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)
Kevin J. McCarthy
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
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(Name and address of agent for service)
Registrant's telephone number, including area code: (312) 917-7700
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Date of fiscal year end: October 31
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Date of reporting period: October 31, 2008
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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,
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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 | Nuveen Investments
October 31, 2008 | MUNICIPAL CLOSED-END FUNDS
Photo of: Small child
NUVEEN PERFORMANCE
PLUS MUNICIPAL
FUND, INC.
NPP
NUVEEN MUNICIPAL
ADVANTAGE FUND, INC.
NMA
NUVEEN MUNICIPAL
MARKET OPPORTUNITY
FUND, INC.
NMO
NUVEEN DIVIDEND
ADVANTAGE
MUNICIPAL FUND
NAD
NUVEEN DIVIDEND
ADVANTAGE
MUNICIPAL FUND 2
NXZ
NUVEEN DIVIDEND
ADVANTAGE
MUNICIPAL FUND 3
NZF
IT'S NOT WHAT YOU EARN, IT'S WHAT YOU KEEP.(R)
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Chairman's
LETTER TO SHAREHOLDERS
| Robert P. Bremner | Chairman of the Board
Dear Shareholders,
I'd like to use my initial letter to you to accomplish several things. First, I
want to report that after fourteen years of service on your Fund's Board,
including the last twelve as chairman, Tim Schwertfeger retired from the Board
in June. The Board has elected me to replace him as the chairman, the first time
this role has been filled by someone who is not an employee of Nuveen
Investments. Electing an independent chairman marks a significant milestone in
the management of your Fund, and it aligns us with what is now considered a
"best practice" in the fund industry. Further, it demonstrates the independence
with which your Board has always acted on your behalf.
Following Tim will not be easy. During my eleven previous years on the Nuveen
Fund Board, I found that Tim always set a very high standard by combining
insightful industry and market knowledge and sound, clear judgment. While the
Board will miss his wise counsel, I am certain we will retain the primary
commitment Tim shared with all of us - an unceasing dedication to creating and
retaining value for Nuveen Fund shareholders. This focus on value over time is a
touchstone that I and all the other Board members will continue to use when
making decisions on your behalf.
Second, I also want to report that we are very fortunate to welcome two new
Board members to our team. John Amboian, the current chairman and CEO of Nuveen
Investments, has replaced Tim as Nuveen's representative on the Board. John's
presence will allow the independent Board members to benefit not only from his
leadership role at Nuveen but also his broad understanding of the fund industry
and Nuveen's role within it. We also added Terry Toth as an independent
director. A former CEO of the Northern Trust Company's asset management group,
Terry will bring extensive experience in the fund industry to our deliberations.
Third, on behalf of the entire Board, I would like you to know that we are
closely monitoring the unprecedented market developments and their distressing
impact on the Funds. We believe that these Funds continue to be actively and
constructively managed for the long term and at the same time we are very aware
that these are trying times for our investors. We appreciate the patience you
have shown with the Board and with Nuveen Investments as they manage your
investment through this extremely difficult period.
Fourth, again on behalf of the entire Board, I would like to acknowledge the
effort the whole Nuveen organization is making to resolve the auction rate
preferred share situation in a satisfactory manner. As you know, we are actively
pursuing a number of possible solutions, all with the goal of providing
liquidity for preferred shareholders while preserving the potential benefits of
leverage for common shareholders. We appreciate the patience you have shown as
we've worked through the many difficulties involved.
Finally, I urge you to take the time to review the Portfolio Managers' Comments,
the Common Share Dividend and Share Price Information, and the Performance
Overview sections of this report. All of us are grateful that you have chosen
Nuveen Investments as a partner as you pursue your financial goals, and, on
behalf of myself and the other members of your Fund's Board, let me say we look
forward to continuing to earn your trust in the months and years ahead.
Sincerely,
/s/ Robert P. Bremner
Robert P. Bremner
Chairman of the Board
December 23, 2008
Portfolio Managers' COMMENTS
Nuveen Investments Municipal Closed-End Funds | NPP, NMA, NMO
NAD, NXZ, NZF
Portfolio managers Tom Spalding and Paul Brennan discuss U.S. economic and
municipal market conditions, key investment strategies, and the twelve-month
performance of these six national Funds. A thirty-two-year veteran of Nuveen,
Tom has managed NXZ since its inception in 2001 and NPP, NMA, NMO, and NAD since
2003. With nineteen years of industry experience, including eleven years at
Nuveen, Paul assumed portfolio management responsibility for NZF in 2006.
WHAT FACTORS AFFECTED THE U.S. ECONOMY AND MUNICIPAL MARKET DURING THE
TWELVE-MONTH REPORTING PERIOD ENDED OCTOBER 31, 2008?
During this period, stress in the financial and credit markets led to increased
price volatility for many securities, reduced liquidity and a general flight to
quality. The Federal Reserve (Fed) began in September 2007 a series of interest
rate cuts that lowered the fed funds rate by 325 basis points--from 5.25% to
2.00%--over an eight-month period ending April 2008. In October 2008, the Fed
announced two additional reductions of 50 basis points each, bringing the fed
funds rate down to 1.00%, its lowest level since 2003. (On December 16, after
the end of this twelve-month period, the Fed reduced the fed funds rate target
to 0.25% or less.)
The Fed's rate-cutting actions also were a response to concerns about the pace
of U.S. economic growth, as measured by the U.S. gross domestic product (GDP).
After declining at an annual rate of 0.2% in the fourth quarter of 2007, GDP
improved to a positive 0.9% in the first quarter of 2008 and posted growth of
2.8% in the second quarter of 2008 (all GDP numbers annualized). During the
third quarter of 2008, however, GDP contracted at an annual rate of 0.5%, the
biggest decrease since 2001, mainly as the result of the first decline in
consumer spending since 1991 and an 18% drop in residential investment. The
Consumer Price Index (CPI), driven largely by increased energy, food and
transportation prices, registered a 3.7% year-over-year gain as of October 2008,
while the core CPI (which excludes food and energy) rose 2.2% over this same
period, above the Fed's unofficial target of 2.0% or lower. In the labor
markets, October 2008 marked the tenth consecutive month of job losses. The
national unemployment rate for October 2008 was 6.5%, its highest point in more
than fourteen years, up from 4.8% in October 2007.
In the municipal bond market, performance was significantly impacted by concerns
about the credit markets, downgrades of municipal bond insurers, failed auctions
of preferred shares and institutional investors' need to unwind various
leveraging strategies. These events created surges of selling pressure,
especially in late September and early October 2008. While some investors
curtailed purchases, non-traditional buyers of
Discussions of specific investments are for illustrative purposes only and are
not intended as recommendations of individual investments. The views expressed
in this commentary represent those of the portfolio managers as of the date of
this report and are subject to change at any time, based on market conditions
and other factors. The Funds disclaim any obligation to advise shareholders of
such changes.
4
municipal bonds such as hedge funds, traditional buyers such as tax-exempt money
market funds, and institutions were forced to sell holdings of longer-maturity
bonds into a market already experiencing reduced liquidity.
Combined with the Fed rate cuts, this selling produced a sharp steepening of the
municipal yield curve, as longer-term interest rates rose and short-term rates
declined over this period. In this environment, bonds with shorter maturities
generally outperformed longer maturity bonds, and higher quality bonds tended to
outperform lower quality credits.
Another item of note in the municipal market was the U.S. Supreme Court's May
2008 ruling that individual states could continue to offer their residents
special tax treatment on municipal bonds issued within their borders. The high
court's decision preserved tax rules in forty-two states, allowing them to
continue to exempt from taxation the income their residents earn on in-state
municipal bonds while taxing the income earned on municipal bonds issued in
other states.
Over the twelve months ended October 31, 2008, municipal bond issuance
nationwide totaled $450.3 billion, a drop of 8% from the previous twelve months.
In 2008, insured bonds comprised less than 20% of new supply, compared with the
recent historical figure of approximately 50%. While market conditions during
this period impacted the demand for municipal bonds, we continued to see demand
from investors attracted by higher interest rates and yields relative to taxable
bonds.
WHAT KEY STRATEGIES WERE USED TO MANAGE THESE FUNDS DURING THIS REPORTING
PERIOD?
During this twelve-month period, with the municipal market characterized by
volatility and a relatively steep yield curve, we sought to capitalize on a
turbulent environment by continuing to focus on relative value and investing for
the long term, preserving and enhancing liquidity, and managing duration(1)
risk.
As events in the general financial markets unfolded, we found attractive
opportunities in various sectors of the municipal market, using a fundamental
approach to identify undervalued sectors and individual credits with the
potential to perform well over the long term. Among the bonds we added during
this period were health care and housing issues that we believed were
attractively priced and had good credit fundamentals. Some of the Funds also
added tobacco bonds to bring their allocations in line with the market.
In addition, some portfolio activity was driven by our efforts to boost
liquidity or cash reserves. Especially during the commotion of September and
October, we believed that it was prudent to take defensive measures that would
reduce the Funds' exposure to market risk. These measures included pre-emptively
selling some holdings and raising the Funds' cash reserves. Throughout the
period, we selectively sold holdings with shorter durations, including
pre-refunded(2) bonds. We also took advantage of strong bids to sell bonds that
were attractive to the retail market. Given the market environment, retail
demand was often strongest for higher credit quality bonds. At all times, we
(1) Duration is a measure of a bond's price sensitivity as interest rates
change, with longer duration bonds displaying more sensitivity to these
changes than bonds with shorter durations.
(2) Pre-refundings, also known as advance refundings or refinancings, occur
when an issuer sells new bonds and uses the proceeds to fund principal and
interest payments of older existing bonds. This process often results in
lower borrowing costs for bond issuers.
5
were careful to balance our efforts to enhance liquidity through sales to the
retail market with our focus on maintaining the credit quality of our portfolios
in an uncertain market. Some of our new purchases were also funded by
reinvesting the proceeds from called or matured bonds.
As a key dimension of risk management, we employed a disciplined approach to
duration positioning as an important component of our overall strategy. As part
of this approach, we used inverse floating rate securities(3), in all six of
these Funds. Inverse floaters typically provide the dual benefit of bringing the
Funds' durations closer to our strategic target and enhancing their
income-generation capabilities. NZF also used certain derivative instruments in
an effort to lengthen its duration and help manage common share net asset value
(NAV) volatility while trying to minimize any negative impact on its income
stream or common share dividends over the short term. As of October 31, 2008, we
continued to use inverse floaters in all of these Funds and the derivatives
remained in place in NZF.
HOW DID THE FUNDS PERFORM?
Individual results for these Funds, as well as relevant index and peer group
information, are presented in the accompanying table.
Annualized Total Returns on Common Share Net Asset Value
For periods ended 10/31/08
1-Year 5-Year 10-Year
NPP -12.49% 1.63% 3.91%
NMA -15.65% 0.89% 3.66%
NMO -13.07% 1.35% 3.37%
NAD -16.42% 0.85% N/A
NXZ -13.23% 2.79% N/A
NZF -14.99% 1.97% N/A
Lipper General
Leveraged
Municipal Debt
Funds Average(4) -19.05% 0.29% 2.87%
Barclays Capital
Municipal
Bond Index(5) -3.30% 2.73% 4.14%
S&P National
Municipal Bond Index(6) -4.15% 2.75% N/A
Past performance is not predictive of future results. Current performance may be
higher or lower than the data shown. Returns do not reflect the deduction of
taxes that shareholders may have to pay on Fund distributions or upon the sale
of Fund shares.
For additional information, see the individual Performance Overview for your
Fund in this report.
(3) An inverse floating rate security is a financial instrument designed to pay
long-term tax-exempt interest at a rate that varies inversely with a
short-term tax-exempt interest rate index. For the Nuveen Funds, the index
typically used is the Securities Industry and Financial Markets (SIFM)
Municipal Swap Index (previously referred to as the Bond Market Association
Index or BMA). Inverse floaters, including those inverse floating rate
securities in which the Funds invested during this reporting period, are
further defined within the Notes to Financial Statements and Glossary of
Terms Used in this Report sections of this shareholder report.
(4) The Lipper General Leveraged Municipal Debt Funds Average is calculated
using the returns of all closed-end funds in this category for each period
as follows: 1 year, 54 funds; 5 years, 52 funds; and 10 years, 38 funds.
Fund and Lipper returns assume reinvestment of dividends.
(5) The Barclays Capital (formerly Lehman Brothers) Municipal Bond Index is an
unleveraged, unmanaged national index comprising a broad range of
investment-grade municipal bonds. Results for the Barclays Capital index do
not reflect any expenses.
(6) The Standard & Poor's (S&P) National Municipal Bond Index is an
unleveraged, market value-weighted index designed to measure the
performance of the investment-grade U.S. municipal bond market.
6
For the twelve months ended October 31, 2008, the total returns on common share
NAV for all six of the Funds in this report exceeded the average return for the
Lipper General Leveraged Municipal Debt Funds Average. The Funds underperformed
the Barclays Capital Municipal Bond Index and the Standard & Poor's (S&P)
National Municipal Bond Index.
Key management factors that influenced the Funds' returns included duration
positioning, the use of derivatives, credit exposure and sector allocations. In
addition, a major factor affecting each Fund's performance over this period was
the use of leverage. The impact of leverage is discussed in more detail on page
eight.
Given the changes in the interest rate environment during this period, bonds in
the Barclays Capital Municipal Bond Index with maturities of ten years or less
outperformed the market as a whole, with bonds maturing in one to six years
benefiting the most. Because they were less sensitive to interest rate changes,
these shorter bonds generally outperformed credits with longer maturities, with
the biggest losses posted by bonds with the longest maturities (twenty-two years
and longer). In general, the greater the Fund's exposure to the underperforming
longer part of the yield curve, the greater the negative impact on the Fund's
return. Overall, among these six Funds, NAD was the most heavily weighted in the
longer part of the curve, while NMO had the smallest exposure to this part of
the curve.
As mentioned earlier, NZF used derivative positions throughout this period to
synthetically extend duration and move it closer to our strategic duration
target. Despite the fact that longer duration municipal bonds generally
underperformed those with shorter durations, the use of these derivatives had a
positive impact on NZF's total return performance. This positive impact was
attributable to the fact that the derivative positions provided exposure to
taxable markets during a period when the taxable securities performed relatively
well when compared with their non-taxable counterparts.
However, the inverse floaters used by all six of these Funds generally had a
negative impact on performance. This resulted from the fact that the inverse
floaters effectively increased the Funds' exposure to longer maturity bonds at a
time when shorter maturities were in favor in the market.
Credit exposure, including exposure to bonds backed by municipal bond insurers,
also was a factor in performance during this period. Because risk-averse
investors generally sought higher quality investments as disruptions in the
financial markets deepened, bonds with higher credit quality ratings typically
performed very well. However, insured bonds with underlying credits that were
rated BBB or non-rated, originally purchased because of the higher yields they
offered, experienced a disproportionately negative impact (compared with bonds
with underlying credits rated AA or A ) if the insurer backing the bond was
downgraded from AAA. As many investors avoided high-yield securities, bonds
rated BBB or below and non-rated bonds generally posted poor returns. As of
October 31, 2008, allocations of bonds rated BBB or lower and
7
non-rated bonds accounted for approximately 9% of NMO's portfolio, 13% of NAD,
14% of NPP and NZF, 16% of NMA and 19% of NXZ. This lower-rated credit exposure,
which was generally higher than that of the Barclays Capital Municipal Bond
Index, was a negative influence on Funds' performances for this period.
Conversely, the Funds' weightings in bonds rated AAA were generally positive for
performance.
Sectors of the market that generally contributed positively to the Funds'
performances included general obligation bonds, resource recovery, water and
sewer, and utilities. Pre-refunded bonds, which are usually backed by U.S.
Treasury securities, were one of the top performing segments of the market, due
primarily to their shorter effective maturities, higher credit quality, and
perceived safety. Holdings of pre-refunded bonds ranged from 18% to 40% among
these Funds, with NMO having the heaviest weighting of pre-refunded issues and
NAD the smallest.
In general, bonds that carried any credit risk, regardless of sector, continued
to post weak performance. Revenue bonds as a whole, and the industrial
development sector in particular, underperformed the general municipal market.
Next to the industrial development sector, zero coupon bonds were among the
worst performing categories. The health care and housing sectors also performed
very poorly, as did lower-rated bonds backed by the 1998 master tobacco
settlement agreement.
IMPACT OF THE FUNDS' CAPITAL STRUCTURES AND LEVERAGE STRATEGIES ON PERFORMANCE
In addition to the factors mentioned above, one of the primary factors
negatively impacting the annual returns of these Funds relative to those of the
unleveraged indexes was the Funds' use of financial leverage. While leverage
offers opportunities to generate additional income and total returns for common
shareholders, the benefits provided by leveraging are influenced by the price
movements of the bonds in each Fund's portfolio. During this period, as yields
on longer-term bonds rose and their prices correspondingly fell, declining
valuations had a negative effect on performance that was magnified by the use of
leverage. In addition, at various points during the twelve-month period, the
Funds' borrowing costs were relatively high, negatively impacting their total
returns. In the turbulent market environment of the past twelve months, the
impact of any valuation change in the Fund's holdings-whether positive or
negative-was magnified by the use of leverage.
RECENT DEVELOPMENTS IN THE MARKET ENVIRONMENT
Beginning in October, the nation's financial institutions and financial
markets--including the municipal bond market--experienced significant turmoil.
Reductions in demand decreased valuations of municipal bonds across all credit
ratings, especially those with lower credit ratings, and this generally reduced
the Funds' net asset values. The municipal market is one in which dealer firms
make markets in bonds on a principal basis using their proprietary capital, and
during the recent market turmoil these firms'capital was severely constrained.
As a result, some firms were unwilling to commit their capital to purchase and
to serve as a dealer for municipal bonds. This reduction in dealer
8
involvement in the market was accompanied by significant net selling pressure by
investors, particularly with respect to lower-rated municipal bonds, as
institutional investors generally removed money from the municipal bond market,
at least in part because of their need to reduce the leveraging of their
municipal investments. This de-leveraging was in part driven by the overall
reduction in the amount of financing available for such leverage, the increased
costs of such leverage financing, and the need to reduce leverage levels that
had recently increased due to the decline in municipal bond prices.
Municipal bond prices were further negatively impacted by concerns that the need
for further de-leveraging and a supply overhang as a large amount of new issues
were postponed would cause selling pressure to persist for a period of time. In
addition to falling prices, these market conditions resulted in greater price
volatility of municipal bonds; wider credit spreads (i.e., lower quality bonds
fell in price more than higher quality bonds); significantly reduced liquidity
(i.e., the ability to sell bonds at a price close to their carrying value),
particularly for lower quality bonds; and a lack of price transparency (i.e.,
the ability to accurately determine the price at which a bond would likely
trade). Reduced liquidity was most pronounced in mid-October, and although
liquidity improved considerably over ensuing weeks, it may reoccur if financial
turmoil persists or worsens.
RECENT DEVELOPMENTS REGARDING BOND INSURANCE COMPANIES
As mentioned earlier, another factor that had an impact on the performance of
these Funds was their position in bonds backed by municipal bond insurers that
experienced downgrades in their credit ratings. During the period covered by
this report, ACA, AMBAC, FGIC, MBIA, RAAI and SYNCORA (formerly XLCA)
experienced one or more rating reductions by at least one or more rating
agencies. Subsequent to the reporting period, AMBAC, MBIA and SYNCORA
experienced further rating reductions while AGC and FSA received their first
rating reductions by at least one rating agency. At the time this report was
prepared, at least one rating agency has placed each of these insurers except
AGC on "negative outlook" or "negative credit watch," which may presage one or
more rating reductions for such insurer or insurers in the future. As concern
increased about the balance sheets of these insurers, prices on bonds insured by
these companies - especially those bonds with weaker underlying credits -
declined, detracting from the Funds' performance. By the end of this period,
most insured bonds were being valued according to their fundamentals as if they
were uninsured. On the whole, the holdings of all of our Funds continued to be
well diversified not only between insured and uninsured bonds, but also within
the insured bond category. It is important to note that municipal bonds
historically have had a very low rate of default.
RECENT DEVELOPMENTS IN THE AUCTION RATE PREFERRED SECURITIES MARKETS
Beginning in February 2008, more shares for sale were submitted in the regularly
scheduled auctions for the auction rate preferred shares issued by these Funds
than
9
there were offers to buy. This meant that these auctions "failed to clear" and
that many or all auction rate preferred shareholders who wanted to sell their
shares in these auctions were unable to do so. This decline in liquidity in
auction rate preferred shares did not lower the credit quality of these shares,
and auction rate preferred shareholders unable to sell their shares received
distributions at the "maximum rate'' applicable to failed auctions as calculated
in accordance with the pre-established terms of the auction rate preferred
shares.
On June 11, 2008, Nuveen announced the Fund Board's approval of plans to use
tender option bonds (TOBs), also known as floating rate securities, to refinance
a portion of the municipal Funds' outstanding auction rate preferred shares, for
which auctions have been failing for several months. This plan included an
initial phase of approximately $1 billion in forty-one Funds. During the
twelve-month reporting period, NPP, NMA, NMO, NAD and NZF redeemed $39,350,000,
$16,350,000, $18,325,000, $28,200,000 and $41,225,000 of their outstanding
auction rate preferred shares, respectively, at liquidation value, using the
proceeds from the issuance of TOBs.
On August 7, 2008, NXZ issued par redemption notices for all outstanding shares
of its auction rate preferred securities totaling $222 million. These
redemptions were achieved through the issuance of $196 million of variable rate
demand preferred shares (VRDP) and the proceeds from the creation of TOBs. VRDP
is a new instrument designed to replace the auction rate preferred securities
used as leverage in many Nuveen closed-end Funds. VRDP is offered only to
qualified institutional buyers, as defined pursuant to Rule 144A under the
Securities Act of 1933.
For current, up-to-date information, please visit the Nuveen CEF Auction Rate
Preferred Resource Center at:
http://www.nuveen.com/ResourceCenter/AuctionRatePreferred.aspx.
10
Common Share
Dividend and Share Price
INFORMATION
During the twelve-month reporting period ended October 31, 2008, there was one
dividend increase in NPP, NMA, NMO, NAD and NZF, while the dividend of NXZ
remained stable throughout the period.
Due to capital gains generated by normal portfolio activity, common shareholders
of the following Funds received capital gains or net ordinary income
distributions at the end of December 2007 as follows:
Short-Term Capital Gains
Long-Term Capital Gains and/or Ordinary Income
(per share) (per share)
NMA $0.0238 --
NAD -- $0.0033
All of the Funds in this report seek to pay stable dividends at rates that
reflect each Fund's past results and projected future performance. During
certain periods, each Fund may pay dividends at a rate that may be more or less
than the amount of net investment income actually earned by the Fund during the
period. If a Fund has cumulatively earned more than it has paid in dividends, it
holds the excess in reserve as undistributed net investment income (UNII) as
part of the Fund's NAV. Conversely, if a Fund has cumulatively paid dividends in
excess of its earnings, the excess constitutes negative UNII that is likewise
reflected in the Fund's NAV. Each Fund will, over time, pay all of its net
investment income as dividends to shareholders. As of October 31, 2008, NPP, NMA
and NAD had positive UNII balances for both tax and financial statement purposes
while NMO, NXZ and NZF had positive UNII balances for tax purposes and negative
UNII balances for financial statement purposes.
11
The Funds' Board of Directors/Trustees approved an open-market share repurchase
program on July 30, 2008, under which each Fund may repurchase up to 10% of its
common shares. As of October 31, 2008, the Funds had not repurchased any of
their outstanding common shares.
As of October 31, 2008, the Funds' common share prices were trading at discounts
to their common share NAVs as shown in the accompanying chart:
10/31/08 Twelve-Month
Discount Average Discount
NPP -9.38% -11.03%
NMA -5.86% -7.47%
NMO -5.81% -9.06%
NAD -8.92% -8.14%
NXZ -2.83% -2.24%
NZF -11.40% -8.61%
12
NPP
Performance
OVERVIEW
Nuveen Performance
Plus Municipal
Fund, Inc.
as of October 31, 2008
Pie Chart:
Credit Quality (as a % of total investments)(1)
AAA/U.S. Guaranteed 48%
AA 32%
A 6%
BBB 10%
BB or Lower 2%
N/R 2%
Bar Chart:
2007-2008 Monthly Tax-Free Dividends Per Common Share
NOV 0.0575
DEC 0.0575
JAN 0.0575
FEB 0.0575
MAR 0.0575
APR 0.0575
MAY 0.0575
JUN 0.0575
JUL 0.0575
AUG 0.0575
SEP 0.0605
OCT 0.0605
Line Chart:
Common Share Price Performance -- Weekly Closing Price
11/01/07 13.53
13.62
13.19
12.87
13.07
13.17
13.27
13.05
13.10
13.27
13.85
13.94
13.74
13.95
13.96
14.20
13.37
13.1549
12.83
13.30
13.00
13.08
13.40
13.50
13.47
13.37
13.27
13.46
13.48
13.53
13.56
13.53
13.49
13.15
12.86
12.95
13.06
13.06
12.71
12.64
12.58
12.74
12.74
12.76
12.87
12.97
12.69
12.28
11.43
11.32
8.35
10.24
11.72
10/31/08 11.50
FUND SNAPSHOT
------------------------------------
Common Share Price $11.50
------------------------------------
Common Share
Net Asset Value $12.69
------------------------------------
Premium/(Discount) to NAV -9.38%
------------------------------------
Market Yield 6.31%
------------------------------------
Taxable-Equivalent Yield(2) 8.76%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $760,496
------------------------------------
Average Effective Maturity
on Securities (Years) 14.16
------------------------------------
Leverage-Adjusted Duration 13.43
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 6/22/89)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year -10.71% -12.49%
------------------------------------
5-Year 1.10% 1.63%
------------------------------------
10-Year 3.29% 3.91%
------------------------------------
STATES
(as a % of total investments)
------------------------------------
Illinois 15.2%
------------------------------------
California 9.5%
------------------------------------
New Jersey 5.5%
------------------------------------
New York 5.3%
------------------------------------
Texas 4.9%
------------------------------------
Florida 4.9%
------------------------------------
Colorado 4.8%
------------------------------------
Ohio 4.2%
------------------------------------
Massachusetts 3.9%
------------------------------------
Indiana 3.9%
------------------------------------
Washington 3.4%
------------------------------------
Michigan 3.1%
------------------------------------
South Carolina 2.8%
------------------------------------
Pennsylvania 2.2%
------------------------------------
Georgia 2.2%
------------------------------------
Utah 2.1%
------------------------------------
Minnesota 2.0%
------------------------------------
Wisconsin 1.9%
------------------------------------
Nevada 1.9%
------------------------------------
Louisiana 1.8%
------------------------------------
Other 14.5%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
U.S. Guaranteed 25.2%
------------------------------------
Tax Obligation/Limited 15.2%
------------------------------------
Tax Obligation/General 14.4%
------------------------------------
Transportation 11.7%
------------------------------------
Utilities 9.7%
------------------------------------
Health Care 8.9%
------------------------------------
Consumer Staples 4.4%
------------------------------------
Other 10.5%
------------------------------------
(1) The percentages shown in the foregoing chart may reflect the ratings on
certain bonds insured by ACA, AGC, AMBAC, FGIC, FSA, MBIA, RAAI and SYNCORA
as of October 31, 2008. Please see the Portfolio Managers' Commentary for
an expanded discussion of the affect on the Fund of changes to the ratings
of certain bonds in the portfolio resulting from changes to the ratings of
the underlying insurers both during the period and after period end.
(2) Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a federal income tax rate of 28%. When
comparing this Fund to investments that generate qualified dividend income,
the Taxable-Equivalent Yield is lower.
13
NMA
Performance
OVERVIEW
Nuveen Municipal
Advantage
Fund, Inc.
as of October 31, 2008
Pie Chart:
Credit Quality (as a % of total investments)(1}
AAA/U.S. Guaranteed 44%
AA 32%
A 8%
BBB 12%
BB or Lower 4%
Bar Chart:
2007-2008 Monthly Tax-Free Dividends Per Common Share(3)
NOV 0.064
DEC 0.064
JAN 0.064
FEB 0.064
MAR 0.064
APR 0.064
MAY 0.064
JUN 0.064
JUL 0.064
AUG 0.064
SEP 0.066
OCT 0.066
Line Chart:
Common Share Price Performance -- Weekly Closing Price
11/01/07 13.90
13.96
13.52
13.17
13.24
13.46
13.59
13.36
13.24
13.69
14.39
14.59
14.26
14.46
14.51
14.58
13.67
13.47
13.08
13.45
13.2799
13.20
13.37
13.56
13.65
13.52
13.55
13.56
13.57
13.78
13.75
13.824
13.73
13.48
13.23
13.06
13.18
13.19
13.09
13.06
13.22
13.15
13.11
13.01
13.35
13.44
13.21
12.59
11.80
11.85
8.43
10.36
11.40
10/31/08 11.41
FUND SNAPSHOT
------------------------------------
Common Share Price $11.41
------------------------------------
Common Share
Net Asset Value $12.12
------------------------------------
Premium/(Discount) to NAV -5.86%
------------------------------------
Market Yield 6.94%
------------------------------------
Taxable-Equivalent Yield(2) 9.64%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $523,602
------------------------------------
Average Effective Maturity
on Securities (Years) 14.60
------------------------------------
Leverage-Adjusted Duration 14.54
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 12/19/89)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year -13.16% -15.65%
------------------------------------
5-Year 0.07% 0.89%
------------------------------------
10-Year 3.29% 3.66%
------------------------------------
STATES
(as a % of total investments)
------------------------------------
California 9.6%
------------------------------------
Illinois 9.5%
------------------------------------
Washington 9.1%
------------------------------------
Texas 8.8%
------------------------------------
Louisiana 8.3%
------------------------------------
New York 7.6%
------------------------------------
Ohio 4.7%
------------------------------------
Colorado 4.5%
------------------------------------
Tennessee 4.0%
------------------------------------
Oklahoma 3.2%
------------------------------------
South Carolina 3.1%
------------------------------------
Nevada 2.9%
------------------------------------
New Jersey 2.6%
------------------------------------
Alabama 2.1%
------------------------------------
Florida 2.0%
------------------------------------
Puerto Rico 1.9%
------------------------------------
Wisconsin 1.8%
------------------------------------
Other 14.3%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
U.S. Guaranteed 32.9%
------------------------------------
Utilities 13.4%
------------------------------------
Health Care 12.0%
------------------------------------
Tax Obligation/Limited 11.5%
------------------------------------
Tax Obligation/General 8.4%
------------------------------------
Transportation 7.8%
------------------------------------
Other 14.0%
------------------------------------
(1) The percentages shown in the foregoing chart may reflect the ratings on
certain bonds insured by ACA, AGC, AMBAC, FGIC, FSA, MBIA, RAAI and SYNCORA
as of October 31, 2008. Please see the Portfolio Managers' Commentary for
an expanded discussion of the affect on the Fund of changes to the ratings
of certain bonds in the portfolio resulting from changes to the ratings of
the underlying insurers both during the period and after period end.
(2) Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a federal income tax rate of 28%. When
comparing this Fund to investments that generate qualified dividend income,
the Taxable-Equivalent Yield is lower.
(3) The Fund paid shareholders a capital gains distribution in December 2007 of
$0.0238 per share.
14
NMO
Performance
OVERVIEW
Nuveen Municipal
Market Opportunity
Fund, Inc.
as of October 31, 2008
Pie Chart:
Credit Quality (as a % of total investments)(1)
AAA/U.S. Guaranteed 54%
AA 32%
A 5%
BBB 7%
BB or Lower 2%
Bar Chart:
2007-2008 Monthly Tax-Free Dividends Per Common Share
NOV 0.0605
DEC 0.0605
JAN 0.0605
FEB 0.0605
MAR 0.0605
APR 0.0605
MAY 0.0605
JUN 0.0605
JUL 0.0605
AUG 0.0605
SEP 0.063
OCT 0.063
Line Chart:
Common Share Price Performance -- Weekly Closing Price
11/01/07 13.55
13.59
13.12
12.59
12.95
13.13
13.25
13.00
12.72
13.08
13.73
14.02
13.74
14.10
14.13
14.23
13.35
13.10
12.90
13.15
12.91
12.73
12.97
13.19
13.08
13.17
13.18
13.23
13.32
13.37
13.58
13.65
13.35
13.04
12.61
12.65
12.73
12.56
12.35
12.30
12.35
12.40
12.28
12.32
12.40
12.49
12.23
11.98
11.42
10.99
8.09
10.06
11.80
10/31/08 11.52
FUND SNAPSHOT
------------------------------------
Common Share Price $11.52
------------------------------------
Common Share
Net Asset Value $12.23
------------------------------------
Premium/(Discount) to NAV -5.81%
------------------------------------
Market Yield 6.56%
------------------------------------
Taxable-Equivalent Yield(2) 9.11%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $557,346
------------------------------------
Average Effective Maturity
on Securities (Years) 11.97
------------------------------------
Leverage-Adjusted Duration 11.99
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 3/21/90)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year -9.87% -13.07%
------------------------------------
5-Year 1.61% 1.35%
------------------------------------
10-Year 3.06% 3.37%
------------------------------------
STATES
(as a % of total investments)
------------------------------------
Texas 13.8%
------------------------------------
Washington 10.7%
------------------------------------
Illinois 8.4%
------------------------------------
New York 6.4%
------------------------------------
California 5.7%
------------------------------------
Minnesota 5.7%
------------------------------------
South Carolina 5.3%
------------------------------------
New Jersey 4.4%
------------------------------------
Colorado 4.2%
------------------------------------
Ohio 3.6%
------------------------------------
Georgia 3.3%
------------------------------------
North Dakota 3.0%
------------------------------------
Massachusetts 2.5%
------------------------------------
Puerto Rico 2.2%
------------------------------------
Nevada 2.2%
------------------------------------
Pennsylvania 1.9%
------------------------------------
Oregon 1.7%
------------------------------------
North Carolina 1.4%
------------------------------------
Other 13.6%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
U.S. Guaranteed 38.9%
------------------------------------
Tax Obligation/General 14.4%
------------------------------------
Transportation 10.2%
------------------------------------
Tax Obligation/Limited 9.7%
------------------------------------
Health Care 8.1%
------------------------------------
Utilities 5.7%
------------------------------------
Consumer Staples 5.2%
------------------------------------
Other 7.8%
------------------------------------
(1) The percentages shown in the foregoing chart may reflect the ratings on
certain bonds insured by ACA, AGC, AMBAC, FGIC, FSA, MBIA, RAAI and SYNCORA
as of October 31, 2008. Please see the Portfolio Managers' Commentary for
an expanded discussion of the affect on the Fund of changes to the ratings
of certain bonds in the portfolio resulting from changes to the ratings of
the underlying insurers both during the period and after period end.
(2) Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a federal income tax rate of 28%. When
comparing this Fund to investments that generate qualified dividend income,
the Taxable-Equivalent Yield is lower.
15
NAD
Performance
OVERVIEW
Nuveen Dividend
Advantage
Municipal Fund
as of October 31, 2008
Pie Chart:
Credit Quality (as a % of municipal bonds)(1)
AAA/U.S. Guaranteed 39%
AA 41%
A 7%
BBB 7%
BB or Lower 4%
N/R 2%
Bar Chart:
2007-2008 Monthly Tax-Free Dividends Per Common Share(3)
NOV 0.0635
DEC 0.0635
JAN 0.0635
FEB 0.0635
MAR 0.0635
APR 0.0635
MAY 0.0635
JUN 0.0635
JUL 0.0635
AUG 0.0635
SEP 0.0655
OCT 0.0655
Line Chart:
Common Share Price Performance -- Weekly Closing Price
11/01/07 13.67
13.66
13.27
12.88
13.20
13.37
13.31
13.26
12.95
13.24
14.15
14.056
13.7899
14.13
14.09
14.09
13.42
13.00
12.60
13.16
12.85
12.88
13.27
13.58
13.43
13.51
13.30
13.54
13.45
13.50
13.43
13.64
13.56
13.11
12.90
12.85
13.10
13.04
12.71
12.82
12.82
12.78
12.80
12.79
12.71
12.80
12.50
12.02
11.68
11.06
7.90
9.783
10.90
10/31/08 10.72
FUND SNAPSHOT
------------------------------------
Common Share Price $10.72
------------------------------------
Common Share
Net Asset Value $11.77
------------------------------------
Premium/(Discount) to NAV -8.92%
------------------------------------
Market Yield 7.33%
------------------------------------
Taxable-Equivalent Yield(2) 10.18%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $462,554
------------------------------------
Average Effective Maturity
on Securities (Years) 14.58
------------------------------------
Leverage-Adjusted Duration 15.26
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 5/26/99)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year -16.46% -16.42%
------------------------------------
5-Year -0.74% 0.85%
------------------------------------
Since
Inception 2.67% 4.08%
------------------------------------
STATES
(as a % of municipal bonds)
------------------------------------
Illinois 20.2%
------------------------------------
New York 7.2%
------------------------------------
Washington 7.2%
------------------------------------
Florida 6.3%
------------------------------------
Wisconsin 5.7%
------------------------------------
Texas 5.2%
------------------------------------
Indiana 4.3%
------------------------------------
Louisiana 4.2%
------------------------------------
New Jersey 4.1%
------------------------------------
Pennsylvania 3.7%
------------------------------------
Colorado 3.4%
------------------------------------
Ohio 3.3%
------------------------------------
Michigan 3.2%
------------------------------------
California 3.1%
------------------------------------
Missouri 2.9%
------------------------------------
Rhode Island 2.2%
------------------------------------
Other 13.8%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
Tax Obligation/Limited 19.7%
------------------------------------
U.S. Guaranteed 16.1%
------------------------------------
Tax Obligation/General 14.7%
------------------------------------
Health Care 14.7%
------------------------------------
Transportation 12.5%
------------------------------------
Utilities 6.2%
------------------------------------
Consumer Staples 5.1%
------------------------------------
Other 11.0%
------------------------------------
(1) The percentages shown in the foregoing chart may reflect the ratings on
certain bonds insured by ACA, AGC, AMBAC, FGIC, FSA, MBIA, RAAI and SYNCORA
as of October 31, 2008. Please see the Portfolio Managers' Commentary for
an expanded discussion of the affect on the Fund of changes to the ratings
of certain bonds in the portfolio resulting from changes to the ratings of
the underlying insurers both during the period and after period end.
(2) Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a federal income tax rate of 28%. When
comparing this Fund to investments that generate qualified dividend income,
the Taxable-Equivalent Yield is lower.
(3) The Fund paid shareholders a net ordinary income distribution in December
2007 of $.0033 per share.
16
NXZ
Performance
OVERVIEW
Nuveen Dividend Advantage
Municipal Fund 2
as of October 31, 2008
Pie Chart:
Credit Quality (as a % of total investments)(1)
AAA/U.S. Guaranteed 49%
AA 27%
A 5%
BBB 13%
BB or Lower 5%
N/R 1%
Bar Chart:
2007-2008 Monthly Tax-Free Dividends Per Common Share
NOV 0.073
DEC 0.073
JAN 0.073
FEB 0.073
MAR 0.073
APR 0.073
MAY 0.073
JUN 0.073
JUL 0.073
AUG 0.073
SEP 0.073
OCT 0.073
Line Chart:
Common Share Price Performance -- Weekly Closing Price
11/01/07 15.54
15.50
14.95
14.47
14.62
14.92
15.17
15.17
15.08
14.80
15.56
15.68
15.55
15.90
15.97
16.15
14.848
14.56
14.2399
14.65
14.11
14.18
14.65
14.70
14.63
14.72
14.95
15.01
15.03
15.22
15.21
15.30
15.27
14.90
14.47
14.5269
14.80
14.73
14.28
14.37
14.47
14.80
14.52
14.6399
14.56
14.39
14.10
13.47
12.13
12.2604
8.94
10.71
12.06
10/31/08 12.35
FUND SNAPSHOT
------------------------------------
Common Share Price $12.35
------------------------------------
Common Share
Net Asset Value $12.71
------------------------------------
Premium/(Discount) to NAV -2.83%
------------------------------------
Market Yield 7.09%
------------------------------------
Taxable-Equivalent Yield(2) 9.85%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $373,940
------------------------------------
Average Effective Maturity
on Securities (Years) 15.26
------------------------------------
Leverage-Adjusted Duration 8.68
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 3/27/01)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year -15.21% -13.23%
------------------------------------
5-Year 2.60% 2.79%
------------------------------------
Since
Inception 3.77% 4.74%
------------------------------------
STATES
(as a % of total investments)
------------------------------------
Texas 18.2%
------------------------------------
Illinois 9.1%
------------------------------------
Michigan 8.6%
------------------------------------
New York 6.6%
------------------------------------
California 5.3%
------------------------------------
Colorado 5.0%
------------------------------------
New Mexico 4.3%
------------------------------------
Alabama 3.5%
------------------------------------
Washington 3.0%
------------------------------------
Florida 2.9%
------------------------------------
Louisiana 2.9%
------------------------------------
Oregon 2.9%
------------------------------------
Kansas 2.6%
------------------------------------
Minnesota 2.6%
------------------------------------
Pennsylvania 2.6%
------------------------------------
Indiana 2.3%
------------------------------------
Massachusetts 2.2%
------------------------------------
Nevada 2.0%
------------------------------------
Other 13.4%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
U.S. Guaranteed 34.6%
------------------------------------
Tax Obligation/Limited 16.6%
------------------------------------
Health Care 13.4%
------------------------------------
Transportation 10.8%
------------------------------------
Consumer Staples 6.0%
------------------------------------
Utilities 5.4%
------------------------------------
Other 13.2%
------------------------------------
(1) The percentages shown in the foregoing chart may reflect the ratings on
certain bonds insured by ACA, AGC, AMBAC, FGIC, FSA, MBIA, RAAI and SYNCORA
as of October 31, 2008. Please see the Portfolio Managers' Commentary for
an expanded discussion of the affect on the Fund of changes to the ratings
of certain bonds in the portfolio resulting from changes to the ratings of
the underlying insurers both during the period and after period end.
(2) Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a federal income tax rate of 28%. When
comparing this Fund to investments that generate qualified dividend income,
the Taxable-Equivalent Yield is lower.
17
NZF
Performance
OVERVIEW
Nuveen Dividend
Advantage
Municipal Fund 3
as of October 31, 2008
Credit Quality (as a % of municipal bonds)(1), (2)
AAA/U.S. Guaranteed 46%
AA 34%
A 6%
BBB 6%
BB or Lower 2%
N/R 6%
Bar Chart:
2007-2008 Monthly Tax-Free Dividends Per Common Share
NOV 0.064
DEC 0.064
JAN 0.064
FEB 0.064
MAR 0.064
APR 0.064
MAY 0.064
JUN 0.064
JUL 0.064
AUG 0.064
SEP 0.0665
OCT 0.0665
Line Chart:
Common Share Price Performance -- Weekly Closing Price
11/01/07 13.84
13.77
13.21
13.01
13.16
13.41
13.52
13.28
13.16
13.41
14.29
14.43
14.40
14.65
14.61
14.82
13.55
13.42
13.08
13.73
13.22
13.05
13.36
13.62
13.54
13.62
13.66
13.77
13.83
13.79
13.85
13.80
13.84
13.45
13.05
13.14
13.15
13.10
12.93
12.98
12.90
12.97
12.90
12.83
12.94
13.03
12.82
12.60
11.64
11.35
7.55
9.821
11.30
10/31/08 10.72
FUND SNAPSHOT
------------------------------------
Common Share Price $10.72
------------------------------------
Common Share
Net Asset Value $12.10
------------------------------------
Premium/(Discount) to NAV -11.40%
------------------------------------
Market Yield 7.44%
------------------------------------
Taxable-Equivalent Yield(3) 10.33%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $488,561
------------------------------------
Average Effective Maturity
on Securities (Years) 15.06
------------------------------------
Leverage-Adjusted Duration 14.17
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 9/25/01)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year -17.85% -14.99%
------------------------------------
5-Year 1.12% 1.97%
------------------------------------
Since
Inception 1.47% 3.62%
------------------------------------
STATES
(as a % of municipal bonds)(2)
------------------------------------
Texas 12.8%
------------------------------------
Washington 11.1%
------------------------------------
Illinois 10.6%
------------------------------------
California 8.1%
------------------------------------
Michigan 6.8%
------------------------------------
Iowa 4.5%
------------------------------------
Indiana 4.1%
------------------------------------
Wisconsin 3.3%
------------------------------------
Colorado 3.2%
------------------------------------
New Jersey 2.5%
------------------------------------
Louisiana 2.5%
------------------------------------
New York 2.4%
------------------------------------
Kentucky 2.4%
------------------------------------
Missouri 2.1%
------------------------------------
Ohio 1.8%
------------------------------------
Oregon 1.7%
------------------------------------
Georgia 1.6%
------------------------------------
Maryland 1.6%
------------------------------------
Oklahoma 1.6%
------------------------------------
Florida 1.5%
------------------------------------
Other 13.8%
------------------------------------
INDUSTRIES
(as a % of total investments)(2)
------------------------------------
U.S. Guaranteed 25.0%
------------------------------------
Transportation 14.9%
------------------------------------
Health Care 14.1%
------------------------------------
Tax Obligation/General 10.6%
------------------------------------
Tax Obligation/Limited 6.5%
------------------------------------
Utilities 5.6%
------------------------------------
Education and Civic
Organizations 5.1%
------------------------------------
Water and Sewer 4.4%
------------------------------------
Other 13.8%
------------------------------------
(1) The percentages shown in the foregoing chart may reflect the ratings on
certain bonds insured by ACA, AGC, AMBAC, FGIC, FSA, MBIA, RAAI and SYNCORA
as of October 31, 2008. Please see the Portfolio Managers' Commentary for
an expanded discussion of the affect on the Fund of changes to the ratings
of certain bonds in the portfolio resulting from changes to the ratings of
the underlying insurers both during the period and after period end.
(2) Excluding derivative transactions.
(3) Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a federal income tax rate of 28%. When
comparing this Fund to investments that generate qualified dividend income,
the Taxable-Equivalent Yield is lower.
18
NPP
NMA
NMO
Shareholder MEETING REPORT
The annual meeting of shareholders was held on July 29, 2008, at The Northern
Trust Company, 50 South La Salle Street, Chicago, IL 60675; at this meeting the
shareholders were asked to vote on the election of Board Members, the
elimination of Fundamental Investment Policies and the approval of new
Fundamental Investment Policies. The meeting was subsequently adjourned to
August 29, 2008, and additionally adjourned to September 30, 2008, October 28,
2008 and November 25, 2008.
NPP NMA NMO
------------------------------------------------------------------------------------------------------------------------------------
Common and Common and Common and
Auction Rate Auction Rate Auction Rate Auction Rate Auction Rate Auction Rate
Preferred Preferred Preferred Preferred Preferred Preferred
shares voting shares voting shares voting shares voting shares voting shares voting
together together together together together together
as a class as a class as a class as a class as a class as a class
====================================================================================================================================
TO APPROVE THE ELIMINATION OF THE FUND'S
FUNDAMENTAL POLICY RELATING TO INVESTMENTS
IN MUNICIPAL SECURITIES AND BELOW INVESTMENT
GRADE SECURITIES.
For 31,015,202 3,989 22,214,414 2,948 22,612,039 2,959
Against 2,664,030 614 1,512,764 641 1,701,472 418
Abstain 1,133,036 83 1,572,156 134 935,654 123
Broker Non-Votes 8,713,336 11,180 5,763,413 8,940 6,907,691 9,329
------------------------------------------------------------------------------------------------------------------------------------
Total 43,525,604 15,866 31,062,747 12,663 32,156,856 12,829
====================================================================================================================================
TO APPROVE THE ELIMINATION OF THE FUND'S
FUNDAMENTAL POLICY RELATING TO INVESTMENTS IN
MUNICIPAL SECURITIES.
For -- -- -- -- -- --
Against -- -- -- -- -- --
Abstain -- -- -- -- -- --
Broker Non-Votes -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- -- -- -- -- --
====================================================================================================================================
TO APPROVE THE NEW FUNDAMENTAL POLICY
RELATING TO INVESTMENTS IN MUNICIPAL SECURITIES
FOR THE FUND.
For 31,228,341 4,033 22,370,519 3,040 22,890,232 2,980
Against 2,389,570 561 1,365,064 591 1,467,395 397
Abstain 1,194,357 92 1,563,751 92 891,538 123
Broker Non-Votes 8,713,336 11,180 5,763,413 8,940 6,907,691 9,329
------------------------------------------------------------------------------------------------------------------------------------
Total 43,525,604 15,866 31,062,747 12,663 32,156,856 12,829
====================================================================================================================================
TO APPROVE THE ELIMINATION OF THE FUNDAMENTAL
POLICY RELATING TO INVESTING IN OTHER INVESTMENT
COMPANIES.
For 30,642,197 3,990 22,072,817 3,025 22,558,126 2,955
Against 2,931,662 598 1,576,290 601 1,725,732 459
Abstain 1,238,409 98 1,650,227 97 965,307 86
Broker Non-Votes 8,713,336 11,180 5,763,413 8,940 6,907,691 9,329
------------------------------------------------------------------------------------------------------------------------------------
Total 43,525,604 15,866 31,062,747 12,663 32,156,856 12,829
====================================================================================================================================
TO APPROVE THE ELIMINATION OF THE FUNDAMENTAL
POLICY RELATING TO DERIVATIVES AND SHORT SALES.
For 30,540,286 3,936 21,961,133 2,864 22,521,371 2,917
Against 3,003,058 630 1,703,165 685 1,754,157 479
Abstain 1,268,924 120 1,635,036 174 973,637 104
Broker Non-Votes 8,713,336 11,180 5,763,413 8,940 6,907,691 9,329
------------------------------------------------------------------------------------------------------------------------------------
Total 43,525,604 15,866 31,062,747 12,663 32,156,856 12,829
====================================================================================================================================
TO APPROVE THE ELIMINATION OF THE FUNDAMENTAL
POLICY RELATING TO COMMODITIES.
For 30,384,824 3,926 22,033,116 2,963 22,548,121 2,907
Against 3,160,397 632 1,615,126 578 1,727,539 481
Abstain 1,267,047 128 1,651,092 182 973,505 112
Broker Non-Votes 8,713,336 11,180 5,763,413 8,940 6,907,691 9,329
------------------------------------------------------------------------------------------------------------------------------------
Total 43,525,604 15,866 31,062,747 12,663 32,156,856 12,829
====================================================================================================================================
TO APPROVE THE NEW FUNDAMENTAL POLICY
RELATING TO COMMODITIES.
For 30,532,211 3,982 22,201,425 2,928 22,656,714 2,893
Against 3,048,760 579 1,478,403 643 1,638,200 501
Abstain 1,231,297 125 1,619,506 152 954,251 106
Broker Non-Votes 8,713,336 11,180 5,763,413 8,940 6,907,691 9,329
------------------------------------------------------------------------------------------------------------------------------------
Total 43,525,604 15,866 31,062,747 12,663 32,156,856 12,829
====================================================================================================================================
19
NPP
NMA
NMO
Shareholder MEETING REPORT (continued)
NPP NMA NMO
------------------------------------------------------------------------------------------------------------------------------------
Common and Common and Common and
Auction Rate Auction Rate Auction Rate Auction Rate Auction Rate Auction Rate
Preferred Preferred Preferred Preferred Preferred Preferred
shares voting shares voting shares voting shares voting shares voting shares voting
together together together together together together
as a class as a class as a class as a class as a class as a class
====================================================================================================================================
APPROVAL OF THE BOARD MEMBERS WAS REACHED
AS FOLLOWS:
John P. Amboian
For 41,364,196 -- 29,944,896 -- 30,921,528 --
Withhold 2,161,391 -- 1,116,819 -- 1,234,580 --
------------------------------------------------------------------------------------------------------------------------------------
Total 43,525,587 -- 31,061,715 -- 32,156,108 --
====================================================================================================================================
Robert P. Bremner
For 41,356,327 -- 29,939,708 -- 30,923,886 --
Withhold 2,169,260 -- 1,122,007 -- 1,232,222 --
------------------------------------------------------------------------------------------------------------------------------------
Total 43,525,587 -- 31,061,715 -- 32,156,108 --
====================================================================================================================================
Jack B. Evans
For 41,332,715 -- 29,935,063 -- 30,933,568 --
Withhold 2,192,872 -- 1,126,652 -- 1,222,540 --
------------------------------------------------------------------------------------------------------------------------------------
Total 43,525,587 -- 31,061,715 -- 32,156,108 --
====================================================================================================================================
William C. Hunter
For -- 15,065 -- 12,157 -- 12,398
Withhold -- 784 -- 459 -- 385
------------------------------------------------------------------------------------------------------------------------------------
Total -- 15,849 -- 12,616 -- 12,783
====================================================================================================================================
David J. Kundert
For 41,359,760 -- 29,927,129 -- 30,929,167 --
Withhold 2,165,827 -- 1,134,586 -- 1,226,941 --
------------------------------------------------------------------------------------------------------------------------------------
Total 43,525,587 -- 31,061,715 -- 32,156,108 --
====================================================================================================================================
William J. Schneider
For -- 15,063 -- 12,157 -- 12,402
Withhold -- 786 -- 459 -- 381
------------------------------------------------------------------------------------------------------------------------------------
Total -- 15,849 -- 12,616 -- 12,783
====================================================================================================================================
Judith M. Stockdale
For 41,334,865 -- 29,927,229 -- 30,906,205 --
Withhold 2,190,722 -- 1,134,486 -- 1,249,903 --
------------------------------------------------------------------------------------------------------------------------------------
Total 43,525,587 -- 31,061,715 -- 32,156,108 --
====================================================================================================================================
Carole E. Stone
For 41,357,083 -- 29,927,754 -- 30,901,572 --
Withhold 2,168,504 -- 1,133,961 -- 1,254,536 --
------------------------------------------------------------------------------------------------------------------------------------
Total 43,525,587 -- 31,061,715 -- 32,156,108 --
====================================================================================================================================
Terence J. Toth
For 41,334,132 -- 29,927,057 -- 30,928,570 --
Withhold 2,191,455 -- 1,134,658 -- 1,227,538 --
------------------------------------------------------------------------------------------------------------------------------------
Total 43,525,587 -- 31,061,715 -- 32,156,108 --
====================================================================================================================================
20
NAD
NXZ
NZF
Shareholder MEETING REPORT (continued)
NAD NXZ NZF
------------------------------------------------------------------------------------------------------------------------------------
Common and Common and Common and
Auction Rate Auction Rate Auction Rate Auction Rate Auction Rate Auction Rate
Preferred Preferred Preferred Preferred Preferred Preferred
shares voting shares voting shares voting shares voting shares voting shares voting
together together together together together together
as a class as a class as a class as a class as a class as a class
====================================================================================================================================
TO APPROVE THE ELIMINATION OF THE FUND'S
FUNDAMENTAL POLICY RELATING TO INVESTMENTS
IN MUNICIPAL SECURITIES AND BELOW INVESTMENT
GRADE SECURITIES.
For 18,885,210 2,378 -- -- -- --
Against 1,498,936 360 -- -- -- --
Abstain 613,768 103 -- -- -- --
Broker Non-Votes 5,613,613 7,252 -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 26,611,527 10,093 -- -- -- --
====================================================================================================================================
TO APPROVE THE ELIMINATION OF THE FUND'S
FUNDAMENTAL POLICY RELATING TO INVESTMENTS IN
MUNICIPAL SECURITIES.
For -- -- 14,502,552 1,779 19,224,433 2,594
Against -- -- 762,921 302 1,232,153 309
Abstain -- -- 444,031 69 659,097 187
Broker Non-Votes -- -- 4,434,989 5,665 6,153,673 8,072
------------------------------------------------------------------------------------------------------------------------------------
Total -- -- 20,144,493 7,815 27,269,356 11,162
====================================================================================================================================
TO APPROVE THE NEW FUNDAMENTAL POLICY
RELATING TO INVESTMENTS IN MUNICIPAL SECURITIES
FOR THE FUND.
For 18,987,736 2,405 14,556,694 1,823 19,344,257 2,605
Against 1,357,368 334 723,338 256 1,148,459 295
Abstain 652,810 102 429,472 71 622,967 190
Broker Non-Votes 5,613,613 7,252 4,434,989 5,665 6,153,673 8,072
------------------------------------------------------------------------------------------------------------------------------------
Total 26,611,527 10,093 20,144,493 7,815 27,269,356 11,162
====================================================================================================================================
TO APPROVE THE ELIMINATION OF THE FUNDAMENTAL
POLICY RELATING TO INVESTING IN OTHER INVESTMENT
COMPANIES.
For -- -- -- -- -- --
Against -- -- -- -- -- --
Abstain -- -- -- -- -- --
Broker Non-Votes -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- -- -- -- -- --
====================================================================================================================================
TO APPROVE THE ELIMINATION OF THE FUNDAMENTAL
POLICY RELATING TO DERIVATIVES AND SHORT SALES.
For -- -- -- -- -- --
Against -- -- -- -- -- --
Abstain -- -- -- -- -- --
Broker Non-Votes -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- -- -- -- -- --
====================================================================================================================================
TO APPROVE THE ELIMINATION OF THE FUNDAMENTAL
POLICY RELATING TO COMMODITIES.
For -- -- -- -- -- --
Against -- -- -- -- -- --
Abstain -- -- -- -- -- --
Broker Non-Votes -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- -- -- -- -- --
====================================================================================================================================
TO APPROVE THE NEW FUNDAMENTAL POLICY
RELATING TO COMMODITIES.
For -- -- -- -- -- --
Against -- -- -- -- -- --
Abstain -- -- -- -- -- --
Broker Non-Votes -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- -- -- -- -- --
====================================================================================================================================
21
NAD
NXZ
NZF
Shareholder MEETING REPORT (continued)
NAD NXZ NZF
------------------------------------------------------------------------------------------------------------------------------------
Common and Common and Common and
Auction Rate Auction Rate Auction Rate Auction Rate Auction Rate Auction Rate
Preferred Preferred Preferred Preferred Preferred Preferred
shares voting shares voting shares voting shares voting shares voting shares voting
together together together together together together
as a class as a class as a class as a class as a class as a class
====================================================================================================================================
APPROVAL OF THE BOARD MEMBERS WAS REACHED
AS FOLLOWS:
John P. Amboian
For 25,358,735 -- 19,549,143 -- 26,172,348 --
Withhold 1,252,786 -- 595,346 -- 1,095,352 --
------------------------------------------------------------------------------------------------------------------------------------
Total 26,611,521 -- 20,144,489 -- 27,267,700 --
====================================================================================================================================
Robert P. Bremner
For -- -- -- -- -- --
Withhold -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- -- -- -- -- --
====================================================================================================================================
Jack B. Evans
For -- -- -- -- -- --
Withhold -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- -- -- -- -- --
====================================================================================================================================
William C. Hunter
For -- 9,724 -- 7,385 -- 10,600
Withhold -- 363 -- 426 -- 456
------------------------------------------------------------------------------------------------------------------------------------
Total -- 10,087 -- 7,811 -- 11,056
====================================================================================================================================
David J. Kundert
For 25,342,294 -- 19,548,963 -- 26,211,608 --
Withhold 1,269,227 -- 595,526 -- 1,056,092 --
------------------------------------------------------------------------------------------------------------------------------------
Total 26,611,521 -- 20,144,489 -- 27,267,700 --
====================================================================================================================================
William J. Schneider
For -- 9,724 -- 7,385 -- 10,607
Withhold -- 363 -- 426 -- 449
------------------------------------------------------------------------------------------------------------------------------------
Total -- 10,087 -- 7,811 -- 11,056
====================================================================================================================================
Judith M. Stockdale
For -- -- -- -- -- --
Withhold -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- -- -- -- -- --
====================================================================================================================================
Carole E. Stone
For -- -- -- -- -- --
Withhold -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- -- -- -- -- --
====================================================================================================================================
Terence J. Toth
For 25,355,076 -- 19,545,305 -- 26,173,147 --
Withhold 1,256,445 -- 599,184 -- 1,094,553 --
------------------------------------------------------------------------------------------------------------------------------------
Total 26,611,521 -- 20,144,489 -- 27,267,700 --
====================================================================================================================================
22
Report of
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
THE BOARD OF DIRECTORS/TRUSTEES AND SHAREHOLDERS
NUVEEN PERFORMANCE PLUS MUNICIPAL FUND, INC.
NUVEEN MUNICIPAL ADVANTAGE FUND, INC.
NUVEEN MUNICIPAL MARKET OPPORTUNITY FUND, INC.
NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND
NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND 2
NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND 3
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Nuveen Performance Plus Municipal Fund, Inc.,
Nuveen Municipal Advantage Fund, Inc., Nuveen Municipal Market Opportunity Fund,
Inc., Nuveen Dividend Advantage Municipal Fund, Nuveen Dividend Advantage
Municipal Fund 2, and Nuveen Dividend Advantage Municipal Fund 3 (the "Funds")
as of October 31, 2008, and the related statements of operations and cash flows
(Nuveen Dividend Advantage Municipal Fund 2 only) for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the period
then ended. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Funds' internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Funds' internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of October 31, 2008, by correspondence with the custodian
and brokers or by other appropriate auditing procedures where replies from
brokers were not received. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of
Nuveen Performance Plus Municipal Fund, Inc., Nuveen Municipal Advantage Fund,
Inc., Nuveen Municipal Market Opportunity Fund, Inc., Nuveen Dividend Advantage
Municipal Fund, Nuveen Dividend Advantage Municipal Fund 2, and Nuveen Dividend
Advantage Municipal Fund 3 at October 31, 2008, the results of their operations
and cash flows (Nuveen Dividend Advantage Municipal Fund 2 only) for the year
then ended, changes in their net assets for each of the two years in the period
then ended, and the financial highlights for each of the five years in the
period then ended in conformity with U.S. generally accepted accounting
principles.
/s/ Ernst & Young LLP
Chicago, Illinois
December 23, 2008
23
NPP
Nuveen Performance Plus Municipal Fund, Inc.
Portfolio of INVESTMENTS
October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 0.3% (0.2% OF TOTAL INVESTMENTS)
Jefferson County, Alabama, Sewer Revenue Refunding Warrants,
Series 1997A:
$ 1,435 5.625%, 2/01/22 - FGIC Insured 2/09 at 100.00 BB $ 975,728
1,505 5.375%, 2/01/27 - FGIC Insured 12/08 at 100.00 BB 1,016,853
------------------------------------------------------------------------------------------------------------------------------------
2,940 Total Alabama 1,992,581
------------------------------------------------------------------------------------------------------------------------------------
ALASKA - 0.1% (0.1% OF TOTAL INVESTMENTS)
2,200 Northern Tobacco Securitization Corporation, Alaska, Tobacco 6/14 at 100.00 Baa3 1,170,400
Settlement Asset-Backed Bonds, Series 2006A, 5.000%, 6/01/46
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 1.5% (0.9% OF TOTAL INVESTMENTS)
1,000 Arizona State Transportation Board, Highway Revenue Bonds, 7/12 at 100.00 AAA 1,074,830
Series 2002B, 5.250%, 7/01/22 (Pre-refunded 7/01/12)
Phoenix, Arizona, Civic Improvement Corporation, Senior Lien Airport
Revenue Bonds, Series 2002B:
5,365 5.750%, 7/01/15 - FGIC Insured (Alternative Minimum Tax) 7/12 at 100.00 AA 5,251,423
5,055 5.750%, 7/01/16 - FGIC Insured (Alternative Minimum Tax) 7/12 at 100.00 AA 4,899,407
------------------------------------------------------------------------------------------------------------------------------------
11,420 Total Arizona 11,225,660
------------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 0.5% (0.3% OF TOTAL INVESTMENTS)
5,080 Independence County, Arkansas, Hydroelectric Power Revenue Bonds, 5/13 at 100.00 B 2,926,791
Series 2003, 5.350%, 5/01/28 - ACA Insured
1,000 Washington County, Arkansas, Hospital Revenue Bonds, Washington 2/15 at 100.00 Baa1 705,200
Regional Medical Center, Series 2005A, 5.000%, 2/01/35
------------------------------------------------------------------------------------------------------------------------------------
6,080 Total Arkansas 3,631,991
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 15.2% (9.5% OF TOTAL INVESTMENTS)
3,500 Alameda Corridor Transportation Authority, California, Subordinate Lien 10/17 at 100.00 AA 2,802,135
Revenue Bonds, Series 2004A, 0.000%, 10/01/25 - AMBAC Insured
11,000 Anaheim Public Finance Authority, California, Subordinate Lease Revenue No Opt. Call AAA 5,532,450
Bonds, Public Improvement Project, Series 1997C, 0.000%, 9/01/20 -
FSA Insured
California Department of Water Resources, Power Supply Revenue Bonds,
Series 2002A:
4,000 6.000%, 5/01/15 (Pre-refunded 5/01/12) 5/12 at 101.00 Aaa 4,448,160
3,175 5.375%, 5/01/22 (Pre-refunded 5/01/12) 5/12 at 101.00 Aaa 3,465,132
3,365 California Health Facilities Financing Authority, Health Facility Revenue 3/13 at 100.00 A 2,655,658
Bonds, Adventist Health System/West, Series 2003A, 5.000%, 3/01/33
California Health Facilities Financing Authority, Revenue Bonds, Kaiser
Permanante System, Series 2006:
5,000 5.000%, 4/01/37 4/16 at 100.00 A+ 3,963,050
7,000 5.250%, 4/01/39 4/16 at 100.00 A+ 5,766,460
2,380 California Infrastructure Economic Development Bank, Revenue Bonds, 10/11 at 101.00 A- 2,081,834
J. David Gladstone Institutes, Series 2001, 5.250%, 10/01/34
3,500 California Pollution Control Financing Authority, Revenue Bonds, Pacific 6/17 at 100.00 A3 2,308,740
Gas and Electric Company, Series 2004C, 4.750%, 12/01/23 - FGIC
Insured (Alternative Minimum Tax)
5,000 California, General Obligation Bonds, Series 2005, 5.000%, 3/01/31 3/16 at 100.00 A+ 4,543,000
4,000 California, General Obligation Bonds, Trust 2652, 0.751%, 6/01/37 (IF) 6/17 at 100.00 A+ 2,202,960
24
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (continued)
$ 6,435 California, General Obligation Refunding Bonds, Series 2002, 6.000%,
4/01/16 - AMBAC Insured No Opt. Call AA $ 7,038,989
5,000 Coast Community College District, Orange County, California, General 8/18 at 100.00 AAA 3,439,350
Obligation Bonds, Series 2006C, 0.000%, 8/01/32 - FSA Insured
1,500 Golden State Tobacco Securitization Corporation, California, Enhanced 6/17 at 100.00 BBB 885,750
Tobacco Settlement Asset-Backed Bonds, Series 2007A-1, 5.125%,
6/01/47
10,000 Golden State Tobacco Securitization Corporation, California, Enhanced 6/22 at 100.00 BBB 4,070,000
Tobacco Settlement Asset-Backed Bonds, Series 2007A-2, 0.000%,
6/01/37
10,000 Golden State Tobacco Securitization Corporation, California, Tobacco 6/13 at 100.00 AAA 11,299,300
Settlement Asset-Backed Bonds, Series 2003A-1, 6.750%, 6/01/39
(Pre-refunded 6/01/13)
1,000 Mt. Diablo Hospital District, California, Insured Hospital Revenue Bonds, 12/08 at 100.00 AA (4) 1,033,860
Series 1993A, 5.125%, 12/01/23 - AMBAC Insured (ETM)
13,450 Ontario Redevelopment Financing Authority, San Bernardino County, No Opt. Call AA 15,337,573
California, Revenue Refunding Bonds, Redevelopment Project 1, Series
1995, 7.200%, 8/01/17 - MBIA Insured
7,770 Palmdale Community Redevelopment Agency, California, Residential No Opt. Call AAA 8,030,994
Mortgage Revenue Refunding Bonds, Series 1991A, 7.150%, 2/01/10
(ETM)
2,325 Palmdale Community Redevelopment Agency, California, Restructured No Opt. Call AAA 2,945,705
Single Family Mortgage Revenue Bonds, Series 1986D, 8.000%,
4/01/16 (Alternative Minimum Tax) (ETM)
2,000 San Francisco Airports Commission, California, Revenue Bonds, San 5/09 at 101.00 A1 (4) 2,055,140
Francisco International Airport, Second Series 1999, Issue 23B, 5.125%,
5/01/30 (Pre-refunded 5/01/09) - FGIC Insured
2,000 San Francisco Airports Commission, California, Revenue Refunding 5/11 at 100.00 AA 1,897,020
Bonds, San Francisco International Airport, Second Series 2001, Issue
27B, 5.125%, 5/01/26 - FGIC Insured
3,000 San Joaquin Hills Transportation Corridor Agency, Orange County, No Opt. Call AA 505,800
California, Toll Road Revenue Refunding Bonds, Series 1997A, 0.000%,
1/15/35 - MBIA Insured
15,745 Walnut Valley Unified School District, Los Angeles County, California, 8/11 at 103.00 AA 17,619,914
General Obligation Refunding Bonds, Series 1997A, 7.200%, 2/01/16 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
132,145 Total California 115,928,974
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 7.7% (4.8% OF TOTAL INVESTMENTS)
5,240 Adams 12 Five Star Schools, Adams County, Colorado, General Obligation 12/15 at 100.00 AAA 5,154,326
Bonds, Series 2005, 5.000%, 12/15/24 - FSA Insured
3,000 Colorado Educational and Cultural Facilities Authority, Charter School 8/14 at 100.00 A 2,684,730
Revenue Bonds, Peak-to-Peak Charter School, Series 2004, 5.250%,
8/15/34 - SYNCORA GTY Insured
5,860 Colorado Health Facilities Authority, Revenue Refunding Bonds, Catholic 9/11 at 100.00 AA (4) 6,220,390
Health Initiatives, Series 2001, 5.250%, 9/01/21 (Pre-refunded
9/01/11)
4,500 Denver City and County, Colorado, Airport System Revenue Refunding 11/11 at 100.00 A+ 4,286,385
Bonds, Series 2001A, 5.500%, 11/15/16 - FGIC Insured (Alternative
Minimum Tax)
20,000 Denver Convention Center Hotel Authority, Colorado, Senior Revenue 12/13 at 100.00 N/R (4) 21,236,999
Bonds, Convention Center Hotel, Series 2003A, 5.000%, 12/01/33
(Pre-refunded 12/01/13) - SYNCORA GTY Insured
12,615 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, Series No Opt. Call AA 5,523,478
1997B, 0.000%, 9/01/21 - MBIA Insured
E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, Series
2000B:
15,700 0.000%, 9/01/32 - MBIA Insured No Opt. Call AA 2,949,559
33,120 0.000%, 9/01/33 - MBIA Insured No Opt. Call AA 5,786,726
18,500 E-470 Public Highway Authority, Colorado, Toll Revenue Bonds, Series No Opt. Call AA 2,676,025
2004A, 0.000%, 3/01/36 - MBIA Insured
755 Jefferson County School District R1, Colorado, General Obligation Bonds, 12/14 at 100.00 AAA 743,698
Series 2004, 5.000%, 12/15/22 - FSA Insured (UB)
1,330 University of Colorado Hospital Authority, Revenue Bonds, Series 1999A, 11/09 at 101.00 Aa3 1,000,160
5.000%, 11/15/29 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
120,620 Total Colorado 58,262,476
------------------------------------------------------------------------------------------------------------------------------------
25
NPP
Nuveen Performance Plus Municipal Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 1.9% (1.2% OF TOTAL INVESTMENTS)
$ 5,275 District of Columbia Tobacco Settlement Corporation, Tobacco 5/11 at 101.00 BBB $ 4,697,757
Settlement Asset-Backed Bonds, Series 2001, 6.250%, 5/15/24
5,590 District of Columbia, General Obligation Bonds, Series 1999B, 5.500%, 6/09 at 101.00 AAA 5,721,700
6/01/13 - FSA Insured
5,000 Washington Convention Center Authority, District of Columbia, Senior 10/16 at 100.00 AA 4,022,150
Lien Dedicated Tax Revenue Bonds, Series 2007A, 4.500%,
10/01/30 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
15,865 Total District of Columbia 14,441,607
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 7.8% (4.9% OF TOTAL INVESTMENTS)
Broward County Housing Finance Authority, Florida, Multifamily Housing
Revenue Bonds, Venice Homes Apartments, Series 2001A:
1,545 5.700%, 1/01/32 - FSA Insured (Alternative Minimum Tax) 7/11 at 100.00 AAA 1,277,962
1,805 5.800%, 1/01/36 - FSA Insured (Alternative Minimum Tax) 7/11 at 100.00 AAA 1,510,785
5,300 Escambia County Health Facilities Authority, Florida, Revenue Bonds, No Opt. Call Aa1 5,451,050
Ascension Health Credit Group, Series 2003A, 5.250%, 11/15/14
2,095 Florida Housing Finance Corporation, Homeowner Mortgage Revenue 1/10 at 100.00 AAA 1,968,483
Bonds, Series 2000-11, 5.850%, 1/01/22 - FSA Insured (Alternative
Minimum Tax)
5,675 Florida Housing Finance Corporation, Homeowner Mortgage Revenue 1/16 at 100.00 AA+ 4,076,239
Bonds, Series 2006-2, 4.950%, 7/01/37 (Alternative Minimum Tax)
10,050 Florida State Board of Education, Full Faith and Credit Public Education 6/10 at 101.00 AAA 10,400,243
Capital Outlay Refunding Bonds, Series 2000D, 5.750%, 6/01/22
7,000 Hillsborough County Aviation Authority, Florida, Revenue Bonds, Tampa 10/13 at 100.00 AA 6,494,950
International Airport, Series 2003A, 5.250%, 10/01/17 - MBIA Insured
(Alternative Minimum Tax)
10,000 JEA, Florida, Electric System Revenue Bonds, Series 2006-3A, 4/15 at 100.00 AAA 8,936,100
5.000%, 10/01/41 - FSA Insured (UB)
10,750 Martin County Industrial Development Authority, Florida, Industrial 12/08 at 100.00 BB+ 9,697,038
Development Revenue Bonds, Indiantown Cogeneration LP, Series
1994A, 7.875%, 12/15/25 (Alternative Minimum Tax)
2,570 Miami-Dade County Housing Finance Authority, Florida, Multifamily 6/11 at 100.00 AAA 2,172,472
Mortgage Revenue Bonds, Country Club Villas II Project, Series
2001-1A, 5.850%, 1/01/37 - FSA Insured (Alternative Minimum Tax)
3,500 Miami-Dade County, Florida, Aviation Revenue Bonds, Miami 10/15 at 100.00 A2 2,522,765
International Airport, Series 2005A, 5.000%, 10/01/37 - SYNCORA GTY
Insured (Alternative Minimum Tax)
1,700 Miami-Dade County, Florida, Beacon Tradeport Community Development 5/12 at 102.00 BBB+ 1,461,966
District, Special Assessment Bonds, Commercial Project, Series 2002A,
5.625%, 5/01/32 - RAAI Insured
4,500 Port Saint Lucie, Florida, Special Assessment Revenue Bonds, Southwest 7/17 at 100.00 AA 3,602,655
Annexation District 1B, Series 2007, 5.000%, 7/01/40 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
66,490 Total Florida 59,572,708
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 3.6% (2.2% OF TOTAL INVESTMENTS)
4,920 Atlanta, Georgia, Airport General Revenue Refunding Bonds, Series 1/10 at 101.00 A+ (4) 5,145,090
2000A, 5.600%, 1/01/30 (Pre-refunded 1/01/10) - FGIC Insured
5,000 Atlanta, Georgia, Water and Wastewater Revenue Bonds, Series 1999A, No Opt. Call AA 4,733,750
5.500%, 11/01/22 - FGIC Insured
2,000 George L. Smith II World Congress Center Authority, Atlanta, Georgia, 7/10 at 101.00 AA 1,770,560
Revenue Refunding Bonds, Domed Stadium Project, Series 2000,
5.500%, 7/01/20 - MBIA Insured (Alternative Minimum Tax)
15,000 Private Colleges and Universities Authority, Georgia, Revenue Bonds, 11/09 at 101.00 AA (4) 15,718,200
Emory University, Series 1999A, 5.500%, 11/01/25 (Pre-refunded
11/01/09)
------------------------------------------------------------------------------------------------------------------------------------
26,920 Total Georgia 27,367,600
------------------------------------------------------------------------------------------------------------------------------------
IDAHO - 0.1% (0.1% OF TOTAL INVESTMENTS)
390 Idaho Housing and Finance Association, Single Family Mortgage Bonds, 1/10 at 100.00 Aa3 393,159
Series 2000D, 6.200%, 7/01/14 (Alternative Minimum Tax)
26
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
IDAHO (continued)
$ 275 Idaho Housing and Finance Association, Single Family Mortgage Bonds, 7/10 at 100.00 Aa2 $ 275,085
Series 2000G-2, 5.950%, 7/01/25 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
665 Total Idaho 668,244
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 24.5% (15.2% OF TOTAL INVESTMENTS)
10,000 Chicago Board of Education, Illinois, Unlimited Tax General Obligation No Opt. Call AA 5,517,500
Bonds, Dedicated Tax Revenues, Series 1998B-1, 0.000%, 12/01/19 -
FGIC Insured
10,000 Chicago Board of Education, Illinois, Unlimited Tax General Obligation No Opt. Call AA 5,143,900
Bonds, Dedicated Tax Revenues, Series 1999A, 0.000%, 12/01/20 -
FGIC Insured
Chicago, Illinois, General Obligation Bonds, City Colleges, Series 1999:
32,170 0.000%, 1/01/21 - FGIC Insured No Opt. Call AA 16,507,392
32,670 0.000%, 1/01/22 - FGIC Insured No Opt. Call AA 15,727,665
9,145 Chicago, Illinois, Revenue Bonds, Midway Airport, Series 1996A, 5.500%, 1/09 at 100.00 AA 8,603,250
1/01/29 - MBIA Insured
1,665 Chicago, Illinois, Third Lien General Airport Revenue Bonds, O'Hare 1/16 at 100.00 A1 1,436,778
International Airport, Series 2005A, 5.000%, 1/01/33 - FGIC Insured
DuPage County Forest Preserve District, Illinois, General Obligation
Bonds, Series 2000:
8,000 0.000%, 11/01/18 No Opt. Call AAA 4,829,120
15,285 0.000%, 11/01/19 No Opt. Call AAA 8,618,600
2,000 Illinois Finance Authority, Revenue Bonds, Children's Memorial Hospital, 8/18 at 100.00 AAA 1,706,740
Series 2008, 5.250%, 8/15/47 - AGC Insured (UB)
5,245 Illinois Finance Authority, Revenue Bonds, Loyola University of Chicago, 7/17 at 100.00 AA 3,962,598
Tender Option Bond Trust 1137, 7.720%, 7/01/46 (IF)
4,000 Illinois Health Facilities Authority, FHA-Insured Mortgage Revenue 8/13 at 100.00 AAA 3,514,800
Refunding Bonds, Sinai Health System, Series 2003, 5.150%, 2/15/37
1,180 Illinois Health Facilities Authority, Revenue Bonds, Lake Forest Hospital, 7/12 at 100.00 A- 1,035,131
Series 2002A, 5.750%, 7/01/29
3,000 Illinois Health Facilities Authority, Revenue Bonds, Lake Forest Hospital, 7/13 at 100.00 A- 2,714,550
Series 2003, 6.000%, 7/01/33
4,580 Illinois Health Facilities Authority, Revenue Bonds, Midwest Care Center 8/10 at 102.00 Aaa 4,611,739
IX Inc., Series 2000, 6.250%, 8/20/35
2,160 Illinois Health Facilities Authority, Revenue Bonds, Silver Cross Hospital 8/09 at 101.00 A 2,126,196
and Medical Centers, Series 1999, 5.250%, 8/15/15 (Mandatory
put 8/15/09)
7,250 Kane, Kendall, LaSalle, and Will Counties, Illinois, Community College 12/13 at 57.71 AA 2,696,420
District 516, General Obligation Bonds, Series 2005E, 0.000%,
12/15/24 - FGIC Insured
3,700 Libertyville, Illinois, Affordable Housing Revenue Bonds, Liberty Towers 11/09 at 100.00 Aaa 3,881,152
Project, Series 1999A, 7.000%, 11/01/29 (Pre-refunded 11/01/09)
(Alternative Minimum Tax)
6,000 McHenry County Conservation District, Illinois, General Obligation Bonds, 2/11 at 100.00 Aa1 (4) 6,384,660
Series 2001A, 5.625%, 2/01/21 (Pre-refunded 2/01/11) - FGIC Insured
5,000 Metropolitan Pier and Exposition Authority, Illinois, Revenue Bonds, 6/12 at 101.00 AAA 4,744,650
McCormick Place Expansion Project, Series 2002A, 5.250%, 6/15/42 -
MBIA Insured
10,650 Metropolitan Pier and Exposition Authority, Illinois, Revenue Bonds, No Opt. Call AAA 12,530,471
McCormick Place Hospitality Facility, Series 1996A, 7.000%, 7/01/26
(ETM)
Metropolitan Pier and Exposition Authority, Illinois, Revenue Refunding
Bonds, McCormick Place Expansion Project, Series 1996A:
9,400 0.000%, 12/15/18 - MBIA Insured No Opt. Call AA 5,575,140
16,570 0.000%, 12/15/20 - MBIA Insured No Opt. Call AA 8,554,428
23,550 0.000%, 12/15/22 - MBIA Insured No Opt. Call AA 10,736,681
13,000 0.000%, 12/15/24 - MBIA Insured No Opt. Call AA 5,236,790
5,100 Metropolitan Pier and Exposition Authority, Illinois, Revenue Refunding No Opt. Call AAA 5,242,341
Bonds, McCormick Place Expansion Project, Series 1998A, 5.500%,
12/15/23 - FGIC Insured
27
NPP
Nuveen Performance Plus Municipal Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS (continued)
$ 5,180 Metropolitan Pier and Exposition Authority, Illinois, Revenue Refunding No Opt. Call AAA $ 5,477,643
Bonds, McCormick Place Expansion Project, Series 1998A, 5.500%,
12/15/23 - FGIC Insured (ETM)
17,865 Regional Transportation Authority, Cook, DuPage, Kane, Lake, McHenry No Opt. Call AAA 18,509,747
and Will Counties, Illinois, General Obligation Bonds, Series 1999,
5.750%, 6/01/23 - FSA Insured
6,090 Sherman, Illinois, GNMA Mortgage Revenue Refunding Bonds, Villa 10/09 at 102.00 AAA 6,186,283
Vianney, Series 1999A, 6.450%, 10/01/29
10,000 Will County Community High School District 210 Lincoln-Way, Illinois, No Opt. Call Aaa 4,424,200
General Obligation Bonds, Series 2006, 0.000%, 1/01/23 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
280,455 Total Illinois 186,236,565
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 6.2% (3.9% OF TOTAL INVESTMENTS)
2,465 Danville Multi-School Building Corporation, Indiana, First Mortgage 7/11 at 100.00 AA 2,490,784
Refunding Bonds, Series 2001, 5.250%, 7/15/18 - AMBAC Insured
3,000 Hospital Authority of Delaware County, Indiana, Hospital Revenue Bonds, 8/16 at 100.00 Baa2 2,003,220
Cardinal Health System, Series 2006, 5.250%, 8/01/36
14,000 Indiana Health Facility Financing Authority, Hospital Revenue Bonds, 8/10 at 101.50 AA (4) 14,957,740
Clarian Health Obligated Group, Series 2000A, 5.500%, 2/15/30
(Pre-refunded 8/15/10) - MBIA Insured
750 Indiana Health Facility Financing Authority, Hospital Revenue Bonds, 2/16 at 100.00 A+ 617,520
Clarian Health Obligation Group, Series 2006B, 5.000%, 2/15/23
2,500 Indiana Health Facility Financing Authority, Hospital Revenue Refunding No Opt. Call AAA 2,757,525
Bonds, Columbus Regional Hospital, Series 1993, 7.000%, 8/15/15 -
FSA Insured
4,320 Indiana Health Facility Financing Authority, Revenue Bonds, Ancilla 12/08 at 100.50 AA (4) 4,329,763
Systems Inc. Obligated Group, Series 1997, 5.250%, 7/01/22 - MBIA
Insured (ETM)
3,000 Indiana Health Facility Financing Authority, Revenue Bonds, Community 3/17 at 100.00 BBB 2,208,240
Foundation of Northwest Indiana, Series 2007, 5.500%, 3/01/37
2,000 Indiana Health Facility Financing Authority, Revenue Bonds, Community 5/15 at 100.00 AA 1,660,360
Hospitals of Indiana, Series 2005A, 5.000%, 5/01/35 - AMBAC Insured
Indiana Transportation Finance Authority, Highway Revenue Bonds,
Series 2000:
1,285 5.375%, 12/01/25 (Pre-refunded 12/01/10) 12/10 at 100.00 AA+ (4) 1,359,273
6,715 5.375%, 12/01/25 (Pre-refunded 12/01/10) 12/10 at 100.00 AA+ (4) 7,103,127
3,105 Indiana University, Student Fee Revenue Bonds, Series 2003O, 5.250%, 8/13 at 100.00 Aa1 3,129,374
8/01/20 - FGIC Insured
1,000 Marion County Convention and Recreational Facilities Authority, Indiana, 6/11 at 100.00 AA 961,120
Excise Taxes Lease Rental Revenue Refunding Senior Bonds, Series
2001A, 5.000%, 6/01/21 - MBIA Insured
2,395 Shelbyville Central Renovation School Building Corporation, Indiana, 7/15 at 100.00 AA+ 2,053,976
First Mortgage Bonds, Series 2005, 4.375%, 7/15/26 - MBIA Insured
1,800 Sunman Dearborn High School Building Corporation, Indiana, First 1/15 at 100.00 AA+ 1,760,004
Mortgage Bonds, Series 2005, 5.000%, 7/15/25 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
48,335 Total Indiana 47,392,026
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 2.1% (1.3% OF TOTAL INVESTMENTS)
1,500 Iowa Finance Authority, Health Facility Revenue Bonds, Care Initiatives 7/16 at 100.00 BBB- 1,214,910
Project, Series 2006A, 5.500%, 7/01/21
Iowa Tobacco Settlement Authority, Asset Backed Settlement Revenue
Bonds, Series 2005C:
5,000 5.375%, 6/01/38 6/15 at 100.00 BBB 2,958,400
5,300 5.625%, 6/01/46 6/15 at 100.00 BBB 3,152,917
4,500 Iowa Tobacco Settlement Authority, Tobacco Asset-Backed Revenue 6/17 at 100.00 BBB 3,132,810
Bonds, Series 2005B, 5.600%, 6/01/34
5,000 Iowa Tobacco Settlement Authority, Tobacco Settlement Asset-Backed 6/11 at 101.00 AAA 5,292,300
Revenue Bonds, Series 2001B, 5.600%, 6/01/35 (Pre-refunded
6/01/11)
------------------------------------------------------------------------------------------------------------------------------------
21,300 Total Iowa 15,751,337
------------------------------------------------------------------------------------------------------------------------------------
28
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 1.6% (1.0% OF TOTAL INVESTMENTS)
$ 3,790 Kansas Department of Transportation, Highway Revenue Bonds, Series 3/14 at 100.00 AAA $ 3,809,140
2008, 5.000%, 3/01/23 (UB)
5,790 Sedgwick County Unified School District 259, Wichita, Kansas, General 9/10 at 100.00 AA 5,347,586
Obligation Bonds, Series 2000, 3.500%, 9/01/17
3,200 Wyandotte County Unified School District 500, Kansas, General 9/11 at 100.00 AAA 2,862,080
Obligation Bonds, Series 2001, 4.000%, 9/01/21 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
12,780 Total Kansas 12,018,806
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 2.9% (1.8% OF TOTAL INVESTMENTS)
725 East Baton Rouge Mortgage Finance Authority, Louisiana, GNMA/FNMA 4/09 at 101.50 Aaa 733,780
Mortgage-Backed Securities Program Single Family Mortgage Revenue
Refunding Bonds, Series 1997B-1, 5.750%, 10/01/26
4,000 Lafayette City and Parish, Louisiana, Utilities Revenue Bonds, Series 11/14 at 100.00 AA 3,929,440
2004, 5.250%, 11/01/25 - MBIA Insured
4,650 Louisiana Public Facilities Authority, Revenue Bonds, Baton Rouge 7/14 at 100.00 AA 4,073,912
General Hospital, Series 2004, 5.250%, 7/01/33 - MBIA Insured
Tobacco Settlement Financing Corporation, Louisiana, Tobacco
Settlement Asset-Backed Bonds, Series 2001B:
10,000 5.500%, 5/15/30 5/11 at 101.00 BBB 8,399,100
6,680 5.875%, 5/15/39 5/11 at 101.00 BBB 4,779,139
------------------------------------------------------------------------------------------------------------------------------------
26,055 Total Louisiana 21,915,371
------------------------------------------------------------------------------------------------------------------------------------
MAINE - 0.7% (0.4% OF TOTAL INVESTMENTS)
5,680 Portland, Maine, Airport Revenue Bonds, Series 2003A, 5.000%, 7/13 at 100.00 AAA 5,105,298
7/01/32 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 1.7% (1.1% OF TOTAL INVESTMENTS)
7,720 Maryland Transportation Authority, Airport Parking Revenue Bonds, 3/12 at 101.00 AA 6,778,392
Baltimore-Washington International Airport Passenger Facility, Series
2002B, 5.125%, 3/01/20 - AMBAC Insured (Alternative Minimum Tax)
5,660 Takoma Park, Maryland, Hospital Facilities Revenue Refunding and No Opt. Call AAA 6,112,121
Improvement Bonds, Washington Adventist Hospital, Series 1995,
6.500%, 9/01/12 - FSA Insured (ETM)
------------------------------------------------------------------------------------------------------------------------------------
13,380 Total Maryland 12,890,513
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 6.3% (3.9% OF TOTAL INVESTMENTS)
Massachusetts Development Finance Authority, Revenue Bonds, 100
Cambridge Street Redevelopment, M/SRBC Project, Series 2002A:
4,000 5.125%, 8/01/28 - MBIA Insured 2/12 at 100.00 AA 3,684,600
5,625 5.125%, 2/01/34 - MBIA Insured 2/12 at 100.00 AA 5,042,250
995 Massachusetts Educational Finance Authority, Student Loan Revenue 12/09 at 101.00 AA 1,010,512
Refunding Bonds, Series 2000G, 5.700%, 12/01/11 - MBIA Insured
(Alternative Minimum Tax)
8,730 Massachusetts Health and Educational Facilities Authority, Revenue 10/15 at 100.00 AAA 8,446,624
Bonds, Berkshire Health System, Series 2008, 5.000%, 10/01/19 -
AGC Insured (UB)
500 Massachusetts Health and Educational Facilities Authority, Revenue 7/18 at 100.00 A3 339,440
Bonds, CareGroup Inc., Series 2008E-1, 5.125%, 7/01/38
1,530 Massachusetts Health and Educational Facilities Authority, Revenue 1/09 at 101.00 A2 1,211,944
Bonds, Southcoast Health System Obligated Group, Series 1998A,
4.750%, 7/01/27 - MBIA Insured
5,745 Massachusetts Industrial Finance Agency, Resource Recovery Revenue 12/08 at 102.00 BBB 4,975,630
Refunding Bonds, Ogden Haverhill Project, Series 1998A, 5.600%,
12/01/19 (Alternative Minimum Tax)
10,150 Massachusetts Turnpike Authority, Metropolitan Highway System 1/09 at 100.00 AA 8,051,082
Revenue Bonds, Senior Series 1997A, 5.000%, 1/01/37 - MBIA
Insured
890 Massachusetts, General Obligation Bonds, Consolidated Loan, Series 11/12 at 100.00 AA (4) 948,286
2002C, 5.250%, 11/01/30 (Pre-refunded 11/01/12)
29
NPP
Nuveen Performance Plus Municipal Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS (continued)
Massachusetts, General Obligation Bonds, Consolidated Loan,
Series 2002E:
$ 1,255 5.250%, 1/01/22 (Pre-refunded 1/01/13) - FGIC Insured 1/13 at 100.00 AA (4) $ 1,336,148
3,745 5.250%, 1/01/22 (Pre-refunded 1/01/13) - FGIC Insured 1/13 at 100.00 AA (4) 3,987,152
8,500 Route 3 North Transportation Improvements Association, 6/10 at 100.00 AA (4) 8,921,175
Massachusetts, Lease Revenue Bonds, Series 2000,
5.375%, 6/15/33 (Pre-refunded 6/15/10) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
51,665 Total Massachusetts 47,954,843
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 5.0% (3.1% OF TOTAL INVESTMENTS)
6,155 Birmingham City School District, Oakland County, Michigan, School 5/09 at 100.00 AAA 5,824,661
Building and Site Bonds, Series 1998, 4.750%, 11/01/24 - FSA Insured
5,000 Detroit, Michigan, Second Lien Sewerage Disposal System Revenue 7/15 at 100.00 AA 4,273,700
Bonds, Series 2005A, 5.000%, 7/01/35 - MBIA Insured
1,500 Michigan State Building Authority, Revenue Bonds, Facilities Program, 10/11 at 100.00 A+ 1,455,045
Series 2001I, 5.000%, 10/15/24
5,000 Michigan State Building Authority, Revenue Refunding Bonds, Facilities 10/13 at 100.00 AA 4,667,550
Program, Series 2003II, 5.000%, 10/15/29 - MBIA Insured
7,115 Michigan State Hospital Finance Authority, Hospital Revenue Refunding 3/13 at 100.00 A1 (4) 7,719,419
Bonds, Henry Ford Health System, Series 2003A, 5.500%, 3/01/16
(Pre-refunded 3/01/13)
3,000 Michigan Strategic Fund, Collateralized Limited Obligation Pollution 9/09 at 102.00 AA 2,512,080
Control Revenue Refunding Bonds, Detroit Edison Company, Series
1999A, 5.550%, 9/01/29 - MBIA Insured (Alternative Minimum Tax)
3,050 Michigan Tobacco Settlement Finance Authority, Tobacco Settlement 6/18 at 100.00 Baa3 2,279,845
Asset-Backed Revenue Bonds, Series 2008A, 6.875%, 6/01/42
10,000 Wayne County, Michigan, Airport Revenue Bonds, Detroit Metropolitan 12/08 at 101.00 AA 9,473,200
Wayne County Airport, Series 1998A, 5.375%, 12/01/16 - MBIA Insured
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
40,820 Total Michigan 38,205,500
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 3.2% (2.0% OF TOTAL INVESTMENTS)
3,000 Minneapolis-St. Paul Metropolitan Airports Commission, Minnesota, 1/11 at 100.00 A (4) 3,162,090
Subordinate Airport Revenue Bonds, Series 2001C, 5.250%, 1/01/26
(Pre-refunded 1/01/11) - FGIC Insured
18,820 St. Paul Housing and Redevelopment Authority, Minnesota, Sales Tax 11/15 at 103.00 AAA 21,325,690
Revenue Refunding Bonds, Civic Center Project, Series 1996, 7.100%,
11/01/23 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
21,820 Total Minnesota 24,487,780
------------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 1.3% (0.8% OF TOTAL INVESTMENTS)
9,750 Mississippi Business Finance Corporation, Pollution Control Revenue 4/09 at 100.00 BBB 7,891,163
Refunding Bonds, System Energy Resources Inc. Project, Series 1998,
5.875%, 4/01/22
2,475 Mississippi Hospital Equipment and Facilities Authority, Revenue Bonds, 9/14 at 100.00 AA 2,187,059
Baptist Memorial Healthcare, Series 2008, 5.000%, 9/01/24 (UB)
------------------------------------------------------------------------------------------------------------------------------------
12,225 Total Mississippi 10,078,222
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 1.8% (1.1% OF TOTAL INVESTMENTS)
6,350 Kansas City, Missouri, Airport Revenue Bonds, General Improvement 9/12 at 100.00 A+ 6,388,227
Projects, Series 2003B, 5.250%, 9/01/17 - FGIC Insured
1,845 Missouri Health and Educational Facilities Authority, Revenue Bonds, 5/13 at 100.00 AA 1,789,779
BJC Health System, Series 2003, 5.250%, 5/15/18
3,815 Missouri Health and Educational Facilities Authority, Revenue Bonds, 6/11 at 101.00 AA (4) 4,070,719
SSM Healthcare System, Series 2001A, 5.250%, 6/01/28
(Pre-refunded 6/01/11) - AMBAC Insured
2,000 Missouri-Illinois Metropolitan District Bi-State Development Agency, Mass 10/13 at 100.00 AAA 1,787,200
Transit Sales Tax Appropriation Bonds, Metrolink Cross County Extension
Project, Series 2002B, 5.000%, 10/01/32 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
14,010 Total Missouri 14,035,925
------------------------------------------------------------------------------------------------------------------------------------
30
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MONTANA - 0.6% (0.4% OF TOTAL INVESTMENTS)
$ 595 Montana Board of Housing, Single Family Mortgage Bonds, Series 12/09 at 100.00 AA+ $ 605,656
2000A-2, 6.450%, 6/01/29 (Alternative Minimum Tax)
4,795 Montana Higher Education Student Assistance Corporation, Student Loan 12/08 at 101.00 A2 3,967,623
Revenue Bonds, Subordinate Series 1998B, 5.500%, 12/01/31 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
5,390 Total Montana 4,573,279
------------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 0.2% (0.1% OF TOTAL INVESTMENTS)
1,220 Nebraska Investment Finance Authority, Single Family Housing Revenue 9/10 at 100.00 AAA 1,217,621
Bonds, Series 2000E, 5.850%, 9/01/20 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 3.1% (1.9% OF TOTAL INVESTMENTS)
10,900 Clark County School District, Nevada, General Obligation Bonds, Series 6/12 at 100.00 AA (4) 11,808,842
2002C, 5.500%, 6/15/19 (Pre-refunded 6/15/12) - MBIA Insured
Director of Nevada State Department of Business and Industry,
Revenue Bonds, Las Vegas Monorail Project, First Tier, Series 2000:
3,500 0.000%, 1/01/21 - AMBAC Insured No Opt. Call AA 1,023,540
2,780 0.000%, 1/01/28 - AMBAC Insured No Opt. Call AA 400,014
6,980 5.375%, 1/01/40 - AMBAC Insured 1/10 at 100.00 AA 4,195,957
5,000 Reno, Nevada, Health Facilities Revenue Bonds, Catholic Healthcare 7/17 at 100.00 A 4,017,100
West, Series 2007A, 5.250%, 7/01/31
2,500 Reno, Nevada, Health Facility Revenue Bonds, Catholic Healthcare West, 7/17 at 100.00 A 1,918,700
Trust 2634, 0.777%, 7/01/31 (IF)
------------------------------------------------------------------------------------------------------------------------------------
31,660 Total Nevada 23,364,153
------------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 1.7% (1.0% OF TOTAL INVESTMENTS)
3,265 New Hampshire Health and Education Facilities Authority, Revenue Bonds, 1/15 at 100.00 BBB 2,332,516
Southern New Hampshire University, Series 2005, 5.000%, 1/01/30 -
ACA Insured
New Hampshire Housing Finance Authority, FHLMC Multifamily Housing
Remarketed Revenue Bonds, Countryside LP, Series 1994:
3,725 6.000%, 7/01/18 (Alternative Minimum Tax) 7/10 at 101.00 Aaa 3,709,802
6,945 6.100%, 7/01/24 (Alternative Minimum Tax) 7/10 at 101.00 Aaa 6,511,840
------------------------------------------------------------------------------------------------------------------------------------
13,935 Total New Hampshire 12,554,158
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 8.8% (5.5% OF TOTAL INVESTMENTS)
3,000 New Jersey Economic Development Authority, Transportation Sublease 5/09 at 100.00 AAA 3,054,450
Revenue Bonds, Light Rail Transit System, Series 1999A, 5.250%,
5/01/17 (Pre-refunded 5/01/09) - FSA Insured
2,110 New Jersey Higher Education Assistance Authority, Student Loan 6/10 at 101.00 Aaa 2,148,676
Revenue Bonds, Series 2000A, 6.000%, 6/01/13 - MBIA Insured
(Alternative Minimum Tax)
4,500 New Jersey Transportation Trust Fund Authority, Transportation System No Opt. Call AAA 4,751,055
Bonds, Series 2001C, 5.500%, 12/15/18 - FSA Insured
9,250 New Jersey Transportation Trust Fund Authority, Transportation System 6/13 at 100.00 AAA 10,148,638
Bonds, Series 2003C, 5.500%, 6/15/23 (Pre-refunded 6/15/13)
New Jersey Transportation Trust Fund Authority, Transportation System
Bonds, Series 2006C:
35,000 0.000%, 12/15/29 - FSA Insured No Opt. Call AAA 10,086,300
10,000 0.000%, 12/15/30 - FGIC Insured No Opt. Call AA 2,671,200
10,000 New Jersey Turnpike Authority, Revenue Bonds, Series 2005A, 5.000%, 7/13 at 100.00 AAA 10,057,200
1/01/20 - FSA Insured (UB)
11,070 Tobacco Settlement Financing Corporation, New Jersey, Tobacco 6/12 at 100.00 AAA 11,806,266
Settlement Asset-Backed Bonds, Series 2002, 5.750%, 6/01/32
(Pre-refunded 6/01/12)
4,450 Tobacco Settlement Financing Corporation, New Jersey, Tobacco 6/13 at 100.00 AAA 5,092,847
Settlement Asset-Backed Bonds, Series 2003, 6.750%, 6/01/39
(Pre-refunded 6/01/13)
31
NPP
Nuveen Performance Plus Municipal Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY (continued)
West Deptford Township, Gloucester County, New Jersey, General
Obligation Bonds, Series 2000:
$ 3,150 5.500%, 9/01/21 (Pre-refunded 9/01/10) - FGIC Insured 9/10 at 100.00 Baa1 (4) $ 3,327,566
3,335 5.500%, 9/01/22 (Pre-refunded 9/01/10) - FGIC Insured 9/10 at 100.00 Baa1 (4) 3,522,994
------------------------------------------------------------------------------------------------------------------------------------
95,865 Total New Jersey 66,667,192
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 8.5% (5.3% OF TOTAL INVESTMENTS)
5,500 Dormitory Authority of the State of New York, FHA-Insured Mortgage 2/14 at 100.00 AAA 5,068,525
Revenue Bonds, Kaleida Health, Series 2004, 5.050%, 2/15/25
2,070 Dormitory Authority of the State of New York, Insured Revenue Bonds, 1/09 at 101.00 AA 2,091,611
853 Schools Program, Gateway-Longview Inc., Series 1998A, 5.500%,
7/01/18 - AMBAC Insured
2,250 Dormitory Authority of the State of New York, Lease Revenue Bonds, 7/09 at 101.00 AA (4) 2,332,395
State University Dormitory Facilities, Series 1999C, 5.500%, 7/01/29
(Pre-refunded 7/01/09) - 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 BBB+ 1,628,000
9,235 6.125%, 7/01/21 - RAAI Insured 7/09 at 101.00 BBB+ 9,008,004
1,500 Dormitory Authority of the State of New York, Revenue Bonds, St. 2/09 at 100.00 AA 1,357,440
Barnabas Hospital, Series 1997, 5.450%, 8/01/35 - AMBAC Insured
1,500 Hempstead Industrial Development Agency, New York, Resource Recovery No Opt. Call Baa3 1,457,325
Revenue Refunding Bonds, American Ref-Fuel Company of Hempstead
LP, Series 2001, 5.000%, 12/01/10 (Mandatory put 6/01/10)
13,220 Metropolitan Transportation Authority, New York, Dedicated Tax Fund 11/12 at 100.00 AAA 13,286,100
Bonds, Series 2002A, 5.500%, 11/15/26 - FSA Insured
13,335 Metropolitan Transportation Authority, New York, Transportation Revenue 11/16 at 100.00 AAA 10,733,875
Bonds, Series 2006B, 4.500%, 11/15/32 - FSA Insured (UB)
68 Metropolitan Transportation Authority, New York, Transportation Revenue 11/16 at 100.00 AAA 34,840
Bonds, Series 2006B, Drivers 1662, 5.904%, 11/15/32 - FSA Insured
(IF)
7,810 New York City Transitional Finance Authority, New York, Future Tax 8/09 at 101.00 AAA 8,138,723
Secured Bonds, Fiscal Series 2000A, 5.750%, 8/15/24
(Pre-refunded 8/15/09)
6,300 New York City, New York, General Obligation Bonds, Fiscal Series 2000A, 5/10 at 101.00 AAA 6,661,431
6.250%, 5/15/26 - FSA Insured
3,000 New York State Energy Research and Development Authority, Pollution 3/09 at 102.00 Aaa 2,587,230
Control Revenue Bonds, Rochester Gas and Electric Corporation, Series
1998A, 5.950%, 9/01/33 - MBIA Insured (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
67,368 Total New York 64,385,499
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 1.5% (1.0% OF TOTAL INVESTMENTS)
4,900 Charlotte-Mecklenburg Hospital Authority, North Carolina, Healthcare 1/15 at 100.00 AA- (4) 5,231,289
System Revenue Bonds, DBA Carolinas Healthcare System, Series
2005A, 5.000%, 1/15/45 (Pre-refunded 1/15/15)
2,000 North Carolina Municipal Power Agency 1, Catawba Electric Revenue 1/09 at 101.00 AA 1,891,680
Bonds, Series 1998A, 5.000%, 1/01/20 - MBIA Insured
5,500 The Charlotte-Mecklenberg Hospital Authority, North Carolina, Doing 1/18 at 100.00 AA- 4,590,300
Business as Carolinas HealthCare System, Health Care Refunding
Revenue Bonds, Series 2008A, 5.000%, 1/15/39 - AGC Insured
------------------------------------------------------------------------------------------------------------------------------------
12,400 Total North Carolina 11,713,269
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 6.7% (4.2% OF TOTAL INVESTMENTS)
10,000 American Municipal Power Ohio Inc., General Revenue Bonds, Series 2/18 at 100.00 A1 8,916,300
2008, 5.250%, 2/15/43
32
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
OHIO (continued)
Buckeye Tobacco Settlement Financing Authority, Ohio, Tobacco
Settlement Asset-Backed Revenue Bonds, Senior Lien, Series
2007A-2:
$ 345 5.125%, 6/01/24 6/17 at 100.00 BBB $ 270,411
3,570 5.875%, 6/01/30 6/17 at 100.00 BBB 2,502,606
3,475 5.750%, 6/01/34 6/17 at 100.00 BBB 2,314,350
14,830 5.875%, 6/01/47 6/17 at 100.00 BBB 9,277,796
5,150 Buckeye Tobacco Settlement Financing Authority, Ohio, Tobacco 6/22 at 100.00 BBB 2,565,576
Settlement Asset-Backed Revenue Bonds, Senior Lien, Series 2007A-3,
0.000%, 6/01/37
6,720 Cleveland, Ohio, Airport System Revenue Bonds, Series 2001A, 5.000%, 1/10 at 101.00 AAA 6,092,419
1/01/31 - FSA Insured
780 Cleveland, Ohio, Airport System Revenue Bonds, Series 2001A, 5.000%, 1/10 at 101.00 AAA 812,464
1/01/31 (Pre-refunded 1/01/10) - FSA Insured
3,650 Montgomery County, Ohio, Revenue Bonds, Catholic Health Initiatives, 5/14 at 100.00 AA 3,141,373
Series 2004A, 5.000%, 5/01/30
5,800 Ohio Water Development Authority, Solid Waste Disposal Revenue Bonds, 3/09 at 102.00 N/R 4,649,164
Bay Shore Power, Series 1998A, 5.875%, 9/01/20 (Alternative
Minimum Tax)
12,400 Ohio Water Development Authority, Solid Waste Disposal Revenue Bonds, 9/09 at 102.00 N/R 10,633,868
Bay Shore Power, Series 1998B, 6.625%, 9/01/20 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
66,720 Total Ohio 51,176,327
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 0.4% (0.2% OF TOTAL INVESTMENTS)
3,400 Tulsa Municipal Airport Trust, Oklahoma, Revenue Refunding Bonds, 6/09 at 100.00 B- 3,370,046
American Airlines Inc., Series 2000B, 6.000%, 6/01/35 (Mandatory put
12/01/08) (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 1.2% (0.7% OF TOTAL INVESTMENTS)
9,150 Port of St. Helens, Oregon, Pollution Control Revenue Bonds, Portland No Opt. Call BBB 8,982,281
General Electric Company, Series 1985B, 4.800%, 6/01/10
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 3.6% (2.2% OF TOTAL INVESTMENTS)
Bethlehem Authority, Northampton and Lehigh Counties, Pennsylvania,
Guaranteed Water Revenue Bonds, Series 1998:
3,125 0.000%, 5/15/22 - FSA Insured No Opt. Call AAA 1,458,188
3,125 0.000%, 5/15/23 - FSA Insured No Opt. Call AAA 1,368,656
3,135 0.000%, 5/15/24 - FSA Insured No Opt. Call AAA 1,285,538
3,155 0.000%, 5/15/26 - FSA Insured No Opt. Call AAA 1,134,002
4,145 0.000%, 11/15/26 - FSA Insured No Opt. Call AAA 1,447,020
2,800 0.000%, 5/15/28 - FSA Insured No Opt. Call AAA 885,444
3,000 0.000%, 11/15/28 - FSA Insured No Opt. Call AAA 921,150
2,050 Carbon County Industrial Development Authority, Pennsylvania, Resource No Opt. Call BBB- 2,071,115
Recovery Revenue Refunding Bonds, Panther Creek Partners Project,
Series 2000, 6.650%, 5/01/10 (Alternative Minimum Tax)
11,000 Delaware County Authority, Pennsylvania, Revenue Bonds, Catholic 11/08 at 102.00 AA 10,647,670
Health East, Series 1998A, 4.875%, 11/15/18 - AMBAC Insured
1,250 Erie, Pennsylvania, Water Authority, Water Revenue Bonds, Series 2008, 12/18 at 100.00 AAA 1,069,400
5.000%, 12/01/43 - FSA Insured
Pennsylvania Economic Development Financing Authority, Senior
Lien Resource Recovery Revenue Bonds, Northampton Generating
Project, Series 1994A:
700 6.400%, 1/01/09 (Alternative Minimum Tax) 12/08 at 100.00 B- 691,908
4,500 6.500%, 1/01/13 (Alternative Minimum Tax) 1/09 at 100.00 B- 4,111,695
400 Pennsylvania Economic Development Financing Authority, Subordinate 1/09 at 100.00 N/R 378,320
Resource Recovery Revenue Bonds, Northampton Generating Project,
Series 1994C, 6.875%, 1/01/11 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
42,385 Total Pennsylvania 27,470,106
------------------------------------------------------------------------------------------------------------------------------------
33
NPP
Nuveen Performance Plus Municipal Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 0.6% (0.4% OF TOTAL INVESTMENTS)
$ 1,250 Puerto Rico Highway and Transportation Authority, Highway Revenue 7/10 at 101.00 AAA $ 1,335,613
Bonds, Series 2000B, 5.875%, 7/01/21 (Pre-refunded 7/01/10) -
MBIA Insured
25,000 Puerto Rico Sales Tax Financing Corporation, Sales Tax Revenue Bonds, No Opt. Call AA 1,780,250
Series 2007A, 0.000%, 8/01/47 - AMBAC Insured
3,750 Puerto Rico Sales Tax Financing Corporation, Sales Tax Revenue Bonds, 8/17 at 100.00 A+ 1,791,375
Trust 2653, 0.777%, 8/01/57 (IF)
------------------------------------------------------------------------------------------------------------------------------------
30,000 Total Puerto Rico 4,907,238
------------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 0.7% (0.4% OF TOTAL INVESTMENTS)
2,000 Kent County Water Authority, Rhode Island, General Revenue Bonds, 7/12 at 100.00 AA 1,937,100
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 BBB+ 1,174,219
1,080 5.250%, 3/15/18 - RAAI Insured 3/12 at 101.00 BBB+
1,570 Rhode Island Tobacco Settlement Financing Corporation, Tobacco 6/12 at 100.00 BBB 1,225,558
Settlement Asset-Backed Bonds, Series 2002A, 6.125%, 6/01/32
------------------------------------------------------------------------------------------------------------------------------------
5,910 Total Rhode Island 5,325,552
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 4.5% (2.8% OF TOTAL INVESTMENTS)
2,625 Medical University Hospital Authority, South Carolina, FHA-Insured 8/14 at 100.00 AA 2,565,806
Mortgage Revenue Bonds, Series 2004A, 5.250%, 2/15/25 - MBIA
Insured
22,855 Piedmont Municipal Power Agency, South Carolina, Electric Revenue No Opt. Call AA 5,280,648
Bonds, Series 2004A-2, 0.000%, 1/01/31 - AMBAC Insured
6,925 South Carolina, General Obligation Bonds, Series 1999A, 4.000%, 10/01/14 10/09 at 101.00 Aaa 6,983,378
18,825 Tobacco Settlement Revenue Management Authority, South Carolina, 5/12 at 100.00 BBB (4) 19,578,564
Tobacco Settlement Asset-Backed Bonds, Series 2001B, 6.000%,
5/15/22 (Pre-refunded 5/15/12)
------------------------------------------------------------------------------------------------------------------------------------
51,230 Total South Carolina 34,408,396
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 1.4% (0.9% OF TOTAL INVESTMENTS)
2,860 Johnson City Health and Educational Facilities Board, Tennessee, 7/23 at 100.00 AA (4) 2,864,147
Hospital Revenue Refunding and Improvement Bonds, Johnson City
Medical Center, Series 1998C, 5.125%, 7/01/25 (Pre-refunded
7/01/23) - MBIA Insured
1,700 Memphis-Shelby County Airport Authority, Tennessee, Airport Revenue 3/10 at 101.00 AA 1,553,426
Bonds, Series 1999D, 6.000%, 3/01/24 - AMBAC Insured (Alternative
Minimum Tax)
6,000 Metropolitan Government of Nashville-Davidson County Health and 12/17 at 100.00 AA 6,250,200
Educational Facilities Board, Tennessee, Revenue Refunding and
Improvement Bonds, Meharry Medical College, Series 1996,
6.000%, 12/01/19 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
10,560 Total Tennessee 10,667,773
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 7.9% (4.9% OF TOTAL INVESTMENTS)
3,975 Bell County Health Facilities Development Corporation, Texas, Revenue 2/10 at 101.00 AAA 4,204,397
Bonds, Scott and White Memorial Hospital and Scott, Sherwood and
Brindley Foundation, Series 2000A, 6.125%, 8/15/23 (Pre-refunded
2/15/10) - MBIA Insured
5,000 Bexar Metropolitan Water District, Texas, Waterworks System Revenue 5/16 at 100.00 AA 4,505,550
Bonds, Series 2006, 5.000%, 5/01/35 - MBIA Insured
Central Texas Regional Mobility Authority, Travis and Williamson
Counties, Toll Road Revenue Bonds, Series 2005:
4,000 5.000%, 1/01/35 - FGIC Insured 1/15 at 100.00 AA 3,157,400
13,000 5.000%, 1/01/45 - FGIC Insured 1/15 at 100.00 AA 9,795,110
34
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS (continued)
$ 4,000 Houston Community College, Texas, Limited Tax General Obligation 2/13 at 100.00 AA $ 3,869,360
Bonds, Series 2003, 5.000%, 2/15/27 - AMBAC Insured
3,885 Houston Independent School District, Public Facility Corporation, Harris No Opt. Call AA 2,159,710
County, Texas, Lease Revenue Bonds, Cesar E. Chavez High School,
Series 1998A, 0.000%, 9/15/19 - AMBAC Insured
33,855 Leander Independent School District, Williamson and Travis Counties, 8/14 at 23.67 AAA 4,472,246
Texas, General Obligation Bonds, Series 2006, 0.000%, 8/15/40
Leander Independent School District, Williamson and Travis
Counties, Texas, Unlimited Tax School Building and Refunding
Bonds, Series 1998:
4,930 0.000%, 8/15/20 12/08 at 52.84 AAA 2,550,289
3,705 0.000%, 8/15/22 12/08 at 47.05 AAA 1,609,267
215 Lubbock Housing Finance Corporation, Texas, GNMA Mortgage-Backed 11/08 at 101.00 AAA 217,698
Securities Program Single Family Mortgage Revenue Refunding Bonds,
Series 1997A, 6.125%, 12/01/17
3,480 Pearland, Texas, General Obligation Bonds, Series 2002, 5.000%, 3/12 at 100.00 Aaa 3,697,361
3/01/27 (Pre-refunded 3/01/12) - FGIC Insured
6,835 San Antonio, Texas, Electric and Gas System Revenue Refunding Bonds, 2/09 at 100.00 Aa1 6,478,623
New Series 1998A, 4.500%, 2/01/21
6,000 Spring Branch Independent School District, Harris County, Texas, Limited 2/11 at 100.00 AAA 6,315,600
Tax Schoolhouse and Refunding Bonds, Series 2001, 5.125%, 2/01/26
(Pre-refunded 2/01/11)
4,000 Tarrant Regional Water District, Texas, Water Revenue Refunding and 3/13 at 100.00 AAA 3,980,480
Improvement Bonds, Series 1999, 5.000%, 3/01/22 - FSA Insured
1,740 Texas, General Obligation Bonds, Water Financial Assistance, State 8/09 at 100.00 Aa1 1,743,515
Participation Program, Series 1999C, 5.500%, 8/01/29 - MBIA Insured
1,690 Webb County, Laredo, Texas, Combination Tax and Sewer System, 2/09 at 100.00 AA 1,665,934
Revenue Certificates of Obligation, Series 1998A, 4.500%, 2/15/18 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
100,310 Total Texas 60,422,540
------------------------------------------------------------------------------------------------------------------------------------
UTAH - 3.4% (2.1% OF TOTAL INVESTMENTS)
Utah County, Utah, Hospital Revenue Bonds, IHC Health Services Inc.,
Series 1997:
12,885 5.250%, 8/15/21 - MBIA Insured (ETM) 12/08 at 100.00 AA (4) 12,912,445
3,900 5.250%, 8/15/26 - MBIA Insured (ETM) 12/08 at 100.00 AA (4) 3,908,307
2,280 Utah Housing Corporation, Single Family Mortgage Bonds, Series 1/12 at 100.00 AA- 2,158,248
2002A-1, 5.300%, 7/01/18 (Alternative Minimum Tax)
5 Utah Housing Finance Agency, Single Family Mortgage Bonds, Series 1/10 at 100.00 Aa2 5,085
2000B, 6.250%, 7/01/22 (Alternative Minimum Tax)
905 Utah Housing Finance Agency, Single Family Mortgage Bonds, Series 7/10 at 100.00 Aa3 911,616
2000D-1, 6.050%, 7/01/14 (Alternative Minimum Tax)
570 Utah Housing Finance Agency, Single Family Mortgage Bonds, Series 7/10 at 100.00 Aa2 579,280
2000E-1, Class II, 6.150%, 1/01/27 (Alternative Minimum Tax)
1,175 Utah Housing Finance Agency, Single Family Mortgage Bonds, Series 7/10 at 100.00 Aa3 1,183,202
2000E-1, Class III, 6.000%, 1/01/15 (Alternative Minimum Tax)
805 Utah Housing Finance Agency, Single Family Mortgage Bonds, Series 7/11 at 100.00 Aa2 708,625
2001A-2, 5.650%, 7/01/27 (Alternative Minimum Tax)
615 Utah Housing Finance Agency, Single Family Mortgage Bonds, Series 1/11 at 100.00 Aaa 611,316
2001B-1, 5.750%, 7/01/19 (Alternative Minimum Tax)
3,000 Utah Water Finance Agency, Revenue Bonds, Pooled Loan Financing 10/12 at 100.00 Aa3 (4) 3,238,950
Program, Series 2002C, 5.250%, 10/01/28 (Pre-refunded 10/01/12) -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
26,140 Total Utah 26,217,074
------------------------------------------------------------------------------------------------------------------------------------
35
NPP
Nuveen Performance Plus Municipal Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
VIRGIN ISLANDS - 0.8% (0.5% OF TOTAL INVESTMENTS)
$ 4,700 Virgin Islands Public Finance Authority, Gross Receipts Taxes Loan Note, 10/14 at 100.00 A3 $ 3,752,433
Series 2003, 5.000%, 10/01/33 - RAAI Insured
2,500 Virgin Islands Public Finance Authority, Revenue Bonds, Refinery 1/14 at 100.00 BBB 1,977,275
Project - Hovensa LLC, Series 2003, 6.125%, 7/01/22 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
7,200 Total Virgin Islands 5,729,708
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 5.5% (3.4% OF TOTAL INVESTMENTS)
12,235 Chelan County Public Utility District 1, Washington, Columbia River-Rock No Opt. Call AA 4,195,871
Island Hydro-Electric System Revenue Refunding Bonds, Series 1997A,
0.000%, 6/01/26 - MBIA Insured
Cowlitz County Public Utilities District 1, Washington, Electric Production
Revenue Bonds, Series 2004:
465 5.000%, 9/01/22 - FGIC Insured 9/14 at 100.00 A- 435,370
3,100 5.000%, 9/01/28 - FGIC Insured 9/14 at 100.00 A- 2,762,813
5,000 Energy Northwest, Washington, Electric Revenue Refunding Bonds, 7/13 at 100.00 Aaa 5,257,450
Nuclear Project 1, Series 2008, 5.500%, 7/01/16 (UB)
10,000 Washington State Healthcare Facilities Authority, Revenue Bonds, 10/16 at 100.00 AA 7,678,900
Providence Health Care Services, Series 2006A, 4.625%, 10/01/34 -
FGIC Insured
4,685 Washington State Healthcare Facilities Authority, Revenue Bonds, 12/09 at 101.00 AA (4) 4,914,706
Providence Services, Series 1999, 5.375%, 12/01/19 (Pre-refunded
12/01/09) - MBIA Insured
5,000 Washington State Housing Finance Commission, Non-Profit Housing 7/09 at 101.00 BBB+ 4,340,000
Revenue Bonds, Kline Galland Center, Series 1999, 6.000%, 7/01/29 -
RAAI Insured
12,000 Washington, Motor Vehicle Fuel Tax General Obligation Bonds, Series
2001D, 5.250%, 1/01/26 1/11 at 100.00 AA+ 12,023,400
------------------------------------------------------------------------------------------------------------------------------------
52,485 Total Washington 41,608,510
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 0.6% (0.4% OF TOTAL INVESTMENTS)
5,000 Mason County, West Virginia, Pollution Control Revenue Bonds, 10/11 at 100.00 BBB 4,303,600
Appalachian Power Company, Series 2003L, 5.500%, 10/01/22
------------------------------------------------------------------------------------------------------------------------------------
36
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 3.1% (1.9% OF TOTAL INVESTMENTS)
11,620 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, 2/10 at 101.00 BBB+ 10,450,331
Marshfield Clinic, Series 1999, 6.250%, 2/15/29 - RAAI Insured
7,490 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, 1/09 at 103.00 N/R 6,130,865
Millennium Housing Foundation Inc., Series 1998, 6.100%, 1/01/28
9,810 Wisconsin Housing and Economic Development Authority, Home 9/14 at 100.00 AA 6,991,587
Ownership Revenue Bonds, Series 2005C, 4.875%, 3/01/36
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
28,920 Total Wisconsin 23,572,783
------------------------------------------------------------------------------------------------------------------------------------
$ 1,601,118 Total Investments (cost $1,299,989,044) - 160.8% 1,222,971,532
=============-----------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (5.0)% (38,288,000)
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.0% 15,462,237
--------------------------------------------------------------------------------------------------------------------
Auction Rate Preferred Shares, at Liquidation Value - (57.8)% (5) (439,650,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 760,495,769
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares unless
otherwise noted.
(2) Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates (month
and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying
prices at later dates. Certain mortgage-backed securities
may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered
public accounting firm): Using the higher of Standard &
Poor's Group ("Standard & Poor's") or Moody's Investor
Service, Inc. ("Moody's") rating. Ratings below BBB by
Standard & Poor's or Baa by Moody's are considered to be
below investment grade.
The Portfolio of Investments may reflect the ratings on
certain bonds insured by ACA, AGC, AMBAC, FGIC, FSA, MBIA,
RAAI and SYNCORA as of October 31, 2008. Please see the
Portfolio Managers' Commentary for an expanded discussion of
the affect on the Fund of changes to the ratings of certain
bonds in the portfolio resulting from changes to the ratings
of the underlying insurers both during the period and after
period end.
(4) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which ensure
the timely payment of principal and interest. Such
investments are normally considered to be equivalent to AAA
rated securities.
(5) Auction Rate Preferred Shares, at Liquidation Value as a
percentage of Total Investments is 35.9%.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected
as a financing transaction pursuant to the provisions of
SFAS No. 140.
See accompanying notes to financial statements.
37
NMA
Nuveen Municipal Advantage Fund, Inc.
Portfolio of INVESTMENTS
October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 3.5% (2.1% OF TOTAL INVESTMENTS)
$ 10,000 Jefferson County, Alabama, Sewer Revenue Capital Improvement 2/09 at 101.00 AAA $10,189,800
Warrants, Series 1999A, 5.375%, 2/01/36 (Pre-refunded 2/01/09) -
FGIC Insured
5,075 Lauderdale County and Florence Healthcare Authority, Alabama, Revenue 7/09 at 101.00 AA 4,187,027
Bonds, Coffee Health Group, Series 1999A, 5.250%, 7/01/24 -
MBIA Insured
5,155 Phenix City Industrial Development Board, Alabama, Environmental 5/12 at 100.00 BBB 3,873,879
Improvement Revenue Bonds, MeadWestvaco Corporation, Series
2002A, 6.350%, 5/15/35 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
20,230 Total Alabama 18,250,706
------------------------------------------------------------------------------------------------------------------------------------
ALASKA - 0.9% (0.5% OF TOTAL INVESTMENTS)
Alaska Housing Finance Corporation, General Housing Purpose Bonds,
Series 2005A:
1,125 5.250%, 12/01/34 - FGIC Insured 12/14 at 100.00 AA 1,047,983
1,280 5.250%, 12/01/41 - FGIC Insured 12/14 at 100.00 AA 1,153,536
Northern Tobacco Securitization Corporation, Alaska, Tobacco Settlement
Asset-Backed Bonds, Series 2006A:
895 4.625%, 6/01/23 12/08 at 100.00 Baa3 727,393
3,250 5.000%, 6/01/46 6/14 at 100.00 Baa3 1,729,000
------------------------------------------------------------------------------------------------------------------------------------
6,550 Total Alaska 4,657,912
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 1.9% (1.2% OF TOTAL INVESTMENTS)
4,905 Maricopa County Industrial Development Authority, Arizona, Health 7/17 at 100.00 A 4,001,352
Facility Revenue Bonds, Catholic Healthcare West, Series 2007A,
5.250%, 7/01/32
5,000 Maricopa County Pollution Control Corporation, Arizona, Remarketed 12/08 at 100.00 Baa3 3,886,750
Revenue Refunding Bonds, Public Service Company of New Mexico,
Series 1992A, 5.750%, 11/01/22
2,500 Phoenix, Arizona, Civic Improvement Corporation, Senior Lien Airport 7/18 at 100.00 AA- 2,221,425
Revenue Bonds, Series 2008A, 5.000%, 7/01/38
------------------------------------------------------------------------------------------------------------------------------------
12,405 Total Arizona 10,109,527
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 16.0% (9.6% OF TOTAL INVESTMENTS)
3,500 Alameda Corridor Transportation Authority, California, Subordinate Lien 10/17 at 100.00 AA 2,802,135
Revenue Bonds, Series 2004A, 0.000%, 10/01/25 - AMBAC Insured
Calexico Unified School District, Imperial County, California, General
Obligation Bonds, Series 2005B:
4,070 0.000%, 8/01/32 - FGIC Insured No Opt. Call AA 818,640
6,410 0.000%, 8/01/34 - FGIC Insured No Opt. Call AA 1,125,852
3,000 California Health Facilities Financing Authority, Health Facility Revenue 3/13 at 100.00 A 2,367,600
Bonds, Adventist Health System/West, Series 2003A, 5.000%, 3/01/33
7,500 California State Public Works Board, Lease Revenue Bonds, Department 6/14 at 100.00 A 6,828,750
of Mental Health, Coalinga State Hospital, Series 2004A, 5.125%,
6/01/29
11,200 California, General Obligation Bonds, Series 2003, 5.250%, 2/01/28 8/13 at 100.00 A+ 10,740,688
4,000 California, General Obligation Bonds, Trust 2652, 0.751%, 6/01/37 (IF) 6/17 at 100.00 A+ 2,202,960
9,955 Capistrano Unified School District, Orange County, California, Special Tax No Opt. Call AA 2,210,707
Bonds, Community Facilities District, Series 2005, 0.000%, 9/01/31 -
FGIC Insured
38
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (continued)
Colton Joint Unified School District, San Bernardino County,
California, General Obligation Bonds, Series 2006C:
$ 3,800 0.000%, 2/01/33 - FGIC Insured 2/15 at 38.73 AA $ 740,316
3,795 0.000%, 2/01/37 - FGIC Insured No Opt. Call AA 583,026
7,535 Contra Costa County, California, GNMA Mortgage-Backed Securities No Opt. Call AAA 9,018,717
Program Home Mortgage Revenue Bonds, Series 1989, 7.750%,
5/01/22 (Alternative Minimum Tax) (ETM)
8,145 Cupertino Union School District, Santa Clara County, California, General 8/13 at 55.54 AA 2,924,299
Obligation Bonds, Series 2003B, 0.000%, 8/01/25 - FGIC Insured
2,510 Folsom Cordova Unified School District, Sacramento County, California, No Opt. Call AA 738,216
General Obligation Bonds, School Facilities Improvement District 1,
Series 2004B, 0.000%, 10/01/28 - MBIA Insured
3,360 Folsom Cordova Unified School District, Sacramento County, California, No Opt. Call AA 1,070,966
General Obligation Bonds, School Facilities Improvement District 2,
Series 2002A, 0.000%, 7/01/27 - MBIA Insured
2,315 Gateway Unified School District, California, General Obligation Bonds, No Opt. Call AA 497,494
Series 2004B, 0.000%, 8/01/32 - FGIC Insured
1,000 Golden State Tobacco Securitization Corporation, California, Enhanced 6/17 at 100.00 BBB 590,500
Tobacco Settlement Asset-Backed Bonds, Series 2007A-1, 5.125%,
6/01/47
3,000 Golden State Tobacco Securitization Corporation, California, Tobacco No Opt. Call AAA 980,190
Settlement Asset-Backed Revenue Bonds, Series 2005A, 0.000%,
6/01/26 - FSA Insured
1,275 Madera Unified School District, Madera County, California, General 8/12 at 100.00 AAA 1,277,040
Obligation Bonds, Series 2002, 5.250%, 8/01/23 - FSA Insured
North Orange County Community College District, California, General
Obligation Bonds, Series 2003B:
7,735 0.000%, 8/01/25 - FGIC Insured No Opt. Call AA 2,896,990
4,000 0.000%, 8/01/26 - FGIC Insured No Opt. Call AA 1,400,680
5,000 Palmdale Community Redevelopment Agency, California, Residential No Opt. Call AAA 5,528,500
Mortgage Revenue Refunding Bonds, Series 1991B, 7.375%, 2/01/12
(ETM)
5,000 Palmdale Community Redevelopment Agency, California, Single Family No Opt. Call AAA 6,323,500
Restructured Mortgage Revenue Bonds, Series 1986A, 8.000%, 3/01/16
(Alternative Minimum Tax) (ETM)
9,315 Perris, California, GNMA Mortgage-Backed Securities Program Single No Opt. Call AAA 10,863,339
Family Mortgage Revenue Bonds, Series 1989A, 7.600%, 1/01/23
(Alternative Minimum Tax) (ETM)
7,660 San Joaquin Hills Transportation Corridor Agency, Orange County, No Opt. Call AAA 3,373,847
California, Senior Lien Toll Road Revenue Bonds, Series 1993, 0.000%,
1/01/24 (ETM)
23,000 San Joaquin Hills Transportation Corridor Agency, Orange County, No Opt. Call AA 3,877,800
California, Toll Road Revenue Refunding Bonds, Series 1997A, 0.000%,
1/15/35 - MBIA Insured
7,250 San Jose-Evergreen Community College District, Santa Clara County, 9/15 at 47.82 Aa2 2,044,210
California, General Obligation Bonds, Series 2005A, 0.000%, 9/01/29 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
155,330 Total California 83,826,962
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 7.6% (4.5% OF TOTAL INVESTMENTS)
1,600 Arkansas River Power Authority, Colorado, Power Revenue Bonds, Series 10/16 at 100.00 BBB 1,221,504
2006, 5.250%, 10/01/40 - SYNCORA GTY Insured
9,440 Colorado Health Facilities Authority, Colorado, Revenue Bonds, Catholic 9/16 at 100.00 AA 6,957,658
Health Initiatives, Series 2006A, 4.500%, 9/01/38
8,350 Colorado Health Facilities Authority, Remarketed Revenue Bonds, Kaiser 12/08 at 101.00 AAA 8,450,117
Permanente System, Series 1994A, 5.350%, 11/01/16 (ETM)
1,150 Colorado Health Facilities Authority, Revenue Bonds, Poudre Valley Health 9/18 at 102.00 AAA 1,036,162
System, Series 2005C, 5.250%, 3/01/40 - FSA Insured
2,000 Denver Convention Center Hotel Authority, Colorado, Senior Revenue 11/16 at 100.00 BBB- 1,410,460
Bonds, Convention Center Hotel, Series 2006, 4.750%, 12/01/35 -
SYNCORA GTY Insured
39
NMA
Nuveen Municipal Advantage Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
COLORADO (continued)
Denver, Colorado, Airport Revenue Bonds, Trust 2365:
$ 1,340 2.901%, 11/15/23 - FGIC Insured (IF) 11/16 at 100.00 AA $ 923,662
825 1.184%, 11/15/24 - FGIC Insured (IF) 11/16 at 100.00 AA 558,212
1,085 1.186%, 11/15/25 - FGIC Insured (IF) 11/16 at 100.00 AA 699,196
E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, Series
1997B:
2,650 0.000%, 9/01/16 - MBIA Insured No Opt. Call AA 1,713,676
8,645 0.000%, 9/01/26 - MBIA Insured No Opt. Call AA 2,569,726
1,000 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, Series 9/10 at 102.00 AAA 1,075,660
2000A, 5.750%, 9/01/35 (Pre-refunded 9/01/10) - MBIA Insured
E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, Series
2000B:
7,500 0.000%, 9/01/29 - MBIA Insured No Opt. Call AA 1,774,425
10,000 0.000%, 9/01/31 - MBIA Insured No Opt. Call AA 2,024,100
10,000 0.000%, 9/01/32 - MBIA Insured No Opt. Call AA 1,878,700
Platte River Power Authority, Colorado, Power Revenue Refunding Bonds,
Series 2002EE:
1,030 5.375%, 6/01/17 (Pre-refunded 6/01/12) 6/12 at 100.00 Aa2 (4) 1,110,865
4,890 5.375%, 6/01/18 (Pre-refunded 6/01/12) 6/12 at 100.00 Aa2 (4) 5,273,914
Platte River Power Authority, Colorado, Power Revenue Refunding Bonds,
Series 2002EE:
970 5.375%, 6/01/17 6/12 at 100.00 AA 1,011,254
110 5.375%, 6/01/18 6/12 at 100.00 AA 113,726
------------------------------------------------------------------------------------------------------------------------------------
72,585 Total Colorado 39,803,017
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 0.2% (0.1% OF TOTAL INVESTMENTS)
1,380 District of Columbia Housing Finance Agency, GNMA/FNMA Single Family 12/08 at 101.00 AAA 1,380,000
Mortgage Revenue Bonds, Series 1997B, 5.900%, 12/01/28
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 3.4% (2.0% OF TOTAL INVESTMENTS)
2,770 Florida Housing Finance Corporation, Housing Revenue Bonds, Stratford 12/10 at 100.00 AAA 2,413,390
Point Apartments, Series 2000O-1, 5.850%, 12/01/31 - FSA Insured
(Alternative Minimum Tax)
8,100 South Miami Health Facilities Authority, Florida, Revenue Bonds, Baptist 8/17 at 100.00 AA- 4,956,309
Health Systems of South Florida, Trust 1025, 7.368%, 8/15/42 (IF)
10,130 Tampa, Florida, Healthcare System Revenue Bonds, Allegany Health 12/08 at 100.00 AA (4) 10,271,617
System - St. Mary's Hospital, Series 1993, 5.125%, 12/01/23 - MBIA
Insured (ETM)
------------------------------------------------------------------------------------------------------------------------------------
21,000 Total Florida 17,641,316
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 1.1% (0.7% OF TOTAL INVESTMENTS)
4,000 Augusta, Georgia, Water and Sewerage Revenue Bonds, Series 2004, 10/14 at 100.00 AAA 3,927,800
5.250%, 10/01/39 - FSA Insured
2,900 Coffee County Hospital Authority, Georgia, Revenue Bonds, Coffee County 12/14 at 100.00 BBB 2,022,170
Regional Medical Center, Series 2004, 5.000%, 12/01/26
------------------------------------------------------------------------------------------------------------------------------------
6,900 Total Georgia 5,949,970
------------------------------------------------------------------------------------------------------------------------------------
HAWAII - 0.5% (0.3% OF TOTAL INVESTMENTS)
2,215 Hawaii Housing and Community Development Corporation, GNMA 7/10 at 102.00 AA 2,080,749
Collateralized Multifamily Housing Revenue Bonds, Sunset Villas, Series
2000, 5.700%, 7/20/31
525 Hawaii Housing Finance and Development Corporation, Single Family 1/09 at 101.00 AAA 521,672
Mortgage Purchase Revenue Bonds, Series 1997A, 5.750%, 7/01/30
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
2,740 Total Hawaii 2,602,421
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 15.9% (9.5% OF TOTAL INVESTMENTS)
4,345 Chicago Board of Education, Illinois, Unlimited Tax General Obligation No Opt. Call AA 1,330,613
Bonds, Dedicated Tax Revenues, Series 1998B-1, 0.000%, 12/01/28 -
FGIC Insured
4,010 Chicago Board of Education, Illinois, Unlimited Tax General Obligation No Opt. Call AA 1,013,046
Bonds, Dedicated Tax Revenues, Series 1999A, 0.000%, 12/01/31 -
FGIC Insured
40
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS (continued)
$ 5,865 Chicago, Illinois, General Obligation Bonds, Neighborhoods Alive 21 7/10 at 101.00 AAA $ 6,304,171
Program, Series 2000A, 6.500%, 1/01/35 (Pre-refunded 7/01/10) -
FGIC Insured
5,000 Chicago, Illinois, Second Lien Passenger Facility Charge Revenue Bonds, 1/11 at 101.00 AA 4,023,600
O'Hare International Airport, Series 2001A, 5.375%, 1/01/32 - AMBAC
Insured (Alternative Minimum Tax)
2,000 Illinois Finance Authority, Revenue Bonds, Children's Memorial Hospital, 8/18 at 100.00 AAA 1,706,740
Series 2008, 5.250%, 8/15/47 - AGC Insured (UB)
8,395 Illinois Finance Authority, Revenue Bonds, Loyola University of Chicago, 7/17 at 100.00 AA 6,342,423
Tender Option Bond Trust 1137, 7.720%, 7/01/46 (IF)
6,000 Illinois Health Facilities Authority, Revenue Bonds, Condell Medical 5/12 at 100.00 Baa3 5,326,440
Center, Series 2002, 5.750%, 5/15/22
6,165 Illinois Health Facilities Authority, Revenue Bonds, Sarah Bush Lincoln 2/09 at 100.00 A 5,715,633
Health Center, Series 1996B, 5.750%, 2/15/22
10,740 Lake and McHenry Counties Community Unit School District 118, 1/15 at 66.94 Aaa 4,540,765
Wauconda, Illinois, General Obligation Bonds, Series 2005B, 0.000%,
1/01/23 - FSA Insured
1,090 Metropolitan Pier and Exposition Authority, Illinois, Revenue Bonds, No Opt. Call A1 544,172
McCormick Place Expansion Project, Series 1993A, 0.000%, 6/15/21 -
FGIC Insured
Metropolitan Pier and Exposition Authority, Illinois, Revenue
Bonds, McCormick Place Expansion Project, Series 1999A:
13,455 5.500%, 12/15/24 - FGIC Insured 12/09 at 101.00 AAA 13,588,337
10,430 5.250%, 12/15/28 - FGIC Insured 12/09 at 101.00 AAA 10,226,198
3,175 Metropolitan Pier and Exposition Authority, Illinois, Revenue Bonds, No Opt. Call AAA 440,119
McCormick Place Expansion Project, Series 2002A, 0.000%, 6/15/41 -
MBIA Insured
6,000 Metropolitan Pier and Exposition Authority, Illinois, Revenue Refunding No Opt. Call AA 2,486,100
Bonds, McCormick Place Expansion Project, Series 1996A, 0.000%,
6/15/24 - MBIA Insured
4,600 Regional Transportation Authority, Cook, DuPage, Kane, Lake, McHenry No Opt. Call AA 5,278,638
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 Bonds, Series 4/13 at 100.00 AA 1,879,860
2003A, 5.000%, 4/01/23 - AMBAC Insured
7,500 Valley View Public Schools, Community Unit School District 365U of No Opt. Call AA 2,832,825
Will County, Illinois, General Obligation Bonds, Series 2005, 0.000%,
11/01/25 - MBIA Insured
23,125 Will County Community High School District 210 Lincoln-Way, Illinois, No Opt. Call Aaa 9,573,750
General Obligation Bonds, Series 2006, 0.000%, 1/01/24 - FSA
Insured
------------------------------------------------------------------------------------------------------------------------------------
123,835 Total Illinois 83,153,430
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 3.0% (1.8% OF TOTAL INVESTMENTS)
5,205 Indiana Health Facility Financing Authority, Hospital Revenue Bonds, 8/10 at 101.50 AA (4) 5,561,074
Clarian Health Obligated Group, Series 2000A, 5.500%, 2/15/30
(Pre-refunded 8/15/10) - MBIA Insured
2,435 Indiana Health Facility Financing Authority, Revenue Bonds, Community 3/17 at 100.00 BBB 1,792,355
Foundation of Northwest Indiana, Series 2007, 5.500%, 3/01/37
6,075 LaGrange County Jail Building Corporation, Indiana, First Mortgage Jail 10/09 at 101.00 A3 (4) 6,340,295
Bonds, Series 1998, 5.400%, 10/01/21 (Pre-refunded 10/01/09)
1,915 St. Joseph County Hospital Authority, Indiana, Revenue Bonds, Madison 2/09 at 102.00 BBB- 1,862,165
Center Inc., Series 1999, 5.450%, 2/15/12
------------------------------------------------------------------------------------------------------------------------------------
15,630 Total Indiana 15,555,889
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 0.5% (0.3% OF TOTAL INVESTMENTS)
4,000 Iowa Tobacco Settlement Authority, Asset Backed Settlement Revenue 6/15 at 100.00 BBB 2,366,720
Bonds, Series 2005C, 5.375%, 6/01/38
250 Iowa Tobacco Settlement Authority, Tobacco Asset-Backed Revenue 6/17 at 100.00 BBB 174,045
Bonds, Series 2005B, 5.600%, 6/01/34
------------------------------------------------------------------------------------------------------------------------------------
4,250 Total Iowa 2,540,765
------------------------------------------------------------------------------------------------------------------------------------
41
NMA
Nuveen Municipal Advantage Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 0.2% (0.1% OF TOTAL INVESTMENTS)
$ 1,750 Wamego, Kansas, Pollution Control Revenue Bonds, Kansas Gas and 6/14 at 100.00 AA $ 1,515,255
Electric Company, Series 2004, 5.300%, 6/01/31 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 1.2% (0.7% OF TOTAL INVESTMENTS)
1,000 Kentucky Economic Development Finance Authority, Louisville Arena 6/18 at 100.00 AAA 970,940
Project Revenue Bonds, Louisville Arena Authority, Inc., Series
2008A-1, 6.000%, 12/01/33 - AGC Insured
5,500 Louisville and Jefferson County Metropolitan Sewer District, Kentucky, 11/08 at 100.50 AA 5,291,825
Sewer and Drainage System Revenue Bonds, Series 1997A, 5.250%,
5/15/27 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
6,500 Total Kentucky 6,262,765
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 14.0% (8.3% OF TOTAL INVESTMENTS)
13,500 DeSoto Parish, Louisiana, Pollution Control Revenue Refunding Bonds, 9/09 at 102.00 AA 13,573,843
Cleco Utility Group Inc. Project, Series 1999, 5.875%, 9/01/29 -
AMBAC Insured
Louisiana Public Facilities Authority, Extended Care Facilities Revenue
Bonds, Comm-Care Corporation Project, Series 1994:
720 11.000%, 2/01/14 (ETM) No Opt. Call N/R (4) 866,002
6,460 11.000%, 2/01/14 (ETM) No Opt. Call N/R (4) 7,768,990
6,650 Louisiana Public Facilities Authority, Revenue Bonds, Baton Rouge 7/14 at 100.00 AA 5,826,132
General Hospital, Series 2004, 5.250%, 7/01/33 - MBIA Insured
9,000 Louisiana Public Facilities Authority, Revenue Bonds, Ochsner Clinic 5/17 at 100.00 A3 7,012,890
Foundation Project, Series 2007A, 5.500%, 5/15/47
28 Louisiana State, Gasoline Tax Revenue Bonds, Series 2006, Residuals 5/16 at 100.00 Aa3 1,892
660-1, 10.855%, 5/01/41 - FGIC Insured (IF)
Louisiana State, Gasoline Tax Revenue Bonds, Series 2006:
20,690 4.500%, 5/01/41 - FGIC Insured (UB) 5/16 at 100.00 Aa3 15,862,816
10,000 5.000%, 5/01/41 - FGIC Insured (UB) 5/16 at 100.00 Aa3 8,718,300
Tobacco Settlement Financing Corporation, Louisiana, Tobacco
Settlement Asset-Backed Bonds, Series 2001B:
6,050 5.500%, 5/15/30 5/11 at 101.00 BBB 5,081,456
11,855 5.875%, 5/15/39 5/11 at 101.00 BBB 8,481,541
------------------------------------------------------------------------------------------------------------------------------------
84,953 Total Louisiana 73,193,862
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 2.0% (1.2% OF TOTAL INVESTMENTS)
620 Massachusetts Health and Educational Facilities Authority, Revenue 7/18 at 100.00 A3 433,343
Bonds, CareGroup Inc., Series 2008E-1, 5.125%, 7/01/33
1,750 Massachusetts Health and Educational Facilities Authority, Revenue 1/09 at 101.00 AA 1,324,120
Bonds, UMass Memorial Healthcare, Series 1998A, 5.000%, 7/01/28 -
AMBAC Insured
180 Massachusetts Housing Finance Agency, Single Family Housing Revenue 12/09 at 100.00 AAA 172,334
Bonds, Series 77, 5.950%, 6/01/25 - FSA Insured (Alternative
Minimum Tax)
Massachusetts Turnpike Authority, Metropolitan Highway System
Revenue Bonds, Senior Series 1997A:
2,000 5.125%, 1/01/17 - MBIA Insured 1/09 at 100.00 AA 1,970,380
500 5.000%, 1/01/27 - MBIA Insured 1/09 at 100.00 AA 430,700
5,000 5.000%, 1/01/37 - MBIA Insured 1/09 at 100.00 AA 3,966,050
2,290 Massachusetts Turnpike Authority, Metropolitan Highway System 1/09 at 100.00 AA 2,012,635
Revenue Bonds, Subordinate Series 1997B, 5.250%, 1/01/29 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
12,340 Total Massachusetts 10,309,562
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 2.0% (1.2% OF TOTAL INVESTMENTS)
Michigan State Hospital Finance Authority, Hospital Revenue
Bonds, Detroit Medical Center Obligated Group, Series 1998A:
4,995 5.250%, 8/15/23 2/09 at 101.00 BB 3,564,282
3,000 5.250%, 8/15/28 2/09 at 101.00 BB 1,994,010
42
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN (continued)
$ 3,275 Michigan State Hospital Finance Authority, Revenue Refunding Bonds, 2/09 at 100.00 BB $ 2,882,622
Detroit Medical Center Obligated Group, Series 1993A, 6.500%,
8/15/18
3,050 Michigan Tobacco Settlement Finance Authority, Tobacco Settlement 6/18 at 100.00 Baa3 2,279,845
Asset-Backed Revenue Bonds, Series 2008A, 6.875%, 6/01/42
------------------------------------------------------------------------------------------------------------------------------------
14,320 Total Michigan 10,720,759
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 1.3% (0.8% OF TOTAL INVESTMENTS)
5,000 Minneapolis-St. Paul Metropolitan Airports Commission, Minnesota, 1/11 at 100.00 A (4) 5,270,150
Subordinate Airport Revenue Bonds, Series 2001C, 5.250%, 1/01/32
(Pre-refunded 1/01/11) - FGIC Insured
555 Minnesota Housing Finance Agency, Single Family Mortgage Revenue 7/09 at 100.00 AA+ 523,149
Bonds, Series 2000C, 5.550%, 7/01/24 (Alternative Minimum Tax)
1,155 Minnesota Housing Finance Agency, Single Family Mortgage Revenue 1/10 at 100.00 AA+ 1,081,738
Bonds, Series 2000J, 5.400%, 1/01/23 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
6,710 Total Minnesota 6,875,037
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 1.0% (0.6% OF TOTAL INVESTMENTS)
12,005 Kansas City Municipal Assistance Corporation, Missouri, Leasehold No Opt. Call AA 3,540,034
Revenue Bonds, Series 2004B-1, 0.000%, 4/15/29 - AMBAC Insured
140 Missouri Housing Development Commission, Single Family Mortgage 9/09 at 102.00 AAA 147,487
Revenue Bonds, Homeownership Loan Program, Series 2000A-1,
7.500%, 3/01/31 (Alternative Minimum Tax)
1,500 Missouri-Illinois Metropolitan District Bi-State Development Agency, 10/13 at 100.00 AAA 1,340,400
Mass Transit Sales Tax Appropriation Bonds, Metrolink Cross County
Extension Project, Series 2002B, 5.000%, 10/01/32 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
13,645 Total Missouri 5,027,921
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 4.8% (2.9% OF TOTAL INVESTMENTS)
7,310 Clark County, Nevada, Limited Tax General Obligation Bank Bonds, Series 7/10 at 100.00 AA+ (4) 7,691,948
2000, 5.500%, 7/01/19 (Pre-refunded 7/01/10)
7,500 Clark County, Nevada, Subordinate Lien Airport Revenue Bonds, Series 7/10 at 101.00 AA (4) 8,016,075
1999A, 6.000%, 7/01/29 (Pre-refunded 7/01/10) - MBIA Insured
Director of Nevada State Department of Business and Industry,
Revenue Bonds, Las Vegas Monorail Project, First Tier, Series
2000:
3,025 0.000%, 1/01/16 - AMBAC Insured No Opt. Call AA 1,434,032
7,910 5.375%, 1/01/40 - AMBAC Insured 1/10 at 100.00 AA 4,755,017
3,750 Henderson, Nevada, Healthcare Facility Revenue Refunding Bonds, 7/17 at 100.00 A 2,878,050
Catholic Healthcare West, Series 2007B, Trust 2633, 1.032%, 7/01/31
(IF)
310 Nevada Housing Division, Single Family Mortgage Bonds, Senior Series 4/09 at 100.00 Aaa 307,994
1997C-2, 5.750%, 4/01/29 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
29,805 Total Nevada 25,083,116
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 4.3% (2.6% OF TOTAL INVESTMENTS)
15,000 New Jersey Transportation Trust Fund Authority, Transportation System No Opt. Call AA 4,006,800
Bonds, Series 2006C, 0.000%, 12/15/30 - FGIC Insured
Tobacco Settlement Financing Corporation, New Jersey, Tobacco
Settlement Asset-Backed Bonds, Series 2002:
12,075 5.750%, 6/01/32 (Pre-refunded 6/01/12) 6/12 at 100.00 AAA 12,878,106
5,050 6.125%, 6/01/42 (Pre-refunded 6/01/12) 6/12 at 100.00 AAA 5,556,061
------------------------------------------------------------------------------------------------------------------------------------
32,125 Total New Jersey 22,440,967
------------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 1.1% (0.7% OF TOTAL INVESTMENTS)
7,500 Farmington, New Mexico, Pollution Control Revenue Refunding Bonds, 4/09 at 100.00 Baa3 5,896,800
Public Service Company of New Mexico - San Juan Project, Series
1997B, 5.800%, 4/01/22
------------------------------------------------------------------------------------------------------------------------------------
43
NMA
Nuveen Municipal Advantage Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 12.8% (7.6% OF TOTAL INVESTMENTS)
$ 7,000 Metropolitan Transportation Authority, New York, State Service Contract 7/12 at 100.00 AA- $ 6,356,910
Refunding Bonds, Series 2002A, 5.125%, 1/01/29
Nassau County, New York, General Obligation Improvement Bonds,
Series 2000F:
3,980 7.000%, 3/01/11 (Pre-refunded 3/01/10) - FSA Insured 3/10 at 100.00 AAA 4,233,964
4,070 7.000%, 3/01/12 (Pre-refunded 3/01/10) - FSA Insured 3/10 at 100.00 AAA 4,329,707
3,925 7.000%, 3/01/15 (Pre-refunded 3/01/10) - FSA Insured 3/10 at 100.00 AAA 4,175,454
4,975 New York City Industrial Development Agency, New York, Special 12/08 at 102.00 Ba1 2,608,343
Facilities Revenue Bonds, British Airways PLC, Series 1998, 5.250%,
12/01/32 (Alternative Minimum Tax)
3,000 New York City Industrial Development Agency, New York, Special 12/12 at 101.00 Ba1 2,177,880
Facilities Revenue Bonds, British Airways PLC, Series 2002, 7.625%,
12/01/32 (Alternative Minimum Tax)
9,850 New York City Municipal Water Finance Authority, New York, Water and 6/09 at 101.00 AAA 10,194,947
Sewerage System Revenue Bonds, Fiscal Series 2000A, 5.750%,
6/15/31 (Pre-refunded 6/15/09) - FGIC Insured
5,000 New York City Municipal Water Finance Authority, New York, Water and 12/14 at 100.00 AAA 4,109,000
Sewerage System Revenue Bonds, Series 2008, Trust 1199, 6.714%,
6/15/36 - FSA Insured (IF)
10,000 New York City Transitional Finance Authority, New York, Future Tax 5/10 at 101.00 AAA 10,659,200
Secured Bonds, Fiscal Series 2000B, 6.000%, 11/15/29
(Pre-refunded 5/15/10)
7,435 New York City, New York, General Obligation Bonds, Fiscal Series 2000A, 5/10 at 101.00 AA (4) 7,897,160
5.750%, 5/15/20 (Pre-refunded 5/15/10)
5,250 New York State Mortgage Agency, Homeowner Mortgage Revenue 4/10 at 100.00 Aa1 4,984,770
Bonds, Series 94, 5.800%, 10/01/20 (Alternative Minimum Tax)
5,000 New York State Urban Development Corporation, Service Contract 1/09 at 101.00 AA (4) 5,086,200
Revenue Bonds, Correctional Facilities, Series 1999C, 6.000%, 1/01/29
(Pre-refunded 1/01/09) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
69,485 Total New York 66,813,535
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 2.0% (1.2% OF TOTAL INVESTMENTS)
1,135 North Carolina Housing Finance Agency, Home Ownership Revenue 7/10 at 100.00 AA 927,488
Bonds, 1998 Trust Agreement, Series 10A, 5.400%, 7/01/32 - AMBAC
Insured (Alternative Minimum Tax)
4,980 North Carolina Housing Finance Agency, Home Ownership Revenue 7/09 at 100.00 AA 4,634,836
Bonds, 1998 Trust Agreement, Series 7A, 6.250%, 1/01/29
(Alternative Minimum Tax)
1,240 North Carolina Housing Finance Agency, Home Ownership Revenue 1/10 at 100.00 AA 1,187,362
Bonds, 1998 Trust Agreement, Series 8A, 5.950%, 1/01/27
(Alternative Minimum Tax)
4,415 North Carolina Housing Finance Agency, Home Ownership Revenue 1/10 at 100.00 AA 3,863,169
Bonds, 1998 Trust Agreement, Series 9A, 5.875%, 7/01/31 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
11,770 Total North Carolina 10,612,855
------------------------------------------------------------------------------------------------------------------------------------
NORTH DAKOTA - 0.6% (0.3% OF TOTAL INVESTMENTS)
1,465 North Dakota Housing Finance Agency, Home Mortgage Finance Program 1/09 at 102.00 Aa1 1,444,783
Bonds, Series 1998B, 5.500%, 7/01/29 - MBIA Insured (Alternative
Minimum Tax)
2,250 Ward County Health Care, North Dakota, Revenue Bonds, Trinity 7/16 at 100.00 BBB+ 1,620,608
Obligated Group, Series 2006, 5.125%, 7/01/25
------------------------------------------------------------------------------------------------------------------------------------
3,715 Total North Dakota 3,065,391
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 7.9% (4.7% OF TOTAL INVESTMENTS)
5,000 Akron, Bath and Copley Joint Township Hospital District, Ohio, Hospital 11/09 at 101.00 Baa1 4,746,150
Facilities Revenue Bonds, Summa Health System, Series 1998A,
5.375%, 11/15/18
10,000 American Municipal Power Ohio Inc., General Revenue Bonds, Series 2/18 at 100.00 A1 8,916,300
2008, 5.250%, 2/15/43
Buckeye Tobacco Settlement Financing Authority, Ohio, Tobacco
Settlement Asset-Backed Revenue Bonds, Senior Lien, Series
2007A-2:
260 5.125%, 6/01/24 6/17 at 100.00 BBB 203,788
2,700 5.875%, 6/01/30 6/17 at 100.00 BBB 1,892,727
2,635 5.750%, 6/01/34 6/17 at 100.00 BBB 1,754,910
5,895 5.875%, 6/01/47 6/17 at 100.00 BBB 3,687,971
44
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
OHIO (continued)
$ 5,150 Buckeye Tobacco Settlement Financing Authority, Ohio, Tobacco 6/22 at 100.00 BBB $ 2,565,576
Settlement Asset-Backed Revenue Bonds, Senior Lien, Series
2007A-3, 0.000%, 6/01/37
Montgomery County, Ohio, Hospital Facilities Revenue Bonds, Kettering
Medical Center, Series 1999:
7,840 6.750%, 4/01/18 (Pre-refunded 4/01/10) 4/10 at 101.00 A (4) 8,398,678
5,000 6.750%, 4/01/22 (Pre-refunded 4/01/10) 4/10 at 101.00 A (4) 5,356,300
1,235 Ohio Housing Finance Agency, GNMA Mortgage-Backed Securities 8/10 at 100.00 Aaa 1,135,521
Program Residential Mortgage Revenue Bonds, Series 2000D, 5.450%,
9/01/31 (Alternative Minimum Tax)
2,650 Ohio, General Obligation Bonds, Higher Education, Series 2003A, 5/13 at 100.00 AA+ 2,654,240
5.000%, 5/01/22
------------------------------------------------------------------------------------------------------------------------------------
48,365 Total Ohio 41,312,161
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 5.3% (3.2% OF TOTAL INVESTMENTS)
1,675 Oklahoma Development Finance Authority, Health System Revenue 8/18 at 100.00 AA- 1,435,676
Bonds, Integris Baptist Medical Center, Series 2008B, 5.250%, 8/15/38
12,000 Oklahoma Development Finance Authority, Revenue Bonds, Saint John 2/17 at 100.00 AA- 9,696,240
Health System, Series 2007, 5.000%, 2/15/42
2,000 Oklahoma Municipal Power Authority, Power Supply System Revenue 1/17 at 100.00 AA 1,429,480
Bonds, Series 2007, 4.500%, 1/01/47 - FGIC Insured
Oklahoma State Industries Authority, Health System Revenue
Bonds, Integris Baptist Medical Center, Series 1999A:
2,110 5.750%, 8/15/29 (Pre-refunded 8/15/09) - MBIA Insured 8/09 at 101.00 AAA 2,186,382
2,890 5.750%, 8/15/29 (Pre-refunded 8/15/09) - MBIA Insured 8/09 at 101.00 AA (4) 2,994,618
10,000 Tulsa Municipal Airport Trust, Oklahoma, Revenue Refunding Bonds, 12/08 at 100.00 B- 9,925,400
American Airlines Inc., Series 2001B, 5.650%, 12/01/35 (Mandatory
put 12/01/08) (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
30,675 Total Oklahoma 27,667,796
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 0.5% (0.3% OF TOTAL INVESTMENTS)
3,000 Oregon State Facilities Authority, Revenue Bonds, Willamette University, 10/17 at 100.00 A 2,486,970
Series 2007A, 5.000%, 10/01/36
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 1.2% (0.7% OF TOTAL INVESTMENTS)
1,160 Carbon County Industrial Development Authority, Pennsylvania, Resource No Opt. Call BBB- 1,171,948
Recovery Revenue Refunding Bonds, Panther Creek Partners Project,
Series 2000, 6.650%, 5/01/10 (Alternative Minimum Tax)
1,250 Erie, Pennsylvania, Water Authority, Water Revenue Bonds, Series 2008, 12/18 at 100.00 AAA 1,069,400
5.000%, 12/01/43 - FSA Insured
1,500 Pennsylvania Housing Finance Agency, Single Family Mortgage Revenue 10/16 at 100.00 AA+ 1,065,885
Bonds, Series 2008, 4.650%, 10/01/31 (Alternative Minimum Tax) (UB)
2,600 Pennsylvania Turnpike Commission, Turnpike Revenue Bonds, Series 12/14 at 100.00 AA 2,605,200
2004A, 5.500%, 12/01/31 - AMBAC Insured
465 Washington County Authority, Pennsylvania, Capital Funding Revenue No Opt. Call AA 398,989
Bonds, Capital Projects and Equipment Acquisition Program, Series
1999, 6.150%, 12/01/29 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
6,975 Total Pennsylvania 6,311,422
------------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 3.2% (1.9% OF TOTAL INVESTMENTS)
5,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series 7/15 at 100.00 A3 4,360,900
2005RR, 5.000%, 7/01/26 - SYNCORA GTY Insured
10,070 Puerto Rico Highway and Transportation Authority, Highway Revenue No Opt. Call BBB+ 8,358,805
Bonds, Series 2007N, 5.250%, 7/01/39 - FGIC Insured
4,000 Puerto Rico, General Obligation Bonds, Series 2000B, 5.625%, 7/10 at 100.00 AA 3,899,600
7/01/19 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
19,070 Total Puerto Rico 16,619,305
------------------------------------------------------------------------------------------------------------------------------------
45
NMA
Nuveen Municipal Advantage Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 1.3% (0.8% OF TOTAL INVESTMENTS)
$ 1,235 Rhode Island Health and Educational Building Corporation, Hospital 11/08 at 101.00 AA $ 1,228,208
Financing Revenue Bonds, Lifespan Obligated Group, Series 1996,
5.500%, 5/15/16 - MBIA Insured
7,000 Rhode Island Housing and Mortgage Finance Corporation, 10/14 at 100.00 AA+ 5,496,470
Homeownership Opportunity Bond Program, Series 50A, 4.650%,
10/01/34
------------------------------------------------------------------------------------------------------------------------------------
8,235 Total Rhode Island 6,724,678
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 5.2% (3.1% OF TOTAL INVESTMENTS)
10,000 Greenville County School District, South Carolina, Installment Purchase 12/12 at 101.00 AA (4) 11,197,100
Revenue Bonds, Series 2002, 6.000%, 12/01/20 (Pre-refunded
12/01/12)
2,500 Lexington County Health Service District, South Carolina, Hospital 11/13 at 100.00 A+ (4) 2,745,750
Revenue Refunding and Improvement Bonds, Series 2003, 5.750%,
11/01/28 (Pre-refunded 11/01/13)
3,000 Myrtle Beach, South Carolina, Hospitality and Accommodation Fee 6/14 at 100.00 A+ 2,459,040
Revenue Bonds, Series 2004A, 5.000%, 6/01/36 - FGIC Insured
1,220 Piedmont Municipal Power Agency, South Carolina, Electric Revenue No Opt. Call AA 474,385
Bonds, Series 2004A-2, 0.000%, 1/01/23 - FGIC Insured
2,125 South Carolina Public Service Authority, Revenue Refunding Bonds, 7/13 at 100.00 AA 2,101,965
Santee Cooper Electric System, Series 2003A, 5.000%, 1/01/21 -
AMBAC Insured
7,585 Tobacco Settlement Revenue Management Authority, South Carolina, 5/16 at 100.00 BBB (4) 8,128,162
Tobacco Settlement Asset-Backed Bonds, Series 2001B, 6.375%,
5/15/28 (Pre-refunded 5/15/16)
------------------------------------------------------------------------------------------------------------------------------------
26,430 Total South Carolina 27,106,402
------------------------------------------------------------------------------------------------------------------------------------
SOUTH DAKOTA - 0.4% (0.2% OF TOTAL INVESTMENTS)
2,945 South Dakota Health and Educational Facilities Authority, Revenue Bonds, 5/17 at 100.00 AA- 2,338,330
Sanford Health, Series 2007, 5.000%, 11/01/40
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 6.7% (4.0% OF TOTAL INVESTMENTS)
6,000 Knox County Health, Educational and Housing Facilities Board, 4/12 at 101.00 A1 4,960,440
Tennessee, Hospital Revenue Bonds, Baptist Health System of East
Tennessee Inc., Series 2002, 6.500%, 4/15/31
20,415 Knox County Health, Educational and Housing Facilities Board, 1/13 at 75.87 AAA 12,304,733
Tennessee, Hospital Revenue Refunding Bonds, Covenant Health,
Series 2002A, 0.000%, 1/01/18 - FSA Insured
14,385 Metropolitan Government of Nashville-Davidson County Health and 11/09 at 101.00 AAA 15,138,197
Educational Facilities Board, Tennessee, Revenue Bonds, Ascension
Health Credit Group, Series 1999A, 5.875%, 11/15/28
(Pre-refunded 11/15/09) - AMBAC Insured
1,750 Metropolitan Government of Nashville-Davidson County, Tennessee, 5/11 at 100.00 AA+ 1,731,013
Electric System Revenue Bonds, Series 2001A, 5.125%, 5/15/26
1,500 Sumner County Health, Educational, and Housing Facilities Board, 11/17 at 100.00 N/R 1,079,115
Tennessee, Revenue Refunding Bonds, Sumner Regional Health
System Inc., Series 2007, 5.500%, 11/01/46
------------------------------------------------------------------------------------------------------------------------------------
44,050 Total Tennessee 35,213,498
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 14.8% (8.8% OF TOTAL INVESTMENTS)
2,000 Abilene Higher Education Authority, Inc., Texas, Student Loan Revenue 11/08 at 100.00 Aa3 1,962,440
Bonds, Subordinate Series 1998B, 5.050%, 7/01/13 (Alternative
Minimum Tax)
11,810 Brazos River Authority, Texas, Pollution Control Revenue Refunding No Opt. Call Caa1 10,259,938
Bonds, TXU Electric Company, Series 2001C, 5.750%, 5/01/36
(Mandatory put 11/01/11) (Alternative Minimum Tax)
6,000 Brazos River Authority, Texas, Revenue Refunding Bonds, Houston No Opt. Call A 5,360,640
Lighting and Power Company, Series 1998, 5.050%, 11/01/18 -
AMBAC Insured (Alternative Minimum Tax)
4,250 Ennis Independent School District, Ellis County, Texas, General Obligation 8/16 at 60.73 Aaa 1,434,928
Bonds, Series 2006, 0.000%, 8/15/26
8,400 Gulf Coast Waste Disposal Authority, Texas, Waste Disposal Revenue 4/09 at 101.00 Baa2 5,449,500
Bonds, Valero Energy Corporation, Series 1999, 5.700%, 4/01/32
(Alternative Minimum Tax)
7,500 Harris County Health Facilities Development Corporation, Texas, Thermal 11/13 at 100.00 AA 6,741,525
Utility Revenue Bonds, TECO Project, Series 2003, 5.000%, 11/15/30 -
MBIA Insured
46
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS (continued)
$ 1,540 Houston Community College, Texas, Limited Tax General Obligation 2/13 at 100.00 AA $ 1,475,520
Bonds, Series 2003, 5.000%, 2/15/28 - AMBAC Insured
3,460 Houston Community College, Texas, Limited Tax General Obligation 2/13 at 100.00 AA (4) 3,710,435
Bonds, Series 2003, 5.000%, 2/15/28 (Pre-refunded 2/15/13) -
AMBAC Insured
Houston, Texas, Water Conveyance System Contract, Certificates of
Participation, Series 1993A-J:
5,490 6.800%, 12/15/10 - AMBAC Insured No Opt. Call AA 5,825,219
2,000 6.800%, 12/15/11 - AMBAC Insured No Opt. Call AA 2,158,700
9,345 Leander Independent School District, Williamson and Travis Counties, 8/15 at 35.34 AA 1,751,160
Texas, General Obligation Bonds, Series 2005, 0.000%, 8/15/34 -
FGIC Insured
16,305 Matagorda County Navigation District 1, Texas, Revenue Bonds, Reliant 5/09 at 101.00 BBB- 11,151,153
Energy Inc., Series 1999B, 5.950%, 5/01/30 (Alternative Minimum Tax)
3,425 Sabine River Authority, Texas, Pollution Control Revenue Refunding No Opt. Call Caa1 2,997,834
Bonds, TXU Electric Company, Series 2001A, 5.500%, 5/01/22
(Mandatory put 11/01/11)
4,700 Sam Rayburn Municipal Power Agency, Texas, Power Supply System 10/12 at 100.00 Baa2 4,245,134
Revenue Refunding Bonds, Series 2002A, 6.000%, 10/01/21
4,000 Texas, General Obligation Bonds, Water Financial Assistance, State 8/09 at 100.00 Aa1 4,001,960
Participation Program, Series 1999C, 5.500%, 8/01/35
6,840 Travis County Health Facilities Development Corporation, Texas, Revenue 11/09 at 101.00 AAA 7,153,819
Bonds, Ascension Health Credit Group, Series 1999A, 5.875%,
11/15/24 (Pre-refunded 11/15/09) - AMBAC Insured
245 Wood Glen Housing Finance Corporation, Texas, FHA-Insured Section 8 12/08 at 100.00 Aaa 245,995
Assisted Mortgage Revenue Bonds, Copperwood I Project, Series
1990A, 7.625%, 1/01/10 - MBIA Insured (ETM)
3,000 Wylie Independent School District, Taylor County, Texas, General 8/15 at 74.57 AAA 1,443,270
Obligation Bonds, Series 2005, 0.000%, 8/15/21
------------------------------------------------------------------------------------------------------------------------------------
100,310 Total Texas 77,369,170
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 0.2% (0.1% OF TOTAL INVESTMENTS)
2,855 Tobacco Settlement Financing Corporation of Virginia, Tobacco 6/17 at 100.00 BBB 1,309,960
Settlement Asset-Backed Bonds, Series 2007B2, 0.000%, 6/01/46
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 15.2% (9.1% OF TOTAL INVESTMENTS)
1,260 Central Puget Sound Regional Transit Authority, Washington, Sales Tax 2/09 at 101.00 AAA 1,151,338
and Motor Vehicle Excise Tax Bonds, Series 1999, 4.750%, 2/01/28 -
FGIC Insured
8,810 Chelan County Public Utility District 1, Washington, Hydro Consolidated 7/11 at 101.00 AA 7,236,534
System Revenue Bonds, Series 2001A, 5.600%, 1/01/36 - MBIA
Insured (Alternative Minimum Tax)
5,665 Chelan County Public Utility District 1, Washington, Hydro Consolidated 7/12 at 100.00 AA 4,293,617
System Revenue Bonds, Series 2002B, 5.250%, 7/01/37 (Mandatory
put 7/01/12) - AMBAC Insured (Alternative Minimum Tax)
10,730 Chelan County Public Utility District 1, Washington, Hydro Consolidated 7/11 at 101.00 AA 9,043,888
System Revenue Refunding Bonds, Series 2001C, 5.650%, 7/01/32 -
MBIA Insured (Alternative Minimum Tax)
10,730 Pierce County School District 320, Sumner, Washington, Unlimited Tax 12/10 at 100.00 Aaa 11,564,579
General Obligation Bonds, Series 2000, 6.250%, 12/01/17
(Pre-refunded 12/01/10) - FSA Insured
10,550 Port of Seattle, Washington, Limited Tax General Obligation Bonds, 12/10 at 100.00 AAA 9,916,051
Series 2000B, 5.750%, 12/01/25 (Alternative Minimum Tax)
5,315 Port of Seattle, Washington, Revenue Bonds, Series 2000B, 6.000%, No Opt. Call AA 5,413,700
2/01/10 - MBIA Insured (Alternative Minimum Tax)
19,475 Port of Seattle, Washington, Special Facility Revenue Bonds, Terminal 18, 3/10 at 101.00 AA (4) 20,587,796
Series 1999A, 6.000%, 9/01/29 (Pre-refunded 3/01/10) -
MBIA Insured
5,000 Port of Seattle, Washington, Special Facility Revenue Bonds, Terminal 18, 3/10 at 101.00 AA 4,712,700
Series 1999B, 6.000%, 9/01/20 - MBIA Insured (Alternative
Minimum Tax)
5,000 Washington State Healthcare Facilities Authority, Revenue Bonds, 12/09 at 101.00 AA (4) 5,245,150
Providence Services, Series 1999, 5.375%, 12/01/19 (Pre-refunded
12/01/09) - MBIA Insured
47
NMA
Nuveen Municipal Advantage Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON (continued)
$ 1,270 Washington State, Motor Vehicle Fuel Tax General Obligation Bonds, No Opt. Call AA+ $ 515,925
Series 2003F, 0.000%, 12/01/24 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
83,805 Total Washington 79,681,278
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 0.8% (0.5% OF TOTAL INVESTMENTS)
5,000 Mason County, West Virginia, Pollution Control Revenue Bonds, 10/11 at 100.00 BBB 4,303,600
Appalachian Power Company, Series 2003L, 5.500%, 10/01/22
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 3.1% (1.8% OF TOTAL INVESTMENTS)
Badger Tobacco Asset Securitization Corporation, Wisconsin, Tobacco
Settlement Asset-Backed Bonds, Series 2002:
1,195 6.000%, 6/01/17 6/12 at 100.00 BBB 1,122,440
6,375 6.125%, 6/01/27 6/12 at 100.00 BBB 6,073,335
565 Green Bay, Wisconsin, Water System Revenue Bonds, Series 2004, 11/14 at 100.00 Aaa 518,224
5.000%, 11/01/29 - FSA Insured
5,000 Madison, Wisconsin, Industrial Development Revenue Refunding Bonds, 4/12 at 100.00 AA- 4,584,250
Madison Gas and Electric Company Projects, Series 2002A, 5.875%,
10/01/34 (Alternative Minimum Tax)
3,000 Southeast Wisconsin Professional Baseball Park District, Sales Tax No Opt. Call AA 3,172,020
Revenue Refunding Bonds, Series 1998A, 5.500%, 12/15/19 -
MBIA Insured
550 Wisconsin Housing and Economic Development Authority, Home 3/10 at 100.00 AA 532,015
Ownership Revenue Bonds, Series 2000B, 5.750%, 3/01/22
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
16,685 Total Wisconsin 16,002,284
------------------------------------------------------------------------------------------------------------------------------------
$ 1,135,853 Total Investments (cost $957,998,565) - 167.6% 877,736,594
=============-----------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (4.8)% (25,008,333)
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.4% 12,524,034
--------------------------------------------------------------------------------------------------------------------
Auction Rate Preferred Shares, at Liquidation Value - (65.2)% (5) (341,650,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 523,602,295
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares unless
otherwise noted.
(2) Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates (month
and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying
prices at later dates. Certain mortgage-backed securities
may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered
public accounting firm): Using the higher of Standard &
Poor's Group ("Standard & Poor's") or Moody's Investor
Service, Inc. ("Moody's") rating. Ratings below BBB by
Standard & Poor's or Baa by Moody's are considered to be
below investment grade.
The Portfolio of Investments may reflect the ratings on
certain bonds insured by ACA, AGC, AMBAC, FGIC, FSA, MBIA
and SYNCORA as of October 31, 2008. Please see the Portfolio
Managers' Commentary for an expanded discussion of the
affect on the Fund of changes to the ratings of certain
bonds in the portfolio resulting from changes to the ratings
of the underlying insurers both during the period and after
period end.
(4) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which ensure
the timely payment of principal and interest. Such
investments are normally considered to be equivalent to AAA
rated securities.
(5) Auction Rate Preferred Shares, at Liquidation Value as a
percentage of Total Investments is 38.9%.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected
as a financing transaction pursuant to the provisions of
SFAS No. 140.
See accompanying notes to financial statements.
48
NMO
Nuveen Municipal Market Opportunity Fund, Inc.
Portfolio of INVESTMENTS
October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 0.6% (0.4% OF TOTAL INVESTMENTS)
Henry County Water Authority, Alabama, Water Revenue Bonds,
Series 2006:
$ 1,935 5.000%, 1/01/36 - RAAI Insured 1/16 at 100.00 BBB+ $ 1,529,830
2,485 5.000%, 1/01/41 - RAAI Insured 1/16 at 100.00 BBB+ 1,921,700
------------------------------------------------------------------------------------------------------------------------------------
4,420 Total Alabama 3,451,530
------------------------------------------------------------------------------------------------------------------------------------
ALASKA - 1.6% (0.9% OF TOTAL INVESTMENTS)
Alaska Housing Finance Corporation, General Housing Purpose Bonds,
Series 2005A:
1,125 5.250%, 12/01/34 - FGIC Insured 12/14 at 100.00 AA 1,047,983
1,275 5.250%, 12/01/41 - FGIC Insured 12/14 at 100.00 AA 1,149,030
12,280 Northern Tobacco Securitization Corporation, Alaska, Tobacco Settlement 12/08 at 100.00 Baa3 6,532,960
Asset-Backed Bonds, Series 2006A, 5.000%, 6/01/46
------------------------------------------------------------------------------------------------------------------------------------
14,680 Total Alaska 8,729,973
------------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 1.5% (0.9% OF TOTAL INVESTMENTS)
5,000 Arkansas Development Finance Authority, Hospital Revenue Bonds, 2/10 at 100.00 Baa1 (4) 5,281,200
Washington Regional Medical Center, Series 2000, 7.000%, 2/01/15
(Pre-refunded 2/01/10)
3,480 Cabot School District 4, Lonoke County, Arkansas, General Obligation 12/08 at 100.00 Aa3 3,273,218
Refunding Bonds, Series 2003, 5.000%, 2/01/27 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
8,480 Total Arkansas 8,554,418
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 9.3% (5.7% OF TOTAL INVESTMENTS)
12,500 Anaheim Public Finance Authority, California, Subordinate Lease Revenue No Opt. Call AAA 2,183,000
Bonds, Public Improvement Project, Series 1997C, 0.000%, 9/01/35 -
FSA Insured
1,350 Antelope Valley Union High School District, Los Angeles County, No Opt. Call AA 376,475
California, General Obligation Bonds, Series 2004B, 0.000%, 8/01/29 -
MBIA Insured
7,800 California County Tobacco Securitization Agency, Tobacco Settlement 12/18 at 100.00 Baa3 4,274,868
Asset-Backed Bonds, Los Angeles County Securitization Corporation,
Series 2006A, 0.000%, 6/01/36 (Mandatory put 6/01/23)
1,350 California Educational Facilities Authority, Revenue Refunding Bonds, No Opt. Call A2 190,229
Loyola Marymount University, Series 2001A, 0.000%, 10/01/39 -
MBIA Insured
4,295 California Health Facilities Financing Authority, Health Facility Revenue 3/13 at 100.00 A 3,389,614
Bonds, Adventist Health System/West, Series 2003A, 5.000%, 3/01/33
9,000 California Health Facilities Financing Authority, Revenue Bonds, Kaiser 3/16 at 100.00 A+ 7,229,070
Permanante System, Series 2006, 5.250%, 3/01/45
1,550 California Statewide Community Development Authority, Revenue Bonds, 7/18 at 100.00 AA- 1,379,934
St. Joseph Health System, Series 2007A, 5.750%, 7/01/47 -
FGIC Insured
6,250 California, Various Purpose General Obligation Bonds, Series 2005 Trust 3/16 at 100.00 AA 2,167,125
2813, 0.930%, 3/01/35 - MBIA Insured (IF)
10,445 Castaic Lake Water Agency, California, Certificates of Participation, Water No Opt. Call AA 3,020,276
System Improvement Project, Series 1999, 0.000%, 8/01/29 -
AMBAC Insured
8,365 Cupertino Union School District, Santa Clara County, California, General 8/13 at 52.66 AA 2,800,937
Obligation Bonds, Series 2003B, 0.000%, 8/01/26 - FGIC Insured
5,000 Golden State Tobacco Securitization Corporation, California, Enhanced 6/13 at 100.00 AAA 5,283,450
Tobacco Settlement Asset-Backed Bonds, Series 2003B, 5.000%,
6/01/38 (Pre-refunded 6/01/13) - AMBAC Insured
49
NMO
Nuveen Municipal Market Opportunity Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (continued)
$ 1,000 Golden State Tobacco Securitization Corporation, California, Enhanced 6/17 at 100.00 BBB $ 590,500
Tobacco Settlement Asset-Backed Bonds, Series 2007A-1, 5.125%,
6/01/47
Golden State Tobacco Securitization Corporation, California, Tobacco
Settlement Asset-Backed Revenue Bonds, Series 2005A:
3,500 0.000%, 6/01/26 - FSA Insured No Opt. Call AAA 1,143,555
3,000 5.000%, 6/01/45 6/15 at 100.00 A 2,166,750
1,500 Lincoln Unified School District, Placer County, California, Community No Opt. Call AA 460,875
Facilities District 1, Special Tax Bonds, Series 2005, 0.000%,
9/01/26 - AMBAC Insured
490 Los Angeles Department of Water and Power, California, Electric Plant 12/08 at 100.00 AA- (4) 489,980
Revenue Bonds, Second Series 1993, 4.750%, 10/15/20 (ETM)
995 Los Angeles Department of Water and Power, California, Electric Plant 12/08 at 100.00 AA- (4) 994,940
Revenue Bonds, Series 1994, 5.375%, 2/15/34 (ETM)
1,000 Pajaro Valley Unified School District, Santa Cruz County, California, No Opt. Call AAA 293,500
General Obligation Bonds, Series 2005B, 0.000%, 8/01/29 -
FSA Insured
8,040 Placentia-Yorba Linda Unified School District, Orange County, California, No Opt. Call AA 1,517,952
Certificates of Participation, Series 2006, 0.000%, 10/01/34 -
FGIC Insured
San Joaquin Hills Transportation Corridor Agency, Orange County,
California, Toll Road Revenue Refunding Bonds, Series 1997A:
5,000 5.650%, 1/15/17 - MBIA Insured 1/14 at 102.00 AA 4,394,300
26,000 0.000%, 1/15/35 - MBIA Insured No Opt. Call AA
5,000 San Jose-Evergreen Community College District, Santa Clara County, 9/15 at 50.47 AA 1,501,000
California, General Obligation Bonds, Series 2005A, 0.000%, 9/01/28 -
MBIA Insured
4,825 Santa Monica Community College District, Los Angeles County, 8/15 at 61.27 AA 1,773,332
California, General Obligation Bonds, Series 2005C, 0.000%, 8/01/25 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
128,255 Total California 52,005,262
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 7.0% (4.2% OF TOTAL INVESTMENTS)
1,085 Arkansas River Power Authority, Colorado, Power Revenue Bonds, Series 10/16 at 100.00 BBB 828,332
2006, 5.250%, 10/01/40 - SYNCORA GTY Insured
3,000 Broomfield, Colorado, Master Facilities Lease Purchase Agreement, 12/09 at 100.00 Aa3 3,005,760
Certificates of Participation, Series 1999, 5.750%, 12/01/24 -
AMBAC Insured
6,285 Broomfield, Colorado, Sales and Use Tax Revenue Refunding and 12/12 at 100.00 Aa3 6,330,315
Improvement Bonds, Series 2002A, 5.500%, 12/01/22 - AMBAC
Insured
11,465 Denver City and County, Colorado, Airport System Revenue Refunding 11/10 at 100.00 AA 11,054,897
Bonds, Series 2000A, 6.000%, 11/15/18 - AMBAC Insured (Alternative
Minimum Tax)
E-470 Public Highway Authority, Colorado, Senior Revenue Bonds,
Series 2000B:
2,200 0.000%, 9/01/22 - MBIA Insured No Opt. Call AA 886,468
7,000 0.000%, 9/01/30 - MBIA Insured No Opt. Call AA 1,529,150
15,960 0.000%, 9/01/33 - MBIA Insured No Opt. Call AA 2,788,531
20,000 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, Series 9/10 at 31.42 Aaa 5,958,200
2000B, 0.000%, 9/01/28 (Pre-refunded 9/01/10) - MBIA Insured
E-470 Public Highway Authority, Colorado, Toll Revenue Bonds, Series
2004B:
3,800 0.000%, 9/01/27 - MBIA Insured 9/20 at 67.94 AA 1,045,684
13,300 0.000%, 9/01/31 - MBIA Insured 9/20 at 53.77 AA 2,692,053
6,250 0.000%, 9/01/32 - MBIA Insured 9/20 at 50.83 AA 1,174,188
10,000 0.000%, 3/01/36 - MBIA Insured 9/20 at 41.72 AA 1,446,500
------------------------------------------------------------------------------------------------------------------------------------
100,345 Total Colorado 38,740,078
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 1.4% (0.9% OF TOTAL INVESTMENTS)
10,000 Washington Convention Center Authority, District of Columbia, Senior 10/16 at 100.00 AA 8,044,300
Lien Dedicated Tax Revenue Bonds, Series 2007A, 4.500%,
10/01/30 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
50
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 0.8% (0.5% OF TOTAL INVESTMENTS)
$ 10,220 Florida Housing Finance Corporation, Homeowner Mortgage Revenue 1/17 at 100.00 AA+ $ 4,576,823
Bonds, Series 2008, Trust 1191, 7.103%, 7/01/32 (Alternative
Minimum Tax) (IF)
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 5.5% (3.3% OF TOTAL INVESTMENTS)
15,000 Atlanta, Georgia, Airport General Revenue Refunding Bonds, Series 1/10 at 101.00 A+ (4) 15,686,250
2000A, 5.600%, 1/01/30 (Pre-refunded 1/01/10) - FGIC Insured
14,330 Fulton County Facilities Corporation, Georgia, Certificates of 11/10 at 101.00 AA 14,658,874
Participation, Public Purpose Project, Series 1999,
5.500%, 11/01/18 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
29,330 Total Georgia 30,345,124
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 13.9% (8.4% OF TOTAL INVESTMENTS)
4,595 Bolingbrook, Illinois, General Obligation Refunding Bonds, Series 2002B, No Opt. Call AA 1,058,183
0.000%, 1/01/32 - FGIC Insured
4,600 Chicago Board of Education, Illinois, Unlimited Tax General Obligation No Opt. Call AA 2,366,194
Bonds, Dedicated Tax Revenues, Series 1999A, 0.000%, 12/01/20 -
FGIC Insured
4,000 Chicago, Illinois, Motor Fuel Tax Revenue Bonds, Series 2003A, 5.000%, 7/13 at 100.00 AA+ 3,659,240
1/01/33 - AMBAC Insured
2,300 Chicago, Illinois, Motor Fuel Tax Revenue Refunding Bonds, Series 1993, No Opt. Call AA+ 2,437,356
5.375%, 1/01/14 - AMBAC Insured
5,250 Chicago, Illinois, Revenue Bonds, Midway Airport, Series 1998B, 5.000%, 1/09 at 101.00 AA 4,678,275
1/01/28 - MBIA Insured
3,400 Illinois Finance Authority, Illinois, Northwestern University, Revenue 12/15 at 100.00 AAA 2,772,626
Bonds, Tender Option Bond Trust 3174, 10.395%, 12/01/42 (IF)
38,645 Illinois, General Obligation Bonds, Illinois FIRST Program, Series 2000, 4/10 at 100.00 AA 38,768,274
5.500%, 4/01/25 - MBIA Insured
Lake and McHenry Counties Community Unit School District 118,
Wauconda, Illinois, General Obligation Bonds, Series 2005B:
10,230 0.000%, 1/01/22 - FSA Insured 1/15 at 70.63 Aaa 4,667,131
6,780 0.000%, 1/01/24 - FSA Insured 1/15 at 63.44 Aaa 2,577,349
1,975 Lake County Community High School District 127, Grayslake, Illinois, No Opt. Call AA 2,382,206
General Obligation Bonds, Series 2002A, 9.000%, 2/01/13 -
FGIC Insured
Metropolitan Pier and Exposition Authority, Illinois, Revenue
Bonds, McCormick Place Expansion Project, Series 2002A:
6,500 0.000%, 6/15/25 - MBIA Insured 6/22 at 101.00 AAA 4,010,175
3,270 5.000%, 12/15/28 - MBIA Insured 6/12 at 101.00 AAA 3,129,815
3,700 0.000%, 6/15/30 - MBIA Insured No Opt. Call AAA 1,037,036
3,280 0.000%, 6/15/37 - MBIA Insured No Opt. Call AAA 584,168
11,715 0.000%, 12/15/38 - MBIA Insured No Opt. Call AAA 1,894,901
9,170 0.000%, 6/15/39 - MBIA Insured No Opt. Call AAA 1,434,830
------------------------------------------------------------------------------------------------------------------------------------
119,410 Total Illinois 77,457,759
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 1.1% (0.7% OF TOTAL INVESTMENTS)
4,695 Indiana Educational Facilities Authority, Revenue Bonds, Butler University, 2/11 at 100.00 AA 4,567,202
Series 2001, 5.500%, 2/01/26 - MBIA Insured
2,000 Petersburg, Indiana, Pollution Control Revenue Refunding Bonds, 8/11 at 102.00 Baa1 1,679,360
Indianapolis Power and Light Company, Series 1991, 5.750%, 8/01/21
------------------------------------------------------------------------------------------------------------------------------------
6,695 Total Indiana 6,246,562
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 0.8% (0.5% OF TOTAL INVESTMENTS)
970 Iowa Finance Authority, Health Facility Revenue Bonds, Care Initiatives 7/16 at 100.00 BBB- 778,658
Project, Series 2006A, 5.000%, 7/01/19
5,000 Iowa Tobacco Settlement Authority, Tobacco Asset-Backed Revenue 6/17 at 100.00 BBB 3,480,900
Bonds, Series 2005B, 5.600%, 6/01/34
------------------------------------------------------------------------------------------------------------------------------------
5,970 Total Iowa 4,259,558
------------------------------------------------------------------------------------------------------------------------------------
51
NMO
Nuveen Municipal Market Opportunity Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 0.5% (0.3% OF TOTAL INVESTMENTS)
$ 2,500 Kansas Development Finance Authority, Water Pollution Control 11/12 at 100.00 AAA $ 2,575,375
Revolving Fund Leveraged Bonds, Series 2002-II, 5.500%, 11/01/21
500 Salina, Kansas, Hospital Revenue Bonds, Salina Regional Medical Center, 4/16 at 100.00 A1 374,125
Series 2006, 4.625%, 10/01/31
------------------------------------------------------------------------------------------------------------------------------------
3,000 Total Kansas 2,949,500
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 2.2% (1.3% OF TOTAL INVESTMENTS)
Jefferson County School District Finance Corporation, Kentucky, School
Building Revenue Bonds, Series 2000A:
3,045 5.250%, 7/01/17 (Pre-refunded 1/01/10) - FSA Insured 1/10 at 101.00 AAA 3,181,538
7,490 5.250%, 7/01/20 (Pre-refunded 1/01/10) - FSA Insured 1/10 at 101.00 AAA 7,825,852
1,000 Kentucky Economic Development Finance Authority, Louisville Arena 6/18 at 100.00 AAA 950,660
Project Revenue Bonds, Louisville Arena Authority, Inc., Series
2008A-1, 6.000%, 12/01/38 - AGC Insured
------------------------------------------------------------------------------------------------------------------------------------
11,535 Total Kentucky 11,958,050
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 1.7% (1.0% OF TOTAL INVESTMENTS)
7,415 Louisiana Local Government Environmental Facilities and Community 12/12 at 100.00 AA 6,244,987
Development Authority, Revenue Bonds, Baton Rouge Community
College Facilities Corporation, Series 2002, 5.000%, 12/01/32 -
MBIA Insured
3,350 Louisiana Public Facilities Authority, Revenue Bonds, Baton Rouge 7/14 at 100.00 AA 2,934,969
General Hospital, Series 2004, 5.250%, 7/01/33 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
10,765 Total Louisiana 9,179,956
------------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 1.0% (0.6% OF TOTAL INVESTMENTS)
4,410 Maryland Community Development Administration, Department of 3/17 at 100.00 Aa2 3,096,129
Housing and Community Development, Residential Revenue Bonds,
Series 2007D, 4.900%, 9/01/42 (Alternative Minimum Tax)
2,500 Maryland Department of Transportation, Consolidated Transportation No Opt. Call AAA 2,744,550
Revenue Bonds, Series 2002, 5.500%, 2/01/16
------------------------------------------------------------------------------------------------------------------------------------
6,910 Total Maryland 5,840,679
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 4.1% (2.5% OF TOTAL INVESTMENTS)
440 Massachusetts Bay Transportation Authority, Assessment Bonds, Series 7/10 at 100.00 AAA 425,599
2000A, 5.250%, 7/01/30
Massachusetts Bay Transportation Authority, Assessment Bonds, Series
2000A:
4,150 5.250%, 7/01/30 (Pre-refunded 7/01/10) 7/10 at 100.00 Aa1 (4) 4,352,769
660 5.250%, 7/01/30 (Pre-refunded 7/01/10) 7/10 at 100.00 Aa1 (4) 692,248
8,315 Massachusetts Turnpike Authority, Metropolitan Highway System 1/09 at 100.00 AA 6,595,541
Revenue Bonds, Senior Series 1997A, 5.000%, 1/01/37 -
MBIA Insured
10,000 Massachusetts Water Resources Authority, General Revenue Bonds, 8/10 at 101.00 AA (4) 10,593,000
Series 2000A, 5.750%, 8/01/39 (Pre-refunded 8/01/10) - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
23,565 Total Massachusetts 22,659,157
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 1.5% (0.9% OF TOTAL INVESTMENTS)
5,000 Detroit Water Supply System, Michigan, Water Supply System Revenue 7/16 at 100.00 AAA 4,060,750
Bonds, Series 2006D, 4.625%, 7/01/32 - FSA Insured
2,090 Grand Rapids Building Authority, Kent County, Michigan, Limited Tax 8/10 at 100.00 AA 2,168,835
General Obligation Bonds, Series 2000, 5.375%, 8/01/17 - AMBAC
Insured
3,050 Michigan Tobacco Settlement Finance Authority, Tobacco Settlement 6/18 at 100.00 Baa3 2,279,845
Asset-Backed Revenue Bonds, Series 2008A, 6.875%, 6/01/42
------------------------------------------------------------------------------------------------------------------------------------
10,140 Total Michigan 8,509,430
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 9.3% (5.7% OF TOTAL INVESTMENTS)
930 Minnesota Agricultural and Economic Development Board, Healthcare 11/10 at 101.00 A 917,789
System Revenue Bonds, Fairview Hospital and Healthcare Services,
Series 2000A, 6.375%, 11/15/29
52
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA (continued)
$ 29,070 Minnesota Agricultural and Economic Development Board, Healthcare 11/10 at 101.00 A (4) $31,438,332
System Revenue Bonds, Fairview Hospital and Healthcare Services,
Series 2000A, 6.375%, 11/15/29 (Pre-refunded 11/15/10)
2,045 Minnesota Housing Finance Agency, Single Family Remarketed Mortgage 1/11 at 101.00 AA+ 2,060,992
Bonds, Series 1998H-2, 6.050%, 7/01/31 (Alternative Minimum Tax)
13,675 Minnesota, General Obligation Bonds, Series 2000, 5.125%, 11/01/16 11/10 at 100.00 AAA 14,208,052
2,925 St. Paul Housing and Redevelopment Authority, Minnesota, Sales Tax 11/15 at 103.00 AAA 3,314,435
Revenue Refunding Bonds, Civic Center Project, Series 1996, 7.100%,
11/01/23 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
48,645 Total Minnesota 51,939,600
------------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 1.0% (0.6% OF TOTAL INVESTMENTS)
5,900 Mississippi Business Finance Corporation, Pollution Control Revenue 4/09 at 100.00 BBB 4,775,165
Refunding Bonds, System Energy Resources Inc. Project, Series 1998,
5.875%, 4/01/22
920 Mississippi Home Corporation, GNMA Mortgage-Backed Securities 1/09 at 104.00 Aaa 939,265
Program Single Family Mortgage Revenue Bonds, Series 1997D-5,
6.750%, 7/01/29 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
6,820 Total Mississippi 5,714,430
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 0.7% (0.4% OF TOTAL INVESTMENTS)
Kansas City Municipal Assistance Corporation, Missouri, Leasehold
Revenue Bonds, Series 2004B-1:
8,000 0.000%, 4/15/27 - AMBAC Insured No Opt. Call AA 2,677,280
5,000 0.000%, 4/15/31 - AMBAC Insured No Opt. Call AA 1,294,250
------------------------------------------------------------------------------------------------------------------------------------
13,000 Total Missouri 3,971,530
------------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 1.7% (1.1% OF TOTAL INVESTMENTS)
11,690 Omaha Convention Hotel Corporation, Nebraska, Convention Center 2/17 at 100.00 AA 9,685,165
Revenue Bonds, Series 2007, 5.000%, 2/01/35 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 3.6% (2.2% OF TOTAL INVESTMENTS)
Director of Nevada State Department of Business and Industry,
Revenue Bonds, Las Vegas Monorail Project, First Tier, Series
2000:
6,125 0.000%, 1/01/17 - AMBAC Insured No Opt. Call AA 2,704,371
8,500 0.000%, 1/01/26 - AMBAC Insured No Opt. Call AA 1,502,205
7,860 0.000%, 1/01/27 - AMBAC Insured No Opt. Call AA 1,255,714
21,000 5.375%, 1/01/40 - AMBAC Insured 1/10 at 100.00 AA 12,623,940
2,135 Reno, Nevada, Capital Improvement Revenue Bonds, Series 2005B, 6/15 at 33.61 AA 301,227
0.000%, 6/01/37 - FGIC Insured
2,500 Reno, Nevada, Health Facility Revenue Bonds, Catholic Healthcare West, 7/17 at 100.00 A 1,918,700
Trust 2634, 0.777%, 7/01/31 (IF)
------------------------------------------------------------------------------------------------------------------------------------
48,120 Total Nevada 20,306,157
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 7.3% (4.4% OF TOTAL INVESTMENTS)
18,400 New Jersey Health Care Facilities Financing Authority, Revenue Bonds, 1/17 at 35.47 Baa2 1,682,496
Saint Barnabas Health Care System, Series 2006A, 0.000%, 7/01/37
18,000 New Jersey Transportation Trust Fund Authority, Transportation System 6/10 at 100.00 AAA 18,989,820
Bonds, Series 2000B, 5.750%, 6/15/17 (Pre-refunded 6/15/10)
35,000 New Jersey Transportation Trust Fund Authority, Transportation System No Opt. Call AAA 7,280,350
Bonds, Series 2006C, 0.000%, 12/15/34 - FSA Insured
5,000 New Jersey Turnpike Authority, Revenue Bonds, Growth and Income 1/17 at 100.00 AA 3,053,500
Securities, Series 2004B, 0.000%, 1/01/35 - AMBAC Insured
3,000 Rahway Valley Sewerage Authority, New Jersey, Sewer Revenue Bonds, No Opt. Call A1 1,070,550
Series 2005A, 0.000%, 9/01/25 - MBIA Insured
3,525 Tobacco Settlement Financing Corporation, New Jersey, Tobacco 6/12 at 100.00 AAA 3,878,240
Settlement Asset-Backed Bonds, Series 2002, 6.125%, 6/01/42
(Pre-refunded 6/01/12)
53
NMO
Nuveen Municipal Market Opportunity Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY (continued)
$ 2,100 Tobacco Settlement Financing Corporation, New Jersey, Tobacco 6/13 at 100.00 AAA $ 2,296,308
Settlement Asset-Backed Bonds, Series 2003, 6.375%, 6/01/32
(Pre-refunded 6/01/13)
4,000 Tobacco Settlement Financing Corporation, New Jersey, Tobacco 6/17 at 100.00 BBB 2,161,600
Settlement Asset-Backed Bonds, Series 2007-1A, 5.000%, 6/01/41
------------------------------------------------------------------------------------------------------------------------------------
89,025 Total New Jersey 40,412,864
------------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 2.0% (1.2% OF TOTAL INVESTMENTS)
5,925 New Mexico Hospital Equipment Loan Council, Hospital Revenue Bonds, 8/11 at 101.00 AA- (4) 6,315,280
Presbyterian Healthcare Services, Series 2001A, 5.500%, 8/01/21
(Pre-refunded 8/01/11)
4,675 University of New Mexico, Revenue Refunding Bonds, Series 1992A,
6.250%, 6/01/12 No Opt. Call AA 4,927,123
------------------------------------------------------------------------------------------------------------------------------------
10,600 Total New Mexico 11,242,403
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 10.5% (6.4% OF TOTAL INVESTMENTS)
3,000 Long Island Power Authority, New York, Electric System General Revenue 6/16 at 100.00 A- 2,689,050
Bonds, Series 2006B, 5.000%, 12/01/35
6,750 Nassau County Tobacco Settlement Corporation, New York, Tobacco 7/09 at 101.00 AAA 7,049,835
Settlement Asset-Backed Bonds, Series 1999A, 6.400%, 7/15/33
(Pre-refunded 7/15/09)
17,870 New York City Transitional Finance Authority, New York, Future Tax 8/09 at 101.00 AAA 18,622,148
Secured Bonds, Fiscal Series 2000A, 5.750%, 8/15/24 (Pre-refunded
8/15/09)
5 New York City, New York, General Obligation Bonds, Fiscal Series 1997H, 8/09 at 100.00 AA 5,038
6.125%, 8/01/25
New York City, New York, General Obligation Bonds, Fiscal Series 2002G:
1,000 5.000%, 8/01/17 8/12 at 100.00 AA 1,006,000
6,530 5.750%, 8/01/18 8/12 at 100.00 AAA 6,808,962
5,000 New York City, New York, General Obligation Bonds, Fiscal Series 2003A, 8/12 at 100.00 AA 5,301,900
5.750%, 8/01/16
10,000 Port Authority of New York and New Jersey, Special Project Bonds, JFK 12/08 at 101.00 AA 8,891,200
International Air Terminal LLC, Sixth Series 1997, 5.750%, 12/01/22 -
MBIA Insured (Alternative Minimum Tax)
8,000 TSASC Inc., New York, Tobacco Flexible Amortization Bonds, Series 7/09 at 101.00 AAA 8,346,960
1999-1, 6.250%, 7/15/34 (Mandatory put 7/15/24) (Pre-refunded
7/15/09)
------------------------------------------------------------------------------------------------------------------------------------
58,155 Total New York 58,721,093
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 2.2% (1.4% OF TOTAL INVESTMENTS)
1,900 Charlotte-Mecklenburg Hospital Authority, North Carolina, Healthcare 1/15 at 100.00 AA- (4) 2,028,459
System Revenue Bonds, DBA Carolinas Healthcare System, Series
2005A, 5.000%, 1/15/45 (Pre-refunded 1/15/15)
4,000 North Carolina Medical Care Commission, Health System Revenue 10/17 at 100.00 AA 3,050,440
Bonds, Mission St. Joseph's Health System, Series 2007, 4.500%,
10/01/31 (UB)
7,500 North Carolina Municipal Power Agency 1, Catawba Electric Revenue 1/13 at 100.00 AA 7,360,575
Bonds, Series 2003A, 5.250%, 1/01/19 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
13,400 Total North Carolina 12,439,474
------------------------------------------------------------------------------------------------------------------------------------
NORTH DAKOTA - 4.9% (3.0% OF TOTAL INVESTMENTS)
23,035 Fargo, North Dakota, Health System Revenue Bonds, MeritCare Obligated 6/10 at 101.00 AAA 22,165,428
Group, Series 2000A, 5.625%, 6/01/31 - FSA Insured
North Dakota Water Commission, Water Development and Management
Program Bonds, Series 2000A:
2,230 5.700%, 8/01/18 (Pre-refunded 8/01/10) - MBIA Insured 8/10 at 100.00 AA (4) 2,358,760
2,450 5.750%, 8/01/19 (Pre-refunded 8/01/10) - MBIA Insured 8/10 at 100.00 AA (4) 2,593,546
------------------------------------------------------------------------------------------------------------------------------------
27,715 Total North Dakota 27,117,734
------------------------------------------------------------------------------------------------------------------------------------
54
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 5.9% (3.6% OF TOTAL INVESTMENTS)
Buckeye Tobacco Settlement Financing Authority, Ohio, Tobacco
Settlement Asset-Backed Revenue Bonds, Senior Lien, Series
2007A-2:
$ 120 5.125%, 6/01/24 6/17 at 100.00 BBB $ 94,056
1,250 5.875%, 6/01/30 6/17 at 100.00 BBB 876,263
1,215 5.750%, 6/01/34 6/17 at 100.00 BBB 809,190
4,300 6.000%, 6/01/42 6/17 at 100.00 BBB 2,800,418
4,750 5.875%, 6/01/47 6/17 at 100.00 BBB 2,971,648
10,000 Columbus City School District, Franklin County, Ohio, General Obligation 12/16 at 100.00 AAA 8,037,100
Bonds, Series 2006, 4.250%, 12/01/32 - FSA Insured (UB)
16,140 Montgomery County, Ohio, Hospital Facilities Revenue Bonds, Kettering No Opt. Call A 17,203,465
Medical Center, Series 1999, 6.300%, 4/01/12
------------------------------------------------------------------------------------------------------------------------------------
37,775 Total Ohio 32,792,140
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 0.3% (0.2% OF TOTAL INVESTMENTS)
1,675 Oklahoma Development Finance Authority, Health System Revenue 8/18 at 100.00 AA- 1,435,676
Bonds, Integris Baptist Medical Center, Series 2008B, 5.250%,
8/15/38
300 Tulsa Municipal Airport Trust, Oklahoma, Revenue Refunding Bonds, 6/09 at 100.00 B- 297,357
American Airlines Inc., Series 2000B, 6.000%, 6/01/35 (Mandatory
put 12/01/08) (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
1,975 Total Oklahoma 1,733,033
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 2.9% (1.7% OF TOTAL INVESTMENTS)
5,000 Oregon Health Sciences University, Revenue Bonds, Series 2002A, 1/13 at 100.00 AA 4,756,100
5.250%, 7/01/22 - MBIA Insured
Portland, Oregon, Water System Revenue Bonds, Series 2000A:
6,780 5.375%, 8/01/18 (Pre-refunded 8/01/10) 8/10 at 100.00 Aa1 (4) 7,133,916
3,880 5.500%, 8/01/20 (Pre-refunded 8/01/10) 8/10 at 100.00 Aa1 (4) 4,090,800
------------------------------------------------------------------------------------------------------------------------------------
15,660 Total Oregon 15,980,816
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 3.2% (1.9% OF TOTAL INVESTMENTS)
5,000 Delaware County Industrial Development Authority, Pennsylvania, 1/09 at 101.00 BB+ 4,345,400
Resource Recovery Revenue Refunding Bonds, Series 1997A, 6.200%,
7/01/19
5,000 Pennsylvania Higher Education Assistance Agency, Capital Acquisition 12/10 at 100.00 A2 (4) 5,356,600
Revenue Bonds, Series 2000, 5.875%, 12/15/30 (Pre-refunded
12/15/10) - MBIA Insured
7,550 Pennsylvania, General Obligation Bonds, Second Series 2001, 5.000%, 9/11 at 101.00 AA 7,888,014
9/15/14
------------------------------------------------------------------------------------------------------------------------------------
17,550 Total Pennsylvania 17,590,014
------------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 3.7% (2.2% OF TOTAL INVESTMENTS)
3,330 Puerto Rico Aqueduct and Sewerage Authority, Revenue Bonds, Senior 7/18 at 100.00 BBB- 2,980,850
Lien Series 2008A, 6.000%, 7/01/44
12,500 Puerto Rico Housing Finance Authority, Capital Fund Program Revenue 12/13 at 100.00 AA+ 12,251,137
Bonds, Series 2003, 4.500%, 12/01/23 (UB)
6,990 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 5,271,509
Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33
------------------------------------------------------------------------------------------------------------------------------------
22,820 Total Puerto Rico 20,503,496
------------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 0.4% (0.2% OF TOTAL INVESTMENTS)
2,960 Rhode Island Tobacco Settlement Financing Corporation, Tobacco 6/12 at 100.00 BBB 2,161,658
Settlement Asset-Backed Bonds, Series 2002A, 6.250%, 6/01/42
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 8.7% (5.3% OF TOTAL INVESTMENTS)
24,730 Greenville County School District, South Carolina, Installment Purchase 12/12 at 101.00 AA (4) 27,219,321
Revenue Bonds, Series 2002, 5.500%, 12/01/22 (Pre-refunded
12/01/12)
21,570 Piedmont Municipal Power Agency, South Carolina, Electric Revenue No Opt. Call AA 5,357,125
Bonds, Series 2004A-2, 0.000%, 1/01/30 - AMBAC Insured
55
NMO
Nuveen Municipal Market Opportunity Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA (continued)
$ 3,560 South Carolina Public Service Authority, Revenue Refunding Bonds, 7/13 at 100.00 AA $ 3,562,706
Santee Cooper Electric System, Series 2003A, 5.000%, 1/01/20 -
AMBAC Insured
11,665 Tobacco Settlement Revenue Management Authority, South Carolina, 5/16 at 100.00 BBB (4) 12,500,331
Tobacco Settlement Asset-Backed Bonds, Series 2001B, 6.375%,
5/15/28 (Pre-refunded 5/15/16)
------------------------------------------------------------------------------------------------------------------------------------
61,525 Total South Carolina 48,639,483
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 0.7% (0.4% OF TOTAL INVESTMENTS)
5,000 Knox County Health, Educational and Housing Facilities Board, 7/13 at 100.00 A3 3,779,950
Tennessee, Hospital Revenue Bonds, East Tennessee Children's
Hospital, Series 2003A, 5.000%, 7/01/23 - RAAI Insured
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 22.8% (13.8% OF TOTAL INVESTMENTS)
2,500 Alliance Airport Authority, Texas, Special Facilities Revenue Bonds, 12/12 at 100.00 CCC+ 853,000
American Airlines Inc., Series 2007, 5.250%, 12/01/29 (Alternative
Minimum Tax)
12,250 Austin, Texas, Subordinate Lien Hotel Occupancy Tax Revenue Refunding 11/09 at 100.00 AA (4) 12,748,698
Bonds, Series 1999, 5.800%, 11/15/29 (Pre-refunded 11/15/09) -
AMBAC Insured
11,255 Brazos River Authority, Texas, Pollution Control Revenue Refunding No Opt. Call Caa1 9,777,781
Bonds, TXU Electric Company, Series 2001C, 5.750%, 5/01/36
(Mandatory put 11/01/11) (Alternative Minimum Tax)
Brownsville Independent School District, Cameron County, Texas, General
Obligation Bonds, Series 1999:
5,015 5.625%, 8/15/25 (Pre-refunded 8/15/09) 8/09 at 100.00 AAA 5,170,465
8,825 5.625%, 8/15/29 (Pre-refunded 8/15/09) 8/09 at 100.00 AAA 9,098,575
1,000 Cedar Hill Independent School District, Dallas County, Texas, General No Opt. Call AA 213,370
Obligation Bonds, Series 2002, 0.000%, 8/15/32 - FGIC Insured
15,000 Central Texas Regional Mobility Authority, Travis and Williamson Counties, 1/15 at 100.00 AA 11,302,050
Toll Road Revenue Bonds, Series 2005, 5.000%, 1/01/45 -
FGIC Insured
Clear Creek Independent School District, Galveston and Harris
Counties, Texas, Unlimited Tax Schoolhouse and Refunding Bonds,
Series 2000:
585 5.400%, 2/15/18 2/10 at 100.00 AAA 591,938
340 5.650%, 2/15/19 2/10 at 100.00 AAA 344,413
235 5.700%, 2/15/20 2/10 at 100.00 AAA 237,818
270 5.700%, 2/15/21 2/10 at 100.00 AAA 272,927
Clear Creek Independent School District, Galveston and Harris
Counties, Texas, Unlimited Tax Schoolhouse and Refunding Bonds,
Series 2000:
16,740 5.400%, 2/15/18 (Pre-refunded 2/15/10) 2/10 at 100.00 AAA 17,414,287
9,660 5.650%, 2/15/19 (Pre-refunded 2/15/10) 2/10 at 100.00 AAA 10,079,630
6,645 5.700%, 2/15/20 (Pre-refunded 2/15/10) 2/10 at 100.00 AAA 6,937,845
7,750 5.700%, 2/15/21 (Pre-refunded 2/15/10) 2/10 at 100.00 AAA 8,091,543
2,500 Comal Independent School District, Comal, Bexar, Guadalupe, Hays, and No Opt. Call Aaa 1,133,250
Kendall Counties, Texas, General Obligation Bonds, Series 2005A,
0.000%, 2/01/23
6,000 Dallas-Ft. Worth International Airport Facility Improvement Corporation, 11/09 at 101.00 CCC+ 2,407,980
Texas, Revenue Bonds, American Airlines Inc., Series 1999, 6.375%,
5/01/35 (Alternative Minimum Tax)
Ennis Independent School District, Ellis County, Texas, General Obligation
Bonds, Series 2006:
3,950 0.000%, 8/15/30 8/16 at 49.21 Aaa 1,022,655
4,000 0.000%, 8/15/31 8/16 at 46.64 Aaa 967,520
1,440 Houston, Texas, Hotel Occupancy Tax and Special Revenue Bonds, No Opt. Call AA 317,894
Convention and Entertainment Project, Series 2001B, 0.000%,
9/01/32 - AMBAC Insured
1,250 Houston, Texas, Junior Lien Water and Sewerage System Revenue 12/11 at 100.00 AAA 1,254,900
Refunding Bonds, Series 2001A, 5.000%, 12/01/20 - FSA Insured
9,350 Leander Independent School District, Williamson and Travis Counties, 8/15 at 39.50 AA 1,995,010
Texas, General Obligation Bonds, Series 2005, 0.000%, 8/15/32 -
FGIC Insured
56
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS (continued)
$ 6,000 Leander Independent School District, Williamson and Travis Counties, 8/14 at 35.28 AAA $ 1,267,860
Texas, General Obligation Bonds, Series 2006, 0.000%, 8/15/33
15,000 San Antonio Independent School District, Bexar County, Texas, General 8/09 at 100.00 AAA 15,489,150
Obligation Bonds, Series 1999, 5.800%, 8/15/29 (Pre-refunded
8/15/09)
3,295 Tarrant County, Texas, Cultural & Educational Facilities Financing 2/17 at 100.00 AA- 826,386
Corporation, Revenue Bonds, Series 2007, Residuals 1760-3, 0.726%,
2/15/36 (IF)
5,000 White Settlement Independent School District, Tarrant County, Texas, 8/15 at 36.81 AAA 989,850
General Obligation Bonds, Series 2005, 0.000%, 8/15/34
3,970 Wichita Falls, Wichita County, Texas, Priority Lien Water and Sewerage 8/11 at 100.00 AA (4) 4,203,555
System Revenue Bonds, Series 2001, 5.000%, 8/01/21 (Pre-refunded
8/01/11) - AMBAC Insured
Wylie Independent School District, Taylor County, Texas, General
Obligation Bonds, Series 2005:
3,000 0.000%, 8/15/23 8/15 at 67.10 AAA 1,265,940
2,000 0.000%, 8/15/24 8/15 at 63.56 AAA 799,800
------------------------------------------------------------------------------------------------------------------------------------
164,825 Total Texas 127,076,090
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 17.7% (10.7% OF TOTAL INVESTMENTS)
5,500 Clark County Public Utility District 1, Washington, Generating System 1/11 at 100.00 AAA 5,515,950
Revenue Refunding Bonds, Series 2000, 5.125%, 1/01/20 -
FSA Insured
2,755 Cowlitz County, Washington, Special Sewerage Revenue Refunding No Opt. Call A- 2,833,214
Bonds, CSOB Wastewater Treatment Facilities, Series 2002, 5.500%,
11/01/16 - FGIC Insured
10,000 Energy Northwest, Washington, Electric Revenue Refunding Bonds, 7/11 at 101.00 AAA 10,453,600
Nuclear Project 3, Series 2001A, 5.500%, 7/01/17 - FSA Insured
2,500 King County, Washington, Sewer Revenue Bonds, Series 2001, 5.000%, 1/12 at 100.00 AA+ 2,474,825
1/01/23 - FGIC Insured
33,490 Port of Seattle, Washington, Revenue Bonds, Series 2000A, 5.625%, 8/10 at 100.00 AA (4) 35,380,844
2/01/30 (Pre-refunded 8/01/10) - MBIA Insured
6,950 Port of Seattle, Washington, Revenue Bonds, Series 2000B, 5.625%, 8/10 at 100.00 AA 6,181,400
2/01/24 - MBIA Insured (Alternative Minimum Tax)
2,150 Seattle, Washington, General Obligation Refunding and Improvement 12/12 at 100.00 AAA 2,054,798
Bonds, Series 2002, 4.500%, 12/01/20
3,000 Spokane County School District 81, Spokane, Washington, General 6/15 at 100.00 AA 2,805,060
Obligation Bonds, Series 2005, 5.000%, 6/01/24 - MBIA Insured
3,520 Washington State Healthcare Facilities Authority, Revenue Bonds, 10/11 at 100.00 Aa3 (4) 3,732,819
Children's Hospital and Regional Medical Center, Series 2001, 5.000%,
10/01/21 (Pre-refunded 10/01/11) - AMBAC Insured
7,890 Washington State Higher Education Facilities Authority, Revenue Bonds, 11/09 at 101.00 BBB+ (4) 8,301,542
Pacific Lutheran University, Series 1999, 5.950%, 11/01/29
(Pre-refunded 11/01/09) - RAAI Insured
11,130 Washington State Tobacco Settlement Authority, Tobacco Settlement 6/13 at 100.00 BBB 9,902,806
Asset-Backed Revenue Bonds, Series 2002, 6.500%, 6/01/26
9,000 Washington, Motor Vehicle Fuel Tax General Obligation Bonds, Series 1/12 at 100.00 AAA 9,025,470
2002C, 5.000%, 1/01/21 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
97,885 Total Washington 98,662,328
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 1.0% (0.6% OF TOTAL INVESTMENTS)
3,630 Badger Tobacco Asset Securitization Corporation, Wisconsin, Tobacco 6/12 at 100.00 BBB 3,458,228
Settlement Asset-Backed Bonds, Series 2002, 6.125%, 6/01/27
1,755 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, 5/16 at 100.00 BBB 1,317,373
Divine Savior Healthcare, Series 2006, 4.750%, 5/01/25
57
NMO
Nuveen Municipal Market Opportunity Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN (continued)
$ 1,250 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, 3/09 at 100.50 N/R $ 886,713
United Lutheran Program for the Aging Inc., Series 1998, 5.700%,
3/01/28
------------------------------------------------------------------------------------------------------------------------------------
6,635 Total Wisconsin 5,662,314
$ 1,265,500 Total Investments (cost $982,534,401) - 165.0% 919,639,931
=============-----------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (2.9)% (16,275,000)
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.8% 15,655,682
--------------------------------------------------------------------------------------------------------------------
Auction Rate Preferred Shares, at Liquidation Value - (64.9)% (5) (361,675,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 557,345,613
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares unless
otherwise noted.
(2) Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates (month
and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying
prices at later dates. Certain mortgage-backed securities
may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered
public accounting firm): Using the higher of Standard &
Poor's Group ("Standard & Poor's") or Moody's Investor
Service, Inc. ("Moody's") rating. Ratings below BBB by
Standard & Poor's or Baa by Moody's are considered to be
below investment grade.
The Portfolio of Investments may reflect the ratings on
certain bonds insured by ACA, AGC, AMBAC, FGIC, FSA, MBIA,
RAAI and SYNCORA as of October 31, 2008. Please see the
Portfolio Managers' Commentary for an expanded discussion of
the affect on the Fund of changes to the ratings of certain
bonds in the portfolio resulting from changes to the ratings
of the underlying insurers both during the period and after
period end.
(4) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which ensure
the timely payment of principal and interest. Such
investments are normally considered to be equivalent to AAA
rated securities.
(5) Auction Rate Preferred Shares, at Liquidation Value as a
percentage of Total Investments is 39.3%.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected
as a financing transaction pursuant to the provisions of
SFAS No. 140.
See accompanying notes to financial statements.
58
NAD
Nuveen Dividend Advantage Municipal Fund
Portfolio of INVESTMENTS
October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS - 160.6% (97.4% OF TOTAL INVESTMENTS)
ALABAMA - 0.3% (0.2% OF TOTAL INVESTMENTS)
$ 1,500 Alabama 21st Century Authority, Tobacco Settlement Revenue Bonds, 6/10 at 102.00 A- $ 1,295,805
Series 2000, 5.750%, 12/01/20
------------------------------------------------------------------------------------------------------------------------------------
ALASKA - 0.2% (0.1% OF TOTAL INVESTMENTS)
750 Alaska Housing Finance Corporation, General Housing Purpose Bonds, 12/14 at 100.00 AA 698,655
Series 2005A, 5.250%, 12/01/34 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 1.1% (0.7% OF TOTAL INVESTMENTS)
2,350 Phoenix, Arizona, Civic Improvement Corporation, Senior Lien Airport 7/18 at 100.00 AA- 2,142,049
Revenue Bonds, Series 2008A, 5.000%, 7/01/33
5,000 Salt Verde Financial Corporation, Arizona, Senior Gas Revenue Bonds, No Opt. Call AA- 3,027,350
Series 2007, 5.000%, 12/01/37
------------------------------------------------------------------------------------------------------------------------------------
7,350 Total Arizona 5,169,399
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 5.2% (3.1% OF TOTAL INVESTMENTS)
1,535 Alameda Corridor Transportation Authority, California, Senior Lien No Opt. Call AA 246,352
Revenue Bonds, Series 1999A, 0.000%, 10/01/37 - MBIA Insured
5,500 Anaheim Public Finance Authority, California, Subordinate Lease Revenue No Opt. Call AAA 1,552,595
Bonds, Public Improvement Project, Series 1997C, 0.000%, 9/01/28 -
FSA Insured
65 California, General Obligation Bonds, Series 1997, 5.000%, 10/01/18 - 12/08 at 100.00 Aaa 65,005
AMBAC Insured
5,000 California, General Obligation Bonds, Series 2005, 5.000%, 3/01/31 3/16 at 100.00 A+ 4,543,000
Golden State Tobacco Securitization Corporation, California, Enhanced
Tobacco Settlement Asset-Backed Bonds, Series 2007A-1:
5,200 5.000%, 6/01/33 6/17 at 100.00 BBB 3,242,512
1,000 5.125%, 6/01/47 6/17 at 100.00 BBB 590,500
Golden State Tobacco Securitization Corporation, California, Tobacco
Settlement Asset-Backed Revenue Bonds, Series 2005A:
3,500 0.000%, 6/01/26 - FSA Insured No Opt. Call AAA 1,143,555
9,925 5.000%, 6/01/45 6/15 at 100.00 AAA 8,148,425
1,495 Palmdale Civic Authority, California, Revenue Refinancing Bonds, Civic 1/09 at 101.00 AA 1,512,088
Center Project, Series 1997A, 5.375%, 7/01/12 - MBIA Insured
17,000 San Joaquin Hills Transportation Corridor Agency, Orange County, No Opt. Call AA 2,866,200
California, Toll Road Revenue Refunding Bonds, Series 1997A, 0.000%,
1/15/35 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
50,220 Total California 23,910,232
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 5.6% (3.4% OF TOTAL INVESTMENTS)
1,125 Antelope Heights Metropolitan District, Colorado, Limited Tax General 12/17 at 100.00 A3 779,130
Obligation Bonds, Series 2007, 5.000%, 12/01/37 - RAAI Insured
Denver City and County, Colorado, Airport Special Facilities Revenue
Bonds, Rental Car Projects, Series 1999A:
3,205 6.000%, 1/01/12 - MBIA Insured (Alternative Minimum Tax) 1/09 at 101.00 AA 3,240,896
1,000 6.000%, 1/01/13 - MBIA Insured (Alternative Minimum Tax) 1/09 at 101.00 AA 1,010,760
1,475 Denver, Colorado, FHA-Insured Multifamily Housing Revenue Bonds, 4/09 at 101.00 AA 1,312,868
Boston Lofts Project, Series 1997A, 5.750%, 10/01/27 (Alternative
Minimum Tax)
59
NAD
Nuveen Dividend Advantage Municipal Fund (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
COLORADO (continued)
$ 8,515 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, Series No Opt. Call AA $ 2,735,784
1997B, 0.000%, 9/01/25 - MBIA Insured
25,000 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, Series No Opt. Call AA 5,060,250
2000B, 0.000%, 9/01/31 - MBIA Insured
60,000 E-470 Public Highway Authority, Colorado, Toll Revenue Bonds, Series No Opt. Call AA 8,679,000
2004A, 0.000%, 3/01/36 - MBIA Insured
12,500 E-470 Public Highway Authority, Colorado, Toll Revenue Bonds, Series 9/26 at 54.77 AA 1,481,875
2006A, 0.000%, 9/01/38 - MBIA Insured
2,000 Metropolitan Football Stadium District, Colorado, Sales Tax Revenue No Opt. Call AA 1,751,160
Bonds, Series 1999A, 0.000%, 1/01/12 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
114,820 Total Colorado 26,051,723
------------------------------------------------------------------------------------------------------------------------------------
CONNECTICUT - 0.7% (0.4% OF TOTAL INVESTMENTS)
4,335 Mashantucket Western Pequot Tribe, Connecticut, Subordinate Special 11/17 at 100.00 Baa3 3,037,404
Revenue Bonds, Series 2007A, 5.750%, 9/01/34
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 10.4% (6.3% OF TOTAL INVESTMENTS)
1,570 Florida Housing Finance Agency, Housing Revenue Bonds, Mar Lago 12/08 at 101.00 AA 1,552,055
Village Apartments, Series 1997F, 5.800%, 12/01/17 - AMBAC Insured
(Alternative Minimum Tax)
15,000 Florida State Board of Education, Public Education Capital Outlay Bonds, 6/15 at 101.00 AAA 12,219,750
Series 2005E, 4.500%, 6/01/35 (UB)
2,500 Marion County Hospital District, Florida, Revenue Bonds, Munroe 10/17 at 100.00 A2 1,768,325
Regional Medical Center, Series 2007, 5.000%, 10/01/34
13,625 Martin County Industrial Development Authority, Florida, Industrial 12/08 at 100.00 BB+ 12,290,430
Development Revenue Bonds, Indiantown Cogeneration LP, Series
1994A, 7.875%, 12/15/25 (Alternative Minimum Tax)
22,000 South Miami Health Facilities Authority, Florida, Revenue Bonds, Baptist 8/17 at 100.00 AA- 17,702,520
Health Systems of South Florida, Series 2007, 5.000%, 8/15/37 (UB)
4,055 South Miami Health Facilities Authority, Florida, Revenue Bonds, Baptist 8/17 at 100.00 AA- 2,481,214
Health Systems of South Florida, Trust 1025, 7.368%, 8/15/42 (IF)
------------------------------------------------------------------------------------------------------------------------------------
58,750 Total Florida 48,014,294
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 2.6% (1.6% OF TOTAL INVESTMENTS)
5,000 Cobb County Development Authority, Georgia, Student Housing Revenue 7/17 at 100.00 Aa3 4,227,750
Bonds, KSU Village II Real Estate Foundation LLC Project, Series 2007A,
5.250%, 7/15/38 - AMBAC Insured
4,000 Forsyth County Water and Sewerage Authority, Georgia, Revenue Bonds, 4/10 at 101.00 AA+ (4) 4,247,520
Series 2000, 6.000%, 4/01/25 (Pre-refunded 4/01/10)
Gainesville and Hall County Hospital Authority, Georgia, Revenue
Anticipation Certificates, Northeast Georgia Health Services Inc., Series
1999:
2,620 5.500%, 5/15/29 (Pre-refunded 5/15/09) - MBIA Insured 5/09 at 101.00 AA (4) 2,700,198
880 5.500%, 5/15/29 (Pre-refunded 5/15/09) - MBIA Insured 5/09 at 101.00 AA (4) 906,259
------------------------------------------------------------------------------------------------------------------------------------
12,500 Total Georgia 12,081,727
------------------------------------------------------------------------------------------------------------------------------------
IDAHO - 0.2% (0.1% OF TOTAL INVESTMENTS)
120 Idaho Housing and Finance Association, Single Family Mortgage Bonds, 7/09 at 101.00 Aa2 119,316
Series 1999E, 5.750%, 1/01/21 (Alternative Minimum Tax)
175 Idaho Housing and Finance Association, Single Family Mortgage Bonds, 1/10 at 100.00 Aa2 176,589
Series 2000D, 6.350%, 7/01/22 (Alternative Minimum Tax)
260 Idaho Housing and Finance Association, Single Family Mortgage Bonds, 7/10 at 100.00 Aaa 260,065
Series 2000E, 5.950%, 7/01/20 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
555 Total Idaho 555,970
------------------------------------------------------------------------------------------------------------------------------------
60
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 33.3% (20.2% OF TOTAL INVESTMENTS)
$ 2,460 Channahon, Illinois, Revenue Refunding Bonds, Morris Hospital, Series 12/09 at 102.00 BBB+ $ 2,478,622
1999, 5.750%, 12/01/12
2,205 Chicago Board of Education, Illinois, Unlimited Tax General Obligation No Opt. Call Aaa 633,761
Bonds, Dedicated Tax Revenues, Series 1998B-1, 0.000%, 12/01/29 -
FGIC Insured
7,250 Chicago Board of Education, Illinois, Unlimited Tax General Obligation No Opt. Call AA 7,290,963
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:
750 5.500%, 12/20/19 (Alternative Minimum Tax) 10/10 at 101.00 AA 704,258
1,210 5.600%, 12/20/29 (Alternative Minimum Tax) 10/10 at 101.00 AA 1,031,501
1,925 5.650%, 12/20/40 (Alternative Minimum Tax) 10/10 at 101.00 AA 1,553,071
22,750 Chicago, Illinois, General Obligation Refunding Bonds, Emergency No Opt. Call AA 23,265,969
Telephone System, Series 1999, 5.500%, 1/01/23 - FGIC Insured
2,620 Chicago, Illinois, Motor Fuel Tax Revenue Refunding Bonds, Series 1993, No Opt. Call AA+ 2,776,466
5.375%, 1/01/14 - AMBAC Insured
3,340 Chicago, Illinois, Third Lien General Airport Revenue Bonds, O'Hare 1/16 at 100.00 A1 2,882,186
International Airport, Series 2005A, 5.000%, 1/01/33 - FGIC Insured
190 DuPage County Community School District 200, Wheaton, Illinois, 11/13 at 100.00 Aaa 193,002
General Obligation Bonds, Series 2003B, 5.250%, 11/01/20 - FSA
Insured
810 DuPage County Community School District 200, Wheaton, Illinois, 11/13 at 100.00 Aaa 884,010
General Obligation Bonds, Series 2003B, 5.250%, 11/01/20
(Pre-refunded 11/01/13) - FSA Insured
500 Hoffman Estates Park District, Cook County, Illinois, General Obligation 12/09 at 102.00 AA 488,575
Bonds, Series 1999, 5.375%, 12/01/29 - MBIA Insured
3,935 Illinois Development Finance Authority, Local Government Program No Opt. Call Baa1 2,874,124
Revenue Bonds, Lake County School District 116 - Round Lake, Series
1999, 0.000%, 1/01/15 - MBIA Insured
2,000 Illinois Finance Authority, Revenue Bonds, Children's Memorial Hospital, 8/18 at 100.00 AAA 1,706,740
Series 2008, 5.250%, 8/15/47 - AGC Insured (UB)
1,000 Illinois Finance Authority, Revenue Bonds, Edward Health Services 2/18 at 100.00 AA 804,190
Corporation, Series 2008A, 5.500%, 2/01/40 - AMBAC Insured
5,570 Illinois Finance Authority, Revenue Bonds, University of Chicago, Series 7/14 at 100.00 Aa1 5,082,124
2004A, 5.000%, 7/01/34
9,840 Illinois Health Facilities Authority, Remarketed Revenue Bonds, University 8/11 at 103.00 Aa1 9,507,211
of Chicago Project, Series 1985A, 5.500%, 8/01/20
5,595 Illinois Health Facilities Authority, Revenue Bonds, Loyola University 1/09 at 100.50 AAA 4,747,973
Health System, Series 1997A, 5.000%, 7/01/24 - MBIA Insured
5,490 Illinois Health Facilities Authority, Revenue Bonds, Sarah Bush Lincoln 2/09 at 100.00 A 5,370,428
Health Center, Series 1996B, 5.500%, 2/15/16
1,500 Illinois Housing Development Authority, Housing Finance Bonds, Series 1/15 at 100.00 A+ 1,176,585
2005E, 4.800%, 1/01/36 - FGIC Insured
2,000 Kane & DeKalb Counties, Illinois, Community United School District 301, No Opt. Call A3 925,180
General Obligation Bonds, Series 2006, 0.000%, 12/01/21 - MBIA Insured
11,345 Lake and McHenry Counties Community Unit School District 118, 1/15 at 60.14 Aaa 4,090,894
Wauconda, Illinois, General Obligation Bonds, Series 2005B, 0.000%,
1/01/25 - FSA Insured
3,000 Lombard Public Facilities Corporation, Illinois, First Tier Conference 1/16 at 100.00 N/R 2,457,360
Center and Hotel Revenue Bonds, Series 2005A-1, 7.125%, 1/01/36
22,500 Metropolitan Pier and Exposition Authority, Illinois, Revenue Bonds, 12/09 at 101.00 AAA 22,722,974
McCormick Place Expansion Project, Series 1999A, 5.500%,
12/15/24 - FGIC Insured
Metropolitan Pier and Exposition Authority, Illinois, Revenue Refunding
Bonds, McCormick Place Expansion Project, Series 1996A:
12,250 0.000%, 12/15/22 - MBIA Insured No Opt. Call AA 5,584,898
13,000 0.000%, 12/15/23 - MBIA Insured No Opt. Call AA 5,581,420
61
NAD
Nuveen Dividend Advantage Municipal Fund (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS (continued)
$ 1,840 Oak Park, Illinois, General Obligation Bonds, Series 2005B, 0.000%, 11/15 at 54.14 AA- $ 549,792
11/01/27 - SYNCORA GTY Insured
Regional Transportation Authority, Cook, DuPage, Kane, Lake,
McHenry and Will Counties, Illinois, General Obligation Bonds,
Series 1999:
22,650 5.750%, 6/01/19 - FSA Insured No Opt. Call AAA 24,758,486
3,500 5.750%, 6/01/23 - FSA Insured No Opt. Call AAA 3,626,315
1,300 Schaumburg, Illinois, General Obligation Bonds, Series 2004B, 5.250%, 12/14 at 100.00 AA+ 1,227,720
12/01/34 - FGIC Insured
10,000 Will County Community High School District 210 Lincoln-Way, Illinois, No Opt. Call Aaa 4,424,200
General Obligation Bonds, Series 2006, 0.000%, 1/01/23 - FSA
Insured
4,500 Will County School District 122, New Lenox, Illinois, General Obligation No Opt. Call Aaa 2,671,740
Bonds, Series 2000B, 0.000%, 11/01/18 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
188,825 Total Illinois 154,072,738
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 7.0% (4.3% OF TOTAL INVESTMENTS)
8,755 Indiana Health Facility Financing Authority, Hospital Revenue Bonds, 11/09 at 101.00 AAA 9,123,148
Charity Obligated Group, Series 1999D, 5.500%, 11/15/24
(Pre-refunded 11/15/09) - MBIA Insured
8,000 Indiana Health Facility Financing Authority, Hospital Revenue Bonds, 8/10 at 101.50 AA (4) 8,547,280
Clarian Health Obligated Group, Series 2000A, 5.500%, 2/15/26
(Pre-refunded 8/15/10) - MBIA Insured
2,000 Indiana Health Facility Financing Authority, Revenue Bonds, Community 3/17 at 100.00 BBB 1,472,160
Foundation of Northwest Indiana, Series 2007, 5.500%, 3/01/37
6,830 Indiana Housing and Community Development Authority, Single Family 1/17 at 100.00 Aaa 3,667,055
Mortgage Revenue Bonds, Series 2007A-1, Drivers 1847, 6.603%,
7/01/32 (Alternative Minimum Tax) (IF)
6,675 Indiana Municipal Power Agency, Power Supply Revenue Bonds, Series 1/17 at 100.00 AA 5,453,408
2007A, 5.000%, 1/01/42 - MBIA Insured
4,190 Indianapolis, Indiana, Economic Development Revenue Bonds, Park 6/09 at 101.00 Aa3 (4) 4,330,114
Tudor Foundation Inc., Project, Series 1999, 5.700%, 6/01/24
(Pre-refunded 6/01/09)
------------------------------------------------------------------------------------------------------------------------------------
36,450 Total Indiana 32,593,165
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 0.9% (0.5% OF TOTAL INVESTMENTS)
7,000 Iowa Tobacco Settlement Authority, Asset Backed Settlement Revenue 6/15 at 100.00 BBB 4,164,230
Bonds, Series 2005C, 5.625%, 6/01/46
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 0.9% (0.5% OF TOTAL INVESTMENTS)
3,825 Wichita, Kansas, Water and Sewerage Utility Revenue Bonds, Series 4/09 at 100.00 AA 3,401,573
1999, 4.000%, 10/01/18 - FGIC Insured
1,000 Wyandotte County-Kansas City Unified Government, Kansas, Sales Tax 12/15 at 100.00 N/R 850,280
Special Obligation Bonds, Redevelopment Project Area B, Series 2005,
5.000%, 12/01/20
------------------------------------------------------------------------------------------------------------------------------------
4,825 Total Kansas 4,251,853
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 1.8% (1.1% OF TOTAL INVESTMENTS)
3,030 Hardin County School District Finance Corporation, Kentucky, School 2/10 at 101.00 Aa3 (4) 3,191,196
Building Revenue Bonds, Series 2000, 5.750%, 2/01/20
(Pre-refunded 2/01/10)
Kentucky Economic Development Finance Authority, Hospital System
Revenue Refunding and Improvement Bonds, Appalachian Regional
Healthcare Inc., Series 1997:
1,850 5.850%, 10/01/17 4/09 at 101.00 BB- 1,478,261
5,000 5.875%, 10/01/22 4/09 at 101.00 BB- 3,702,650
------------------------------------------------------------------------------------------------------------------------------------
9,880 Total Kentucky 8,372,107
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 6.9% (4.2% OF TOTAL INVESTMENTS)
2,245 Lafayette, Louisiana, Sales Tax Revenue Bonds, Public Improvements, 5/10 at 101.50 AA- (4) 2,388,680
Series 2000B, 5.625%, 5/01/25 (Pre-refunded 5/01/10) - FGIC Insured
1,750 Louisiana Local Government Environmental Facilities and Community 6/12 at 105.00 Aaa 1,786,365
Development Authority, GNMA Collateralized Mortgage Revenue
Refunding Bonds, Sharlo Apartments, Series 2002A, 6.500%, 6/20/37
62
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA (continued)
$ 5,350 Louisiana Public Facilities Authority, Revenue Bonds, Baton Rouge 7/14 at 100.00 AA $ 4,687,189
General Hospital, Series 2004, 5.250%, 7/01/33 - MBIA Insured
9,000 Louisiana Public Facilities Authority, Revenue Bonds, Ochsner Clinic 5/17 at 100.00 A3 7,012,890
Foundation Project, Series 2007A, 5.500%, 5/15/47
5,445 Louisiana State, Gasoline and Fuels Tax Revenue Bonds, Series 2006, 5/16 at 100.00 AA 4,174,627
4.500%, 5/01/41 - FGIC Insured (UB)
13,570 Louisiana Transportation Authority, Senior Lien Toll Road Revenue Bonds, 12/10 at 38.73 AA 3,640,424
Series 2005B, 0.000%, 12/01/28 - AMBAC Insured
9,545 Tobacco Settlement Financing Corporation, Louisiana, Tobacco 5/11 at 101.00 BBB 8,016,941
Settlement Asset-Backed Bonds, Series 2001B, 5.500%, 5/15/30
------------------------------------------------------------------------------------------------------------------------------------
46,905 Total Louisiana 31,707,116
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 1.8% (1.1% OF TOTAL INVESTMENTS)
1,455 Boston Industrial Development Financing Authority, Massachusetts, 9/12 at 102.00 N/R 1,056,606
Subordinate Revenue Bonds, Crosstown Center Project, Series 2002,
8.000%, 9/01/35 (Alternative Minimum Tax)
4,365 Massachusetts Health and Educational Facilities Authority, Revenue 10/15 at 100.00 AAA 4,223,312
Bonds, Berkshire Health System, Series 2008, 5.000%, 10/01/19 -
AGC Insured (UB)
620 Massachusetts Health and Educational Facilities Authority, Revenue 7/18 at 100.00 A3 433,343
Bonds, CareGroup Inc., Series 2008E-1, 5.125%, 7/01/33
785 Massachusetts Port Authority, Special Facilities Revenue Bonds, US 3/09 at 100.00 AA 662,516
Airways Group Inc., Series 1996A, 5.875%, 9/01/23 - MBIA Insured
(Alternative Minimum Tax)
2,000 Massachusetts Turnpike Authority, Metropolitan Highway System 1/09 at 100.00 AA 1,970,380
Revenue Bonds, Senior Series 1997A, 5.125%, 1/01/17 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
9,225 Total Massachusetts 8,346,157
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 4.1% (2.5% OF TOTAL INVESTMENTS)
6,000 Detroit, Michigan, Second Lien Sewerage Disposal System Revenue 7/15 at 100.00 AA 5,128,440
Bonds, Series 2005A, 5.000%, 7/01/35 - MBIA Insured
15,255 Michigan State Hospital Finance Authority, Hospital Revenue Bonds, 2/09 at 101.00 BB 10,139,541
Detroit Medical Center Obligated Group, Series 1998A, 5.250%,
8/15/28
4,000 Wayne County, Michigan, Airport Revenue Bonds, Detroit Metropolitan 12/08 at 101.00 AA 3,789,280
Wayne County Airport, Series 1998A, 5.375%, 12/01/16 - MBIA
Insured (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
25,255 Total Michigan 19,057,261
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 0.2% (0.1% OF TOTAL INVESTMENTS)
810 Minnesota Housing Finance Agency, Single Family Mortgage Bonds, 1/10 at 101.00 AA+ 803,593
Series 1998H-1, 5.650%, 7/01/31 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 2.6% (1.6% OF TOTAL INVESTMENTS)
Kansas City Municipal Assistance Corporation, Missouri, Leasehold
Revenue Bonds, Series 2004B-1:
7,000 0.000%, 4/15/27 - AMBAC Insured No Opt. Call AA 2,342,620
5,000 0.000%, 4/15/29 - AMBAC Insured No Opt. Call AA 1,474,400
2,185 Missouri Health and Educational Facilities Authority, Revenue Bonds, 6/11 at 101.00 AA 2,057,374
SSM Healthcare System, Series 2001A, 5.250%, 6/01/21 - AMBAC
Insured
Missouri Health and Educational Facilities Authority, Revenue
Bonds, SSM Healthcare System, Series 2001A:
2,185 5.250%, 6/01/21 (Pre-refunded 6/01/11) - AMBAC Insured 6/11 at 101.00 AA (4) 2,338,256
3,670 5.250%, 6/01/28 (Pre-refunded 6/01/11) - AMBAC Insured 6/11 at 101.00 AA (4) 3,916,000
------------------------------------------------------------------------------------------------------------------------------------
20,040 Total Missouri 12,128,650
------------------------------------------------------------------------------------------------------------------------------------
63
NAD
Nuveen Dividend Advantage Municipal Fund (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MONTANA - 0.4% (0.2% OF TOTAL INVESTMENTS)
$ 815 Montana Board of Housing, Single Family Mortgage Bonds, Series 12/09 at 100.00 AA+ $ 829,597
2000A-2, 6.450%, 6/01/29 (Alternative Minimum Tax)
1,000 Montana Higher Education Student Assistance Corporation, Student Loan 12/09 at 100.00 A2 922,290
Revenue Bonds, Subordinate Series 1999B, 6.400%, 12/01/32
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
1,815 Total Montana 1,751,887
------------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 0.2% (0.1% OF TOTAL INVESTMENTS)
1,000 NebHelp Inc., Nebraska, Senior Subordinate Bonds, Student Loan No Opt. Call A2 1,028,370
Program, Series 1993A-5A, 6.200%, 6/01/13 - MBIA Insured
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 2.2% (1.3% OF TOTAL INVESTMENTS)
Director of Nevada State Department of Business and Industry,
Revenue Bonds, Las Vegas Monorail Project, First Tier, Series
2000:
8,000 0.000%, 1/01/19 - AMBAC Insured No Opt. Call AA 2,863,520
4,000 5.625%, 1/01/32 - AMBAC Insured 1/10 at 102.00 AA 2,411,720
3,000 5.375%, 1/01/40 - AMBAC Insured 1/10 at 100.00 AA 1,803,420
3,750 Henderson, Nevada, Healthcare Facility Revenue Refunding Bonds, 7/17 at 100.00 A 2,878,050
Catholic Healthcare West, Series 2007B, Trust 2633, 1.032%, 7/01/31
(IF)
------------------------------------------------------------------------------------------------------------------------------------
18,750 Total Nevada 9,956,710
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 6.7% (4.1% OF TOTAL INVESTMENTS)
355 New Jersey Health Care Facilities Financing Authority, FHA-Insured 8/11 at 100.00 AA 355,291
Mortgage Revenue Bonds, Jersey City Medical Center, Series 2001,
4.800%, 8/01/21 - AMBAC Insured
1,830 New Jersey Higher Education Assistance Authority, Student Loan 6/10 at 101.00 Aaa 1,863,544
Revenue Bonds, Series 2000A, 6.000%, 6/01/13 - MBIA Insured
(Alternative Minimum Tax)
4,130 New Jersey Transit Corporation, Certificates of Participation, Federal No Opt. Call AA 4,357,604
Transit Administration Grants, Series 2002A, 5.500%, 9/15/13 -
AMBAC Insured
4,000 New Jersey Transportation Trust Fund Authority, Transportation System No Opt. Call AA- 4,292,400
Bonds, Series 1999A, 5.750%, 6/15/18
20,000 New Jersey Transportation Trust Fund Authority, Transportation System No Opt. Call AA 6,075,200
Bonds, Series 2006C, 0.000%, 12/15/28 - AMBAC Insured
Tobacco Settlement Financing Corporation, New Jersey, Tobacco
Settlement Asset-Backed Bonds, Series 2002:
8,615 5.750%, 6/01/32 (Pre-refunded 6/01/12) 6/12 at 100.00 AAA 9,187,984
3,165 6.125%, 6/01/42 (Pre-refunded 6/01/12) 6/12 at 100.00 AAA 3,482,165
1,365 Tobacco Settlement Financing Corporation, New Jersey, Tobacco 6/13 at 100.00 AAA 1,562,188
Settlement Asset-Backed Bonds, Series 2003, 6.750%, 6/01/39
(Pre-refunded 6/01/13)
------------------------------------------------------------------------------------------------------------------------------------
43,460 Total New Jersey 31,176,376
------------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 0.7% (0.4% OF TOTAL INVESTMENTS)
3,855 University of New Mexico, FHA-Insured Mortgage Hospital Revenue 7/14 at 100.00 AAA 3,397,296
Bonds, Series 2004, 5.000%, 7/01/32 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 11.8% (7.2% OF TOTAL INVESTMENTS)
2,170 Dormitory Authority of the State of New York, Insured Revenue Bonds, 1/09 at 101.00 A3 2,060,762
Franciscan Health Partnership Obligated Group - Frances Shervier
Home and Hospital, Series 1997, 5.500%, 7/01/17 - RAAI Insured
7,500 Dormitory Authority of the State of New York, Secured Hospital Revenue 2/09 at 100.75 AA 7,147,725
Refunding Bonds, Wyckoff Heights Medical Center, Series 1998H,
5.300%, 8/15/21 - MBIA Insured
Nassau County, New York, General Obligation Improvement Bonds,
Series 1999B:
4,005 5.250%, 6/01/19 (Pre-refunded 6/01/09) - AMBAC Insured 6/09 at 102.00 AA (4) 4,167,443
7,005 5.250%, 6/01/21 (Pre-refunded 6/01/09) - AMBAC Insured 6/09 at 102.00 AA (4) 7,289,123
64
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK (continued)
$ 6,000 New York City Industrial Development Agency, New York, American 8/16 at 101.00 B- $ 4,142,580
Airlines-JFK International Airport Special Facility Revenue Bonds,
Series 2005, 7.750%, 8/01/31 (Alternative Minimum Tax)
2,500 New York City Municipal Water Finance Authority, New York, Water and 12/14 at 100.00 AAA 2,054,500
Sewerage System Revenue Bonds, Series 2008, Trust 1199, 6.714%,
6/15/36 - FSA Insured (IF)
8,800 New York City Sales Tax Asset Receivable Corporation, New York, 10/14 at 100.00 AAA 8,329,816
Dedicated Revenue Bonds, Local Government Assistance Corporation,
Series 2008, 5.000%, 10/15/32 - AMBAC Insured (UB)
10,000 New York City Transitional Finance Authority, New York, Future Tax 8/09 at 101.00 AAA 10,420,900
Secured Bonds, Fiscal Series 2000A, 5.750%, 8/15/24 (Pre-refunded
8/15/09)
10,000 Port Authority of New York and New Jersey, Special Project Bonds, JFK 12/08 at 101.00 AA 9,114,800
International Air Terminal LLC, Sixth Series 1997, 5.900%, 12/01/17 -
MBIA Insured (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
57,980 Total New York 54,727,649
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 1.2% (0.7% OF TOTAL INVESTMENTS)
3,830 Charlotte-Mecklenburg Hospital Authority, North Carolina, Healthcare 1/15 at 100.00 AA- (4) 4,088,946
System Revenue Bonds, DBA Carolinas Healthcare System, Series
2005A, 5.000%, 1/15/45 (Pre-refunded 1/15/15)
1,500 The Charlotte-Mecklenberg Hospital Authority, North Carolina, Doing 1/18 at 100.00 AA- 1,421,610
Business as Carolinas HealthCare System, Health Care Refunding
Revenue Bonds, Series 2008A, 5.250%, 1/15/24 - AGC Insured
------------------------------------------------------------------------------------------------------------------------------------
5,330 Total North Carolina 5,510,556
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 5.4% (3.3% OF TOTAL INVESTMENTS)
2,300 Amherst Exempted Village School District, Ohio, Unlimited Tax General 12/11 at 100.00 A1 (4) 2,454,192
Obligation School Improvement Bonds, Series 2001, 5.125%, 12/01/21
(Pre-refunded 12/01/11) - FGIC Insured
Buckeye Tobacco Settlement Financing Authority, Ohio, Tobacco
Settlement Asset-Backed Revenue Bonds, Senior Lien, Series
2007A-2:
170 5.125%, 6/01/24 6/17 at 100.00 BBB 133,246
1,800 5.875%, 6/01/30 6/17 at 100.00 BBB 1,261,818
1,740 5.750%, 6/01/34 6/17 at 100.00 BBB 1,158,840
3,930 5.875%, 6/01/47 6/17 at 100.00 BBB 2,458,647
3,635 Franklin County, Ohio, FHA-Insured Multifamily Housing Mortgage 1/09 at 100.00 Aa2 3,216,793
Revenue Bonds, Hamilton Creek Apartments Project, Series 1994A,
5.550%, 7/01/24 (Alternative Minimum Tax)
3,650 Montgomery County, Ohio, Revenue Bonds, Catholic Health Initiatives, 5/14 at 100.00 AA 3,141,373
Series 2004A, 5.000%, 5/01/30
11,900 Ohio Water Development Authority, Solid Waste Disposal Revenue Bonds, 9/09 at 102.00 N/R 10,205,083
Bay Shore Power, Series 1998B, 6.625%, 9/01/20 (Alternative
Minimum Tax)
1,115 Warren County, Ohio, Limited Tax General Obligations, Series 1997, 12/08 at 100.00 Aa2 1,117,342
5.500%, 12/01/17
------------------------------------------------------------------------------------------------------------------------------------
30,240 Total Ohio 25,147,334
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 0.5% (0.3% OF TOTAL INVESTMENTS)
2,355 Portland, Oregon, Downtown Waterfront Urban Renewal and 6/10 at 101.00 Aa3 2,333,522
Redevelopment Revenue Bonds, Series 2000A, 5.500%, 6/15/20 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 6.1% (3.7% OF TOTAL INVESTMENTS)
3,480 Allegheny County Hospital Development Authority, Pennsylvania, 11/10 at 102.00 AAA 3,968,348
Revenue Bonds, West Penn Allegheny Health System, Series 2000B,
9.250%, 11/15/22 (Pre-refunded 11/15/10)
1,030 Carbon County Industrial Development Authority, Pennsylvania, Resource No Opt. Call BBB- 1,040,609
Recovery Revenue Refunding Bonds, Panther Creek Partners Project,
Series 2000, 6.650%, 5/01/10 (Alternative Minimum Tax)
1,250 Erie, Pennsylvania, Water Authority, Water Revenue Bonds, Series 2008, 12/18 at 100.00 AAA 1,069,400
5.000%, 12/01/43 - FSA Insured
1,500 Pennsylvania Housing Finance Agency, Single Family Mortgage Revenue 10/16 at 100.00 AA+ 1,065,885
Bonds, Series 2008, 4.650%, 10/01/31 (Alternative Minimum Tax) (UB)
65
NAD
Nuveen Dividend Advantage Municipal Fund (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA (continued)
$ 18,900 Philadelphia Airport System, Pennsylvania, Revenue Bonds, Series 12/08 at 102.00 A+ $17,567,171
1998A, 5.500%, 6/15/18 - FGIC Insured (Alternative
Minimum Tax)
3,205 Philadelphia School District, Pennsylvania, General Obligation Bonds, 8/12 at 100.00 Aa3 (4) 3,493,771
Series 2002B, 5.625%, 8/01/16 (Pre-refunded 8/01/12) -
FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
29,365 Total Pennsylvania 28,205,184
------------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 3.4% (2.1% OF TOTAL INVESTMENTS)
2,500 Puerto Rico Aqueduct and Sewerage Authority, Revenue Bonds, Senior 7/18 at 100.00 BBB- 2,237,875
Lien Series 2008A, 6.000%, 7/01/44
12,500 Puerto Rico Housing Finance Authority, Capital Fund Program Revenue 12/13 at 100.00 AA+ 12,252,952
Bonds, Series 2008, 4.500%, 12/01/23 (UB)
12,845 Puerto Rico Infrastructure Financing Authority, Special Tax Revenue No Opt. Call BBB+ 1,273,582
Bonds, Series 2005A, 0.000%, 7/01/42 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
27,845 Total Puerto Rico 15,764,409
------------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 3.7% (2.2% OF TOTAL INVESTMENTS)
2,015 Central Falls, Rhode Island, General Obligation School Bonds, Series 5/09 at 102.00 Baa3 2,049,718
1999, 6.250%, 5/15/20 - RAAI Insured
3,500 Providence Redevelopment Agency, Rhode Island, Revenue Bonds, Public 4/10 at 101.00 Aa3 (4) 3,704,470
Safety and Municipal Building Projects, Series 1999A, 5.750%,
4/01/29 (Pre-refunded 4/01/10) - AMBAC Insured
Rhode Island Housing & Mortgage Finance Corporation, Homeownership
Opportunity 57-B Bond Program, Series 2008, Trust 1177:
1,500 8.125%, 10/01/27 (Alternative Minimum Tax) (IF) 4/17 at 100.00 AA+ 1,011,840
1,000 8.225%, 10/01/32 (Alternative Minimum Tax) (IF) 4/17 at 100.00 AA+ 605,920
12,500 Rhode Island Tobacco Settlement Financing Corporation, Tobacco 6/12 at 100.00 BBB 9,757,625
Settlement Asset-Backed Bonds, Series 2002A, 6.125%, 6/01/32
------------------------------------------------------------------------------------------------------------------------------------
20,515 Total Rhode Island 17,129,573
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 0.3% (0.2% OF TOTAL INVESTMENTS)
1,500 Greenville, South Carolina, Hospital Facilities Revenue Bonds, Series 5/11 at 101.00 AA 1,292,925
2001, 5.000%, 5/01/31 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 2.3% (1.4% OF TOTAL INVESTMENTS)
6,400 Memphis-Shelby County Airport Authority, Tennessee, Airport Revenue 3/10 at 101.00 AA 5,848,192
Bonds, Series 1999D, 6.000%, 3/01/24 - AMBAC Insured (Alternative
Minimum Tax)
2,425 Memphis-Shelby County Airport Authority, Tennessee, Airport Revenue 3/11 at 100.00 AAA 2,345,072
Bonds, Series 2001B, 5.125%, 3/01/26 - FSA Insured
1,910 Sullivan County Health Educational and Housing Facilities Board, 9/16 at 100.00 BBB+ 1,255,806
Tennessee, Revenue Bonds, Wellmont Health System, Series 2006C,
5.250%, 9/01/36
1,500 Sumner County Health, Educational, and Housing Facilities Board, 11/17 at 100.00 N/R 1,079,115
Tennessee, Revenue Refunding Bonds, Sumner Regional Health
System Inc., Series 2007, 5.500%, 11/01/46
------------------------------------------------------------------------------------------------------------------------------------
12,235 Total Tennessee 10,528,185
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 8.6% (5.2% OF TOTAL INVESTMENTS)
2,560 Brazos River Authority, Texas, Pollution Control Revenue Refunding 4/13 at 101.00 Caa1 1,904,717
Bonds, TXU Electric Company, Series 1999C, 7.700%, 3/01/32
(Alternative Minimum Tax)
4,675 Carrollton-Farmers Branch Independent School District, Dallas County, 2/09 at 100.00 AAA 4,733,344
Texas, Unlimited Tax School Building Bonds, Series 1999, 6.000%,
2/15/20 (Pre-refunded 2/15/09)
2,820 Central Texas Regional Mobility Authority, Travis and Williamson Counties, 1/15 at 100.00 AA 2,124,785
Toll Road Revenue Bonds, Series 2005, 5.000%, 1/01/45 -
FGIC Insured
66
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS (continued)
Coppell Independent School District, Dallas County, Texas, Unlimited Tax
School Building and Refunding Bonds, Series 1999:
$ 1,535 0.000%, 8/15/20 8/09 at 52.47 AAA $ 782,512
2,100 0.000%, 8/15/21 8/09 at 49.48 AAA 977,466
2,200 0.000%, 8/15/23 8/09 at 44.01 AAA 893,068
2,100 0.000%, 8/15/24 8/09 at 41.50 AAA 795,942
2,200 0.000%, 8/15/25 8/09 at 39.14 AAA 782,870
2,095 0.000%, 8/15/26 8/09 at 36.91 AAA 692,607
820 Dallas Area Rapid Transit, Texas, Senior Lien Sales Tax Revenue Bonds, 12/11 at 100.00 AAA 872,718
Series 2001, 5.000%, 12/01/31 (Pre-refunded 12/01/11) - AMBAC
Insured
2,205 Harris County-Houston Sports Authority, Texas, Senior Lien Revenue No Opt. Call AA 1,040,451
Refunding Bonds, Series 2001A, 0.000%, 11/15/20 - MBIA Insured
3,130 Houston, Texas, Hotel Occupancy Tax and Special Revenue Bonds, No Opt. Call AA 794,394
Convention and Entertainment Project, Series 2001B, 0.000%,
9/01/30 - AMBAC Insured
2,500 Jefferson County, Texas, Certificates of Obligation, Series 2000, 6.000%, 8/10 at 100.00 AAA 2,657,125
8/01/25 (Pre-refunded 8/01/10) - FSA Insured
2,000 Laredo, Texas, Sports Venue Sales Tax Revenue Bonds, Series 2001, 3/09 at 100.00 A- (4) 2,025,700
5.300%, 3/15/26 (Pre-refunded 3/15/09) - FGIC Insured
30,095 Leander Independent School District, Williamson and Travis Counties, 8/12 at 27.94 AAA 5,854,681
Texas, General Obligation Bonds, Series 2004, 0.000%, 8/15/34
9,345 Leander Independent School District, Williamson and Travis Counties, 8/15 at 37.33 AA 1,873,112
Texas, General Obligation Bonds, Series 2005, 0.000%, 8/15/33 -
FGIC Insured
33,160 Leander Independent School District, Williamson and Travis Counties, 8/14 at 26.50 AAA 5,004,176
Texas, General Obligation Bonds, Series 2006, 0.000%, 8/15/38
1,000 San Antonio, Texas, Water System Revenue Bonds, Series 2005, 4.750%, 5/15 at 100.00 AA 829,720
5/15/37 - MBIA Insured
3,295 Tarrant County, Texas, Cultural & Educational Facilities Financing 2/17 at 100.00 AA- 826,386
Corporation, Revenue Bonds, Series 2007, Residuals 1760-3, 0.726%,
2/15/36 (IF)
7,000 White Settlement Independent School District, Tarrant County, Texas, 8/15 at 34.92 AAA 1,293,390
General Obligation Bonds, Series 2005, 0.000%, 8/15/35
Wylie Independent School District, Taylor County, Texas, General
Obligation Bonds, Series 2005:
3,000 0.000%, 8/15/20 8/15 at 78.46 AAA 1,559,220
3,000 0.000%, 8/15/22 8/15 at 70.77 AAA 1,351,020
------------------------------------------------------------------------------------------------------------------------------------
122,835 Total Texas 39,669,404
------------------------------------------------------------------------------------------------------------------------------------
UTAH - 0.2% (0.1% OF TOTAL INVESTMENTS)
Utah Housing Finance Agency, Single Family Mortgage Bonds, Series
1999C-2, Class II:
280 5.700%, 7/01/19 (Alternative Minimum Tax) 1/10 at 101.50 Aaa 277,794
90 5.750%, 7/01/21 (Alternative Minimum Tax) 1/10 at 101.50 Aa2 89,496
35 Utah Housing Finance Agency, Single Family Mortgage Bonds, Series 7/09 at 101.00 AA 34,935
1999D, 5.850%, 7/01/21 (Alternative Minimum Tax)
10 Utah Housing Finance Agency, Single Family Mortgage Bonds, Series 7/09 at 101.50 Aa3 10,179
1999F, 6.300%, 7/01/21 (Alternative Minimum Tax)
685 Utah Housing Finance Agency, Single Family Mortgage Bonds, Series 7/10 at 100.00 Aa3 673,533
2000F-2, Class III, 6.000%, 1/01/15 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
1,100 Total Utah 1,085,937
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 0.0% (0.0% OF TOTAL INVESTMENTS)
3,395 Virginia Small Business Financing Authority, Industrial Development 11/09 at 102.00 N/R 110,338
Water Revenue Bonds, S.I.L. Clean Water, LLC Project, Series 1999,
7.250%, 11/01/24 (Alternative Minimum Tax) (5)
------------------------------------------------------------------------------------------------------------------------------------
67
NAD
Nuveen Dividend Advantage Municipal Fund (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 11.8% (7.2% OF TOTAL INVESTMENTS)
$ 4,000 Energy Northwest, Washington, Electric Revenue Refunding Bonds, 7/13 at 100.00 AA- $ 4,169,840
Nuclear Project 3, Series 2003A, 5.500%, 7/01/17 - SYNCORA GTY Insured
Port of Seattle, Washington, Special Facility Revenue Bonds, Terminal 18,
Series 1999B:
1,755 6.000%, 9/01/15 - MBIA Insured (Alternative Minimum Tax) 3/10 at 101.00 AA 1,743,873
2,590 6.000%, 9/01/16 - MBIA Insured (Alternative Minimum Tax) 3/10 at 101.00 AA 2,557,496
Port of Seattle, Washington, Special Facility Revenue Bonds, Terminal 18,
Series 1999C:
875 6.000%, 9/01/15 - MBIA Insured (Alternative Minimum Tax) 3/10 at 101.00 AA 869,453
1,260 6.000%, 9/01/16 - MBIA Insured (Alternative Minimum Tax) 3/10 at 101.00 AA 1,244,187
4,820 Seattle, Washington, Municipal Light and Power Revenue Refunding and 3/11 at 100.00 AAA 4,921,798
Improvement Bonds, Series 2001, 5.500%, 3/01/19 - FSA Insured
6,655 Washington State Tobacco Settlement Authority, Tobacco Settlement 6/13 at 100.00 BBB 5,921,220
Asset-Backed Revenue Bonds, Series 2002, 6.500%, 6/01/26
11,605 Washington, Certificates of Participation, Washington Convention and 7/09 at 100.00 AA 11,780,236
Trade Center, Series 1999, 5.250%, 7/01/16 - MBIA Insured
3,350 Washington, General Obligation Compound Interest Bonds, Series No Opt. Call AAA 2,118,909
1999S-2, 0.000%, 1/01/18 - FSA Insured
Washington, General Obligation Compound Interest Bonds, Series
1999S-3:
17,650 0.000%, 1/01/20 No Opt. Call AA+ 9,724,444
18,470 0.000%, 1/01/21 No Opt. Call AA+ 9,556,378
------------------------------------------------------------------------------------------------------------------------------------
73,030 Total Washington 54,607,834
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 9.3% (5.7% OF TOTAL INVESTMENTS)
1,115 Badger Tobacco Asset Securitization Corporation, Wisconsin, Tobacco 6/12 at 100.00 BBB 1,047,297
Settlement Asset-Backed Bonds, Series 2002, 6.000%, 6/01/17
1,690 Green Bay, Wisconsin, Water System Revenue Bonds, Series 2004, 11/14 at 100.00 Aaa 1,825,369
5.000%, 11/01/29 (Pre-refunded 11/01/14) - FSA Insured
560 Green Bay, Wisconsin, Water System Revenue Bonds, Series 2004, 11/14 at 100.00 Aaa 513,638
5.000%, 11/01/29 - FSA Insured
3,810 La Crosse, Wisconsin, Industrial Development Revenue Refunding Bonds, 12/08 at 102.00 Aaa 3,858,501
Dairyland Power Cooperative, Series 1997C, 5.550%, 2/01/15 -
AMBAC Insured
7,410 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, 11/16 at 100.00 Aa1 6,107,396
Ascension Health, Series 2006A, 5.000%, 11/15/36
Wisconsin Health and Educational Facilities Authority, Revenue Bonds,
FH Healthcare Development Inc., Series 1999:
8,375 6.250%, 11/15/20 (Pre-refunded 11/15/09) 11/09 at 101.00 N/R (4) 8,845,759
5,000 6.250%, 11/15/28 (Pre-refunded 11/15/09) 11/09 at 101.00 N/R (4) 5,281,050
4,180 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, 5/09 at 101.00 A 3,674,011
Kenosha Hospital and Medical Center Inc., Series 1999, 5.625%,
5/15/29
12,700 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, 8/09 at 101.00 Aa3 10,701,655
Mercy Health System Corporation, Series 1999, 5.500%, 8/15/25 -
AMBAC Insured
2,200 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, 8/13 at 100.00 A- 1,354,848
Wheaton Franciscan Services Inc., Series 2003A, 5.125%, 8/15/33
------------------------------------------------------------------------------------------------------------------------------------
47,040 Total Wisconsin 43,209,524
------------------------------------------------------------------------------------------------------------------------------------
$ 1,103,640 Total Municipal Bonds (cost $826,316,827) 742,945,092
=============-----------------------------------------------------------------------------------------------------------------------
68
SHARES DESCRIPTION (1) VALUE
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT COMPANIES - 0.1% (0.1% OF TOTAL INVESTMENTS)
9,219 BlackRock MuniHoldings Fund Inc. $ 98,920
32,332 Morgan Stanley Quality Municipal Income Trust 298,101
------------------------------------------------------------------------------------------------------------------------------------
Total Investment Companies (cost $534,262) 397,021
--------------------------------------------------------------------------------------------------------------------
Total Long-Term Investments (cost $826,851,089) - 160.7% 743,342,113
--------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT (000) DESCRIPTION (1) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 4.2% (2.5% OF TOTAL INVESTMENTS)
$ 5,620 Michigan Strategic Fund, Limited Obligation Revenue Bonds, MCSM Inc. A-1+ 5,620,000
Project, Variable Rate Demand Obligations, Series 2007, 1.750%,
3/01/27 (Alternative Minimum Tax) (6)
2,865 Missouri Development Finance Board, Kansas City, Infrastructure VMIG-1 2,865,000
Facilities Revenue Bonds, Ninth Street Garage Project, Variable Rate
Demand Obligations, Series 2004B, 1.500%, 6/01/34 (6)
3,990 Montgomery County Public Building Authority, Tennessee, Tennessee VMIG-1 3,990,000
County Loan Pool Program Revenue Bonds, Variable Rate Demand
Obligations, Series 1997, 1.500%, 11/01/27 (6)
6,850 St. Charles County Public Water Supply District 2, Missouri, Certificates VMIG-1 6,850,000
of Participation, Variable Rate Demand Obligations, Series 2005A,
1.500%, 12/01/33 (6)
------------------------------------------------------------------------------------------------------------------------------------
$ 19,325 Total Short-Term Investments (cost $19,325,000) 19,325,000
=============-----------------------------------------------------------------------------------------------------------------------
Total Investments (cost $846,176,089) - 164.9% 762,667,113
--------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (10.5)% (48,740,000)
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 3.3% 15,427,179
--------------------------------------------------------------------------------------------------------------------
Auction Rate Preferred Shares, at Liquidation Value - (57.7)% (7) (266,800,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 462,554,292
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares unless
otherwise noted.
(2) Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates (month
and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying
prices at later dates. Certain mortgage-backed securities
may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered
public accounting firm): Using the higher of Standard &
Poor's Group ("Standard & Poor's") or Moody's Investor
Service, Inc. ("Moody's") rating. Ratings below BBB by
Standard & Poor's or Baa by Moody's are considered to be
below investment grade.
The Portfolio of Investments may reflect the ratings on
certain bonds insured by ACA, AGC, AMBAC, FGIC, FSA, MBIA,
RAAI and SYNCORA as of October 31, 2008. Please see the
Portfolio Managers' Commentary for an expanded discussion of
the affect on the Fund of changes to the ratings of certain
bonds in the portfolio resulting from changes to the ratings
of the underlying insurers both during the period and after
period end.
(4) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which ensure
the timely payment of principal and interest. Such
investments are normally considered to be equivalent to AAA
rated securities.
(5) Non-income producing security, in the case of a bond,
generally denotes that the issuer has defaulted on the
payment of principal or interest or has filed for
bankruptcy.
(6) Investment has a maturity of more than one year, but has
variable rate and demand features which qualify it as a
short-term investment. The rate disclosed is that in effect
at the end of the reporting period. This rate changes
periodically based on market conditions or a specified
market index.
(7) Auction Rate Preferred Shares, at Liquidation Value as a
percentage of Total Investments is 35.0%.
N/R Not rated.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected
as a financing transaction pursuant to the provisions of
SFAS No. 140.
See accompanying notes to financial statements.
69
NXZ
Nuveen Dividend Advantage Municipal Fund 2
Portfolio of INVESTMENTS
October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 5.3% (3.5% OF TOTAL INVESTMENTS)
$ 18,500 Huntsville Healthcare Authority, Alabama, Revenue Bonds, Series 2001A, 6/11 at 101.00 A2 (4) $19,815,349
5.750%, 6/01/31 (Pre-refunded 6/01/11)
------------------------------------------------------------------------------------------------------------------------------------
ALASKA - 0.3% (0.2% OF TOTAL INVESTMENTS)
2,200 Northern Tobacco Securitization Corporation, Alaska, Tobacco Settlement 6/14 at 100.00 Baa3 1,170,400
Asset-Backed Bonds, Series 2006A, 5.000%, 6/01/46
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 0.7% (0.4% OF TOTAL INVESTMENTS)
3,120 Phoenix, Arizona, Civic Improvement Corporation, Senior Lien Airport 7/12 at 100.00 AA 2,441,930
Revenue Bonds, Series 2002B, 5.250%, 7/01/32 - FGIC Insured
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 0.2% (0.2% OF TOTAL INVESTMENTS)
1,105 Arkansas Development Finance Authority, Single Family Mortgage 1/12 at 100.00 AAA 888,199
Revenue Bonds, GNMA Mortgage-Backed Securities Program, Series
2002C, 5.400%, 1/01/34 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 8.0% (5.3% OF TOTAL INVESTMENTS)
9,000 California County Tobacco Securitization Agency, Tobacco Settlement 12/18 at 100.00 Baa3 4,932,540
Asset-Backed Bonds, Los Angeles County Securitization Corporation,
Series 2006A, 0.000%, 6/01/36 (Mandatory put 6/01/23)
6,000 California Educational Facilities Authority, Revenue Bonds, Stanford 6/11 at 101.00 AAA 5,991,600
University, Series 2001Q, 5.250%, 12/01/32
4,080 California Health Facilities Financing Authority, Revenue Bonds, Kaiser 4/16 at 100.00 AAA 3,669,634
Permanante System, Series 2006, 5.000%, 4/01/37 - BHAC Insured
Golden State Tobacco Securitization Corporation, California, Enhanced
Tobacco Settlement Asset-Backed Bonds, Series 2007A-1:
1,000 5.000%, 6/01/33 6/17 at 100.00 BBB 623,560
1,000 5.125%, 6/01/47 6/17 at 100.00 BBB 590,500
5,000 Golden State Tobacco Securitization Corporation, California, Tobacco 6/13 at 100.00 AAA 5,649,650
Settlement Asset-Backed Bonds, Series 2003A-1, 6.750%, 6/01/39
(Pre-refunded 6/01/13)
5,000 Golden State Tobacco Securitization Corporation, California, Tobacco 6/15 at 100.00 A --
Settlement Asset-Backed Revenue Bonds, Series 2005A, Trust 2448,
0.891%, 6/01/45 - FGIC Insured (IF)
6,000 Los Angeles Regional Airports Improvement Corporation, California, 12/12 at 102.00 B- 4,360,500
Sublease Revenue Bonds, Los Angeles International Airport, American
Airlines Inc. Terminal 4 Project, Series 2002C, 7.500%, 12/01/24
(Alternative Minimum Tax)
5,000 San Jose, California, Airport Revenue Bonds, Series 2007A, 6.000%, 3/17 at 100.00 AA 4,140,400
3/01/47 - AMBAC Insured (Alternative Minimum Tax)
110 Yuba County Water Agency, California, Yuba River Development Revenue 3/09 at 100.00 Baa3 108,074
Bonds, Pacific Gas and Electric Company, Series 1966A, 4.000%,
3/01/16
------------------------------------------------------------------------------------------------------------------------------------
42,190 Total California 30,066,458
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 7.6% (5.0% OF TOTAL INVESTMENTS)
2,495 Colorado Educational and Cultural Facilities Authority, Charter School 8/11 at 100.00 AAA 2,777,209
Revenue Bonds, Peak-to-Peak Charter School, Series 2001, 7.500%,
8/15/21 (Pre-refunded 8/15/11)
70
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
COLORADO (continued)
Denver, Colorado, Airport Revenue Bonds, Trust 2365:
$ 1,340 2.901%, 11/15/23 - FGIC Insured (IF) 11/16 at 100.00 AA $ 923,662
825 1.184%, 11/15/24 - FGIC Insured (IF) 11/16 at 100.00 AA 558,212
1,085 1.186%, 11/15/25 - FGIC Insured (IF) 11/16 at 100.00 AA 699,196
10,000 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, Series 9/10 at 31.42 Aaa 2,979,100
2000B, 0.000%, 9/01/28 (Pre-refunded 9/01/10) - MBIA Insured
1,280 Eagle County Air Terminal Corporation, Colorado, Airport Terminal 5/11 at 101.00 N/R 1,119,117
Revenue Bonds, Series 2001, 7.125%, 5/01/31 (Alternative
Minimum Tax)
755 Jefferson County School District R1, Colorado, General Obligation Bonds, 12/14 at 100.00 AAA 743,698
Series 2004, 5.000%, 12/15/22 - FSA Insured (UB)
5,000 Northwest Parkway Public Highway Authority, Colorado, Revenue Bonds, 6/11 at 102.00 AAA 5,349,900
Senior Series 2001A, 5.250%, 6/15/41 (Pre-refunded 6/15/11) -
FSA Insured (5)
Northwest Parkway Public Highway Authority, Colorado, Senior Lien
Revenue Bonds, Series 2001B:
22,000 0.000%, 6/15/28 (Pre-refunded 6/15/11) - FSA Insured 6/11 at 35.65 AAA 7,126,240
17,650 0.000%, 6/15/29 (Pre-refunded 6/15/11) - AMBAC Insured 6/11 at 33.46 AA (4) 5,365,071
1,000 Plaza Metropolitan District 1, Lakewood, Colorado, Tax Increment 6/14 at 101.00 N/R 925,710
Revenue Bonds, Series 2003, 8.000%, 12/01/25
------------------------------------------------------------------------------------------------------------------------------------
63,430 Total Colorado 28,567,115
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 1.3% (0.9% OF TOTAL INVESTMENTS)
985 District of Columbia Tobacco Settlement Corporation, Tobacco 5/11 at 101.00 BBB 877,211
Settlement Asset-Backed Bonds, Series 2001, 6.250%, 5/15/24
5,000 Washington Convention Center Authority, District of Columbia, Senior 10/16 at 100.00 AA 4,022,150
Lien Dedicated Tax Revenue Bonds, Series 2007A, 4.500%,
10/01/30 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
5,985 Total District of Columbia 4,899,361
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 4.5% (2.9% OF TOTAL INVESTMENTS)
15,000 Jacksonville, Florida, Transportation Revenue Bonds, Series 2001, 10/11 at 100.00 AA 14,321,550
5.250%, 10/01/29 - MBIA Insured
3,000 Miami-Dade County, Florida, Aviation Revenue Bonds, Miami 10/12 at 100.00 A2 2,392,380
International Airport, Series 2002, 5.375%, 10/01/32 - FGIC Insured
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
18,000 Total Florida 16,713,930
------------------------------------------------------------------------------------------------------------------------------------
HAWAII - 2.8% (1.8% OF TOTAL INVESTMENTS)
Honolulu Board of Water Supply, Hawaii, Water System Revenue Bonds,
Series 2001:
3,000 5.250%, 7/01/26 (Pre-refunded 7/01/11) - FSA Insured 7/11 at 100.00 AAA 3,195,840
6,725 5.250%, 7/01/31 (Pre-refunded 7/01/11) - FSA Insured 7/11 at 100.00 AAA 7,164,008
------------------------------------------------------------------------------------------------------------------------------------
9,725 Total Hawaii 10,359,848
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 13.7% (9.1% OF TOTAL INVESTMENTS)
3,590 Chicago, Illinois, FHA/GNMA Collateralized Multifamily Housing Revenue 12/11 at 100.00 AAA 3,240,155
Bonds, Stone Terrace Apartments, Series 2001A, 5.750%, 12/20/42
(Alternative Minimum Tax)
870 Chicago, Illinois, FNMA/GNMA Collateralized Single Family Mortgage 4/11 at 105.00 AAA 885,590
Revenue Bonds, Series 2001A, 6.250%, 10/01/32 (Alternative
Minimum Tax)
5,000 Chicago, Illinois, General Obligation Bonds, City Colleges, Series 1999, No Opt. Call AA 1,110,200
0.000%, 1/01/34 - FGIC Insured
3,985 Chicago, Illinois, General Obligation Bonds, Series 2001A, 5.250%, 1/11 at 101.00 AA 3,741,038
1/01/33 - MBIA Insured
5,285 Chicago, Illinois, General Obligation Bonds, Series 2001A, 5.250%, 1/11 at 101.00 AA (4) 5,620,492
1/01/33 (Pre-refunded 1/01/11) - MBIA Insured
3,180 Illinois Development Finance Authority, Revenue Bonds, Chicago Charter 12/12 at 100.00 BBB (4) 3,512,755
School Foundation, Series 2002A, 6.250%, 12/01/32 (Pre-refunded
12/01/12)
71
NXZ
Nuveen Dividend Advantage Municipal Fund 2 (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS (continued)
$ 910 Illinois Development Finance Authority, Revenue Bonds, Illinois Wesleyan 9/11 at 100.00 AA $ 881,745
University, Series 2001, 5.500%, 9/01/32 - AMBAC Insured
4,090 Illinois Development Finance Authority, Revenue Bonds, Illinois Wesleyan 9/11 at 100.00 AA (4) 4,346,239
University, Series 2001, 5.500%, 9/01/32 (Pre-refunded 9/01/11) -
AMBAC Insured
3,100 Illinois Development Finance Authority, Revenue Bonds, Midwestern 5/11 at 101.00 AAA 3,346,574
University, Series 2001B, 6.000%, 5/15/31 (Pre-refunded 5/15/11)
9,450 Illinois Finance Authority, Revenue Bonds, Palos Community Hospital, 5/17 at 100.00 AA 7,311,182
Series 2007A, 5.000%, 5/15/32 - MBIA Insured
5,000 Illinois Health Facilities Authority, Revenue Bonds, Edward Hospital 2/11 at 101.00 AAA 5,323,350
Obligated Group, Series 2001B, 5.250%, 2/15/34 (Pre-refunded
2/15/11) - FSA Insured
2,500 Illinois Housing Development Authority, Homeowner Mortgage Revenue 2/16 at 100.00 AA 2,036,575
Bonds, Series 2006C2, 5.050%, 8/01/27 (Alternative Minimum Tax)
2,275 Illinois, Sales Tax Revenue Bonds, Series 2001, 5.500%, 6/15/16 6/11 at 100.00 AAA 2,387,499
2,500 Kane & DeKalb Counties, Illinois, Community United School District 301, No Opt. Call A3 1,010,000
General Obligation Bonds, Series 2006, 0.000%, 12/01/23 -
MBIA Insured
4,980 Metropolitan Pier and Exposition Authority, Illinois, Revenue Refunding 12/08 at 100.00 AA 4,627,416
Bonds, McCormick Place Expansion Project, Series 1996A, 5.250%,
6/15/27 - AMBAC Insured
986 Montgomery, Illinois, Lakewood Creek Project Special Assessment 3/16 at 100.00 BBB+ 744,588
Bonds, Series 2007, 4.700%, 3/01/30 - RAAI Insured
3,360 Northfield Township High School District 225, Cook County, Illinois, 12/16 at 69.01 AAA 1,300,421
Glenbrook, General Obligation School Bonds, Series 2007B, 0.000%,
12/01/24
------------------------------------------------------------------------------------------------------------------------------------
61,061 Total Illinois 51,425,819
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 3.6% (2.3% OF TOTAL INVESTMENTS)
2,000 Indiana Health Facility Financing Authority, Hospital Revenue Bonds, 9/11 at 100.00 BBB+ 1,455,720
Methodist Hospitals Inc., Series 2001, 5.500%, 9/15/31
2,500 Indiana Health Facility Financing Authority, Hospital Revenue Refunding No Opt. Call AAA 2,757,525
Bonds, Columbus Regional Hospital, Series 1993, 7.000%, 8/15/15 -
FSA Insured
4,000 Indiana Transportation Finance Authority, Highway Revenue Bonds, 6/13 at 100.00 AAA 3,959,040
Series 2003A, 5.000%, 6/01/23 - FSA Insured
6,100 St. Joseph County Hospital Authority, Indiana, Revenue Bonds, Madison 2/09 at 102.00 BBB- 5,137,725
Center Inc., Series 1999, 5.800%, 2/15/24
------------------------------------------------------------------------------------------------------------------------------------
14,600 Total Indiana 13,310,010
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 1.5% (1.0% OF TOTAL INVESTMENTS)
1,000 Iowa Higher Education Loan Authority, Private College Facility Revenue 10/12 at 100.00 N/R (4) 1,084,580
Bonds, WartburgCollege, Series 2002, 5.500%, 10/01/28
(Pre-refunded 10/01/12) - ACA Insured
6,340 Iowa Tobacco Settlement Authority, Tobacco Asset-Backed Revenue 6/17 at 100.00 BBB 4,413,781
Bonds, Series 2005B, 5.600%, 6/01/34
------------------------------------------------------------------------------------------------------------------------------------
7,340 Total Iowa 5,498,361
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 4.0% (2.6% OF TOTAL INVESTMENTS)
17,000 Wichita, Kansas, Hospital Facilities Revenue Refunding and Improvement 11/11 at 101.00 A+ 15,014,229
Bonds, Via Christi Health System Inc., Series 2001-III, 5.625%,
11/15/31
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 0.3% (0.2% OF TOTAL INVESTMENTS)
1,000 Kentucky Economic Development Finance Authority, Louisville Arena 6/18 at 100.00 AAA 950,660
Project Revenue Bonds, Louisville Arena Authority, Inc., Series
2008A-1, 6.000%, 12/01/38 - AGC Insured
------------------------------------------------------------------------------------------------------------------------------------
73
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 4.4% (2.9% OF TOTAL INVESTMENTS)
$ 3,960 Louisiana State, Gasoline and Fuels Tax Revenue Bonds, Series 2006, 5/16 at 100.00 AA $ 3,036,092
4.500%, 5/01/41 - FGIC Insured (UB)
18,825 Tobacco Settlement Financing Corporation, Louisiana, Tobacco 5/11 at 101.00 BBB 13,468,158
Settlement Asset-Backed Bonds, Series 2001B, 5.875%, 5/15/39
------------------------------------------------------------------------------------------------------------------------------------
22,785 Total Louisiana 16,504,250
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 3.3% (2.2% OF TOTAL INVESTMENTS)
15,585 Massachusetts Turnpike Authority, Metropolitan Highway System 1/09 at 100.00 AA 12,362,178
Revenue Bonds, Senior Series 1997A, 5.000%, 1/01/37 - MBIA
Insured
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 13.0% (8.6% OF TOTAL INVESTMENTS)
Detroit, Michigan, Senior Lien Water Supply System Revenue Bonds,
Series 2001A:
20,000 5.500%, 7/01/33 (Pre-refunded 7/01/11) - FGIC Insured 7/11 at 101.00 A (4) 21,533,599
15,390 5.250%, 7/01/33 (Pre-refunded 7/01/11) - FGIC Insured 7/11 at 100.00 A+ (4) 16,268,460
4,000 Michigan Municipal Bond Authority, Public School Academy Revenue 10/09 at 102.00 Ba1 3,776,200
Bonds, Detroit Academy of Arts and Sciences Charter School, Series
2001A, 8.000%, 10/01/31
2,000 Michigan State Hospital Finance Authority, Hospital Revenue Bonds, 2/09 at 101.00 BB 1,554,160
Detroit Medical Center Obligated Group, Series 1998A, 5.125%,
8/15/18
Michigan State Hospital Finance Authority, Revenue Refunding
Bonds, Detroit Medical Center Obligated Group, Series 1993A:
2,000 6.250%, 8/15/13 2/09 at 100.00 BB 1,915,340
4,000 6.500%, 8/15/18 2/09 at 100.00 BB 3,520,760
------------------------------------------------------------------------------------------------------------------------------------
47,390 Total Michigan 48,568,519
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 3.9% (2.6% OF TOTAL INVESTMENTS)
14,000 Minneapolis-St. Paul Metropolitan Airports Commission, Minnesota, 1/11 at 100.00 AAA 14,756,420
Airport Revenue Bonds, Series 2001A, 5.250%, 1/01/32 (Pre-refunded
1/01/11) - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
MONTANA - 0.7% (0.4% OF TOTAL INVESTMENTS)
2,455 Montana Board of Housing, Single Family Program Bonds, Series 12/10 at 100.00 AA+ 2,440,368
2001A-2, 5.700%, 6/01/32 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 3.0% (2.0% OF TOTAL INVESTMENTS)
12,275 Director of Nevada State Department of Business and Industry, Revenue 1/10 at 100.00 AA 7,378,994
Bonds, Las Vegas Monorail Project, First Tier, Series 2000, 5.375%,
1/01/40 - AMBAC Insured
3,500 Director of Nevada State Department of Business and Industry, Revenue 1/10 at 102.00 N/R 815,605
Bonds, Las Vegas Monorail Project, Second Tier, Series 2000, 7.375%,
1/01/40
2,000 Henderson, Nevada, Healthcare Facility Revenue Refunding Bonds, 7/17 at 100.00 A 1,534,960
Catholic Healthcare West, Series 2007B, Trust 2633, 1.032%, 7/01/31
(IF)
1,750 Reno, Nevada, Health Facility Revenue Bonds, Catholic Healthcare West, 7/17 at 100.00 A 1,343,090
Trust 2634, 0.777%, 7/01/31 (IF)
------------------------------------------------------------------------------------------------------------------------------------
19,525 Total Nevada 11,072,649
------------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 2.1% (1.4% OF TOTAL INVESTMENTS)
8,000 New Hampshire Business Finance Authority, Pollution Control 4/09 at 102.00 Baa1 6,653,840
Remarketed Revenue Refunding Bonds, Connecticut Light and Power
Company, Series 1992A, 5.850%, 12/01/22
1,160 New Hampshire Housing Finance Authority, Single Family Mortgage 5/11 at 100.00 Aa2 1,152,970
Acquisition Bonds, Series 2001A, 5.700%, 1/01/31 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
9,160 Total New Hampshire 7,806,810
------------------------------------------------------------------------------------------------------------------------------------
73
NXZ
Nuveen Dividend Advantage Municipal Fund 2 (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 2.5% (1.6% OF TOTAL INVESTMENTS)
$ 3,995 New Jersey Economic Development Authority, Special Facilities Revenue 11/10 at 101.00 B $ 2,586,723
Bonds, Continental Airlines Inc., Series 2000, 7.000%, 11/15/30
(Alternative Minimum Tax)
385 Tobacco Settlement Financing Corporation, New Jersey, Tobacco 6/12 at 100.00 AAA 410,606
Settlement Asset-Backed Bonds, Series 2002, 5.750%, 6/01/32
(Pre-refunded 6/01/12)
Tobacco Settlement Financing Corporation, New Jersey, Tobacco
Settlement Asset-Backed Bonds, Series 2003:
2,200 6.375%, 6/01/32 (Pre-refunded 6/01/13) 6/13 at 100.00 AAA 2,405,656
425 6.750%, 6/01/39 (Pre-refunded 6/01/13) 6/13 at 100.00 AAA 486,396
3,085 6.250%, 6/01/43 (Pre-refunded 6/01/13) 6/13 at 100.00 AAA 3,465,566
------------------------------------------------------------------------------------------------------------------------------------
10,090 Total New Jersey 9,354,947
------------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 6.5% (4.3% OF TOTAL INVESTMENTS)
New Mexico Hospital Equipment Loan Council, Hospital Revenue
Bonds, Presbyterian Healthcare Services, Series 2001A:
12,000 5.500%, 8/01/25 (Pre-refunded 8/01/11) 8/11 at 101.00 AA- (4) 12,790,440
10,800 5.500%, 8/01/30 (Pre-refunded 8/01/11) 8/11 at 101.00 AA- (4) 11,511,396
------------------------------------------------------------------------------------------------------------------------------------
22,800 Total New Mexico 24,301,836
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 10.0% (6.6% OF TOTAL INVESTMENTS)
1,300 Dormitory Authority of the State of New York, Revenue Bonds, Mount 7/10 at 101.00 A3 1,312,610
Sinai NYU Health Obligated Group, Series 2000A, 6.625%, 7/01/19
3,600 Dormitory Authority of the State of New York, Revenue Bonds, Mount 7/10 at 101.00 A3 (4) 3,891,060
Sinai NYU Health Obligated Group, Series 2000A, 6.625%, 7/01/19
(Pre-refunded 7/01/10)
6,000 Long Island Power Authority, New York, Electric System General Revenue 5/11 at 100.00 AAA 6,402,300
Bonds, Series 2001L, 5.375%, 5/01/33 (Pre-refunded 5/01/11)
12,800 Metropolitan Transportation Authority, New York, Transportation Revenue 11/16 at 100.00 AAA 10,303,232
Bonds, Series 2006B, 4.500%, 11/15/32 - FSA Insured (UB)
5,000 New York City Industrial Development Agency, New York, Special 8/12 at 101.00 B- 3,791,000
Facilities Revenue Bonds, JFK Airport - American Airlines Inc., Series
2002B, 8.500%, 8/01/28 (Alternative Minimum Tax)
12,000 New York City Municipal Water Finance Authority, New York, Water and 6/11 at 101.00 AAA 11,600,280
Sewerage System Revenue Bonds, Fiscal Series 2001C, 5.125%,
6/15/33
------------------------------------------------------------------------------------------------------------------------------------
40,700 Total New York 37,300,482
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 1.9% (1.2% OF TOTAL INVESTMENTS)
2,950 North Carolina Capital Facilities Financing Agency, Revenue Bonds, 4/13 at 100.00 BBB- 2,443,131
Johnson and Wales University, Series 2003A, 5.000%, 4/01/33 -
SYNCORA GTY Insured
4,500 North Carolina Eastern Municipal Power Agency, Power System Revenue 1/09 at 102.00 BBB+ 4,521,465
Refunding Bonds, Series 1999B, 5.600%, 1/01/15
------------------------------------------------------------------------------------------------------------------------------------
7,450 Total North Carolina 6,964,596
------------------------------------------------------------------------------------------------------------------------------------
NORTH DAKOTA - 0.5% (0.3% OF TOTAL INVESTMENTS)
1,865 North Dakota Housing Finance Agency, Home Mortgage Finance Program 7/10 at 100.00 Aa1 1,793,664
Refunding Bonds, Series 2001A, 5.550%, 1/01/32 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 1.9% (1.3% OF TOTAL INVESTMENTS)
Buckeye Tobacco Settlement Financing Authority, Ohio, Tobacco
Settlement Asset-Backed Revenue Bonds, Senior Lien, Series
2007A-2:
10,000 5.750%, 6/01/34 6/17 at 100.00 BBB 6,660,000
1,000 5.875%, 6/01/47 6/17 at 100.00 BBB 625,610
------------------------------------------------------------------------------------------------------------------------------------
11,000 Total Ohio 7,285,610
------------------------------------------------------------------------------------------------------------------------------------
75
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 1.0% (0.7% OF TOTAL INVESTMENTS)
Oklahoma Development Finance Authority, Revenue Refunding Bonds,
Hillcrest Healthcare System, Series 1999A:
$ 2,655 5.125%, 8/15/10 (Pre-refunded 8/15/09) 8/09 at 101.00 AAA $ 2,750,155
1,000 5.200%, 8/15/11 (Pre-refunded 8/15/09) 8/09 at 101.00 AAA 1,036,430
------------------------------------------------------------------------------------------------------------------------------------
3,655 Total Oklahoma 3,786,585
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 4.3% (2.9% OF TOTAL INVESTMENTS)
8,000 Clackamas County Hospital Facility Authority, Oregon, Revenue 5/11 at 101.00 A+ 7,529,200
Refunding Bonds, Legacy Health System, Series 2001, 5.250%,
5/01/21
9,000 Oregon Department of Administrative Services, Certificates of 5/11 at 101.00 AA 8,694,540
Participation, Series 2001D, 5.000%, 5/01/26 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
17,000 Total Oregon 16,223,740
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 3.9% (2.6% OF TOTAL INVESTMENTS)
5,000 Allegheny County Hospital Development Authority, Pennsylvania, 11/10 at 102.00 AAA 5,701,650
Revenue Bonds, West Penn Allegheny Health System, Series 2000B,
9.250%, 11/15/30 (Pre-refunded 11/15/10)
1,155 Carbon County Industrial Development Authority, Pennsylvania, Resource No Opt. Call BBB- 1,166,897
Recovery Revenue Refunding Bonds, Panther Creek Partners Project,
Series 2000, 6.650%, 5/01/10 (Alternative Minimum Tax)
8,000 Pennsylvania Higher Educational Facilities Authority, Revenue Bonds, 1/11 at 101.00 AA- 7,613,440
UPMC Health System, Series 2001A, 6.000%, 1/15/31
------------------------------------------------------------------------------------------------------------------------------------
14,155 Total Pennsylvania 14,481,987
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 27.6% (18.2% OF TOTAL INVESTMENTS)
7,500 Austin, Texas, Electric Utility System Revenue Refunding Bonds, Series 11/10 at 100.00 AAA 7,006,050
2001, 5.000%, 11/15/30 - FSA Insured
10,000 Central Texas Regional Mobility Authority, Travis and Williamson Counties, 1/15 at 100.00 AA 7,534,700
Toll Road Revenue Bonds, Series 2005, 5.000%, 1/01/45 - FGIC
Insured
Dallas-Fort Worth International Airport Public Facility
Corporation, Texas, Airport Hotel Revenue Bonds, Series 2001:
15,000 5.250%, 1/15/26 - FSA Insured 1/09 at 100.00 AAA 14,439,750
1,750 5.200%, 1/15/31 - FSA Insured 1/09 at 100.00 AAA 1,636,233
6,000 Decatur Hospital Authority, Texas, Revenue Bonds, Wise Regional Health 9/14 at 100.00 N/R 5,044,860
System, Series 2004A, 7.125%, 9/01/34
10,000 Gulf Coast Industrial Development Authority, Texas, Solid Waste Disposal 4/12 at 100.00 Baa3 9,392,500
Revenue Bonds, Citgo Petroleum Corporation Project, Series 1998,
8.000%, 4/01/28 (Alternative Minimum Tax)
30,980 Harris County-Houston Sports Authority, Texas, Junior Lien Revenue 11/11 at 100.00 AA 25,086,054
Refunding Bonds, Series 2001B, 5.250%, 11/15/40 - MBIA Insured
40,000 Harris County-Houston Sports Authority, Texas, Senior Lien Revenue 11/30 at 54.04 AA 3,654,400
Refunding Bonds, Series 2001A, 0.000%, 11/15/40 - MBIA Insured
3,965 Harris County-Houston Sports Authority, Texas, Third Lien Revenue 11/24 at 52.47 AA 547,249
Bonds, Series 2004-A3., 0.000%, 11/15/35 - MBIA Insured
Hays Consolidated Independent School District, Hays County,
Texas, General Obligation School Building Bonds, Series 2001:
10,715 0.000%, 8/15/25 (Pre-refunded 8/15/11) 8/11 at 43.18 AAA 4,220,424
12,940 0.000%, 8/15/26 (Pre-refunded 8/15/11) 8/11 at 40.60 AAA 4,792,976
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 AA 1,269,000
5,540 0.000%, 9/01/31 - AMBAC Insured No Opt. Call AA 1,311,706
75
NXZ
Nuveen Dividend Advantage Municipal Fund 2 (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS (continued)
$ 5,000 Metro Health Facilities Development Corporation, Texas, Hospital 1/11 at 100.00 Ba3 $ 4,313,750
Revenue Bonds, Wilson N. Jones Memorial Hospital, Series 2001,
7.250%, 1/01/31
3,295 Tarrant County, Texas, Cultural & Educational Facilities Financing 2/17 at 100.00 AA- 826,386
Corporation, Revenue Bonds, Series 2007, Residuals 1760-3, 0.726%,
2/15/36 (IF)
10,500 Texas, General Obligation Bonds, Water Financial Assistance Program, 8/11 at 100.00 Aa1 10,176,495
Series 2001, 5.250%, 8/01/35
2,000 Tom Green County Health Facilities Development Corporation, Texas, 5/11 at 101.00 Baa3 1,981,620
Hospital Revenue Bonds, Shannon Health System Project, Series 2001,
6.750%, 5/15/21
------------------------------------------------------------------------------------------------------------------------------------
180,185 Total Texas 103,234,153
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 4.5% (3.0% OF TOTAL INVESTMENTS)
7,250 Seattle, Washington, Municipal Light and Power Revenue Refunding and 3/11 at 100.00 AAA 6,909,178
Improvement Bonds, Series 2001, 5.125%, 3/01/26 - FSA Insured
7,500 Washington State Healthcare Facilities Authority, Revenue Bonds, Sisters 10/11 at 100.00 AA 7,038,750
of Providence Health System, Series 2001A, 5.250%, 10/01/21 -
MBIA Insured
900 Washington State Tobacco Settlement Authority, Tobacco Settlement 6/13 at 100.00 BBB 800,766
Asset-Backed Revenue Bonds, Series 2002, 6.500%, 6/01/26
2,100 Washington, Certificates of Participation, Washington Convention and 7/09 at 100.00 AA 2,129,988
Trade Center, Series 1999, 5.125%, 7/01/13 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
17,750 Total Washington 16,878,682
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 1.1% (0.8% OF TOTAL INVESTMENTS)
5,000 Mason County, West Virginia, Pollution Control Revenue Bonds, 10/11 at 100.00 BBB 4,303,600
Appalachian Power Company, Series 2003L, 5.500%, 10/01/22
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 0.3% (0.2% OF TOTAL INVESTMENTS)
1,000 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, 5/12 at 100.00 N/R (4) 1,127,840
Divine Savior Healthcare, Series 2002A, 7.375%, 5/01/26
(Pre-refunded 5/01/12)
------------------------------------------------------------------------------------------------------------------------------------
$ 728,806 Total Long-Term Investments (cost $602,139,786) - 150.2% 561,670,585
=============-----------------------------------------------------------------------------------------------------------------------
76
PRINCIPAL
AMOUNT (000) DESCRIPTION (1) RATINGS (3) VALUEE
------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 1.3% (0.8% OF TOTAL INVESTMENTS)
$ 4,680 South Carolina JOBS Economic Development Authority, Economic A-1+ $ 4,680,000
Development Revenue Bonds, Franco Manufacturing Company, Variable
Rate Demand Obligations, Series 1998, 1.750%, 5/01/19 (Alternative
Minimum Tax) (6)
=============-----------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (cost $4,680,000) 4,680,000
--------------------------------------------------------------------------------------------------------------------
Total Investments (cost $606,819,786) - 151.5% 566,350,585
--------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (3.0)% (11,245,000)
--------------------------------------------------------------------------------------------------------------------
Variable Rate Demand Preferred Shares, at Liquidation Value - (52.4)% (7) (196,000,000)
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 3.9% 14,833,985
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 373,939,570
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares unless
otherwise noted.
(2) Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates (month
and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying
prices at later dates. Certain mortgage-backed securities
may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered
public accounting firm): Using the higher of Standard &
Poor's Group ("Standard & Poor's") or Moody's Investor
Service, Inc. ("Moody's") rating. Ratings below BBB by
Standard & Poor's or Baa by Moody's are considered to be
below investment grade.
The Portfolio of Investments may reflect the ratings on
certain bonds insured by ACA, AGC, AMBAC, FGIC, FSA, MBIA,
RAAI and SYNCORA as of October 31, 2008. Please see the
Portfolio Managers' Commentary for an expanded discussion of
the affect on the Fund of changes to the ratings of certain
bonds in the portfolio resulting from changes to the ratings
of the underlying insurers both during the period and after
period end.
(4) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which ensure
the timely payment of principal and interest. Such
investments are normally considered to be equivalent to AAA
rated securities.
(5) Portion of investment has been pledged as collateral for
Recourse Trusts.
(6) Investment has a maturity of more than one year, but has
variable rate and demand features which qualify it as a
short-term investment. The rate disclosed is that in effect
at the end of the reporting period. This rate changes
periodically based on market conditions or a specified
market index.
(7) Variable Rate Demand Preferred Shares, at Liquidation Value
as a percentage of Total Investments is 34.6%.
N/R Not rated.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected
as a financing transaction pursuant to the provisions of
SFAS No. 140.
See accompanying notes to financial statements.
77
NZF
Nuveen Dividend Advantage Municipal Fund 3
Portfolio of INVESTMENTS
October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS - 160.3% (99.8% OF TOTAL INVESTMENTS)
ALABAMA - 1.8% (1.1% OF TOTAL INVESTMENTS)
$ 3,500 Alabama Special Care Facilities Financing Authority, Revenue Bonds, 11/16 at 100.00 AA $ 2,892,750
Ascension Health, Series 2008, 5.000%, 11/15/36 (UB)
5,655 Alabama State Port Authority, Revenue Bonds, State Docks Department 10/11 at 100.00 AA (4) 6,029,700
Facilities, Series 2001, 5.250%, 10/01/26 (Pre-refunded 10/01/11) -
AMBAC Insured (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
9,155 Total Alabama 8,922,450
------------------------------------------------------------------------------------------------------------------------------------
ALASKA - 0.1% (0.1% OF TOTAL INVESTMENTS)
1,000 Northern Tobacco Securitization Corporation, Alaska, Tobacco Settlement 6/14 at 100.00 Baa3 532,000
Asset-Backed Bonds, Series 2006A, 5.000%, 6/01/46
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 0.9% (0.5% OF TOTAL INVESTMENTS)
3,390 Arizona State Transportation Board, Highway Revenue Bonds, Series 7/18 at 100.00 AAA 2,821,734
2006, Trust 3151, 10.121%, 7/01/33 (IF)
2,200 Salt Verde Financial Corporation, Arizona, Senior Gas Revenue Bonds, No Opt. Call AA- 1,332,034
Series 2007, 5.000%, 12/01/37
------------------------------------------------------------------------------------------------------------------------------------
5,590 Total Arizona 4,153,768
------------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 0.7% (0.5% OF TOTAL INVESTMENTS)
Sebastian County Health Facilities Board, Arkansas, Hospital
Revenue Improvement Bonds, Sparks Regional Medical Center,
Series 2001A:
1,805 5.500%, 11/01/13 11/11 at 101.00 Baa3 1,754,929
1,900 5.500%, 11/01/14 11/11 at 101.00 Baa3 1,823,468
------------------------------------------------------------------------------------------------------------------------------------
3,705 Total Arkansas 3,578,397
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 13.0% (8.1% OF TOTAL INVESTMENTS)
California Health Facilities Financing Authority, Health Facility Revenue
Bonds, Adventist Health System/West, Series 2003A:
855 5.000%, 3/01/28 3/13 at 100.00 A 709,154
140 5.000%, 3/01/33 3/13 at 100.00 A 110,488
920 California Health Facilities Financing Authority, Revenue Bonds, Sutter 11/16 at 100.00 AA- 531,476
Health, Tender Option Bond Trust 3175, 11.475%, 11/15/42 (IF)
5,000 California Infrastructure Economic Development Bank, Revenue Bonds, 8/11 at 102.00 A+ 4,372,800
Kaiser Hospital Assistance LLC, Series 2001A, 5.550%, 8/01/31
4,955 California Statewide Community Development Authority, Revenue Bonds, 5/18 at 100.00 AA- 3,311,796
Sutter Health, Tender Option Bond Trust 3175, 11.640%, 11/15/48 (IF)
18,850 California, General Obligation Veterans Welfare Bonds, Series 2001BZ, 12/08 at 100.00 AA 17,212,499
5.350%, 12/01/21 - MBIA Insured (Alternative Minimum Tax) (5)
11,865 Golden State Tobacco Securitization Corporation, California, Enhanced 6/17 at 100.00 BBB 7,006,283
Tobacco Settlement Asset-Backed Bonds, Series 2007A-1, 5.125%,
6/01/47
Los Angeles Regional Airports Improvement Corporation,
California, Lease Revenue Refunding Bonds, LAXFUEL Corporation
at Los Angeles International Airport, Series 2001:
13,955 5.750%, 1/01/16 - AMBAC Insured (Alternative Minimum Tax) 1/12 at 100.00 AA 13,744,838
5,000 5.375%, 1/01/21 - AMBAC Insured (Alternative Minimum Tax) 1/12 at 100.00 AA 4,437,050
1,500 5.250%, 1/01/23 - AMBAC Insured (Alternative Minimum Tax) 1/12 at 100.00 AA 1,277,145
10,000 5.500%, 1/01/32 - AMBAC Insured (Alternative Minimum Tax) 1/12 at 100.00 AA 8,281,400
78
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (continued)
$ 10,000 San Joaquin Hills Transportation Corridor Agency, Orange County, No Opt. Call AA $ 1,686,000
California, Toll Road Revenue Refunding Bonds, Series 1997A, 0.000%,
1/15/35 - MBIA Insured
3,000 San Mateo County Community College District, California, General No Opt. Call Aa1 806,370
Obligation Bonds, Series 2006C, 0.000%, 9/01/30 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
86,040 Total California 63,487,299
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 5.2% (3.2% OF TOTAL INVESTMENTS)
2,250 Canterberry Crossing Metropolitan District II, Parker, Colorado, Limited 12/12 at 100.00 N/R 1,961,258
Tax General Obligation Bonds, Series 2002, 7.375%, 12/01/32
1,575 Colorado Educational and Cultural Facilities Authority, Charter School 3/13 at 100.00 N/R (4) 1,798,178
Revenue Bonds, Belle Creek Education Center, Series 2002A, 7.625%,
3/15/32 (Pre-refunded 3/15/13)
3,160 Colorado Educational and Cultural Facilities Authority, Charter School 3/10 at 102.00 N/R (4) 3,411,726
Revenue Bonds, Montessori Peaks Building Foundation, Series 2002A,
8.000%, 5/01/32 (Pre-refunded 3/01/10)
1,775 Colorado Educational and Cultural Facilities Authority, Charter School 6/11 at 100.00 Ba1 (4) 1,965,564
Revenue Bonds, Weld County School District 6 - Frontier Academy,
Series 2001, 7.375%, 6/01/31 (Pre-refunded 6/01/11)
3,465 Colorado Educational and Cultural Facilities Authority, Revenue Bonds, 5/16 at 102.00 N/R 2,556,269
Montessori Peaks Academy, Series 2006, 5.400%, 5/01/26
3,380 Colorado Housing Finance Authority, Multifamily Project Bonds, Class I, 10/11 at 100.00 AAA 2,817,061
Series 2001A-1, 5.500%, 4/01/31 (Alternative Minimum Tax)
5,000 Compark Business Campus Metropolitan District, Colorado, General 12/17 at 100.00 BBB+ 4,160,700
Obligation Limited Tax Bonds, Series 2007, 5.600%, 12/01/34 -
RAAI Insured
2,000 Denver City and County, Colorado, Airport System Revenue Refunding 11/11 at 100.00 A+ 1,905,060
Bonds, Series 2001A, 5.500%, 11/15/16 - FGIC Insured (Alternative
Minimum Tax)
Denver, Colorado, Airport Revenue Bonds, Trust 2365:
1,340 2.901%, 11/15/23 - FGIC Insured (IF) 11/16 at 100.00 AA 923,662
825 1.184%, 11/15/24 - FGIC Insured (IF) 11/16 at 100.00 AA 558,212
1,085 1.186%, 11/15/25 - FGIC Insured (IF) 11/16 at 100.00 AA 699,196
2,000 Maher Ranch Metropolitan District 4, Colorado, General Obligation 12/17 at 100.00 A3 1,464,800
Limited Tax Bonds, Series 2007, 5.250%, 12/01/36 - RAAI Insured
1,000 Plaza Metropolitan District 1, Lakewood, Colorado, Tax Increment 6/14 at 101.00 N/R 925,710
Revenue Bonds, Series 2003, 8.000%, 12/01/25
------------------------------------------------------------------------------------------------------------------------------------
28,855 Total Colorado 25,147,396
------------------------------------------------------------------------------------------------------------------------------------
DELAWARE - 0.3% (0.2% OF TOTAL INVESTMENTS)
1,595 Delaware Housing Authority, Multifamily Mortgage Revenue Bonds, 7/12 at 100.00 Aa3 1,632,897
Series 2001A, 5.400%, 7/01/24
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 0.7% (0.5% OF TOTAL INVESTMENTS)
1,375 District of Columbia, Revenue Bonds, Catholic University of America, 10/09 at 101.00 AA 1,369,074
Series 1999, 5.625%, 10/01/29 - AMBAC Insured
1,335 Washington Convention Center Authority, District of Columbia, Senior 10/16 at 100.00 AA 627,597
Lien Dedicated Tax Revenue Bonds, Series 2007, Residuals 1606,
1.947%, 10/01/30 - AMBAC Insured (IF)
3,335 Washington DC Convention Center Authority, Dedicated Tax Revenue 10/16 at 100.00 AA 1,567,817
Bonds, Residual Series 1730,1731, 1736, 0.469%, 10/01/30 -
AMBAC Insured (IF)
------------------------------------------------------------------------------------------------------------------------------------
6,045 Total District of Columbia 3,564,488
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 2.4% (1.5% OF TOTAL INVESTMENTS)
Orange County Housing Finance Authority, Florida, Multifamily Housing
Revenue Bonds, Oak Glen Apartments, Series 2001G:
1,105 5.400%, 12/01/32 - FSA Insured 12/11 at 100.00 AAA 899,426
2,195 5.450%, 12/01/41 - FSA Insured 12/11 at 100.00 AAA 1,721,758
4,175 Pace Property Finance Authority Inc., Florida, Utility System Improvement 3/09 at 101.00 AA 4,183,058
and Revenue Refunding Bonds, Series 1997, 5.250%, 9/01/17 -
AMBAC Insured
79
NZF
Nuveen Dividend Advantage Municipal Fund 3 (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA (continued)
$ 5,455 South Miami Health Facilities Authority, Florida, Hospital Revenue, Baptist 8/17 at 100.00 AA- $ 4,291,721
Health System Obligation Group, Series 2007, 5.000%, 8/15/42 (UB)
1,000 Tolomato Community Development District, Florida, Special Assessment 5/18 at 100.00 N/R 807,270
Bonds, Series 2007, 6.650%, 5/01/40
------------------------------------------------------------------------------------------------------------------------------------
13,930 Total Florida 11,903,233
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 2.6% (1.6% OF TOTAL INVESTMENTS)
5,000 Atlanta, Georgia, Airport General Revenue Bonds, Series 2000B, 5.625%, 1/10 at 101.00 A+ 4,207,550
1/01/30 - FGIC Insured (Alternative Minimum Tax)
2,700 Atlanta, Georgia, Tax Allocation Bonds, Atlantic Station Project, Series 12/11 at 101.00 AAA 3,124,224
2001, 7.900%, 12/01/24 (Pre-refunded 12/01/11)
2,000 Fulton County Residential Care Facilities Authority, Georgia, Revenue 7/17 at 100.00 N/R 1,172,040
Bonds, Elderly Care, Lenbrook Square Project, Series 2006A, 5.125%,
7/01/42
3,740 Gainesville and Hall County Hospital Authority, Georgia, Revenue 5/11 at 100.00 A- (4) 3,969,786
Anticipation Certificates, Northeast Georgia Health Services Inc., Series
2001, 5.500%, 5/15/31 (Pre-refunded 5/15/11)
500 Gainesville Redevelopment Authority, Georgia, Educational Facilities 3/17 at 100.00 N/R 285,350
Revenue Bonds, Riverside Military Academy Project, Series 2007,
5.125%, 3/01/37
------------------------------------------------------------------------------------------------------------------------------------
13,940 Total Georgia 12,758,950
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 17.0% (10.6% OF TOTAL INVESTMENTS)
8,375 Chicago, Illinois, Revenue Bonds, Midway Airport, Series 2001A, 5.500%, 1/11 at 101.00 AAA 7,787,578
1/01/19 - FSA Insured (Alternative Minimum Tax)
1,600 Chicago, Illinois, Sales Tax Revenue Bonds, Series 1998, 5.250%,
1/01/28 - FGIC Insured 1/09 at 101.50 AAA 1,569,568
4,950 Chicago, Illinois, Second Lien Passenger Facility Charge Revenue Bonds, 1/11 at 101.00 AA 3,983,364
O'Hare International Airport, Series 2001A, 5.375%, 1/01/32 - AMBAC
Insured (Alternative Minimum Tax)
2,220 Chicago, Illinois, Second Lien Wastewater Transmission Revenue Bonds, No Opt. Call AA 2,379,840
Series 2001A, 5.500%, 1/01/16 - MBIA Insured
10,000 Chicago, Illinois, Senior Lien Water Revenue Bonds, Series 2001, 11/11 at 100.00 AA (4) 10,628,200
5.000%, 11/01/26 (Pre-refunded 11/01/11) - AMBAC Insured
1,665 Chicago, Illinois, Third Lien General Airport Revenue Bonds, O'Hare 1/16 at 100.00 A1 1,436,778
International Airport, Series 2005A, 5.000%, 1/01/33 - FGIC Insured
2,415 Illinois Finance Authority, General Obligation Debt Certificates, Local 12/14 at 100.00 Aa3 2,228,828
Government Program - Kankakee County, Series 2005B, 5.000%,
12/01/24 - AMBAC Insured
2,385 Illinois Finance Authority, Revenue Bonds, Sherman Health Systems, 8/17 at 100.00 A- 1,650,038
Series 2007A, 5.500%, 8/01/37
1,130 Illinois Health Facilities Authority, Revenue Bonds, Condell Medical 5/10 at 101.00 Baa3 1,025,746
Center, Series 2000, 6.500%, 5/15/30
9,000 Illinois Health Facilities Authority, Revenue Bonds, Covenant Retirement 12/11 at 101.00 BBB 7,622,280
Communities Inc., Series 2001, 5.875%, 12/01/31
15,000 Illinois Health Facilities Authority, Revenue Bonds, Loyola University 7/11 at 100.00 Baa2 (4) 16,162,050
Health System, Series 2001A, 6.125%, 7/01/31 (Pre-refunded
7/01/11)
5,000 Lake County School District 38, Big Hallow, Illinois, General Obligation No Opt. Call Baa1 2,255,250
Bonds, Series 2005, 0.000%, 2/01/22 - AMBAC Insured
7,000 Lombard Public Facilities Corporation, Illinois, First Tier Conference 1/16 at 100.00 N/R 5,733,840
Center and Hotel Revenue Bonds, Series 2005A-1, 7.125%, 1/01/36
16,900 Metropolitan Pier and Exposition Authority, Illinois, Revenue Bonds, 12/09 at 101.00 AAA 16,569,772
McCormick Place Expansion Project, Series 1999A, 5.250%,
12/15/28 - FGIC Insured
2,000 Metropolitan Pier and Exposition Authority, Illinois, Revenue Refunding No Opt. Call AAA 2,017,100
Bonds, McCormick Place Expansion Project, Series 1998A, 5.500%,
6/15/29 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
89,640 Total Illinois 83,050,232
------------------------------------------------------------------------------------------------------------------------------------
80
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 6.6% (4.1% OF TOTAL INVESTMENTS)
Clark-Pleasant Community School Building Corporation, Indiana, First
Mortgage Bonds, Series 2001:
$ 1,255 5.000%, 7/15/21 (Pre-refunded 1/15/12) - AMBAC Insured 1/12 at 100.00 AA (4) $ 1,331,116
1,000 5.000%, 1/15/26 (Pre-refunded 1/15/12) - AMBAC Insured 1/12 at 100.00 AA (4) 1,060,650
Evansville Vanderburgh Public Library Lease Corporation, Indiana, First
Mortgage Bonds, Series 2001:
2,000 5.750%, 7/15/18 (Pre-refunded 1/15/12) - MBIA Insured 1/12 at 100.00 AA (4) 2,166,800
2,750 5.125%, 1/15/24 (Pre-refunded 1/15/12) - MBIA Insured 1/12 at 100.00 AA (4) 2,927,210
1,250 Hamilton Southeastern Cumberland Campus School Building 1/12 at 100.00 AA (4) 1,330,550
Corporation, Indiana, First Mortgage Bonds, Series 2001, 5.125%,
1/15/23 (Pre-refunded 1/15/12) - AMBAC Insured
9,500 Indiana Educational Facilities Authority, Revenue Bonds, Butler University, 2/11 at 100.00 AA 9,241,410
Series 2001, 5.500%, 2/01/26 - MBIA Insured
4,230 Indiana Finance Authority, Educational Facilities Revenue Bonds, Tudor 6/15 at 100.00 Aa3 3,984,998
Park Foundation, Series 2005B, 5.000%, 6/01/24
2,800 Indiana Health Facility Financing Authority, Revenue Bonds, Community 5/15 at 100.00 AA 2,324,504
Hospitals of Indiana, Series 2005A, 5.000%, 5/01/35 - AMBAC Insured
3,500 University of Southern Indiana, Student Fee Bonds, Series 2001H, 10/11 at 100.00 Aa3 3,314,745
5.000%, 10/01/21 - AMBAC Insured
Vigo County, Indiana, Hospital Authority, Union Hospital, Revenue Bonds,
Series 2007:
2,500 5.750%, 9/01/42 9/17 at 100.00 N/R 1,642,800
2,500 5.800%, 9/01/47 9/17 at 100.00 N/R 1,641,725
1,090 Wayne County Jail Holding Corporation, Indiana, First Mortgage Bonds, 1/13 at 101.00 AA (4) 1,198,749
Series 2001, 5.500%, 7/15/22 (Pre-refunded 1/15/13) - AMBAC
Insured
------------------------------------------------------------------------------------------------------------------------------------
34,375 Total Indiana 32,165,257
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 7.3% (4.5% OF TOTAL INVESTMENTS)
2,000 Iowa Finance Authority, Healthcare Revenue Bonds, Great River Medical 5/11 at 100.00 Aaa 1,827,420
Center, Series 2001, 5.250%, 5/15/31 - FSA Insured
Iowa Tobacco Settlement Authority, Tobacco Settlement Asset-Backed
Revenue Bonds, Series 2001B:
28,000 5.300%, 6/01/25 (Pre-refunded 6/01/11) 6/11 at 101.00 AAA 29,609,435
3,950 5.600%, 6/01/35 (Pre-refunded 6/01/11) 6/11 at 101.00 AAA 4,180,917
------------------------------------------------------------------------------------------------------------------------------------
33,950 Total Iowa 35,617,772
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 0.2% (0.1% OF TOTAL INVESTMENTS)
Manhattan Health Care Facility Revenue Bonds, Kansas, Meadowlarks
Hills Retirement, Series 2007B:
1,000 5.125%, 5/15/37 5/14 at 103.00 N/R 604,110
1,000 5.125%, 5/15/42 5/14 at 103.00 N/R 590,340
------------------------------------------------------------------------------------------------------------------------------------
2,000 Total Kansas 1,194,450
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 3.8% (2.4% OF TOTAL INVESTMENTS)
1,000 Kentucky Economic Development Finance Authority, Louisville Arena 6/18 at 100.00 AAA 932,090
Project Revenue Bonds, Louisville Arena Authority, Inc., Series
2008A-1, 6.000%, 12/01/42 - AGC Insured
18,500 Louisville and Jefferson County Metropolitan Sewer District, Kentucky, 11/11 at 101.00 AA 17,534,853
Sewer and DrainageSystem Revenue Bonds, Series 2001A, 5.125%,
5/15/27 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
19,500 Total Kentucky 18,466,943
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 4.0% (2.5% OF TOTAL INVESTMENTS)
3,000 Louisiana Local Government Environmental Facilities & Community 11/17 at 100.00 BB+ 2,282,220
Development Authority, Revenue Bonds, Westlake Chemical
Corporation Project, Series 2007, 6.750%, 11/01/32
3,700 Louisiana Public Facilities Authority, Revenue Bonds, Ochsner Clinic 5/17 at 100.00 A3 2,883,077
Foundation Project, Series 2007A, 5.500%, 5/15/47
81
NZF
Nuveen Dividend Advantage Municipal Fund 3 (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA (continued)
$ 19,890 Tobacco Settlement Financing Corporation, Louisiana, Tobacco 5/11 at 101.00 BBB $14,230,102
Settlement Asset-Backed Bonds, Series 2001B, 5.875%, 5/15/39
------------------------------------------------------------------------------------------------------------------------------------
26,590 Total Louisiana 19,395,399
------------------------------------------------------------------------------------------------------------------------------------
MAINE - 1.2% (0.7% OF TOTAL INVESTMENTS)
Maine State Housing Authority, Single Family Mortgage Purchase Bonds,
Series 2001B:
4,610 5.400%, 11/15/21 (Alternative Minimum Tax) 11/10 at 100.00 AA+ 4,161,770
1,610 5.500%, 11/15/32 (Alternative Minimum Tax) 11/10 at 100.00 AA+ 1,588,410
------------------------------------------------------------------------------------------------------------------------------------
6,220 Total Maine 5,750,180
------------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 2.6% (1.6% OF TOTAL INVESTMENTS)
1,000 Howard County, Maryland, Retirement Community Revenue Bonds, 4/17 at 100.00 N/R 591,200
Vantage House, Series 2007B, 5.250%, 4/01/37
1,570 Maryland Community Development Administration, Insured Multifamily 7/11 at 100.00 Aa2 1,397,237
Housing Mortgage Loan Revenue Bonds, Series 2001B, 5.250%,
7/01/21 (Alternative Minimum Tax)
2,000 Maryland Economic Development Corporation, Revenue Bonds, 12/16 at 100.00 N/R 1,198,720
Chesapeake Bay Hyatt Conference Center, Series 2006A, 5.000%,
12/01/31
10,600 Maryland Energy Financing Administration, Revenue Bonds, AES Warrior 1/09 at 100.00 N/R 9,077,628
Run Project, Series 1995, 7.400%, 9/01/19 (Alternative Minimum Tax)
555 Maryland Health and Higher Educational Facilities Authority, Revenue 7/17 at 100.00 BBB+ 361,749
Bonds, Mercy Ridge Retirement Community, Series 2007, 4.750%,
7/01/34
------------------------------------------------------------------------------------------------------------------------------------
15,725 Total Maryland 12,626,534
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 2.3% (1.4% OF TOTAL INVESTMENTS)
1,375 Massachusetts Development Finance Agency, Revenue Bonds, Orchard 10/12 at 102.00 BB- 898,824
Cove, Series 2007, 5.250%, 10/01/26
1,000 Massachusetts Health and Educational Facilities Authority, Revenue 7/15 at 100.00 BBB- 708,260
Bonds, Milton Hospital Project, Series 2005D, 5.250%, 7/01/30
4,860 Massachusetts Housing Finance Agency, Single Family Housing Revenue 6/18 at 100.00 Aa2 2,987,248
Bonds, Series 2008, Trust 3145, 11.962%, 6/01/39 (IF)
5,000 Massachusetts Port Authority, Special Facilities Revenue Bonds, Delta 1/11 at 101.00 AA 4,013,900
Air Lines Inc., Series2001A, 5.500%, 1/01/18 - AMBAC Insured
(Alternative Minimum Tax)
3,465 Massachusetts Water Resources Authority, General Revenue Bonds, 2/17 at 100.00 AAA 2,673,144
4.500%, 8/01/46 - FSA Insured (UB)
------------------------------------------------------------------------------------------------------------------------------------
15,700 Total Massachusetts 11,281,376
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 10.9% (6.8% OF TOTAL INVESTMENTS)
15,000 Detroit City School District, Wayne County, Michigan, Unlimited Tax No Opt. Call AAA 15,955,500
School Building and SiteImprovement Bonds, Series 2001A, 6.000%,
5/01/29 - FSA Insured (UB)
2,000 Garden City Hospital Finance Authority, Michigan, Revenue Bonds, 8/17 at 100.00 N/R 1,097,680
Garden City Hospital Obligated Group, Series 2007A, 5.000%, 8/15/38
11,000 Kent Hospital Finance Authority, Michigan, Revenue Bonds, Spectrum 7/11 at 101.00 AA (4) 11,827,420
Health, Series 2001A, 5.500%, 1/15/31 (Pre-refunded 7/15/11)
1,235 Michigan State Building Authority, Revenue Bonds, Facilities Program, 10/11 at 100.00 A+ 1,247,115
Series 2001I, 5.500%, 10/15/18
1,355 Michigan State Hospital Finance Authority, Hospital Revenue Bonds, 2/09 at 101.00 BB 966,887
Detroit Medical Center Obligated Group, Series 1998A, 5.250%,
8/15/23
3,485 Michigan State Hospital Finance Authority, Hospital Revenue Refunding No Opt. Call AA (4) 3,725,012
Bonds, Sisters of Mercy Health Corporation, Series 1993P, 5.375%,
8/15/14 - MBIA Insured (ETM)
82
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN (continued)
Michigan State Hospital Finance Authority, Hospital Revenue Refunding
Bonds, Sparrow Obligated Group, Series 2001:
$ 1,400 5.500%, 11/15/21 (Pre-refunded 11/15/11) 11/11 at 101.00 A+ (4) $ 1,513,918
2,500 5.625%, 11/15/31 (Pre-refunded 11/15/11) 11/11 at 101.00 A+ (4) 2,712,425
3,500 Michigan State Hospital Finance Authority, Revenue Bonds, Trinity Health 12/16 at 100.00 Aa2 2,999,325
Care Group, Series 2008, 5.000%, 12/01/31 (UB)
12,640 Royal Oak Hospital Finance Authority, Michigan, Hospital Revenue Bonds, 11/11 at 100.00 AA 11,262,240
William Beaumont Hospital, Series 2001M, 5.250%, 11/15/31 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
54,115 Total Michigan 53,307,522
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 0.6% (0.4% OF TOTAL INVESTMENTS)
2,275 Dakota County Community Development Agency, Minnesota, GNMA 10/11 at 105.00 Aaa 1,949,470
Collateralized Multifamily Housing Revenue Bonds, Rose Apartments
Project, Series 2001, 6.350%, 10/20/37 (Alternative Minimum Tax)
1,375 Saint Paul Port Authority, Minnesota, Lease Revenue Bonds, Regions 8/16 at 100.00 N/R 831,696
Hospital Parking Ramp Project, Series 2007-1, 5.000%, 8/01/36
------------------------------------------------------------------------------------------------------------------------------------
3,650 Total Minnesota 2,781,166
------------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 1.0% (0.6% OF TOTAL INVESTMENTS)
2,155 Mississippi Business Finance Corporation, GNMA Collateralized 5/09 at 103.00 AAA 1,987,794
Retirement Facility Mortgage Revenue Refunding Bonds, Aldersgate
Retirement Community Inc. Project, Series 1999A, 5.450%, 5/20/34
3,000 Mississippi Hospital Equipment and Facilities Authority, Revenue Bonds, 9/14 at 100.00 AA 2,650,980
Baptist Memorial Healthcare, Series 2008, 5.000%, 9/01/24 (UB)
------------------------------------------------------------------------------------------------------------------------------------
5,155 Total Mississippi 4,638,774
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 3.3% (2.1% OF TOTAL INVESTMENTS)
1,495 Cape Girardeau County Industrial Development Authority, Missouri, 6/17 at 100.00 N/R 1,041,043
Health Facilities Revenue Bonds, Southeast Missouri Hospital
Association, Series 2007, 5.000%, 6/01/36
1,000 Clinton County Industrial Development Authority, Missouri, Revenue 12/17 at 100.00 N/R 612,160
Bonds, Cameron Regional Medical Center, Series 2007, 5.000%,
12/01/32
1,825 Fenton, Missouri, Tax Increment Refunding and Improvement Revenue 10/12 at 100.00 N/R (4) 2,015,384
Bonds, Gravois Bluffs Redevelopment Project, Series 2002, 6.125%,
10/01/21 (Pre-refunded 10/01/12)
Missouri Development Finance Board, Cultural Facilities Revenue Bonds,
Nelson Gallery Foundation, Series 2001A:
3,335 5.250%, 12/01/19 - MBIA Insured 12/11 at 100.00 AA 3,376,454
3,510 5.250%, 12/01/20 - MBIA Insured 12/11 at 100.00 AA 3,536,606
3,695 5.250%, 12/01/21 - MBIA Insured 12/11 at 100.00 AA 3,708,376
2,040 5.250%, 12/01/22 - MBIA Insured 12/11 at 100.00 AA 2,037,899
------------------------------------------------------------------------------------------------------------------------------------
16,900 Total Missouri 16,327,922
------------------------------------------------------------------------------------------------------------------------------------
MONTANA - 0.9% (0.5% OF TOTAL INVESTMENTS)
5,000 Montana Board of Investments, Exempt Facility Revenue Bonds, 7/10 at 101.00 Caa1 4,127,550
Stillwater Mining Company, Series 2000, 8.000%, 7/01/20
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 1.2% (0.7% OF TOTAL INVESTMENTS)
Nebraska Investment Finance Authority, Single Family Housing Revenue
Bonds, Series 2001D:
2,135 5.250%, 9/01/21 (Alternative Minimum Tax) 9/11 at 100.00 AAA 2,081,561
2,860 5.375%, 9/01/32 (Alternative Minimum Tax) 9/11 at 100.00 AAA 2,807,405
1,005 Omaha Public Power District, Nebraska, Separate Electric System 2/17 at 100.00 AAA 893,083
Revenue Bonds, Nebraska City 2, Series 2006A, Trust 11673,
14.495%, 2/01/49 - AMBAC Insured (IF)
------------------------------------------------------------------------------------------------------------------------------------
6,000 Total Nebraska 5,782,049
------------------------------------------------------------------------------------------------------------------------------------
83
NZF
Nuveen Dividend Advantage Municipal Fund 3 (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 1.4% (0.9% OF TOTAL INVESTMENTS)
$ 2,000 Director of Nevada State Department of Business and Industry, Revenue 1/10 at 100.00 AA $ 1,202,280
Bonds, Las Vegas Monorail Project, First Tier, Series 2000, 5.375%,
1/01/40 - AMBAC Insured
4,000 Director of Nevada State Department of Business and Industry, Revenue 1/10 at 102.00 N/R 932,120
Bonds, Las Vegas Monorail Project, Second Tier, Series 2000, 7.375%,
1/01/40
200 Nevada Housing Division, Single Family Mortgage Bonds, Senior Series 4/09 at 100.75 Aaa 194,846
1998A-1, 5.300%, 4/01/18 (Alternative Minimum Tax)
4,290 University of Nevada, Revenue Bonds, Community College System, 1/12 at 100.00 AA- (4) 4,580,004
Series 2001A, 5.250%, 7/01/26 (Pre-refunded 1/01/12) - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
10,490 Total Nevada 6,909,250
------------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 0.4% (0.3% OF TOTAL INVESTMENTS)
2,000 New Hampshire Health and Education Authority, Hospital Revenue Bonds, 10/11 at 101.00 Aaa 2,001,860
Concord Hospital, Series 2001, 5.500%, 10/01/21 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 4.0% (2.5% OF TOTAL INVESTMENTS)
10,000 New Jersey Economic Development Authority, Water Facilities Revenue 11/12 at 101.00 Aa3 7,863,500
Bonds, American Water Company, Series 2002A, 5.250%, 11/01/32 -
AMBAC Insured (Alternative Minimum Tax)
450 New Jersey Health Care Facilities Financing Authority, Revenue Bonds, 7/13 at 100.00 Ba2 260,663
Somerset Medical Center, Series 2003, 5.500%, 7/01/33
4,125 New Jersey Transit Corporation, Certificates of Participation, Federal No Opt. Call AA 4,352,329
Transit Administration Grants, Series 2002A, 5.500%, 9/15/13 -
AMBAC Insured
20,000 New Jersey Transportation Trust Fund Authority, Transportation System No Opt. Call AA 6,075,200
Bonds, Series 2006C, 0.000%, 12/15/28 - AMBAC Insured
2,000 Tobacco Settlement Financing Corporation, New Jersey, Tobacco 6/17 at 100.00 BBB 1,101,240
Settlement Asset-Backed Bonds, Series 2007-1A, 4.750%, 6/01/34
------------------------------------------------------------------------------------------------------------------------------------
36,575 Total New Jersey 19,652,932
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 3.9% (2.4% OF TOTAL INVESTMENTS)
900 Albany Industrial Development Agency, New York, Revenue Bonds, 4/17 at 100.00 N/R 611,253
Brighter Choice Charter Schools, Series 2007A, 5.000%, 4/01/32
1,780 East Rochester Housing Authority, New York, GNMA Secured Revenue 10/11 at 101.00 AAA 1,587,101
Bonds, Gates Senior Housing Inc., Series 2001, 5.300%, 4/20/31
220 Hudson Yards Infrastructure Corporation, New York, Revenue Bonds, 2/17 at 100.00 AA 90,614
Driver Trust 1649, 2006, 4.745%, 2/15/47 - MBIA Insured (IF)
4,360 Hudson Yards Infrastructure Corporation, New York, Revenue Bonds, 2/17 at 100.00 AA 3,102,881
Series 2006A, 4.500%, 2/15/47 - MBIA Insured (UB)
4,155 Monroe County Airport Authority, New York, Revenue Refunding Bonds, No Opt. Call AA 4,192,852
Greater Rochester International Airport, Series 1999, 5.750%,
1/01/13 - MBIA Insured (Alternative Minimum Tax)
7,000 New York City Industrial Development Agency, New York, American 8/16 at 101.00 B- 4,833,010
Airlines-JFK International Airport Special Facility Revenue Bonds,
Series 2005, 7.750%, 8/01/31 (Alternative Minimum Tax)
1,715 New York City, New York, General Obligation Bonds, Fiscal Series 2002G, 8/12 at 100.00 AA 1,733,694
5.625%, 8/01/20 - MBIA Insured
785 New York City, New York, General Obligation Bonds, Fiscal Series 2002G, 8/12 at 100.00 Aa3 (4) 860,101
5.625%, 8/01/20 (Pre-refunded 8/01/12) - MBIA Insured
2,000 New York State Tobacco Settlement Financing Corporation, Tobacco 6/11 at 100.00 AA- 2,027,240
Settlement Asset-Backed and State Contingency Contract-Backed
Bonds, Series 2003B-1C, 5.500%, 6/01/16
------------------------------------------------------------------------------------------------------------------------------------
22,915 Total New York 19,038,746
------------------------------------------------------------------------------------------------------------------------------------
84
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 1.3% (0.8% OF TOTAL INVESTMENTS)
$ 3,080 Charlotte-Mecklenberg Hospital Authority, North Carolina, Carolinas 1/18 at 100.00 AA- $ 1,893,954
Health Care System Revenue Bonds, Series 2008, Trust 1149, 6.780%,
1/15/47 (IF)
1,200 Charlotte-Mecklenburg Hospital Authority, North Carolina, Health Care 1/17 at 100.00 AA- 1,026,204
System Revenue Bonds, Carolinas Health Care, Series 2007A, 5.000%,
1/15/31
1,750 Charlotte-Mecklenburg Hospital Authority, North Carolina, Healthcare 1/15 at 100.00 AA- (4) 1,856,313
System Revenue Bonds, DBA Carolinas Healthcare System, Series
2005A, 4.875%, 1/15/32 (Pre-refunded 1/15/15)
1,600 North Carolina Municipal Power Agency 1, Catawba Electric Revenue No Opt. Call A2 1,664,384
Bonds, Series 2003A, 5.500%, 1/01/13
------------------------------------------------------------------------------------------------------------------------------------
7,630 Total North Carolina 6,440,855
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 2.8% (1.8% OF TOTAL INVESTMENTS)
Buckeye Tobacco Settlement Financing Authority, Ohio, Tobacco
Settlement Asset-Backed Revenue Bonds, Senior Lien, Series
2007A-2:
3,435 5.125%, 6/01/24 6/17 at 100.00 BBB 2,692,353
710 5.875%, 6/01/30 6/17 at 100.00 BBB 497,717
685 5.750%, 6/01/34 6/17 at 100.00 BBB 456,210
1,570 5.875%, 6/01/47 6/17 at 100.00 BBB 982,208
1,505 Ohio Housing Finance Agency, GNMA Mortgage-Backed Securities 3/09 at 100.75 Aaa 1,393,209
Program Residential MortgageRevenue Bonds, Series 1998A-1,
5.300%, 9/01/19 - FSA Insured (Alternative Minimum Tax)
6,900 Ohio Water Development Authority, Solid Waste Disposal Revenue Bonds, 9/09 at 102.00 N/R 5,917,233
Bay Shore Power, Series 1998B, 6.625%, 9/01/20 (Alternative
Minimum Tax)
1,870 Portage County, Ohio, General Obligation Bonds, Series 2001, 5.000%, 12/11 at 100.00 AA 1,869,925
12/01/21 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
16,675 Total Ohio 13,808,855
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 2.5% (1.6% OF TOTAL INVESTMENTS)
Oklahoma Development Finance Authority, Revenue Bonds, Saint John
Health System, Series 2007:
4,930 5.000%, 2/15/37 2/17 at 100.00 AA- 4,076,962
955 5.000%, 2/15/42 2/17 at 100.00 AA- 771,659
2,500 Oklahoma Development Finance Authority, Revenue Refunding Bonds, 8/09 at 101.00 AAA 2,599,350
Hillcrest Healthcare System, Series 1999A, 5.625%, 8/15/29
(Pre-refunded 8/15/09)
Tulsa County Industrial Authority, Oklahoma, Health Care Revenue
Bonds, Saint Francis Health System, Series 2006:
6,305 5.000%, 12/15/36 (UB) 12/16 at 100.00 AA 4,903,335
88 Tulsa County Industrial Authority, Oklahoma, Health Care Revenue Bonds, 12/16 at 100.00 AA 48,873
Saint Francis Health System, Series 2006, Trust 3500, 7.262%,
12/15/36 (IF)
------------------------------------------------------------------------------------------------------------------------------------
14,778 Total Oklahoma 12,400,179
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 2.7% (1.7% OF TOTAL INVESTMENTS)
4,700 Oregon Health, Housing, Educational and Cultural Facilities Authority, 11/11 at 101.00 AA 4,490,897
Revenue Bonds, PeaceHealth Project, Series 2001, 5.250%,
11/15/21 - AMBAC Insured
10,000 Oregon Housing and Community Services Department, Multifamily 7/10 at 100.00 Aaa 8,527,100
Housing Revenue Bonds, Series 2000A, 6.050%, 7/01/42
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
14,700 Total Oregon 13,017,997
------------------------------------------------------------------------------------------------------------------------------------
85
NZF
Nuveen Dividend Advantage Municipal Fund 3 (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 2.3% (1.4% OF TOTAL INVESTMENTS)
Allegheny County Hospital Development Authority, Pennsylvania,
Revenue Bonds, West Penn Allegheny Health System, Series 2000B:
$ 2,000 9.250%, 11/15/22 (Pre-refunded 11/15/10) 11/10 at 102.00 AAA $ 2,280,660
2,000 9.250%, 11/15/30 (Pre-refunded 11/15/10) 11/10 at 102.00 AAA 2,280,660
500 Bucks County Industrial Development Authority, Pennsylvania, Charter 3/17 at 100.00 BBB 323,625
School Revenue Bonds, School Lane Charter School, Series 2007A,
5.000%, 3/15/37
3,500 Pennsylvania Economic Development Financing Authority, Senior Lien 1/09 at 100.00 B- 2,973,740
Resource Recovery Revenue Bonds, Northampton Generating Project,
Series 1994A, 6.600%, 1/01/19 (Alternative Minimum Tax)
3,205 Philadelphia School District, Pennsylvania, General Obligation Bonds, 8/12 at 100.00 Aa3 (4) 3,493,771
Series 2002B, 5.625%, 8/01/16 (Pre-refunded 8/01/12) - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
11,205 Total Pennsylvania 11,352,456
------------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 0.5% (0.3% OF TOTAL INVESTMENTS)
2,500 Puerto Rico Sales Tax Financing Corporation, Sales Tax Revenue Bonds, 8/17 at 100.00 A+ 2,173,450
Series 2007A, 5.250%, 8/01/57
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 1.5% (0.9% OF TOTAL INVESTMENTS)
6,850 South Carolina Transportation Infrastructure Bank, Revenue Bonds, 10/11 at 100.00 Aa3 (4) 7,365,394
Series 2001A, 5.500%, 10/01/22 (Pre-refunded 10/01/11) - AMBAC
Insured
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 2.0% (1.2% OF TOTAL INVESTMENTS)
3,680 Knox County Health, Educational and Housing Facilities Board, 1/17 at 30.07 A- 319,976
Tennessee, Hospital Revenue Refunding Bonds, Covenant Health,
Series 2006, 0.000%, 1/01/41
5,210 Memphis-Shelby County Airport Authority, Tennessee, Airport Revenue 3/11 at 100.00 AAA 5,142,010
Bonds, Series 2001A, 5.500%, 3/01/14 - FSA Insured
(Alternative Minimum Tax)
275 Sullivan County Health Educational and Housing Facilities Board, 9/16 at 100.00 BBB+ 180,810
Tennessee, Revenue Bonds, Wellmont Health System, Series 2006C,
5.250%, 9/01/36
Sumner County Health, Educational, and Housing Facilities Board,
Tennessee, Revenue Refunding Bonds, Sumner Regional Health System
Inc., Series 2007:
800 5.500%, 11/01/37 11/17 at 100.00 N/R 593,344
2,800 5.500%, 11/01/46 11/17 at 100.00 N/R 2,014,348
745 Tennessee Housing Development Agency, Homeownership Program 1/09 at 101.00 AA 657,120
Bonds, Series 1998-2, 5.350%, 7/01/23 (Alternative Minimum Tax)
760 Tennessee Housing Development Agency, Homeownership Program 7/11 at 100.00 AA 665,714
Bonds, Series 2001-3A, 5.200%, 7/01/22 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
14,270 Total Tennessee 9,573,322
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 20.6% (12.8% OF TOTAL INVESTMENTS)
5,445 Board of Regents, University of Texas System, Financing System 2/17 at 100.00 AAA 4,199,456
Revenue Bonds, Series 2006F, 4.250%, 8/15/36 (UB)
1,125 Brushy Creek Municipal Utility District, Williamson County, Texas, 6/09 at 100.00 Aaa 1,112,749
Combination Unlimited Tax and Revenue Refunding Bonds, Series
2001, 5.125%, 6/01/26 - FSA Insured
Collins and Denton Counties, Frisco, Texas, General Obligation Bonds,
Series 2001:
1,910 5.000%, 2/15/20 - FGIC Insured 2/11 at 100.00 AA 1,904,958
2,005 5.000%, 2/15/21 - FGIC Insured 2/11 at 100.00 AA 1,974,123
3,850 Dallas-Ft. Worth International Airport, Texas, Joint Revenue Refunding 11/11 at 100.00 A+ 3,052,742
and Improvement Bonds, Series 2001A, 5.500%, 11/01/35 - FGIC
Insured (Alternative Minimum Tax)
5,000 Decatur Hospital Authority, Texas, Revenue Bonds, Wise Regional Health 9/14 at 100.00 N/R 4,185,800
System, Series 2004A, 7.000%, 9/01/25
4,040 Harris County, Texas, Tax and Revenue Certificates of Obligation, Series 8/11 at 100.00 AAA 3,948,252
2001, 5.000%, 8/15/27
86
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS (continued)
$ 6,000 Houston, Texas, Junior Lien Water and Sewerage System Revenue No Opt. Call AA (4) $ 6,181,860
Refunding Bonds, Series 2001B, 5.500%, 12/01/29 - MBIA Insured
(ETM)
7,000 Houston, Texas, Subordinate Lien Airport System Revenue Bonds, Series 1/09 at 100.50 A+ 6,773,130
1998B, 5.250%, 7/01/14 - FGIC Insured (Alternative Minimum Tax)
Houston, Texas, Subordinate Lien Airport System Revenue Refunding
Bonds, Series 2001A:
2,525 5.500%, 7/01/13 - FGIC Insured (Alternative Minimum Tax) 1/12 at 100.00 A+ 2,508,411
2,905 5.500%, 7/01/14 - FGIC Insured (Alternative Minimum Tax) 1/12 at 100.00 A+ 2,845,360
14,200 Hutto Independent School District, Williamson County, Texas, General 8/16 at 100.00 AAA 11,980,682
Obligation Bonds, Series 2007A, 4.750%, 8/01/43
Jefferson County Health Facilities Development Corporation,
Texas, FHA-Insured Mortgage Revenue Bonds, Baptist Hospital of
Southeast Texas, Series 2001:
8,500 5.400%, 8/15/31 - AMBAC Insured 8/11 at 100.00 AA 6,646,490
8,500 5.500%, 8/15/41 - AMBAC Insured 8/11 at 100.00 AA 6,305,895
10,700 Laredo Independent School District, Webb County, Texas, General 8/11 at 100.00 AAA 10,567,748
Obligation Refunding Bonds, Series 2001, 5.000%, 8/01/25
2,500 Matagorda County Navigation District 1, Texas, Collateralized Revenue No Opt. Call Aaa 1,999,500
Refunding Bonds, Houston Light and Power Company, Series 1997,
5.125%, 11/01/28 - AMBAC Insured (Alternative Minimum Tax)
3,150 North Texas Thruway Authority, Second Tier System Revenue Refunding 1/18 at 100.00 A3 2,659,356
Bonds, Series 2008, 5.750%, 1/01/38
3,045 Port of Houston Authority, Harris County, Texas, General Obligation Port 10/11 at 100.00 AAA 2,854,901
Improvement Bonds, Series 2001B, 5.500%, 10/01/17 - FGIC Insured
(Alternative Minimum Tax)
7,700 Tarrant County, Texas, Cultural & Educational Facilities Financing 2/17 at 100.00 AA- 6,257,790
Corporation, Texas, Revenue Bonds, Series 2007A, 5.000%, 2/15/36
(UB)
9,840 Texas Department of Housing and Community Affairs, Residential 7/11 at 100.00 AAA 9,358,529
Mortgage Revenue Bonds, Series 2001A, 5.350%, 7/01/33
(Alternative Minimum Tax)
White Settlement Independent School District, Tarrant County, Texas,
General Obligation Bonds, Series 2006:
9,110 0.000%, 8/15/37 8/15 at 31.98 AAA 1,464,888
9,110 0.000%, 8/15/40 8/15 at 27.11 AAA 1,200,880
7,110 0.000%, 8/15/44 8/15 at 21.88 AAA 719,248
------------------------------------------------------------------------------------------------------------------------------------
135,270 Total Texas 100,702,748
------------------------------------------------------------------------------------------------------------------------------------
UTAH - 0.7% (0.4% OF TOTAL INVESTMENTS)
Utah Housing Corporation, Single Family Mortgage Bonds, Series 2001E:
1,165 5.200%, 1/01/18 (Alternative Minimum Tax) 7/11 at 100.00 AA- 1,075,994
295 5.500%, 1/01/23 (Alternative Minimum Tax) 7/11 at 100.00 Aaa 290,643
Utah Housing Corporation, Single Family Mortgage Bonds, Series 2001
F-1:
1,600 4.950%, 7/01/18 (Alternative Minimum Tax) 7/11 at 100.00 AA- 1,539,568
400 5.300%, 7/01/23 (Alternative Minimum Tax) 7/11 at 100.00 Aaa 390,924
------------------------------------------------------------------------------------------------------------------------------------
3,460 Total Utah 3,297,129
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 0.1% (0.1% OF TOTAL INVESTMENTS)
1,000 Chesterfield County Health Center Commission, Virginia, Mortgage 12/15 at 100.00 N/R 663,640
Revenue Bonds, Lucy Corr Village, Series 2005, 5.375%, 12/01/28
------------------------------------------------------------------------------------------------------------------------------------
87
NZF
Nuveen Dividend Advantage Municipal Fund 3 (continued)
Portfolio of INVESTMENTS October 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 17.8% (11.1% OF TOTAL INVESTMENTS)
Bellingham Housing Authority, Washington, Housing Revenue Bonds,
Varsity Village Project, Series 2001A:
$ 1,000 5.500%, 12/01/27 - MBIA Insured 12/11 at 100.00 A1 $ 990,630
2,000 5.600%, 12/01/36 - MBIA Insured 12/11 at 100.00 A1 1,956,420
12,955 Port of Seattle, Washington, Passenger Facility Charge Revenue Bonds, 12/08 at 101.00 AA 12,219,286
Series 1998B, 5.300%, 12/01/16 - AMBAC Insured (Alternative
Minimum Tax)
Port of Seattle, Washington, Revenue Bonds, Series 2001B:
2,535 5.625%, 4/01/18 - FGIC Insured (Alternative Minimum Tax) 10/11 at 100.00 AA 2,383,838
16,000 5.100%, 4/01/24 - FGIC Insured (Alternative Minimum Tax) 4/09 at 100.00 AA 13,141,280
2,090 Public Utility District 1, Benton County, Washington, Electric Revenue 11/11 at 100.00 AAA 2,202,463
Refunding Bonds, Series 2001A, 5.625%, 11/01/15 - FSA Insured
5,680 Seattle, Washington, Municipal Light and Power Revenue Refunding and 3/11 at 100.00 AAA 5,850,400
Improvement Bonds, Series 2001, 5.500%, 3/01/18 - FSA Insured
4,530 Tacoma, Washington, Solid Waste Utility Revenue Refunding Bonds, 12/11 at 100.00 AA (4) 4,850,271
Series 2001, 5.250%, 12/01/21 (Pre-refunded 12/01/11) - AMBAC
Insured
3,720 Washington State Healthcare Facilities Authority, Revenue Bonds, 10/11 at 100.00 Aa3 (4) 3,983,711
Children's Hospital and Regional Medical Center, Series 2001, 5.375%,
10/01/18 (Pre-refunded 10/01/11) - AMBAC Insured
Washington State Healthcare Facilities Authority, Revenue Bonds, Good
Samaritan Hospital, Series 2001:
5,480 5.500%, 10/01/21 (Pre-refunded 10/01/11) - RAAI Insured 10/11 at 101.00 BBB+ (4) 5,938,018
25,435 5.625%, 10/01/31 (Pre-refunded 10/01/11) - RAAI Insured 10/11 at 101.00 BBB+ (4) 27,649,115
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 3,054,222
2,915 5.375%, 12/01/18 - AMBAC Insured 12/11 at 101.00 AAA 2,947,619
------------------------------------------------------------------------------------------------------------------------------------
87,345 Total Washington 87,167,273
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 5.2% (3.3% OF TOTAL INVESTMENTS)
Appleton, Wisconsin, Waterworks Revenue Refunding Bonds, Series 2001:
3,705 5.375%, 1/01/20 (Pre-refunded 1/01/12) - FGIC Insured 1/12 at 100.00 N/R (4) 3,969,352
1,850 5.000%, 1/01/21 (Pre-refunded 1/01/12) - FGIC Insured 1/12 at 100.00 N/R (4) 1,961,185
12,250 La Crosse, Wisconsin, Pollution Control Revenue Refunding Bonds, 12/08 at 102.00 Aaa 12,405,943
Dairyland Power Cooperative, Series 1997B, 5.550%, 2/01/15 -
AMBAC Insured
1,000 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, 9/17 at 100.00 BBB+ 702,950
Franciscan Sisters of Christian Charity HealthCare Ministry, Series
2007, 5.000%, 9/01/33
350 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, 10/11 at 101.00 AA- 308,767
Froedtert and Community Health Obligated Group, Series 2001,
5.375%, 10/01/30
3,650 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, 10/11 at 101.00 AA- (4) 3,942,365
Froedtert and Community Health Obligated Group, Series 2001,
5.375%, 10/01/30 (Pre-refunded 10/01/11)
2,500 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, 2/12 at 100.00 BBB+ 2,265,750
Marshfield Clinic, Series 2001B, 6.000%, 2/15/25
50 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, 8/13 at 100.00 A- 30,796
Wheaton Franciscan Services Inc., Series 2003A, 5.125%, 8/15/33
------------------------------------------------------------------------------------------------------------------------------------
25,355 Total Wisconsin 25,587,108
------------------------------------------------------------------------------------------------------------------------------------
$ 917,393 Total Municipal Bonds (cost $867,562,658) 783,347,198
=============-----------------------------------------------------------------------------------------------------------------------
88
SHARES DESCRIPTION (1) VALUE
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT COMPANIES - 0.3% (0.2% OF TOTAL INVESTMENTS)
29,401 BlackRock MuniHoldings Fund Inc. $ 315,473
26,880 Dreyfus Strategic Municipal Fund 163,968
27,920 PIMCO Municipal Income Fund II 258,818
42,020 Van Kampen Investment Grade Municipal Trust 424,822
19,260 Van Kampen Municipal Trust 195,489
------------------------------------------------------------------------------------------------------------------------------------
Total Investment Companies (cost $1,846,128) 1,358,570
--------------------------------------------------------------------------------------------------------------------
Total Investments (cost $869,408,786) - 160.6% 784,705,768
--------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (7.6)% (37,032,000)
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.4% 11,662,070
--------------------------------------------------------------------------------------------------------------------
Auction Rate Preferred Shares, at Liquidation Value - (55.4)% (6) (270,775,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 488,560,838
====================================================================================================================
FUTURES CONTRACTS OUTSTANDING AT OCTOBER 31, 2008:
UNREALIZED
CONTRACT NUMBER OF CONTRACT VALUE AT APPRECIATION
TYPE POSITION CONTRACTS EXPIRATION OCTOBER 31, 2008 (DEPRECIATION)
--------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bond Long 156 12/08 $17,647,500 $(679,241)
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares unless
otherwise noted.
(2) Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates (month
and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying
prices at later dates. Certain mortgage-backed securities
may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered
public accounting firm): Using the higher of Standard &
Poor's Group ("Standard & Poor's") or Moody's Investor
Service, Inc. ("Moody's") rating. Ratings below BBB by
Standard & Poor's or Baa by Moody's are considered to be
below investment grade.
The Portfolio of Investments may reflect the ratings on
certain bonds insured by ACA, AGC, AMBAC, FGIC, FSA, MBIA,
RAAI and SYNCORA as of October 31, 2008. Please see the
Portfolio Managers' Commentary for an expanded discussion of
the affect on the Fund of changes to the ratings of certain
bonds in the portfolio resulting from changes to the ratings
of the underlying insurers both during the period and after
period end.
(4) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which ensure
the timely payment of principal and interest. Such
investments are normally considered to be equivalent to AAA
rated securities.
(5) Portion of investment has been pledged to collateralize the
net payment obligations under futures contracts.
(6) Auction Rate Preferred Shares, at Liquidation Value as a
percentage of Total Investments is 34.5%.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected
as a financing transaction pursuant to the provisions of
SFAS No. 140.
See accompanying notes to financial statements.
89
Statement of
ASSETS & LIABILITIES
October 31, 2008
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $1,299,989,044,
$957,998,565, $982,534,401,
$846,176,089, $606,819,786
and $869,408,786,
respectively) $1,222,971,532 $877,736,594 $919,639,931 $762,667,113 $566,350,585 $784,705,768
Cash -- -- 323,710 6,100,102 -- --
Deposits with brokers for
open futures contracts -- -- -- -- -- 74,651
Receivables:
Dividend and interest 19,497,827 16,153,365 15,602,429 12,357,190 11,032,760 14,925,408
Investments sold 700,128 -- 2,984,000 -- 12,500,502 656,503
Deferred offering costs -- -- -- -- 2,252,175 --
Other assets 132,984 101,190 108,167 91,761 61,535 58,757
------------------------------------------------------------------------------------------------------------------------------------
Total assets 1,243,302,471 893,991,149 938,658,237 781,216,166 592,197,557 800,421,087
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft 589,492 497,704 -- -- 182,797 631,450
Variable Rate Demand Preferred shares,
at liquidation value -- -- -- -- 196,000,000 --
Floating rate obligations 38,288,000 25,008,333 16,275,000 48,740,000 11,245,000 37,032,000
Unrealized depreciation on
Recourse Trusts -- -- -- -- 554,400 --
Payables:
Investments purchased -- -- -- -- 7,746,444 --
Variation margin on futures contracts -- -- -- -- -- 185,250
Common share dividends 3,092,411 2,381,196 2,451,807 2,453,912 2,059,178 2,575,662
Auction Rate Preferred
share dividends 124,979 94,112 115,977 64,460 -- 63,079
Offering costs -- -- -- -- 222,222 --
Accrued expenses:
Management fees 627,043 458,383 484,803 357,442 233,170 308,331
Other 434,777 299,126 310,037 246,060 14,776 289,477
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 43,156,702 28,738,854 19,637,624 51,861,874 218,257,987 41,085,249
------------------------------------------------------------------------------------------------------------------------------------
Auction Rate Preferred shares, at
liquidation value 439,650,000 341,650,000 361,675,000 266,800,000 -- 270,775,000
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to
Common shares $ 760,495,769 $523,602,295 $557,345,613 $462,554,292 $373,939,570 $488,560,838
====================================================================================================================================
Common shares outstanding 59,914,073 43,214,524 45,557,788 39,287,298 29,426,326 40,378,174
====================================================================================================================================
Net asset value per Common share
outstanding (net assets
applicable to Common
shares, divided by
Common shares outstanding) $ 12.69 $ 12.12 $ 12.23 $ 11.77 $ 12.71 $ 12.10
====================================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF:
------------------------------------------------------------------------------------------------------------------------------------
Common shares, $.01 par
value per share $ 599,141 $ 432,145 $ 455,578 $ 392,873 $ 294,263 $ 403,782
Paid-in surplus 836,437,628 604,052,660 635,757,048 550,788,248 418,451,843 573,909,890
Undistributed
(Over-distribution
of) net
investment income 871,663 444,924 (1,194,990) 154,163 (762,556) (568,658)
Accumulated net realized gain
(loss) from investments
and derivative transactions (395,151) (1,065,463) (14,777,553) (5,272,016) (3,020,379) 198,083
Net unrealized appreciation
(depreciation) of
investments and
derivative transactions (77,017,512) (80,261,971) (62,894,470) (83,508,976) (41,023,601) (85,382,259)
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable
to Common shares $ 760,495,769 $523,602,295 $557,345,613 $462,554,292 $373,939,570 $488,560,838
====================================================================================================================================
Authorized shares:
Common 200,000,000 200,000,000 200,000,000 Unlimited Unlimited Unlimited
Auction Rate Preferred
and Variable Rate
Demand Preferred 1,000,000 1,000,000 1,000,000 Unlimited Unlimited Unlimited
====================================================================================================================================
See accompanying notes to financial statements.
90
Statement of
OPERATIONS
Year Ended October 31, 2008
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $ 71,675,160 $ 54,966,066 $ 55,699,409 $ 47,974,587 $ 37,149,261 $ 48,881,721
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 8,107,704 5,950,476 6,207,591 5,146,483 4,027,559 5,392,507
Auction fees 1,169,626 888,135 942,392 719,163 510,709 750,340
Dividend disbursing agent fees 50,000 50,000 40,000 30,000 33,535 30,000
Shareholders' servicing agent fees
and expenses 128,608 79,879 84,403 11,195 4,849 6,269
Interest expense 678,511 1,059,512 881,530 1,142,379 2,147,370 1,117,381
Custodian's fees and expenses 246,694 134,732 174,205 135,237 118,434 154,155
Directors'/Trustees' fees
and expenses 27,271 19,910 20,501 17,019 13,475 17,948
Professional fees 82,465 63,190 65,148 54,273 44,644 56,948
Shareholders' reports - printing and
mailing expenses 153,999 117,159 118,624 99,322 74,097 99,882
Stock exchange listing fees 20,714 15,305 15,799 13,639 3,882 5,334
Investor relations expense 171,445 124,289 131,627 105,886 81,559 109,964
Other expenses 58,108 46,792 50,490 32,455 385,591 33,481
------------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee
credit and expense reimbursement 10,895,145 8,549,379 8,732,310 7,507,051 7,445,704 7,774,209
Custodian fee credit (118,866) (113,251) (81,913) (118,267) (51,508) (112,966)
Expense reimbursement -- -- -- (741,847) (1,120,050) (1,730,003)
------------------------------------------------------------------------------------------------------------------------------------
Net expenses 10,776,279 8,436,128 8,650,397 6,646,937 6,274,146 5,931,240
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 60,898,881 46,529,938 47,049,012 41,327,650 30,875,115 42,950,481
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments (328,499) (1,136,012) (1,618,281) 1,445,057 3,731,159 (3,045,414)
Forward swaps -- -- -- -- -- 2,733,000
Futures -- -- -- -- -- 865,654
Change in net unrealized
appreciation (depreciation) of:
Investments (153,071,771) (130,946,869) (116,402,236) (124,805,304) (86,311,451) (117,423,115)
Forward swaps -- -- -- -- -- (1,472,119)
Futures -- -- -- -- -- (679,241)
------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) (153,400,270) (132,082,881) (118,020,517) (123,360,247) (82,580,292) (119,021,235)
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO AUCTION RATE
PREFERRED SHAREHOLDERS
From net investment income (17,368,890) (12,897,786) (13,956,934) (10,685,162) (6,026,331) (11,064,289)
From accumulated net realized gains -- (363,253) -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Auction Rate
Preferred shareholders (17,368,890) (13,261,039) (13,956,934) (10,685,162) (6,026,331) (11,064,289)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from operations $(109,870,279) $ (98,813,982) $ (84,928,439) $ (92,717,759) $(57,731,508) $ (87,135,043)
====================================================================================================================================
See accompanying notes to financial statements.
91
Statement of
CHANGES in NET ASSETS
PERFORMANCE PLUS (NPP) MUNICIPAL ADVANTAGE (NMA) MARKET OPPORTUNITY (NMO)
------------------------------- ------------------------------ -------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
10/31/08 10/31/07 10/31/08 10/31/07 10/31/08 10/31/07
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 60,898,881 $ 59,081,814 $ 46,529,938 $ 46,092,114 $ 47,049,012 $ 47,185,988
Net realized gain (loss) from:
Investments (328,499) (114,084) (1,136,012) 1,405,723 (1,618,281) (2,764,433)
Forward swaps -- -- -- -- -- --
Futures -- -- -- -- -- --
Change in net unrealized
appreciation (depreciation) of:
Investments (153,071,771) (27,296,563) (130,946,869) (28,042,883) (116,402,236) (22,450,181)
Forward swaps -- -- -- -- -- --
Futures -- -- -- -- -- --
Distributions to Auction Rate
Preferred shareholders:
From net investment income (17,368,890) (16,373,121) (12,897,786) (12,659,658) (13,956,934) (13,663,433)
From accumulated net
realized gains -- (858,202) (363,253) -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from operations (109,870,279) 14,439,844 (98,813,982) 6,795,296 (84,928,439) 8,307,941
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (41,700,208) (44,830,422) (33,361,611) (36,025,128) (33,302,749) (34,547,696)
From accumulated net realized gains -- (2,765,395) (1,028,506) -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Common shareholders (41,700,208) (47,595,817) (34,390,117) (36,025,128) (33,302,749) (34,547,696)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares issued
to shareholders due to reinvestment
of distributions -- -- -- 2,361,680 -- 257,295
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares from
capital share transactions -- -- -- 2,361,680 -- 257,295
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
applicable to
Common shares (151,570,487) (33,155,973) (133,204,099) (26,868,152) (118,231,188) (25,982,460)
Net assets applicable to
Common shares at the
beginning of year 912,066,256 945,222,229 656,806,394 683,674,546 675,576,801 701,559,261
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of year $ 760,495,769 $912,066,256 $ 523,602,295 $656,806,394 $ 557,345,613 $675,576,801
====================================================================================================================================
Undistributed (Over-distribution of)
net investment income at the
end of year $ 871,663 $ (904,878) $ 444,924 $ 293,060 $ (1,194,990) $ (967,250)
====================================================================================================================================
See accompanying notes to financial statements.
92
DIVIDEND ADVANTAGE (NAD) DIVIDEND ADVANTAGE 2 (NXZ) DIVIDEND ADVANTAGE 3 (NZF)
------------------------------- ------------------------------ -------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
10/31/08 10/31/07 10/31/08 10/31/07 10/31/08 10/31/07
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 41,327,650 $ 40,737,006 $ 30,875,115 $ 33,194,589 $ 42,950,481 $43,162,296
Net realized gain (loss) from:
Investments 1,445,057 2,375,892 3,731,159 (1,406,045) (3,045,414) 172,182
Forward swaps -- -- -- -- 2,733,000 (455,000)
Futures -- -- -- -- 865,654 (418,916)
Change in net unrealized
appreciation (depreciation) of:
Investments (124,805,304) (25,931,805) (86,311,451) (11,366,291) (117,423,115) (18,402,081)
Forward swaps -- -- -- -- (1,472,119) 1,331,159
Futures -- -- -- -- (679,241) (129,711)
Distributions to Auction Rate
Preferred shareholders:
From net investment income (10,685,162) (10,593,575) (6,026,331) (7,987,669) (11,064,289) (11,080,897)
From accumulated net
realized gains -- -- -- -- -- (226,888)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from operations (92,717,759) 6,587,518 (57,731,508) 12,434,584 (87,135,043) 13,952,144
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (30,223,720) (31,716,407) (25,763,976) (26,454,214) (31,212,328) (33,803,641)
From accumulated net realized gains -- -- -- -- -- (798,769)
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Common shareholders (30,223,720) (31,716,407) (25,763,976) (26,454,214) (31,212,328) (34,602,410)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares issued
to shareholders due to reinvestment
of distributions -- 308,799 443,496 821,897 -- 722,964
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares from
capital share transactions -- 308,799 443,496 821,897 -- 722,964
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
applicable to
Common shares (122,941,479) (24,820,090) (83,051,988) (13,197,733) (118,347,371) (19,927,302)
Net assets applicable to
Common shares at the
beginning of year 585,495,771 610,315,861 456,991,558 470,189,291 606,908,209 626,835,511
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of year $462,554,292 $585,495,771 $373,939,570 $456,991,558 $ 488,560,838 $606,908,209
====================================================================================================================================
Undistributed (Over-distribution of)
net investment income at the
end of year $ 154,163 $ (207,189) $ (762,556) $ 164,014 $ (568,658) $ (1,234,602)
====================================================================================================================================
See accompanying notes to financial statements.
93
Statement of
CASH FLOWS
Year Ended October 31, 2008
DIVIDEND
ADVANTAGE 2
(NXZ)
------------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHARES FROM OPERATIONS $ (57,731,508)
Adjustments to reconcile the net increase (decrease) in net assets applicable to
Common shares from operations to net cash provided by (used in) operating
activities:
Purchases of investments (62,126,117)
Proceeds from sales and maturities of investments 115,255,550
Proceeds from (Purchases of) short-term investments, net (4,680,000)
Amortization (Accretion) of premiums and discounts, net (2,195,512)
(Increase) Decrease in receivable for dividend and interest 578,589
(Increase) Decrease in receivable for investments sold (12,500,502)
(Increase) Decrease in other assets 8
Increase (Decrease) in payable for investments purchased 7,746,444
Increase (Decrease) in payable for Auction Rate Preferred share dividends (37,883)
Increase (Decrease) in accrued management fees (4,344)
Increase (Decrease) in accrued other liabilities (128,233)
Net realized (gain) loss from investments (3,731,159)
Change in net unrealized (appreciation) depreciation of investments 86,311,451
Change in taxes paid on undistributed capital gains (97)
------------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) operating activities 66,756,687
------------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (Decrease) in cash overdraft balance 104,124
Increase (Decrease) in floating rate obligations (13,520,000)
Cash distributions paid to Common shareholders (25,310,858)
Increase (Decrease) in Variable Rate Demand Preferred shares 196,000,000
(Increase) Decrease in deferred offering costs (2,252,175)
Increase (Decrease) in payable for offering cost 222,222
Increase (Decrease) in Auction Rate Preferred shares (222,000,000)
------------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities (66,756,687)
------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH --
Cash at the beginning of year --
------------------------------------------------------------------------------------------------------------------------------------
CASH AT THE END OF YEAR $ --
====================================================================================================================================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid by Dividend Advantage 2 (NXZ) for interest (excluding amortization of
offering costs) was $2,129,545.
Non-cash financing activities not included herein consist of reinvestments of
Common share distributions of $443,496.
See accompanying notes to financial statements.
94
Notes to
FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The funds covered in this report and their corresponding Common share stock
exchange symbols are Nuveen Performance Plus Municipal Fund, Inc. (NPP), Nuveen
Municipal Advantage Fund, Inc. (NMA), Nuveen Municipal Market Opportunity Fund,
Inc. (NMO), Nuveen Dividend Advantage Municipal Fund (NAD), Nuveen Dividend
Advantage Municipal Fund 2 (NXZ) and Nuveen Dividend Advantage Municipal Fund 3
(NZF) (collectively, the "Funds"). Performance Plus (NPP), Municipal Advantage
(NMA), Market Opportunity (NMO) and Dividend Advantage (NAD) are traded on the
New York Stock Exchange 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 or certain U.S. territories.
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements in accordance with U.S.
generally accepted accounting principles.
Investment Valuation
The prices of municipal bonds in each Fund's investment portfolio are provided
by a pricing service approved by the Fund's Board of Directors/Trustees. When
market price quotes are not readily available (which is usually the case for
municipal securities), the pricing service may establish fair value based on
yields or prices of municipal bonds of comparable quality, type of issue,
coupon, maturity and rating, indications of value from securities dealers,
evaluations of anticipated cash flows or collateral and general market
conditions. Prices of forward swap contracts are also provided by an independent
pricing service approved by each Fund's Board of Directors/Trustees. Futures
contracts are valued using the closing settlement price, or, in the absence of
such a price, at the mean of the bid and asked prices. If the pricing service is
unable to supply a price for an investment or derivative instrument, each Fund
may use market quotes provided by major broker/dealers in such investments. If
it is determined that the market price for an investment or derivative
instrument is unavailable or inappropriate, the Board of Directors/Trustees of
the Funds, or its designee, may establish fair value in accordance with
procedures established in good faith by the Board of Directors/Trustees.
Temporary investments in securities that have variable rate and demand features
qualifying them as short-term investments are valued at amortized cost, which
approximates market value.
Investment Transactions
Investment transactions are recorded on a trade date basis. Realized gains and
losses from transactions are determined on the specific identification method.
Investments purchased on a when-issued/delayed delivery basis may have extended
settlement periods. Any investments so purchased are subject to market
fluctuation during this period. The Funds have instructed the custodian to
segregate assets with a current value at least equal to the amount of the
when-issued/delayed delivery purchase commitments. At October 31, 2008, 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.
Interest income also includes paydown gains and losses, if any. Dividend income,
if any, is recorded on the ex-dividend date.
Income Taxes
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund
intends to distribute substantially all of its net investment income and net
capital gains to shareholders and to otherwise comply with the requirements of
Subchapter M of the Internal Revenue Code applicable to regulated investment
companies. Therefore, no federal income tax provision is required. Furthermore,
each Fund intends to satisfy conditions which will enable interest from
municipal securities, which is exempt from
95
Notes to
FINANCIAL STATEMENTS (continued)
regular federal income tax, to retain such tax-exempt status when distributed to
shareholders of the Funds. Net realized capital gains and ordinary income
distributions paid by the Funds are subject to federal taxation.
Effective April 30, 2008, the Funds adopted Financial Accounting Standards Board
(FASB) Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN
48). FIN 48 provides guidance for how uncertain tax positions should be
recognized, measured, presented and disclosed in the financial statements. FIN
48 requires the affirmative evaluation of tax positions taken or expected to be
taken in the course of preparing the Funds' tax returns to determine whether it
is "more-likely-than-not" (i.e., a greater than 50-percent likelihood) of being
sustained by the applicable tax authority. Tax positions not deemed to meet the
more-likely-than-not threshold may result in a tax expense in the current year.
Implementation of FIN 48 required management of the Funds to analyze all open
tax years, as defined by the statute of limitations, for all major
jurisdictions, which includes federal and certain states. Open tax years are
those that are open for examination by taxing authorities (i.e., generally the
last four tax year ends and the interim tax period since then). The Funds have
no examinations in progress.
For all open tax years and all major taxing jurisdictions through the end of the
reporting period, management of the Funds has reviewed all tax positions taken
or expected to be taken in the preparation of the Funds' tax returns and
concluded the adoption of FIN 48 resulted in no impact to the Funds' net assets
or results of operations as of and during the fiscal year ended October 31,
2008.
The Funds are also not aware of any tax positions for which it is reasonably
possible that the total amounts of unrecognized tax benefits will significantly
change in the next twelve months.
Dividends and Distributions to Common Shareholders
Dividends from tax-exempt net investment income are declared monthly. Net
realized capital gains and/or market discount from investment transactions, if
any, are distributed to shareholders at least annually. Furthermore, capital
gains are distributed only to the extent they exceed available capital loss
carryforwards.
Distributions to Common shareholders of tax-exempt net investment income, net
realized capital gains and/or market discount, if any, are recorded on the
ex-dividend date. The amount and timing of distributions are determined in
accordance with federal income tax regulations, which may differ from U.S.
generally accepted accounting principles.
Auction Rate Preferred Shares
The following Funds have issued and outstanding Auction Rate Preferred shares,
$25,000 stated value per share, as a means of effecting financial leverage. Each
Fund's Auction Rate Preferred shares are issued in more than one series. The
dividend rate paid by the Funds on each Series is determined every seven days,
pursuant to a dutch auction process overseen by the auction agent, and is
payable at the end of each rate period. As of October 31, 2008, the number of
Auction Rate Preferred shares outstanding, by Series and in total, for each Fund
is as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NZF)
-------------------------------------------------------------------------------------------------------------------
Number of shares:
Series M 3,672 2,863 3,807 3,618 --
Series T 3,671 2,863 3,807 3,617 --
Series W 3,671 2,863 3,046 -- 3,610
Series TH 2,900 2,214 -- 3,437 3,610
Series F 3,672 2,863 3,807 -- 3,611
-------------------------------------------------------------------------------------------------------------------
Total 17,586 13,666 14,467 10,672 10,831
===================================================================================================================
96
Beginning in February 2008, more shares for sale were submitted in the regularly
scheduled auctions for the Auction Rate Preferred shares issued by the Funds
than there were offers to buy. This meant that these auctions "failed to
clear," and that many Auction Rate Preferred shareholders who wanted to sell
their shares in these auctions were unable to do so. Auction Rate Preferred
shareholders unable to sell their shares received distributions at the "maximum
rate" applicable to failed auctions as calculated in accordance with the
pre-established terms of the Auction Rate Preferred shares.
These developments generally do not affect the management or investment policies
of the Funds. However, one implication of these auction failures for Common
shareholders is that the Funds' cost of leverage will be higher, at least
temporarily, than it otherwise would have been had the auctions continued to be
successful. As a result, the Funds' future Common share earnings may be lower
than they otherwise would have been.
On June 11, 2008, Nuveen Investments, Inc. ("Nuveen") announced the Fund Board's
approval of plans to use tender option bonds (TOBs), also known as "floaters" or
floating rate obligations, to refinance a portion of the municipal funds'
outstanding Auction Rate Preferred shares, whose auctions have been failing for
several months. The plan included an initial phase of approximately $1 billion
in forty-one funds. During the fiscal year ended October 31, 2008 Performance
Plus (NPP), Municipal Advantage (NMA), Market Opportunity (NMO), Dividend
Advantage (NAD) and Dividend Advantage 3 (NZF) redeemed $39,350,000,
$16,350,000, $18,325,000, $28,200,000 and $41,225,000 of their outstanding
Auction Rate Preferred shares, respectively, at liquidation value, using the
proceeds from the issuance of TOBs.
Variable Rate Demand Preferred Shares
On August 7, 2008, Dividend Advantage 2 (NXZ) issued 1,960 Series 1 Variable
Rate Demand Preferred (VRDP) shares, $100,000 liquidation value per share,
through a private placement to qualified institutional buyers pursuant to Rule
144A under the Securities Act of 1933. Proceeds of this offering along with the
proceeds from the Fund's creation of TOBs, discussed above, were used to redeem
all of the Fund's outstanding Auction Rate Preferred shares totaling
$222,000,000. The VRDP shares have a maturity date of August 1, 2038. Dividends
on the VRDP shares are set through a weekly remarketing process at a rate
established by a remarketing agent, which is intended to result in the value of
the VRDP shares approximately equaling their liquidation value. VRDP shares
include a liquidity feature that allows VRDP shareholders who are tendering
shares for remarketing to have their shares purchased by a liquidity provider,
Deutsche Bank AG (acting through its New York branch), in the event that the
remarketing agent is not able to sell the tendered VRDP shares to other
qualified institutional buyers.
Subject to certain conditions, VRDP shares may be redeemed, in whole or in part,
at any time at the option of the Fund. The Fund may also redeem certain of the
VRDP shares if the Fund fails to maintain certain asset coverage requirements
and such failures are not cured by the applicable cure date. The redemption
price per share is equal to the sum of the liquidation value per share plus any
accumulated but unpaid dividends.
The terms of the VRDP shares provide that, if any VRDP shares tendered to the
liquidity provider cannot be successfully remarketed, the dividend rate for all
VRDP shares will be set at the Maximum Rate determined under a formula set forth
in the Fund's organizational documents. The Maximum Rate is generally equal to a
stated percentage spread in excess of the seven-day London Inter-Bank Offered
Rate (LIBOR). If remarketings for these shares continue to be unsuccessful, the
Maximum Rate is designed to escalate according to a specified schedule in order
to enhance the remarketing agent's ability to successfully remarket the VRDP
shares. This would increase the Fund's cost of leverage over time and reduce the
Fund's Common share net earnings. There are various potential factors that could
result in unsuccessful remarketings. These include periods of market stress, an
actual or potential downgrade of the liquidity provider's credit ratings as well
as changes in market perceptions regarding the financial strength of the Fund's
liquidity provider.
Dividend Advantage 2 (NXZ) had $196,000,000 VRDP shares outstanding for the
period August 7, 2008 through October 31, 2008 with an annualized interest rate
of 3.56%.
For financial reporting purposes only, VRDP shares, at the liquidation value,
are recorded as a liability on the Statement of Assets and Liabilities and the
dividends paid on the VRDP shares are included as a component of "Interest
expense" on the Statement of Operations.
Inverse Floating Rate Securities
Each Fund is authorized to invest in inverse floating rate securities. An
inverse floating rate security is created by depositing a municipal bond,
typically with a fixed interest rate, into a special purpose trust created by a
broker-dealer. In turn, this trust (a) issues floating rate certificates, in
face amounts equal to some fraction of the deposited bond's par amount or market
value, that typically pay short-term tax-exempt interest rates to third parties,
and (b) issues to a long-term investor (such as one of the Funds) an inverse
floating rate certificate (sometimes referred to as an "inverse floater") that
represents all remaining or residual interest in the trust. The income received
by the inverse floater holder varies inversely with the short-term rate paid to
the floating rate certificates' holders, and in most circumstances the inverse
floater holder bears substantially all of the underlying bond's downside
investment risk and also benefits disproportionately from any potential
appreciation of the underlying bond's value. The price of an inverse floating
rate security will be more volatile than that of the underlying bond because the
interest rate is dependent on not
97
Notes to
FINANCIAL STATEMENTS (continued)
only the fixed coupon rate of the underlying bond but also on the short-term
interest paid on the floating rate certificates, and because the inverse
floating rate security essentially bears the risk of loss of the greater face
value of the underlying bond.
A Fund may purchase an inverse floating rate security in a secondary market
transaction without first owning the underlying bond (referred to as an
"externally-deposited inverse floater"), or instead by first selling a
fixed-rate bond to a broker-dealer for deposit into the special purpose trust
and receiving in turn the residual interest in the trust (referred to as a
"self-deposited inverse floater"). The inverse floater held by a Fund gives the
Fund the right (a) to cause the holders of the floating rate certificates to
tender their notes at par, and (b) to have the broker transfer the fixed-rate
bond held by the trust to the Fund, thereby collapsing the trust. An investment
in an externally-deposited inverse floater is identified in the Portfolio of
Investments as an "Inverse floating rate investment". An investment in a
self-deposited inverse floater is accounted for as a financing transaction in
accordance with Statement of Financial Accounting Standards No. 140 (SFAS No.
140) "Accounting for Transfers and Servicing of Financial Assets and
Extinguishment of Liabilities". In such instances, a fixed-rate bond deposited
into a special purpose trust is identified in the Portfolio of Investments as an
"Underlying bond of an inverse floating rate trust", with the Fund accounting
for the short-term floating rate certificates issued by the trust as "Floating
rate obligations" on the Statement of Assets and Liabilities. In addition, the
Fund reflects in Investment Income the entire earnings of the underlying bond
and the related interest paid to the holders of the short-term floating rate
certificates is included as a component of "Interest expense" on the Statement
of Operations.
Each Fund may also enter into shortfall and forbearance agreements (sometimes
referred to as a "recourse trust" or "credit recovery swap") (such agreements
referred to herein as "Recourse Trusts") with a broker-dealer by which a Fund
agrees to reimburse the broker-dealer, in certain circumstances, for the
difference between the liquidation value of the fixed-rate bond held by the
trust and the liquidation value of the floating rate certificates issued by the
trust plus any shortfalls in interest cash flows. Under these agreements, a
Fund's potential exposure to losses related to or on inverse floaters may
increase beyond the value of a Fund's inverse floater investments as a Fund may
potentially be liable to fulfill all amounts owed to holders of the floating
rate certificates. At period end, any such shortfall is included as "Unrealized
depreciation on Recourse Trusts" on the Statement of Assets and Liabilities.
During the fiscal year ended October 31, 2008, each Fund invested in externally
deposited inverse floaters and/or self-deposited inverse floaters.
At October 31, 2008, each Fund's maximum exposure to externally-deposited
Recourse Trusts, if any, is as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
------------------------------------------------------------------------------------------------------------------------------------
Maximum exposure $30,750,000 $33,001,650 $7,500,000 $11,250,000 $36,001,650 $9,751,650
====================================================================================================================================
The average floating rate obligations outstanding and average annual interest
rate and fees related to self-deposited inverse floaters during the fiscal year
ended October 31, 2008, were as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
------------------------------------------------------------------------------------------------------------------------------------
Average floating rate obligations $23,377,306 $37,179,863 $31,164,317 $40,431,995 $17,280,628 $39,844,432
Average annual interest rate and fees 2.90% 2.85% 2.83% 2.83% 2.83% 2.80%
====================================================================================================================================
Forward Swap Transactions
Each Fund is authorized to invest in forward interest rate swap transactions.
Each Fund's use of forward interest rate swap transactions is intended to help
the Fund manage its overall interest rate sensitivity, either shorter or longer,
generally to more closely align the Fund's interest rate sensitivity with that
of the broader municipal market. Forward interest rate swap transactions
98
involve each Fund's agreement with a counterparty to pay, in the future, a fixed
or variable rate payment in exchange for the counterparty paying the Fund a
variable or fixed rate payment, the accruals for which would begin at a
specified date in the future (the "effective date"). The amount of the payment
obligation is based on the notional amount of the forward swap contract and the
termination date of the swap (which is akin to a bond's maturity). The value of
the Fund's swap commitment would increase or decrease based primarily on the
extent to which long-term interest rates for bonds having a maturity of the
swap's termination date increases or decreases. The Funds may terminate a swap
contract prior to the effective date, at which point a realized gain or loss is
recognized. When a forward swap is terminated, it ordinarily does not involve
the delivery of securities or other underlying assets or principal, but rather
is settled in cash on a net basis. Each Fund intends, but is not obligated, to
terminate its forward swaps before the effective date. Accordingly, the risk of
loss with respect to the swap counterparty on such transactions is limited to
the credit risk associated with a counterparty failing to honor its commitment
to pay any realized gain to the Fund upon termination. To reduce such credit
risk, all counterparties are required to pledge collateral daily (based on the
daily valuation of each swap) on behalf of each Fund with a value approximately
equal to the amount of any unrealized gain above a pre-determined threshold.
Reciprocally, when any of the Funds have an unrealized loss on a swap contract,
the Funds have instructed the custodian to pledge assets of the Funds as
collateral with a value approximately equal to the amount of the unrealized loss
above a pre-determined threshold. Collateral pledges are monitored and
subsequently adjusted if and when the swap valuations fluctuate, either up or
down, by at least the predetermined threshold amount. Dividend Advantage 3 (NZF)
was the only Fund to invest in forward interest swap transactions during the
fiscal year ended October 31, 2008.
Futures Contracts
Each Fund is authorized to invest in futures contracts. Upon entering into a
futures contract, a Fund is required to deposit with the broker an amount of
cash or liquid securities equal to a specified percentage of the contract
amount. This is known as the "initial margin." Subsequent payments ("variation
margin") are made or received by a Fund each day, depending on the daily
fluctuation of the value of the contract.
During the period the futures contract is open, changes in the value of the
contract are recognized as an unrealized gain or loss by "marking-to-market" on
a daily basis to reflect the changes in market value of the contract. When the
contract is closed or expired, a Fund records a realized gain or loss equal to
the difference between the value of the contract on the closing date and value
of the contract when originally entered into. Cash held by the broker to cover
initial margin requirements on open futures contracts, if any, is recognized on
the Statement of Assets and Liabilities. Additionally, the Statement of Assets
and Liabilities reflects a receivable or payable for the variation margin, when
applicable. Dividend Advantage 3 (NZF) was the only Fund to invest in futures
contracts during the fiscal year ended October 31, 2008.
Risks of investments in futures contracts include the possible adverse movement
of the securities or indices underlying the contracts, the possibility that
there may not be a liquid secondary market for the contracts and/or that a
change in the value of the contract may not correlate with a change in the value
of the underlying securities or indices.
Zero Coupon Securities
Each Fund is authorized to invest in zero coupon securities. A zero coupon
security does not pay a regular interest coupon to its holders during the life
of the security. Tax-exempt income to the holder of the security comes from
accretion of the difference between the original purchase price of the security
at issuance and the par value of the security at maturity and is effectively
paid at maturity. Such securities are included in the Portfolios of Investments
with a 0.000% coupon rate in their description. The market prices of zero coupon
securities generally are more volatile than the market prices of securities that
pay interest periodically.
Offering Costs
Costs incurred by Dividend Advantage 2 (NXZ) in connection with its offering of
the VRDP shares ($2,270,000) were recorded as a deferred charge which will be
amortized over the 30-year life of the shares and is included as a component of
"Interest expense"on the Statement of Operations.
Custodian Fee Credit
Each Fund has an arrangement with the custodian bank whereby certain custodian
fees and expenses are reduced by net credits earned on each Fund's cash on
deposit with the bank. Such deposit arrangements are an alternative to overnight
investments. Credits for cash balances may be offset by charges for any days on
which a Fund overdraws its account at the custodian bank.
Indemnifications
Under the Funds' organizational documents, their Officers and Director/Trustees
are indemnified against certain liabilities arising out of the performance of
their duties to the Funds. In addition, in the normal course of business, the
Funds enter into contracts that provide general indemnifications to other
parties. The Funds' maximum exposure under these arrangements is unknown as this
would involve future claims that may be made against the Funds that have not yet
occurred. However, the Funds have not had prior claims or losses pursuant to
these contracts and expect the risk of loss to be remote.
99
Notes to
FINANCIAL STATEMENTS (continued)
Use of Estimates
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of increases and
decreases in net assets applicable to Common shares from operations during the
reporting period. Actual results may differ from those estimates.
2. FUND SHARES
Common Shares
On July 30, 2008, the Funds' Board of Directors/Trustees approved an open-market
share repurchase program under which each Fund may repurchase an aggregate of up
to approximately 10% of its outstanding Common shares. The Funds did not
repurchase any of their Common shares during the fiscal year ended October 31,
2008.
Transactions in Common shares were as follows:
MUNICIPAL MARKET
PERFORMANCE PLUS (NPP) ADVANTAGE (NMA) OPPORTUNITY (NMO)
----------------------- --------------------- ---------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
10/31/08 10/31/07 10/31/08 10/31/07 10/31/08 10/31/07
------------------------------------------------------------------------------------------------------------------
Common shares issued to shareholders due to
reinvestment of distributions -- -- -- 148,621 -- 16,916
==================================================================================================================
DIVIDEND DIVIDEND DIVIDEND
ADVANTAGE (NAD) ADVANTAGE 2 (NXZ) ADVANTAGE 3 (NZF)
----------------------- --------------------- ---------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
10/31/08 10/31/07 10/31/08 10/31/07 10/31/08 10/31/07
------------------------------------------------------------------------------------------------------------------
Common shares issued to shareholders due to
reinvestment of distributions -- 19,807 29,827 50,467 -- 46,333
==================================================================================================================
Preferred Shares
Transactions in Auction Rate Preferred shares were as follows:
PERFORMANCE PLUS (NPP) MUNICIPAL ADVANTAGE (NMA)
-------------------------------------------- ------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
10/31/08 10/31/07 10/31/08 10/31/07
--------------------------------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
--------------------------------------------------------------------------------------------------------------------------
Auction Rate Preferred shares redeemed:
Series M 328 $ 8,200,000 -- $ -- 137 $ 3,425,000 -- $ --
Series T 329 8,225,000 -- -- 137 3,425,000 -- --
Series W 329 8,225,000 -- -- 137 3,425,000 -- --
Series TH 260 6,500,000 -- -- 106 2,650,000 -- --
Series F 328 8,200,000 -- -- 137 3,425,000 -- --
--------------------------------------------------------------------------------------------------------------------------
Total 1,574 $39,350,000 -- $ -- 654 $16,350,000 -- $ --
==========================================================================================================================
100
MARKET OPPORTUNITY (NMO) DIVIDEND ADVANTAGE (NAD)
-------------------------------------------- ------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
10/31/08 10/31/07 10/31/08 10/31/07
--------------------------------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
--------------------------------------------------------------------------------------------------------------------------
Auction Rate Preferred shares redeemed:
Series M 193 $ 4,825,000 -- $ -- 382 $ 9,550,000 -- $ --
Series T 193 4,825,000 -- -- 383 9,575,000 -- --
Series W 154 3,850,000 -- -- -- -- -- --
Series TH -- -- -- -- 363 9,075,000 -- --
Series F 193 4,825,000 -- -- -- -- -- --
--------------------------------------------------------------------------------------------------------------------------
Total 733 $18,325,000 -- $ -- 1,128 $28,200,000 -- $ --
==========================================================================================================================
DIVIDEND ADVANTAGE 2 (NXZ) DIVIDEND ADVANTAGE 3 (NZF)
-------------------------------------------- ------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
10/31/08 10/31/07 10/31/08 10/31/07
--------------------------------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
--------------------------------------------------------------------------------------------------------------------------
Auction Rate Preferred shares redeemed:
Series M 3,000 $ 75,000,000 -- $ -- -- $ -- -- $ --
Series T 3,000 75,000,000 -- -- -- -- -- --
Series W -- -- -- -- 550 13,750,000 -- --
Series TH -- -- -- -- 550 13,750,000 -- --
Series F 2,880 72,000,000 -- -- 549 13,725,000 -- --
--------------------------------------------------------------------------------------------------------------------------
Total 8,880 $222,000,000 -- $ -- 1,649 $41,225,000 -- $ --
==========================================================================================================================
Transactions in Variable Rate Demand Preferred shares were as follows:
DIVIDEND ADVANTAGE 2 (NXZ)
------------------------------------------
YEAR ENDED YEAR ENDED
10/31/08 10/31/07
--------------------------------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
--------------------------------------------------------------------------------------------------------------------------
Variable Rate Demand Preferred shares issued:
Series 1 1,960 $196,000,000 -- $ --
==========================================================================================================================
3. INVESTMENT TRANSACTIONS
Purchases and sales (including maturities but excluding short-term investments
and derivative transactions) during the fiscal year ended October 31, 2008, were
as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
------------------------------------------------------------------------------------------------------------------------------------
Purchases $123,620,755 $127,780,691 $ 82,319,343 $ 92,619,494 $ 62,126,117 $59,480,551
Sales and maturities 145,226,088 175,267,119 139,011,635 132,897,726 115,255,550 86,663,867
====================================================================================================================================
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 taxable market discount,
timing differences in recognizing certain gains and losses on investment
transactions and the treatment of investments in inverse floating rate
transactions subject to SFAS No. 140. To the extent that differences arise that
are permanent in nature, such amounts are reclassified within the capital
accounts on the Statement of Assets and Liabilities presented in the annual
report, based on their federal tax basis treatment; temporary differences do not
require reclassification. Temporary and permanent differences do not impact the
net asset values of the Funds.
At October 31, 2008, the cost of investments was as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
------------------------------------------------------------------------------------------------------------------------------------
Cost of investments $1,260,467,249 $931,359,400 $966,004,462 $796,434,756 $594,717,363 $832,318,433
====================================================================================================================================
101
Notes to
FINANCIAL STATEMENTS (continued)
Gross unrealized appreciation and gross unrealized depreciation of investments
at October 31, 2008, 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 $ 29,817,057 $ 25,185,475 $ 31,201,920 $ 15,840,155 $ 18,077,115 $ 16,511,283
Depreciation (105,608,945) (103,809,567) (93,831,453) (98,345,862) (57,672,259) (101,204,502)
------------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation
(depreciation) of investments $ (75,791,888) $ (78,624,092) $(62,629,533) $(82,505,707) $(39,595,144) $ (84,693,219)
====================================================================================================================================
The tax components of undistributed net tax-exempt income, net ordinary income
and net long-term capital gains at October 31, 2008, the Funds' tax year end,
were as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
------------------------------------------------------------------------------------------------------------------------------------
Undistributed net tax-exempt income * $3,489,193 $1,437,801 $1,322,949 $1,215,719 $164,196 $1,724,493
Undistributed net ordinary income ** 60,857 126,563 198 -- 347,635 311,541
Undistributed net long-term capital gains -- -- -- -- -- --
====================================================================================================================================
* Undistributed net tax-exempt income (on a tax basis) has not been reduced
for the dividend declared on October 1, 2008, paid on November 3, 2008.
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
The tax character of distributions paid during the Funds' tax years ended
October 31, 2008 and October 31, 2007, 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
2008 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
------------------------------------------------------------------------------------------------------------------
Distributions from net
tax-exempt income*** $58,938,252 $46,196,128 $47,134,373 $40,676,616 $33,466,437 $42,267,778
Distributions from net
ordinary income ** -- -- -- 171,088 -- --
Distributions from net long-term
capital gains**** -- 1,389,990 -- -- -- --
==================================================================================================================
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
2007 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
------------------------------------------------------------------------------------------------------------------
Distributions from net
tax-exempt income $61,544,192 $49,015,900 $48,416,601 $42,441,771 $34,569,733 $45,208,503
Distributions from net
ordinary income ** 58,535 -- 77,487 121,024 -- --
Distributions from net long-term
capital gains 3,618,054 -- -- -- -- 1,024,327
==================================================================================================================
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
*** The Funds hereby designate these amounts paid during the fiscal year ended
October 31, 2008, as Exempt Interest Dividends.
**** The Funds designated as a long-term capital gain dividend, pursuant to the
Internal Revenue Code Section 852(b)(3), the amount necessary to reduce
earnings and profits of the Funds related to net capital gain to zero for
the tax year ended October 31, 2008.
102
At October 31, 2008, the Funds' tax year end, the Funds had unused capital loss
carryforwards available for federal income tax purposes to be applied against
future capital gains, if any. If not applied, the carryforwards will expire as
follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
-------------------------------------------------------------------------------------------------------------------
Expiration:
October 31, 2011 $ -- $ -- $ 7,158,110 $4,594,300 $ -- $ --
October 31, 2012 -- -- 973,824 -- -- --
October 31, 2013 -- -- -- 104,762 177,536 --
October 31, 2014 -- -- 3,141,529 -- 1,882,135 --
October 31, 2015 105,896 -- 1,902,879 -- 961,027 347,417
October 31, 2016 443,483 876,507 1,398,166 -- -- --
-------------------------------------------------------------------------------------------------------------------
Total $549,379 $876,507 $14,574,508 $4,699,062 $3,020,698 $347,417
===================================================================================================================
Dividend Advantage (NAD) had $7,670,294 of its capital loss carryforward expire
on October 31, 2008.
5. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Each Fund's management fee is separated into two components - a complex-level
component, based on the aggregate amount of all fund assets managed by Nuveen
Asset Management (the "Adviser"), a wholly owned subsidiary of Nuveen, and a
specific fund-level component, based only on the amount of assets within each
individual Fund. This pricing structure enables Nuveen fund shareholders to
benefit from growth in the assets within each individual fund as well as from
growth in the amount of complex-wide assets managed by the Adviser.
The annual fund-level fee, payable monthly, for each Fund is based upon the
average daily net assets (including net assets attributable to Auction Rate
Preferred shares or VRDP shares) of each Fund as follows:
PERFORMANCE PLUS (NPP)
AVERAGE DAILY NET ASSETS (INCLUDING MUNICIPAL ADVANTAGE (NMA)
NET ASSETS ATTRIBUTABLE TO MARKET OPPORTUNITY (NMO)
AUCTION RATE PREFERRED SHARES OR VRDP SHARES) FUND-LEVEL FEE RATE
--------------------------------------------------------------------------------
For the first $125 million .4500%
For the next $125 million .4375
For the next $250 million .4250
For the next $500 million .4125
For the next $1 billion .4000
For the next $3 billion .3875
For net assets over $5 billion .3750
================================================================================
DIVIDEND ADVANTAGE (NAD)
AVERAGE DAILY NET ASSETS (INCLUDING DIVIDEND ADVANTAGE 2 (NXZ)
NET ASSETS ATTRIBUTABLE TO DIVIDEND ADVANTAGE 3 (NZF)
AUCTION RATE PREFERRED SHARES OR VRDP SHARES) FUND-LEVEL FEE RATE
--------------------------------------------------------------------------------
For the first $125 million .4500%
For the next $125 million .4375
For the next $250 million .4250
For the next $500 million .4125
For the next $1 billion .4000
For net assets over $2 billion .3750
================================================================================
The annual complex-level fee, payable monthly, which is additive to the
fund-level fee, for all Nuveen sponsored funds in the U.S., is based on the
aggregate amount of total fund assets managed as stated in the following table.
As of October 31, 2008, the complex-level fee rate was .1998%.
103
Notes to
FINANCIAL STATEMENTS (continued)
The complex-level fee schedule is as follows:
COMPLEX-LEVEL ASSET BREAKPOINT LEVEL (1) EFFECTIVE RATE AT BREAKPOINT LEVEL
--------------------------------------------------------------------------------
$55 billion .2000%
$56 billion .1996
$57 billion .1989
$60 billion .1961
$63 billion .1931
$66 billion .1900
$71 billion .1851
$76 billion .1806
$80 billion .1773
$91 billion .1691
$125 billion .1599
$200 billion .1505
$250 billion .1469
$300 billion .1445
================================================================================
(1) The complex-level component of the management fee for the funds is
calculated based upon the aggregate daily net assets of all Nuveen funds,
with such daily net assets to include assets attributable to preferred
stock (Auction Rate Preferred shares or VRDP shares) issued by or
borrowings by such funds) but to exclude assets attributable to investments
in other Nuveen funds.
The management fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Funds pay no
compensation directly to those of its Directors/Trustees who are affiliated with
the Adviser or to its Officers, all of whom receive remuneration for their
services to the Funds from the Adviser or its affiliates. The Board of
Directors/Trustees has adopted a deferred compensation plan for independent
Directors/Trustees that enables Directors/Trustees to elect to defer receipt of
all or a portion of the annual compensation they are entitled to receive from
certain Nuveen advised funds. Under the plan, deferred amounts are treated as
though equal dollar amounts had been invested in shares of select Nuveen advised
funds.
For the first ten years of 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 Auction Rate Preferred shares or VRDP
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.
104
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 Auction Rate Preferred shares or VRDP
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 Auction Rate Preferred shares or VRDP
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. NEW ACCOUNTING PRONOUNCEMENTS
Financial Accounting Standards Board Statement of Financial Accounting Standards
No. 157 (SFASNo. 157)
In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements." This
standard establishes a single authoritative definition of fair value, sets out a
framework for measuring fair value and requires additional disclosures about
fair value measurements. SFAS No. 157 applies to fair value measurements already
required or permitted by existing standards. SFAS No. 157 is effective for
financial statements issued for fiscal years beginning after November 15, 2007,
and interim periods within those fiscal years. The changes to current generally
accepted accounting principles from the application of this standard relate to
the definition of fair value, the methods used to measure fair value, and the
expanded disclosures about fair value measurements. As of October 31, 2008,
management does not believe the adoption of SFAS No. 157 will impact the
financial statement amounts; however, additional disclosures may be required
about the inputs used to develop the measurements and the effect of certain of
the measurements included within the Statement of Operations for the period.
Financial Accounting Standards Board Statement of Financial Accounting Standards
No. 161 (SFASNo. 161)
In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative
Instruments and Hedging Activities." This standard is intended to enhance
financial statement disclosures for derivative instruments and hedging
activities and enable investors to understand: a) how and why a fund uses
derivative instruments, b) how derivative instruments and related hedge items
are accounted for, and c) how derivative instruments and related hedge items
affect a fund's financial position, results of operations and cash flows. SFAS
No. 161 is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008. As of October 31, 2008,
management does not believe the adoption of SFAS No. 161 will impact the
financial statement amounts; however, additional footnote disclosures may be
required about the use of derivative instruments and hedging items.
105
Notes to
FINANCIAL STATEMENTS (continued)
7. SUBSEQUENT EVENTS
Distributions to Common Shareholders
The Funds declared Common share dividend distributions from their tax-exempt net
investment income which were paid on December 1, 2008, to shareholders of record
on November 15, 2008, 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 $.0605 $.0660 $.0630 $.0655 $.0730 $.0665
==================================================================================================================
106
Financial
HIGHLIGHTS
107
Financial
HIGHLIGHTS
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
--------------------------------------------------------------- --------------------------------
Distributions Distributions
from Net from
Investment Capital Net
Beginning Income to Gains to Investment Capital
Common Net Auction Auction Income to Gains to
Share Net Realized/ Rate Rate Common Common
Net Asset Investment Unrealized Preferred Preferred Share- Share-
Value Income Gain (Loss) Shareholders+ Shareholders+ Total holders holders Total
=================================================================================================================================
PERFORMANCE PLUS (NPP)
---------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2008 $15.22 $1.02 $(2.56) $(.29) $ -- $(1.83) $ (.70) $ -- $ (.70)
2007 15.78 .99 (.47) (.27) (.01) .24 (.75) (.05) (.80)
2006 15.51 1.00 .38 (.25) -- 1.13 (.84) (.02) (.86)
2005 15.87 1.02 (.26) (.16) -- .60 (.94) (.02) (.96)
2004 15.45 1.04 .42 (.07) -- 1.39 (.97) -- (.97)
MUNICIPAL ADVANTAGE (NMA)
---------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2008 15.20 1.08 (3.06) (.30) (.01) (2.29) (.77) (.02) (.79)
2007 15.88 1.07 (.63) (.29) -- .15 (.83) -- (.83)
2006 15.70 1.08 .27 (.26) -- 1.09 (.90) (.01) (.91)
2005 16.02 1.09 (.24) (.16) -- .69 (1.00) (.01) (1.01)
2004 15.62 1.11 .41 (.08) -- 1.44 (1.03) (.01) (1.04)
=================================================================================================================================
Total Returns
--------------------
Based
Ending on
Common Based Common
Share Ending on Share Net
Net Asset Market Market Asset
Value Value Value* Value*
=====================================================================
PERFORMANCE PLUS (NPP)
---------------------------------------------------------------------
Year Ended 10/31:
2008 $12.69 $11.50 (10.71)% (12.49)%
2007 15.22 13.59 (4.97) 1.53
2006 15.78 15.09 10.78 7.50
2005 15.51 14.43 3.02 3.83
2004 15.87 14.95 9.10 9.30
MUNICIPAL ADVANTAGE (NMA)
---------------------------------------------------------------------
Year Ended 10/31:
2008 12.12 11.41 (13.16) (15.65)
2007 15.20 13.95 (7.08) 1.06
2006 15.88 15.85 10.68 7.16
2005 15.70 15.19 3.29 4.42
2004 16.02 15.70 8.82 9.57
=====================================================================
Ratios/Supplemental Data
----------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets Ratios to Average Net Assets
Applicable to Common Shares Applicable to Common Shares
Before Credit/Reimbursement/Refund After Credit/Reimbursement/Refund**
------------------------------------------ ------------------------------------------
Ending
Net
Assets
Applicable Expenses Expenses Net Expenses Expenses Net Portfolio
to Common Including Excluding Investment Including Excluding Investment Turnover
Shares (000) Interest++(a) Interest++(a) Income++ Interest++(a) Interest++(a) Income++ Rate
====================================================================================================================================
PERFORMANCE PLUS (NPP)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2008 $760,496 1.25% 1.17% 6.96% 1.23% 1.16% 6.98% 9%
2007 912,066 1.16 1.14 6.38 1.14 1.13 6.39 6
2006 945,222 1.15 1.15 6.44 1.14 1.14 6.45 9
2005 929,544 1.15 1.15 6.45 1.14 1.14 6.46 6
2004 950,993 1.17 1.17 6.69 1.17 1.17 6.70 11
MUNICIPAL ADVANTAGE (NMA)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2008 523,602 1.38 1.21 7.50 1.36 1.19 7.52 13
2007 656,806 1.40 1.17 6.87 1.38 1.15 6.89 10
2006 683,675 1.18 1.18 6.92 1.17 1.17 6.93 11
2005 675,678 1.17 1.17 6.81 1.16 1.16 6.82 8
2004 689,190 1.19 1.19 7.00 1.18 1.18 7.00 4
====================================================================================================================================
Auction Rate Preferred Shares Variable Rate Demand Preferred Shares
at End of Period at End of Period
-------------------------------------- -------------------------------------------
Aggregate Liquidation Aggregate Liquidation
Amount and Market Asset Amount and Market Asset
Outstanding Value Coverage Outstanding Value Coverage
(000) Per Share Per Share (000) Per Share Per Share
=================================================================================================
PERFORMANCE PLUS (NPP)
-------------------------------------------------------------------------------------------------
Year Ended 10/31:
2008 $439,650 $25,000 $68,244 $ -- $ -- $ --
2007 479,000 25,000 72,603 -- -- --
2006 479,000 25,000 74,333 -- -- --
2005 479,000 25,000 73,515 -- -- --
2004 479,000 25,000 74,634 -- -- --
MUNICIPAL ADVANTAGE (NMA)
-------------------------------------------------------------------------------------------------
Year Ended 10/31:
2008 341,650 25,000 63,314 -- -- --
2007 358,000 25,000 70,866 -- -- --
2006 358,000 25,000 72,743 -- -- --
2005 358,000 25,000 72,184 -- -- --
2004 358,000 25,000 73,128 -- -- --
=================================================================================================
* Total Return Based on Market Value is the combination of changes in the
market price per share and the effect of reinvested dividend income and
reinvested capital gains distributions, if any, at the average price paid
per share at the time of reinvestment. The last dividend declared in the
period, which is typically paid on the first business day of the following
month, is assumed to be reinvested at the ending market price. The actual
reinvestment for the last dividend declared in the period may take place
over several days, and in some instances may not be based on the market
price, so the actual reinvestment price may be different from the price
used in the calculation. Total returns are not annualized.
Total Return Based on Common Share Net Asset Value is the combination of
changes in Common share net asset value, reinvested dividend income at net
asset value and reinvested capital gains distributions at net asset value,
if any. The last dividend declared in the period, which is typically paid
on the first business day of the following month, is assumed to be
reinvested at the ending net asset value. The actual reinvest price for the
last dividend declared in the period may often be based on the Fund's
market price (and not its net asset value), and therefore may be different
from the price used in the calculation. Total returns are not annualized.
** After custodian fee credit, expense reimbursement and legal fee refund,
where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Auction Rate
Preferred shareholders; income ratios reflect income earned on assets
attributable to Auction Rate Preferred shares or VRDP shares, where
applicable.
(a) Interest expense arises from payments to Variable Rate Demand Preferred
shareholders and the application of SFAS No. 140 to certain inverse
floating rate transactions entered into by the Fund as more fully described
in Footnote 1 - Variable Rate Demand Preferred Shares and Inverse Floating
Rate Securities, where applicable.
See accompanying notes to financial statements.
108-109 spread
Financial
HIGHLIGHTS (continued)
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
--------------------------------------------------------------- --------------------------------
Distributions Distributions
from Net from
Investment Capital Net
Beginning Income to Gains to Investment Capital
Common Net Auction Auction Income to Gains to
Share Net Realized/ Rate Rate Common Common
Net Asset Investment Unrealized Preferred Preferred Share- Share-
Value Income Gain (Loss) Shareholders+ Shareholders+ Total holders holders Total
=================================================================================================================================
MARKET OPPORTUNITY (NMO)
---------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2008 $14.83 $1.03 $(2.59) $(.31) $ -- $(1.87) $ (.73) $ -- $ (.73)
2007 15.41 1.04 (.56) (.30) -- .18 (.76) -- (.76)
2006 15.14 1.02 .34 (.26) -- 1.10 (.83) -- (.83)
2005 15.48 1.03 (.29) (.16) -- .58 (.92) -- (.92)
2004 15.11 1.03 .37 (.08) -- 1.32 (.95) -- (.95)
DIVIDEND ADVANTAGE (NAD)
---------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2008 14.90 1.05 (3.14) (.27) -- (2.36) (.77) -- (.77)
2007 15.54 1.04 (.60) (.27) -- .17 (.81) -- (.81)
2006 15.28 1.04 .32 (.24) -- 1.12 (.86) -- (.86)
2005 15.62 1.06 (.25) (.15) -- .66 (1.00) -- (1.00)
2004 15.17 1.09 .46 (.07) -- 1.48 (1.03) -- (1.03)
=================================================================================================================================
Total Returns
--------------------
Based
Ending on
Common Based Common
Share Ending on Share Net
Net Asset Market Market Asset
Value Value Value* Value*
====================================================================
MARKET OPPORTUNITY (NMO)
--------------------------------------------------------------------
Year Ended 10/31:
2008 $12.23 $11.52 (9.87)% (13.07)%
2007 14.83 13.53 (5.00) 1.20
2006 15.41 15.00 11.92 7.49
2005 15.14 14.19 4.70 3.78
2004 15.48 14.44 7.97 9.00
DIVIDEND ADVANTAGE (NAD)
--------------------------------------------------------------------
Year Ended 10/31:
2008 11.77 10.72 (16.46) (16.42)
2007 14.90 13.63 (5.96) 1.10
2006 15.54 15.30 11.19 7.59
2005 15.28 14.58 1.77 4.27
2004 15.62 15.31 8.37 10.06
====================================================================
Ratios/Supplemental Data
-----------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets Ratios to Average Net Assets
Applicable to Common Shares Applicable to Common Shares
Before Credit/Reimbursement/Refund After Credit/Reimbursement/Refund**
------------------------------------------ ------------------------------------------
Ending
Net
Assets
Applicable Expenses Expenses Net Expenses Expenses Net Portfolio
to Common Including Excluding Investment Including Excluding Investment Turnover
Shares (000) Interest++(a) Interest++(a) Income++ Interest++(a) Interest++(a) Income++ Rate
====================================================================================================================================
MARKET OPPORTUNITY (NMO)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2008 $557,346 1.36% 1.23% 7.33% 1.35% 1.21% 7.35% 8%
2007 675,577 1.38 1.19 6.87 1.36 1.17 6.88 5
2006 701,559 1.19 1.19 6.73 1.18 1.18 6.74 14
2005 689,682 1.19 1.19 6.66 1.18 1.18 6.67 7
2004 704,760 1.21 1.21 6.75 1.19 1.19 6.77 4
DIVIDEND ADVANTAGE (NAD)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2008 462,554 1.36 1.15 7.33 1.20 1.00 7.48 11
2007 585,496 1.24 1.13 6.60 1.01 .90 6.83 11
2006 610,316 1.12 1.12 6.54 .83 .83 6.83 8
2005 599,887 1.17 1.17 6.48 .80 .80 6.84 11
2004 613,328 1.14 1.14 6.69 .70 .70 7.12 7
====================================================================================================================================
Auction Rate Preferred Shares Variable Rate Demand Preferred Shares
at End of Period at End of Period
-------------------------------------- -------------------------------------------
Aggregate Liquidation Aggregate Liquidation
Amount and Market Asset Amount and Market Asset
Outstanding Value Coverage Outstanding Value Coverage
(000) Per Share Per Share (000) Per Share Per Share
=================================================================================================
MARKET OPPORTUNITY (NMO)
-------------------------------------------------------------------------------------------------
Year Ended 10/31:
2008 $361,675 $25,000 $63,525 $ -- $ -- $ --
2007 380,000 25,000 69,446 -- -- --
2006 380,000 25,000 71,155 -- -- --
2005 380,000 25,000 70,374 -- -- --
2004 380,000 25,000 71,366 -- -- --
DIVIDEND ADVANTAGE (NAD)
-------------------------------------------------------------------------------------------------
Year Ended 10/31:
2008 266,800 25,000 68,343 -- -- --
2007 295,000 25,000 74,618 -- -- --
2006 295,000 25,000 76,722 -- -- --
2005 295,000 25,000 75,838 -- -- --
2004 295,000 25,000 76,977 -- -- --
=================================================================================================
* Total Return Based on Market Value is the combination of changes in the
market price per share and the effect of reinvested dividend income and
reinvested capital gains distributions, if any, at the average price paid
per share at the time of reinvestment. The last dividend declared in the
period, which is typically paid on the first business day of the following
month, is assumed to be reinvested at the ending market price. The actual
reinvestment for the last dividend declared in the period may take place
over several days, and in some instances may not be based on the market
price, so the actual reinvestment price may be different from the price
used in the calculation. Total returns are not annualized.
Total Return Based on Common Share Net Asset Value is the combination of
changes in Common share net asset value, reinvested dividend income at net
asset value and reinvested capital gains distributions at net asset value,
if any. The last dividend declared in the period, which is typically paid
on the first business day of the following month, is assumed to be
reinvested at the ending net asset value. The actual reinvest price for the
last dividend declared in the period may often be based on the Fund's
market price (and not its net asset value), and therefore may be different
from the price used in the calculation. Total returns are not annualized.
** After custodian fee credit, expense reimbursement and legal fee refund,
where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Auction Rate
Preferred shareholders; income ratios reflect income earned on assets
attributable to Auction Rate Preferred shares or VRDP shares, where
applicable.
(a) Interest expense arises from payments to Variable Rate Demand Preferred
shareholders and the application of SFAS No. 140 to certain inverse
floating rate transactions entered into by the Fund as more fully described
in Footnote 1 - Variable Rate Demand Preferred Shares and Inverse Floating
Rate Securities, where applicable.
See accompanying notes to financial statements.
110-111 spread
Financial
HIGHLIGHTS (continued)
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
--------------------------------------------------------------- --------------------------------
Distributions Distributions
from Net from
Investment Capital Net
Beginning Income to Gains to Investment Capital
Common Net Auction Auction Income to Gains to
Share Net Realized/ Rate Rate Common Common
Net Asset Investment Unrealized Preferred Preferred Share- Share-
Value Income Gain (Loss) Shareholders+ Shareholders+ Total holders holders Total
=================================================================================================================================
DIVIDEND ADVANTAGE 2 (NXZ)
---------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2008 $15.55 $1.05 $(2.81) $(.20) $ -- $(1.96) $ (.88) $ -- $ (.88)
2007 16.02 1.13 (.43) (.27) -- .43 (.90) -- (.90)
2006 15.80 1.12 .32 (.24) -- 1.20 (.98) -- (.98)
2005 15.63 1.13 .22 (.15) -- 1.20 (1.03) -- (1.03)
2004 15.13 1.12 .51 (.07) -- 1.56 (1.03) (.03) (1.06)
DIVIDEND ADVANTAGE 3 (NZF)
---------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2008 15.03 1.06 (2.95) (.27) -- (2.16) (.77) -- (.77)
2007 15.54 1.07 (.44) (.27) (.01) .35 (.84) (.02) (.86)
2006 15.32 1.07 .29 (.24) -- 1.12 (.90) -- (.90)
2005 15.36 1.06 .01 (.15) -- .92 (.96) -- (.96)
2004 14.74 1.06 .59 (.07) -- 1.58 (.96) -- (.96)
=================================================================================================================================
Total Returns
--------------------
Based
Ending on
Common Based Common
Share Ending on Share Net
Net Asset Market Market Asset
Value Value Value* Value*
=====================================================================
DIVIDEND ADVANTAGE 2 (NXZ)
---------------------------------------------------------------------
Year Ended 10/31:
2008 $12.71 $12.35 (15.21)% (13.23)%
2007 15.55 15.48 (.78) 2.76
2006 16.02 16.50 11.95 7.86
2005 15.80 15.64 8.58 7.83
2004 15.63 15.38 11.16 10.67
DIVIDEND ADVANTAGE 3 (NZF)
---------------------------------------------------------------------
Year Ended 10/31:
2008 12.10 10.72 (17.85) (14.99)
2007 15.03 13.85 (7.72) 2.31
2006 15.54 15.88 16.90 7.57
2005 15.32 14.41 6.11 6.09
2004 15.36 14.50 12.45 11.10
=====================================================================
Ratios/Supplemental Data
----------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets Ratios to Average Net Assets
Applicable to Common Shares Applicable to Common Shares
Before Credit/Reimbursement/Refund After Credit/Reimbursement/Refund**
------------------------------------------ ------------------------------------------
Ending
Net
Assets
Applicable Expenses Expenses Net Expenses Expenses Net Portfolio
to Common Including Excluding Investment Including Excluding Investment Turnover
Shares (000) Interest++(a) Interest++(a) Income++ Interest++(a) Interest++(a) Income++ Rate
====================================================================================================================================
DIVIDEND ADVANTAGE
2 (NXZ)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2008 $373,940 1.71% 1.22% 6.82% 1.44% .95% 7.09% 10%
2007 456,992 1.25 1.11 6.83 .91 .77 7.18 5
2006 470,189 1.11 1.11 6.70 .70 .70 7.11 5
2005 462,862 1.12 1.12 6.66 .67 .67 7.12 2
2004 457,552 1.14 1.14 6.87 .69 .69 7.32 3
DIVIDEND ADVANTAGE
3 (NZF)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2008 488,561 1.34 1.15 7.08 1.02 .83 7.39 7
2007 606,908 1.32 1.13 6.65 .93 .75 7.03 14
2006 626,836 1.13 1.13 6.51 .68 .68 6.96 9
2005 617,358 1.13 1.13 6.39 .68 .68 6.84 3
2004 619,118 1.15 1.15 6.64 .69 .69 7.10 3
====================================================================================================================================
Auction Rate Preferred Shares Variable Rate Demand Preferred Shares
at End of Period at End of Period
-------------------------------------- -------------------------------------------
Aggregate Liquidation Aggregate Liquidation
Amount and Market Asset Amount and Market Asset
Outstanding Value Coverage Outstanding Value Coverage
(000) Per Share Per Share (000) Per Share Per Share
=================================================================================================
DIVIDEND ADVANTAGE 2 (NXZ)
-------------------------------------------------------------------------------------------------
Year Ended 10/31:
2008 $ -- $ -- $ -- $196,000 $100,000 $290,785
2007 222,000 25,000 76,463 -- -- --
2006 222,000 25,000 77,949 -- -- --
2005 222,000 25,000 77,124 -- -- --
2004 222,000 25,000 76,526 -- -- --
DIVIDEND ADVANTAGE 3 (NZF)
-------------------------------------------------------------------------------------------------
Year Ended 10/31:
2008 270,775 25,000 70,108 -- -- --
2007 312,000 25,000 73,630 -- -- --
2006 312,000 25,000 75,227 -- -- --
2005 312,000 25,000 74,468 -- -- --
2004 312,000 25,000 74,609 -- -- --
=================================================================================================
* Total Return Based on Market Value is the combination of changes in the
market price per share and the effect of reinvested dividend income and
reinvested capital gains distributions, if any, at the average price paid
per share at the time of reinvestment. The last dividend declared in the
period, which is typically paid on the first business day of the following
month, is assumed to be reinvested at the ending market price. The actual
reinvestment for the last dividend declared in the period may take place
over several days, and in some instances may not be based on the market
price, so the actual reinvestment price may be different from the price
used in the calculation. Total returns are not annualized.
Total Return Based on Common Share Net Asset Value is the combination of
changes in Common share net asset value, reinvested dividend income at net
asset value and reinvested capital gains distributions at net asset value,
if any. The last dividend declared in the period, which is typically paid
on the first business day of the following month, is assumed to be
reinvested at the ending net asset value. The actual reinvest price for the
last dividend declared in the period may often be based on the Fund's
market price (and not its net asset value), and therefore may be different
from the price used in the calculation. Total returns are not annualized.
** After custodian fee credit, expense reimbursement and legal fee refund,
where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Auction Rate
Preferred shareholders; income ratios reflect income earned on assets
attributable to Auction Rate Preferred shares or VRDP shares, where
applicable.
(a) Interest expense arises from payments to Variable Rate Demand Preferred
shareholders and the application of SFAS No. 140 to certain inverse
floating rate transactions entered into by the Fund as more fully described
in Footnote 1 - Variable Rate Demand Preferred Shares and Inverse Floating
Rate Securities, where applicable.
See accompanying notes to financial statements.
112-113 spread
Board Members & Officers
The management of the Funds, including general supervision of the duties
performed for the Funds by the Adviser, is the responsibility of the Board
Members of the Funds. The number of board members of the Fund is currently set
at nine. None of the board members who are not "interested" persons of the Funds
(referred to herein as "independent board members") has ever been a director or
employee of, or consultant to, Nuveen or its affiliates. The names and business
addresses of the board members and officers of the Funds, their principal
occupations and other affiliations during the past five years, the number of
portfolios each oversees and other directorships they hold are set forth below.
NAME, POSITION(S) HELD YEAR FIRST NUMBER PRINCIPAL
BIRTHDATE WITH THE FUNDS ELECTED OR OF PORTFOLIOS OCCUPATION(S)
& ADDRESS APPOINTED IN FUND COMPLEX INCLUDING OTHER
AND TERM(1) OVERSEEN BY DIRECTORSHIPS
BOARD MEMBER DURING PAST 5 YEARS
INDEPENDENT BOARD MEMBERS:
[] ROBERT P. BREMNER Private Investor and Management Consultant.
8/22/40 Chairman of
333 W. Wacker Drive the Board 1997 186
Chicago, IL 60606 and Board member
[] JACK B. EVANS President, The Hall-Perrine Foundation, a
10/22/48 private philanthropic corporation (since
333 W. Wacker Drive Board member 1999 186 1996); Director and Vice Chairman, United
Chicago, IL 60606 Fire Group, a publicly held company;
Member of the Board of Regents for the
State of Iowa University System;
Director, Gazette Companies; Life Trustee
of Coe College and Iowa College
Foundation; Member of the Advisory
Council of the Department of Finance in
the Tippie College of Business,
University of Iowa; formerly, Director,
Alliant Energy; formerly, Director,
Federal Reserve Bank of Chicago;
formerly, President and Chief Operating
Officer, SCI Financial Group, Inc., a
regional financial services firm.
[] WILLIAM C. HUNTER Dean, Tippie College of Business,
3/6/48 University of Iowa (since July 2006);
333 W. Wacker Drive Board member 2004 186 formerly, Dean and Distinguished
Chicago, IL 60606 Professor of Finance, School of Business
at the University of Connecticut
(2003-2006); previously, Senior Vice
President and Director of Research at the
Federal Reserve Bank of Chicago
(1995-2003); Director (since 1997),
Credit Research Center at Georgetown
University; Director (since 2004) of
Xerox Corporation; Director (since 2005),
Beta Gamma Sigma International Honor
Society; Director, SS&C Technologies,
Inc. (May 2005-October 2005).
[] DAVID J. KUNDERT Director, Northwestern Mutual Wealth
10/28/42 Management Company; Retired (since 2004)
333 W. Wacker Drive Board member 2005 186 as Chairman, JPMorgan Fleming Asset
Chicago, IL 60606 Management, President and CEO, Banc One
Investment Advisors Corporation, and
President, One Group Mutual Funds; prior
thereto, Executive Vice President, Banc
One Corporation and Chairman and CEO,
Banc One Investment Management Group;
Member, Board of Regents, Luther College;
member of the Wisconsin Bar Association;
member of Board of Directors, Friends of
Boerner Botanical Gardens; member of
Investment Committee, Greater Milwaukee
Foundation.
[] WILLIAM J. SCHNEIDER Chairman, formerly, Senior Partner and
9/24/44 Chief Operating Officer (retired, 2004)
333 W. Wacker Drive Board member 1997 186 of Miller-Valentine Partners Ltd., a real
Chicago, IL 60606 estate investment company; Director,
Dayton Development Coalition; formerly,
member, Business Advisory Council,
Cleveland Federal Reserve Bank.
114
NAME, POSITION(S) HELD YEAR FIRST NUMBER PRINCIPAL
BIRTHDATE WITH THE FUNDS ELECTED OR OF PORTFOLIOS OCCUPATION(S)
& ADDRESS APPOINTED IN FUND COMPLEX INCLUDING OTHER
AND TERM(1) OVERSEEN BY DIRECTORSHIPS
BOARD MEMBER DURING PAST 5 YEARS
INDEPENDENT BOARD MEMBERS:
[] JUDITH M. STOCKDALE Executive Director, Gaylord and Dorothy
12/29/47 Donnelley Foundation (since 1994); prior
333 W. Wacker Drive Board member 1997 186 thereto, Executive Director, Great Lakes
Chicago, IL 60606 Protection Fund (from 1990 to 1994).
[] CAROLE E. STONE Director, Chicago Board Options Exchange
6/28/47 (since 2006); Commissioner, New York
333 W. Wacker Drive Board member 2007 186 State Commission on Public Authority
Chicago, IL 60606 Reform (since 2005); formerly, Chair New
York Racing Association Oversight Board
(2005-2007); formerly, Director, New York
State Division of the Budget (2000-2004),
Chair, Public Authorities Control Board
(2000-2004) and Director, Local
Government Assistance Corporation
(2000-2004).
[] TERENCE J. TOTH
9/29/59 Director, Legal & General Investment
333 W. Wacker Drive Board Member 2008 186 Management (since 2008); Private Investor
Chicago, IL 60606 (since 2007); CEO and President, Northern
Trust Investments (2004-2007); Executive
Vice President, Quantitative Management &
Securities Lending (2007-2004); prior
thereto, various positions with Northern
Trust Company (since 1994); Member:
Goodman Theatre Board (Since 2004);
Chicago Fellowship Boards (since 2005),
University of Illinois Leadership Council
Board (since 2007) and Catalyst Schools
of Chicago Board (since 2008); formerly
Member: Northern Trust Mutual Funds Board
(2005-2007), Northern Trust Japan Board
(2004-2007), Northern Trust Securities
Inc. Board (2003-2007) and Northern Trust
Hong Kong Board (1997-2004).
INTERESTED BOARD MEMBER:
[] JOHN P. AMBOIAN(2)(3) Chief Executive Officer (since July 2007)
6/14/61 and Director (since 1999) of Nuveen
333 W. Wacker Drive Board Member 2008 186 Investments, Inc.; Chief Executive
Chicago, IL 60606 Officer (since 2007) of Nuveen Asset
Management, Rittenhouse Asset Management,
Nuveen Investments Advisors, Inc.
formerly, President (1999-2004) of Nuveen
Advisory Corp. and Nuveen Institutional
Advisory Corp.(3)
115
NAME, POSITION(S) HELD YEAR FIRST NUMBER PRINCIPAL
BIRTHDATE WITH THE FUNDS ELECTED OR OF PORTFOLIOS OCCUPATION(S)
AND ADDRESS APPOINTED(4) IN FUND COMPLEX DURING PAST 5 YEARS
OVERSEEN
BY OFFICER
OFFICERS OF THE FUNDS:
[] GIFFORD R. ZIMMERMAN Managing Director (since 2002), Assistant
9/9/56 Chief Secretary and Associate General Counsel
333 W. Wacker Drive Administrative 1988 186 of Nuveen Investments, LLC; Managing
Chicago, IL 60606 Officer Director (since 2002), Associate General
Counsel and Assistant Secretary, of
Nuveen Asset Management; Vice President
and Assistant Secretary of NWQ Investment
Management Company, LLC. (since 2002),
Nuveen Investments Advisers Inc. (since
2002), Symphony Asset Management LLC, and
NWQ Investment Management Company, LLC
(since 2003), Tradewinds Global
Investors, LLC, and Santa Barbara Asset
Management, LLC (since 2006), Nuveen
HydePark Group LLC and Nuveen Investment
Solutions, Inc. (since 2007); Managing
Director, Associate General Counsel and
Assistant Secretary of Rittenhouse Asset
Management, Inc. (since 2003); Managing
Director (since 2004) and Assistant
Secretary (since 1994) of Nuveen
Investments, Inc.; formerly, Managing
Director (2002-2004), General Counsel
(1998-2004) and Assistant Secretary of
Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp.(3);
Chartered Financial Analyst.
[] WILLIAM ADAMS IV Executive Vice President of Nuveen
6/9/55 Investments, Inc.; Executive Vice
333 W. Wacker Drive Vice President 2007 120 President, U.S. Structured Products of
Chicago, IL 60606 Nuveen Investments, LLC, (since 1999),
prior thereto, Managing Director of
Structured Investments.
[] CEDRIC H. ANTOSIEWICZ Managing Director, (since 2004)
1/11/62 previously, Vice President (1993-2004) of
333 W. Wacker Drive Vice President 2007 120 Nuveen Investments, LLC.
Chicago, IL 60606
[] MICHAEL T. ATKINSON Vice President (since 2002) of Nuveen
2/3/66 Vice President Investments, LLC.
333 W. Wacker Drive and Assistant 2000 186
Chicago, IL 60606 Secretary
[] LORNA C. FERGUSON Managing Director (since 2004), formerly,
10/24/45 Vice President of Nuveen Investments,
333 W. Wacker Drive Vice President 1998 186 LLC; Managing Director (since 2005) of
Chicago, IL 60606 Nuveen Asset Management; Managing
Director (2004-2005), formerly, Vice
President (1998-2004) of Nuveen Advisory
Corp. and Nuveen Institutional Advisory
Corp.(3)
[] STEPHEN D. FOY Vice President (since 1993) and Funds
5/31/54 Vice President Controller (since 1998) of Nuveen
333 W. Wacker Drive and Controller 1998 186 Investments, LLC; formerly, Vice
Chicago, IL 60606 President and Funds Controller
(1998-2004) of Nuveen Investments, Inc.;
Certified Public Accountant.
[] WALTER M. KELLY Senior Vice President (since 2008), Vice
2/24/70 Chief Compliance President (2006-2008) formerly, Assistant
333 W. Wacker Drive Officer and 2003 186 Vice President and Assistant General
Chicago, IL 60606 Vice President Counsel (2003-2006) of Nuveen
Investments, LLC; Vice President (since
2006) and Assistant Secretary (since
2008) of Nuveen Asset Management.
[] DAVID J. LAMB Vice President (since 2000) of Nuveen
3/22/63 Investments, LLC; Certified Public
333 W. Wacker Drive Vice President 2000 186 Accountant.
Chicago, IL 60606
116
NAME, POSITION(S) HELD YEAR FIRST NUMBER PRINCIPAL
BIRTHDATE WITH THE FUNDS ELECTED OR OF PORTFOLIOS OCCUPATION(S)
AND ADDRESS APPOINTED(4) IN FUND COMPLEX DURING PAST 5 YEARS
OVERSEEN
BY OFFICER
OFFICERS OF THE FUNDS:
[] TINA M. LAZAR Vice President of Nuveen Investments, LLC
8/27/61 (since 1999).
333 W. Wacker Drive Vice President 2002 186
Chicago, IL 60606
[] LARRY W. MARTIN Vice President, Assistant Secretary and
7/27/51 Vice President Assistant General Counsel of Nuveen
333 W. Wacker Drive and Assistant 1988 186 Investments, LLC; Vice President (since
Chicago, IL 60606 Secretary 2005) and Assistant Secretary of Nuveen
Investments, Inc.; Vice President (since
2005) and Assistant Secretary (since
1997) of Nuveen Asset Management; Vice
President (since 2000), Assistant
Secretary and Assistant General Counsel
(since 1998) of Rittenhouse Asset
Management, Inc.; Vice President and
Assistant Secretary of Nuveen Investments
Advisers Inc. (since 2002); NWQ
Investment Management Company, LLC (since
2002), Symphony Asset Management LLC
(since 2003), Tradewinds Global
Investors, LLC, Santa Barbara Asset
Management LLC (since 2006) and of Nuveen
HydePark LLC and Nuveen Investment
Solutions, Inc. (since 2007); formerly,
Vice President and Assistant Secretary of
Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp.(3)
[] KEVIN J. MCCARTHY Managing Director (since 2008), formerly,
3/26/66 Vice President Vice President (2007-2008), Nuveen
333 W. Wacker Drive and Secretary 2007 186 Investments, LLC; Vice President, and
Chicago, IL 60606 Assistant Secretary, Nuveen Asset
Management, Rittenhouse Asset Management,
Inc., Nuveen Investment Advisers Inc.,
Nuveen Investment Institutional Services
Group LLC, NWQ Investment Management
Company, LLC, Tradewinds Global Investors
LLC, NWQHoldings, LLC, Symphony Asset
Management LLC, Santa Barbara Asset
Management LLC, Nuveen HydePark Group,
LLC and Nuveen Investment Solutions, Inc.
(since 2007); prior thereto, Partner,
Bell, Boyd & Lloyd LLP (1997-2007).
[] JOHN V. MILLER Managing Director (since 2007), formerly,
4/10/67 Vice President 2007 186 Vice President (2002-2007) of Nuveen
333 W. Wacker Drive Asset Management and Nuveen Investments,
Chicago, IL 60606 LLC; Chartered Financial Analyst.
[] CHRISTOPHER M. ROHRBACHER Vice President, Nuveen Investments, LLC
8/1/71 Vice President (since 2008); Vice President and
333 W. Wacker Drive and Assistant 2008 186 Assistant Secretary, Nuveen Asset
Chicago, IL 60606 Secretary Management (since 2008); prior thereto,
Associate, Skadden, Arps, Slate Meagher &
Flom LLP (2002-2008).
[] JAMES F. RUANE Vice President, Nuveen Investments, LLC
7/3/62 Vice President (since 2007); prior thereto, Partner,
333 W. Wacker Drive and Assistant 2007 186 Deloitte & Touche USA LLP (2005-2007),
Chicago, IL 60606 Secretary formerly, senior tax manager (2002-2005);
Certified Public Accountant.
[] MARK L. WINGET Vice President, Nuveen Investments, LLC
12/21/68 Vice President (since 2008); Vice President and
333 W. Wacker Drive and Assistant 2008 186 Assistant Secretary, Nuveen Asset
Chicago, IL 60606 Secretary Management (since 2008); prior thereto,
Counsel, Vedder Price P.C. (1997-2007).
(1) For Dividend Advantage (NAD), Dividend Advantage 2 (NXZ) and Dividend
Advantage 3 (NZF), Board Members serve three year terms, except for two
board members who are elected by the holders of Preferred Shares. The Board
of Trustees for NAD, NXZ and NZF is divided into three classes, Class I,
Class II, and Class III, with each being elected to serve until the third
succeeding annual shareholders' meeting subsequent to its election or
thereafter in each case when its respective successors are duly elected or
appointed, except two board members are elected by the holders of Preferred
Shares to serve until the next annual shareholders' meeting subsequent to
its election or thereafter in each case when its respective successors are
duly elected or appointed. For Performance Plus (NPP), Municipal Advantage
(NMA) and Market Opportunity (NMO), the Board Members serve a one year term
to serve until the next annual meeting or until their successors shall have
been duly elected and qualified. The first year elected or appointed
represents the year in which the board member was first elected or
appointed to any fund in the Nuveen Complex.
(2) Mr. Amboian is an interested trustee because of his position with Nuveen
Investments, Inc. and certain of its subsidiaries, which are affiliates of
the Nuveen Funds.
(3) Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp. were
reorganized into Nuveen Asset Management, effective January 1, 2005.
(4) Officers serve one year terms through July of each year. The year first
elected or appointed represents the year in which the Officer was first
elected or appointed to any fund in the Nuveen Complex.
117
Annual Investment
Management Agreement
APPROVAL PROCESS
The Investment Company Act of 1940, as amended (the "1940 Act"), provides, in
substance, that each investment advisory agreement between a fund and its
investment adviser will continue in effect from year to year only if its
continuance is approved at least annually by the fund's board members, including
by a vote of a majority of the board members who are not parties to the advisory
agreement or "interested persons" of any parties (the "Independent Board
Members"), cast in person at a meeting called for the purpose of considering
such approval. In connection with such approvals, the fund's board members must
request and evaluate, and the investment adviser is required to furnish, such
information as may be reasonably necessary to evaluate the terms of the advisory
agreement. Accordingly, at a meeting held on May 28-29, 2008 (the "May
Meeting"), the Boards of Trustees or Directors (as the case may be)(each, a
"Board" and each Trustee or Director, a "Board Member") of the Funds, including
a majority of the Independent Board Members, considered and approved the
continuation of the advisory agreement (each, an "Advisory Agreement") between
each Fund and Nuveen Asset Management ("NAM") for an additional one-year period.
In preparation for their considerations at the May Meeting, the Board also held
a separate meeting on April 23, 2008 (the "April Meeting"). Accordingly, the
factors considered and determinations made regarding the renewals by the
Independent Board Members include those made at the April Meeting.
In addition, in evaluating the Advisory Agreements, as described in further
detail below, the Independent Board Members reviewed a broad range of
information relating to the Funds and NAM, including absolute performance, fee
and expense information for the Funds as well as comparative performance, fee
and expense information for a comparable peer group of funds, the performance
information of recognized benchmarks (as applicable), the profitability of
Nuveen for its advisory activities (which includes its wholly owned
subsidiaries), and other information regarding the organization, personnel, and
services provided by NAM. The Independent Board Members also met quarterly as
well as at other times as the need arose during the year and took into account
the information provided at such meetings and the knowledge gained therefrom.
Prior to approving the renewal of the Advisory Agreements, the Independent Board
Members reviewed the foregoing information with their independent legal counsel
and with management, reviewed materials from independent legal counsel
describing applicable law and their duties in reviewing advisory contracts, and
met with independent legal counsel in private sessions without management
present. The Independent Board Members considered the legal advice provided by
independent legal counsel and relied upon their knowledge of NAM, its services
and the Funds resulting from their meetings and other interactions throughout
the year and their own business judgment in determining the factors to be
considered in evaluating the Advisory Agreements. Each Board Member may have
accorded different weight to the various factors in reaching his or her
conclusions with respect to a Fund's Advisory Agreement. The Independent Board
Members did not identify any single factor as all-important or controlling. The
Independent Board Members' considerations were instead based on a comprehensive
consideration of all the information presented. The principal factors considered
by the Board and its conclusions are described below.
A. NATURE, EXTENT AND QUALITY OF SERVICES
In considering renewal of the Advisory Agreements, the Independent Board Members
considered the nature, extent and quality of NAM's services, including advisory
services and administrative services. The Independent Board Members reviewed
materials outlining, among other things, NAM's organization and business; the
types of services that NAM or its affiliates provide and are expected to provide
to the Funds; the performance record of the applicable Fund (as described in
further detail below); and any initiatives Nuveen had taken for the applicable
fund product line. With respect to personnel, the Independent Board Members
evaluated the background, experience and track record of NAM's
118
investment personnel. In this regard, the Independent Board Members considered
the additional investment in personnel to support Nuveen fund advisory
activities, including in operations, product management and marketing as well as
related fund support functions, including sales, executive, finance, human
resources and information technology. The Independent Board Members also
reviewed information regarding portfolio manager compensation arrangements to
evaluate NAM's ability to attract and retain high quality investment personnel.
In evaluating the services of NAM, the Independent Board Members also considered
NAM's ability to supervise the Funds' other service providers and given the
importance of compliance, NAM's compliance program. Among other things, the
Independent Board Members considered the report of the chief compliance officer
regarding the Funds' compliance policies and procedures.
In addition to advisory services, the Independent Board Members considered the
quality of administrative services provided by NAM and its affiliates including
product management, fund administration, oversight of service providers,
shareholder services, administration of Board relations, regulatory and
portfolio compliance and legal support.
In addition to the foregoing services, the Independent Board Members also noted
the additional services that NAM or its affiliates provide to closed-end funds,
including, in particular, its secondary market support activities and the costs
of such activities. The Independent Board Members recognized Nuveen's continued
commitment to supporting the secondary market for the common shares of its
closed-end funds through a variety of programs designed to raise investor and
analyst awareness and understanding of closed-end funds. These efforts include
maintaining an investor relations program to timely provide information and
education to financial advisers and investors; providing advertising and
marketing for the closed-end funds; maintaining its closed-end fund website; and
providing educational seminars. With respect to closed-end funds that utilize
leverage through the issuance of auction rate preferred securities ("ARPS"), the
Board has recognized the unprecedented market conditions in the auction rate
market industry with the failure of the auction process. The Independent Board
Members noted Nuveen's efforts and the resources and personnel employed to
analyze the situation, explore potential alternatives and develop and implement
solutions that serve the interests of the affected funds and all of their
respective shareholders. The Independent Board Members further noted Nuveen's
commitment and efforts to keep investors and financial advisers informed as to
its progress in addressing the ARPS situation through, among other things,
conference calls, press releases, and information posted on its website as well
as its refinancing activities. The Independent Board Members also noted Nuveen's
continued support for holders of preferred shares of its closed-end funds by,
among other things, seeking distribution for preferred shares with new market
participants, managing relations with remarketing agents and the broker
community, maintaining the leverage and risk management of leverage and
maintaining systems necessary to test compliance with rating agency criteria.
Based on their review, the Independent Board Members found that, overall, the
nature, extent and quality of services provided (and expected to be provided) to
the respective Funds under the Advisory Agreements were satisfactory.
B. THE INVESTMENT PERFORMANCE OF THE FUNDS AND NAM
The Board considered the investment performance of each Fund, including the
Fund's historic performance as well as its performance compared to funds with
similar investment objectives (the "Performance Peer Group") based on data
provided by an independent third party (as described below). The Independent
Board Members also reviewed portfolio level performance (which does not reflect
fund level fees, expenses and leverage), as described in further detail below.
In evaluating the performance information, the Board considered whether the Fund
has operated within its investment objectives and parameters and the impact that
the investment mandates may have had on performance. In addition, in comparing a
Fund's performance with that of its Performance Peer Group, the Independent
Board Members took into account that the closest Performance Peer Group in
certain
119
ANNUAL INVESTMENT MANAGEMENT AGREEMENT
APPROVAL PROCESS (continued)
instances may not adequately reflect the respective fund's investment objectives
and strategies thereby hindering a meaningful comparison of the fund's
performance with that of the Performance Peer Group.
The Independent Board Members reviewed performance information including, among
other things, total return information compared with the Fund's Performance Peer
Group and recognized benchmarks for the one-, three-, and five-year periods (as
applicable) ending December 31, 2007 and with the Performance Peer Group for the
quarter and same yearly periods ending March 31, 2008 (as applicable). The
Independent Board Members also reviewed the Fund's portfolio level performance
(which does not reflect fund level fees and expenses (and leverage for
closed-end funds)) compared to recognized benchmarks for the one-, three-, and
five-year periods ending December 31, 2007 (as applicable). The analysis was
used to assess the efficacy of investment decisions against appropriate measures
of risk and total return, within specific market segments. This information
supplemented the Fund performance information provided to the Board at each of
its quarterly meetings. Based on their review, the Independent Board Members
determined that each Fund's investment performance over time had been
satisfactory.
C. FEES, EXPENSES AND PROFITABILITY
1. FEES AND EXPENSES
The Board evaluated the management fees and expenses of each Fund
reviewing, among other things, such Fund's gross management fees (which
take into account breakpoints), net management fees (which take into
account fee waivers or reimbursements) and total expense ratios (before and
after expense reimbursements and/or waivers) in absolute terms as well as
compared to the gross management fees, net management fees (after waivers
and/or reimbursements) and total expense ratios (before and after waivers)
of a comparable universe of unaffiliated funds based on data provided by an
independent data provider (the "Peer Universe") and/or a more focused
subset of funds therein (the "Peer Group"). The Independent Board Members
further reviewed data regarding the construction of Peer Groups as well as
the methods of measurement for the fee and expense analysis and the
performance analysis. In reviewing the comparisons of fee and expense
information, the Independent Board Members took into account that in
certain instances various factors such as the size of the Fund relative to
peers, the size and particular composition of the Peer Group, the
investment objectives of the peers, expense anomalies, and the timing of
information used may impact the comparative data, thereby limiting the
ability to make a meaningful comparison. The Independent Board Members also
considered, among other things, the differences in the use of leverage and
the differences in the use of insurance, if any. In reviewing the fee
schedule for a Fund, the Independent Board Members also considered the
fund-level and complex-wide breakpoint schedules (described in further
detail below) and any fee waivers and reimbursements provided by Nuveen
(applicable, in particular, for certain closed-end funds launched since
1999). Based on their review of the fee and expense information provided,
the Independent Board Members determined that each Fund's management fees
and net total expense ratio were reasonable in light of the nature, extent
and quality of services provided to the Fund.
2. COMPARISONS WITH THE FEES OF OTHER CLIENTS
The Independent Board Members further reviewed information regarding the
nature of services and fee rates offered by NAM to other clients. Such
other clients include NAM's municipal separately managed accounts. In
evaluating the comparisons of fees, the Independent Board Members noted
that the fee rates charged to the Funds and other clients vary, among other
things, because of the different services involved and the additional
regulatory and compliance requirements associated with registered
investment companies, such as the Funds. Accordingly, the Independent Board
Members considered the differences in the product types, including, but not
limited to, the services provided, the structure and operations, product
distribution and costs thereof, portfolio investment policies, investor
profiles, account sizes and regulatory requirements. The Independent Board
Members noted, in particular, that
120
the range of services provided to the Funds (as discussed above) is much
more extensive than that provided to separately managed accounts. Given the
inherent differences in the products, particularly the extensive services
provided to the Funds, the Independent Board Members believe such facts
justify the different levels of fees.
3. PROFITABILITY OF NUVEEN
In conjunction with its review of fees, the Independent Board Members also
considered the profitability of Nuveen for its advisory activities (which
incorporated Nuveen's wholly-owned affiliated sub-advisers) and its
financial condition. The Independent Board Members reviewed the revenues
and expenses of Nuveen's advisory activities for the last two years and the
allocation methodology used in preparing the profitability data. The
Independent Board Members noted this information supplemented the
profitability information requested and received during the year to help
keep them apprised of developments affecting profitability (such as changes
in fee waivers and expense reimbursement commitments). In this regard, the
Independent Board Members noted that they had also appointed an Independent
Board Member as a point person to review and keep them apprised of changes
to the profitability analysis and/or methodologies during the year. The
Independent Board Members considered Nuveen's profitability compared with
other fund sponsors prepared by two independent third party service
providers as well as comparisons of the revenues, expenses and profit
margins of various unaffiliated management firms with similar amounts of
assets under management prepared by Nuveen.
In reviewing profitability, the Independent Board Members recognized the
subjective nature of determining profitability which may be affected by
numerous factors including the allocation of expenses. Further, the
Independent Board Members recognized the difficulties in making comparisons
as the profitability of other advisers generally is not publicly available
and the profitability information that is available for certain advisers or
management firms may not be representative of the industry and may be
affected by, among other things, the adviser's particular business mix,
capital costs, types of funds managed and expense allocations.
Notwithstanding the foregoing, the Independent Board Members reviewed Nuveen's
methodology and assumptions for allocating expenses across product lines to
determine profitability. In reviewing profitability, the Independent Board
Members recognized Nuveen's investment in its fund business.
Based on its review, the Independent Board Members concluded that Nuveen's level
of profitability for its advisory activities was reasonable in light of the
services provided.
In evaluating the reasonableness of the compensation, the
Independent Board Members also considered other amounts paid to NAM by the Funds
as well as any indirect benefits (such as soft dollar arrangements, if any) NAM
and its affiliates receive, or are expected to receive, that are directly
attributable to the management of the Funds, if any. See Section E below for
additional information on indirect benefits NAM may receive as a result of its
relationship with the Funds. Based on their review of the overall fee
arrangements of each Fund, the Independent Board Members determined that the
advisory fees and expenses of the respective Fund were reasonable.
D. ECONOMIES OF SCALE AND WHETHER FEE LEVELS REFLECT THESE ECONOMIES OF SCALE
With respect to economies of scale, the Independent Board Members recognized the
potential benefits resulting from the costs of a fund being spread over a larger
asset base. The Independent Board Members therefore considered whether the Funds
have appropriately benefited from any economies of scale and whether there is
potential realization of any further economies of scale. In considering
economies of scale, the Independent Board Members have recognized that economies
of scale are difficult to measure and predict with precision, particularly on a
fund-by-fund basis. Notwithstanding the foregoing, one method to help ensure the
shareholders share in these benefits is to include breakpoints in the advisory
fee schedule. Accordingly, the Independent Board Members reviewed and considered
the fund-level breakpoints in the
121
ANNUAL INVESTMENT MANAGEMENT AGREEMENT
APPROVAL PROCESS (continued)
advisory fee schedules that reduce advisory fees. In this regard, given that the
Funds are closed-end funds, the Independent Board Members recognized that
although the Funds may from time to time make additional share offerings, the
growth in their assets will occur primarily through appreciation of each Fund's
investment portfolio.
In addition to fund-level advisory fee breakpoints, the Board also considered
the Funds' complex-wide fee arrangement. Pursuant to the complex-wide fee
arrangement, the fees of the funds in the Nuveen complex, including the Funds,
are reduced as the assets in the fund complex reach certain levels. In
evaluating the complex-wide fee arrangement, the Independent Board Members
recognized that the complex-wide fee schedule was recently revised in 2007 to
provide for additional fee savings to shareholders and considered the amended
schedule. The Independent Board Members further considered that the complex-wide
fee arrangement seeks to provide the benefits of economies of scale to fund
shareholders when total fund complex assets increase, even if assets of a
particular fund are unchanged or have decreased. The approach reflects the
notion that some of Nuveen's costs are attributable to services provided to all
its funds in the complex and therefore all funds benefit if these costs are
spread over a larger asset base. Based on their review, the Independent Board
Members concluded that the breakpoint schedule and complex-wide fee arrangement
were acceptable and desirable in providing benefits from economies of scale to
shareholders.
E. INDIRECT BENEFITS
In evaluating fees, the Independent Board Members received and considered
information regarding potential "fall out" or ancillary benefits NAM or its
affiliates may receive as a result of its relationship with each Fund. In this
regard, the Independent Board Members considered revenues received by affiliates
of NAM for serving as agent at Nuveen's preferred trading desk and for serving
as a co-manager in the initial public offering of new closed-end exchange traded
funds.
In addition to the above, the Independent Board Members considered whether NAM
received any benefits from soft dollar arrangements whereby a portion of the
commissions paid by a Fund for brokerage may be used to acquire research that
may be useful to NAM in managing the assets of the Funds and other clients. The
Independent Board Members noted that NAM does not currently have any soft dollar
arrangements; however, to the extent certain bona fide agency transactions that
occur on markets that traditionally trade on a principal basis and riskless
principal transactions are considered as generating "commissions," NAM intends
to comply with the applicable safe harbor provisions.
Based on their review, the Independent Board Members concluded that any indirect
benefits received by NAM as a result of its relationship with the Funds were
reasonable and within acceptable parameters.
F. OTHER CONSIDERATIONS
The Independent Board Members did not identify any single factor discussed
previously as all-important or controlling. The Board Members, including the
Independent Board Members, unanimously concluded that the terms of the Advisory
Agreements are fair and reasonable, that NAM's fees are reasonable in light of
the services provided to each Fund and that the Advisory Agreements be renewed.
122
Reinvest Automatically
EASILY and CONVENIENTLY
NUVEEN MAKES REINVESTING EASY. A PHONE CALL IS ALL IT TAKES TO SET UP YOUR
REINVESTMENT ACCOUNT.
NUVEEN CLOSED-END FUNDS DIVIDEND REINVESTMENT PLAN
Your Nuveen Closed-End Fund allows you to conveniently reinvest dividends and/or
capital gains distributions in additional Fund shares.
By choosing to reinvest, you'll be able to invest money regularly and
automatically, and watch your investment grow through the power of tax-free
compounding. Just like dividends or distributions in cash, there may be times
when income or capital gains taxes may be payable on dividends or distributions
that are reinvested.
It is important to note that an automatic reinvestment plan does not ensure a
profit, nor does it protect you against loss in a declining market.
EASY AND CONVENIENT
To make recordkeeping easy and convenient, each month you'll receive a statement
showing your total dividends and distributions, the date of investment, the
shares acquired and the price per share, and the total number of shares you own.
HOW SHARES ARE PURCHASED
The shares you acquire by reinvesting will either be purchased on the open
market or newly issued by the Fund. If the shares are trading at or above net
asset value at the time of valuation, the Fund will issue new shares at the
greater of the net asset value or 95% of the then-current market price. If the
shares are trading at less than net asset value, shares for your account will be
purchased on the open market. If the Plan Agent begins purchasing Fund shares on
the open market while shares are trading below net asset value, but the Fund's
shares subsequently trade at or above their net asset value before the Plan
Agent is able to complete its purchases, the Plan Agent may cease open-market
purchases and may invest the uninvested portion of the distribution in
newly-issued Fund shares at a price equal to the greater of the shares' net
asset value or 95% of the shares' market value on the last business day
immediately prior to the purchase date. Dividends and distributions received to
purchase shares in the open market will normally be invested shortly after the
dividend payment date. No interest will be paid on dividends and distributions
awaiting reinvestment. Because the market price of the shares may increase
before purchases are completed, the average purchase price 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.
123
FLEXIBLE
You may change your distribution option or withdraw from the Plan at any time,
should your needs or situation change. Should you withdraw, you can receive a
certificate for all whole shares credited to your reinvestment account and cash
payment for fractional shares, or cash payment for all reinvestment account
shares, less brokerage commissions and a $2.50 service fee.
You can reinvest whether your shares are registered in your name, or in the name
of a brokerage firm, bank, or other nominee. Ask your investment advisor if his
or her firm will participate on your behalf. Participants whose shares are
registered in the name of one firm may not be able to transfer the shares to
another firm and continue to participate in the Plan.
The Fund reserves the right to amend or terminate the Plan at any time. Although
the Fund reserves the right to amend the Plan to include a service charge
payable by the participants, there is no direct service charge to participants
in the Plan at this time.
CALL TODAY TO START REINVESTING DIVIDENDS AND/OR DISTRIBUTIONS
For more information on the Nuveen Automatic Reinvestment Plan or to enroll in
or withdraw from the Plan, speak with your financial advisor or call us at (800)
257-8787.
124
NOTES
125
Glossary of
TERMS USED in this REPORT
[] AUCTION RATE BOND: An auction rate bond is a security whose interest
payments are adjusted periodically through an auction process, which
process typically also serves as a means for buying and selling the bond.
Auctions that fail to attract enough buyers for all the shares offered for
sale are deemed to have "failed", with current holders receiving a
formula-based interest rate until the next scheduled auction.
[] AVERAGE ANNUAL TOTAL RETURN: This is a commonly used method to express an
investment's performance over a particular, usually multi-year time period.
It expresses the return that would have been necessary each year to equal
the investment's actual cumulative performance (including change in NAV or
market price and reinvested dividends and capital gains distributions, if
any) over the time period being considered.
[] AVERAGE EFFECTIVE MATURITY: The average of the number of years to maturity
of the bonds in a Fund's portfolio, computed by weighting each bond's time
to maturity (the date the security comes due) by the market value of the
security. This figure does not account for the likelihood of prepayments or
the exercise of call provisions unless an escrow account has been
established to redeem the bond before maturity. The market value weighting
for an investment in an inverse floating rate security is the value of the
portfolio's residual interest in the inverse floating rate trust, and does
not include the value of the floating rate securities issued by the trust.
[] INVERSE FLOATERS: Inverse floating rate securities are created by
depositing a municipal bond, typically with a fixed interest rate, into a
special purpose trust created by a broker-dealer. This trust, in turn, (a)
issues floating rate certificates typically paying short-term tax-exempt
interest rates to third parties in amounts equal to some fraction of the
deposited bond's par amount or market value, and (b) issues an inverse
floating rate certificate (sometimes referred to as an "inverse floater")
to an investor (such as a Fund) interested in gaining investment exposure
to a long-term municipal bond. The income received by the holder of the
inverse floater varies inversely with the short-term rate paid to the
floating rate certificates' holders, and in most circumstances the holder
of the inverse floater bears substantially all of the underlying bond's
downside investment risk. The holder of the inverse floater typically also
benefits disproportionately from any potential appreciation of the
underlying bond's value. Hence, an inverse floater essentially represents
an investment in the underlying bond on a leveraged basis.
[] LEVERAGE-ADJUSTED DURATION: Duration is a measure of the expected period
over which a bond's principal and interest will be paid, and consequently
is a measure of the sensitivity of a bond's or bond Fund's value to changes
when market interest rates change. Generally, the longer a bond's or Fund's
duration, the more the price of the bond or Fund will change as interest
rates change. Leverage-adjusted duration takes into account the leveraging
process for a Fund and therefore is longer than the duration of the Fund's
portfolio of bonds.
[] MARKET YIELD (ALSO KNOWN AS DIVIDEND YIELD OR CURRENT YIELD): An
investment's current annualized dividend divided by its current market
price.
[] NET ASSET VALUE (NAV): A Fund's NAV per common share is calculated by
subtracting the liabilities of the Fund (including any Preferred shares
issued in order to leverage the Fund) from its total assets and then
dividing the remainder by the number of common shares outstanding. Fund
NAVs are calculated at the end of each business day.
[] 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.
[] ZERO COUPON BOND: A zero coupon bond does not pay a regular interest coupon
to its holders during the life of the bond. Tax-exempt income to the holder
of the bond comes from accretion of the difference between the original
purchase price of the bond at issuance and the par value of the bond at
maturity and is effectively paid at maturity. The market prices of zero
coupon bonds generally are more volatile than the market prices of bonds
that pay interest periodically.
126
Other Useful INFORMATION
QUARTERLY PORTFOLIO OF INVESTMENTS AND PROXY VOTING INFORMATION
You may obtain (i) each Fund's quarterly portfolio of investments, (ii)
information regarding how the Funds voted proxies relating to portfolio
securities held during the twelve-month period ended June 30, 2008, and (iii) a
description of the policies and procedures that the Funds used to determine how
to vote proxies relating to portfolio securities without charge, upon request,
by calling Nuveen Investments toll-free at (800) 257-8787 or on Nuveen's website
at www.nuveen.com.
You may also obtain this and other Fund information directly from the Securities
and Exchange Commission ("SEC"). The SEC may charge a copying fee for this
information. Visit the SEC on-line at http://www.sec.gov or in person at the
SEC's Public Reference Room in Washington, D.C. Call the SEC at (202) 942-8090
for room hours and operation. You may also request Fund information by sending
an e-mail request to publicinfo@sec.gov or by writing to the SEC's Public
References Section at 100 F Street NE, Washington, D.C. 20549.
CEO CERTIFICATION DISCLOSURE
Each Fund's Chief Executive Officer has submitted to the New York Stock Exchange
(NYSE) the annual CEO certification as required by Section 303A.12(a) of the
NYSE Listed Company Manual.
Each Fund has filed with the Securities and Exchange Commission the
certification of its Chief Executive Officer and Chief Financial Officer
required by Section 302 of the Sarbanes-Oxley Act.
BOARD OF DIRECTORS/TRUSTEES
John P. Amboian
Robert P. Bremner
Jack B. Evans
William C. Hunter
David J. Kundert
William J. Schneider
Judith M. Stockdale
Carole E. Stone
Terence J. Toth
FUND MANAGER
Nuveen Asset Management
333 West Wacker Drive
Chicago, IL 60606
CUSTODIAN
State Street Bank & Trust Company
Boston, MA
TRANSFER AGENT AND
SHAREHOLDER SERVICES
State Street Bank & Trust Company
Nuveen Funds
P.O. Box 43071
Providence, RI 02940-3071
(800) 257-8787
LEGAL COUNSEL
Chapman and Cutler LLP
Chicago, IL
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Ernst & Young LLP
Chicago, IL
Each Fund intends to repurchase and/or redeem shares of its own common or
auction rate preferred stock in the future at such times and in such amounts as
is deemed advisable. During the period covered by this report, NPP, NMA, NMO,
NAD, NXZ and NZF redeemed 1,574, 654, 733, 1,128, 8,880 and 1,649 auction rate
preferred shares, respectively. Any future repurchases and/or redemptions will
be reported to shareholders in the next annual or semi-annual report.
127
Nuveen Investments:
-------------------
SERVING INVESTORS FOR GENERATIONS
Since 1898, financial advisors and their clients have relied on Nuveen
Investments to provide dependable investment solutions. For the past century,
Nuveen Investments has adhered to the belief that the best approach to investing
is to apply conservative risk-management principles to help minimize volatility.
Building on this tradition, we today offer a range of high quality equity and
fixed-income solutions that are integral to a well-diversified core portfolio.
Our clients have come to appreciate this diversity, as well as our continued
adherence to proven, long-term investing principles.
We offer many different investing solutions for our clients' different needs.
Nuveen Investments is a global investment management firm that seeks to help
secure the long-term goals of institutions and high net worth investors as well
as the consultants and financial advisors who serve them. Nuveen Investments
markets its growing range of specialized investment solutions under the
high-quality brands of HydePark, NWQ, Nuveen, Rittenhouse, Santa Barbara,
Symphony and Tradewinds. In total, the Company managed $134 billion of assets on
September 30, 2008.
Find out how we can help you reach your financial goals.
To learn more about the products and services Nuveen Investments offers, talk to
your financial advisor, or call us at (800) 257-8787. Please read the
information provided carefully before you invest. Be sure to obtain a
prospectus, where applicable. Investors should consider the investment objective
and policies, risk considerations, charges and expenses of the Fund carefully
before investing. The prospectus contains this and other information relevant to
an investment in the Fund. For a prospectus, please contact your securities
representative or Nuveen Investments, 333 W. Wacker Dr., Chicago, IL 60606.
Please read the prospectus carefully before you invest or send money.
Learn more about Nuveen Funds at: www.nuveen.com/etf
Share prices
Fund details
Daily financial news
Investor education
Interactive planning tools
EAN-B-1008D
ITEM 2. CODE OF ETHICS.
As of the end of the period covered by this report, the registrant has adopted a
code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions. There were no amendments to or waivers
from the Code during the period covered by this report. The registrant has
posted the code of ethics on its website at www.nuveen.com/etf. (To view the
code, click on the Shareholder Resources drop down menu box, click on Fund
Governance and then click on Code of Conduct.)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Directors or Trustees determined that the registrant
has at least one "audit committee financial expert" (as defined in Item 3 of
Form N-CSR) serving on its Audit Committee. The registrant's audit committee
financial expert is Jack B. Evans, who is "independent" for purposes of Item 3
of Form N-CSR.
Mr. Evans was formerly President and Chief Operating Officer of SCI Financial
Group, Inc., a full service registered broker-dealer and registered investment
adviser ("SCI"). As part of his role as President and Chief Operating Officer,
Mr. Evans actively supervised the Chief Financial Officer (the "CFO") and
actively supervised the CFO's preparation of financial statements and other
filings with various regulatory authorities. In such capacity, Mr. Evans was
actively involved in the preparation of SCI's financial statements and the
resolution of issues raised in connection therewith. Mr. Evans has also served
on the audit committee of various reporting companies. At such companies, Mr.
Evans was involved in the oversight of audits, audit plans, and the preparation
of financial statements. Mr. Evans also formerly chaired the audit committee of
the Federal Reserve Bank of Chicago.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Nuveen Dividend Advantage Municipal Fund 3
The following tables show the amount of fees that Ernst & Young LLP, the Fund's
auditor, billed to the Fund during the Fund's last two full fiscal years. For
engagements with Ernst & Young LLP the Audit Committee approved in advance all
audit services and non-audit services that Ernst & Young LLP provided to the
Fund, except for those non-audit services that were subject to the pre-approval
exception under Rule 2-01 of Regulation S-X (the "pre-approval exception"). The
pre-approval exception for services provided directly to the Fund waives the
pre-approval requirement for services other than audit, review or attest
services if: (A) the aggregate amount of all such services provided constitutes
no more than 5% of the total amount of revenues paid by the Fund to its
accountant during the fiscal year in which the services are provided; (B) the
Fund did not recognize the services as non-audit services at the time of the
engagement; and (C) the services are promptly brought to the Audit Committee's
attention, and the Committee (or its delegate) approves the services before the
audit is completed.
The Audit Committee has delegated certain pre-approval responsibilities to its
Chairman (or, in his absence, any other member of the Audit Committee).
SERVICES THAT THE FUND'S AUDITOR BILLED TO THE FUND
AUDIT FEES BILLED AUDIT-RELATED FEES TAX FEES ALL OTHER FEES
FISCAL YEAR ENDED TO FUND (1) BILLED TO FUND (2) BILLED TO FUND (3) BILLED TO FUND (4)
------------------------------------------------------------------------------------------------------------------------------------
October 31, 2008 $ 35,039 $ 0 $ 0 $ 850
------------------------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0% 0%
pursuant to
pre-approval
exception
------------------------------------------------------------------------------------------------------------------------------------
October 31, 2007 $ 30,797 $ 0 $ 500 $ 750
------------------------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0% 0%
pursuant to
pre-approval
exception
------------------------------------------------------------------------------------------------------------------------------------
(1) "Audit Fees" are the aggregate fees billed for professional services for
the audit of the Fund's annual financial statements and services provided
in connection with statutory and regulatory filings or engagements.
(2) "Audit Related Fees" are the aggregate fees billed for assurance and
related services reasonably related to the performance of the audit or
review of financial statements and are not reported under "Audit Fees".
(3) "Tax Fees" are the aggregate fees billed for professional services for tax
advice, tax compliance, and tax planning.
(4) "All Other Fees" are the aggregate fees billed for products and services
for agreed upon procedures engagements performed for leveraged funds.
SERVICES THAT THE FUND'S AUDITOR BILLED TO THE
ADVISER AND AFFILIATED FUND SERVICE PROVIDERS
The following tables show the amount of fees billed by Ernst & Young LLP to
Nuveen Asset Management ("NAM" or the "Adviser"), and any entity controlling,
controlled by or under common control with NAM ("Control Affiliate") that
provides ongoing services to the Fund ("Affiliated Fund Service Provider"), for
engagements directly related to the Fund's operations and financial reporting,
during the Fund's last two full fiscal years.
The tables also show the percentage of fees subject to the pre-approval
exception. The pre-approval exception for services provided to the Adviser and
any Affiliated Fund Service Provider (other than audit, review or attest
services) waives the pre-approval requirement if: (A) the aggregate amount of
all such services provided constitutes no more than 5% of the total amount of
revenues paid to Ernst & Young LLP by the Fund, the Adviser and Affiliated Fund
Service Providers during the fiscal year in which the services are provided that
would have to be pre-approved by the Audit Committee; (B) the Fund did not
recognize the services as non-audit services at the time of the engagement; and
(C) the services are promptly brought to the Audit Committee's attention, and
the Committee (or its delegate) approves the services before the Fund's audit is
completed.
FISCAL YEAR ENDED AUDIT-RELATED FEES TAX FEES BILLED TO ALL OTHER FEES
BILLED TO ADVISER AND ADVISER AND BILLED TO ADVISER
AFFILIATED FUND AFFILIATED FUND AND AFFILIATED FUND
SERVICE PROVIDERS SERVICE PROVIDERS SERVICE PROVIDERS
--------------------------------------------------------------------------------------------------------------
October 31, 2008 $ 0 $ 0 $ 0
--------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
--------------------------------------------------------------------------------------------------------------
October 31, 2007 $ 0 $ 0 $ 0
--------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
--------------------------------------------------------------------------------------------------------------
NON-AUDIT SERVICES
The following table shows the amount of fees that Ernst & Young LLP billed
during the Fund's last two full fiscal years for non-audit services. The Audit
Committee is required to pre-approve non-audit services that Ernst & Young LLP
provides to the Adviser and any Affiliated Fund Services Provider, if the
engagement related directly to the Fund's operations and financial reporting
(except for those subject to the de minimis exception described above). The
Audit Committee requested and received information from Ernst & Young LLP about
any non-audit services that Ernst & Young LLP rendered during the Fund's last
fiscal year to the Adviser and any Affiliated Fund Service Provider. The
Committee considered this information in evaluating Ernst & Young LLP's
independence.
FISCAL YEAR ENDED TOTAL NON-AUDIT FEES
BILLED TO ADVISER AND
AFFILIATED FUND SERVICE TOTAL NON-AUDIT FEES
PROVIDERS (ENGAGEMENTS BILLED TO ADVISER AND
RELATED DIRECTLY TO THE AFFILIATED FUND SERVICE
TOTAL NON-AUDIT FEES OPERATIONS AND FINANCIAL PROVIDERS (ALL OTHER
BILLED TO FUND REPORTING OF THE FUND) ENGAGEMENTS) TOTAL
-----------------------------------------------------------------------------------------------------------------------------
October 31, 2008 $ 850 $ 0 $ 0 $ 850
October 31, 2007 $ 1,250 $ 0 $ 0 $ 1,250
"Non-Audit Fees billed to Adviser" for both fiscal year ends represent "Tax
Fees" billed to Adviser in their respective amounts from the previous table.
Audit Committee Pre-Approval Policies and Procedures. Generally, the Audit
Committee must approve (i) all non-audit services to be performed for the Fund
by the Fund's independent accountants and (ii) all audit and non-audit services
to be performed by the Fund's independent accountants for the Affiliated Fund
Service Providers with respect to operations and financial reporting of the
Fund. Regarding tax and research projects conducted by the independent
accountants for the Fund and Affiliated Fund Service Providers (with respect to
operations and financial reports of the Fund) such engagements will be (i)
pre-approved by the Audit Committee if they are expected to be for amounts
greater than $10,000; (ii) reported to the Audit Committee chairman for his
verbal approval prior to engagement if they are expected to be for amounts under
$10,000 but greater than $5,000; and (iii) reported to the Audit Committee at
the next Audit Committee meeting if they are expected to be for an amount under
$5,000.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The registrant's Board of Directors or Trustees has a separately designated
Audit Committee established in accordance with Section 3(a)(58)(A) of the
Securities Exchange Act of 1934, as amended (15 U.S.C. 78c(a)(58)(A)). The
members of the audit committee are Robert P. Bremner, Jack B. Evans, Terence J.
Toth, William J. Schneider and David J. Kundert.
ITEM 6. SCHEDULE OF INVESTMENTS.
See Portfolio of Investments in Item 1.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
The registrant invests its assets primarily in municipal bonds and cash
management securities. On rare occasions the registrant may acquire, directly or
through a special purpose vehicle, equity securities of a municipal bond issuer
whose bonds the registrant already owns when such bonds have deteriorated or are
expected shortly to deteriorate significantly in credit quality. The purpose of
acquiring equity securities generally will be to acquire control of the
municipal bond issuer and to seek to prevent the credit deterioration or
facilitate the liquidation or other workout of the distressed issuer's credit
problem. In the course of exercising control of a distressed municipal issuer,
NAM may pursue the registrant's interests in a variety of ways, which may entail
negotiating and executing consents, agreements and other arrangements, and
otherwise influencing the management of the issuer. NAM does not consider such
activities proxy voting for purposes of Rule 206(4)-6 under the 1940 Act, but
nevertheless provides reports to the registrant's Board of Trustees on its
control activities on a quarterly basis.
In the rare event that a municipal issuer were to issue a proxy or that the
registrant were to receive a proxy issued by a cash management security, NAM
would either engage an independent third party to determine how the proxy should
be voted or vote the proxy with the consent, or based on the instructions, of
the registrant's Board of Trustees or its representative. A member of NAM's
legal department would oversee the administration of the voting, and ensure that
records were maintained in accordance with Rule 206(4)-6, reports were filed
with the SEC on Form N-PX, and the results provided to the registrant's Board of
Trustees and made available to shareholders as required by applicable rules.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
THE PORTFOLIO MANAGER
The following individual has primary responsibility for the day-to-day
implementation of the registrant's investment strategies:
NAME FUND
PAUL BRENNAN Nuveen Dividend Advantage Municipal Fund 3.
Other Accounts Managed. In addition to managing the registrant, the portfolio
manager is also primarily responsible for the day-to-day portfolio management of
the following accounts:
NUMBER OF
PORTFOLIO MANAGER TYPE OF ACCOUNT MANAGED ACCOUNTS ASSETS
--------------------------------------------------------------------------------
Paul Brennan Registered Investment Company 15 $12.21 billion
Other Pooled Investment Vehicles 0 $0
Other Accounts 1 $.859 million
* Assets are as of October 31, 2008. None of the assets in these accounts are
subject to an advisory fee based on performance.
Compensation. Each portfolio manager's compensation consists of three basic
elements--base salary, cash bonus and long-term incentive compensation. The
compensation strategy is to annually compare overall compensation, including
these three elements, to the market in order to create a compensation structure
that is competitive and consistent with similar financial services companies. As
discussed below, several factors are considered in determining each portfolio
manager's total compensation. In any year these factors may include, among
others, the effectiveness of the investment strategies recommended by the
portfolio manager's investment team, the investment performance of the accounts
managed by the portfolio manager, and the overall performance of Nuveen
Investments, Inc. (the parent company of NAM). Although investment performance
is a factor in determining the portfolio manager's compensation, it is not
necessarily a decisive factor. The portfolio manager's performance is evaluated
in part by comparing manager's performance against a specified investment
benchmark. This fund-specific benchmark is a customized subset (limited to bonds
in each Fund's specific state and with certain maturity parameters) of the
S&P/Investortools Municipal Bond index, an index comprised of bonds held by
managed municipal bond fund customers of Standard & Poor's Securities Pricing,
Inc. that are priced daily and whose fund holdings aggregate at least $2
million. As of October 31, 2008, the S&P/Investortools Municipal Bond index was
comprised of 52,959 securities with an aggregate current market value of $1,009
billion.
Base salary. Each portfolio manager is paid a base salary that is set at a level
determined by NAM in accordance with its overall compensation strategy discussed
above. NAM is not under any current contractual obligation to increase a
portfolio manager's base salary.
Cash bonus. Each portfolio manager is also eligible to receive an annual cash
bonus. The level of this bonus is based upon evaluations and determinations made
by each portfolio manager's supervisors, along with reviews submitted by his
peers. These reviews and evaluations often take into account a number of
factors, including the effectiveness of the investment strategies recommended to
the NAM's investment team, the performance of the accounts for which he serves
as portfolio manager relative to any benchmarks established for those accounts,
his effectiveness in communicating investment performance to stockholders and
their representatives, and his contribution to the NAM's investment process and
to the execution of investment strategies. The cash bonus component is also
impacted by the overall performance of Nuveen Investments, Inc. in achieving its
business objectives.
Long-term incentive compensation. In connection with the acquisition of Nuveen
Investments, Inc., by a group of investors lead by Madison Dearborn Partners in
November 2007, certain employees, including portfolio managers, received profit
interests in Nuveen's parent. These profit interests entitle the holders to
participate in the appreciation in the value of Nuveen beyond the issue date and
vest over five to seven years, or earlier in the case of a liquidity event.
Material Conflicts of Interest. Each portfolio manager's simultaneous management
of the registrant and the other accounts noted above may present actual or
apparent conflicts of interest with respect to the allocation and aggregation of
securities orders placed on behalf of the Registrant and the other account. NAM,
however, believes that such potential conflicts are mitigated by the fact that
the NAM has adopted several policies that address potential conflicts of
interest, including best execution and trade allocation policies that are
designed to ensure (1) that portfolio management is seeking the best price for
portfolio securities under the circumstances, (2) fair and equitable allocation
of investment opportunities among accounts over time and (3) compliance with
applicable regulatory requirements. All accounts are to be treated in a
non-preferential manner, such that allocations are not based upon account
performance, fee structure or preference of the portfolio manager, although the
allocation procedures may provide allocation preferences to funds with special
characteristics (such as favoring state funds versus national funds for
allocations of in-state bonds). In addition, NAM has adopted a Code of Conduct
that sets forth policies regarding conflicts of interest.
Beneficial Ownership of Securities. As of October 31, 2008, the portfolio
manager beneficially owned the following dollar range of equity securities
issued by the Registrant and other Nuveen Funds managed by NAM's municipal
investment team.
DOLLAR RANGE OF
EQUITY SECURITIES
DOLLAR RANGE OF BENEFICIALLY OWNED
EQUITY IN THE REMAINDER OF
SECURITIES NUVEEN FUNDS MANAGED
BENEFICIALLY BY NAM'S MUNICIPAL
NAME OF PORTFOLIO MANAGER FUND OWNED IN FUND INVESTMENT TEAM
-------------------------------------------------------------------------------------------------------------------
Paul Brennan Nuveen Dividend Advantage Municipal Fund 3 $10,001-$50,000 $100,001-$500,000
PORTFOLIO MANAGER BIO:
Paul Brennan, CFA, CPA, became a portfolio manager of Flagship Financial Inc. in
1994, and subsequently became an Assistant Vice President of NAM upon the
acquisition of Flagship Resources Inc. by Nuveen in 1997. He became Vice
President of NAM in 2002. He currently manages investments for 16
Nuveen-sponsored investment companies.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Period* (a) (b) (c) (d)*
TOTAL NUMBER OF AVERAGE TOTAL NUMBER OF SHARES MAXIMUM NUMBER (OR
SHARES (OR PRICE (OR UNITS) PURCHASED AS APPROXIMATE DOLLAR VALUE) OF
UNITS) PAID PER PART OF PUBLICLY SHARES (OR UNITS) THAT MAY YET
PURCHASED SHARE (OR ANNOUNCED PLANS OR BE PURCHASED UNDER THE PLANS OR
UNIT) PROGRAMS PROGRAMS
AUGUST 7-31, 2008 0 $0 0 4,040,000
SEPTEMBER 1-30, 2008 0 $0 0 4,040,000
OCTOBER 1-31, 2008 0 $0 0 4,040,000
TOTAL 0
* The registrant's repurchase program, which authorized the repurchase of
4,040,000 shares, was announced August 7, 2008. Any repurchases made by the
registrant pursuant to the program were made through open-market
transactions.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the registrant's Board implemented after the registrant
last provided disclosure in response to this item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of this report that includes the disclosure
required by this paragraph, based on their evaluation of the controls
and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")
(17 CFR 240.13a-15(b) or 240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter
of the period covered by this report that has materially affected, or
is reasonably likely to materially affect, the registrant's internal
control over financial reporting.
ITEM 12. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit: Not applicable
because the code is posted on registrant's website at www.nuveen.com/etf and
there were no amendments during the period covered by this report. (To view the
code, click on the Investor Resources drop down menu box, click on Fund
Governance and then Code of Conduct.)
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2(a) under
the 1940 Act (17 CFR 270.30a-2(a)) in the exact form set forth below: Ex-99.CERT
Attached hereto.
(a)(3) Any written solicitation to purchase securities under Rule 23c-1 under
the 1940 Act (17 CFR 270.23c-1) sent or given during the period covered by the
report by or on behalf of the registrant to 10 or more persons. Not applicable.
(b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act,
provide the certifications required by Rule 30a-2(b) under the 1940 Act (17 CFR
270.30a-2(b)); Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR
240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of
the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished
pursuant to this paragraph will not be deemed "filed" for purposes of Section 18
of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of
that section. Such certification will not be deemed to be incorporated by
reference into any filing under the Securities Act of 1933 or the Exchange Act,
except to the extent that the registrant specifically incorporates it by
reference. Ex-99.906 CERT attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Nuveen Dividend Advantage Municipal Fund 3
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By (Signature and Title) /s/ Kevin J. McCarthy
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Kevin J. McCarthy
Vice President and Secretary
Date: January 9, 2009
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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
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Gifford R. Zimmerman
Chief Administrative Officer
(principal executive officer)
Date: January 9, 2009
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By (Signature and Title) /s/ Stephen D. Foy
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Stephen D. Foy
Vice President and Controller
(principal financial officer)
Date: January 9, 2009
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