 - FSA Insured (Alternative Minimum Tax)
275 Sullivan County Health Educational and Housing 9/16 at 100.00 BBB+ 230,073
Facilities Board, Tennessee, Revenue Bonds, Wellmont
Health System, Series 2006C, 5.250%, 9/01/36
Sumner County Health, Educational, and Housing Facilities
Board, Tennessee, Revenue Refunding Bonds, Sumner Regional
Health System Inc., Series 2007:
800 5.500%, 11/01/37 11/17 at 100.00 N/R 304,080
2,800 5.500%, 11/01/46 11/17 at 100.00 N/R 1,064,280
745 Tennessee Housing Development Agency, Homeownership 1/10 at 100.00 AA+ 745,581
Program Bonds, Series 1998-2, 5.350%, 7/01/23
(Alternative Minimum Tax)
760 Tennessee Housing Development Agency, Homeownership 7/11 at 100.00 AA+ 766,468
Program Bonds, Series 2001-3A, 5.200%, 7/01/22
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------
14,270 Total Tennessee 8,971,052
------------------------------------------------------------------------------------------------------------------------------
TEXAS - 20.1% (13.2% OF TOTAL INVESTMENTS)
5,445 Board of Regents, University of Texas System, Financing 2/17 at 100.00 AAA 5,181,081
System Revenue Bonds, Series 2006F, 4.250%, 8/15/36
(UB)
595 Brushy Creek Municipal Utility District, Williamson 1/10 at 100.00 Aa3 595,411
County, Texas, Combination Unlimited Tax and Revenue
Refunding Bonds, Series 2001, 5.125%, 6/01/26 - FSA
Insured
Collins and Denton Counties, Frisco, Texas, General
Obligation Bonds, Series 2001:
1,910 5.000%, 2/15/20 - FGIC Insured 2/11 at 100.00 AA 1,944,838
2,005 5.000%, 2/15/21 - FGIC Insured 2/11 at 100.00 AA 2,038,002
3,850 Dallas-Ft. Worth International Airport, Texas, Joint 11/11 at 100.00 A+ 3,859,394
Revenue Refunding and Improvement Bonds, Series
2001A, 5.500%, 11/01/35 - FGIC Insured (Alternative
Minimum Tax)
5,000 Decatur Hospital Authority, Texas, Revenue Bonds, Wise 9/14 at 100.00 N/R 4,864,400
Regional Health System, Series 2004A, 7.000%, 9/01/25
4,040 Harris County, Texas, Tax and Revenue Certificates of 8/11 at 100.00 AAA 4,114,215
Obligation, Series 2001, 5.000%, 8/15/27
6,000 Houston, Texas, Junior Lien Water and Sewerage System No Opt. Call AA (4) 7,097,160
Revenue Refunding Bonds, Series 2001B, 5.500%,
12/01/29 - NPFG Insured (ETM)
7,000 Houston, Texas, Subordinate Lien Airport System Revenue 1/10 at 100.00 A 7,010,360
Bonds, Series 1998B, 5.250%, 7/01/14 - FGIC Insured
(Alternative Minimum Tax)
76 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
TEXAS (continued)
Houston, Texas, Subordinate Lien Airport System Revenue
Refunding Bonds, Series 2001A:
$ 2,525 5.500%, 7/01/13 - FGIC Insured (Alternative Minimum Tax) 1/12 at 100.00 A $ 2,672,410
2,905 5.500%, 7/01/14 - FGIC Insured (Alternative Minimum Tax) 1/12 at 100.00 A 3,044,818
14,200 Hutto Independent School District, Williamson County, 8/16 at 100.00 AAA 14,235,642
Texas, General Obligation Bonds, Series 2007A,
4.750%, 8/01/43 (UB)
Jefferson County Health Facilities Development Corporation,
Texas, FHA-Insured Mortgage Revenue Bonds, Baptist Hospital
of Southeast Texas, Series 2001:
8,500 5.400%, 8/15/31 - AMBAC Insured 8/11 at 100.00 N/R 8,615,005
8,500 5.500%, 8/15/41 - AMBAC Insured 8/11 at 100.00 N/R 8,339,010
10,700 Laredo Independent School District, Webb County, Texas, 8/11 at 100.00 AAA 11,119,761
General Obligation Refunding Bonds, Series 2001,
5.000%, 8/01/25
2,500 Matagorda County Navigation District 1, Texas, No Opt. Call BBB+ 2,363,850
Collateralized Revenue Refunding Bonds, Houston Light
and Power Company, Series 1997, 5.125%, 11/01/28 -
AMBAC Insured (Alternative Minimum Tax)
3,150 North Texas Thruway Authority, Second Tier System 1/18 at 100.00 A3 3,186,540
Revenue Refunding Bonds, Series 2008, 5.750%, 1/01/38
3,045 Port of Houston Authority, Harris County, Texas, General 10/11 at 100.00 AAA 3,119,146
Obligation Port Improvement Bonds, Series 2001B,
5.500%, 10/01/17 - FGIC Insured (Alternative Minimum
Tax)
7,700 Tarrant County, Texas, Cultural & Educational Facilities 2/17 at 100.00 AA- 7,426,573
Financing Corporation, Texas, Revenue Bonds, Series
2007A, 5.000%, 2/15/36 (UB)
9,780 Texas Department of Housing and Community Affairs, 7/11 at 100.00 AAA 9,540,781
Residential Mortgage Revenue Bonds, Series 2001A,
5.350%, 7/01/33 (Alternative Minimum Tax)
White Settlement Independent School District, Tarrant
County, Texas, General Obligation Bonds, Series 2006:
9,110 0.000%, 8/15/37 8/15 at 31.98 AAA 2,038,636
9,110 0.000%, 8/15/40 8/15 at 27.11 AAA 1,729,260
7,110 0.000%, 8/15/44 8/15 at 21.88 AAA 1,069,344
------------------------------------------------------------------------------------------------------------------------------
134,680 Total Texas 115,205,637
------------------------------------------------------------------------------------------------------------------------------
UTAH - 0.5% (0.3% OF TOTAL INVESTMENTS)
Utah Housing Corporation, Single Family Mortgage Bonds,
Series 2001E:
935 5.200%, 1/01/18 (Alternative Minimum Tax) 7/11 at 100.00 AA- 944,257
265 5.500%, 1/01/23 (Alternative Minimum Tax) 7/11 at 100.00 Aaa 262,774
Utah Housing Corporation, Single Family Mortgage Bonds,
Series 2001F-1:
1,345 4.950%, 7/01/18 (Alternative Minimum Tax) 7/11 at 100.00 AA- 1,345,659
375 5.300%, 7/01/23 (Alternative Minimum Tax) 7/11 at 100.00 Aaa 368,359
------------------------------------------------------------------------------------------------------------------------------
2,920 Total Utah 2,921,049
------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 0.1% (0.1% OF TOTAL INVESTMENTS)
1,000 Chesterfield County Health Center Commission, Virginia, 12/15 at 100.00 N/R 789,500
Mortgage Revenue Bonds, Lucy Corr Village, Series
2005, 5.375%, 12/01/28
------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 16.4% (10.8% OF TOTAL INVESTMENTS)
Bellingham Housing Authority, Washington, Housing
Revenue Bonds, Varsity Village Project, Series 2001A:
1,000 5.500%, 12/01/27 - NPFG Insured 12/11 at 100.00 A1 1,017,470
2,000 5.600%, 12/01/36 - NPFG Insured 12/11 at 100.00 A1 2,015,920
2,500 King County, Washington, Sewer Revenue Bonds, Series 1/19 at 100.00 AA+ 2,605,100
2009, 5.250%, 1/01/42
12,955 Port of Seattle, Washington, Passenger Facility Charge 12/09 at 100.50 A 13,086,364
Revenue Bonds, Series 1998A, 5.300%, 12/01/16 - AMBAC
Insured (Alternative Minimum Tax)
Port of Seattle, Washington, Revenue Bonds, Series 2001B:
2,535 5.625%, 4/01/18 - FGIC Insured (Alternative Minimum 10/11 at 100.00 Aa2 2,585,370
Tax) (UB)
16,000 5.100%, 4/01/24 - FGIC Insured (Alternative Minimum 1/10 at 100.00 Aa2 15,854,400
Tax) (UB)
2,090 Public Utility District 1, Benton County, Washington, 11/11 at 100.00 AAA 2,268,779
Electric Revenue Refunding Bonds, Series 2001A,
5.625%, 11/01/15 - FSA Insured
5,680 Seattle, Washington, Municipal Light and Power Revenue 3/11 at 100.00 AAA 5,938,724
Refunding and Improvement Bonds, Series 2001, 5.500%,
3/01/18 - FSA Insured
Nuveen Investments 77
NZF | Nuveen Dividend Advantage Municipal Fund 3 (continued)
| Portfolio of Investments October 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
WASHINGTON (continued)
$ 4,530 Tacoma, Washington, Solid Waste Utility Revenue 12/11 at 100.00 AA (4) $ 4,947,258
Refunding Bonds, Series 2001, 5.250%, 12/01/21
(Pre-refunded 12/01/11) - AMBAC Insured
3,720 Washington State Healthcare Facilities Authority, 10/11 at 100.00 Aa3 (4) 4,046,876
Revenue Bonds, Children's Hospital and Regional
Medical Center, Series 2001, 5.375%, 10/01/18
(Pre-refunded 10/01/11) - AMBAC Insured
Washington State Healthcare Facilities Authority,
Revenue Bonds, Good Samaritan Hospital, Series 2001:
5,480 5.500%, 10/01/21 (Pre-refunded 10/01/11) - RAAI Insured 10/11 at 101.00 BBB- (4) 6,003,011
25,435 5.625%, 10/01/31 (Pre-refunded 10/01/11) - RAAI Insured 10/11 at 101.00 BBB- (4) 27,922,797
Washington State Healthcare Facilities Authority, Revenue
Bonds, Group Health Cooperative of Puget Sound, Series
2001:
3,005 5.375%, 12/01/17 - AMBAC Insured 12/11 at 101.00 BBB+ 3,038,416
2,915 5.375%, 12/01/18 - AMBAC Insured 12/11 at 101.00 BBB+ 2,934,997
------------------------------------------------------------------------------------------------------------------------------
89,845 Total Washington 94,265,482
------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 4.7% (3.0% OF TOTAL INVESTMENTS)
Appleton, Wisconsin, Waterworks Revenue Refunding Bonds,
Series 2001:
3,705 5.375%, 1/01/20 (Pre-refunded 1/01/12) - FGIC Insured 1/12 at 100.00 N/R (4) 4,053,196
1,850 5.000%, 1/01/21 (Pre-refunded 1/01/12) - FGIC Insured 1/12 at 100.00 N/R (4) 2,009,025
12,250 La Crosse, Wisconsin, Pollution Control Revenue 12/09 at 101.00 A3 12,533,955
Refunding Bonds, Dairyland Power Cooperative, Series
1997B, 5.550%, 2/01/15 - AMBAC Insured
1,000 Wisconsin Health and Educational Facilities Authority, 9/17 at 100.00 BBB+ 846,040
Revenue Bonds, Franciscan Sisters of Christian
Charity HealthCare Ministry, Series 2007, 5.000%,
9/01/33
350 Wisconsin Health and Educational Facilities Authority, 10/11 at 101.00 AA- 354,932
Revenue Bonds, Froedtert and Community Health
Obligated Group, Series 2001, 5.375%, 10/01/30
3,650 Wisconsin Health and Educational Facilities Authority, 10/11 at 101.00 AA- (4) 3,994,889
Revenue Bonds, Froedtert and Community Health
Obligated Group, Series 2001, 5.375%, 10/01/30
(Pre-refunded 10/01/11)
2,500 Wisconsin Health and Educational Facilities Authority, 2/12 at 100.00 BBB+ 2,514,575
Revenue Bonds, Marshfield Clinic, Series 2001B,
6.000%, 2/15/25
50 Wisconsin Health and Educational Facilities Authority, 8/13 at 100.00 BBB+ 42,046
Revenue Bonds, Wheaton Franciscan Services Inc.,
Series 2003A, 5.125%, 8/15/33
------------------------------------------------------------------------------------------------------------------------------
25,355 Total Wisconsin 26,348,658
------------------------------------------------------------------------------------------------------------------------------
$ 924,428 Total Municipal Bonds (cost $872,416,114) 863,883,204
===============---------------------------------------------------------------------------------------------------------------
SHARES DESCRIPTION (1) VALUE
------------------------------------------------------------------------------------------------------------------------------
INVESTMENT COMPANIES - 0.6% (0.4% OF TOTAL INVESTMENTS)
10,766 BlackRock MuniHoldings Fund Inc. $ 157,830
26,880 Dreyfus Strategic Municipal Fund 201,600
131,278 DWS Municipal Income Trust 1,490,005
43,420 PIMCO Municipal Income Fund II 440,279
43,020 Van Kampen Investment Grade Municipal Trust 582,921
30,000 Van Kampen Municipal Opportunity Trust 396,900
------------------------------------------------------------------------------------------------------------------------------
Total Investment Companies (cost $3,388,285) 3,269,535
-----------------------------------------------------------------------------------------------------------
Total Long-Term Investments (cost $875,804,399) - 151.3% 867,152,739
-----------------------------------------------------------------------------------------------------------
78 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 0.4% (0.3% OF TOTAL INVESTMENTS)
$ 2,325 Maryland Transportation Authority, Revenue Bonds, 7/17 at 100.00 A-1 $ 2,325,000
Transportation Facilities Projects, Variable
Rate Demand Obligations, Series 2008, 0.240%, 7/01/34 -
FSA Insured (6)
===============---------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (cost $2,325,000) 2,325,000
-----------------------------------------------------------------------------------------------------------
Total Investments (cost $878,129,399) - 151.7% 869,477,739
-----------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (13.2)% (75,908,650)
-----------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.8% 16,468,739
-----------------------------------------------------------------------------------------------------------
Auction Rate Preferred Shares, at Liquidation Value - (41.3)% (7) (236,950,000)
-----------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 573,087,828
===========================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net
assets applicable to Common shares unless otherwise noted.
(2) Optional Call Provisions (not covered by the report of independent
registered public accounting firm): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other call
provisions at varying prices at later dates. Certain mortgage-backed
securities may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered public
accounting firm): Using the higher of Standard & Poor's Group ("Standard &
Poor's") or Moody's Investor Service, Inc. ("Moody's") rating. Ratings
below BBB by Standard & Poor's or Baa by Moody's are considered to be
below investment grade.
(4) Backed by an escrow or trust containing sufficient U.S. Government or U.S.
Government agency securities which ensure the timely payment of principal
and interest. Such investments are normally considered to be equivalent to
AAA rated securities.
(5) Investment has a maturity of more than one year, but has variable rate and
demand features which qualify it as a short-term investment. The rate
disclosed is that in effect at the end of the reporting period. This rate
changes periodically based on market conditions or a specified market
index.
(6) The Fund's Adviser has concluded this issue is not likely to meet its
future interest payment obligations and has directed the Fund's custodian
to cease accruing additional income on the Fund's records.
(7) Auction Rate Preferred Shares, at Liquidation Value as a percentage of
Total Investments is 27.3%
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected as a financing
transaction. See Notes to Financial Statements, Footnote 1 - Inverse
Floating Rate Securities for more information.
See accompanying notes to financial statements.
Nuveen Investments 79
| Statement of
| Assets & Liabilities October 31, 2009
PERFORMANCE MUNICIPAL MARKET
PLUS ADVANTAGE OPPORTUNITY
(NPP) (NMA) (NMO)
-------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $1,286,419,790,
$951,929,964 and $1,011,308,429, respectively) $ 1,311,136,145 $ 948,796,834 $ 997,616,000
Cash -- 326,405 2,264,536
Receivables:
Dividends and interest 19,673,422 16,205,061 15,509,796
Investments sold 19,595,000 27,332,250 20,383,900
Deferred offering costs -- -- --
Other assets 265,595 210,839 240,654
-------------------------------------------------------------------------------------------------------------------
Total assets 1,350,670,162 992,871,389 1,036,014,886
-------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft 6,647,209 -- --
Floating rate obligations 42,945,000 67,694,983 48,745,000
Payables:
Investments purchased 6,408,325 19,528,605 17,477,313
Auction Rate Preferred share dividends 20,045 14,566 18,882
Common share dividends 3,719,388 2,775,284 2,908,499
Variable Rate Demand Preferred shares, at
liquidation value -- -- --
Accrued expenses:
Management fees 702,530 499,270 523,832
Other 454,953 345,516 347,444
-------------------------------------------------------------------------------------------------------------------
Total liabilities 60,897,450 90,858,224 70,020,970
-------------------------------------------------------------------------------------------------------------------
Auction Rate Preferred shares, at liquidation value 419,900,000 293,200,000 346,675,000
-------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $ 869,872,712 $ 608,813,165 $ 619,318,916
===================================================================================================================
Common shares outstanding 59,914,073 43,235,072 45,557,788
===================================================================================================================
Net asset value per Common share outstanding (net
assets applicable to Common shares,
divided by Common shares outstanding) $ 14.52 $ 14.08 $ 13.59
===================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF:
-------------------------------------------------------------------------------------------------------------------
Common shares, $.01 par value per share $ 599,141 $ 432,351 $ 455,578
Paid-in surplus 838,355,071 604,606,186 635,757,216
Undistributed (Over-distribution of) net
investment income 11,740,346 8,985,143 9,176,487
Accumulated net realized gain (loss) from
investments and derivative transactions (5,538,201) (2,077,385) (12,377,936)
Net unrealized appreciation (depreciation) of
investments 24,716,355 (3,133,130) (13,692,429)
-------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $ 869,872,712 $ 608,813,165 $ 619,318,916
===================================================================================================================
Authorized shares:
Common 200,000,000 200,000,000 200,000,000
Auction Rate Preferred 1,000,000 1,000,000 1,000,000
Variable Rate Demand Preferred -- -- --
===================================================================================================================
80 Nuveen Investments
DIVIDEND DIVIDEND DIVIDEND
ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NAD) (NXZ) (NZF)
-------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $843,692,750,
$627,295,004 and $878,129,399, respectively) $ 836,463,181 $ 636,448,449 $ 869,477,739
Cash -- 279,403 2,693,790
Receivables:
Dividends and interest 13,352,022 11,521,392 15,472,256
Investments sold 22,441,300 -- 1,673,655
Deferred offering costs -- 2,214,920 --
Other assets 168,858 37,190 162,690
-------------------------------------------------------------------------------------------------------------------
Total assets 872,425,361 650,501,354 889,480,130
-------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft 2,702,217 -- --
Floating rate obligations 51,605,000 26,661,650 75,908,650
Payables:
Investments purchased 7,274,876 -- 11,359
Auction Rate Preferred share dividends 11,253 -- 10,106
Common share dividends 2,781,632 2,212,650 2,903,343
Variable Rate Demand Preferred shares, at
liquidation value -- 196,000,000 --
Accrued expenses:
Management fees 443,783 278,555 392,044
Other 272,450 95,052 216,800
-------------------------------------------------------------------------------------------------------------------
Total liabilities 65,091,211 225,247,907 79,442,302
-------------------------------------------------------------------------------------------------------------------
Auction Rate Preferred shares, at liquidation
value 261,800,000 -- 236,950,000
-------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $ 545,534,150 $ 425,253,447 $ 573,087,828
===================================================================================================================
Common shares outstanding 39,287,298 29,436,352 40,378,174
===================================================================================================================
Net asset value per Common share outstanding (net
assets applicable to Common shares,
divided by Common shares outstanding) $ 13.89 $ 14.45 $ 14.19
===================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF:
-------------------------------------------------------------------------------------------------------------------
Common shares, $.01 par value per share $ 392,873 $ 294,364 $ 403,782
Paid-in surplus 551,021,937 420,673,054 575,532,006
Undistributed (Over-distribution of) net
investment income 7,380,865 3,538,442 6,415,652
Accumulated net realized gain (loss) from
investments and derivative transactions (6,031,956) (8,405,858) (611,952)
Net unrealized appreciation (depreciation) of
investments (7,229,569) 9,153,445 (8,651,660)
-------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $ 545,534,150 $ 425,253,447 $ 573,087,828
===================================================================================================================
Authorized shares:
Common Unlimited Unlimited Unlimited
Auction Rate Preferred Unlimited Unlimited Unlimited
Variable Rate Demand Preferred -- Unlimited --
===================================================================================================================
See accompanying notes to financial statements.
Nuveen Investments 81
| Statement of
| Operations Year Ended October 31, 2009
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $ 71,670,777 $ 54,980,490 $ 57,545,906 $ 48,064,381 $ 37,461,031 $ 48,874,903
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 7,790,181 5,533,758 5,860,313 4,836,311 3,706,653 5,063,119
Auction fees 861,237 623,050 700,106 524,295 198,721 507,965
Dividend disbursing agent
fees 50,000 50,000 40,000 30,000 21,877 30,000
Shareholders' servicing
agent fees and expenses 122,259 76,672 79,700 10,749 4,605 6,112
Interest expense and
amortization of offering
costs 424,808 519,599 419,116 453,184 1,745,939 597,338
Liquidity fees -- -- -- -- 1,516,104 --
Custodian's fees and expenses 220,875 161,533 172,793 143,811 110,682 150,642
Directors'/Trustees' fees
and expenses 39,719 27,950 29,908 24,331 18,721 24,965
Professional fees 92,807 69,862 73,076 59,118 46,521 61,810
Shareholders' reports -
printing and mailing
expenses 212,025 142,476 159,250 124,727 90,623 125,150
Stock exchange listing fees 20,540 14,880 15,628 13,480 4,153 5,703
Investor relations expense 77,715 54,894 57,991 47,076 35,748 48,152
Other expenses 66,105 53,554 56,399 37,702 23,316 38,678
------------------------------------------------------------------------------------------------------------------------------------
Total expenses before
custodian fee credit and
expense reimbursement 9,978,271 7,328,228 7,664,280 6,304,784 7,523,663 6,659,634
Custodian fee credit (2,344) (33,405) (18,467) (28,055) (7,809) (33,380)
Expense reimbursement -- -- -- (282,920) (707,935) (1,180,795)
------------------------------------------------------------------------------------------------------------------------------------
Net expenses 9,975,927 7,294,823 7,645,813 5,993,809 6,807,919 5,445,459
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 61,694,850 47,685,667 49,900,093 42,070,572 30,653,112 43,429,444
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss)
from:
Investments (3,345,387) (953,244) 2,387,779 (762,348) (3,563,781) (520,239)
Futures contracts -- -- -- -- -- 1,331,299
Change in net unrealized
appreciation
(depreciation) of:
Investments 101,733,867 77,128,841 49,202,041 76,279,407 50,177,046 76,051,358
Futures contracts -- -- -- -- -- 679,241
------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) 98,388,480 76,175,597 51,589,820 75,517,059 46,613,265 77,541,659
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO AUCTION RATE
PREFERRED SHAREHOLDERS
From net investment income (3,512,067) (2,612,721) (2,842,583) (2,117,175) -- (2,094,400)
From accumulated net
realized gains -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets
applicable to Common
shares from distributions
to Auction Rate Preferred
shareholders (3,512,067) (2,612,721) (2,842,583) (2,117,175) -- (2,094,400)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in
net assets applicable to
Common Shares from
operations $ 156,571,263 $ 121,248,543 $ 98,647,330 $ 115,470,456 $ 77,266,377 $ 118,876,703
====================================================================================================================================
See accompanying notes to financial statements.
82 Nuveen Investments
| Statement of
| Changes in Net Assets
PERFORMANCE PLUS (NPP) MUNICIPAL ADVANTAGE (NMA) MARKET OPPORTUNITY (NMO)
-------------------------------- -------------------------------- ---------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
10/31/09 10/31/08 10/31/09 10/31/08 10/31/09 10/31/08
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 61,694,850 $ 60,898,881 $ 47,685,667 $ 46,529,938 $ 49,900,093 $ 47,049,012
Net realized gain (loss)
from:
Investments (3,345,387) (328,499) (953,244) (1,136,012) 2,387,779 (1,618,281)
Forward swaps -- -- -- -- -- --
Futures contracts -- -- -- -- -- --
Change in net unrealized
appreciation
(depreciation) of:
Investments 101,733,867 (153,071,771) 77,128,841 (130,946,869) 49,202,041 (116,402,236)
Forward swaps -- -- -- -- -- --
Futures contracts -- -- -- -- -- --
Distributions to Auction Rate
Preferred shareholders:
From net investment income (3,512,067) (17,368,890) (2,612,721) (12,897,786) (2,842,583) (13,956,934)
From accumulated net
realized gains -- -- -- (363,253) -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in
net assets applicable to
Common shares from
operations 156,571,263 (109,870,279) 121,248,543 (98,813,982) 98,647,330 (84,928,439)
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON
SHAREHOLDERS
From net investment income (47,194,320) (41,700,208) (36,309,116) (33,361,611) (36,674,027) (33,302,749)
From accumulated net
realized gains -- -- -- (1,028,506) -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets
applicable to Common
shares from distributions
to Common shareholders (47,194,320) (41,700,208) (36,309,116) (34,390,117) (36,674,027) (33,302,749)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common
shares issued to
shareholders due to
reinvestment of
distributions -- -- 271,443 -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in
net assets applicable to
Common shares from
capital share transactions -- -- 271,443 -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in
net assets applicable to
Common shares 109,376,943 (151,570,487) 85,210,870 (133,204,099) 61,973,303 (118,231,188)
Net assets applicable to
Common shares at the
beginning of year 760,495,769 912,066,256 523,602,295 656,806,394 557,345,613 675,576,801
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to
Common shares at the end
of year $ 869,872,712 $ 760,495,769 $ 608,813,165 $ 523,602,295 $ 619,318,916 $ 557,345,613
====================================================================================================================================
Undistributed
(Over-distribution of)net
investment income at the
end of year $ 11,740,346 $ 871,663 $ 8,985,143 $ 444,924 $ 9,176,487 $ (1,194,990)
====================================================================================================================================
See accompanying notes to financial statements.
Nuveen Investments 83
| Statement of
| Changes in Net Assets (continued) October 31, 2009
DIVIDEND ADVANTAGE (NAD) DIVIDEND ADVANTAGE 2 (NXZ) DIVIDEND ADVANTAGE 3 (NZF)
-------------------------------- -------------------------------- ---------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
10/31/09 10/31/08 10/31/09 10/31/08 10/31/09 10/31/08
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 42,070,572 $ 41,327,650 $ 30,653,112 $ 30,875,115 $ 43,429,444 $ 42,950,481
Net realized gain (loss)
from:
Investments (762,348) 1,445,057 (3,563,781) 3,731,159 (520,239) (3,045,414)
Forward swaps -- -- -- -- -- 2,733,000
Futures contracts -- -- -- -- 1,331,299 865,654
Change in net unrealized
appreciation
(depreciation)
of:
Investments 76,279,407 (124,805,304) 50,177,046 (86,311,451) 76,051,358 (117,423,115)
Forward swaps -- -- -- -- -- (1,472,119)
Futures contracts -- -- -- -- 679,241 (679,241)
Distributions to Auction
Rate Preferred
shareholders:
From net investment income (2,117,175) (10,685,162) -- (6,026,331) (2,094,400) (11,064,289)
From accumulated net
realized gains -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in
net assets applicable to
Common shares from
operations 115,470,456 (92,717,759) 77,266,377 (57,731,508) 118,876,703 (87,135,043)
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON
SHAREHOLDERS
From net investment income (32,490,598) (30,223,720) (26,078,788) (25,763,976) (34,349,713) (31,212,328)
From accumulated net
realized gains -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets
applicable to Common
shares from distributions
to Common shareholders (32,490,598) (30,223,720) (26,078,788) (25,763,976) (34,349,713) (31,212,328)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common
shares issued to
shareholders due to
reinvestment of
distributions -- -- 126,288 443,496 -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in
net assets applicable to
Common shares from
capital share transactions -- -- 126,288 443,496 -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in
net assets applicable to
Common shares 82,979,858 (122,941,479) 51,313,877 (83,051,988) 84,526,990 (118,347,371)
Net assets applicable to
Common shares at the
beginning of year 462,554,292 585,495,771 373,939,570 456,991,558 488,560,838 606,908,209
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to
Common shares at the end
of year $ 545,534,150 $ 462,554,292 $ 425,253,447 $ 373,939,570 $ 573,087,828 $ 488,560,838
====================================================================================================================================
Undistributed
(Over-distribution of) net
investment income at the
end of year $ 7,380,865 $ 154,163 $ 3,538,442 $ (762,556) $ 6,415,652 $ (568,658)
====================================================================================================================================
See accompanying notes to financial statements.
84 Nuveen Investments
| Statement of
| Cash Flows Year Ended October 31, 2009
MUNICIPAL DIVIDEND DIVIDEND DIVIDEND
ADVANTAGE ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMA) (NAD) (NXZ) (NZF)
------------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON
SHARES FROM OPERATIONS $ 121,248,543 $ 115,470,456 $ 77,266,377 $ 118,876,703
Adjustments to reconcile the net increase (decrease) in net
assets applicable to Common shares from operations to net
cash provided by (used in)operating activities:
Purchases of investments (82,196,025) (79,636,661) (33,168,991) (18,387,465)
Proceeds from sales and maturities of investments 111,091,760 74,910,841 13,459,816 19,438,983
Proceeds from (Purchases of) short-term investments, net -- 19,325,000 4,680,000 (2,325,000)
Proceeds from closed/expired futures contracts -- -- -- 1,331,299
Amortization (Accretion) of premiums and discounts, net (4,873,713) (7,063,189) (1,614,975) 1,009,280
(Increase) Decrease in receivable for dividends and
interest (51,696) (994,832) (488,632) (546,848)
(Increase) Decrease in receivable for investments sold (27,332,250) (22,441,300) 12,500,502 (1,017,152)
(Increase) Decrease in other assets (109,649) (77,097) 24,345 (103,933)
Increase (Decrease) in payable for investments
purchased 19,528,605 7,274,876 (7,746,444) 11,359
Increase (Decrease) in payable for Auction Rate
Preferred share dividends (79,546) (53,207) -- (52,973)
Increase (Decrease) in payable for variation margin on
futures contracts -- -- -- (185,250)
Increase (Decrease) in accrued management fees 40,887 86,341 45,385 83,713
Increase (Decrease) in accrued other liabilities 46,390 26,390 80,276 (72,677)
Net realized (gain) loss from investments 953,244 762,348 3,563,781 520,239
Net realized (gain) loss from futures contracts -- -- -- (1,331,299)
Change in net unrealized (appreciation) depreciation
of investments (77,128,841) (76,279,407) (50,177,046) (76,051,358)
Taxes paid on undistributed capital gains (15) -- (118,199) --
------------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) operating activities 61,137,694 31,310,559 18,306,195 41,197,621
------------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (Decrease) in cash overdraft (497,704) 2,702,217 (182,797) (631,450)
Increase (Decrease) in floating rate obligations 23,780,000 (2,950,000) 8,140,000 29,900,000
Cash distributions paid to Common shareholders (35,643,585) (32,162,878) (25,799,028) (34,022,032)
(Increase) Decrease in deferred offering costs -- -- 37,255 --
Increase (Decrease) in payable for offering cost -- -- (222,222) --
Increase (Decrease) in Auction Rate Preferred shares, at
liquidation value (48,450,000) (5,000,000) -- (33,825,000)
------------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities (60,811,289) (37,410,661) (18,026,792) (38,578,482)
------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH 326,405 (6,100,102) 279,403 2,619,139
Cash at the beginning of year -- 6,100,102 -- 74,651
------------------------------------------------------------------------------------------------------------------------------------
Cash at the End of Year $ 326,405 $ -- $ 279,403 $ 2,693,790
====================================================================================================================================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest (excluding amortization of offering costs, where
applicable) was as follows:
MUNICIPAL DIVIDEND DIVIDEND DIVIDEND
ADVANTAGE ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMA) (NAD) (NXZ) (NZF)
------------------------------------------------------------------------------------------------------------------------------------
$ 519,599 $ 453,184 $ 1,670,114 $ 597,338
====================================================================================================================================
Non-cash financing activities not included herein consist of reinvestments of
Common share distributions of $271,443 and $126,288 for Municipal Advantage
(NMA) and Dividend Advantage 2 (NXZ), respectively.
See accompanying notes to financial statements.
Nuveen Investments 85
| Notes to
| Financial Statements
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The funds covered in this report and their corresponding Common share stock
exchange symbols are Nuveen Performance Plus Municipal Fund, Inc. (NPP), Nuveen
Municipal Advantage Fund, Inc. (NMA), Nuveen Municipal Market Opportunity Fund,
Inc. (NMO), Nuveen Dividend Advantage Municipal Fund (NAD), Nuveen Dividend
Advantage Municipal Fund 2 (NXZ) and Nuveen Dividend Advantage Municipal Fund 3
(NZF) (collectively, the "Funds"). Performance Plus (NPP), Municipal Advantage
(NMA), Market Opportunity (NMO) and Dividend Advantage (NAD) are traded on the
New York Stock Exchange (NYSE) while Dividend Advantage 2 (NXZ) and Dividend
Advantage 3 (NZF) are traded on the NYSE Amex. The Funds are registered under
the Investment Company Act of 1940, as amended, as closed-end, management
investment companies.
Each Fund seeks to provide current income exempt from regular federal income tax
by investing primarily in a portfolio of municipal obligations issued by state
and local government authorities or certain U.S. territories.
In June 2009, the Financial Accounting Standards Board (FASB) established the
FASB Accounting Standards Codification(TM) (the "Codification") as the single
source of authoritative accounting principles recognized by the FASB in the
preparation of financial statements in conformity with generally accepted
accounting principles (GAAP). The Codification supersedes existing
non-grandfathered, non-SEC accounting and reporting standards. The Codification
did not change GAAP but rather organized it into a hierarchy where all guidance
within the Codification carries an equal level of authority. The Codification
became effective for financial statements issued for interim and annual periods
ending after September 15, 2009. The Codification did not have a material effect
on the Funds' financial statements.
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements in accordance with US
generally accepted accounting principles.
Investment Valuation
Exchange-listed securities are generally valued at the last sales price on the
securities exchange on which such securities are primarily traded. Securities
traded on a securities exchange for which there are no transactions on a given
day or securities are not listed on a securities exchange are valued at the mean
of the closing bid and asked prices. Securities traded on NASDAQ are valued at
the NASDAQ Official Closing Price. 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. Prices of forward swap contracts are also provided
by an independent pricing service approved by each Fund's Board of
Directors/Trustees. Futures contracts are valued using the closing settlement
price, or, in the absence of such a price, at the mean of the bid and asked
prices. When market price quotes are not readily available (which is usually the
case for municipal securities), the pricing service or, in the absence of a
pricing service for a particular investment or derivative instrument, the Board
of Directors/Trustees of the Fund, or its designee, may establish fair value
using a wide variety of market data including yields or prices of investments of
comparable quality, type of issue, coupon, maturity and rating, market quotes or
indications of value from security dealers, evaluations of anticipated cash
flows or collateral, general market conditions and other information and
analysis, including the obligor's credit characteristics considered relevant.
Temporary investments in securities that have variable rate and demand features
qualifying them as short-term investments are valued at amortized cost, which
approximates value.
Investment Transactions
Investment transactions are recorded on a trade date basis. Realized gains and
losses from transactions are determined on the specific identification method.
Investments purchased on a when-issued/delayed delivery basis may have extended
settlement periods. Any investments so purchased are subject to market
fluctuation during this period. The Funds have instructed the custodian to
segregate assets with a current value at least equal to the amount of the
when-issued/delayed delivery purchase commitments. At October 31, 2009,
Performance Plus (NPP), Municipal Advantage (NMA), Market Opportunity (NMO) and
Dividend Advantage (NAD) had outstanding when-issued/delayed delivery purchase
commitments of $6,408,325, $19,528,605, $17,477,313 and $7,274,876,
respectively. There were no such outstanding purchase commitments in any of the
other Funds.
Investment Income
Dividend income is recorded on the ex-dividend date. Dividend income is recorded
on the ex-dividend date when information is available. 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.
86 Nuveen Investments
Income Taxes
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund
intends to distribute substantially all of its net investment income and net
capital gains to shareholders and to otherwise comply with the requirements of
Subchapter M of the Internal Revenue Code applicable to regulated investment
companies. Therefore, no federal income tax provision is required. Furthermore,
each Fund intends to satisfy conditions which will enable interest from
municipal securities, which is exempt from regular federal income tax, to retain
such tax-exempt status when distributed to shareholders of the Funds. Net
realized capital gains and ordinary income distributions paid by the Funds are
subject to federal taxation.
For all open tax years and all major taxing jurisdictions, management of the
Funds has concluded that there are no significant uncertain tax positions that
would require recognition in the financial statements. Open tax years are those
that are open for examination by taxing authorities (i.e., generally the last
four tax year ends and the interim tax period since then). Furthermore,
management of the Funds is also not aware of any tax positions for which it is
reasonably possible that the total amounts of unrecognized tax benefits will
significantly change in the next twelve months.
Dividends and Distributions to Common Shareholders
Dividends from tax-exempt net investment income are declared monthly. Net
realized capital gains and/or market discount from investment transactions, if
any, are distributed to shareholders at least annually. Furthermore, capital
gains are distributed only to the extent they exceed available capital loss
carryforwards.
Distributions to Common shareholders of tax-exempt net investment income, net
realized capital gains and/or market discount, if any, are recorded on the
ex-dividend date. The amount and timing of distributions are determined in
accordance with federal income tax regulations, which may differ from US
generally accepted accounting principles.
Auction Rate Preferred Shares
The following Funds have issued and outstanding Auction Rate Preferred shares,
$25,000 stated value per share, as a means of effecting financial leverage. Each
Fund's Auction Rate Preferred shares are issued in more than one Series. The
dividend rate paid by the Funds on each Series is determined every seven days,
pursuant to a dutch auction process overseen by the auction agent, and is
payable at the end of each rate period. As of October 31, 2009, the number of
Auction Rate Preferred shares outstanding, by Series and in total, for each Fund
is as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NZF)
-------------------------------------------------------------------------------------------------------------------
Number of shares:
Series M 3,507 2,457 3,649 3,550 --
Series T 3,506 2,457 3,648 3,549 --
Series W 3,505 2,456 2,920 -- 3,159
Series TH 2,770 1,901 -- 3,373 3,159
Series F 3,508 2,457 3,650 -- 3,160
-------------------------------------------------------------------------------------------------------------------
Total 16,796 11,728 13,867 10,472 9,478
===================================================================================================================
Beginning in February 2008, more shares for sale were submitted in the regularly
scheduled auctions for the Auction Rate Preferred shares issued by the Funds
than there were offers to buy. This meant that these auctions "failed to clear,"
and that many Auction Rate Preferred shareholders who wanted to sell their
shares in these auctions were unable to do so. Auction Rate Preferred
shareholders unable to sell their shares received distributions at the "maximum
rate" applicable to failed auctions as calculated in accordance with the
pre-established terms of the Auction Rate Preferred shares.
These developments have generally not affected the management or investment
policies of the Funds. However, one continuing implication of these auction
failures for Common shareholders is that the Funds' cost of leverage likely has
been incrementally higher at times, than it otherwise would have been had the
auctions continued to be successful. As a result, the Funds' future Common share
earnings may likely have been incrementally lower than they otherwise would have
been. As of October 31, 2009, the aggregate amount of outstanding Auction Rate
Preferred shares redeemed by each Fund is as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
------------------------------------------------------------------------------------------------------------------------------------
Auction Rate Preferred shares
redeemed, at liquidation
value $ 59,100,000 $ 64,800,000 $ 33,325,000 $ 33,200,000 $ 222,000,000 $ 75,050,000
====================================================================================================================================
Effective May 1, 2009, auction participation fees with respect to auctions that
have failed have been reduced from 25 bps (annualized) to 15 bps (annualized).
All auction participants have signed new agreements incorporating this change.
Nuveen Investments 87
| Notes to
| Financial Statements (continued)
Variable Rate Demand Preferred Shares
On August 7, 2008, Dividend Advantage 2 (NXZ) issued 1,960 Series 1 Variable
Rate Demand Preferred shares, $100,000 liquidation value per share, in a
privately negotiated offering. Proceeds of this offering along with the proceeds
from the Fund's creation of tender option bonds (TOBs), also known as "floaters"
or floating rate obligations, were used to redeem all of the Fund's outstanding
Auction Rate Preferred shares totaling $222,000,000. The Variable Rate Demand
Preferred shares were offered to institutional buyers as defined pursuant to
Rule 144A under the Securities Act of 1933, have a maturity date of August 1,
2038 and include a liquidity feature that allows the Variable Rate Demand
Preferred shareholders to have their shares purchased by the liquidity provider
in the event that sell orders are not matched with purchase orders in a
remarketing. Dividends on the Variable Rate Demand Preferred shares (which are
treated as interest payments for financial reporting purposes) are set weekly at
a rate established by a remarketing agent; therefore, the liquidation value of
the Variable Rate Demand Preferred shares approximates fair value.
Subject to certain conditions, Variable Rate Demand Preferred shares may be
redeemed, in whole or in part, at any time at the option of the Fund. The Fund
may also redeem certain of the Variable Rate Demand Preferred shares if the Fund
fails to maintain certain asset coverage requirements and such failures are not
cured by the applicable cure date. The redemption price per share is equal to
the sum of the liquidation value per share plus any accumulated but unpaid
dividends.
Dividend Advantage 2 (NXZ) had all $196,000,000 of its Variable Rate Demand
Preferred shares outstanding during the fiscal year ended October 31, 2009, with
an annualized interest rate of .73%.
For financial reporting purposes only, the liquidation value of Variable Rate
Demand Preferred shares is recorded as a liability on the Statement of Assets
and Liabilities and the dividends paid on the Variable Rate Demand Preferred
shares are included as a component of "Interest expense and amortization of
offering costs" on the Statement of Operations. In addition to interest expense,
the Fund also paid a per annum liquidity fee which is recognized as "Liquidity
fees" on the Statement of Operations.
Inverse Floating Rate Securities
Each Fund is authorized to invest in inverse floating rate securities. An
inverse floating rate security is created by depositing a municipal bond,
typically with a fixed interest rate, into a special purpose trust created by a
broker-dealer. In turn, this trust (a) issues floating rate certificates, in
face amounts equal to some fraction of the deposited bond's par amount or market
value, that typically pay short-term tax-exempt interest rates to third parties,
and (b) issues to a long-term investor (such as one of the Funds) an inverse
floating rate certificate (sometimes referred to as an "inverse floater") that
represents all remaining or residual interest in the trust. The income received
by the inverse floater holder varies inversely with the short-term rate paid to
the floating rate certificates' holders, and in most circumstances the inverse
floater holder bears substantially all of the underlying bond's downside
investment risk and also benefits disproportionately from any potential
appreciation of the underlying bond's value. The price of an inverse floating
rate security will be more volatile than that of the underlying bond because the
interest rate is dependent on not only the fixed coupon rate of the underlying
bond but also on the short-term interest paid on the floating rate certificates,
and because the inverse floating rate security essentially bears the risk of
loss of the greater face value of the underlying bond.
A Fund may purchase an inverse floating rate security in a secondary market
transaction without first owning the underlying bond (referred to as an
"externally-deposited inverse floater"), or instead by first selling a
fixed-rate bond to a broker-dealer for deposit into the special purpose trust
and receiving in turn the residual interest in the trust (referred to as a
"self-deposited inverse floater"). The inverse floater held by a Fund gives the
Fund the right (a) to cause the holders of the floating rate certificates to
tender their notes at par, and (b) to have the broker transfer the fixed-rate
bond held by the trust to the Fund, thereby collapsing the trust. An investment
in an externally-deposited inverse floater is identified in the Portfolio of
Investments as "(IF) - Inverse floating rate investment." An investment in a
self-deposited inverse floater is accounted for as a financing transaction. In
such instances, a fixed-rate bond deposited into a special purpose trust is
identified in the Portfolio of Investments as "(UB) - Underlying bond of an
inverse floating rate trust reflected as a financing transaction," with the Fund
accounting for the short-term floating rate certificates issued by the trust as
"Floating rate obligations" on the Statement of Assets and Liabilities. In
addition, the Fund reflects in "Investment Income" the entire earnings of the
underlying bond and recognizes the related interest paid to the holders of the
short-term floating rate certificates as "Interest expense and amortization of
offering costs" on the Statement of Operations.
During the fiscal year ended October 31, 2009, each Fund invested in
externally-deposited inverse floaters and/or self-deposited inverse floaters.
Each Fund may also enter into shortfall and forbearance agreements (sometimes
referred to as a "recourse trust" or "credit recovery swap") (such agreements
referred to herein as "Recourse Trusts") with a broker-dealer by which a Fund
agrees to reimburse the broker-dealer, in certain circumstances, for the
difference between the liquidation value of the fixed-rate bond held by the
trust and the liquidation value of the floating rate certificates issued by the
trust plus any shortfalls in interest cash flows. Under these agreements, a
Fund's potential exposure to losses related to or on inverse floaters may
increase beyond the value of a Fund's inverse floater investments as a Fund may
potentially be liable to fulfill all amounts owed to holders of the floating
rate certificates. At period end, any such shortfall is recognized as
"Unrealized depreciation on Recourse Trusts" on the Statement of Assets and
Liabilities.
88 Nuveen Investments
At October 31, 2009, each Fund's maximum exposure to externally-deposited
Recourse Trusts is as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
------------------------------------------------------------------------------------------------------------------------------------
Maximum exposure to Recourse
Trusts $ 7,500,000 $ 11,250,000 $ 7,500,000 $ 11,250,000 $ 11,250,000 $ --
====================================================================================================================================
The average floating rate obligations outstanding and average annual interest
rate and fees related to self-deposited inverse floaters during the fiscal year
ended October 31, 2009, were as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
------------------------------------------------------------------------------------------------------------------------------------
Average floating rate
obligations outstanding $ 43,509,819 $ 58,897,682 $ 45,976,096 $ 53,617,767 $ 24,862,486 $ 63,958,171
Average annual interest rate
and fees 0.98% 0.88% 0.91% 0.85% 0.94% 0.93%
====================================================================================================================================
Futures Contracts
Each Fund is subject to interest rate risk in the normal course of pursuing its
investment objectives and is authorized to invest in futures contracts in
attempt to manage such risk. Upon entering into a futures contract, a Fund is
required to deposit with the broker an amount of cash or liquid securities equal
to a specified percentage of the contract amount. This is known as the "initial
margin." Cash held by the broker to cover initial margin requirements on open
futures contracts, if any, is recognized as "Deposits with brokers for open
futures contracts" on the Statement of Assets and Liabilities. Subsequent
payments ("variation margin") are made or received by a Fund each day, depending
on the daily fluctuation of the value of the contract. Variation margin is
recognized as a receivable or payable for "Variation margin on futures
contracts" on the Statement of Assets and Liabilities, when applicable.
During the period the futures contract is open, changes in the value of the
contract are recorded as an unrealized gain or loss by "marking-to-market" on a
daily basis to reflect the changes in market value of the contract and is
recognized as "Change in net unrealized appreciation (depreciation) of futures
contracts" on the Statement of Operations. When the contract is closed or
expired, a Fund records a realized gain or loss equal to the difference between
the value of the contract on the closing date and value of the contract when
originally entered into and is recognized as "Net realized gain (loss) from
futures contracts" on the Statement of Operations.
Risks of investments in futures contracts include the possible adverse movement
of the securities or indices underlying the contracts, the possibility that
there may not be a liquid secondary market for the contracts and/or that a
change in the value of the contract may not correlate with a change in the value
of the underlying securities or indices. Dividend Advantage 3 (NZF) invested in
futures contracts during the fiscal year ended October 31, 2009.
The average number of futures contracts outstanding during the fiscal year ended
October 31, 2009, was as follows:
DIVIDEND
ADVANTAGE 3
(NZF)
--------------------------------------------------------------------------------
Average number of futures contracts outstanding 31*
================================================================================
* The average number of contracts is calculated based on the outstanding
contracts at the beginning of the fiscal year and at the end of each
fiscal quarter within the current fiscal year. The Fund was not invested
in futures contracts at the end of the current fiscal year.
Refer to Footnote 3 - Derivative Instruments and Hedging Activities for further
details on futures contract activity.
Forward Swap Contracts
Each Fund is authorized to enter into forward interest rate swap contracts
consistent with their investment objectives and policies to reduce, increase or
otherwise alter its risk profile or to alter its portfolio characteristics (i.e.
duration, yield curve positioning and credit quality).
Each Fund is subject to interest rate risk in the normal course of pursuing its
investment objectives. Each Fund's use of forward interest rate swap
transactions is intended to help the Fund manage its overall interest rate
sensitivity, either shorter or longer, generally to more closely align the
Fund's interest rate sensitivity with that of the broader municipal market.
Forward interest rate swap transactions involve each Fund's agreement with a
counterparty to pay, in the future, a fixed or variable rate payment in exchange
for the counterparty paying the Fund a variable or fixed rate payment, the
accruals for which would begin at a specified date in the future (the "effective
date"). The amount of the payment obligation is based on the notional amount of
the 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.
Forward interest rate swap contracts are valued daily. The net amount recorded
on these transactions for each counterparty is recognized on the Statement of
Assets and Liabilities as "Unrealized appreciation or depreciation on forward
swaps" with the change during the fiscal period recognized on the Statement of
Operations as "Change in net unrealized appreciation (depreciation) of forward
swaps."
Nuveen Investments 89
| Notes to
| Financial Statements (continued)
The Funds may terminate a swap contract prior to the effective date, at which
point a realized gain or loss is recognized. When a forward swap is terminated,
it ordinarily does not involve the delivery of securities or other underlying
assets or principal, but rather is settled in cash on a net basis. Net realized
gains and losses during the fiscal period are recognized on the Statement of
Operations as "Net realized gain (loss) from forward swaps." 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. The Funds did not invest in forward interest rate swap transactions
during the fiscal year ended October 31, 2009.
Market and Counterparty Credit Risk
In the normal course of business each Fund may invest in financial instruments
and enter into financial transactions where risk of potential loss exists due to
changes in the market (market risk) or failure of the other party to the
transaction to perform (counterparty credit risk). The potential loss could
exceed the value of the financial assets recorded on the financial statements.
Financial assets, which potentially expose each Fund to counterparty credit
risk, consist principally of cash due from counterparties on forward, option and
swap transactions. The extent of each Fund's exposure to counterparty credit
risk in respect to these financial assets approximates their carrying value as
recorded on the Statement of Assets and Liabilities. Futures contracts expose a
Fund to minimal counterparty credit risk as they are exchange traded and the
exchange's clearinghouse, which is counterparty to all exchange traded futures,
guarantees the futures contracts against default.
Each Fund helps manage counterparty credit risk by entering into agreements only
with counterparties the Adviser believes have the financial resources to honor
their obligations and by having the Nuveen Asset Management (the "Adviser"), a
wholly-owned subsidiary of Nuveen Investments, Inc. ("Nuveen"), monitor the
financial stability of the counterparties. Additionally, counterparties may be
required to pledge collateral daily (based on the daily valuation of the
financial asset) on behalf of each Fund with a value approximately equal to the
amount of any unrealized gain above a pre-determined threshold. Reciprocally,
when each Fund has an unrealized loss, 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 valuations
fluctuate, either up or down, by at least the predetermined threshold amount.
Zero Coupon Securities
Each Fund is authorized to invest in zero coupon securities. A zero coupon
security does not pay a regular interest coupon to its holders during the life
of the security. Tax-exempt income to the holder of the security comes from
accretion of the difference between the original purchase price of the security
at issuance and the par value of the security at maturity and is effectively
paid at maturity. Such securities are included in the Portfolios of Investments
with a 0.000% coupon rate in their description. The market prices of zero coupon
securities generally are more volatile than the market prices of securities that
pay interest periodically.
Offering Costs
Costs incurred by Dividend Advantage 2 (NXZ) in connection with its offering of
the Variable Rate Demand Preferred shares ($2,270,000) were recorded as a
deferred charge which will be amortized over the 30-year life of the shares and
are included as a component of "Interest expense and amortization of offering
costs" on the Statement of Operations.
Custodian Fee Credit
Each Fund has an arrangement with the custodian bank whereby certain custodian
fees and expenses are reduced by net credits earned on each Fund's cash on
deposit with the bank. Such deposit arrangements are an alternative to overnight
investments. Credits for cash balances may be offset by charges for any days on
which a Fund overdraws its account at the custodian bank.
Indemnifications
Under the Funds' organizational documents, their Officers and Directors/Trustees
are indemnified against certain liabilities arising out of the performance of
their duties to the Funds. In addition, in the normal course of business, the
Funds enter into contracts that provide general indemnifications to other
parties. The Funds' maximum exposure under these arrangements is unknown as this
would involve future claims that may be made against the Funds that have not yet
occurred. However, the Funds have not had prior claims or losses pursuant to
these contracts and expect the risk of loss to be remote.
Use of Estimates
The preparation of financial statements in conformity with US 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. FAIR VALUE MEASUREMENTS
During the current fiscal period, the Funds adopted authoritative guidance under
GAAP on determining fair value measurements. This guidance defines fair value,
establishes a framework for measuring fair value in GAAP and expands disclosure
about fair value measurements. In determining the value of each Fund's
investments various inputs are used. These inputs are summarized in the three
broad levels listed below:
Level 1 - Quoted prices in active markets for identical securities.
Level 2 - Other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit risk, etc.).
90 Nuveen Investments
Level 3 - Significant unobservable inputs (including management's
assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not an indication of
the risk associated with investing in those securities. The following is a
summary of each Fund's fair value measurements as of October 31, 2009:
PERFORMANCE PLUS (NPP) LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
-------------------------------------------------------------------------------------------------
Investments:
Municipal Bonds $ -- $ 1,311,136,145 $ -- $ 1,311,136,145
=================================================================================================
MUNICIPAL ADVANTAGE (NMA) LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
-------------------------------------------------------------------------------------------------
Investments:
Municipal Bonds $ -- $ 948,796,834 $ -- $ 948,796,834
=================================================================================================
MARKET OPPORTUNITY (NMO) LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
-------------------------------------------------------------------------------------------------
Investments:
Municipal Bonds $ -- $ 997,616,000 $ -- $ 997,616,000
=================================================================================================
DIVIDEND ADVANTAGE (NAD) LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
-------------------------------------------------------------------------------------------------
Investments:
Municipal Bonds $ -- $ 835,953,168 $ -- $ 835,953,168
Investment Companies 510,013 -- -- 510,013
-------------------------------------------------------------------------------------------------
Total $ 510,013 $ 835,953,168 $ -- $ 836,463,181
=================================================================================================
DIVIDEND ADVANTAGE 2 (NXZ) LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
=================================================================================================
Investments:
Municipal Bonds $ -- $ 636,448,449 $ -- $ 636,448,449
=================================================================================================
DIVIDEND ADVANTAGE 3 (NZF) LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
-------------------------------------------------------------------------------------------------
Investments:
Municipal Bonds $ -- $ 863,883,204 $ -- $ 863,883,204
Investment Companies 3,269,535 -- -- 3,269,535
Short-Term Investments -- 2,325,000 -- 2,325,000
-------------------------------------------------------------------------------------------------
Total $ 3,269,535 $ 866,208,204 $ -- $ 869,477,739
=================================================================================================
3. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
During the current fiscal period, the Funds adopted amendments to authoritative
guidance under GAAP on disclosures about derivative instruments and hedging
activities. This guidance is intended to enhance financial statement disclosures
for derivative instruments and hedging activities and enable investors to better
understand: a) how and why a fund uses derivative instruments; b) how derivative
instruments are accounted for; and c) how derivative instruments affect a fund's
financial position, results of operations and cash flows, if any. The Funds
record derivative instruments at fair value with changes in fair value
recognized on the Statement of Operations, when applicable. Even though the
Funds' investments in derivatives may represent economic hedges, under this
guidance they are considered to be non-hedge transactions for financial
reporting purposes. For additional information on the derivative instruments in
which each Fund was invested during and at the end of the reporting period,
refer to the Portfolio of Investments, Financial Statements and Footnote 1 -
General Information and Significant Accounting Policies.
The following tables present the amount of net realized gain (loss) and change
in net unrealized appreciation (depreciation) recognized for the fiscal year
ended October 31, 2009, on derivative instruments, as well as the primary risk
exposure associated with each. Dividend Advantage 3 (NZF) invested in derivative
instruments during the fiscal year ended October 31, 2009. None of the Funds had
derivative contracts outstanding at October 31, 2009.
DIVIDEND
NET REALIZED GAIN (LOSS) FROM FUTURES CONTRACTS ADVANTAGE 3 (NZF)
--------------------------------------------------------------------------------------------------
RISK EXPOSURE
Interest Rate $ 1,331,299
==================================================================================================
DIVIDEND
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) OF FUTURES CONTRACTS ADVANTAGE 3 (NZF)
--------------------------------------------------------------------------------------------------
RISK EXPOSURE
Interest Rate $ 679,241
==================================================================================================
Nuveen Investments 91
| Notes to
| Financial Statements (continued)
4. FUND SHARES
Common Shares
Since the inception of the Funds' repurchase program, the Funds have not
repurchased any of their outstanding common shares.
Transactions in Common shares were as follows:
MUNICIPAL MARKET
PERFORMANCE PLUS (NPP) ADVANTAGE (NMA) OPPORTUNITY (NMO)
-------------------------------- -------------------------------- ---------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
10/31/09 10/31/08 10/31/09 10/31/08 10/31/09 10/31/08
------------------------------------------------------------------------------------------------------------------------------------
Common shares issued to
shareholders due to
reinvestment of
distributions -- -- 20,548 -- -- --
====================================================================================================================================
DIVIDEND DIVIDEND DIVIDEND
ADVANTAGE (NAD) ADVANTAGE 2 (NXZ) ADVANTAGE 3 (NZF)
-------------------------------- -------------------------------- ---------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
10/31/09 10/31/08 10/31/09 10/31/08 10/31/09 10/31/08
------------------------------------------------------------------------------------------------------------------------------------
Common shares issued to
shareholders due to
reinvestment of
distributions -- -- 10,026 29,827 -- --
====================================================================================================================================
Preferred Shares
Transactions in Auction Rate Preferred shares were as follows:
PERFORMANCE PLUS (NPP) MUNICIPAL ADVANTAGE (NMA)
---------------------------------------------- -----------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
10/31/09 10/31/08 10/31/09 10/31/08
------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------------------------------------------------------------------------------
Auction Rate Preferred shares
redeemed:
Series M 165 $ 4,125,000 328 $ 8,200,000 406 $ 10,150,000 137 $ 3,425,000
Series T 165 4,125,000 329 8,225,000 406 10,150,000 137 3,425,000
Series W 166 4,150,000 329 8,225,000 407 10,175,000 137 3,425,000
Series TH 130 3,250,000 260 6,500,000 313 7,825,000 106 2,650,000
Series F 164 4,100,000 328 8,200,000 406 10,150,000 137 3,425,000
------------------------------------------------------------------------------------------------------------------------------------
Total 790 $ 19,750,000 1,574 $ 39,350,000 1,938 $ 48,450,000 654 $ 16,350,000
====================================================================================================================================
MARKET OPPORTUNITY (NMO) DIVIDEND ADVANTAGE (NAD)
---------------------------------------------- -----------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
10/31/09 10/31/08 10/31/09 10/31/08
------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------------------------------------------------------------------------------
Auction Rate Preferred shares
redeemed:
Series M 158 $ 3,950,000 193 $ 4,825,000 68 $ 1,700,000 382 $ 9,550,000
Series T 159 3,975,000 193 4,825,000 68 1,700,000 383 9,575,000
Series W 126 3,150,000 154 3,850,000 -- -- -- --
Series TH -- -- -- -- 64 1,600,000 363 9,075,000
Series F 157 3,925,000 193 4,825,000 -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 600 $ 15,000,000 733 $ 18,325,000 200 $ 5,000,000 1,128 $ 28,200,000
====================================================================================================================================
92 Nuveen Investments
DIVIDEND ADVANTAGE 2 (NXZ) DIVIDEND ADVANTAGE 3 (NZF)
---------------------------------------------- -----------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
10/31/09 10/31/08 10/31/09 10/31/08
------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------------------------------------------------------------------------------
Auction Rate Preferred shares
redeemed:
Series M N/A N/A 3,000 $ 75,000,000 -- $ -- -- $ --
Series T N/A N/A 3,000 75,000,000 -- -- -- --
Series W N/A N/A -- -- 451 11,275,000 550 13,750,000
Series TH N/A N/A -- -- 451 11,275,000 550 13,750,000
Series F N/A N/A 2,880 72,000,000 451 11,275,000 549 13,725,000
------------------------------------------------------------------------------------------------------------------------------------
Total 8,880 $ 222,000,000 1,353 $ 33,825,000 1,649 $ 41,225,000
====================================================================================================================================
N/A - All $222,000,000 of the Fund's Auction Rate Preferred shares were redeemed
during the fiscal year ended October 31, 2008.
Transactions in Variable Rate Demand Preferred shares were as follows:
DIVIDEND ADVANTAGE 2 (NXZ)
-----------------------------------------------
YEAR YEAR
ENDED ENDED
10/31/09 10/31/08
-----------------------------------------------
SHARES AMOUNT SHARES AMOUNT
-----------------------------------------------------------------------------------
Variable Rate Demand Preferred
shares issued:
Series 1 -- $ -- 1,960 $ 196,000,000
===================================================================================
5. INVESTMENT TRANSACTIONS
Purchases and sales (including maturities but excluding short-term investments
and derivative transactions) during the fiscal year ended October 31, 2009, were
as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
------------------------------------------------------------------------------------------------------------------------------------
Purchases $ 78,074,792 $ 82,196,025 $ 99,549,963 $ 79,636,661 $ 33,168,991 $ 18,387,465
Sales and maturities 96,603,731 111,091,760 118,781,903 74,910,841 13,459,816 19,438,983
====================================================================================================================================
6. INCOME TAX INFORMATION
The following information is presented on an income tax basis. Differences
between amounts for financial statement and federal income tax purposes are
primarily due to timing differences in recognizing taxable market discount,
timing differences in recognizing certain gains and losses on investment
transactions and the treatment of investments in inverse floating rate
securities reflected as financing transactions, if any. 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, 2009, the cost of investments was as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
------------------------------------------------------------------------------------------------------------------------------------
Cost of investments $ 1,246,688,313 $ 887,112,184 $ 962,582,230 $ 791,061,909 $ 604,070,661 $ 803,762,493
====================================================================================================================================
Gross unrealized appreciation and gross unrealized depreciation of investments
at October 31, 2009, were as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
------------------------------------------------------------------------------------------------------------------------------------
Gross unrealized:
Appreciation $ 69,322,967 $ 37,889,272 $ 46,796,282 $ 39,580,694 $ 35,816,524 $ 30,100,078
Depreciation (47,817,816) (43,913,869) (60,507,164) (45,786,360) (30,106,102) (40,241,415)
------------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation
(depreciation)of
investments $ 21,505,151 $ (6,024,597) $ (13,710,882) $ (6,205,666) $ 5,710,422 $ (10,141,337)
====================================================================================================================================
Nuveen Investments 93
| Notes to
| Financial Statements (continued)
The tax components of undistributed net tax-exempt income, net ordinary income
and net long-term capital gains at October 31, 2009, the Funds' tax year end,
were as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
------------------------------------------------------------------------------------------------------------------------------------
Undistributed net tax-exempt
income * $ 14,778,549 $ 10,307,023 $ 11,839,667 $ 8,600,550 $ 4,767,927 $ 9,202,532
Undistributed net ordinary
income ** 22,973 63,544 665 -- 431,904 830,858
Undistributed net long-term
capital gains 863,865 3,011,399 -- -- -- 1,900,388
====================================================================================================================================
* Undistributed net tax-exempt income (on a tax basis) has not been reduced
for the dividend declared on October 1, 2009, paid on November 2, 2009.
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
The tax character of distributions paid during the Funds' tax years ended
October 31, 2009 and October 31, 2008, was designated for purposes of the
dividends paid deduction as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
2009 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
------------------------------------------------------------------------------------------------------------------------------------
Distributions from net
tax-exempt income *** $ 50,061,453 $ 38,441,112 $ 39,112,569 $ 34,327,038 $ 27,368,520 $ 35,861,517
Distributions from net
ordinary income ** 60,857 126,563 -- -- -- 312,544
Distributions from net
long-term capital
gains **** -- -- -- -- -- --
====================================================================================================================================
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
2008 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
------------------------------------------------------------------------------------------------------------------------------------
Distributions from net
tax-exempt income $ 58,938,252 $ 46,196,128 $ 47,134,373 $ 40,676,616 $ 33,466,437 $ 42,267,778
Distributions from net
ordinary income ** -- -- -- 171,088 -- --
Distributions from net
long-term capital gains -- 1,389,990 -- -- -- --
====================================================================================================================================
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
*** The Funds hereby designate these amounts paid during the fiscal year ended
October 31, 2009, as Exempt Interest Dividends.
**** The Funds designated as a long-term capital gain dividend, pursuant to the
Internal Revenue Code Section 852(b)(3), the amount necessary to reduce
earnings and profits of the Funds related to net capital gain to zero for
the tax year ended October 31, 2009.
At October 31, 2009, the Funds' tax year end, the Funds had unused capital loss
carryforwards available for federal income tax purposes to be applied against
future capital gains, if any. If not applied, the carryforwards will expire as
follows:
MARKET DIVIDEND DIVIDEND
OPPORTUNITY ADVANTAGE ADVANTAGE 2
(NMO) (NAD) (NXZ)
--------------------------------------------------------------------------------
Expiration:
October 31, 2011 $ 4,216,771 $ 4,594,300 $ --
October 31, 2012 973,824 -- --
October 31, 2013 -- 104,762 --
October 31, 2014 3,141,529 -- 1,425,745
October 31, 2015 1,902,879 -- 961,027
October 31, 2016 1,398,166 -- --
October 31, 2017 -- 424,278 --
--------------------------------------------------------------------------------
Total $ 11,633,169 $ 5,123,340 $ 2,386,772
================================================================================
7. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Each Fund's management fee is separated into two components - a complex-level
component, based on the aggregate amount of all fund assets managed by the
Adviser, and a specific fund-level component, based only on the amount of assets
within each individual Fund. This pricing structure enables Nuveen fund
shareholders to benefit from growth in the assets within each individual fund as
well as from growth in the amount of complex-wide assets managed by the Adviser.
94 Nuveen Investments
The annual fund-level fee, payable monthly, for each Fund is based upon the
average daily net assets of each Fund as follows:
PERFORMANCE PLUS (NPP)
MUNICIPAL ADVANTAGE (NMA)
MARKET OPPORTUNITY (NMO)
AVERAGE DAILY NET ASSETS(1) 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
================================================================================
DIVIDEND ADVANTAGE (NAD)
DIVIDEND ADVANTAGE 2 (NXZ)
DIVIDEND ADVANTAGE 3 (NZF)
AVERAGE DAILY NET ASSETS(1) 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 net assets managed as stated in the following
table. As of October 31, 2009, the complex-level fee rate was .1907%.
The complex-level fee schedule is as follows:
COMPLEX-LEVEL NET ASSET EFFECTIVE RATE AT
BREAKPOINT LEVEL(1) BREAKPOINT LEVEL
--------------------------------------------------------------------------------
$55 billion .2000%
$56 billion .1996
$57 billion .1989
$60 billion .1961
$63 billion .1931
$66 billion .1900
$71 billion .1851
$76 billion .1806
$80 billion .1773
$91 billion .1691
$125 billion .1599
$200 billion .1505
$250 billion .1469
$300 billion .1445
================================================================================
(1) The complex-level fee component of the management fee for the funds is
calculated based upon the aggregate daily managed net assets of all Nuveen
funds, with such daily managed net assets defined separately for each fund
in its management agreement, but excluding assets attributable to
investments in other Nuveen funds. For the complex-level and fund-level
fee components, daily managed net assets include assets managed by the
Adviser that are attributable to financial leverage. For these purposes,
financial leverage includes the funds use of preferred stock and
borrowings and investments in the residual interest certificates (also
called inverse floating rate securities) in tender option bond (TOB)
trusts, including the portion of assets held by the TOB trust that has
been effectively financed by the trust's issuance of floating rate
securities, subject to an agreement by the Adviser to limit the amount of
such assets for determining managed net assets in certain circumstances.
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.
Nuveen Investments 95
| Notes to
| Financial Statements (continued)
For the first ten years of Dividend Advantage's (NAD) operations, the Adviser
has agreed to reimburse the Fund, as a percentage of average daily net assets,
for fees and expenses in the amounts and for the time periods set forth below:
YEAR ENDING YEAR ENDING
JULY 31, JULY 31,
--------------------------------------------------------------------------------
1999* .30% 2005 .25%
2000 .30 2006 .20
2001 .30 2007 .15
2002 .30 2008 .10
2003 .30 2009 .05
2004 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Dividend Advantage (NAD) for any portion
of its fees and expenses beyond July 31, 2009.
For the first ten years of Dividend Advantage 2's (NXZ) operations, the Adviser
has agreed to reimburse the Fund, as a percentage of average daily net assets,
for fees and expenses in the amounts and for the time periods set forth below:
YEAR ENDING YEAR ENDING
MARCH 31, MARCH 31,
--------------------------------------------------------------------------------
2001* .30% 2007 .25%
2002 .30 2008 .20
2003 .30 2009 .15
2004 .30 2010 .10
2005 .30 2011 .05
2006 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Dividend Advantage 2 (NXZ) for any
portion of its fees and expenses beyond March 31, 2011.
For the first ten years of Dividend Advantage 3's (NZF) operations, the Adviser
has agreed to reimburse the Fund, as a percentage of average daily net assets,
for fees and expenses in the amounts and for the time periods set forth below:
YEAR ENDING YEAR ENDING
SEPTEMBER 30, SEPTEMBER 30,
--------------------------------------------------------------------------------
2001* .30% 2007 .25%
2002 .30 2008 .20
2003 .30 2009 .15
2004 .30 2010 .10
2005 .30 2011 .05
2006 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Dividend Advantage 3 (NZF) for any
portion of its fees and expenses beyond September 30, 2011.
8. NEW ACCOUNTING STANDARDS
Accounting for Transfers of Financial Assets
During June 2009, the FASB issued changes to the authoritative guidance under
GAAP on accounting for transfers of financial assets. The objective of this
guidance is to improve the relevance, representational faithfulness, and
comparability of the information that a reporting entity provides in its
financial statements about a transfer of financial assets; the effects of a
transfer on its financial position, financial performance, and cash flows; and a
transferor's continuing involvement, if any, in transferred financial assets.
This guidance is effective as of the beginning of each reporting entity's first
annual reporting period that begins after November 15, 2009, for interim periods
within that first annual reporting period and for interim and annual reporting
periods thereafter. Earlier application is prohibited. The recognition and
measurement provisions of this guidance must be applied to transfers occurring
on or after the effective date. Additionally, the disclosure provisions of this
guidance should be applied to transfers that occurred both before and after the
effective date of this guidance. At this time, management is evaluating the
implications of this guidance and the impact it will have on the financial
statement amounts and disclosures, if any.
96 Nuveen Investments
9. SUBSEQUENT EVENTS
Distributions to Common Shareholders
The Funds declared Common share dividend distributions from their tax-exempt net
investment income which were paid on December 1, 2009, to shareholders of record
on November 15, 2009, as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
------------------------------------------------------------------------------------------------------------------------------------
Dividend per share $ .0720 $ .0760 $ .0740 $ .0740 $ .0780 $ .0745
====================================================================================================================================
Evaluation Date
In May 2009, the FASB issued changes to authoritative guidance under GAAP for
subsequent events. This guidance requires an entity to recognize in the
financial statements the effects of all subsequent events that provide
additional evidence about conditions that existed at the date of the balance
sheet. This guidance is intended to establish general standards of accounting
and for disclosure of events that occur after the balance sheet date but before
financial statements are issued or are available to be issued. This guidance
requires the disclosure of the date through which an entity has evaluated
subsequent events and the basis for that date - that is, whether that date
represents the date the financial statements were issued or were available to be
issued. This guidance is effective for interim and annual periods ending after
June 15, 2009. The Funds have performed an evaluation of subsequent events
through December 28, 2009, which is the date the financial statements were
issued.
Nuveen Investments 97
| Financial
| Highlights
Selected data for a Common share outstanding throughout each period:
INVESTMENT OPERATIONS
--------------------------------------------------------------------------
DISTRIBUTIONS DISTRIBUTIONS
FROM NET FROM
INVESTMENT CAPITAL
BEGINNING INCOME TO GAINS TO
COMMON NET AUCTION RATE AUCTION RATE
SHARE NET REALIZED/ PREFERRED PREFERRED
NET ASSET INVESTMENT UNREALIZED SHARE- SHARE-
VALUE INCOME GAIN (LOSS) HOLDERS+ HOLDERS+ TOTAL
-----------------------------------------------------------------------------------------------------------------------
PERFORMANCE PLUS (NPP)
-----------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2009 $ 12.69 $ 1.03 $ 1.65 $ (.06) $ -- $ 2.62
2008 15.22 1.02 (2.56) (.29) -- (1.83)
2007 15.78 .99 (.47) (.27) (.01) .24
2006 15.51 1.00 .38 (.25) -- 1.13
2005 15.87 1.02 (.26) (.16) -- .60
MUNICIPAL ADVANTAGE (NMA)
-----------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2009 12.12 1.10 1.76 (.06) -- 2.80
2008 15.20 1.08 (3.06) (.30) (.01) (2.29)
2007 15.88 1.07 (.63) (.29) -- .15
2006 15.70 1.08 .27 (.26) -- 1.09
2005 16.02 1.09 (.24) (.16) -- .69
=======================================================================================================================
LESS DISTRIBUTIONS
---------------------------------------
NET
INVESTMENT CAPITAL ENDING
INCOME TO GAINS TO COMMON
COMMON COMMON SHARE ENDING
SHARE- SHARE- NET ASSET MARKET
HOLDERS HOLDERS TOTAL VALUE VALUE
----------------------------------------------------------------------------------------------------
PERFORMANCE PLUS (NPP)
----------------------------------------------------------------------------------------------------
Year Ended 10/31:
2009 $ (.79) $ -- $ (.79) $ 14.52 $ 13.48
2008 (.70) -- (.70) 12.69 11.50
2007 (.75) (.05) (.80) 15.22 13.59
2006 (.84) (.02) (.86) 15.78 15.09
2005 (.94) (.02) (.96) 15.51 14.43
MUNICIPAL ADVANTAGE (NMA)
----------------------------------------------------------------------------------------------------
Year Ended 10/31:
2009 (.84) -- (.84) 14.08 13.41
2008 (.77) (.02) (.79) 12.12 11.41
2007 (.83) -- (.83) 15.20 13.95
2006 (.90) (.01) (.91) 15.88 15.85
2005 (1.00) (.01) (1.01) 15.70 15.19
====================================================================================================
AUCTION RATE PREFERRED SHARES
AT END OF PERIOD
-------------------------------------------------------
AGGREGATE LIQUIDATION
AMOUNT AND MARKET ASSET
OUTSTANDING VALUE COVERAGE
(000) PER SHARE PER SHARE
---------------------------------------------------------------------------------------
PERFORMANCE PLUS (NPP)
---------------------------------------------------------------------------------------
Year Ended 10/31:
2009 $ 419,900 $ 25,000 $ 76,790
2008 439,650 25,000 68,244
2007 479,000 25,000 72,603
2006 479,000 25,000 74,333
2005 479,000 25,000 73,515
MUNICIPAL ADVANTAGE (NMA)
---------------------------------------------------------------------------------------
Year Ended 10/31:
2009 293,200 25,000 76,911
2008 341,650 25,000 63,314
2007 358,000 25,000 70,866
2006 358,000 25,000 72,743
2005 358,000 25,000 72,184
=======================================================================================
98 Nuveen Investments
RATIOS/SUPPLEMENTAL DATA
--------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
APPLICABLE TO COMMON SHARES
TOTAL RETURNS BEFORE REIMBURSEMENT
---------------------- -----------------------------------------------
BASED ENDING
ON NET
BASED COMMON ASSETS
ON SHARE NET APPLICABLE EXPENSES EXPENSES NET
MARKET ASSET TO COMMON INCLUDING EXCLUDING INVESTMENT
VALUE* VALUE* SHARES (000) I NTEREST++(a) INTEREST++ INCOME++
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE PLUS (NPP)
-------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2009 24.78% 21.20% $ 869,873 1.23% 1.18% 7.59%
2008 (10.71) (12.49) 760,496 1.25 1.17 6.96
2007 (4.97) 1.53 912,066 1.16 1.14 6.38
2006 10.78 7.50 945,222 1.15 1.15 6.44
2005 3.02 3.83 929,544 1.15 1.15 6.45
MUNICIPAL ADVANTAGE (NMA)
-------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2009 25.70% 23.89% 608,813 1.31 1.22 8.51
2008 (13.16) (15.65) 523,602 1.38 1.21 7.50
2007 (7.08) 1.06 656,806 1.40 1.17 6.87
2006 10.68 7.16 683,675 1.18 1.18 6.92
2005 3.29 4.42 675,678 1.17 1.17 6.81
=========================================================================================================================
RATIOS/SUPPLEMENTAL DATA
-------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
APPLICABLE TO COMMON SHARES
AFTER REIMBURSEMENT**
---------------------------------------------------
EXPENSES EXPENSES NET PORTFOLIO
INCLUDING EXCLUDING INVESTMENT TURNOVER
INTEREST++(a) INTEREST++ INCOME++ RATE
---------------------------------------------------------------------------------------------------
PERFORMANCE PLUS (NPP)
---------------------------------------------------------------------------------------------------
Year Ended 10/31:
2009 1.23% 1.18% 7.59% 6%
2008 1.25 1.17 6.96 9
2007 1.16 1.14 6.38 6
2006 1.15 1.15 6.44 9
2005 1.15 1.15 6.45 6
MUNICIPAL ADVANTAGE (NMA)
---------------------------------------------------------------------------------------------------
Year Ended 10/31:
2009 1.31 1.22 8.51 9
2008 1.38 1.21 7.50 13
2007 1.40 1.17 6.87 10
2006 1.18 1.18 6.92 11
2005 1.17 1.17 6.81 8
===================================================================================================
* Total Return Based on Market Value is the combination of changes in the
market price per share and the effect of reinvested dividend income and
reinvested capital gains distributions, if any, at the average price paid
per share at the time of reinvestment. The last dividend declared in the
period, which is typically paid on the first business day of the following
month, is assumed to be reinvested at the ending market price. The actual
reinvestment for the last dividend declared in the period may take place
over several days, and in some instances may not be based on the market
price, so the actual reinvestment price may be different from the price
used in the calculation. Total returns are not annualized.
Total Return Based on Common Share Net Asset Value is the combination of
changes in Common share net asset value, reinvested dividend income at net
asset value and reinvested capital gains distributions at net asset value,
if any. The last dividend declared in the period, which is typically paid
on the first business day of the following month, is assumed to be
reinvested at the ending net asset value. The actual reinvest price for
the last dividend declared in the period may often be based on the Fund's
market price (and not its net asset value), and therefore may be different
from the price used in the calculation. Total returns are not annualized.
** After expense reimbursement from Adviser, where applicable. Expense ratios
do not reflect the reduction of custodian fee credits earned on the Fund's
net cash on deposit with the custodian bank, where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Auction Rate
Preferred shareholders; Net Investment Income ratios reflect income earned
and expenses incurred on assets attributable to Auction Rate Preferred
shares.
(a) The expense ratios in the above table reflect, among other things, the
interest expense deemed to have been paid by the Fund on the floating rate
certificates issued by the special purpose trusts for the self-deposited
inverse floaters held by the Fund, as described in Footnote 1 - Inverse
Floating Rate Securities.
See accompanying notes to financial statements.
Nuveen Investments 99
| Financial
| Highlights (continued)
Selected data for a Common share outstanding throughout each period:
INVESTMENT OPERATIONS
----------------------------------------------------------------------------------
DISTRIBUTIONS DISTRIBUTIONS
FROM NET FROM
INVESTMENT CAPITAL
BEGINNING INCOME TO GAINS TO
COMMON NET AUCTION RATE AUCTION RATE
SHARE NET REALIZED/ PREFERRED PREFERRED
NET ASSET INVESTMENT UNREALIZED SHARE- SHARE-
VALUE INCOME GAIN (LOSS) HOLDERS+ HOLDERS+ TOTAL
-----------------------------------------------------------------------------------------------------------------------------------
MARKET OPPORTUNITY (NMO)
-----------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2009 $ 12.23 $ 1.10 $ 1.13 $ (.06) $ -- $ 2.17
2008 14.83 1.03 (2.59) (.31) -- (1.87)
2007 15.41 1.04 (.56) (.30) -- .18
2006 15.14 1.02 .34 (.26) -- 1.10
2005 15.48 1.03 (.29) (.16) -- .58
DIVIDEND ADVANTAGE (NAD)
-----------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2009 11.77 1.07 1.93 (.05) -- 2.95
2008 14.90 1.05 (3.14) (.27) -- (2.36)
2007 15.54 1.04 (.60) (.27) -- .17
2006 15.28 1.04 .32 (.24) -- 1.12
2005 15.62 1.06 (.25) (.15) -- .66
===================================================================================================================================
LESS DISTRIBUTIONS
-----------------------------------------
NET
INVESTMENT CAPITAL ENDING
INCOME TO GAINS TO COMMON
COMMON COMMON SHARE ENDING
SHARE- SHARE- NET ASSET MARKET
HOLDERS HOLDERS TOTAL VALUE VALUE
------------------------------------------------------------------------------------------------------
MARKET OPPORTUNITY (NMO)
------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2009 $ (.81) $ -- $ (.81) $ 13.59 $ 13.32
2008 (.73) -- (.73) 12.23 11.52
2007 (.76) -- (.76) 14.83 13.53
2006 (.83) -- (.83) 15.41 15.00
2005 (.92) -- (.92) 15.14 14.19
DIVIDEND ADVANTAGE (NAD)
------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2009 (.83) -- (.83) 13.89 12.89
2008 (.77) -- (.77) 11.77 10.72
2007 (.81) -- (.81) 14.90 13.63
2006 (.86) -- (.86) 15.54 15.30
2005 (1.00) -- (1.00) 15.28 14.58
======================================================================================================
AUCTION RATE PREFERRED SHARES
AT END OF PERIOD
---------------------------------------------------
AGGREGATE LIQUIDATION
AMOUNT AND MARKET ASSET
OUTSTANDING VALUE COVERAGE
(000) PER SHARE PER SHARE
-----------------------------------------------------------------------------------
MARKET OPPORTUNITY (NMO)
-----------------------------------------------------------------------------------
Year Ended 10/31:
2009 $ 346,675 $ 25,000 $ 69,661
2008 361,675 25,000 63,525
2007 380,000 25,000 69,446
2006 380,000 25,000 71,155
2005 380,000 25,000 70,374
DIVIDEND ADVANTAGE (NAD)
-----------------------------------------------------------------------------------
Year Ended 10/31:
2009 261,800 25,000 77,095
2008 266,800 25,000 68,343
2007 295,000 25,000 74,618
2006 295,000 25,000 76,722
2005 295,000 25,000 75,838
===================================================================================
100 Nuveen Investments
RATIOS/SUPPLEMENTAL DATA
-------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
APPLICABLE TO COMMON SHARES
TOTAL RETURNS BEFORE REIMBURSEMENT
------------------------- ---------------------------------------------
BASED ENDING
ON NET
BASED COMMON ASSETS
ON SHARE NET APPLICABLE EXPENSES EXPENSES NET
MARKET ASSET TO COMMON INCLUDING EXCLUDING INVESTMENT
VALUE* VALUE* SHARES (000) INTEREST++(a) INTEREST++ INCOME++
------------------------------------------------------------------------------------------------------------------------------
MARKET OPPORTUNITY (NMO)
------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2009 23.67% 18.30% $ 619,319 1.32% 1.25% 8.58%
2008 (9.87) (13.07) 557,346 1.36 1.23 7.33
2007 (5.00) 1.20 675,577 1.38 1.19 6.87
2006 11.92 7.49 701,559 1.19 1.19 6.73
2005 4.70 3.78 689,682 1.19 1.19 6.66
DIVIDEND ADVANTAGE (NAD)
------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2009 28.86 25.78 545,534 1.26 1.17 8.38
2008 (16.46) (16.42) 462,554 1.36 1.15 7.33
2007 (5.96) 1.10 585,496 1.24 1.13 6.60
2006 11.19 7.59 610,316 1.12 1.12 6.54
2005 1.77 4.27 599,887 1.17 1.17 6.48
==============================================================================================================================
RATIOS/SUPPLEMENTAL DATA
--------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
APPLICABLE TO COMMON SHARES
AFTER REIMBURSEMENT**
---------------------------------------------------
EXPENSES EXPENSES NET PORTFOLIO
INCLUDING EXCLUDING INVESTMENT TURNOVER
INTEREST++(a) INTEREST++ INCOME++ RATE
----------------------------------------------------------------------------------------------------
MARKET OPPORTUNITY (NMO)
----------------------------------------------------------------------------------------------------
Year Ended 10/31:
2009 1.32% 1.25% 8.58% 10%
2008 1.36 1.23 7.33 8
2007 1.38 1.19 6.87 5
2006 1.19 1.19 6.73 14
2005 1.19 1.19 6.66 7
DIVIDEND ADVANTAGE (NAD)
----------------------------------------------------------------------------------------------------
Year Ended 10/31:
2009 1.21 1.12 8.43 9
2008 1.22 1.02 7.46 11
2007 1.03 .92 6.81 11
2006 .85 .85 6.81 8
2005 .81 .81 6.83 11
====================================================================================================
* Total Return Based on Market Value is the combination of changes in the
market price per share and the effect of reinvested dividend income and
reinvested capital gains distributions, if any, at the average price paid
per share at the time of reinvestment. The last dividend declared in the
period, which is typically paid on the first business day of the following
month, is assumed to be reinvested at the ending market price. The actual
reinvestment for the last dividend declared in the period may take place
over several days, and in some instances may not be based on the market
price, so the actual reinvestment price may be different from the price
used in the calculation. Total returns are not annualized.
Total Return Based on Common Share Net Asset Value is the combination of
changes in Common share net asset value, reinvested dividend income at net
asset value and reinvested capital gains distributions at net asset value,
if any. The last dividend declared in the period, which is typically paid
on the first business day of the following month, is assumed to be
reinvested at the ending net asset value. The actual reinvest price for
the last dividend declared in the period may often be based on the Fund's
market price (and not its net asset value), and therefore may be different
from the price used in the calculation. Total returns are not annualized.
** After expense reimbursement from Adviser, where applicable. Expense ratios
do not reflect the reduction of custodian fee credits earned on the Fund's
net cash on deposit with the custodian bank, where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Auction Rate
Preferred shareholders; Net Investment Income ratios reflect income earned
and expenses incurred on assets attributable to Auction Rate Preferred
shares.
(a) The expense ratios in the above table reflect, among other things, the
interest expense deemed to have been paid by the Fund on the floating rate
certificates issued by the special purpose trusts for the self-deposited
inverse floaters held by the Fund, as described in Footnote 1 - Inverse
Floating Rate Securities.
See accompanying notes to financial statements.
Nuveen Investments 101
| Financial
| Highlights (continued)
Selected data for a Common share outstanding throughout each period:
INVESTMENT OPERATIONS
----------------------------------------------------------------------------------
DISTRIBUTIONS DISTRIBUTIONS
FROM NET FROM
INVESTMENT CAPITAL
BEGINNING INCOME TO GAINS TO
COMMON NET AUCTION RATE AUCTION RATE
SHARE NET REALIZED/ PREFERRED PREFERRED
NET ASSET INVESTMENT UNREALIZED SHARE- SHARE-
VALUE INCOME GAIN (LOSS) HOLDERS+ HOLDERS+ TOTAL
----------------------------------------------------------------------------------------------------------------------------------
DIVIDEND ADVANTAGE 2 (NXZ)
----------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2009 $ 12.71 $ 1.04 $ 1.59 $ -- $ -- $ 2.63
2008 15.55 1.05 (2.81) (.20) -- (1.96)
2007 16.02 1.13 (.43) (.27) -- .43
2006 15.80 1.12 .32 (.24) -- 1.20
2005 15.63 1.13 .22 (.15) -- 1.20
DIVIDEND ADVANTAGE 3 (NZF)
----------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2009 12.10 1.08 1.91 (.05) -- 2.94
2008 15.03 1.06 (2.95) (.27) -- (2.16)
2007 15.54 1.07 (.44) (.27) (.01) .35
2006 15.32 1.07 .29 (.24) -- 1.12
2005 15.36 1.06 .01 (.15) -- .92
==================================================================================================================================
LESS DISTRIBUTIONS
---------------------------------------
NET
INVESTMENT CAPITAL ENDING
INCOME TO GAINS TO COMMON
COMMON COMMON SHARE ENDING
SHARE- SHARE- NET ASSET MARKET
HOLDERS HOLDERS TOTAL VALUE VALUE
-----------------------------------------------------------------------------------------------------
DIVIDEND ADVANTAGE 2 (NXZ)
-----------------------------------------------------------------------------------------------------
Year Ended 10/31:
2009 $ (.89) $ -- $ (.89) $ 14.45 $ 14.14
2008 (.88) -- (.88) 12.71 12.35
2007 (.90) -- (.90) 15.55 15.48
2006 (.98) -- (.98) 16.02 16.50
2005 (1.03) -- (1.03) 15.80 15.64
DIVIDEND ADVANTAGE 3 (NZF)
-----------------------------------------------------------------------------------------------------
Year Ended 10/31:
2009 (.85) -- (.85) 14.19 13.38
2008 (.77) -- (.77) 12.10 10.72
2007 (.84) (.02) (.86) 15.03 13.85
2006 (.90) -- (.90) 15.54 15.88
2005 (.96) -- (.96) 15.32 14.41
=====================================================================================================
AUCTION RATE PREFERRED SHARES VARIABLE RATE DEMAND PREFERRED SHARES
AT END OF PERIOD AT END OF PERIOD
--------------------------------------- ----------------------------------------
AGGREGATE LIQUIDATION AGGREGATE LIQUIDATION
AMOUNT AND MARKET ASSET AMOUNT AND MARKET ASSET
OUTSTANDING VALUE COVERAGE OUTSTANDING VALUE COVERAGE
(000) PER SHARE PER SHARE (000) PER SHARE PER SHARE
------------------------------------------------------------------------------------------------------------------
DIVIDEND ADVANTAGE 2 (NXZ)
------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2009 $ -- $ -- $ -- $ 196,000 $ 100,000 $ 316,966
2008 -- -- -- 196,000 100,000 290,785
2007 222,000 25,000 76,463 -- -- --
2006 222,000 25,000 77,949 -- -- --
2005 222,000 25,000 77,124 -- -- --
DIVIDEND ADVANTAGE 3 (NZF)
------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2009 236,950 25,000 85,465 -- -- --
2008 270,775 25,000 70,108 -- -- --
2007 312,000 25,000 73,630 -- -- --
2006 312,000 25,000 75,227 -- -- --
2005 312,000 25,000 74,468 -- -- --
==================================================================================================================
102 Nuveen Investments
RATIOS/SUPPLEMENTAL DATA
-----------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
APPLICABLE TO COMMON SHARES
TOTAL RETURNS BEFORE REIMBURSEMENT
----------------------- ------------------------------------------
BASED ENDING
ON NET
BASED COMMON ASSETS
ON SHARE NET APPLICABLE EXPENSES EXPENSES NET
MARKET ASSET TO COMMON INCLUDING EXCLUDING INVESTMENT
VALUE* VALUE* SHARES (000) INTEREST++(a) INTEREST++ INCOME++
----------------------------------------------------------------------------------------------------------------------
DIVIDEND ADVANTAGE 2 (NXZ)
----------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2009 22.63% 21.41% $ 425,253 1.91% 1.47% 7.59%
2008 (15.21) (13.23) 373,940 1.71 1.22 6.82
2007 (.78) 2.76 456,992 1.25 1.11 6.83
2006 11.95 7.86 470,189 1.11 1.11 6.70
2005 8.58 7.83 462,862 1.12 1.12 6.66
DIVIDEND ADVANTAGE 3 (NZF)
----------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2009 33.89% 25.08% 573,088 1.26 1.15 7.98
2008 (17.85) (14.99) 488,561 1.34 1.15 7.08
2007 (7.72) 2.31 606,908 1.32 1.13 6.65
2006 16.90 7.57 626,836 1.13 1.13 6.51
2005 6.11 6.09 617,358 1.13 1.13 6.39
======================================================================================================================
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
APPLICABLE TO COMMON SHARES
AFTER REIMBURSEMENT**
----------------------------------------------
EXPENSES EXPENSES NET PORTFOLIO
INCLUDING EXCLUDING INVESTMENT TURNOVER
INTEREST++(a) INTEREST++ INCOME++ RATE
--------------------------------------------------------------------------------------------
DIVIDEND ADVANTAGE 2 (NXZ)
--------------------------------------------------------------------------------------------
Year Ended 10/31:
2009 1.73% 1.29% 7.77% 2%
2008 1.45 .96 7.08 10
2007 .93 .79 7.16 5
2006 .72 .72 7.09 5
2005 .68 .68 7.11 2
DIVIDEND ADVANTAGE 3 (NZF)
--------------------------------------------------------------------------------------------
Year Ended 10/31:
2009 1.04 0.92 8.20 2
2008 1.04 .85 7.37 7
2007 .94 .76 7.02 14
2006 .68 .68 6.96 9
2005 .69 .69 6.83 3
============================================================================================
* Total Return Based on Market Value is the combination of changes in the
market price per share and the effect of reinvested dividend income and
reinvested capital gains distributions, if any, at the average price paid
per share at the time of reinvestment. The last dividend declared in the
period, which is typically paid on the first business day of the following
month, is assumed to be reinvested at the ending market price. The actual
reinvestment for the last dividend declared in the period may take place
over several days, and in some instances may not be based on the market
price, so the actual reinvestment price may be different from the price
used in the calculation. Total returns are not annualized.
Total Return Based on Common Share Net Asset Value is the combination of
changes in Common share net asset value, reinvested dividend income at net
asset value and reinvested capital gains distributions at net asset value,
if any. The last dividend declared in the period, which is typically paid
on the first business day of the following month, is assumed to be
reinvested at the ending net asset value. The actual reinvest price for
the last dividend declared in the period may often be based on the Fund's
market price (and not its net asset value), and therefore may be different
from the price used in the calculation. Total returns are not annualized.
** After expense reimbursement from Adviser, where applicable. Expense ratios
do not reflect the reduction of custodian fee credits earned on the Fund's
net cash on deposit with the custodian bank, where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Auction Rate
Preferred shareholders; Net Investment Income ratios reflect income earned
and expenses incurred on assets attributable to Auction Rate Preferred
shares or Variable Rate Demand Preferred shares, where applicable.
(a) The expense ratios in the above table reflect, among other things,
payments to Variable Rate Demand Preferred shareholders and the interest
expense deemed to have been paid by the Fund on the floating rate
certificates issued by the special purpose trusts for the self-deposited
inverse floaters held by the Fund, as described in Footnote 1 - Variable
Rate Demand Preferred Shares and Inverse Floating Rate Securities,
respectively.
See accompanying notes to financial statements.
Nuveen Investments 103
Board Members & Officers
The management of the Funds, including general supervision of the duties
performed for the Funds by the Adviser, is the responsibility of the Board
Members of the Funds. The number of board members of the Fund is currently set
at nine. None of the board members who are not "interested" persons of the Funds
(referred to herein as "independent board members") has ever been a director or
employee of, or consultant to, Nuveen or its affiliates. The names and business
addresses of the board members and officers of the Funds, their principal
occupations and other affiliations during the past five years, the number of
portfolios each oversees and other directorships they hold are set forth below.
NUMBER PRINCIPAL
YEAR FIRST OF PORTFOLIOS OCCUPATION(S)
NAME, ELECTED OR IN FUND COMPLEX INCLUDING OTHER
BIRTHDATE POSITION(S) HELD APPOINTED OVERSEEN BY DIRECTORSHIPS
& ADDRESS WITH THE FUNDS AND TERM(1) BOARD MEMBER DURING PAST 5 YEARS
------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT BOARD MEMBERS:
o ROBERT P. BREMNER Private Investor and Management
8/22/40 Chairman of Consultant; Treasurer and Director,
333 W. Wacker Drive the Board 1997 198 Humanities Council of Washington
Chicago, IL 60606 and Board Member D.C.
o JACK B. EVANS President, The Hall-Perrine
10/22/48 Foundation, a private philanthropic
333 W. Wacker Drive Board Member 1999 198 corporation (since 1996); Director
Chicago, IL 60606 and Chairman, United Fire Group, a
publicly held company; President Pro
Tem of the Board of Regents for the
State of Iowa University System;
Director, Gazette Companies; Life
Trustee of Coe College and the 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.
o WILLIAM C. HUNTER Dean, Tippie College of Business,
3/6/48 University of Iowa (since 2006);
333 W. Wacker Drive Board Member 2004 198 Director (since 2004) of Xerox
Chicago, IL 60606 Corporation; Director (since 2005),
Beta Gamma Sigma International Honor
Society; formerly, Dean and
Distinguished 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, SS&C
Technologies, Inc. (May 2005-October
2005); formerly, Director
(1997-2007), Credit Research Center
at Georgetown University.
o DAVID J. KUNDERT Director, Northwestern Mutual Wealth
10/28/42 Management Company; retired (since
333 W. Wacker Drive Board Member 2005 198 2004) as Chairman, JPMorgan Fleming
Chicago, IL 60606 Asset Management, President and CEO,
Banc One Investment Advisors
Corporation, and President, One
Group Mutual Funds; prior thereto,
Executive Vice President, Banc One
Corporation and Chairman and CEO,
Banc One Investment Management
Group; Member, Board of Regents,
Luther College; member of the
Wisconsin Bar Association; member of
Board of Directors, Friends of
Boerner Botanical Gardens; member of
Investment Committee, Greater
Milwaukee Foundation.
o WILLIAM J. SCHNEIDER Chairman of Miller-Valentine
9/24/44 Partners Ltd., a real estate
333 W. Wacker Drive Board Member 1997 198 investment company; formerly, Senior
Chicago, IL 60606 Partner and Chief Operating Officer
(retired, 2004) of Miller-Valentine
Group; member, University of Dayton
Business School Advisory Council;
member, Dayton Philharmonic
Orchestra Association; formerly,
member, Business Advisory Council,
Cleveland Federal Reserve Bank;
formerly, Director, Dayton
Development Coalition.
104 Nuveen Investments
NUMBER PRINCIPAL
YEAR FIRST OF PORTFOLIOS OCCUPATION(S)
NAME, ELECTED OR IN FUND COMPLEX INCLUDING OTHER
BIRTHDATE POSITION(S) HELD APPOINTED OVERSEEN BY DIRECTORSHIPS
& ADDRESS WITH THE FUNDS AND TERM(1) BOARD MEMBER DURING PAST 5 YEARS
------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT BOARD MEMBERS:
o JUDITH M. STOCKDALE Executive Director, Gaylord and
12/29/47 Dorothy Donnelley Foundation (since
333 W. Wacker Drive Board Member 1997 198 1994); prior thereto, Executive
Chicago, IL 60606 Director, Great Lakes Protection
Fund (from 1990 to 1994).
o CAROLE E. STONE Director, Chicago Board Options
6/28/47 Exchange (since 2006); Director, C2
333 W. Wacker Drive Board Member 2007 198 Options Exchange, Incorporated
Chicago, IL 60606 (since 2009); Commissioner, New York
State Commission on Public Authority
Reform (since 2005); formerly,
Chair, New York Racing Association
Oversight Board (2005-2007).
o TERENCE J. TOTH Director, Legal & General Investment
9/29/59 Management America, Inc. (since
333 W. Wacker Drive Board Member 2008 198 2008); Managing Partner, Musso
Chicago, IL 60606 Capital Management (since 2008);
formerly, CEO and President,
Northern Trust Investments
(2004-2007); Executive Vice
President, Quantitative Management &
Securities Lending (2004-2007);
prior thereto, various positions
with Northern Trust Company (since
1994); Member: Goodman Theatre Board
(since 2004), Chicago Fellowship
Boards (since 2005), University of
Illinois Leadership Council Board
(since 2007) and Catalyst Schools of
Chicago Board (since 2008);
formerly, Member: Northern Trust
Mutual Funds Board (2005-2007),
Northern Trust Investments Board
(2004-2007), Northern Trust Japan
Board (2004-2007), Northern Trust
Securities Inc. Board (2003-2007)
and Northern Trust Hong Kong Board
(1997-2004).
INTERESTED BOARD MEMBER:
o JOHN P. AMBOIAN(2) Chief Executive Officer (since July
6/14/61 2007) and Director (since 1999) of
333 W. Wacker Drive Board Member 2008 198 Nuveen Investments, Inc.; Chief
Chicago, IL 60606 Executive Officer (since 2007) of
Nuveen Asset Management, Nuveen
Investments Advisors, Inc. formerly,
President (1999-2004) of Nuveen
Advisory Corp. and Nuveen
Institutional Advisory Corp.(3)
Nuveen Investments 105
Board Members & Officers (continued)
NUMBER
OF PORTFOLIOS
NAME, YEAR FIRST IN FUND COMPLEX PRINCIPAL
BIRTHDATE POSITION(S) HELD ELECTED OR OVERSEEN OCCUPATION(S)
AND ADDRESS WITH THE FUNDS APPOINTED(4) BY OFFICER DURING PAST 5 YEARS
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS:
o GIFFORD R. ZIMMERMAN Managing Director (since 2002),
9/9/56 Chief Assistant Secretary and Associate
333 W. Wacker Drive Administrative 1988 198 General Counsel of Nuveen
Chicago, IL 60606 Officer Investments, LLC; Managing Director,
Associate General Counsel and
Assistant Secretary, of Nuveen Asset
Management (since 2002) and of
Symphony Asset Management LLC,
(since 2003); Vice President and
Assistant Secretary of NWQ
Investment Management Company, LLC.
(since 2002), Nuveen Investments
Advisers Inc. (since 2002),
Tradewinds Global Investors, LLC,
and Santa Barbara Asset Management,
LLC (since 2006), Nuveen HydePark
Group LLC and Nuveen Investment
Solutions, Inc. (since 2007);
Managing Director (since 2004) and
Assistant Secretary (since 1994) of
Nuveen Investments, Inc.; formerly,
Managing Director (2002-2004),
General Counsel (1998-2004) and
Assistant Secretary of Nuveen
Advisory Corp. and Nuveen
Institutional Advisory Corp.(3);
Chartered Financial Analyst.
o WILLIAM ADAMS IV Executive Vice President of Nuveen
6/9/55 Investments, Inc.; Executive Vice
333 W. Wacker Drive Vice President 2007 123 President, U.S. Structured Products
Chicago, IL 60606 of Nuveen Investments, LLC, (since
1999), prior thereto, Managing
Director of Structured Investments.
o MARK J.P. ANSON President and Executive Director of
6/10/59 Nuveen Investments, Inc. (since
333 W. Wacker Drive Vice President 2009 198 2007); President of Nuveen
Chicago, IL 60606 Investments Institutional Services
Group LLC (since 2007); previously,
Chief Executive Officer of the
British Telecom Pension Scheme
(2006-2007) and Chief Investment
Officer of Calpers (1999-2006); PhD,
Chartered Financial Analyst,
Chartered Alternative Investment
Analyst, Certified Public
Accountant, Certified Management
Accountant and Certified Internal
Auditor.
o CEDRIC H. ANTOSIEWICZ Managing Director, (since 2004),
1/11/62 previously, Vice President
333 W. Wacker Drive Vice President 2007 123 (1993-2004) of Nuveen Investments,
Chicago, IL 60606 LLC.
o NIZIDA ARRIAGA Vice President (since 2007) of
6/1/68 Nuveen Investments, LLC; previously,
333 W. Wacker Drive Vice President 2009 198 Portfolio Manager, Allstate
Chicago, IL 60606 Investments, LLC (1996-2006);
Chartered Financial Analyst.
o MICHAEL T. ATKINSON Vice President (since 2002) of
2/3/66 Vice President Nuveen Investments, LLC.; Vice
333 W. Wacker Drive and Assistant 2000 198 President of Nuveen Asset Management
Chicago, IL 60606 Secretary (since 2005).
o MARGO L. COOK Executive Vice President (since Oct
4/11/64 2008) of Nuveen Investments, Inc.;
333 W. Wacker Drive Vice President 2009 198 previously, Head of Institutional
Chicago, IL 60606 Asset Management (2007-2008) of Bear
Stearns Asset Management; Head of
Institutional Asset Mgt (1986-2007)
of Bank of NY Mellon; Chartered
Financial Analyst.
o LORNA C. FERGUSON Managing Director (since 2004) of
10/24/45 Nuveen Investments, LLC; Managing
333 W. Wacker Drive Vice President 1998 198 Director (since 2005) of Nuveen
Chicago, IL 60606 Asset Management; Managing Director
(2004-2005), of Nuveen Advisory
Corp. and Nuveen Institutional
Advisory Corp.(3)
106 Nuveen Investments
NUMBER
OF PORTFOLIOS
NAME, YEAR FIRST IN FUND COMPLEX PRINCIPAL
BIRTHDATE POSITION(S) HELD ELECTED OR OVERSEEN OCCUPATION(S)
AND ADDRESS WITH THE FUNDS APPOINTED(4) BY OFFICER DURING PAST 5 YEARS
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS:
o STEPHEN D. FOY Vice President (since 1993) and
5/31/54 Vice President Funds Controller (since 1998) of
333 W. Wacker Drive and Controller 1998 198 Nuveen Investments, LLC; Vice
Chicago, IL 60606 President (since 2005) of Nuveen
Asset Management; Certified Public
Accountant.
o SCOTT S. GRACE Managing Director, Corporate Finance
8/20/70 Vice President & Development, Treasurer (since
333 West Wacker Drive and Treasurer 2009 198 September 2009) of Nuveen
Chicago, IL 60606 Investments, LLC, formerly,
Treasurer (2006-2009), Senior Vice
President (2008-2009), previously,
Vice President (2006-2008) of Janus
Capital Group, Inc.; formerly.
Senior Associate in Morgan Stanley's
Global Financial Services Group
(2000-2003); Chartered Accountant
Designation.
o WILLIAM T. HUFFMAN Chief Operating Officer, Municipal
5/7/69 Fixed Income (since 2008) of Nuveen
333 W. Wacker Drive Vice President 2009 134 Asset Management; previously,
Chicago, IL 60606 Chairman, President and Chief
Executive Officer (2002 - 2007) of
Northern Trust Global Advisors, Inc.
and Chief Executive Officer (2007)
of Northern Trust Global Investments
Limited; Certified Public
Accountant.
o WALTER M. KELLY Senior Vice President (since 2008),
2/24/70 Chief Compliance Vice President (2006-2008) formerly,
333 W. Wacker Drive Officer and 2003 198 Assistant Vice President and
Chicago, IL 60606 Vice President Assistant General Counsel
(2003-2006) of Nuveen Investments,
LLC; Vice President (since 2006) and
Assistant Secretary (since 2008) of
Nuveen Asset Management.
o DAVID J. LAMB Senior Vice President (since 2009),
3/22/63 formerly, Vice President (2000-2009)
333 W. Wacker Drive Vice President 2000 198 of Nuveen Investments, LLC; Vice
Chicago, IL 60606 President (since 2005) of Nuveen
Asset Management; Certified Public
Accountant.
o TINA M. LAZAR Senior Vice President (since 2009),
8/27/61 formerly, Vice President of Nuveen
333 W. Wacker Drive Vice President 2002 198 Investments, LLC (1999-2009); Vice
Chicago, IL 60606 President of Nuveen Asset Management
(since 2005).
o LARRY W. MARTIN Vice President, Assistant Secretary
7/27/51 Vice President and Assistant General Counsel of
333 W. Wacker Drive and Assistant 1988 198 Nuveen Investments, LLC; Vice
Chicago, IL 60606 Secretary 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 and Assistant Secretary of
Nuveen Investments Advisers Inc.
(since 2002); NWQ Investment
Management Company, LLC (since
2002), Symphony Asset Management LLC
(since 2003), Tradewinds Global
Investors, LLC, Santa Barbara Asset
Management LLC (since 2006) and of
Nuveen HydePark Group, LLC and
Nuveen Investment Solutions, Inc.
(since 2007); formerly, Vice
President and Assistant Secretary of
Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp.(3)
o KEVIN J. MCCARTHY Managing Director (since 2008),
3/26/66 Vice President formerly, Vice President
333 W. Wacker Drive and Secretary 2007 198 (2007-2008), Nuveen Investments,
Chicago, IL 60606 LLC; Managing Director (since 2008),
formerly, Vice President, and
Assistant Secretary, Nuveen Asset
Management, and Nuveen Investments
Holdings, Inc.; Vice President
(since 2007) and Assistant
Secretary, Nuveen Investment
Advisers Inc., Nuveen Investment
Institutional Services Group LLC,
NWQ Investment Management Company,
LLC, Tradewinds Global Investors
LLC, NWQ Holdings, LLC, Symphony
Asset Management LLC, Santa Barbara
Asset Management LLC, Nuveen
HydePark Group, LLC and Nuveen
Investment Solutions, Inc. (since
2007); prior thereto, Partner, Bell,
Boyd & Lloyd LLP (1997- 2007).
Nuveen Investments 107
Board Members & Officers (continued)
NUMBER
OF PORTFOLIOS
NAME, YEAR FIRST IN FUND COMPLEX PRINCIPAL
BIRTHDATE POSITION(S) HELD ELECTED OR OVERSEEN OCCUPATION(S)
AND ADDRESS WITH THE FUNDS APPOINTED(4) BY OFFICER DURING PAST 5 YEARS
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS:
o JOHN V. MILLER Chief Investment Officer and
4/10/67 Managing Director (since 2007),
333 W. Wacker Drive Vice President 2007 134 formerly, Vice President (2002-2007)
Chicago, IL 60606 of Nuveen Asset Management and
Managing Director (since 2007),
formerly Vice President (2002-2007)
Nuveen Investments, LLC; Chartered
Financial Analyst.
o GREGORY MINO Vice President of Nuveen
1/4/71 Investments, LLC (since 2008);
333 W. Wacker Drive Vice President 2009 198 previously, Director (2004-2007) and
Chicago, IL 60606 Executive Director (2007-2008) of
UBS Global Asset Management;
previously, Vice President
(2000-2003) and Director (2003-2004)
of Merrill Lynch Investment
Managers; Chartered Financial
Analyst.
o CHRISTOPHER M. ROHRBACHER Vice President, Nuveen Investments,
8/1/71 Vice President LLC (since 2008); Vice President and
333 W. Wacker Drive and Assistant 2008 198 Assistant Secretary, Nuveen Asset
Chicago, IL 60606 Secretary Management (since 2008); prior
thereto, Associate, Skadden, Arps,
Slate Meagher & Flom LLP
(2002-2008).
o JAMES F. RUANE Vice President, Nuveen Investments,
7/3/62 Vice President LLC (since 2007); prior thereto,
333 W. Wacker Drive and Assistant 2007 198 Partner, Deloitte & Touche USA LLP
Chicago, IL 60606 Secretary (2005-2007), formerly, senior tax
manager (2002-2005); Certified
Public Accountant.
o MARK L. WINGET Vice President, Nuveen Investments,
12/21/68 Vice President LLC (since 2008); Vice President and
333 W. Wacker Drive and Assistant 2008 198 Assistant Secretary, Nuveen Asset
Chicago, IL 60606 Secretary Management (since 2008); prior
thereto, Counsel, Vedder Price P.C.
(1997-2007).
(1) For Dividend Advantage (NAD), Dividend Advantage 2 (NXZ) and Dividend
Advantage 3 (NZF), Board Members serve three year terms, except for two
board members who are elected by the holders of Preferred Shares. The
Board of Trustees for NAD, NXZ and NZF is divided into three classes,
Class I, Class II, and Class III, with each being elected to serve until
the third succeeding annual shareholders' meeting subsequent to its
election or thereafter in each case when its respective successors are
duly elected or appointed, except two board members are elected by the
holders of Preferred Shares to serve until the next annual shareholders'
meeting subsequent to its election or thereafter in each case when its
respective successors are duly elected or appointed. For Performance Plus
(NPP), Municipal Advantage (NMA) and Market Opportunity (NMO), the Board
Members serve a one year term to serve until the next annual meeting or
until their successors shall have been duly elected and qualified. The
first year elected or appointed represents the year in which the board
member was first elected or appointed to any fund in the Nuveen Complex.
(2) Mr. Amboian is an interested trustee because of his position with Nuveen
Investments, Inc. and certain of its subsidiaries, which are affiliates of
the Nuveen Funds.
(3) Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp. were
reorganized into Nuveen Asset Management, effective January 1, 2005.
(4) Officers serve one year terms through July of each year. The year first
elected or appointed represents the year in which the Officer was first
elected or appointed to any fund in the Nuveen Complex.
108 Nuveen Investments
Annual Investment Management Agreement Approval Process
The Investment Company Act of 1940, as amended (the "1940 Act"), provides, in
substance, that each investment advisory agreement between a fund and its
investment adviser will continue in effect from year to year only if its
continuance is approved at least annually by the fund's board members, including
by a vote of a majority of the board members who are not parties to the advisory
agreement or "interested persons" of any parties (the "Independent Board
Members"), cast in person at a meeting called for the purpose of considering
such approval. In connection with such approvals, the fund's board members must
request and evaluate, and the investment adviser is required to furnish, such
information as may be reasonably necessary to evaluate the terms of the advisory
agreement. Accordingly, at a meeting held on May 27-29, 2009 (the "May
Meeting"), the Boards of Trustees or Directors (as the case may be) (each, a
"Board" and each Trustee or Director, a "Board Member") of the Funds, including
a majority of the Independent Board Members, considered and approved the
continuation of the advisory agreements (each an "Advisory Agreement") between
each Fund and Nuveen Asset Management ("NAM") for an additional one-year period.
In preparation for their considerations at the May Meeting, the Board also held
a separate meeting on April 21-22, 2009 (the "April Meeting"). Accordingly, the
factors considered and determinations made regarding the renewals by the
Independent Board Members include those made at the April Meeting.
In addition, in evaluating the Advisory Agreements, the Independent Board
Members reviewed a broad range of information relating to the Funds and NAM,
including absolute performance, fee and expense information for the Funds as
well as comparative performance, fee and expense information for a comparable
peer group of funds, the performance information of recognized and/or customized
benchmarks (as applicable) of the Funds, the profitability of Nuveen for its
advisory activities (which includes its wholly owned subsidiaries other than
Winslow Capital Management, Inc. ("Winslow Capital"), which was recently
acquired in December 2008), and other information regarding the organization,
personnel, and services provided by NAM. The Independent Board Members also met
quarterly as well as at other times as the need arose during the year and took
into account the information provided at such meetings and the knowledge gained
therefrom. Prior to approving the renewal of the Advisory Agreements, the
Independent Board Members reviewed the foregoing information with their
independent legal counsel and with management, reviewed materials from
independent legal counsel describing applicable law and their duties in
reviewing advisory contracts, and met with independent legal counsel in private
sessions without management present. The Independent Board Members considered
the legal advice provided by independent legal counsel and relied upon their
knowledge of NAM, its services and the Funds resulting from their meetings and
other interactions throughout the year and their own business judgment in
determining the factors to be considered in evaluating
Nuveen Investments 109
Annual Investment Management Agreement Approval Process (continued)
the Advisory Agreements. Each Board Member may have accorded different weight to
the various factors in reaching his or her conclusions with respect to a Fund's
Advisory Agreement. The Independent Board Members did not identify any single
factor as all-important or controlling. The Independent Board Members'
considerations were instead based on a comprehensive consideration of all the
information presented. The principal factors considered by the Board and its
conclusions are described below.
A. NATURE, EXTENT AND QUALITY OF SERVICES
In considering renewal of the Advisory Agreements, the Independent Board Members
considered the nature, extent and quality of NAM's services, including advisory
services and administrative services. The Independent Board Members reviewed
materials outlining, among other things, NAM's organization and business; the
types of services that NAM or its affiliates provide and are expected to provide
to the Funds; the performance record of the applicable Fund (as described in
further detail below); and any initiatives Nuveen had taken for the applicable
fund product line.
In reviewing the services provided and the initiatives undertaken during the
past year, the Independent Board Members recognized the severe market turmoil
experienced in the capital markets during recent periods, including sustained
periods of high volatility, credit disruption and government intervention. The
Independent Board Members considered NAM's efforts, expertise and other actions
taken to address matters as they arose that impacted the Funds. The Independent
Board Members recognized the role of the Investment Services group which, among
other things, monitors the various positions throughout the Nuveen fund complex
to identify and address any systematic risks. In addition, the Capital Markets
Committee of NAM provides a multi-departmental venue for developing new policies
to mitigate any risks. The Independent Board Members further recognized NAM's
continuous review of the Nuveen funds' investment strategies and mandates in
seeking to continue to refine and improve the investment process for the funds,
particularly in light of market conditions. With respect to closed-end funds
that issued auction rate preferred shares ("ARPs") or that otherwise utilize
leverage, the Independent Board Members noted, in particular, NAM's efforts in
refi-nancing the preferred shares of such funds frozen by the collapse of the
auction rate market and managing leverage during a period of rapid market
declines, particularly for the non-equity funds. Such efforts included
negotiating and maintaining the availability of bank loan facilities and other
sources of credit used for investment purposes or to satisfy liquidity needs,
liquidating portfolio securities during difficult times to meet leverage ratios,
and seeking alternative forms of debt and other leverage that may over time
reduce financing costs associated with ARPs and enable the funds that have
issued ARPs to restore liquidity to ARPs holders. The Independent Board Members
also noted Nuveen's continued commitment and efforts to keep investors and
financial advisers informed as to its progress with the ARPs through, among
other things, conference calls, emails, press releases, information posted on
its website, and telephone calls and in-person meetings with financial advisers.
In addition to the foregoing, the Independent Board Members also noted the
additional services that NAM or its affiliates provide to closed-end funds,
including, in particular, Nuveen's continued commitment to supporting the
secondary market for the common shares of its closed-end funds
110 Nuveen Investments
through a variety of programs designed to raise investor and analyst awareness
and understanding of closed-end funds. These efforts include maintaining an
investor relations program to provide timely information and education to
financial advisers and investors; providing advertising and marketing for the
closed-end funds; maintaining websites; and providing educational seminars.
As part of their review, the Independent Board Members also evaluated the
background, experience and track record of NAM's investment personnel. In this
regard, the Independent Board Members considered any changes in the personnel,
and the impact on the level of services provided to the Funds, if any. The
Independent Board Members also reviewed information regarding portfolio manager
compensation arrangements to evaluate NAM's ability to attract and retain high
quality investment personnel, preserve stability, and reward performance but not
provide an incentive for taking undue risks.
In addition to advisory services, the Independent Board Members considered the
quality of administrative services provided by NAM and its affiliates including
product management, fund administration, oversight of service providers,
shareholder services, administration of Board relations, regulatory and
portfolio compliance and legal support. Given the importance of compliance, the
Independent Board Members considered NAM's compliance program, including the
report of the chief compliance officer regarding the Funds' compliance policies
and procedures.
Based on their review, the Independent Board Members found that, overall, the
nature, extent and quality of services provided (and expected to be provided) to
the respective Funds under the Advisory Agreements were satisfactory.
B. THE INVESTMENT PERFORMANCE OF THE FUNDS AND NAM
The Board considered the investment performance of each Fund, including the
Fund's historic performance as well as its performance compared to funds with
similar investment objectives (the "Performance Peer Group") based on data
provided by an independent provider of mutual fund data as well as recognized
and/or customized benchmarks (as applicable). The Independent Board Members
reviewed performance information including, among other things, total return
information compared with the Fund's Performance Peer Group and recognized
and/or customized benchmarks (as applicable) for the quarter-, one-, three- and
five-year periods (as applicable) ending December 31, 2008 and for the same
periods (as applicable) ending March 31, 2009. The Independent Board Members
also reviewed performance information of the Nuveen municipal funds managed by
NAM in the aggregate ranked by peer group and the performance of such funds, in
the aggregate, relative to their benchmark. This information supplemented the
Fund performance information provided to the Board at each of its quarterly
meetings.
In comparing a fund's performance with that of its Performance Peer Group, the
Independent Board Members took into account that the closest Performance Peer
Group in certain instances may not adequately reflect the respective fund's
investment objectives and strategies thereby hindering a meaningful comparison
of the fund's performance with that of the Performance Peer Group. The
Independent Board Members further considered the performance of the Funds in the
context of the volatile
Nuveen Investments 111
Annual Investment Management Agreement Approval Process (continued)
market conditions during the past year, and their impact on various asset
classes and the portfolio management of the Funds.
Based on their review and factoring in the severity of market turmoil in 2008,
the Independent Board Members determined that each Fund's investment performance
over time had been satisfactory.
C. FEES, EXPENSES AND PROFITABILITY
1. Fees and Expenses
The Board evaluated the management fees and expenses of each Fund
reviewing, among other things, such Fund's gross management fees, net
management fees and total expense ratios (before and after expense
reimbursements and/or waivers) in absolute terms as well as compared to
the fee and expenses of a comparable universe of unaffiliated funds based
on data provided by an independent fund data provider (the "Peer
Universe") and in certain cases, to a more focused subset of funds in the
Peer Universe (the "Peer Group").
The Independent Board Members further reviewed data regarding the
construction of the applicable Peer Universe and Peer Group. In reviewing
the comparisons of fee and expense information, the Independent Board
Members took into account that in certain instances various factors such
as the asset level of a fund relative to peers, the size and particular
composition of the Peer Universe or Peer Group, the investment objectives
of the peers, expense anomalies, changes in the funds comprising the Peer
Universe or Peer Group from year to year, levels of reimbursement and the
timing of information used may impact the comparative data, thereby
limiting the ability to make a meaningful comparison. In addition, the
Independent Board Members considered, among other things, the differences
in the use and type of leverage compared to the peers. In reviewing the
fee schedule for a Fund, the Independent Board Members also considered the
fund-level and complex-wide breakpoint schedules (described in further
detail below) and any fee waivers and reimbursements provided by Nuveen
(applicable, in particular, for certain closed-end funds launched since
1999).
Based on their review of the fee and expense information provided, the
Independent Board Members determined that each Fund's management fees and
net total expense ratio were reasonable in light of the nature, extent and
quality of services provided to the Fund.
2. Comparisons with the Fees of Other Clients
The Independent Board Members further reviewed information regarding the
nature of services and fee rates offered by NAM to other clients. Such
other clients include NAM's municipal separately managed accounts. In
evaluating the comparisons of fees, the Independent Board Members noted
that the fee rates charged to the Funds and other clients vary, among
other things, because of the different services involved and the
additional regulatory and compliance requirements associated with
registered investment companies, such as the Funds. Accordingly, the
Independent Board Members considered the differences in the product types,
including, but not limited to, the services provided, the structure and
operations, product distribution and
112 Nuveen Investments
costs thereof, portfolio investment policies, investor profiles, account
sizes and regulatory requirements. The Independent Board Members noted, in
particular, that the range of services provided to the Funds (as discussed
above) is much more extensive than that provided to separately managed
accounts. Given the inherent differences in the products, particularly the
extensive services provided to the Funds, the Independent Board Members
believe such facts justify the different levels of fees.
3. Profitability of Nuveen
In conjunction with its review of fees, the Independent Board Members also
considered the profitability of Nuveen for its advisory activities (which
incorporated Nuveen's wholly-owned affiliated sub-advisers other than
Winslow Capital) and its financial condition. The Independent Board
Members reviewed the revenues and expenses of Nuveen's advisory activities
for the last two years, the allocation methodology used in preparing the
profitability data and an analysis of the key drivers behind the changes
in revenues and expenses that impacted profitability in 2008. In addition,
the Independent Board Members reviewed information regarding the financial
results of Nuveen for 2008 based on its Form 8-K filed on March 31, 2009.
The Independent Board Members noted this information supplemented the
profitability information requested and received during the year to help
keep them apprised of developments affecting profitability (such as
changes in fee waivers and expense reimbursement commitments). In this
regard, the Independent Board Members noted that they had also appointed
an Independent Board Member as a point person to review and keep them
apprised of changes to the profitability analysis and/or methodologies
during the year. The Independent Board Members also considered Nuveen's
revenues for advisory activities, expenses, and profit margin compared to
that of various unaffiliated management firms with similar amounts of
assets under management and relatively comparable asset composition
prepared by Nuveen.
In reviewing profitability, the Independent Board Members recognized the
subjective nature of determining profitability which may be affected by
numerous factors including the allocation of expenses. Further, the
Independent Board Members recognized the difficulties in making
comparisons as the profitability of other advisers generally is not
publicly available and the profitability information that is available for
certain advisers or management firms may not be representative of the
industry and may be affected by, among other things, the adviser's
particular business mix, capital costs, types of funds managed and expense
allocations. Notwithstanding the foregoing, the Independent Board Members
reviewed Nuveen's methodology and assumptions for allocating expenses
across product lines to determine profitability. In reviewing
profitability, the Independent Board Members recognized Nuveen's
investment in its fund business.
Based on their review, the Independent Board Members concluded that
Nuveen's level of profitability for its advisory activities was reasonable
in light of the services provided.
Nuveen Investments 113
Annual Investment Management Agreement Approval Process (continued)
In evaluating the reasonableness of the compensation, the Independent
Board Members also considered other amounts paid to NAM by the Funds as
well as any indirect benefits (such as soft dollar arrangements, if any)
NAM and its affiliates receive, or are expected to receive, that are
directly attributable to the management of the Funds, if any. See Section
E below for additional information on indirect benefits NAM may receive as
a result of its relationship with the Funds. Based on their review of the
overall fee arrangements of each Fund, the Independent Board Members
determined that the advisory fees and expenses of the respective Fund were
reasonable.
D. ECONOMIES OF SCALE AND WHETHER FEE LEVELS REFLECT THESE ECONOMIES OF SCALE
With respect to economies of scale, the Independent Board Members have
recognized the potential benefits resulting from the costs of a fund being
spread over a larger asset base, although economies of scale are difficult to
measure and predict with precision, particularly on a fund-by-fund basis. One
method to help ensure the shareholders share in these benefits is to include
breakpoints in the advisory fee schedule. Generally, management fees for funds
in the Nuveen complex are comprised of a fund-level component and a
complex-level component, subject to certain exceptions. Accordingly, the
Independent Board Members reviewed and considered the applicable fund-level
breakpoints in the advisory fee schedules that reduce advisory fees as asset
levels increase. In this regard, the Independent Board Members noted that
although closed-end funds may from time-to-time make additional share offerings,
the growth of their assets will occur primarily through the appreciation of such
funds' investment portfolio. While economies of scale result when costs can be
spread over a larger asset base, the Independent Board Members also recognized
that the asset levels generally declined in 2008 due to, among other things, the
market downturn. Accordingly, for funds with a reduction in assets under
management, advisory fee levels may have increased as breakpoints in the fee
schedule were no longer surpassed.
In addition to fund-level advisory fee breakpoints, the Board also considered
the Funds' complex-wide fee arrangement. Pursuant to the complex-wide fee
arrangement, the fees of the funds in the Nuveen complex generally are reduced
as the assets in the fund complex reach certain levels. The complex-wide fee
arrangement seeks to provide the benefits of economies of scale to fund
shareholders when total fund complex assets increase, even if assets of a
particular fund are unchanged or have decreased. The approach reflects the
notion that some of Nuveen's costs are attributable to services provided to all
its funds in the complex and therefore all funds benefit if these costs are
spread over a larger asset base. Generally, the complex-wide pricing reduces
Nuveen's revenue because total complex fund assets have consistently grown in
prior years. As noted, however, total fund assets declined in 2008 resulting in
a smaller downward adjustment of revenues due to complex-wide pricing compared
to the prior year.
Based on their review, the Independent Board Members concluded that the
breakpoint schedules and complex-wide fee arrangement were acceptable and
reflect economies of scale to be shared with shareholders when assets under
management increase.
114 Nuveen Investments
E. INDIRECT BENEFITS
In evaluating fees, the Independent Board Members received and considered
information regarding potential "fall out" or ancillary benefits NAM or its
affiliates may receive as a result of its relationship with each Fund. In this
regard, the Independent Board Members considered revenues received by affiliates
of NAM for serving as agent at Nuveen's trading desk.
In addition to the above, the Independent Board Members considered whether NAM
received any benefits from soft dollar arrangements whereby a portion of the
commissions paid by a Fund for brokerage may be used to acquire research that
may be useful to NAM in managing the assets of the Funds and other clients. The
Independent Board Members noted that NAM does not currently have any soft dollar
arrangements; however, to the extent certain bona fide agency transactions that
occur on markets that traditionally trade on a principal basis and riskless
principal transactions are considered as generating "commissions," NAM intends
to comply with the applicable safe harbor provisions.
Based on their review, the Independent Board Members concluded that any indirect
benefits received by NAM as a result of its relationship with the Funds were
reasonable and within acceptable parameters.
F. OTHER CONSIDERATIONS
The Independent Board Members did not identify any single factor discussed
previously as all-important or controlling. The Board Members, including the
Independent Board Members, unanimously concluded that the terms of the Advisory
Agreements are fair and reasonable, that NAM's fees are reasonable in light of
the services provided to each Fund and that the Advisory Agreements be renewed.
Nuveen Investments 115
Reinvest Automatically Easily and Conveniently
NUVEEN MAKES REINVESTING EASY. A PHONE CALL IS ALL IT TAKES TO SET UP YOUR
REINVESTMENT ACCOUNT.
NUVEEN CLOSED-END FUNDS DIVIDEND REINVESTMENT PLAN
Your Nuveen Closed-End Fund allows you to conveniently reinvest dividends and/or
capital gains distributions in additional Fund shares.
By choosing to reinvest, you'll be able to invest money regularly and
automatically, and watch your investment grow through the power of tax-free
compounding. Just like dividends or distributions in cash, there may be times
when income or capital gains taxes may be payable on dividends or distributions
that are reinvested.
It is important to note that an automatic reinvestment plan does not ensure a
profit, nor does it protect you against loss in a declining market.
EASY AND CONVENIENT
To make recordkeeping easy and convenient, each month you'll receive a statement
showing your total dividends and distributions, the date of investment, the
shares acquired and the price per share, and the total number of shares you own.
HOW SHARES ARE PURCHASED
The shares you acquire by reinvesting will either be purchased on the open
market or newly issued by the Fund. If the shares are trading at or above net
asset value at the time of valuation, the Fund will issue new shares at the
greater of the net asset value or 95% of the then-current market price. If the
shares are trading at less than net asset value, shares for your account will be
purchased on the open market. If the Plan Agent begins purchasing Fund shares on
the open market while shares are trading below net asset value, but the Fund's
shares subsequently trade at or above their net asset value before the Plan
Agent is able to complete its purchases, the Plan Agent may cease open-market
purchases and may invest the uninvested portion of the distribution in
newly-issued Fund shares at a price equal to the greater of the shares' net
asset value or 95% of the shares' market value on the last business day
immediately prior to the purchase date. Dividends and distributions received to
purchase shares in the open market will normally be invested shortly after the
dividend payment date. No interest will be paid on dividends and distributions
awaiting reinvestment. Because the market price of the shares may increase
before purchases are completed, the average purchase price
116 Nuveen Investments
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.
Nuveen Investments 117
Glossary of Terms Used in this Report
o AUCTION RATE BOND: An auction rate bond is a security whose interest
payments are adjusted periodically through an auction process, which
process typically also serves as a means for buying and selling the bond.
Auctions that fail to attract enough buyers for all the shares offered for
sale are deemed to have "failed," with current holders receiving a
formula-based interest rate until the next scheduled auction.
o AVERAGE ANNUAL TOTAL RETURN: This is a commonly used method to express an
investment's performance over a particular, usually multi-year time
period. It expresses the return that would have been necessary each year
to equal the investment's actual cumulative performance (including change
in NAV or market price and reinvested dividends and capital gains
distributions, if any) over the time period being considered.
o AVERAGE EFFECTIVE MATURITY: The average of the number of years to maturity
of the bonds in a Fund's portfolio, computed by weighting each bond's time
to maturity (the date the security comes due) by the market value of the
security. This figure does not account for the likelihood of prepayments
or the exercise of call provisions unless an escrow account has been
established to redeem the bond before maturity. The market value weighting
for an investment in an inverse floating rate security is the value of the
portfolio's residual interest in the inverse floating rate trust, and does
not include the value of the floating rate securities issued by the trust.
o INVERSE FLOATERS: Inverse floating rate securities, also known as inverse
floaters, are created by depositing a municipal bond, typically with a
fixed interest rate, into a special purpose trust created by a
broker-dealer. This trust, in turn, (a) issues floating rate certificates
typically paying short-term tax-exempt interest rates to third parties in
amounts equal to some fraction of the deposited bond's par amount or
market value, and (b) issues an inverse floating rate certificate
(sometimes referred to as an "inverse floater") to an investor (such as a
Fund) interested in gaining investment exposure to a long-term municipal
bond. The income received by the holder of the inverse floater varies
inversely with the short-term rate paid to the floating rate certificates'
holders, and in most circumstances the holder of the inverse floater bears
substantially all of the underlying bond's downside investment risk. The
holder of the inverse floater typically also benefits disproportionately
from any potential appreciation of the underlying bond's value. Hence, an
inverse floater essentially represents an investment in the underlying
bond on a leveraged basis.
118 Nuveen Investments
o LEVERAGE-ADJUSTED DURATION: Duration is a measure of the expected period
over which a bond's principal and interest will be paid, and consequently
is a measure of the sensitivity of a bond's or bond Fund's value to
changes when market interest rates change. Generally, the longer a bond's
or Fund's duration, the more the price of the bond or Fund will change as
interest rates change. Leverage-adjusted duration takes into account the
leveraging process for a Fund and therefore is longer than the duration of
the Fund's portfolio of bonds.
o MARKET YIELD (ALSO KNOWN AS DIVIDEND YIELD OR CURRENT YIELD): An
investment's current annualized dividend divided by its current market
price.
o NET ASSET VALUE (NAV): A Fund's NAV per common share is calculated by
subtracting the liabilities of the Fund (including any Preferred shares
issued in order to leverage the Fund) from its total assets and then
dividing the remainder by the number of common shares outstanding. Fund
NAVs are calculated at the end of each business day.
o PRE-REFUNDING: Pre-refunding, also known as advanced refundings or
refinancings, is a procedure used by state and local governments to
refinance municipal bonds to lower interest expenses. The issuer sells new
bonds with a lower yield and uses the proceeds to buy U.S. Treasury
securities, the interest from which is used to make payments on the
higher-yielding bonds. Because of this collateral, pre-refunding generally
raises a bond's credit rating and thus its value.
o TAXABLE-EQUIVALENT YIELD: The yield necessary from a fully taxable
investment to equal, on an after-tax basis, the yield of a municipal bond
investment.
o ZERO COUPON BOND: A zero coupon bond does not pay a regular interest
coupon to its holders during the life of the bond. Tax-exempt income to
the holder of the bond comes from accretion of the difference between the
original purchase price of the bond at issuance and the par value of the
bond at maturity and is effectively paid at maturity. The market prices of
zero coupon bonds generally are more volatile than the market prices of
bonds that pay interest periodically.
Nuveen Investments 119
Notes
120 Nuveen Investments
Other Useful Information
BOARD OF DIRECTORS/TRUSTEES
John P. Amboian
Robert P. Bremner
Jack B. Evans
William C. Hunter
David J. Kundert
William J. Schneider
Judith M. Stockdale
Carole E. Stone
Terence J. Toth
FUND MANAGER
Nuveen Asset Management
333 West Wacker Drive
Chicago, IL 60606
CUSTODIAN
State Street Bank & Trust
Company
Boston, MA
TRANSFER AGENT AND SHAREHOLDER SERVICES
State Street Bank & Trust
Company
Nuveen Funds
P.O. Box 43071
Providence, RI 02940-3071
(800) 257-8787
LEGAL COUNSEL
Chapman and Cutler LLP
Chicago, IL
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Ernst & Young LLP
Chicago, IL
QUARTERLY PORTFOLIO OF INVESTMENTS AND PROXY VOTING INFORMATION
You may obtain (i) each Fund's quarterly portfolio of investments, (ii)
information regarding how the Funds voted proxies relating to portfolio
securities held during the twelve-month period ended June 30, 2009, and (iii) a
description of the policies and procedures that the Funds used to determine how
to vote proxies relating to portfolio securities without charge, upon request,
by calling Nuveen Investments toll-free at (800) 257-8787 or on Nuveen's website
at www.nuveen.com.
You may also obtain this and other Fund information directly from the Securities
and Exchange Commission ("SEC"). The SEC may charge a copying fee for this
information. Visit the SEC on-line at http://www.sec.gov or in person at the
SEC's Public Reference Room in Washington, D.C. Call the SEC at (202) 942-8090
for room hours and operation. You may also request Fund information by sending
an e-mail request to publicinfo@sec.gov or by writing to the SEC's Public
References Section at 100 F Street NE, Washington, D.C. 20549.
CEO CERTIFICATION DISCLOSURE
Each Fund's Chief Executive Officer has submitted to the New York Stock Exchange
(NYSE) the annual CEO certification as required by Section 303A.12(a) of the
NYSE Listed Company Manual.
Each Fund has filed with the SEC the certification of its Chief Executive
Officer and Chief Financial Officer required by Section 302 of the
Sarbanes-Oxley Act.
COMMON AND PREFERRED SHARE INFORMATION
Each Fund intends to repurchase and/or redeem shares of its own common or
preferred stock in the future at such times and in such amounts as is deemed
advisable. During the period covered by this report, the Funds repurchased
and/or redeemed shares of their common and/or preferred stock as shown in the
accompanying table.
COMMON SHARES PREFERRED SHARES
FUND REPURCHASED REDEEMED
NPP -- 790
NMA -- 1,938
NMO -- 600
NAD -- 200
NXZ -- --
NZF -- 1,353
Any future repurchases and/or redemptions will be reported to shareholders in
the next annual or semi-annual report.
Nuveen Investments 121
Nuveen Investments:
Serving Investors for Generations
Since 1898, financial advisors and their clients have relied on Nuveen
Investments to provide dependable investment solutions. For the past century,
Nuveen Investments has adhered to the belief that the best approach to investing
is to apply conservative risk-management principles to help minimize volatility.
Building on this tradition, we today offer a range of high quality equity and
fixed-income solutions that are integral to a well-diversified core portfolio.
Our clients have come to appreciate this diversity, as well as our continued
adherence to proven, long-term investing principles.
WE OFFER MANY DIFFERENT INVESTING SOLUTIONS FOR OUR CLIENTS' DIFFERENT NEEDS.
Nuveen Investments is a global investment management firm that seeks to help
secure the long-term goals of institutions and high net worth investors as well
as the consultants and financial advisors who serve them. Nuveen Investments
markets its growing range of specialized investment solutions under the
high-quality brands of HydePark, NWQ, Nuveen, Santa Barbara, Symphony,
Tradewinds and Winslow Capital. In total, the Company managed $141 billion of
assets on September 30, 2009.
FIND OUT HOW WE CAN HELP YOU REACH YOUR FINANCIAL GOALS.
To learn more about the products and services Nuveen Investments offers, talk to
your financial advisor, or call us at (800) 257-8787. Please read the
information provided carefully before you invest. Be sure to obtain a
prospectus, where applicable. Investors should consider the investment objective
and policies, risk considerations, charges and expenses of the Fund carefully
before investing. The prospectus contains this and other information relevant to
an investment in the Fund. For a prospectus, please contact your securities
representative or NUVEEN INVESTMENTS, 333 W. WACKER DR., CHICAGO, IL 60606.
Please read the prospectus carefully before you invest or send money.
Learn more about Nuveen Funds at: WWW.NUVEEN.COM/CEF
o Share prices
o Fund details
o Daily financial news
o Investor education
o Interactive planning tools
Distributed by
Nuveen Investments, LLC
333 West Wacker Drive
Chicago, IL 60606 It's not what you earn,
www.nuveen.com it's what you keep.(R)
EAN-B-1009D
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/CEF/Info/Shareholder.
(To view the code, 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 ("Board") determined that the
registrant has at least one "audit committee financial expert" (as defined in
Item 3 of Form N-CSR) serving on its Audit Committee. The registrant's audit
committee financial expert is Jack B. Evans, who is "independent" for purposes
of Item 3 of Form N-CSR.
Mr. Evans was formerly President and Chief Operating Officer of SCI Financial
Group, Inc., a full service registered broker-dealer and registered investment
adviser ("SCI"). As part of his role as President and Chief Operating Officer,
Mr. Evans actively supervised the Chief Financial Officer (the "CFO") and
actively supervised the CFO's preparation of financial statements and other
filings with various regulatory authorities. In such capacity, Mr. Evans was
actively involved in the preparation of SCI's financial statements and the
resolution of issues raised in connection therewith. Mr. Evans has also served
on the audit committee of various reporting companies. At such companies, Mr.
Evans was involved in the oversight of audits, audit plans, and the preparation
of financial statements. Mr. Evans also formerly chaired the audit committee of
the Federal Reserve Bank of Chicago.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Nuveen Dividend Advantage Municipal Fund 3
The following tables show the amount of fees that Ernst & Young LLP, the Fund's
auditor, billed to the Fund during the Fund's last two full fiscal years. For
engagements with Ernst & Young LLP 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, 2009 $ 34,599 $ 0 $ 0 $ 850
------------------------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0% 0%
pursuant to
pre-approval
exception
------------------------------------------------------------------------------------------------------------------------------------
October 31, 2008 $ 35,039 $ 0 $ 0 $ 850
------------------------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0% 0%
pursuant to
pre-approval
exception
------------------------------------------------------------------------------------------------------------------------------------
(1) "Audit Fees" are the aggregate fees billed for professional services for
the audit of the Fund's annual financial statements and services provided
in connection with statutory and regulatory filings or engagements.
(2) "Audit Related Fees" are the aggregate fees billed for assurance and
related services reasonably related to the performance of the audit or
review of financial statements and are not reported under "Audit Fees."
(3) "Tax Fees" are the aggregate fees billed for professional services for tax
advice, tax compliance, and tax planning.
(4) "All Other Fees" are the aggregate fees billed for products and services
for agreed upon procedures engagements performed for leveraged funds.
SERVICES THAT THE FUND'S AUDITOR BILLED TO THE
ADVISER AND AFFILIATED FUND SERVICE PROVIDERS
The following tables show the amount of fees billed by Ernst & Young LLP to
Nuveen Asset Management ("NAM" or the "Adviser"), and any entity controlling,
controlled by or under common control with NAM that provides ongoing services to
the Fund ("Affiliated Fund Service Provider"), for engagements directly related
to the Fund's operations and financial reporting, during the Fund's last two
full fiscal years.
The tables also show the percentage of fees subject to the pre-approval
exception. The pre-approval exception for services provided to the Adviser and
any Affiliated Fund Service Provider (other than audit, review or attest
services) waives the pre-approval requirement if: (A) the aggregate amount of
all such services provided constitutes no more than 5% of the total amount of
revenues paid to Ernst & Young LLP by the Fund, the Adviser and Affiliated Fund
Service Providers during the fiscal year in which the services are provided that
would have to be pre-approved by the Audit Committee; (B) the Fund did not
recognize the services as non-audit services at the time of the engagement; and
(C) the services are promptly brought to the Audit Committee's attention, and
the Committee (or its delegate) approves the services before the Fund's audit is
completed.
FISCAL YEAR ENDED AUDIT-RELATED FEES TAX FEES BILLED TO ALL OTHER FEES
BILLED TO ADVISER AND ADVISER AND BILLED TO ADVISER
AFFILIATED FUND AFFILIATED FUND AND AFFILIATED FUND
SERVICE PROVIDERS SERVICE PROVIDERS SERVICE PROVIDERS
------------------------------------------------------------------------------------------------------------------------------------
October 31, 2009 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
------------------------------------------------------------------------------------------------------------------------------------
October 31, 2008 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
------------------------------------------------------------------------------------------------------------------------------------
NON-AUDIT SERVICES
The following table shows the amount of fees that Ernst & Young LLP billed
during the Fund's last two full fiscal years for non-audit services. The Audit
Committee is required to pre-approve non-audit services that Ernst & Young LLP
provides to the Adviser and any Affiliated Fund Services Provider, if the
engagement related directly to the Fund's operations and financial reporting
(except for those subject to the pre-approval 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, 2009 $ 850 $ 0 $ 0 $ 850
October 31, 2008 $ 850 $ 0 $ 0 $ 850
"Non-Audit Fees billed to Fund" for both fiscal year ends represent "Tax Fees"
and "All Other Fees" billed to Fund 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 has a separately designated Audit Committee established
in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934,
as amended (15 U.S.C. 78c(a)(58)(A)). The members of the audit committee are
Robert P. Bremner, Jack B. Evans, Terence J. Toth, William J. Schneider and
David J. Kundert.
ITEM 6. SCHEDULE OF INVESTMENTS.
a) See Portfolio of Investments in Item 1.
b) Not applicable.
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 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 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 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 Dividend Advantage Municipal Fund 3.
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:
TYPE OF ACCOUNT NUMBER OF
PORTFOLIO MANAGER MANAGED ACCOUNTS ASSETS
--------------------------------------------------------------------------------
Paul Brennan Registered Investment Company 13 $13.3 billion
Other Pooled Investment Vehicles 0 $0
Other Accounts 1 $1.06 million
* Assets are as of October 31, 2009. 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, 2009, the S&P/Investortools Municipal Bond index was
comprised of 54,552 securities with an aggregate current market value of $1,178
billion.
Base salary. Each portfolio manager is paid a base salary that is set at a level
determined by NAM in accordance with its overall compensation strategy discussed
above. NAM is not under any current contractual obligation to increase a
portfolio manager's base salary.
Cash bonus. Each portfolio manager is also eligible to receive an annual cash
bonus. The level of this bonus is based upon evaluations and determinations made
by each portfolio manager's supervisors, along with reviews submitted by his
peers. These reviews and evaluations often take into account a number of
factors, including the effectiveness of the investment strategies recommended to
the NAM's investment team, the performance of the accounts for which he serves
as portfolio manager relative to any benchmarks established for those accounts,
his effectiveness in communicating investment performance to stockholders and
their representatives, and his contribution to the NAM's investment process and
to the execution of investment strategies. The cash bonus component is also
impacted by the overall performance of Nuveen Investments, Inc. in achieving its
business objectives.
Long-term incentive compensation. In connection with the acquisition of Nuveen
Investments, Inc., by a group of investors led by Madison Dearborn Partners in
November 2007, certain employees, including portfolio managers, received profit
interests in Nuveen's parent. These profit interests entitle the holders to
participate in the appreciation in the value of Nuveen beyond the issue date and
vest over five to seven years, or earlier in the case of a liquidity event. In
addition, in July 2009, Nuveen Investments created and funded a trust, as part
of a newly-established incentive program, which purchased shares of certain
Nuveen Mutual Funds and awarded such shares, subject to vesting, to certain
employees, including portfolio managers.
Material Conflicts of Interest. Each portfolio manager's simultaneous management
of the registrant and the other accounts noted above may present actual or
apparent conflicts of interest with respect to the allocation and aggregation of
securities orders placed on behalf of the registrant and the other account. NAM,
however, believes that such potential conflicts are mitigated by the fact that
the NAM has adopted several policies that address potential conflicts of
interest, including best execution and trade allocation policies that are
designed to ensure (1) that portfolio management is seeking the best price for
portfolio securities under the circumstances, (2) fair and equitable allocation
of investment opportunities among accounts over time and (3) compliance with
applicable regulatory requirements. All accounts are to be treated in a
non-preferential manner, such that allocations are not based upon account
performance, fee structure or preference of the portfolio manager, although the
allocation procedures may provide allocation preferences to funds with special
characteristics (such as favoring state funds versus national funds for
allocations of in-state bonds). In addition, NAM has adopted a Code of Conduct
that sets forth policies regarding conflicts of interest.
Beneficial Ownership of Securities. As of October 31, 2009, the portfolio
manager beneficially owned the following dollar range of equity securities
issued by the registrant and other Nuveen Funds managed by NAM's municipal
investment team.
DOLLAR RANGE OF
EQUITY SECURITIES
DOLLAR RANGE OF BENEFICIALLY OWNED IN
EQUITY THE REMAINDER OF
SECURITIES NUVEEN FUNDS MANAGED
NAME OF PORTFOLIO BENEFICIALLY BY NAM'S MUNICIPAL
MANAGER FUND OWNED IN FUND INVESTMENT TEAM
------------------------------------------------------------------------------------------------------------------
Paul Brennan Nuveen Dividend Advantage Municipal Fund 3 $10,001-$50,000 $100,001-$500,000
PORTFOLIO MANAGER BIO:
Paul Brennan, CFA, CPA, became a portfolio manager of Flagship Financial Inc. in
1994, and subsequently became an Assistant Vice President of NAM upon the
acquisition of Flagship Resources Inc. by Nuveen in 1997. He became Vice
President of NAM in 2002. He currently manages investments for 14
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 registrant's Board implemented after the registrant
last provided disclosure in response to this item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of this report that includes the disclosure
required by this paragraph, based on their evaluation of the controls
and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")
(17 CFR 240.13a-15(b) or 240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter
of the period covered by this report that has materially affected, or
is reasonably likely to materially affect, the registrant's internal
control over financial reporting.
ITEM 12. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit: Not applicable
because the code is posted on registrant's website at www.nuveen.com/CEF/Info/
Shareholder and there were no amendments during the period covered by this
report. (To view the code, 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 Dividend Advantage Municipal Fund 3
-----------------------------------------------------------
By (Signature and Title) /s/ Kevin J. McCarthy
----------------------------------------------
Kevin J. McCarthy
Vice President and Secretary
Date: January 8, 2010
-------------------------------------------------------------------
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 8, 2010
-------------------------------------------------------------------
By (Signature and Title) /s/ Stephen D. Foy
----------------------------------------------
Stephen D. Foy
Vice President and Controller
(principal financial officer)
Date: January 8, 2010
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