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 811-7484
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Nuveen Massachusetts Premium Income Municipal Fund
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(Exact name of registrant as specified in charter)
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
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(Address of principal executive offices) (Zip code)
Kevin J. McCarthy
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
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(Name and address of agent for service)
Registrant's telephone number, including area code: (312) 917-7700
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Date of fiscal year end: May 31
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Date of reporting period: May 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,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
ANNUAL REPORT
May 31, 2008
Nuveen Investments
MUNICIPAL CLOSED-END FUNDS
Photo of: Small child
NUVEEN CONNECTICUT
PREMIUM INCOME
MUNICIPAL FUND
NTC
NUVEEN CONNECTICUT
DIVIDEND ADVANTAGE
MUNICIPAL FUND
NFC
NUVEEN CONNECTICUT
DIVIDEND ADVANTAGE
MUNICIPAL FUND 2
NGK
NUVEEN CONNECTICUT
DIVIDEND ADVANTAGE
MUNICIPAL FUND 3
NGO
NUVEEN MASSACHUSETTS
PREMIUM INCOME
MUNICIPAL FUND
NMT
NUVEEN MASSACHUSETTS
DIVIDEND ADVANTAGE
MUNICIPAL FUND
NMB
NUVEEN INSURED
MASSACHUSETTS
TAX-FREE ADVANTAGE
MUNICIPAL FUND
NGX
NUVEEN MISSOURI
PREMIUM INCOME
MUNICIPAL FUND
NOM
IT'S NOT WHAT YOU EARN, IT'S WHAT YOU KEEP.(R)
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Chairman's
LETTER TO SHAREHOLDERS
Photo of: Robert P. Bremner
Robert P. Bremner | Chairman of the Board
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 be welcoming two new
Board members to our team. John Amboian, the current chairman and CEO of Nuveen
Investments, has agreed to replace 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 are adding 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 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 details 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
July 15, 2008
Portfolio Managers' COMMENTS
Nuveen Investments Municipal Closed-End Funds | NTC, NFC, NGK, NGO,
NMT, NMB, NGX, NOM
Portfolio managers Cathryn Steeves and Scott Romans review economic and
municipal market conditions at both the national and state levels, key
investment strategies, and the annual performance of these eight Nuveen Funds.
Cathryn, who joined Nuveen in 1996, has managed the Connecticut and
Massachusetts Funds since 2006. Scott, who has been with Nuveen since 2000,
assumed portfolio management responsibility for NOM in 2003.
WHAT FACTORS AFFECTED THE U.S. ECONOMIC AND MUNICIPAL MARKET ENVIRONMENTS DURING
THE TWELVE-MONTH REPORTING PERIOD ENDED MAY 31, 2008?
During this period, developments in the credit markets led to increased price
volatility and tightening liquidity, causing a flight to quality. These
developments, which began to take shape last summer, became particularly evident
in August 2007 when market concerns about defaults on sub-prime mortgages
resulted in a liquidity crisis across all fixed income asset classes. In
September 2007, the Federal Reserve (Fed) responded to credit market volatility
by launching a series of interest rate cuts that lowered the fed funds rate by
325 basis points--from 5.25% to 2.00%--in eight months, including reductions of
125 basis points in January 2008 alone.
The Fed's actions also were a response to increased signs of weakness in the
U.S. economy, as evidenced by the slowing growth of the U.S. gross domestic
product (GDP), a closely watched measure of economic performance. While GDP
expanded at 3.8% in the second quarter of 2007 and 4.9% in the third quarter,
this measure dropped sharply to 0.6% in the fourth quarter of 2007 (all GDP
numbers annualized). In the first quarter of 2008, GDP grew at an annual rate of
1.0%, restrained by a 25% decline in residential investment and the weakest
consumer spending since 2001. Driven largely by increased energy and food
prices, the Consumer Price Index (CPI) registered a 4.2% year-over-year gain as
of May 2008. The core CPI (which excludes food and energy prices) rose 2.3%
between June 2007 and May 2008, remaining above the Fed's unofficial target of
2.0% or lower. In the labor markets, January 2008 marked the first decline in
new jobs creation since 2003, breaking the longest string of employment growth
(fifty-two months) in U.S. history. The national unemployment rate for May 2008
was 5.5%, its highest level since October 2004, compared with 4.5% in May 2007.
The 0.5% increase in this rate between April and May 2008 represented the
biggest one-month jump in more than twenty-two years.
In the municipal bond market, factors related to the sub-prime mortgage crisis
had an indirect, but important, influence on performance. General concerns about
the credit markets as well as more specific concerns about municipal bond
insurers with exposure to sub-prime mortgages caused some investors to curtail
purchases. As a
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
result, in February 2008, hedge funds and other non-traditional buyers of
municipal bonds were forced to sell holdings of long-maturity bonds into a
market already experiencing a lack of 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 interest rates declined. In this
environment, bonds with shorter maturities generally outperformed longer
maturity bonds and higher quality bonds tended to outperform lower quality
issues.
Also of note in the municipal market, the U.S. Supreme Court in May 2008 ruled
that individual states could continue to offer their residents special tax
treatment on municipal bonds issued within their borders. The high court's
decision in Department of Revenue of the Commonwealth of Kentucky vs. Davis
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 May 2008, municipal bond issuance nationwide
totaled $467.0 billion, an increase of 2% from the previous twelve months. As of
May 31, 2008, insured bonds comprised 25% of new supply, compared with the
recent historical figure of approximately 50%. Despite disruptions in the
markets, new municipal issuance continued to be met with solid demand by
institutional and retail investors as well as nontraditional buyers returning to
the market in the last few months.
HOW WERE THE ECONOMIC AND MARKET CONDITIONS IN CONNECTICUT, MASSACHUSETTS, AND
MISSOURI DURING THIS PERIOD?
Connecticut, which continued to have the highest per-capita income in the
nation, benefited from a varied economy driven by the financial services,
manufacturing, education and health care sectors. The state also continued to
rely heavily on the defense industry, with 25% of its manufacturing jobs
concentrated in that sector. Connecticut's 2007 economic growth expanded at a
rate of 2.8%, which ranked 11th in the nation in terms of state GDP, compared
with the 2.0% national average. However, in recent months, the state's job
market has softened. As of May 2008, the unemployment rate in Connecticut was
5.4%, its highest level since 2003, up from 4.4% in May 2007. Due to an increase
in tax receipts, Connecticut ended fiscal 2007 with a surplus, marking the
fourth consecutive year it had done so. The 2008-2009 Connecticut state budget,
which provided for $36 billion in expenditures over the two years, is currently
projected to produce a $15.7 million general fund surplus, although tax revenues
have weakened in recent months. In April 2008, both Moody's and Standard &
Poor's (S&P) confirmed their ratings on Connecticut general obligation debt at
Aa3 and AA, respectively, with stable outlooks. Issuance of municipal debt in
Connecticut during the twelve months ended May 31, 2008, totaled $7.1 billion,
an increase of 55% over the previous reporting period. For the first five months
of 2008, issuance reached $3.4 billion, up 130% compared with the first five
months of 2007. The majority of this increase was due to the April 2008 issuance
of $2.3 billion in taxable general obligation pension bonds, with proceeds
deposited in the state's teachers' retirement fund. According to
5
Moody's, Connecticut's debt per capita was the second highest in the nation
(following Massachusetts) in 2007, and the debt per capita/income per capita
ratio was the fourth highest among the fifty states.
Massachusetts' economy remained diverse, with growth led by education, health
care, financial services and technology. The concentration of colleges and
universities in the commonwealth continued to add a degree of stability to the
job market and provided a source of well-educated workers for its service
industries. Education-related jobs accounted for approximately 5% of
Massachusetts' employment, twice the national average. However, employment
growth has weakened in recent months, with a May 2008 jobless rate of 4.9%, the
highest level in three years, up from 4.5% in May 2007. According to the
S&P/Case-Shiller home price index of twenty major metropolitan areas, housing
prices in Boston fell 6.4% between April 2007 and April 2008. This compared with
an average decline of 15.3% nationwide, the steepest drop since the index was
established in 2001. Massachusetts' 2007 economic growth rate of 2.5% ranked it
15th in the nation in terms of state GDP. In fiscal 2008, increased
expenditures, notably for the commonwealth's universal health insurance
initiative, resulted in a $100 million budget gap, which was addressed through
spending reductions and a drawdown of reserves. In March 2008, Moody's confirmed
its rating on Massachusetts general obligation debt at Aa2, and S&P confirmed
its rating of AA in April 2008. Both rating agencies maintained stable outlooks.
For the twelve months ended May 31, 2008, new municipal supply in Massachusetts
totaled $13.2 billion, an increase of 5% from the previous reporting period.
According to Moody's, Massachusetts' debt per capita ranked as the highest in
the nation in 2007, while debt as a percentage of personal income ranked second
in the country.
Missouri's economy grew at a considerably slower pace than the national economy
in 2007, as continued problems in the state's manufacturing sector were
compounded by fallout from a slumping housing market. Missouri's 2007 growth
rate of 1.3% (compared with the national average of 2.0%) ranked 36th in terms
of state GDP. After a brief period of stability, the state's manufacturing
sector continued to shed jobs, most notably in the auto industry. Growth in
Missouri was driven mainly by the health and education and the leisure and
hospitality sectors, followed by government, professional and business services
and retail trade. The state, which recently made efforts to diversify into the
highly competitive biotechnology sector, continued to work to attract more
high-tech industry. While housing prices in the state have held up relatively
well, new home construction was down 50% from 2006 levels, and the consequences
were being felt in housing-related industries, including financial services. In
May 2008, the jobless rate in Missouri was 6.0%, compared with 4.8% in May 2007,
ranking the state 11th in the nation in terms of unemployment. As of May 2008,
Moody's and S&P maintained their ratings on Missouri general obligation debt at
Aaa/AAA with a stable outlook, reflecting the state's conservative debt and
fiscal management practices. During the twelve months ended May 31, 2008,
municipal issuance in Missouri was down 30%. For January-May 2008, issuance in
the state totaled $1.7 billion, down 30% from the first five months of 2007.
6
WHAT KEY STRATEGIES WERE USED TO MANAGE THESE FUNDS DURING THIS PERIOD?
During this twelve-month period, as the municipal market was characterized by
volatility and a steepening yield curve, we sought to capitalize on the
turbulent environment by continuing to focus on relative value, using a
fundamental approach to find undervalued sectors and individual credits with the
potential to perform well over the long term.
Among the issues we added to the Connecticut and Massachusetts Funds were health
care and long-term care/retirement facilities bonds. The Connecticut Funds also
purchased single-family housing credits and higher education bonds, including
those issued for Yale University and Quinipiac College. All of the Connecticut
and Massachusetts Funds also added exposure to the short end of the yield curve
by purchasing small positions in auction rate bonds. Because of their extremely
short durations, auction rate securities traditionally have been far more
popular with money market fund managers than municipal bond fund managers. But
demand for these issues evaporated when the credit markets became relatively
illiquid, and their yields rose to unprecedented levels. We saw an opportunity
to buy these bonds at attractive prices relative to their income.
In NOM, we were also focused on taking advantage of opportunities presented by
the volatility of the past twelve months. When interest rates were low, we
continued to purchase defensive, high credit quality bonds that we believed
would hold their value well despite market fluctuations. When interest rates
backed up, we took an opportunistic approach to increasing NOM's credit exposure
at discount prices, adding bonds that we believed had greater performance
potential and better structural features. We also watched for opportunities to
pick up good values that other investors were forced to sell as a consequence of
the lack of liquidity in the market.
To generate cash for purchases, we selectively sold some holdings with shorter
durations,(1) including pre-refunded bonds.(2) Selling shorter duration bonds
and reinvesting further out on the yield curve also helped to improve the Funds'
overall call protection profiles. We also took advantage of strong bids to sell
bonds that were attractive to the retail market. In NOM, many of our new
purchases were funded by reinvesting the proceeds from bond calls.
As part of our disciplined approach to duration management, we used inverse
floating rate securities,(3) a type of derivative financial instrument, in NOM
throughout the reporting period. In addition, we added new inverse floating rate
securities to all of the Connecticut Funds during the last half of this period.
Inverse floaters typically provide the dual benefit of bringing the durations of
the Funds closer to our strategic target and enhancing their income-generation
capabilities. All of the Connecticut and Massachusetts Funds also used forward
interest rate swaps, another type of derivative financial instrument. The goal
of this strategy was to help us manage the common share net asset value (NAV)
volatility of these Funds without having a negative impact on their income
streams or common share dividends over the short term. Given the market
environment, we thought it prudent to remove the forward interest rate swaps
from the majority of these Funds, however as of May 31, 2008, NMT and NMB still
held forward interest rate swaps.
(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) Advance refundings, also known as pre-refundings or refinancings, occur
when an issuer sells new bonds and uses the proceeds to fund principal and
interest payments of older existing bonds. This process often results in
lower borrowing costs for bond issuers.
(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 the reporting period, are
further defined within the Notes to Financial Statements and Glossary of
Terms Used in This Report sections of this report.
7
HOW DID THE FUNDS PERFORM?
Individual results for these Nuveen Funds, as well as relevant index and peer
group information, are presented in the accompanying table.
Total Returns on Common Share Net Asset Value*
For periods ended 5/31/08
1-Year 5-Year 10-Year
Connecticut Funds
NTC 3.60% 3.85% 5.66%
NFC 4.62% 4.42% N/A
NGK 4.54% 3.87% N/A
NGO 2.79% 3.61% N/A
Massachusetts Funds
NMT 2.08% 3.95% 5.25%
NMB 1.55% 3.87% N/A
Missouri Fund
NOM 0.26% 3.21% 5.15%
Lipper Other States
Municipal Debt Funds
Average(4) 0.84% 3.75% 5.25%
Lehman Brothers
Municipal Bond Index(6) 3.87% 3.67% 5.06%
Insured Massachusetts Fund
NGX 3.04% 3.85% N/A
Lipper Single-State
Insured Municipal Debt
Funds Average(5) 0.92% 3.60% 5.04%
Lehman Brothers
Insured Municipal
Bond Index(6) 3.48% 3.60% 5.18%
For the twelve months ended May 31, 2008, the total returns on common share NAV
for NFC and NGK exceeded the return on the national Lehman Brothers Municipal
Bond Index, while NTC, NGO, NMT, NMB and NOM trailed this index. For the same
period, NGX underperformed the return on the Lehman Brothers Insured Municipal
Bond Index. At the same time, NTC, NFC, NGK, NGO, NMT, and NMB outperformed the
average return for the Lipper Other States Municipal Debt Funds Average, NOM
lagged this group average, and NGX outperformed the Lipper Single-State Insured
Municipal Debt Funds Average.
One of the factors influencing the performance of these Funds relative to those
of the unleveraged Lehman Brothers Municipal Bond Index and Lehman Brothers
Insured
*Annualized.
Past performance is not predictive of future results. Current performance may be
higher or lower than the data shown. Returns do not reflect the deduction of
taxes that shareholders may have to pay on Fund distributions or upon the sale
of Fund shares.
For additional information, see the individual Performance Overview for your
Fund in this report.
(4) The Lipper Other States Municipal Debt Funds Average is calculated using
the returns of all closed-end funds in this category for each period as
follows: 1 year, 43; 5 years, 43; and 10 years, 18. Fund and Lipper returns
assume reinvestment of dividends.
(5) The Lipper Single-State Insured Municipal Debt Funds Average is calculated
using the returns of all closed-end funds in this category for each period
as follows: 1 year, 44; 5 years, 44; and 10 years, 24. Fund and Lipper
returns assume reinvestment of dividends.
(6) The Lehman Brothers Municipal Bond Index is an unleveraged, unmanaged
national index comprising a broad range of investment-grade municipal
bonds, while the Lehman Brothers Insured Municipal Bond Index is an
unleveraged, unmanaged national index containing a broad range of insured
municipal bonds. Results for the Lehman indexes do not reflect any
expenses.
8
Municipal Bond Index was the use of financial leverage. While leverage provides
opportunities for additional income and total returns for common shareholders,
the benefits of leveraging are impacted by the general price movements of the
bonds in each Fund's portfolio. During this period, the Funds' borrowing costs
remained relatively high, which generally had a negative impact on total
returns. In addition, in the turbulent market environment of the past twelve
months, the impact of any valuation change in the Funds' holdings--whether
positive or negative--was magnified by the use of leverage.
Other key factors that influenced the Funds' returns included yield curve and
duration positioning, the use of derivatives, credit exposure and sector
allocations and holdings of bonds backed by lower-rated municipal bond insurers.
Bonds in the Lehman Brothers Municipal Bond Index with maturities of less than
eight years, especially those maturing in approximately four to six years,
benefited the most from changes in the interest rate environment. As a result,
these bonds generally outperformed credits with longer maturities. Bonds having
the longest maturities (twenty-two years and longer) posted the worst returns.
For the most part, the duration positioning of the Connecticut and Massachusetts
Funds was a net positive for performance during this period. Although the Funds
were underexposed to the outperforming shorter maturity categories, this was
generally offset by their heavier allocations to the intermediate part of the
yield curve, which performed relatively well, and lower weightings in the
underperforming long part of the curve. In NOM, which had the longest duration
among these Funds, duration positioning had a moderately negative impact on the
Fund's return.
As mentioned earlier, the Connecticut and Massachusetts Funds used forward
interest rate swaps during part of this period to synthetically extend their
durations and move them closer to our strategic duration target. Despite the
fact that longer duration municipal bonds generally underperformed those with
shorter durations, the use of forward interest rate swaps had a positive impact
on the return performance of these seven Funds. This was due to the fact that
the interest rate swaps provided exposure to taxable markets during a period
when, in contrast to historical trends, the taxable markets and the municipal
market moved in the opposite directions. As municipal market performance lagged
the gains in the taxable markets, the interest rate swaps performed very well.
After the removal of the forward interest rate swaps in NTC, NFC, NGK, NGO and
NGX, the durations of these Funds remained slightly short of our strategic
target, which helped their performances as shorter duration bonds outperformed.
The inverse floaters used by NOM throughout the period had a negative impact on
this Fund's performance. This resulted from the fact that the inverse floaters
effectively increased NOM's exposure to longer maturity bonds during a period
when shorter maturities were in favor in the market. In addition, the securities
used to fund the inverse floaters, although insured, performed very poorly due
to long duration, low underlying credit rating (BBB), and the downgrade of the
bond's insurer (Ambac). All of the inverse floaters benefited these Funds by
helping to support their income streams.
Bonds rated BBB or below generally posted poor returns. The underperformance of
the lower credit quality sectors was largely the result of risk-averse
investors' flight to
quality as disruptions in the financial and housing markets deepened. Among the
Connecticut Funds, NTC, NFC and NGK allocated approximately 9% of their
portfolio
9
to BBB rated bonds, while NGO allocated 14% to bonds rated BBB as of May 31,
2008. In Massachusetts, NMT and NMB had weightings of approximately 14% and 16%,
respectively, to the lower-rated and non-rated credit categories. The insured
NGX, which can invest up to 20% of its assets in uninsured investment-grade
quality securities, held 1% of its uninsured portfolio in bonds rated BBB as of
May 31, 2008, and the Fund benefited from this overall higher credit quality. In
NOM, BBB rated and non-rated bonds accounted for more than 23% of the Fund's
portfolio. The credit positions of NGO, NMB, and NOM were generally weaker than
those of the other five Funds, and the negative impact of this greater exposure
to credit risk accounted for some of the performance differentials among these
Funds.
In general, bonds that carried any credit risk, regardless of sector, tended to
perform poorly. Revenue bonds as a whole, and especially the industrial
development and health care (including hospitals and long-term care) sectors
that had ranked among the top performers in the Lehman Brothers Municipal Bond
Index over the past few years, underperformed the general municipal market. The
housing sector also performed poorly, as did lower-rated bonds backed by the
1998 master tobacco settlement agreement, which comprised slightly over 1% of
the portfolios of NTC and NGK and 2.3% of NGO as of May 31, 2008.
Sectors of the market that generally contributed positively to the Funds'
performances included general obligation bonds, water and sewer, special tax
issues and education. Pre-refunded bonds performed exceptionally well, due
primarily to their shorter effective maturities and higher credit quality. Among
these Funds, NGX held 23%, NFC and NOM held 14%, NGK 12%, NMB 11% and NTC 7% or
more of their portfolios in pre-refunded bonds.
All of the Funds were also impacted by their positions in bonds backed by
municipal bond insurers that experienced downgrades in their credit ratings. As
concern increased about the balance sheets of these insurers, prices on bonds
insured by these companies declined, detracting from the Funds' performance.
NOM, in particular, was negatively affected by its relatively higher exposure to
bonds insured by CIFG Guaranty and FGIC Corporation, two of the municipal bond
insurers that were downgraded to sub-investment grade levels. On the whole,
however, 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.
RECENT DEVELOPMENTS REGARDING BOND INSURANCE COMPANIES
The portfolios of investments reflect the ratings on certain bonds insured by
ACA, AMBAC, FGIC, MBIA, RAAI and XLCA as of May 31, 2008. During the period
covered by this report, each of these insurers experienced one or more rating
reductions by at least one or more rating agencies. Subsequent to May 31, 2008,
at least one rating agency further reduced their rating and at least one rating
agency had withdrawn their rating for AMBAC-insured and MBIA-insured bonds. At
the time this report was prepared, at least one rating agency has placed each of
these insurers on "negative credit watch", which may presage one or more rating
reductions for such insurer or insurers in the future. If one or more insurers'
ratings are reduced by these rating agencies, it would likely reduce the
effective rating of many of the bonds insured by that insurer or insurers. It is
important to note that municipal bonds historically have had a very low rate of
default.
10
During March 2008, the Nuveen Funds' Board of Directors/Trustees approved
changes to the investment policies of all of the Nuveen insured municipal
closed-end funds. The new policies require that (1) at least 80% of a Fund's net
assets must be invested in insured municipal bonds guaranteed by insurers rated
"A" or better by at least one rating agency at the time of purchase; (2) at
least 80% of a Fund's net assets must be invested in municipal bonds rated "AA"
or better by at least one rating agency (with or without insurance), deemed to
be of comparable quality by the Adviser, or backed by an escrow or trust
containing sufficient U.S. Government or Government agency securities at the
time of purchase; and (3) up to 20% of a Fund's net assets may be invested in
uninsured municipal bonds rated "A" to "BBB" by at least one rating agency or
deemed to be of comparable quality by the Adviser at the time of purchase. These
policy changes are designed to increase portfolio manager flexibility and retain
the insured nature of the Funds' investment portfolios for current and future
environments. Insured Massachusetts Tax-Free Advantage (NGX) implemented these
policy changes on March 20, 2008.
RECENT DEVELOPMENTS IN THE AUCTION RATE PREFERRED SECURITIES (ARPS) MARKETS
Beginning in February 2008, more shares for sale were submitted in the regularly
scheduled auctions for the preferred shares issued by these Funds than there
were offers to buy. This meant that these auctions "failed to clear" and that
many or all auction preferred shareholders who wanted to sell their shares in
these auctions were unable to do so. This decline in liquidity in auction
preferred shares did not lower the credit quality of these shares, and auction
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 preferred shares. At the time this
report was prepared, the Funds' managers could not predict when future auctions
might succeed in attracting sufficient buyers for the shares offered, if ever.
The Funds' managers are working diligently to refund the auction preferred
shares, and have made progress in these efforts, but at present there is no
assurance that these efforts will succeed. These developments generally do not
affect the management or investment policies of these Funds. However, one
implication of these auction failures for common shareholders is that the Funds'
cost of leverage will likely 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 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 ARPS, whose auctions have been
failing for several months, including an initial phase of approximately $1
billion in forty-one funds. On June 26, 2008, thirteen municipal funds (none of
which are included in this shareholder report) issued par redemption notices for
a portion of their auction-rate securities aggregating approximately $580
million.
For current, up-to-date information, please visit the Nuveen CEF Auction Rate
Preferred Resource Center at:
http://www.nuveen.com/ResourceCenter/AuctionRatePreferred.aspx.
11
Common Share
Dividend and Share Price
INFORMATION
As previously noted, all of the Funds in this report use leverage to potentially
enhance opportunities for additional income for common shareholders. While this
strategy continued to provide incremental income, the extent of this benefit was
reduced to some degree by the borrowing costs associated with leverage, which
remained relatively high. Some of the Funds' income streams were also impacted
as the proceeds from older, higher-yielding bonds that matured or were called
were reinvested into bonds currently available in the market, which generally
offered lower yields than the maturing or called bonds. These factors resulted
in one monthly common share dividend reduction in NTC and NGK and two reductions
in NGO during this reporting period. Over the twelve-month reporting period
ended May 31, 2008, the dividends of NFC, NMT, NMB, and NOM remained stable. In
NGX, we were able to increase the dividend effective August 2007.
Due to normal portfolio activity, common shareholders of the following Funds
received capital gains and 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)
NTC $0.0288 --
NFC $0.0648 $0.0016
NGK $0.0738 --
NMT $0.0166 --
NMB $0.0248 --
NOM $0.1265 --
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 common share 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 common share NAV. Each Fund will, over time,
pay all of its net investment income as dividends to shareholders. As of May 31,
2008, all of the Funds in this report with the exception of NOM, had positive
UNII balances for tax purposes and negative UNII balances for
12
financial statement purposes. NOM had a positive UNII balance for both tax and
financial statement purposes.
As of May 31, 2008, the Funds' common share prices were trading at premiums or
discounts to their common share NAVs as shown in the accompanying chart:
5/31/08 Twelve-Month Average
Premium/Discount Premium/Discount
NTC -1.19% -2.01%
NFC +1.63% +1.14%
NGK +1.63% +1.16%
NGO -3.20% -3.13%
NMT -4.29% -5.74%
NMB +1.74% -1.67%
NGX -0.98% -2.27%
NOM +9.17% +4.23%
13
NTC
Performance
OVERVIEW
Nuveen Connecticut Premium Income Municipal Fund
as of May 31, 2008
Pie Chart:
Credit Quality (as a % of total investments)(1)
AAA/U.S. Guaranteed 71%
AA 19%
A 1%
BBB 9%
Bar Chart:
2007-2008 Monthly Tax-Free Dividends Per Common Share(3)
Jun 0.052
Jul 0.052
Aug 0.052
Sep 0.052
Oct 0.052
Nov 0.052
Dec 0.052
Jan 0.052
Feb 0.052
Mar 0.049
Apr 0.049
May 0.049
Line Chart:
Common Share Price Performance -- Weekly Closing Price
6/01/07 15.18
15.29
15.11
14.5
15.2
14.76
14.76
14.85
14.4
14.52
14.34
13.9
13.7
14.04
14.18
14.14
14.09
14.2
13.97
13.67
13.64
13.71
13.65
13.51
13.01
13.1
13.38
13.62
13.59
13.03
13.33
14.08
13.9
13.76
14.054
13.87
14.08
13.27
13.3
13.22
13.86
13.61
13.1
13.36
13.31
13.4501
13.41
13.65
13.93
13.95
14.1
13.95
14.08
5/31/08 14.08
FUND SNAPSHOT
------------------------------------
Common Share Price $14.08
------------------------------------
Common Share
Net Asset Value $14.25
------------------------------------
Premium/(Discount) to NAV -1.19%
------------------------------------
Market Yield 4.18%
------------------------------------
Taxable-Equivalent Yield(2) 6.11%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $76,441
------------------------------------
Average Effective Maturity
on Securities (Years) 16.93
------------------------------------
Leverage-Adjusted Duration 8.57
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 5/20/93)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year -1.08% 3.60%
------------------------------------
5-Year 1.50% 3.85%
------------------------------------
10-Year 4.48% 5.66%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
Education and Civic
Organizations 24.6%
------------------------------------
Tax Obligation/General 17.5%
------------------------------------
Tax Obligation/Limited 13.9%
------------------------------------
Health Care 10.8%
------------------------------------
U.S. Guaranteed 8.1%
------------------------------------
Water and Sewer 7.5%
------------------------------------
Housing/Single Family 4.8%
------------------------------------
Other 12.8%
------------------------------------
(1) The percentages shown in the foregoing chart may reflect the ratings on
certain bonds insured by ACA, AMBAC, FGIC, MBIA, RAAI and XLCA as of May
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 combined federal and state income tax
rate of 31.6%. 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
$0.0288 per share.
14
NFC
Performance
OVERVIEW
Nuveen Connecticut Dividend Advantage Municipal Fund
as of May 31, 2008
Pie Chart:
Credit Quality (as a % of total investments)(1)
AAA/U.S. Guaranteed 65%
AA 20%
A 6%
BBB 9%
Bar Chart:
2007-2008 Monthly Tax-Free Dividends Per Common Share(3)
Jun 0.0555
Jul 0.0555
Aug 0.0555
Sep 0.0555
Oct 0.0555
Nov 0.0555
Dec 0.0555
Jan 0.0555
Feb 0.0555
Mar 0.0555
Apr 0.0555
May 0.0555
Line Chart:
Common Share Price Performance -- Weekly Closing Price
6/01/07 16.3
16
16.21
16.28
15.92
15.78
15.8
15.12
15.3
15.34
16.5
15.3
14.64
15.2
15.25
15.42
15.14
15.07
14.9176
14.55
14.4
14.47
14.44
14.21
13.9
13.82
14.11
14.13
14.03
13.72
13.88
14.56
14.64
14.85
14.85
14.84
14.85
14.3
14.25
14.06
14.6
14.28
14.26
14.25
14.37
14.3101
14.45
14.52
14.71
14.88
14.67
15.03
14.93
5/31/08 14.93
FUND SNAPSHOT
------------------------------------
Common Share Price $14.93
------------------------------------
Common Share
Net Asset Value $14.69
------------------------------------
Premium/(Discount) to NAV 1.63%
------------------------------------
Market Yield 4.46%
------------------------------------
Taxable-Equivalent Yield(2) 6.52%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $37,874
------------------------------------
Average Effective Maturity
on Securities (Years) 16.29
------------------------------------
Leverage-Adjusted Duration 8.60
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 1/26/01)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year -4.10% 4.62%
------------------------------------
5-Year 3.46% 4.42%
------------------------------------
Since
Inception 5.26% 5.98%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
Education and Civic
Organizations 23.3%
------------------------------------
U.S. Guaranteed 19.3%
------------------------------------
Tax Obligation/Limited 16.6%
------------------------------------
Tax Obligation/General 8.3%
------------------------------------
Water and Sewer 8.1%
------------------------------------
Health Care 7.6%
------------------------------------
Housing/Single Family 4.6%
------------------------------------
Other 12.2%
------------------------------------
(1) The percentages shown in the foregoing chart may reflect the ratings on
certain bonds insured by ACA, AMBAC, FGIC, MBIA, RAAI and XLCA as of May
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 combined federal and state income tax
rate of 31.6%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
(3) The Fund paid shareholders capital gains and net ordinary income
distributions in December 2007 of $0.0664 per share.
15
NGK
Performance
OVERVIEW
Nuveen Connecticut Dividend Advantage Municipal Fund 2
as of May 31, 2008
Pie Chart:
Credit Quality (as a % of total investments)(1)
AAA/U.S. Guaranteed 69%
AA 22%
BBB 9%
Bar Chart:
2007-2008 Monthly Tax-Free Dividends Per Common Share(3)
Jun 0.058
Jul 0.058
Aug 0.058
Sep 0.058
Oct 0.055
Nov 0.055
Dec 0.055
Jan 0.055
Feb 0.055
Mar 0.055
Apr 0.055
May 0.055
Line Chart:
Common Share Price Performance -- Weekly Closing Price
6/01/07 16.65
16.55
16.1401
16.33
15.8
15.79
15.79
15.7
15.55
15.8
15.5
15.35
15.695
15.3
15.9
16
16
15.39
14.58
14.5
14.29
14.5399
14.45
14.34
13.93
14.05
14.2
14.18
14.24
14.082
13.72
14.46
14.7
15
14.78
14.84
15.12
14.1301
14.41
13.76
14.4656
14.7
13.91
14.19
14.21
14.26
14.37
14.44
14.54
15.15
14.62
14.92
15
5/31/08 15
FUND SNAPSHOT
------------------------------------
Common Share Price $15.00
------------------------------------
Common Share
Net Asset Value $14.76
------------------------------------
Premium/(Discount) to NAV 1.63%
------------------------------------
Market Yield 4.40%
------------------------------------
Taxable-Equivalent Yield(2) 6.43%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $34,188
------------------------------------
Average Effective Maturity
on Securities (Years) 16.19
------------------------------------
Leverage-Adjusted Duration 8.35
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 3/25/02)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year -3.63% 4.54%
------------------------------------
5-Year 4.62% 3.87%
------------------------------------
Since
Inception 5.64% 6.28%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
Education and Civic
Organizations 22.2%
------------------------------------
U.S. Guaranteed 18.3%
------------------------------------
Tax Obligation/General 14.7%
------------------------------------
Tax Obligation/Limited 10.8%
------------------------------------
Health Care 8.7%
------------------------------------
Water and Sewer 6.4%
------------------------------------
Transportation 4.1%
------------------------------------
Housing/Single Family 4.1%
------------------------------------
Other 10.7%
------------------------------------
(1) The percentages shown in the foregoing chart may reflect the ratings on
certain bonds insured by ACA, AMBAC, FGIC, MBIA, RAAI and XLCA as of May
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 combined federal and state income tax
rate of 31.6%. 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
$0.0738 per share.
16
NGO
Performance
OVERVIEW
Nuveen Connecticut Dividend Advantage Municipal Fund 3
as of May 31, 2008
Pie Chart:
Credit Quality (as a % of total investments)(1)
AAA/U.S. Guaranteed 68%
AA 18%
BBB 14%
Bar Chart:
2007-2008 Monthly Tax-Free Dividends Per Common Share
Jun 0.052
Jul 0.052
Aug 0.052
Sep 0.052
Oct 0.0505
Nov 0.0505
Dec 0.0505
Jan 0.0505
Feb 0.0505
Mar 0.0485
Apr 0.0485
May 0.0485
Line Chart:
Common Share Price Performance -- Weekly Closing Price
6/01/07 14.8
14.6014
14.99
14.87
14.6
14.9
14.4
14.4
14.38
14.29
13.91
13.83
14
14
14.13
14.2501
14.1
13.96
13.65
13.35
13.42
13.5001
13.51
13.15
12.9601
12.75
13.41
13.52
13.35
12.63
13.15
13.77
13.95
13.82
13.75
13.52
13.728
12.9
13.11
12.75
13.6999
13.2301
12.7
12.9
13.2199
13.07
13.178
13.3
13.13
13.52
13.5
13.48
13.63
5/31/08 13.63
FUND SNAPSHOT
------------------------------------
Common Share Price $13.63
------------------------------------
Common Share
Net Asset Value $14.08
------------------------------------
Premium/(Discount) to NAV -3.20%
------------------------------------
Market Yield 4.27%
------------------------------------
Taxable-Equivalent Yield(2) 6.24%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $61,476
------------------------------------
Average Effective Maturity
on Securities (Years) 16.67
------------------------------------
Leverage-Adjusted Duration 8.91
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 9/26/02)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year -3.07% 2.79%
------------------------------------
5-Year 3.01% 3.61%
------------------------------------
Since
Inception 3.30% 4.66%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
Education and Civic
Organizations 17.5%
------------------------------------
Tax Obligation/General 17.1%
------------------------------------
Tax Obligation/Limited 14.3%
------------------------------------
U.S. Guaranteed 14.2%
------------------------------------
Water and Sewer 9.2%
------------------------------------
Long-Term Care 8.3%
------------------------------------
Health Care 6.3%
------------------------------------
Other 13.1%
------------------------------------
(1) The percentages shown in the foregoing chart may reflect the ratings on
certain bonds insured by ACA, AMBAC, FGIC, MBIA, RAAI and XLCA as of May
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 combined federal and state income tax
rate of 31.6%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
17
NMT
Performance
OVERVIEW
Nuveen Massachusetts Premium Income Municipal Fund
as of May 31, 2008
Pie Chart:
Credit Quality (as a % of total investments)(1),(2)
AAA/U.S. Guaranteed 63%
AA 15%
A 8%
BBB 9%
BB or Lower 3%
N/R 2%
Bar Chart:
2007-2008 Monthly Tax-Free Dividends Per Common Share(4)
Jun 0.0515
Jul 0.0515
Aug 0.0515
Sep 0.0515
Oct 0.0515
Nov 0.0515
Dec 0.0515
Jan 0.0515
Feb 0.0515
Mar 0.0515
Apr 0.0515
May 0.0515
Line Chart:
Common Share Price Performance -- Weekly Closing Price
6/01/07 14.3
14.37
14.19
14.1
14.23
13.9
13.8
13.86
14.19
13.64
13.16
13.53
13.25
13.4
13.67
13.84
13.8042
13.65
13.66
13.5
13.3601
13.33
13.42
13.14
13.04
13.03
13.11
13.25
13.04
12.61
12.67
13.47
13.72
13.79
13.78
13.97
14.09
13.04
12.98
13
13.08
13.12
13.3
13.45
13.28
13.24
13.08
13.25
13.14
13.35
13.12
13.33
13.61
5/31/08 13.61
FUND SNAPSHOT
------------------------------------
Common Share Price $13.61
------------------------------------
Common Share
Net Asset Value $14.22
------------------------------------
Premium/(Discount) to NAV -4.29%
------------------------------------
Market Yield 4.54%
------------------------------------
Taxable-Equivalent Yield(3) 6.66%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $67,720
------------------------------------
Average Effective Maturity
on Securities (Years) 15.92
------------------------------------
Leverage-Adjusted Duration 8.86
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 3/18/93)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year -0.48% 2.08%
------------------------------------
5-Year 1.01% 3.95%
------------------------------------
10-Year 3.46% 5.25%
------------------------------------
INDUSTRIES
(as a % of total investments)(2)
------------------------------------
Education and Civic
Organizations 18.4%
------------------------------------
Health Care 16.0%
------------------------------------
U.S. Guaranteed 14.8%
------------------------------------
Tax Obligation/General 11.2%
------------------------------------
Tax Obligation/Limited 8.6%
------------------------------------
Water and Sewer 7.0%
------------------------------------
Transportation 6.6%
------------------------------------
Other 17.4%
------------------------------------
(1) The percentages shown in the foregoing chart may reflect the ratings on
certain bonds insured by ACA, AMBAC, FGIC, MBIA, RAAI and XLCA as of May
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 combined federal and state income tax
rate of 31.8%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
(4) The Fund paid shareholders a capital gains distribution in December 2007 of
$0.0166 per share.
18
NMB
Performance
OVERVIEW
Nuveen Massachusetts Dividend Advantage Municipal Fund
as of May 31, 2008
Pie Chart:
Credit Quality (as a % of total investments)(1,2)
AAA/U.S. Guaranteed 57%
AA 20%
A 7%
BBB 10%
BB or Lower 4%
N/R 2%
Bar Chart:
2007-2008 Monthly Tax-Free Dividends Per Common Share(4)
Jun 0.0565
Jul 0.0565
Aug 0.0565
Sep 0.0565
Oct 0.0565
Nov 0.0565
Dec 0.0565
Jan 0.0565
Feb 0.0565
Mar 0.0565
Apr 0.0565
May 0.0565
Line Chart:
Common Share Price Performance -- Weekly Closing Price
6/01/07 16.15
16.44
15.42
15.35
15.07
15.01
14.8
14.88
15.35
14.7
14.44
14.21
14.4
14.26
14.57
14.53
14.3
14.35
14.08
14.1
14.03
14
14.13
13.84
13.93
13.67
14.0999
13.61
13.5
13.32
13.48
13.9
14.24
14.2799
14.09
14.3801
14.52
13.5
13.98
13.73
13.62
14.29
14.28
14.109
14.5
14.96
14.49
14.2899
14.16
14.45
14.35
14.14
14.61
5/31/08 14.61
FUND SNAPSHOT
------------------------------------
Common Share Price $14.61
------------------------------------
Common Share
Net Asset Value $14.36
------------------------------------
Premium/(Discount) to NAV 1.74%
------------------------------------
Market Yield 4.64%
------------------------------------
Taxable-Equivalent Yield(3) 6.80%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $28,135
------------------------------------
Average Effective Maturity
on Securities (Years) 17.93
------------------------------------
Leverage-Adjusted Duration 8.77
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 1/30/01)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year -5.73% 1.55%
------------------------------------
5-Year 3.42% 3.87%
------------------------------------
Since
Inception 5.40% 6.11%
------------------------------------
INDUSTRIES
(as a % of total investments)(2)
------------------------------------
Education and Civic
Organizations 22.8%
------------------------------------
Health Care 17.2%
------------------------------------
U.S. Guaranteed 10.9%
------------------------------------
Tax Obligation/General 10.6%
------------------------------------
Water and Sewer 8.8%
------------------------------------
Housing/Multifamily 7.5%
------------------------------------
Tax Obligation/Limited 7.2%
------------------------------------
Long-Term Care 5.3%
------------------------------------
Other 9.7%
------------------------------------
(1) The percentages shown in the foregoing chart may reflect the ratings on
certain bonds insured by ACA, AMBAC, FGIC, MBIA, RAAI and XLCA as of May
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 combined federal and state income tax
rate of 31.8%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
(4) The Fund paid shareholders a capital gains distribution in December 2007 of
$0.0248 per share.
19
NGX
Performance
OVERVIEW
Nuveen Insured Massachusetts Tax-Free Advantage Municipal Fund
as of May 31, 2008
Pie Chart:
Credit Quality (as a % of total investments)(1)
Insured 62%
U.S. Guaranteed 24%
GNMA Guaranteed 3%
AAA (Uninsured) 2%
AA (Uninsured) 6%
A (Uninsured) 2%
BBB (Uninsured) 1%
Bar Chart:
2007-2008 Monthly Tax-Free Dividends Per Common Share
Jun 0.0525
Jul 0.0525
Aug 0.0545
Sep 0.0545
Oct 0.0545
Nov 0.0545
Dec 0.0545
Jan 0.0545
Feb 0.0545
Mar 0.0545
Apr 0.0545
May 0.0545
Line Chart:
Common Share Price Performance -- Weekly Closing Price
6/01/07 14.54
14.37
14.1
14.03
14.25
14.05
14
14.25
14.13
13.98
14.0936
13.98
14.34
13.83
14.59
14.4
14.1
13.9101
14
14.2
13.95
13.9
13.92
13.85
13.54
13.51
13.98
13.74
13.26
13.31
13.74
14.33
14.14
14.76
14.2
14.3
14.28
14.2
14.2
13.69
14.15
14.1799
13.9088
14.04
13.9154
14.25
14.06
14.1
14
14.09
14.2
14.06
14.14
5/31/08 14.14
FUND SNAPSHOT
------------------------------------
Common Share Price $14.14
------------------------------------
Common Share
Net Asset Value $14.28
------------------------------------
Premium/(Discount) to NAV -0.98%
------------------------------------
Market Yield 4.63%
------------------------------------
Taxable-Equivalent Yield(2) 6.79%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $38,873
------------------------------------
Average Effective Maturity
on Securities (Years) 18.01
------------------------------------
Leverage-Adjusted Duration 9.33
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 11/21/02)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 2.49% 3.04%
------------------------------------
5-Year 2.80% 3.85%
------------------------------------
Since
Inception 3.92% 5.11%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
U.S. Guaranteed 23.8%
------------------------------------
Tax Obligation/Limited 15.6%
------------------------------------
Education and Civic
Organizations 14.5%
------------------------------------
Tax Obligation/General 12.7%
------------------------------------
Health Care 9.0%
------------------------------------
Water and Sewer 10.6%
------------------------------------
Housing/Multifamily 6.2%
------------------------------------
Other 7.6%
------------------------------------
INSURERS
(as a % of total Insured investments
------------------------------------
MBIA 38.1%
------------------------------------
AMBAC 18.8%
------------------------------------
FGIC 17.0%
------------------------------------
FSA 13.7%
------------------------------------
AGC 7.1%
------------------------------------
XLCA 5.3%
------------------------------------
(1) The percentages shown in the foregoing chart reflect the ratings on certain
bonds insured by AMBAC, FGIC, MBIA and XLCA as of May 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 combined federal and state income tax
rate of 31.8%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
20
NOM
Performance
OVERVIEW
Nuveen Missouri Premium Income Municipal Fund
as of May 31, 2008
Pie Chart:
Credit Quality (as a % of total investments)(1)
AAA/U.S. Guaranteed 51%
AA 19%
A 7%
BBB 7%
N/R 16%
Bar Chart:
2007-2008 Monthly Tax-Free Dividends Per Common Share(3)
Jun 0.0545
Jul 0.0545
Aug 0.0545
Sep 0.0545
Oct 0.0545
Nov 0.0545
Dec 0.0545
Jan 0.0545
Feb 0.0545
Mar 0.0545
Apr 0.0545
May 0.0545
Line Chart:
Common Share Price Performance -- Weekly Closing Price
6/01/07 16.56
16.4
15.5
15.43
15.35
15.09
15.06
14.55
14.3
14.42
14.17
13.848
14.04
14.1
14.34
14.39
14.45
14.03
14.04
14.1
14.2
14.15
14.47
14.15
14.44
14.35
14.2
14.04
13.9
13.62
14.1399
14.08
15.02
14.82
14.6
15.25
15.44
15
14.6
13.28
13.65
13.45
13.5
13.85
13.8999
13.8
14
13.94
13.96
13.82
13.85
14.51
14.76
5/31/08 14.76
FUND SNAPSHOT
------------------------------------
Common Share Price $14.76
------------------------------------
Common Share
Net Asset Value $13.52
------------------------------------
Premium/(Discount) to NAV 9.17%
------------------------------------
Market Yield 4.43%
------------------------------------
Taxable-Equivalent Yield(2) 6.54%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $31,170
------------------------------------
Average Effective Maturity
on Securities (Years) 14.61
------------------------------------
Leverage-Adjusted Duration 9.53
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 5/20/93)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year -5.74% 0.26%
------------------------------------
5-Year 2.56% 3.21%
------------------------------------
10-Year 5.85% 5.15%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
Tax Obligation/General 19.7%
------------------------------------
Tax Obligation/Limited 18.0%
------------------------------------
U.S. Guaranteed 15.2%
------------------------------------
Health Care 13.2%
------------------------------------
Water and Sewer 9.9%
------------------------------------
Housing/Single Family 5.5%
------------------------------------
Long-Term Care 5.4%
------------------------------------
Other 13.1%
------------------------------------
(1) The percentages shown in the foregoing chart may reflect the ratings on
certain bonds insured by ACA, AMBAC, FGIC, MBIA, RAAI and XLCA as of May
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 combined federal and state income tax
rate of 32.3%. 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
$0.1265 per share.
21
Report of
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
THE BOARD OF TRUSTEES AND SHAREHOLDERS
NUVEEN CONNECTICUT PREMIUM INCOME MUNICIPAL FUND
NUVEEN CONNECTICUT DIVIDEND ADVANTAGE MUNICIPAL FUND
NUVEEN CONNECTICUT DIVIDEND ADVANTAGE MUNICIPAL FUND 2
NUVEEN CONNECTICUT DIVIDEND ADVANTAGE MUNICIPAL FUND 3
NUVEEN MASSACHUSETTS PREMIUM INCOME MUNICIPAL FUND
NUVEEN MASSACHUSETTS DIVIDEND ADVANTAGE MUNICIPAL FUND
NUVEEN INSURED MASSACHUSETTS TAX-FREE ADVANTAGE MUNICIPAL FUND
NUVEEN MISSOURI PREMIUM INCOME MUNICIPAL FUND
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Nuveen Connecticut Premium Income Municipal
Fund, Nuveen Connecticut Dividend Advantage Municipal Fund, Nuveen Connecticut
Dividend Advantage Municipal Fund 2, Nuveen Connecticut Dividend Advantage
Municipal Fund 3, Nuveen Massachusetts Premium Income Municipal Fund, Nuveen
Massachusetts Dividend Advantage Municipal Fund, Nuveen Insured Massachusetts
Tax-Free Advantage Municipal Fund and Nuveen Missouri Premium Income Municipal
Fund (the Funds) as of May 31, 2008, and the related statements of operations
for the year then ended, the statements of changes in net assets for each of the
two years in the period then ended, and the financial highlights for each of the
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 May 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 Connecticut Premium Income Municipal Fund, Nuveen Connecticut Dividend
Advantage Municipal Fund, Nuveen Connecticut Dividend Advantage Municipal Fund
2, Nuveen Connecticut Dividend Advantage Municipal Fund 3, Nuveen Massachusetts
Premium Income Municipal Fund, Nuveen Massachusetts Dividend Advantage Municipal
Fund, Nuveen Insured Massachusetts Tax-Free Advantage Municipal Fund and Nuveen
Missouri Premium Income Municipal Fund at May 31, 2008, the results of their
operations for the year then ended, changes in their net assets for each of the
two years in the period then ended, and their 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
July 21, 2008
22
NTC
Nuveen Connecticut Premium Income Municipal Fund
Portfolio of INVESTMENTS
May 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 1.8% (1.1% OF TOTAL INVESTMENTS)
$ 1,440 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB $ 1,372,522
Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 38.1% (24.6% OF TOTAL INVESTMENTS)
1,595 Connecticut Health and Education Facilities Authority, Revenue 7/17 at 100.00 AAA 1,652,675
Bonds, Quinnipiac University, Series 2007-I, 5.000%, 7/01/25 -
MBIA Insured
1,050 Connecticut Health and Education Facilities Authority, University of 7/16 at 100.00 AA 1,050,630
Hartford Revenue Bonds, Series 2006G, 5.250%, 7/01/36 -
RAAI Insured
925 Connecticut Health and Educational Facilities Authority, Revenue 7/13 at 100.00 AAA 945,785
Bonds, Brunswick School, Series 2003B, 5.000%, 7/01/33 -
MBIA Insured
200 Connecticut Health and Educational Facilities Authority, Revenue 7/16 at 100.00 AA 192,974
Bonds, Canterbury School, Series 2006B, 5.000%, 7/01/36 -
RAAI Insured
305 Connecticut Health and Educational Facilities Authority, Revenue 7/17 at 100.00 AA 306,092
Bonds, Chase Collegiate School, Series 2007A, 5.000%, 7/01/27 -
RAAI Insured
725 Connecticut Health and Educational Facilities Authority, Revenue 7/08 at 102.00 AAA 740,066
Bonds, Fairfield University, Series 1998H, 5.000%, 7/01/23 -
MBIA Insured
750 Connecticut Health and Educational Facilities Authority, Revenue 7/09 at 101.00 Aaa 770,303
Bonds, Horace Bushnell Memorial Hall, Series 1999A,
5.625%, 7/01/29 - MBIA Insured
640 Connecticut Health and Educational Facilities Authority, Revenue 7/08 at 100.00 AAA 641,402
Bonds, Loomis Chaffee School, Series 1996C, 5.500%, 7/01/16 -
MBIA Insured
800 Connecticut Health and Educational Facilities Authority, Revenue No Opt. Call Aaa 883,528
Bonds, Loomis Chaffee School, Series 2005F, 5.250%, 7/01/19 -
AMBAC Insured
270 Connecticut Health and Educational Facilities Authority, Revenue 7/17 at 100.00 AAA 273,532
Bonds, Renbrook School, Series 2007A, 5.000%, 7/01/37 -
AMBAC Insured
1,375 Connecticut Health and Educational Facilities Authority, Revenue 7/14 at 100.00 AAA 1,446,074
Bonds, Trinity College, Series 2004H, 5.000%, 7/01/21 -
MBIA Insured
2,000 Connecticut Health and Educational Facilities Authority, Revenue 7/12 at 101.00 AA 2,010,240
Bonds, University of Hartford, Series 2002E, 5.250%, 7/01/32 -
RAAI Insured
1,500 Connecticut Health and Educational Facilities Authority, Revenue 7/09 at 100.00 AAA 1,519,140
Bonds, Yale University, Series 2002W, 5.125%, 7/01/27
1,500 Connecticut Health and Educational Facilities Authority, Revenue 7/13 at 100.00 AAA 1,530,960
Bonds, Yale University, Series 2003X-1, 5.000%, 7/01/42
3,550 Connecticut Health and Educational Facilities Authority, Revenue 7/16 at 100.00 AAA 3,647,268
Bonds, Yale University, Series 2007Z-1, 5.000%, 7/01/42
6,150 Connecticut Health and Educational Facilities Authority, Revenue 7/17 at 100.00 AAA 6,356,148
Bonds, Yale University, Series 2007Z-3, 5.050%, 7/01/42 (UB)
295 Connecticut Higher Education Supplemental Loan Authority, Revenue 11/09 at 102.00 AAA 298,829
Bonds, Family Education Loan Program, Series 1999A,
6.000%, 11/15/18 - AMBAC Insured (Alternative Minimum Tax)
660 Connecticut Higher Education Supplemental Loan Authority, Revenue 11/11 at 100.00 Aaa 669,557
Bonds, Family Education Loan Program, Series 2001A,
5.250%, 11/15/18 - MBIA Insured (Alternative Minimum Tax)
1,000 University of Connecticut, General Obligation Bonds, Series 2004A, 1/14 at 100.00 AAA 1,066,480
5.000%, 1/15/18 - MBIA Insured
23
NTC
Nuveen Connecticut Premium Income Municipal Fund (continued)
Portfolio of INVESTMENTS May 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS (continued)
$ 1,220 University of Connecticut, General Obligation Bonds, Series 2005A, 2/15 at 100.00 AAA $ 1,328,055
5.000%, 2/15/17 - FSA Insured
685 University of Connecticut, General Obligation Bonds, Series 2006A, 2/16 at 100.00 AA 722,106
5.000%, 2/15/23 - FGIC Insured
1,000 University of Connecticut, Student Fee Revenue Refunding Bonds, 11/12 at 101.00 AA- 1,064,810
Series 2002A, 5.250%, 11/15/19 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
28,195 Total Education and Civic Organizations 29,116,654
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 16.7% (10.8% OF TOTAL INVESTMENTS)
Connecticut Health and Educational Facilities Authority, Revenue
Bonds, Bristol Hospital, Series 2002B:
500 5.500%, 7/01/21 - RAAI Insured 7/12 at 101.00 AA 516,945
700 5.500%, 7/01/32 - RAAI Insured 7/12 at 101.00 AA 708,981
645 Connecticut Health and Educational Facilities Authority, Revenue 7/10 at 101.00 AA 662,905
Bonds, Eastern Connecticut Health Network, Series 2000A,
6.000%, 7/01/25 - RAAI Insured
Connecticut Health and Educational Facilities Authority, Revenue
Bonds, Griffin Hospital, Series 2005B:
800 5.000%, 7/01/20 - RAAI Insured 7/15 at 100.00 Aa3 812,840
500 5.000%, 7/01/23 - RAAI Insured 7/15 at 100.00 Aa3 502,940
385 Connecticut Health and Educational Facilities Authority, Revenue 7/17 at 100.00 AA 386,636
Bonds, Hospital For Special Care, Series 2007C,
5.250%, 7/01/32 - RAAI Insured
2,620 Connecticut Health and Educational Facilities Authority, Revenue 7/16 at 100.00 Aaa 2,668,731
Bonds, Middlesex Hospital, Series 2006, 5.000%, 7/01/32 -
FSA Insured
2,000 Connecticut Health and Educational Facilities Authority, Revenue 7/09 at 101.00 Aaa 2,040,520
Bonds, Stamford Hospital, Series 1999G, 5.000%, 7/01/24 -
MBIA Insured
1,395 Connecticut Health and Educational Facilities Authority, Revenue 7/16 at 100.00 AAA 1,424,714
Bonds, Yale-New Haven Hospital, Series 2006J-1,
5.000%, 7/01/31 - AMBAC Insured
3,000 Connecticut Health and Educational Facilities Authority, Revenue 7/08 at 100.50 Aaa 3,032,519
Refunding Bonds, Middlesex Health Services, Series 1997H,
5.125%, 7/01/27 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
12,545 Total Health Care 12,757,731
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 2.6% (1.7% OF TOTAL INVESTMENTS)
1,000 Connecticut Housing Finance Authority, Housing Mortgage Finance 12/09 at 100.00 AAA 1,019,240
Program Bonds, Series 1999D-2, 6.200%, 11/15/41
(Alternative Minimum Tax)
1,000 Connecticut Housing Finance Authority, Multifamily Housing 11/15 at 100.00 AAA 944,370
Mortgage Finance Program Bonds, Series 2006G-2,
4.800%, 11/15/27 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
2,000 Total Housing/Multifamily 1,963,610
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 7.4% (4.8% OF TOTAL INVESTMENTS)
Connecticut Housing Finance Authority, Housing Mortgage
Finance Program Bonds, Series 2001C:
1,000 5.300%, 11/15/33 (Alternative Minimum Tax) 11/10 at 100.00 AAA 983,510
500 5.450%, 11/15/43 (Alternative Minimum Tax) 11/10 at 100.00 AAA 488,860
1,675 Connecticut Housing Finance Authority, Housing Mortgage 5/13 at 100.00 AAA 1,672,538
Finance Program Bonds, Series 2004-A5, 5.050%, 11/15/34
Connecticut Housing Finance Authority, Housing Mortgage
Finance Program Bonds, Series 2006-A1:
205 4.700%, 11/15/26 (Alternative Minimum Tax) 11/15 at 100.00 AAA 191,540
220 4.800%, 11/15/31 (Alternative Minimum Tax) 11/15 at 100.00 AAA 203,933
2,100 Connecticut Housing Finance Authority, Housing Mortgage 5/16 at 100.00 AAA 2,113,293
Finance Program Bonds, Series 2006D, 4.650%, 11/15/27
------------------------------------------------------------------------------------------------------------------------------------
5,700 Total Housing/Single Family 5,653,674
------------------------------------------------------------------------------------------------------------------------------------
24
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 2.2% (1.3% OF TOTAL INVESTMENTS)
$ 1,750 Connecticut Resource Recovery Authority, Revenue Bonds, 12/11 at 102.00 Baa2 $ 1,707,580
American Ref-Fuel Company of Southeastern Connecticut LP,
Series 1998A-I, 5.500%, 11/15/15 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 6.0% (3.9% OF TOTAL INVESTMENTS)
615 Connecticut Development Authority, First Mortgage Gross 10/08 at 101.00 BBB- 621,273
Revenue Refunding Healthcare Bonds, Church Homes Inc. -
Congregational Avery Heights, Series 1997, 5.700%, 4/01/12
615 Connecticut Development Authority, First Mortgage Gross Revenue 9/09 at 102.00 AA 636,291
Refunding Healthcare Bonds, Connecticut Baptist Homes Inc.,
Series 1999, 5.500%, 9/01/15 - RAAI Insured
Connecticut Development Authority, Revenue Refunding Bonds,
Duncaster Inc., Series 1999A:
1,000 5.250%, 8/01/19 - RAAI Insured 2/10 at 102.00 AA 1,018,310
1,000 5.375%, 8/01/24 - RAAI Insured 2/10 at 102.00 AA 1,013,420
1,300 Connecticut Health and Educational Facilities Authority, 8/08 at 102.00 AAA 1,308,372
FHA-Insured Mortgage Revenue Bonds, Hebrew Home and
Hospital, Series 1999B, 5.200%, 8/01/38
------------------------------------------------------------------------------------------------------------------------------------
4,530 Total Long-Term Care 4,597,666
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 27.1% (17.5% OF TOTAL INVESTMENTS)
750 Bridgeport, Connecticut, General Obligation Refunding Bonds, 8/12 at 100.00 Baa1 775,695
Series 2002A, 5.375%, 8/15/19 - FGIC Insured
1,140 Capitol Region Education Council, Connecticut, Revenue Bonds, 10/08 at 100.00 BBB 1,142,599
Series 1995, 6.700%, 10/15/10
1,110 Connecticut State, General Obligation Bonds, Series 2004C, 4/14 at 100.00 AA 1,157,231
5.000%, 4/01/23 - FGIC Insured
2,000 Connecticut State, General Obligation Bonds, Series 2006A, 12/16 at 100.00 AA 2,081,140
4.750%, 12/15/24
1,300 Connecticut State, General Obligation Bonds, Series 2006C, 6/16 at 100.00 AAA 1,376,414
5.000%, 6/01/23 - FSA Insured
3,015 Connecticut State, General Obligation Bonds, Series 2007B, No Opt. Call AA 3,342,971
5.000%, 5/01/16
Hartford, Connecticut, General Obligation Bonds, Series 2005A:
775 5.000%, 8/01/20 - FSA Insured 8/15 at 100.00 AAA 822,453
525 4.375%, 8/01/24 - FSA Insured 8/15 at 100.00 AAA 522,265
500 New Haven, Connecticut, General Obligation Bonds, Series 2006, 11/16 at 100.00 AAA 540,925
5.000%, 11/01/17 - AMBAC Insured
500 North Haven, Connecticut, General Obligation Bonds, Series 2006, No Opt. Call Aa2 546,490
5.000%, 7/15/24
1,860 Puerto Rico, General Obligation and Public Improvement Bonds, No Opt. Call AAA 1,991,502
Series 2001A, 5.500%, 7/01/20 - MBIA Insured
Regional School District 16, Beacon Falls and Prospect,
Connecticut, General Obligation Bonds, Series 2000:
350 5.500%, 3/15/18 - FSA Insured 3/10 at 101.00 Aaa 367,668
350 5.625%, 3/15/19 - FSA Insured 3/10 at 101.00 Aaa 368,739
350 5.700%, 3/15/20 - FSA Insured 3/10 at 101.00 Aaa 369,383
1,420 Regional School District 16, Connecticut, General Obligation Bonds, 3/13 at 101.00 Aaa 1,531,172
Series 2003, 5.000%, 3/15/16 - AMBAC Insured
Suffield, Connecticut, General Obligation Bonds, Series 2005:
465 5.000%, 6/15/17 No Opt. Call AA 516,448
460 5.000%, 6/15/19 No Opt. Call AA 508,125
1,000 5.000%, 6/15/21 No Opt. Call AA 1,098,160
1,500 West Hartford, Connecticut, General Obligation Bonds, 10/15 at 100.00 AAA 1,627,620
Series 2005B, 5.000%, 10/01/18
------------------------------------------------------------------------------------------------------------------------------------
19,370 Total Tax Obligation/General 20,687,000
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 21.5% (13.9% OF TOTAL INVESTMENTS)
Connecticut Health and Educational Facilities Authority, Child
Care Facilities Program Revenue Bonds, Series 2006F:
1,300 5.000%, 7/01/31 - AGC Insured 7/16 at 100.00 AAA 1,327,690
1,000 5.000%, 7/01/36 - AGC Insured 7/16 at 100.00 AAA 1,016,580
25
NTC
Nuveen Connecticut Premium Income Municipal Fund (continued)
Portfolio of INVESTMENTS May 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 1,945 Connecticut Health and Educational Facilities Authority, 7/09 at 102.00 AAA $ 2,015,876
Revenue Bonds, Child Care Facilities Program, Series 1999C,
5.625%, 7/01/29 - AMBAC Insured
Connecticut, Special Tax Obligation Transportation Infrastructure
Purpose Bonds, Series 2002B:
2,000 5.000%, 12/01/20 - AMBAC Insured 12/12 at 100.00 AAA 2,065,940
1,000 5.000%, 12/01/21 - AMBAC Insured 12/12 at 100.00 AAA 1,029,990
500 Connecticut, Special Tax Obligation Transportation Infrastructure 1/14 at 100.00 AA 518,705
Purpose Bonds, Series 2003B, 5.000%, 1/01/23 - FGIC Insured
1,750 Connecticut, Special Tax Obligation Transportation Infrastructure 8/17 at 100.00 AAA 1,832,460
Purpose Revenue Bonds, Series 2007A, 5.000%, 8/01/27 -
AMBAC Insured
Puerto Rico Infrastructure Financing Authority, Special Tax Revenue
Bonds, Series 2005A:
960 0.000%, 7/01/32 - FGIC Insured No Opt. Call BBB+ 243,120
2,615 0.000%, 7/01/33 - FGIC Insured No Opt. Call BBB+ 626,763
2,000 Puerto Rico Municipal Finance Agency, Series 2002A, 8/12 at 100.00 AAA 2,102,860
5.250%, 8/01/21 - FSA Insured
2,400 Puerto Rico Municipal Finance Agency, Series 2005C, 8/15 at 100.00 AAA 2,562,839
5.000%, 8/01/16 - FSA Insured
1,000 Virgin Islands Public Finance Authority, Gross Receipts Taxes 10/14 at 100.00 AAA 1,088,550
Loan Note, Series 2003, 5.250%, 10/01/19 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
18,470 Total Tax Obligation/Limited 16,431,373
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 1.0% (0.6% OF TOTAL INVESTMENTS)
750 Connecticut, General Airport Revenue Bonds, Bradley 4/11 at 101.00 A 736,395
International Airport, Series 2001A, 5.125%, 10/01/26 -
FGIC Insured (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 12.5% (8.1% OF TOTAL INVESTMENTS) (4)
50 Connecticut Health and Educational Facilities Authority, Revenue 7/10 at 101.00 AA (4) 54,143
Bonds, Eastern Connecticut Health Network, Series 2000A,
6.000%, 7/01/25 (Pre-refunded 7/01/10) - RAAI Insured
650 Connecticut Health and Educational Facilities Authority, Revenue 7/11 at 101.00 A2 (4) 710,626
Bonds, Loomis Chaffee School, Series 2001D, 5.500%, 7/01/23
(Pre-refunded 7/01/11)
40 Connecticut, General Obligation Bonds, Series 1993E, No Opt. Call AA (4) 44,434
6.000%, 3/15/12 (ETM)
1,500 Connecticut, General Obligation Bonds, Series 2002B, 6/12 at 100.00 AA (4) 1,647,045
5.500%, 6/15/21 (Pre-refunded 6/15/12)
600 Guam Economic Development Authority, Tobacco Settlement 5/11 at 100.00 Baa3 (4) 646,740
Asset-Backed Bonds, Series 2001B, 5.500%, 5/15/41
(Pre-refunded 5/15/11)
1,000 Hartford, Connecticut, Parking System Revenue Bonds, 7/10 at 100.00 Baa2 (4) 1,080,780
Series 2000A, 6.400%, 7/01/20 (Pre-refunded 7/01/10)
400 Northern Mariana Islands, General Obligation Bonds, 6/10 at 100.00 AAA 428,952
Series 2000A, 6.000%, 6/01/20 (Pre-refunded 6/01/10) -
ACA Insured
1,000 Puerto Rico Infrastructure Financing Authority, Special Obligation 10/10 at 101.00 AAA 1,039,690
Bonds, Series 2000A, 5.500%, 10/01/40
485 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 506,854
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20
(Pre-refunded 7/01/10)
1,100 University of Connecticut, General Obligation Bonds, 2/13 at 100.00 AAA 1,200,012
Series 2003A, 5.125%, 2/15/21 (Pre-refunded 2/15/13) -
MBIA Insured
1,000 Virgin Islands Public Finance Authority, Gross Receipts Taxes 10/10 at 101.00 BBB+ (4) 1,102,870
Loan Note, Series 1999A, 6.500%, 10/01/24
(Pre-refunded 10/01/10)
1,000 Waterbury, Connecticut, General Obligation Bonds, Series 2002A, 4/12 at 100.00 AAA 1,089,390
5.375%, 4/01/17 (Pre-refunded 4/01/12) - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
8,825 Total U.S. Guaranteed 9,551,536
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 6.4% (4.2% OF TOTAL INVESTMENTS)
1,150 Bristol Resource Recovery Facility Operating Committee, No Opt. Call AAA 1,224,129
Connecticut, Solid Waste Revenue Bonds, Covanta Bristol Inc.,
Series 2005, 5.000%, 7/01/12 - AMBAC Insured
26
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES (continued)
$ 1,000 Connecticut Development Authority, Pollution Control Revenue 10/08 at 102.00 Baa1 $ 1,000,820
Refunding Bonds, Connecticut Light and Power Company,
Series 1993A, 5.850%, 9/01/28
1,070 Connecticut Development Authority, Solid Waste Disposal 11/12 at 100.00 Baa1 1,072,622
Facilities Revenue Bonds, PSEG Power LLC Project,
Series 2007A, 5.750%, 11/01/37 (Alternative Minimum Tax)
Eastern Connecticut Resource Recovery Authority, Solid Waste
Revenue Bonds, Wheelabrator Lisbon Project, Series 1993A:
355 5.500%, 1/01/14 (Alternative Minimum Tax) 7/08 at 100.00 BBB 355,071
1,290 5.500%, 1/01/20 (Alternative Minimum Tax) 7/08 at 100.00 BBB 1,260,266
------------------------------------------------------------------------------------------------------------------------------------
4,865 Total Utilities 4,912,908
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 11.5% (7.5% OF TOTAL INVESTMENTS)
500 Connecticut Development Authority, Water Facility Revenue 9/17 at 100.00 A- 440,750
Bonds, Aquarion Water Company Project, Series 200.7,
5.100%, 9/01/37 - XLCA Insured (Alternative Minimum Tax)
1,185 Connecticut, State Revolving Fund General Revenue Bonds, 10/13 at 100.00 AAA 1,280,179
Series 2003A, 5.000%, 10/01/16
Greater New Haven Water Pollution Control Authority,
Connecticut, Regional Wastewater System Revenue Bonds, Series 2005A:
1,520 5.000%, 11/15/30 - MBIA Insured 11/15 at 100.00 AAA 1,549,336
2,260 5.000%, 8/15/35 - MBIA Insured 11/15 at 100.00 AAA 2,297,923
South Central Connecticut Regional Water Authority, Water System
Revenue Bonds, Eighteenth Series 2003A:
1,000 5.000%, 8/01/20 - MBIA Insured 8/13 at 100.00 AAA 1,036,820
1,075 5.000%, 8/01/33 - MBIA Insured 8/13 at 100.00 AAA 1,088,599
1,100 Stamford, Connecticut, Water Pollution Control System and 11/13 at 100.00 AA+ 1,120,999
Facility Revenue Bonds, Series 2003A, 5.000%, 11/15/32
------------------------------------------------------------------------------------------------------------------------------------
8,640 Total Water and Sewer 8,814,606
------------------------------------------------------------------------------------------------------------------------------------
$ 117,080 Total Investments (cost $116,927,539) - 154.8% 118,303,255
=============-----------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (6.0)% (4,613,000)
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.3% 1,051,008
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (50.1)% (5) (38,300,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $76,441,263
====================================================================================================================
(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, AMBAC, FGIC, MBIA, RAAI and
XLCA as of May 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) Preferred Shares, at Liquidation Value as a percentage of
total investments is (32.4)%.
(ETM) Escrowed to maturity.
(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.
27
NFC
Nuveen Connecticut Dividend Advantage Municipal Fund
Portfolio of INVESTMENTS
May 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 36.2% (23.3% OF TOTAL INVESTMENTS)
$ 795 Connecticut Health and Education Facilities Authority, Revenue 7/17 at 100.00 AAA $ 823,747
Bonds, Quinnipiac University, Series 2007-I, 5.000%, 7/01/25 -
MBIA Insured
500 Connecticut Health and Education Facilities Authority, 7/16 at 100.00 AA 500,300
University of Hartford Revenue Bonds, Series 2006G,
5.250%, 7/01/36 - RAAI Insured
100 Connecticut Health and Educational Facilities Authority, 7/16 at 100.00 AA 96,487
Revenue Bonds, Canterbury School, Series 2006B,
5.000%, 7/01/36 - RAAI Insured
150 Connecticut Health and Educational Facilities Authority, 7/17 at 100.00 AA 150,537
Revenue Bonds, Chase Collegiate School, Series 2007A,
5.000%, 7/01/27 - RAAI Insured
440 Connecticut Health and Educational Facilities Authority, No Opt. Call Aaa 490,684
Revenue Bonds, Loomis Chaffee School, Series 2005F,
5.250%, 7/01/18 - AMBAC Insured
130 Connecticut Health and Educational Facilities Authority, 7/17 at 100.00 AAA 131,700
Revenue Bonds, Renbrook School, Series 2007A,
5.000%, 7/01/37 - AMBAC Insured
50 Connecticut Health and Educational Facilities Authority, 7/08 at 101.00 AA 49,747
Revenue Bonds, Sacred Heart University, Series 1998E,
5.000%, 7/01/28 - RAAI Insured
350 Connecticut Health and Educational Facilities Authority, 7/14 at 100.00 AAA 373,401
Revenue Bonds, Trinity College, Series 2004H,
5.000%, 7/01/17 - MBIA Insured
1,000 Connecticut Health and Educational Facilities Authority, 7/12 at 101.00 AA 1,005,120
Revenue Bonds, University of Hartford, Series 2002E,
5.250%, 7/01/32 - RAAI Insured
1,000 Connecticut Health and Educational Facilities Authority, 7/09 at 100.00 AAA 1,012,760
Revenue Bonds, Yale University, Series 2002W,
5.125%, 7/01/27
500 Connecticut Health and Educational Facilities Authority, 7/13 at 100.00 AAA 510,320
Revenue Bonds, Yale University, Series 2003X-1,
5.000%, 7/01/42
1,800 Connecticut Health and Educational Facilities Authority, 7/16 at 100.00 AAA 1,849,320
Revenue Bonds, Yale University, Series 2007Z-1,
5.000%, 7/01/42
3,050 Connecticut Health and Educational Facilities Authority, 7/17 at 100.00 AAA 3,152,236
Revenue Bonds, Yale University, Series 2007Z-3,
5.050%, 7/01/42 (UB)
515 Connecticut Higher Education Supplemental Loan Authority, 11/11 at 100.00 Aaa 522,457
Revenue Bonds, Family Education Loan Program, Series 2001A,
5.250%, 11/15/18 - MBIA Insured (Alternative Minimum Tax)
Puerto Rico Industrial, Tourist, Educational, Medical and
Environmental Control Facilities Financing Authority, Higher
Education Revenue Bonds, Ana G. Mendez University System,
Series 1999:
125 5.375%, 2/01/19 2/09 at 101.00 BBB- 125,390
270 5.375%, 2/01/29 2/09 at 101.00 BBB- 258,296
University of Connecticut, General Obligation Bonds, Series 2001A:
1,000 4.750%, 4/01/20 4/11 at 101.00 AA 1,030,610
1,000 4.750%, 4/01/21 - MBIA Insured 4/11 at 101.00 AA 1,027,020
585 University of Connecticut, General Obligation Bonds, Series 2006A, 2/16 at 100.00 AA 616,689
5.000%, 2/15/23 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
13,360 Total Education and Civic Organizations 13,726,821
------------------------------------------------------------------------------------------------------------------------------------
28
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 11.8% (7.6% OF TOTAL INVESTMENTS)
$ 1,400 Connecticut Health and Educational Facilities Authority, 7/12 at 101.00 AA $ 1,417,962
Revenue Bonds, Bristol Hospital, Series 2002B, 5.500%, 7/01/32 -
RAAI Insured
Connecticut Health and Educational Facilities Authority, Revenue
Bonds, Griffin Hospital, Series 2005B:
500 5.000%, 7/01/20 - RAAI Insured 7/15 at 100.00 Aa3 508,025
250 5.000%, 7/01/23 - RAAI Insured 7/15 at 100.00 Aa3 251,470
185 Connecticut Health and Educational Facilities Authority, 7/17 at 100.00 AA 185,786
Revenue Bonds, Hospital For Special Care, Series 2007C,
5.250%, 7/01/32 - RAAI Insured
60 Connecticut Health and Educational Facilities Authority, 7/16 at 100.00 Aaa 61,116
Revenue Bonds, Middlesex Hospital, Series 2006,
5.000%, 7/01/32 - FSA Insured
125 Connecticut Health and Educational Facilities Authority, 7/09 at 101.00 Aaa 127,533
Revenue Bonds, Stamford Hospital, Series 1999G,
5.000%, 7/01/24 - MBIA Insured
1,870 Connecticut Health and Educational Facilities Authority, 7/16 at 100.00 AAA 1,909,831
Revenue Bonds, Yale-New Haven Hospital, Series 2006J-1,
5.000%, 7/01/31 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
4,390 Total Health Care 4,461,723
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 3.2% (2.1% OF TOTAL INVESTMENTS)
500 Connecticut Housing Finance Authority, Multifamily Housing 11/15 at 100.00 AAA 472,185
Mortgage Finance Program Bonds, Series 2006G-2,
4.800%, 11/15/27 (Alternative Minimum Tax)
750 Stamford Housing Authority, Connecticut, Multifamily Housing No Opt. Call BBB+ 750,203
Revenue Bonds, Fairfield Apartments, Series 1998,
4.750%, 12/01/28 (Mandatory put 12/01/08)
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
1,250 Total Housing/Multifamily 1,222,388
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 7.2% (4.6% OF TOTAL INVESTMENTS)
Connecticut Housing Finance Authority, Housing Mortgage
Finance Program Bonds, Series 2001C:
1,000 5.300%, 11/15/33 (Alternative Minimum Tax) 11/10 at 100.00 AAA 983,510
250 5.450%, 11/15/43 (Alternative Minimum Tax) 11/10 at 100.00 AAA 244,430
800 Connecticut Housing Finance Authority, Housing Mortgage 5/13 at 100.00 AAA 798,824
Finance Program Bonds, Series 2004-A5, 5.050%, 11/15/34
700 Connecticut Housing Finance Authority, Housing Mortgage 5/16 at 100.00 AAA 704,431
Finance Program Bonds, Series 2006D, 4.650%, 11/15/27
------------------------------------------------------------------------------------------------------------------------------------
2,750 Total Housing/Single Family 2,731,195
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 2.6% (1.6% OF TOTAL INVESTMENTS)
1,000 Connecticut Resource Recovery Authority, Revenue Bonds, 12/11 at 102.00 Baa2 975,760
American Ref-Fuel Company of Southeastern Connecticut LP,
Series 1998A-I, 5.500%, 11/15/15 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 1.6% (1.0% OF TOTAL INVESTMENTS)
300 Connecticut Development Authority, First Mortgage Gross 12/11 at 102.00 BBB+ 308,097
Revenue Healthcare Bonds, Elim Park Baptist Home Inc.,
Series 2003, 5.750%, 12/01/23
110 Connecticut Development Authority, First Mortgage Gross 10/08 at 101.00 BBB- 112,428
Revenue Refunding Healthcare Bonds, Church Homes Inc. -
Congregational Avery Heights, Series 1997, 5.800%, 4/01/21
250 Connecticut State Development Authority, Health Facilities 8/17 at 100.00 N/R 219,413
Revenue Bonds, Alzheimer's Resource Center of Connecticut,
Inc., Series 2007, 5.500%, 8/15/27
------------------------------------------------------------------------------------------------------------------------------------
660 Total Long-Term Care 639,938
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 13.0% (8.3% OF TOTAL INVESTMENTS)
560 Connecticut State, General Obligation Bonds, Series 2004C, 4/14 at 100.00 AA 583,828
5.000%, 4/01/23 - FGIC Insured
700 Connecticut State, General Obligation Bonds, Series 2006A, 12/16 at 100.00 AA 728,399
4.750%, 12/15/24
400 Connecticut State, General Obligation Bonds, Series 2006C, 6/16 at 100.00 AAA 423,512
5.000%, 6/01/23 - FSA Insured
29
NFC
Nuveen Connecticut Dividend Advantage Municipal Fund (continued)
Portfolio of INVESTMENTS May 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 450 Connecticut State, General Obligation Bonds, Series 2007B, No Opt. Call AA $ 498,951
5.000%, 5/01/16
Hartford, Connecticut, General Obligation Bonds, Series 2005A:
360 5.000%, 8/01/21 - FSA Insured 8/15 at 100.00 AAA 380,228
240 4.375%, 8/01/24 - FSA Insured 8/15 at 100.00 AAA 238,750
400 North Haven, Connecticut, General Obligation Bonds, Series 2006, No Opt. Call Aa2 437,192
5.000%, 7/15/24
Suffield, Connecticut, General Obligation Bonds, Series 2005:
335 5.000%, 6/15/17 No Opt. Call AA 372,064
335 5.000%, 6/15/19 No Opt. Call AA 370,048
810 West Hartford, Connecticut, General Obligation Bonds, 10/15 at 100.00 AAA 878,915
Series 2005B, 5.000%, 10/01/18
------------------------------------------------------------------------------------------------------------------------------------
4,590 Total Tax Obligation/General 4,911,887
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 25.8% (16.6% OF TOTAL INVESTMENTS)
Connecticut Health and Educational Facilities Authority, Child Care
Facilities Program Revenue Bonds, Series 2006F:
650 5.000%, 7/01/31 - AGC Insured 7/16 at 100.00 AAA 663,845
500 5.000%, 7/01/36 - AGC Insured 7/16 at 100.00 AAA 508,290
1,000 Connecticut Health and Educational Facilities Authority, Revenue 7/08 at 105.00 A 1,051,230
Bonds, New Opportunities for Waterbury Inc., Series 1998A,
6.750%, 7/01/28
Connecticut, Certificates of Participation, Juvenile Training School,
Series 2001:
600 5.000%, 12/15/20 12/11 at 101.00 AA- 620,400
1,000 5.000%, 12/15/30 12/11 at 101.00 AA- 1,013,340
1,475 Connecticut, Special Tax Obligation Transportation Infrastructure No Opt. Call AAA 1,629,551
Purpose Bonds, Series 1998B, 5.500%, 11/01/12 - FSA Insured
900 Connecticut, Special Tax Obligation Transportation Infrastructure 8/17 at 100.00 AAA 942,408
Purpose Revenue Bonds, Series 2007A, 5.000%, 8/01/27 -
AMBAC Insured
600 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call AAA 633,090
Revenue Bonds, Series 2007N, 5.250%, 7/01/31 - AMBAC Insured
470 Puerto Rico Infrastructure Financing Authority, Special Tax No Opt. Call BBB+ 119,028
Revenue Bonds, Series 2005A, 0.000%, 7/01/32 - FGIC Insured
1,200 Puerto Rico Municipal Finance Agency, Series 2005C, 8/15 at 100.00 AAA 1,281,420
5.000%, 8/01/16 - FSA Insured
750 Virgin Islands Public Finance Authority, Gross Receipts Taxes 10/10 at 101.00 BBB+ 797,865
Loan Note, Series 1999A, 6.375%, 10/01/19
500 Virgin Islands Public Finance Authority, Senior Lien Revenue 10/08 at 101.00 AA 507,360
Refunding Bonds, Matching Fund Loan Note, Series 1998A,
5.500%, 10/01/18 - RAAI Insured
------------------------------------------------------------------------------------------------------------------------------------
9,645 Total Tax Obligation/Limited 9,767,827
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 6.5% (4.2% OF TOTAL INVESTMENTS)
2,500 Connecticut, General Airport Revenue Bonds, Bradley 4/11 at 101.00 A 2,454,647
International Airport, Series 2001A, 5.125%, 10/01/26 -
FGIC Insured (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 30.0% (19.3% OF TOTAL INVESTMENTS) (4)
1,000 Connecticut Health and Educational Facilities Authority, Revenue 7/11 at 101.00 A2 (4) 1,093,270
Bonds, Loomis Chaffee School, Series 2001D, 5.500%, 7/01/23
(Pre-refunded 7/01/11)
2,000 Connecticut, Clean Water Fund Revenue Bonds, Series 2001, 10/11 at 100.00 AAA 2,177,760
5.500%, 10/01/20 (Pre-refunded 10/01/11)
30
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (4) (continued)
$ 500 Connecticut, General Obligation Bonds, Series 2002B, 6/12 at 100.00 AA (4) $ 549,015
5.500%, 6/15/21 (Pre-refunded 6/15/12)
500 East Lyme, Connecticut, General Obligation Bonds, Series 2001, 7/11 at 102.00 Aa3 (4) 546,010
5.125%, 7/15/20 (Pre-refunded 7/15/11) - FGIC Insured
Guam Economic Development Authority, Tobacco Settlement
Asset-Backed Bonds, Series 2001A:
25 5.000%, 5/15/22 (Pre-refunded 5/15/11) 5/11 at 100.00 Baa3 (4) 26,544
500 5.400%, 5/15/31 (Pre-refunded 5/15/11) 5/11 at 100.00 Baa3 (4) 536,510
1,270 Guam Economic Development Authority, Tobacco Settlement 5/11 at 100.00 Baa3 (4) 1,368,933
Asset-Backed Bonds, Series 2001B, 5.500%, 5/15/41
(Pre-refunded 5/15/11)
220 New Haven, Connecticut, General Obligation Bonds, Series 2001A, 11/11 at 100.00 A- (4) 233,554
5.000%, 11/01/20 (Pre-refunded 11/01/11) - FGIC Insured
250 Northern Mariana Islands, General Obligation Bonds, 6/10 at 100.00 AAA 268,095
Series 2000A, 6.000%, 6/01/20 (Pre-refunded 6/01/10) -
ACA Insured
Puerto Rico Infrastructure Financing Authority, Special Obligation
Bonds, Series 2000A:
1,425 5.500%, 10/01/32 10/10 at 101.00 AAA 1,484,152
1,300 5.500%, 10/01/40 10/10 at 101.00 AAA 1,351,597
235 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 245,589
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20
(Pre-refunded 7/01/10)
1,000 Waterbury, Connecticut, General Obligation Bonds, Series 2002A, 4/12 at 100.00 AAA 1,089,390
5.375%, 4/01/17 (Pre-refunded 4/01/12) - FSA Insured
370 Windsor, Connecticut, General Obligation Bonds, Series 2001, 7/09 at 100.00 Aa2 (4) 381,973
5.000%, 7/15/20 (Pre-refunded 7/15/09)
------------------------------------------------------------------------------------------------------------------------------------
10,595 Total U.S. Guaranteed 11,352,392
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 5.2% (3.3% OF TOTAL INVESTMENTS)
500 Connecticut Development Authority, Pollution Control Revenue 10/08 at 102.00 Baa1 500,410
Refunding Bonds, Connecticut Light and Power Company,
Series 1993A, 5.850%, 9/01/28
560 Connecticut Development Authority, Solid Waste Disposal 11/12 at 100.00 Baa1 561,372
Facilities Revenue Bonds, PSEG Power LLC Project,
Series 2007A, 5.750%, 11/01/37 (Alternative Minimum Tax)
900 Eastern Connecticut Resource Recovery Authority, 7/08 at 100.00 BBB 900,180
Solid Waste Revenue Bonds, Wheelabrator Lisbon Project,
Series 1993A, 5.500%, 1/01/14 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
1,960 Total Utilities 1,961,962
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 12.6% (8.1% OF TOTAL INVESTMENTS)
255 Connecticut Development Authority, Water Facility Revenue 9/17 at 100.00 A- 224,783
Bonds, Aquarion Water Company Project, Series 200.7,
5.100%, 9/01/37 - XLCA Insured (Alternative Minimum Tax)
1,185 Connecticut, State Revolving Fund General Revenue Bonds, 10/13 at 100.00 AAA 1,280,179
Series 2003A, 5.000%, 10/01/16
Greater New Haven Water Pollution Control Authority,
Connecticut, Regional Wastewater System Revenue Bonds, Series 2005A:
720 5.000%, 11/15/30 - MBIA Insured 11/15 at 100.00 AAA 733,896
1,110 5.000%, 8/15/35 - MBIA Insured 11/15 at 100.00 AAA 1,128,626
31
NFC
Nuveen Connecticut Dividend Advantage Municipal Fund (continued)
Portfolio of INVESTMENTS May 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER (continued)
$ 140 Guam Government Waterworks Authority, Water and Wastewater 7/15 at 100.00 Ba2 $ 141,996
System Revenue Bonds, Series 2005, 6.000%, 7/01/25
South Central Connecticut Regional Water Authority, Water System
Revenue Bonds, Eighteenth Series 2003A:
750 5.000%, 8/01/20 - MBIA Insured 8/13 at 100.00 AAA 777,615
470 5.000%, 8/01/33 - MBIA Insured 8/13 at 100.00 AAA 475,946
------------------------------------------------------------------------------------------------------------------------------------
4,630 Total Water and Sewer 4,763,041
------------------------------------------------------------------------------------------------------------------------------------
$ 57,330 Total Investments (cost $58,030,626) - 155.7% 58,969,581
=============-----------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (6.0)% (2,287,000)
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.8% 691,121
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (51.5)% (5) (19,500,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $37,873,702
====================================================================================================================
(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, AMBAC, FGIC, MBIA, RAAI and
XLCA as of May 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) Preferred Shares, at Liquidation Value as a percentage of
total investments is (33.1)%.
N/R Not rated.
(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.
32
NGK
Nuveen Connecticut Dividend Advantage Municipal Fund 2
Portfolio of INVESTMENTS
May 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 2.0% (1.4% OF TOTAL INVESTMENTS)
$ 725 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB $ 691,027
Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 34.2% (22.2% OF TOTAL INVESTMENTS)
715 Connecticut Health and Education Facilities Authority, Revenue 7/17 at 100.00 AAA 740,854
Bonds, Quinnipiac University, Series 2007-I, 5.000%, 7/01/25 -
MBIA Insured
500 Connecticut Health and Education Facilities Authority, University 7/16 at 100.00 AA 500,300
of Hartford Revenue Bonds, Series 2006G, 5.250%, 7/01/36 -
RAAI Insured
100 Connecticut Health and Educational Facilities Authority, Revenue 7/16 at 100.00 AA 96,487
Bonds, Canterbury School, Series 2006B, 5.000%, 7/01/36 -
RAAI Insured
135 Connecticut Health and Educational Facilities Authority, Revenue 7/17 at 100.00 AA 135,483
Bonds, Chase Collegiate School, Series 2007A, 5.000%, 7/01/27 -
RAAI Insured
95 Connecticut Health and Educational Facilities Authority, Revenue 7/08 at 102.00 AAA 96,974
Bonds, Fairfield University, Series 1998H, 5.000%, 7/01/23 -
MBIA Insured
500 Connecticut Health and Educational Facilities Authority, Revenue 7/08 at 101.00 AAA 505,630
Bonds, Hopkins School, Series 1998A, 5.000%, 7/01/20 -
AMBAC Insured
310 Connecticut Health and Educational Facilities Authority, Revenue No Opt. Call Aaa 342,367
Bonds, Loomis Chaffee School, Series 2005F, 5.250%, 7/01/19 -
AMBAC Insured
120 Connecticut Health and Educational Facilities Authority, Revenue 7/17 at 100.00 AAA 121,570
Bonds, Renbrook School, Series 2007A, 5.000%, 7/01/37 -
AMBAC Insured
Connecticut Health and Educational Facilities Authority, Revenue
Bonds, University of Hartford, Series 2002E:
590 5.500%, 7/01/22 - RAAI Insured 7/12 at 101.00 AA 611,771
1,000 5.250%, 7/01/32 - RAAI Insured 7/12 at 101.00 AA 1,005,120
1,000 Connecticut Health and Educational Facilities Authority, Revenue 7/09 at 100.00 AAA 1,012,760
Bonds, Yale University, Series 2002W, 5.125%, 7/01/27
500 Connecticut Health and Educational Facilities Authority, Revenue 7/13 at 100.00 AAA 510,320
Bonds, Yale University, Series 2003X-1, 5.000%, 7/01/42
1,600 Connecticut Health and Educational Facilities Authority, Revenue 7/16 at 100.00 AAA 1,643,840
Bonds, Yale University, Series 2007Z-1, 5.000%, 7/01/42
2,750 Connecticut Health and Educational Facilities Authority, Revenue 7/17 at 100.00 AAA 2,842,180
Bonds, Yale University, Series 2007Z-3, 5.050%, 7/01/42 (UB)
University of Connecticut, General Obligation Bonds, Series 2006A:
450 5.000%, 2/15/19 - FGIC Insured 2/16 at 100.00 AA 485,393
490 5.000%, 2/15/23 - FGIC Insured 2/16 at 100.00 AA 516,543
500 University of Connecticut, Student Fee Revenue Refunding Bonds, 11/12 at 101.00 AA- 526,980
Series 2002A, 5.250%, 11/15/22 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
11,355 Total Education and Civic Organizations 11,694,572
------------------------------------------------------------------------------------------------------------------------------------
33
NGK
Nuveen Connecticut Dividend Advantage Municipal Fund 2 (continued)
Portfolio of INVESTMENTS May 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 13.5% (8.7% OF TOTAL INVESTMENTS)
$ 300 Connecticut Health and Educational Facilities Authority, Revenue 7/12 at 101.00 AA $ 303,849
Bonds, Bristol Hospital, Series 2002B, 5.500%, 7/01/32 -
RAAI Insured
Connecticut Health and Educational Facilities Authority, Revenue
Bonds, Eastern Connecticut Health Network, Series 2000A:
20 6.125%, 7/01/20 - RAAI Insured 7/10 at 101.00 AA 20,932
65 6.000%, 7/01/25 - RAAI Insured 7/10 at 101.00 AA 66,804
Connecticut Health and Educational Facilities Authority, Revenue
Bonds, Griffin Hospital, Series 2005B:
300 5.000%, 7/01/20 - RAAI Insured 7/15 at 100.00 Aa3 304,815
300 5.000%, 7/01/23 - RAAI Insured 7/15 at 100.00 Aa3 301,764
170 Connecticut Health and Educational Facilities Authority, Revenue 7/17 at 100.00 AA 170,723
Bonds, Hospital For Special Care, Series 2007C,
5.250%, 7/01/32 - RAAI Insured
1,190 Connecticut Health and Educational Facilities Authority, Revenue 7/16 at 100.00 Aaa 1,212,134
Bonds, Middlesex Hospital, Series 2006, 5.000%, 7/01/32 -
FSA Insured
1,000 Connecticut Health and Educational Facilities Authority, Revenue 7/12 at 101.00 AA 1,007,090
Bonds, St. Francis Hospital and Medical Center, Series 2002D,
5.000%, 7/01/22 - RAAI Insured
25 Connecticut Health and Educational Facilities Authority, Revenue 7/09 at 101.00 Aaa 25,649
Bonds, Stamford Hospital, Series 1999G, 5.000%, 7/01/18 -
MBIA Insured
1,170 Connecticut Health and Educational Facilities Authority, Revenue 7/16 at 100.00 AAA 1,194,921
Bonds, Yale-New Haven Hospital, Series 2006J-1,
5.000%, 7/01/31 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
4,540 Total Health Care 4,608,681
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 2.8% (1.8% OF TOTAL INVESTMENTS)
500 Connecticut Housing Finance Authority, Multifamily Housing 11/15 at 100.00 AAA 472,185
Mortgage Finance Program Bonds, Series 2006G-2,
4.800%, 11/15/27 (Alternative Minimum Tax)
500 Stamford Housing Authority, Connecticut, Multifamily Housing No Opt. Call BBB+ 500,135
Revenue Bonds, Fairfield Apartments, Series 1998,
4.750%, 12/01/28 (Mandatory put 12/01/08)
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
1,000 Total Housing/Multifamily 972,320
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 6.3% (4.1% OF TOTAL INVESTMENTS)
250 Connecticut Housing Finance Authority, Housing Mortgage 11/10 at 100.00 AAA 244,430
Finance Program Bonds, Series 2001C, 5.450%, 11/15/43
(Alternative Minimum Tax)
700 Connecticut Housing Finance Authority, Housing Mortgage Finance 5/13 at 100.00 AAA 698,971
Program Bonds, Series 2004-A5, 5.050%, 11/15/34
Connecticut Housing Finance Authority, Housing Mortgage Finance
Program Bonds, Series 2006-A1:
305 4.700%, 11/15/26 (Alternative Minimum Tax) 11/15 at 100.00 AAA 284,974
330 4.800%, 11/15/31 (Alternative Minimum Tax) 11/15 at 100.00 AAA 305,900
600 Connecticut Housing Finance Authority, Housing Mortgage Finance 5/16 at 100.00 AAA 603,798
Program Bonds, Series 2006D, 4.650%, 11/15/27
------------------------------------------------------------------------------------------------------------------------------------
2,185 Total Housing/Single Family 2,138,073
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 2.9% (1.8% OF TOTAL INVESTMENTS)
1,000 Connecticut Resource Recovery Authority, Revenue Bonds, 12/11 at 102.00 Baa2 975,760
American Ref-Fuel Company of Southeastern Connecticut LP,
Series 1998A-II, 5.500%, 11/15/15 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
34
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 3.8% (2.4% OF TOTAL INVESTMENTS)
$ 320 Connecticut Development Authority, First Mortgage Gross 12/11 at 102.00 BBB+ $ 328,637
Revenue Healthcare Bonds, Elim Park Baptist Home Inc.,
Series 2003, 5.750%, 12/01/23
265 Connecticut Development Authority, First Mortgage Gross 10/08 at 101.00 BBB- 267,703
Revenue Refunding Healthcare Bonds, Church Homes Inc. -
Congregational Avery Heights, Series 1997, 5.700%, 4/01/12
450 Connecticut Health and Educational Facilities Authority, 7/12 at 101.00 AAA 471,038
Revenue Bonds, Village for Families and Children Inc.,
Series 2002A, 5.000%, 7/01/19 - AMBAC Insured
250 Connecticut State Development Authority, Health Facilities 8/17 at 100.00 N/R 219,413
Revenue Bonds, Alzheimer's Resource Center of Connecticut,
Inc., Series 2007, 5.500%, 8/15/27
------------------------------------------------------------------------------------------------------------------------------------
1,285 Total Long-Term Care 1,286,791
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 22.7% (14.7% OF TOTAL INVESTMENTS)
600 Connecticut State, General Obligation Bonds, Series 2006A, 12/16 at 100.00 AA 624,342
4.750%, 12/15/24
400 Connecticut State, General Obligation Bonds, Series 2006C, 6/16 at 100.00 AAA 423,512
5.000%, 6/01/23 - FSA Insured
500 Connecticut State, General Obligation Bonds, Series 2007B, No Opt. Call AA 554,390
5.000%, 5/01/16
Farmington, Connecticut, General Obligation Bonds, Series 2002:
1,000 5.000%, 9/15/20 9/12 at 101.00 Aa1 1,063,530
1,450 5.000%, 9/15/21 9/12 at 101.00 Aa1 1,531,041
1,305 Hartford County Metropolitan District, Connecticut, General 4/12 at 101.00 AA+ 1,368,919
Obligation Bonds, Series 2002, 5.000%, 4/01/22
Hartford, Connecticut, General Obligation Bonds, Series 2005A:
360 5.000%, 8/01/21 - FSA Insured 8/15 at 100.00 AAA 380,228
140 4.375%, 8/01/24 - FSA Insured 8/15 at 100.00 AAA 139,271
650 New Haven, Connecticut, General Obligation Bonds, Series 2006, 11/16 at 100.00 AAA 703,203
5.000%, 11/01/17 - AMBAC Insured
400 Suffield, Connecticut, General Obligation Bonds, Series 2005, No Opt. Call AA 439,264
5.000%, 6/15/21
500 West Hartford, Connecticut, General Obligation Bonds, Series 2005B, 10/15 at 100.00 AAA 546,510
5.000%, 10/01/17
------------------------------------------------------------------------------------------------------------------------------------
7,305 Total Tax Obligation/General 7,774,210
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 16.7% (10.8% OF TOTAL INVESTMENTS)
Connecticut Health and Educational Facilities Authority, Child
Care Facilities Program Revenue Bonds, Series 2006F:
575 5.000%, 7/01/31 - AGC Insured 7/16 at 100.00 AAA 587,248
500 5.000%, 7/01/36 - AGC Insured 7/16 at 100.00 AAA 508,290
500 Connecticut, Special Tax Obligation Transportation Infrastructure 10/11 at 100.00 AAA 535,800
Purpose Bonds, Series 2001B, 5.375%, 10/01/13 - FSA Insured
1,625 Connecticut, Special Tax Obligation Transportation Infrastructure 7/12 at 100.00 AAA 1,733,955
Purpose Bonds, Series 2002A, 5.375%, 7/01/20 - FSA Insured
850 Connecticut, Special Tax Obligation Transportation Infrastructure 8/17 at 100.00 AAA 890,052
Purpose Revenue Bonds, Series 2007A, 5.000%, 8/01/27 -
AMBAC Insured
500 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call AAA 527,575
Revenue Bonds, Series 2007N, 5.250%, 7/01/31 - AMBAC Insured
430 Puerto Rico Infrastructure Financing Authority, Special Tax No Opt. Call BBB+ 108,898
Revenue Bonds, Series 2005A, 0.000%, 7/01/32 - FGIC Insured
750 Puerto Rico Municipal Finance Agency, Series 2005C, 8/15 at 100.00 AAA 800,888
5.000%, 8/01/16 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
5,730 Total Tax Obligation/Limited 5,692,706
------------------------------------------------------------------------------------------------------------------------------------
35
NGK
Nuveen Connecticut Dividend Advantage Municipal Fund 2 (continued)
Portfolio of INVESTMENTS May 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 6.3% (4.1% OF TOTAL INVESTMENTS)
$ 1,950 New Haven, Connecticut, Revenue Refunding Bonds, Air Rights No Opt. Call AAA $ 2,150,732
Parking Facility, Series 2002, 5.375%, 12/01/15 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 28.2% (18.3% OF TOTAL INVESTMENTS) (4)
2,250 Connecticut Health and Educational Facilities Authority, Revenue 11/11 at 100.00 AAA 2,416,227
Bonds, Connecticut State University System, Series 2002D-2,
5.000%, 11/01/21 (Pre-refunded 11/01/11) - FSA Insured
Connecticut Health and Educational Facilities Authority, Revenue
Bonds, Eastern Connecticut Health Network, Series 2000A:
100 6.125%, 7/01/20 (Pre-refunded 7/01/10) - RAAI Insured 7/10 at 101.00 AA (4) 108,623
30 6.125%, 7/01/20 (Pre-refunded 7/01/10) - RAAI Insured 7/10 at 101.00 AA (4) 32,561
5 6.000%, 7/01/25 (Pre-refunded 7/01/10) - RAAI Insured 7/10 at 101.00 AA (4) 5,414
400 Connecticut Health and Educational Facilities Authority, 3/11 at 101.00 AAA 429,152
Revenue Bonds, Greenwich Academy, Series 2001B,
5.000%, 3/01/32 (Pre-refunded 3/01/11) - FSA Insured
250 Guam Economic Development Authority, Tobacco Settlement 5/11 at 100.00 Baa3 (4) 269,475
Asset-Backed Bonds, Series 2001B, 5.500%, 5/15/41
(Pre-refunded 5/15/11)
1,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/10 at 101.00 AAA 1,070,650
Series 2000HH, 5.250%, 7/01/29 (Pre-refunded 7/01/10) -
FSA Insured
Puerto Rico Infrastructure Financing Authority, Special Obligation
Bonds, Series 2000A:
1,000 5.500%, 10/01/32 10/10 at 101.00 AAA 1,041,510
2,000 5.500%, 10/01/40 10/10 at 101.00 AAA 2,079,379
1,535 Regional School District 8, Andover, Hebron and Marlborough, 5/11 at 101.00 Aaa 1,650,999
Connecticut, General Obligation Bonds, Series 2002,
5.000%, 5/01/22 (Pre-refunded 5/01/11) - FSA Insured
500 Waterbury, Connecticut, General Obligation Bonds, Series 2002A, 4/12 at 100.00 AAA 544,695
5.375%, 4/01/17 (Pre-refunded 4/01/12) - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
9,070 Total U.S. Guaranteed 9,648,685
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 5.0% (3.3% OF TOTAL INVESTMENTS)
500 Connecticut Development Authority, Pollution Control Revenue 10/08 at 102.00 Baa1 500,410
Refunding Bonds, Connecticut Light and Power Company,
Series 1993A, 5.850%, 9/01/28
470 Connecticut Development Authority, Solid Waste Disposal Facilities 11/12 at 100.00 Baa1 471,152
Revenue Bonds, PSEG Power LLC Project, Series 2007A,
5.750%, 11/01/37 (Alternative Minimum Tax)
Eastern Connecticut Resource Recovery Authority, Solid Waste
Revenue Bonds, Wheelabrator Lisbon Project, Series 1993A:
250 5.500%, 1/01/15 (Alternative Minimum Tax) 7/08 at 100.00 BBB 250,018
510 5.500%, 1/01/20 (Alternative Minimum Tax) 7/08 at 100.00 BBB 498,245
------------------------------------------------------------------------------------------------------------------------------------
1,730 Total Utilities 1,719,825
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 9.9% (6.4% OF TOTAL INVESTMENTS)
220 Connecticut Development Authority, Water Facility Revenue 9/17 at 100.00 A- 193,930
Bonds, Aquarion Water Company Project, Series 200.7,
5.100%, 9/01/37 - XLCA Insured (Alternative Minimum Tax)
785 Connecticut, State Revolving Fund General Revenue Bonds, 10/13 at 100.00 AAA 848,051
Series 2003A, 5.000%, 10/01/16
Greater New Haven Water Pollution Control Authority,
Connecticut, Regional Wastewater System Revenue Bonds, Series 2005A:
690 5.000%, 11/15/30 - MBIA Insured 11/15 at 100.00 AAA 703,317
320 5.000%, 8/15/35 - MBIA Insured 11/15 at 100.00 AAA 325,370
36
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER (continued)
$ 130 Guam Government Waterworks Authority, Water and Wastewater 7/15 at 100.00 Ba2 $ 131,854
System Revenue Bonds, Series 2005, 6.000%, 7/01/25
South Central Connecticut Regional Water Authority, Water System
Revenue Bonds, Eighteenth Series 2003A:
750 5.000%, 8/01/20 - MBIA Insured 8/13 at 100.00 AAA 777,615
410 5.000%, 8/01/33 - MBIA Insured 8/13 at 100.00 AAA 415,187
------------------------------------------------------------------------------------------------------------------------------------
3,305 Total Water and Sewer 3,395,324
------------------------------------------------------------------------------------------------------------------------------------
$ 51,180 Total Investments (cost $51,732,583) - 154.3% 52,748,706
=============-----------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (6.0)% (2,062,000)
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.9% 1,001,311
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (51.2)% (5) (17,500,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $34,188,017
====================================================================================================================
(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, AMBAC, FGIC, MBIA, RAAI and
XLCA as of May 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) Preferred Shares, at Liquidation Value as a percentage of
total investments is (33.2)%.
N/R Not rated.
(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
NGO
Nuveen Connecticut Dividend Advantage Municipal Fund 3
Portfolio of INVESTMENTS
May 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 3.6% (2.3% OF TOTAL INVESTMENTS)
$ 2,310 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB $ 2,201,753
Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 27.0% (17.5% OF TOTAL INVESTMENTS)
1,000 Connecticut Health and Education Facilities Authority, Revenue 7/17 at 100.00 AAA 968,430
Bonds, Connecticut College, Series 2007G, 4.500%, 7/01/37 -
MBIA Insured
1,300 Connecticut Health and Education Facilities Authority, Revenue 7/17 at 100.00 AAA 1,347,008
Bonds, Quinnipiac University, Series 2007-I, 5.000%, 7/01/25 -
MBIA Insured
650 Connecticut Health and Education Facilities Authority, University 7/16 at 100.00 AA 650,390
of Hartford Revenue Bonds, Series 2006G, 5.250%, 7/01/36 -
RAAI Insured
150 Connecticut Health and Educational Facilities Authority, Revenue 7/16 at 100.00 AA 144,731
Bonds, Canterbury School, Series 2006B, 5.000%, 7/01/36 -
RAAI Insured
250 Connecticut Health and Educational Facilities Authority, Revenue 7/17 at 100.00 AA 250,895
Bonds, Chase Collegiate School, Series 2007A, 5.000%, 7/01/27 -
RAAI Insured
400 Connecticut Health and Educational Facilities Authority, Revenue No Opt. Call Aaa 441,764
Bonds, Loomis Chaffee School, Series 2005F, 5.250%, 7/01/19 -
AMBAC Insured
215 Connecticut Health and Educational Facilities Authority, Revenue 7/17 at 100.00 AAA 217,812
Bonds, Renbrook School, Series 2007A, 5.000%, 7/01/37 -
AMBAC Insured
750 Connecticut Health and Educational Facilities Authority, Revenue 7/12 at 101.00 AA 777,675
Bonds, University of Hartford, Series 2002E, 5.500%, 7/01/22 -
RAAI Insured
1,500 Connecticut Health and Educational Facilities Authority, Revenue 7/09 at 100.00 AAA 1,519,140
Bonds, Yale University, Series 2002W, 5.125%, 7/01/27
3,000 Connecticut Health and Educational Facilities Authority, Revenue 7/16 at 100.00 AAA 3,082,199
Bonds, Yale University, Series 2007Z-1, 5.000%, 7/01/42
5,050 Connecticut Health and Educational Facilities Authority, Revenue 7/17 at 100.00 AAA 5,219,276
Bonds, Yale University, Series 2007Z-3, 5.050%, 7/01/42 (UB)
University of Connecticut, General Obligation Bonds, Series 2006A:
850 5.000%, 2/15/19 - FGIC Insured 2/16 at 100.00 AA 916,853
490 5.000%, 2/15/23 - FGIC Insured 2/16 at 100.00 AA 516,543
500 University of Connecticut, Student Fee Revenue Refunding Bonds, 11/12 at 101.00 AA- 526,980
Series 2002A, 5.250%, 11/15/22 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
16,105 Total Education and Civic Organizations 16,579,696
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 9.7% (6.3% OF TOTAL INVESTMENTS)
Connecticut Health and Educational Facilities Authority, Revenue
Bonds, Bristol Hospital, Series 2002B:
500 5.500%, 7/01/21 - RAAI Insured 7/12 at 101.00 AA 516,945
600 5.500%, 7/01/32 - RAAI Insured 7/12 at 101.00 AA 607,698
800 Connecticut Health and Educational Facilities Authority, 7/15 at 100.00 Aa3 812,840
Revenue Bonds, Griffin Hospital, Series 2005B,
5.000%, 7/01/20 - RAAI Insured
38
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE (continued)
$ 310 Connecticut Health and Educational Facilities Authority, Revenue 7/17 at 100.00 AA $ 311,318
Bonds, Hospital For Special Care, Series 2007C,
5.250%, 7/01/32 - RAAI Insured
2,130 Connecticut Health and Educational Facilities Authority, Revenue 7/16 at 100.00 Aaa 2,169,618
Bonds, Middlesex Hospital, Series 2006, 5.000%, 7/01/32 -
FSA Insured
200 Connecticut Health and Educational Facilities Authority, Revenue 7/09 at 101.00 Aaa 205,188
Bonds, Stamford Hospital, Series 1999G, 5.000%, 7/01/18 -
MBIA Insured
1,325 Connecticut Health and Educational Facilities Authority, Revenue 7/16 at 100.00 AAA 1,353,223
Bonds, Yale-New Haven Hospital, Series 2006J-1,
5.000%, 7/01/31 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
5,865 Total Health Care 5,976,830
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 2.8% (1.7% OF TOTAL INVESTMENTS)
1,000 Connecticut Housing Finance Authority, Multifamily Housing 11/15 at 100.00 AAA 944,370
Mortgage Finance Program Bonds, Series 2006G-2,
4.800%, 11/15/27 (Alternative Minimum Tax)
750 Stamford Housing Authority, Connecticut, Multifamily Housing No Opt. Call BBB+ 750,203
Revenue Bonds, Fairfield Apartments, Series 1998,
4.750%, 12/01/28 (Mandatory put 12/01/08)
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
1,750 Total Housing/Multifamily 1,694,573
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 5.6% (3.7% OF TOTAL INVESTMENTS)
750 Connecticut Housing Finance Authority, Housing Mortgage Finance 11/10 at 100.00 AAA 733,290
Program Bonds, Series 2001C, 5.450%, 11/15/43
(Alternative Minimum Tax)
1,300 Connecticut Housing Finance Authority, Housing Mortgage Finance 5/13 at 100.00 AAA 1,298,089
Program Bonds, Series 2004-A5, 5.050%, 11/15/34
Connecticut Housing Finance Authority, Housing Mortgage Finance
Program Bonds, Series 2006-A1:
435 4.700%, 11/15/26 (Alternative Minimum Tax) 11/15 at 100.00 AAA 406,438
465 4.800%, 11/15/31 (Alternative Minimum Tax) 11/15 at 100.00 AAA 431,041
600 Connecticut Housing Finance Authority, Housing Mortgage Finance 5/16 at 100.00 AAA 603,798
Program Bonds, Series 2006D, 4.650%, 11/15/27
------------------------------------------------------------------------------------------------------------------------------------
3,550 Total Housing/Single Family 3,472,656
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 3.2% (2.1% OF TOTAL INVESTMENTS)
2,000 Connecticut Resource Recovery Authority, Revenue Bonds, 12/11 at 102.00 Baa2 1,951,520
American Ref-Fuel Company of Southeastern Connecticut LP,
Series 1998A-I, 5.500%, 11/15/15 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 12.7% (8.3% OF TOTAL INVESTMENTS)
500 Connecticut Development Authority, First Mortgage Gross Revenue 12/11 at 102.00 BBB+ 513,495
Healthcare Bonds, Elim Park Baptist Home Inc., Series 2003,
5.750%, 12/01/23
495 Connecticut Development Authority, First Mortgage Gross Revenue 10/08 at 101.00 BBB- 500,049
Refunding Healthcare Bonds, Church Homes Inc. -
Congregational Avery Heights, Series 1997, 5.700%, 4/01/12
Connecticut Development Authority, Revenue Bonds, Duncaster
Inc., Series 2002:
650 5.125%, 8/01/22 - RAAI Insured 8/12 at 101.00 AA 659,737
1,025 4.750%, 8/01/32 - RAAI Insured 8/12 at 101.00 AA 947,285
Connecticut Health and Educational Facilities Authority, Revenue
Bonds, Village for Families and Children Inc., Series 2002A:
430 5.000%, 7/01/18 - AMBAC Insured 7/12 at 101.00 AAA 451,113
475 5.000%, 7/01/20 - AMBAC Insured 7/12 at 101.00 AAA 493,900
260 5.000%, 7/01/23 - AMBAC Insured 7/12 at 101.00 AAA 267,628
1,000 5.000%, 7/01/32 - AMBAC Insured 7/12 at 101.00 AAA 1,004,410
39
NGO
Nuveen Connecticut Dividend Advantage Municipal Fund 3 (continued)
Portfolio of INVESTMENTS May 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE (continued)
Connecticut Housing Finance Authority, Special Needs Housing
Mortgage Finance Program Special Obligation Bonds,
Series 2002SNH-1:
$ 1,000 5.000%, 6/15/22 - AMBAC Insured 6/12 at 101.00 AAA $ 1,038,500
1,500 5.000%, 6/15/32 - AMBAC Insured 6/12 at 101.00 AAA 1,513,185
500 Connecticut State Development Authority, Health Facilities 8/17 at 100.00 N/R 438,825
Revenue Bonds, Alzheimer's Resource Center of Connecticut,
Inc., Series 2007, 5.500%, 8/15/27
------------------------------------------------------------------------------------------------------------------------------------
7,835 Total Long-Term Care 7,828,127
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 26.3% (17.1% OF TOTAL INVESTMENTS)
Bethel, Connecticut, General Obligation Bonds, Series 2002:
525 5.000%, 11/01/18 - FGIC Insured 11/12 at 100.00 Aa3 550,720
525 5.000%, 11/01/19 - FGIC Insured 11/12 at 100.00 Aa3 550,720
525 5.000%, 11/01/20 - FGIC Insured 11/12 at 100.00 Aa3 549,785
525 5.000%, 11/01/21 - FGIC Insured 11/12 at 100.00 Aa3 546,383
525 5.000%, 11/01/22 - FGIC Insured 11/12 at 100.00 Aa3 544,205
1,200 Connecticut State, General Obligation Bonds, Series 2006A, 12/16 at 100.00 AA 1,248,684
4.750%, 12/15/24
700 Connecticut State, General Obligation Bonds, Series 2006C, 6/16 at 100.00 AAA 741,146
5.000%, 6/01/23 - FSA Insured
2,470 Connecticut State, General Obligation Bonds, Series 2007B, No Opt. Call AA 2,738,687
5.000%, 5/01/16
450 Farmington, Connecticut, General Obligation Bonds, Series 2002, 9/12 at 101.00 Aa1 478,589
5.000%, 9/15/20
600 Hartford, Connecticut, General Obligation Bonds, Series 2005A, 8/15 at 100.00 AAA 633,714
5.000%, 8/01/21 - FSA Insured
New Canaan, Connecticut, General Obligation Bonds, Series 2002A:
950 4.500%, 5/01/19 5/11 at 100.00 Aaa 969,846
900 4.600%, 5/01/20 5/11 at 100.00 Aaa 918,522
500 4.700%, 5/01/21 5/11 at 100.00 Aaa 510,325
1,000 New Haven, Connecticut, General Obligation Bonds, Series 2006, 11/16 at 100.00 AAA 1,081,850
5.000%, 11/01/17 - AMBAC Insured
Southbury, Connecticut, General Obligation Bonds, Series 2002:
500 4.875%, 12/15/20 12/11 at 101.00 Aa3 520,315
500 4.875%, 12/15/21 12/11 at 101.00 Aa3 518,205
500 5.000%, 12/15/22 12/11 at 101.00 Aa3 523,615
Stratford, Connecticut, General Obligation Bonds, Series 2002:
1,375 4.000%, 2/15/19 - FSA Insured 2/12 at 100.00 AAA 1,386,165
630 4.125%, 2/15/20 - FSA Insured 2/12 at 100.00 AAA 634,152
500 West Hartford, Connecticut, General Obligation Bonds, 10/15 at 100.00 AAA 542,540
Series 2005B, 5.000%, 10/01/18
------------------------------------------------------------------------------------------------------------------------------------
15,400 Total Tax Obligation/General 16,188,168
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 22.0% (14.3% OF TOTAL INVESTMENTS)
930 Connecticut Health and Educational Facilities Authority, 7/16 at 100.00 AAA 945,419
Child Care Facilities Program Revenue Bonds, Series 2006F,
5.000%, 7/01/36 - AGC Insured
60 Connecticut, Special Tax Obligation Transportation Infrastructure No Opt. Call AA 65,476
Purpose Bonds, Series 1992B, 6.125%, 9/01/12
Connecticut, Special Tax Obligation Transportation Infrastructure
Purpose Bonds, Series 2002B:
2,810 5.000%, 12/01/20 - AMBAC Insured 12/12 at 100.00 AAA 2,902,645
1,000 5.000%, 12/01/21 - AMBAC Insured 12/12 at 100.00 AAA 1,029,990
1,000 5.000%, 12/01/22 - AMBAC Insured 12/12 at 100.00 AAA 1,025,500
500 Connecticut, Special Tax Obligation Transportation Infrastructure 1/14 at 100.00 AA 518,705
Purpose Bonds, Series 2003B, 5.000%, 1/01/23 - FGIC Insured
40
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 1,500 Connecticut, Special Tax Obligation Transportation Infrastructure 8/17 at 100.00 AAA $ 1,570,680
Purpose Revenue Bonds, Series 2007A, 5.000%, 8/01/27 -
AMBAC Insured
1,000 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call AAA 1,055,150
Revenue Bonds, Series 2007N, 5.250%, 7/01/31 - AMBAC Insured
Puerto Rico Infrastructure Financing Authority, Special Tax Revenue
Bonds, Series 2005A:
780 0.000%, 7/01/32 - FGIC Insured No Opt. Call BBB+ 197,535
2,120 0.000%, 7/01/33 - FGIC Insured No Opt. Call BBB+ 508,122
Puerto Rico Public Buildings Authority, Guaranteed Government
Facilities Revenue Bonds, Series 2002G:
890 5.250%, 7/01/17 7/12 at 100.00 BBB- 900,547
1,000 5.250%, 7/01/20 7/12 at 100.00 BBB- 1,006,340
1,045 5.250%, 7/01/21 7/12 at 100.00 BBB- 1,048,950
750 Virgin Islands Public Finance Authority, Senior Lien Revenue 10/08 at 101.00 BBB 754,178
Refunding Bonds, Matching Fund Loan Note, Series 1998A,
5.500%, 10/01/22
------------------------------------------------------------------------------------------------------------------------------------
15,385 Total Tax Obligation/Limited 13,529,237
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 0.7% (0.4% OF TOTAL INVESTMENTS)
415 New Haven, Connecticut, Revenue Refunding Bonds, Air Rights No Opt. Call AAA 457,720
Parking Facility, Series 2002, 5.375%, 12/01/15 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 21.9% (14.2% OF TOTAL INVESTMENTS) (4)
500 Bridgeport, Connecticut, General Obligation Bonds, Series 2003A, 9/13 at 100.00 AAA 552,505
5.250%, 9/15/23 (Pre-refunded 9/15/13) - FSA Insured
3,100 Connecticut Health and Educational Facilities Authority, 7/11 at 101.00 AAA 3,340,620
Revenue Bonds, Trinity College, Series 2001G, 5.000%, 7/01/21
(Pre-refunded 7/01/11) - AMBAC Insured
40 New Haven, Connecticut, General Obligation Bonds, Series 2002A, 11/11 at 101.00 AAA 43,058
5.250%, 11/01/17 - AMBAC Insured (ETM)
3,050 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/10 at 101.00 AAA 3,265,482
Series 2000HH, 5.250%, 7/01/29 (Pre-refunded 7/01/10) -
FSA Insured
3,000 Puerto Rico Infrastructure Financing Authority, Special Obligation 10/10 at 101.00 AAA 3,119,069
Bonds, Series 2000A, 5.500%, 10/01/40
1,010 Puerto Rico Public Finance Corporation, Commonwealth No Opt. Call AAA 1,090,224
Appropriation Bonds, Series 1998A, 5.125%, 6/01/24 -
AMBAC Insured (ETM)
Puerto Rico Public Finance Corporation, Commonwealth
Appropriation Bonds, Series 2002E:
570 5.500%, 8/01/29 (Pre-refunded 2/01/12) 2/12 at 100.00 Aaa 612,323
195 5.500%, 8/01/29 (Pre-refunded 2/01/12) 2/12 at 100.00 AAA 209,479
1,100 University of Connecticut, General Obligation Bonds, 2/13 at 100.00 AAA 1,200,012
Series 2003A, 5.125%, 2/15/21 (Pre-refunded 2/15/13) -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
12,565 Total U.S. Guaranteed 13,432,772
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 4.5% (2.9% OF TOTAL INVESTMENTS)
720 Connecticut Development Authority, Pollution Control Revenue 10/08 at 102.00 Baa1 720,590
Refunding Bonds, Connecticut Light and Power Company,
Series 1993A, 5.850%, 9/01/28
860 Connecticut Development Authority, Solid Waste Disposal Facilities 11/12 at 100.00 Baa1 862,107
Revenue Bonds, PSEG Power LLC Project, Series 2007A,
5.750%, 11/01/37 (Alternative Minimum Tax)
Eastern Connecticut Resource Recovery Authority, Solid Waste
Revenue Bonds, Wheelabrator Lisbon Project, Series 1993A:
900 5.500%, 1/01/14 (Alternative Minimum Tax) 7/08 at 100.00 BBB 900,180
305 5.500%, 1/01/20 (Alternative Minimum Tax) 7/08 at 100.00 BBB 297,970
------------------------------------------------------------------------------------------------------------------------------------
2,785 Total Utilities 2,780,847
------------------------------------------------------------------------------------------------------------------------------------
41
NGO
Nuveen Connecticut Dividend Advantage Municipal Fund 3 (continued)
Portfolio of INVESTMENTS May 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 14.2% (9.2% OF TOTAL INVESTMENTS)
$ 400 Connecticut Development Authority, Water Facility Revenue 9/17 at 100.00 A- $ 352,600
Bonds, Aquarion Water Company Project, Series 200.7,
5.100%, 9/01/37 - XLCA Insured (Alternative Minimum Tax)
1,185 Connecticut, State Revolving Fund General Revenue Bonds, 10/13 at 100.00 AAA 1,280,179
Series 2003A, 5.000%, 10/01/16
Greater New Haven Water Pollution Control Authority,
Connecticut, Regional Wastewater System Revenue Bonds, Series
2005A:
1,230 5.000%, 11/15/30 - MBIA Insured 11/15 at 100.00 AAA 1,253,739
640 5.000%, 8/15/35 - MBIA Insured 11/15 at 100.00 AAA
230 Guam Government Waterworks Authority, Water and Wastewater 7/15 at 100.00 Ba2 233,280
System Revenue Bonds, Series 2005, 6.000%, 7/01/25
South Central Connecticut Regional Water Authority, Water System
Revenue Bonds, Eighteenth Series 2003A:
2,050 5.000%, 8/01/20 - MBIA Insured 8/13 at 100.00 AAA 2,125,481
590 5.000%, 8/01/33 - MBIA Insured 8/13 at 100.00 AAA 597,464
1,840 South Central Connecticut Regional Water Authority, Water 8/16 at 100.00 AAA 1,878,217
System Revenue Bonds, Twentieth Series, 2007A,
5.000%, 8/01/30 - MBIA Insured
350 Stamford, Connecticut, Water Pollution Control System and 11/13 at 100.00 AA+ 356,682
Facility Revenue Bonds, Series 2003A, 5.000%, 11/15/32
------------------------------------------------------------------------------------------------------------------------------------
8,515 Total Water and Sewer 8,728,381
------------------------------------------------------------------------------------------------------------------------------------
$ 94,480 Total Investments (cost $94,470,470) - 154.2% 94,822,280
=============-----------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (6.2)% (3,788,000)
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 4.1% 2,442,194
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (52.1)% (5) (32,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $61,476,474
====================================================================================================================
(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, AMBAC, FGIC, MBIA, RAAI and
XLCA as of May 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.
(5) Preferred Shares, at Liquidation Value as a percentage of
total investments is (33.7)%.
N/R Not rated.
(ETM) Escrowed to maturity.
(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.
42
NMT
Nuveen Massachusetts Premium Income Municipal Fund
Portfolio of INVESTMENTS
May 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 2.0% (1.2% OF TOTAL INVESTMENTS)
$ 1,465 Boston Industrial Development Financing Authority, Massachusetts, 9/12 at 102.00 Ba3 $ 1,347,155
Senior Revenue Bonds, Crosstown Center Project, Series 2002,
6.500%, 9/01/35 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 29.4% (18.4% OF TOTAL INVESTMENTS)
1,045 Massachusetts Development Finance Agency, Revenue Bonds, 9/17 at 100.00 AAA 1,058,052
Worcester Polytechnic Institute, Series 2007, 5.000%, 9/01/37 -
MBIA Insured
890 Massachusetts Development Finance Authority, Revenue Bonds, 3/09 at 101.00 BBB 904,000
Curry College, Series 2000A, 6.000%, 3/01/20 - ACA Insured
1,745 Massachusetts Development Finance Authority, Revenue Bonds, 7/15 at 100.00 AAA 1,790,981
Massachusetts College of Pharmacy and Allied Health Sciences,
Series 2005D, 5.000%, 7/01/27 - AGC Insured
750 Massachusetts Development Finance Authority, Revenue Bonds, 9/13 at 100.00 AA- 806,648
Milton Academy, Series 2003A, 5.000%, 9/01/19
4,900 Massachusetts Development Finance Authority, Revenue Bonds, 1/18 at 100.00 AAA 4,970,609
WGBH Educational Foundation, Series 2008A, 5.000%, 1/01/42 -
AGC Insured
1,090 Massachusetts Development Finance Authority, Revenue Refunding No Opt. Call A2 1,233,291
Bonds, Boston University, Series 1999P, 6.000%, 5/15/29
25 Massachusetts Education Loan Authority, Student Loan Revenue 7/08 at 100.00 Aaa 25,048
Bonds, Issue E, Series 1995, 6.150%, 7/01/10 - AMBAC Insured
(Alternative Minimum Tax)
1,550 Massachusetts Educational Finance Authority, Educational Loan 1/12 at 100.00 AAA 1,574,320
Revenue Bonds, Series 2002E, 5.000%, 1/01/13 - AMBAC
Insured (Alternative Minimum Tax)
2,000 Massachusetts Health and Educational Facilities Authority, 6/13 at 100.00 AA- 2,138,980
Revenue Bonds, Boston College, Series 2003N, 5.250%, 6/01/18
500 Massachusetts Health and Educational Facilities Authority, 9/08 at 100.00 AA 389,384
Revenue Bonds, Hebrew College, Series 1999A,
3.763%, 7/01/31 (4)
500 Massachusetts Health and Educational Facilities Authority, Revenue 7/13 at 100.00 Aaa 514,440
Bonds, Wellesley College, Series 2003H, 5.000%, 7/01/26
555 Massachusetts Health and Educational Facilities Authority, Revenue 7/13 at 100.00 AAA 581,729
Bonds, Williams College, Series 2003H, 5.000%, 7/01/21
1,380 Massachusetts Health and Educational Facilities Authority, Revenue 7/16 at 100.00 AAA 1,429,128
Bonds, Williams College, Series 2007L, 5.000%, 7/01/31
500 Massachusetts Health and Educational Facilities Authority, Revenue 11/12 at 100.00 AAA 502,140
Bonds, Worcester State College, Series 2002, 5.000%, 11/01/32 -
AMBAC Insured
1,645 Massachusetts Industrial Finance Agency, Revenue Bonds, 7/08 at 100.00 Aa1 1,646,612
Whitehead Institute for Biomedical Research, Series 1993,
5.125%, 7/01/26
375 Puerto Rico Industrial, Tourist, Educational, Medical and 2/09 at 101.00 BBB- 376,170
Environmental Control Facilities Financing Authority, Higher
Education Revenue Bonds, Ana G. Mendez University System,
Series 1999, 5.375%, 2/01/19
------------------------------------------------------------------------------------------------------------------------------------
19,450 Total Education and Civic Organizations 19,941,532
------------------------------------------------------------------------------------------------------------------------------------
43
NMT
Nuveen Massachusetts Premium Income Municipal Fund (continued)
Portfolio of INVESTMENTS May 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 25.6% (16.0% OF TOTAL INVESTMENTS)
$ 1,250 Massachusetts Health and Educational Facilities Authority, Revenue 10/11 at 101.00 BBB+ $ 1,282,388
Bonds, Berkshire Health System, Series 2001E, 6.250%, 10/01/31
1,000 Massachusetts Health and Educational Facilities Authority, Revenue 11/11 at 101.00 AA 982,760
Bonds, Cape Cod Health Care Inc., Series 2001C,
5.250%, 11/15/31 - RAAI Insured
Massachusetts Health and Educational Facilities Authority,
Revenue Bonds, Capital Asset Program, Series 1998B-1:
1,800 5.375%, 2/01/26 (WI/DD, Settling 6/13/08) - MBIA Insured 8/18 at 100.00 AAA 1,841,778
770 5.375%, 2/01/28 (WI/DD, Settling 6/13/08) - MBIA Insured 8/18 at 100.00 AAA 781,696
1,500 Massachusetts Health and Educational Facilities Authority, 8/18 at 100.00 AAA 1,531,110
Revenue Bonds, Capital Asset Program, Series 1998B-2,
5.375%, 2/01/27 (WI/DD, Settling 6/09/08) - MBIA Insured
1,000 Massachusetts Health and Educational Facilities Authority, 7/12 at 101.00 BBB 1,022,160
Revenue Bonds, Caritas Christi Obligated Group, Series 2002B,
6.250%, 7/01/22
935 Massachusetts Health and Educational Facilities Authority, 8/15 at 100.00 AA 870,588
Revenue Bonds, Emerson Hospital, Series 2005E,
5.000%, 8/15/35 - RAAI Insured
1,000 Massachusetts Health and Educational Facilities Authority, 8/15 at 100.00 A 1,020,610
Revenue Bonds, Lahey Clinic Medical Center, Series 2005C,
5.000%, 8/15/21 - FGIC Insured
2,000 Massachusetts Health and Educational Facilities Authority, 8/17 at 100.00 A 2,049,740
Revenue Bonds, Lahey Medical Center, Series 2007D,
5.250%, 8/15/28
585 Massachusetts Health and Educational Facilities Authority, 7/17 at 100.00 BBB- 505,545
Revenue Bonds, Milford Regional Medical Center, Series 2007E,
5.000%, 7/15/32
1,000 Massachusetts Health and Educational Facilities Authority, 7/15 at 100.00 BBB- 911,660
Revenue Bonds, Milton Hospital Project, Series 2005D,
5.250%, 7/01/30
750 Massachusetts Health and Educational Facilities Authority, 7/08 at 100.00 AAA 750,968
Revenue Bonds, New England Medical Center Hospitals,
Series 1993G-1, 5.375%, 7/01/24 - MBIA Insured
75 Massachusetts Health and Educational Facilities Authority, 7/11 at 101.00 AA 78,525
Revenue Bonds, Partners HealthCare System Inc., Series 2001C,
5.750%, 7/01/32
375 Massachusetts Health and Educational Facilities Authority, 7/11 at 100.00 BBB 385,571
Revenue Bonds, UMass Memorial Health Care, Series 2001C,
6.625%, 7/01/32
1,445 Massachusetts Health and Educational Facilities Authority, 7/15 at 100.00 BBB 1,279,201
Revenue Bonds, UMass Memorial Health Care, Series 2005D,
5.000%, 7/01/33
2,000 Massachusetts State, Health and Educational Facilities Authority, 7/17 at 100.00 AA 2,035,000
Partners HealthCare System Inc., Series 2007G, 5.000%, 7/01/32
------------------------------------------------------------------------------------------------------------------------------------
17,485 Total Health Care 17,329,300
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 7.9% (4.9% OF TOTAL INVESTMENTS)
1,335 Massachusetts Development Finance Authority, Multifamily 7/17 at 100.00 AAA 1,241,083
Housing Revenue Bonds, Emerson Manor Project, Series 2007,
4.800%, 7/20/48
1,860 Massachusetts Development Financing Authority, Assisted Living 12/09 at 102.00 N/R 1,891,322
Revenue Bonds, Prospect House Apartments, Series 1999,
7.000%, 12/01/31
335 Massachusetts Housing Finance Agency, Housing Bonds, 6/15 at 100.00 AA- 320,729
Series 2006A, 5.100%, 12/01/37 (Alternative Minimum Tax)
500 Massachusetts Housing Finance Agency, Housing Revenue Bonds, 6/13 at 100.00 AA- 493,705
Series 2003S, 5.050%, 12/01/23 (Alternative Minimum Tax)
44
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY (continued)
$ 375 Massachusetts Housing Finance Agency, Rental Housing Mortgage 7/10 at 101.00 AAA $ 385,526
Revenue Bonds, Series 1999D, 5.500%, 7/01/13 - AMBAC Insured
(Alternative Minimum Tax)
1,000 Somerville Housing Authority, Massachusetts, GNMA Collateralized 5/12 at 103.00 AAA 1,028,220
Mortgage Revenue Bonds, Clarendon Hill Towers, Series 2002,
5.200%, 11/20/22
------------------------------------------------------------------------------------------------------------------------------------
5,405 Total Housing/Multifamily 5,360,585
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 1.9% (1.2% OF TOTAL INVESTMENTS)
1,500 Massachusetts Housing Finance Agency, Single Family Housing 6/16 at 100.00 AA 1,318,995
Revenue Bonds, Series 2006-126, 4.625%, 6/01/32
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 1.2% (0.8% OF TOTAL INVESTMENTS)
345 Massachusetts Development Finance Agency, Pioneer Valley No Opt. Call N/R 332,387
Resource Recovery Revenue Bonds, Eco/Springfield LLC,
Series 2006, 5.875%, 7/01/14 (Alternative Minimum Tax)
400 Massachusetts Development Finance Agency, Solid Waste No Opt. Call BBB 401,724
Disposal Revenue Bonds, Waste Management Inc., Series 2003,
5.450%, 6/01/14
------------------------------------------------------------------------------------------------------------------------------------
745 Total Industrials 734,111
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 7.4% (4.6% OF TOTAL INVESTMENTS)
1,270 Boston, Massachusetts, FHA-Insured Mortgage Revenue Bonds, 10/08 at 105.00 AAA 1,337,894
Deutsches Altenheim Inc., Series 1998A, 6.125%, 10/01/31
1,685 Massachusetts Development Finance Agency, Revenue Bonds, 10/12 at 102.00 BB- 1,521,184
Orchard Cove, Series 2007, 5.250%, 10/01/26
1,500 Massachusetts Development Finance Authority, 3/12 at 105.00 AAA 1,595,670
GNMA Collateralized Assisted Living Facility Revenue Bonds,
Arbors at Chicopee, Series 2001A, 6.250%, 9/20/42
(Alternative Minimum Tax)
150 Massachusetts Industrial Finance Agency, FHA-Insured Project 8/08 at 100.00 AAA 150,221
Revenue Bonds, Heights Crossing LP, Series 1995,
6.000%, 2/01/15 (Alternative Minimum Tax)
400 Massachusetts Industrial Finance Agency, First Mortgage 1/11 at 101.00 BBB- 388,488
Revenue Bonds, Berkshire Retirement Community,
Series 1994B, 4.750%, 7/01/17
------------------------------------------------------------------------------------------------------------------------------------
5,005 Total Long-Term Care 4,993,457
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 18.0% (11.2% OF TOTAL INVESTMENTS)
500 Ashland, Massachusetts, General Obligation Bonds, Series 2004, 5/15 at 100.00 Aaa 533,250
5.250%, 5/15/23 - AMBAC Insured
1,250 Boston, Massachusetts, General Obligation Bonds, Series 2005A, 1/15 at 100.00 AA+ 1,360,938
5.000%, 1/01/17
1,000 Fall River, Massachusetts, General Obligation Bonds, Series 2003, 2/13 at 101.00 AAA 1,051,100
5.000%, 2/01/21 - FSA Insured
2,500 Massachusetts Bay Transportation Authority, General Obligation No Opt. Call AAA 3,068,600
Transportation System Bonds, Series 1991A, 7.000%, 3/01/21
1,275 Massachusetts, General Obligation Bonds, Consolidated Loan, No Opt. Call AAA 1,457,223
Series 2001D, 6.000%, 11/01/13 - MBIA Insured
980 Monson, Massachusetts, General Obligation Bonds, Series 2002, 5/12 at 101.00 Aaa 1,036,115
5.250%, 5/15/22 - AMBAC Insured
1,260 Norwell, Massachusetts, General Obligation Bonds, Series 2003, No Opt. Call AA+ 1,366,029
5.000%, 11/15/20 - FGIC Insured
1,000 Puerto Rico, General Obligation and Public Improvement Bonds, No Opt. Call Baa3 1,034,190
Series 2001A, 5.500%, 7/01/29 - FGIC Insured
1,220 Worcester, Massachusetts, General Obligation Bonds, Series 2005A, 7/15 at 100.00 A- 1,293,041
5.000%, 7/01/19 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
10,985 Total Tax Obligation/General 12,200,486
------------------------------------------------------------------------------------------------------------------------------------
45
NMT
Nuveen Massachusetts Premium Income Municipal Fund (continued)
Portfolio of INVESTMENTS May 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 13.8% (8.6% OF TOTAL INVESTMENTS)
$ 210 Martha's Vineyard Land Bank, Massachusetts, Revenue Bonds, 5/14 at 100.00 AAA $ 214,958
Series 2004, 5.000%, 5/01/26 - AMBAC Insured
385 Massachusetts Bay Transportation Authority, Senior Lien Sales Tax No Opt. Call AAA 433,437
Revenue Refunding Bonds, Series 2004C, 5.250%, 7/01/21
975 Massachusetts Bay Transportation Authority, Senior Sales Tax 7/18 at 100.00 AAA 1,028,703
Revenue Bonds, Series 2006, 5.000%, 7/01/26
550 Massachusetts College Building Authority, Project Revenue Bonds, 5/14 at 100.00 AAA 582,164
Series 2004A, 5.000%, 5/01/19 - MBIA Insured
325 Massachusetts College Building Authority, Project Revenue Bonds, 5/16 at 100.00 AAA 327,948
Series 2006A, 5.000%, 5/01/31 - AMBAC Insured
1,200 Massachusetts College Building Authority, Project Revenue Bonds, 5/18 at 100.00 AAA 1,229,196
Series 2008A, 5.000%, 5/01/33 - AGC Insured
1,000 Massachusetts College Building Authority, Project Revenue Refunding No Opt. Call A1 1,086,340
Bonds, Series 2003B, 5.375%, 5/01/23 - XLCA Insured
1,300 Massachusetts School Building Authority, Dedicated Sales Tax 8/15 at 100.00 AAA 1,378,962
Revenue Bonds, Series 2005A, 5.000%, 8/15/20 - FSA Insured
540 Massachusetts, Special Obligation Dedicated Tax Revenue Bonds, No Opt. Call A 575,716
Series 2005, 5.000%, 1/01/20 - FGIC Insured
1,000 Massachusetts, Special Obligation Refunding Notes, Federal No Opt. Call Aaa 1,094,560
Highway Grant Anticipation Note Program, Series 2003A,
5.000%, 12/15/13 - FSA Insured
240 Puerto Rico Infrastructure Financing Authority, Special Tax No Opt. Call AAA 33,314
Revenue Bonds, Series 2005A, 0.000%, 7/01/43 -
AMBAC Insured
1,300 Puerto Rico, Highway Revenue Bonds, Highway and Transportation No Opt. Call AAA 1,393,067
Authority, Series 2003AA, 5.500%, 7/01/19 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
9,025 Total Tax Obligation/Limited 9,378,365
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 10.6% (6.6% OF TOTAL INVESTMENTS)
2,000 Massachusetts Port Authority, Revenue Bonds, Series 2003A, 7/13 at 100.00 AAA 2,034,920
5.000%, 7/01/33 - MBIA Insured
1,000 Massachusetts Port Authority, Special Facilities Revenue Bonds, 7/17 at 100.00 A2 943,830
BOSFUEL Corporation, Series 2007, 5.000%, 7/01/32 -
FGIC Insured (Alternative Minimum Tax)
225 Massachusetts Port Authority, Special Facilities Revenue Bonds, 1/11 at 101.00 AAA 182,003
Delta Air Lines Inc., Series 2001A, 5.000%, 1/01/27 - AMBAC
Insured (Alternative Minimum Tax)
4,000 Massachusetts Port Authority, Special Facilities Revenue Bonds, 9/08 at 100.00 AAA 3,999,600
US Airways Group Inc., Series 1996A, 5.750%, 9/01/16 -
MBIA Insured (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
7,225 Total Transportation 7,160,353
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 23.7% (14.8% OF TOTAL INVESTMENTS) (5)
550 Guam Economic Development Authority, Tobacco Settlement 5/11 at 100.00 Baa3 (5) 592,845
Asset-Backed Bonds, Series 2001B, 5.500%, 5/15/41
(Pre-refunded 5/15/11)
25 Massachusetts Bay Transportation Authority, Senior Sales Tax 7/18 at 100.00 Aa2 (5) 27,770
Revenue Bonds, Series 2006, 5.000%, 7/01/26
(Pre-refunded 7/01/18)
2,500 Massachusetts Development Finance Authority, GNMA Collateralized 10/11 at 105.00 AAA 2,943,675
Revenue Bonds, VOA Concord Assisted Living Inc., Series 2000A,
6.900%, 10/20/41 (Pre-refunded 10/20/11)
500 Massachusetts Development Finance Authority, Revenue Bonds, 9/11 at 101.00 A (5) 545,045
Belmont Hills School, Series 2001, 5.375%, 9/01/23
(Pre-refunded 9/01/11)
46
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (5) (continued)
$ 1,000 Massachusetts Development Finance Authority, Revenue Bonds, 7/13 at 101.00 A- (5) $ 1,133,090
Massachusetts College of Pharmacy and Allied Health Sciences,
Series 2003C, 5.750%, 7/01/33 (Pre-refunded 7/01/13)
410 Massachusetts Health and Educational Facilities Authority, 7/21 at 100.00 AAA 448,593
Revenue Bonds, CareGroup Inc., Series 1998A, 5.000%, 7/01/25
(Pre-refunded 7/01/21) - MBIA Insured
600 Massachusetts Health and Educational Facilities Authority, 5/12 at 100.00 Baa3 (5) 649,422
Revenue Bonds, New England Medical Center Hospitals,
Series 2002H, 5.375%, 5/15/19 (Pre-refunded 5/15/12) -
FGIC Insured
1,925 Massachusetts Health and Educational Facilities Authority, 7/11 at 101.00 AA (5) 2,114,497
Revenue Bonds, Partners HealthCare System Inc., Series 2001C,
5.750%, 7/01/32 (Pre-refunded 7/01/11)
1,000 Massachusetts Health and Educational Facilities Authority, 10/11 at 100.00 A+ (5) 1,078,300
Revenue Bonds, University of Massachusetts - Worcester
Campus, Series 2001B, 5.250%, 10/01/31 (Pre-refunded
10/01/11) - FGIC Insured
2,300 Massachusetts Industrial Finance Agency, Revenue Bonds, 9/08 at 101.00 A (5) 2,341,975
Belmont Hill School, Series 1998, 5.250%, 9/01/28
(Pre-refunded 9/01/08)
620 Massachusetts Port Authority, Revenue Bonds, Series 1982, 7/08 at 100.00 AAA 785,844
13.000%, 7/01/13 (ETM)
1,500 Massachusetts, Special Obligation Dedicated Tax Revenue Bonds, 1/14 at 100.00 A (5) 1,640,460
Series 2004, 5.250%, 1/01/25 (Pre-refunded 1/01/14) -
FGIC Insured
1,615 Springfield, Massachusetts, General Obligation Bonds, 1/13 at 100.00 AAA 1,747,624
Series 2003, 5.250%, 1/15/23 (Pre-refunded 1/15/13) -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
14,545 Total U.S. Guaranteed 16,049,140
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 3.1% (2.0% OF TOTAL INVESTMENTS)
1,000 Massachusetts Development Finance Agency, Resource Recovery 1/12 at 101.00 AAA 1,077,720
Revenue Bonds, SEMass System, Series 2001A, 5.625%, 1/01/16 -
MBIA Insured
1,000 Massachusetts Industrial Finance Agency, Resource Recovery 12/08 at 102.00 BBB 1,001,680
Revenue Refunding Bonds, Ogden Haverhill Project,
Series 1998A, 5.600%, 12/01/19 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
2,000 Total Utilities 2,079,400
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 11.2% (7.0% OF TOTAL INVESTMENTS)
2,000 Boston Water and Sewerage Commission, Massachusetts, 11/14 at 100.00 AA 2,085,720
General Revenue Bonds, Senior Series 2004A, 5.000%, 11/01/25
60 Massachusetts Water Pollution Abatement Trust, Pooled Loan 8/13 at 100.00 AAA 62,660
Program Bonds, Series 2003-9, 5.000%, 8/01/22
285 Massachusetts Water Pollution Abatement Trust, Pooled Loan 8/14 at 100.00 AAA 297,246
Program Bonds, Series 2004-10, 5.000%, 8/01/26
750 Massachusetts Water Pollution Abatement Trust, Pooled Loan 8/15 at 100.00 AAA 746,918
Program Bonds, Series 2005-11, 4.500%, 8/01/29
1,000 Massachusetts Water Pollution Abatement Trust, Pooled Loan 8/16 at 100.00 AAA 963,660
Program Bonds, Series 2006-12, 4.375%, 8/01/31
1,250 Massachusetts Water Pollution Abatement Trust, Revenue Bonds, 8/12 at 100.00 AAA 1,330,375
MWRA Loan Program, Series 2002A, 5.250%, 8/01/20
1,500 Massachusetts Water Resources Authority, General Revenue Bonds, 8/17 at 100.00 AAA 1,558,034
Series 2005A, 5.000%, 8/01/28 - MBIA Insured
625 Massachusetts Water Resources Authority, General Revenue Bonds, 8/16 at 100.00 AA 532,630
Series 2006A, 4.000%, 8/01/46
------------------------------------------------------------------------------------------------------------------------------------
7,470 Total Water and Sewer 7,577,243
------------------------------------------------------------------------------------------------------------------------------------
$ 102,305 Total Long-Term Investments (cost $104,075,866) - 155.8% 105,470,122
=============-----------------------------------------------------------------------------------------------------------------------
47
NMT
Nuveen Massachusetts Premium Income Municipal Fund (continued)
Portfolio of INVESTMENTS May 31, 2008
PRINCIPAL
AMOUNT (000) DESCRIPTION (1) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 4.4% (2.7% OF TOTAL INVESTMENTS)
$ 2,000 Massachusetts Development Finance Authority, Revenue Bonds, VMIG-1 $ 2,000,000
Wentworth Institute of Technology, Variable Rate Demand
Obligations, Series 2000, 6.250%, 10/01/30 -
AMBAC Insured (6)
1,000 Massachusetts Health and Educational Facilities Authority, A2 1,000,000
Revenue Bonds, CareGroup Inc., Variable Rate Demand
Obligations, Auction Rate Series 2004D, 3.900%, 7/01/24 -
MBIA Insured (6)
------------------------------------------------------------------------------------------------------------------------------------
$ 3,000 Total Short-Term Investments (cost $3,000,000) 3,000,000
============------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $107,075,866) - 160.2% 108,470,122
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - (10.0)% (6,749,756)
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (50.2)% (7) (34,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 67,720,366
====================================================================================================================
FORWARD SWAPS OUTSTANDING AT MAY 31, 2008:
FUND FIXED RATE UNREALIZED
NOTIONAL PAY/RECEIVE FLOATING RATE FIXED RATE PAYMENT EFFECTIVE TERMINATION APPRECIATION
COUNTERPARTY AMOUNT FLOATING RATE INDEX (ANNUALIZED) FREQUENCY DATE (8) DATE (DEPRECIATION)
------------------------------------------------------------------------------------------------------------------------------------
Royal Bank
of Canada $1,450,000 Pay SIFM 4.335% Quarterly 8/06/08 8/06/37 $92,080
====================================================================================================================================
SIFM - Securities Industry and Financial Markets (SIFM) Municipal Swap Index
(previously referred to as the Bond Market Association index or BMA).
(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, AMBAC, FGIC, MBIA, RAAI and
XLCA as of May 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) Investment valued at fair value using methods determined in
good faith by, or at the discretion of, the Board of
Trustees.
(5) 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.
(6) Investment has a maturity of more than one year, but has a
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) Preferred Shares, at Liquidation Value as a percentage of
total investments is (31.3)%.
(8) Effective date represents the date on which both the Fund
and counterparty commence interest payment accruals on each
forward swap contract.
N/R Not rated.
WI/DD Purchased on a when-issued or delayed delivery basis.
(ETM) Escrowed to maturity.
See accompanying notes to financial statements.
48
NMB
Nuveen Massachusetts Dividend Advantage Municipal Fund
Portfolio of INVESTMENTS
May 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 1.6% (1.0% OF TOTAL INVESTMENTS)
$ 490 Boston Industrial Development Financing Authority, Massachusetts, 9/12 at 102.00 Ba3 $ 450,584
Senior Revenue Bonds, Crosstown Center Project, Series 2002,
6.500%, 9/01/35 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 36.8% (22.8% OF TOTAL INVESTMENTS)
450 Massachusetts Development Finance Agency, Revenue Bonds, 9/17 at 100.00 AAA 455,621
Worcester Polytechnic Institute, Series 2007, 5.000%, 9/01/37 -
MBIA Insured
495 Massachusetts Development Finance Authority, Revenue Bonds, 7/15 at 100.00 AAA 508,043
Massachusetts College of Pharmacy and Allied Health Sciences,
Series 2005D, 5.000%, 7/01/27 - AGC Insured
500 Massachusetts Development Finance Authority, Revenue Bonds, 9/13 at 100.00 AA- 537,765
Milton Academy, Series 2003A, 5.000%, 9/01/19
2,100 Massachusetts Development Finance Authority, Revenue Bonds, 1/18 at 100.00 AAA 2,130,261
WGBH Educational Foundation, Series 2008A, 5.000%, 1/01/42 -
AGC Insured
1,000 Massachusetts Development Finance Authority, Revenue Refunding 5/29 at 105.00 A2 1,089,120
Bonds, Boston University, Series 1999P, 6.000%, 5/15/59
1,085 Massachusetts Educational Finance Authority, Educational Loan 7/10 at 100.00 AAA 1,120,848
Revenue Bonds, Series 2001E, 5.300%, 1/01/16 - AMBAC Insured
(Alternative Minimum Tax)
1,000 Massachusetts Health and Educational Facilities Authority, Revenue 6/13 at 100.00 AA- 1,069,490
Bonds, Boston College, Series 2003N, 5.250%, 6/01/18
1,000 Massachusetts Health and Educational Facilities Authority, Revenue 9/08 at 100.00 AA 778,768
Bonds, Hebrew College, Series 1999A, 3.763%, 7/01/31 (4)
2,000 Massachusetts Health and Educational Facilities Authority, Revenue 2/11 at 100.00 Aa2 2,049,800
Bonds, Tufts University, Series 2001I, 5.500%, 2/15/36
590 Massachusetts Health and Educational Facilities Authority, Revenue 7/16 at 100.00 AAA 611,004
Bonds, Williams College, Series 2007L, 5.000%, 7/01/31
------------------------------------------------------------------------------------------------------------------------------------
10,220 Total Education and Civic Organizations 10,350,720
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 27.8% (17.2% OF TOTAL INVESTMENTS)
500 Massachusetts Health and Educational Facilities Authority Revenue 1/18 at 100.00 N/R 493,160
Bonds, Quincy Medical Center Issue, Series A 2008,
6.500%, 1/15/38
500 Massachusetts Health and Educational Facilities Authority, Revenue 10/11 at 101.00 BBB+ 512,955
Bonds, Berkshire Health System, Series 2001E, 6.250%, 10/01/31
775 Massachusetts Health and Educational Facilities Authority, Revenue 8/18 at 100.00 AAA 792,988
Bonds, Capital Asset Program, Series 1998B-1, 5.375%, 2/01/26
(WI/DD, Settling 6/13/08) - MBIA Insured
500 Massachusetts Health and Educational Facilities Authority, Revenue 8/18 at 100.00 AAA 510,370
Bonds, Capital Asset Program, Series 1998B-2, 5.375%, 2/01/27
(WI/DD, Settling 6/09/08) - MBIA Insured
250 Massachusetts Health and Educational Facilities Authority, Revenue 1/09 at 101.00 BBB 248,580
Bonds, Caritas Christi Obligated Group, Series 1999A,
5.625%, 7/01/20
295 Massachusetts Health and Educational Facilities Authority, Revenue 1/12 at 101.00 N/R 304,092
Bonds, Covenant Health Systems Obligated Group, Series 2002,
6.000%, 7/01/31
49
NMB
Nuveen Massachusetts Dividend Advantage Municipal Fund (continued)
Portfolio of INVESTMENTS May 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE (continued)
$ 315 Massachusetts Health and Educational Facilities Authority, Revenue 8/15 at 100.00 AA $ 293,300
Bonds, Emerson Hospital, Series 2005E, 5.000%, 8/15/35 -
RAAI Insured
600 Massachusetts Health and Educational Facilities Authority, Revenue 8/15 at 100.00 A 612,366
Bonds, Lahey Clinic Medical Center, Series 2005C,
5.000%, 8/15/21 - FGIC Insured
1,000 Massachusetts Health and Educational Facilities Authority, Revenue 8/17 at 100.00 A 1,024,870
Bonds, Lahey Medical Center, Series 2007D, 5.250%, 8/15/28
290 Massachusetts Health and Educational Facilities Authority, Revenue 7/17 at 100.00 BBB- 250,612
Bonds, Milford Regional Medical Center, Series 2007E,
5.000%, 7/15/32
500 Massachusetts Health and Educational Facilities Authority, Revenue 7/15 at 100.00 BBB- 455,830
Bonds, Milton Hospital Project, Series 2005D, 5.250%, 7/01/30
500 Massachusetts Health and Educational Facilities Authority, Revenue 7/14 at 100.00 BB- 501,085
Bonds, Northern Berkshire Community Services Inc., Series 2004B,
6.375%, 7/01/34
1,000 Massachusetts Health and Educational Facilities Authority, Revenue 7/09 at 101.00 AA 1,021,920
Bonds, Partners HealthCare System Inc., Series 1999B,
5.125%, 7/01/19
35 Massachusetts Health and Educational Facilities Authority, Revenue 7/11 at 101.00 AA 36,645
Bonds, Partners HealthCare System Inc., Series 2001C,
5.750%, 7/01/32
500 Massachusetts Health and Educational Facilities Authority, Revenue 7/11 at 100.00 BBB 514,095
Bonds, UMass Memorial Health Care, Series 2001C,
6.625%, 7/01/32
285 Massachusetts Health and Educational Facilities Authority, Revenue 7/15 at 100.00 BBB 252,299
Bonds, UMass Memorial Health Care, Series 2005D,
5.000%, 7/01/33
------------------------------------------------------------------------------------------------------------------------------------
7,845 Total Health Care 7,825,167
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 12.1% (7.5% OF TOTAL INVESTMENTS)
570 Massachusetts Development Finance Authority, Multifamily 7/17 at 100.00 AAA 529,901
Housing Revenue Bonds, Emerson Manor Project, Series 2007,
4.800%, 7/20/48
135 Massachusetts Housing Finance Agency, Housing Bonds, 6/15 at 100.00 AA- 129,249
Series 2006A, 5.100%, 12/01/37 (Alternative Minimum Tax)
500 Massachusetts Housing Finance Agency, Housing Revenue 6/13 at 100.00 AA- 493,705
Bonds, Series 2003S, 5.050%, 12/01/23 (Alternative Minimum Tax)
1,215 Massachusetts Housing Finance Agency, Rental Housing Mortgage 1/11 at 100.00 AAA 1,224,125
Revenue Bonds, Series 2001A, 5.850%, 7/01/35 - AMBAC Insured
(Alternative Minimum Tax)
1,000 Somerville Housing Authority, Massachusetts, GNMA Collateralized 5/12 at 103.00 AAA 1,028,220
Mortgage Revenue Bonds, Clarendon Hill Towers, Series 2002,
5.200%, 11/20/22
------------------------------------------------------------------------------------------------------------------------------------
3,420 Total Housing/Multifamily 3,405,200
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 2.0% (1.3% OF TOTAL INVESTMENTS)
650 Massachusetts Housing Finance Agency, Single Family Housing 6/16 at 100.00 AA 571,565
Revenue Bonds, Series 2006-126, 4.625%, 6/01/32
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 1.3% (0.8% OF TOTAL INVESTMENTS)
160 Massachusetts Development Finance Agency, Pioneer Valley No Opt. Call N/R 154,150
Resource Recovery Revenue Bonds, Eco/Springfield LLC,
Series 2006, 5.875%, 7/01/14 (Alternative Minimum Tax)
200 Massachusetts Development Finance Agency, Solid Waste Disposal No Opt. Call BBB 200,862
Revenue Bonds, Waste Management Inc., Series 2003,
5.450%, 6/01/14
------------------------------------------------------------------------------------------------------------------------------------
360 Total Industrials 355,012
------------------------------------------------------------------------------------------------------------------------------------
50
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 8.6% (5.3% OF TOTAL INVESTMENTS)
$ 725 Massachusetts Development Finance Agency, Revenue Bonds, 10/12 at 102.00 BB- $ 654,516
Orchard Cove, Series 2007, 5.250%, 10/01/26
655 Massachusetts Development Finance Authority, First Mortgage 7/11 at 102.00 BBB- 701,538
Revenue Bonds, Berkshire Retirement Community - Edgecombe
Project, Series 2001A, 6.750%, 7/01/21
1,000 Massachusetts Development Finance Authority, GNMA 3/12 at 105.00 AAA 1,063,780
Collateralized Assisted Living Facility Revenue Bonds, Arbors at
Chicopee, Series 2001A, 6.250%, 9/20/42 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
2,380 Total Long-Term Care 2,419,834
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 17.1% (10.6% OF TOTAL INVESTMENTS)
310 Ashland, Massachusetts, General Obligation Bonds, Series 2004, 5/15 at 100.00 Aaa 330,615
5.250%, 5/15/23 - AMBAC Insured
2,000 Brookline, Massachusetts, General Obligation Bonds, Series 2000, 4/10 at 101.00 Aaa 2,110,580
5.375%, 4/01/17
440 Fall River, Massachusetts, General Obligation Bonds, Series 2003, 2/13 at 101.00 AAA 462,484
5.000%, 2/01/21 - FSA Insured
750 Massachusetts, General Obligation Bonds, Consolidated Loan, No Opt. Call AA 861,293
Series 2002D, 5.500%, 8/01/19
500 Norwell, Massachusetts, General Obligation Bonds, Series 2003, No Opt. Call AA+ 542,075
5.000%, 11/15/20 - FGIC Insured
500 Puerto Rico, General Obligation and Public Improvement Bonds, No Opt. Call Baa3 517,095
Series 2001A, 5.500%, 7/01/29 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
4,500 Total Tax Obligation/General 4,824,142
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 11.7% (7.2% OF TOTAL INVESTMENTS)
395 Martha's Vineyard Land Bank, Massachusetts, Revenue Bonds, 5/14 at 100.00 AAA 404,326
Series 2004, 5.000%, 5/01/26 - AMBAC Insured
85 Massachusetts Bay Transportation Authority, Assessment Bonds, 7/10 at 100.00 AAA 87,360
Series 2000A, 5.250%, 7/01/30
385 Massachusetts Bay Transportation Authority, Senior Lien Sales Tax No Opt. Call AAA 433,437
Revenue Refunding Bonds, Series 2004C, 5.250%, 7/01/21
230 Massachusetts College Building Authority, Project Revenue Bonds, 5/14 at 100.00 AAA 243,450
Series 2004A, 5.000%, 5/01/19 - MBIA Insured
250 Massachusetts College Building Authority, Project Revenue Bonds, 5/16 at 100.00 AAA 252,268
Series 2006A, 5.000%, 5/01/31 - AMBAC Insured
550 Massachusetts College Building Authority, Project Revenue Bonds, 5/18 at 100.00 AAA 563,382
Series 2008A, 5.000%, 5/01/33 - AGC Insured
500 Massachusetts School Building Authority, Dedicated Sales Tax 8/15 at 100.00 AAA 530,370
Revenue Bonds, Series 2005A, 5.000%, 8/15/20 - FSA Insured
230 Massachusetts, Special Obligation Dedicated Tax Revenue Bonds, No Opt. Call A 245,212
Series 2005, 5.000%, 1/01/20 - FGIC Insured
500 Virgin Islands Public Finance Authority, Gross Receipts Taxes 10/10 at 101.00 BBB+ 531,910
Loan Note, Series 1999A, 6.375%, 10/01/19
------------------------------------------------------------------------------------------------------------------------------------
3,125 Total Tax Obligation/Limited 3,291,715
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 1.3% (0.8% OF TOTAL INVESTMENTS)
400 Massachusetts Port Authority, Special Facilities Revenue Bonds, 7/17 at 100.00 A2 377,532
BOSFUEL Corporation, Series 2007, 5.000%, 7/01/32 -
FGIC Insured (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
51
NMB
Nuveen Massachusetts Dividend Advantage Municipal Fund (continued)
Portfolio of INVESTMENTS May 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 17.6% (10.9% OF TOTAL INVESTMENTS) (5)
$ 1,000 Boston, Massachusetts, General Obligation Bonds, Series 2001A, 2/11 at 100.00 AA+ (5) $ 1,061,230
5.000%, 2/01/20 (Pre-refunded 2/01/11)
1,675 Lawrence, Massachusetts, General Obligation Bonds, Series 2001, 2/11 at 100.00 Aaa 1,777,560
5.000%, 2/01/21 (Pre-refunded 2/01/11) - AMBAC Insured
125 Massachusetts Bay Transportation Authority, Assessment Bonds, 7/10 at 100.00 Aa1 (5) 132,401
Series 2000A, 5.250%, 7/01/30 (Pre-refunded 7/01/10)
80 Massachusetts Health and Educational Facilities Authority, 1/12 at 101.00 Aaa 88,920
Revenue Bonds, Covenant Health Systems Obligated Group,
Series 2002, 6.000%, 7/01/31 (Pre-refunded 1/01/12)
965 Massachusetts Health and Educational Facilities Authority, 7/11 at 101.00 AA (5) 1,059,995
Revenue Bonds, Partners HealthCare System Inc., Series 2001C,
5.750%, 7/01/32 (Pre-refunded 7/01/11)
750 Massachusetts, Special Obligation Dedicated Tax Revenue Bonds, 1/14 at 100.00 A (5) 820,230
Series 2004, 5.250%, 1/01/25 (Pre-refunded 1/01/14) -
FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
4,595 Total U.S. Guaranteed 4,940,336
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 5.9% (3.6% OF TOTAL INVESTMENTS)
1,070 Massachusetts Development Finance Agency, Resource Recovery 1/12 at 101.00 AAA 1,153,160
Revenue Bonds, SEMass System, Series 2001A, 5.625%, 1/01/14 -
MBIA Insured
500 Massachusetts Industrial Finance Agency, Resource Recovery 12/08 at 102.00 BBB 500,840
Revenue Refunding Bonds, Ogden Haverhill Project, Series 1998A,
5.600%, 12/01/19 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
1,570 Total Utilities 1,654,000
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 14.3% (8.8% OF TOTAL INVESTMENTS)
530 Boston Water and Sewerage Commission, Massachusetts, 11/14 at 100.00 AA 552,716
General Revenue Bonds, Senior Series 2004A, 5.000%, 11/01/25
125 Guam Government Waterworks Authority, Water and Wastewater 7/15 at 100.00 Ba2 126,783
System Revenue Bonds, Series 2005, 6.000%, 7/01/25
500 Massachusetts Water Pollution Abatement Trust, Pooled Loan 8/15 at 100.00 AAA 497,945
Program Bonds, Series 2005-11, 4.500%, 8/01/29
400 Massachusetts Water Pollution Abatement Trust, Pooled Loan 8/16 at 100.00 AAA 385,464
Program Bonds, Series 2006-12, 4.375%, 8/01/31
500 Massachusetts Water Pollution Abatement Trust, Revenue Bonds, 8/12 at 100.00 AAA 532,149
MWRA Loan Program, Series 2002A, 5.250%, 8/01/20
1,405 Massachusetts Water Pollution Abatement Trust, Revenue Bonds, 8/09 at 101.00 AAA 1,450,057
MWRA Loan Program, Subordinate Series 1999A, 5.750%, 8/01/29
250 Massachusetts Water Resources Authority, General Revenue Bonds, 8/17 at 100.00 AAA 259,672
Series 2005A, 5.000%, 8/01/28 - MBIA Insured
250 Massachusetts Water Resources Authority, General Revenue Bonds, 8/16 at 100.00 AA 213,053
Series 2006A, 4.000%, 8/01/46
------------------------------------------------------------------------------------------------------------------------------------
3,960 Total Water and Sewer 4,017,839
------------------------------------------------------------------------------------------------------------------------------------
$ 43,515 Total Long-Term Investments (cost $44,111,865) - 158.1% 44,483,646
=============-----------------------------------------------------------------------------------------------------------------------
52
PRINCIPAL
AMOUNT (000) DESCRIPTION (1) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 3.6% (2.2% OF TOTAL INVESTMENTS)
$ 1,000 Massachusetts Development Finance Authority, Revenue Bonds, VMIG-1 $ 1,000,000
Wentworth Institute of Technology, Variable Rate Demand
Obligations, Series 2000, 6.250%, 10/01/30 - AMBAC Insured (6)
=============-----------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (cost $1,000,000) 1,000,000
--------------------------------------------------------------------------------------------------------------------
Total Investments (cost $45,111,865) - 161.7% 45,483,646
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - (8.4)% (2,348,337)
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (53.3)% (7) (15,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $28,135,309
====================================================================================================================
FORWARD SWAPS OUTSTANDING AT MAY 31, 2008:
FUND FIXED RATE UNREALIZED
NOTIONAL PAY/RECEIVE FLOATING RATE FIXED RATE PAYMENT EFFECTIVE TERMINATION APPRECIATION
COUNTERPARTY AMOUNT FLOATING RATE INDEX (ANNUALIZED) FREQUENCY DATE (8) DATE (DEPRECIATION)
------------------------------------------------------------------------------------------------------------------------------------
Royal Bank
of Canada $900,000 Pay SIFM 4.335% Quarterly 8/06/08 8/06/37 $57,153
====================================================================================================================================
SIFM - Securities Industry and Financial Markets (SIFM) Municipal Swap Index
(previously referred to as the Bond Market Association Index or BMA).
(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, AMBAC, FGIC, MBIA, RAAI and
XLCA as of May 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) Investment valued at fair value using methods determined in
good faith by, or at the discretion of, the Board of
Trustees.
(5) 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.
(6) Investment has a maturity of more than one year, but has a
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) Preferred Shares, at Liquidation Value as a percentage of
total investments is (33.0)%.
(8) Effective date represents the date on which both the Fund
and counterparty commence interest payment accruals on each
forward swap contract.
N/R Not rated.
WI/DD Purchased on a when-issued or delayed delivery basis.
See accompanying notes to financial statements.
53
NGX
Nuveen Insured Massachusetts Tax-Free Advantage Municipal Fund
Portfolio of INVESTMENTS
May 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 24.0% (14.5% OF TOTAL INVESTMENTS)
$ 1,135 Massachusetts Development Finance Agency, Revenue Bonds, 10/15 at 100.00 AAA $ 1,138,030
Boston University, Series 2005T-1, 5.000%, 10/01/39 -
AMBAC Insured
600 Massachusetts Development Finance Agency, Revenue Bonds, 9/17 at 100.00 AAA 607,494
Worcester Polytechnic Institute, Series 2007, 5.000%, 9/01/37 -
MBIA Insured
1,250 Massachusetts Development Finance Authority, Revenue Bonds, 9/13 at 100.00 A1 1,255,638
Middlesex School, Series 2003, 5.000%, 9/01/33
3,000 Massachusetts Development Finance Authority, Revenue Bonds, 1/18 at 100.00 AAA 3,043,230
WGBH Educational Foundation, Series 2008A, 5.000%, 1/01/42 -
AGC Insured
1,750 Massachusetts Health and Educational Facilities Authority, 6/13 at 100.00 AA- 1,783,828
Revenue Bonds, Boston College, Series 2003N, 5.125%, 6/01/37
1,500 Massachusetts Health and Educational Facilities Authority, 11/12 at 100.00 AAA 1,506,420
Revenue Bonds, Worcester State College, Series 2002,
5.000%, 11/01/32 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
9,235 Total Education and Civic Organizations 9,334,640
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 14.9% (9.0% OF TOTAL INVESTMENTS)
600 Massachusetts Health and Educational Facilities Authority, 8/18 at 100.00 AAA 611,016
Revenue Bonds, Capital Asset Program, Series 1998B-1,
5.375%, 2/01/27 (WI/DD, Settling 6/13/08) - MBIA Insured
1,500 Massachusetts Health and Educational Facilities Authority, 8/18 at 100.00 AAA 1,522,785
Revenue Bonds, Capital Asset Program, Series 1998B-2,
5.375%, 2/01/28 (WI/DD, Settling 6/09/08) - MBIA Insured
500 Massachusetts Health and Educational Facilities Authority, 7/08 at 102.00 AAA 502,730
Revenue Bonds, CareGroup Inc., Series 1998A, 5.000%, 7/01/25 -
MBIA Insured
585 Massachusetts Health and Educational Facilities Authority, 7/17 at 100.00 BBB- 505,545
Revenue Bonds, Milford Regional Medical Center, Series 2007E,
5.000%, 7/15/32
200 Massachusetts Health and Educational Facilities Authority, 7/15 at 100.00 BBB- 182,332
Revenue Bonds, Milton Hospital Project, Series 2005D,
5.250%, 7/01/30
2,400 Massachusetts Health and Educational Facilities Authority, 5/12 at 100.00 Aaa 2,238,600
Revenue Bonds, New England Medical Center Hospitals,
Series 2002H, 5.000%, 5/15/25 - FGIC Insured
250 Massachusetts Health and Educational Facilities Authority, 7/15 at 100.00 BBB 221,315
Revenue Bonds, UMass Memorial Health Care, Series 2005D,
5.000%, 7/01/33
------------------------------------------------------------------------------------------------------------------------------------
6,035 Total Health Care 5,784,323
------------------------------------------------------------------------------------------------------------------------------------
54
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 10.2% (6.2% OF TOTAL INVESTMENTS)
$ 775 Massachusetts Development Finance Authority, Multifamily 7/17 at 100.00 AAA $ 720,479
Housing Revenue Bonds, Emerson Manor Project, Series 2007,
4.800%, 7/20/48
2,000 Massachusetts Housing Finance Agency, Housing Bonds, 12/12 at 100.00 AA- 1,972,760
Series 2003H, 5.125%, 6/01/43
1,265 Massachusetts Housing Finance Agency, Rental Housing Mortgage 7/12 at 100.00 AAA 1,264,937
Revenue Bonds, Series 2002H, 5.200%, 7/01/42 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
4,040 Total Housing/Multifamily 3,958,176
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 4.7% (2.9% OF TOTAL INVESTMENTS)
1,750 Massachusetts Development Finance Authority, GNMA 12/12 at 105.00 AAA 1,870,628
Collateralized Revenue Bonds, Neville Communities, Series 2002A,
6.000%, 6/20/44
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 20.9% (12.7% OF TOTAL INVESTMENTS)
1,280 Littleton, Massachusetts, General Obligation Bonds, Series 2003, 1/13 at 101.00 A+ 1,325,760
5.000%, 1/15/21 - FGIC Insured
3,000 Massachusetts, General Obligation Bonds, Consolidated Loan, No Opt. Call AAA 3,365,789
Series 2004B, 5.250%, 8/01/21 - FSA Insured
1,705 North Attleborough, Massachusetts, General Obligation Bonds, 7/14 at 101.00 A1 1,872,175
Series 2004, 5.000%, 7/15/15 - FGIC Insured
1,500 Pittsfield, Massachusetts, General Obligation Bonds, 4/12 at 101.00 AAA 1,578,015
Series 2002, 5.000%, 4/15/18 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
7,485 Total Tax Obligation/General 8,141,739
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 25.7% (15.6% OF TOTAL INVESTMENTS)
3,000 Martha's Vineyard Land Bank, Massachusetts, Revenue Bonds, 5/13 at 100.00 AAA 3,018,060
Series 2002, 5.000%, 5/01/32 - AMBAC Insured
750 Massachusetts College Building Authority, Project Revenue Bonds, 5/18 at 100.00 AAA 768,248
Series 2008A, 5.000%, 5/01/33 - AGC Insured
2,790 Massachusetts College Building Authority, Project Revenue 5/13 at 100.00 A1 2,866,446
Refunding Bonds, Series 2003A, 5.250%, 5/01/22 - XLCA Insured
Massachusetts Development Finance Authority, Revenue Bonds, 100
Cambridge Street Redevelopment, M/SRBC Project, Series 2002A:
1,475 5.125%, 8/01/28 - MBIA Insured 2/12 at 100.00 AAA 1,502,273
1,500 5.125%, 2/01/34 - MBIA Insured 2/12 at 100.00 AAA 1,519,140
300 Massachusetts, Special Obligation Dedicated Tax Revenue Bonds, No Opt. Call A 319,842
Series 2005, 5.000%, 1/01/20 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
9,815 Total Tax Obligation/Limited 9,994,009
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 3.9% (2.4% OF TOTAL INVESTMENTS)
1,000 Massachusetts Port Authority, Revenue Bonds, Series 2003A, 7/13 at 100.00 AAA 1,017,460
5.000%, 7/01/33 - MBIA Insured
500 Massachusetts Turnpike Authority, Metropolitan Highway System 1/09 at 101.00 AAA 499,980
Revenue Bonds, Subordinate Series 1999A, 5.000%, 1/01/39 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
1,500 Total Transportation 1,517,440
------------------------------------------------------------------------------------------------------------------------------------
55
NGX
Nuveen Insured Massachusetts Tax-Free Advantage Municipal Fund (continued)
Portfolio of INVESTMENTS May 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 39.3% (23.8% OF TOTAL INVESTMENTS) (4)
$ 2,000 Massachusetts Bay Transportation Authority, Senior Sales Tax 7/12 at 100.00 AAA $ 2,157,080
Revenue Refunding Bonds, Series 2002A, 5.000%, 7/01/27
(Pre-refunded 7/01/12) - FGIC Insured
500 Massachusetts Development Finance Authority, Revenue Bonds, 7/13 at 101.00 A- (4) 581,150
Massachusetts College of Pharmacy and Allied Health Sciences,
Series 2003C, 6.375%, 7/01/23 (Pre-refunded 7/01/13)
100 Massachusetts Health and Educational Facilities Authority, 5/12 at 100.00 Aaa 107,546
Revenue Bonds, New England Medical Center Hospitals,
Series 2002H, 5.000%, 5/15/25 (Pre-refunded 5/15/12) -
FGIC Insured
620 Massachusetts Port Authority, Revenue Bonds, Series 1982, 7/08 at 100.00 AAA 785,844
13.000%, 7/01/13 (ETM)
2,000 Massachusetts, General Obligation Bonds, Consolidated Loan, 11/11 at 100.00 AAA 2,138,300
Series 2001D, 5.000%, 11/01/20 (Pre-refunded 11/01/11) -
MBIA Insured
1,000 Massachusetts, Special Obligation Dedicated Tax Revenue Bonds, 1/14 at 100.00 A (4) 1,093,640
Series 2004, 5.250%, 1/01/21 (Pre-refunded 1/01/14) -
FGIC Insured
1,025 Maynard, Massachusetts, General Obligation Bonds, Series 2003, 2/13 at 101.00 Aaa 1,142,660
5.500%, 2/01/19 (Pre-refunded 2/01/13) - MBIA Insured
1,500 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/10 at 101.00 AAA 1,605,975
Series 2000HH, 5.250%, 7/01/29 (Pre-refunded 7/01/10) -
FSA Insured
3,000 Springfield, Massachusetts, General Obligation Bonds, 1/13 at 100.00 AAA 3,246,360
Series 2003, 5.250%, 1/15/22 (Pre-refunded 1/15/13) -
MBIA Insured
2,140 University of Massachusetts Building Authority, Senior Lien 11/14 at 100.00 AAA 2,403,883
Project Revenue Bonds, Series 2004-1, 5.375%, 11/01/21
(Pre-refunded 11/01/14) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
13,885 Total U.S. Guaranteed 15,262,438
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 17.6% (10.6% OF TOTAL INVESTMENTS)
1,900 Lynn Water and Sewer Commission, Massachusetts, General 12/13 at 100.00 AAA 1,918,183
Revenue Bonds, Series 2003A, 5.000%, 12/01/32 - MBIA Insured
600 Massachusetts Water Pollution Abatement Trust, Pooled Loan 8/16 at 100.00 AAA 578,196
Program Bonds, Series 2006-12, 4.375%, 8/01/31
1,000 Massachusetts Water Resources Authority, General Revenue No Opt. Call AAA 1,119,120
Bonds, Series 2002J, 5.250%, 8/01/19 - FSA Insured
1,000 Massachusetts Water Resources Authority, General Revenue 8/13 at 100.00 AAA 1,035,080
Bonds, Series 2004D, 5.000%, 8/01/24 - MBIA Insured
Massachusetts Water Resources Authority, General Revenue
Bonds, Series 2006A:
1,500 5.000%, 8/01/31 - AMBAC Insured 8/16 at 100.00 AAA 1,541,415
125 4.000%, 8/01/46 8/16 at 100.00 AA 106,526
56
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER (continued)
$ 495 Springfield Water and Sewerage Commission, Massachusetts, 7/14 at 100.00 AAA $ 528,516
General Revenue Bonds, Series 2003A, 5.000%, 7/01/16 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
6,620 Total Water and Sewer 6,827,036
------------------------------------------------------------------------------------------------------------------------------------
$ 60,365 Total Long-Term Investments (cost $61,633,693) - 161.2% 62,690,429
=============-----------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 3.9% (2.3% OF TOTAL INVESTMENTS)
$ 1,500 Massachusetts Health and Educational Facilities Authority, A2 1,500,000
Revenue Bonds, CareGroup Inc., Variable Rate Demand
Obligations, Auction Rate Series 2004D, 3.900%, 7/01/24 -
MBIA Insured (5)
=============-----------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (cost $1,500,000) 1,500,000
--------------------------------------------------------------------------------------------------------------------
Total Investments (cost $63,133,693) - 165.1% 64,190,429
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - (12.4)% (4,816,997)
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (52.7)% (6) (20,500,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $38,873,432
====================================================================================================================
As of May 31, 2008, at least 80% of the Fund's net assets
(including net assets attributable to Preferred shares) are
invested in municipal securities that are either covered by
Original Issue Insurance, Secondary Market Insurance or
Portfolio Insurance which ensures the timely payment of
principal and interest. Up to 20% of the Fund's net assets
(including net assets attributable to Preferred shares) may
be invested in municipal securities that are (i) either
backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities (also
ensuring the timely payment of principal and interest), or
(ii) rated, at the time of investment, within the four
highest grades (Baa or BBB or better by Moody's, Standard &
Poor's or Fitch) or unrated but judged to be of comparable
quality by the Adviser.
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares unless
otherwise noted.
(2) Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates (month
and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying
prices at later dates. Certain mortgage-backed securities
may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered
public accounting firm): Using the higher of Standard &
Poor's 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 reflects the ratings on certain
bonds insured by AMBAC, FGIC, MBIA and XLCA as of May 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) Investment has a maturity of more than one year, but has a
variable rate and demand features which qualify it as a
short-term investment. The rate disclosed is that in effect
at the end of the reporting period. This rate changes
periodically based on market conditions or a specified
market index.
(6) Preferred Shares, at Liquidation Value as a percentage of
total investments is (31.9)%.
WI/DD Purchased on a when-issued or delayed delivery basis.
(ETM) Escrowed to maturity.
See accompanying notes to financial statements.
57
NOM
Nuveen Missouri Premium Income Municipal Fund
Portfolio of INVESTMENTS
May 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 3.3% (2.1% OF TOTAL INVESTMENTS)
$ 1,000 Missouri Development Finance Board, Solid Waste Disposal No Opt. Call AA- $ 1,028,210
Revenue Bonds, Procter and Gamble Inc., Series 1999,
5.200%, 3/15/29 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 3.7% (2.4% OF TOTAL INVESTMENTS)
250 Lincoln University, Missouri, Auxillary System Revenue Bonds, 6/17 at 100.00 AAA 256,673
Series 2007, 5.125%, 6/01/37 - AGC Insured
500 Missouri Health and Educational Facilities Authority, Revenue 8/08 at 101.00 A3 502,765
Bonds, St. Louis Priory School, Series 2000, 5.650%, 2/01/25
365 Missouri Health and Educational Facilities Authority, Revenue 4/11 at 100.00 Aaa 383,670
Bonds, Webster University, Series 2001, 5.500%, 4/01/18 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
1,115 Total Education and Civic Organizations 1,143,108
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 20.4% (13.2% OF TOTAL INVESTMENTS)
710 Cape Girardeau County Industrial Development Authority, Missouri, 6/17 at 100.00 N/R 652,000
Health Facilities Revenue Bonds, Southeast Missouri Hospital
Association, Series 2007, 5.000%, 6/01/27
480 Cass County, Missouri, Hospital Revenue Bonds, Series 2007, 11/16 at 100.00 N/R 452,554
5.625%, 5/01/38
480 Clinton County Industrial Development Authority, Missouri, Revenue 12/17 at 100.00 N/R 388,944
Bonds, Cameron Regional Medical Center, Series 2007,
5.000%, 12/01/37
750 Joplin Industrial Development Authority, Missouri, Health Facilities 2/15 at 102.00 BBB+ 753,023
Revenue Bonds, Freeman Health System, Series 2004,
5.500%, 2/15/29
500 Missouri Health & Educational Facilities Authority, Saint Lukes 6/11 at 101.00 AAA 511,210
Episcopal- Presbyterian Hospitals Revenue Bonds, Series 2001,
5.250%, 12/01/26 - FSA Insured
Missouri Health and Educational Facilities Authority, Revenue
Bonds, BJC Health System, Series 2003:
1,500 5.125%, 5/15/25 5/13 at 100.00 AA 1,519,935
1,155 5.250%, 5/15/32 5/13 at 100.00 AA 1,165,499
425 Missouri Health and Educational Facilities Authority, Revenue 8/08 at 100.00 BBB+ 425,451
Bonds, Lake Regional Health System, Series 1996,
6.500%, 2/15/21
500 Missouri Health and Educational Facilities Authority, Revenue 2/14 at 100.00 BBB+ 501,640
Bonds, Lake Regional Health System, Series 2003,
5.700%, 2/15/34
------------------------------------------------------------------------------------------------------------------------------------
6,500 Total Health Care 6,370,256
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 6.2% (4.0% OF TOTAL INVESTMENTS)
295 Missouri Housing Development Commission, Multifamily Housing 12/11 at 100.00 AA 306,393
Revenue Bonds, Series 2001II, 5.250%, 12/01/16
500 St. Charles County Industrial Development Authority, Missouri, 10/08 at 102.00 AAA 500,130
FHA-Insured Multifamily Housing Revenue Bonds, Ashwood
Apartments, Series 1998A, 5.600%, 4/01/30 - FSA Insured
(Alternative Minimum Tax)
485 St. Louis County Industrial Development Authority, Missouri, 10/08 at 101.00 AAA 496,519
GNMA Collateralized Multifamily Housing Revenue Refunding
Bonds, South Summit Apartments, Series 1997A, 5.950%, 4/20/17
58
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY (continued)
$ 600 St. Louis County Industrial Development Authority, Missouri, 10/08 at 101.00 AAA $ 614,274
GNMA Collateralized Multifamily Housing Revenue Refunding
Bonds, South Summit Apartments, Series 1997B, 6.000%, 10/20/15
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
1,880 Total Housing/Multifamily 1,917,316
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 8.5% (5.5% OF TOTAL INVESTMENTS)
15 Missouri Housing Development Commission, Single Family 9/08 at 103.00 AAA 15,264
Mortgage Revenue Bonds, Homeownership Loan Program,
Series 1995C, 7.250%, 9/01/26 (Alternative Minimum Tax)
90 Missouri Housing Development Commission, Single Family 3/10 at 100.00 AAA 92,450
Mortgage Revenue Bonds, Homeownership Loan Program,
Series 2000B-1, 6.250%, 3/01/31 (Alternative Minimum Tax)
730 Missouri Housing Development Commission, Single Family 3/16 at 104.50 AAA 739,052
Mortgage Revenue Bonds, Homeownership Loan Program,
Series 2006E-1, 5.600%, 3/01/37 (Alternative Minimum Tax)
980 Missouri Housing Development Commission, Single Family 9/16 at 100.00 AAA 908,391
Mortgage Revenue Bonds, Homeownership Loan Program,
Series 2007A-1, 4.700%, 9/01/27 (Alternative Minimum Tax)
1,000 Missouri Housing Development Commission, Single Family 3/17 at 100.00 AAA 908,210
Mortgage Revenue Bonds, Homeownership Loan Program,
Series 2007C-1, 4.800%, 9/01/38 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
2,815 Total Housing/Single Family 2,663,367
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 8.3% (5.4% OF TOTAL INVESTMENTS)
1,750 Cole County Industrial Development Authority, Missouri, 2/14 at 100.00 N/R 1,723,382
Revenue Bonds, Lutheran Senior Services - Heisinger Project,
Series 2004, 5.500%, 2/01/35
475 Lees Summit Industrial Development Authority, Missouri, 8/17 at 100.00 N/R 401,945
Revenue Bonds, John Knox Village Obligated Group,
Series 2007A, 5.125%, 8/15/32
500 St. Louis County Industrial Development Authority, Missouri, 9/17 at 100.00 N/R 471,985
Revenue Bonds, Friendship Village of West County, Series 2007A,
5.500%, 9/01/28
------------------------------------------------------------------------------------------------------------------------------------
2,725 Total Long-Term Care 2,597,312
------------------------------------------------------------------------------------------------------------------------------------
MATERIALS - 2.2% (1.5% OF TOTAL INVESTMENTS)
750 Sugar Creek, Missouri, Industrial Development Revenue Bonds, 6/13 at 101.00 BBB 675,615
Lafarge North America Inc., Series 2003A, 5.650%, 6/01/37
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 30.5% (19.7% OF TOTAL INVESTMENTS)
1,500 Camdenton Reorganized School District R3, Camden County, No Opt. Call AAA 1,600,575
Missouri, General Obligation Bonds, Series 2005, 5.250%, 3/01/24 -
FSA Insured
500 Jackson County School District R-7, Lees Summit, Missouri, 3/12 at 100.00 AAA 536,390
General Obligation Refunding and Improvement Bonds,
Series 2002, 5.250%, 3/01/18 - FSA Insured
500 Missouri School Boards Association, Lease Participation 3/17 at 100.00 AAA 531,310
Certificates, Clay County School District 53 Liberty, Series 2007,
5.250%, 3/01/27 - FSA Insured
1,630 North Kansas City School District, Missouri, General Obligation 3/13 at 100.00 AA+ 1,701,246
Bonds, Series 2003A, 5.000%, 3/01/23
1,000 Puerto Rico, General Obligation and Public Improvement Bonds, No Opt. Call AAA 1,070,700
Series 2001A, 5.500%, 7/01/20 - MBIA Insured
2,020 Ritenour Consolidated School District, St. Louis County, Missouri, No Opt. Call A1 2,273,489
General Obligation Bonds, Series 1995, 7.375%, 2/01/12 -
FGIC Insured
1,405 St. Louis Board of Education, Missouri, General Obligation 4/13 at 100.00 AAA 1,480,364
Refunding Bonds, Series 2003A, 5.000%, 4/01/19 - FSA Insured
270 St. Louis County Pattonville School District R3, Missouri, General 3/14 at 100.00 AAA 292,073
Obligation Bonds, Series 2004, 5.250%, 3/01/20 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
8,825 Total Tax Obligation/General 9,486,147
------------------------------------------------------------------------------------------------------------------------------------
59
NOM
Nuveen Missouri Premium Income Municipal Fund (continued)
Portfolio of INVESTMENTS May 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 27.8% (18.0% OF TOTAL INVESTMENTS)
$ 600 Chesterfield, Missouri, Certificates of Participation, Series 2005, 12/15 at 100.00 Aa1 $ 606,732
5.000%, 12/01/24 - FGIC Insured
80 Cottleville, Missouri, Certificates of Participation, Series 2006, 8/14 at 100.00 N/R 75,395
5.250%, 8/01/31
465 Fenton, Missouri, Tax Increment Revenue Bonds, Gravois Bluffs 4/14 at 100.00 N/R 463,851
Redevelopment Project, Series 2006, 4.500%, 4/01/21
315 Fulton, Missouri, Tax Increment Revenue Bonds, Fulton Commons 6/16 at 100.00 N/R 267,051
Redevelopment Project, Series 2006, 5.000%, 6/01/28
475 Kansas City Tax Increment Financing District, Missouri, Tax 6/14 at 102.00 N/R 427,643
Increment Revenue Bonds, Briarcliff West Project, Series 2006A,
5.400%, 6/01/24
415 Missouri Development Finance Board, Independence, Infrastructure 3/16 at 100.00 A+ 412,394
Facilities Revenue Bonds, Crackerneck Creek Project,
Series 2006C, 5.000%, 3/01/28
360 Missouri Development Finance Board, Infrastructure Facilities 6/15 at 100.00 BBB+ 319,828
Revenue Bonds, Branson Landing Project, Series 2005A,
5.000%, 6/01/35
450 Monarch-Chesterfield Levee District, St. Louis County, Missouri, 3/10 at 101.00 AAA 473,598
Levee District Improvement Bonds, Series 1999,
5.750%, 3/01/19 - MBIA Insured
500 Osage Beach, Missouri, Tax Increment Revenue Bonds, 5/12 at 102.00 N/R 439,675
Prewitts Point Transportation Development District, Series 2006,
5.000%, 5/01/23
200 Riverside Industrial Development Authority, Missouri, Industrial 5/17 at 100.00 BBB 186,144
Development Revenue Bonds, Riverside Horizon, Series 2007A,
5.000%, 5/01/27 - ACA Insured
600 Riverside, Missouri, L-385 Levee Redevelopment Plan Tax 5/15 at 100.00 BBB 597,084
Increment Revenue Bonds, Series 2004, 5.250%, 5/01/20
1,380 Springfield Center City Development Corporation, Missouri, 11/11 at 100.00 Aaa 1,411,202
Lease Revenue Bonds, Jordan Valley Park Parking Garage,
Series 2002D, 5.000%, 11/01/22 - AMBAC Insured
2,000 Springfield Public Building Corporation, Missouri, Lease 6/10 at 100.00 AAA 2,112,019
Revenue Bonds, Jordan Valley Park Projects, Series 2000A,
6.125%, 6/01/21 - AMBAC Insured
St. Joseph Industrial Development Authority, Missouri, Tax
Increment Bonds, Shoppes at North Village Project, Series 2005A:
340 5.375%, 11/01/24 11/14 at 100.00 N/R 311,178
400 5.500%, 11/01/27 11/14 at 100.00 N/R 364,620
200 St. Joseph Industrial Development Authority, Missouri, Tax 11/14 at 100.00 N/R 182,310
Increment Bonds, Shoppes at North Village Project,
Series 2005B, 5.500%, 11/01/27
------------------------------------------------------------------------------------------------------------------------------------
8,780 Total Tax Obligation/Limited 8,650,724
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 4.8% (3.1% OF TOTAL INVESTMENTS)
500 Kansas City, Missouri, Passenger Facility Charge Revenue 4/11 at 101.00 AAA 493,270
Bonds, Kansas City International Airport, Series 2001,
5.000%, 4/01/23 - AMBAC Insured (Alternative Minimum Tax)
1,000 St. Louis Land Clearance Redevelopment Authority, Missouri, 9/09 at 102.00 N/R 1,017,380
Revenue Refunding and Improvement Bonds, LCRA Parking
Facilities, Series 1999C, 7.000%, 9/01/19
------------------------------------------------------------------------------------------------------------------------------------
1,500 Total Transportation 1,510,650
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 23.5% (15.2% OF TOTAL INVESTMENTS) (4)
685 Fenton, Missouri, Tax Increment Refunding and Improvement 10/12 at 100.00 N/R (4) 767,693
Revenue Bonds, Gravois Bluffs Redevelopment Project,
Series 2002, 6.125%, 10/01/21 (Pre-refunded 10/01/12)
2,500 Missouri Health and Educational Facilities Authority, Revenue 6/11 at 101.00 AAA 2,694,849
Bonds, SSM Healthcare System, Series 2001A,
5.250%, 6/01/28 (Pre-refunded 6/01/11) - AMBAC Insured
1,000 Missouri Health and Educational Facilities Authority, Revenue 12/10 at 101.00 A (4) 1,099,600
Bonds, St. Anthony's Medical Center, Series 2000,
6.250%, 12/01/30 (Pre-refunded 12/01/10)
80 St. Louis County Pattonville School District R3, Missouri, 3/14 at 100.00 AAA 88,542
General Obligation Bonds, Series 2004, 5.250%, 3/01/20
(Pre-refunded 3/01/14) - FSA Insured
500 St. Louis County, Missouri, GNMA Collateralized Mortgage Revenue No Opt. Call N/R (4) 553,380
Bonds, Series 1993D, 5.650%, 7/01/20 (Alternative
Minimum Tax) (ETM)
60
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (4) (continued)
$ 1,000 St. Louis Municipal Finance Corporation, Missouri, Leasehold 2/12 at 100.00 Baa3 (4) $ 1,097,070
Revenue Bonds, Carnahan Courthouse, Series 2002A,
5.750%, 2/15/16 (Pre-refunded 2/15/12) - FGIC Insured
950 Texas County, Missouri, Hospital Revenue Bonds, Texas County 6/10 at 100.00 N/R (4) 1,039,101
Memorial Hospital, Series 2000, 7.250%, 6/15/25
(Pre-refunded 6/15/10)
------------------------------------------------------------------------------------------------------------------------------------
6,715 Total U.S. Guaranteed 7,340,235
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 15.3% (9.9% OF TOTAL INVESTMENTS)
640 Metropolitan St. Louis Sewerage District, Missouri, Revenue 5/14 at 100.00 AAA 677,357
Bonds, Wastewater System, Series 2004A, 5.000%, 5/01/20 -
MBIA Insured
2,965 Missouri Environmental Improvement and Energy Resources 12/16 at 100.00 AA 2,634,580
Authority, Water Facility Revenue Bonds, Missouri-American
Water Company, Series 2006, 4.600%, 12/01/36 - AMBAC Insured
(Alternative Minimum Tax) (UB)
1,000 Missouri Environmental Improvement and Energy Resources 1/13 at 100.00 Aaa 1,057,190
Authority, Water Pollution Control and Drinking Water Revenue
Bonds, Series 2003B, 5.125%, 1/01/21
350 Missouri Environmental Improvement and Energy Resources No Opt. Call Aaa 393,789
Authority, Water Pollution Control Revenue Bonds, State
Revolving Fund Program - Kansas City Project, Series 1997C,
6.750%, 1/01/12
------------------------------------------------------------------------------------------------------------------------------------
4,955 Total Water and Sewer 4,762,916
------------------------------------------------------------------------------------------------------------------------------------
$ 47,560 Total Investments (cost $47,951,481) - 154.5% 48,145,856
=============-----------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (7.1)% (2,225,000)
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 3.9% 1,249,015
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (51.3)% (5) (16,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $31,169,871
====================================================================================================================
(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, AMBAC,
FGIC, MBIA, RAAI and XLCA as of May 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) Preferred Shares, at Liquidation Value as a percentage of
total investments is (33.2)%.
N/R Not rated.
(ETM) Escrowed to maturity.
(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.
61
Statement of
ASSETS & LIABILITIES
May 31, 2008
CONNECTICUT CONNECTICUT CONNECTICUT CONNECTICUT
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NTC) (NFC) (NGK) (NGO)
------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $116,927,539, $58,030,626,
$51,732,583 and $94,470,470, respectively) $118,303,255 $58,969,581 $52,748,706 $94,822,280
Cash -- -- 451,550 1,325,240
Unrealized appreciation on forward swaps -- -- -- --
Receivables:
Interest 1,727,745 790,918 710,738 1,372,301
Investments sold 170,000 85,000 -- --
Other assets 8,380 7,797 294 4,670
------------------------------------------------------------------------------------------------------------------------------------
Total assets 120,209,380 59,853,296 53,911,288 97,524,491
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft 526,536 13,075 -- --
Floating rate obligations 4,613,000 2,287,000 2,062,000 3,788,000
Payable for investments purchased -- -- -- --
Accrued expenses:
Management fees 61,823 23,616 19,087 31,346
Other 30,123 18,876 18,590 27,053
Common share dividends payable 231,425 131,496 119,913 190,268
Preferred share dividends payable 5,210 5,531 3,681 11,350
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 5,468,117 2,479,594 2,223,271 4,048,017
------------------------------------------------------------------------------------------------------------------------------------
Preferred shares, at liquidation value 38,300,000 19,500,000 17,500,000 32,000,000
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $ 76,441,263 $37,873,702 $34,188,017 $61,476,474
------------------------------------------------------------------------------------------------------------------------------------
Common shares outstanding 5,363,976 2,578,688 2,315,979 4,365,873
====================================================================================================================================
Net asset value per Common share outstanding (net assets applicable
to Common shares, divided by Common shares outstanding) $ 14.25 $ 14.69 $ 14.76 $ 14.08
====================================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF:
------------------------------------------------------------------------------------------------------------------------------------
Common shares, $.01 par value per share $ 53,640 $ 25,787 $ 23,160 $ 43,659
Paid-in surplus 74,527,557 36,578,637 32,796,312 61,611,229
Undistributed (Over-distribution of) net investment income (44,979) (39,553) (22,815) (152,848)
Accumulated net realized gain (loss) from investments
and derivative transactions 529,329 369,876 375,237 (377,376)
Net unrealized appreciation (depreciation) of investments
and derivative transactions 1,375,716 938,955 1,016,123 351,810
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $ 76,441,263 $37,873,702 $34,188,017 $61,476,474
====================================================================================================================================
Authorized shares:
Common Unlimited Unlimited Unlimited Unlimited
Preferred Unlimited Unlimited Unlimited Unlimited
====================================================================================================================================
See accompanying notes to financial statements.
62
INSURED
MASSACHUSETTS MASSACHUSETTS MASSACHUSETTS MISSOURI
PREMIUM DIVIDEND TAX-FREE PREMIUM
INCOME ADVANTAGE ADVANTAGE INCOME
(NMT) (NMB) (NGX) (NOM)
------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $107,075,866, $45,111,865,
$63,133,693 and $47,951,481, respectively) $108,470,122 $45,483,646 $64,190,429 $48,145,856
Cash 909,457 479,431 -- 626,459
Unrealized appreciation on forward swaps 92,080 57,153 -- --
Receivables:
Interest 1,563,137 663,038 872,744 777,241
Investments sold 120,000 20,000 85,000 --
Other assets 6,362 7,731 6,177 2,883
------------------------------------------------------------------------------------------------------------------------------------
Total assets 111,161,158 46,710,999 65,154,350 49,552,439
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft -- -- 419,533 --
Floating rate obligations -- -- -- 2,225,000
Payable for investments purchased 9,132,745 3,431,408 5,175,825 --
Accrued expenses:
Management fees 54,820 17,765 19,908 25,379
Other 29,286 16,282 19,357 16,896
Common share dividends payable 219,317 105,980 141,983 113,117
Preferred share dividends payable 4,624 4,255 4,312 2,176
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 9,440,792 3,575,690 5,780,918 2,382,568
------------------------------------------------------------------------------------------------------------------------------------
Preferred shares, at liquidation value 34,000,000 15,000,000 20,500,000 16,000,000
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $ 67,720,366 $28,135,309 $38,873,432 $31,169,871
====================================================================================================================================
Common shares outstanding 4,763,486 1,959,689 2,722,958 2,306,020
====================================================================================================================================
Net asset value per Common share outstanding (net assets applicable
to Common shares, divided by Common shares outstanding) $ 14.22 $ 14.36 $ 14.28 $ 13.52
====================================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF:
------------------------------------------------------------------------------------------------------------------------------------
Common shares, $.01 par value per share $ 47,635 $ 19,597 $ 27,230 $ 23,060
Paid-in surplus 66,145,494 27,748,739 38,370,620 30,918,361
Undistributed (Over-distribution of) net investment income (20,540) (39,471) (70,435) 50,539
Accumulated net realized gain (loss) from investments
and derivative transactions 61,441 (22,490) (510,719) (16,464)
Net unrealized appreciation (depreciation) of investments
and derivative transactions 1,486,336 428,934 1,056,736 194,375
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $ 67,720,366 $28,135,309 $38,873,432 $31,169,871
====================================================================================================================================
Authorized shares:
Common Unlimited Unlimited Unlimited Unlimited
Preferred Unlimited Unlimited Unlimited Unlimited
====================================================================================================================================
See accompanying notes to financial statements.
63
Statement of
OPERATIONS
Year Ended May 31, 2008
CONNECTICUT CONNECTICUT CONNECTICUT CONNECTICUT
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NTC) (NFC) (NGK) (NGO)
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $ 5,443,919 $2,733,403 $2,441,281 $ 4,307,798
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 728,057 363,366 327,836 593,946
Preferred shares -- auction fees 95,881 48,817 43,810 80,110
Preferred shares -- dividend disbursing agent fees 10,000 10,000 10,000 10,000
Shareholders' servicing agent fees and expenses 10,612 1,561 1,313 1,237
Interest expense on floating rate obligations 18,703 9,272 8,360 15,358
Custodian's fees and expenses 53,151 27,473 30,236 38,083
Trustees' fees and expenses 2,656 1,289 1,123 2,086
Professional fees 13,678 10,543 10,234 12,514
Shareholders' reports -- printing and mailing expenses 26,558 13,852 13,163 19,745
Stock exchange listing fees 9,497 280 251 474
Investor relations expense 10,127 5,327 4,891 8,654
Other expenses 13,833 12,027 12,952 13,270
------------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit and expense reimbursement 992,753 503,807 464,169 795,477
Custodian fee credit (12,816) (8,594) (5,325) (13,096)
Expense reimbursement -- (105,067) (124,844) (249,504)
------------------------------------------------------------------------------------------------------------------------------------
Net expenses 979,937 390,146 334,000 532,877
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 4,463,982 2,343,257 2,107,281 3,774,921
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments 298,858 433,225 442,376 142,304
Forward swaps 487,864 348,636 273,468 171,871
Change in net unrealized appreciation (depreciation) of:
Investments (1,365,508) (796,148) (728,130) (1,287,450)
Forward swaps 47,886 37,677 28,258 3,949
------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) (530,900) 23,390 15,972 (969,326)
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
From net investment income (1,196,691) (617,335) (540,900) (1,099,727)
From accumulated net realized gains (49,238) (51,129) (52,122) --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to Common shares
from distributions to Preferred shareholders (1,245,929) (668,464) (593,022) (1,099,727)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable to Common shares
from operations $ 2,687,153 $1,698,183 $1,530,231 $ 1,705,868
====================================================================================================================================
See accompanying notes to financial statements.
64
INSURED
MASSACHUSETTS MASSACHUSETTS MASSACHUSETTS MISSOURI
PREMIUM DIVIDEND TAX-FREE PREMIUM
INCOME ADVANTAGE ADVANTAGE INCOME
(NMT) (NMB) (NGX) (NOM)
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $ 5,023,691 $2,124,018 $2,782,118 $ 2,532,710
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 649,456 276,503 378,449 303,568
Preferred shares -- auction fees 85,117 37,552 51,321 40,055
Preferred shares -- dividend disbursing agent fees 10,000 10,000 10,000 10,000
Shareholders' servicing agent fees and expenses 6,485 660 520 4,111
Interest expense on floating rate obligations -- -- -- 66,757
Custodian's fees and expenses 34,319 14,539 16,993 18,791
Trustees' fees and expenses 2,322 944 1,308 1,075
Professional fees 12,858 9,738 10,905 10,035
Shareholders' reports -- printing and mailing expenses 24,759 12,074 15,485 13,172
Stock exchange listing fees 9,496 213 296 250
Investor relations expense 9,681 4,389 5,894 4,738
Other expenses 13,601 11,554 12,088 12,520
------------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit and expense reimbursement 858,094 378,166 503,259 485,072
Custodian fee credit (13,070) (7,928) (5,869) (4,247)
Expense reimbursement -- (79,995) (166,957) --
------------------------------------------------------------------------------------------------------------------------------------
Net expenses 845,024 290,243 330,433 480,825
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 4,178,667 1,833,775 2,451,685 2,051,885
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments 55,351 (51,170) 112,230 23,306
Forward swaps 113,292 43,595 41,813 --
Change in net unrealized appreciation (depreciation) of:
Investments (1,860,524) (945,603) (729,499) (1,458,850)
Forward swaps 131,277 72,832 -- --
------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) (1,560,604) (880,346) (575,456) (1,435,544)
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
From net investment income (1,186,015) (511,186) (703,413) (465,017)
From accumulated net realized gains (28,016) (16,392) -- (93,600)
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to Common shares
from distributions to Preferred shareholders (1,214,031) (527,578) (703,413) (558,617)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable to Common shares
from operations $ 1,404,032 $ 425,851 $1,172,816 $ 57,724
====================================================================================================================================
See accompanying notes to financial statements.
65
Statement of
CHANGES in NET ASSETS
CONNECTICUT CONNECTICUT CONNECTICUT
PREMIUM INCOME (NTC) DIVIDEND ADVANTAGE (NFC) DIVIDEND ADVANTAGE 2 (NGK)
----------------------------- ---------------------------- -----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
5/31/08 5/31/07 5/31/08 5/31/07 5/31/08 5/31/07
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 4,463,982 $ 4,447,923 $ 2,343,257 $ 2,365,016 $ 2,107,281 $ 2,107,925
Net realized gain (loss) from:
Investments 298,858 72,769 433,225 124,379 442,376 144,586
Forward swaps 487,864 -- 348,636 -- 273,468 --
Futures -- 28,706 -- (18,408) -- (2,992)
Change in net unrealized
appreciation (depreciation) of:
Investments (1,365,508) 346,705 (796,148) 38,540 (728,130) 36,334
Forward swaps 47,886 (47,886) 37,677 (37,677) 28,258 (28,258)
Distributions to
Preferred shareholders:
From net investment income (1,196,691) (1,082,148) (617,335) (569,903) (540,900) (499,055)
From accumulated net
realized gains (49,238) (74,762) (51,129) -- (52,122) (18,854)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from operations 2,687,153 3,691,307 1,698,183 1,901,947 1,530,231 1,739,686
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (3,298,641) (3,464,778) (1,721,069) (1,872,256) (1,556,110) (1,683,074)
From accumulated net
realized gains (154,483) (372,181) (167,071) -- (170,904) (85,757)
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Common shareholders (3,453,124) (3,836,959) (1,888,140) (1,872,256) (1,727,014) (1,768,831)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares
issued to shareholders due to
reinvestment of distributions 56,012 18,479 39,414 89,571 18,857 43,271
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
applicable to Common shares
from capital share transactions 56,012 18,479 39,414 89,571 18,857 43,271
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares (709,959) (127,173) (150,543) 119,262 (177,926) 14,126
Net assets applicable to Common
shares at the beginning
of year 77,151,222 77,278,395 38,024,245 37,904,983 34,365,943 34,351,817
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of year $76,441,263 $77,151,222 $37,873,702 $38,024,245 $34,188,017 $34,365,943
====================================================================================================================================
Undistributed (Over-distribution of)
net investment income at the
end of year $ (44,979) $ (13,624) $ (39,553) $ (44,395) $ (22,815) $ (33,086)
====================================================================================================================================
See accompanying notes to financial statements.
66
CONNECTICUT MASSACHUSETTS PREMIUM MASSACHUSETTS
DIVIDEND ADVANTAGE 3 (NGO) INCOME (NMT) DIVIDEND ADVANTAGE (NMB)
----------------------------- ---------------------------- -----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
5/31/08 5/31/07 5/31/08 5/31/07 5/31/08 5/31/07
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 3,774,921 $ 3,733,076 $ 4,178,667 $ 4,182,224 $ 1,833,775 $ 1,827,149
Net realized gain (loss) from:
Investments 142,304 (42,201) 55,351 (13,789) (51,170) 55,772
Forward swaps 171,871 -- 113,292 -- 43,595 --
Futures -- (14,700) -- -- -- --
Change in net unrealized
appreciation (depreciation) of:
Investments (1,287,450) 617,398 (1,860,524) 713,731 (945,603) 86,124
Forward swaps 3,949 (3,949) 131,277 (39,197) 72,832 (15,679)
Distributions to
Preferred shareholders:
From net investment income (1,099,727) (992,233) (1,186,015) (1,116,532) (511,186) (479,691)
From accumulated net
realized gains -- -- (28,016) (5,552) (16,392) --
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from operations 1,705,868 3,297,391 1,404,032 3,720,885 425,851 1,473,675
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (2,644,809) (2,798,715) (2,943,779) (3,183,927) (1,328,586) (1,459,044)
From accumulated net realized gains -- -- (79,074) (23,558) (48,600) --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Common shareholders (2,644,809) (2,798,715) (3,022,853) (3,207,485) (1,377,186) (1,459,044)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares
issued to shareholders due to
reinvestment of distributions 90,750 -- 15,691 33,601 14,859 52,919
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
applicable to Common shares
from capital share transactions 90,750 -- 15,691 33,601 14,859 52,919
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares (848,191) 498,676 (1,603,130) 547,001 (936,476) 67,550
Net assets applicable to Common
shares at the beginning
of year 62,324,665 61,825,989 69,323,496 68,776,495 29,071,785 29,004,235
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of year $61,476,474 $62,324,665 $67,720,366 $69,323,496 $28,135,309 $29,071,785
====================================================================================================================================
Undistributed (Over-distribution of)
net investment income at the
end of year $ (152,848) $ (183,233) $ (20,540) $ (55,735) $ (39,471) $ (33,440)
====================================================================================================================================
See accompanying notes to financial statements.
67
Statement of
CHANGES in NET ASSETS (continued)
INSURED MASSACHUSETTS MISSOURI PREMIUM
TAX-FREE ADVANTAGE (NGX) INCOME (NOM)
---------------------------- ----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
5/31/08 5/31/07 5/31/08 5/31/07
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 2,451,685 $ 2,460,127 $ 2,051,885 $ 2,057,588
Net realized gain (loss) from:
Investments 112,230 27,964 23,306 352,272
Forward swaps 41,813 27,938 -- --
Futures -- -- -- --
Change in net unrealized appreciation (depreciation) of:
Investments (729,499) 246,559 (1,458,850) (540,979)
Forward swaps -- (117,661) -- --
Distributions to Preferred shareholders:
From net investment income (703,413) (671,046) (465,017) (524,016)
From accumulated net realized gains -- -- (93,600) (2,414)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from operations 1,172,816 1,973,881 57,724 1,342,451
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (1,769,589) (1,694,504) (1,506,279) (1,656,219)
From accumulated net realized gains -- -- (291,322) (11,028)
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Common shareholders (1,769,589) (1,694,504) (1,797,601) (1,667,247)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares
issued to shareholders due to
reinvestment of distributions 12,022 -- 83,533 216,543
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
applicable to Common shares
from capital share transactions 12,022 -- 83,533 216,543
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares (584,751) 279,377 (1,656,344) (108,253)
Net assets applicable to Common
shares at the beginning of year 39,458,183 39,178,806 32,826,215 32,934,468
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of year $38,873,432 $39,458,183 $31,169,871 $32,826,215
====================================================================================================================================
Undistributed (Over-distribution of)
net investment income at the
end of year $ (70,435) $ (49,118) $ 50,539 $ (29,959)
====================================================================================================================================
See accompanying notes to financial statements.
68
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 Connecticut Premium Income Municipal Fund (NTC),
Nuveen Connecticut Dividend Advantage Municipal Fund (NFC), Nuveen Connecticut
Dividend Advantage Municipal Fund 2 (NGK), Nuveen Connecticut Dividend Advantage
Municipal Fund 3 (NGO), Nuveen Massachusetts Premium Income Municipal Fund
(NMT), Nuveen Massachusetts Dividend Advantage Municipal Fund (NMB), Nuveen
Insured Massachusetts Tax-Free Advantage Municipal Fund (NGX) and Nuveen
Missouri Premium Income Municipal Fund (NOM) (collectively, the "Funds"). Common
shares of Connecticut Premium Income (NTC) and Massachusetts Premium Income
(NMT) are traded on the New York Stock Exchange while Common shares of
Connecticut Dividend Advantage (NFC), Connecticut Dividend Advantage 2 (NGK),
Connecticut Dividend Advantage 3 (NGO), Massachusetts Dividend Advantage (NMB),
Insured Massachusetts Tax-Free Advantage (NGX) and Missouri Premium Income (NOM)
are traded on the American Stock Exchange. The Funds are registered under the
Investment Company Act of 1940, as amended, as closed-end management investment
companies.
Each Fund seeks to provide current income exempt from both regular federal and
designated state income taxes, and in the case of Insured Massachusetts Tax-Free
Advantage (NGX) the alternative minimum tax applicable to individuals, by
investing primarily in a diversified portfolio of municipal obligations issued
by state and local government authorities within a single state 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 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 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
a municipal bond, forward swap or futures contract, 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 Trustees of the Funds, or its designee, may
establish fair value in accordance with procedures established in good faith by
the Board of 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 May 31, 2008,
Massachusetts Premium Income (NMT), Massachusetts Dividend Advantage (NMB) and
Insured Massachusetts Tax-Free Advantage (NGX) had outstanding
when-issued/delayed delivery purchase commitments of $4,193,126, $1,314,428 and
$2,151,568, respectively. There were no such outstanding purchase commitments in
any of the other Funds.
69
Notes to
FINANCIAL STATEMENTS (continued)
Investment Income
Interest income, which includes the amortization of premiums and accretion of
discounts for financial reporting purposes, is recorded on an accrual basis.
Investment income also includes paydown gains and losses, if any.
Income Taxes
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund
intends to distribute substantially all of its net investment income and net
capital gains to shareholders and to otherwise comply with the requirements of
Subchapter M of the Internal Revenue Code applicable to regulated investment
companies. Therefore, no federal income tax provision is required. Furthermore,
each Fund intends to satisfy conditions which will enable interest from
municipal securities, which is exempt from regular federal and designated state
income taxes, and in the case of Insured Massachusetts Tax-Free Advantage (NGX)
the alternative minimum tax applicable to individuals, 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 November 30, 2007, 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 benefit or 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 May 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.
70
Preferred Shares
The Funds have issued and outstanding Preferred shares, $25,000 stated value per
share, as a means of effecting financial leverage. Each Fund's Preferred shares
are issued in one Series. The dividend rate paid by the Funds on each Series is
determined every seven days, pursuant to a dutch auction process overseen by the
auction agent, and is payable at the end of each rate period. The number of
Preferred shares outstanding for each Fund is as follows:
CONNECTICUT CONNECTICUT CONNECTICUT CONNECTICUT
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NTC) (NFC) (NGK) (NGO)
--------------------------------------------------------------------------------
Number of shares:
Series T -- 780 -- --
Series W -- -- 700 --
Series TH 1,532 -- -- --
Series F -- -- -- 1,280
================================================================================
INSURED
MASSACHUSETTS MASSACHUSETTS MASSACHUSETTS MISSOURI
PREMIUM DIVIDEND TAX-FREE PREMIUM
INCOME ADVANTAGE ADVANTAGE INCOME
(NMT) (NMB) (NGX) (NOM)
--------------------------------------------------------------------------------
Number of shares:
Series T -- 600 -- --
Series W -- -- 820 --
Series TH 1,360 -- -- 640
Series F -- -- -- --
================================================================================
Beginning in February 2008, more shares for sale were submitted in the regularly
scheduled auctions for the Preferred shares issued by the Funds than there were
offers to buy. This meant that these auctions "failed to clear," and that many
Preferred shareholders who wanted to sell their shares in these auctions were
unable to do so. 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 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 likely 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.
Insurance
During the fiscal year ended May 31, 2008, Insured Massachusetts Tax-Free
Advantage (NGX) primarily invested at least 80% of its net assets (including net
assets attributable to Preferred shares) in municipal securities that were
covered by insurance. The Fund may have also invested up to 20% of its net
assets (including net assets attributable to Preferred shares) in municipal
securities which are either (i) backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency securities, or (ii) rated,
at the time of investment, within the four highest grades (Baa or BBB or better
by Moody's, Standard &Poor's or Fitch) or unrated but judged to be of comparable
quality by Nuveen Asset Management (the "Adviser"), a wholly owned subsidiary of
Nuveen Investments, Inc. ("Nuveen").
Effective March 20, 2008, pursuant to action taken by the Funds' Board of
Trustees, under normal circumstances, Insured Massachusetts Tax-Free Advantage
(NGX), must invest at least 80% of its net assets (including net assets
attributable to Preferred shares) in municipal securities which are either
covered by insurance or backed by an escrow or trust account containing
sufficient U.S. Government or U.S. Government agency securities, both of which
ensure the timely payment of principal and interest. For purposes of this 80%
test, insurers must have a claims paying ability rated at least "A" at the time
of purchase. In addition, the Fund must invest at least 80% of its net assets
(including net assets attributable to Preferred shares) in municipal securities
that are rated at least "AA" at the time of purchase. The Fund may also invest
up to 20% of its net assets (including net assets attributable to Preferred
shares) in municipal securities rated below "AA" (based on the higher rating of
the insurer, if any, or the underlying bond) or are unrated but judged to be of
comparable quality by the Adviser.
71
Notes to
FINANCIAL STATEMENTS (continued)
Each insured municipal security is covered by Original Issue Insurance,
Secondary Market Insurance or Portfolio Insurance. Such insurance does not
guarantee the market value of the municipal securities or the value of the
Fund's Common shares. Original Issue Insurance and Secondary Market Insurance
remain in effect as long as the municipal securities covered thereby remain
outstanding and the insurer remains in business, regardless of whether the Fund
ultimately disposes of such municipal securities. Consequently, the market value
of the municipal securities covered by Original Issue Insurance or Secondary
Market Insurance may reflect value attributable to the insurance. Portfolio
Insurance, in contrast, is effective only while the municipal securities are
held by the Fund. Accordingly, neither the prices used in determining the market
value of the underlying municipal securities nor the Common share net asset
value of the Fund includes value, if any, attributable to the Portfolio
Insurance. Each policy of the Portfolio Insurance does, however, give the Fund
the right to obtain permanent insurance with respect to the municipal security
covered by the Portfolio Insurance policy at the time of its sale.
Inverse Floating Rate Securities
Each Fund is authorized to invest in inverse floating rate securities. An
inverse floating rate security is created by depositing a municipal bond,
typically with a fixed interest rate, into a special purpose trust created by a
broker-dealer. In turn, this trust (a) issues floating rate certificates, in
face amounts equal to some fraction of the deposited bond's par amount or market
value, that typically pay short-term tax-exempt interest rates to third parties,
and (b) issues to a long-term investor (such as one of the Funds) an inverse
floating rate certificate (sometimes referred to as an "inverse floater") that
represents all remaining or residual interest in the trust. The income received
by the inverse floater holder varies inversely with the short-term rate paid to
the floating rate certificates' holders, and in most circumstances the inverse
floater holder bears substantially all of the underlying bond's downside
investment risk and also benefits disproportionately from any potential
appreciation of the underlying bond's value. The price of an inverse floating
rate security will be more volatile than that of the underlying bond because the
interest rate is dependent on not only the fixed coupon rate of the underlying
bond but also on the short-term interest paid on the floating rate certificates,
and because the inverse floating rate security essentially bears the risk of
loss of the greater face value of the underlying bond.
A Fund may purchase an inverse floating rate security in a secondary market
transaction without first owning the underlying bond (referred to as an
"externally-deposited inverse floater"), or instead by first selling a
fixed-rate bond to a broker-dealer for deposit into the special purpose trust
and receiving in turn the residual interest in the trust (referred to as a
"self-deposited inverse floater"). A Fund may also enter into shortfall and
forbearance agreements (sometimes referred to as a "recourse trust" or "credit
recovery swap") 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, as well as any shortfalls in interest
cash flows. 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, recourse trust or credit recovery swap is
accounted for as a financing transaction in accordance with Statement of
Financial Accounting Standards (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 accounts for the related interest
paid to the holders of the short-term floating rate certificates as "Interest
expense on floating rate obligations" in the Statement of Operations.
During the fiscal year ended May 31, 2008, Connecticut Premium Income (NTC),
Connecticut Dividend Advantage (NFC), Connecticut Dividend Advantage 2 (NGK),
Connecticut Dividend Advantage 3 (NGO) and Missouri Premium Income (NOM)
invested in externally deposited inverse floaters and/or self-deposited inverse
floaters. Massachusetts Premium Income (NMT), Massachusetts Dividend Advantage
(NMB) and Insured Massachusetts Tax-Free Advantage (NGX) did not invest in any
such instruments during the fiscal year ended May 31, 2008.
72
The average floating rate obligations outstanding and average annual interest
rate and fees related to self-deposited inverse floaters during the fiscal year
ended May 31, 2008, were as follows:
CONNECTICUT CONNECTICUT CONNECTICUT CONNECTICUT MISSOURI
PREMIUM DIVIDEND DIVIDEND DIVIDEND PREMIUM
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 INCOME
(NTC) (NFC) (NGK) (NGO) (NOM)
------------------------------------------------------------------------------------------------------------------
Average floating rate obligations $831,852 $412,410 $371,836 $683,082 $2,106,831
Average annual interest rate and fees 2.25% 2.25% 2.25% 2.25% 3.17%
==================================================================================================================
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 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. Missouri Premium Income
(NOM) was the only Fund that did not invest in forward interest rate swap
transactions during the fiscal year ended May 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 in
the Statement of Assets and Liabilities. Additionally, the Statement of Assets
and Liabilities reflects a receivable or payable for the variation margin, when
applicable. None of the Funds invested in futures contracts during the fiscal
year ended May 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.
73
Notes to
FINANCIAL STATEMENTS (continued)
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 Trustees are
indemnified against certain liabilities arising out of the performance of their
duties to the Funds. In addition, in the normal course of business, the Funds
enter into contracts that provide general indemnifications to other parties. The
Funds' maximum exposure under these arrangements is unknown as this would
involve future claims that may be made against the Funds that have not yet
occurred. However, the Funds have not had prior claims or losses pursuant to
these contracts and expect the risk of loss to be remote.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of increases and
decreases in net assets applicable to Common shares from operations during the
reporting period. Actual results may differ from those estimates.
2. FUND SHARES
Transactions in Common shares were as follows:
CONNECTICUT CONNECTICUT DIVIDEND CONNECTICUT DIVIDEND
PREMIUM INCOME (NTC) ADVANTAGE (NFC) ADVANTAGE 2 (NGK)
--------------------- -------------------- --------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
5/31/08 5/31/07 5/31/08 5/31/07 5/31/08 5/31/07
------------------------------------------------------------------------------------------------------------------
Common shares issued to shareholders
due to reinvestment of distributions 3,915 1,268 2,675 5,695 1,265 2,746
==================================================================================================================
CONNECTICUT DIVIDEND MASSACHUSETTS MASSACHUSETTS DIVIDEND
ADVANTAGE 3 (NGO) PREMIUM INCOME (NMT) ADVANTAGE (NMB)
--------------------- -------------------- ----------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
5/31/08 5/31/07 5/31/08 5/31/07 5/31/08 5/31/07
------------------------------------------------------------------------------------------------------------------
Common shares issued to shareholders
due to reinvestment of distributions 6,503 -- 1,090 2,282 1,004 3,459
==================================================================================================================
INSURED
MASSACHUSETTS TAX-FREE MISSOURI
ADVANTAGE (NGX) PREMIUM INCOME (NOM)
---------------------- ---------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
5/31/08 5/31/07 5/31/08 5/31/07
------------------------------------------------------------------------------------------------------------------
Common shares issued to shareholders
due to reinvestment of distributions 863 -- 5,970 13,593
==================================================================================================================
74
3. INVESTMENT TRANSACTIONS
Purchases and sales (including maturities but excluding short-term investments
and derivative transactions) during the fiscal year ended May 31, 2008, were as
follows:
CONNECTICUT CONNECTICUT CONNECTICUT CONNECTICUT
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NTC) (NFC) (NGK) (NGO)
--------------------------------------------------------------------------------
Purchases $30,714,049 $14,028,219 $14,075,306 $25,546,696
Sales and maturities 25,020,340 11,521,054 12,135,668 22,418,575
================================================================================
INSURED
MASSACHUSETTS MASSACHUSETTS MASSACHUSETTS MISSOURI
PREMIUM DIVIDEND TAX-FREE PREMIUM
INCOME ADVANTAGE ADVANTAGE INCOME
(NMT) (NMB) (NGX) (NOM)
--------------------------------------------------------------------------------
Purchases $21,382,249 $9,093,802 $11,273,238 $2,253,169
Sales and maturities 13,978,094 6,426,431 7,688,282 3,087,833
================================================================================
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 May 31, 2008, the cost of investments was as follows:
CONNECTICUT CONNECTICUT CONNECTICUT CONNECTICUT
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NTC) (NFC) (NGK) (NGO)
--------------------------------------------------------------------------------
Cost of investments $112,305,990 $55,707,104 $49,651,139 $90,666,804
================================================================================
INSURED
MASSACHUSETTS MASSACHUSETTS MASSACHUSETTS MISSOURI
PREMIUM DIVIDEND TAX-FREE PREMIUM
INCOME ADVANTAGE ADVANTAGE INCOME
(NMT) (NMB) (NGX) (NOM)
--------------------------------------------------------------------------------
Cost of investments $107,006,789 $45,081,373 $63,133,593 $45,710,887
================================================================================
Gross unrealized appreciation and gross unrealized depreciation of investments
at May 31, 2008, were as follows:
CONNECTICUT CONNECTICUT CONNECTICUT CONNECTICUT
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NTC) (NFC) (NGK) (NGO)
--------------------------------------------------------------------------------
Gross unrealized:
Appreciation $2,425,714 $1,412,472 $1,488,202 $1,642,514
Depreciation (1,041,485) (436,913) (452,554) (1,275,080)
--------------------------------------------------------------------------------
Net unrealized
appreciation
(depreciation)
of investments $1,384,229 $ 975,559 $1,035,648 $ 367,434
================================================================================
INSURED
MASSACHUSETTS MASSACHUSETTS MASSACHUSETTS MISSOURI
PREMIUM DIVIDEND TAX-FREE PREMIUM
INCOME ADVANTAGE ADVANTAGE INCOME
(NMT) (NMB) (NGX) (NOM)
--------------------------------------------------------------------------------
Gross unrealized:
Appreciation $2,991,664 $1,147,717 $1,546,613 $1,490,878
Depreciation (1,528,331) (745,444) (489,777) (1,280,366)
--------------------------------------------------------------------------------
Net unrealized
appreciation
(depreciation)
of investments $1,463,333 $ 402,273 $1,056,836 $ 210,512
================================================================================
75
Notes to
FINANCIAL STATEMENTS (continued)
The tax components of undistributed net tax-exempt income, net ordinary income
and net long-term capital gains at May 31, 2008, the Funds' tax year end, were
as follows:
CONNECTICUT CONNECTICUT CONNECTICUT CONNECTICUT
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NTC) (NFC) (NGK) (NGO)
-------------------------------------------------------------------------------
Undistributed net
tax-exempt income* $194,231 $ 68,567 $ 75,481 $35,434
Undistributed net
ordinary income ** 488,906 226,061 275,669 --
Undistributed net
long-term capital gains 60,678 147,900 112,806 --
===============================================================================
INSURED
MASSACHUSETTS MASSACHUSETTS MASSACHUSETTS MISSOURI
PREMIUM DIVIDEND TAX-FREE PREMIUM
INCOME ADVANTAGE ADVANTAGE INCOME
(NMT) (NMB) (NGX) (NOM)
--------------------------------------------------------------------------------
Undistributed net
tax-exempt income* $160,328 $45,010 $82,161 $162,256
Undistributed net
ordinary income ** 39,566 -- -- --
Undistributed net
long-term capital gains 69,077 -- -- --
================================================================================
* Undistributed net tax-exempt income (on a tax basis) has not been reduced
for the dividend declared on May 1, 2008, paid on June 2, 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 May
31, 2008 and May 31, 2007, was designated for purposes of the dividends paid
deduction as follows:
CONNECTICUT CONNECTICUT CONNECTICUT CONNECTICUT
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
2008 (NTC) (NFC) (NGK) (NGO)
----------------------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt income*** $4,528,844 $2,336,458 $2,101,642 $3,755,918
Distributions from net ordinary income ** -- 5,381 -- 102
Distributions from net long-term capital gains**** 203,721 218,200 223,026 --
======================================================================================================================
INSURED
MASSACHUSETTS MASSACHUSETTS MASSACHUSETTS MISSOURI
PREMIUM DIVIDEND TAX-FREE PREMIUM
INCOME ADVANTAGE ADVANTAGE INCOME
2008 (NMT) (NMB) (NGX) (NOM)
----------------------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt income*** $4,147,682 $1,843,671 $2,465,317 $1,987,482
Distributions from net ordinary income ** -- -- -- --
Distributions from net long-term capital gains**** 107,090 64,958 -- 384,860
======================================================================================================================
** 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
May 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 May 31, 2008.
76
CONNECTICUT CONNECTICUT CONNECTICUT CONNECTICUT
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
2007 (NTC) (NFC) (NGK) (NGO)
----------------------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt income $4,570,640 $2,466,418 $2,210,985 $3,816,478
Distributions from net ordinary income ** 41,683 -- 82 --
Distributions from net long-term capital gains 405,561 -- 104,613 --
======================================================================================================================
INSURED
MASSACHUSETTS MASSACHUSETTS MASSACHUSETTS MISSOURI
PREMIUM DIVIDEND TAX-FREE PREMIUM
INCOME ADVANTAGE ADVANTAGE INCOME
2007 (NMT) (NMB) (NGX) (NOM)
----------------------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt income $4,336,292 $1,953,268 $2,384,976 $2,195,931
Distributions from net ordinary income ** 15,666 -- -- 7
Distributions from net long-term capital gains 28,705 -- -- 13,435
======================================================================================================================
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
At May 31, 2008, the Funds' tax year end, the following Funds had unused capital
loss carryforwards available for federal income tax purposes to be applied
against future capital gains, if any. If not applied, the carryforwards will
expire as follows:
INSURED
CONNECTICUT MASSACHUSETTS
DIVIDEND TAX-FREE
ADVANTAGE 3 ADVANTAGE
(NGO) (NGX)
--------------------------------------------------------------------------------
Expiration:
May 31, 2013 $ 35,642 $ 18,655
May 31, 2014 111,331 427,135
May 31, 2015 211,213 --
--------------------------------------------------------------------------------
Total $358,186 $445,790
================================================================================
The following Funds have elected to defer net realized losses from investments
incurred from November 1, 2007 through May 31, 2008, the Funds' tax year end,
("post-October losses") in accordance with federal income tax regulations.
Post-October losses are treated as having arisen on the first day of the
following fiscal year:
INSURED
MASSACHUSETTS MASSACHUSETTS MASSACHUSETTS MISSOURI
PREMIUM DIVIDEND TAX-FREE PREMIUM
INCOME ADVANTAGE ADVANTAGE INCOME
(NMT) (NMB) (NGX) (NOM)
--------------------------------------------------------------------------------
$47,203 $22,492 $64,928 $16,463
================================================================================
77
Notes to
FINANCIAL STATEMENTS (continued)
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 the
Adviser, and a specific fund-level component, based only on the amount of assets
within each individual Fund. This pricing structure enables Nuveen fund
shareholders to benefit from growth in the assets within each individual fund as
well as from growth in the amount of complex-wide assets managed by the Adviser.
The annual fund-level fee, payable monthly, for each Fund is based upon the
average daily net assets (including net assets attributable to Preferred shares)
of each Fund as follows:
CONNECTICUT PREMIUM INCOME (NTC)
AVERAGE DAILY NET ASSETS MASSACHUSETTS PREMIUM INCOME (NMT)
(INCLUDING NET ASSETS MISSOURI PREMIUM INCOME (NOM)
ATTRIBUTABLE TO PREFERRED SHARES) FUND-LEVEL FEE RATE
--------------------------------------------------------------------------------
For the first $125 million .4500%
For the next $125 million .4375
For the next $250 million .4250
For the next $500 million .4125
For the next $1 billion .4000
For the next $3 billion .3875
For net assets over $5 billion .3750
================================================================================
CONNECTICUT DIVIDEND ADVANTAGE (NFC)
CONNECTICUT DIVIDEND ADVANTAGE 2 (NGK)
CONNECTICUT DIVIDEND ADVANTAGE 3 (NGO)
AVERAGE DAILY NET ASSETS MASSACHUSETTS DIVIDEND ADVANTAGE (NMB)
(INCLUDING NET ASSETS INSURED MASSACHUSETTS TAX-FREE ADVANTAGE (NGX)
ATTRIBUTABLE TO PREFERRED SHARES) FUND-LEVEL FEE RATE
--------------------------------------------------------------------------------
For the first $125 million .4500%
For the next $125 million .4375
For the next $250 million .4250
For the next $500 million .4125
For the next $1 billion .4000
For net assets over $2 billion .3750
================================================================================
78
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 tables below. As
of May 31, 2008, the complex-level fee rate was .1851%.
Effective August 20, 2007, 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
================================================================================
Prior to August 20, 2007, the complex-level fee schedule was 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 .1698
$125 billion .1617
$200 billion .1536
$250 billion .1509
$300 billion .1490
================================================================================
(1) The complex-level fee component of the management fee for the funds is
calculated based upon the aggregate Managed Assets ("Managed Assets" means
the average daily net assets of each fund including assets attributable to
preferred stock issued by or borrowings by the Nuveen funds) of
Nuveen-sponsored funds in the U.S.
79
Notes to
FINANCIAL STATEMENTS (continued)
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 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 Trustees has
adopted a deferred compensation plan for independent Trustees that enables
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 Connecticut Dividend Advantage's (NFC) and
Massachusetts Dividend Advantage's (NMB) operations, the Adviser has agreed to
reimburse the Funds, as a percentage of average daily net assets (including net
assets attributable to Preferred shares), for fees and expenses in the amounts
and for the time periods set forth below:
YEAR ENDING YEAR ENDING
JANUARY 31, JANUARY 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 Connecticut Dividend Advantage (NFC) and
Massachusetts Dividend Advantage (NMB) for any portion of their fees and
expenses beyond January 31, 2011.
For the first ten years of Connecticut Dividend Advantage 2's (NGK) operations,
the Adviser has agreed to reimburse the Fund, as a percentage of average daily
net assets (including net assets attributable to Preferred shares), for fees and
expenses in the amounts and for the time periods set forth below:
YEAR ENDING YEAR ENDING
MARCH 31, MARCH 31,
--------------------------------------------------------------------------------
2002* .30% 2008 .25%
2003 .30 2009 .20
2004 .30 2010 .15
2005 .30 2011 .10
2006 .30 2012 .05
2007 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Connecticut Dividend Advantage 2 (NGK)
for any portion of its fees and expenses beyond March 31, 2012.
80
For the first eight years of Connecticut Dividend Advantage 3's (NGO)
operations, the Adviser has agreed to reimburse the Fund, as a percentage of
average daily net assets (including net assets attributable to Preferred
shares), for fees and expenses in the amounts and for the time periods set forth
below:
YEAR ENDING YEAR ENDING
SEPTEMBER 30, SEPTEMBER 30,
--------------------------------------------------------------------------------
2002* .32% 2007 .32%
2003 .32 2008 .24
2004 .32 2009 .16
2005 .32 2010 .08
2006 .32
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Connecticut Dividend Advantage 3 (NGO)
for any portion of its fees and expenses beyond September 30, 2010.
For the first eight years of Insured Massachusetts Tax-Free Advantage's (NGX)
operations, the Adviser has agreed to reimburse the Fund, as a percentage of
average daily net assets (including net assets attributable to Preferred
shares), for fees and expenses in the amounts and for the time periods set forth
below:
YEAR ENDING YEAR ENDING
NOVEMBER 30, NOVEMBER 30,
--------------------------------------------------------------------------------
2002* .32% 2007 .32%
2003 .32 2008 .24
2004 .32 2009 .16
2005 .32 2010 .08
2006 .32
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Insured Massachusetts Tax-Free Advantage
(NGX) for any portion of its fees and expenses beyond November 30, 2010.
Agreement and Plan of Merger
On June 20, 2007, Nuveen Investments announced that it had entered into a
definitive Agreement and Plan of Merger ("Merger Agreement") with Windy City
Investments, Inc. ("Windy City"), a corporation formed by investors led by
Madison Dearborn Partners, LLC ("Madison Dearborn"), pursuant to which Windy
City would acquire Nuveen Investments. Madison Dearborn is a private equity
investment firm based in Chicago, Illinois. The merger was consummated on
November 13, 2007.
The consummation of the merger was deemed to be an "assignment" (as that term is
defined in the Investment Company Act of 1940) of the investment management
agreement between each Fund and the Adviser, and resulted in the automatic
termination of each Fund's agreement. The Board of Trustees of each Fund
considered and approved a new investment management agreement with the Adviser
on the same terms as the previous agreements. Each new ongoing agreement, was
approved by the shareholders of each Fund and took effect on November 13, 2007.
The investors led by Madison Dearborn includes an affiliate of Merrill Lynch. As
a result, Merrill Lynch is an indirect "affiliated person" (as that term is
defined in the Investment Company Act of 1940) of each Fund. Certain conflicts
of interest may arise as a result of such indirect affiliation. For example, the
Funds are generally prohibited from entering into principal transactions with
Merrill Lynch and its affiliates. The Adviser does not believe that any such
prohibitions or limitations as a result of Merrill Lynch's affiliation will
significantly impact the ability of the Funds to pursue their investment
objectives and policies.
81
Notes to
FINANCIAL STATEMENTS (continued)
6. NEW ACCOUNTING PRONOUNCEMENTS
Financial Accounting Standards Board Statement of Financial Accounting Standards
No. 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 May 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
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 May 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.
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 July 1, 2008, to shareholders of record on
June 15, 2008, as follows:
CONNECTICUT CONNECTICUT CONNECTICUT CONNECTICUT
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NTC) (NFC) (NGK) (NGO)
--------------------------------------------------------------------------------
Dividend per share $.0490 $.0555 $.0550 $.0485
================================================================================
INSURED
MASSACHUSETTS MASSACHUSETTS MASSACHUSETTS MISSOURI
PREMIUM DIVIDEND TAX-FREE PREMIUM
INCOME ADVANTAGE ADVANTAGE INCOME
(NMT) (NMB) (NGX) (NOM)
--------------------------------------------------------------------------------
Dividend per share $.0515 $.0565 $.0545 $.0545
================================================================================
Auction Rate Preferred Shares (ARPS)
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 ARPS, whose auctions have been
failing for several months, including an initial phase of approximately $1
billion in forty-one funds. On June 26, 2008, thirteen municipal funds (none of
which are included in this shareholder report) issued par redemption notices for
a portion of their auction-rate securities aggregating approximately $580
million.
82
Financial
HIGHLIGHTS
83
Financial
HIGHLIGHTS
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
--------------------------------------------------------------- -------------------------------
Distributions Distributions
from Net from Net
Beginning Investment Capital Investment Capital
Common Net Income to Gains to Income to Gains to
Share Net Realized/ Preferred Preferred Common Common
Net Asset Investment Unrealized Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
===============================================================================================================================
CONNECTICUT PREMIUM INCOME (NTC)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2008 $14.39 $.83 $ (.09) $(.22) $(.01) $ .51 $(.62) $(.03) $(.65)
2007 14.42 .83 .07 (.20) (.01) .69 (.65) (.07) (.72)
2006 15.26 .84 (.54) (.14) (.03) .13 (.75) (.22) (.97)
2005 14.60 .88 .75 (.09) -- 1.54 (.87) (.01) (.88)
2004 15.56 .93 (.96) (.05) -- (.08) (.88) -- (.88)
CONNECTICUT DIVIDEND ADVANTAGE (NFC)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2008 14.76 .91 .01 (.24) (.02) .66 (.67) (.06) (.73)
2007 14.75 .92 .04 (.22) -- .74 (.73) -- (.73)
2006 15.39 .93 (.55) (.17) -- .21 (.85) -- (.85)
2005 14.56 .95 .86 (.09) -- 1.72 (.89) -- (.89)
2004 15.53 .97 (1.00) (.05) -- (.08) (.89) -- (.89)
===============================================================================================================================
Total Returns
---------------------
Offering Based
Costs and Ending on
Preferred Common Based Common
Share Share Ending on Share Net
Underwriting Asset Market Market Asset
Discounts Value Value Value* Value*
=============================================================================
CONNECTICUT PREMIUM INCOME (NTC)
-----------------------------------------------------------------------------
Year Ended 5/31:
2008 $ -- $14.25 $14.08 (1.08)% 3.60%
2007 -- 14.39 14.91 12.33 4.79
2006 -- 14.42 13.95 (6.00) .88
2005 -- 15.26 15.81 15.61 10.82
2004 -- 14.60 14.47 (10.80) (.51)
CONNECTICUT DIVIDEND ADVANTAGE (NFC)
-----------------------------------------------------------------------------
Year Ended 5/31:
2008 -- 14.69 14.93 (4.10) 4.62
2007 -- 14.76 16.37 5.46 5.05
2006 -- 14.75 16.26 8.79 1.38
2005 -- 15.39 15.73 17.89 12.06
2004 -- 14.56 14.12 (8.64) (.56)
=============================================================================
Ratios/Supplemental Data
-----------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets Ratios to Average Net Assets
Applicable to Common Shares Applicable to Common Shares
Before Credit/Reimbursement After Credit/Reimbursement**
------------------------------------------- -----------------------------------------
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
=================================================================================================================================
CONNECTICUT PREMIUM INCOME (NTC)
---------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2008 $76,441 1.30% 1.27% 5.82% 1.28% 1.26% 5.84% 22%
2007 77,151 1.24 1.24 5.67 1.21 1.21 5.69 8
2006 77,278 1.25 1.25 5.66 1.23 1.23 5.68 16
2005 81,529 1.24 1.24 5.81 1.24 1.24 5.82 12
2004 77,725 1.23 1.23 6.16 1.23 1.23 6.16 15
CONNECTICUT DIVIDEND ADVANTAGE (NFC)
---------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2008 37,874 1.33 1.31 5.90 1.03 1.01 6.20 20
2007 38,024 1.29 1.29 5.78 .92 .92 6.16 9
2006 37,905 1.29 1.29 5.70 .84 .84 6.14 14
2005 39,464 1.29 1.29 5.81 .83 .83 6.27 9
2004 37,238 1.26 1.26 5.97 .80 .80 6.44 4
=================================================================================================================================
Floating Rate Obligations
Preferred Shares at End of Period at End of Period
--------------------------------------------------------------------------------
Aggregate Liquidation Aggregate
Amount and Market Asset Amount Asset
Outstanding Value Coverage Outstanding Coverage
(000) Per Share Per Share (000) Per $1,000
================================================================================
CONNECTICUT PREMIUM INCOME (NTC)
--------------------------------------------------------------------------------
Year Ended 5/31:
2008 $38,300 $25,000 $74,896 $4,613 $25,873
2007 38,300 25,000 75,360 -- --
2006 38,300 25,000 75,443 -- --
2005 38,300 25,000 78,217 -- --
2004 38,300 25,000 75,734 -- --
CONNECTICUT DIVIDEND ADVANTAGE (NFC)
--------------------------------------------------------------------------------
Year Ended 5/31:
2008 19,500 25,000 73,556 2,287 26,087
2007 19,500 25,000 73,749 -- --
2006 19,500 25,000 73,596 -- --
2005 19,500 25,000 75,595 -- --
2004 19,500 25,000 72,740 -- --
================================================================================
* Total Return on Market Value is the combination of changes in the market
price per share and the effect of reinvested dividend income and reinvested
capital gains distributions, if any, at the average price paid per share at
the time of reinvestment. 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 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 and expense reimbursement, where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
(a) Interest expense arises from the application of SFAS No. 140 to certain
inverse floating rate transactions entered into by the Fund as more fully
described in Footnote 1 - Inverse Floating Rate Securities.
See accompanying notes to financial statements.
84-85 spread
Financial
HIGHLIGHTS (continued)
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
--------------------------------------------------------------- -------------------------------
Distributions Distributions
from Net from Net
Beginning Investment Capital Investment Capital
Common Net Income to Gains to Income to Gains to
Share Net Realized/ Preferred Preferred Common Common
Net Asset Investment Unrealized Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
===============================================================================================================================
CONNECTICUT DIVIDEND ADVANTAGE 2 (NGK)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2008 $14.85 $.91 $ (.01) $(.23) $(.02) $ .65 $(.67) $(.07) $(.74)
2007 14.86 .91 .08 (.22) (.01) .76 (.73) (.04) (.77)
2006 15.64 .91 (.60) (.17) (.01) .13 (.83) (.08) (.91)
2005 15.01 .92 .74 (.09) -- 1.57 (.87) (.07) (.94)
2004 16.23 .96 (1.13) (.04) (.01) (.22) (.87) (.12) (.99)
CONNECTICUT DIVIDEND ADVANTAGE 3 (NGO)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2008 14.30 .87 (.23) (.25) -- .39 (.61) -- (.61)
2007 14.18 .86 .13 (.23) -- .76 (.64) -- (.64)
2006 14.78 .84 (.54) (.18) -- .12 (.72) -- (.72)
2005 13.97 .86 .83 (.10) -- 1.59 (.78) -- (.78)
2004 15.06 .88 (1.14) (.05) -- (.31) (.78) -- (.78)
===============================================================================================================================
Total Returns
---------------------
Offering Based
Costs and Ending on
Preferred Common Based Common
Share Share Ending on Share Net
Underwriting Asset Market Market Asset
Discounts Value Value Value* Value*
============================================================================
CONNECTICUT DIVIDEND ADVANTAGE 2 (NGK)
----------------------------------------------------------------------------
Year Ended 5/31:
2008 $ -- $14.76 $15.00 (3.63)% 4.54%
2007 -- 14.85 16.38 3.58 5.13
2006 -- 14.86 16.60 9.78 .84
2005 -- 15.64 15.98 19.92 10.70
2004 (.01) 15.01 14.14 (4.65) (1.48)
CONNECTICUT DIVIDEND ADVANTAGE 3 (NGO)
----------------------------------------------------------------------------
Year Ended 5/31:
2008 -- 14.08 13.63 (3.07) 2.79
2007 -- 14.30 14.70 9.15 5.42
2006 -- 14.18 14.09 1.84 .83
2005 -- 14.78 14.54 18.17 11.60
2004 -- 13.97 13.00 (8.92) (2.08)
============================================================================
Ratios/Supplemental Data
-----------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets Ratios to Average Net Assets
Applicable to Common Shares Applicable to Common Shares
Before Credit/Reimbursement After Credit/Reimbursement**
------------------------------------------- -----------------------------------------
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
===================================================================================================================================
CONNECTICUT DIVIDEND ADVANTAGE 2 (NGK)
-----------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2008 $34,188 1.36% 1.33% 5.79% .98% .95% 6.17% 23%
2007 34,366 1.31 1.31 5.60 .85 .85 6.06 12
2006 34,352 1.29 1.29 5.51 .83 .83 5.97 11
2005 36,105 1.28 1.28 5.52 .82 .82 5.98 12
2004 34,646 1.25 1.25 5.73 .80 .80 6.18 10
CONNECTICUT DIVIDEND ADVANTAGE 3 (NGO)
-----------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2008 61,476 1.29 1.27 5.70 .86 .84 6.13 24
2007 62,325 1.26 1.26 5.44 .76 .76 5.94 15
2006 61,826 1.24 1.24 5.30 .74 .74 5.80 9
2005 64,324 1.24 1.24 5.40 .76 .76 5.89 9
2004 60,774 1.24 1.24 5.58 .74 .74 6.08 14
===================================================================================================================================
Floating Rate Obligations
Preferred Shares at End of Period at End of Period
--------------------------------------------------------------------------------
Aggregate Liquidation Aggregate
Amount and Market Asset Amount Asset
Outstanding Value Coverage Outstanding Coverage
(000) Per Share Per Share (000) Per $1,000
================================================================================
CONNECTICUT DIVIDEND ADVANTAGE 2 (NGK)
--------------------------------------------------------------------------------
Year Ended 5/31:
2008 $17,500 $25,000 $73,840 $2,062 $26,067
2007 17,500 25,000 74,094 -- --
2006 17,500 25,000 74,074 -- --
2005 17,500 25,000 76,579 -- --
2004 17,500 25,000 74,495 -- --
CONNECTICUT DIVIDEND ADVANTAGE 3 (NGO)
--------------------------------------------------------------------------------
Year Ended 5/31:
2008 32,000 25,000 73,028 3,788 25,677
2007 32,000 25,000 73,691 -- --
2006 32,000 25,000 73,302 -- --
2005 32,000 25,000 75,253 -- --
2004 32,000 25,000 72,480 -- --
================================================================================
* Total Return on Market Value is the combination of changes in the market
price per share and the effect of reinvested dividend income and reinvested
capital gains distributions, if any, at the average price paid per share at
the time of reinvestment. 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 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 and expense reimbursement, where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
(a) Interest expense arises from the application of SFAS No. 140 to certain
inverse floating rate transactions entered into by the Fund as more fully
described in Footnote 1 - Inverse Floating Rate Securities.
See accompanying notes to financial statements.
86-87 spread
Financial
HIGHLIGHTS (continued)
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
--------------------------------------------------------------- -------------------------------
Distributions Distributions
from Net from Net
Beginning Investment Capital Investment Capital
Common Net Income to Gains to Income to Gains to
Share Net Realized/ Preferred Preferred Common Common
Net Asset Investment Unrealized Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
===============================================================================================================================
MASSACHUSETTS PREMIUM INCOME (NMT)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2008 $14.56 $ .88 $ (.32) $(.25) $(.01) $ .30 $(.62) $ (.02) $ (.64)
2007 14.45 .88 .13 (.23) --* .78 (.67) --* (.67)
2006 15.10 .88 (.50) (.18) -- .20 (.81) (.04) (.85)
2005 14.34 .91 .81 (.08) -- 1.64 (.88) -- (.88)
2004 15.30 .94 (.97) (.05) -- (.08) (.88) -- (.88)
MASSACHUSETTS DIVIDEND ADVANTAGE (NMB)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2008 14.84 .94 (.45) (.26) (.01) .22 (.68) (.02) (.70)
2007 14.83 .93 .08 (.25) -- .76 (.75) -- (.75)
2006 15.65 .95 (.54) (.17) (.02) .22 (.85) (.19) (1.04)
2005 14.84 .97 .95 (.08) -- 1.84 (.92) (.11) (1.03)
2004 16.00 1.00 (1.11) (.04) (.01) (.16) (.92) (.08) (1.00)
===============================================================================================================================
Total Returns
---------------------
Offering Based
Costs and Ending on
Preferred Common Based Common
Share Share Ending on Share Net
Underwriting Asset Market Market Asset
Discounts Value Value Value** Value**
===============================================================================
MASSACHUSETTS PREMIUM INCOME (NMT)
-------------------------------------------------------------------------------
Year Ended 5/31:
2008 $ -- $14.22 $13.61 (.48)% 2.08%
2007 -- 14.56 14.33 4.60 5.47
2006 -- 14.45 14.35 (6.14) 1.41
2005 -- 15.10 16.14 18.97 11.74
2004 -- 14.34 14.35 (9.51) (.51)
MASSACHUSETTS DIVIDEND ADVANTAGE (NMB)
-------------------------------------------------------------------------------
Year Ended 5/31:
2008 -- 14.36 14.61 (5.73) 1.55
2007 -- 14.84 16.28 10.04 5.14
2006 -- 14.83 15.53 (5.23) 1.49
2005 -- 15.65 17.45 24.96 12.76
2004 -- 14.84 14.88 (3.74) (1.03)
===============================================================================
Ratios/Supplemental Data
-----------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets Ratios to Average Net Assets
Applicable to Common Shares Applicable to Common Shares
Before Credit/Reimbursement After Credit/Reimbursement***
------------------------------------------- -----------------------------------------
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
===================================================================================================================================
MASSACHUSETTS PREMIUM INCOME (NMT)
-----------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2008 $67,720 1.26% 1.26% 6.09% 1.24% 1.24% 6.11% 14%
2007 69,323 1.24 1.24 5.97 1.23 1.23 5.98 9
2006 68,776 1.25 1.25 5.98 1.24 1.24 6.00 13
2005 71,648 1.24 1.24 6.15 1.24 1.24 6.16 18
2004 67,806 1.24 1.24 6.37 1.23 1.23 6.38 22
MASSACHUSETTS DIVIDEND ADVANTAGE (NMB)
-----------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2008 28,135 1.32 1.32 6.11 1.02 1.02 6.42 15
2007 29,072 1.33 1.33 5.84 .95 .95 6.21 9
2006 29,004 1.29 1.29 5.79 .83 .83 6.24 13
2005 30,539 1.31 1.31 5.83 .86 .86 6.28 12
2004 28,904 1.27 1.27 6.05 .81 .81 6.51 26
===================================================================================================================================
Floating Rate Obligations
Preferred Shares at End of Period at End of Period
--------------------------------------------------------------------------------
Aggregate Liquidation Aggregate
Amount and Market Asset Amount Asset
Outstanding Value Coverage Outstanding Coverage
(000) Per Share Per Share (000) Per $1,000
================================================================================
MASSACHUSETTS PREMIUM INCOME (NMT)
--------------------------------------------------------------------------------
Year Ended 5/31:
2008 $34,000 $25,000 $74,794 $ -- $ --
2007 34,000 25,000 75,973 -- --
2006 34,000 25,000 75,571 -- --
2005 34,000 25,000 77,682 -- --
2004 34,000 25,000 74,857 -- --
MASSACHUSETTS DIVIDEND ADVANTAGE (NMB)
--------------------------------------------------------------------------------
Year Ended 5/31:
2008 15,000 25,000 71,892 -- --
2007 15,000 25,000 73,453 -- --
2006 15,000 25,000 73,340 -- --
2005 15,000 25,000 75,899 -- --
2004 15,000 25,000 73,173 -- --
================================================================================
* Distributions from Capital Gains to Preferred Shareholders and
Distributions from Capital Gains to Common Shareholders round to less than
$.01 per share.
** Total Return on Market Value is the combination of changes in the market
price per share and the effect of reinvested dividend income and reinvested
capital gains distributions, if any, at the average price paid per share at
the time of reinvestment. 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 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 and expense reimbursement, where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
(a) Interest expense arises from the application of SFAS No. 140 to certain
inverse floating rate transactions entered into by the Fund as more fully
described in Footnote 1 - Inverse Floating Rate Securities.
See accompanying notes to financial statements.
88-89 spread
Financial
HIGHLIGHTS (continued)
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
--------------------------------------------------------------- -------------------------------
Distributions Distributions
from Net from Net
Beginning Investment Capital Investment Capital
Common Net Income to Gains to Income to Gains to
Share Net Realized/ Preferred Preferred Common Common
Net Asset Investment Unrealized Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
===============================================================================================================================
INSURED MASSACHUSETTS TAX-FREE ADVANTAGE (NGX)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2008 $14.50 $.90 $ (.21) $(.26) $ -- $ .43 $(.65) $ -- $(.65)
2007 14.39 .90 .08 (.25) -- .73 (.62) -- (.62)
2006 14.93 .90 (.53) (.20) -- .17 (.71) -- (.71)
2005 14.04 .92 .90 (.09) -- 1.73 (.84) -- (.84)
2004 15.25 .94 (1.22) (.06) -- (.34) (.86) (.01) (.87)
MISSOURI PREMIUM INCOME (NOM)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2008 14.27 .89 (.62) (.20) (.04) .03 (.65) (.13) (.78)
2007 14.40 .90 (.08) (.23) --* .59 (.72) --* (.72)
2006 15.11 .92 (.51) (.17) (.01) .23 (.84) (.10) (.94)
2005 14.37 .94 .77 (.09) -- 1.62 (.88) -- (.88)
2004 15.40 .96 (1.05) (.06) -- (.15) (.88) -- (.88)
===============================================================================================================================
Total Returns
---------------------
Offering Based
Costs and Ending on
Preferred Common Based Common
Share Share Ending on Share Net
Underwriting Asset Market Market Asset
Discounts Value Value Value** Value**
=================================================================================
INSURED MASSACHUSETTS TAX-FREE ADVANTAGE (NGX)
---------------------------------------------------------------------------------
Year Ended 5/31:
2008 $ -- $14.28 $14.14 2.49% 3.04%
2007 -- 14.50 14.45 12.49 5.12
2006 -- 14.39 13.43 (11.62) 1.20
2005 -- 14.93 15.94 20.95 12.62
2004 -- 14.04 13.90 (6.83) (2.18)
MISSOURI PREMIUM INCOME (NOM)
---------------------------------------------------------------------------------
Year Ended 5/31:
2008 -- 13.52 14.76 (5.74) .26
2007 -- 14.27 16.56 5.98 4.17
2006 -- 14.40 16.35 (3.53) 1.57
2005 -- 15.11 17.90 24.38 11.54
2004 -- 14.37 15.15 (5.35) (1.00)
=================================================================================
Ratios/Supplemental Data
-----------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets Ratios to Average Net Assets
Applicable to Common Shares Applicable to Common Shares
Before Credit/Reimbursement After Credit/Reimbursement**
------------------------------------------- -----------------------------------------
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
====================================================================================================================================
INSURED MASSACHUSETTS TAX-FREE ADVANTAGE (NGX)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2008 $38,873 1.29% 1.29% 5.82% .84% .84% 6.26% 13%
2007 39,458 1.28 1.28 5.67 .77 .77 6.17 6
2006 39,179 1.29 1.29 5.66 .79 .79 6.16 5
2005 40,611 1.27 1.27 5.83 .79 .79 6.31 2
2004 38,121 1.28 1.28 5.94 .75 .75 6.46 97
MISSOURI PREMIUM INCOME (NOM)
-----------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2008 31,170 1.52 1.31 6.43 1.51 1.30 6.44 5
2007 32,826 1.39 1.30 6.15 1.37 1.27 6.18 16
2006 32,934 1.29 1.29 6.20 1.27 1.27 6.22 9
2005 34,219 1.29 1.29 6.29 1.28 1.28 6.30 17
2004 32,231 1.27 1.27 6.44 1.26 1.26 6.45 24
====================================================================================================================================
Floating Rate Obligations
Preferred Shares at End of Period at End of Period
--------------------------------------------------------------------------------
Aggregate Liquidation Aggregate
Amount and Market Asset Amount Asset
Outstanding Value Coverage Outstanding Coverage
(000) Per Share Per Share (000) Per $1,000
================================================================================
INSURED MASSACHUSETTS TAX-FREE ADVANTAGE (NGX)
--------------------------------------------------------------------------------
Year Ended 5/31:
2008 $20,500 $25,000 $72,407 $ -- $ --
2007 20,500 25,000 73,120 -- --
2006 20,500 25,000 72,779 -- --
2005 20,500 25,000 74,526 -- --
2004 20,500 25,000 71,489 -- --
MISSOURI PREMIUM INCOME (NOM)
--------------------------------------------------------------------------------
Year Ended 5/31:
2008 16,000 25,000 73,703 2,225 22,200
2007 16,000 25,000 76,291 1,975 25,722
2006 16,000 25,000 76,460 -- --
2005 16,000 25,000 78,468 -- --
2004 16,000 25,000 75,360 -- --
================================================================================
* Distributions from Capital Gains to Preferred Shareholders and
Distributions from Capital Gains to Common Shareholders round to less than
$.01 per share.
** Total Return on Market Value is the combination of changes in the market
price per share and the effect of reinvested dividend income and reinvested
capital gains distributions, if any, at the average price paid per share at
the time of reinvestment. 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 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 and expense reimbursement, where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
(a) Interest expense arises from the application of SFAS No. 140 to certain
inverse floating rate transactions entered into by the Fund as more fully
described in Footnote 1 - Inverse Floating Rate Securities.
See accompanying notes to financial statements.
90-91 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 1997
333 W. Wacker Drive the Board CLASS III 186
Chicago, IL 60606 and Board member
[] JACK B. EVANS President, The Hall-Perrine Foundation, a
10/22/48 1999 private philanthropic corporation (since
333 W. Wacker Drive Board member CLASS III 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 2004 University of Iowa (since July 2006);
333 W. Wacker Drive Board member ANNUAL 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 2005 Management Company; Retired (since 2004)
333 W. Wacker Drive Board member CLASS II 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 1997 Chief Operating Officer (retired, 2004)
333 W. Wacker Drive Board member ANNUAL 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.
92
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 1997 Donnelley Foundation (since 1994); prior
333 W. Wacker Drive Board member CLASS I 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 2007 (since 2006); Chair New York Racing
333 W. Wacker Drive Board member CLASS I 186 Association Oversight Board (since 2005);
Chicago, IL 60606 Commissioner, New York State Commission
on Public Authority Reform (since 2005);
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(2)
9/29/59 2008 Private Investor (since 2007); CEO and
333 W. Wacker Drive Board Member CLASS II 174(4) President, Northern Trust Investments
Chicago, IL 60606 (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 2008 and Director (since 1999) of Nuveen
333 W. Wacker Drive Board Member CLASS II 174(4) 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.
OFFICERS OF THE FUND:
[] GIFFORD R. ZIMMERMAN Managing Director (since 2002), Assistant
9/9/56 Chief Secretary and Associate General Counsel,
333 W. Wacker Drive Administrative 1988 186 formerly, Vice President and Assistant
Chicago, IL 60606 Officer General Counsel, of Nuveen Investments,
LLC; Managing 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 Richards & Tierney, 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.(5);
Chartered Financial Analyst.
[] WILLIAM ADAMS IV Executive Vice President, U.S. Structured
6/9/55 Products of Nuveen Investments, LLC,
333 W. Wacker Drive Vice President 2007 120 (since 1999), prior thereto, Managing
Chicago, IL 60606 Director of Structured Investments.
93
NAME, POSITION(S) HELD YEAR FIRST NUMBER PRINCIPAL
BIRTHDATE WITH THE FUNDS ELECTED OR OF PORTFOLIOS OCCUPATION(S)
AND ADDRESS APPOINTED(6) IN FUND COMPLEX DURING PAST 5 YEARS
OVERSEEN
BY OFFICER
OFFICERS OF THE FUND:
[] CEDRIC H. ANTOSIEWICZ
1/11/62 Managing Director, (since 2004)
333 W. Wacker Drive Vice President 2007 120 previously, Vice President (1993-2004) of
Chicago, IL 60606 Nuveen Investments, LLC.
[] 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 (2004) formerly,
Chicago, IL 60606 Vice President (1998-2004) of Nuveen
Advisory Corp. and Nuveen Institutional
Advisory Corp.(5); Managing Director
(since 2005) of Nuveen Asset Management.
[] 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
[] 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 Group, LLC and Richards
& Tierney, Inc. (since 2007); formerly,
Vice President and Assistant Secretary of
Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp.(5)
94
NAME, POSITION(S) HELD YEAR FIRST NUMBER PRINCIPAL
BIRTHDATE WITH THE FUNDS ELECTED OR OF PORTFOLIOS OCCUPATION(S)
AND ADDRESS APPOINTED(6) IN FUND COMPLEX DURING PAST 5 YEARS
OVERSEEN
BY OFFICER
OFFICERS OF THE FUND:
[] 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, NWQ Holdings, LLC, Symphony Asset
Management LLC, Santa Barbara Asset
Management LLC, Nuveen HydePark Group,
LLC and Richards & Tierney, Inc. (since
2007); Managing Director (since 2008),
formerly, Vice President (2007-2008) and
Assistant General Counsel, Nuveen
Investments, Inc. prior thereto, Partner,
Bell, Boyd & Lloyd LLP (1997-2007).
[] JOHN V. MILLER Managing Director (since 2007), formerly,
4/10/67 Vice President Vice President (2002-2007) of Nuveen
333 W. Wacker Drive and Assistant 2007 186 Investments, LLC; Chartered Financial
Chicago, IL 60606 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); Vice President
and Assistant General Counsel, Nuveen
Investment, Inc. (since 2008); prior
thereto, Associate, Skadden, Arps, Slate
Meagher & Flom LLP (2002-2008).
[] JAMES F. RUANE Vice President, Nuveen Investments since
7/3/62 Vice President 2007; prior thereto, Partner, Deloitte &
333 W. Wacker Drive and Assistant 2007 186 Touche USA LLP (since 2005), formerly,
Chicago, IL 60606 Secretary senior tax manager (since 2002);
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); Vice President
and Assistant General Counsel, Nuveen
Investments Inc. (since 2008); prior
thereto, Counsel, Vedder Price P.C.
(1997-2007).
(1) Board Members serve three year terms, except for two board members who are
elected by the holders of Preferred Shares. The Board of Trustees 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.
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 and Mr. Toth were appointed to the Board of Trustees of certain
Nuveen Funds, effective July 1, 2008. In connection with the appointment of
Mr. Amboian as trustee, Timothy R. Schwertfeger, an interested trustee,
resigned from the Board of Trustees, effective July 1, 2008.
(3) 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.
(4) Mr. Amboian and Mr. Toth are standing for election to the Boards of twelve
Nuveen closed-end funds whose annual meeting on June 30, 2008 was adjourned
to July 29, 2008.
(5) Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp. were
reorganized into Nuveen Asset Management, effective January 1, 2005.
(6) 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.
95
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;
96
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 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 Fund's 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 respective Fund and all of its
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.
97
ANNUAL INVESTMENT MANAGEMENT AGREEMENT
APPROVAL PROCESS (continued)
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 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.
With respect to state specific municipal funds, the Independent Board Members
also recognized that certain funds lack comparable peers in which case their
performance is measured against a more general municipal category for various
states. The closed-end municipal funds that do not have corresponding
state-specific Performance Peer Groups are from states other than New York,
California, Florida, New Jersey, Michigan, and Pennsylvania.
With respect to municipal funds, 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. 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. With respect to closed-end funds,
the Independent Board Members also considered, among other things, the
differences in the use of leverage and with respect to municipal funds, the
Independent Board Members considered the differences in the use of
insurance as well as the states reflected in a respective Peer Group for
the state municipal funds (such as the use of a general "other states"
category for closed-end state funds (other than New York and California)).
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
98
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. With
respect to municipal funds, 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 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 Nuveeninvestment 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
99
ANNUAL INVESTMENT MANAGEMENT AGREEMENT
APPROVAL PROCESS (continued)
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 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 such 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.
100
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.
101
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.
102
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.
103
NOTES
102
NOTES
105
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 common share NAV per 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 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.
106
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, 2007, 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 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 shares of its own common or preferred stock in
the future at such times and in such amounts as is deemed advisable. No common
or preferred shares were repurchased during the period covered by this report.
Any future repurchases will be reported to shareholders in the next annual or
semi-annual report.
107
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.
Managing $153 billion in assets, as of March 31, 2008, Nuveen Investments offers
access to a number of different asset classes and investing solutions through a
variety of products. Nuveen Investments markets its capabilities under six
distinct brands: Nuveen, a leader in fixed-income investments; NWQ, a leader in
value-style equities; Rittenhouse, a leader in growth-style equities; Symphony,
a leading institutional manager of market-neutral alternative investment
portfolios; Santa Barbara, a leader in growth equities; and Tradewinds, a leader
in global equities.
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-0508D
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 Massachusetts Premium Income Municipal Fund
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)
--------------------------------------------------------------------------------------------------------------------------------
May 30, 2008 $ 10,330 $ 0 $ 500 $ 800
--------------------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0% 0%
pursuant to
pre-approval
exception
--------------------------------------------------------------------------------------------------------------------------------
May 31, 2007 $ 9,097 $ 0 $ 0 $ 2,250
--------------------------------------------------------------------------------------------------------------------------------
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
--------------------------------------------------------------------------------------------------------------
May 30, 2008 $ 0 $ 0 $ 0
--------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
--------------------------------------------------------------------------------------------------------------
May 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
-----------------------------------------------------------------------------------------------------------------------------
May 30, 2008 $ 1,300 $ 0 $ 0 $ 1,300
May 31, 2007 $ 2,250 $ 0 $ 0 $ 2,250
"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)). As of
May 31, 2008, the members of the audit committee are Robert P. Bremner, Jack
B. Evans, 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
Cathryn P. Steeves Nuveen Massachusetts Premium Income Municipal Fund
Other Accounts Managed. In addition to managing the registrant, the portfolio
manager is also primarily responsible for the day-to-day portfolio management of
the following accounts:
TYPE OF ACCOUNT NUMBER OF
PORTFOLIO MANAGER MANAGED ACCOUNTS ASSETS
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Cathryn P. Steeves Registered Investment Company 41 $8.257 billion
Other Pooled Investment Vehicles 0 $0
Other Accounts 0 $0
* Assets are as of May 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 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 June 30, 2008, the
S&P/Investortools Municipal Bond index was comprised of 52,385 securities with
an aggregate current market value of $1,052 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 May 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
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Cathryn P. Steeves Nuveen Massachusetts Premium Income $0 $10,001-$50,000
Municipal Fund
PORTFOLIO MANAGER BIO:
Cathryn P. Steeves, PhD is currently a portfolio manager for 42 state-specific
municipal bond funds. She joined Nuveen in 1996 and worked as a senior analyst
in the healthcare sector. Ms. Steeves has an undergraduate degree from Wake
Forest University as well as an MA, an MPhil and a PhD from Columbia University.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the registrants Board implemented after the registrant
last provided disclosure in response to this item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of this report that includes the disclosure
required by this paragraph, based on their evaluation of the controls
and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")
(17 CFR 240.13a-15(b) or 240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter
of the period covered by this report that has materially affected, or
is reasonably likely to materially affect, the registrant's internal
control over financial reporting.
ITEM 12. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit: Not applicable
because the code is posted on registrant's website at www.nuveen.com/etf and
there were no amendments during the period covered by this report. (To view the
code, click on the Investor Resources drop down menu box, click on Fund
Governance and then Code of Conduct.)
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2(a) under
the 1940 Act (17 CFR 270.30a-2(a)) in the exact form set forth below: Ex-99.CERT
Attached hereto.
(a)(3) Any written solicitation to purchase securities under Rule 23c-1 under
the 1940 Act (17 CFR 270.23c-1) sent or given during the period covered by the
report by or on behalf of the registrant to 10 or more persons. Not applicable.
(b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act,
provide the certifications required by Rule 30a-2(b) under the 1940 Act (17 CFR
270.30a-2(b)); Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR
240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of
the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished
pursuant to this paragraph will not be deemed "filed" for purposes of Section 18
of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of
that section. Such certification will not be deemed to be incorporated by
reference into any filing under the Securities Act of 1933 or the Exchange Act,
except to the extent that the registrant specifically incorporates it by
reference. Ex-99.906 CERT attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Nuveen Massachusetts Premium Income Municipal Fund
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By (Signature and Title) /s/ Kevin J. McCarthy
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Kevin J. McCarthy
Vice President and Secretary
Date: August 7, 2008
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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: August 7, 2008
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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: August 7, 2008
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