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
------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
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(Address of principal executive offices) (Zip code)
Jessica R. Droeger
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
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(Name and address of agent for service)
Registrant's telephone number, including area code: (312) 917-7700
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Date of fiscal year end: October 31, 2003
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Date of reporting period: October 31, 2003
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
ANNUAL REPORT October 31, 2003
Nuveen
Municipal Closed-End
Exchange-Traded
Funds
NUVEEN PERFORMANCE PLUS MUNICIPAL FUND
NPP
NUVEEN MUNICIPAL ADVANTAGE FUND
NMA
NUVEEN MUNICIPAL MARKET OPPORTUNITY FUND
NMO
NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND
NAD
NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND 2
NXZ
NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND 3
NZF
Photo of: Man holding up child in his arms.
Photo of: 2 woman and 2 girls looking at seashells.
DEPENDABLE,
TAX-FREE INCOME
BECAUSE
IT'S NOT WHAT YOU EARN,
IT'S WHAT YOU KEEP.(R)
Logo: NUVEEN Investments
FASTER INFORMATION
RECEIVE YOUR
NUVEEN FUND REPORT
ELECTRONICALLY
By registering for electronic delivery, you will receive an e-mail as soon as
your Nuveen Fund information is available. Click on the link and you will be
taken directly to the report. Your Fund report can be viewed and saved on your
computer. Your report will arrive faster via e-mail than by traditional mail.
Registering is easy and only takes a few minutes (see instructions at right).
--------------------------------------------------------------------------------
SOME COMMON CONCERNS:
WILL MY E-MAIL ADDRESS BE DISTRIBUTED TO OTHER COMPANIES?
No, your e-mail address is strictly confidential and will not be used for
anything other than notification of shareholder information.
WHAT IF I CHANGE MY MIND AND WANT TO RECEIVE INVESTOR MATERIALS THROUGH REGULAR
MAIL DELIVERY AGAIN?
If you decide you do not like receiving your reports electronically, it's a
simple process to go back to regular mail delivery.
--------------------------------------------------------------------------------
IF YOUR NUVEEN FUND DIVIDENDS AND STATEMENTS
COME FROM YOUR FINANCIAL ADVISOR OR BROKERAGE ACCOUNT,
FOLLOW THE STEPS OUTLINED BELOW:
1 Go to WWW.INVESTORDELIVERY.COM and follow the simple instructions, using
the address sheet that accompanied this report as a guide.
2 You'll be taken to a page with several options. Select the NEW
ENROLLMENT-CREATE screen and follow the simple instructions.
3 Click Submit. Confirm the information you just entered is correct, then
click Submit again.
4 You should get a confirmation e-mail within 24 hours. If you do not, go
back through these steps to make sure all the information is correct.
5 Use this same process if you need to change your registration information
or cancel internet viewing.
IF YOUR NUVEEN FUND DIVIDENDS AND STATEMENTS
COME DIRECTLY TO YOU FROM NUVEEN,
FOLLOW THE STEPS OUTLINED BELOW:
1 Go to WWW.NUVEEN.COM
2 Select ACCESS YOUR ACCOUNT. Select the E-REPORT ENROLLMENT section. Click
on Enrollment Today.
3 You'll be taken to a screen that asks for your Social Security number and
e-mail address. Fill in this information, then click Enroll.
4 You should get a confirmation e-mail within 24 hours. If you do not, go
back through these steps to make sure all the information is correct.
5 Use this same process if you need to change your registration information
or cancel internet viewing.
Logo: NUVEEN Investments
Photo of: Timothy R. Schwertfeger
Chairman of the Board
Sidebar text: WE THINK YOUR NUVEEN FUND CAN BE AN IMPORTANT BUILDING BLOCK IN A
PORTFOLIO DESIGNED TO PERFORM WELL THROUGH A VARIETY OF MARKET CONDITIONS.
Dear
SHAREHOLDER
I am very pleased to report that for the year ended October 31, 2003, your
Nuveen Fund continued to provide you with attractive monthly tax-free income.
Your Nuveen Fund is managed with a value investing strategy that puts an
emphasis on finding securities that we think are undervalued or underrated. We
believe that there are always some municipal bonds that the market is not
properly valuing, and that by using a consistent, research-oriented management
approach we have the opportunity to find them for your Fund.
In this low-rate environment, many have begun to wonder whether interest rates
will soon start to rise, and whether that possibility should cause them to
adjust their holdings of fixed-income investments. We believe that by
constructing a carefully balanced portfolio with the help of a trusted
investment professional you may be able to reduce your overall investment risk
and give yourself a better chance to meet your financial goals. We think that
municipal bond investments like your Nuveen Fund can be important building
blocks in a portfolio designed to perform well through a variety of market
conditions.
Since 1898, Nuveen Investments has offered financial products and solutions that
incorporate careful research, diversification, and the application of
conservative risk-management principles. We are grateful that you have chosen us
as a partner as you pursue your financial goals. We look forward to continuing
to earn your trust in the months and years ahead.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
December 15, 2003
1
Nuveen National Municipal Closed-End Exchange-Traded Funds
(NPP, NMA, NMO, NAD, NXZ, NZF)
Portfolio Manager's
COMMENTS
Portfolio manager Tom Spalding discusses U.S. economic and market conditions,
key investment strategies, and the annual performance of these national Funds.
With 27 years of investment experience at Nuveen, Tom has managed NXZ since its
inception in 2001, adding NPP, NMA, NMO, NAD, and NZF in January 2003.
WHAT FACTORS AFFECTED THE U.S. ECONOMY AND MUNICIPAL MARKET DURING THE 12-MONTH
PERIOD ENDED OCTOBER 31, 2003?
Over the 12-month reporting period the two greatest influences on the general
economy continued to be historically low interest rates and the overall pace of
economic improvement. In June 2003, the Federal Reserve reduced the fed funds
rate to 1.0%, the lowest level since 1958. The Fed's accommodative monetary
policy coupled with Washington's tax relief measures and increased spending for
defense helped to fuel an 8.2% year-over-year jump in the third-quarter Gross
Domestic Product (GDP), up from 3.3% in the second quarter. At the same time,
inflation remained under control throughout the period.
In the municipal market, the slower rate of economic recovery over the majority
of this reporting period, low interest rates, and lack of inflationary pressures
helped many municipal bonds perform well. During the summer of 2003, however,
stronger-than-expected economic data precipitated a spike in bond yields and a
corresponding drop in bond prices that impacted results across all fixed-income
markets, including the municipal market, for the 12-month period ended October
31, 2003.
During the first 10 months of 2003, municipal supply nationally remained robust,
with $319.9 billion in new bonds, up 8% over the same period in 2002.
HOW DID THESE NUVEEN FUNDS PERFORM OVER THIS REPORTING PERIOD?
Individual results for these Funds, as well as for relevant benchmarks, are
presented in the accompanying table.
TOTAL RETURN LEHMAN LIPPER
MARKET YIELD ON NAV TOTAL RETURN1 AVERAGE2
--------------------------------------------------------------------------------
1 YEAR 1 YEAR 1 YEAR
TAXABLE- ENDED ENDED ENDED
10/31/03 EQUIVALENT3 10/31/03 10/31/03 10/31/03
--------------------------------------------------------------------------------
NPP 6.64% 9.22% 6.97% 5.11% 8.08%
--------------------------------------------------------------------------------
NMA 6.68% 9.28% 8.71% 5.11% 8.08%
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NMO 6.63% 9.21% 10.24% 5.11% 8.08%
--------------------------------------------------------------------------------
NAD 6.79% 9.43% 8.41% 5.11% 8.08%
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NXZ 6.95% 9.65% 8.67% 5.11% 8.08%
--------------------------------------------------------------------------------
NZF 6.87% 9.54% 7.82% 5.11% 8.08%
--------------------------------------------------------------------------------
Past performance is not predictive of future results.
For additional information, see the individual Performance Overview for your
Fund in this report.
For the 12 months ended October 31, 2003, all six of the Funds in this report
outperformed the unleveraged Lehman Brothers Municipal Bond Index. NMA, NMO, NAD
and NXZ also outperformed their Lipper peer group average, while NPP and NZF
trailed this measure. The use of leverage was one of the factors that influenced
the performances of these Funds relative to the Lehman index over the past 12
months. While this
1 The total annual returns on common share net asset value (NAV) for these
Nuveen Funds are compared with the total annual return of the Lehman Brothers
Municipal Bond Index, an unleveraged, unmanaged index comprising a broad range
of investment-grade municipal bonds. Results for the Lehman index do not
reflect any expenses.
2 The total returns of these Funds are compared with the average annualized
return of the 62 funds in the Lipper General Leveraged Municipal Debt Funds
category. Fund and Lipper returns assume reinvestment of dividends.
3 The taxable-equivalent yield represents the yield that must be earned on a
taxable investment, other than an investment that generates qualified dividend
income taxable at a maximum rate of 15%, in order to equal the yield of the
Nuveen Fund on an after-tax basis. It is calculated using the current market
yield and a federal income tax rate of 28%.
2
is a strategy that carries price risk and additional volatility, leveraging can
provide opportunities for additional income for common shareholders, especially
during periods of low short-term interest rates.
In general, the Funds also benefited from their duration4 positioning during
this period. As of October 31, 2003, the durations of these Funds ranged from
8.94 to 10.22, compared with 8.22 for the Lehman index. These durations were
long enough to enable these Funds to benefit as interest rates declined during
most of the 12-month reporting period and short enough to offer some protection
as interest rates rose in recent months. In general, investments with longer
durations would be expected to outperform those with shorter durations during
periods of declining interest rates, all other factors being equal.
In addition to leverage and duration, factors such as call exposure, portfolio
trading activity, and the price movement of specific sectors and holdings also
had an impact on the Funds' relative performances during this period. For
example, at the beginning of this reporting period, NPP held a higher
concentration of airline-backed bonds than the other five Funds. In recent
months, airline bonds started to rebound, recovering much of their value.
Because we had already begun to trim NPP's airline allocation to bring it more
in line with the other Funds, the Fund did not benefit from the recovery of
these bonds to the extent that the others did.
HOW DID THE MARKET ENVIRONMENT AFFECT THE FUNDS' DIVIDENDS AND SHARE PRICES?
With short-term interest rates remaining at historically low levels, the
dividend-paying capabilities of all of these Funds benefited from their use of
leverage. During the 12 months ended October 31, 2003, continued low short-term
rates enabled us to implement three dividend increases in NPP, NAD, and NXZ, two
in NMA and NZF, and one in NMO.
Even at these dividend levels, each Fund's common share net investment income
during the period exceeded the amount of dividends paid to common shareholders.
This excess net investment income, along with any excess net investment income
from prior fiscal periods, was held in reserve by the Funds as undistributed net
investment income (UNII) and is part of the Funds' net asset value. The Funds,
over time, will pay all their net investment income out to common shareholders.
However, UNII reserves may help the Funds maintain more stable common share
dividend levels over time should the short-term rates the Funds pay on their
MuniPreferred shares rise or net common share earnings otherwise decline.
4 Duration is a measure of a fund's NAV volatility in reaction to interest rate
movements. Fund duration, also known as leverage-adjusted duration, takes into
account the leveraging process for a fund and therefore is generally longer
than the duration of the actual portfolio of individual bonds that make up the
fund. References to duration in this commentary are intended to indicate fund
duration unless otherwise noted.
3
Despite the increased volatility in the fixed-income markets during the summer
of 2003, the Funds' share prices and NAVs finished the period higher than they
had been at the beginning. As of October 31, 2003, the discounts to common share
NAV for all six Funds were narrower than they had been 12 months earlier.
WHAT KEY STRATEGIES WERE USED TO MANAGE THESE FUNDS DURING THE FISCAL YEAR ENDED
OCTOBER 31, 2003?
Over this 12-month reporting period, we continued to place strong emphasis on
keeping the Funds fully invested and well diversified, improving call
protection, and enhancing dividend-paying capabilities. We also continued to
focus on managing the Funds'durations as a way of enhancing our ability to
mitigate interest rate risk and produce potentially more consistent returns over
time. Interest rate risk is the risk that the value of a Fund's portfolio will
decline when market interest rates rise (since bond prices move in the opposite
direction of interest rates). The longer the duration of a Fund's portfolio, the
greater its interest rate risk. As a result of our efforts, the durations of all
six Funds shortened over the 12 month reporting period.
In line with the steepness of the municipal yield curve, the majority of our
purchase activity over the past year focused on value opportunities in the
intermediate part of the yield curve (i.e., bonds that mature in 15 to 20
years). In many cases, bonds in this part of the curve offered yields similar to
those of longer-term bonds but, in our opinion, had less inherent interest rate
risk. In the recent market environment, we have also focused on bonds offering
above-market coupons that can help support the Funds' dividends and on issues in
the low AA/high A credit quality sectors that can add diversification.
4
HOW WERE THE FUNDS POSITIONED IN TERMS OF CREDIT QUALITY AND BOND CALLS AS OF
OCTOBER 31, 2003?
We believe that, given the current geopolitical and economic climate,
maintaining strong credit quality remains a vital requirement. As of October 31,
2003, these Nuveen Funds offered excellent credit quality, with allocations of
bonds rated AAA/U.S. guaranteed and AA ranging from 65% to 83%.
Looking at bond calls, these Funds offer good levels of call protection over the
next two years, with potential call exposure ranging from 2% in NXZ and NZF to
11% in NPP during 2004 and 2005. The number of bond calls will depend largely on
market interest rates in coming months.
In general, we believe that these Nuveen Funds can continue to serve as
attractive sources of tax-free income, while simultaneously offering the
potential for portfolio diversification. In our opinion, the Funds represent a
quality component of a well- balanced core investment portfolio that can
continue to benefit shareholders over time.
5
Nuveen Performance Plus Municipal Fund, Inc.
Performance
OVERVIEW As of October 31, 2003
NPP
Pie Chart:
CREDIT QUALITY
AAA/U.S. Guaranteed 69%
AA 14%
A 5%
BBB 8%
NR 3%
BB or Lower 1%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $14.64
--------------------------------------------------
Common Share Net Asset Value $15.45
--------------------------------------------------
Market Yield 6.64%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 9.22%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $925,525
--------------------------------------------------
Average Effective Maturity (Years) 17.33
--------------------------------------------------
Leverage-Adjusted Duration 9.99
--------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (Inception 6/22/89)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 9.58% 6.97%
--------------------------------------------------
5-Year 5.54% 6.24%
--------------------------------------------------
10-Year 5.50% 6.30%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
U.S. Guaranteed 16%
--------------------------------------------------
Tax Obligation/General 15%
--------------------------------------------------
Tax Obligation/Limited 14%
--------------------------------------------------
Utilities 10%
--------------------------------------------------
Healthcare 9%
--------------------------------------------------
Bar Chart:
2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Nov 0.077
Dec 0.078
Jan 0.078
Feb 0.078
Mar 0.0795
Apr 0.0795
May 0.0795
Jun 0.0795
Jul 0.0795
Aug 0.0795
Sep 0.081
Oct 0.081
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
11/1/02 14.4
14.29
14.12
13.77
13.95
14.01
13.86
13.86
14.15
14.3
13.98
14.02
14.16
14.34
14.27
14.16
14.15
14.43
14.48
14.45
14.28
14.46
14.42
14.5
14.59
14.68
14.89
15.05
15.48
15.63
15.78
15.12
15.32
15.25
15.36
14.55
14.16
14.37
14.02
14.11
14.16
14.34
14.47
14.44
14.55
14.54
14.45
14.65
10/31/03 14.64
1 Taxable-equivalent yield represents the yield that must be earned on a taxable
investment, other than an investment that generates qualified dividend income
that is taxable at a maximum rate of 15%, in order to equal the yield of the
Nuveen Fund on an after-tax basis. It is calculated using the current market
yield and a federal income tax rate of 28%.
2 The Fund also paid shareholders capital gains and net ordinary income
distributions in December 2002 of $0.0254 per share.
6
Nuveen Municipal Advantage Fund, Inc.
Performance
OVERVIEW As of October 31, 2003
NMA
Pie Chart:
CREDIT QUALITY
AAA/U.S. Guaranteed 60%
AA 15%
A 6%
BBB 17%
BB or Lower 2%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $15.44
--------------------------------------------------
Common Share Net Asset Value $15.62
--------------------------------------------------
Market Yield 6.68%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 9.28%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $671,147
--------------------------------------------------
Average Effective Maturity (Years) 18.75
--------------------------------------------------
Leverage-Adjusted Duration 8.99
--------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (Inception 12/19/89)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 13.17% 8.71%
--------------------------------------------------
5-Year 6.61% 6.51%
--------------------------------------------------
10-Year 6.07% 6.43%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Healthcare 17%
--------------------------------------------------
Utilities 17%
--------------------------------------------------
U.S. Guaranteed 14%
--------------------------------------------------
Housing/Single Family 11%
--------------------------------------------------
Transportation 10%
--------------------------------------------------
Bar Chart:
2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Nov 0.082
Dec 0.0835
Jan 0.0835
Feb 0.0835
Mar 0.086
Apr 0.086
May 0.086
Jun 0.086
Jul 0.086
Aug 0.086
Sep 0.086
Oct 0.086
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
11/1/02 14.65
14.78
14.44
14.32
14.35
14.58
14.39
14.33
14.7
14.75
14.48
14.56
14.75
14.75
14.8
14.79
14.83
14.91
15.02
15
14.72
15
15.04
14.97
15
15.18
15.39
15.53
15.98
16.31
16.39
15.69
15.9
15.92
16.01
15.44
14.94
15.22
14.82
14.94
15.09
15.12
15.14
15.27
15.37
15.31
15.19
15.3
10/31/03 15.44
1 Taxable-equivalent yield represents the yield that must be earned on a taxable
investment, other than an investment that generates qualified dividend income
that is taxable at a maximum rate of 15%, in order to equal the yield of the
Nuveen Fund on an after-tax basis. It is calculated using the current market
yield and a federal income tax rate of 28%.
2 The Fund also paid shareholders capital gains and net ordinary income
distributions in December 2002 of $0.0733 per share.
7
Nuveen Municipal Market Opportunity Fund, Inc.
Performance
OVERVIEW As of October 31, 2003
NMO
Pie Chart:
CREDIT QUALITY
AAA/U.S. Guaranteed 67%
AA 10%
A 12%
BBB 8%
NR 1%
BB or Lower 2%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $14.29
--------------------------------------------------
Common Share Net Asset Value $15.11
--------------------------------------------------
Market Yield 6.63%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 9.21%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $687,955
--------------------------------------------------
Average Effective Maturity (Years) 17.92
--------------------------------------------------
Leverage-Adjusted Duration 8.94
--------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (Inception 3/21/90)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 10.62% 10.24%
--------------------------------------------------
5-Year 4.53% 5.42%
--------------------------------------------------
10-Year 5.01% 5.85%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Tax Obligation/General 23%
--------------------------------------------------
Transportation 16%
--------------------------------------------------
Tax Obligation/Limited 13%
--------------------------------------------------
U.S. Guaranteed 13%
--------------------------------------------------
Healthcare 10%
--------------------------------------------------
Bar Chart:
2002-2003 Monthly Tax-Free Dividends Per Share
Nov 0.078
Dec 0.078
Jan 0.078
Feb 0.078
Mar 0.079
Apr 0.079
May 0.079
Jun 0.079
Jul 0.079
Aug 0.079
Sep 0.079
Oct 0.079
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
11/1/02 13.83
14.07
13.8
13.57
13.68
13.8
13.6
13.63
13.87
13.99
13.54
13.72
13.75
13.92
13.89
13.89
13.82
14.05
14.08
14.05
13.94
14.1
14.15
14.1
14.19
14.19
14.61
14.62
14.94
15.16
15.33
14.76
14.98
15.09
15.12
14.47
13.88
14.24
13.88
13.98
14.11
14.1
14.09
14.2
14.21
14.17
14.05
14.12
10/31/03 14.29
1 Taxable-equivalent yield represents the yield that must be earned on a taxable
investment, other than an investment that generates qualified dividend income
that is taxable at a maximum rate of 15%, in order to equal the yield of the
Nuveen Fund on an after-tax basis. It is calculated using the current market
yield and a federal income tax rate of 28%.
8
Nuveen Dividend Advantage Municipal Fund
Performance
OVERVIEW As of October 31, 2003
NAD
Pie Chart:
CREDIT QUALITY
AAA/U.S. Guaranteed 65%
AA 10%
A 2%
BBB 7%
NR 11%
BB or Lower 5%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $15.12
--------------------------------------------------
Common Share Net Asset Value $15.17
--------------------------------------------------
Market Yield 6.79%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 9.43%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $595,266
--------------------------------------------------
Average Effective Maturity (Years) 16.72
--------------------------------------------------
Leverage-Adjusted Duration 9.18
--------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (Inception 5/26/99)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 11.41% 8.41%
--------------------------------------------------
Since Inception 6.67% 7.84%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Healthcare 16%
--------------------------------------------------
Transportation 14%
--------------------------------------------------
Tax Obligation/General 14%
--------------------------------------------------
U.S. Guaranteed 12%
--------------------------------------------------
Tax Obligation/Limited 12%
--------------------------------------------------
Bar Chart:
2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Nov 0.081
Dec 0.082
Jan 0.082
Feb 0.082
Mar 0.082
Apr 0.082
May 0.082
Jun 0.083
Jul 0.083
Aug 0.083
Sep 0.0855
Oct 0.0855
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
11/1/02 14.51
14.5
14.46
14.34
14.29
14.4
14.38
14.4
14.61
14.95
14.29
14.5
14.57
14.79
14.92
14.87
14.98
15
15.04
14.93
14.48
14.74
14.75
14.84
14.87
14.95
15.11
15.29
15.7
15.74
16.02
15.75
15.78
15.72
15.67
14.81
14.5
14.73
14.48
14.58
14.44
14.67
14.75
14.94
14.9
14.82
14.82
14.95
10/31/03 15.12
1 Taxable-equivalent yield represents the yield that must be earned on a taxable
investment, other than an investment that generates qualified dividend income
that is taxable at a maximum rate of 15%, in order to equal the yield of the
Nuveen Fund on an after-tax basis. It is calculated using the current market
yield and a federal income tax rate of 28%.
9
Nuveen Dividend Advantage Municipal Fund 2
Performance
OVERVIEW As of October 31, 2003
NXZ
Pie Chart:
CREDIT QUALITY
AAA/U.S. Guaranteed 58%
AA 7%
A 16%
BBB 8%
NR 2%
BB or Lower 9%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $14.85
--------------------------------------------------
Common Share Net Asset Value $15.13
--------------------------------------------------
Market Yield 6.95%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 9.65%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $443,101
--------------------------------------------------
Average Effective Maturity (Years) 25.19
--------------------------------------------------
Leverage-Adjusted Duration 10.22
--------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (Inception 3/27/01)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 14.39% 8.67%
--------------------------------------------------
Since Inception 6.09% 8.59%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Healthcare 24%
--------------------------------------------------
Tax Obligation/Limited 19%
--------------------------------------------------
Transportation 14%
--------------------------------------------------
Water and Sewer 9%
--------------------------------------------------
Tax Obligation/General 9%
--------------------------------------------------
Bar Chart:
2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Nov 0.079
Dec 0.0815
Jan 0.0815
Feb 0.0815
Mar 0.0845
Apr 0.0845
May 0.0845
Jun 0.086
Jul 0.086
Aug 0.086
Sep 0.086
Oct 0.086
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
11/1/02 14
14.15
13.83
13.54
13.72
14.08
13.89
13.77
14.25
14.21
14.21
13.98
14.15
14.23
14.41
14.21
14.2
14.44
14.55
14.38
14.31
14.56
14.65
14.55
14.58
14.65
14.79
14.89
15.28
15.57
15.67
15.29
15.4
15.55
15.3
14.8
14.6
14.63
14.48
14.47
14.5
14.62
14.7
14.84
14.84
14.84
14.66
14.8
10/31/03 14.85
1 Taxable-equivalent yield represents the yield that must be earned on a taxable
investment, other than an investment that generates qualified dividend income
that is taxable at a maximum rate of 15%, in order to equal the yield of the
Nuveen Fund on an after-tax basis. It is calculated using the current market
yield and a federal income tax rate of 28%.
2 The Fund also paid shareholders a capital gains distribution in December 2002
of $0.0093 per share.
10
Nuveen Dividend Advantage Municipal Fund 3
Performance
OVERVIEW As of October 31, 2003
NZF
Pie Chart:
CREDIT QUALITY
AAA/U.S. Guaranteed 72%
AA 11%
A 2%
BBB 9%
NR 4%
BB or Lower 2%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $13.80
--------------------------------------------------
Common Share Net Asset Value $14.74
--------------------------------------------------
Market Yield 6.87%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 9.54%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $594,154
--------------------------------------------------
Average Effective Maturity (Years) 21.56
--------------------------------------------------
Leverage-Adjusted Duration 10.00
--------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (Inception 9/25/01)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 9.04% 7.82%
--------------------------------------------------
Since Inception 2.30% 7.65%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Transportation 17%
--------------------------------------------------
Healthcare 16%
--------------------------------------------------
Water and Sewer 12%
--------------------------------------------------
Tax Obligation/Limited 12%
--------------------------------------------------
Tax Obligation/General 9%
--------------------------------------------------
Bar Chart:
2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Nov 0.0755
Dec 0.0755
Jan 0.0755
Feb 0.0755
Mar 0.078
Apr 0.078
May 0.078
Jun 0.079
Jul 0.079
Aug 0.079
Sep 0.079
Oct 0.079
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
11/1/02 13.62
13.63
13.37
13.23
13.26
13.55
13.19
13.05
13.49
13.62
13.35
13.44
13.62
13.74
13.85
13.73
13.55
13.73
13.92
13.73
13.57
13.82
13.97
13.85
13.93
14.07
14.2
14.28
14.5
14.73
14.86
14.55
14.49
14.75
14.63
14.15
13.69
13.91
13.7
13.84
13.78
13.81
13.8
13.72
13.72
13.8
13.71
13.82
10/31/03 13.8
1 Taxable-equivalent yield represents the yield that must be earned on a taxable
investment, other than an investment that generates qualified dividend income
that is taxable at a maximum rate of 15%, in order to equal the yield of the
Nuveen Fund on an after-tax basis. It is calculated using the current market
yield and a federal income tax rate of 28%.
11
Report of
INDEPENDENT AUDITORS
THE BOARD OF DIRECTORS/TRUSTEES AND SHAREHOLDERS
NUVEEN PERFORMANCE PLUS MUNICIPAL FUND, INC.
NUVEEN MUNICIPAL ADVANTAGE FUND, INC.
NUVEEN MUNICIPAL MARKET OPPORTUNITY FUND, INC.
NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND
NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND 2
NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND 3
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Nuveen Performance Plus Municipal Fund, Inc.,
Nuveen Municipal Advantage Fund, Inc., Nuveen Municipal Market Opportunity Fund,
Inc., Nuveen Dividend Advantage Municipal Fund, Nuveen Dividend Advantage
Municipal Fund 2 and Nuveen Dividend Advantage Municipal Fund 3 as of October
31, 2003, and the related statements of operations and changes in net assets and
the financial highlights for the periods indicated therein. These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of investments owned as of October 31, 2003, by correspondence with
the custodian and brokers or by other appropriate auditing procedures where
replies from brokers were not received. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of
Nuveen Performance Plus Municipal Fund, Inc., Nuveen Municipal Advantage Fund,
Inc., Nuveen Municipal Market Opportunity Fund, Inc., Nuveen Dividend Advantage
Municipal Fund, Nuveen Dividend Advantage Municipal Fund 2 and Nuveen Dividend
Advantage Municipal Fund 3 at October 31, 2003, and the results of their
operations, changes in their net assets and financial highlights for the periods
indicated therein in conformity with accounting principles generally accepted in
the United States.
/s/ Ernst & Young LLP
Chicago, Illinois
December 12, 2003
12
Nuveen Performance Plus Municipal Fund, Inc. (NPP)
Portfolio of
INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 1.7%
$ 3,615 Alabama Water Pollution Control Authority, Revolving Fund Loan 8/05 at 100.00 AAA $ 3,943,929
Bonds, Series 1994A, 6.750%, 8/15/17 - AMBAC Insured
Jefferson County, Alabama, Sewer Revenue Warrants,
Series 1997A Refunding:
3,640 5.625%, 2/01/22 (Pre-refunded to 2/01/07) - FGIC Insured 2/07 at 101.00 AAA 4,093,107
1,435 5.625%, 2/01/22 - FGIC Insured 2/07 at 101.00 AAA 1,551,321
3,820 5.375%, 2/01/27 (Pre-refunded to 2/01/07) - FGIC Insured 2/07 at 100.00 AAA 4,229,695
1,505 5.375%, 2/01/27 - FGIC Insured 2/07 at 100.00 AAA 1,572,289
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 1.3%
1,000 Arizona State Transportation Board, Highway Revenue Bonds, 7/12 at 100.00 AAA 1,055,110
Series 2002B, 5.250%, 7/01/22
Phoenix, Arizona, Civic Improvement Corporation, Senior Lien
Airport Revenue Bonds, Series 2002B:
5,365 5.750%, 7/01/15 (Alternative Minimum Tax) - FGIC Insured 7/12 at 100.00 AAA 5,867,701
5,055 5.750%, 7/01/16 (Alternative Minimum Tax) - FGIC Insured 7/12 at 100.00 AAA 5,494,532
------------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 0.6%
5,080 Independence County, Arkansas, Hydroelectric Power Revenue 5/13 at 100.00 A 5,093,106
Bonds, Series 2003, 5.350%, 5/01/28 - ACA Insured
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 12.7%
11,000 Anaheim Public Financing Authority, California, Subordinate No Opt. Call AAA 4,685,230
Lease Revenue Bonds, Anaheim Public Improvements
Project, Series 1997C, 0.000%, 9/01/20 - FSA Insured
2,000 California Health Facilities Financing Authority, Revenue Bonds, 3/13 at 100.00 A 1,834,680
Adventist Health System/West, Series 2003A,
5.000%, 3/01/33
6,435 State of California, General Obligation Refunding Bonds, No Opt. Call AAA 7,611,768
Series 2002, 6.000%, 4/01/16 - AMBAC Insured
California Department of Water Resources, Power Supply
Revenue Bonds, Series 2002A:
4,000 6.000%, 5/01/15 5/12 at 101.00 A3 4,544,160
2,500 5.375%, 5/01/22 5/12 at 101.00 A3 2,560,725
6,925 East Bay Municipal Utility District, Alameda and Contra Costa 6/06 at 100.00 AAA 6,938,919
Counties, California, Water System Subordinated Revenue
Refunding Bonds, Series 1996, 4.750%, 6/01/21 -
FGIC Insured
10,000 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 BBB 9,123,400
Tobacco Settlement Asset-Backed Bonds, Series 2003A-1,
6.750%, 6/01/39
1,000 Mt. Diablo Hospital District, California Insured Hospital 12/03 at 102.00 AAA 1,023,520
Revenue Bonds, Series 1993A, 5.125%, 12/01/23 -
AMBAC Insured
13,450 Ontario Redevelopment Financing Authority, San Bernardino No Opt. Call AAA 17,597,846
County, California, Revenue Refunding Bonds, Redevelopment
Project 1, Series 1995, 7.200%, 8/01/17 - MBIA Insured
20,420 Palmdale Community Redevelopment Agency, California, No Opt. Call AAA 23,815,438
Residential Mortgage Revenue Refunding Bonds,
Series 1991A, 7.150%, 2/01/10
2,325 Palmdale Community Redevelopment Agency, California, No Opt. Call AAA 3,182,483
Restructured Single Family Mortgage Revenue Bonds,
Series 1986D, 8.000%, 4/01/16 (Alternative Minimum Tax)
10,000 San Bernardino County, California, Certificates of Participation, 8/05 at 102.00 AAA 10,940,900
Medical Center Financing Project, Series 1995,
5.500%, 8/01/15 (Pre-refunded to 8/01/05) - MBIA Insured
2,000 Airports Commission of the City and County of 5/09 at 101.00 AAA 2,023,580
San Francisco, California, San Francisco International
Airport, Second Series Revenue Bonds, Issue 23B,
5.125%, 5/01/30 - FGIC Insured
2,000 San Francisco City and County Airports Commission, 5/11 at 100.00 AAA 2,037,380
California, Revenue Refunding Bonds, San Francisco
International Airport, Series 2, Issue 27B, 5.125%, 5/01/26 -
FGIC Insured
15,745 Walnut Valley Unified School District, Los Angeles County, 8/11 at 103.00 AAA 19,510,259
California, General Obligation Refunding Bonds,
Series 1997A, 7.200%, 2/01/16 - MBIA Insured
13
Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 0.6%
$ 5,425 City and County of Denver, Colorado, Airport System Revenue 11/07 at 101.00 AAA $ 5,641,403
Bonds, Series 1997E, 5.250%, 11/15/23 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 0.7%
6,985 District of Columbia Tobacco Settlement Financing Corporation, 5/11 at 101.00 BBB 6,393,720
Tobacco Settlement Asset-Backed Bonds, Series 2001,
6.250%, 5/15/24
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 4.5%
1,700 Miami-Dade County, Florida, Beacon Tradeport Community 5/12 at 102.00 AA 1,797,648
Development District, Special Assessment Bonds, Commercial
Project, Series 2002A, 5.625%, 5/01/32 - RAAI Insured
Housing Finance Authority of Broward County, Florida,
Multifamily Housing Revenue Bonds, Venice Homes Apartments
Project, Series 2001A:
1,545 5.700%, 1/01/32 (Alternative Minimum Tax) - FSA Insured 7/11 at 100.00 AAA 1,563,401
1,805 5.800%, 1/01/36 (Alternative Minimum Tax) - FSA Insured 7/11 at 100.00 AAA 1,834,512
4,200 Florida Housing Finance Corporation, Homeowner Mortgage 1/10 at 100.00 AAA 4,373,124
Revenue Bonds, 2000 Series 11, 5.850%, 1/01/22
(Alternative Minimum Tax) - FSA Insured
10,050 State of Florida, Full Faith and Credit, State Board of 6/10 at 101.00 AA+ 11,069,975
Education, Public Education Capital Outlay Refunding
Bonds, 1999 Series D, 5.750%, 6/01/22
7,000 Hillsborough County Aviation Authority, Florida, Tampa 10/13 at 100.00 AAA 7,333,200
International Airport Revenue Bonds, Series 2003A,
5.250%, 10/01/17 (Alternative Minimum Tax) -
MBIA Insured
10,750 Martin County, Florida, Industrial Development Authority, 12/04 at 102.00 BBB- 11,230,203
Industrial Development Revenue Bonds, Indiantown
Cogeneration, L.P. Project, Series 1994A,
7.875%, 12/15/25 (Alternative Minimum Tax)
2,570 Miami-Dade County Housing Finance Authority, Florida, 6/11 at 100.00 AAA 2,672,157
Multifamily Mortgage Revenue Bonds, Country Club
Villas II Project, Series 2001-1A, 5.850%, 1/01/37
(Alternative Minimum Tax) - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 3.2%
4,920 City of Atlanta, Georgia, Airport General Revenue and 1/10 at 101.00 AAA 5,689,537
Refunding Bonds, Series 2000A, 5.600%, 1/01/30
(Pre-refunded to 1/01/10) - FGIC Insured
5,000 City of Atlanta, Georgia, Water and Wastewater Revenue No Opt. Call AAA 5,562,600
Bonds, Series 1999A, 5.500%, 11/01/22 - FGIC Insured
2,000 George L. Smith II World Congress Center Authority, 7/10 at 101.00 AAA 2,101,200
Revenue Refunding Bonds, Domed Stadium Project,
Series 2000, 5.500%, 7/01/20 (Alternative Minimum Tax) -
MBIA Insured
15,000 Private Colleges and Universities Authority, Georgia, Revenue 11/09 at 101.00 AA 15,867,300
Bonds, Emory University Project, Series 1999A,
5.500%, 11/01/25
------------------------------------------------------------------------------------------------------------------------------------
IDAHO - 0.3%
1,350 Idaho Housing and Finance Association, Single Family 7/10 at 100.00 Aa2 1,412,816
Mortgage Bonds, Series 2000-G2, 5.950%, 7/01/25
(Alternative Minimum Tax)
1,170 Idaho Housing and Finance Association, Single Family 1/10 at 100.00 A1 1,236,257
Mortgage Bonds, Series 2000D, 6.200%, 7/01/14
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 20.2%
3,000 City of Chicago, Illinois, General Obligation Bonds, Library, 1/08 at 102.00 AAA 3,368,700
Series 1997, 5.750%, 1/01/17 - FGIC Insured
City of Chicago, Illinois, General Obligation Bonds, City
Colleges of Chicago Capital Improvement Project, Series 1999:
32,170 0.000%, 1/01/21 - FGIC Insured No Opt. Call AAA 13,328,996
32,670 0.000%, 1/01/22 - FGIC Insured No Opt. Call AAA 12,660,278
10,000 Chicago School Reform Board of Trustees of the Board of No Opt. Call AAA 4,476,700
Education of the City of Chicago, Illinois, Unlimited Tax
General Obligation Bonds, Dedicated Tax Revenue,
Series 1998-B1, 0.000%, 12/01/19 - FGIC Insured
10,000 Chicago School Reform Board of Trustees of the Board No Opt. Call AAA 4,195,200
of Education of the City of Chicago, Illinois, Unlimited Tax
General Obligation Bonds, Dedicated Tax Revenues,
Series 1999A, 0.000%, 12/01/20 - FGIC Insured
14
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS (continued)
$ 9,145 City of Chicago, Illinois, Chicago Midway Airport Revenue 1/07 at 101.00 AAA $ 9,479,981
Bonds, Series 1996A, 5.500%, 1/01/29 - MBIA Insured
DuPage County Forest Preserve District, Illinois, General
Obligation Bonds, Series 2000:
8,000 0.000%, 11/01/18 No Opt. Call AAA 3,870,160
15,285 0.000%, 11/01/19 No Opt. Call AAA 6,925,022
3,500 Illinois Development Finance Authority, Pollution Control 3/05 at 102.00 AAA 3,804,780
Revenue Refunding Bonds, Commonwealth Edison Company
Project, Series 1994D, 6.750%, 3/01/15 - AMBAC Insured
10,000 Illinois Educational Facilities Authority, Adjustable Demand 12/03 at 102.00 AAA 10,239,300
Revenue Bonds, University of Chicago, Series 1985
Remarketed, 5.700%, 12/01/25 (Pre-refunded to 12/01/03)
12,910 Illinois Health Facilities Authority, Revenue Bonds, 8/04 at 102.00 AA+ 13,297,042
Northwestern Memorial Hospital, Series 1994A,
6.000%, 8/15/24
3,285 Illinois Health Facilities Authority, Revenue Bonds, 8/09 at 101.00 A- 3,422,050
Silver Cross Hospital and Medical Centers, Series 1999,
5.250%, 8/15/15
4,580 Illinois Health Facilities Authority, Revenue Bonds, 8/10 at 102.00 Aaa 4,892,127
Midwest Care Center IX, Series 2000, 6.250%, 8/20/35
3,000 Illinois Health Facilities Authority, Revenue Bonds, 7/13 at 100.00 A- 3,183,810
Lake Forest Hospital, Series 2003, 6.000%, 7/01/33
4,415 Illinois Health Facilities Authority, Revenue Refunding 1/04 at 100.00 BB+ 4,367,980
Bonds, Proctor Community Hospital Project, Series 1991,
7.375%, 1/01/23
3,700 Village of Libertyville, Illinois, Affordable Housing 11/09 at 100.00 A2 3,714,319
Revenue Bonds, Liberty Towers Project, Series 1999A,
7.000%, 11/01/29 (Alternative Minimum Tax)
6,000 McHenry County, Illinois, Conservation District General 2/11 at 100.00 AAA 6,539,400
Obligation Bonds, Series 2001A, 5.625%, 2/01/21 -
FGIC Insured
Metropolitan Pier and Exposition Authority, Illinois, McCormick
Place Expansion Project Refunding Bonds, Series 1996A:
9,400 0.000%, 12/15/18 - MBIA Insured No Opt. Call AAA 4,515,290
16,570 0.000%, 12/15/20 - MBIA Insured No Opt. Call AAA 6,988,729
23,550 0.000%, 12/15/22 - MBIA Insured No Opt. Call AAA 8,683,827
13,000 0.000%, 12/15/24 - MBIA Insured No Opt. Call AAA 4,158,180
Metropolitan Pier and Exposition Authority, Illinois, McCormick
Place Expansion Project Refunding Bonds, Series 1998A:
5,180 5.500%, 12/15/23 - FGIC Insured No Opt. Call AAA 5,783,677
5,100 5.500%, 12/15/23 - FGIC Insured No Opt. Call AAA 5,644,578
10,650 Metropolitan Pier and Exposition Authority, Illinois, No Opt. Call AAA 13,710,597
McCormick Place Hospitality Facilities Revenue Bonds,
Series 1996A, 7.000%, 7/01/26
17,865 Regional Transportation Authority, Cook, DuPage, Kane, No Opt. Call AAA 20,260,697
Lake, McHenry and Will Counties, Illinois, General Obligation
Bonds, Series 1999, 5.750%, 6/01/23 - FSA Insured
6,090 Sherman, Illinois, GNMA Mortgage Revenue Refunding 10/09 at 102.00 AAA 6,516,970
Bonds, Villa Vianney, Series 1999A, 6.450%, 10/01/29
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 6.9%
5,000 Ft. Wayne South Side School Building Corporation, 1/04 at 102.00 AAA 5,152,700
Indiana, First Mortgage Bonds, Series 1994,
6.125%, 1/15/12 (Pre-refunded to 1/15/04) - MBIA Insured
5,250 Indiana Bond Bank, State Revolving Fund Program Bonds, 2/04 at 102.00 AAA 5,413,853
Guarantee Revenue Bonds, Series 1994A, 6.000%, 2/01/16
14,000 Indiana Health Facility Financing Authority, Hospital 8/10 at 101.50 AAA 14,698,740
Revenue Bonds, Clarian Health Obligated Group,
Series 2000A, 5.500%, 2/15/30 - MBIA Insured
Indiana Health Facility Financing Authority, Revenue Bonds,
Ancilla Systems Incorporated Obligated Group, Series 1997:
15,380 5.250%, 7/01/17 - MBIA Insured 7/07 at 101.00 AAA 16,714,984
2,250 5.250%, 7/01/22 - MBIA Insured 7/07 at 101.00 AAA 2,373,908
4,320 5.250%, 7/01/22 - MBIA Insured 7/07 at 101.00 AAA 4,557,902
8,000 Indiana Transportation Finance Authority, Highway Revenue 12/10 at 100.00 AA 8,374,800
Bonds, Series 2000, 5.375%, 12/01/25
15
Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
INDIANA (continued)
$ 5,730 Michigan City School Building Corporation, Indiana, First 12/04 at 102.00 AAA $ 6,169,319
Mortgage Bonds, Series 1994A, 6.125%, 12/15/09
(Pre-refunded to 12/15/04) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 0.4%
5,000 Tobacco Settlement Authority, Iowa, Tobacco Settlement 6/11 at 101.00 BBB 3,864,100
Asset-Backed Revenue Bonds, Series 2001B, 5.600%, 6/01/35
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 0.9%
5,790 Sedgwick County Unified School District No. 259, Wichita, 9/10 at 100.00 AA 5,273,764
Kansas, General Obligation Bonds, Series 2000,
3.500%, 9/01/17
3,200 Unified School District No. 500, County of Wyandotte, 9/11 at 100.00 AAA 2,947,744
Kansas, General Obligation School Bonds, Series 2001,
4.000%, 9/01/21 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 0.4%
3,700 Louisville Metropolitan Sewer District, Kentucky, Sewer 5/07 at 101.00 AAA 4,130,162
and Drainage System Revenue Bonds, Series 1997A,
6.250%, 5/15/26 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 6.7%
2,475 East Baton Rouge Mortgage Finance Authority, Louisiana, 10/07 at 102.00 Aaa 2,569,595
GNMA/FNMA Mortgage-Backed Securities Program,
Single Family Mortgage Revenue Refunding Bonds,
Series 1997B-1, 5.750%, 10/01/26
35,700 Louisiana Stadium and Exposition District, Hotel Occupancy 7/06 at 102.00 AAA 40,271,385
Tax Bonds, Series 1996, 5.750%, 7/01/26 (Pre-refunded
to 7/01/06) - FGIC Insured
5,630 New Orleans Housing Development Corporation, Louisiana, 12/03 at 100.00 AAA 5,639,740
FNMA Multifamily Housing Revenue Refunding Bonds,
Curran Place Apartments, Series 1990A, 7.700%, 8/01/23
Tobacco Settlement Financing Corporation, Louisiana,
Asset-Backed Bonds, Series 2001B:
10,000 5.500%, 5/15/30 5/11 at 101.00 BBB 8,166,000
6,250 5.875%, 5/15/39 5/11 at 101.00 BBB 5,004,125
------------------------------------------------------------------------------------------------------------------------------------
MAINE - 1.3%
5,935 Maine State Housing Authority, Mortgage Purchase Bonds, 2/04 at 102.00 AA+ 6,029,307
Series 1994A, 5.700%, 11/15/26
5,680 Portland, Maine, General Airport Revenue Bonds, 7/13 at 100.00 AAA 5,709,877
Series 2003A, 5.000%, 7/01/32 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 2.7%
1,145 Community Development Administration, Maryland 9/10 at 100.00 Aa2 1,191,063
Department of Housing and Community Development,
Residential Revenue Bonds, Series H, 5.800%, 9/01/32
(Alternative Minimum Tax)
7,720 Maryland Transportation Authority, Baltimore-Washington 3/12 at 101.00 AAA 7,899,876
International Airport, Parking Revenue Bonds, Series 2002B,
5.125%, 3/01/20 (Alternative Minimum Tax) - AMBAC Insured
7,475 Housing Opportunities Commission of Montgomery County, 7/04 at 102.00 Aa2 7,659,035
Maryland, Multifamily Housing Revenue Bonds,
Series 1994A, 6.250%, 7/01/28
7,090 Takoma Park, Maryland, Hospital Facilities Refunding and No Opt. Call AAA 8,531,113
Improvement Revenue Bonds, Washington Adventist
Hospital Project, Series 1995, 6.500%, 9/01/12 -
FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 3.3%
1,820 Massachusetts Educational Financing Authority, Education 12/09 at 101.00 AAA 2,034,214
Loan Revenue and Refunding Bonds, Issue G, Series 2000A,
5.700%, 12/01/11 (Alternative Minimum Tax) - MBIA Insured
Massachusetts Municipal Wholesale Electric Company,
Power Supply System Revenue Bonds, Series 1987A:
70 8.750%, 7/01/18 (Pre-refunded to 1/01/04) 1/04 at 100.00 Aaa 70,899
70 8.750%, 7/01/18 (Pre-refunded to 7/01/04) 7/04 at 100.00 Aaa 73,572
35 8.750%, 7/01/18 (Pre-refunded to 1/01/05) 1/05 at 100.00 Aaa 38,053
35 8.750%, 7/01/18 (Pre-refunded to 7/01/05) 7/05 at 100.00 Aaa 39,312
2,500 Commonwealth of Massachusetts, General Obligation 11/12 at 100.00 Aa2 2,563,975
Bonds, Consolidated Loan, Series 2002C,
5.250%, 11/01/30
5,000 Commonwealth of Massachusetts, General Obligation 1/13 at 100.00 AAA 5,261,550
Bonds, Consolidated Loan, Series 2002E, 5.250%, 1/01/22 -
FGIC Insured
16
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS (continued)
Massachusetts Development Finance Authority, Revenue Bonds, 100
Cambridge Street Redevelopment, M/SRBC Project, 2002 Series A:
$ 4,000 5.125%, 8/01/28 - MBIA Insured 2/12 at 100.00 AAA $ 4,058,280
5,000 5.125%, 2/01/34 - MBIA Insured 2/12 at 100.00 AAA 5,057,950
1,420 Massachusetts Health and Educational Facilities Authority, 7/08 at 101.00 Aaa 1,376,718
Revenue Bonds, Southcoast Health System Obligated
Group Issue, Series A, 4.750%, 7/01/27 - MBIA Insured
8,500 Route 3 North Transportation Improvements Association, 6/10 at 100.00 AAA 9,719,325
Commonwealth of Massachusetts, Lease Revenue Bonds,
Series 2000, 5.375%, 6/15/33 (Pre-refunded to 6/15/10) -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 5.4%
17,000 Birmingham City School District, Oakland County, Michigan, 11/07 at 100.00 AAA 16,854,990
School Building and Site Bonds, Series 1998,
4.750%, 11/01/24 - FSA Insured
3,000 City of Detroit, Michigan, Water Supply System Revenue 7/07 at 101.00 AAA 3,073,230
Senior Lien Bonds, Series 1997A, 5.000%, 7/01/21 -
MBIA Insured
3,885 Grand Rapids Housing Corporation, Multifamily Revenue 1/04 at 104.00 AAA 3,991,604
Refunding Bonds, FHA-Insured Mortgage Loan-Section 8
Assisted Elderly Project, Series 1992, 7.375%, 7/15/41
4,030 Hancock Hospital Finance Authority, Michigan, FHA-Insured 8/08 at 100.00 AAA 4,223,722
Mortgage Hospital Revenue Bonds, Portage Health System,
Inc., Series 1998, 5.450%, 8/01/47 - MBIA Insured
1,000 Michigan State Building Authority, Facilities Program Revenue 10/11 at 100.00 AA+ 1,012,080
Refunding Bonds, Series 2001I, 5.000%, 10/15/24
7,115 Michigan State Hospital Finance Authority, Hospital Revenue 3/13 at 100.00 A1 7,466,552
Refunding Bonds, Henry Ford Health System, Series 2003A,
5.500%, 3/01/16
3,000 Michigan Strategic Fund, Collateralized Limited Obligation 9/09 at 102.00 AAA 3,110,370
Revenue Refunding Pollution Control Bonds, Detroit Edison
Company, Series 1999A, 5.550%, 9/01/29 (Alternative
Minimum Tax) - MBIA Insured
10,000 Wayne County, Michigan, Airport Revenue Bonds, Detroit 12/08 at 101.00 AAA 10,622,800
Metropolitan Wayne County Airport, Series 1998A,
5.375%, 12/01/16 (Alternative Minimum Tax) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 6.6%
7,475 Dakota County Community Development Agency, Minnesota, 2/12 at 102.00 Aaa 7,722,273
GNMA Collateralized Mortgage Loan Multifamily Senior
Housing Revenue Bonds, Wingate Project, Series 2002A,
5.625%, 8/20/43
990 Dakota County Housing and Redevelopment Authority, 4/04 at 102.00 AAA 1,015,057
Minnesota, FNMA Collateralized Single Family Mortgage
Revenue Bonds, Series 1994A, 6.900%, 10/01/27
(Alternative Minimum Tax)
3,000 Minneapolis-St. Paul Metropolitan Airports Commission, 1/11 at 100.00 AAA 3,078,840
Minnesota, Subordinate Airport Revenue Bonds,
Series 2001C, 5.250%, 1/01/26 - FGIC Insured
18,020 Plymouth, Minnesota, GNMA Collateralized Mortgage 3/12 at 105.00 Aaa 18,327,962
Loan Senior Housing Revenue Bonds, Regent at Plymouth
Project, Series 2002A, 4.090%, 9/20/43
21,860 St. Paul Housing and Redevelopment Authority, 11/15 at 103.00 AAA 26,962,124
Minnesota, Sales Tax Revenue Refunding Bonds, Civic
Center Project, Series 1996, 7.100%, 11/01/23 -
FSA Insured
3,395 St. Paul Housing and Redevelopment Authority, Minnesota, 3/05 at 102.60 Aaa 3,547,435
Single Family Mortgage Revenue Refunding Bonds, FNMA
Mortgage-Backed Securities Middle Income Program - Phase II,
Series 1995, 6.800%, 3/01/28
------------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 1.1%
9,750 Mississippi Business Finance Corporation, Pollution Control 4/04 at 102.00 BBB- 9,722,310
Revenue Refunding Bonds, System Energy Resources Inc.
Project, Series 1998, 5.875%, 4/01/22
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 1.4%
2,000 Missouri-Illinois Metropolitan District Bi-State Development 10/13 at 100.00 AAA 2,018,300
Agency, Mass Transit Sales Tax Appropriation Bonds,
Metrolink Cross County Extension Project, Series 2002B,
5.000%, 10/01/32 - FSA Insured
6,350 City of Kansas City, Missouri, General Improvement Airport 9/12 at 100.00 AAA 6,839,903
Revenue Bonds, Series 2003B, 5.250%, 9/01/17 -
FGIC Insured
435 Missouri Housing Development Commission, GNMA 11/03 at 100.00 AAA 435,596
Mortgage-Backed Securities Program Single Family
Mortgage Revenue Bonds, Series 1988A, 8.300%, 5/01/19
(Alternative Minimum Tax)
17
Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI (continued)
$ 3,740 Health and Educational Facilities Authority of the State 6/11 at 101.00 AAA $ 3,836,193
of Missouri, Revenue Bonds, SSM Health Care,
Series 2001A, 5.250%, 6/01/28 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
MONTANA - 1.1%
1,845 Montana Board of Housing, Single Family Mortgage Bonds, 6/07 at 101.50 AA+ 1,914,077
Series 1997A, 6.150%, 6/01/30 (Alternative Minimum Tax)
2,890 Montana Board of Housing, Single Family Mortgage Bonds, 12/09 at 100.00 AA+ 3,041,436
Series 2000A-2, 6.450%, 6/01/29 (Alternative
Minimum Tax)
4,795 Montana Higher Education Student Assistance 12/08 at 101.00 A2 4,884,762
Corporation, Student Loan Revenue Bonds, Subordinate
Series 1998B, 5.500%, 12/01/31 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 0.4%
3,260 Nebraska Investment Finance Authority, Single Family 9/10 at 100.00 AAA 3,390,172
Housing Revenue Bonds, 2000 Series E, 5.850%, 9/01/20
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 2.5%
10,900 Clark County School District, Nevada, General Obligation 6/12 at 100.00 AAA 11,829,334
Bonds, Series 2002C, 5.500%, 6/15/19 - MBIA Insured
10,505 State of Nevada, General Obligation Bonds, Municipal Bond 5/06 at 101.00 AAA 11,765,285
Bank Project No. 52, Series 1996A, 6.000%, 5/15/21
(Pre-refunded to 5/15/06)
------------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 1.2%
New Hampshire Housing Finance Authority, FHLMC Multifamily
Housing Revenue Remarketing Bonds, Countryside LP Project,
Series 1994:
3,725 6.000%, 7/01/18 (Alternative Minimum Tax) 7/10 at 101.00 Aaa 3,925,815
6,945 6.100%, 7/01/24 (Alternative Minimum Tax) 7/10 at 101.00 Aaa 7,251,900
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 7.1%
4,425 New Jersey Higher Education Student Assistance Authority, 6/10 at 101.00 AAA 4,891,484
Student Loan Revenue Bonds, Series 2000A,
6.000%, 6/01/13 (Alternative Minimum Tax) -
MBIA Insured
3,000 New Jersey Economic Development Authority, Transportation 5/09 at 100.00 AAA 3,391,020
Project Sublease Revenue Bonds, New Jersey Transit
Corporation - Light Rail Transit System Projects,
Series 1999A, 5.250%, 5/01/17 (Pre-refunded to
5/01/09) - FSA Insured
8,750 New Jersey Transportation Trust Fund Authority, 6/07 at 102.00 AA- 9,470,300
Transportation System Bonds, Series 1996B,
5.250%, 6/15/16
9,250 New Jersey Transportation Trust Fund Authority, 6/13 at 100.00 AA- 9,946,803
Transportation System Bonds, Series 2003C,
5.500%, 6/15/23
4,500 New Jersey Transportation Trust Fund Authority, No Opt. Call AAA 5,092,920
Transportation System Bonds, Series 2001C,
5.500%, 12/15/18 - FSA Insured
10,000 New Jersey Turnpike Authority, Turnpike Revenue Bonds, 7/13 at 100.00 AAA 10,439,700
Series 2003A, 5.000%, 1/01/20 - FSA Insured
15,000 Tobacco Settlement Financing Corporation, New Jersey, 6/12 at 100.00 BBB 12,916,650
Tobacco Settlement Asset-Backed Bonds, Series 2002,
5.750%, 6/01/32
3,125 Tobacco Settlement Financing Corporation, New Jersey, 6/13 at 100.00 BBB 2,840,313
Tobacco Settlement Asset-Backed Bonds, Series 2003,
6.750%, 6/01/39
Township of West Deptford, County of Gloucester, New Jersey,
General Obligation Bonds, Series 2000:
3,150 5.500%, 9/01/21 - FGIC Insured 9/10 at 100.00 Aaa 3,391,857
3,335 5.500%, 9/01/22 - FGIC Insured 9/10 at 100.00 Aaa 3,582,857
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 16.5%
5 City of New York, New York, General Obligation Bonds, 2/04 at 100.00 A 5,084
Fiscal Series 1987D, 8.500%, 8/01/08
12,500 City of New York, New York, General Obligation Bonds, No Opt. Call A 13,625,250
Fiscal Series 1997A, 7.000%, 8/01/05
6,300 City of New York, New York, General Obligation Bonds, 5/10 at 101.00 AAA 7,244,055
Fiscal Series 2000A, 6.250%, 5/15/26 - FSA Insured
18
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK (continued)
City of New York, New York, General Obligation Bonds,
Fiscal Series 1996F:
$ 2,240 5.750%, 2/01/15 (Pre-refunded to 2/01/06) 2/06 at 101.50 A*** $ 2,482,166
14,055 5.750%, 2/01/15 2/06 at 101.50 A 15,123,180
20,650 New York City Municipal Water Finance Authority, New York, 6/06 at 101.00 AAA 22,696,209
Water and Sewer System Revenue Bonds, Fiscal
Series 1996B, 5.750%, 6/15/26 - MBIA Insured
4,875 New York Municipal Water Finance Authority, New York, 6/06 at 101.00 AAA 5,194,605
Water and Sewer System Revenue Bonds, Fiscal
Series 1997A, 5.500%, 6/15/24 - MBIA Insured
10,000 New York City Municipal Water Finance Authority, 6/09 at 101.00 AA 10,994,700
New York, Water and Sewer System Revenue Bonds,
Fiscal Series 2000A, 5.750%, 6/15/30
7,810 New York Transitional Finance Authority, New York, 8/09 at 101.00 AA+*** 9,177,375
Future Tax Secured Bonds, Fiscal Series 2000A,
5.750%, 8/15/24 (Pre-refunded to 8/15/09)
2,250 Dormitory Authority of the State of New York, Lease 7/09 at 101.00 AAA 2,403,090
Revenue Bonds, State University Dormitory Facilities
Issue, Series 1999C, 5.500%, 7/01/29 - MBIA Insured
4,000 Dormitory Authority of the State of New York, State 11/03 at 100.00 AA- 4,094,200
University Educational Facilities, Revenue Bonds,
Series 1990B, 6.000%, 5/15/17
1,500 Dormitory Authority of the State of New York, Revenue 8/07 at 101.00 AAA 1,593,645
Bonds, St. Barnabas Hospital, Series 1997,
5.450%, 8/01/35 - AMBAC Insured
2,070 Dormitory Authority of the State of New York, Insured 7/08 at 101.00 AAA 2,301,198
Revenue Bonds, 853 Schools Program 1998 Issue 1,
Gateway-Longview Inc., Series 1998A,
5.500%, 7/01/18 - AMBAC Insured
17,000 Dormitory Authority of the State of New York, City University 7/09 at 101.00 AAA 19,713,540
System Consolidated Third General Resolution Revenue
Bonds, Series 1999-1, 5.500%, 7/01/29 (Pre-refunded
to 7/01/09) - FSA Insured
3,000 Dormitory Authority of the State of New York, City University 1/08 at 102.00 AAA 3,435,180
System Consolidated Third General Resolution Revenue
Bonds, Series 1997-1, 5.375%, 7/01/24 (Pre-refunded
to 1/01/08) - FSA Insured
2,000 Dormitory Authority of the State of New York, Mental 2/06 at 102.00 AAA 2,089,600
Health Services Facilities Improvement Revenue Bonds,
Series 1996B, 5.375%, 2/15/26 - MBIA Insured
Dormitory Authority of the State of New York, Revenue Bonds,
Marymount Manhattan College, Series 1999:
1,580 6.375%, 7/01/13 - RAAI Insured 7/09 at 101.00 AA 1,788,402
9,235 6.125%, 7/01/21 - RAAI Insured 7/09 at 101.00 AA 10,145,109
3,000 New York State Energy Research and Development 9/08 at 102.00 AAA 3,213,420
Authority, Pollution Control Revenue Bonds, Rochester
Gas and Electric Corporation Project, Series 1998A,
5.950%, 9/01/33 (Alternative Minimum Tax) - MBIA Insured
14,750 New York State Medical Care Facilities Finance Agency, 2/04 at 102.00 AAA 15,192,205
Mental Health Services Facilities Improvement Revenue
Bonds, Series 1993F Refunding, 5.375%, 2/15/14 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 0.2%
2,000 North Carolina Municipal Power Agency Number 1, 1/08 at 102.00 AAA 2,057,980
Catawba Electric Revenue Bonds, Series 1998A,
5.000%, 1/01/20 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
NORTH DAKOTA - 0.3%
2,900 North Dakota Housing Finance Agency, Home Mortgage 7/10 at 100.00 Aa2 3,049,843
Finance Program Refunding Bonds, Series 2000A,
6.500%, 1/01/31 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 5.8%
7,500 Cleveland, Ohio, Airport System Revenue Bonds, 1/10 at 101.00 AAA 7,555,650
Series 2000A, 5.000%, 1/01/31 - FSA Insured
17,715 Ohio Housing Finance Agency, Residential Mortgage 7/09 at 100.00 Aaa 18,221,472
Revenue Bonds, Mortgage-Backed Securities Program,
Series 1999C, 5.750%, 9/01/30 (Alternative Minimum Tax)
15,200 Ohio Water Development Authority, Solid Waste Disposal 9/08 at 102.00 N/R 14,007,256
Revenue Bonds, Bay Shore Power Project, Series 1998A,
5.875%, 9/01/20 (Alternative Minimum Tax)
14,100 Ohio Water Development Authority, Solid Waste Disposal 9/09 at 102.00 N/R 14,034,717
Revenue Bonds, Bay Shore Power Project, Convertible
Series 1998B, 6.625%, 9/01/20 (Alternative Minimum Tax)
19
Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 0.3%
$ 3,400 Trustees of the Tulsa Municipal Airport Trust, Oklahoma, 12/08 at 100.00 B- $ 2,893,604
Revenue Refunding Bonds, Refunding Series 2000B,
6.000%, 6/01/35 (Alternative Minimum Tax)
(Mandatory put 12/01/08)
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 1.0%
1,220 State of Oregon, Housing and Community Services 1/10 at 100.00 Aa2 1,276,925
Department, Mortgage Revenue Bonds, Single Family
Mortgage Program, Series 2000F, 6.250%, 7/01/28
(Alternative Minimum Tax)
9,150 Port of St. Helens, Oregon, Pollution Control Revenue Bonds, No Opt. Call BBB 7,900,019
Portland General Electric Company Project, Series 1985B,
4.800%, 6/01/10
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 4.3%
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 1,208,687
3,125 0.000%, 5/15/23 - FSA Insured No Opt. Call AAA 1,130,969
3,135 0.000%, 5/15/24 - FSA Insured No Opt. Call AAA 1,057,843
3,155 0.000%, 5/15/26 - FSA Insured No Opt. Call AAA 940,632
4,145 0.000%, 11/15/26 - FSA Insured No Opt. Call AAA 1,203,086
2,800 0.000%, 5/15/28 - FSA Insured No Opt. Call AAA 744,800
3,000 0.000%, 11/15/28 - FSA Insured No Opt. Call AAA 775,050
4,730 Carbon County Industrial Development Authority, No Opt. Call BBB- 5,083,993
Pennsylvania, Resource Recovery Revenue Refunding
Bonds, Panther Creek Partners Project, Series 2000,
6.650%, 5/01/10 (Alternative Minimum Tax)
2,565 Cumberland County Municipal Authority, Pennsylvania, 11/04 at 102.00 BBB-*** 2,731,007
Carlisle Hospital and Health Services First Mortgage
Revenue and Refunding Bonds, Series 1994,
6.800%, 11/15/14 (Pre-refunded to 11/15/04)
11,000 Delaware County Authority, Pennsylvania, Health System 11/08 at 102.00 AAA 11,242,990
Revenue Bonds, Catholic Health East Issue, Series 1998A,
4.875%, 11/15/18 - AMBAC Insured
Pennsylvania Economic Development Financing Authority, Resource
Recovery Revenue Bonds, Northampton Generating Project, Senior
Series 1994A:
2,100 6.400%, 1/01/09 (Alternative Minimum Tax) 1/04 at 102.00 BBB- 2,146,284
4,500 6.500%, 1/01/13 (Alternative Minimum Tax) 1/04 at 102.00 BBB- 4,562,820
900 Pennsylvania Economic Development Financing Authority, 1/04 at 102.00 N/R 900,099
Resource Recovery Revenue Subordinate Bonds,
Northampton Generating Project, Series 1994C,
6.875%, 1/01/11 (Alternative Minimum Tax)
6,250 Pennsylvania Economic Development Financing Authority, No Opt. Call N/R 6,427,937
Resource Recovery Revenue Bonds, Northampton
Generating Project, Senior Lien Series 1994B,
6.750%, 1/01/07 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 0.2%
1,250 Puerto Rico Highway and Transportation Authority, 7/10 at 101.00 AAA 1,426,437
Highway Revenue Bonds, Series 2000B, 5.875%, 7/01/21 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 0.5%
2,000 Kent County Water Authority, Rhode Island, General Revenue 7/12 at 100.00 AAA 2,037,320
Bonds, Series 2002A, 5.000%, 7/15/23 -MBIA Insured
Rhode Island Health and Educational Building Corporation,
Revenue Refunding Bonds, Salve Regina University, Series 2002:
1,260 5.250%, 3/15/17 - RAAI Insured 3/12 at 101.00 AA 1,334,378
1,080 5.250%, 3/15/18 - RAAI Insured 3/12 at 101.00 AA 1,136,797
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 2.8%
6,925 South Carolina, General Obligation Bonds, Series 1999A, 10/09 at 101.00 AAA 7,014,679
4.000%, 10/01/14
21,000 Tobacco Settlement Revenue Management Authority, 5/11 at 101.00 BBB 19,028,730
South Carolina, Tobacco Settlement Asset-Backed Bonds,
Series 2001B, 6.000%, 5/15/22
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 2.8%
2,260 The Health and Educational Facilities Board of the City of 7/23 at 100.00 AAA 2,359,530
Johnson City, Tennessee, Hospital Revenue Refunding and
Improvement Bonds, Johnson City Medical Center Hospital,
Series 1998C, 5.125%, 7/01/25 (Pre-refunded
to 7/01/23) - MBIA Insured
1,700 Memphis-Shelby County Airport Authority, Tennessee, 3/10 at 101.00 AAA 1,836,561
Airport Revenue Bonds, Series 1999D, 6.000%, 3/01/24
(Alternative Minimum Tax) - AMBAC Insured
20
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE (continued)
$ 6,675 Memphis Health, Educational and Housing Facilities Board, 1/04 at 102.00 AAA $ 6,840,473
Tennessee, Multifamily Mortgage Revenue Refunding
Bonds, Riverdale Plaza Apartments Project, Series 1993,
6.350%, 7/20/28
6,000 The Health and Educational Facilities Board of the 12/17 at 100.00 AAA 6,980,700
Metropolitan Government of Nashville and Davidson
County, Tennessee, Revenue Refunding and Improvement
Bonds, Meharry Medical College Project Series 1996,
6.000%, 12/01/19 - AMBAC Insured
7,225 Tennessee Housing Development Agency, Homeownership 7/10 at 101.00 AA 7,516,095
Program Bonds, Issue 2000-1, 6.375%, 7/01/25
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 4.7%
3,740 Austin, Texas, Hotel Occupancy Tax Subordinate Lien Revenue 11/09 at 100.00 AAA 4,166,173
Refunding Bonds, Series 1999, 5.625%, 11/15/17 -
AMBAC Insured
3,975 Bell County Health Facilities Development Corporation, 2/10 at 101.00 AAA 4,404,141
Texas, Hospital Revenue Bonds, Scott and White Memorial
Hospital and Scott, Sherwood and Brindley Foundation
Project, Series 2000A, 6.125%, 8/15/23 - MBIA Insured
5,690 Dallas-Ft. Worth, Texas, International Airport Facilities 11/05 at 100.00 CCC 4,908,820
Improvement Corporation, Revenue Refunding Bonds,
Series 2000B, American Airlines, 6.050%, 5/01/29
(Alternative Minimum Tax) (Mandatory put 11/01/05)
680 Ft. Worth Housing Finance Corporation, Texas, Home 4/04 at 101.00 Aa2 688,670
Mortgage Revenue Refunding Bonds, Series 1991A,
8.500%, 10/01/11
1,625 Harris County, Texas, Health Facilities Development 7/09 at 101.00 AAA 1,689,773
Corporation, Revenue Bonds, Christus Health,
Series 1999A, 5.375%, 7/01/24 - MBIA Insured
180 Hidalgo County Housing Finance Corporation, Texas, 4/04 at 102.00 AAA 182,378
GNMA/FNMA Collateralized Single Family Mortgage
Revenue Bonds, Series 1994A, 6.750%, 10/01/15
(Alternative Minimum Tax)
3,885 Houston Independent School District Public Facility No Opt. Call AAA 1,758,740
Corporation, Harris County, Texas, Lease Revenue
Bonds, Cesar E. Chavez High School, Series 1998A,
0.000%, 9/15/19 - AMBAC Insured
1,690 Webb County, Laredo, Texas, Combination Tax and Sewer 2/08 at 100.00 AAA 1,696,760
System, Revenue Certificates of Obligation, Series 1998A,
4.500%, 2/15/18 - MBIA Insured
Leander Independent School District, Williamson and Travis
Counties, Texas, Unlimited Tax School Building and Refunding
Bonds, Series 1998:
4,930 0.000%, 8/15/20 8/06 at 46.47 AAA 1,982,008
3,705 0.000%, 8/15/22 8/06 at 41.33 AAA 1,318,572
695 Lubbock Housing Finance Corporation, Texas, Single Family 6/07 at 102.00 AAA 707,586
Mortgage Revenue Refunding Bonds, GNMA
Mortgage-Backed Securities Program, Series 1997A,
6.125%, 12/01/17
3,480 Pearland, Texas, General Obligation Bonds, Series 2002, 3/12 at 100.00 AAA 3,501,680
5.000%, 3/01/27 - FGIC Insured
6,050 City of San Antonio, Texas, Electric and Gas Systems 2/09 at 100.00 AA+ 5,918,171
Revenue Refunding Bonds, Series 1998A, 4.500%, 2/01/21
6,000 Spring Branch Independent School District, Harris County, 2/11 at 100.00 AAA 6,073,440
Texas, Limited Tax Schoolhouse and Refunding Bonds,
Series 2001, 5.125%, 2/01/26
4,000 Tarrant Regional Water District, Texas, Water Revenue 3/13 at 100.00 AAA 4,091,080
Bonds, Series 1999 Refunding and Improvement,
5.000%, 3/01/22 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
UTAH - 4.6%
10,000 Intermountain Power Agency, Utah, Power Supply Revenue 7/07 at 102.00 AAA 11,138,100
Refunding Bonds, Series 1997B, 5.750%, 7/01/19 -
MBIA Insured
Utah County, Utah, Hospital Revenue Bonds, IHC Health
Services, Inc., Series 1997:
12,500 5.250%, 8/15/21 - MBIA Insured 8/07 at 101.00 AAA 12,980,250
3,900 5.250%, 8/15/26 - MBIA Insured 8/07 at 101.00 AAA 3,986,697
4,445 Utah Housing Corporation, Single Family Mortgage Bonds, 1/12 at 100.00 AA- 4,669,072
Series 2002-A1, 5.300%, 7/01/18 (Alternative Minimum Tax)
495 Utah Housing Finance Agency, Single Family Mortgage Bonds, 1/10 at 100.00 AA 506,979
Series 2000B, 6.250%, 7/01/22 (Alternative Minimum Tax)
2,850 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/10 at 100.00 AA- 3,069,991
Series 2000D-1, 6.050%, 7/01/14 (Alternative Minimum Tax)
21
Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
UTAH (continued)
$ 3,165 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/10 at 100.00 Aa1 $ 3,440,165
Series 2000E-1, Class III, 6.000%, 1/01/15
(Alternative Minimum Tax)
715 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/10 at 100.00 AA 731,259
Series 2000E-1, Class II, 6.150%, 1/01/27
(Alternative Minimum Tax)
1,255 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/11 at 100.00 AA 1,275,005
Series 2001A2, 5.650%, 7/01/27
(Alternative Minimum Tax)
945 Utah Housing Finance Agency, Single Family Mortgage Bonds, 1/11 at 100.00 Aa2 1,008,504
Series 2001B-1, 5.750%, 7/01/19
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
VERMONT - 0.5%
4,725 Vermont Housing Finance Agency, Single Family Housing 11/04 at 102.00 A+ 4,828,336
Bonds, Series 1994-5, 7.000%, 11/01/27
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 1.8%
16,000 Metropolitan Washington Airports Authority, Virginia, 10/04 at 100.00 AAA 16,403,680
Airport System Revenue Bonds, Series 1994A,
5.500%, 10/01/24 (Alternative Minimum Tax) -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 3.6%
12,235 Chelan County Public Utility District 1, Washington, No Opt. Call AAA 3,305,408
Columbia River-Rock Island Hydroelectric System
Revenue Refunding Bonds, Series 1997A,
0.000%, 6/01/26 - MBIA Insured
5,000 Energy Northwest, Washington, Nuclear Project No. 1 7/13 at 100.00 Aa1 5,518,050
Electric Revenue Bonds, Series 2003A Refunding,
5.500%, 7/01/16
1,815 Grant County Public Utility District 2, Washington, 1/06 at 102.00 AAA 1,926,332
Wanapum Hydroelectric Revenue Bonds, Series 1997A,
Master Lease Program, 5.625%, 1/01/26 - MBIA Insured
12,000 State of Washington, Motor Vehicle Fuel Tax General 1/11 at 100.00 AA+ 12,341,640
Obligation Bonds, Series 2001D, 5.250%, 1/01/26
5,000 Washington State Housing Finance Commission, 7/09 at 101.00 AA 5,455,550
Nonprofit Housing Revenue Bonds, The Kline Galland
Center Project, Series 1999, 6.000%, 7/01/29 - RAAI Insured
4,500 Washington Health Care Facilities Authority Revenue 12/09 at 101.00 AAA 4,787,370
Bonds, Providence Services, Series 1999,
5.375%, 12/01/19 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 0.5%
5,000 Mason County, West Virginia, Pollution Control Revenue 10/11 at 100.00 BBB 4,962,000
Bonds, Appalachian Power Company Project,
Series 2003L, 5.500%, 10/01/22
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 2.3%
1,660 Wisconsin Health and Educational Facilities Authority, 2/04 at 102.00 AAA 1,698,014
Revenue Bonds, Aurora Health Care Obligated Group,
Series 1993, 5.250%, 8/15/23 - MBIA Insured
11,620 Wisconsin Health and Educational Facilities Authority, 2/10 at 101.00 AA 12,900,292
Revenue Bonds, Marshfield Clinic, Series 1999,
6.250%, 2/15/29 - RAAI Insured
7,490 Wisconsin Health and Educational Facilities Authority, 7/08 at 103.00 N/R 6,661,081
Revenue Bonds, The Millennium Housing Foundation Inc.
Project, Series 1998, 6.100%, 1/01/28
------------------------------------------------------------------------------------------------------------------------------------
$ 1,439,015 Total Long-Term Investments (cost $1,285,853,235) - 147.9% 1,368,462,830
=============-----------------------------------------------------------------------------------------------------------------------
22
PRINCIPAL MARKET
AMOUNT (000) DESCRIPTION(1) RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 1.1%
$ 10,600 Nebraska Educational Finance Authority, Revenue Bonds, VMIG-1 $ 10,600,000
Creighton University, Variable Rate Demand Obligations,
Series 2003, 1.150%, 3/01/33 - AMBAC Insured+
------------------------------------------------------------------------------------------------------------------------------------
$ 10,600 Total Short-Term Investments (cost $10,600,000) 10,600,000
=============-----------------------------------------------------------------------------------------------------------------------
Total Investments (cost $1,296,453,235) - 149.0% 1,379,062,830
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.8% 25,462,017
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (51.8)% (479,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 925,524,847
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments
are based on net assets applicable to Common shares.
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and
prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent
auditors): Using the higher of Standard & Poor's or
Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of
principal and interest. Such securities are normally
considered to be equivalent to AAA rated securities.
N/R Investment is not rated.
+ Security has a maturity of more than one year, but has
variable rate and demand features which qualify it as a
short-term security. The rate disclosed is that
currently in effect. This rate changes periodically
based on market conditions or a specified market index.
See accompanying notes to financial statements.
23
Nuveen Municipal Advantage Fund, Inc. (NMA)
Portfolio of
INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 3.3%
$ 10,000 Jefferson County, Alabama, Sewer Revenue Capital 2/09 at 101.00 AAA $11,439,400
Improvement Warrants, Series 1999A, 5.375%, 2/01/36
(Pre-refunded to 2/01/09) - FGIC Insured
5,075 The Health Care Authority of Lauderdale County and the 7/09 at 101.00 AAA 5,197,155
City of Florence, Alabama, Revenue Bonds, Coffee
Health Group, Series 1999A, 5.250%, 7/01/24 -
MBIA Insured
5,155 Phenix City, Alabama, Industrial Development Board 5/12 at 100.00 BBB 5,280,937
Environmental Improvement Revenue Bonds,
MeadWestvaco Project, 2002A, 6.350%, 5/15/35
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 0.7%
5,000 Maricopa County, Arizona, Pollution Control Corporation, 5/06 at 101.00 BBB- 4,909,400
Pollution Control Revenue Refunding Bonds, Remarketing
Series 1992A, Public Service Company of New Mexico,
5.750%, 11/01/22
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 7.5%
3,000 California Health Facilities Financing Authority, Revenue 3/13 at 100.00 A 2,752,020
Bonds, Adventist Health System/West, Series 2003A,
5.000%, 3/01/33
2,500 California Department of Water Resources, Power Supply 5/12 at 101.00 A3 2,560,725
Revenue Bonds, Series 2002A, 5.375%, 5/01/22
7,535 Contra Costa County, California, GNMA Mortgage-Backed No Opt. Call AAA 10,098,934
Securities Program Home Mortgage Revenue Bonds,
Series 1989, 7.750%, 5/01/22 (Alternative Minimum Tax)
6,925 East Bay Municipal Utility District, Alameda and Contra 6/06 at 100.00 AAA 6,938,919
Costa Counties, California, Water System Subordinated
Revenue Refunding Bonds, Series 1996, 4.750%, 6/01/21 -
FGIC Insured
2,500 Los Angeles County Metropolitan Transportation Authority, 7/05 at 100.00 AAA 2,657,750
California, Proposition C Sales Tax Revenue Bonds, Second
Senior Series 1995A, 5.000%, 7/01/25 (Pre-refunded
to 7/01/05) - AMBAC Insured
5,000 Palmdale Community Redevelopment Agency, California, No Opt. Call AAA 6,337,350
Residential Mortgage Revenue Refunding Bonds,
Series 1991B, 7.375%, 2/01/12
5,000 Palmdale Community Redevelopment Agency, California, No Opt. Call AAA 6,834,400
Single Family Restructured Mortgage Revenue Bonds,
Series 1986A, 8.000%, 3/01/16 (Alternative Minimum Tax)
9,315 Perris, California, GNMA Mortgage-Backed Securities No Opt. Call AAA 12,396,309
Program, Single Family Mortgage Revenue Bonds,
Series 1989A, 7.600%, 1/01/23 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 2.6%
8,350 Colorado Health Facilities Authority, Remarketed Revenue 7/06 at 102.00 A 8,587,223
Bonds, Kaiser Permanente, Series 1994A, 5.350%, 11/01/16
2,650 E-470 Public Highway Authority, Colorado, Senior Revenue No Opt. Call AAA 1,455,884
Bonds, Series 1997B, 0.000%, 9/01/16 - MBIA Insured
Platte River Power Authority, Colorado, Power Revenue
Bonds, Series EE Refunding:
2,000 5.375%, 6/01/17 6/12 at 100.00 AA- 2,176,080
5,000 5.375%, 6/01/18 6/12 at 100.00 AA- 5,406,450
------------------------------------------------------------------------------------------------------------------------------------
CONNECTICUT - 0.8%
5,000 Connecticut Housing Finance Authority, Housing Mortgage 11/09 at 100.00 AAA 5,214,450
Finance Program Bonds, Series 2000B, Subseries B-2,
5.750%, 11/15/21 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 1.4%
4,940 District of Columbia Housing Finance Agency, GNMA 12/04 at 103.00 AAA 5,000,564
Collateralized Single Family Mortgage Revenue Bonds,
Series 1988F-1, 6.375%, 6/01/26 (Alternative
Minimum Tax)
4,390 District of Columbia Housing Finance Agency, Single Family 6/07 at 102.00 AAA 4,534,475
Mortgage Revenue Bonds, Series 1997B, 5.900%, 12/01/28
(Alternative Minimum Tax)
24
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 2.0%
$ 2,770 Florida Housing Finance Corporation, Housing 12/10 at 100.00 AAA $ 2,879,055
Revenue Bonds, Stratford Point Apartments,
2000 Series O-1, 5.850%, 12/01/31 (Alternative
Minimum Tax) - FSA Insured
9,990 City of Tampa, Florida, Allegany Health System Revenue 12/03 at 102.00 AAA 10,489,001
Bonds, St. Mary's Hospital, Inc. Issue, Series 1993,
5.125%, 12/01/23 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
HAWAII - 0.8%
3,205 Hawaii Housing Finance and Development Corporation, 7/07 at 102.00 AAA 3,288,715
Single Family Mortgage Purchase Revenue Bonds,
Series 1997A, 5.750%, 7/01/30 (Alternative Minimum Tax)
2,215 Hawaii Housing and Community Development Corporation, 7/10 at 102.00 AAA 2,312,017
GNMA Collateralized Multifamily Housing Revenue Bonds,
Sunset Villas, Series 2000, 5.700%, 7/20/31
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 13.7%
5,865 City of Chicago, Illinois, General Obligation Bonds, 7/10 at 101.00 AAA 7,146,796
Neighborhoods Alive 21 Program, Series 2000A,
6.500%, 1/01/35 (Pre-refunded to 7/01/10) -
FGIC Insured
4,000 Chicago School Reform Board of Trustees of the Board 12/07 at 102.00 AAA 4,427,720
of Education of the City of Chicago, Illinois, Unlimited Tax
General Obligation Bonds, Dedicated Tax Revenues,
Series 1997, 5.750%, 12/01/20 - AMBAC Insured
12,500 Chicago School Reform Board of Trustees of the Board 12/07 at 102.00 AAA 12,788,500
of Education of the City of Chicago, Illinois, Unlimited Tax
General Obligation Bonds, Dedicated Tax Revenues,
Series 1997A, 5.250%, 12/01/27 - AMBAC Insured
5,000 City of Chicago, Illinois, Chicago O'Hare International No Opt. Call Ca 1,300,000
Airport, Special Facility Revenue Bonds, United Air Lines,
Inc. Project, Series 2001A, 6.375%, 11/01/35
(Alternative Minimum Tax) (Mandatory put 5/01/13)#
5,000 City of Chicago, Illinois, Chicago O'Hare International 1/11 at 101.00 AAA 5,108,950
Airport, Second Lien Passenger Facility Charge Revenue
Bonds, Series 2001A, 5.375%, 1/01/32 (Alternative
Minimum Tax) - AMBAC Insured
5,000 City of Chicago, Illinois, Second Lien Wastewater 1/08 at 102.00 AAA 5,108,350
Transmission Revenue Bonds, Series 1997,
5.250%, 1/01/28 - AMBAC Insured
10,115 Illinois Health Facilities Authority, Revenue Bonds, 11/06 at 102.00 AAA 11,466,667
Rush-Presbyterian-Saint Luke's Medical Center Obligation
Group, Series 1996A Refunding, 6.250%, 11/15/20 -
MBIA Insured
6,165 Illinois Health Facilities Authority, Revenue Bonds, 2/07 at 102.00 A 6,303,774
Sarah Bush Lincoln Health Center, Series 1996B,
5.750%, 2/15/22
3,935 Illinois Health Facilities Authority, Revenue Bonds, Victory 8/07 at 101.00 A- 3,238,348
Health Services, Series 1997A, 5.375%, 8/15/16
6,000 Illinois Health Facilities Authority, Revenue Bonds, Condell 5/12 at 100.00 A3 6,164,700
Medical Center, Series 2002, 5.750%, 5/15/22
Metropolitan Pier and Exposition Authority, Illinois, McCormick
Place Expansion Project Bonds, Series 1999A:
12,455 5.500%, 12/15/24 - FGIC Insured 12/09 at 101.00 AAA 13,174,276
10,000 5.250%, 12/15/28 - FGIC Insured 12/09 at 101.00 AAA 10,224,200
2,600 Regional Transportation Authority, Cook, DuPage, Kane, No Opt. Call AAA 3,412,084
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 Revenue 4/13 at 100.00 AAA 1,968,305
Bonds, Series 2003A, 5.000%, 4/01/23 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 5.2%
7,425 Ft. Wayne International Airport Building Corporation, 1/04 at 101.00 Aa3 7,511,130
Indiana, General Obligation Airport Bonds, Series 1994,
5.900%, 1/01/14 (Alternative Minimum Tax)
5,205 Indiana Health Facility Financing Authority, Hospital 8/10 at 101.50 AAA 5,464,782
Revenue Bonds, Clarian Health Obligated Group,
Series 2000A, 5.500%, 2/15/30 - MBIA Insured
9,000 Indiana Health Facility Financing Authority, Hospital 5/06 at 102.00 AAA 9,744,030
Revenue Refunding and Improvement Bonds, Community
Hospitals Projects, Series 1995, 5.700%, 5/15/22 -
MBIA Insured
6,075 LaGrange County Jail Building Corporation, Indiana, 10/09 at 101.00 A3 6,270,007
First Mortgage Jail Bonds, Series 1998, 5.400%, 10/01/21
25
Nuveen Municipal Advantage Fund, Inc. (NMA) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
INDIANA (continued)
$ 3,215 Mooresville Consolidated School Building Corporation, 1/04 at 102.00 N/R*** $ 3,314,794
Morgan County, Indiana, First Mortgage Bonds,
Series 1994B, 6.400%, 7/15/15 (Pre-refunded to 1/15/04)
2,725 Saint Joseph County Hospital Authority, Indiana, Health 2/09 at 102.00 BBB 2,762,850
System Revenue Bonds, Madison Center Inc. Project,
Series 1999, 5.450%, 2/15/12
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 0.8%
1,925 Iowa Finance Authority, GNMA/FNMA Mortgage-Backed 1/05 at 102.00 AAA 1,988,410
Securities Program Single Family Mortgage Bonds,
Series 1995C, 6.450%, 1/01/24
3,500 Marshalltown, Iowa, Pollution Control Revenue Refunding 11/03 at 102.00 AAA 3,578,645
Bonds, Iowa Electric Light and Power Company Project,
Series 1993, 5.500%, 11/01/23 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 0.8%
5,000 Burlington, Kansas, Environmental Improvement Revenue No Opt. Call A2 5,330,500
Bonds, Kansas City Power and Light Company Project,
Series 1998A, 4.750%, 9/01/15 (Mandatory put 10/01/07)
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 1.6%
5,500 Louisville Metropolitan Sewer District, Kentucky, Sewer 5/07 at 101.00 AAA 5,669,345
and Drainage System Revenue Bonds, Series 1997A,
5.250%, 5/15/27 - MBIA Insured
4,950 Louisville and Jefferson County Metropolitan Sewer 11/07 at 101.00 AAA 5,063,850
District, Commonwealth of Kentucky, Sewer and Drainage
System Revenue Bonds, Series 1997B, 5.200%, 5/15/25 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 6.2%
13,500 De Soto Parish, Louisiana, Pollution Control Revenue 9/09 at 102.00 AAA 14,903,460
Refunding Bonds, Cleco Utility Group Inc. Project,
Series 1999, 5.875%, 9/01/29 - AMBAC Insured
10,000 Louisiana Public Facilities Authority, Extended Care Facilities No Opt. Call BBB 12,489,800
Revenue Bonds, Comm-Care Corporation Project,
Series 1994, 11.000%, 2/01/14
Tobacco Settlement Financing Corporation, Louisiana,
Asset-Backed Bonds, Series 2001B:
6,000 5.500%, 5/15/30 5/11 at 101.00 BBB 4,899,600
11,750 5.875%, 5/15/39 5/11 at 101.00 BBB 9,407,755
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 2.8%
5,000 Commonwealth of Massachusetts, General Obligation 8/12 at 100.00 AAA 5,341,150
Bonds, Consolidated Loan of 2002 Series D,
5.375%, 8/01/21 - MBIA Insured
1,750 Massachusetts Health and Educational Facilities Authority, 1/09 at 101.00 AAA 1,751,960
Revenue Bonds, UMass Memorial Health Issue A,
5.000%, 7/01/28 - AMBAC Insured
9,120 Massachusetts Housing Finance Agency, Single Family 12/09 at 100.00 AAA 9,899,304
Housing Revenue Bonds, Series 77, 5.950%, 6/01/25
(Alternative Minimum Tax) - FSA Insured
1,495 Massachusetts Housing Finance Agency, Single Family 12/09 at 100.00 AAA 1,556,235
Housing Revenue Bonds, Series 79, 5.950%, 12/01/27
(Alternative Minimum Tax) - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 1.1%
3,275 Michigan State Hospital Finance Authority, Revenue and 2/04 at 102.00 Ba3 2,414,985
Refunding Bonds, Detroit Medical Center Obligated Group,
Series 1993A, 6.500%, 8/15/18
Michigan State Hospital Finance Authority, Hospital Revenue
Bonds, Detroit Medical Center Obligated Group, Series 1998A:
4,995 5.250%, 8/15/23 8/08 at 101.00 Ba3 3,006,540
3,000 5.250%, 8/15/28 8/08 at 101.00 Ba3 1,725,960
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 2.2%
5,000 Minneapolis-St. Paul Metropolitan Airports Commission, 1/11 at 100.00 AAA 5,124,700
Minnesota, Subordinate Airport Revenue Bonds,
Series 2001C, 5.250%, 1/01/32 - FGIC Insured
5,890 Minnesota Housing Finance Agency, Single Family 7/09 at 100.00 AA+ 6,041,844
Mortgage Revenue Bonds, Series 2000C, 5.550%, 7/01/24
(Alternative Minimum Tax)
3,560 Minnesota Housing Finance Agency, Single Family 1/10 at 100.00 AA+ 3,797,523
Mortgage Revenue Bonds, Series 2000J, 5.400%, 1/01/23
(Alternative Minimum Tax)
26
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 0.7%
$ 2,140 Coahoma-Clarksdale Housing Development Corporation, 2/04 at 100.00 AAA $ 2,142,418
Mississippi, Multifamily Mortgage Revenue Refunding
Bonds, Gooden Estates and McLaurin Arms Project,
Series 1990A, 8.000%, 8/01/24
2,665 Coahoma-Clarksdale Housing Development Corporation, 2/04 at 100.00 AAA 2,668,011
Multifamily Mortgage Revenue Refunding Bonds, Gooden
Estates and McLaurin Arms Project, Series 1990B,
8.000%, 8/01/24
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 0.4%
1,500 Missouri-Illinois Metropolitan District Bi-State Development 10/13 at 100.00 AAA 1,513,725
Agency, Metrolink Cross County Extension Project, Mass
Transit Sales Tax Appropriation Bonds, Series 2002B,
5.000%, 10/01/32 - FSA Insured
855 Missouri Housing Development Commission, Homeownership 9/09 at 102.00 AAA 898,434
Loan Program, Single Family Mortgage Revenue Bonds,
Series 2000A-1, 7.500%, 3/01/31 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
MONTANA - 2.4%
8,420 Montana Board of Housing, Single Family Program Bonds, 12/05 at 102.00 AA+ 8,723,794
Series 1995B, 6.400%, 12/01/27 (Alternative Minimum Tax)
6,920 Montana Board of Housing, Single Family Mortgage Bonds, 6/07 at 101.50 AA+ 7,209,187
Series 1997A, 6.050%, 12/01/37
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 3.9%
7,310 Clark County, Nevada, General Obligation Limited Tax 7/10 at 100.00 AA 8,029,962
Bond Bank Bonds, Series 2000, 5.500%, 7/01/19
7,500 Clark County, Nevada, Airport System Subordinate Lien 7/10 at 101.00 AAA 8,914,050
Revenue Bonds, Series 1999A, 6.000%, 7/01/29
(Pre-refunded to 7/01/10) - MBIA Insured
7,000 Director of Nevada State Department of Business and 1/10 at 100.00 AAA 7,323,470
Industry, Revenue Bonds, Las Vegas Monorail Project,
1st Tier Series 2000, 5.375%, 1/01/40 - AMBAC Insured
2,125 Nevada Housing Division, Single Family Mortgage Bonds, 4/07 at 102.00 Aaa 2,164,398
1997 Senior Series C-2, 5.750%, 4/01/29
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 0.6%
2,480 New Hampshire Business Finance Authority, Water Facility 12/04 at 102.00 AAA 2,664,859
Revenue Bonds, Pennichuck Water Works Inc.,
Series 1994A, 6.350%, 12/01/19 - AMBAC Insured
1,320 New Hampshire Business Finance Authority, Revenue 12/04 at 102.00 AAA 1,418,908
Bonds, Pennichuck Water Works, Inc., Series 1994B,
6.450%, 12/01/16 (Alternative Minimum Tax) -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 3.2%
3,000 New Jersey Turnpike Authority, Turnpike Revenue Bonds, No Opt. Call A 3,550,170
Series 1991C, 6.500%, 1/01/09
Tobacco Settlement Financing Corporation, New Jersey,
Tobacco Settlement Asset-Backed Bonds, Series 2002:
16,000 5.750%, 6/01/32 6/12 at 100.00 BBB 13,777,760
5,000 6.125%, 6/01/42 6/12 at 100.00 BBB 4,117,900
------------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 1.1%
7,500 City of Farmington, New Mexico, Pollution Control Revenue 4/06 at 101.00 BBB- 7,426,800
Refunding Bonds, Public Service Company of New Mexico,
San Juan Project, Series 1997B, 5.800%, 4/01/22
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 15.4%
7,000 Metropolitan Transportation Authority, New York, State 7/12 at 100.00 AA- 7,092,400
Service Contract Refunding Bonds, Series 2002A,
5.125%, 1/01/29
County of Nassau, New York, General Obligations, Serial
General Improvement Bonds, Series F:
3,980 7.000%, 3/01/11 (Pre-refunded to 3/01/10) - FSA Insured 3/10 at 100.00 AAA 4,906,066
4,070 7.000%, 3/01/12 (Pre-refunded to 3/01/10) - FSA Insured 3/10 at 100.00 AAA 5,017,008
3,925 7.000%, 3/01/15 (Pre-refunded to 3/01/10) - FSA Insured 3/10 at 100.00 AAA 4,838,269
The City of New York, New York, General Obligation Bonds,
Fiscal Series 1997G:
1,515 6.000%, 10/15/26 (Pre-refunded to 10/15/07) 10/07 at 101.00 Aaa 1,761,824
8,485 6.000%, 10/15/26 10/07 at 101.00 A 9,273,172
7,435 The City of New York, New York, General Obligation Bonds, 5/10 at 101.00 A 7,970,394
Fiscal Series 2000E, 5.750%, 5/15/20
9,750 New York City Municipal Water Finance Authority, New York, 6/09 at 101.00 AAA 10,736,993
Water and Sewer System Revenue Bonds, Fiscal
Series 2000A, 5.750%, 6/15/31 - FGIC Insured
27
Nuveen Municipal Advantage Fund, Inc. (NMA) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK (continued)
$ 5,000 New York City Municipal Water Finance Authority, 6/07 at 101.00 AAA $ 5,494,650
New York, Water and Sewer System Revenue Bonds,
Fiscal Series 1997B, 5.750%, 6/15/29 - FGIC Insured
10,000 New York Transitional Finance Authority, New York, 5/10 at 101.00 AA+*** 11,899,300
Future Tax Secured Bonds, Fiscal Series 2000B,
6.000%, 11/15/29 (Pre-refunded to 5/15/10)
4,975 New York City Industrial Development Agency, New York, 12/08 at 102.00 Ba2 3,564,040
Special Facilities Revenue Bonds, British Airways PLC
Project, Series 1998, 5.250%, 12/01/32 (Alternative
Minimum Tax)
3,000 New York City Industrial Development Agency, New York, 12/12 at 101.00 Ba2 2,957,640
Special Facilities Revenue Bonds, British Airways PLC
Project, Series 2002, 7.625%, 12/01/32
3,655 Dormitory Authority of the State of New York, State 5/08 at 101.00 AA-*** 4,139,141
University Educational Facilities Revenue Bonds,
Series 1997, 5.125%, 5/15/27 (Pre-refunded to 5/15/08)
Dormitory Authority of the State of New York, Mental Health
Services Facilities Improvement Revenue Bonds, Series 1997B:
45 5.625%, 2/15/21 (Pre-refunded to 2/15/07) 2/07 at 102.00 AA-*** 51,289
7,315 5.625%, 2/15/21 2/07 at 102.00 AA- 7,684,042
9,495 State of New York Mortgage Agency, Homeowner Mortgage 4/10 at 100.00 Aa1 9,968,706
Revenue Bonds, Series 94, 5.800%, 10/01/20
(Alternative Minimum Tax)
5,000 New York State Urban Development Corporation, 1/09 at 101.00 AAA 5,877,750
Correctional Facilities Service Contract Revenue
Bonds, Series C, 6.000%, 1/01/29 (Pre-refunded to
1/01/09) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 4.3%
9,815 North Carolina Housing Finance Agency, Home Ownership 7/09 at 100.00 AA 10,255,693
Revenue Bonds, Series 7A, 1998 Trust Agreement,
6.250%, 1/01/29 (Alternative Minimum Tax)
9,915 North Carolina Housing Finance Agency, Home Ownership 1/10 at 100.00 AA 10,607,265
Revenue Bonds, Series 8A, 1998 Trust Agreement,
5.950%, 1/01/27 (Alternative Minimum Tax)
5,990 North Carolina Housing Finance Agency, Home Ownership 1/10 at 100.00 AA 6,203,663
Revenue Bonds, Series 9A, 1998 Trust Agreement,
5.875%, 7/01/31 (Alternative Minimum Tax)
1,545 North Carolina Housing Finance Agency, Home Ownership 7/10 at 100.00 AAA 1,565,749
Revenue Bonds, Series 10A, 1998 Trust Agreement,
5.400%, 7/01/32 (Alternative Minimum Tax) -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
NORTH DAKOTA - 0.7%
4,575 North Dakota Housing Finance Agency, Home Mortgage 7/08 at 102.00 Aaa 4,656,298
Finance Program Bonds, Series 1998B, 5.500%, 7/01/29
(Alternative Minimum Tax) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 6.0%
5,000 Akron, Bath, and Copley Joint Township Hospital District, 11/09 at 101.00 Baa1 4,704,900
Ohio, Hospital Facilities Revenue Bonds, Summa Health
System Project, Series 1998A, 5.375%, 11/15/18
6,000 County of Cuyahoga, Ohio, Hospital Revenue Bonds, 7/09 at 101.00 AAA 6,261,600
University Hospitals Health System, Inc., Series 1999,
5.500%, 1/15/30 - AMBAC Insured
Montgomery County, Ohio, Hospital Facilities Revenue
Bonds, Kettering Medical Center, Series 1999:
7,840 6.750%, 4/01/18 4/10 at 101.00 BBB+ 8,513,848
5,000 6.750%, 4/01/22 4/10 at 101.00 BBB+ 5,353,700
2,680 Ohio Housing Finance Agency, GNMA Mortgage-Backed 8/10 at 100.00 Aaa 2,747,992
Securities Program, Residential Mortgage Revenue
Bonds, Series 2000D, 5.450%, 9/01/31 (Alternative
Minimum Tax)
2,650 Ohio State Higher Education, General Obligation Bonds, 5/13 at 100.00 AA+ 2,733,926
Series 2003A, 5.000%, 5/01/22
10,000 Ohio Air Quality Development Authority, Pollution Control 12/04 at 100.00 Baa2 10,218,500
Revenue Refunding Bonds, Ohio Edison Company Project,
Series 1999C, 5.800%, 6/01/16 (Mandatory put 12/01/04)
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 2.0%
5,000 Oklahoma Industries Authority, Health System Revenue 8/09 at 101.00 AAA 5,341,300
and Refunding Bonds, INTEGRIS Obligated Group of Baptist
Medical Center, Inc., South Oklahoma City Hospital
Corporation, and Rural Health, Inc., Series 1999A,
5.750%, 8/15/29 - MBIA Insured
10,000 Trustees of the Tulsa Municipal Airport Trust, Oklahoma, 12/08 at 100.00 B- 8,411,300
Revenue Refunding Bonds, American Airlines Inc,
Series 2001B, 5.650%, 12/01/35 (Alternative Minimum
Tax) (Mandatory put 12/01/08)
28
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 2.2%
$ 20 Pennsylvania Housing Finance Agency, FNMA Rental 1/04 at 102.00 AAA $ 20,371
Housing Revenue Refunding Bonds, Series 1993,
5.800%, 7/01/18
2,500 Philadelphia School District, Pennsylvania, General 2/12 at 100.00 AAA 2,637,900
Obligation Bonds, Series 2002A, 5.500%, 2/01/31 -
FSA Insured
4,285 Venango Housing Corporation, Pennsylvania, Multifamily 2/04 at 100.00 AAA 4,298,155
FHA-Insured Mortgage Revenue Bonds, Evergreen Arbors
Project, Series 1990A, 8.000%, 2/01/24
6,750 Washington County Authority, Pennsylvania, Capital No Opt. Call AAA 7,844,513
Funding Revenue Bonds, Capital Projects and Equipment
Acquisition Program, Series 1999, 6.150%, 12/01/29 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 2.7%
The Housing Authority of the City of Providence, Rhode Island,
Multifamily Mortgage Revenue Bonds, FHA-Insured Mortgage Loan -
Cathedral Square Apartments II Project, 1992 Series:
370 7.375%, 4/01/10 (Alternative Minimum Tax) 4/07 at 100.00 AAA 385,100
1,060 7.400%, 4/01/20 (Alternative Minimum Tax) 4/07 at 100.00 AAA 1,103,301
3,050 7.500%, 10/01/32 (Alternative Minimum Tax) 4/07 at 100.00 AAA 3,175,141
12,250 Rhode Island Health and Educational Building Corporation, 5/07 at 102.00 AAA 13,324,203
Hospital Financing Revenue Bonds, Lifespan Obligated
Group Issue, Series 1996, 5.500%, 5/15/16 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 3.9%
10,000 Greenville County School District, South Carolina, Installment 12/12 at 101.00 AA- 11,115,300
Purchase Revenue Bonds, Series 2002, 6.000%, 12/01/20
2,500 Lexington County Health Services District, South Carolina, 11/13 at 100.00 A 2,601,225
Hospital Revenue Bonds, Series 2003 Refunding and
Improvement, 5.750%, 11/01/28
South Carolina Public Service Authority, Revenue Refunding
Bonds, Series 2003A:
3,560 5.000%, 1/01/20 - AMBAC Insured 7/13 at 100.00 AAA 3,699,481
2,125 5.000%, 1/01/21 - AMBAC Insured 7/13 at 100.00 AAA 2,194,785
7,500 Tobacco Settlement Revenue Management Authority, 5/11 at 101.00 BBB 6,608,700
South Carolina, Tobacco Settlement Asset-Backed Bonds,
Series 2001B, 6.375%, 5/15/28
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 5.2%
6,000 Knox County Health, Educational, and Housing Facilities 4/12 at 101.00 Baa2 6,181,140
Board, Tennessee, Hospital Facilities Revenue Bonds,
Baptist Health System of East Tennessee, Series 2002,
6.500%, 4/15/31
20,415 Knox County Health, Educational, and Housing Facility 1/13 at 75.87 AAA 9,805,529
Board, Tennessee, Hospital Revenue Refunding Bonds,
Covenant Health, Series 2002A, 0.000%, 1/01/18 -
FSA Insured
1,750 The Metropolitan Government of Nashville and Davidson 5/11 at 100.00 AA 1,782,043
County, Tennessee, Electric System Revenue Bonds,
Series 2001A, 5.125%, 5/15/26
14,385 The Health and Educational Facilities Board of the 11/09 at 101.00 AAA 17,005,515
Metropolitan Government of Nashville and Davidson
County Tennessee, Revenue Bonds, Ascension Health
Credit Group, Series 1999A, 5.875%, 11/15/28
(Pre-refunded to 11/15/09) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 16.3%
14,900 Brazos River Authority, Texas, Pollution Control Revenue No Opt. Call BBB 15,599,406
Refunding Bonds, TXU Electric Company Project,
Series 2001C, 5.750%, 5/01/36 (Alternative
Minimum Tax) (Mandatory put 11/01/11)
6,000 Brazos River Authority, Texas, Revenue Refunding Bonds, No Opt. Call AAA 6,306,900
Houston Lighting and Power Company Project,
Series 1998, 5.050%, 11/01/18 (Alternative Minimum
Tax) - AMBAC Insured
8,400 Gulf Coast Waste Disposal Authority, Texas, Waste 4/09 at 101.00 BBB 7,894,740
Disposal Revenue Bonds, Valero Energy Corporation
Project, Series 1999, 5.700%, 4/01/32 (Alternative
Minimum Tax)
10,000 Harris County Health Facilities Development Corporation, 5/06 at 102.00 AAA 11,066,200
Texas, Special Facilities Revenue Bonds, Texas Medical
Center Project, Series 1996, 5.900%, 5/15/16 -
MBIA Insured
5,000 Harris County Health Facilities Development Corporation, 11/13 at 100.00 AAA 5,037,200
Texas, Thermal Utility Revenue Bonds, TECO Project,
Series 2003, 5.000%, 11/15/30 - MBIA Insured
12,500 City of Houston, Texas, Airport System Subordinate Lien 7/10 at 100.00 AAA 13,200,500
Revenue Bonds, Series 2000B, 5.500%, 7/01/30 -
FSA Insured
29
Nuveen Municipal Advantage Fund, Inc. (NMA) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS (continued)
City of Houston, Texas, Water Conveyance System Contract,
Certificates of Participation, Series 1993 A-J:
$ 5,490 6.800%, 12/15/10 - AMBAC Insured No Opt. Call AAA $ 6,682,593
2,000 6.800%, 12/15/11 - AMBAC Insured No Opt. Call AAA 2,441,800
16,305 Matagorda County Navigation District 1, Texas, Revenue 5/09 at 101.00 BBB- 15,414,095
Refunding Bonds, Reliant Energy Project, Series 1999B,
5.950%, 5/01/30 (Alternative Minimum Tax)
3,425 Sabine River Authority, Texas, Pollution Control Revenue No Opt. Call BBB 3,587,345
Refunding Bonds, TXU Electric Company Project,
Series 2001A, 5.500%, 5/01/22 (Mandatory put 11/01/11)
4,700 Sam Rayburn Municipal Power Agency, Texas, Power 10/12 at 100.00 Baa2 4,838,603
Supply System Revenue Refunding Bonds, Series 2002A,
6.000%, 10/01/21
4,000 State of Texas, General Obligation Bonds, Water Financial 8/09 at 100.00 Aa1 4,208,640
Assistance, State Participation Program, Series 199C,
5.500%, 8/01/35
6,840 Travis County Health Facilities Development Corporation, 11/09 at 101.00 AAA 8,086,043
Texas, Revenue Bonds, Ascension Health Credit Group,
Series 1999A, 5.875%, 11/15/24 (Pre-refunded to
11/15/09) - AMBAC Insured
2,500 Trinity River Authority of Texas, Pollution Control Revenue No Opt. Call Baa2 2,614,625
Refunding Bonds, TXU Electric Company Project,
Series 2001A, 5.000%, 5/01/27 (Alternative Minimum Tax)
(Mandatory put 11/01/06)
245 Wood Glen Housing Finance Corporation, Texas, Mortgage 1/04 at 100.00 AAA 245,916
Revenue Refunding Bonds, FHA-Insured Mortgage Loan -
Section 8 Assisted Copperwood I Project, Series 1990A,
7.625%, 1/01/10 - MBIA Insured
Wood Glen Housing Finance Corporation, Texas, Mortgage Revenue
Refunding Bonds, FHA-Insured Mortgage Loan - Section 8 Assisted
Copperwood II Project, Series 1990C:
205 7.625%, 1/01/10 - MBIA Insured 1/04 at 100.00 AAA 205,502
1,250 7.650%, 7/01/23 - MBIA Insured 1/04 at 100.00 AAA 1,280,937
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 1.0%
6,380 Capital Region Airport Authority, Richmond, Virginia, 7/05 at 102.00 AAA 6,854,098
Airport Revenue Bonds, International Airport Projects,
Series 1995A, 5.625%, 7/01/20 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 14.5%
8,810 Public Utility District No. 1 of Chelan County, Washington, 7/11 at 101.00 AAA 9,161,695
Chelan Hydro-Consolidated System Revenue Bonds,
Series 2001A, 5.600%, 1/01/36 (Alternative Minimum Tax) -
MBIA Insured
10,730 Public Utility District No. 1 of Chelan County, Washington, 7/11 at 101.00 AAA 11,234,847
Chelan Hydro-Consolidated System Revenue Refunding
Bonds, Series 2001C, 5.650%, 7/01/32 (Alternative
Minimum Tax) - MBIA Insured
5,665 Public Utility District No. 1 of Chelan County, Washington, 7/12 at 100.00 AAA 5,723,123
Chelan Hydro-Consolidated System Revenue Bonds,
Series 2002B, 5.250%, 7/01/37 (Alternative Minimum Tax) -
AMBAC Insured
10,730 Pierce County School District 320, Sumner, Washington, 12/10 at 100.00 Aaa 12,596,054
Unlimited Tax General Obligation Bonds, Series 2000,
6.250%, 12/01/17 - FSA Insured
10,550 Port of Seattle, Washington, Limited Tax General Obligation 12/10 at 100.00 AA+ 11,071,064
Bonds, Series 2000B, 5.750%, 12/01/25 (Alternative
Minimum Tax)
5,315 Port of Seattle, Washington, Revenue Bonds, No Opt. Call AAA 6,047,779
Series 2000B, 6.000%, 2/01/10 (Alternative Minimum
Tax) - MBIA Insured
19,295 Port of Seattle, Washington, Special Facility Revenue Bonds, 3/10 at 101.00 AAA 21,437,710
Terminal 18 Project, Series 1999A, 6.000%, 9/01/29 -
MBIA Insured
5,000 Port of Seattle, Washington, Special Facility Revenue Bonds, 3/10 at 101.00 AAA 5,393,650
Terminal 18 Project, Series 1999B, 6.000%, 9/01/20
(Alternative Minimum Tax) - MBIA Insured
5,000 Washington Health Care Facilities Authority Revenue Bonds, 12/09 at 101.00 AAA 5,319,300
Providence Services, Series 1999, 5.375%, 12/01/19 -
MBIA Insured
8,750 Washington Public Power Supply System, Nuclear Project 7/08 at 102.00 Aa1 9,084,425
No. 3, Refunding Revenue Bonds, Series 1998A,
5.125%, 7/01/18
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 0.7%
5,000 Mason County, West Virginia, Pollution Control Revenue 10/11 at 100.00 BBB 4,962,000
Bonds, Appalachian Power Company Project, Series 2003L,
5.500%, 10/01/22
30
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 7.8%
$ 8,000 Badger Tobacco Asset Securitization Corporation, 6/12 at 100.00 BBB $ 7,312,640
Wisconsin, Tobacco Settlement Asset-Backed Bonds,
Series 2002, 6.125%, 6/01/27
5,000 Madison, Wisconsin, Industrial Development Revenue 4/12 at 100.00 AA- 5,137,250
Refunding Bonds, Madison Gas & Electric Company
Projects, Series 2002A, 5.875%, 10/01/34 (Alternative
Minimum Tax)
3,000 Southeast Wisconsin Professional Baseball Park District, No Opt. Call AAA 3,383,610
Sales Tax Revenue Refunding Bonds, Series 1998A,
5.500%, 12/15/19 - MBIA Insured
3,640 Wisconsin Housing and Economic Development Authority, 3/10 at 100.00 AA 3,870,335
Home Ownership Revenue Bonds, Series 2000B,
5.750%, 3/01/22 (Alternative Minimum Tax)
Wisconsin Health and Educational Facilities Authority,
Revenue Bonds, Aurora Medical Group, Inc. Project,
Series 1996:
10,000 5.600%, 11/15/16 - FSA Insured 5/06 at 102.00 AAA 10,979,602
20,000 5.750%, 11/15/25 - FSA Insured 5/06 at 102.00 AAA 21,607,400
------------------------------------------------------------------------------------------------------------------------------------
$ 962,480 Total Long-Term Investments (cost $936,335,897) - 148.5% 996,661,335
=============-----------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 1.8%
4,000 Moffat County, Colorado, Pollution Control Revenue Refunding A-1+ 4,000,000
Bonds, Pacificorp Projects, Variable Rate Demand Bonds,
Series 1994, 1.200%, 5/01/13 - AMBAC Insured+
6,095 Montgomery County, Tennessee, Public Building Authority VMIG-1 6,095,000
Pooled Financing Revenue Bonds, County Loan Pool
Program, Variable Rate Demand Bonds, Series 2002,
1.150%, 4/01/32+
2,000 Nebraska Educational Finance Authority, Variable Rate VMIG-1 2,000,000
Demand Revenue Refunding Bonds, Creighton University,
Series 2001, 1.150%, 8/01/31+
------------------------------------------------------------------------------------------------------------------------------------
$ 12,095 Total Short-Term Investments (cost $12,095,000) 12,095,000
=============-----------------------------------------------------------------------------------------------------------------------
Total Investments (cost $948,430,897) - 150.3% 1,008,756,335
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 3.0% 20,390,939
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (53.3)% (358,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 671,147,274
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments
are based on net assets applicable to Common shares.
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and
prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent
auditors): Using the higher of Standard & Poor's or
Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of
principal and interest. Such securities are normally
considered to be equivalent to AAA rated securities.
# On December 9, 2002, UALCorporation, the holding
company of United Air Lines, Inc. filed for federal
bankruptcy protection. The Adviser determined that it
was likely United would not remain current on their
interest payment obligations with respect to these
bonds and thus has stopped accruing interest.
N/R Investment is not rated.
+ Security has a maturity of more than one year, but has
variable rate and demand features which qualify it as a
short-term security. The rate disclosed is that
currently in effect. This rate changes periodically
based on market conditions or a specified market index.
See accompanying notes to financial statements.
31
Nuveen Municipal Market Opportunity Fund, Inc. (NMO)
Portfolio of
INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 0.8%
$ 3,000 Arizona State Transportation Board, Highway Revenue 7/11 at 100.00 AAA $ 3,196,590
Bonds, Series 2001, 5.250%, 7/01/20
1,725 Maricopa County Industrial Development Authority, Education 7/10 at 102.00 Baa3 1,707,146
Revenue Bonds, Arizona Charter Schools Project I,
Series 2000A, 6.750%, 7/01/29
570 Pima County Industrial Development Authority, Arizona, 5/07 at 105.85 AAA 601,111
FNMA/GNMA Single Family Mortgage Revenue Bonds,
Series 1997A, 7.100%, 11/01/29 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 1.8%
5,000 Arkansas Development Finance Authority, Hospital Revenue 2/10 at 100.00 BBB- 5,475,850
Bonds, Washington Regional Medical Center, Series 2000,
7.000%, 2/01/15
3,480 Cabot School District No. 4 of Lonoke County, Arkansas, 8/08 at 100.00 Aaa 3,505,160
General Obligation Bonds, Series 2003 Refunding,
5.000%, 2/01/27 - AMBAC Insured
2,865 Board of Trustees of The University of Arkansas at 12/12 at 100.00 Aaa 3,120,042
Fayetteville, Various Facilities Revenue Bonds, Series 2002,
5.500%, 12/01/20 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 4.9%
3,225 California Health Facilities Financing Authority, Revenue 3/13 at 100.00 A 2,958,422
Bonds, Adventist Health System/West, Series 2003A,
5.000%, 3/01/33
1,000 California Department of Water Resources, Power Supply 5/12 at 101.00 A3 1,092,480
Revenue Bonds, Series 2002A, 5.750%, 5/01/17
2,500 Los Angeles Community Redevelopment Agency, California, 1/04 at 100.00 BBB*** 2,526,200
Tax Allocation Refunding Bonds, Central Business District
Redevelopment Project, Series 1987G, 6.750%, 7/01/10
Department of Water and Power of The City of Los Angeles,
California, Electric Plant Revenue Bonds, Second Issue of 1993:
490 4.750%, 10/15/20 4/04 at 102.00 AA-*** 500,795
5,510 4.750%, 10/15/20 4/04 at 102.00 Aaa 5,631,496
995 Department of Water and Power of The City of Los Angeles, 2/04 at 102.00 AA-*** 1,007,268
California, Electric Plant Revenue Bonds, Issue of 1994,
5.375%, 2/15/34
Orange County, California, Recovery Certificates of
Participation, Series 1996A:
13,100 5.875%, 7/01/19 - MBIA Insured 7/06 at 102.00 AAA 14,713,003
690 6.000%, 7/01/26 - MBIA Insured 7/06 at 102.00 AAA 771,213
5,000 San Joaquin Hills Transportation Corridor Agency, 1/14 at 102.00 AAA 4,521,950
California, Toll Road Refunding Revenue Bonds,
Series 1997A, 0.000%, 1/15/17 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 3.9%
3,000 Broomfield, Colorado, Master Facilities Lease Purchase 12/09 at 100.00 AAA 3,265,530
Agreement, Certificates of Participation, Series 1999,
5.750%, 12/01/24 - AMBAC Insured
6,000 Broomfield, Colorado, Sales and Use Tax Revenue Bonds, 12/12 at 100.00 Aaa 6,496,560
Series 2002A Refunding and Improvement,
5.500%, 12/01/22 - AMBAC Insured
11,465 City and County of Denver, Colorado, Airport System 11/10 at 100.00 AAA 12,460,047
Revenue Refunding Bonds, Series 2000A, 6.000%, 11/15/18
(Alternative Minimum Tax) - AMBAC Insured
20,000 E-470 Public Highway Authority, Colorado, Senior Revenue 9/10 at 31.42 AAA 4,758,000
Bonds, Series 2000A, 0.000%, 9/01/28 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 6.2%
15,000 City of Atlanta, Georgia, Airport General Revenue and 1/10 at 101.00 AAA 17,346,150
Refunding Bonds Series 2000A, 5.600%, 1/01/30
(Pre-refunded to 1/01/10) - FGIC Insured
14,000 Fulton County Facilities Corporation, Georgia, Certificates 11/10 at 101.00 AAA 15,404,340
of Participation, Public Purpose Project, Series 1999,
5.500%, 11/01/18 - AMBAC Insured
32
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA (continued)
$ 8,000 Georgia, General Obligation Bonds, Series 1995C, No Opt. Call AAA $ 9,683,280
7.250%, 7/01/08
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 10.1%
6,500 Chicago, Illinois, Gas Supply Revenue Refunding Bonds, 6/05 at 102.00 Aa2 6,956,820
Peoples Gas Light and Coke Company Project, Series 1995A,
6.100%, 6/01/25
5,250 City of Chicago, Illinois, Chicago Midway Airport, Revenue 1/09 at 101.00 AAA 5,257,455
Bonds, Series 1998B, 5.000%, 1/01/28 - MBIA Insured
4,000 City of Chicago, Illinois, Motor Fuel Tax Revenue Bonds, 7/13 at 100.00 AAA 4,010,360
Series 2003A, 5.000%, 1/01/33 - AMBAC Insured
5,210 Illinois Housing Development Authority, Section 8 Elderly 1/04 at 101.00 A 5,281,690
Housing Revenue Bonds, Garden House of River Oaks West
Development, Series 1992A, 6.875%, 1/01/20
950 Illinois Housing Development Authority, Section 8 Elderly 3/04 at 101.00 A 971,052
Housing Revenue Bonds, Village Center Development,
Series 1992C, 6.600%, 3/01/07
38,645 State of Illinois, General Obligation Bonds, Illinois FIRST, 4/10 at 100.00 AAA 40,686,229
Series 2000, 5.500%, 4/01/25 - MBIA Insured
1,975 Lake County Community High School District No. 127, No Opt. Call AAA 2,756,863
Grayslake, Illinois, General Obligation Bonds, Series 2002A,
9.000%, 2/01/13 - FGIC Insured
Metropolitan Pier and Exposition Authority, Illinois, McCormick
Place Expansion Project Revenue Bonds, Series 2002A:
3,250 0.000%, 6/15/25 - MBIA Insured 6/22 at 101.00 AAA 1,566,273
2,270 5.000%, 12/15/28 - MBIA Insured 6/12 at 101.00 AAA 2,282,803
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 2.0%
4,695 Indiana Educational Facilities Authority, Educational Facilities 2/11 at 100.00 AAA 4,939,328
Revenue Bonds, Butler University Project, Series 2001,
5.500%, 2/01/26 - MBIA Insured
20,695 Indianapolis Airport Authority, Indiana, Specialty Facility 11/05 at 102.00 Ca 7,191,513
Revenue Bonds, United Air Lines, Inc., Indianapolis
Maintenance Center Project, Series 1995A, 6.500%, 11/15/31
(Alternative Minimum Tax)#
2,000 City of Petersburg, Indiana, Pollution Control Revenue 8/11 at 102.00 Baa2 1,928,100
Refunding Bonds, Indianapolis Power and Light Company,
Series 1991, 5.750%, 8/01/21
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 0.6%
4,215 Iowa Finance Authority, Solid Waste Disposal Revenue No Opt. Call N/R 3,915,693
Bonds, IPSCO Project, Series 1997, 6.000%, 6/01/27
(Alternative Minimum Tax) (Mandatory put 6/01/07)
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 1.6%
Jefferson County, Kentucky, School District Finance Corporation,
School Building Revenue Bonds, Series 2000A:
3,045 5.250%, 7/01/17 - FSA Insured 1/10 at 101.00 AAA 3,295,695
7,490 5.250%, 7/01/20 - FSA Insured 1/10 at 101.00 AAA 7,970,484
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 1.1%
7,415 Louisiana Local Government Environmental Facilities and 12/12 at 100.00 AAA 7,439,395
Community Development Authority, Revenue Bonds, Baton
Rouge Community College Facilities Corporation Project,
Series 2002, 5.000%, 12/01/32 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 1.6%
Frederick County, Maryland, General Obligation Public
Facilities Bonds, Series 2002:
3,710 5.000%, 11/01/18 11/12 at 101.00 AA 3,957,494
3,890 5.000%, 11/01/19 11/12 at 101.00 AA 4,116,476
2,500 Department of Transportation, State of Maryland, County No Opt. Call AA 2,861,525
Transportation Revenue Bonds, Series 2002, 5.500%, 2/01/16
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 3.3%
5,250 Massachusetts Bay Transportation Authority, Assessment 7/10 at 100.00 AAA 5,439,998
Bonds, Series 2000A, 5.250%, 7/01/30
10,000 Massachusetts Water Resources Authority, General Revenue 8/10 at 101.00 AAA 10,959,100
Bonds, Series 2000A, 5.750%, 8/01/39 - FGIC Insured
33
Nuveen Municipal Market Opportunity Fund, Inc. (NMO) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS (continued)
$ 6,195 University of Massachusetts Building Authority, Facilities 11/10 at 100.00 AAA $ 6,312,767
Revenue Bonds, Senior Series 2000A, Commonwealth
Guaranteed, 5.125%, 11/01/25 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 1.5%
6,635 Detroit, Michigan, Water Supply System Revenue Bonds, 7/11 at 101.00 AAA 7,784,447
Senior Lien, Series 2001A, 5.750%, 7/01/28 (Pre-refunded
to 7/01/11) - FGIC Insured
2,090 City of Grand Rapids Building Authority, County of Kent, 8/10 at 100.00 AAA 2,289,700
Michigan, General Obligation Limited Tax Bonds,
Series 2000, 5.375%, 8/01/17 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 8.1%
13,675 State of Minnesota, General Obligation Bonds, 11/10 at 100.00 AAA 14,807,564
Series 2000, 5.125%, 11/01/16
4,375 Minnesota Housing Finance Agency, Single Family Mortgage 1/11 at 101.00 AA+ 4,632,075
Bonds, Series 1998H-2, Remarketed, 6.050%, 7/01/31
(Alternative Minimum Tax)
30,000 Minnesota Agricultural and Economic Development Board, 11/10 at 101.00 A 32,126,700
Health Care System Revenue Bonds, Fairview Health
Services, Series 2000A, 6.375%, 11/15/29
3,390 The Housing and Redevelopment Authority of the City of 11/15 at 103.00 AAA 4,181,226
St. Paul, Minnesota, Sales Tax Revenue Refunding Bonds,
Civic Center Project, Series 1996, 7.100%, 11/01/23 -
FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 1.2%
5,900 Mississippi Business Finance Corporation, Pollution Control 4/04 at 102.00 BBB- 5,883,244
Revenue Refunding Bonds, System Energy Resources Inc.
Project, Series 1998, 5.875%, 4/01/22
2,070 Mississippi Home Corporation, GNMA Mortgage-Backed 7/07 at 105.00 Aaa 2,157,975
Securities Single Family Mortgage Revenue Bonds,
Series 1997D-5, 6.750%, 7/01/29 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 3.8%
Director of Nevada State Department of Business and Industry,
Revenue Bonds, Las Vegas Monorail Project, 1st Tier Series 2000:
8,500 0.000%, 1/01/26 - AMBAC Insured No Opt. Call AAA 2,504,185
5,315 0.000%, 1/01/27 - AMBAC Insured No Opt. Call AAA 1,482,832
21,000 5.375%, 1/01/40 - AMBAC Insured 1/10 at 100.00 AAA 21,970,410
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 4.0%
650 Camden County Pollution Control Financing Authority, 12/03 at 100.00 B2 623,720
New Jersey, Solid Waste Disposal and Resource Recovery
System Revenue Bonds, Series 1991D, 7.250%, 12/01/10
21,000 New Jersey Transportation Trust Fund Authority, 6/10 at 100.00 AA-*** 24,468,990
Transportation System Bonds, Series 2000B,
5.750%, 6/15/17 (Pre-refunded to 6/15/10)
3,165 Tobacco Settlement Financing Corporation, New Jersey, 6/12 at 100.00 BBB 2,606,631
Tobacco Settlement Asset-Backed Bonds, Series 2002,
6.125%, 6/01/42
------------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 1.9%
5,925 New Mexico Hospital Equipment Loan Council, Hospital 8/11 at 101.00 A+ 6,100,617
Revenue Bonds, Presbyterian Healthcare Services,
Series 2001A, 5.500%, 8/01/21
5,675 Regents of the University of New Mexico, System Revenue No Opt. Call AA 6,759,663
Refunding Bonds, Series 1992A, 6.250%, 6/01/12
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 24.8%
5,000 Long Island Power Authority, New York, Electric System 6/08 at 101.00 AAA 5,172,900
General Revenue Bonds, Series 1998A, 5.250%, 12/01/26 -
MBIA Insured
11,000 Nassau County Tobacco Settlement Corporation, New York, 7/09 at 101.00 Baa2 10,947,970
Tobacco Settlement Asset-Backed Bonds, Series 1999A,
6.400%, 7/15/33
21,715 City of New York, New York, General Obligation Bonds, 3/06 at 101.50 A 23,559,689
Fiscal Series 1996I, 5.875%, 3/15/18
City of New York, New York, General Obligation Bonds,
Fiscal Series 2002G:
1,000 5.000%, 8/01/17 8/12 at 100.00 A 1,023,050
10,500 5.750%, 8/01/18 8/12 at 100.00 A 11,467,680
5,000 City of New York, New York, General Obligation Bonds, 8/12 at 100.00 A 5,460,800
Fiscal Series 2003A, 5.750%, 8/01/16
34
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK (continued)
City of New York, New York, General Obligation Bonds,
Fiscal Series 1997H:
$ 80 6.125%, 8/01/25 (Pre-refunded to 8/01/07) 8/07 at 101.00 A*** $ 92,968
9,920 6.125%, 8/01/25 8/07 at 101.00 A 11,014,771
17,870 New York Transitional Finance Authority, New York, Future 8/09 at 101.00 AA+*** 20,998,680
Tax Secured Bonds, Fiscal Series 2000A, 5.750%, 8/15/24
(Pre-refunded to 8/15/09)
Dormitory Authority of the State of New York, Mental Health
Services Facilities Improvement Revenue Bonds, Series 1997A:
19,290 5.750%, 2/15/27 (Pre-refunded to 2/15/07) 2/07 at 102.00 AA-*** 22,062,359
710 5.750%, 2/15/27 2/07 at 102.00 AA- 748,794
4,500 New York State Energy Research and Development 1/04 at 102.00 AAA 4,592,610
Authority, Gas Facilities Revenue Bonds, The Brooklyn
Union Gas Company Project, Series 1989C, 5.600%, 6/01/25
(Alternative Minimum Tax) - MBIA Insured
3,000 New York State Medical Care Facilities Finance Agency, 2/05 at 102.00 AAA 3,277,620
Brookdale Hospital Medical Center Secured Hospital
Revenue Bonds, 1995 Series A, 6.850%, 2/15/17
(Pre-refunded to 2/15/05)
4,785 New York State Medical Care Facilities Finance Agency, 11/05 at 102.00 Aa1 5,079,469
Health Center Projects Revenue Bonds, Secured Mortgage
Program, Series 1995A, 6.375%, 11/15/19
10,000 Port Authority of New York and New Jersey, Special 12/07 at 102.00 AAA 11,040,600
Project Bonds, JFK International Air Terminal LLC Project,
Series 6, 5.750%, 12/01/22 (Alternative Minimum Tax) -
MBIA Insured
5,400 Tobacco Settlement Financing Corporation of New York State, 6/10 at 100.00 AA- 5,728,212
Asset-Backed Bonds, Series 2003-A1, 5.500%, 6/01/16
7,000 Triborough Bridge and Tunnel Authority, New York, General 1/22 at 100.00 AAA 7,878,780
Purpose Revenue Bonds, Series 1999B, 5.500%, 1/01/30
(Pre-refunded to 1/01/22)
20,500 TSASC, Inc., New York, Tobacco Flexible Amortization Bonds, 7/09 at 101.00 A3 20,850,755
Series 1999-1, 6.250%, 7/15/34
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 1.2%
7,500 North Carolina Municipal Power Agency Number 1, 1/13 at 100.00 AAA 7,990,725
Catawba Electric Revenue Bonds, Series 2003A,
5.250%, 1/01/19 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
NORTH DAKOTA - 4.3%
22,905 Fargo, North Dakota, Health System Revenue Bonds, 6/10 at 101.00 AAA 24,005,814
MeritCare Obligated Group, Series 2000A, 5.625%, 6/01/31 -
FSA Insured
North Dakota Water Commission, Water Development and
Management Program Bonds, Series 2000A:
2,230 5.700%, 8/01/18 - MBIA Insured 8/10 at 100.00 AAA 2,508,572
2,450 5.750%, 8/01/19 - MBIA Insured 8/10 at 100.00 AAA 2,757,377
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 2.6%
16,140 Montgomery County, Ohio, Hospital Facilities Revenue Bonds, No Opt. Call BBB+ 17,870,047
Kettering Medical Center, Series 1999, 6.300%, 4/01/12
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 0.0%
300 Trustees of the Tulsa Municipal Airport Trust, Oklahoma, 12/08 at 100.00 B- 255,318
Revenue Refunding Bonds, Series 2000B, 6.000%, 6/01/35
(Alternative Minimum Tax) (Mandatory put 12/01/08)
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 2.4%
5,000 Oregon Health Sciences University, Revenue Bonds, 1/13 at 100.00 AAA 5,265,400
Series 2002A, 5.250%, 7/01/22 - MBIA Insured
Portland, Oregon, Water System Revenue Bonds, Series 2000A:
6,780 5.375%, 8/01/18 8/10 at 100.00 Aa1 7,384,030
3,655 5.500%, 8/01/20 8/10 at 100.00 Aa1 3,991,187
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 6.4%
5,000 Delaware County Industrial Development Authority, 1/08 at 102.00 BBB 5,184,450
Pennsylvania, Resource Recovery Revenue Refunding
Bonds, Series 1997A, 6.200%, 7/01/19
15,000 Delaware River Port Authority, Pennsylvania, Revenue No Opt. Call AAA 16,732,350
Refunding Bonds, Series 1998B, 5.250%, 1/01/08 -
AMBAC Insured
15,050 Pennsylvania General Obligation Bonds, Second 9/11 at 101.00 AA 16,299,903
Series 2001, 5.000%, 9/15/14
35
Nuveen Municipal Market Opportunity Fund, Inc. (NMO) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA (continued)
$ 5,000 Pennsylvania Higher Education Assistance Agency, 12/10 at 100.00 AAA $ 5,911,250
Capital Acquisition Revenue Bonds, Series 2000,
5.875%, 12/15/30 (Pre-refunded to 12/15/10) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 1.1%
8,150 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 7,360,673
Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 5.4%
24,730 Greenville County School District, South Carolina, Installment 12/12 at 101.00 AA- 26,067,893
Purchase Revenue Bonds, Series 2002, 5.500%, 12/01/22
1,865 Three Rivers Solid Waste Authority, South Carolina, 1/07 at 102.00 AAA 1,932,979
Solid Waste Disposal Facilities Revenue Bonds, Series 1997,
5.300%, 1/01/27 - MBIA Insured
10,000 Tobacco Settlement Revenue Management Authority, 5/11 at 101.00 BBB 8,811,600
South Carolina, Tobacco Settlement Asset-Backed Bonds,
Series 2001B, 6.375%, 5/15/28
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 0.9%
5,000 The Health, Educational, and Housing Facilities Board of 7/13 at 100.00 AA 4,965,650
Knox County, Tennessee, Hospital Facilities Revenue Bonds,
East Tennessee Children's Hospital, Series 2003A,
5.000%, 7/01/23 - RAAI Insured
1,200 The Health and Educational Facilities Board of the 1/04 at 102.00 N/R 1,150,164
Metropolitan Government of Nashville and Davidson
County, Tennessee, Revenue Refunding Bonds, The Blakeford
at Green Hills, Series 1998, 5.650%, 7/01/16
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 26.5%
5,000 Alliance Airport Authority, Inc., Texas, Special Facilities 12/03 at 100.00 CCC 3,491,050
Revenue Bonds, American Airlines, Inc. Project,
Series 1990, 7.500%, 12/01/29 (Alternative Minimum Tax)
Arlington Independent School District, Tarrant County, Texas,
General Obligation Bonds, Series 1995:
3,710 0.000%, 2/15/12 2/05 at 67.33 Aaa 2,428,863
3,710 0.000%, 2/15/13 2/05 at 62.94 Aaa 2,270,668
12,250 Austin, Texas, Hotel Occupancy Tax Subordinate Lien Revenue 11/09 at 100.00 AAA 13,323,713
Refunding Bonds, Series 1999, 5.800%, 11/15/29 -
AMBAC Insured
14,200 Brazos River Authority, Texas, Pollution Control Revenue No Opt. Call BBB 14,866,548
Refunding Bonds, TXU Electric Company Project,
Series 2001C, 5.750%, 5/01/36 (Alternative Minimum
Tax) (Mandatory put 11/01/11)
Brownsville Independent School District, Cameron County,
Texas, General Obligation Bonds, Series 1999:
5,015 5.625%, 8/15/25 8/09 at 100.00 AAA 5,363,894
8,825 5.625%, 8/15/29 8/09 at 100.00 AAA 9,428,277
Clear Creek Independent School District, Galveston and Harris
Counties, Texas, Unlimited Tax Schoolhouse and Refunding Bonds,
Series 2000:
17,325 5.400%, 2/15/18 2/10 at 100.00 AAA 18,787,057
10,000 5.650%, 2/15/19 2/10 at 100.00 AAA 11,059,800
6,880 5.700%, 2/15/20 2/10 at 100.00 AAA 7,601,437
8,020 5.700%, 2/15/21 2/10 at 100.00 AAA 8,804,597
6,000 Dallas-Fort Worth International Airport Facility Improvement 11/09 at 101.00 CCC 3,960,240
Corporation, Texas, Revenue Bonds, American Airlines,
Inc., Series 1999, 6.375%, 5/01/35 (Alternative
Minimum Tax)
11,750 Dallas-Fort Worth International Airport Facilities 11/07 at 100.00 CCC 8,722,025
Improvement Corporation, Texas, Revenue Refunding
Bonds, American Airlines, Inc., Series 2000C,
6.150%, 5/01/29 (Alternative Minimum Tax)
(Mandatory put 11/01/07)
21,500 City of Houston, Texas, Airport System Subordinate Lien 7/10 at 100.00 AAA 22,704,860
Revenue Bonds, Series 2000B, 5.500%, 7/01/30 - FSA Insured
22,500 Houston, Texas, Water and Sewer System Junior Lien 12/10 at 100.00 AAA 23,052,150
Revenue Refunding Bonds, Series 2000B, 5.250%, 12/01/30 -
FGIC Insured
1,250 Houston, Texas, Water and Sewer System Junior Lien Revenue 12/11 at 100.00 AAA 1,291,912
Refunding Bonds, Series 2001A, 5.000%, 12/01/20 -
FSA Insured
36
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS (continued)
$ 15,000 San Antonio Independent School District, Bexar County, 8/09 at 100.00 AAA $17,493,450
Texas, General Obligation Bonds, Series 1999,
5.800%, 8/15/29 (Pre-refunded to 8/15/09)
4,259 Texas General Services Commission, Participation Interests, 9/05 at 100.00 A 4,329,441
Series 1992, 7.500%, 9/01/22
3,970 City of Wichita Falls, Wichita County, Texas, Water and 8/11 at 100.00 AAA 4,068,377
Sewer System Priority Lien Revenue Bonds, Series 2001,
5.000%, 8/01/21 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 16.1%
5,500 Public Utility District No. 1 of Clark County, Washington, 1/11 at 100.00 AAA 5,742,880
Generating System Revenue Refunding Bonds, Series 2000,
5.125%, 1/01/20 - FSA Insured
2,755 Cowlitz County, Washington, Special Sewer Revenue No Opt. Call AAA 3,121,332
Refunding Bonds, CSOB Wastewater Treatment Facilities,
Series 2002, 5.500%, 11/01/16 - FGIC Insured
10,000 Energy Northwest, Washington, Nuclear Project No. 3 7/11 at 101.00 AAA 10,927,000
Electric Revenue Refunding Bonds, Series 2001A,
5.500%, 7/01/17 - FSA Insured
2,500 King County, Washington, Sewer Revenue Bonds, 1/12 at 100.00 AAA 2,539,200
Series 2001, 5.000%, 1/01/23 - FGIC Insured
33,490 Port of Seattle, Washington, Revenue Bonds, Series 2000A, 8/10 at 100.00 AAA 35,752,250
5.625%, 2/01/30 - MBIA Insured
6,950 Port of Seattle, Washington, Revenue Bonds, Series 2000B, 8/10 at 100.00 AAA 7,225,151
5.625%, 2/01/24 (Alternative Minimum Tax) - MBIA Insured
Seattle, Washington, General Obligation Bonds, Series 2002
Refunding and Improvement:
6,165 4.400%, 12/01/19 12/12 at 100.00 AAA 6,107,974
6,445 4.500%, 12/01/20 12/12 at 100.00 AAA 6,402,979
City of Tacoma, Washington, Electric System Revenue Bonds,
Series 2001A Refunding:
6,630 5.750%, 1/01/17 - FSA Insured 1/11 at 101.00 AAA 7,440,783
3,500 5.750%, 1/01/18 - FSA Insured 1/11 at 101.00 AAA 3,916,115
9,000 State of Washington, Motor Vehicle Fuel Tax General 1/12 at 100.00 AAA 9,239,130
Obligation Bonds, Series 2002C, 5.000%, 1/01/21 -
FSA Insured
7,890 Washington State Higher Education Facilities Authority, 11/09 at 101.00 AA 8,624,875
Revenue Bonds, Pacific Lutheran University Project,
Series 1999, 5.950%, 11/01/29 - RAAI Insured
3,520 Washington State Health Care Facilities Authority, Revenue 10/11 at 100.00 Aaa 3,580,860
Bonds, Children's Hospital and Regional Medical Center,
Series 2001, 5.000%, 10/01/21 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 0.2%
1,250 Wisconsin Health and Educational Facilities Authority, 3/08 at 101.00 N/R 1,040,980
Revenue Bonds, United Lutheran Program for the Aging
Inc., Series 1998, 5.700%, 3/01/28
------------------------------------------------------------------------------------------------------------------------------------
WYOMING - 0.4%
2,800 Jackson National Rural Utilities Cooperative Financing 5/07 at 101.00 A 2,897,048
Corporation, Wyoming, Guaranteed Gas Supply Revenue
Bonds, Lower Valley Power and Light Inc. Project,
Series 1997B, 5.875%, 5/01/26 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
$ 1,019,914 Total Long-Term Investments (cost $977,453,141) - 150.7% 1,036,269,730
=============-----------------------------------------------------------------------------------------------------------------------
37
Nuveen Municipal Market Opportunity Fund, Inc. (NMO) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL MARKET
AMOUNT (000) DESCRIPTION(1) RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 1.7%
$ 11,900 Chester County Industrial Development Authority, VMIG-1 $ 11,900,000
Pennsylvania, Archdiocese of Philadelphia, Variable Rate
Demand Revenue Bonds, Series 2001, 1.150%, 7/01/31+
------------------------------------------------------------------------------------------------------------------------------------
$ 11,900 Total Short-Term Investments (cost $11,900,000) 11,900,000
=============-----------------------------------------------------------------------------------------------------------------------
Total Investments (cost $989,353,141) - 152.4% 1,048,169,730
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.8% 19,785,422
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (55.2)% (380,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 687,955,152
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments
are based on net assets applicable to Common shares.
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and
prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent
auditors): Using the higher of Standard & Poor's or
Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of
principal and interest. Such securities are normally
considered to be equivalent to AAA rated securities.
# On December 9, 2002, UALCorporation, the holding
company of United Air Lines, Inc. filed for federal
bankruptcy protection. The Adviser determined that it
was likely United would not remain current on their
interest payment obligations with respect to these
bonds and thus has stopped accruing interest.
N/R Investment is not rated.
+ Security has a maturity of more than one year, but has
variable rate and demand features which qualify it as a
short-term security. The rate disclosed is that
currently in effect. This rate changes periodically
based on market conditions or a specified market index.
See accompanying notes to financial statements.
38
Nuveen Dividend Advantage Municipal Fund (NAD)
Portfolio of
INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 0.2%
$ 1,500 Alabama 21st Century Authority, Tobacco Settlement 6/10 at 102.00 A1 $ 1,407,630
Revenue Bonds, Series 2000, 5.750%, 12/01/20
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 2.6%
15,000 Maricopa County, Arizona, Pollution Control Corporation, No Opt. Call BB+ 15,605,550
Pollution Control Revenue Remarketing Bonds, El Paso
Electric Company, Series 1994A, 6.375%, 7/01/14
(Mandatory put 8/01/05)
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 2.1%
2,475 Department of Water and Power of the City of Los Angeles, 7/06 at 100.00 AA- 2,597,389
California, Power System Revenue Bonds, Series 2001A,
Subseries A-3, 5.375%, 7/01/20
9,375 Sacramento County Sanitation District Financing Authority, 12/05 at 101.00 AA 10,189,313
California, Revenue Bonds, Series 2000A, 5.875%, 12/01/27
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 2.6%
10,000 City and County of Denver, Colorado, Airport System Revenue 11/06 at 101.00 AAA 10,436,600
Bonds, Series 1996D, 5.500%, 11/15/25 - MBIA Insured
1,475 City and County of Denver, Colorado, Multifamily Housing 10/07 at 102.00 AAA 1,512,023
Revenue Bonds, FHA-Insured Mortgage Loan - The Boston
Lofts Project, Series 1997A, 5.750%, 10/01/27 (Alternative
Minimum Tax)
3,205 City and County of Denver, Colorado, Airport Special Facilities 1/09 at 101.00 AAA 3,579,921
Revenue Bonds, Rental Car Projects, Series 1999A,
6.000%, 1/01/12 (Alternative Minimum Tax) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
CONNECTICUT - 0.5%
Connecticut Development Authority, Health Facility Refunding
Revenue Bonds, Alzheimer's Resource Center of Connecticut,
Inc. Project, Series 1994A:
290 6.875%, 8/15/04 No Opt. Call N/R 289,684
2,700 7.125%, 8/15/14 8/04 at 102.00 N/R 2,592,891
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 2.7%
1,630 Florida Housing Finance Agency, Housing Revenue Bonds, 12/07 at 102.00 AAA 1,707,686
Mar Lago Village Apartments Project, Series 1997F,
5.800%, 12/01/17 (Alternative Minimum Tax) -
AMBAC Insured
13,625 Martin County, Florida, Industrial Development Authority, 12/04 at 102.00 BBB- 14,233,629
Industrial Development Revenue Bonds, Indiantown
Cogeneration, L.P. Project, Series 1994A, 7.875%, 12/15/25
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 1.4%
4,000 Forsyth County Water and Sewerage Authority, Georgia, 4/10 at 102.00 AA*** 4,736,360
Revenue Bonds, Series 2000, 6.000%, 4/01/25
(Pre-refunded to 4/01/10)
3,500 The Hospital Authority of Hall County and the City of Gainesville, 5/09 at 101.00 AAA 3,620,610
Georgia, Revenue Anticipation Certificates, Northeast Georgia
Health System, Inc. Project, Series 1999, 5.500%, 5/15/29 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
IDAHO - 0.8%
1,045 Idaho Housing and Finance Association, Single Family 7/09 at 101.00 Aa2 1,088,984
Mortgage Bonds, Series 1999E, 5.750%, 1/01/21
(Alternative Minimum Tax)
1,690 Idaho Housing and Finance Association, Single Family 1/10 at 100.00 Aa2 1,781,970
Mortgage Bonds, Series 2000D, 6.350%, 7/01/22
(Alternative Minimum Tax)
1,595 Idaho Housing and Finance Association, Single Family 7/10 at 100.00 Aaa 1,683,028
Mortgage Bonds, Series 2000E, 5.950%, 7/01/20
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 33.2%
3,635 Channahon, Illinois, Revenue Refunding Bonds, Morris 12/09 at 102.00 BBB+ 3,796,358
Hospital, Series 1999, 5.750%, 12/01/12
22,750 City of Chicago, Illinois, General Obligation Bonds, Emergency No Opt. Call AAA 25,107,355
Telephone System, Refunding Series 1999, 5.500%, 1/01/23 -
FGIC Insured
39
Nuveen Dividend Advantage Municipal Fund (NAD) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS (continued)
$ 7,250 Chicago School Reform Board of Trustees of the Board of No Opt. Call AAA $ 7,980,075
Education of the City of Chicago, Illinois, Unlimited Tax
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:
935 5.500%, 12/20/19 (Alternative Minimum Tax) 10/10 at 101.00 AAA 976,645
1,210 5.600%, 12/20/29 (Alternative Minimum Tax) 10/10 at 101.00 AAA 1,232,688
1,925 5.650%, 12/20/40 (Alternative Minimum Tax) 10/10 at 101.00 AAA 1,955,550
4,940 City of Chicago, Illinois, Wastewater Transmission Revenue 1/06 at 102.00 AAA 4,990,190
Bonds, Series 1995, 5.125%, 1/01/25 - FGIC Insured
5,000 City of Chicago, Illinois, Water Revenue Bonds, Series 1997, 11/07 at 102.00 AAA 5,115,300
5.250%, 11/01/27 - FGIC Insured
24,835 Illinois Development Finance Authority, Revenue Bonds, 9/07 at 102.00 AAA 26,395,135
The Presbyterian Home of Lake Forest Project, Series 1999,
5.625%, 9/01/31 - FSA Insured
3,935 Illinois Development Finance Authority, Local Government No Opt. Call Aaa 2,375,796
Program Revenue Bonds, Round Lake Community Unit
School District 116 Project, Series 1999, 0.000%, 1/01/15 -
MBIA Insured
2,750 Illinois Educational Facilities Authority, Revenue Bonds, 9/09 at 100.00 AAA 2,988,095
MJH Education Assistance Illinois LLC, Series 1999D,
5.450%, 9/01/14 - AMBAC Insured
Illinois Health Facilities Authority, Revenue Bonds, Loyola
University Health System, Series 1997A:
1,600 5.000%, 7/01/24 (Pre-refunded to 7/01/07) - MBIA Insured 7/07 at 101.00 AAA 1,787,648
5,400 5.000%, 7/01/24 - MBIA Insured 7/07 at 101.00 AAA 5,440,662
5,490 Illinois Health Facilities Authority, Revenue Bonds, Sarah 2/07 at 102.00 A 5,655,578
Bush Lincoln Health Center, Series 1996B, 5.500%, 2/15/16
17,280 Illinois Health Facilities Authority Converted Adjustable 10/07 at 102.00 AAA 20,172,845
Rate Revenue Bonds, Highland Park Hospital, Series 1991A,
6.000%, 10/01/15 (Pre-refunded to 10/01/07) - FGIC Insured
9,940 Illinois Health Facilities Authority, Revenue Bonds, University 8/11 at 103.00 Aa1 10,777,644
of Chicago Project, Series 1985A Remarketed,
5.500%, 8/01/20
7,245 Illinois Health Facilities Authority, Revenue Refunding Bonds, 1/04 at 100.00 BB+ 7,167,841
Proctor Community Hospital Project, Series 1991,
7.375%, 1/01/23
Metropolitan Pier and Exposition Authority, Illinois, McCormick
Place Expansion Project Refunding Bonds, Series 1996A:
9,750 0.000%, 12/15/22 - MBIA Insured No Opt. Call AAA 3,595,215
13,000 0.000%, 12/15/23 - MBIA Insured No Opt. Call AAA 4,472,130
20,500 Metropolitan Pier and Exposition Authority, Illinois, 12/09 at 101.00 AAA 21,683,875
McCormick Place Expansion Project Bonds, Series 1999A,
5.500%, 12/15/24 - FGIC Insured
Regional Transportation Authority, Cook, DuPage, Kane, Lake,
McHenry and Will Counties, Illinois, General Obligation Bonds,
Series 1999:
22,650 5.750%, 6/01/19 - FSA Insured No Opt. Call AAA 26,029,833
3,500 5.750%, 6/01/23 - FSA Insured No Opt. Call AAA 3,969,350
5,000 Robbins, Illinois, Resources Recovery Revenue Bonds, No Opt. Call N/R 1,853,950
Restructuring Project, Series 1999C, Guaranteed by Foster
Wheeler, 7.250%, 10/15/24 (Alternative Minimum Tax)
4,500 Will County School District No. 122, New Lenox, Illinois, No Opt. Call Aaa 2,176,965
General Obligation Bonds, Series 2000B, 0.000%, 11/01/18 -
FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 3.9%
8,000 Indiana Health Facility Financing Authority, Hospital Revenue 8/10 at 101.50 AAA 8,379,200
Bonds, Clarian Health Obligated Group, Series 2000A,
5.500%, 2/15/26 - MBIA Insured
8,755 Indiana Health Facility Financing Authority, Hospital Revenue 11/09 at 101.00 AAA 10,168,320
Bonds, Charity Obligated Group, Series 1999D,
5.500%, 11/15/24 (Pre-refunded to 11/15/09) -
MBIA Insured
4,190 Indianapolis, Indiana, Economic Development Revenue 6/09 at 101.00 Aa3 4,419,612
Bonds, Park Tudor Foundation Inc., Project, Series 1999,
5.700%, 6/01/24
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 2.0%
11,135 Iowa Higher Education Loan Authority, Private College 10/10 at 102.00 N/R 11,758,671
Facility Revenue Bonds, Waldorf College Project,
Series 1999, 7.375%, 10/01/19
40
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 0.6%
$ 3,825 Wichita, Kansas, Water and Sewer Utility Revenue Bonds, 10/06 at 101.00 AAA $ 3,672,995
Series 1999, 4.000%, 10/01/18 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 5.6%
3,030 Hardin County School District Finance Corporation, Kentucky, 2/10 at 101.00 Aa3 3,370,057
School Building Revenue Bonds, Series 2000, 5.750%, 2/01/20
Kentucky Economic Development Financing Authority, Hospital
System Revenue and Refunding Improvement Bonds,
Applachian Regional Healthcare, Inc. Project, Series 1997:
1,850 5.850%, 10/01/17 4/08 at 102.00 BB- 1,701,445
5,000 5.875%, 10/01/22 4/08 at 102.00 BB- 4,414,250
Newport Public Properties Corporation, Kentucky, First Mortgage
Revenue Bonds, Public Parking and Plaza Project, Series 2000A:
16,730 8.375%, 1/01/18 7/10 at 104.00 N/R 16,084,222
3,000 8.500%, 1/01/27 7/10 at 104.00 N/R 2,895,570
4,985 8.375%, 1/01/27 7/10 at 104.00 N/R 4,754,793
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 1.7%
2,245 City of Lafayette, Louisiana, Public Improvement Sales Tax 5/10 at 101.50 AAA 2,415,800
Bonds, Series 2000B, 5.625%, 5/01/25 - FGIC Insured
9,545 Tobacco Settlement Financing Corporation, Louisiana, 5/11 at 101.00 BBB 7,794,447
Asset-Backed Bonds, Series 2001B, 5.500%, 5/15/30
------------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 0.9%
5,000 Community Development Administration, Maryland Department 9/09 at 100.00 Aa2 5,215,300
of Housing and Community Development, Residential
Revenue Bonds, Series 2000G, 5.950%, 9/01/29
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 1.8%
1,500 Boston, Massachusetts, Industrial Development Financing 9/12 at 102.00 N/R 1,455,780
Authority, Subordinate Revenue Bonds, Crosstown Center
Project, Series 2002, 8.000%, 9/01/35 (Alternative
Minimum Tax)
785 Massachusetts Port Authority, Special Facilities Revenue 9/06 at 102.00 AAA 807,828
Bonds, US Air Project, Series 1996-A, 5.875%, 9/01/23
(Alternative Minimum Tax) - MBIA Insured
7,000 Massachusetts Port Authority, Special Facilities Revenue 7/07 at 102.00 AAA 7,417,410
Bonds, BOSFUEL Corporation Project, Series 1997,
5.500%, 7/01/18 (Alternative Minimum Tax) -
MBIA Insured
955 Massachusetts Housing Finance Agency, Single Family 12/04 at 102.00 AA 984,853
Housing Revenue Bonds, Series 32, 6.600%, 12/01/26
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 1.6%
Detroit, Michigan, Water Supply System Revenue Bonds,
Senior Lien, Series 2001A:
2,565 5.250%, 7/01/33 (Pre-refunded to 7/01/11) - FGIC Insured 7/11 at 100.00 AAA 2,903,093
2,435 5.250%, 7/01/33 - FGIC Insured 7/11 at 100.00 AAA 2,505,225
4,000 Wayne County, Michigan, Airport Revenue Bonds, Detroit 12/08 at 101.00 AAA 4,249,120
Metropolitan Wayne County Airport, Series 1998A,
5.375%, 12/01/16 (Alternative Minimum Tax) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 0.8%
2,250 Minneapolis-St. Paul Metropolitan Airports Commission, 4/11 at 101.00 N/R 2,052,990
Minnesota, Special Facilities Revenue Bonds, Northwest
Airlines, Inc. Project, Series 2001A, 7.000%, 4/01/25
(Alternative Minimum Tax)
2,510 Minnesota Housing Finance Agency, Single Family 1/10 at 101.00 AA+ 2,564,316
Mortgage Bonds, Series 1998H-1, 5.650%, 7/01/31
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 1.4%
Health and Educational Facilities Authority of the State of
Missouri, Revenue Bonds, SSM Health Care Series 2001A:
4,370 5.250%, 6/01/21 - AMBAC Insured 6/11 at 101.00 AAA 4,577,269
3,670 5.250%, 6/01/28 - AMBAC Insured 6/11 at 101.00 AAA 3,764,392
------------------------------------------------------------------------------------------------------------------------------------
MONTANA - 0.9%
3,900 Montana Board of Housing, Single Family Mortgage Bonds, 12/09 at 100.00 AA+ 4,104,360
Series 2000A-2, 6.450%, 6/01/29 (Alternative Minimum Tax)
41
Nuveen Dividend Advantage Municipal Fund (NAD) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
MONTANA (continued)
$ 1,000 Montana Higher Education Student Assistance Corporation, 12/09 at 100.00 A2 $ 1,048,100
Student Loan Revenue Bonds, Subordinate Series 1999B,
6.400%, 12/01/32 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 0.4%
2,000 Nebraska Higher Education Loan Program Incorporated, No Opt. Call AAA 2,170,240
Senior Subordinate Bonds, Series 1993A-5A,
6.200%, 6/01/13 (Alternative Minimum Tax) -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 0.7%
4,250 New Hampshire Housing Finance Authority Single Family 7/05 at 102.00 Aa2 4,355,060
Mortgage Acquisition Revenue Bonds, Series 1995D,
6.550%, 7/01/26 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 8.2%
3,835 New Jersey Higher Education Student Assistance Authority, 6/10 at 101.00 AAA 4,239,286
Student Loan Revenue Bonds, Series 2000A,
6.000%, 6/01/13 (Alternative Minimum Tax) -
MBIA Insured
2,000 New Jersey Health Care Facilities Financing Authority, 8/11 at 100.00 AAA 2,064,660
FHA-Insured Mortgage Revenue Bonds, Jersey City
Medical Center Issue, Series 2001, 4.800%, 8/01/21 -
AMBAC Insured
15,600 New Jersey Economic Development Authority, Solid Waste No Opt. Call N/R 10,725,000
Facilities Revenue Bonds, Bridgewater Resources Inc.
Project, Series 1999B, 8.250%, 6/01/19 (Alternative
Minimum Tax)##
475 New Jersey Economic Development Authority, Solid Waste No Opt. Call N/R 327,156
Revenue Bonds, Bridgewater Resources Inc. Project,
Series 2003C, 0.000%, 6/30/05##
4,130 New Jersey Transit Corporation, Federal Transit No Opt. Call AAA 4,690,524
Administration Grants, Certificates of Participation,
Series 2002A, 5.500%, 9/15/13 - AMBAC Insured
4,000 New Jersey Transportation Trust Fund Authority, No Opt. Call AA- 4,608,040
Transportation System Bonds, Series 1999A,
5.750%, 6/15/18
10,000 Port Authority of New York and New Jersey, Special 12/07 at 102.00 AAA 11,211,900
Project Bonds, JFK International Air Terminal LLC Project,
Series 6, 5.900%, 12/01/17 (Alternative Minimum Tax) -
MBIA Insured
Tobacco Settlement Financing Corporation, New Jersey,
Tobacco Settlement Asset-Backed Bonds, Series 2002:
10,000 5.750%, 6/01/32 6/12 at 100.00 BBB 8,611,100
3,165 6.125%, 6/01/42 6/12 at 100.00 BBB 2,606,631
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 19.1%
1,940 Cattaraugus County Industrial Development Agency, No Opt. Call N/R 1,240,727
New York, Revenue Bonds, Laidlaw Energy and
Environmental Inc. Project, Series 1999A,
8.500%, 7/01/21 (Alternative Minimum Tax)#
5,000 Long Island Power Authority, New York, Electric System 6/08 at 101.00 AAA 5,172,900
General Revenue Bonds, Series 1998A, 5.250%, 12/01/26 -
FSA Insured
County of Nassau, New York, General Obligation Serial
Improvement Bonds, Series B:
4,005 5.250%, 6/01/19 - AMBAC Insured 6/09 at 102.00 AAA 4,332,449
7,005 5.250%, 6/01/20 - AMBAC Insured 6/09 at 102.00 AAA 7,517,346
7,005 5.250%, 6/01/21 - AMBAC Insured 6/09 at 102.00 AAA 7,469,291
2,000 City of New York, New York, General Obligation Bonds, 2/08 at 101.00 AAA 2,178,500
Fiscal Series 1998E, 5.250%, 8/01/14 - AMBAC Insured
14,000 City of New York, New York, General Obligation Bonds, 2/08 at 101.00 AAA 14,719,880
Series 1998F, 5.375%, 8/01/19 - MBIA Insured
2,525 New York City Transitional Finance Authority, New York, 8/07 at 101.00 AA+*** 2,833,378
Future Tax Secured Bonds, Fiscal Series 1998A,
5.000%, 8/15/27 (Pre-refunded to 8/15/07)
12,350 New York City Transitional Finance Authority, Future Tax 5/10 at 101.00 AA+*** 14,322,295
Secured Bonds, Fiscal Series 2000C, 5.500%, 11/01/29
(Pre-refunded to 5/01/10)
10,000 New York City Transitional Finance Authority, New York, 8/09 at 101.00 AA+*** 11,750,800
Future Tax Secured Bonds, Fiscal Series 2000A,
5.750%, 8/15/24 (Pre-refunded to 8/15/09)
4,400 Dormitory Authority of the State of New York, Mental 2/07 at 102.00 AAA 4,766,300
Health Services Facilities Improvement Revenue Bonds,
Series 1996E, 5.250%, 2/15/18 - AMBAC Insured
2,170 Dormitory Authority of the State of New York, Frances 7/07 at 102.00 AA 2,383,810
Schervier Home & Hospital Insured Revenue Bonds,
Franciscan Health Partnership Obligated Group,
Series 1997, 5.500%, 7/01/17 - RAAI Insured
42
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK (continued)
Dormitory Authority of the State of New York, Mental Health
Services Facilities Improvement Revenue Bonds, Series 1996B:
$ 4,305 5.125%, 8/15/21 (Pre-refunded to 2/15/06) - MBIA Insured 2/06 at 100.00 AAA $ 4,736,921
165 5.125%, 8/15/21 - MBIA Insured 2/06 at 102.00 AAA 171,250
7,500 Dormitory Authority of the State of New York, Secured 2/08 at 101.50 AAA 7,949,325
Hospital Revenue Refunding Bonds, Wyckoff Heights
Medical Center, Series 1998H, 5.300%, 8/15/21 -
MBIA Insured
10,000 Dormitory Authority of the State of New York, City University 7/09 at 101.00 AAA 11,596,200
System Consolidated Third General Resolution Revenue
Bonds, 1999 Series 1, 5.500%, 7/01/29 (Pre-refunded
to 7/01/09) - FSA Insured
2,000 Dormitory Authority of the State of New York, City University 1/08 at 102.00 AAA 2,290,120
System Consolidated Third General Resolution Revenue
Bonds, 1997 Series 1, 5.375%, 7/01/24 (Pre-refunded
to 1/01/08) - FSA Insured
7,500 New York State Urban Development Corporation, Correctional 1/06 at 102.00 AAA 8,270,025
Facilities Revenue Bonds, Series 6, 5.375%, 1/01/25
(Pre-refunded to 1/01/06) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 0.6%
3,000 County of Wake, North Carolina, General Obligation School 2/11 at 102.00 AAA 3,275,850
Bonds, Series 2001B, 5.250%, 2/01/17
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 4.4%
2,300 Amherst Exempted Village School District, Ohio, General 12/11 at 100.00 Aaa 2,388,205
Obligation Unlimited Tax School Improvement Bonds,
Series 2001, 5.125%, 12/01/21 - FGIC Insured
3,635 Franklin County, Ohio, FHA-Insured Multifamily Housing 1/05 at 103.00 Aa 3,677,202
Mortgage Revenue Bonds, Hamilton Creek Apartments
Project, Series 1994A, 5.550%, 7/01/24 (Alternative
Minimum Tax)
5,650 Ohio Water Development Authority, Solid Waste Disposal 9/08 at 102.00 N/R 5,206,645
Revenue Bonds, Bay Shore Power Project, Series 1998A,
5.875%, 9/01/20 (Alternative Minimum Tax)
13,500 Ohio Water Development Authority, Solid Waste Disposal 9/09 at 102.00 N/R 13,437,495
Revenue Bonds, Bay Shore Power Project, Convertible
Series 1998B, 6.625%, 9/01/20 (Alternative Minimum Tax)
1,115 Warren County, Ohio, Special Assessment Bonds, 12/07 at 101.00 Aa2 1,236,167
Waterstone Boulevard, Series 1997 General Obligation,
5.500%, 12/01/17
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 0.4%
2,255 Portland, Oregon, Downtown Waterfront Urban Renewal 6/10 at 101.00 Aaa 2,461,400
and Redevelopment Bonds, Series 2000A, 5.500%, 6/15/20 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 5.0%
3,480 Allegheny County, Pennsylvania, Hospital Development 11/10 at 102.00 B 3,575,770
Authority, Health System Revenue Bonds, Series 2000B,
West Penn Allegheny Health System, 9.250%, 11/15/22
2,365 Carbon County Industrial Development Authority, No Opt. Call BBB- 2,541,997
Pennsylvania, Resource Recovery Revenue Refunding
Bonds, Panther Creek Partners Project, Series 2000,
6.650%, 5/01/10 (Alternative Minimum Tax)
18,900 City of Philadelphia Airport Revenue Refunding Bonds, 6/08 at 102.00 AAA 20,034,000
Pennsylvania, Philadelphia Airport System, Series 1998A,
5.500%, 6/15/18 (Alternative Minimum Tax) - FGIC Insured
3,205 Philadelphia School District, Pennsylvania, General 8/12 at 100.00 AAA 3,567,325
Obligation Bonds, Series 2002B, 5.625%, 8/01/16 -
FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 2.7%
2,015 Central Falls, Rhode Island, General Obligation School Bonds, 5/09 at 102.00 AA 2,261,797
Series 1999, 6.250%, 5/15/20 - RAAI Insured
3,500 Providence Redevelopment Agency, Rhode Island, Revenue 4/10 at 101.00 Aaa 3,831,310
Bonds, Public Safety and Municipal Building Projects,
Series 1999A, 5.750%, 4/01/29 - AMBAC Insured
12,000 Tobacco Settlement Financing Corporation of Rhode Island, 6/12 at 100.00 BBB 10,184,400
Asset-Backed Bonds, Series 2002A, 6.125%, 6/01/32
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 2.3%
5,260 Memphis-Shelby County Airport Authority, Tennessee, 3/10 at 101.00 AAA 5,682,536
Airport Revenue Bonds, Series 1999D, 6.000%, 3/01/24
(Alternative Minimum Tax) - AMBAC Insured
2,425 Memphis-Shelby County Airport Authority, Tennessee, 3/11 at 100.00 AAA 2,457,956
Airport Revenue Bonds, Series 2001B, 5.125%, 3/01/26 -
FSA Insured
43
Nuveen Dividend Advantage Municipal Fund (NAD) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE (continued)
$ 3,625 Tennessee Housing Development Agency, Homeownership 7/10 at 101.00 AA $ 3,771,051
Program Bonds, Issue 2000-1, 6.375%, 7/01/25
(Alternative Minimum Tax)
1,790 Tennessee Housing Development Agency, Homeownership 7/10 at 100.00 AA 1,855,138
Program Bonds, Issue 2000-2B, 6.250%, 1/01/20
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 14.2%
1,000 Alliance Airport Authority, Inc., Texas, Special Facilities 12/03 at 100.00 CCC 698,210
Revenue Bonds, American Airlines, Inc. Project, Series 1990,
7.500%, 12/01/29 (Alternative Minimum Tax)
10,000 Austin, Texas, Airport System Prior Lien Revenue Bonds, 11/05 at 102.00 AAA 11,009,900
Series 1995A, 6.125%, 11/15/25 (Alternative Minimum
Tax) - MBIA Insured
2,560 Brazos River Authority, Texas, Pollution Control Revenue 4/13 at 101.00 BBB 2,848,896
Refunding Bonds, TXU Electric Company Project,
Series 1999C, 7.700%, 4/01/32 (Alternative Minimum Tax)
4,675 Carrollton-Farmers Branch Independent School District, 2/09 at 100.00 AAA 5,452,967
Dallas County, Texas, School Building Unlimited Tax Bonds,
Series 1999, 6.000%, 2/15/20 (Pre-refunded to 2/15/09)
Coppell Independent School District, Dallas County, Texas,
Unlimited Tax School Building and Refunding Bonds, Series 1999:
5,130 0.000%, 8/15/20 8/09 at 52.47 AAA 2,058,669
7,000 0.000%, 8/15/21 8/09 at 49.48 AAA 2,623,600
7,345 0.000%, 8/15/23 8/09 at 44.01 AAA 2,381,102
7,000 0.000%, 8/15/24 8/09 at 41.50 AAA 2,126,320
7,350 0.000%, 8/15/25 8/09 at 39.14 AAA 2,099,234
7,000 0.000%, 8/15/26 8/09 at 36.91 AAA 1,879,080
2,000 Dallas-Ft. Worth, Texas, International Airport Facilities 11/05 at 100.00 CCC 1,725,420
Improvement Corporation, Revenue Refunding Bonds,
American Airlines, Series 2000B, 6.050%, 5/01/29
(Alternative Minimum Tax) (Mandatory put 11/01/05)
6,000 Dallas-Fort Worth, Texas, International Airport Facilities 11/07 at 100.00 CCC 4,453,800
Improvement Corporation, Revenue Refunding Bonds,
American Airlines, Series 2000C, 6.150%, 5/01/29
(Alternative Minimum Tax) (Mandatory put 11/01/07)
Harris County, Texas, Health Facilities Development
Corporation, Revenue Bonds, Christus Health, Series 1999A:
12,000 5.375%, 7/01/24 - MBIA Insured 7/09 at 101.00 AAA 12,478,320
11,000 5.375%, 7/01/29 - MBIA Insured 7/09 at 101.00 AAA 11,409,750
2,500 Jefferson County, Texas, Certificates of Obligation, 8/10 at 100.00 AAA 2,956,750
Series 2000, 6.000%, 8/01/25 (Pre-refunded to 8/01/10) -
FSA Insured
4,245 Laredo Independent School District, Webb County, Texas, 8/09 at 100.00 AAA 4,373,836
Unlimited Tax School Building Bonds, Series 1999,
5.250%, 8/01/24
2,000 Laredo, Texas, Sports Venue Sales Tax Revenue Bonds, 3/09 at 100.00 AAA 2,064,520
Series 2001, 5.300%, 3/15/26 - FGIC Insured
1,500 Port Arthur, Texas, Jefferson County, General Obligation 2/07 at 100.00 AAA 1,526,955
Bonds, Series 1997, 5.000%, 2/15/21 - MBIA Insured
10,000 Tarrant County Health Facilities Development Corporation 2/08 at 102.00 AAA 10,597,200
Texas Health Resources System Revenue Bonds,
Series 1997A, 5.250%, 2/15/17 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
UTAH - 1.2%
195 Utah Housing Finance Agency, Single Family Mortgage 7/04 at 102.00 AAA 198,853
Senior Bonds, Federally Insured or Guaranteed Mortgage
Loans, Series 1994F, 7.000%, 7/01/27 (Alternative
Minimum Tax)
Utah Housing Finance Agency, Single Family Mortgage Bonds, 1999
Series C-2 Class I:
1,795 5.700%, 7/01/19 (Alternative Minimum Tax) 1/10 at 101.50 AAA 1,888,843
910 5.750%, 7/01/21 (Alternative Minimum Tax) 1/10 at 101.50 AA 950,886
1,685 Utah Housing Finance Agency, Single Family Mortgage 7/09 at 101.00 AA 1,764,347
Bonds, Series 1999D, 5.850%, 7/01/21 (Alternative
Minimum Tax)
350 Utah Housing Finance Agency, Single Family Mortgage 7/09 at 101.50 Aa2 373,009
Bonds, Series 1999F, 6.300%, 7/01/21 (Alternative
Minimum Tax)
1,800 Utah Housing Finance Agency, Single Family Mortgage 7/10 at 100.00 AA- 1,860,660
Bonds, Series 2000F-2, Class III, 6.000%, 1/01/15
(Alternative Minimum Tax)
44
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 1.4%
$ 4,815 Metropolitan Washington Airports Authority, Virginia, Airport 10/04 at 100.00 AAA $ 4,936,482
System Revenue Bonds, Series 1994A, 5.500%, 10/01/24
(Alternative Minimum Tax) - MBIA Insured
3,395 Virginia Small Business Financing Authority, Industrial 11/09 at 102.00 N/R 3,345,399
Development Water Revenue Bonds, S.I.L. Clean Water,
LLC Project, Series 1999, 7.250%, 11/01/24 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 10.7%
4,000 Energy Northwest, Washington, Nuclear Project No. 3 7/13 at 100.00 Aa1 4,387,760
Electric Revenue Bonds, Series 2003A Refunding,
5.500%, 7/01/17
Port of Seattle, Washington, Special Facility Revenue Bonds,
Terminal 18 Project, Series 1999B:
1,755 6.000%, 9/01/15 (Alternative Minimum Tax) - MBIA Insured 3/10 at 101.00 AAA 1,920,409
2,590 6.000%, 9/01/16 (Alternative Minimum Tax) - MBIA Insured 3/10 at 101.00 AAA 2,823,618
Port of Seattle, Washington, Special Facilities Revenue Bonds,
Terminal 18 Project, Series 1999C:
875 6.000%, 9/01/15 (Alternative Minimum Tax) - MBIA Insured 3/10 at 101.00 AAA 957,469
1,260 6.000%, 9/01/16 (Alternative Minimum Tax) - MBIA Insured 3/10 at 101.00 AAA 1,373,652
9,760 City of Tacoma, Washington, Electric System Revenue Bonds, 1/11 at 101.00 AAA 10,622,296
Series 2001A Refunding, 5.625%, 1/01/21 - FSA Insured
7,725 Tobacco Settlement Authority, Washington State, Tobacco 6/13 at 100.00 BBB 7,121,369
Settlement Asset-Backed Revenue Bonds, Series 2002,
6.500%, 6/01/26
11,605 State of Washington, Certificates of Participation, 7/09 at 100.00 AAA 12,531,775
Washington State Convention and Trade Center, Series 1999,
5.250%, 7/01/16 - MBIA Insured
3,350 State of Washington, General Obligation Compound Interest No Opt. Call AAA 1,678,049
Bonds, Series 1999S-2, 0.000%, 1/01/18 - FSA Insured
State of Washington, General Obligation Compound Interest
Bonds, Series 1999S-3:
17,650 0.000%, 1/01/20 No Opt. Call AA+ 7,708,991
18,470 0.000%, 1/01/21 No Opt. Call AA+ 7,549,613
4,800 Washington Public Power Supply System, Nuclear Project 7/07 at 102.00 AAA 5,171,856
No. 3 Refunding Revenue Bonds, Series 1997A,
5.250%, 7/01/16 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 6.3%
3,810 City of La Crosse, Wisconsin, Industrial Development 12/08 at 102.00 AAA 4,143,832
Refunding Revenue Bonds, Dairyland Power Cooperative
Project, Series 1997C, 5.550%, 2/01/15 - AMBAC Insured
4,180 Wisconsin Health and Educational Facilities Authority, 5/09 at 101.00 A 4,193,460
Revenue Bonds, Kenosha Hospital and Medical Center Inc.
Project, Series 1999, 5.625%, 5/15/29
Wisconsin Health and Educational Facilities Authority,
Revenue Bonds, FH Healthcare Development Inc. Project,
Series 1999:
8,375 6.250%, 11/15/20 11/09 at 101.00 N/R 8,813,599
5,000 6.250%, 11/15/28 11/09 at 101.00 N/R 5,185,950
12,700 Wisconsin Health and Educational Facilities Authority, 8/09 at 101.00 Aaa 13,358,491
Revenue Bonds, Mercy Health System Corporation,
Series 1999, 5.500%, 8/15/25 - AMBAC Insured
2,200 Wisconsin Health and Educational Facilities Authority, 8/13 at 100.00 A 2,065,840
Revenue Bonds, Wheaton Franciscan Services,
Series 2003A, 5.125%, 8/15/33
------------------------------------------------------------------------------------------------------------------------------------
$ 901,055 Total Long-Term Investments (cost $810,194,357) - 144.9% 862,687,804
=============-----------------------------------------------------------------------------------------------------------------------
45
Nuveen Dividend Advantage Municipal Fund (NAD) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL MARKET
AMOUNT (000) DESCRIPTION(1) RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 1.8%
$ 5,250 California Statewide Communities Development Authority, A-1 $ 5,250,000
Variable Rate Demand Revenue Bonds, Fremont-Rideout
Health Group, Series 2001A, 1.100%, 1/01/31 -
AMBAC Insured+
2,300 Fulton County Residential Care Facilities Authority, A-1+ 2,300,000
Georgia, Variable Rate Demand Revenue Refunding
Bonds, Lenbrook Square Foundation Inc., Series 1996,
1.200%, 1/01/18+
3,300 Massachusetts Health and Educational Facilities A-1+ 3,300,000
Authority, Revenue Bonds, Wellesley College Variable Rate
Demand Obligations, Series 1999G, 1.080%, 7/01/39+
------------------------------------------------------------------------------------------------------------------------------------
$ 10,850 Total Short-Term Investments (cost $10,850,000) 10,850,000
=============-----------------------------------------------------------------------------------------------------------------------
Total Investments (cost $821,044,357) - 146.7% 873,537,804
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.9% 16,728,426
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (49.6)% (295,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 595,266,230
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments
are based on net assets applicable to Common shares.
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and
prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent
auditors): Using the higher of Standard & Poor's or
Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of
principal and interest. Such securities are normally
considered to be equivalent to AAA rated securities.
# Non-income producing security. In August 2002,
Cattaraugus Acquisition Corp. (an entity formed by
several Nuveen Funds owning various interests in the
Laidlaw Energy and Environmental Inc. project) took
possession of 80% of the Laidlaw Energy assets on
behalf of the various Nuveen Funds. Cattaraugus
Acquisition Corp. has determined that a sale of the
facility is in the best interests of shareholders and
is proceeding accordingly.
## Non-income producing security. In June 2003, Waste
Solutions Group, Inc. (an entity formed for the benefit
of Nuveen Dividend Advantage Municipal Fund (NAD) which
owns various interests in the Bridgewater Resources
Inc. project) took possession of 45% of the Bridgewater
Resources Inc. assets on behalf of the Fund.
Bridgewater Resources Inc. emerged from bankruptcy in
June 2003. NAD, via Waste Solutions Group Inc., has
agreed to allow debt service reserve monies to be used
for capital expenses, and has also agreed to a debt
service moratorium until December 2005. Nuveen Advisory
Corp. will continue to actively monitor the Bridgewater
Resources, Inc. project, and to cause NAD and Waste
Solutions Group Inc. to act in what it believes is in
the best interests of fund shareholders.
N/R Investment is not rated.
+ Security has a maturity of more than one year, but has
variable rate and demand features which qualify it as a
short-term security. The rate disclosed is that
currently in effect. This rate changes periodically
based on market conditions or a specified market index.
See accompanying notes to financial statements.
46
Nuveen Dividend Advantage Municipal Fund 2 (NXZ)
Portfolio of
INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 4.2%
$ 18,500 Huntsville Health Care Authority, Alabama, Revenue Bonds, 6/11 at 101.00 A2 $18,805,805
Series 2001A, 5.750%, 6/01/31
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 0.6%
2,500 Phoenix, Arizona, Civic Improvement Corporation, 7/12 at 100.00 AAA 2,543,350
Senior Lien Airport Revenue Bonds, Series 2002B,
5.250%, 7/01/32 (Alternative Minimum Tax) - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 0.6%
2,500 Arkansas Development Finance Authority, Single Family 1/12 at 100.00 AAA 2,546,400
Mortgage Revenue Bonds, GNMA Mortgage-Backed
Securities Program, Series 2002C, 5.400%, 1/01/34
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 10.0%
6,000 California Educational Facilities Authority, Revenue Bonds, 6/11 at 101.00 AAA 6,203,640
Stanford University, Series 2001Q, 5.250%, 12/01/32
13,825 Department of Veterans Affairs of the State of California, 6/06 at 101.00 AAA 14,718,648
Home Purchase Revenue Bonds, Series 2001A,
5.550%, 12/01/25 - AMBAC Insured
11,200 State of California, General Obligation Bonds, 8/13 at 100.00 A3 11,121,600
Series 2003, 5.250%, 2/01/28
1,500 California Statewide Communities Development Authority, 10/15 at 103.00 N/R 1,427,535
Revenue Bonds, East Valley Tourist Authority, Senior Lien,
Series 2003B, 9.250%, 10/01/20
5,000 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 BBB 4,561,700
Tobacco Settlement Asset-Backed Bonds, Series 2003A-1,
6.750%, 6/01/39
6,000 Regional Airports Improvement Corporation, California, 12/12 at 102.00 B- 5,835,120
American Airlines Inc. Terminal 4 Project, Los Angeles
International Airport Facilities Sublease Revenue Bonds,
Series 2002C, 7.500%, 12/01/24 (Alternative Minimum Tax)
240 Yuba County Water Agency, California, Yuba River 3/04 at 100.00 Ba3 231,569
Development Revenue Bonds, Pacific Gas and Electric
Company Project, Series 1966A, 4.000%, 3/01/16
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 5.2%
3,000 Colorado Educational and Cultural Facilities Authority, 8/11 at 100.00 Ba2 3,118,500
Boulder County, Colorado, Charter School Revenue Bonds,
Peak to Peak Charter School Project, Created by Boulder
Valley School District No. RE-2, 7.500%, 8/15/21
10,000 E-470 Public Highway Authority, Colorado, Senior Revenue 9/10 at 31.42 AAA 2,379,000
Bonds, Series 2000A, 0.000%, 9/01/28 - MBIA Insured
1,885 Eagle County Air Terminal Corporation, Colorado, Airport 5/11 at 101.00 N/R 1,736,801
Terminal Revenue Bonds, Series 2001, 7.125%, 5/01/31
(Alternative Minimum Tax)
5,000 Northwest Parkway Public Highway Authority, Colorado, 6/11 at 102.00 AAA 5,138,500
Revenue Bonds, Senior Series 2001A, 5.250%, 6/15/41 -
FSA Insured
Northwest Parkway Public Highway Authority, Colorado,
Revenue Bonds, Senior Series 2001B:
22,000 0.000%, 6/15/28 - FSA Insured 6/11 at 35.65 AAA 5,442,800
17,650 0.000%, 6/15/29 - AMBAC Insured 6/11 at 33.45 AAA 4,094,977
1,000 Plaza Metropolitan District No. 1, Lakewood, Colorado, 6/14 at 101.00 N/R 1,003,260
Tax Increment Revenue Bonds, Series 2003,
8.000%, 12/01/25
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 5.1%
15,000 City of Jacksonville, Florida, Transportation Revenue Bonds, 10/11 at 100.00 AAA 15,504,450
Series 2001, 5.250%, 10/01/29 - MBIA Insured
3,000 Miami-Dade County, Florida, Aviation Revenue Bonds, 10/12 at 100.00 AAA 3,083,910
Miami International Airport, Series 2002,
5.375%, 10/01/32 (Alternative Minimum Tax) -
FGIC Insured
4,000 Miami-Dade County Health Facilities Authority, Florida, 8/11 at 101.00 AAA 4,073,360
Hospital Revenue Refunding Bonds, Miami Children's
Hospital, Series 2001A, 5.125%, 8/15/26 - AMBAC Insured
47
Nuveen Dividend Advantage Municipal Fund 2 (NXZ) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
HAWAII - 2.3%
Honolulu City and County, Hawaii, Board of Water Supply, Water
System Revenue Bonds, Series 2001:
$ 3,000 5.250%, 7/01/26 - FSA Insured 7/11 at 100.00 AAA $ 3,096,210
6,725 5.250%, 7/01/31 - FSA Insured 7/11 at 100.00 AAA 6,923,253
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 12.0%
15,270 City of Chicago, Illinois, General Obligation Bonds, Project 1/11 at 101.00 AAA 15,692,368
and Refunding Series 2001A, 5.250%, 1/01/33 - MBIA Insured
3,710 Chicago, Illinois, FHA/GNMA Collateralized Multifamily 12/11 at 100.00 A+ 3,820,150
Housing Revenue Bonds, Stone Terrace Apartments Project,
Series 2001A, 5.750%, 12/20/42 (Alternative Minimum Tax)
1,755 City of Chicago, Illinois, Chicago O'Hare International Airport, No Opt. Call Ca 456,300
Special Facility Revenue Bonds, United Air Lines, Inc.
Project, Series 2001A, 6.375%, 11/01/35 (Alternative
Minimum Tax) (Mandatory put 5/01/13)#
3,790 Chicago, Illinois, Collateralized Single Family Mortgage 4/11 at 105.00 AAA 4,118,328
Revenue Bonds, Series 2001A, 6.250%, 10/01/32
(Alternative Minimum Tax)
3,180 Illinois Development Finance Authority, Revenue Bonds, 12/21 at 100.00 BBB 3,098,783
Chicago Charter School Foundation Project, Series 2002A,
6.250%, 12/01/32
5,000 Illinois Development Finance Authority, Revenue Bonds, 9/11 at 100.00 AAA 5,261,950
Illinois Wesleyan University, Series 2001, 5.500%, 9/01/32 -
AMBAC Insured
3,100 Illinois Development Finance Authority, Revenue Bonds, 5/11 at 101.00 BBB+ 3,209,957
Midwestern University, Series 2001B, 6.000%, 5/15/31
5,000 Illinois Health Facilities Authority, Revenue Bonds, 2/11 at 101.00 AAA 5,122,800
Edward Hospital Obligated Group, Series 2001B,
5.250%, 2/15/34 - FSA Insured
3,000 Illinois Educational Facilities Authority, Student Housing 5/12 at 101.00 Baa2 3,008,850
Revenue Bonds, Educational Advancement Foundation
Fund, University Center Project, Series 2002,
6.250%, 5/01/34
2,275 State of Illinois, Build Illinois Bonds, Sales Tax Revenue 6/11 at 100.00 AAA 2,520,814
Bonds, Series 2001, 5.500%, 6/15/16
4,980 Metropolitan Pier and Exposition Authority, Illinois, 6/06 at 102.00 AAA 5,092,548
McCormick Place Expansion Project Refunding Bonds,
Series 1996A, 5.250%, 6/15/27 - AMBAC Insured
5,000 Robbins, Illinois, Resources Recovery Revenue Bonds, No Opt. Call N/R 1,853,950
Restructuring Project, Series 1999C, Guaranteed by Foster
Wheeler, 7.250%, 10/15/24 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 5.6%
2,000 Indiana Health Facility Financing Authority, Hospital Revenue 9/11 at 100.00 A+ 1,981,560
Bonds, The Methodist Hospital Inc, Series 2001,
5.500%, 9/15/31
2,500 Indiana Health Facility Financing Authority, Hospital Revenue No Opt. Call AAA 3,124,450
Refunding Bonds, Columbus Regional Hospital, Series 1993,
7.000%, 8/15/15 - FSA Insured
Indiana Transportation Finance Authority, Highway Revenue
Bonds, Series 2003A:
4,000 5.000%, 6/01/23 - FSA Insured 6/13 at 100.00 AAA 4,068,400
6,000 5.000%, 6/01/24 - FSA Insured 6/13 at 100.00 AAA 6,065,760
2,000 Indianapolis Airport Authority, Indiana, Special Facilities 7/04 at 102.00 BBB 2,103,000
Revenue Bonds, Federal Express Corporation Project,
Series 1994, 7.100%, 1/15/17 (Alternative Minimum Tax)
5,000 Indianapolis Airport Authority, Indiana, Specialty Facility 11/05 at 102.00 Ca 1,737,500
Revenue Bonds, United Air Lines, Inc., Indianapolis
Maintenance Center Project, Series 1995A,
6.500%, 11/15/31 (Alternative Minimum Tax)#
6,000 Saint Joseph County Hospital Authority, Indiana, Health 2/09 at 102.00 BBB 5,742,420
System Revenue Bonds, Madison Center Inc. Project,
Series 1999, 5.800%, 2/15/24
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 0.2%
1,000 Iowa Higher Education Loan Authority, Private College 10/12 at 100.00 A 1,034,630
Facility Revenue Bonds, Wartburg College Project,
Series 2002, 5.500%, 10/01/28 - ACA Insured
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 3.9%
17,000 City of Wichita, Kansas, Hospital Facilities Improvement 11/11 at 101.00 A+ 17,312,800
and Refunding Revenue Bonds, Via Christi Health System
Inc, Series III 2001, 5.625%, 11/15/31
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 3.1%
17,060 Tobacco Settlement Financing Corporation, Louisiana, 5/11 at 101.00 BBB 13,659,260
Asset-Backed Bonds, Series 2001B, 5.875%, 5/15/39
48
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 4.2%
$ 3,300 Massachusetts Port Authority, Special Facilities Revenue 7/07 at 102.00 AAA $ 3,489,354
Bonds, BOSFUEL Corporation Project, Series 1997,
5.750%, 7/01/39 (Alternative Minimum Tax) - MBIA Insured
15,000 Massachusetts Turnpike Authority, Metropolitan Highway 1/07 at 102.00 AAA 15,029,400
System Revenue Bonds, Series 1997A Senior,
5.000%, 1/01/37 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 14.3%
Detroit, Michigan, Water Supply System Revenue Bonds,
Senior Lien, Series 2001A:
15,390 5.250%, 7/01/33 (Pre-refunded to 7/01/11) - FGIC Insured 7/11 at 100.00 AAA 17,418,556
20,000 5.500%, 7/01/33 - FGIC Insured 7/11 at 101.00 AAA 21,191,800
14,610 5.250%, 7/01/33 - FGIC Insured 7/11 at 100.00 AAA 15,031,352
4,000 Michigan Municipal Bond Authority, Public School Academy 10/09 at 102.00 Ba1 3,949,040
Revenue Bonds, Detroit Academy, Series 2001A,
8.000%, 10/01/31
Michigan State Hospital Finance Authority, Revenue and Refunding
Bonds, Detroit Medical Center Obligated Group, Series 1993A:
2,000 6.250%, 8/15/13 2/04 at 102.00 Ba3 1,536,100
4,000 6.500%, 8/15/18 2/04 at 102.00 Ba3 2,949,600
2,000 Michigan State Hospital Finance Authority, Hospital Revenue 8/08 at 101.00 Ba3 1,263,880
Bonds, Detroit Medical Center Obligated Group,
Series 1998A, 5.125%, 8/15/18
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 3.2%
14,000 Minneapolis-St. Paul Metropolitan Airports Commission, 1/11 at 100.00 AAA 14,349,160
Minnesota, Airport Revenue Bonds, Series 2001A,
5.250%, 1/01/32 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 4.9%
21,000 Health and Educational Facilities Authority of the State 6/11 at 101.00 AAA 21,540,120
of Missouri, Revenue Bonds, SSM Health Care,
Series 2001A, 5.250%, 6/01/28 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
MONTANA - 1.2%
5,320 Montana Board of Housing, Single Family Program Bonds, 12/10 at 100.00 AA+ 5,454,756
Series 2001A-2, 5.700%, 6/01/32 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 4.6%
12,275 Director of Nevada State Department of Business and 1/10 at 100.00 AAA 12,842,228
Industry, Revenue Bonds, Las Vegas Monorail Project,
1st Tier Series 2000, 5.375%, 1/01/40 - AMBAC Insured
3,500 State of Nevada, Director of Business and Industry, 1/10 at 102.00 N/R 3,460,240
Las Vegas Monorail Company Project, Second Tier
Series 2000, 7.375%, 1/01/40
4,000 Henderson, Nevada, Health Care Facility Revenue Bonds, 7/08 at 101.00 Baa1 3,890,120
Catholic Healthcare West, Series 1998A, 5.250%, 7/01/18
------------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 2.7%
8,000 New Hampshire Business Finance Authority, Pollution 10/08 at 102.00 A3 8,309,040
Control Revenue Bonds, Connecticut Light and Power
Company, Series 1992A Refunding, Remarketed,
5.850%, 12/01/22
3,660 New Hampshire Housing Finance Authority, Single Family 5/11 at 100.00 Aa2 3,757,685
Mortgage Acquisition Bonds, Series 2001A,
5.700%, 1/01/31 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 1.4%
3,995 New Jersey Economic Development Authority, Special 11/10 at 101.00 B 3,657,662
Facilities Revenue Bonds, Continental Airlines Inc. Project,
Series 2000, 7.000%, 11/15/30 (Alternative Minimum Tax)
Tobacco Settlement Financing Corporation, New Jersey,
Tobacco Settlement Asset-Backed Bonds, Series 2003:
425 6.750%, 6/01/39 6/13 at 100.00 BBB 386,283
2,700 6.250%, 6/01/43 6/13 at 100.00 BBB 2,263,977
------------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 5.2%
New Mexico Hospital Equipment Loan Council, Hospital Revenue
Bonds, Presbyterian Healthcare Services, Series 2001A:
12,000 5.500%, 8/01/25 8/11 at 101.00 A+ 12,161,040
10,800 5.500%, 8/01/30 8/11 at 101.00 A+ 10,877,328
49
Nuveen Dividend Advantage Municipal Fund 2 (NXZ) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 6.7%
$ 6,000 Long Island Power Authority, New York, Electric System 5/11 at 100.00 A- $ 6,107,400
General Revenue Bonds, Series 2000L, 5.375%, 5/01/33
14,500 New York City Municipal Water Finance Authority, Water 6/11 at 101.00 AA 14,660,225
and Sewer System Revenue Bonds, Fiscal Series 2001C,
5.125%, 6/15/33
5,000 New York City Industrial Development Agency, New York, 8/12 at 101.00 CCC 3,825,050
Special Facilities Revenue Bonds, American Airlines, Inc.
JFK Airport Project, Series 2002B, 8.500%, 8/01/28
(Alternative Minimum Tax)
4,900 Dormitory Authority of the State of New York, Revenue 7/10 at 101.00 Ba1 5,016,032
Bonds, Mount Sinai NYU Obligated Group, Series 2000A,
6.625%, 7/01/19
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 1.7%
2,950 North Carolina Capital Facilities Financing Agency, 4/13 at 100.00 AAA 2,968,585
Educational Facilities Revenue Bonds, Johnson and Wales
University Project, Series 2003A, 5.000%, 4/01/33 -
XLCA Insured
4,500 North Carolina Eastern Municipal Power Agency, Power 1/09 at 102.00 BBB 4,721,355
System Revenue Refunding Bonds, Series 1999B,
5.600%, 1/01/15
------------------------------------------------------------------------------------------------------------------------------------
NORTH DAKOTA - 0.9%
4,130 North Dakota Housing Finance Agency, Home Mortgage 7/10 at 100.00 Aa2 4,174,563
Finance Program Refunding Bonds, Series 2001A,
5.550%, 1/01/32 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 0.4%
1,845 Board of Education, City School District of Columbus, 6/13 at 100.00 AAA 1,865,369
Franklin County, Ohio, General Obligation Bonds,
Series 2003, 5.000%, 12/01/28 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 0.7%
Oklahoma Development Finance Authority, Hillcrest
Healthcare System Revenue and Refunding Bonds,
Series 1999A:
2,655 5.125%, 8/15/10 8/09 at 101.00 B1 2,168,524
1,000 5.200%, 8/15/11 8/09 at 101.00 B1 801,890
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 3.9%
8,000 Hospital Facility Authority of Clackamas County, Oregon, 5/11 at 101.00 AA 8,274,240
Revenue Refunding Bonds, Legacy Health System,
Series 2001, 5.250%, 5/01/21
9,000 State of Oregon Department of Administrative Services, 5/11 at 101.00 AAA 9,121,320
Certificates of Participation, Series 2001D,
5.000%, 5/01/26 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 3.0%
5,000 Allegheny County, Pennsylvania, Hospital Development 11/10 at 102.00 B 5,137,600
Authority, Health System Revenue Bonds, Series 2000B,
West Penn Allegheny Health System, 9.250%, 11/15/30
8,000 Pennsylvania Higher Educational Facilities Authority, 1/11 at 101.00 A 8,327,520
Revenue Bonds, UPMC Health System, Series 2001A,
6.000%, 1/15/31
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 0.2%
630 South Carolina Public Service Authority, Revenue Refunding 1/06 at 102.00 AAA 687,084
Bonds, Series 1996A, 5.750%, 1/01/22 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
SOUTH DAKOTA - 1.1%
4,820 South Dakota Housing Development Authority, Remarketed 5/09 at 102.00 AAA 5,029,574
Homeownership Mortgage Bonds, Series 1997E-4,
5.450%, 5/01/18 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 22.7%
7,500 City of Austin, Texas, Electric Utility System Revenue 11/10 at 100.00 AAA 7,532,925
Refunding Bonds, Series 2001, 5.000%, 11/15/30 -
FSA Insured
Dallas-Fort Worth International Airport Public Facility
Improvement Corporation, Texas, Airport Hotel Revenue Bonds,
Series 2001:
15,000 5.250%, 1/15/26 - FSA Insured 1/09 at 100.00 AAA 15,269,250
1,750 5.200%, 1/15/31 - FSA Insured 1/09 at 100.00 AAA 1,779,278
50
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS (continued)
$ 10,000 Gulf Coast Industrial Development Authority, Texas, 4/12 at 100.00 Ba2 $10,176,100
Solid Waste Disposal Revenue Bonds, Citgo Petroleum
Project, Series 1998, 8.000%, 4/01/28 (Alternative
Minimum Tax)
3,000 Harris County, Texas, Health Facilities Development 7/09 at 101.00 AAA 3,119,580
Corporation, Revenue Bonds, Christus Health,
Series 1999A, 5.375%, 7/01/24 - MBIA Insured
40,000 Houston Sports Authority, Harris County, Texas, Senior 11/30 at 54.04 AAA 4,697,200
Lien Revenue Refunding Bonds, Series 2001A,
0.000%, 11/15/40 - MBIA Insured
30,980 Houston Sports Authority, Harris County, Texas, Junior Lien 11/11 at 100.00 AAA 31,684,485
Revenue Refunding Bonds, Series 2001B, 5.250%, 11/15/40 -
MBIA Insured
Hays Consolidated Independent School District, Hays County,
Texas, General Obligation School Building Bonds, Series 2001:
10,715 0.000%, 8/15/25 8/11 at 43.18 AAA 3,120,529
12,940 0.000%, 8/15/26 8/11 at 40.60 AAA 3,552,806
Houston, Texas, Hotel Occupancy Tax and Special Revenue Bonds,
Convention and Entertainment Project, Series 2001B:
5,000 0.000%, 9/01/30 - AMBAC Insured No Opt. Call AAA 1,115,350
5,000 0.000%, 9/01/31 - AMBAC Insured No Opt. Call AAA 1,052,700
5,000 Metro Health Facilities Development Corporation, Texas, 1/11 at 100.00 B1 4,631,150
Hospital Revenue Bonds, Wilson N. Jones Memorial
Hospital Project, Series 2001, 7.250%, 1/01/31
10,500 Texas State, General Obligation Bonds, Water Financial 8/11 at 100.00 Aa1 10,778,040
Assistance Program, Series 2001, 5.250%, 8/01/35
2,000 Tom Green County Health Facilities Development 5/11 at 101.00 Baa3 2,097,060
Corporation, Texas, Hospital Revenue Bonds, Shannon
Health System Project, Series 2001, 6.750%, 5/15/21
------------------------------------------------------------------------------------------------------------------------------------
UTAH - 0.5%
2,200 Intermountain Power Agency, Utah, Power Supply Revenue 1/04 at 102.00 A+*** 2,251,920
Refunding Bonds, Series 1993A, 5.500%, 7/01/20
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 4.8%
7,250 City of Seattle, Washington, Municipal Light and Power 3/11 at 100.00 AAA 7,335,188
Improvements and Revenue Refunding Bonds, Series 2001,
5.125%, 3/01/26 - FSA Insured
3,500 City of Tacoma, Washington, Electric System Revenue 1/11 at 101.00 AAA 3,916,115
Refunding Bonds, Series 2001A, 5.750%, 1/01/18 -
FSA Insured
2,000 State of Washington, Certificates of Participation, 7/09 at 100.00 AAA 2,163,400
Washington State Convention and Trade Center,
Series 1999, 5.125%, 7/01/13 - MBIA Insured
7,500 Washington State Health Care Facilities Authority, 10/11 at 100.00 AAA 7,724,775
Revenue Bonds, Providence Health System, Series 2001A,
5.250%, 10/01/21 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 1.1%
5,000 Mason County, West Virginia, Pollution Control Revenue 10/11 at 100.00 BBB 4,962,000
Bonds, Appalachian Power Company Project, Series 2003L,
5.500%, 10/01/22
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 0.7%
1,000 Wisconsin Health and Educational Facilities Authority, 5/12 at 100.00 N/R 996,740
Revenue Bonds, Divine Savior Healthcare, Series 2002A,
7.375%, 5/01/26
2,100 Wisconsin Health and Educational Facilities Authority, 8/13 at 100.00 A 1,971,940
Revenue Bonds, Wheaton Franciscan Services,
Series 2003A, 5.125%, 8/15/33
------------------------------------------------------------------------------------------------------------------------------------
$ 732,985 Total Long-Term Investments (cost $613,391,578) - 142.9% 633,300,549
=============-----------------------------------------------------------------------------------------------------------------------
51
Nuveen Dividend Advantage Municipal Fund 2 (NXZ) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL MARKET
AMOUNT (000) DESCRIPTION(1) RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 4.6%
$ 10,000 Clark County School District, Nevada, General Obligation A-1+ $ 10,000,000
Variable Rate Demand Bonds, Series A,
1.120%, 6/15/21 - FSA Insured+
10,200 Clarksville Public Building Authority, Tennessee, VMIG-1 10,200,000
Municipal Bond Fund Pooled Financing, Variable Rate
Demand Bonds, Series 2003, 1.150%, 1/01/33+
------------------------------------------------------------------------------------------------------------------------------------
$ 20,200 Total Short-Term Investments (cost $20,200,000) 20,200,000
=============-----------------------------------------------------------------------------------------------------------------------
Total Investments (cost $633,591,578) - 147.5% 653,500,549
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.6% 11,600,709
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (50.1)% (222,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 443,101,258
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments
are based on net assets applicable to Common shares.
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and
prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent
auditors): Using the higher of Standard & Poor's or
Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of
principal and interest. Such securities are normally
considered to be equivalent to AAA rated securities.
# On December 9, 2002, UALCorporation, the holding
company of United Air Lines, Inc. filed for federal
bankruptcy protection. The Adviser determined that it
was likely United would not remain current on their
interest payment obligations with respect to these
bonds and thus has stopped accruing interest.
N/R Investment is not rated.
+ Security has a maturity of more than one year, but has
variable rate and demand features which qualify it as a
short-term security. The rate disclosed is that
currently in effect. This rate changes periodically
based on market conditions or a specified market index.
See accompanying notes to financial statements.
52
Nuveen Dividend Advantage Municipal Fund 3 (NZF)
Portfolio of
INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 1.0%
$ 5,655 Alabama State Port Authority, Docks Facilities Revenue 10/11 at 100.00 AAA $ 5,740,730
Bonds, Series 2001, 5.250%, 10/01/26 (Alternative
Minimum Tax) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
ALASKA - 0.7%
4,000 Alaska Student Loan Corporation, Student Loan Revenue 7/08 at 100.00 AAA 4,157,160
Bonds, Series 1998A, 5.250%, 7/01/14 (Alternative
Minimum Tax) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 0.9%
Sebastian County, Arkansas, Sparks Regional Medical Center,
Public Health Facilities Board Hospital Revenue Improvement
Bonds, Series 2001A:
1,805 5.500%, 11/01/13 11/11 at 101.00 Baa1 1,902,542
1,900 5.500%, 11/01/14 11/11 at 101.00 Baa1 1,984,284
1,305 5.250%, 11/01/21 11/11 at 101.00 Baa1 1,277,504
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 9.6%
5,000 California Infrastructure and Economic Development Bank, 8/11 at 102.00 A 5,094,150
Revenue Bonds, Kaiser Hospital Assistance I - LLC,
Series 2001A, 5.550%, 8/01/31
18,850 California State, General Obligation Veterans Welfare 6/07 at 101.00 AAA 19,158,763
Bonds, Series 2001BZ, 5.350%, 12/01/21 (Alternative
Minimum Tax) - MBIA Insured
1,500 California Statewide Communities Development Authority, 10/15 at 103.00 N/R 1,427,535
Revenue Bonds, East Valley Tourist Authority, Senior Lien,
Series 2003B, 9.250%, 10/01/20
Los Angeles, California, Regional Airports Improvement
Corporation Lease Revenue Refunding Bonds, LAXFUEL Corporation
at Los Angeles International Airport, Series 2001:
13,955 5.750%, 1/01/16 (Alternative Minimum Tax) - AMBAC Insured 1/12 at 100.00 AAA 14,913,848
5,000 5.375%, 1/01/21 (Alternative Minimum Tax) - AMBAC Insured 1/12 at 100.00 AAA 5,078,200
1,500 5.250%, 1/01/23 (Alternative Minimum Tax) - AMBAC Insured 1/12 at 100.00 AAA 1,500,375
10,000 5.500%, 1/01/32 (Alternative Minimum Tax) - AMBAC Insured 1/12 at 100.00 AAA 10,140,300
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 8.5%
2,250 Canterberry Crossing Metropolitan District II, Parker, 12/12 at 100.00 N/R 2,247,120
Colorado, General Obligation Limited Tax Bonds,
Series 2002, 7.375%, 12/01/32
1,775 Colorado Educational and Cultural Facilities Authority, 6/11 at 100.00 Ba1 1,830,842
Charter School Revenue Bonds, Series 2001, Frontier
Academy Project in Weld County School District No. 6,
7.375%, 6/01/31
3,250 Colorado Educational and Cultural Facilities Authority, 5/12 at 102.00 N/R 3,212,268
Charter School Revenue Bonds, Montessori Peaks Building
Foundation, Series 2002A, 8.000%, 5/01/32
1,700 Colorado Educational and Cultural Facilities Authority, 3/12 at 100.00 N/R 1,702,023
Charter School Revenue Bonds, Belle Creek Education
Center, Series 2002A, 7.625%, 3/15/32
5,060 Colorado Housing and Finance Authority, Multifamily 10/11 at 100.00 AAA 5,173,698
Project Bonds, Class I, Series 2001A-1, 5.500%, 4/01/31
(Alternative Minimum Tax)
10,100 City of Colorado Springs, Colorado, Utilities System 11/07 at 100.00 AA 10,579,649
Improvement and Refunding Revenue Bonds, Series 1997A,
5.375%, 11/15/26
2,000 City and County of Denver, Colorado, Airport System Revenue 11/11 at 100.00 AAA 2,128,760
Refunding Bonds, Series 2001A, 5.500%, 11/15/16
(Alternative Minimum Tax) - FGIC Insured
City and County of Denver, Colorado, Airport System Revenue
Bonds, Series 1996A:
19,150 5.750%, 11/15/16 - MBIA Insured 11/06 at 101.00 AAA 21,173,389
1,105 5.500%, 11/15/25 - MBIA Insured 11/06 at 101.00 AAA 1,162,217
1,000 Plaza Metropolitan District No. 1, Lakewood, Colorado, 6/14 at 101.00 N/R 1,003,260
Tax Increment Revenue Bonds, Series 2003, 8.000%, 12/01/25
53
Nuveen Dividend Advantage Municipal Fund 3 (NZF) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONNECTICUT - 1.4%
$ 5,250 Connecticut Housing Finance Authority, Housing Mortgage 11/09 at 100.00 AAA $ 5,444,617
Finance Program Bonds, Series 2000B, Subseries B-2,
5.850%, 5/15/31 (Alternative Minimum Tax)
2,895 Connecticut Housing Finance Authority, Housing Mortgage 5/10 at 100.00 AAA 2,971,631
Finance Program Bonds, Series 2001A, Subseries A-2,
5.350%, 11/15/22 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
DELAWARE - 0.7%
4,000 Delaware State Housing Authority, Multifamily Mortgage 7/12 at 100.00 Aa3 4,116,520
Revenue Bonds, Series 2001A, 5.400%, 7/01/24
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 1.1%
6,000 District of Columbia, Revenue Bonds, Catholic University 10/09 at 101.00 AAA 6,384,720
of America Issue, Series 1999, 5.625%, 10/01/29 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 1.7%
2,000 Dade County, Florida, Water and Sewer System Revenue 10/07 at 102.00 AAA 2,202,480
Bonds, Series 1997, 5.375%, 10/01/16 - FGIC Insured
Orange County, Florida, Housing Finance Authority, Multifamily
Housing Revenue Bonds, Oak Glen Apartments, Series 2001G:
1,105 5.400%, 12/01/32 (Alternative Minimum Tax) - FSA Insured 12/11 at 100.00 AAA 1,124,636
2,195 5.450%, 12/01/41 (Alternative Minimum Tax) - FSA Insured 12/11 at 100.00 AAA 2,229,286
4,175 Pace Property Finance Authority, Inc., Florida, Utility System 9/07 at 102.00 AAA 4,515,722
Improvement and Revenue Refunding Bonds, Series 1997,
5.250%, 9/01/17 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 2.3%
5,000 City of Atlanta, Georgia, Airport General Revenue Bonds, 1/10 at 101.00 AAA 5,206,800
Series 2000B, 5.625%, 1/01/30 (Alternative Minimum Tax) -
FGIC Insured
2,700 City of Atlanta, Georgia, Tax Allocation Bonds, Atlantic 12/11 at 101.00 N/R 2,781,594
Station Project, Series 2001, 7.900%, 12/01/24
3,600 Gainesville and Hall County Hospital Authority, Georgia, 5/11 at 100.00 A- 3,616,416
Revenue Anticipation Certificates, Northeast Georgia Health
System Inc. Project, Series 2001, 5.500%, 5/15/31
2,000 Henry County Water and Sewerage Authority, Georgia, 2/10 at 101.00 AAA 2,156,100
Water and Sewerage Revenue Bonds, Series 2000,
5.625%, 2/01/30 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
HAWAII - 0.9%
5,125 State of Hawaii, Highway Revenue Bonds, Series 2001, 7/11 at 100.00 AAA 5,479,906
5.375%, 7/01/21 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 16.6%
3,000 City of Chicago, Illinois, General Obligation Bonds, 1/11 at 100.00 AAA 3,143,460
Neighborhoods Alive 21 Program, Series 2001A,
5.500%, 1/01/31 - FGIC Insured
8,375 City of Chicago, Illinois, Midway Airport Revenue Bonds, 1/11 at 101.00 AAA 8,775,325
Series 2001A, 5.500%, 1/01/19 (Alternative Minimum
Tax) - FSA Insured
4,950 City of Chicago, Illinois, Chicago O'Hare International 1/11 at 101.00 AAA 5,057,861
Airport, Second Lien Passenger Facility Charge Revenue
Bonds, Series 2001A, 5.375%, 1/01/32 (Alternative
Minimum Tax) - AMBAC Insured
1,750 Chicago, Illinois, Sales Tax Revenue Bonds, Series 1998, 7/08 at 102.00 AAA 1,788,150
5.250%, 1/01/28 - FGIC Insured
10,800 City of Chicago, Illinois, Sales Tax Revenue Bonds, 1/09 at 101.00 AAA 12,337,164
Series 1999, 5.375%, 1/01/30 (Pre-refunded to 1/01/09) -
FGIC Insured
City of Chicago, Illinois, Second Lien Wastewater Transmission
Revenue Bonds, Series 2001A:
2,220 5.500%, 1/01/16 - MBIA Insured No Opt. Call AAA 2,493,726
8,610 5.500%, 1/01/26 - AMBAC Insured 1/11 at 100.00 AAA 9,027,068
10,000 City of Chicago, Illinois, Senior Lien Water Revenue Bonds, 11/11 at 100.00 AAA 10,055,700
Series 2001, 5.000%, 11/01/26 - AMBAC Insured
1,100 Illinois Health Facilities Authority, Revenue Bonds, Condell 5/10 at 101.00 A3 1,168,849
Medical Center, Series 2000, 6.500%, 5/15/30
15,000 Illinois Health Facilities Authority, Revenue Bonds, Loyola 7/11 at 100.00 Baa1 15,348,000
University Health System, Series 2001A, 6.125%, 7/01/31
54
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS (continued)
$ 9,000 Illinois Health Facilities Authority, Revenue Bonds, 12/11 at 101.00 BBB+ $ 8,572,410
Covenant Retirement Communities Inc., Series 2001,
5.875%, 12/01/31
2,000 Metropolitan Pier and Exposition Authority, Illinois, No Opt. Call AAA 2,206,600
McCormick Place Expansion Project Refunding Bonds,
Series 1998A, 5.500%, 6/15/29 - FGIC Insured
16,900 Metropolitan Pier and Exposition Authority, Illinois, 12/09 at 101.00 AAA 17,278,898
McCormick Place Expansion Project Bonds, Series 1999A,
5.250%, 12/15/28 - FGIC Insured
4,000 Robbins, Illinois, Resources Recovery Revenue Bonds, No Opt. Call N/R 1,483,160
Restructuring Project, Series 1999C, Guaranteed by Foster
Wheeler, 7.250%, 10/15/24 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 4.9%
Clark-Pleasant Community School Building Corporation,
Indiana, First Mortgage Bonds, Series 2001:
1,255 5.000%, 7/15/21 - AMBAC Insured 1/12 at 100.00 AAA 1,285,020
1,000 5.000%, 1/15/26 - AMBAC Insured 1/12 at 100.00 AAA 1,004,270
Evansville Vanderburgh Public Library Leasing Corporation,
Indiana, First Mortgage Bonds, Series 2001:
2,000 5.750%, 7/15/18 - MBIA Insured 7/12 at 100.00 AAA 2,206,580
2,750 5.125%, 1/15/24 - MBIA Insured 1/12 at 100.00 AAA 2,793,973
3,480 Gary, Indiana, GNMA/FHA Mortgage Revenue Bonds, 11/11 at 102.00 AAA 3,505,822
Windsor Square Project, Series 2001A, 5.375%, 10/20/41
(Alternative Minimum Tax)
1,250 Hamilton Southeastern Cumberland Campus School 1/12 at 100.00 AAA 1,277,962
Building Corporation, Indiana, First Mortgage Bonds,
Series 2001, 5.125%, 1/15/23 - AMBAC Insured
9,500 Indiana Educational Facilities Authority, Educational Facilities 2/11 at 100.00 AAA 9,994,380
Revenue Bonds, Butler University Project, Series 2001,
5.500%, 2/01/26 - MBIA Insured
3,000 Indianapolis Airport Authority, Indiana, Specialty Facility 11/05 at 102.00 Ca 1,042,500
Revenue Bonds, United Air Lines, Inc., Indianapolis
Maintenance Center Project, Series 1995A,
6.500%, 11/15/31 (Alternative Minimum Tax)#
3,500 University of Southern Indiana, Student Fee Bonds, 10/11 at 100.00 Aaa 3,593,065
Series 2001H, 5.000%, 10/01/21 - AMBAC Insured
Wayne County Jail Holding Corporation, Indiana, First
Mortgage Bonds, Series 2001:
1,150 5.625%, 7/15/18 - AMBAC Insured 1/13 at 101.00 AAA 1,280,410
1,090 5.500%, 7/15/22 - AMBAC Insured 1/13 at 101.00 AAA 1,178,802
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 4.6%
2,000 Iowa Finance Authority, Healthcare Facilities Revenue Bonds, 5/11 at 100.00 AAA 2,018,540
Great River Medical Center, Series 2001, 5.250%, 5/15/31 -
FSA Insured
Tobacco Settlement Authority, Iowa, Tobacco Settlement
Asset-Backed Revenue Bonds, Series 2001B:
28,000 5.300%, 6/01/25 6/11 at 101.00 BBB 22,201,760
3,950 5.600%, 6/01/35 6/11 at 101.00 BBB 3,052,639
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 3.2%
18,500 Louisville and Jefferson County Metropolitan Sewer 11/11 at 101.00 AAA 18,922,355
District, Kentucky, Sewer and Drainage System Revenue
Bonds, Series 2001A, 5.125%, 5/15/27 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 3.7%
19,890 Tobacco Settlement Financing Corporation, Louisiana, 5/11 at 101.00 BBB 15,925,127
Asset-Backed Bonds, Series 2001B, 5.875%, 5/15/39
6,000 Parish of West Feliciana, Louisiana, Remarketed Pollution 11/03 at 102.00 BB+ 6,196,980
Control Revenue Bonds, Gulf States Utilities Company
Project, Series 1985A, 7.500%, 5/01/15
------------------------------------------------------------------------------------------------------------------------------------
MAINE - 1.3%
Maine State Housing Authority, Mortgage Purchase Bonds,
Series 2001B:
4,610 5.400%, 11/15/21 (Alternative Minimum Tax) 11/10 at 100.00 AA+ 4,740,186
3,065 5.500%, 11/15/32 (Alternative Minimum Tax) 11/10 at 100.00 AA+ 3,127,587
------------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 2.3%
Community Development Administration, Department of Housing and
Community Development, Maryland, Multifamily Housing Revenue
Bonds, Insured Mortgage Loan, Series 2001B:
1,175 5.250%, 5/15/21 (Alternative Minimum Tax) 5/11 at 100.00 Aa2 1,205,104
1,585 5.250%, 7/01/21 (Alternative Minimum Tax) 7/11 at 100.00 Aa2 1,629,174
55
Nuveen Dividend Advantage Municipal Fund 3 (NZF) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
MARYLAND (continued)
$ 10,600 Maryland Energy Financing Administration Limited 9/05 at 102.00 N/R $10,753,806
Obligation Cogeneration Revenue Bonds, AES Warrior
Run Project, Series 1995, 7.400%, 9/01/19 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 1.0%
5,000 Massachusetts Port Authority, Special Facilities Revenue 1/11 at 101.00 AAA 5,225,250
Bonds, Delta Air Lines Inc. Project, Series 2001A,
5.500%, 1/01/18 (Alternative Minimum Tax) -
AMBAC Insured
765 Massachusetts Housing Finance Agency, Single Family 6/09 at 100.00 AAA 782,870
Housing Revenue Bonds, Series 71, 5.650%, 6/01/31
(Alternative Minimum Tax) - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 8.1%
15,000 Detroit School District, Wayne County, Michigan, No Opt. Call AAA 17,717,700
Unlimited Tax School Building and Site Improvement
General Obligation Bonds, Series 2001A, 6.000%, 5/01/29 -
FSA Insured
11,000 Kent Hospital Finance Authority, Michigan, Revenue Bonds, 7/11 at 101.00 AA 11,208,450
Spectrum Health, Series 2001A, 5.500%, 1/15/31
Michigan State Hospital Finance Authority, Hospital Revenue
Refunding Bonds, Sparrow Obligated Group, Series 2001:
1,400 5.500%, 11/15/21 11/11 at 101.00 A1 1,432,480
2,500 5.625%, 11/15/31 11/11 at 101.00 A1 2,524,625
12,640 Royal Oak, Michigan, Hospital Finance Authority, Hospital 11/11 at 100.00 AAA 12,861,832
Revenue Bonds, William Beaumont Hospital, Series 2001M,
5.250%, 11/15/31 - MBIA Insured
2,395 Ypsilanti Community Utilities Authority, Washtenaw 5/11 at 100.00 AAA 2,428,506
County, Michigan, Sanitary Sewer System No. 3 Bonds,
Charter Township of Ypsilanti, 5.100%, 5/01/31 -
FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 0.4%
2,390 Dakota County Community Development Agency, 10/11 at 105.00 Aaa 2,461,987
Minnesota, GNMA Collateralized Multifamily Housing
Revenue Bonds, Rose Apartments Project, Series 2001,
6.350%, 10/20/37 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 0.4%
2,155 Mississippi Business Finance Corporation, GNMA 5/09 at 103.00 AAA 2,211,935
Collateralized Retirement Facility Mortgage Revenue
Refunding Bonds, Aldersgate Retirement Community Inc.
Project, Series 1999A, 5.450%, 5/20/34
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 2.6%
2,000 Fenton, Missouri, Tax Increment Bonds, Gravois Bluffs 10/12 at 100.00 N/R 2,034,200
Project, Series 2002 Refunding and Improvement,
6.125%, 10/01/21
Missouri Development Finance Board, Cultural Facilities Revenue
Bonds, The Nelson Gallery Foundation, Series 2001A:
3,335 5.250%, 12/01/19 - MBIA Insured 12/11 at 100.00 AAA 3,572,319
3,510 5.250%, 12/01/20 - MBIA Insured 12/11 at 100.00 AAA 3,739,730
3,695 5.250%, 12/01/21 - MBIA Insured 12/11 at 100.00 AAA 3,908,608
2,040 5.250%, 12/01/22 - MBIA Insured 12/11 at 100.00 AAA 2,138,410
------------------------------------------------------------------------------------------------------------------------------------
MONTANA - 0.8%
5,000 Montana Board of Investments, Exempt Facility Revenue 7/10 at 101.00 Ba3 4,792,550
Bonds, Stillwater Mining Company Project, Series 2000,
8.000%, 7/01/20 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 1.4%
Nebraska Investment Finance Authority, Single Family Housing
Revenue Bonds, Series 2001D:
3,570 5.250%, 9/01/21 (Alternative Minimum Tax) 9/11 at 100.00 AAA 3,640,900
4,825 5.375%, 9/01/32 (Alternative Minimum Tax) 9/11 at 100.00 AAA 4,883,045
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 7.9%
35,000 Clark County, Nevada, General Obligation Limited Tax Bond 7/10 at 100.00 AAA 37,280,250
Bank Bonds, Series 2000, 5.500%, 7/01/30 - MBIA Insured
4,000 State of Nevada, Director of Business and Industry, 1/10 at 102.00 N/R 3,954,560
Las Vegas Monorail Company Project, Second Tier
Series 2000, 7.375%, 1/01/40
1,165 Nevada Housing Division, Single Family Mortgage Senior 4/08 at 101.50 Aaa 1,200,940
Bonds, Series 1998A-1, 5.300%, 4/01/18
(Alternative Minimum Tax)
56
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEVADA (continued)
$ 4,290 University of Nevada, Universities Revenue Bonds, 1/12 at 100.00 AAA $ 4,420,330
Community College System Project, Series 2001A,
5.250%, 7/01/26 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 0.4%
2,000 New Hampshire Health and Education Authority, Hospital 10/11 at 101.00 Aaa 2,139,740
Revenue Bonds, Concord Hospital Issue, Series 2001,
5.500%, 10/01/21 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 2.5%
10,000 New Jersey Economic Development Authority, Water 11/12 at 101.00 Aaa 10,224,100
Facilities Revenue Bonds, New Jersey-American Water
Company Project, Series 2002A, 5.250%, 11/01/32
(Alternative Minimum Tax) - AMBAC Insured
4,125 New Jersey Transit Corporation, Federal Transit No Opt. Call AAA 4,684,845
Administration Grants, Certificates of Participation,
Series 2002A, 5.500%, 9/15/13 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 5.0%
1,780 East Rochester Housing Authority, New York, GNMA 10/11 at 101.00 AAA 1,829,804
Secured Revenue Bonds, Gates Senior Housing, Inc.
Project, Series 2001, 5.300%, 4/20/31
5,350 Metropolitan Transportation Authority, New York, 11/11 at 100.00 AAA 5,393,924
Dedicated Tax Fund Bonds, Series 2001A,
5.000%, 11/15/31 - FGIC Insured
4,155 Monroe County Airport Authority, New York, Greater No Opt. Call AAA 4,645,581
Rochester International Airport Revenue Refunding Bonds,
Series 1999, 5.750%, 1/01/13 (Alternative Minimum Tax) -
MBIA Insured
2,500 The City of New York, New York, General Obligation Bonds, 8/12 at 100.00 AAA 2,761,325
Fiscal 2002 Series G, 5.625%, 8/01/20 - MBIA Insured
New York City Municipal Water Finance Authority, New York, Water
and Sewer System Revenue Bonds, Fiscal Series 2001A:
8,610 5.500%, 6/15/33 - MBIA Insured 6/10 at 101.00 AAA 9,197,719
5,710 5.500%, 6/15/33 - FGIC Insured 6/10 at 101.00 AAA 6,099,765
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 3.2%
7,150 Ohio Housing Finance Agency, GNMA Mortgage-Backed 3/08 at 101.50 AAA 7,343,550
Securities Program Residential Mortgage Revenue Bonds,
Series 1998A-1, 5.300%, 9/01/19 (Alternative
Minimum Tax) - FSA Insured
7,900 Ohio Water Development Authority, Solid Waste Disposal 9/09 at 102.00 N/R 7,863,423
Revenue Bonds, Bay Shore Power Project, Convertible
Series 1998B, 6.625%, 9/01/20 (Alternative Minimum Tax)
Portage County, Ohio, General Obligation Bonds, Series 2001:
1,870 5.000%, 12/01/21 - FGIC Insured 12/11 at 100.00 AAA 1,923,127
1,775 5.000%, 12/01/23 - FGIC Insured 12/11 at 100.00 AAA 1,809,808
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 0.4%
Oklahoma Development Finance Authority, Hillcrest
Healthcare System Revenue and Refunding Bonds,
Series 1999A:
1,000 5.125%, 8/15/10 8/09 at 101.00 B1 816,770
2,500 5.625%, 8/15/29 8/09 at 101.00 B1 1,678,900
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 2.5%
4,700 Oregon Health, Housing, Educational, and Cultural 11/11 at 101.00 AAA 4,907,834
Facilities Authority, Revenue Bonds, Peacehealth Issue,
Series 2001, 5.250%, 11/15/21 - AMBAC Insured
10,000 Oregon Housing and Community Services Department, 7/10 at 100.00 Aa2 10,135,600
Multifamily Housing Revenue Bonds, Series 2000A,
6.050%, 7/01/42 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 1.9%
Allegheny County, Pennsylvania, Hospital Development Authority,
Health System Revenue Bonds, West Penn Allegheny Health System,
Series 2000B:
2,000 9.250%, 11/15/22 11/10 at 102.00 B 2,055,040
2,000 9.250%, 11/15/30 11/10 at 102.00 B 2,055,040
3,500 Pennsylvania Economic Development Financing Authority, 1/04 at 102.00 BBB- 3,538,150
Resource Recovery Revenue Bonds, Northampton Generating
Project, Senior Series 1994A, 6.600%, 1/01/19 (Alternative
Minimum Tax)
57
Nuveen Dividend Advantage Municipal Fund 3 (NZF) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA (continued)
$ 3,205 Philadelphia School District, Pennsylvania, General Obligation 8/12 at 100.00 AAA $ 3,567,325
Bonds, Series 2002B, 5.625%, 8/01/16 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 1.7%
2,185 Greenville County, South Carolina, Special Source Revenue 4/11 at 101.00 AAA 2,369,611
Bonds, Road Improvement Project, Series 2001,
5.500%, 4/01/21 - AMBAC Insured
6,850 South Carolina Transportation Infrastructure Bank, Revenue 10/11 at 100.00 Aaa 7,893,255
Bonds, Series 2001A, 5.500%, 10/01/22 (Pre-refunded to
10/01/11) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 1.7%
5,210 Memphis-Shelby County Airport Authority, Tennessee, 3/11 at 100.00 AAA 5,624,820
Airport Revenue Bonds, Series 2001A, 5.500%, 3/01/14
(Alternative Minimum Tax) - FSA Insured
2,395 Tennessee Housing Development Agency, Homeownership 1/09 at 101.00 AA 2,437,320
Program Bonds, Issue 1998-2, 5.350%, 7/01/23 (Alternative
Minimum Tax)
2,130 Tennessee Housing Development Agency, Homeownership 7/11 at 100.00 AA 2,162,674
Program Bonds, Issue 2001-3A, 5.200%, 7/01/22 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 18.1%
1,125 Brushy Creek Municipal Utility District, Williamson County, 6/09 at 100.00 Aaa 1,136,036
Texas, Combination Unlimited Tax Revenue and Refunding
Bonds, Series 2001, 5.125%, 6/01/26 - FSA Insured
3,850 Cities of Dallas and Fort Worth, Texas, Dallas-Ft. Worth 11/11 at 100.00 AAA 3,963,113
International Airport, Joint Revenue Refunding and
Improvement Bonds, Series 2001A, 5.500%, 11/01/35
(Alternative Minimum Tax) - FGIC Insured
City of Frisco, Texas, Counties of Collins and Denton, General
Obligation Bonds, Series 2001:
1,910 5.000%, 2/15/20 - FGIC Insured 2/11 at 100.00 AAA 1,970,337
2,005 5.000%, 2/15/21 - FGIC Insured 2/11 at 100.00 AAA 2,052,178
4,040 Harris County, Texas, Tax and Revenue Certificates of 8/11 at 100.00 AA+ 4,067,957
Obligation, Series 2001, 5.000%, 8/15/27
7,000 City of Houston, Texas, Airport System Subordinate Lien 7/08 at 101.00 AAA 7,422,310
Revenue Bonds, Series 1998B, 5.250%, 7/01/14 (Alternative
Minimum Tax) - FGIC Insured
City of Houston, Texas, Airport System Subordinate Lien
Revenue Refunding Bonds, Series 2001A:
2,525 5.500%, 7/01/13 (Alternative Minimum Tax) - FGIC Insured 1/12 at 100.00 AAA 2,743,438
2,905 5.500%, 7/01/14 (Alternative Minimum Tax) - FGIC Insured 1/12 at 100.00 AAA 3,127,203
6,000 City of Houston, Texas, Water and Sewer System Junior No Opt. Call AAA 6,578,160
Lien Revenue Refunding Bonds, Series 2001B,
5.500%, 12/01/29 - MBIA Insured
Jefferson County, Texas, Health Facilities Development
Corporation, FHA-Insured Mortgage Revenue Bonds, Baptist
Hospital of Southeast Texas, Series 2001:
8,500 5.400%, 8/15/31 - AMBAC Insured 8/11 at 100.00 AAA 8,661,500
8,500 5.500%, 8/15/41 -AMBAC Insured 8/11 at 100.00 AAA 8,716,155
10,700 Laredo Independent School District, Webb County, Texas, 8/11 at 100.00 AAA 10,757,245
General Obligation Refunding Bonds, Series 2001,
5.000%, 8/01/25
2,500 Matagorda County Navigation District 1, Texas, Collateralized No Opt. Call AAA 2,525,025
Revenue Refunding Bonds, Houston Light and Power
Company Project, Series 1997, 5.125%, 11/01/28
(Alternative Minimum Tax) - AMBAC Insured
1,540 Medina Valley Independent School District, Medina County, 2/11 at 100.00 Aaa 1,580,656
Texas, General Obligation Bonds, Series 2001,
5.250%, 2/15/26
5,430 Mineral Wells Independent School District, Pale Pinto 2/08 at 100.00 Aaa 5,419,737
and Parker Counties, Texas, Unlimited School Tax Building
and Refunding Bonds, Series 1998, 4.750%, 2/15/22
3,000 North Central Texas Health Facilities Development 2/08 at 102.00 AAA 3,075,750
Corporation, Revenue Bonds, Texas Health Resources
System, Series 1997B, 5.375%, 2/15/26 - MBIA Insured
3,045 Port of Houston Authority of Harris County, Texas, General 10/11 at 100.00 AAA 3,228,096
Obligation Port Improvement Bonds, Series 2001B,
5.500%, 10/01/17 (Alternative Minimum Tax) - FGIC Insured
12,960 Texas Department of Housing and Community Affairs, 7/11 at 100.00 AAA 13,095,302
Residential Mortgage Revenue Bonds, Series 2001A,
5.350%, 7/01/33 (Alternative Minimum Tax)
58
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS (continued)
$ 15,600 Texas Water Development Board, State Revolving Fund, 1/07 at 100.00 AAA $16,545,360
Senior Lien Revenue Bonds, Series 1996B, 5.125%, 7/15/18
------------------------------------------------------------------------------------------------------------------------------------
UTAH - 1.2%
Utah Housing Corporation, Single Family Mortgage Bonds,
Series 2001E:
2,385 5.200%, 1/01/18 (Alternative Minimum Tax) 7/11 at 100.00 AA- 2,489,272
730 5.500%, 1/01/23 (Alternative Minimum Tax) 7/11 at 100.00 Aa2 739,505
Utah Housing Corporation, Single Family Mortgage Bonds,
Series 2001F-1:
2,905 4.950%, 7/01/18 (Alternative Minimum Tax) 7/11 at 100.00 Aa2 2,989,739
715 5.300%, 7/01/23 (Alternative Minimum Tax) 7/11 at 100.00 AA- 748,912
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 1.2%
7,145 Virginia Housing Development Authority, Commonwealth 7/11 at 100.00 AAA 7,389,502
Mortgage Bonds, Series 2001J, Subseries J-1,
5.200%, 7/01/19 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 16.5%
Bellingham Housing Authority, Washington, Housing Revenue
Bonds, Varsity Village Project, Series 2001A:
1,000 5.500%, 12/01/27 - MBIA Insured 12/11 at 100.00 Aaa 1,048,240
2,000 5.600%, 12/01/36 - MBIA Insured 12/11 at 100.00 Aaa 2,098,820
2,090 Public Utility District No. 1 of Benton County, Washington, 11/11 at 100.00 AAA 2,348,408
Electric Revenue Refunding Bonds, Series 2001A,
5.625%, 11/01/15 - FSA Insured
1,500 Public Utility District No. 1 of Grays Harbor County, 1/11 at 100.00 AAA 1,540,980
Washington, Electric Revenue Bonds, Series 2001,
5.125%, 1/01/22 - AMBAC Insured
2,475 Public Utility District No. 1 of Klickitat County, Washington, 12/11 at 100.00 AAA 2,483,885
Electric Revenue Bonds, Series 2001B, 5.000%, 12/01/26 -
AMBAC Insured
12,955 Port of Seattle, Washington, Passenger Facility Charge 12/08 at 101.00 AAA 13,667,914
Revenue Bonds, Series 1998B, 5.300%, 12/01/16
(Alternative Minimum Tax) - AMBAC Insured
Port of Seattle, Washington, Revenue Bonds, Series 2001B:
2,535 5.625%, 4/01/18 (Alternative Minimum Tax) - FGIC Insured 10/11 at 100.00 AAA 2,713,134
16,000 5.100%, 4/01/24 (Alternative Minimum Tax) - FGIC Insured 10/08 at 100.00 AAA 16,002,720
5,680 City of Seattle, Washington, Municipal Light and Power 3/11 at 100.00 AAA 6,213,182
Improvements and Revenue Refunding Bonds, Series 2001,
5.500%, 3/01/18 - FSA Insured
4,530 City of Tacoma, Washington, Solid Waste Utility Revenue 12/11 at 100.00 AAA 4,752,604
Refunding Bonds, Series 2001, 5.250%, 12/01/21 -
AMBAC Insured
2,250 State of Washington, Certificates of Participation, 7/09 at 100.00 AAA 2,451,667
Washington State Convention and Trade Center,
Series 1999, 5.250%, 7/01/14 - MBIA Insured
Washington State Healthcare Facilities Authority, Revenue
Bonds, Group Health Cooperative of Puget
Sound, Series 2001:
3,005 5.375%, 12/01/17 - AMBAC Insured 12/11 at 101.00 AAA 3,239,450
2,915 5.375%, 12/01/18 - AMBAC Insured 12/11 at 101.00 AAA 3,124,676
3,720 Washington State Healthcare Facilities Authority, Revenue 10/11 at 100.00 Aaa 3,959,084
Bonds, Children's Hospital and Regional Medical Center,
Series 2001, 5.375%, 10/01/18 - AMBAC Insured
Washington State Health Care Facilities Authority, Revenue
Bonds, Good Samaritan Hospital, Series 2001:
5,480 5.500%, 10/01/21 - RAAI Insured 10/11 at 101.00 AA 5,737,176
25,435 5.625%, 10/01/31 - RAAI Insured 10/11 at 101.00 AA 26,631,462
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 5.2%
City of Appleton, Wisconsin, Waterworks Revenue Refunding
Bonds, Series 2001:
3,705 5.375%, 1/01/20 - FGIC Insured 1/12 at 100.00 Aaa 3,954,272
1,850 5.000%, 1/01/21 - FGIC Insured 1/12 at 100.00 Aaa 1,901,689
1,735 Evansville Community School District, Dane, Green, and 4/11 at 100.00 AAA 1,892,746
Rock Counties, Wisconsin, General Obligation Refunding
Bonds, Series 2001, 5.500%, 4/01/20 - FGIC Insured
12,250 City of La Crosse, Wisconsin, Pollution Control Revenue 12/08 at 102.00 AAA 13,323,345
Refunding Bonds, Dairyland Power Cooperative Project,
Series 1997B, 5.550%, 2/01/15 - AMBAC Insured
59
Nuveen Dividend Advantage Municipal Fund 3 (NZF) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN (continued)
$ 3,180 State of Wisconsin, Clean Water Revenue Bonds, 6/09 at 100.00 AA+ $ 3,524,394
1999 Series 1, 5.500%, 6/01/17
4,000 Wisconsin Health and Educational Facilities Authority, 10/11 at 101.00 A+ 3,960,480
Revenue Bonds, Froedert and Community Health Obligated
Group, Series 2001, 5.375%, 10/01/30
2,500 Wisconsin Health and Educational Facilities Authority, 2/12 at 100.00 BBB+ 2,523,274
Revenue Bonds, Marshfield Clinic, Series 2001B,
6.000%, 2/15/25
------------------------------------------------------------------------------------------------------------------------------------
$ 869,040 Total Long-Term Investments (cost $871,058,204) - 149.5% 888,188,075
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 3.0% 17,966,002
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (52.5)% (312,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 594,154,077
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments
are based on net assets applicable to Common shares.
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and
prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent
auditors): Using the higher of Standard & Poor's or
Moody's rating.
# On December 9, 2002, UALCorporation, the holding
company of United Air Lines, Inc. filed for federal
bankruptcy protection. The Adviser determined that it
was likely United would not remain current on their
interest payment obligations with respect to these
bonds and thus has stopped accruing interest.
N/R Investment is not rated.
See accompanying notes to financial statements.
60
Statement of
ASSETS AND LIABILITIES October 31, 2003
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at market value (cost
$1,296,453,235, $948,430,897,
$989,353,141, $821,044,357,
$633,591,578 and $871,058,204,
respectively) $1,379,062,830 $1,008,756,335 $1,048,169,730 $873,537,804 $653,500,549 $888,188,075
Cash -- 1,024,201 -- -- 3,005,929 --
Receivables:
Interest 22,300,811 18,849,236 18,162,689 15,069,666 11,440,319 15,693,012
Investments sold 8,514,439 1,273,831 9,669,706 3,143,978 -- 3,160,038
Other assets 49,277 41,688 47,219 46,678 31,356 10,844
------------------------------------------------------------------------------------------------------------------------------------
Total assets 1,409,927,357 1,029,945,291 1,076,049,344 891,798,126 667,978,153 907,051,969
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft 4,335,428 -- 7,242,723 933,950 -- 446,360
Payable for investments purchased -- -- -- -- 2,551,563 --
Accrued expenses:
Management fees 732,858 541,657 561,198 244,628 193,521 252,427
Other 306,507 230,456 259,908 337,533 115,577 184,301
Preferred share dividends payable 27,717 25,904 30,363 15,785 16,234 14,804
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 5,402,510 798,017 8,094,192 1,531,896 2,876,895 897,892
------------------------------------------------------------------------------------------------------------------------------------
Preferred shares, at
liquidation value 479,000,000 358,000,000 380,000,000 295,000,000 222,000,000 312,000,000
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to
Common shares $ 925,524,847 $ 671,147,274 $ 687,955,152 $595,266,230 $443,101,258 $594,154,077
====================================================================================================================================
Common shares outstanding 59,914,073 42,980,333 45,540,872 39,237,705 29,282,000 40,310,119
====================================================================================================================================
Net asset value per Common share
outstanding (net assets
applicable to Common
shares, divided by
Common shares outstanding) $ 15.45 $ 15.62 $ 15.11 $ 15.17 $ 15.13 $ 14.74
====================================================================================================================================
NET ASSETS APPLICABLE TO
COMMON SHARES CONSIST OF:
------------------------------------------------------------------------------------------------------------------------------------
Common shares, $.01
par value per share $ 599,141 $ 429,803 $ 455,409 $ 392,377 $ 292,820 $ 403,101
Paid-in surplus 836,307,520 600,296,194 635,397,085 557,556,239 416,101,191 572,811,979
Undistributed net investment
income 11,883,367 9,507,298 6,566,696 6,991,496 5,895,336 5,124,505
Accumulated net realized gain (loss)
from investment transactions (5,874,776) 588,541 (13,280,627) (22,167,329) 902,940 (1,315,379)
Net unrealized appreciation
of investments 82,609,595 60,325,438 58,816,589 52,493,447 19,908,971 17,129,871
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to
Common shares $ 925,524,847 $ 671,147,274 $ 687,955,152 $595,266,230 $443,101,258 $594,154,077
====================================================================================================================================
Authorized shares:
Common 200,000,000 200,000,000 200,000,000 Unlimited Unlimited Unlimited
Preferred 1,000,000 1,000,000 1,000,000 Unlimited Unlimited Unlimited
====================================================================================================================================
See accompanying notes to financial statements.
61
Statement of
OPERATIONS Year Ended October 31, 2003
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $74,947,407 $56,742,924 $ 55,594,814 $48,296,150 $36,964,229 $47,382,671
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 8,676,542 6,397,562 6,586,891 5,553,186 4,174,354 5,658,480
Preferred shares - auction fees 1,218,276 901,466 955,263 752,720 540,021 770,667
Preferred shares - dividend
disbursing agent fees 50,000 50,000 40,000 30,000 30,000 30,000
Shareholders' servicing agent fees
and expenses 258,874 153,740 173,785 28,367 12,564 11,307
Custodian's fees and expenses 304,155 225,793 242,125 209,041 156,821 201,996
Directors'/Trustees' fees
and expenses 24,305 14,057 19,095 15,980 12,275 16,781
Professional fees 36,381 36,576 131,553 1,134,658 44,860 37,316
Shareholders' reports - printing and
mailing expenses 152,991 88,126 135,189 111,008 68,541 95,385
Stock exchange listing fees 23,105 16,784 17,739 15,923 1,232 4,056
Investor relations expense 149,319 132,004 139,930 111,707 71,806 104,830
Other expenses 63,655 60,322 64,701 42,677 34,931 38,114
------------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee
credit and expense
reimbursement 10,957,603 8,076,430 8,506,271 8,005,267 5,147,405 6,968,932
Custodian fee credit (27,822) (23,445) (35,349) (31,113) (25,168) (19,376)
Expense reimbursement -- -- -- (2,666,357) (1,982,210) (2,714,220)
------------------------------------------------------------------------------------------------------------------------------------
Net expenses 10,929,781 8,052,985 8,470,922 5,307,797 3,140,027 4,235,336
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 64,017,626 48,689,939 47,123,892 42,988,353 33,824,202 43,147,335
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
FROM INVESTMENTS
Net realized gain (loss)
from investments (5,880,620) 634,285 (11,663,137) (4,617,432) 890,827 202,373
Change in net unrealized appreciation
(depreciation) of investments 8,871,335 9,982,884 34,046,066 12,311,762 4,294,735 3,920,609
------------------------------------------------------------------------------------------------------------------------------------
Net gain from investments 2,990,715 10,617,169 22,382,929 7,694,330 5,185,562 4,122,982
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
From net investment income (4,280,974) (3,175,596) (3,474,652) (2,660,192) (2,029,376) (2,863,822)
From accumulated net realized gains
from investments (139,879) (242,543) -- -- (28,710) --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Preferred shareholders (4,420,853) (3,418,139) (3,474,652) (2,660,192) (2,058,086) (2,863,822)
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable
to Common shares from
operations $62,587,488 $55,888,969 $ 66,032,169 $48,022,491 $36,951,678 $44,406,495
====================================================================================================================================
See accompanying notes to financial statements.
62
Statement of
CHANGES IN NET ASSETS
PERFORMANCE PLUS (NPP) MUNICIPAL ADVANTAGE (NMA) MARKET OPPORTUNITY (NMO)
----------------------------- ------------------------------ ----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
10/31/03 10/31/02 10/31/03 10/31/02 10/31/03 10/31/02
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 64,017,626 $ 65,273,913 $ 48,689,939 $ 49,642,569 $ 47,123,892 $ 50,666,010
Net realized gain (loss)
from investments (5,880,620) 1,658,527 634,285 3,175,745 (11,663,137) (1,622,794)
Change in net unrealized
appreciation (depreciation)
of investments 8,871,335 (15,059,549) 9,982,884 (13,241,244) 34,046,066 (30,326,455)
Distributions to Preferred
shareholders:
From net investment income (4,280,974) (5,916,338) (3,175,596) (4,136,412) (3,474,652) (4,944,432)
From accumulated net
realized gains
from investments (139,879) (720,966) (242,543) (1,143,082) -- (289,119)
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
applicable to Common shares
from operations 62,587,488 45,235,587 55,888,969 34,297,576 66,032,169 13,483,210
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (56,921,521) (53,683,146) (44,027,554) (40,570,160) (42,990,586) (41,601,362)
From accumulated net realized gains
from investments (1,515,794) (2,612,288) (2,984,339) (4,129,879) -- (992,816)
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Common shareholders (58,437,315) (56,295,434) (47,011,893) (44,700,039) (42,990,586) (42,594,178)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares issued
to shareholders due to reinvestment
of distributions -- -- -- -- -- --
Preferred shares offering costs (1,000) (501,535) -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from capital share transactions (1,000) (501,535) -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares 4,149,173 (11,561,382) 8,877,076 (10,402,463) 23,041,583 (29,110,968)
Net assets applicable to Common
shares at the beginning
of year 921,375,674 932,937,056 662,270,198 672,672,661 664,913,569 694,024,537
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of year $925,524,847 $921,375,674 $671,147,274 $662,270,198 $687,955,152 $664,913,569
====================================================================================================================================
Undistributed net investment
income at the end of year $ 11,883,367 $ 9,074,385 $ 9,507,298 $ 8,026,346 $ 6,566,696 $ 5,943,407
====================================================================================================================================
See accompanying notes to financial statements.
63
Statement of
CHANGES IN NET ASSETS (continued)
DIVIDEND ADVANTAGE (NAD) DIVIDEND ADVANTAGE 2 (NXZ) DIVIDEND ADVANTAGE 3 (NZF)
----------------------------- ------------------------------ ----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
10/31/03 10/31/02 10/31/03 10/31/02 10/31/03 10/31/02
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 42,988,353 $ 44,433,341 $ 33,824,202 $ 33,702,642 $ 43,147,335 $ 41,656,411
Net realized gain (loss)
from investments (4,617,432) 140,122 890,827 301,752 202,373 (1,471,054)
Change in net unrealized
appreciation (depreciation)
of investments 12,311,762 (107,226) 4,294,735 (9,579,398) 3,920,609 7,512,570
Distributions to Preferred
shareholders:
From net investment income (2,660,192) (3,979,694) (2,029,376) (3,000,574) (2,863,822) (4,027,379)
From accumulated net realized
gains from investments -- -- (28,710) (64,965) -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
applicable to Common shares
from operations 48,022,491 40,486,543 36,951,678 21,359,457 44,406,495 43,670,548
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (38,956,575) (36,722,714) (29,486,976) (26,749,093) (37,528,721) (36,520,445)
From accumulated net realized
gains from investments -- -- (272,342) (298,687) -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Common shareholders (38,956,575) (36,722,714) (29,759,318) (27,047,780) (37,528,721) (36,520,445)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares issued
to shareholders due to reinvestment
of distributions 155,266 1,192,197 -- -- 476,145 43,936
Preferred shares offering costs -- -- 2,137 286,674 1,199 (3,494,972)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from capital share transactions 155,266 1,192,197 2,137 286,674 477,344 (3,451,036)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in
net assets applicable
to Common shares 9,221,182 4,956,026 7,194,497 (5,401,649) 7,355,118 3,699,067
Net assets applicable to
Common shares at the
beginning of year 586,045,048 581,089,022 435,906,761 441,308,410 586,798,959 583,099,892
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of year $595,266,230 $586,045,048 $443,101,258 $435,906,761 $594,154,077 $586,798,959
====================================================================================================================================
Undistributed net investment
income at
the end of year $ 6,991,496 $ 5,680,795 $ 5,895,336 $ 3,600,024 $ 5,124,505 $ 2,370,251
====================================================================================================================================
See accompanying notes to financial statements.
64
Notes to
FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The National Funds (the "Funds") covered in this report and their corresponding
Common share stock exchange symbols are Nuveen Performance Plus Municipal Fund,
Inc. (NPP), Nuveen Municipal Advantage Fund, Inc. (NMA), Nuveen Municipal Market
Opportunity Fund, Inc. (NMO), Nuveen Dividend Advantage Municipal Fund (NAD),
Nuveen Dividend Advantage Municipal Fund 2 (NXZ) and Nuveen Dividend Advantage
Municipal Fund 3 (NZF). Performance Plus (NPP), Municipal Advantage (NMA),
Market Opportunity (NMO) and Dividend Advantage (NAD) are traded on the New York
Stock Exchange while Dividend Advantage 2 (NXZ) and Dividend Advantage 3 (NZF)
are traded on the American Stock Exchange. The Funds are registered under the
Investment Company Act of 1940, as amended, as closed-end, diversified
management investment companies.
Each Fund seeks to provide current income exempt from regular federal income tax
by investing primarily in a diversified portfolio of municipal obligations
issued by state and local government authorities.
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements in accordance with
accounting principles generally accepted in the United States.
Securities Valuation
The prices of municipal bonds in each Fund's investment portfolio are provided
by a pricing service approved by the Fund's Board of Directors/Trustees. When
price quotes are not readily available (which is usually the case for municipal
securities), the pricing service establishes fair market value based on yields
or prices of municipal bonds of comparable quality, type of issue, coupon,
maturity and rating, indications of value from securities dealers, evaluations
of anticipated cash flows or collateral and general market conditions. If it is
determined that market prices for a security are unavailable or inappropriate,
the Board of Directors/Trustees of the Funds, or its designee, may establish a
fair value for the security. Temporary investments in securities that have
variable rate and demand features qualifying them as short-term securities are
valued at amortized cost, which approximates market value.
Securities Transactions
Securities transactions are recorded on a trade date basis. Realized gains and
losses from such transactions are determined on the specific identification
method. Securities purchased or sold on a when-issued or delayed delivery basis
may have extended settlement periods. The securities so purchased are subject to
market fluctuation during this period. The Funds have instructed the custodian
to segregate assets with a current value at least equal to the amount of the
when-issued and delayed delivery purchase commitments. At October 31, 2003,
there were no such outstanding purchase commitments in any of the Funds.
Investment Income
Interest income, which includes the amortization of premiums and accretion of
discounts for financial reporting purposes, is recorded on an accrual basis.
Professional Fees
Professional fees presented in the Statement of Operations consist of legal fees
incurred in the normal course of operations, audit fees, tax consulting fees
and, in some cases, workout expenditures. Workout expenditures are incurred in
an attempt to protect or enhance an investment, or to pursue other claims or
legal actions on behalf of the Fund's shareholders.
Federal Income Taxes
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund
intends to comply with the requirements of the Internal Revenue Code applicable
to regulated investment companies and to distribute all of its net investment
income to its shareholders. Therefore, no federal income tax provision is
required. Furthermore, each Fund intends to satisfy conditions which will enable
interest from municipal securities, which is exempt from regular federal income
tax, to retain such tax-exempt status when distributed to shareholders of the
Funds. All monthly tax-exempt income dividends paid during the fiscal year ended
October 31, 2003, have been designated Exempt Interest Dividends.
65
Notes to
FINANCIAL STATEMENTS (continued)
Dividends and Distributions to Common Shareholders
Dividends from tax-exempt net investment income are declared monthly. Net
realized capital gains and/or market discount from investment transactions, if
any, are distributed to shareholders not less frequently than annually.
Furthermore, capital gains are distributed only to the extent they exceed
available capital loss carryforwards.
Distributions to Common shareholders of tax-exempt net investment income, net
realized capital gains and/or market discount, if any, are recorded on the
ex-dividend date. The amount and timing of distributions are determined in
accordance with federal income tax regulations, which may differ from accounting
principles generally accepted in the United States.
Preferred Shares
The Funds have issued and outstanding $25,000 stated value Preferred shares.
Each Fund's Preferred shares are issued in more than one Series. The dividend
rate on each Series may change every seven days, as set pursuant to a dutch
auction process by the auction agent, and is payable at or near the end of each
rate period. The number of Preferred shares outstanding, by Series and in total,
for each Fund is as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
---------------------------------------------------------------------------------------------------------
Number of shares:
Series M 4,000 3,000 4,000 4,000 3,000 --
Series T 4,000 3,000 4,000 4,000 3,000 --
Series W 4,000 3,000 3,200 -- -- 4,160
Series TH 3,160 2,320 -- 3,800 -- 4,160
Series F 4,000 3,000 4,000 -- 2,880 4,160
---------------------------------------------------------------------------------------------------------
Total 19,160 14,320 15,200 11,800 8,880 12,480
=========================================================================================================
66
Derivative Financial Instruments
The Funds may invest in certain derivative financial instruments including
futures, forward, swap and option contracts, and other financial instruments
with similar characteristics. Although the Funds are authorized to invest in
such financial instruments, and may do so in the future, they did not make any
such investments during the fiscal year ended October 31, 2003.
Custodian Fee Credit
Each Fund has an arrangement with the custodian bank whereby certain custodian
fees and expenses are reduced by credits earned on each Fund's cash on deposit
with the bank. Such deposit arrangements are an alternative to overnight
investments.
Offering Costs
Costs incurred by Performance Plus (NPP) and Dividend Advantage 3 (NZF) in
connection with their offerings of Preferred shares ($502,535 and $3,493,773,
respectively) were recorded as a reduction to paid-in surplus.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of increases and
decreases in net assets applicable to Common shares from operations during the
reporting period. Actual results may differ from those estimates.
2. FUND SHARES
Transactions in Common and Preferred shares were as follows:
MUNICIPAL MARKET
PERFORMANCE PLUS (NPP) ADVANTAGE (NMA) OPPORTUNITY (NMO)
---------------------- ------------------ -------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
10/31/03 10/31/02 10/31/03 10/31/02 10/31/03 10/31/02
=========================================================================================================
Common shares issued to
shareholders due to
reinvestment of
distributions -- -- -- -- -- --
=========================================================================================================
Preferred shares sold -- 1,400 -- -- -- --
=========================================================================================================
DIVIDEND ADVANTAGE (NAD) DIVIDEND ADVANTAGE 2 (NXZ) DIVIDEND ADVANTAGE 3 (NZF)
------------------------ -------------------------- --------------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
10/31/03 10/31/02 10/31/03 10/31/02 10/31/03 10/31/02
=========================================================================================================
Common shares issued to
shareholders due to
reinvestment of
distributions 9,858 80,089 -- -- -- 3,119
=========================================================================================================
Preferred shares sold -- -- -- -- -- 12,480
=========================================================================================================
67
Notes to
FINANCIAL STATEMENTS (continued)
3. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of investments in long-term municipal
securities during the fiscal year ended October 31, 2003, were as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
---------------------------------------------------------------------------------------------------------
Purchases $142,495,719 $74,556,548 $ 95,269,111 $30,224,317 $72,469,463 $30,112,563
Sales and maturities 136,068,025 91,537,583 108,089,800 47,917,593 92,271,573 26,282,970
=========================================================================================================
4. INCOME TAX INFORMATION
The following information is presented on an income tax basis. Differences
between amounts for financial statement and federal income tax purposes are
primarily due to timing differences in recognizing income on taxable market
discount securities and timing differences in recognizing certain gains and
losses on security transactions.
At October 31, 2003, the cost of investments were 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 $1,295,588,954 $947,768,522 $988,885,955 $820,431,397 $633,345,726 $871,007,676
=============================================================================================================
Gross unrealized appreciation and gross unrealized depreciation of investments
at October 31, 2003, 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 $96,389,691 $77,539,144 $81,144,469 $67,183,324 $30,778,706 $28,953,058
Depreciation (12,915,815) (16,551,331) (21,860,694) (14,076,917) (10,623,883) (11,772,659)
---------------------------------------------------------------------------------------------------------
Net unrealized appreciation
of investments $83,473,876 $60,987,813 $59,283,775 $53,106,407 $20,154,823 $17,180,399
=========================================================================================================
68
The tax components of undistributed net investment income and net realized gains
at October 31, 2003, were as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
---------------------------------------------------------------------------------------------------------
Undistributed net tax-exempt
income $15,733,229 $12,505,878 $9,582,171 $9,592,110 $8,183,960 $8,273,202
Undistributed net ordinary
income * 166,616 11,261 145,432 27,034 11 79
Undistributed net long-term
capital gains -- 638,541 -- -- 902,940 --
=========================================================================================================
* Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
The tax character of distributions paid during the fiscal years ended October
31, 2003 and October 31, 2002, 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
2003 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
---------------------------------------------------------------------------------------------------------
Distributions from net
tax-exempt income $60,990,090 $46,876,673 $46,423,461 $41,473,029 $31,323,275 $40,277,088
Distributions from net
ordinary income * 3,729 179,625 -- -- 185,573 --
Distributions from net
long-term
capital gains 1,655,369 3,226,882 -- -- 115,479 --
=========================================================================================================
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
2002 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
---------------------------------------------------------------------------------------------------------
Distributions from net
tax-exempt income $59,286,613 $44,278,184 $46,362,835 $40,491,284 $29,610,711 $37,463,976
Distributions from net
ordinary income * 256,881 1,271,708 -- -- 363,652 --
Distributions from net
long-term
capital gains 3,076,373 4,070,716 1,281,935 -- -- --
=========================================================================================================
* Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
At October 31, 2003, the following Funds had unused capital loss carryforwards
available for federal income tax purposes to be applied against future capital
gains, if any. If not applied, the carryforwards will expire as follows:
PERFORMANCE MARKET DIVIDEND DIVIDEND
PLUS OPPORTUNITY ADVANTAGE ADVANTAGE 3
(NPP) (NMO) (NAD) (NZF)
---------------------------------------------------------------------------------------------------------
Expiration year:
2007 $ -- $ -- $ 2,980,482 $ --
2008 -- -- 14,462,547 --
2009 -- -- -- --
2010 -- 1,622,794 -- 1,315,379
2011 5,874,776 11,657,833 4,594,300 --
---------------------------------------------------------------------------------------------------------
Total $5,874,776 $13,280,627 $22,037,329 $1,315,379
=========================================================================================================
69
Notes to
FINANCIAL STATEMENTS (continued)
5. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under Performance Plus' (NPP), Municipal Advantage's (NMA) and Market
Opportunity's (NMO) investment management agreements with Nuveen Advisory Corp.
(the "Adviser"), a wholly owned subsidiary of Nuveen Investments, Inc.
(formerly, The John Nuveen Company), each Fund pays an annual management fee,
payable monthly, at the rates set forth below, which are based upon the average
daily net assets (including net assets attributable to Preferred shares) of each
Fund as follows:
AVERAGE DAILY NET ASSETS (INCLUDING NET ASSETS
ATTRIBUTABLE TO PREFERRED SHARES) MANAGEMENT FEE
--------------------------------------------------------------------------------
For the first $125 million .6500%
For the next $125 million .6375
For the next $250 million .6250
For the next $500 million .6125
For the next $1 billion .6000
For the next $3 billion .5875
For net assets over $5 billion .5750
================================================================================
Under Dividend Advantage's (NAD), Dividend Advantage 2's (NXZ) and Dividend
Advantage 3's (NZF) investment management agreements with the Adviser, each Fund
pays an annual management fee, payable monthly, at the rates set forth below,
which are based upon the average daily net assets (including net assets
attributable to Preferred shares) of each Fund as follows:
AVERAGE DAILY NET ASSETS (INCLUDING NET ASSETS
ATTRIBUTABLE TO PREFERRED SHARES) MANAGEMENT FEE
--------------------------------------------------------------------------------
For the first $125 million .6500%
For the next $125 million .6375
For the next $250 million .6250
For the next $500 million .6125
For the next $1 billion .6000
For net assets over $2 billion .5750
================================================================================
The management fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Funds pay no
compensation directly to those of its Directors/Trustees who are affiliated with
the Adviser or to their officers, all of whom receive remuneration for their
services to the Funds from the Adviser or its affiliates.
For the first ten years of Dividend Advantage's (NAD) operations, the Adviser
has agreed to reimburse the Fund, as a percentage of average daily net assets
(including net assets attributable to Preferred shares), for fees and expenses
in the amounts, and for the time periods set forth below:
YEAR ENDING YEAR ENDING
JULY 31, JULY 31,
--------------------------------------------------------------------------------
1999* .30% 2005 .25%
2000 .30 2006 .20
2001 .30 2007 .15
2002 .30 2008 .10
2003 .30 2009 .05
2004 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Dividend Advantage (NAD) for any portion
of its fees and expenses beyond July 31, 2009.
70
For the first ten years of Dividend Advantage 2's (NXZ) operations, the Adviser
has agreed to reimburse the Fund, as a percentage of average daily net assets
(including net assets attributable to Preferred shares), for fees and expenses
in the amounts, and for the time periods set forth below:
YEAR ENDING YEAR ENDING
MARCH 31, MARCH 31,
--------------------------------------------------------------------------------
2001* .30% 2007 .25%
2002 .30 2008 .20
2003 .30 2009 .15
2004 .30 2010 .10
2005 .30 2011 .05
2006 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Dividend Advantage 2 (NXZ) for any
portion of its fees and expenses beyond March 31, 2011.
For the first ten years of Dividend Advantage 3's (NZF) operations, the Adviser
has agreed to reimburse the Fund, as a percentage of average daily net assets
(including net assets attributable to Preferred shares), for fees and expenses
in the amounts, and for the time periods set forth below:
YEAR ENDING YEAR ENDING
SEPTEMBER 30, SEPTEMBER 30,
--------------------------------------------------------------------------------
2001* .30% 2007 .25%
2002 .30 2008 .20
2003 .30 2009 .15
2004 .30 2010 .10
2005 .30 2011 .05
2006 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Dividend Advantage 3 (NZF) for any
portion of its fees and expenses beyond September 30, 2011.
6. INVESTMENT COMPOSITION
At October 31, 2003, the revenue sources by municipal purpose, expressed as a
percent of total investments, were as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
---------------------------------------------------------------------------------------------------------
Consumer Staples 5% 5% 5% 4% 3% 5%
Education and Civic Organizations 4 -- 4 5 3 5
Healthcare 9 17 10 16 24 16
Housing/Multifamily 6 2 1 1 1 4
Housing/Single Family 6 11 1 4 6 7
Long-Term Care 1 2 -- 4 1 1
Tax Obligation/General 15 7 23 14 9 9
Tax Obligation/Limited 14 9 13 12 19 12
Transportation 8 10 16 14 14 17
U.S. Guaranteed 16 14 13 12 3 2
Utilities 10 17 8 10 7 8
Water and Sewer 6 5 5 3 9 12
Other -- 1 1 1 1 2
---------------------------------------------------------------------------------------------------------
100% 100% 100% 100% 100% 100%
=========================================================================================================
Certain investments owned by the Funds are either covered by insurance issued by
several private insurers or are backed by an escrow or trust containing U.S.
Government or U.S. Government agency securities, both of which ensure the timely
payment of principal and interest in the event of default (62% for Performance
Plus (NPP), 55% for Municipal Advantage (NMA), 56% for Market Opportunity (NMO),
62% for Dividend Advantage (NAD), 53% for Dividend Advantage 2 (NXZ) and 66% for
Dividend Advantage 3 (NZF)). Such insurance or escrow, however, does not
guarantee the market value of the municipal securities or the value of the
Funds' shares.
For additional information regarding each investment security, refer to the
Portfolio of Investments of each Fund.
71
Notes to
FINANCIAL STATEMENTS (continued)
7. SUBSEQUENT EVENT - DISTRIBUTIONS TO COMMON SHAREHOLDERS
The Funds declared Common share dividend distributions from their tax-exempt net
investment income which were paid on December 1, 2003, to shareholders of record
on November 15, 2003, as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
---------------------------------------------------------------------------------------------------------
Dividend per share $.0810 $.0860 $.0790 $.0855 $.0860 $.0790
=========================================================================================================
72
Financial
HIGHLIGHTS
73
Financial
HIGHLIGHTS
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
---------------------------------------------------------------- -------------------------------
Distributions Distributions
from Net from Net
Beginning Net Investment Capital Investment Capital
Common Realized/ Income to Gains to Income to Gains to
Share Net Unrealized Preferred Preferred Common Common
Net Asset Investment Investment Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
====================================================================================================================================
PERFORMANCE PLUS (NPP)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2003 $15.38 $1.07 $ .05 $(.07) $ -- $ 1.05 $ (.95) $(.03) $ (.98)
2002 15.57 1.09 (.22) (.10) (.01) .76 (.90) (.04) (.94)
2001 14.36 1.10 1.17 (.23) -- 2.04 (.83) -- (.83)
2000 13.69 1.12 .69 (.29) -- 1.52 (.84) -- (.84)
1999 15.43 1.12 (1.73) (.21) -- (.82) (.91) (.01) (.92)
MUNICIPAL ADVANTAGE (NMA)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2003 15.41 1.13 .25 (.07) (.01) 1.30 (1.02) (.07) (1.09)
2002 15.65 1.15 (.22) (.10) (.03) .80 (.94) (.10) (1.04)
2001 14.61 1.16 1.10 (.24) (.03) 1.99 (.87) (.08) (.95)
2000 13.98 1.24 .63 (.33) -- 1.54 (.91) -- (.91)
1999 15.85 1.24 (1.85) (.24) -- (.85) (1.00) -- (1.00)
MARKET OPPORTUNITY (NMO)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2003 14.60 1.03 .50 (.08) -- 1.45 (.94) -- (.94)
2002 15.24 1.11 (.70) (.11) (.01) .29 (.91) (.02) (.93)
2001 14.45 1.16 .80 (.26) (.01) 1.69 (.87) (.03) (.90)
2000 14.11 1.24 .38 (.34) -- 1.28 (.94) -- (.94)
1999 15.96 1.26 (1.83) (.24) -- (.81) (1.01) (.01) (1.02)
DIVIDEND ADVANTAGE (NAD)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2003 14.94 1.10 .19 (.07) -- 1.22 (.99) -- (.99)
2002 14.84 1.13 .01 (.10) -- 1.04 (.94) -- (.94)
2001 13.59 1.16 1.21 (.24) -- 2.13 (.88) -- (.88)
2000 12.78 1.15 .84 (.31) -- 1.68 (.86) -- (.86)
1999(a) 14.33 .39 (1.47) (.07) -- (1.15) (.30) -- (.30)
DIVIDEND ADVANTAGE 2 (NXZ)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2003 14.89 1.16 .17 (.07) -- 1.26 (1.01) (.01) (1.02)
2002 15.07 1.15 (.32) (.10) -- .73 (.91) (.01) (.92)
2001(b) 14.33 .52 .88 (.09) -- 1.31 (.45) -- (.45)
DIVIDEND ADVANTAGE 3 (NZF)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2003 14.56 1.07 .10 (.07) -- 1.10 (.93) -- (.93)
2002 14.47 1.03 .16 (.10) -- 1.09 (.91) -- (.91)
2001(c) 14.33 .03 .14 -- -- .17 -- -- --
====================================================================================================================================
Total Returns
--------------------
Offering Based
Costs and Ending on
Preferred Common Based Common
Share Share Ending on Share Net
Underwriting Net Asset Market Market Asset
Discounts Value Value Value** Value**
============================================================================================
PERFORMANCE PLUS (NPP)
--------------------------------------------------------------------------------------------
Year Ended 10/31:
2003 $ -- $15.45 $14.6400 9.58% 6.97%
2002 (.01) 15.38 14.2800 4.51 5.03
2001 -- 15.57 14.5800 26.96 14.51
2000 (.01) 14.36 12.1875 .90 11.47
1999 -- 13.69 12.9375 (10.76) (5.63)
MUNICIPAL ADVANTAGE (NMA)
--------------------------------------------------------------------------------------------
Year Ended 10/31:
2003 -- 15.62 15.4400 13.17 8.71
2002 -- 15.41 14.6600 5.89 5.39
2001 -- 15.65 14.8500 23.35 13.97
2000 -- 14.61 12.8750 1.46 11.48
1999 (.02) 13.98 13.6250 (8.16) (5.83)
MARKET OPPORTUNITY (NMO)
--------------------------------------------------------------------------------------------
Year Ended 10/31:
2003 -- 15.11 14.2900 10.62 10.24
2002 -- 14.60 13.8000 .49 2.03
2001 -- 15.24 14.6500 20.03 11.93
2000 -- 14.45 13.0000 2.97 9.41
1999 (.02) 14.11 13.5625 (9.18) (5.49)
DIVIDEND ADVANTAGE (NAD)
--------------------------------------------------------------------------------------------
Year Ended 10/31:
2003 -- 15.17 15.1200 11.41 8.41
2002 -- 14.94 14.5000 2.01 7.26
2001 -- 14.84 15.1400 27.35 16.03
2000 (.01) 13.59 12.6250 (.79) 13.61
1999(a) (.10) 12.78 13.6250 (7.29) (8.83)
DIVIDEND ADVANTAGE 2 (NXZ)
--------------------------------------------------------------------------------------------
Year Ended 10/31:
2003 -- 15.13 14.8500 14.39 8.67
2002 .01 14.89 13.9100 (.81) 5.16
2001(b) (.12) 15.07 14.9600 2.75 8.39
DIVIDEND ADVANTAGE 3 (NZF)
--------------------------------------------------------------------------------------------
Year Ended 10/31:
2003 .01 14.74 13.8000 9.04 7.82
2002 (.09) 14.56 13.5300 (4.26) 7.20
2001(c) (.03) 14.47 15.0700 .47 .98
============================================================================================
Ratios/Supplemental Data
----------------------------------------------------------------------------------------------
Before Credit/Reimbursement After Credit/Reimbursement***
----------------------------- -------------------------------
Ratio of Net Ratio of Net
Ratio of Investment Ratio of Investment
Ending Expenses Income to Expenses Income to
Net to Average Average to Average Average
Assets Net Assets Net Assets Net Assets Net Assets
Applicable Applicable Applicable Applicable Applicable Portfolio
to Common to Common to Common to Common to Common Turnover
Shares (000) Shares++ Shares++ Shares++ Shares++ Rate
================================================================================================================================
PERFORMANCE PLUS (NPP)
--------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2003 $925,525 1.18% 6.89% 1.18% 6.90% 10%
2002 921,376 1.18 7.11 1.17 7.12 11
2001 932,937 1.15 7.29 1.14 7.30 14
2000 860,556 1.17 8.09 1.16 8.10 25
1999 820,432 1.15 7.48 1.12 7.51 30
MUNICIPAL ADVANTAGE (NMA)
--------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2003 671,147 1.21 7.27 1.20 7.27 7
2002 662,270 1.22 7.55 1.22 7.55 17
2001 672,673 1.23 7.60 1.22 7.61 18
2000 628,099 1.23 8.77 1.23 8.77 39
1999 600,923 1.16 8.12 1.16 8.12 29
MARKET OPPORTUNITY (NMO)
--------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2003 687,955 1.25 6.94 1.25 6.94 9
2002 664,914 1.24 7.50 1.24 7.51 13
2001 694,025 1.23 7.73 1.23 7.74 11
2000 658,070 1.25 8.76 1.23 8.77 52
1999 642,643 1.15 8.18 1.14 8.19 31
DIVIDEND ADVANTAGE (NAD)
--------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2003 595,266 1.35 6.78 .89 7.24 3
2002 586,045 1.25 7.24 .80 7.70 7
2001 581,089 1.26 7.56 .78 8.04 12
2000 531,571 1.22 8.34 .73 8.83 37
1999(a) 499,783 1.06* 6.10* .58* 6.58* 16
DIVIDEND ADVANTAGE 2 (NXZ)
--------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2003 443,101 1.17 7.20 .71 7.66 11
2002 435,907 1.17 7.32 .70 7.79 9
2001(b) 441,308 1.13* 5.56* .63* 6.06* 5
DIVIDEND ADVANTAGE 3 (NZF)
--------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2003 594,154 1.17 6.80 .71 7.26 3
2002 586,799 1.17 6.78 .70 7.25 7
2001(c) 583,100 .72* 2.05* .42* 2.36* 1
================================================================================================================================
Preferred Shares at End of Period
---------------------------------------
Aggregate Liquidation
Amount and Market Asset
Outstanding Value Coverage
(000) Per Share Per Share
==========================================================================
PERFORMANCE PLUS (NPP)
--------------------------------------------------------------------------
Year Ended 10/31:
2003 $479,000 $25,000 $73,305
2002 479,000 25,000 73,089
2001 444,000 25,000 77,530
2000 444,000 25,000 73,455
1999 400,000 25,000 76,277
MUNICIPAL ADVANTAGE (NMA)
--------------------------------------------------------------------------
Year Ended 10/31:
2003 358,000 25,000 71,868
2002 358,000 25,000 71,248
2001 358,000 25,000 71,974
2000 358,000 25,000 68,862
1999 358,000 25,000 66,964
MARKET OPPORTUNITY (NMO)
--------------------------------------------------------------------------
Year Ended 10/31:
2003 380,000 25,000 70,260
2002 380,000 25,000 68,744
2001 380,000 25,000 70,660
2000 380,000 25,000 68,294
1999 380,000 25,000 67,279
DIVIDEND ADVANTAGE (NAD)
--------------------------------------------------------------------------
Year Ended 10/31:
2003 295,000 25,000 75,446
2002 295,000 25,000 74,665
2001 295,000 25,000 74,245
2000 295,000 25,000 70,048
1999(a) 295,000 25,000 67,354
DIVIDEND ADVANTAGE 2 (NXZ)
--------------------------------------------------------------------------
Year Ended 10/31:
2003 222,000 25,000 74,899
2002 222,000 25,000 74,089
2001(b) 222,000 25,000 74,697
DIVIDEND ADVANTAGE 3 (NZF)
--------------------------------------------------------------------------
Year Ended 10/31:
2003 312,000 25,000 72,608
2002 312,000 25,000 72,019
2001(c) -- -- --
==========================================================================
* Annualized.
** Total Investment Return on Market Value is the combination of reinvested
dividend income, reinvested capital gains distributions, if any, and
changes in stock price per share. Total Return on Common Share Net Asset
Value is the combination of reinvested dividend income at net asset value,
reinvested capital gains distributions at net asset value, if any, and
changes in Common share net asset value per share. Total returns are not
annualized.
*** After custodian fee credit and expense reimbursement, where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares, where applicable.
(a) For the period May 26, 1999 (commencement of operations) through October
31, 1999.
(b) For the period March 27, 2001 (commencement of operations) through October
31, 2001.
(c) For the period September 25, 2001 (commencement of operations) through
October 31, 2001.
See accompanying notes to financial statements.
74-75 spread
Directors/Trustees
AND OFFICERS
The management of the Funds, including general supervision of the duties
performed for the Funds by the Adviser, is the responsibility of the Board of
Directors/ Trustees of the Funds. The number of directors/trustees of the Funds
is currently set at twelve. None of the directors/trustees who are not
"interested" persons of the Funds has ever been a director/trustee or employee
of, or consultant to, Nuveen or its affiliates. The names and business addresses
of the directors/trustees and officers of the Funds, their principal occupations
and other affiliations during the past five years, the number of portfolios each
oversees and other directorships they hold are set forth below.
NUMBER OF
PORTFOLIOS IN
POSITION(S) YEAR FIRST PRINCIPAL OCCUPATION(S) FUND COMPLEX
NAME, BIRTHDATE HELD WITH ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY
AND ADDRESS THE FUNDS APPOINTED(2) DURING PAST 5 YEARS DIRECTOR/TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------
DIRECTOR/TRUSTEE WHO IS AN INTERESTED PERSON OF THE FUNDS:
------------------------------------------------------------------------------------------------------------------------------------
Timothy R. Schwertfeger (1) Chairman of the 1994 Chairman and Director (since 1996) of Nuveen 142
3/28/49 Board and Investments, Inc. and Nuveen Investments, LLC;
333 W. Wacker Drive Director/Trustee Director (since 1992) and Chairman (since 1996) of
Chicago, IL 60606 Nuveen Advisory Corp. and Nuveen Institutional
Advisory Corp.; Chairman and Director (since 1997)
of Nuveen Asset Management, Inc.; Director (since 1996)
of Institutional Capital Corporation; Chairman and Director
(since 1999) of Rittenhouse Asset Management, Inc.;
Chairman of Nuveen Investments Advisers Inc. (since 2002).
DIRECTORS/TRUSTEES WHO ARE NOT INTERESTED PERSONS OF THE FUNDS:
------------------------------------------------------------------------------------------------------------------------------------
William E. Bennett Director/Trustee 2001 Private Investor; previously, President and Chief Executive 142
10/16/46 Officer, Draper & Kramer, Inc., a private company that
333 W. Wacker Drive handles mortgage banking, real estate development, pension
Chicago, IL 60606 advisory and real estate management (1995-1998). Prior
thereto, Executive Vice President and Chief Credit Officer of
First Chicago Corporation and its principal subsidiary, The
First National Bank of Chicago.
------------------------------------------------------------------------------------------------------------------------------------
Robert P. Bremner Director/Trustee 1997 Private Investor and Management Consultant. 141
8/22/40
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Lawrence H. Brown Director/Trustee 1993 Retired (since 1989) as Senior Vice President of The 141
7/29/34 Northern Trust Company; Director of the United Way of
333 W. Wacker Drive Highland Park-Highwood (since 2002).
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Jack B. Evans Director/Trustee 1999 President, The Hall-Perrine Foundation, a private philanthropic 131
10/22/48 corporation (since 1996); Director, Alliant Energy; Director and
333 W. Wacker Drive Vice Chairman, United Fire & Casualty Company; Director,
Chicago, IL 60606 Federal Reserve Bank of Chicago; formerly, President and Chief
Operating Officer, SCI Financial Group, Inc., a regional financial
services firm.
------------------------------------------------------------------------------------------------------------------------------------
Anne E. Impellizzeri Director/Trustee 1994 Retired, formerly, Executive Director (since 1998) of Manitoga/ 141
1/26/33 The Russel Wright Design Center; prior thereto, President and
333 W. Wacker Drive Chief Executive Officer of Blanton-Peale Institute (since 1990);
Chicago, IL 60606 prior thereto, Vice President, Metropolitan Life Insurance Co.
------------------------------------------------------------------------------------------------------------------------------------
William L. Kissick Director/Trustee 1992 Professor Emeritus, School of Medicine and the Wharton 131
7/29/32 School of Management and former Chairman, Leonard Davis
333 W. Wacker Drive Institute of Health Economics, University of Pennsylvania;
Chicago, IL 60606 Adjunct Professor, Health Policy and Management, Yale University.
------------------------------------------------------------------------------------------------------------------------------------
Thomas E. Leafstrand Director/Trustee 1992 Retired; previously, Vice President in charge of Municipal 131
11/11/31 Underwriting and Dealer Sales at The Northern Trust
333 W. Wacker Drive Company.
Chicago, IL 60606
76
NUMBER OF
PORTFOLIOS IN
POSITION(S) YEAR FIRST PRINCIPAL OCCUPATION(S) FUND COMPLEX
NAME, BIRTHDATE HELD WITH ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY
AND ADDRESS THE FUNDS APPOINTED(2) DURING PAST 5 YEARS DIRECTOR/TRUSTEES
------------------------------------------------------------------------------------------------------------------------------------
DIRECTORS/TRUSTEES WHO ARE NOT INTERESTED PERSONS OF THE FUNDS (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
Peter R. Sawers Director/Trustee 1991 Adjunct Professor of Business and Economics, University of 141
4/3/33 Dubuque, Iowa; formerly (1991-2000) Adjunct Professor, Lake
333 W. Wacker Drive Forest Graduate School of Management, Lake Forest, Illinois;
Chicago, IL 60606 prior thereto, Executive Director, Towers Perrin Australia, a
management consulting firm; Chartered Financial Analyst;
Certified Management Consultant; Director, Executive
Service Corps of Chicago, a not-for-profit organization.
------------------------------------------------------------------------------------------------------------------------------------
William J. Schneider Director/Trustee 1997 Senior Partner and Chief Operating Officer, Miller-Valentine 141
9/24/44 Group, Vice President, Miller-Valentine Realty, a construction
333 W. Wacker Drive company; Chair, MiamiValley Hospital; Chair, Dayton
Chicago, IL 60606 Development Coalition; formerly, Member, Community
Advisory Board, National City Bank, Dayton, Ohio and
Business Advisory Council, Cleveland Federal Reserve Bank.
------------------------------------------------------------------------------------------------------------------------------------
Judith M. Stockdale Director/Trustee 1997 Executive Director, Gaylord and Dorothy Donnelley Foundation 141
12/29/47 (since 1994); prior thereto, Executive Director, Great Lakes
333 W. Wacker Drive Protection Fund (from 1990 to 1994).
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Sheila W. Wellington Director/Trustee 1994 President (since 1993) of Catalyst (a not-for-profit organization 131
2/24/32 focusing on women's leadership development in business
333 W. Wacker Drive and the professions).
Chicago, IL 60606
POSITION(S) YEAR FIRST NUMBER OF PORTFOLIOS
NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) IN FUND COMPLEX
AND ADDRESS THE FUNDS APPOINTED(3) DURING PAST 5 YEARS OVERSEEN BY OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS:
------------------------------------------------------------------------------------------------------------------------------------
Gifford R. Zimmerman Chief 1988 Managing Director (since 2002), Assistant Secretary 142
9/9/56 Administrative and Associate General Counsel, formerly, Vice President
333 W. Wacker Drive Officer and Assistant General Counsel of Nuveen Investments, LLC;
Chicago, IL 60606 Managing Director (since 2002), General Counsel and
Assistant Secretary, formerly, Vice President of Nuveen
Advisory Corp. and Nuveen Institutional Advisory Corp.;
Managing Director (since 2002), Assistant Secretary and
Associate General Counsel, formerly, Vice President (since
2000), of Nuveen Asset Management, Inc.; Assistant
Secretary of Nuveen Investments, Inc. (since 1994);
Assistant Secretary of NWQ Investment Management
Company, LLC (since 2002); Vice President and
Assistant Secretary of Nuveen Investments Advisers Inc.
(since 2002); Managing Director, Associate General
Counsel and Assistant Secretary of Rittenhouse Asset
Management, Inc. (since May 2003); Chartered
Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
Michael T. Atkinson Vice President 2000 Vice President (since 2002), formerly, Assistant 142
2/3/66 and Assistant Vice President (since 2000), previously, Associate of
333 W. Wacker Drive Secretary Nuveen Investments, LLC.
Chicago, IL 60606
77
Directors/Trustees
AND OFFICERS (CONTINUED)
POSITION(S) YEAR FIRST NUMBER OF PORTFOLIOS
NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) IN FUND COMPLEX
AND ADDRESS THE FUNDS APPOINTED(3) DURING PAST 5 YEARS OVERSEEN BY OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
Paul L. Brennan Vice President 1999 Vice President (since 2002), formerly, Assistant 128
11/10/66 Vice President (since 1997), of Nuveen Advisory Corp.;
333 W. Wacker Drive prior thereto, portfolio manager of Flagship Financial Inc.;
Chicago, IL 60606 Chartered Financial Analyst and Certified Public Accountant.
------------------------------------------------------------------------------------------------------------------------------------
Peter H. D'Arrigo Vice President 1999 Vice President of Nuveen Investments, LLC (since 1999), 142
11/28/67 and Treasurer prior thereto, Assistant Vice President (since 1997); Vice
333 W. Wacker Drive President and Treasurer of Nuveen Investments, Inc. (since
Chicago, IL 60606 1999); Vice President and Treasurer of Nuveen Advisory Corp.
and Nuveen Institutional Advisory Corp. (since 1999); Vice
President and Treasurer of Nuveen Asset Management,
Inc. (since 2002) and of Nuveen Investments Advisers
Inc. (since 2002); Assistant Treasurer of NWQ Investment
Management Company, LLC (since 2002); Chartered
Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
Susan M. DeSanto Vice President 2001 Vice President of Nuveen Advisory Corp. (since 2001); 142
9/8/54 previously, Vice President of Van Kampen Investment
333 W. Wacker Drive Advisory Corp. (since 1998); Vice President of Nuveen
Chicago, IL 60606 Institutional Advisory Corp. (since 2002); prior thereto,
Assistant Vice President of Van Kampen Investment
Advisory Corp. (since 1994).
------------------------------------------------------------------------------------------------------------------------------------
Jessica R. Droeger Vice President 2000 Vice President (since 2002) and Assistant General Counsel 142
9/24/64 and Secretary (since 1998); formerly, Assistant Vice President (since 1998)
333 W. Wacker Drive of Nuveen Investments, LLC; Vice President (since 2002)
Chicago, IL 60606 and Assistant Secretary (since 1998), formerly Assistant
Vice President of Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp.
------------------------------------------------------------------------------------------------------------------------------------
Lorna C. Ferguson Vice President 1998 Vice President of Nuveen Investments, LLC; Vice 142
10/24/45 President (since 1998) of Nuveen Advisory Corp. and
333 W. Wacker Drive Nuveen Institutional Advisory Corp.
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
William M. Fitzgerald Vice President 1995 Managing Director (since 2002) of Nuveen Investments, 142
3/2/64 LLC; Managing Director (since 2001), formerly Vice
333 W. Wacker Drive President of Nuveen Advisory Corp. and Nuveen
Chicago, IL 60606 Institutional Advisory Corp. (since 1995); Managing
Director of Nuveen Asset Management, Inc. (since 2001);
Vice President of Nuveen Investment Advisers Inc.
(since 2002); Chartered Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
Stephen D. Foy Vice President 1998 Vice President (since 1993) and Funds Controller (since 142
5/31/54 and Controller 1998) of Nuveen Investments, LLC and Vice President and
333 W. Wacker Drive Funds Controller (since 1998) of Nuveen Investments, Inc.;
Chicago, IL 60606 Certified Public Accountant.
------------------------------------------------------------------------------------------------------------------------------------
J. Thomas Futrell Vice President 1988 Vice President of Nuveen Advisory Corp.; 128
7/5/55 Chartered Financial Analyst.
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Steven J. Krupa Vice President 1990 Vice President of Nuveen Advisory Corp. 128
8/21/57
333 W. Wacker Drive
Chicago, IL 60606
78
POSITION(S) YEAR FIRST NUMBER OF PORTFOLIOS
NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) IN FUND COMPLEX
AND ADDRESS THE FUNDS APPOINTED(3) DURING PAST 5 YEARS OVERSEEN BY OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
David J. Lamb Vice President 2000 Vice President (since 2000) of Nuveen Investments, LLC, 142
3/22/63 previously Assistant Vice President (since 1999); prior
333 W. Wacker Drive thereto, Associate of Nuveen Investments, LLC; Certified
Chicago, IL 60606 Public Accountant.
------------------------------------------------------------------------------------------------------------------------------------
Tina M. Lazar Vice President 2002 Vice President (since 1999), previously, Assistant Vice 142
8/27/61 President (since 1993) of Nuveen Investments, LLC.
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Larry W. Martin Vice President 1988 Vice President, Assistant Secretary and Assistant General 142
7/27/51 and Assistant Counsel of Nuveen Investments, LLC; Vice President and
333 W. Wacker Drive Secretary Assistant Secretary of Nuveen Advisory Corp. and Nuveen
Chicago, IL 60606 Institutional Advisory Corp.; Assistant Secretary of Nuveen
Investments, Inc. and (since 1997) Nuveen Asset Management,
Inc.; Vice President (since 2000), Assistant Secretary and
Assistant General Counsel (since 1998) of Rittenhouse Asset
Management, Inc.; Vice President and Assistant Secretary of
Nuveen Investments Advisers Inc. (since 2002); Assistant
Secretary of NWQ Investment Management Company, LLC
(since 2002).
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John V. Miller Vice President 2003 Vice President (since 2003), previously, Assistant 128
4/10/67 Vice President (since 1999), prior thereto, credit
333 W. Wacker Drive analyst (since 1996) of Nuveen Advisory Corp.;
Chicago, IL 60606 Chartered Financial Analyst.
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Edward F. Neild, IV Vice President 1996 Managing Director (since 2002) of Nuveen Investments, 142
7/7/65 LLC; Managing Director (since 1997), formerly Vice
333 W. Wacker Drive President (since 1996) of Nuveen Advisory Corp. and
Chicago, IL 60606 Nuveen Institutional Advisory Corp.; Managing Director
of Nuveen Asset Management, Inc. (since 1999).
Chartered Financial Analyst.
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Thomas J. O'Shaughnessy Vice President 1999 Vice President (since 2002), formerly, Assistant 128
9/4/60 Vice President (since 1998), of Nuveen Advisory Corp.;
333 W. Wacker Drive prior thereto, portfolio manager.
Chicago, IL 60606
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Daniel S. Solender Vice President 2003 Vice President of Nuveen Advisory Corp. (since 2003); 128
10/27/65 previously, Principal and portfolio manager with The Vanguard
333 W. Wacker Drive Group (1999-2003); prior thereto, Assistant Vice President
Chicago, IL 60606 of the Nuveen Advisory Corp.; Chartered Financial Analyst.
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Thomas C. Spalding Vice President 1982 Vice President of Nuveen Advisory Corp. and Nuveen 128
7/31/51 Institutional Advisory Corp.; Chartered Financial Analyst.
333 W. Wacker Drive
Chicago, IL 60606
(1) Mr. Schwertfeger is an "interested person" of the Funds, as defined in the
Investment Company Act of 1940, because he is an officer and trustee of the
Adviser.
(2) Directors/Trustees serve a one-year term until his/her successor is elected.
The year first elected or appointed represents the year in which the
Director/Trustee was first elected or appointed to any fund in the Nuveen
Complex.
(3) Officers serve a one-year term 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.
79
Build Your Wealth
AUTOMATICALLY
Sidebar text: NUVEEN MAKES REINVESTING EASY. A PHONE CALL IS ALL IT TAKES TO SET
UP YOUR REINVESTMENT ACCOUNT.
NUVEEN CLOSED-END EXCHANGE-TRADED FUNDS DIVIDEND REINVESTMENT PLAN
Your Nuveen Closed-End Exchange-Traded Fund allows you to conveniently reinvest
dividends and/or capital gains distributions in additional fund shares.
By choosing to reinvest, you'll be able to invest money regularly and
automatically, and watch your investment grow through the power of tax-free
compounding. Just like dividends or distributions in cash, there may be times
when income or capital gains taxes may be payable on dividends or distributions
that are reinvested.
It is important to note that an automatic reinvestment plan does not ensure a
profit, nor does it protect you against loss in a declining market.
EASY AND CONVENIENT
To make recordkeeping easy and convenient, each month you'll receive a statement
showing your total dividends and distributions, the date of investment, the
shares acquired and the price per share, and the total number of shares you own.
HOW SHARES ARE PURCHASED
The shares you acquire by reinvesting will either be purchased on the open
market or newly issued by the Fund. If the shares are trading at or above net
asset value at the time of valuation, the Fund will issue new shares at the
then-current market price. If the shares are trading at less than net asset
value, shares for your account will be purchased on the open market. Dividends
and distributions received to purchase shares in the open market will normally
be invested shortly after the dividend payment date. No interest will be paid on
dividends and distributions awaiting reinvestment. Because the market price of
shares may increase before purchases are completed, the average purchase price
per share may exceed the market price at the time of valuation, resulting in the
acquisition of fewer shares than if the dividend or distribution had been paid
in shares issued by the Fund. A pro rata portion of any applicable brokerage
commissions on open market purchases will be paid by Plan participants. These
commissions usually will be lower than those charged on individual transactions.
FLEXIBILITY
You may change your distribution option or withdraw from the Plan at any time,
should your needs or situation change. Should you withdraw, you can receive a
certificate for all whole shares credited to your reinvestment account and cash
payment for fractional shares, or cash payment for all reinvestment account
shares, less brokerage commissions and a $2.50 service fee.
You can reinvest whether your shares are registered in your name, or in the name
of a brokerage firm, bank, or other nominee. Ask your investment advisor if his
or her firm will participate on your behalf. Participants whose shares are
registered in the name of one firm may not be able to transfer the shares to
another firm and continue to participate in the Plan.
The Fund reserves the right to amend or terminate the Plan at any time. Although
the Fund reserves the right to amend the Plan to include a service charge
payable by the participants, there is no direct service charge to participants
in the Plan at this time.
For more information on the Nuveen Automatic Reinvestment Plan or to enroll in
or withdraw from the Plan, speak with your financial advisor or call us at (800)
257-8787.
80
Fund
INFORMATION
BOARD OF DIRECTORS/TRUSTEES
William E. Bennett
Robert P. Bremner
Lawrence H. Brown
Jack B. Evans
Anne E. Impellizzeri
William L. Kissick
Thomas E. Leafstrand
Peter R. Sawers
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
Sheila W. Wellington
FUND MANAGER
Nuveen Advisory Corp.
333 West Wacker Drive
Chicago, IL 60606
CUSTODIAN
State Street Bank & Trust
Boston, MA
TRANSFER AGENT AND
SHAREHOLDER SERVICES
State Street Bank & Trust
Nuveen Funds
P.O. Box 43071
Providence, RI 02940-3071
(800) 257-8787
LEGAL COUNSEL
Chapman and Cutler LLP
Chicago, IL
INDEPENDENT AUDITORS
Ernst & Young LLP
Chicago, IL
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Funds use to determine how
to vote proxies relating to portfolio securities is available (i) without
charge, upon request, by calling Nuveen Investments at (800) 257-8787; and (ii)
on the Commission's website at http://www.sec.gov.
POLICY CHANGE
On November 14, 2002, the Board adopted a policy that allows each Fund, in
addition to investments in municipal bonds, to invest up to 5% of its net assets
(including assets attributable to preferred shares, if any) in tax-exempt or
taxable fixed-income securities or equity securities for the purpose of
acquiring control of an issuer whose municipal bonds (a) the Fund already owns
and (b) have deteriorated or are expected shortly to deteriorate significantly
in credit quality, provided Nuveen Advisory determines that such investment
should enable the Fund to better maximize the value of its existing investment
in such issuer. This policy is a non-fundamental policy of each Fund which means
that it can be changed at any time by the Board of Trustees without vote of the
shareholders.
GLOSSARY OF TERMS USED IN THIS REPORT
Average Annual Total Return: This is a commonly used method to express an
investment's performance over a particular, usually multi-year time period. It
expresses the return (including change in NAV and reinvested dividends) that
would have been necessary on an annual basis to equal the investment's actual
performance over the time period being considered.
Average Duration: Duration is a measure of a bond or bond fund's sensitivity to
changes in interest rates. Generally, the longer a bond or fund's duration, the
more the price of the bond or fund will change as interest rates change.
Average Effective Maturity: The average of all the maturities of the bonds in a
fund's portfolio, computed by weighting each maturity date (the date the
security comes due) by the market value of the security. This figure does not
account for the likelihood of prepayments or the exercise of call provisions.
Leverage-Adjusted Duration: Duration is a measure of a bond or bond fund's
sensitivity to changes in interest rates. Generally, the longer a bond or fund's
duration, the more the price of the bond or fund will change as interest rates
change. Leverage-adjusted duration takes into account the leveraging process for
a Fund and therefore is generally longer than the duration of the actual
portfolio of individual bonds that make up the Fund.
Market Yield (also known as Dividend Yield or Current Yield): An investment's
current annualized dividend divided by its current market price.
Net Asset Value (NAV): A fund's NAV is calculated by subtracting the liabilities
of the fund from its total assets and then dividing the remainder by the number
of shares outstanding. Fund NAVs are calculated at the end of each business day.
Taxable-Equivalent Yield: The yield necessary from a fully taxable investment to
equal, on an after-tax basis, the yield of a municipal bond investment.
---------
Each Fund intends to repurchase shares of its own common or preferred stock,
where applicable, in the future at such times and in such amounts as is deemed
advisable. No shares were repurchased during the fiscal year ended October 31,
2003. Any future repurchases will be reported to shareholders in the next annual
or semiannual report.
81
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.
Managing $90 billion in assets, Nuveen Investments offers access to a number of
different asset classes and investing solutions through a variety of products.
Nuveen Investments markets its capabilities under four distinct brands: Nuveen,
a leader in tax-free investments; NWQ, a leader in value-style equities;
Rittenhouse, a leader in growth-style equities; and Symphony, a leading
institutional manager of market-neutral alternative investment portfolios.
To learn more about the products and services Nuveen Investments offers and for
a prospectus, where applicable, talk to your financial advisor, or call us at
(800) 257-8787. Please read the information carefully before you invest.
Distributed by
NUVEEN INVESTMENTS, LLC | 333 West Wacker Drive | Chicago, Illinois 60606
| www.nuveen.com
EAN-B-1003D
ITEM 2. CODE OF ETHICS.
As of the end of the period covered by this report, the registrant has adopted
a code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions. The registrant has posted such code of
ethics on its website at www.nuveen.com/etf.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's board of directors has 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 William E. Bennett, who is "independent" for purposes of
Item 3 of Form N-CSR.
Mr. Bennett was formerly Executive Vice President and Chief Credit Officer of
First Chicago Corporation and its principal subsidary, The First National Bank
of Chicago. As part of his role as Chief Credit Officer, Mr. Bennett set policy
as to accrual of assets/loans; designated performing/non-performing assets; set
the level of reserves against the credit portfolio; and determined the carrying
value of credit related assets and exposure. Among other things, Mr. Bennett was
also responsible for the oversight of the internal analysis function including
setting ground rules for the review and preparation of financial analysis and
financial statements for use in making credit and risk decisions for clients.
Mr. Bennett has significant experience reviewing, analyzing and evaluating
financial statements of domestic and international companies in a variety of
industries with complex accounting issues.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable at this time.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable at this time.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
In the rare event that a municipal issuer held by the Fund were to issue a proxy
or that the Fund were to receive a proxy issued by a cash management security,
Nuveen Advisory Corp. (the "Adviser") would either engage an independent third
party to determine how the proxy should be voted or vote the proxy with the
consent, or based on the instructions, of the Fund's Board of Directors or
Trustees or its representative. In the case of a conflict of interest, the proxy
would be submitted to the applicable Fund's Board to determine how the proxy
should be voted. A member of the Adviser's legal department would oversee the
administration of the voting, and ensure that records were maintained in
accordance with Rule 204-2(c)(2) under the Investment Advisers Act of 1940 (17
CFR 275.204-2(c)(2)), reports were filed with the SEC on Form N-PX, and the
results were provided to the Board of Directors or Trustees and made available
to shareholders as required by applicable rules.
ITEM 8. [RESERVED]
ITEM 9. 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 registrant's last
fiscal half-year (the registrant's second fiscal half-year in the case
of an annual report) that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over
financial reporting.
ITEM 10. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit: Not applicable
because posted on registrant's website at www.nuveen.com/etf.
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2(a) under
the Act (17 CFR 270.30a-2(a)) in the exact form set forth below: Ex-99.CERT
Attached hereto.
(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 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
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By (Signature and Title)* /s/ Jessica R. Droeger
----------------------------------------------
Jessica R. Droeger
Vice President and Secretary
Date: January 8, 2004
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Gifford R. Zimmerman
----------------------------------------------
Gifford R. Zimmerman
Chief Administrative Officer
(Principal Executive Officer)
Date: January 8, 2004
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By (Signature and Title)* /s/ Stephen D. Foy
----------------------------------------------
Stephen D. Foy
Vice President and Controller
(Principal Financial Officer)
Date: January 8, 2004
-------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.