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 811-09475
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Nuveen Insured Dividend Advantage Municipal Fund
------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
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(Address of principal executive offices) (Zip code)
Jessica R. Droeger
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
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(Name and address of agent for service)
Registrant's telephone number, including area code: (312) 917-7700
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Date of fiscal year end: October 31, 2003
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Date of reporting period: October 31, 2003
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
ANNUAL REPORT October 31, 2003
Nuveen
Municipal Closed-End
Exchange-Traded
Funds
NUVEEN INSURED QUALITY MUNICIPAL FUND
NQI
NUVEEN INSURED MUNICIPAL OPPORTUNITY FUND
NIO
NUVEEN PREMIER INSURED MUNICIPAL INCOME FUND
NIF
NUVEEN INSURED PREMIUM INCOME MUNICIPAL FUND 2
NPX
NUVEEN INSURED DIVIDEND ADVANTAGE MUNICIPAL FUND
NVG
NUVEEN INSURED TAX-FREE ADVANTAGE MUNICIPAL FUND
NEA
Photo of: Man holding up child in his arms.
Photo of: 2 women and 2 girls looking at seashells.
DEPENDABLE,
TAX-FREE INCOME
BECAUSE
IT'S NOT WHAT YOU EARN,
IT'S WHAT YOU KEEP.(R)
Logo: NUVEEN Investments
FASTER INFORMATION
RECEIVE YOUR
NUVEEN FUND REPORT
ELECTRONICALLY
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your Nuveen Fund information is available. Click on the link and you will be
taken directly to the report. Your Fund report can be viewed and saved on your
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Registering is easy and only takes a few minutes (see instructions at right).
--------------------------------------------------------------------------------
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No, your e-mail address is strictly confidential and will not be used for
anything other than notification of shareholder information.
WHAT IF I CHANGE MY MIND AND WANT TO RECEIVE INVESTOR MATERIALS THROUGH REGULAR
MAIL DELIVERY AGAIN?
If you decide you do not like receiving your reports electronically, it's a
simple process to go back to regular mail delivery.
--------------------------------------------------------------------------------
IF YOUR NUVEEN FUND DIVIDENDS AND STATEMENTS
COME FROM YOUR FINANCIAL ADVISOR OR BROKERAGE ACCOUNT,
FOLLOW THE STEPS OUTLINED BELOW:
1 Go to WWW.INVESTORDELIVERY.COM and follow the simple instructions, using
the address sheet that accompanied this report as a guide.
2 You'll be taken to a page with several options. Select the NEW
ENROLLMENT-CREATE screen and follow the simple instructions.
3 Click Submit. Confirm the information you just entered is correct, then
click Submit again.
4 You should get a confirmation e-mail within 24 hours. If you do not, go
back through these steps to make sure all the information is correct.
5 Use this same process if you need to change your registration information
or cancel internet viewing.
IF YOUR NUVEEN FUND DIVIDENDS AND STATEMENTS
COME DIRECTLY TO YOU FROM NUVEEN,
FOLLOW THE STEPS OUTLINED BELOW:
1 Go to WWW.NUVEEN.COM
2 Select ACCESS YOUR ACCOUNT. Select the E-REPORT ENROLLMENT section. Click
on Enrollment Today.
3 You'll be taken to a screen that asks for your Social Security number and
e-mail address. Fill in this information, then click Enroll.
4 You should get a confirmation e-mail within 24 hours. If you do not, go
back through these steps to make sure all the information is correct.
5 Use this same process if you need to change your registration information
or cancel internet viewing.
Logo: NUVEEN Investments
Photo of: Timothy R. Schwertfeger
Chairman of the Board
Sidebar text: WE THINK YOUR NUVEEN FUND CAN BE AN IMPORTANT BUILDING BLOCK IN A
PORTFOLIO DESIGNED TO PERFORM WELL THROUGH A VARIETY OF MARKET CONDITIONS.
Dear
SHAREHOLDER
I am very pleased to report that for the year ended October 31, 2003, your
Nuveen Fund continued to provide you with attractive monthly tax-free income.
Your Nuveen Fund is managed with a value investing strategy that puts an
emphasis on finding securities that we think are undervalued or underrated. We
believe that there are always some municipal bonds that the market is not
properly valuing, and that by using a consistent, research-oriented management
approach we have the opportunity to find them for your Fund.
In this low-rate environment, many have begun to wonder whether
interest rates will soon start to rise, and whether that possibility should
cause them to adjust their holdings of fixed-income investments. We believe that
by constructing a carefully balanced portfolio with the help of a trusted
investment professional you may be able to reduce your overall investment risk
and give yourself a better chance to meet your financial goals. We think that
municipal bond investments like your Nuveen Fund can be important building
blocks in a portfolio designed to perform well through a variety of market
conditions.
Since 1898, Nuveen Investments has offered financial products and solutions that
incorporate careful research, diversification, and the application of
conservative risk-management principles. We are grateful that you have chosen us
as a partner as you pursue your financial goals. We look forward to continuing
to earn your trust in the months and years ahead.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
December 15, 2003
1
Nuveen National Insured Municipal Closed-End Exchange-Traded Funds (NQI, NIO,
NIF, NPX, NVG, NEA)
Portfolio Manager's
COMMENTS
Portfolio manager Tom O'Shaughnessy discusses U.S. economic and market
conditions, key investment strategies, and the annual performance of the
national insured Funds. With 20 years of investment experience at Nuveen, Tom
assumed portfolio management responsibility for NEA at its inception in November
2002, adding NQI, NIO, NIF, NPX, and NVG in January 2003.
WHAT FACTORS AFFECTED THE U.S. ECONOMY AND MUNICIPAL MARKET DURING THE 12-MONTH
PERIOD ENDED OCTOBER 31, 2003?
Over the 12-month reporting period, the two greatest influences on the general
economy continued to be historically low interest rates and the overall pace of
economic improvement. In June 2003, the Federal Reserve reduced the fed funds
rate to 1.0%, the lowest level since 1958. The Fed's accommodative monetary
policy coupled with Washington's tax relief measures and increased spending for
defense helped to fuel an 8.2% jump year-over-year in the third-quarter Gross
Domestic Product (GDP), up from 3.3% in the second quarter. At the same time,
inflation remained under control throughout the period.
In the municipal market, the slower rate of economic recovery over the majority
of this reporting period, low interest rates, and lack of inflationary pressures
helped many municipal bonds perform well. During the summer of 2003, however,
stronger-than-expected economic data precipitated a spike in bond yields and a
corresponding drop in bond prices that impacted results across all fixed-income
markets, including the municipal market, for the 12-month period ended October
31, 2003.
During the first 10 months of 2003, municipal supply nationally remained robust,
with $319.9 billion in new bonds, up 8% over the same period in 2002.
HOW DID THESE NUVEEN FUNDS PERFORM OVER THIS REPORTING PERIOD?
Individual results for these Funds, as well as for relevant benchmarks, are
presented in the accompanying table.
TOTAL RETURN LEHMAN LIPPER
MARKET YIELD ON NAV TOTAL RETURN1 AVERAGE2
--------------------------------------------------------------------------------
1 YEAR 1 YEAR 1 YEAR
TAXABLE- ENDED ENDED ENDED
10/31/03 EQUIVALENT3 10/31/03 10/31/03 10/31/03
--------------------------------------------------------------------------------
NQI 6.19% 8.60% 6.27% 5.52% 6.72%
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NIO 6.21% 8.63% 7.51% 5.52% 6.72%
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NIF 6.31% 8.76% 7.28% 5.52% 6.72%
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NPX 6.20% 8.61% 6.70% 5.52% 6.72%
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NVG 6.28% 8.72% 7.37% 5.52% 6.72%
--------------------------------------------------------------------------------
NEA 6.29% 8.74% NA -- --
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Past performance is not predictive of future results.
For additional information, see the individual Performance Overview for your
Fund in this report.
1 The total annual returns on common share net asset value (NAV) for these
Nuveen Funds are compared with the total annual return of the Lehman Brothers
Insured Municipal Bond Index, an unleveraged, unmanaged index comprising a
broad range of insured municipal bonds. Results for the Lehman index do not
reflect any expenses.
2 The total returns of these Funds are compared with the average annualized
return of the 24 funds in the Lipper Insured Leveraged Municipal Debt Funds
category. Fund and Lipper returns assume reinvestment of dividends.
3 The taxable-equivalent yield represents the yield that must be earned on a
taxable investment, other than an investment that generates qualified dividend
income that is taxable at a maximum rate of 15%, in order to equal the yield
of the Nuveen Fund on an after-tax basis. It is calculated using the current
market yield and a federal income tax rate of 28%.
2
For the 12 months ended October 31, 2003, all of the Funds in this report with
at least one year of performance history outperformed the unleveraged Lehman
Brothers Insured Municipal Bond Index. NIO, NIF, and NVG also outperformed their
Lipper peer group average, while NPX performed in line with the Lipper average
while NQI trailed this measure. The use of leverage was one of the factors that
influenced the performances of these Funds relative to the Lehman index over the
past 12 months. While this is a strategy that carries some price risk and
increased volatility, leveraging can provide opportunities for additional income
for common shareholders, especially during periods of low short-term interest
rates.
In general, the Funds also benefited from their duration4 positioning during
this period. As of October 31, 2003, the durations of the four older Funds
ranged (NQI, NIO, NIF and NPX) from 7.59 to 9.94, while NVG and NEA had
durations of 10.02 and 11.47, respectively, compared with 8.98 for the Lehman
insured index. However, NPX's duration of 7.59 kept the Fund from fully
benefiting from the decline in interest rates during much of the past year.
In addition to leverage and duration, factors such as call exposure, portfolio
trading activity, and the price movement of specific sectors and holdings also
had an impact on the Funds' relative performances during this period. For
example, as of October 31, 2003 NQI and NPX held 7% and 8%, respectively, of
their portfolios in multifamily housing bonds. For the 12 months ended October
2003, the multifamily housing sector, as measured by the Lehman index, was among
the poorer performers, lagging the insured municipal market by almost 80 basis
points.
HOW DID THE MARKET ENVIRONMENT AFFECT THE FUNDS' DIVIDENDS AND SHARE PRICES?
With short-term interest rates remaining at historically low levels, the
dividend-paying capabilities of these Funds benefited from their use of
leverage. During the 12 months ended October 31, 2003, continued low short-term
rates enabled us to implement two dividend increases in NQI and NPX and one each
in NIO and NIF. Leverage also helped to support the dividends of the two newer
Funds, as NVG and NEA continued to pay shareholders steady, attractive dividends
since their first dividend declarations in May 2002 and January 2003,
respectively.
4 Duration is a measure of a fund's NAV volatility in reaction to interest rate
movements. Fund duration, also known as leverage-adjusted duration, takes into
account the leveraging process for a fund and therefore is generally longer
than the duration of the actual portfolio of individual bonds that make up the
fund. References to duration in this commentary are intended to indicate fund
duration unless otherwise noted.
3
Even at these dividend levels, each Fund's common share net investment income
during the period exceeded the amount of dividends paid to common shareholders.
This excess net investment income, along with any excess net investment income
from prior fiscal periods, was held in reserve by the Funds as undistributed net
investment income (UNII) and is part of the Funds' net asset value. The Funds,
over time, will pay all their net investment income out to common shareholders.
However, UNII reserves may help the Funds maintain more stable common share
dividend levels over time should the short-term rates the Funds pay on their
MuniPreferred shares rise or net common share earnings otherwise decline.
Despite the increased volatility in the fixed-income markets during the summer
of 2003, the share prices of all four of the older Funds (NQI, NIO, NIF and NPX)
ended the period higher than they had been at the beginning. As of October 31,
2003, NQI had moved to trading at a premium to its common share NAV from a
discount 12 months earlier, and the discounts on NIO, NIF, and NPX had narrowed.
NVG and NEA both saw slight declines in share price during this period; NEA
continued to trade at a premium, while the discount on NVG widened modestly .
WHAT KEY STRATEGIES WERE USED TO MANAGE THESE FUNDS DURING THE FISCAL YEAR ENDED
OCTOBER 31, 2003?
Over this 12-month reporting period, we continued to place strong emphasis on
keeping the Funds fully invested and well diversified, improving call
protection, and enhancing dividend-paying capabilities. We also continued to
focus on managing the Funds' durations as a way of enhancing our ability to
mitigate interest rate risk and produce potentially more consistent returns over
time. Interest rate risk is the risk that the value of a Fund's portfolio will
decline when market interest rates rise. The longer the duration of a Fund's
portfolio, the greater its interest rate risk. Over the past 12 months, we
worked to make the Funds' durations more consistent with one another, although
the duration of the newest Fund--NEA--was kept somewhat longer to provide
additional support for its income stream in the current market environment.
4
In line with the steepness of the municipal yield curve, the majority of our
purchase activity over the past year focused on value opportunities in the
intermediate part of the yield curve (i.e., bonds that mature in 15 to 20
years). In many cases, bonds in this part of the curve offered yields similar to
those of longer-term bonds but, in our opinion, had less inherent interest rate
risk.
We also took advantage of strategies that would enable us to reduce taxable
distributions to shareholders. Over the past four months, as appropriate
opportunities arose, we took losses on selected bonds in order to offset the
substantial capital gains that had accumulated in some of the Funds. We also
began to gradually cut our holdings of AMT (alternative minimum tax) bonds. In
November 2002, we also introduced NEA, which cannot invest in any AMT bonds.
HOW WERE THE FUNDS POSITIONED IN TERMS OF CREDIT QUALITY AND BOND CALLS AS OF
OCTOBER 31, 2003?
We believe that, given the current geopolitical and economic climate,
maintaining strong credit quality remains a vital requirement. The four older
Funds continued to be 100% invested in insured and/or U.S. guaranteed bonds,
while the two newer Funds (NVG and NEA), which are allowed to invest up to 20%
in uninsured investment-grade quality securities, held 88% and 89% of their
portfolios, respectively, in insured and/or U.S. guaranteed bonds as of October
31, 2003.
Looking at bond calls, NVG and NEA should not face any significant call exposure
for several years, while the four older Funds offer good levels of protection
over the next two years, with potential call exposure ranging from 8% in NIF to
21% in NQI during 2004 and 2005. The number of bond calls will depend largely on
market interest rates in coming months.
In general, we believe that these Nuveen Funds can continue to serve as
attractive sources of tax-free income, while simultaneously offering the
potential for considerable portfolio diversification. In our opinion, the Funds
represent a quality component of a well-balanced core investment portfolio that
can continue to benefit shareholders over time.
5
Nuveen Insured Quality Municipal Fund, Inc.
Performance
OVERVIEW As of October 31, 2003
NQI
Pie Chart:
CREDIT QUALITY
Insured 88%
Insured and U.S. Guaranteed 11%
U.S. Guaranteed 1%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $16.39
--------------------------------------------------
Common Share Net Asset Value $15.72
--------------------------------------------------
Market Yield 6.19%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 8.60%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $598,102
--------------------------------------------------
Average Effective Maturity (Years) 21.05
--------------------------------------------------
Leverage-Adjusted Duration 8.13
--------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (Inception 12/19/90)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 12.92% 6.27%
--------------------------------------------------
5-Year 7.70% 6.17%
--------------------------------------------------
10-Year 6.21% 6.16%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Transportation 21%
--------------------------------------------------
Healthcare 16%
--------------------------------------------------
Utilities 13%
--------------------------------------------------
U.S. Guaranteed 12%
--------------------------------------------------
Tax Obligation/General 12%
--------------------------------------------------
Bar Chart:
2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Nov 0.08
Dec 0.0815
Jan 0.0815
Feb 0.0815
Mar 0.0845
Apr 0.0845
May 0.0845
Jun 0.0845
Jul 0.0845
Aug 0.0845
Sep 0.0845
Oct 0.0845
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
11/1/02 15.55
15.41
15.48
15.5
15.65
15.64
15.55
15.48
15.61
15.95
15.6
15.67
15.87
15.94
15.9
16.08
16.01
16.25
16.21
16.17
15.92
16.38
16.4
16.42
16.6
16.53
16.75
16.85
16.83
16.94
16.97
16.61
17
17.1
16.81
16.04
15.72
15.73
15.51
15.6
15.63
15.86
15.73
15.88
15.97
15.95
16.16
16.18
10/31/03 16.39
1 Taxable equivalent yield represents the yield that must be earned on a taxable
investment, other than an investment that generates qualified dividend income
that is taxable at a maximum rate of 15%, in order to equal the yield of the
Nuveen Fund on an after-tax basis. It is calculated using the current market
yield and a federal income tax rate of 28%.
2 The Fund also paid shareholders a capital gains distribution in December 2002
of $0.1191 per share.
6
Nuveen Insured Municipal Opportunity Fund, Inc.
Performance
OVERVIEW As of October 31, 2003
NIO
Pie Chart:
CREDIT QUALITY
Insured 80%
Insured and U.S. Guaranteed 18%
U.S. Guaranteed 2%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $15.64
--------------------------------------------------
Common Share Net Asset Value $15.89
--------------------------------------------------
Market Yield 6.21%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 8.63%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $1,288,087
--------------------------------------------------
Average Effective Maturity (Years) 19.70
--------------------------------------------------
Leverage-Adjusted Duration 8.40
--------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (Inception 9/19/91)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 10.22% 7.51%
--------------------------------------------------
5-Year 5.38% 6.22%
--------------------------------------------------
10-Year 6.43% 6.33%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Transportation 20%
--------------------------------------------------
U.S. Guaranteed 20%
--------------------------------------------------
Utilities 14%
--------------------------------------------------
Tax Obligation/Limited 12%
--------------------------------------------------
Healthcare 10%
--------------------------------------------------
Bar Chart:
2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Nov 00.08
Dec 00.08
Jan 00.08
Feb 00.08
Mar 00.081
Apr 00.081
May 00.081
Jun 00.081
Jul 00.081
Aug 00.081
Sep 00.081
Oct 00.081
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
11/1/02 15.27
15.35
15.18
14.95
15.03
15.32
15.24
15.33
15.49
15.67
15.34
15.6
15.65
15.73
15.85
15.82
15.78
15.93
15.8
15.7
15.54
15.86
15.85
15.9
15.92
15.96
16.17
16.12
16.38
16.52
16.59
16.04
16.26
16.21
16.17
15.42
15.24
15.36
15.05
15.13
15.16
15.32
15.3
15.36
15.61
15.42
15.45
15.67
10/31/03 15.64
1 Taxable equivalent yield represents the yield that must be earned on a taxable
investment, other than an investment that generates qualified dividend income
that is taxable at a maximum rate of 15%, in order to equal the yield of the
Nuveen Fund on an after-tax basis. It is calculated using the current market
yield and a federal income tax rate of 28%.
2 The Fund also paid shareholders capital gains and net ordinary income
distributions in December 2002 of $0.1285 per share.
7
Nuveen Premier Insured Municipal Income Fund, Inc.
Performance
OVERVIEW As of October 31, 2003
NIF
Pie Chart:
CREDIT QUALITY
Insured 82%
Insured and U.S. Guaranteed 4%
U.S. Guaranteed 14%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $15.51
--------------------------------------------------
Common Share Net Asset Value $15.69
--------------------------------------------------
Market Yield 6.31%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 8.76%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $303,912
--------------------------------------------------
Average Effective Maturity (Years) 18.30
--------------------------------------------------
Leverage-Adjusted Duration 9.94
--------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (Inception 12/19/91)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 7.84% 7.28%
--------------------------------------------------
5-Year 4.66% 5.64%
--------------------------------------------------
10-Year 6.39% 5.90%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Tax Obligation/General 19%
--------------------------------------------------
U.S. Guaranteed 18%
--------------------------------------------------
Transportation 17%
--------------------------------------------------
Healthcare 16%
--------------------------------------------------
Tax Obligation/Limited 11%
--------------------------------------------------
Bar Chart:
2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Nov 0.0805
Dec 0.0805
Jan 0.0805
Feb 0.0805
Mar 0.0815
Apr 0.0815
May 0.0815
Jun 0.0815
Jul 0.0815
Aug 0.0815
Sep 0.0815
Oct 0.0815
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
11/1/02 15.7
15.29
15.19
15.22
15.38
15.46
15.34
15.2
15.55
15.9
15.39
15.53
15.65
15.78
15.87
15.78
15.94
15.9
16.06
16.04
15.77
15.95
16.13
15.99
16.03
16.14
16.31
16.34
16.62
16.95
16.96
16.47
16.67
16.7
16.51
16.01
14.99
15.24
14.93
15.16
15.16
15.24
15.35
15.37
15.37
15.35
15.26
15.53
10/31/03 15.51
1 Taxable equivalent yield represents the yield that must be earned on a taxable
investment, other than an investment that generates qualified dividend income
that is taxable at a maximum rate of 15%, in order to equal the yield of the
Nuveen Fund on an after-tax basis. It is calculated using the current market
yield and a federal income tax rate of 28%.
2 The Fund also paid shareholders capital gains and net ordinary income
distributions in December 2002 of $0.0360 per share.
8
Nuveen Insured Premium Income Municipal Fund 2
Performance
OVERVIEW As of October 31, 2003
NPX
Pie Chart:
CREDIT QUALITY
Insured 90%
Insured and U.S. Guaranteed 10%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $14.12
--------------------------------------------------
Common Share Net Asset Value $14.24
--------------------------------------------------
Market Yield 6.20%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 8.61%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $530,975
--------------------------------------------------
Average Effective Maturity (Years) 18.45
--------------------------------------------------
Leverage-Adjusted Duration 7.59
--------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (Inception 7/22/93)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 8.84% 6.70%
--------------------------------------------------
5-Year 6.79% 6.05%
--------------------------------------------------
10-Year 6.44% 5.82%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Utilities 17%
--------------------------------------------------
Tax Obligation/Limited 15%
--------------------------------------------------
Transportation 13%
--------------------------------------------------
Tax Obligation/General 12%
--------------------------------------------------
Healthcare 11%
--------------------------------------------------
Bar Chart:
2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Nov 0.0705
Dec 0.0705
Jan 0.0705
Feb 0.0705
Mar 0.072
Apr 0.072
May 0.072
Jun 0.072
Jul 0.072
Aug 0.072
Sep 0.073
Oct 0.073
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
11/1/02 13.87
13.92
13.82
13.32
13.74
13.85
13.85
13.73
13.88
13.98
13.99
13.87
13.88
14.14
14.21
14.13
14.23
14.31
14.25
14.15
13.91
14.29
14.26
14.31
14.33
14.42
14.64
14.72
14.7
14.9
15.15
14.74
14.93
14.98
14.99
14.2
13.99
13.85
13.69
13.75
13.89
13.8
13.9
13.89
13.96
14.12
13.96
14
10/31/03 14.12
1 Taxable equivalent yield represents the yield that must be earned on a taxable
investment, other than an investment that generates qualified dividend income
that is taxable at a maximum rate of 15%, in order to equal the yield of the
Nuveen Fund on an after-tax basis. It is calculated using the current market
yield and a federal income tax rate of 28%.
9
Nuveen Insured Dividend Advantage Municipal Fund
Performance
OVERVIEW As of October 31, 2003
NVG
Pie Chart:
CREDIT QUALITY
Insured 86%
Insured and U.S. Guaranteed 2%
AAA (Uninsured) 5%
AA (Uninsured) 5%
A (Uninsured) 2%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $14.81
--------------------------------------------------
Common Share Net Asset Value $15.41
--------------------------------------------------
Market Yield 6.28%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 8.72%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $459,368
--------------------------------------------------
Average Effective Maturity (Years) 21.65
--------------------------------------------------
Leverage-Adjusted Duration 10.02
--------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (Inception 3/25/02)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 6.10% 7.37%
--------------------------------------------------
Since Inception 5.59% 11.18%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Tax Obligation/General 23%
--------------------------------------------------
Transportation 21%
--------------------------------------------------
Tax Obligation/Limited 16%
--------------------------------------------------
Water and Sewer 12%
--------------------------------------------------
Education and Civic Organizations 10%
--------------------------------------------------
Bar Chart:
2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Nov 0.0775
Dec 0.0775
Jan 0.0775
Feb 0.0775
Mar 0.0775
Apr 0.0775
May 0.0775
Jun 0.0775
Jul 0.0775
Aug 0.0775
Sep 0.0775
Oct 0.0775
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
11/1/02 14.99
14.96
14.86
14.6
14.59
14.72
14.46
14.19
14.5
15.01
14.45
14.8
14.84
14.92
15.01
14.91
15
15.04
14.94
14.95
14.84
14.93
14.95
15.05
15.04
15.02
15.2
15.35
15.62
15.88
15.95
15.41
15.4
15.73
15.67
15.19
14.1
14.49
14.31
14.26
14.44
14.59
14.55
14.48
14.56
14.89
14.67
14.81
10/31/03 14.81
1 Taxable equivalent yield represents the yield that must be earned on a taxable
investment, other than an investment that generates qualified dividend income
that is taxable at a maximum rate of 15%, in order to equal the yield of the
Nuveen Fund on an after-tax basis. It is calculated using the current market
yield and a federal income tax rate of 28%.
2 The Fund also paid shareholders a capital gains distribution in December 2002
of $0.1051 per share.
10
Nuveen Insured Tax-Free Advantage Municipal Fund
Performance
OVERVIEW As of October 31, 2003
NEA
Pie Chart:
CREDIT QUALITY
Insured 87%
Insured and U.S. Guaranteed 2%
AAA (Uninsured) 4%
AA (Uninsured) 1%
A (Uninsured) 4%
BBB (Uninsured) 2%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $14.79
--------------------------------------------------
Common Share Net Asset Value $14.54
--------------------------------------------------
Market Yield 6.29%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 8.74%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $269,112
--------------------------------------------------
Average Effective Maturity (Years) 24.10
--------------------------------------------------
Leverage-Adjusted Duration 11.47
--------------------------------------------------
CUMULATIVE TOTAL RETURN (Inception 11/22/02)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
Since Inception 3.87% 6.98%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Tax Obligation/Limited 31%
--------------------------------------------------
Tax Obligation/General 26%
--------------------------------------------------
Utilities 14%
--------------------------------------------------
Healthcare 13%
--------------------------------------------------
Transportation 8%
--------------------------------------------------
Bar Chart:
2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Jan 0.0775
Feb 0.0775
Mar 0.0775
Apr 0.0775
May 0.0775
Jun 0.0775
Jul 0.0775
Aug 0.0775
Sep 0.0775
Oct 0.0775
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
11/22/02 15
15
15
15
15.01
15
14.66
14.8
14.94
14.94
14.94
14.8
15
14.99
14.93
14.97
14.66
14.83
14.96
15.17
15
15.08
14.97
15.05
15.18
15.57
15.63
15.56
15.36
15.45
15.33
15.52
15.1
14.24
14.74
14.07
14.09
14.07
14.08
14.13
14.06
14.41
14.56
14.42
14.67
10/31/03 14.79
1 Taxable equivalent yield represents the yield that must be earned on a taxable
investment, other than an investment that generates qualified dividend income
that is taxable at a maximum rate of 15%, in order to equal the yield of the
Nuveen Fund on an after-tax basis. It is calculated using the current market
yield and a federal income tax rate of 28%.
11
Shareholder
MEETING REPORT
The annual shareholder meeting was held on July 28, 2003, at the Northern Trust
Bank, Chicago, Illinois.
NQI
------------------------------------------------------------------------------------------------------------------------------------
APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS:
Common and
MuniPreferred MuniPreferred
shares voting shares voting
together together MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred
as a class as a class Series M Series T Series W Series TH Series F
====================================================================================================================================
William E. Bennett
For 21,572,589 -- -- -- -- -- --
Withhold 1,036,844 -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 22,609,433 -- -- -- -- -- --
====================================================================================================================================
Robert P. Bremner
For 21,577,891 -- -- -- -- -- --
Withhold 1,031,542 -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 22,609,433 -- -- -- -- -- --
====================================================================================================================================
Lawrence H. Brown
For 21,613,444 -- -- -- -- -- --
Withhold 995,989 -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 22,609,433 -- -- -- -- -- --
====================================================================================================================================
Jack B. Evans
For 21,592,868 -- -- -- -- -- --
Withhold 1,016,565 -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 22,609,433 -- -- -- -- -- --
====================================================================================================================================
Anne E. Impellizzeri
For 21,570,511 -- -- -- -- -- --
Withhold 1,038,922 -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 22,609,433 -- -- -- -- -- --
====================================================================================================================================
William L. Kissick
For 21,555,672 -- -- -- -- -- --
Withhold 1,053,761 -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 22,609,433 -- -- -- -- -- --
====================================================================================================================================
Thomas E. Leafstrand
For 21,575,308 -- -- -- -- -- --
Withhold 1,034,125 -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 22,609,433 -- -- -- -- -- --
====================================================================================================================================
Peter R. Sawers
For 21,613,529 -- -- -- -- -- --
Withhold 995,904 -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 22,609,433 -- -- -- -- -- --
====================================================================================================================================
William J. Schneider
For -- 10,978 -- -- -- -- --
Withhold -- 76 -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- 11,054 -- -- -- -- --
====================================================================================================================================
12
NQI
------------------------------------------------------------------------------------------------------------------------------------
APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS:
Common and
MuniPreferred MuniPreferred
shares voting shares voting
together together MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred
as a class as a class Series M Series T Series W Series TH Series F
====================================================================================================================================
Timothy R. Schwertfeger
For -- 10,981 -- -- -- -- --
Withhold -- 73 -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- 11,054 -- -- -- -- --
====================================================================================================================================
Judith M. Stockdale
For 21,613,363 -- -- -- -- -- --
Withhold 996,070 -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 22,609,433 -- -- -- -- -- --
====================================================================================================================================
Sheila W. Wellington
For 21,567,533 -- -- -- -- -- --
Withhold 1,041,900 -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 22,609,433 -- -- -- -- -- --
====================================================================================================================================
TO APPROVE A CHANGE TO A
FUNDAMENTAL INVESTMENT
RESTRICTION WITH RESPECT
TO LENDING
For 16,610,597 2,224 -- -- -- -- --
Against 1,675,317 227 -- -- -- -- --
Abstain 856,753 90 -- -- -- -- --
Broker Non-Vote 3,466,766 8,513 -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 22,609,433 11,054 -- -- -- -- --
====================================================================================================================================
TO APPROVE A CHANGE TO A
FUNDAMENTAL INVESTMENT
RESTRICTION WITH RESPECT
TO BORROWING
For 16,585,598 2,216 -- -- -- -- --
Against 1,718,177 235 -- -- -- -- --
Abstain 838,892 90 -- -- -- -- --
Broker Non-Vote 3,466,766 8,513 -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 22,609,433 11,054 -- -- -- -- --
====================================================================================================================================
TO APPROVE AN AGREEMENT
AND PLAN OF REORGANIZATION
AND THE TRANSACTIONS
CONTEMPLATED THEREBY
For 16,824,047 2,260 461 435 445 464 455
Against 1,445,925 188 19 7 46 74 42
Abstain 872,695 93 28 1 37 12 15
Broker Non-Vote 3,466,766 8,513 1,825 1,630 1,706 1,443 1,909
------------------------------------------------------------------------------------------------------------------------------------
Total 22,609,433 11,054 2,333 2,073 2,234 1,993 2,421
====================================================================================================================================
13
Shareholder
MEETING REPORT (continued)
NIO
------------------------------------------------------------------------------------------------------------------------------------
APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS:
Common and
MuniPreferred MuniPreferred
shares voting shares voting Muni- Muni- Muni- Muni- Muni- Muni- Muni-
together together Preferred Preferred Preferred Preferred Preferred Preferred Preferred
as a class as a class Series M Series T Series W Series W2 Series TH Series TH2 Series F
====================================================================================================================================
William E. Bennett
For 48,101,550 -- -- -- -- -- -- -- --
Withhold 1,244,787 -- -- -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 49,346,337 -- -- -- -- -- -- -- --
====================================================================================================================================
Robert P. Bremner
For 48,130,374 -- -- -- -- -- -- -- --
Withhold 1,215,963 -- -- -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 49,346,337 -- -- -- -- -- -- -- --
====================================================================================================================================
Lawrence H. Brown
For 48,176,808 -- -- -- -- -- -- -- --
Withhold 1,169,529 -- -- -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 49,346,337 -- -- -- -- -- -- -- --
====================================================================================================================================
Jack B. Evans
For 48,151,961 -- -- -- -- -- -- -- --
Withhold 1,194,376 -- -- -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 49,346,337 -- -- -- -- -- -- -- --
====================================================================================================================================
Anne E. Impellizzeri
For 48,114,883 -- -- -- -- -- -- -- --
Withhold 1,231,454 -- -- -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 49,346,337 -- -- -- -- -- -- -- --
====================================================================================================================================
William L. Kissick
For 48,091,932 -- -- -- -- -- -- -- --
Withhold 1,254,405 -- -- -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 49,346,337 -- -- -- -- -- -- -- --
====================================================================================================================================
Thomas E. Leafstrand
For 48,127,866 -- -- -- -- -- -- -- --
Withhold 1,218,471 -- -- -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 49,346,337 -- -- -- -- -- -- -- --
====================================================================================================================================
Peter R. Sawers
For 48,136,824 -- -- -- -- -- -- -- --
Withhold 1,209,513 -- -- -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 49,346,337 -- -- -- -- -- -- -- --
====================================================================================================================================
William J. Schneider
For -- 24,301 -- -- -- -- -- -- --
Withhold -- 142 -- -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- 24,443 -- -- -- -- -- -- --
====================================================================================================================================
14
NIO
------------------------------------------------------------------------------------------------------------------------------------
APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS:
Common and
MuniPreferred MuniPreferred
shares voting shares voting Muni- Muni- Muni- Muni- Muni- Muni- Muni-
together together Preferred Preferred Preferred Preferred Preferred Preferred Preferred
as a class as a class Series M Series T Series W Series W2 Series TH Series TH2 Series F
====================================================================================================================================
Timothy R. Schwertfeger
For -- 24,307 -- -- -- -- -- -- --
Withhold -- 136 -- -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- 24,443 -- -- -- -- -- -- --
====================================================================================================================================
Judith M. Stockdale
For 48,156,501 -- -- -- -- -- -- -- --
Withhold 1,189,836 -- -- -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 49,346,337 -- -- -- -- -- -- -- --
====================================================================================================================================
Sheila W. Wellington
For 48,092,502 -- -- -- -- -- -- -- --
Withhold 1,253,835 -- -- -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 49,346,337 -- -- -- -- -- -- -- --
====================================================================================================================================
TO APPROVE A CHANGE TO A
FUNDAMENTAL INVESTMENT
RESTRICTION WITH RESPECT
TO LENDING
For 33,939,671 3,930 -- -- -- -- -- -- --
Against 2,593,875 317 -- -- -- -- -- -- --
Abstain 1,922,180 410 -- -- -- -- -- -- --
Broker Non-Vote 10,890,611 19,786 -- -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 49,346,337 24,443 -- -- -- -- -- -- --
====================================================================================================================================
TO APPROVE A CHANGE TO A
FUNDAMENTAL INVESTMENT
RESTRICTION WITH RESPECT
TO BORROWING
For 33,854,073 3,939 -- -- -- -- -- -- --
Against 2,689,263 322 -- -- -- -- -- -- --
Abstain 1,912,390 396 -- -- -- -- -- -- --
Broker Non-Vote 10,890,611 19,786 -- -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 49,346,337 24,443 -- -- -- -- -- -- --
====================================================================================================================================
TO APPROVE AN AGREEMENT
AND PLAN OF REORGANIZATION
AND THE TRANSACTIONS
CONTEMPLATED THEREBY
For 34,290,901 4,019 987 508 403 369 461 481 810
Against 2,197,208 187 18 35 44 12 24 22 32
Abstain 1,967,617 451 70 107 95 58 38 12 71
Broker Non-Vote 10,890,611 19,786 2,343 3,031 3,023 2,677 3,089 2,857 2,766
------------------------------------------------------------------------------------------------------------------------------------
Total 49,346,337 24,443 3,418 3,681 3,565 3,116 3,612 3,372 3,679
====================================================================================================================================
15
Shareholder
MEETING REPORT (continued)
NIF
------------------------------------------------------------------------------------------------------------------------------------
APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS:
Common and
MuniPreferred MuniPreferred
shares voting shares voting
together together MuniPreferred MuniPreferred MuniPreferred
as a class as a class Series W Series TH Series F
====================================================================================================================================
William E. Bennett
For 11,124,069 -- -- -- --
Withhold 274,673 -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 11,398,742 -- -- -- --
====================================================================================================================================
Robert P. Bremner
For 11,130,999 -- -- -- --
Withhold 267,743 -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 11,398,742 -- -- -- --
====================================================================================================================================
Lawrence H. Brown
For 11,124,870 -- -- -- --
Withhold 273,872 -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 11,398,742 -- -- -- --
====================================================================================================================================
Jack B. Evans
For 11,128,843 -- -- -- --
Withhold 269,899 -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 11,398,742 -- -- -- --
====================================================================================================================================
Anne E. Impellizzeri
For 11,122,494 -- -- -- --
Withhold 276,248 -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 11,398,742 -- -- -- --
====================================================================================================================================
William L. Kissick
For 11,114,736 -- -- -- --
Withhold 284,006 -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 11,398,742 -- -- -- --
====================================================================================================================================
Thomas E. Leafstrand
For 11,123,376 -- -- -- --
Withhold 275,366 -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 11,398,742 -- -- -- --
====================================================================================================================================
Peter R. Sawers
For 11,125,137 -- -- -- --
Withhold 273,605 -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 11,398,742 -- -- -- --
====================================================================================================================================
William J. Schneider
For -- 6,037 -- -- --
Withhold -- 63 -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- 6,100 -- -- --
====================================================================================================================================
16
NIF
------------------------------------------------------------------------------------------------------------------------------------
APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS:
Common and
MuniPreferred MuniPreferred
shares voting shares voting
together together MuniPreferred MuniPreferred MuniPreferred
as a class as a class Series W Series TH Series F
====================================================================================================================================
Timothy R. Schwertfeger
For -- 6,040 -- -- --
Withhold -- 60 -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- 6,100 -- -- --
====================================================================================================================================
Judith M. Stockdale
For 11,131,990 -- -- -- --
Withhold 266,752 -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 11,398,742 -- -- -- --
====================================================================================================================================
Sheila W. Wellington
For 11,121,848 -- -- -- --
Withhold 276,894 -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 11,398,742 -- -- -- --
====================================================================================================================================
TO APPROVE A CHANGE TO A FUNDAMENTAL
INVESTMENT RESTRICTION WITH RESPECT TO LENDING
For 7,960,506 1,034 -- -- --
Against 566,171 55 -- -- --
Abstain 366,221 16 -- -- --
Broker Non-Vote 2,505,844 4,995 -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 11,398,742 6,100 -- -- --
====================================================================================================================================
TO APPROVE A CHANGE TO A FUNDAMENTAL INVESTMENT
RESTRICTION WITH RESPECT TO BORROWING
For 7,958,571 1,020 -- -- --
Against 572,962 55 -- -- --
Abstain 361,365 30 -- -- --
Broker Non-Vote 2,505,844 4,995 -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 11,398,742 6,100 -- -- --
====================================================================================================================================
TO APPROVE AN AGREEMENT AND PLAN OF REORGANIZATION
AND THE TRANSACTIONS CONTEMPLATED THEREBY
For 8,022,008 992 122 535 335
Against 486,969 85 3 52 30
Abstain 383,921 28 -- 20 8
Broker Non-Vote 2,505,844 4,995 657 1,977 2,361
------------------------------------------------------------------------------------------------------------------------------------
Total 11,398,742 6,100 782 2,584 2,734
====================================================================================================================================
17
Shareholder
MEETING REPORT (continued)
NPX NVG NEA
------------------------------------------------------------------------------------------------------------------------------------
APPROVAL OF THE BOARD MEMBERS WAS
REACHED AS FOLLOWS:
Common and Common and Common and
MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred
shares voting shares voting shares voting shares voting shares voting shares voting
together together together together together together
as a class as a class as a class as a class as a class as a class
====================================================================================================================================
William E. Bennett
For 24,575,140 -- 17,811,562 -- 10,760,464 --
Withhold 566,512 -- 402,111 -- 263,055 --
------------------------------------------------------------------------------------------------------------------------------------
Total 25,141,652 -- 18,213,673 -- 11,023,519 --
====================================================================================================================================
Robert P. Bremner
For 24,585,639 -- 17,810,865 -- 10,762,969 --
Withhold 556,013 -- 402,808 -- 260,550 --
------------------------------------------------------------------------------------------------------------------------------------
Total 25,141,652 -- 18,213,673 -- 11,023,519 --
====================================================================================================================================
Lawrence H. Brown
For 24,575,923 -- 17,813,468 -- 10,759,630 --
Withhold 565,729 -- 400,205 -- 263,889 --
------------------------------------------------------------------------------------------------------------------------------------
Total 25,141,652 -- 18,213,673 -- 11,023,519 --
====================================================================================================================================
Jack B. Evans
For 24,597,048 -- 17,806,462 -- 10,764,443 --
Withhold 544,604 -- 407,211 -- 259,076 --
------------------------------------------------------------------------------------------------------------------------------------
Total 25,141,652 -- 18,213,673 -- 11,023,519 --
====================================================================================================================================
Anne E. Impellizzeri
For 24,538,313 -- 17,782,261 -- 10,757,033 --
Withhold 603,339 -- 431,412 -- 266,486 --
------------------------------------------------------------------------------------------------------------------------------------
Total 25,141,652 -- 18,213,673 -- 11,023,519 --
====================================================================================================================================
William L. Kissick
For 24,553,417 -- 17,778,595 -- 10,758,256 --
Withhold 588,235 -- 435,078 -- 265,263 --
------------------------------------------------------------------------------------------------------------------------------------
Total 25,141,652 -- 18,213,673 -- 11,023,519 --
====================================================================================================================================
Thomas E. Leafstrand
For 24,562,479 -- 17,809,999 -- 10,759,067 --
Withhold 579,173 -- 403,674 -- 264,452 --
------------------------------------------------------------------------------------------------------------------------------------
Total 25,141,652 -- 18,213,673 -- 11,023,519 --
====================================================================================================================================
Peter R. Sawers
For 24,578,898 -- 17,801,778 -- 10,760,623 --
Withhold 562,754 -- 411,895 -- 262,896 --
------------------------------------------------------------------------------------------------------------------------------------
Total 25,141,652 -- 18,213,673 -- 11,023,519 --
====================================================================================================================================
William J. Schneider
For -- 9,499 -- 9,233 -- 5,647
Withhold -- 44 -- 39 -- 73
------------------------------------------------------------------------------------------------------------------------------------
Total -- 9,543 -- 9,272 -- 5,720
====================================================================================================================================
18
NPX NVG NEA
------------------------------------------------------------------------------------------------------------------------------------
APPROVAL OF THE BOARD MEMBERS WAS
REACHED AS FOLLOWS:
Common and Common and Common and
MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred
shares voting shares voting shares voting shares voting shares voting shares voting
together together together together together together
as a class as a class as a class as a class as a class as a class
====================================================================================================================================
Timothy R. Schwertfeger
For -- 9,503 -- 9,240 -- 5,647
Withhold -- 40 -- 32 -- 73
------------------------------------------------------------------------------------------------------------------------------------
Total -- 9,543 -- 9,272 -- 5,720
====================================================================================================================================
Judith M. Stockdale
For 24,588,470 -- 17,827,152 -- 10,763,809 --
Withhold 553,182 -- 386,521 -- 259,710 --
------------------------------------------------------------------------------------------------------------------------------------
Total 25,141,652 -- 18,213,673 -- 11,023,519 --
====================================================================================================================================
Sheila W. Wellington
For 24,546,047 -- 17,774,871 -- 10,758,232 --
Withhold 595,605 -- 438,802 -- 265,287 --
------------------------------------------------------------------------------------------------------------------------------------
Total 25,141,652 -- 18,213,673 -- 11,023,519 --
====================================================================================================================================
TO APPROVE A CHANGE TO A FUNDAMENTAL
INVESTMENT RESTRICTION WITH RESPECT
TO LENDING
For 16,831,893 1,602 11,790,649 1,674 7,085,896 1,181
Against 1,138,769 148 776,827 68 730,586 242
Abstain 806,531 137 573,381 47 347,471 38
Broker Non-Vote 6,364,459 7,656 5,072,816 7,483 2,859,566 4,259
------------------------------------------------------------------------------------------------------------------------------------
Total 25,141,652 9,543 18,213,673 9,272 11,023,519 5,720
====================================================================================================================================
TO APPROVE A CHANGE TO A FUNDAMENTAL
INVESTMENT RESTRICTION WITH RESPECT TO
BORROWING
For 16,812,795 1,641 11,643,905 1,631 7,048,121 1,181
Against 1,112,977 159 844,600 111 743,124 242
Abstain 851,421 87 652,352 47 372,708 38
Broker Non-Vote 6,364,459 7,656 5,072,816 7,483 2,859,566 4,259
------------------------------------------------------------------------------------------------------------------------------------
Total 25,141,652 9,543 18,213,673 9,272 11,023,519 5,720
====================================================================================================================================
TO APPROVE AN AGREEMENT AND PLAN OF
REORGANIZATION AND THE TRANSACTIONS
CONTEMPLATED THEREBY
For -- -- -- -- -- --
Against -- -- -- -- -- --
Abstain -- -- -- -- -- --
Broker Non-Vote -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- -- -- -- -- --
====================================================================================================================================
19
Report of
INDEPENDENT AUDITORS
THE BOARD OF DIRECTORS/TRUSTEES AND SHAREHOLDERS
NUVEEN INSURED QUALITY MUNICIPAL FUND, INC.
NUVEEN INSURED MUNICIPAL OPPORTUNITY FUND, INC.
NUVEEN PREMIER INSURED MUNICIPAL INCOME FUND, INC.
NUVEEN INSURED PREMIUM INCOME MUNICIPAL FUND 2
NUVEEN INSURED DIVIDEND ADVANTAGE MUNICIPAL FUND
NUVEEN INSURED TAX-FREE ADVANTAGE MUNICIPAL FUND
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Nuveen Insured Quality Municipal Fund, Inc.,
Nuveen Insured Municipal Opportunity Fund, Inc., Nuveen Premier Insured
Municipal Income Fund, Inc., Nuveen Insured Premium Income Municipal Fund 2,
Nuveen Insured Dividend Advantage Municipal Fund and Nuveen Insured Tax-Free
Advantage Municipal Fund as of October 31, 2003, and the related statements of
operations, changes in net assets and the financial highlights for the periods
indicated therein. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of investments owned as of October 31, 2003, by correspondence with
the custodian and brokers or by other appropriate auditing procedures where
replies from brokers were not received. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of
Nuveen Insured Quality Municipal Fund, Inc., Nuveen Insured Municipal
Opportunity Fund, Inc., Nuveen Premier Insured Municipal Income Fund, Inc.,
Nuveen Insured Premium Income Municipal Fund 2, Nuveen Insured Dividend
Advantage Municipal Fund and Nuveen Insured Tax-Free Advantage Municipal Fund at
October 31, 2003, and the results of their operations, changes in their net
assets and financial highlights for the periods indicated therein in conformity
with accounting principles generally accepted in the United States.
/s/ Ernst & Young LLP
Chicago, Illinois
December 12, 2003
20
Nuveen Insured Quality Municipal Fund, Inc. (NQI)
Portfolio of
INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 0.2%
$ 1,135 Birmingham, Waterworks and Sewer Board, Alabama, Water and 1/13 at 100.00 AAA $ 1,204,859
Sewer Revenue Bonds, Series 2002B, 5.250%, 1/01/20 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 1.6%
9,200 Phoenix, Civic Improvement Corporation, Arizona, Senior Lien 7/12 at 100.00 AAA 9,359,528
Airport Revenue Bonds, Series 2002B, 5.250%, 7/01/32
(Alternative Minimum Tax) - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 1.0%
5,775 Arkansas Development Finance Authority, Single Family Mortgage 7/05 at 102.00 AAA 5,997,337
Revenue Bonds, Mortgage-Backed Securities Program,
Series 1995B, 6.700%, 7/01/27 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 20.8%
8,135 Alameda County Public Facilities Corporation, Alameda County, 9/06 at 102.00 AAA 9,251,529
California, Certificates of Participation, Series 1991,
6.000%, 9/01/21 (Pre-refunded to 9/01/06) - MBIA Insured
13,175 California Pollution Control Financing Authority, Pollution 9/09 at 101.00 AAA 13,806,610
Control Revenue Refunding Bonds, Southern California Edison
Company, Series 1999A, 5.450%, 9/01/29 - MBIA Insured
9,000 State of California, General Obligation Bonds, Series 2002, 10/12 at 100.00 AAA 9,025,290
5.000%, 10/01/32 - MBIA Insured
20,500 State of California, General Obligation Refunding Bonds, 4/12 at 100.00 AAA 20,632,020
Series 2002, 5.000%, 4/01/27 - AMBAC Insured
5,500 California Statewide Communities Development Authority, 7/04 at 102.00 AAA 5,785,340
San Diego, California, Certificates of Participation, The
Salk Institute for Biological Studies, 6.200%, 7/01/24 -
CONNIE LEE/AMBAC Insured
Foothill-Eastern Transportation Corridor Agency, California,
Toll Road Refunding Revenue Bonds, Series 1999:
22,985 0.000%, 1/15/24 - MBIA Insured 1/10 at 44.52 AAA 7,261,881
22,000 0.000%, 1/15/31 - MBIA Insured 1/10 at 29.11 AAA 4,502,960
50,000 0.000%, 1/15/37 - MBIA Insured 1/10 at 20.19 AAA 7,083,000
5,000 Garden Grove, California, Certificates of Participation, Financing 3/12 at 101.00 AAA 5,078,650
Project, Series 2002A, 5.125%, 3/01/32 - AMBAC Insured
5,000 Inland Empire Solid Waste Financing Authority, California, 8/06 at 102.00 AAA 5,663,000
Revenue Bonds, Landfill Improvement Financing Project,
Series 1996B, 6.000%, 8/01/16 (Alternative Minimum Tax)
(Pre-refunded to 8/01/06) - FSA Insured
5,513 Moreno Valley Public Finance Authority, California, GNMA 1/12 at 105.00 Aaa 6,475,845
Collateralized Assisted Living Housing Revenue Bonds,
CDC Assisted Living Project, Series 2000A, 7.500%, 1/20/42
6,250 Ontario Redevelopment Financing Authority, San Bernardino 2/04 at 102.00 AAA 6,400,750
County, California, Revenue Bonds, Ontario Redevelopment
Project No. 1, Series 1993, 5.850%, 8/01/22 - MBIA Insured
3,615 Pasadena Unified School District, Los Angeles County, 5/13 at 100.00 AAA 3,668,249
California, General Obligation Bonds, Series 2003D,
5.000%, 5/01/24 - MBIA Insured
San Francisco City and County Airports Commission, California,
Revenue Refunding Bonds, San Francisco International Airport,
Series 2- Issue 27A:
7,200 5.125%, 5/01/21 (Alternative Minimum Tax) - MBIA Insured 5/11 at 100.00 AAA 7,284,888
12,690 5.250%, 5/01/31 (Alternative Minimum Tax) - MBIA Insured 5/11 at 100.00 AAA 12,858,650
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 1.7%
5,630 E-470 Public Highway Authority, Arapahoe County, Colorado, 8/05 at 103.00 AAA 6,296,198
Capital Improvement Trust Fund Highway Revenue Bonds,
E-470 Project Vehicle Registration Fee Bonds, Series 1986A,
6.150%, 8/31/26 (Pre-refunded to 8/31/05) - MBIA Insured
3,750 City and County of Denver, Colorado, Airport System Revenue 11/06 at 101.00 AAA 3,913,725
Bonds, Series 1996D, 5.500%, 11/15/25 - MBIA Insured
21
Nuveen Insured Quality Municipal Fund, Inc. (NQI) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 1.4%
$ 8,000 Washington Convention Center Authority, District of Columbia, 10/08 at 101.00 AAA $ 8,187,440
Senior Lien Dedicated Tax Revenue Bonds, Series 1998,
5.000%, 10/01/21 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 6.9%
4,550 Florida Housing Finance Agency, Florida, Single Family Mortgage 7/04 at 102.00 AAA 4,672,395
Revenue Bonds, 1994 Series B, 6.650%, 7/01/26 (Alternative
Minimum Tax)
20,000 Lee County, Florida, Airport Revenue Bonds, Series 2000A, 10/10 at 101.00 AAA 21,164,000
5.750%, 10/01/25 (Alternative Minimum Tax) - FSA Insured
4,115 Housing Finance Authority of Miami-Dade County, Florida, 7/11 at 100.00 AAA 4,279,888
Multifamily Housing Revenue Bonds, Series 2001-2A, Monterey
Pointe Apartments Project, 5.850%, 7/01/37 (Alternative
Minimum Tax) - FSA Insured
7,000 Miami-Dade County, Florida, Aviation Revenue Bonds, 10/12 at 100.00 AAA 7,195,790
Miami International Airport, Series 2002, 5.375%, 10/01/32
(Alternative Minimum Tax) - FGIC Insured
3,780 The School Board of Palm Beach County, Florida, Certificates 8/13 at 100.00 AAA 4,049,363
of Participation, Series 2003A, 5.000%, 8/01/16 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
HAWAII - 6.3%
1,620 Hawaii County, Hawaii, General Obligation Bonds, 7/13 at 100.00 AAA 1,673,363
Series 2003A, 5.000%, 7/15/21 - FSA Insured
Hawaii Department of Transportation, Airport System Revenue
Refunding Bonds, Series 2000B:
8,785 6.625%, 7/01/18 (Alternative Minimum Tax) - FGIC Insured 7/10 at 101.00 AAA 10,342,053
7,000 6.000%, 7/01/19 (Alternative Minimum Tax) - FGIC Insured 7/10 at 101.00 AAA 7,786,380
16,180 Hawaii Department of Budget and Finance, Special Purpose 5/06 at 101.00 AAA 17,809,811
Revenue Bonds, Hawaii Electric Company, Inc. and Subsidiaries
Project, Series 1996A, 6.200%, 5/01/26 (Alternative Minimum
Tax) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 19.4%
10,000 City of Chicago, Illinois, General Obligation Bonds, Series 1995, 7/05 at 102.00 AAA 11,005,200
6.125%, 1/01/16 (Pre-refunded to 7/01/05) - AMBAC Insured
6,000 City of Chicago, Illinois, Chicago-O'Hare International Airport, 1/05 at 102.00 AAA 6,449,280
General Airport Second Lien Revenue Refunding Bonds,
1994 Series A, 6.375%, 1/01/12 - MBIA Insured
9,500 City of Chicago, Illinois, Chicago-O'Hare International Airport, 1/10 at 101.00 AAA 10,096,695
General Airport Second Lien Revenue Refunding Bonds,
1999 Series, 5.500%, 1/01/15 (Alternative Minimum Tax) -
AMBAC Insured
6,825 Chicago Public Building Commission, Illinois, Building Revenue 12/03 at 102.00 AAA 6,988,595
Bonds, Chicago Board of Education, Series 1993A,
5.750%, 12/01/18 (Pre-refunded to 12/01/03) - MBIA Insured
7,165 Illinois Development Finance Authority, Revenue Bonds, 8/09 at 101.00 AAA 8,294,204
Bradley University Project, Series 1999, 5.500%, 8/01/29
(Pre-refunded to 8/01/09) - AMBAC Insured
25,000 Illinois Health Facilities Authority, Revenue Bonds, Iowa 2/10 at 101.00 AAA 26,867,000
Health System, Series 2000, 5.875%, 2/15/30 - AMBAC Insured
15,785 State of Illinois, General Obligation Bonds, Illinois FIRST, 4/12 at 100.00 AAA 16,296,750
Series of April 2002, 5.250%, 4/01/27 - FSA Insured
13,275 State of Illinois, General Obligation Bonds, Illinois FIRST, 5/11 at 100.00 AAA 13,668,604
Series of 2001, 5.250%, 5/01/26 - FSA Insured
18,000 Metropolitan Pier and Exposition Authority, Illinois, McCormick No Opt. Call AAA 5,698,620
Place Expansion Project Revenue Bonds, Series 2002A,
0.000%, 12/15/24 - MBIA Insured
10,000 University of Illinois, Certificates of Participation, Utility 8/11 at 100.00 AAA 10,424,100
Infrastructure Projects, Series 2001B, 5.250%, 8/15/21 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 1.0%
6,000 Jasper County, Indiana, Collateralized Pollution Control Revenue 1/04 at 100.00 AAA 6,210,900
Refunding Bonds, Northern Indiana Public Service Company
Project, Series 1991, 7.100%, 7/01/17 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 0.5%
3,000 Wichita, Kansas, Water and Sewer and Utility Revenue Bonds, 10/13 at 100.00 AAA 3,105,450
Series 2003, 5.000%, 10/01/21 - FGIC Insured
22
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 4.0%
Kentucky Economic Development Finance Authority, Health System
Revenue Bonds, Norton Healthcare Inc., Series 2000C:
$ 6,345 6.150%, 10/01/27 - MBIA Insured 10/13 at 101.00 AAA $ 6,131,554
18,185 6.150%, 10/01/28 - MBIA Insured 10/13 at 101.00 AAA 17,533,068
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 3.2%
13,170 City of New Orleans, Louisiana, General Obligation Refunding 10/05 at 101.00 AAA 14,365,573
Bonds, Series 1995, 6.200%, 10/01/21 - AMBAC Insured
4,285 Orleans Levee District, Louisiana, Levee District General 12/05 at 103.00 AAA 4,784,031
Obligation Bonds, Series 1986, 5.950%, 11/01/15 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
MAINE - 1.5%
8,000 Maine Health and Higher Educational Facilities Authority, 7/09 at 101.00 AAA 8,800,400
Revenue Bonds, Series 1999B, 6.000%, 7/01/29 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 1.3%
7,535 Maryland Transportation Authority, Baltimore-Washington 3/12 at 101.00 AAA 8,059,210
International Airport Parking Revenue Bonds, Series 2002B,
5.500%, 3/01/18 (Alternative Minimum Tax) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 0.8%
5,000 Massachusetts Bay Transportation Authority, Senior Sales 7/12 at 100.00 AAA 5,048,700
Tax Revenue Bonds, Series 2002A Refunding,
5.000%, 7/01/27 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 0.8%
4,750 Michigan Strategic Fund, Collateralized Limited Obligation 9/09 at 102.00 AAA 4,924,753
Revenue Refunding Pollution Control Bonds, Detroit Edison
Company, Series 1999A, 5.550%, 9/01/29 (Alternative
Minimum Tax) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 0.0%
127 St. Louis Park, Minnesota, GNMA Mortgage-Backed Securities 4/04 at 100.00 Aaa 127,091
Program, Single Family Residential Mortgage Revenue
Bonds, Series 1991A, 7.250%, 4/20/23
------------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 2.0%
2,545 Harrison County Wastewater Management District, No Opt. Call AAA 3,459,113
Mississippi, Wastewater Revenue Refunding Bonds,
Series 1991A, 8.500%, 2/01/13 - FGIC Insured
2,715 Harrison County Wastewater Management District, No Opt. Call AAA 3,578,804
Mississippi, Wastewater Treatment Facilities Revenue
Refunding Bonds, Series 1991B, 7.750%, 2/01/14 -
FGIC Insured
4,495 Mississippi Home Corporation, Single Family Mortgage 6/06 at 105.00 Aaa 4,931,330
Revenue Bonds, GNMA Collateralized Home Mortgage
Program, Series 1996C, 7.600%, 6/01/29 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 0.9%
5,000 St. Louis, Missouri, Municipal Finance Corporation, 2/06 at 102.00 AAA 5,593,650
Leasehold Revenue Bonds, Series 1996A, City Justice
Center Project, 6.000%, 2/15/19 (Pre-refunded to 2/15/06) -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 9.2%
33,700 Director of Nevada State Department of Business and Industry, 1/10 at 100.00 AAA 35,257,277
Revenue Bonds, Las Vegas Monorail Project, 1st Tier
Series 2000, 5.375%, 1/01/40 - AMBAC Insured
5,720 Reno, Nevada, Sales and Room Tax Revenue Bonds, Reno 6/12 at 100.00 AAA 5,787,496
Transportation Rail Access Corridor Project, Senior Lien
Series 2002, 5.125%, 6/01/32 - AMBAC Insured
13,185 Washoe County, Nevada, Hospital Revenue Bonds, Washoe 6/04 at 102.00 AAA 13,797,443
Medical Center Inc. Project, Refunding Series 1994A,
6.000%, 6/01/19 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 2.4%
3,750 New Jersey Health Care Facilities Financing Authority, Revenue 7/04 at 102.00 AAA 3,954,525
Bonds, Monmouth Medical Center Issue, Series C,
6.250%, 7/01/24 (Pre-refunded to 7/01/04) - CAP
GTY/FSA Insured
10,000 New Jersey Turnpike Authority, Turnpike Revenue Bonds, 7/13 at 100.00 AAA 10,125,600
Series 2003A, 5.000%, 1/01/30 - AMBAC Insured
23
Nuveen Insured Quality Municipal Fund, Inc. (NQI) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 2.0%
$ 6,000 City of Farmington, New Mexico, Pollution Control Refunding 4/04 at 100.00 BB $ 6,201,600
Revenue Bonds, Southern California Edison Company Four
Corners Project, 1991 Series A, 7.200%, 4/01/21
5,750 Santa Fe, New Mexico, Utility Revenue Bonds, Series 1994A, 6/04 at 100.00 AAA 5,927,503
6.300%, 6/01/24 (Pre-refunded to 6/01/04) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 16.8%
8,000 Metropolitan Transportation Authority, New York, State Service 7/12 at 100.00 AAA 8,097,680
Contract Refunding Bonds, Series 2002A, 5.000%, 7/01/25 -
FGIC Insured
6,500 Metropolitan Transportation Authority, New York, Dedicated 11/12 at 100.00 AAA 6,558,695
Tax Fund Bonds, Series 2002A, 5.000%, 11/15/32 - FSA Insured
City of New York, New York, General Obligation Bonds, Fiscal
Series 1991A:
2,000 8.000%, 3/15/11 - FSA Insured 3/04 at 100.00 AAA 2,049,200
6,000 7.250%, 3/15/19 - FSA Insured 3/04 at 100.00 AAA 6,216,900
10,335 New York Municipal Water Finance Authority, New York, Water 6/05 at 101.00 AAA 11,237,866
and Sewer System Revenue Bonds, Fiscal Series 1996A,
6.000%, 6/15/25 (Pre-refunded to 6/15/05) - MBIA Insured
11,760 Dormitory Authority of the State of New York, Court Facilities 5/10 at 101.00 AAA 12,915,420
Lease Revenue Bonds, City of New York Issue, Series 1999,
5.750%, 5/15/30 - AMBAC Insured
7,000 New York State Energy Research and Development Authority, 7/05 at 102.00 A1 7,582,750
Facilities Refunding Revenue Bonds, Consolidated Edison
Company of New York, Inc. Project, Series 1995A,
6.100%, 8/15/20
10,875 New York State Housing Finance Agency, Housing Project 5/06 at 102.00 AAA 11,549,576
Mortgage Revenue Refunding Bonds, Series 1996A,
6.125%, 11/01/20 - FSA Insured
4,200 New York Mortgage Agency, Homowner Mortgage Revenue 10/09 at 100.00 AAA 4,378,836
Bonds, Series 82, 5.550%, 10/01/19 (Alternative Minimum
Tax) - MBIA Insured
12,000 New York State Medical Care Facilities Finance Agency, 2/05 at 102.00 AAA 13,114,800
New York, Hospital FHA-Insured Mortgage Revenue Bonds,
Series 1994A, 6.900%, 8/15/34 (Pre-refunded to 2/15/05) -
AMBAC Insured
15,000 Dormitory Authority of the State of New York, School Districts 10/12 at 100.00 AAA 16,643,400
Financing Program Revenue Bonds, Series 2002D,
5.500%, 10/01/17 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 0.3%
1,720 Union County, North Carolina, Certificates of Participation, 6/13 at 101.00 AAA 1,846,884
Series 2003, 5.000%, 6/01/16 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
NORTH DAKOTA - 3.6%
20,000 Mercer County, North Dakota, Pollution Control Revenue 1/05 at 102.00 AAA 21,336,600
Refunding Bonds, Basin Electric Power Cooperative - Antelope
Valley Unit 1 and Common Facilities, Second Series 1995,
6.050%, 1/01/19 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 0.9%
5,000 Lorain County, Ohio, Health Facilities Revenue Bonds, 9/09 at 102.00 AAA 5,225,250
Catholic Healthcare Partners, Series 1999A, 5.500%, 9/01/29 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 2.6%
7,000 Allegheny County, Pennsylvania, Airport Revenue Refunding 1/08 at 101.00 AAA 7,358,680
Bonds, Pittsburgh International Airport, Series 1997A,
5.250%, 1/01/16 (Alternative Minimum Tax) - MBIA Insured
7,250 Lehigh County Industrial Development Authority, Pennsylvania, 8/05 at 102.00 AAA 7,898,585
Pollution Control Revenue Refunding Bonds, Pennsylvania
Power & Light Company Project, Series 1995A,
6.150%, 8/01/29 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 1.0%
5,000 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call AAA 5,747,400
Revenue Bonds, Series 2003AA, 5.500%, 7/01/16 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 0.9%
5,050 Rhode Island Port Authority and Economic Development 7/04 at 102.00 AAA 5,327,952
Corporation, Airport Revenue Bonds, Series 1994A,
6.625%, 7/01/24 (Alternative Minimum Tax) - FSA Insured
24
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 0.8%
Knox County Health, Educational and Housing Facility Board,
Tennessee, Hospital Revenue Bonds, Covenant Health, Series 2002A
Refunding:
$ 7,500 0.000%, 1/01/24 - FSA Insured 1/13 at 52.75 AAA $ 2,376,450
5,000 0.000%, 1/01/25 - FSA Insured 1/13 at 49.71 AAA 1,490,300
2,750 0.000%, 1/01/26 - FSA Insured 1/13 at 46.78 AAA 772,365
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 20.5%
8,000 Abilene Health Facilities Development Corporation, Texas, 9/05 at 102.00 AAA 8,764,080
Hospital Revenue Refunding and Improvement Bonds,
Hendrick Medical Center Project, Series 1995C,
6.150%, 9/01/25 - MBIA Insured
5,275 City of Austin, Texas, Combined Utility Systems Revenue 11/07 at 100.00 AAA 5,476,874
Refunding Bonds, Series 1997, 5.125%, 11/15/20 - FSA Insured
3,000 Cities of Dallas and Fort Worth, Texas, Dallas-Ft. Worth 11/11 at 100.00 AAA 3,285,030
International Airport, Joint Revenue Refunding and
Improvement Bonds, Series 2001A, 5.750%, 11/01/13
(Alternative Minimum Tax) - FGIC Insured
3,735 Grand Prairie Independent School District, Dallas County, 2/13 at 100.00 AAA 3,796,814
Texas, General Obligation Bonds, Series 2003, 5.125%, 2/15/31 -
FSA Insured
Harris County Hospital District, Texas, Revenue Refunding Bonds,
Series 1990:
2,100 7.400%, 2/15/10 - AMBAC Insured No Opt. Call AAA 2,364,894
2,900 7.400%, 2/15/10 - AMBAC Insured No Opt. Call AAA 3,388,592
4,500 City of Houston, Texas, General Obligation Public Improvement 3/11 at 100.00 AAA 4,589,640
Bonds, Series 2001A, 5.000%, 3/01/22 - FSA Insured
4,685 Houston, Texas, Airport System Subordinate Lien Revenue 7/10 at 100.00 AAA 4,873,946
Bonds, Series 2000A, 5.500%, 7/01/19 (Alternative Minimum
Tax) - FSA Insured
17,000 Houston, Texas, Water and Sewer System Junior Lien Revenue No Opt. Call AAA 19,443,750
Refunding Bonds, Series 2002A, 5.750%, 12/01/32 -
FSA Insured
19,200 Jefferson County Health Facilities Development Corporation, 8/11 at 100.00 AAA 19,564,800
Texas, FHA-Insured Mortgage Revenue Bonds, Baptist
Hospital of Southeast Texas, Series 2001, 5.400%, 8/15/31 -
AMBAC Insured
6,000 Laredo Community College District, Texas, Limited Tax General 8/10 at 100.00 AAA 6,231,840
Obligation Bonds, Series 2001, 5.375%, 8/01/31 -
AMBAC Insured
22,045 North Central Texas Health Facility Development Corporation, 8/12 at 101.00 AAA 22,670,417
Revenue Bonds, Children's Medical Center of Dallas,
Series 2002, 5.250%, 8/15/32 - AMBAC Insured
17,429 Tarrant County Housing Finance Corporation, Texas, GNMA 3/12 at 105.00 Aaa 18,456,265
Collateralized Mortgage Loan Multifamily Housing Revenue
Bonds, Bardin Green Apartments Project, Series 2001,
6.600%, 9/20/42
------------------------------------------------------------------------------------------------------------------------------------
UTAH - 1.1%
6,000 Salt Lake City, Utah, Hospital Revenue Refunding Bonds, 11/03 at 100.00 AAA 6,732,540
IHC Hospitals, Inc., Series 1988A, 8.000%, 5/15/07
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 10.7%
10,730 Public Utility District No. 1 of Chelan County, Washington, 7/11 at 101.00 AAA 11,234,847
Chelan Hydro Consolidated System Revenue Bonds,
Series 2001C Refunding, 5.650%, 7/01/32 (Alternative
Minimum Tax) - MBIA Insured
4,700 Seattle Housing Authority, Washington, GNMA Collateralized 9/11 at 102.00 AAA 5,149,696
Mortgage Loan, Low Income Housing Assistance Revenue
Bonds, RHF/Esperanza Apartments Project, Series 2000A,
6.125%, 3/20/42 (Alternative Minimum Tax)
15,025 Seattle Housing Authority, Washington, GNMA Collateralized 11/11 at 105.00 AAA 17,047,515
Mortgage Loan, Low Income Housing Assistance Revenue
Bonds, Park Place Project, Series 2000A, 7.000%, 5/20/42
5,000 City of Seattle, Washington, Municipal Light and Power 12/10 at 100.00 AAA 5,244,900
Revenue Bonds, Series 2000, 5.250%, 12/01/21 - FSA Insured
10,000 Washington, General Obligation Refunding Bonds, 1/12 at 100.00 AAA 10,376,000
Series R-2003A, 5.000%, 1/01/19 - MBIA Insured
2,500 Washington Health Care Facilities Authority Revenue Bonds, 12/09 at 101.00 AAA 2,659,650
Providence Services, Series 1999, 5.375%, 12/01/19 -
MBIA Insured
11,750 Washington Public Power Supply System, Nuclear Project No. 1, 7/08 at 102.00 AAA 12,408,470
Refunding Revenue Bonds, Series 1998A, 5.125%, 7/01/17 -
MBIA Insured
25
Nuveen Insured Quality Municipal Fund, Inc. (NQI) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 2.3%
$ 12,845 West Virginia Water Development Authority, Infrastructure 10/10 at 100.00 AAA $ 13,643,060
Revenue Bonds, West Virginia Infrastructure and Jobs
Development Council Program, 2000 Series A,
5.500%, 10/01/39 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
$ 948,249 Total Long-Term Investments (cost $841,952,939) - 150.4% 899,334,120
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.8% 16,767,798
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (53.2)% (318,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $598,101,918
====================================================================================================================
All of the bonds in the portfolio are either covered by
Original Issue Insurance, Secondary Market Insurance or
Portfolio Insurance, or are backed by an escrow or trust
containing sufficient U.S. Government or U.S. Government
agency securities, any of which ensure the timely payment of
principal and interest.
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares.
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other
call provisions at varying prices at later dates.
** Ratings (not covered by the report of independent auditors):
Using the higher of Standard & Poor's or Moody's rating.
See accompanying notes to financial statements.
26
Nuveen Insured Municipal Opportunity Fund, Inc. (NIO)
Portfolio of
INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 15.9%
$ 3,850 Alabama Housing Finance Authority, Multifamily Housing 7/05 at 103.00 Aaa $ 4,040,267
Revenue Refunding Bonds, GNMA Collateralized Royal Hills
Apartment Project, Series 1995F, 6.500%, 7/20/30
11,000 Special Care Facilities Financing Authority of the City of 5/05 at 102.00 AAA 11,830,060
Birmingham, Alabama, Baptist Medical Centers Revenue
Bonds, Series 1995-B, Baptist Health System, Inc.,
5.875%, 11/15/20 - MBIA Insured
Special Care Facilities Financing Authority of the City of
Birmingham, Alabama, Baptist Medical Centers Revenue Bonds,
Series 1996-A, Baptist Health System, Inc.:
7,465 5.875%, 11/15/19 - MBIA Insured 11/06 at 102.00 AAA 8,297,945
1,750 5.875%, 11/15/26 - MBIA Insured 11/06 at 102.00 AAA 1,901,148
11,175 Hoover City Board of Education, Alabama, Capital Outlay 2/11 at 100.00 AAA 11,698,661
Tax Anticipation Warrants, Series 2001, 5.250%, 2/15/22 -
MBIA Insured
Jefferson County, Alabama, Sewer Revenue Warrants,
Series 1997-A Refunding:
25,825 5.375%, 2/01/27 (Pre-refunded to 2/01/07) - FGIC Insured 2/07 at 100.00 AAA 28,594,731
10,195 5.375%, 2/01/27 - FGIC Insured 2/07 at 100.00 AAA 10,650,818
Jefferson County, Alabama, Sewer Revenue Capital Improvement
Warrants, Series 1999A:
10,815 5.000%, 2/01/33 (Pre-refunded to 2/01/09) - FGIC Insured 2/09 at 101.00 AAA 12,122,966
9,790 5.000%, 2/01/33 (Pre-refunded to 2/01/09) - FGIC Insured 2/09 at 101.00 AAA 11,020,211
12,000 5.375%, 2/01/36 (Pre-refunded to 2/01/09) - FGIC Insured 2/09 at 101.00 AAA 13,727,280
29,860 5.750%, 2/01/38 (Pre-refunded to 2/01/09) - FGIC Insured 2/09 at 101.00 AAA 34,704,188
18,760 Jefferson County, Alabama, Sewer Revenue Capitol Improvement 2/11 at 101.00 AAA 20,861,308
Warrants, Series 2001A, 5.000%, 2/01/41 (Pre-refunded to
2/01/11) - FGIC Insured
Jefferson County, Alabama, Sewer Revenue Capital Improvement
Warrants, Series 2002B:
2,500 5.125%, 2/01/42 (Pre-refunded to 8/01/12) - FGIC Insured 8/12 at 100.00 AAA 2,777,700
2,500 5.125%, 2/01/42 (Pre-refunded to 8/01/12) - FGIC Insured 8/12 at 100.00 AAA 2,795,600
Jefferson County, Alabama, Sewer Revenue Capital Improvement
Warrants, Series 2002D:
425 5.000%, 2/01/38 (Pre-refunded to 8/01/12) - FGIC Insured 8/12 at 100.00 AAA 468,257
1,940 5.000%, 2/01/38 (Pre-refunded to 8/01/12) - FGIC Insured 8/12 at 100.00 AAA 2,151,266
14,800 5.000%, 2/01/42 (Pre-refunded to 8/01/12) - FGIC Insured 8/12 at 100.00 AAA 16,411,720
5,240 Jefferson County, Alabama, Sewer Revenue Bonds, 2/11 at 101.00 AAA 5,859,211
Series 2003B Refunding, 5.000%, 2/01/41 (Pre-refunded to
2/01/11) - FGIC Insured
4,250 Shelby County Board of Education, Alabama, General Obligation 2/05 at 102.00 AAA 4,550,518
Warrants, Series 1995 Refunding, 5.875%, 2/01/17 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
ALASKA - 2.7%
11,245 Alaska Housing Finance Corporation, General Mortgage 6/09 at 100.00 AAA 11,693,113
Revenue Bonds, Series 1999A, 6.050%, 6/01/39 - MBIA Insured
11,460 Alaska Housing Finance Corporation, Governmental Purpose 12/05 at 102.00 AAA 11,981,201
Bonds, 1995 Series A, 5.875%, 12/01/30 - MBIA Insured
4,990 Alaska Housing Finance Corporation, Collateralized Veterans 12/09 at 100.00 AAA 5,211,356
Mortgage Program Bonds, First Series 1999-A2, 6.250%, 6/01/39
(Alternative Minimum Tax)
3,190 Alaska Housing Finance Corporation, Collateralized Veterans 12/09 at 100.00 AAA 3,357,507
Mortgage Program Bonds, Series 1999-A1, 6.150%, 6/01/39
3,000 Alaska Student Loan Corporation, Student Loan Revenue Bonds, 7/08 at 100.00 AAA 3,117,870
1998 Series A, 5.250%, 7/01/14 (Alternative Minimum Tax) -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 0.8%
7,560 Pima County Industrial Development Authority, Arizona, Lease 1/04 at 102.00 AAA 7,965,594
Obligation Revenue Refunding Bonds, Tucson Electric Power
Company Irvington Project, Series 1988A, 7.250%, 7/15/10 -
FSA Insured
2,000 Industrial Development Authority of the City of Yuma, Arizona, 8/11 at 101.00 AAA 2,155,220
Hospital Revenue Bonds, Series 2001, Yuma Regional Medical
Centre, 5.500%, 8/01/20 - FSA Insured
27
Nuveen Insured Municipal Opportunity Fund, Inc. (NIO) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 31.3%
$ 6,135 California Housing Finance Agency, Housing Revenue Bonds, 8/04 at 102.00 AAA $ 6,306,351
Series 1994C, 6.250%, 8/01/25 - MBIA Insured
California Rural Home Mortgage Finance Authority, Single Family
Mortgage Revenue Bonds, Mortgage-Backed Securities Program, 1996
Series A:
405 7.550%, 11/01/26 (Alternative Minimum Tax) No Opt. Call AAA 425,509
330 7.750%, 5/01/27 (Alternative Minimum Tax) No Opt. Call AAA 347,143
4,500 California, General Obligation Bonds, Series 1998, 10/08 at 101.00 AAA 4,613,940
5.000%, 10/01/19 - FGIC Insured
10,000 Department of Veterans Affairs of the State of California, 6/12 at 101.00 AAA 10,405,800
Home Purchase Revenue Bonds, Series 2002A,
5.300%, 12/01/21 - AMBAC Insured
14,585 California Housing Finance Agency, Home Mortgage Revenue 11/10 at 55.40 AAA 5,500,441
Bonds, 2000 Series Y, 0.000%, 8/01/20 (Alternative Minimum
Tax) - FSA Insured
California Department of Water Resources, Power Supply
Revenue Bonds, Series 2002A:
30,000 5.375%, 5/01/17 5/12 at 101.00 AAA 32,540,700
35,000 5.375%, 5/01/18 - AMBAC Insured 5/12 at 101.00 AAA 37,990,050
3,100 Campbell Union School District, Santa Clara County, 8/04 at 102.00 AAA 3,283,272
California, 1994 General Obligation Bonds, Series A,
6.250%, 8/01/19 (Pre-refunded to 8/01/04) - MBIA Insured
8,200 Castaic Lake Water Agency, California, Revenue Refunding 8/04 at 102.00 AAA 8,667,236
Certificates of Participation, Water System Improvement
Projects, Series 1994A, 6.300%, 8/01/20 - MBIA Insured
20,000 Cucamonga County Water District, California, Certificates 9/11 at 101.00 AAA 20,253,800
of Participation, 2000 Water Shares Purchase,
5.125%, 9/01/35 - FGIC Insured
5,500 Fallbrook Union High School District, San Diego County, 9/04 at 102.00 AAA 5,848,755
California, 1994 General Obligation Bonds, Series A,
6.250%, 9/01/19 (Pre-refunded to 9/01/04) - MBIA Insured
5,000 Long Beach Bond Financing Authority, California, Lease 11/11 at 101.00 AAA 5,142,650
Revenue Refunding Bonds, Long Beach Aquarium of the South
Pacific, Series 2001, 5.250%, 11/01/30 - AMBAC Insured
20,000 Los Angeles Unified School District, Los Angeles County, 7/13 at 100.00 AAA 20,720,200
California, General Obligation Bonds, Series 2003A,
5.000%, 7/01/21 - FSA Insured
9,000 Orange County, California, Refunding Recovery Bonds, 6/05 at 102.00 AAA 9,777,870
Series 1995A, 5.750%, 6/01/15 - MBIA Insured
12,500 Orange County, California, Recovery Certificates of 7/06 at 102.00 AAA 13,971,250
Participation, Series 1996A, 6.000%, 7/01/26 - MBIA Insured
13,205 Port of Oakland, California, Revenue Bonds, Series 2002L, 11/12 at 100.00 AAA 13,266,799
5.000%, 11/01/22 (Alternative Minimum Tax) - FGIC Insured
Poway Redevelopment Agency, California, Tax Allocation Bonds,
Paguay Redevelopment Project, Series 2001:
15,000 5.200%, 6/15/30 - AMBAC Insured 12/11 at 101.00 AAA 15,383,550
5,000 5.125%, 6/15/33 - AMBAC Insured 12/11 at 101.00 AAA 5,065,150
6,000 Redlands Unified School District, San Bernardino County, 7/13 at 100.00 AAA 6,070,740
California, General Obligation Bonds, Series 2003,
5.000%, 7/01/26 - FSA Insured
11,000 Sacramento Municipal Utility District, California, Electric 8/13 at 100.00 AAA 11,054,120
Revenue Bonds, Series 2003R, 5.000%, 8/15/33 - MBIA Insured
19,300 Sacramento Power Authority, California, Revenue Bonds, 7/06 at 102.00 AAA 21,703,429
Power Authority Cogeneration Project, Series 1995,
5.875%, 7/01/15 - MBIA Insured
6,500 Salinas, California, GNMA Collateralized Housing Facility 7/04 at 102.00 AAA 6,692,660
Revenue Refunding Bonds, Villa Serra Project, Series 1994A,
6.600%, 7/20/30
10,000 San Francisco City and County Airports Commission, California, 5/06 at 101.00 AAA 10,280,800
Revenue Bonds, San Francisco International Airport, Series 2 -
Issue 13B, 5.500%, 5/01/26 (Alternative Minimum Tax) -
MBIA Insured
18,710 San Francisco City and County Airports Commission, California, 5/11 at 100.00 AAA 18,993,644
Revenue Refunding Bonds, San Francisco International Airport,
Series 2 - Issue 27A, 5.250%, 5/01/26 (Alternative
Minimum Tax) - MBIA Insured
11,500 San Francisco Bay Area Rapid Transit District, California, 7/11 at 100.00 AAA 11,644,555
Sales Tax Revenue Bonds, Series 2001, 5.125%, 7/01/36 -
AMBAC Insured
28
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (continued)
$ 66,685 San Joaquin Hills Transportation Corridor Agency, Orange No Opt. Call AAA $28,589,193
County, California, Senior Lien Toll Road Revenue Bonds,
0.000%, 1/01/21
San Joaquin Hills Transportation Corridor Agency Orange County,
California,Toll Road Refunding Revenue Bonds, Series 1997A:
31,615 5.250%, 1/15/30 - MBIA Insured 1/07 at 102.00 AAA 32,601,704
21,500 0.000%, 1/15/32 - MBIA Insured No Opt. Call AAA 4,520,375
12,525 San Jose Redevelopment Agency, California, Tax Allocation 8/10 at 101.00 AAA 12,928,430
Bonds, Merged Area Redevelopment Project, Series 2002,
5.000%, 8/01/20 - MBIA Insured
11,000 Santa Ana Financing Authority, California, Police Administration No Opt. Call AAA 13,213,310
and Housing Facility Lease Revenue Bonds, Series 1994A,
6.250%, 7/01/24 - MBIA Insured
5,500 Santa Clara County Financing Authority, California, Lease 11/04 at 102.00 AAA 5,935,050
Revenue Bonds, VMC Facility Replacement Project,
Series 1994A, 6.750%, 11/15/20 (Pre-refunded to
11/15/04) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 6.3%
10,000 City and County of Denver, Colorado, Airport System Revenue 11/11 at 100.00 AAA 10,713,400
Refunding Bonds, Series 2001A, 5.500%, 11/15/15 (Alternative
Minimum Tax) - FGIC Insured
10,545 City and County of Denver, Colorado, Airport System Revenue 11/06 at 101.00 AAA 11,005,395
Bonds, Series 1996D, 5.500%, 11/15/25 - MBIA Insured
6,200 Denver Convention Center Hotel Authority, Colorado, 12/13 at 100.00 AAA 6,216,802
Convention Center Hotel Senior Revenue Bonds, Series 2003A,
5.000%, 12/01/33 - XLCA Insured
35,995 E-470 Public Highway Authority, Colorado, Senior Revenue No Opt. Call AAA 12,414,316
Bonds, Series 1997B, 0.000%, 9/01/23 - MBIA Insured
30,800 E-470 Public Highway Authority, Colorado, Senior Revenue 9/10 at 102.00 AAA 33,816,860
Bonds, Series 2000A, 5.750%, 9/01/35 - MBIA Insured
11,800 E-470 Public Highway Authority, Colorado, Senior Revenue 9/10 at 74.80 AAA 6,638,326
Bonds, 2000 Series B, 0.000%, 9/01/15 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
CONNECTICUT - 0.2%
2,500 Connecticut Health and Educational Facilities Authority, 7/04 at 101.00 AAA 2,624,300
Revenue Bonds, Choate Rosemary Hall Issue, Series A,
7.000%, 7/01/25 (Pre-refunded to 7/01/04) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 1.5%
3,770 District of Columbia Housing Finance Agency, GNMA 12/03 at 100.00 AAA 3,773,091
Collateralized Single Family Mortgage Revenue Bonds,
Series 1990B, 7.100%, 12/01/24 (Alternative Minimum Tax)
District of Columbia Water and Sewer Authority, Public Utility
Revenue Bonds, Subordinate Lien Series 2003:
5,000 5.125%, 10/01/24 - FGIC Insured 10/13 at 100.00 AAA 5,095,200
5,000 5.125%, 10/01/25 - FGIC Insured 10/13 at 100.00 AAA 5,083,000
4,840 Metropolitan Washington DC Airports Authority, Airport 10/11 at 101.00 AAA 5,095,794
System Revenue Bonds, Series 2001A, 5.500%, 10/01/19
(Alternative Minimum Tax) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 5.6%
4,425 Jacksonville Economic Development Commission, Florida, 11/12 at 100.00 AAA 4,667,844
Health Care Facilities Revenue Bonds, Mayo Clinic,
Series 2001C, 5.500%, 11/15/36 - MBIA Insured
35,920 Miami-Dade County, Florida, Aviation Revenue Bonds, 10/12 at 100.00 AAA 36,924,682
Miami International Airport, Series 2002, 5.375%, 10/01/32
(Alternative Minimum Tax) - FGIC Insured
Miami-Dade County, Florida, Aviation Revenue Bonds, Miami
International Airport, Series 2002A:
18,500 5.000%, 10/01/33 (Alternative Minimum Tax) - FSA Insured 10/12 at 100.00 AAA 18,371,425
2,150 5.125%, 10/01/35 (Alternative Minimum Tax) - FSA Insured 10/12 at 100.00 AAA 2,164,749
3,000 Orange County, Florida, Solid Waste Facility Revenue Bonds, 10/13 at 100.00 AAA 3,221,880
Series 2003 Refunding, 5.000%, 10/01/14 - MBIA Insured
Plantation, Florida, Non-Ad Valorem Revenue Bonds, Refunding
and Improvement Projects, Series 2003:
2,010 5.000%, 8/15/16 - FSA Insured 8/13 at 100.00 Aaa 2,153,695
2,110 5.000%, 8/15/17 - FSA Insured 8/13 at 100.00 Aaa 2,243,331
2,225 5.000%, 8/15/18 - FSA Insured 8/13 at 100.00 Aaa 2,347,331
29
Nuveen Insured Municipal Opportunity Fund, Inc. (NIO) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 0.4%
$ 5,000 Glynn-Brunswick Memorial Hospital Authority, Georgia, 8/06 at 102.00 AAA $ 5,416,450
Revenue Bonds, Southeast Georgia Health Systems Project,
Series 1996, 5.250%, 8/01/13 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
HAWAII - 2.1%
24,250 Hawaii Department of Budget and Finance, Special Purpose 5/06 at 101.00 AAA 26,692,702
Revenue Bonds, Hawaii Electric Company, Inc. and Subsidiaries
Project, Series 1996A, 6.200%, 5/01/26 (Alternative Minimum
Tax) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
IDAHO - 0.4%
1,685 Idaho Housing Agency, Single Family Mortgage Bonds, No Opt. Call Aa1 1,796,513
Series 1994B-1, 6.750%, 7/01/22
1,560 Idaho Housing Agency, Single Family Mortgage Bonds, No Opt. Call Aa1 1,718,340
1994 Series B2, 6.900%, 7/01/26 (Alternative Minimum Tax)
1,845 Idaho Housing Agency, Single Family Mortgage Bonds, 1/05 at 102.00 Aaa 1,904,169
1995 Series B, Senior Lien, 6.600%, 7/01/27 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 10.1%
12,500 City of Chicago, Illinois, Chicago-O'Hare International Airport, 1/04 at 102.00 AAA 12,806,125
General Airport Second Lien, Revenue Refunding Bonds,
1993 Series C, 5.000%, 1/01/18 - MBIA Insured
City of Chicago, Illinois, Chicago-O'Hare International Airport,
Second Lien Passenger Facility Charge Revenue Bonds, Series
2001E Refunding:
4,615 5.500%, 1/01/17 (Alternative Minimum Tax) - AMBAC Insured 1/11 at 101.00 AAA 4,877,086
4,870 5.500%, 1/01/18 (Alternative Minimum Tax) - AMBAC Insured 1/11 at 101.00 AAA 5,129,668
12,000 Cook County, Illinois, General Obligation Bonds, Series 2003 No Opt. Call AAA 13,370,760
Refunding, 5.000%, 11/15/10 - MBIA Insured
5,000 Community Unit School District No. 204, Indian Prairie, 12/11 at 100.00 AAA 5,314,700
Counties of DuPage and Will, Illinois, General Obligation
Bonds, Series 2001, 5.000%, 12/30/15 - FGIC Insured
Eastern Illinois University, Auxiliary Facilities System Revenue
Bonds, Series 1989:
12,355 0.000%, 10/01/09 - MBIA Insured 10/04 at 74.08 AAA 8,986,409
16,470 0.000%, 4/01/16 (Pre-refunded to 10/01/04) - MBIA Insured 10/04 at 47.07 AAA 7,674,691
10,000 Illinois Development Finance Authority, Revenue Bonds, 5/08 at 101.00 AAA 10,636,100
Provena Health, Series 1998A, 5.500%, 5/15/21 - MBIA Insured
2,095 Illinois Educational Facilities Authority, Revenue Bonds, 12/07 at 100.00 Aaa 2,270,163
Robert Morris College, Series 2000, 5.800%, 6/01/30 -
MBIA Insured
2,180 Illinois Educational Facilities Authority, Revenue Bonds, DePaul 10/10 at 101.00 AAA 2,384,222
University, Series 2000, 5.500%, 10/01/19 - AMBAC Insured
7,000 Illinois Health Facilities Authority, Revenue Bonds, Hospital 6/08 at 101.00 Aaa 7,211,470
Sisters Services Inc. Obligated Group, Series 1998A,
5.000%, 6/01/18 - MBIA Insured
Illinois Health Facilities Authority, Revenue Bonds, Alexian
Brothers Health System, Series 1999:
4,500 5.000%, 1/01/19 - FSA Insured 1/09 at 101.00 AAA 4,619,610
12,000 5.125%, 1/01/28 - FSA Insured 1/09 at 101.00 AAA 12,168,000
22,410 State of Illinois, General Obligation Bonds, Illinois FIRST 2/12 at 100.00 AAA 22,774,387
Program, Series 2002, 5.125%, 2/01/27 - FGIC Insured
4,560 County of Macon, Illinois, Revenue Bonds, Millikin University, 10/05 at 100.00 AAA 4,990,874
Series 1995, 6.250%, 10/01/16 (Pre-refunded to 10/01/05) -
AMBAC Insured
5,000 Regional Transportation Authority, Cook, DuPage, Kane, Lake, 6/04 at 102.00 AAA 5,266,550
McHenry and Will Counties, Illinois, General Obligation
Bonds, Series 1994D, 6.750%, 6/01/25 (Pre-refunded
to 6/01/04) - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 4.0%
2,030 Decatur Township Multi-School Building Corporation, Marion 7/13 at 100.00 AAA 2,098,472
County, Indiana, First Mortgage Bonds, Series 2003,
5.000%, 7/15/20 - FGIC Insured
11,000 Indiana Health Facility Financing Authority, Hospital Revenue 11/03 at 102.00 Aaa 11,260,370
Bonds, Daughters of Charity, Series 1993, 5.750%, 11/15/22
3,250 Indianapolis, Indiana, Local Public Improvement Bond Bank, 7/12 at 100.00 AAA 3,348,995
Series 2002A, Waterworks Project, 5.250%, 7/01/33 -
MBIA Insured
30
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
INDIANA (continued)
$ 20,000 Indianapolis, Indiana, Local Public Improvement Bond Bank, No Opt. Call AAA $ 5,270,200
Series 1999E, 0.000%, 2/01/28 - AMBAC Insured
9,545 New Prairie School Building Corporation, LaPorte and 7/04 at 102.00 AAA 10,149,771
St. Joseph Counties, Indiana, First Mortgage Bonds,
Series 1994, 7.200%, 7/15/21 (Pre-refunded to 7/15/04) -
CAP GTY/FSA Insured
5,000 Noblesville Redevelopment Authority, Indiana, Economic 7/13 at 100.00 AAA 5,009,150
Development Lease Rental Bonds of 2003, Exit 10 Project,
5.000%, 1/15/28 - AMBAC Insured
10,000 Trustees of Purdue University, Indiana, Purdue University 1/12 at 100.00 AAA 10,389,900
Student Fee Bonds, Series O, 5.000%, 7/01/19 - MBIA Insured
3,705 Whitley County Middle School Building Corporation, Columbia 7/13 at 100.00 AAA 3,961,905
City, Indiana, First Mortgage Bonds, Series 2003,
5.000%, 7/15/16 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 0.3%
3,045 Ames, Iowa, Hospital Revenue Bonds, Mary Greeley Medical 6/13 at 100.00 Aaa 3,239,758
Center, Series 2003 Refunding, 5.000%, 6/15/15 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 0.4%
5,000 University of Kansas Hospital Authority, Health Facilities 9/09 at 100.00 AAA 5,268,450
Revenue Bonds, KU Health System, Series 1999A,
5.650%, 9/01/29 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 1.1%
12,980 Louisville and Jefferson County Metropolitan Sewer District, 11/11 at 101.00 AAA 13,784,500
Kentucky, Sewer and Drainage System Revenue Bonds,
2001 Series A, 5.500%, 5/15/34 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 1.6%
5,000 De Soto Parish, Louisiana, Pollution Control Revenue Refunding 9/09 at 102.00 AAA 5,519,800
Bonds, Cleco Utility Group Inc. Project, Series 1999,
5.875%, 9/01/29 - AMBAC Insured
7,305 Orleans Levee District, Louisiana, Levee District General 12/05 at 103.00 AAA 8,155,740
Obligation Bonds, Series 1986, 5.950%, 11/01/15 -
FSA Insured
3,000 St. Charles Parish, Louisiana, Pollution Control Revenue Bonds, 12/03 at 100.00 AAA 3,126,450
Louisiana Power and Light Company Project, Series 1991,
7.500%, 6/01/21 (Alternative Minimum Tax) - FSA Insured
3,500 Tangipahoa Parish Hospital Service District 1, Louisiana, 2/04 at 102.00 AAA 3,615,675
Hospital Revenue Bonds, Series 1994, 6.250%, 2/01/24
(Pre-refunded to 2/01/04) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
MAINE - 0.2%
3,000 Maine Health and Higher Educational Facilities Authority, 7/13 at 100.00 AAA 3,015,780
Revenue Bonds, Series 2003B, 5.000%, 7/01/28 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 5.8%
22,500 Massachusetts Development Finance Authority, Revenue 1/12 at 101.00 AAA 23,410,125
Bonds, Series 2002A, WGBH Educational Foundation,
5.375%, 1/01/42 - AMBAC Insured
8,400 Massachusetts Health and Educational Facilities Authority, 10/05 at 102.00 AAA 9,220,512
Revenue Bonds, Berkshire Health Systems Issue, Series D,
6.000%, 10/01/13 - MBIA Insured
2,960 Massachusetts Health and Educational Facilities Authority, 1/04 at 101.00 AAA 3,039,476
Revenue Bonds, South Shore Hospital Issue, Series D,
6.500%, 7/01/22 - MBIA Insured
4,865 Massachusetts Housing Finance Agency, Housing Revenue 12/05 at 102.00 AAA 5,084,314
Bonds, 1995 Series A Refunding, 6.100%, 12/01/16 -
MBIA Insured
33,315 Massachusetts Turnpike Authority, Metropolitan Highway 1/07 at 102.00 AAA 33,380,297
System Revenue Bonds, 1997 Series A (Senior),
5.000%, 1/01/37 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 7.4%
6,000 City of Detroit, Michigan, General Obligation Bonds, 10/11 at 100.00 AAA 6,527,280
2001 Series A-1, 5.375%, 4/01/18 - MBIA Insured
5,490 Detroit School District, Wayne County, Michigan, Unlimited No Opt. Call AAA 6,484,678
Tax School Building and Site Improvement General
Obligation Bonds, Series 2001A, 6.000%, 5/01/29 -
FSA Insured
Detroit, Michigan, Sewage Disposal System Revenue Bonds,
Series 1999A:
15,825 5.750%, 7/01/26 (Pre-refunded to 1/01/10) - FGIC Insured 1/10 at 101.00 AAA 18,452,583
20,000 5.875%, 7/01/27 (Pre-refunded to 1/01/10) - FGIC Insured 1/10 at 101.00 AAA 23,461,000
31
Nuveen Insured Municipal Opportunity Fund, Inc. (NIO) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN (continued)
$ 8,700 City of Detroit, Michigan, Water Supply System Revenue Senior 7/07 at 101.00 AAA $ 8,748,981
Lien Bonds, Series 1997-A, 5.000%, 7/01/27 - MBIA Insured
8,000 Gaylord Community Schools, Counties of Ostego and Antrim, 5/07 at 37.75 AAA 2,793,920
Michigan, 1992 School Building and Site and Refunding Bonds,
0.000%, 5/01/21 (Pre-refunded to 5/01/07) - MBIA Insured
Grand Rapids Community College, Kent County, Michigan,
General Obligation Bonds, Series 2003 Refunding:
1,050 5.250%, 5/01/17 - AMBAC Insured 5/13 at 100.00 AAA 1,141,214
1,085 5.250%, 5/01/20 - AMBAC Insured 5/13 at 100.00 AAA 1,156,415
27,000 Okemos Public School District, Ingham County, Michigan, 5/06 at 34.54 AAA 8,917,290
School Building and Site Bonds, Series 1991I,
0.000%, 5/01/21 (Pre-refunded to 5/01/06) - MBIA Insured
10,000 Wayne County, Michigan, Limited Tax General Obligation 12/11 at 101.00 AAA 10,391,200
Airport Hotel Revenue Bonds, Detroit Metropolitan Wayne
County Airport, Series 2001A, 5.250%, 12/01/25 - MBIA Insured
6,850 Wayne County, Michigan, Airport Revenue Bonds, Detroit 12/08 at 101.00 AAA 7,317,855
Metropolitan Wayne County Airport, Series 1998A,
5.375%, 12/01/15 (Alternative Minimum Tax) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 1.2%
2,130 Minnesota Housing Finance Agency, Single Family Mortgage 1/04 at 102.00 AA+ 2,176,796
Bonds, Series 1994M, 6.700%, 7/01/26 (Alternative
Minimum Tax)
13,020 St. Paul Housing and Redevelopment Authority, Minnesota, 12/11 at 102.00 Aaa 13,283,915
GNMA Collateralized Mortgage Loan, Multifamily Housing
Revenue Bonds, Marian Center GEAC Project, Series 2001A,
3.870%, 6/20/43
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 6.5%
Director of Nevada State Department of Business and Industry,
Revenue Bonds, Las Vegas Monorail Project, 1st Tier Series 2000:
15,000 5.625%, 1/01/34 - AMBAC Insured 1/10 at 102.00 AAA 16,197,900
13,000 5.375%, 1/01/40 - AMBAC Insured 1/10 at 100.00 AAA 13,600,730
1,295 Nevada Housing Division, Single Family Mortgage Bonds, 4/04 at 102.00 Aa2 1,329,615
1994 Senior Series B-1, 6.700%, 10/01/17
1,000 Nevada Housing Division, Single Family Mortgage Bonds, 4/04 at 102.00 Aa2 1,017,190
1994 Senior Series B-2, 6.950%, 10/01/26 (Alternative
Minimum Tax)
40,285 Reno, Nevada, Capital Improvement Revenue Bonds, 6/12 at 100.00 AAA 41,900,026
Series 2002, 5.375%, 6/01/32 - FGIC Insured
10,000 Reno, Nevada, Sales and Room Tax Revenue Bonds, Reno 6/12 at 100.00 AAA 10,152,200
Transportation Rail Access Corridor Project, Senior Lien,
Series 2002, 5.125%, 6/01/27 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 7.7%
8,685 Long Island Power Authority, New York, Electric System 6/08 at 101.00 AAA 9,417,406
General Revenue Bonds, Series 1998A, 5.300%, 12/01/19 -
FSA Insured
5,000 Metropolitan Transportation Authority, New York, State 7/12 at 100.00 AAA 5,061,050
Service Contract Refunding Bonds, Series 2002A,
5.000%, 7/01/25 - FGIC Insured
10,000 New York City Municipal Water Finance Authority, New York, 6/06 at 101.00 AAA 10,990,900
Water and Sewer System Revenue Bonds, Fiscal 1996
Series B, 5.750%, 6/15/26 - MBIA Insured
15,000 New York City Municipal Water Finance Authority, New York, 6/06 at 101.00 AAA 15,678,600
Water and Sewer System Revenue Bonds, Fiscal 1997
Series A, 5.375%, 6/15/26 - FSA Insured
Dormitory Authority of the State of New York, City University
System Consolidated, Third General Resolution Revenue Bonds,
1994 Series 2:
3,000 6.250%, 7/01/19 (Pre-refunded to 7/01/04) - MBIA Insured 7/04 at 100.00 AAA 3,104,640
6,400 6.750%, 7/01/24 (Pre-refunded to 7/01/04) - MBIA Insured 7/04 at 102.00 AAA 6,771,584
5,000 New York State Urban Development Corporation, Correctional 1/07 at 102.00 AAA 5,692,800
Capital Facilities Revenue Bonds, Series 7, 5.700%, 1/01/27
(Pre-refunded to 1/01/07) - MBIA Insured
15,600 Port Authority of New York and New Jersey, Consolidated Bonds, 1/05 at 101.00 AAA 16,656,276
Ninety- Seventh Series, 6.650%, 1/15/23 (Alternative
Minimum Tax) - FGIC Insured
25,000 Triborough Bridge and Tunnel Authority, New York, General 11/12 at 100.00 AAA 25,225,750
Revenue Refunding Subordinate Lien Bonds, Series 2002E,
5.000%, 11/15/32 - MBIA Insured
32
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 0.4%
$ 5,000 North Carolina Municipal Power Agency Number 1, 1/13 at 100.00 AAA $ 5,433,400
Catawba Electric Revenue Bonds, Series 2003A,
5.250%, 1/01/16 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 3.6%
20,100 Lucas County, Ohio, Hospital Revenue Bonds, ProMedica 11/09 at 101.00 AAA 20,636,268
Healthcare Obligated Group, Series 1999, 5.375%, 11/15/39 -
AMBAC Insured
2,865 Ohio Housing Finance Agency, GNMA Mortgage-Backed 3/05 at 102.00 Aaa 2,961,808
Securities Program, Residential Mortgage Revenue Bonds,
Series 1995A-2, 6.625%, 3/01/26 (Alternative Minimum Tax)
Ohio Air Quality Development Authority, Revenue Refunding Bonds,
JMG Funding Limited Partnership Project, Series 1994:
13,750 6.375%, 1/01/29 (Alternative Minimum Tax) - AMBAC Insured 10/04 at 102.00 AAA 14,660,663
8,000 6.375%, 4/01/29 (Alternative Minimum Tax) - AMBAC Insured 10/04 at 102.00 AAA 8,529,840
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 1.2%
9,685 Oklahoma Housing Finance Agency, GNMA Collateralized No Opt. Call AAA 10,475,102
Single Family Mortgage Revenue Bonds, Series 1987A,
7.997%, 8/01/18 (Alternative Minimum Tax)
5,245 Oklahoma Industries Authority, Revenue Bonds, Oklahoma 2/11 at 100.00 Aaa 5,450,814
Medical Research Foundation Project, Series 2001,
5.250%, 2/01/21 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 0.2%
2,670 Oregon Housing and Community Services Department, 7/05 at 102.00 Aa2 2,765,933
Mortgage Revenue Bonds, Single-Family Mortgage Program,
1995 Series A, 6.450%, 7/01/26 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 0.6%
7,120 Lehigh County General Purpose Authority, Pennsylvania, 7/04 at 102.00 AAA 7,509,322
Hospital Revenue Bonds, Lehigh Valley Hospital, Series 1994A,
6.250%, 7/01/22 (Pre-refunded to 7/01/04) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 0.2%
2,000 Puerto Rico Highway and Transportation Authority, 7/13 at 100.00 AAA 2,169,460
Transportation Revenue Bonds, Series 2003G, 5.250%, 7/01/19 -
FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 2.0%
2,195 Providence Housing Development Corporation, Rhode Island, 7/04 at 102.00 AAA 2,260,323
Mortgage Revenue Refunding Bonds, Series 1994A,
FHA-Insured Mortgage Loan-Barbara Jordan Apartments
Project, 6.750%, 7/01/25 - MBIA Insured
20,475 Rhode Island Depositors Economic Protection Corporation, 2/11 at 100.00 AAA 23,060,583
Special Obligation Refunding Bonds, 1992 Series B,
5.250%, 8/01/21 (Pre-refunded to 2/01/11) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 3.6%
10,000 Beaufort County, South Carolina, Tax Increment Bonds, 12/12 at 100.00 AAA 10,109,500
New River Redevelopment Project, Series 2002,
5.000%, 6/01/27 - MBIA Insured
Piedmont Municipal Power Agency, South Carolina, Electric
Revenue Bonds, 1988 Refunding Series:
9,190 0.000%, 1/01/13 (Pre-refunded to 1/01/10) - AMBAC Insured 1/10 at 79.60 AAA 5,931,502
12,810 0.000%, 1/01/13 - AMBAC Insured No Opt. Call AAA 8,412,071
South Carolina Jobs-Economic Development Authority, Hospital
Revenue Bonds, Oconee Memorial Hospital Inc, Series 1995:
3,000 6.150%, 3/01/15 - CONNIE LEE/AMBAC Insured 3/05 at 102.00 AAA 3,230,490
600 6.150%, 3/01/25 - CONNIE LEE/AMBAC Insured 3/05 at 102.00 AAA 642,720
8,000 South Carolina Jobs-Economic Development Authority, 11/12 at 100.00 AAA 8,246,400
Industrial Revenue Bonds, South Carolina Electric and
Gas Company Project, Series 2002A, 5.200%, 11/01/27 -
AMBAC Insured
10,000 South Carolina Jobs-Economic Development Authority, Industrial 11/12 at 100.00 AAA 10,300,300
Revenue Bonds, South Carolina Electric and Gas Company
Project, Series 2002B, 5.450%, 11/01/32 (Alternative
Minimum Tax) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 0.5%
6,455 Memphis-Shelby County Airport Authority, Tennessee, 3/11 at 100.00 AAA 6,835,393
Airport Revenue Bonds, Series 2001A, 5.500%, 3/01/18
(Alternative Minimum Tax) - FSA Insured
33
Nuveen Insured Municipal Opportunity Fund, Inc. (NIO) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 16.5%
$ 22,650 Brazos River Authority, Texas, Revenue Refunding Bonds, 5/08 at 102.00 AAA $23,727,461
Houston Industries Inc. Project, Series 1998C, 5.125%, 5/01/19
(Optional put 5/01/08) - AMBAC Insured
1,773 Capital Area Housing Finance Corporation, Texas, FNMA 4/12 at 106.00 AAA 1,897,777
Backed Single Family Mortgage Revenue Refunding Bonds,
Series 2002A-2, 6.300%, 4/01/35 (Alternative Minimum Tax) -
AMBAC Insured
11,460 Dallas County Utility and Reclamation District, Texas, Unlimited 2/05 at 100.00 AAA 11,969,397
Tax Refunding Bonds, Series 1999B, 5.875%, 2/15/29 -
AMBAC Insured
25,000 Harris County-Houston Sports Authority, Texas, Junior Lien 11/11 at 100.00 AAA 25,568,500
Revenue Refunding Bonds, Series 2001B, 5.250%, 11/15/40 -
MBIA Insured
Harris County, Texas, Senior Lien Toll Road Revenue Bonds,
Series 1989:
9,000 0.000%, 8/15/18 (Pre-refunded to 8/15/09) - AMBAC Insured 8/09 at 53.84 AAA 4,056,030
39,000 0.000%, 8/15/19 (Pre-refunded to 8/15/09) - AMBAC Insured 8/09 at 50.26 AAA 16,407,300
7,280 0.000%, 8/15/20 (Pre-refunded to 8/15/09) - AMBAC Insured 8/09 at 46.91 AAA 2,859,074
5,085 0.000%, 8/15/21 (Pre-refunded to 8/15/09) - AMBAC Insured 8/09 at 43.80 AAA 1,864,212
2,130 Harris County Health Facilities Development Corporation, Texas, 11/13 at 100.00 AAA 2,265,681
Thermal Utility Revenue Bonds, TECO Project, Series 2003,
5.000%, 11/15/15 - MBIA Insured
6,570 City of Houston, Texas, General Obligation Public Improvement 3/11 at 100.00 AAA 7,073,985
Bonds, Series 2001A, 5.375%, 3/01/19 - FSA Insured
4,170 City of Houston, Texas, Airport System Subordinate Lien Revenue 7/10 at 100.00 AAA 4,403,687
Bonds, Series 2000B, 5.500%, 7/01/30 - FSA Insured
8,225 City of Houston, Texas, Airport System Subordinate Lien 7/07 at 100.00 AAA 8,434,491
Revenue Bonds, Series 1997 Refunding, 5.125%, 7/01/22 -
FGIC Insured
17,500 Houston, Texas, Hotel Occupancy Tax and Special Revenue 9/11 at 100.00 AAA 17,990,700
Bonds, Convention and Entertainment Project, Series 2001B,
5.250%, 9/01/33 - AMBAC Insured
12,826 Houston Housing Finance Corporation, Texas, GNMA 9/11 at 105.00 Aaa 13,455,500
Collateralized Mortgage Multifamily Housing Revenue Bonds,
RRG Apartments Project, Series 2001, 6.350%, 3/20/42
23,865 Jefferson County, Health Facilities Development Corporation, 8/11 at 100.00 AAA 24,471,887
Texas, FHA-Insured Mortgage Revenue Bonds, Baptist Hospital
of Southeast Texas, Series 2001, 5.500%, 8/15/41 -
AMBAC Insured
8,205 Lower Colorado River Authority, Texas, Refunding and Improvement 5/11 at 100.00 AAA 8,404,053
Revenue Bonds, Series 2001A, 5.000%, 5/15/21 - MBIA Insured
Port of Houston Authority of Harris County, Texas, General
Obligation Port Improvement Bonds, Series 2001B:
3,205 5.500%, 10/01/18 (Alternative Minimum Tax) - FGIC Insured 10/11 at 100.00 AAA 3,384,672
3,375 5.500%, 10/01/19 (Alternative Minimum Tax) - FGIC Insured 10/11 at 100.00 AAA 3,545,944
7,205 City of San Antonio, Texas, Airport System Improvement Revenue 7/11 at 101.00 AAA 7,681,611
Bonds, Series 2001, 5.375%, 7/01/15 (Alternative Minimum
Tax) - FGIC Insured
Tarrant County Health Facilities Development Corporation, Texas,
Health Resources System Revenue Bonds, Series 1997A:
2,900 5.250%, 2/15/22 - MBIA Insured 2/08 at 102.00 AAA 2,989,262
6,500 5.000%, 2/15/26 - MBIA Insured 2/08 at 101.00 AAA 6,536,075
10,830 Texas Department of Housing and Community Affairs, Single 9/06 at 102.00 AAA 11,216,090
Family Mortgage Revenue Bonds, Series 1996D,
6.250%, 9/01/28 (Alternative Minimum Tax) - MBIA Insured
1,840 Ysleta Independent School District, Texas, Public Facility 11/09 at 100.00 AAA 1,921,310
Corporation, Lease Revenue Refunding Bonds, Series 2001,
5.375%, 11/15/24 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
UTAH - 1.3%
10,000 Intermountain Power Agency, Utah, Power Supply Revenue 7/13 at 100.00 AAA 10,674,700
Bonds, Series 2003A Refunding, 5.000%, 7/01/16 - FSA Insured
5,630 Utah Housing Finance Agency, Multifamily Housing Refunding 1/04 at 100.00 AA 5,645,088
Bonds, 1992 Issue A, FHA-Insured Mortgage Loans,
7.400%, 7/01/24
450 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/04 at 102.00 Aaa 456,057
Series 1994D, 6.750%, 1/01/27 (Alternative Minimum Tax)
34
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 0.8%
$ 10,000 Virginia Housing Development Authority, Commonwealth Mortgage 7/11 at 100.00 AAA $ 10,096,100
Bonds, 2001 Series H - Subseries H-1, 5.375%, 7/01/36 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 1.5%
3,195 Kitsap County, Washington, Limited Tax General Obligation 7/10 at 100.00 AAA 3,360,693
Bonds, Series 2000, 5.500%, 7/01/25 - AMBAC Insured
4,250 Snohomish County Public Utility District 1, Washington, 1/04 at 100.00 AAA 5,263,115
Generation System Revenue Bonds, Series 1989,
6.650%, 1/01/16 - FGIC Insured
6,000 Washington Health Care Facilities Authority, Revenue Bonds, 8/13 at 102.00 AAA 6,056,580
Harrison Memorial Hospital, Series 1998, 5.000%, 8/15/28 -
AMBAC Insured
4,345 Washington Public Power Supply System, Nuclear Project No. 1 7/07 at 102.00 AAA 4,586,321
Refunding Revenue Bonds, Series 1997A, 5.125%, 7/01/17 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 0.8%
10,000 Harrison County Commission, West Virginia, Solid Waste 11/03 at 102.00 AAA 10,242,400
Disposal Revenue Bonds, West Penn Power Company -
Harrison Station Project, Series 1993B, 6.300%, 5/01/23
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 2.8%
1,130 Wisconsin Housing and Economic Development Authority, 1/04 at 100.00 AAA 1,133,491
Housing Revenue Bonds, 1992 Series A, 6.850%, 11/01/12 -
MBIA Insured
15,000 Wisconsin Health and Educational Facilities Authority, Revenue 2/07 at 102.00 AAA 16,178,400
Bonds, Marshfield Clinic Project, Series 1997,
5.750%, 2/15/27 - MBIA Insured
18,000 Wisconsin Health and Educational Facilities Authority, Revenue 8/07 at 102.00 AAA 19,120,680
Bonds, Aurora Health Care, Inc., Series 1997, 5.250%, 8/15/17 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
WYOMING - 0.4%
4,415 Wyoming Community Development Authority, Housing Revenue 12/07 at 101.50 AAA 4,539,900
Bonds, Series 1997-6, 5.600%, 6/01/29 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
$ 2,016,549 Total Long-Term Investments (cost $1,789,468,672) - 149.9% 1,930,364,152
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.9% 37,722,581
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (52.8)% (680,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $1,288,086,733
====================================================================================================================
All of the bonds in the portfolio are either covered by
Original Issue Insurance, Secondary Market Insurance or
Portfolio Insurance, or are backed by an escrow or trust
containing sufficient U.S. Government or U.S. Government
agency securities, any of which ensure the timely payment of
principal and interest.
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares.
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other
call provisions at varying prices at later dates.
** Ratings (not covered by the report of independent auditors):
Using the higher of Standard & Poor's or Moody's rating.
See accompanying notes to financial statements.
35
Nuveen Premier Insured Municipal Income Fund, Inc. (NIF)
Portfolio of
INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALASKA - 1.0%
$ 2,890 Alaska Housing Finance Corporation, Governmental Purpose 12/05 at 102.00 AAA $ 2,995,485
Bonds, 1995 Series A, 5.875%, 12/01/24 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 31.2%
ABAG Finance Authority for Nonprofit Corporations, California,
Insured Certificates of Participation, Children's Hospital
Medical Center of Northern California, Series 1999:
6,750 5.875%, 12/01/19 - AMBAC Insured 12/09 at 101.00 AAA 7,596,585
10,000 6.000%, 12/01/29 - AMBAC Insured 12/09 at 101.00 AAA 11,146,400
4,755 Antioch Area Public Facilities Financing Agency, California, 8/09 at 101.00 AAA 5,229,074
Special Tax Bonds, Community Facilities District No. 1989-1,
5.700%, 8/01/22 - AMBAC Insured
3,250 California Pollution Control Financing Authority, Pollution 4/11 at 102.00 AAA 3,474,965
Control Revenue Refunding Bonds, Pacific Gas and Electric
Company, Series 1996A Remarketed, 5.350%, 12/01/16
(Alternative Minimum Tax) - MBIA Insured
380 Kern County Housing Authority, California, GNMA Guaranteed No Opt. Call AAA 399,407
Mortgage Obligation Bonds, Series 1994A-I, 7.150%, 12/30/24
(Alternative Minimum Tax)
350 Kern County Housing Authority, California, GNMA Guaranteed No Opt. Call AAA 366,975
Tax-Exempt Mortgage Obligation Bonds, Series 1994A-III,
7.450%, 6/30/25 (Alternative Minimum Tax)
5,365 La Verne-Grand Terrace Housing Finance Agency, California, No Opt. Call AAA 7,726,083
Single Family Residential Mortgage Revenue Bonds,
Series 1984A, 10.250%, 7/01/17
11,080 City of Lodi, California, Electric System Revenue, Certificates 1/09 at 40.71 AAA 3,907,584
of Participation, 1999 Series B, 0.000%, 1/15/24
(Pre-refunded to 1/15/09) - MBIA Insured
5,000 Ontario Redevelopment Financing Authority, San Bernardino No Opt. Call AAA 6,741,650
County, California, Revenue Refunding Bonds, Redevelopment
Project 1, Series 1995, 7.400%, 8/01/25 - MBIA Insured
8,880 Pomona, California, GNMA-FHLMC Mortgage-Backed Securities, No Opt. Call AAA 11,808,180
Single Family Mortgage Revenue Refunding Bonds,
Series 1990B, 7.500%, 8/01/23
10,305 San Bernardino, California, GNMA Mortgage-Backed Securities, No Opt. Call AAA 13,487,493
Single Family Mortgage Revenue Refunding Bonds,
Series 1990A, 7.500%, 5/01/23
14,755 San Bernardino County, California, GNMA Mortgage-Backed No Opt. Call AAA 18,973,455
Securities, Single Family Mortgage Revenue Bonds,
Series 1988A, 8.300%, 9/01/14 (Alternative Minimum Tax)
4,300 San Francisco City and County Airports Commission, California, 5/11 at 100.00 AAA 4,380,367
Revenue Refunding Bonds, San Francisco International
Airport, Series 2 - Issue 27A, 5.125%, 5/01/19 (Alternative
Minimum Tax) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 4.0%
1,500 Joint School District No. 28, Adams and Arapahoe Counties, 12/13 at 100.00 AAA 1,573,650
Colorado, General Obligation Bonds, Series 2003A,
5.125%, 12/01/21 - FSA Insured
2,500 City and County of Denver, Colorado, Airport System Revenue 11/12 at 100.00 AAA 2,648,700
Refunding Bonds, Series 2002E, 5.500%, 11/15/18
(Alternative Minimum Tax) - FGIC Insured
6,000 E-470 Public Highway Authority, Colorado, Senior Revenue 9/10 at 102.00 AAA 6,572,760
Bonds, Series 2000A, 5.750%, 9/01/29 - MBIA Insured
1,225 Summit County School District RE-1, Colorado, General 12/04 at 100.00 AAA 1,299,897
Obligation Bonds, Series 1994, 6.700%, 12/01/14 (Pre-refunded
to 12/01/04) - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 5.3%
4,145 City of Miami, Florida, General Obligation Bonds, Series 2002, 1/12 at 100.00 AAA 4,226,864
5.000%, 1/01/22 - MBIA Insured
6,985 Orange County, Florida, Sales Tax Revenue Bonds, Series 2002B, 1/13 at 100.00 AAA 7,143,490
5.125%, 1/01/32 - FGIC Insured
4,240 Reedy Creek Improvement District, Florida, Utilities Revenue 10/13 at 100.00 AAA 4,624,865
Bonds, Series 2003-1, 5.250%, 10/01/17 - MBIA Insured
36
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 2.2%
$ 6,500 Medical Center Hospital Authority, Georgia, Revenue 8/09 at 102.00 AAA $ 6,751,420
Anticipation Certificates, Columbus Regional Healthcare
System, Inc. Project, Series 1999, 5.500%, 8/01/25 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
HAWAII - 3.9%
8,030 Hawaii Department of Transportation, Airport System Revenue 7/10 at 101.00 AAA 9,405,378
Refunding Bonds, Series 2000B, 6.500%, 7/01/15 (Alternative
Minimum Tax) - FGIC Insured
2,250 Hawaii Department of Budget and Finance, Special Purpose 1/09 at 101.00 AAA 2,523,308
Revenue Bonds, Hawaii Electric Company, Inc. and Subsidiaries
Project, Series 1999D, 6.150%, 1/01/20 (Alternative Minimum
Tax) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 20.3%
4,000 Bridgeview, Illinois, General Obligation Bonds, Series 2002, 12/12 at 100.00 AAA 4,080,320
5.000%, 12/01/22 - FGIC Insured
10,000 City of Chicago, Illinois, General Obligation Bonds, Refunding 1/10 at 101.00 AAA 10,552,200
Series 2000D, 5.500%, 1/01/35 - FGIC Insured
8,200 Board of Education of the City of Chicago, Illinois, General No Opt. Call AAA 9,737,992
Obligation Lease Certificates, 1992 Series A, 6.250%, 1/01/15 -
MBIA Insured
23,110 Illinois Development Finance Authority, Local Government No Opt. Call Aaa 12,343,744
Program Revenue Bonds, Elgin School District U46, Kane, Cook,
and DuPage Counties, Series 2002, 0.000%, 1/01/17 -
FSA Insured
10,010 Illinois Development Finance Authority, Revenue Bonds, 2/05 at 102.00 AAA 10,419,809
Catholic Health Partners Services, Series 1995A,
5.300%, 2/15/18 - CONNIE LEE/AMBAC Insured
10,150 Onterie Center Housing Finance Corporation, An Illinois 1/04 at 101.50 AAA 10,233,941
Not for Profit Corporation, Mortgage Revenue Refunding
Bonds, Series 1992A, FHA-Insured Mortgage Loan,
7.050%, 7/01/27 - MBIA Insured
3,225 Regional Transportation Authority, Cook, DuPage, Kane, Lake, No Opt. Call AAA 4,233,393
McHenry and Will Counties, Illinois, General Obligation Bonds,
Series 1992A, 9.000%, 6/01/09 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 3.5%
4,725 Decatur Township Multi-School Building Corporation, Marion 7/13 at 100.00 AAA 4,994,514
County, Indiana, First Mortgage Bonds, Series 2003,
5.000%, 7/15/17 - FGIC Insured
5,375 Indiana Health Facility Financing Authority, Hospital Revenue 11/03 at 101.00 AAA 5,537,863
Refunding and Improvement Bonds, Series 1992, Community
Hospitals Projects, 6.400%, 5/01/12 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 1.2%
3,345 Ames, Iowa, Hospital Revenue Bonds, Mary Greeley Medical 6/13 at 100.00 Aaa 3,504,924
Center, Series 2003 Refunding, 5.000%, 6/15/17 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 1.7%
5,000 Maryland Transportation Authority, Baltimore-Washington 3/12 at 101.00 AAA 5,096,100
International Airport Parking Revenue Bonds, Series 2002B,
5.125%, 3/01/21 (Alternative Minimum Tax) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 4.4%
2,250 Kalamazoo Hospital Finance Authority, Michigan, Hospital 5/06 at 102.00 AAA 2,482,223
Revenue Refunding and Improvement Bonds, Bronson
Methodist Hospital, Series 1996, 5.750%, 5/15/16 -
MBIA Insured
6,500 Michigan Higher Education Student Loan Authority, Revenue No Opt. Call AAA 7,056,725
Bonds, Series 2000 XII-T, 5.300%, 9/01/10 (Alternative
Minimum Tax) - AMBAC Insured
3,810 Michigan Housing Development Authority, GNMA Collateralized 8/12 at 102.00 Aaa 3,922,319
Limited Obligation Multifamily Housing Revenue Bonds,
Cranbrook Apartments, Series 2001A, 5.500%, 2/20/43
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 2.1%
4,860 Minneapolis-St. Paul Metropolitan Airports Commission, 1/11 at 100.00 AAA 5,248,363
Minnesota, Airport Revenue Bonds, Series 2001B,
5.750%, 1/01/15 (Alternative Minimum Tax) - FGIC Insured
1,195 Minnesota Housing Finance Agency, Rental Housing Bonds, 2/05 at 102.00 AAA 1,231,268
Series 1995D, 5.950%, 2/01/18 - MBIA Insured
37
Nuveen Premier Insured Municipal Income Fund, Inc. (NIF) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 3.3%
$ 7,495 Jefferson County Industrial Development Authority, Missouri, 8/07 at 100.00 AAA $ 9,892,725
Housing Revenue Bonds, Richardson Road Apartments
Project, Series 1985, 11.000%, 12/15/15 (Pre-refunded
to 8/15/07)
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 7.8%
10,000 Clark County, Nevada, Airport System Subordinated Lien Revenue 7/11 at 100.00 AAA 10,314,500
Bonds, Series 2001B, 5.125%, 7/01/21 - FGIC Insured
7,990 Reno, Nevada, Sales and Room Tax Revenue Bonds, Reno 6/12 at 100.00 AAA 8,180,881
Transportation Rail Access Corridor Project, Senior Lien Series
2002, 5.250%, 6/01/41 - AMBAC Insured
5,050 Washoe County, Nevada, Gas and Water Facilities Refunding 1/04 at 101.50 AAA 5,218,417
Revenue Bonds, Sierra Pacific Power Company Project,
Series 1987 Remarketed, 6.300%, 12/01/14 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 2.8%
7,645 Metropolitan Transportation Authority, New York, Transit No Opt. Call AAA 8,634,722
Facilities Revenue Bonds, Series J, 9.100%, 7/01/05 -
FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 1.0%
3,100 North Carolina Medical Care Commission, FHA-Insured Mortgage 10/13 at 100.00 AAA 3,147,554
Revenue Bonds, Betsy Johnson Regional Hospital Project,
Series 2003, 5.125%, 10/01/32 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 3.9%
2,050 Oklahoma Housing Finance Agency, GNMA Collateralized Single No Opt. Call AAA 2,217,239
Family Mortgage Revenue Bonds, Series 1987A,
7.997%, 8/01/18 (Alternative Minimum Tax)
5,440 Sapulpa Municipal Authority, Oklahoma, Capital Improvement 7/10 at 101.00 AAA 6,343,203
Revenue Bonds, Series 2000 Refunding, 5.625%, 7/01/20
(Pre-refunded to 7/01/10) - FSA Insured
3,000 Tulsa Industrial Authority, Oklahoma, GNMA Collateralized 11/05 at 103.00 Aaa 3,141,840
Multifamily Housing Revenue Bonds, Country Club of
Woodland Hills Project, Series 1995, 6.250%, 11/01/27
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 9.7%
Oregon Health Sciences University, Revenue Bonds, Series 2002A:
5,000 5.000%, 7/01/26 - MBIA Insured 1/13 at 100.00 AAA 5,071,300
19,000 5.000%, 7/01/32 - MBIA Insured 1/13 at 100.00 AAA 19,207,670
4,990 Oregon, Health, Housing, Educational, and Cultural Facilities 3/12 at 105.00 Aaa 5,342,544
Authority, Revenue Bonds, GNMA Mortgaged-Backed
Securities Program, Necanicum Village Assisted Living Project,
2001 Series A, 6.850%, 6/20/42
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 4.9%
1,650 Pennsylvania Turnpike Commission, Oil Franchise Tax Senior 12/13 at 100.00 AAA 1,676,730
Lien Revenue Bonds, Series 2003A, 5.000%, 12/01/24 -
MBIA Insured
13,000 State Public School Building Authority, Pennsylvania, Lease 6/13 at 100.00 AAA 13,092,950
Revenue Bonds, Philadelphia School District Project,
Series 2003, 5.000%, 6/01/33 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 0.8%
2,000 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call AAA 2,296,280
Revenue Bonds, Series 2003AA, 5.500%, 7/01/17 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 2.0%
5,000 Health and Educational Facilities Board of the Metropolitan 11/09 at 101.00 AAA 5,945,450
Government of Nashville and Davidson County, Tennessee,
Revenue Bonds, Ascension Health Credit Group, Series 1999A,
6.000%, 11/15/30 (Pre-refunded to 11/15/09) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 10.4%
400 Corpus Christi Housing Finance Corporation, Texas, Single 1/04 at 101.00 AAA 404,888
Family Mortgage Senior Revenue Refunding Bonds,
Series 1991A, 7.700%, 7/01/11 - MBIA Insured
12,500 Cities of Dallas and Fort Worth, Texas, Dallas-Ft. Worth 11/09 at 100.00 AAA 12,788,750
International Airport, Joint Revenue Refunding and
Improvement Bonds, Series 2001A, 5.500%, 11/01/35
(Alternative Minimum Tax) - FGIC Insured
38
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS (continued)
$ 445 El Paso Property Finance Authority Inc., Texas, GNMA Mortgage- 12/03 at 102.00 Aaa $ 454,314
Backed Securities Program, Single Family Mortgage Revenue
Bonds, Series 1992A, 8.700%, 12/01/18 (Alternative
Minimum Tax)
North Harris County Regional Water Authority, Texas, Senior
Water Revenue Bonds, Series 2003:
4,565 5.250%, 12/15/20 - FGIC Insured 12/13 at 100.00 AAA 4,854,056
4,800 5.250%, 12/15/21 - FGIC Insured 12/13 at 100.00 AAA 5,075,856
7,600 City of San Antonio, Texas, Airport System Improvement Revenue 7/11 at 101.00 AAA 8,046,652
Bonds, Series 2001, 5.375%, 7/01/16 (Alternative
Minimum Tax) - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
UTAH - 0.7%
2,000 Clearfield City, Utah, Sales Tax Revenue Bonds, Series 2003, 7/13 at 100.00 AAA 2,018,180
5.000%, 7/01/28 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 1.2%
3,635 Virginia Housing Development Authority, Commonwealth 7/11 at 100.00 AAA 3,732,273
Mortgage Bonds, 2001 Series C - Subseries C-2,
5.450%, 7/01/23 (Alternative Minimum Tax) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 21.0%
5,000 Public Utility District No. 1 of Chelan County, Washington, 7/11 at 101.00 AAA 5,199,600
Chelan Hydro Consolidated System Revenue Bonds,
Series 2001B, 5.600%, 1/01/36 (Alternative Minimum Tax) -
MBIA Insured
1,570 Sedro-Wooley School District No. 101, Clark County, Washington, 12/12 at 100.00 Aaa 1,684,170
General Obligation Bonds, Series 2002, 5.250%, 12/01/18 -
FSA Insured
Bellevue School District No. 405, King County, Washington,
General Obligation Bonds, Series 2002:
12,060 5.000%, 12/01/19 - FGIC Insured 12/12 at 100.00 AAA 12,555,304
12,785 5.000%, 12/01/20 - FGIC Insured 12/12 at 100.00 AAA 13,232,731
Pierce County School District No. 343, Dieringer, Washington,
General Obligation Bonds, Series 2003 Refunding:
2,755 5.250%, 12/01/18 - FSA Insured 6/13 at 100.00 Aaa 2,964,297
2,990 5.250%, 12/01/19 - FSA Insured 6/13 at 100.00 Aaa 3,195,323
4,715 Port of Seattle, Washington, Revenue Bonds, Series 2001B, 10/11 at 100.00 AAA 5,078,479
5.625%, 4/01/17 (Alternative Minimum Tax) - FGIC Insured
Port of Seattle, Washington, Special Facilities Revenue Bonds,
Terminal 18 Project, Series 1999C:
755 6.000%, 9/01/29 (Alternative Minimum Tax) 3/10 at 101.00 AAA 880,277
(Pre-refunded to 3/01/10) - MBIA Insured
895 6.000%, 9/01/29 (Alternative Minimum Tax) - MBIA Insured 3/10 at 101.00 AAA 957,847
1,265 City of Tacoma, Washington, General Obligation Bonds, 12/12 at 100.00 AAA 1,327,567
Series 2002, 5.000%, 12/01/18 - FGIC Insured
4,200 City of Tacoma, Washington, Solid Waste Utility Revenue 12/11 at 100.00 AAA 4,439,313
Bonds, Series 2001 Refunding, 5.250%, 12/01/20 -
AMBAC Insured
5,000 State of Washington, General Obligation Bonds, 1/11 at 100.00 AAA 5,142,350
2001 Series C 5.250%, 1/01/26 - FSA Insured
6,990 Washington Public Power Supply System, Nuclear Project No. 1, 7/08 at 102.00 AAA 7,381,720
Refunding Revenue Bonds, Series 1998A, 5.125%, 7/01/17 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
$ 436,525 Total Long-Term Investments (cost $425,205,273) - 150.3% 456,817,685
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.7% 8,094,007
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (53.0)% (161,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $303,911,692
====================================================================================================================
All of the bonds in the portfolio are either covered by
Original Issue Insurance, Secondary Market Insurance or
Portfolio Insurance, or are backed by an escrow or trust
containing sufficient U.S. Government or U.S. Government
agency securities, any of which ensure the timely payment of
principal and interest.
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares.
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other
call provisions at varying prices at later dates.
** Ratings (not covered by the report of independent auditors):
Using the higher of Standard & Poor's or Moody's rating.
See accompanying notes to financial statements.
39
Nuveen Insured Premium Income Municipal Fund 2 (NPX)
Portfolio of
INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 3.9%
Jefferson County, Alabama, Sewer Revenue Warrants,
Series 1997D:
$ 5,000 5.700%, 2/01/20 (Pre-refunded to 2/01/07) - FGIC Insured 2/07 at 101.00 AAA $ 5,634,150
3,970 5.750%, 2/01/22 (Pre-refunded to 2/01/07) - FGIC Insured 2/07 at 101.00 AAA 4,479,708
4,830 5.750%, 2/01/22 (Pre-refunded to 2/01/07) - FGIC Insured 2/07 at 101.00 AAA 5,464,855
2,500 City of Mobile, Alabama, General Obligation Refunding 2/06 at 102.00 AAA 2,785,850
Warrants, Series 1996, 5.750%, 2/15/16 (Pre-refunded to
2/15/06) - AMBAC Insured
2,000 City of Scottsboro, Alabama, General Obligation School 7/06 at 102.00 AAA 2,215,040
Warrants, Series 1996-B, 5.750%, 7/01/14 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 13.8%
31,200 Foothill-Eastern Transportation Corridor Agency, California, 1/10 at 24.23 AAA 5,303,376
Toll Road Refunding Revenue Bonds, Series 1999,
0.000%, 1/15/34 - MBIA Insured
6,850 Orange County, California, Recovery Certificates of Participation, 7/06 at 102.00 AAA 7,656,245
Series 1996A, 6.000%, 7/01/26 - MBIA Insured
15,000 Orange County Sanitation District, California, Certificates 8/13 at 100.00 AAA 15,490,050
of Participation, Series 2003, 5.250%, 2/01/30 - FGIC Insured
10,000 Orange County Water District, California, Revenue Certificates 8/13 at 100.00 AAA 10,033,800
of Participation, Series 2003B, 5.000%, 8/15/34 - MBIA Insured
1,435 Pasadena Area Community College District, Los Angeles County, 6/13 at 100.00 AAA 1,476,228
California, General Obligation Bonds, Series 2003A,
5.000%, 6/01/22 - FGIC Insured
13,000 Sacramento City Financing Authority, California, Capital 12/09 at 102.00 AAA 14,719,900
Improvement Revenue Bonds, Solid Waste and Redevelopment
Projects, Series 1999, 5.800%, 12/01/19 - AMBAC Insured
San Leandro Housing Finance Corporation, California, Mortgage
Revenue Refunding Bonds, Series 1993A, FHA-Insured Mortgage Loan
- Ashland Village Apartments, Section 8 Assisted Project:
1,140 6.550%, 1/01/12 - MBIA Insured 1/04 at 100.00 AAA 1,143,420
5,100 6.650%, 1/01/25 - MBIA Insured 1/04 at 100.00 AAA 5,111,730
12,500 University of California, Multiple Purpose Projects, Revenue 5/13 at 100.00 AAA 12,561,000
Bonds, Series 2003A, 5.000%, 5/15/33 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 10.0%
Colorado Educational and Cultural Facilities Authority, Charter
School Revenue Bonds, Adams School District 12 - Pinnacle School
Project, Series 2003:
1,940 5.250%, 6/01/23 - XLCA Insured 6/13 at 100.00 AAA 2,019,210
1,000 5.000%, 6/01/33 - XLCA Insured 6/13 at 100.00 AAA 999,190
3,405 Colorado Educational and Cultural Facilities Authority, 12/13 at 100.00 AAA 3,549,713
Charter School Revenue Bonds, Classical Academy Project,
Series 2003, 5.250%, 12/01/23 - XLCA Insured
Colorado Health Facilities Authority, Hospital Revenue Bonds,
Poudre Valley Health Care, Inc., Series 1999A:
2,480 5.625%, 12/01/19 - FSA Insured 12/09 at 101.00 Aaa 2,701,365
3,500 5.750%, 12/01/23 - FSA Insured 12/09 at 101.00 Aaa 3,796,765
12,955 City and County of Denver, Colorado, Airport System Revenue 11/05 at 102.00 AAA 13,955,903
Bonds, Series 1995A, 5.600%, 11/15/20 - MBIA Insured
Denver Convention Center Hotel Authority, Colorado, Convention
Center Hotel Senior Revenue Bonds, Series 2003A:
6,770 5.000%, 12/01/19 - XLCA Insured 12/13 at 100.00 AAA 7,061,245
17,495 5.000%, 12/01/33 - XLCA Insured 12/13 at 100.00 AAA 17,542,411
1,325 El Paso County, Colorado, Certificates of Participation, 12/12 at 100.00 AAA 1,337,084
Series 2002B, Detention Facility Project, 5.000%, 12/01/27 -
AMBAC Insured
40
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 0.7%
$ 3,540 District of Columbia Housing Finance Agency, GNMA 12/03 at 102.00 AAA $ 3,562,975
Collateralized Single Family Mortgage Revenue Bonds,
Series 1990C-4, 6.350%, 12/01/24 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 1.4%
Municipal Electric Authority of Georgia, Combustion Turbine
Project Revenue Bonds, Series 2003A:
1,775 5.000%, 11/01/21 - MBIA Insured 11/13 at 100.00 AAA 1,829,244
2,580 5.000%, 11/01/22 - MBIA Insured 11/13 at 100.00 AAA 2,642,230
3,000 Valdosta and Lowndes County Hospital Authority, Georgia, 10/12 at 101.00 AAA 3,111,180
Series 2002, South Georgia Medical Center Project Revenue
Certificates, 5.200%, 10/01/22 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
HAWAII - 7.9%
2,375 Hawaii County, Hawaii, General Obligation Bonds, 7/13 at 100.00 AAA 2,485,461
Series 2003A, 5.000%, 7/15/19 - FSA Insured
Hawaii Department of Transportation, Airport System Revenue
Refunding Bonds, Series 2000B:
6,105 6.100%, 7/01/16 (Alternative Minimum Tax) - FGIC Insured 7/10 at 101.00 AAA 6,908,662
9,500 6.625%, 7/01/17 (Alternative Minimum Tax) - FGIC Insured 7/10 at 101.00 AAA 11,183,780
20,000 Department of Budget and Finance of the State of Hawaii, 7/10 at 101.00 AAA 21,490,000
Special Purpose Revenue Bonds, Hawaiian Electric Company,
Inc. and Subsidiary Projects, Refunding Series 2000,
5.700%, 7/01/20 (Alternative Minimum Tax) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
IDAHO - 0.3%
1,510 Idaho Housing and Finance Association, Single Family Mortgage 1/08 at 101.50 AAA 1,622,148
Bonds, 1998 Series E, 5.450%, 7/01/18 (Alternative Minimum
Tax) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 15.1%
2,500 Kane, DuPage, Kendall and Will Counties, Aurora, Illinois, 1/05 at 100.00 AAA 2,635,050
General Obligation Obligation Bonds, Series 1996,
5.800%, 1/01/14 (Pre-refunded to 1/01/05) - MBIA Insured
1,500 City of Chicago, Illinois, General Obligation Bonds, 7/05 at 102.00 AAA 1,650,780
Series 1995, 6.125%, 1/01/16 (Pre-refunded to 7/01/05) -
AMBAC Insured
25,585 City of Chicago, Illinois, General Obligation Bonds, Project 1/06 at 102.00 AAA 25,796,844
and Refunding, Series 1996B, 5.125%, 1/01/25 - FGIC Insured
8,370 City of Chicago, Illinois, Chicago Midway Airport Revenue 1/07 at 101.00 AAA 9,128,741
Bonds, Series 1996A, 5.625%, 1/01/17 - MBIA Insured
City of Chicago, Illinois, Chicago Midway Airport Revenue Bonds,
1994 Series A:
280 6.100%, 1/01/08 (Alternative Minimum Tax) - MBIA Insured 1/04 at 102.00 AAA 287,605
710 6.250%, 1/01/14 (Alternative Minimum Tax) - MBIA Insured 1/04 at 102.00 AAA 730,107
8,235 City of Chicago, Illinois, Chicago-O'Hare International Airport, 1/05 at 102.00 AAA 8,843,155
General Airport Second Lien Revenue Refunding Bonds,
1994 Series A, 6.375%, 1/01/15 - MBIA Insured
4,115 Chicago Park District, Illinois, General Obligation Limited 7/11 at 100.00 AAA 4,507,201
Tax Bonds, Series 2001C, 5.500%, 1/01/18 - FGIC Insured
9,680 Illinois Educational Facilities Authority, Revenue Bonds, 6/08 at 100.00 AAA 9,923,162
Columbia College Bonds, Series 1998, 5.000%, 12/01/20 -
MBIA Insured
1,950 Illinois Health Facilities Authority, Health Facilities Refunding No Opt. Call AAA 2,359,598
Revenue Bonds, SSM Health Care, Series 1992AA,
6.550%, 6/01/14 - MBIA Insured
Illinois Health Facilities Authority, Lutheran General Health
System, Revenue Bonds, Series 1993A:
4,355 6.125%, 4/01/12 - FSA Insured No Opt. Call AAA 5,018,746
5,000 6.250%, 4/01/18 - FSA Insured No Opt. Call AAA 6,061,000
2,510 Illinois Housing Development Authority, Housing Development 1/04 at 102.00 A+ 2,564,442
Bonds, 1993 Series A, 6.000%, 7/01/18
745 Peoria, Moline and Freeport, Illinois, Collateralized Single 10/05 at 105.00 AAA 782,749
Family Mortgage Revenue Bonds, Series 1995A,
7.600%, 4/01/27 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 1.2%
1,000 Ft. Wayne South Side School Building Corporation, Indiana, 1/04 at 102.00 AAA 1,030,540
First Mortgage Bonds, Series 1994, 6.125%, 1/15/12
(Pre-refunded to 1/15/04) - MBIA Insured
5,285 Logansport School Building Corporation, Indiana, First Mortgage 7/11 at 100.00 AAA 5,441,859
Bonds, Series 2001, 5.125%, 1/15/22 - FGIC Insured
41
Nuveen Insured Premium Income Municipal Fund 2 (NPX) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 0.1%
$ 245 Olathe-Labette Count, Kansas, GNMA Collateralized Single 2/05 at 105.00 Aaa $ 260,075
Family Mortgage Revenue Refunding Bonds, Series 1994A-I,
8.100%, 8/01/23 (Alternative Minimum Tax)
405 Sedgwick and Shawnee Counties, Kansas, GNMA Collateralized 11/04 at 105.00 Aaa 424,019
Single Family Mortgage Revenue Refunding Bonds,
Series 1994A-II, 8.050%, 5/01/24 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 0.3%
7,000 Kentucky Economic Development Finance Authority, Health System No Opt. Call AAA 1,768,270
Revenue Bonds, Norton Healthcare Inc., Series 2000B,
0.000%, 10/01/28 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 3.1%
4,910 Commonwealth of Massachusetts, General Obligation Bonds, No Opt. Call AAA 5,609,037
Consolidated Loan, Series 2002C, 5.500%, 11/01/15 -
MBIA Insured
3,000 Massachusetts Development Finance Authority, Revenue No Opt. Call AAA 3,399,990
Bonds, Series 2002A, WGBH Educational Foundation,
5.750%, 1/01/42 - AMBAC Insured
3,765 Massachusetts Housing Finance Agency, Single Family Housing 6/06 at 102.00 AAA 3,919,440
Revenue Bonds, Series 48, 6.350%, 6/01/26 (Alternative
Minimum Tax) - MBIA Insured
3,340 Massachusetts Housing Finance Agency, Single Family Housing 6/07 at 102.00 AAA 3,474,836
Revenue Bonds, Series 53, 6.150%, 12/01/29 (Alternative
Minimum Tax) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 2.9%
4,705 Board of Control of Grand Valley State University, Michigan, 12/10 at 100.00 AAA 5,012,237
General Revenue Bonds, Series 2000, 5.250%, 12/01/20 -
FGIC Insured
10,000 Michigan State Housing Development Authority, Rental Housing 4/07 at 102.00 AAA 10,501,500
Revenue Bonds, 1997 Series A, 6.000%, 4/01/16 (Alternative
Minimum Tax) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 1.4%
7,275 Minnesota Housing Finance Agency, Rental Housing Bonds, 2/05 at 102.00 AAA 7,495,796
Series 1995D, 5.950%, 2/01/18 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 1.5%
1,000 Hazelwood Industrial Development Authority, Missouri, 9/06 at 102.00 AAA 1,050,610
GNMA Collateralized Project Multifamily Housing Revenue
Refunding Bonds, Lakes Apartments Project, Series 1996,
6.000%, 9/20/16
4,500 Land Clearance for Redevelopment Authority of Kansas City, 12/05 at 102.00 AAA 4,972,050
Missouri, Lease Revenue Bonds, Municipal Auditorium and
Muehlebach Hotel Redevelopment Projects, Series 1995A, 5.900%,
12/01/18 - CAP GTY/FSA Insured
1,000 Kansas City Municipal Assistance Corporation, Missouri, 1/06 at 101.00 AAA 1,083,250
Leasehold Revenue Bonds, Capital Improvement, Series 1996B,
5.750%, 1/15/14 - AMBAC Insured
1,030 Missouri Housing Development Commission, Multifamily 12/06 at 102.00 AAA 1,086,125
Housing Revenue Bonds, Brookstone Village Apartments
Project, 1996 Series A, 6.000%, 12/01/16 (Alternative
Minimum Tax) - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 8.0%
5,000 Clark County, Nevada, Industrial Development Revenue Bonds, 12/03 at 101.00 AAA 5,160,750
Nevada Power Company Project, Series 1992A,
6.700%, 6/01/22 (Alternative Minimum Tax) - FGIC Insured
5,000 Clark County, Nevada, Industrial Development Revenue 7/10 at 102.00 AAA 5,382,950
Bonds, Series 2000C, Southwest Gas Corporation,
5.950%, 12/01/38 (Alternative Minimum Tax) -
AMBAC Insured
5,500 Director of Nevada State Department of Business and 1/10 at 102.00 AAA 5,926,195
Industry, Revenue Bonds, Las Vegas Monorail Project,
1st Tier Series 2000, 5.625%, 1/01/32 - AMBAC Insured
Las Vegas Convention and Visitors Authority, Nevada, Revenue
Bonds, Series 1999:
2,695 5.750%, 7/01/15 - AMBAC Insured 7/09 at 101.00 AAA 3,060,765
6,035 5.750%, 7/01/16 - AMBAC Insured 7/09 at 101.00 AAA 6,854,070
6,500 5.750%, 7/01/17 - AMBAC Insured 7/09 at 101.00 AAA 7,365,215
3,535 5.750%, 7/01/18 - AMBAC Insured 7/09 at 101.00 AAA 3,993,030
4,000 6.000%, 7/01/19 - AMBAC Insured 7/09 at 101.00 AAA 4,562,560
42
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 0.7%
$ 3,075 New Jersey Transit Corporation, Certificates of Participation, No Opt. Call AAA $ 3,469,768
Series 2003 Refunding, 5.500%, 10/01/15 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 17.1%
4,090 Metropolitan Transportation Authority, New York, Commuter No Opt. Call AAA 4,975,158
Facilities Revenue Bonds, Series 1994A, 8.000%, 7/01/07 -
MBIA Insured
4,985 Metropolitan Transportation Authority, New York, Transit No Opt. Call AAA 6,063,854
Facilities Revenue Bonds, Series O, 8.000%, 7/01/07 -
MBIA Insured
County of Nassau, New York, General Obligation Improvement
Bonds, Series 2000E:
1,755 6.000%, 3/01/16 - FSA Insured 3/10 at 100.00 AAA 2,006,492
2,740 6.000%, 3/01/18 - FSA Insured 3/10 at 100.00 AAA 3,132,642
2,265 County of Nassau, New York, General Obligation Bonds, Serial 3/10 at 100.00 AAA 2,792,020
General Improvement Bonds, Series F, 7.000%, 3/01/14
(Pre-refunded to 3/01/10) - FSA Insured
7,500 Nassau Health Care Corporation, New York, County Guaranteed 8/09 at 102.00 AAA 8,224,950
Health System Revenue Bonds, Series 1999, 5.750%, 8/01/29 -
FSA Insured
4,000 City of New York, New York, General Obligation Bonds, Fiscal No Opt. Call AAA 4,454,840
Series 1995E, 8.000%, 8/01/05 - MBIA Insured
7,900 City of New York, New York, General Obligation Bonds, Fiscal 3/06 at 101.50 AAA 8,644,022
Series 1996I, 5.875%, 3/15/18 - FSA Insured
7,000 New York City Municipal Water Finance Authority, New York, 6/09 at 101.00 AAA 7,708,610
Water and Sewer System Revenue Bonds, Fiscal 2000 Series A,
5.750%, 6/15/31 - FGIC Insured
Dormitory Authority of the State of New York, Insured Revenue
Bonds, New Island Hospital Issue, Series 1999B:
3,400 5.750%, 7/01/19 - MBIA Insured 7/09 at 101.00 AAA 3,694,440
5,750 6.000%, 7/01/24 - MBIA Insured 7/09 at 101.00 AAA 6,489,853
9,095 New York State Housing Finance Agency, Housing Project 5/06 at 102.00 AAA 9,659,163
Mortgage Revenue Refunding Bonds, Series 1996A,
6.125%, 11/01/20 - FSA Insured
6,095 New York State Medical Care Facilities Finance Agency, 2/05 at 102.00 AAA 6,591,255
Mental Health Services Facilities Improvement Revenue Bonds,
1995 Series A, 6.000%, 8/15/15 (Pre-refunded to 2/15/05) -
MBIA Insured
New York State Medical Care Facilities Finance Agency, New York,
Hospital FHA-Insured Mortgage Revenue Bonds, Series 1994A:
3,000 6.750%, 8/15/14 (Pre-refunded to 2/15/05) - AMBAC Insured 2/05 at 102.00 AAA 3,272,970
2,500 6.800%, 8/15/24 (Pre-refunded to 2/15/05) - AMBAC Insured 2/05 at 102.00 AAA 2,729,075
New York State Urban Development Corporation, Correctional
Capital Facilities Revenue Bonds, Series 7:
3,505 5.700%, 1/01/27 (Pre-refunded to 1/01/07) - MBIA Insured 1/07 at 102.00 AAA 3,990,653
5,000 5.700%, 1/01/27 (Pre-refunded to 1/01/07) - FSA Insured 1/07 at 102.00 AAA 5,692,800
------------------------------------------------------------------------------------------------------------------------------------
NORTH DAKOTA - 3.7%
10,715 Fargo, North Dakota, Health System Revenue Bonds, MeritCare 6/10 at 101.00 AAA 11,473,515
Obligated Group, Series 2000A, 5.600%, 6/01/21 - FSA Insured
8,000 North Dakota, Student Loan Trust Revenue Bonds, 12/10 at 100.00 AAA 8,314,000
Series 2000B, 5.850%, 12/01/25 (Alternative Minimum Tax) -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 2.3%
12,200 Board of Education, City School District of Columbus, Franklin 6/13 at 100.00 AAA 12,315,168
County, Ohio, General Obligation Bonds, Series 2003,
5.000%, 12/01/31 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 1.0%
Oklahoma City, Oklahoma, Airport Trust Junior Lien Tax Exempt
Bonds, Twenty Seventh Series 2000A:
1,320 5.125%, 7/01/20 - FSA Insured 7/10 at 100.00 AAA 1,360,696
4,040 5.250%, 7/01/21 - FSA Insured 7/10 at 100.00 AAA 4,200,550
43
Nuveen Insured Premium Income Municipal Fund 2 (NPX) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 3.7%
Portland, Oregon, Airport Way Urban Renewal and Redevelopment
Bonds, Series 2000A:
$ 4,405 5.700%, 6/15/17 - AMBAC Insured 6/10 at 101.00 Aaa $ 4,901,267
3,665 5.750%, 6/15/18 - AMBAC Insured 6/10 at 101.00 Aaa 4,081,234
4,265 5.750%, 6/15/19 - AMBAC Insured 6/10 at 101.00 Aaa 4,726,729
1,375 5.750%, 6/15/20 - AMBAC Insured 6/10 at 101.00 Aaa 1,515,003
Housing Authority of Portland, Oregon, Multifamily Housing
Revenue Bonds, Series 2000, Lovejoy Station Apartments Project:
1,500 5.900%, 7/01/23 (Alternative Minimum Tax) - MBIA Insured 7/10 at 100.00 Aaa 1,565,265
2,520 6.000%, 7/01/33 (Alternative Minimum Tax) - MBIA Insured 7/10 at 100.00 Aaa 2,619,212
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 8.6%
12,620 Allegheny County Hospital Development Authority, Pennsylvania, 11/10 at 102.00 AAA 14,558,558
Health System Insured Revenue Bonds, Series 2000A,
West Penn Allegheny Health System, 6.500%, 11/15/30 -
MBIA Insured
2,165 Allegheny County Residential Finance Authority, Pennsylvania, 11/06 at 102.00 Aaa 2,266,798
Single Family Mortgage Revenue Bonds, GNMA Mortgage
Backed Securities Program, Series 1996AA, 6.450%, 5/01/28
(Alternative Minimum Tax)
9,485 Berks County Municipal Authority, Pennsylvania, Hospital 11/09 at 102.00 AAA 11,372,515
Revenue Bonds, Reading Hospital and Medical Center Project,
Series 1999, 6.000%, 11/01/19 (Pre-refunded to 11/01/09) -
FSA Insured
1,000 Luzerne County Industrial Development Authority, Pennsylvania, 12/04 at 102.00 Aaa 1,081,280
Exempt Facilities Revenue Refunding Bonds, Pennsylvania Gas
and Water Company Project, Series 1994A, 7.000%, 12/01/17
(Alternative Minimum Tax) - AMBAC Insured
12,730 City of Philadelphia, Pennsylvania, Water and Wastewater 8/07 at 102.00 AAA 12,904,783
Revenue Bonds, Series 1997A, 5.125%, 8/01/27 - AMBAC Insured
3,650 State Public School Building Authority, Pennsylvania, Lease 6/13 at 100.00 AAA 3,684,456
Revenue Bonds, Philadelphia School District Project,
Series 2003, 5.000%, 6/01/29 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 0.8%
4,000 Puerto Rico Municipal Finance Agency, 2002 Series A, 8/12 at 100.00 AAA 4,361,200
5.250%, 8/01/17 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 19.1%
Brazos River Authority, Texas, Revenue Refunding Bonds, Houston
Industries Inc. Project, Series 1998C:
10,000 5.125%, 5/01/19 - AMBAC Insured 5/08 at 102.00 AAA 10,475,700
9,000 5.125%, 11/01/20 (Optional put 11/01/08) - AMBAC Insured 11/08 at 102.00 AAA 9,348,300
12,500 Cities of Dallas and Fort Worth, Texas, Dallas-Ft. Worth 11/09 at 100.00 AAA 12,788,750
International Airport, Joint Revenue Refunding and Improvement
Bonds, Series 2001A, 5.500%, 11/01/35 (Alternative Minimum
Tax) - FGIC Insured
3,895 Denton, Texas, Utility System Revenue Bonds, Series 2000A, 12/10 at 100.00 AAA 4,312,544
5.625%, 12/01/19 - FSA Insured
7,210 Houston, Texas, Water and Sewer System Junior Lien Revenue 12/07 at 101.00 AAA 7,489,171
Refunding Bonds, Series 1997A, 5.250%, 12/01/22 -
FGIC Insured
4,485 Lower Colorado River Authority, Texas, Transmission Contract 5/12 at 100.00 AAA 4,605,647
Refunding Revenue Bonds, Transmission Services Corporation
Project, Series 2003B, 5.000%, 5/15/21 - FSA Insured
10,000 Lower Colorado River Authority, Texas, Contract Revenue 5/13 at 100.00 AAA 10,048,800
Refunding Bonds, Transmission Services Corporation Project,
Series 2003C, 5.000%, 5/15/33 - AMBAC Insured
4,151 Panhandle Regional Housing Finance Corporation, Texas, 7/12 at 105.00 Aaa 4,400,766
Multifamily Housing Revenue Bonds, GNMA Collateralized
Mortgage - Renaissance of Amarillo Apartments, Series 2001A,
6.650%, 7/20/42
Tarrant County Health Facilities Development Corporation, Texas,
Hospital Revenue Bonds, Cook Children's Medical Center Project,
Series 2000A:
6,725 5.750%, 12/01/17 - FSA Insured 12/10 at 101.00 AAA 7,491,717
7,500 5.750%, 12/01/24 - FSA Insured 12/10 at 101.00 AAA 7,984,800
10,627 Tarrant County Housing Finance Corporation, Texas, GNMA 10/11 at 105.00 Aaa 11,239,115
Collateralized Mortgage Loan, Multifamily Housing Revenue
Bonds, Legacy Senior Residence Apartments Project,
Series 2001, 6.625%, 4/20/42
44
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS (continued)
Texas General Obligation Bonds, Veterans Housing Assistance
Program Fund, Series 1993:
$ 1,315 6.800%, 12/01/23 (Alternative Minimum Tax) 12/03 at 102.00 Aa1 $ 1,343,378
(Pre-refunded to 12/01/03)
6,585 6.800%, 12/01/23 (Alternative Minimum Tax) 12/03 at 102.00 AAA 6,729,277
(Pre-refunded to 12/01/03) - MBIA Insured
2,300 Texas State University System, Financing Revenue Refunding 3/12 at 100.00 AAA 2,406,329
Bonds, Series 2002, 5.000%, 3/15/18 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
UTAH - 3.3%
2,695 Intermountain Power Agency, Utah, Power Supply Revenue 1/04 at 102.00 AAA 2,758,602
Refunding Bonds, Series 1993A, 5.500%, 7/01/20 -
AMBAC Insured
8,600 Intermountain Power Agency, Utah, Power Supply Revenue 7/13 at 100.00 AAA 9,040,234
Bonds, Series 2003A Refunding, 5.000%, 7/01/18 -
FSA Insured
5,525 Utah Transit Authority, Sales Tax Revenue Bonds, 12/12 at 100.00 AAA 5,591,300
Series 2002A, 5.000%, 6/15/24 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
VERMONT - 0.3%
1,320 Vermont Educational and Health Buildings Financing Agency, 12/10 at 101.00 AAA 1,438,391
Revenue Bonds, Fletcher Allen Health Care Project,
Series 2000A, 6.000%, 12/01/23 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 0.4%
2,250 Virginia Housing Development Authority, Multifamily Housing 1/08 at 102.00 AAA 2,381,130
Bonds, Series 1997B, 6.050%, 5/01/17 (Alternative Minimum
Tax) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 6.5%
10,000 Public Utility District No. 1 of Chelan County, Washington, 7/11 at 101.00 AAA 10,399,200
Chelan Hydro Consolidated System Revenue Bonds,
Series 2001B, 5.600%, 1/01/36 (Alternative Minimum Tax) -
MBIA Insured
1,370 Sedro-Wooley School District No. 101, Clark County, Washington, 12/12 at 100.00 Aaa 1,401,579
General Obligation Bonds, Series 2002, 5.000%, 12/01/22 -
FSA Insured
5,230 Douglas County Public Utility District 1, Washington, Wells 9/09 at 102.00 AAA 5,799,076
Hydroelectric Revenue Bonds, Series 1999A, 6.125%, 9/01/29
(Alternative Minimum Tax) - MBIA Insured
3,485 Public Utility District No. 2 of Grant County, Washington, Priest 1/06 at 102.00 AAA 3,777,601
Rapids Hydroelectric Development Revenue Bonds, Second
Series B of 1996, 5.900%, 1/01/21 (Alternative Minimum Tax) -
MBIA Insured
2,500 City of Tacoma, Washington, Sewer Revenue Bonds, 12/05 at 100.00 AAA 2,760,725
1995 Series B, 6.375%, 12/01/15 (Pre-refunded to 12/01/05) -
FGIC Insured
6,200 State of Washington, General Obligation Bonds, Series 2003A 7/12 at 100.00 AAA 6,408,816
Various Purpose, 5.000%, 7/01/20 - FGIC Insured
3,950 Washington Health Care Facilities Authority, Revenue Bonds, 11/08 at 101.00 Aaa 4,031,722
Swedish Health Services, Series 1998, 5.125%, 11/15/22 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 1.6%
8,000 Pleasants County, West Virginia, Pollution Control Revenue 5/05 at 102.00 AAA 8,691,120
Bonds, Monongahela Power Company - Pleasants Station
Project, Series 1995C, 6.150%, 5/01/15 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 6.4%
7,000 La Crosse, Wisconsin, Resource Recovery Revenue Refunding No Opt. Call AAA 8,055,460
Bonds, Northern States Power Company Project, Series 1996,
6.000%, 11/01/21 (Alternative Minimum Tax) - MBIA Insured
12,750 Milwaukee County, Wisconsin, Airport Revenue Bonds, 12/10 at 100.00 Aaa 13,379,720
Series 2000A, 5.750%, 12/01/25 (Alternative Minimum Tax) -
FGIC Insured
6,250 Wisconsin Health and Educational Facilities Authority, Revenue 8/06 at 102.00 AAA 6,944,500
Bonds, Series 1996, Sinai Samaritan Medical Center, Inc. Project,
5.750%, 8/15/16 - MBIA Insured
45
Nuveen Insured Premium Income Municipal Fund 2 (NPX) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN (continued)
$ 5,000 Wisconsin Health and Educational Facilities Authority, 8/05 at 102.00 AAA $ 5,474,750
Revenue Bonds, Mercy Health System Corporation, Series 1995,
6.125%, 8/15/13 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
$ 759,768 Total Long-Term Investments (cost $730,247,731) - 147.1% 780,891,281
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 3.5% 18,983,263
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (50.6)% (268,900,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $530,974,544
====================================================================================================================
All of the bonds in the portfolio are either covered by
Original Issue Insurance, Secondary Market Insurance or
Portfolio Insurance, or are backed by an escrow or trust
containing sufficient U.S. Government or U.S. Government
agency securities, any of which ensure the timely payment of
principal and interest.
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares.
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other
call provisions at varying prices at later dates.
** Ratings (not covered by the report of independent auditors):
Using the higher of Standard & Poor's or Moody's rating.
See accompanying notes to financial statements.
46
Nuveen Insured Dividend Advantage Municipal Fund (NVG)
Portfolio of
INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 4.4%
$ 5,310 Athens, Alabama, Water and Sewer Revenue Warrants, 5/12 at 101.00 AAA $ 5,522,135
Series 2002, 5.300%, 5/01/32 - MBIA Insured
3,045 Hoover, Alabama, General Obligation Warrants, Series 2003, 3/12 at 101.00 AAA 3,160,984
5.000%, 3/01/20 - MBIA Insured
10,000 Jefferson County, Alabama, Sewer Revenue Capital Improvement 2/09 at 101.00 AAA 11,439,400
Warrants, Series 1999A, 5.375%, 2/01/36 (Pre-refunded to
2/01/09) - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
ALASKA - 3.4%
15,000 State of Alaska, International Airport System Revenue Bonds, 10/12 at 100.00 AAA 15,397,800
Series 2002B, 5.250%, 10/01/27 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 1.1%
5,000 Phoenix Civic Improvement Corporation, Arizona, Senior Lien 7/12 at 100.00 AAA 5,086,700
Airport Revenue Bonds, Series 2002B, 5.250%, 7/01/32
(Alternative Minimum Tax) - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 11.4%
10,000 State of California, General Obligation Veterans Welfare 12/08 at 101.00 A 10,395,700
Bonds, Series 1997BH, 5.400%, 12/01/14 (Alternative
Minimum Tax)
3,200 State of California, General Obligation Various Purpose Bonds, 9/10 at 100.00 AAA 3,398,592
5.250%, 9/01/17 - MBIA Insured
10,000 State of California, General Obligation Refunding Bonds, No Opt. Call AAA 10,144,400
Series 2002, 5.000%, 2/01/23 - MBIA Insured
3,000 State of California, General Obligation Veterans Welfare Bonds, 6/07 at 101.00 AAA 3,032,580
Series 2001BZ, 5.375%, 12/01/24 (Alternative Minimum
Tax) - MBIA Insured
7,935 Los Angeles, California, Certificates of Participation, Real 4/12 at 100.00 AAA 8,206,694
Property Acquisition Program, Series 2002, 5.300%, 4/01/32 -
AMBAC Insured
1,000 Los Angeles Convention and Exhibition Center Authority, 12/05 at 100.00 AAA 1,158,080
California, Certificates of Participation, Series 1985,
9.000%, 12/01/20 (Pre-refunded to 12/01/05)
7,500 Northern California Power Agency, Revenue Refunding Bonds, 7/08 at 101.00 AAA 7,647,900
Hydroelectric Project 1, Series 1998A, 5.200%, 7/01/32 -
MBIA Insured
2,320 Sacramento Municipal Utility District, California, Electric Revenue 8/11 at 100.00 AAA 2,499,104
Bonds, Series 2001P, 5.250%, 8/15/18 - FSA Insured
6,000 University of California, Multiple Purpose Projects, Revenue Bonds, 5/13 at 100.00 AAA 6,065,640
Series 2003A, 5.000%, 5/15/27 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 16.9%
11,600 Greater Orlando Aviation Authority, Florida, Airport Facilities 10/12 at 100.00 AAA 11,740,244
Revenue Bonds, Series 2002B, 5.125%, 10/01/21 (Alternative
Minimum Tax) - FSA Insured
6,000 JEA, Florida, Water and Sewer System Revenue Bonds, 4/07 at 100.00 AAA 6,331,440
Series 2002A, 5.500%, 10/01/41 - MBIA Insured
8,155 Lee County, Florida, Solid Waste System Revenue Refunding 10/11 at 100.00 Aaa 8,867,502
Bonds, Series 2001, 5.625%, 10/01/13 (Alternative Minimum
Tax) - MBIA Insured
15,000 Miami-Dade County School Board, Florida, Certificates of No Opt. Call AAA 16,568,550
Participation, Series 2003A, 5.000%, 8/01/08 (Mandatory
put 8/01/08) - MBIA Insured
Miami-Dade County, Florida, Aviation Revenue Bonds, Miami
International Airport, Series 2002:
7,165 5.625%, 10/01/15 (Alternative Minimum Tax) - FGIC Insured 10/12 at 100.00 AAA 7,831,202
5,600 5.750%, 10/01/16 (Alternative Minimum Tax) - FGIC Insured 10/12 at 100.00 AAA 6,132,952
10,000 5.125%, 10/01/21 (Alternative Minimum Tax) - FGIC Insured 10/12 at 100.00 AAA 10,149,700
2,000 5.250%, 10/01/22 (Alternative Minimum Tax) - FGIC Insured 10/12 at 100.00 AAA 2,044,920
8,400 Village Center Community Development District, Florida, 11/13 at 101.00 AAA 8,461,572
Recreational Revenue Bonds, Series 2003A, 5.000%, 11/01/32 -
MBIA Insured
47
Nuveen Insured Dividend Advantage Municipal Fund (NVG) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 0.4%
$ 1,695 Georgia Housing and Finance Agency, Single Family Mortgage 12/11 at 100.00 AAA $ 1,737,121
Bonds, 2002 Series B-2, 5.500%, 6/01/32 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 15.9%
19,185 Village of Bolingbrook, Illinois, General Obligation Bonds, 1/12 at 100.00 AAA 19,888,898
Series 2002A, 5.375%, 1/01/38 - FGIC Insured
5,000 City of Chicago, Illinois, General Obligation Bonds, Project 1/11 at 101.00 AAA 5,245,850
and Refunding Bonds, Series 2001A, 5.500%, 1/01/38 -
MBIA Insured
City of Chicago, Illinois, Chicago O'Hare International Airport,
Second Lien Passenger Facility Charge Revenue Bonds, Series
2001C:
4,250 5.500%, 1/01/16 (Alternative Minimum Tax) - AMBAC Insured 1/11 at 101.00 AAA 4,518,090
4,485 5.500%, 1/01/17 (Alternative Minimum Tax) - AMBAC Insured 1/11 at 101.00 AAA 4,739,703
4,730 5.500%, 1/01/18 (Alternative Minimum Tax) - AMBAC Insured 1/11 at 101.00 AAA 4,982,204
2,930 5.500%, 1/01/19 (Alternative Minimum Tax) - AMBAC Insured 1/11 at 101.00 AAA 3,070,054
3,000 City of Chicago, Illinois, Chicago-O'Hare International Airport, 1/12 at 100.00 AAA 3,229,290
General Airport Third Lien Revenue Refunding Bonds,
Series 2002A, 5.750%, 1/01/17 (Alternative Minimum Tax) -
MBIA Insured
12,765 City of Chicago, Illinois, Skyway Toll Bridge Revenue Bonds, 1/07 at 102.00 AAA 13,569,450
Series 1996, 5.500%, 1/01/23 - MBIA Insured
4,000 Town of Cicero, Cook County, Illinois, General Obligation 12/12 at 101.00 AAA 4,113,120
Corporate Purpose Bonds, Series 2002, 5.000%, 12/01/21 -
MBIA Insured
1,500 DuPage County Community School District 200, Wheaton, 10/13 at 100.00 Aaa 1,575,045
Illinois, General Obligation Bonds, Series 2003C,
5.250%, 10/01/22 - FSA Insured
5,000 State of Illinois, General Obligation Bonds, Illinois FIRST, 4/12 at 100.00 AAA 5,205,000
Series of April 2002, 5.250%, 4/01/23
2,700 University of Illinois, Certificates of Participation, Utility 8/11 at 100.00 AAA 2,770,740
Infrastructure Projects, Series 2001A, 5.000%, 8/15/20 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 16.5%
3,380 Evansville, Indiana, Sewage Works Revenue Bonds, Series 2003A 7/13 at 100.00 AAA 3,507,054
Refunding, 5.000%, 7/01/20 - AMBAC Insured
Indiana Bond Bank, Special Program Bonds, 2002 Series D,
Hendricks County Redevelopment District:
2,500 5.375%, 4/01/23 - AMBAC Insured 4/12 at 100.00 AAA 2,618,750
7,075 5.250%, 4/01/26 - AMBAC Insured 4/12 at 100.00 AAA 7,275,718
7,000 5.250%, 4/01/30 - AMBAC Insured 4/12 at 100.00 AAA 7,184,030
10,000 Indiana Health Facility Financing Authority, Hospital Revenue 7/12 at 100.00 AAA 10,258,300
Bonds, Marion General Hospital Project, Series 2002,
5.250%, 7/01/32 - AMBAC Insured
25,000 Indianapolis, Indiana, Local Public Improvement Bond Bank, 7/12 at 100.00 AAA 25,761,500
Series 2002A, Waterworks Project, 5.250%, 7/01/33 -
MBIA Insured
New Albany-Floyd County School Building Corporation, Indiana,
First Mortgage Bonds, Series 2002:
2,500 5.750%, 7/15/17 - FGIC Insured 7/12 at 100.00 AAA 2,806,100
3,810 5.750%, 7/15/20 - FGIC Insured 7/12 at 100.00 AAA 4,232,224
Northern Wells Community School Building Corporation, Wells
County, Indiana, First Mortgage Bonds, Series 2001:
420 5.250%, 1/15/19 - FGIC Insured 7/12 at 100.00 AAA 445,091
430 5.250%, 7/15/19 - FGIC Insured 7/12 at 100.00 AAA 455,688
1,675 5.400%, 7/15/23 - FGIC Insured 7/12 at 100.00 AAA 1,761,882
6,960 Valparaiso Middle Schools Building Corporation, Indiana, First 1/13 at 100.00 AAA 7,018,255
Mortgage Bonds, Series 2002 Refunding, 5.000%, 7/15/24 -
MBIA Insured
2,490 Whitley County Middle School Building Corporation, Columbia 7/13 at 100.00 AAA 2,623,937
City, Indiana, First Mortgage Bonds, Series 2003,
5.000%, 1/15/18 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 0.7%
3,085 City of New Orleans, Louisiana, General Obligation Bonds, 9/12 at 100.00 AAA 3,214,477
Series 2002 Refunding, 5.125%, 9/01/21 - MBIA Insured
48
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 2.4%
$ 10,000 Commonwealth of Massachusetts, Special Obligation Refunding No Opt. Call Aaa $10,952,600
Notes, Federal Highway Grant Anticipation Note Program,
Series 2003A, 5.000%, 12/15/13 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 2.0%
8,735 City of St. Louis, Missouri, Airport Revenue Bonds, 7/11 at 100.00 AAA 8,964,905
Series 2001A, Airport Development Program, 5.250%, 7/01/31 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 0.5%
Municipal Energy Agency of Nebraska, Power Supply System
Revenue Bonds, Series 2003A:
1,000 5.250%, 4/01/20 (WI, settling 11/05/03) - FSA Insured 4/13 at 100.00 AAA 1,066,110
1,000 5.250%, 4/01/21 (WI, settling 11/05/03) - FSA Insured 4/13 at 100.00 AAA 1,060,560
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 4.2%
9,810 Clark County School District, Nevada, General Obligation Bonds, 6/12 at 100.00 AAA 10,068,592
Series 2002C, 5.000%, 6/15/21 - MBIA Insured
8,750 Truckee Meadows Water Authority, Nevada, Water Revenue 7/11 at 100.00 AAA 9,004,538
Bonds, Series 2001A, 5.250%, 7/01/34 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 6.6%
20,000 Metropolitan Transportation Authority, New York, Transportation 11/12 at 100.00 AAA 20,195,200
Revenue Bonds, Series 2002A Refunding, 5.000%, 11/15/30 -
FSA Insured
10,000 Triborough Bridge and Tunnel Authority, New York, General 1/12 at 100.00 AAA 10,082,700
Purpose Revenue Bonds, Series 2001A, 5.000%, 1/01/32 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 0.6%
2,435 North Carolina Medical Care Commission, FHA-Insured 10/13 at 100.00 AAA 2,566,953
Mortgage Revenue Bonds, Betsy Johnson Regional Hospital
Project, Series 2003, 5.375%, 10/01/24 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 3.3%
State of Oregon, General Obligation Veterans Welfare Bonds,
2002 Series 82:
9,570 5.375%, 12/01/31 12/11 at 100.00 AA 9,773,937
5,465 5.500%, 12/01/42 12/11 at 100.00 AA 5,588,454
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 2.7%
4,500 Allegheny County, Pennsylvania, Airport Revenue Refunding No Opt. Call AAA 4,948,560
Bonds, Pittsburgh International Airport, Series 1997A,
5.750%, 1/01/13 (Alternative Minimum Tax) - MBIA Insured
5,000 Pennsylvania Higher Educational Facilities Authority, University 7/08 at 100.00 AAA 5,258,900
of Pennsylvania Revenue Bonds, Series 1998,
5.500%, 7/15/38 - MBIA Insured
1,000 Pennsylvania Higher Educational Facilities Authority, 11/13 at 100.00 AA 1,076,140
Lycoming College Revenue Bonds, Series 2003-AA2,
5.250%, 11/01/16 - RAAI Insured
1,000 State Public School Building Authority, Pennsylvania, Lease 6/13 at 100.00 AAA 1,016,330
Revenue Bonds, Philadelphia School District Project,
Series 2003, 5.000%, 6/01/23 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 0.8%
Greenville, South Carolina, Tax Increment Revenue Improvement
Bonds, Series 2003:
1,000 5.500%, 4/01/17 - MBIA Insured 4/13 at 100.00 AAA 1,108,830
2,300 5.000%, 4/01/21 - MBIA Insured 4/13 at 100.00 AAA 2,374,014
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 8.1%
10,000 Memphis and Shelby County Sports Authority, Inc., Tennessee, 11/12 at 100.00 AAA 10,162,900
Revenue Bonds, 2002 Series A, Memphis Arena Project,
5.125%, 11/01/28 - AMBAC Insured
11,000 Memphis and Shelby County Sports Authority, Inc., Tennessee, 11/12 at 100.00 AAA 11,177,540
Revenue Bonds, 2002 Series B, Memphis Arena Project,
5.125%, 11/01/29 - AMBAC Insured
15,195 Tennessee State School Bond Authority, Higher Educational 5/12 at 100.00 AAA 15,712,694
Facilities Bonds, Second Program, Series 2002A,
5.250%, 5/01/32 - FSA Insured
49
Nuveen Insured Dividend Advantage Municipal Fund (NVG) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 29.7%
$ 7,165 Arlington Independent School District, Tarrant County, Texas, 2/08 at 100.00 Aaa $ 7,187,928
General Obligation Bonds, Series 1998 Refunding,
4.750%, 2/15/21
3,500 Cities of Dallas and Fort Worth, Texas, Dallas-Ft. Worth 11/11 at 100.00 AAA 3,832,535
International Airport, Joint Revenue Refunding and
Improvement Bonds, Series 2001A, 5.750%, 11/01/13
(Alternative Minimum Tax) - FGIC Insured
10,000 Gainesville Hospital District, Texas, General Obligation 8/11 at 100.00 AAA 10,388,300
Limited Tax Bonds, Series 2002, 5.375%, 8/15/32 -
MBIA Insured
3,645 Galveston, Texas, General Obligation Bonds, Series 2001A No Opt. Call AAA 3,824,735
Refunding, 5.250%, 5/01/21 - AMBAC Insured
Harris County Health Facilities Development Corporation,
Texas, Thermal Utility Revenue Bonds,
TECO Project, Series 2003:
2,240 5.000%, 11/15/16 - MBIA Insured 11/13 at 100.00 AAA 2,363,894
2,355 5.000%, 11/15/17 - MBIA Insured 11/13 at 100.00 AAA 2,465,709
13,000 Houston Area Water Corporation, Texas, City of Houston Contract 3/12 at 100.00 AAA 13,177,710
Revenue Bonds, Northeast Water Purification Plant Project,
Series 2002, 5.125%, 3/01/32 - FGIC Insured
2,500 Houston Higher Education Finance Corporation, Texas, Revenue 11/09 at 101.00 AAA 2,605,100
Bonds, Rice University Project, Series 1999A,
5.375%, 11/15/29
4,345 San Antonio, Texas, Water System Senior Lien Revenue 5/12 at 100.00 AAA 4,767,942
Refunding Bonds, Series 2002, 5.500%, 5/15/17 - FSA Insured
9,145 State of Texas, General Obligation Bonds, Veterans Housing 6/12 at 100.00 Aa1 9,318,572
Assistance Program Fund II, 2002 Series A-1, 5.250%, 12/01/22
(Alternative Minimum Tax)
7,255 Texas Department of Housing and Community Affairs, 7/11 at 100.00 AAA 7,330,742
Residential Mortgage Revenue Bonds, 2001 Series A,
5.350%, 7/01/33 (Alternative Minimum Tax)
6,000 Texas Department of Housing and Community Affairs, 7/12 at 100.00 AAA 6,056,700
Residential Mortgage Revenue Bonds, 2002 Series A,
5.350%, 7/01/33 (Alternative Minimum Tax)
Texas Public Finance Authority, Revenue Financing System
Bonds, Series 2002, Texas Southern University:
3,520 5.125%, 11/01/20 - MBIA Insured 5/12 at 100.00 Aaa 3,670,938
3,520 5.125%, 11/01/21 - MBIA Insured 5/12 at 100.00 Aaa 3,650,803
8,905 Texas Department of Housing and Community Affairs, Single 3/12 at 100.00 AAA 9,098,417
Family Mortgage Bonds, Series 2002B, 5.550%, 9/01/33
(Alternative Minimum Tax) - MBIA Insured
Texas Student Housing Authority, Student Housing Revenue
Bonds, Austin Project, Senior Series 2001A:
9,400 5.375%, 1/01/23 - MBIA Insured 1/12 at 102.00 Aaa 9,958,266
11,665 5.500%, 1/01/33 - MBIA Insured 1/12 at 102.00 Aaa 12,416,459
5,000 Texas Water Development Board, State Revolving Fund, Senior 1/10 at 100.00 AAA 5,391,150
Lien Revenue Bonds, Series 1999B, 5.250%, 7/15/17
Williamson County, Texas, General Obligation Road Bonds,
Series 2002:
3,500 5.200%, 2/15/21 - FSA Insured 2/12 at 100.00 AAA 3,657,850
3,000 5.250%, 2/15/22 - FSA Insured 2/12 at 100.00 AAA 3,136,080
7,340 5.250%, 2/15/23 - FSA Insured 2/12 at 100.00 AAA 7,631,838
5,000 5.250%, 2/15/25 - FSA Insured 2/12 at 100.00 AAA 5,164,100
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 12.9%
7,675 Energy Northwest, Washington, Nuclear Project No. 1 Electric 7/12 at 100.00 AAA 8,484,099
Revenue Bonds, Series 2002A Refunding, 5.500%, 7/01/15 -
MBIA Insured
6,600 Energy Northwest, Washington, Columbia Generation Station 7/12 at 100.00 AAA 7,092,096
Electric Revenue Refunding Bonds, Series 2002B,
5.350%, 7/01/18 - FSA Insured
2,500 Port of Seattle, Washington, Revenue Bonds, Series 2002D 11/12 at 100.00 AAA 2,739,850
Refunding, 5.750%, 11/01/15 (Alternative Minimum Tax) -
FGIC Insured
3,255 Yelm Community Schools, Thurston and Pierce Counties, 6/13 at 100.00 Aaa 3,550,424
Washington, General Obligation Bonds, Series 2003,
5.250%, 12/01/16 - FSA Insured
50
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON (continued)
Washington State Economic Development Finance Authority,
Wastewater Revenue Bonds, LOTT Project, Series 2002:
$ 2,000 5.500%, 6/01/17 - AMBAC Insured 6/12 at 100.00 Aaa $ 2,187,940
4,325 5.125%, 6/01/22 - AMBAC Insured 6/12 at 100.00 Aaa 4,446,965
15,000 Washington Health Care Facilities Authority, Revenue Bonds, 8/13 at 102.00 AAA 15,141,450
Harrison Memorial Hospital, Series 1998, 5.000%, 8/15/28 -
AMBAC Insured
10,000 Washington State Health Care Facilities Authority, Revenue 10/11 at 100.00 Aaa 10,135,900
Bonds, Children's Hospital and Regional Medical Center,
Series 2001, 5.125%, 10/01/31 - AMBAC Insured
5,170 Whitman County School District No. 267, Pullman, Washington, 6/12 at 100.00 Aaa 5,342,885
General Obligation Bonds, Series 2002, 5.000%, 12/01/20 -
FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 4.5%
8,080 Wisconsin Housing and Economic Development Authority, Home 3/12 at 100.00 AA 8,210,250
Ownership Revenue Bonds, 2002 Series E, 5.250%, 9/01/22
(Alternative Minimum Tax)
11,950 State of Wisconsin, Transportation Revenue Bonds, 7/12 at 100.00 AAA 12,662,458
Series 2002-1 Refunding, 5.125%, 7/01/18 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
$ 657,110 Total Long-Term Investments (cost $653,305,321) - 149.0% 684,341,904
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.7% 8,026,142
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (50.7)% (233,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $459,368,046
====================================================================================================================
At least 80% of the Fund's net assets (including net assets
applicable 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
applicable 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) municipal bonds that are
rated, at the time of investment, within the four highest
grades (Baa or BBB or better by Moody's, S&P or Fitch) or
unrated but judged to be of comparable quality by the
Adviser.
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares.
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other
call provisions at varying prices at later dates.
** Ratings (not covered by the report of independent auditors):
Using the higher of Standard & Poor's or Moody's rating.
(WI) Security purchased on a when-issued basis.
See accompanying notes to financial statements.
51
Nuveen Insured Tax-Free Advantage Municipal Fund (NEA)
Portfolio of
INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 9.0%
$ 5,655 Colbert County-Northwest Health Care Facilities Authority, 6/13 at 101.00 Baa3 $ 5,331,477
Alabama, Helen Keller Hospital Revenue Bonds, Series 2003,
5.750%, 6/01/27
3,100 Huntsville Health Care Authority, Alabama, Revenue Bonds, 5/12 at 102.00 AAA 3,294,277
Series 1998A, 5.400%, 6/01/22 - MBIA Insured
2,000 Huntsville Public Building Authority, Alabama, Lease Revenue 10/12 at 101.00 AAA 2,017,820
Bonds, Municipal Justice and Public Safety Center, Series 2002,
5.000%, 10/01/29 - MBIA Insured
6,280 Jefferson County, Alabama, Sewer Revenue Capital Improvement 8/12 at 100.00 AAA 6,963,892
Warrants, Series 2002D, 5.000%, 2/01/32 (Pre-refunded
to 8/01/12) - FGIC Insured
1,750 Montgomery, Alabama, General Obligation Warrants, 5/12 at 101.00 AAA 1,806,788
Series 2003, 5.000%, 5/01/21 - AMBAC Insured
4,500 Sheffield, Alabama, Electric Revenue Warrants, Series 2003, 7/13 at 100.00 Aaa 4,767,030
5.500%, 7/01/29 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 3.8%
10,000 Maricopa County, Arizona, Pollution Control Corporation Revenue 11/12 at 100.00 AAA 10,092,900
Bonds, Arizona Public Service Company - Palo Verde Project,
Series 2002A, 5.050%, 5/01/29 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 29.8%
13,500 State of California, General Obligation Refunding Bonds, 4/12 at 100.00 AAA 13,892,445
Series 2002, 5.250%, 4/01/30 - XLCA Insured
26,300 California State Public Works Board, Department of General 12/12 at 100.00 AAA 26,576,413
Services, Lease Revenue Bonds, Capital East End Project,
Series 2002A, 5.000%, 12/01/27 - AMBAC Insured
2,910 Cathedral City Public Financing Authority, California, Tax 8/12 at 102.00 AAA 2,942,359
Allocation Bonds, Housing Set-Aside, Series 2002D,
5.000%, 8/01/26 - MBIA Insured
3,500 Cerritos Public Financing Authority, California, Tax Allocation 11/17 at 102.00 AAA 3,575,600
Revenue Bonds, Los Cerritos Redevelopment Projects,
Series 2002A, 5.000%, 11/01/24 - AMBAC Insured
2,500 Irvine Public Facilities and Infrastructure Authority, California, 3/04 at 103.00 AAA 2,508,500
Assessment Revenue Bonds, Series 2003C,
5.000%, 9/02/23 - AMBAC Insured
4,000 Montara Sanitary District, California, General Obligation 8/11 at 101.00 AAA 4,038,120
Bonds, Series 2003, 5.000%, 8/01/28 - FGIC Insured
2,000 Northern California Power Agency, Revenue Refunding Bonds, 7/08 at 101.00 AAA 2,011,680
Hydroelectric Project 1, Series 1998A, 5.000%, 7/01/28 -
MBIA Insured
Plumas County, California, Certificates of Participation,
Series 2003A, Capital Improvement Program:
1,130 5.250%, 6/01/19 - AMBAC Insured 6/13 at 101.00 AAA 1,220,965
1,255 5.250%, 6/01/21 - AMBAC Insured 6/13 at 101.00 AAA 1,338,420
1,210 Redding Joint Power Financing Authority, California, Lease 3/13 at 100.00 AAA 1,233,462
Revenue Bonds, Series 2003A, Capital Projects,
5.000%, 3/01/23 - AMBAC Insured
Sacramento Municipal Utility District, California, Electric
Revenue Bonds, Series 2003R:
3,750 5.000%, 8/15/28 - MBIA Insured 8/13 at 100.00 AAA 3,785,887
5,000 5.000%, 8/15/33 - MBIA Insured 8/13 at 100.00 AAA 5,024,600
1,500 San Diego Community College District, California, General 5/13 at 100.00 AAA 1,514,115
Obligation Bonds, Series 2003A, 5.000%, 5/01/28 -
FSA Insured
3,000 San Jose Redevelopment Agency, California, Tax Allocation 8/10 at 101.00 AAA 3,009,900
Bonds, Merged Area Redevelopment Project, Series 2002,
5.000%, 8/01/32 - MBIA Insured
1,055 Turlock Irrigation District, California, Certificates of 1/13 at 100.00 AAA 1,063,029
Participation, Series 2003A, 5.000%, 1/01/28 -
MBIA Insured
6,300 University of California, Multiple Purpose Projects, Revenue 5/13 at 100.00 AAA 6,330,744
Bonds, Series 2003A, 5.000%, 5/15/33 - AMBAC Insured
52
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 5.2%
Bowles Metropolitan District, Colorado, General Obligation
Bonds, Series 2003:
$ 4,300 5.500%, 12/01/23 - FSA Insured 12/13 at 100.00 AAA $ 4,654,363
3,750 5.500%, 12/01/28 - FSA Insured 12/13 at 100.00 AAA 4,009,088
5,250 Sand Creek Metropolitan District, Colorado, General Obligation 12/13 at 100.00 AAA 5,276,618
Bonds, Series 2003 Refunding, 5.000%, 12/01/31 -
XLCA Insured
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 1.1%
3,000 Pinellas County Health Facilities Authority, Florida, Revenue 5/13 at 100.00 A1 3,014,280
Bonds, Baycare Health System, Series 2003, 5.500%, 11/15/27
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 1.4%
3,825 Metropolitan Atlanta Rapid Transit Authority, Georgia, Sales 1/13 at 100.00 AAA 3,858,354
Tax Revenue Bonds, Second Indenture Series 2002,
5.000%, 7/01/32 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 1.4%
1,310 Cook County School District No. 100, Berwyn, Illinois, General 12/13 at 100.00 Aaa 1,390,526
Obligation Bonds, Series 2003B Refunding,
5.250%, 12/01/21 - FSA Insured
2,500 Illinois Health Facilities Authority, Revenue Bonds, Lake Forest 7/13 at 100.00 A- 2,483,150
Hospital, Series 2003, 5.250%, 7/01/23
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 8.7%
2,500 Evansville, Indiana, Sewage Works Revenue Bonds, Series 2003A 7/13 at 100.00 AAA 2,546,875
Refunding, 5.000%, 7/01/23 - AMBAC Insured
2,190 Indiana Bond Bank, Common School Fund Advance Purchase 8/13 at 100.00 AAA 2,276,374
Funding Bonds, Series 2003B, 5.000%,8/01/19 - MBIA Insured
1,000 Trustees of Indiana University, Indiana University Student Fee 8/13 at 100.00 AAA 1,021,210
Revenue Bonds, 2003 Series O, 5.000%, 8/01/22 -
FGIC Insured
IPS Multi-School Building Corporation, Indiana, First Mortgage
Bonds, Series 2003:
11,020 5.000%, 7/15/19 - MBIA Insured 7/13 at 100.00 AAA 11,488,350
6,000 5.000%, 7/15/20 - MBIA Insured 7/13 at 100.00 AAA 6,211,920
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 2.4%
6,250 Kansas Development Finance Authority, Revenue Bonds, 4/13 at 102.00 AAA 6,463,125
Kansas Board of Regents, Scientific Research and Development
Facilities Projects, Series 2003C, 5.000%, 10/01/22 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 0.5%
1,325 Commonwealth of Kentucky, State Property and Buildings 8/13 at 100.00 AAA 1,354,150
Commission, Project No. 77 Revenue and Refunding Bonds,
Series 2003, 5.000%, 8/01/23 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 2.2%
5,785 City of New Orleans, Louisiana, General Obligation Bonds, 12/12 at 100.00 AAA 6,026,813
Series 2002 Refunding, 5.300%, 12/01/27 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 5.3%
10,000 Massachusetts Bay Transportation Authority, Senior Sales Tax 7/12 at 100.00 AAA 10,097,400
Revenue Bonds, Series 2002A Refunding, 5.000%, 7/01/27 -
FGIC Insured
1,125 Massachusetts Development Finance Agency, Revenue Bonds, 9/13 at 100.00 A1 1,145,812
Middlesex School Project, Series 2003, 5.125%, 9/01/23
3,000 Massachusetts Turnpike Authority, Metropolitan Highway 1/07 at 102.00 AAA 3,005,880
System Revenue Bonds, 1997 Series A - Senior,
5.000%, 1/01/37 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 11.8%
6,130 Detroit, Michigan, Water Supply System Senior Lien Revenue 7/13 at 100.00 AAA 6,254,439
Bonds, Series 2003A, 5.000%, 7/01/23 - MBIA Insured
4,465 City of Detroit, Michigan, Water Supply System Senior Lien 7/13 at 100.00 AAA 4,583,546
Revenue Bonds, Series 2003C Refunding, 5.000%, 7/01/22 -
MBIA Insured
53
Nuveen Insured Tax-Free Advantage Municipal Fund (NEA) (continued)
Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN (continued)
$ 955 Grand Rapids Community College, Kent County, Michigan, 5/13 at 100.00 AAA $ 1,030,168
General Obligation Bonds, Series 2003 Refunding,
5.250%, 5/01/18 - AMBAC Insured
10,800 Michigan Strategic Fund, Resource Recovery Limited 12/12 at 100.00 AAA 11,142,900
Obligation Revenue Bonds, Detroit Edison Company,
Series 2002D Refunding, 5.250%, 12/15/32 - XLCA Insured
2,250 Romulus Community Schools, County of Wayne, State of 5/11 at 100.00 AAA 2,325,307
Michigan, General Obligation Bonds, Series 2001
Refunding, 5.250%, 5/01/25
6,500 Wayne County, Michigan, Limited Tax General Obligation, 12/11 at 101.00 AAA 6,549,270
Airport Hotel Revenue Bonds, Detroit Metropolitan Wayne
County Airport, Series 2001A, 5.000%, 12/01/30 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
MONTANA - 2.3%
6,105 Forsyth, Rosebud County, Montana, Pollution Control Revenue 3/13 at 101.00 AAA 6,141,325
Refunding Bonds, Puget Sound Energy, Series 2003A,
5.000%, 3/01/31 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 3.3%
5,000 Lincoln, Nebraska, Sanitary Sewer System Revenue Bonds, 6/13 at 100.00 AAA 5,059,150
Series 2003 Refunding, 5.000%, 6/15/28 - MBIA Insured
3,855 Nebraska Public Power District, General Revenue Bonds, 1/13 at 100.00 AAA 3,887,189
Series 2002B, 5.000%, 1/01/33 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 0.9%
2,315 Clark County, Nevada, Airport System Subordinated Lien Revenue 7/11 at 100.00 AAA 2,351,971
Bonds, Series 2001B, 5.200%, 7/01/31 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 9.4%
25,000 Metropolitan Transportation Authority, New York, Transportation 11/12 at 100.00 AAA 25,225,750
Revenue Bonds, Series 2002F Refunding, 5.000%, 11/15/31 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 3.3%
8,700 North Carolina Medical Care Commission, Revenue Bonds, 10/13 at 100.00 AA 8,928,288
Maria Pelham Medical Center, Series 2003, 5.375%, 10/01/33 -
RAAI Insured
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 3.5%
9,350 Oregon Health Sciences University, Revenue Bonds, 1/13 at 100.00 AAA 9,452,196
Series 2002A, 5.000%, 7/01/32 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 8.6%
3,000 Lehigh County General Purpose Authority, Pennsylvania, Hospital 8/13 at 100.00 BBB 2,900,340
Revenue Bonds, St. Luke's Hospital of Bethlehem, Series 2003,
5.375%, 8/15/33
2,000 Philadelphia, Pennsylvania, Gas Works Revenue Bonds, General 8/13 at 100.00 AAA 2,010,420
Ordinance, Fourth Series 1998, 5.000%, 8/01/32 - FSA Insured
5,000 City of Philadelphia, Pennsylvania, Water and Wastewater 8/07 at 102.00 AAA 5,068,650
Revenue Bonds, Series 1997A, 5.125%, 8/01/27 -
AMBAC Insured
13,000 State Public School Building Authority, Pennsylvania, Lease 6/13 at 100.00 AAA 13,092,950
Revenue Bonds, Philadelphia School District Project,
Series 2003, 5.000%, 6/01/33 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 7.9%
Greenville County School District, South Carolina, Installment
Purchase Revenue Bonds, Series 2003:
3,000 5.000%, 12/01/22 12/13 at 100.00 AA- 3,005,760
1,785 5.000%, 12/01/23 12/13 at 100.00 AA- 1,785,625
1,365 Myrtle Beach, South Carolina, Water and Sewer System Revenue 3/13 at 100.00 AAA 1,476,207
Bonds, Series 2003 Refunding, 5.375%, 3/01/19 - FGIC Insured
15,000 South Carolina Transportation Infrastructure Bank, Revenue 10/12 at 100.00 Aaa 15,112,050
Bonds, Series 2002A, 5.000%, 10/01/33 - AMBAC Insured
54
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 12.2%
$ 7,975 Fort Bend Independent School District, Fort Bend County, 8/10 at 100.00 AAA $ 8,013,120
Texas, General Obligation Bonds, Series 2000,
5.000%, 8/15/25
12,500 Grand Prairie Independent School District, Dallas County, Texas, 2/13 at 100.00 AAA 12,706,875
General Obligation Bonds, Series 2003, 5.125%, 2/15/31 -
FSA Insured
5,515 Houston, Texas, General Obligation Bonds, Series 2002 3/12 at 100.00 AAA 5,832,829
Refunding, 5.250%, 3/01/20 - MBIA Insured
5,850 Katy Independent School District, Harris Fort Bend, and 2/12 at 100.00 AAA 6,173,564
Waller Counties, Texas, General Obligation Bonds,
Series 2002A, 5.125%, 2/15/18
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 0.6%
1,500 Hampton, Virginia, Convention Center Revenue Bonds, 1/13 at 100.00 AAA 1,531,230
Series 2002, 5.125%, 1/15/28 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 9.1%
4,945 Broadway Office Properties, King County, Washington, Lease 12/12 at 100.00 AAA 4,950,143
Revenue Bonds, Washington Project, Series 2002,
5.000%, 12/01/31 - MBIA Insured
5,250 Public Utility District No. 1 of Chelan County, Washington, 7/12 at 100.00 AAA 5,295,308
Chelan Hydro Consolidated System Revenue Bonds,
Series 2002C, 5.125%, 7/01/33 - AMBAC Insured
2,135 Kitsap County Consolidated Housing Authority, Washington, 7/13 at 100.00 Aaa 2,160,172
Revenue Bonds, Bremerton Government Center Project,
Series 2003, 5.000%, 7/01/23 - MBIA Insured
1,935 Pierce County School District No. 343, Dieringer, Washington, 6/13 at 100.00 Aaa 2,097,850
General Obligation Bonds, Series 2003 Refunding,
5.250%, 12/01/17 - FSA Insured
9,670 State of Washington, General Obligation Bonds, Series 2003D, 6/13 at 100.00 AAA 9,962,904
5.000%, 12/01/21 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 1.2%
3,000 West Virginia State Building Commission, Lease Revenue Bonds, No Opt. Call AAA 3,280,830
Series 1998A Refunding, Regional Jail Project, 5.375%, 7/01/21 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 6.1%
4,750 Wisconsin Health and Educational Facilities Authority, Revenue 8/08 at 102.00 AAA 4,887,513
Bonds, Wausau Hospital Inc., Series 1998A Refunding,
5.125%, 8/15/20 - AMBAC Insured
3,000 Wisconsin Health and Educational Facilities Authority, Revenue No Opt. Call AAA 3,433,440
Bonds, Series 1992A, Meriter Hospital, Inc.,
6.000%, 12/01/22 - FGIC Insured
3,600 Wisconsin Health and Educational Facilities Authority, Revenue 8/13 at 100.00 A 3,380,472
Bonds, Wheaton Franciscan Services, Series 2003A,
5.125%, 8/15/33
4,605 Wisconsin Health and Educational Facilities Authority, Revenue 9/13 at 100.00 A- 4,628,482
Bonds, Franciscan Sisters of Christian Health Care Ministry,
Series 2003A, 5.875%, 9/01/33
------------------------------------------------------------------------------------------------------------------------------------
$ 398,130 Total Long-Term Investments (cost $398,679,247) - 151.0% 406,382,944
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.5% 6,729,443
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (53.5)% (144,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $269,112,387
====================================================================================================================
At least 80% of the Fund's net assets (including net assets
applicable 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
applicable 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) municipal bonds that are
rated, at the time of investment, within the four highest
grades (Baa or BBB or better by Moody's, S&P or Fitch) or
unrated but judged to be of comparable quality by the
Adviser.
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares.
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other
call provisions at varying prices at later dates.
** Ratings (not covered by the report of independent auditors):
Using the higher of Standard & Poor's or Moody's rating.
See accompanying notes to financial statements.
55
Statement of
ASSETS AND LIABILITIES October 31, 2003
INSURED INSURED INSURED
INSURED INSURED PREMIER PREMIUM DIVIDEND TAX-FREE
QUALITY OPPORTUNITY INSURED INCOME INCOME 2 ADVANTAGE ADVANTAGE
(NQI) (NIO) (NIF) (NPX) (NVG) (NEA)
------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at market value
(cost $841,952,939, $1,789,468,672,
$425,205,273, $730,247,731,
$653,305,321 and $398,679,247,
respectively) $899,334,120 $1,930,364,152 $456,817,685 $780,891,281 $684,341,904 $406,382,944
Cash -- 287,186 621,390 1,765,136 289,399 676,120
Receivables:
Interest 12,825,106 30,783,815 7,709,805 13,694,058 10,117,516 6,348,311
Investments sold 4,798,116 14,117,073 115,180 4,258,848 -- --
Other assets 47,095 80,231 17,289 42,786 24,435 6,907
------------------------------------------------------------------------------------------------------------------------------------
Total assets 917,004,437 1,975,632,457 465,281,349 800,652,109 694,773,254 413,414,282
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft 181,468 -- -- -- -- --
Payable for investments purchased -- 6,100,993 -- -- 2,085,070 --
Accrued expenses:
Management fees 484,135 1,018,982 250,022 424,083 196,504 111,443
Organization and offering costs -- -- -- -- -- 5,000
Other 217,555 387,777 112,049 337,682 108,337 179,330
Preferred share dividends payable 19,361 37,972 7,586 15,800 15,297 6,122
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 902,519 7,545,724 369,657 777,565 2,405,208 301,895
------------------------------------------------------------------------------------------------------------------------------------
Preferred shares, at
liquidation value 318,000,000 680,000,000 161,000,000 268,900,000 233,000,000 144,000,000
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to
Common shares $598,101,918 $1,288,086,733 $303,911,692 $530,974,544 $459,368,046 $269,112,387
====================================================================================================================================
Common shares outstanding 38,051,042 81,060,946 19,371,141 37,292,863 29,807,822 18,507,847
====================================================================================================================================
Net asset value per Common
share outstanding (net assets
applicable to Common
shares, divided by Common
shares outstanding) $ 15.72 $ 15.89 $ 15.69 $ 14.24 $ 15.41 $ 14.54
====================================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF:
------------------------------------------------------------------------------------------------------------------------------------
Common shares, $.01 par value
per share $ 380,510 $ 810,609 $ 193,711 $ 372,929 $ 298,078 $ 185,078
Paid-in surplus 530,579,588 1,127,616,209 268,677,643 490,981,637 423,486,894 261,300,467
Undistributed (Overdistribution of)
net investment income 7,882,002 16,782,480 3,050,407 5,784,342 2,280,637 (180,848)
Accumulated net realized gain
(loss) from investments 1,878,637 1,981,955 377,519 (16,807,915) 2,265,854 103,993
Net unrealized appreciation
of investments 57,381,181 140,895,480 31,612,412 50,643,551 31,036,583 7,703,697
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to
Common shares $598,101,918 $1,288,086,733 $303,911,692 $530,974,544 $459,368,046 $269,112,387
====================================================================================================================================
Authorized shares:
Common 200,000,000 200,000,000 200,000,000 Unlimited Unlimited Unlimited
Preferred 1,000,000 1,000,000 1,000,000 Unlimited Unlimited Unlimited
====================================================================================================================================
See accompanying notes to financial statements.
56
Statement of
OPERATIONS Year Ended October 31, 2003
INSURED INSURED INSURED
INSURED INSURED PREMIER PREMIUM DIVIDEND TAX-FREE
QUALITY OPPORTUNITY INSURED INCOME INCOME 2 ADVANTAGE ADVANTAGE
(NQI) (NIO) (NIF) (NPX) (NVG) (NEA)*
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $49,005,308 $101,120,686 $24,064,314 $41,860,523 $34,133,654 $16,796,072
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 5,746,494 12,056,807 2,960,010 5,023,477 4,365,615 2,319,452
Preferred shares - auction fees 802,763 1,716,149 405,689 661,155 574,916 278,916
Preferred shares - dividend
disbursing agent fees 50,000 70,000 30,000 50,000 30,000 15,780
Shareholders' servicing agent fees
and expenses 132,841 213,403 52,429 80,241 10,174 5,542
Custodian's fees and expenses 199,461 427,011 114,216 184,146 164,105 82,595
Directors'/Trustees' fees
and expenses 12,513 24,426 5,753 11,844 11,187 5,962
Professional fees 32,157 61,225 18,750 24,978 29,184 19,050
Shareholders' reports - printing
and mailing expenses 60,970 116,978 37,998 48,620 109,994 65,510
Stock exchange listing fees 15,892 31,000 15,602 15,742 2,270 1,371
Investor relations expense 96,115 202,491 57,503 97,455 90,221 32,699
Portfolio insurance expense 37,227 42,511 -- 13,097 -- --
Other expenses 46,827 81,932 31,227 36,766 18,891 6,255
------------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian
fee credit and
expense reimbursement 7,233,260 15,043,933 3,729,177 6,247,521 5,406,557 2,833,132
Custodian fee credit (30,261) (87,236) (33,888) (58,338) (15,279) (34,962)
Expense reimbursement -- -- -- -- (2,080,476) (1,165,162)
------------------------------------------------------------------------------------------------------------------------------------
Net expenses 7,202,999 14,956,697 3,695,289 6,189,183 3,310,802 1,633,008
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 41,802,309 86,163,989 20,369,025 35,671,340 30,822,852 15,163,064
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
FROM INVESTMENTS
Net realized gain
from investments 1,876,817 2,436,868 398,323 4,868,689 2,261,496 103,646
Change in net unrealized
appreciation (depreciation)
of investments (4,019,790) 11,623,684 2,116,009 (3,467,246) 2,080,176 7,703,697
------------------------------------------------------------------------------------------------------------------------------------
Net gain from investments (2,142,973) 14,060,552 2,514,332 1,401,443 4,341,672 7,807,343
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
From net investment income (2,683,386) (5,618,357) (1,427,461) (2,405,892) (1,986,953) (1,000,298)
From accumulated net realized
gains from investments (433,291) (990,259) (66,215) -- (389,279) --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Preferred shareholders (3,116,677) (6,608,616) (1,493,676) (2,405,892) (2,376,232) (1,000,298)
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
applicable to Common shares
from operations $36,542,659 $ 93,615,925 $21,389,681 $34,666,891 $32,788,292 $21,970,109
====================================================================================================================================
* For the period November 22, 2002 (commencement of operations) through
October 31, 2003. See accompanying notes to financial statements.
57
Statement of
CHANGES IN NET ASSETS
INSURED QUALITY (NQI) INSURED OPPORTUNITY (NIO)
--------------------------------- --------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
10/31/03 10/31/02 10/31/03 10/31/02
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 41,802,309 $ 42,568,954 $ 86,163,989 $ 93,065,833
Net realized gain from investments 1,876,817 4,974,138 2,436,868 11,512,148
Change in net unrealized appreciation (depreciation)
of investments (4,019,790) (3,800,192) 11,623,684 (10,056,251)
Distributions to Preferred Shareholders:
From net investment income (2,683,386) (4,177,031) (5,618,357) (8,962,116)
From accumulated net realized gains from investments (433,291) (252,858) (990,259) (425,567)
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable
to Common shares from operations 36,542,659 39,313,011 93,615,925 85,134,047
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (37,979,535) (34,809,135) (78,840,403) (74,985,371)
From accumulated net realized gains from investments (4,511,581) (824,876) (10,041,988) (1,454,843)
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to Common shares
from distributions to Common shareholders (42,491,116) (35,634,011) (88,882,391) (76,440,214)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Common shares:
Net proceeds from sale of shares -- -- -- --
Net proceeds from shares issued to shareholders
due to reinvestment of distributions 2,555,277 817,396 -- --
Preferred shares offering costs -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable to Common shares
from capital share transactions 2,555,277 817,396 -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable to Common shares (3,393,180) 4,496,396 4,733,534 8,693,833
Net assets applicable to Common shares at the
beginning of year 601,495,098 596,998,702 1,283,353,199 1,274,659,366
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares at the end of year $598,101,918 $601,495,098 $1,288,086,733 $1,283,353,199
====================================================================================================================================
Undistributed (Overdistribution of) net investment income
at the end of year $ 7,882,002 $ 6,743,927 $ 16,782,480 $ 15,148,385
====================================================================================================================================
See accompanying notes to financial statements.
58
PREMIER INSURED INSURED PREMIUM
INCOME (NIF) INCOME 2 (NPX)
--------------------------------- --------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
10/31/03 10/31/02 10/31/03 10/31/02
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 20,369,025 $ 21,949,356 $ 35,671,340 $ 36,821,783
Net realized gain from investments 398,323 1,473,037 4,868,689 5,701,469
Change in net unrealized appreciation (depreciation)
of investments 2,116,009 (2,260,720) (3,467,246) 159,715
Distributions to Preferred Shareholders:
From net investment income (1,427,461) (2,181,015) (2,405,892) (3,630,320)
From accumulated net realized gains from investments (66,215) -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable
to Common shares from operations 21,389,681 18,980,658 34,666,891 39,052,647
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (18,862,625) (18,123,654) (32,051,466) (30,549,239)
From accumulated net realized gains from investments (674,649) -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to Common shares
from distributions to Common shareholders (19,537,274) (18,123,654) (32,051,466) (30,549,239)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Common shares:
Net proceeds from sale of shares -- -- -- --
Net proceeds from shares issued to shareholders
due to reinvestment of distributions 937,964 610,174 559,464 --
Preferred shares offering costs -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable to Common shares
from capital share transactions 937,964 610,174 559,464 --
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable to Common shares 2,790,371 1,467,178 3,174,889 8,503,408
Net assets applicable to Common shares at the
beginning of period 301,121,321 299,654,143 527,799,655 519,296,247
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares at the
end of period $303,911,692 $301,121,321 $530,974,544 $527,799,655
====================================================================================================================================
Undistributed (Overdistribution of) net investment income
at the end of period $ 3,050,407 $ 2,973,772 $ 5,784,342 $ 4,646,374
====================================================================================================================================
See accompanying notes to financial statements.
59
Statement of
CHANGES IN NET ASSETS (continued)
INSURED DIVIDEND INSURED TAX-FREE
ADVANTAGE (NVG) ADVANTAGE (NEA)
---------------------------- -----------------
FOR THE FOR THE
PERIOD PERIOD
3/25/02 11/22/02
(COMMENCEMENT (COMMENCEMENT
YEAR OF OPERATIONS) OF OPERATIONS)
ENDED THROUGH THROUGH
10/31/03 10/31/02 10/31/03
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 30,822,852 $ 16,506,478 $ 15,163,064
Net realized gain from investments 2,261,496 3,519,698 103,646
Change in net unrealized appreciation (depreciation) of investments 2,080,176 28,956,407 7,703,697
Distributions to Preferred Shareholders:
From net investment income (1,986,953) (1,473,247) (1,000,298)
From accumulated net realized gains from investments (389,279) -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable
to Common shares from operations 32,788,292 47,509,336 21,970,109
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (27,721,277) (13,860,480) (14,343,267)
From accumulated net realized gains from investments (3,132,797) -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to Common shares
from distributions to Common shareholders (30,854,074) (13,860,480) (14,343,267)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Common shares:
Net proceeds from sale of shares (1,575) 426,270,921 264,457,500
Net proceeds from shares issued to shareholders
due to reinvestment of distributions -- 12,436 12,612
Preferred shares offering costs 3,032 (2,600,117) (3,084,842)
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable to Common shares
from capital share transactions 1,457 423,683,240 261,385,270
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable to Common shares 1,935,675 457,332,096 269,012,112
Net assets applicable to Common shares at the beginning of period 457,432,371 100,275 100,275
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares at the end of period $459,368,046 $457,432,371 $269,112,387
====================================================================================================================================
Undistributed (Overdistribution of) net investment income at the end of period $ 2,280,637 $ 1,172,751 $ (180,848)
====================================================================================================================================
See accompanying notes to financial statements.
60
Notes to
FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The National Funds (the "Funds") covered in this report and their corresponding
Common share stock exchange symbols are Nuveen Insured Quality Municipal Fund,
Inc. (NQI), Nuveen Insured Municipal Opportunity Fund, Inc. (NIO), Nuveen
Premier Insured Municipal Income Fund, Inc. (NIF), Nuveen Insured Premium Income
Municipal Fund 2 (NPX), Nuveen Insured Dividend Advantage Municipal Fund (NVG)
and Nuveen Insured Tax-Free Advantage Municipal Fund (NEA). Common shares of
Insured Quality (NQI), Insured Opportunity (NIO), Premier Insured Income (NIF)
and Insured Premium Income 2 (NPX) are traded on the New York Stock Exchange
while Common shares of Insured Dividend Advantage (NVG) and Insured Tax-Free
Advantage (NEA) are traded on the American Stock Exchange. The Funds are
registered under the Investment Company Act of 1940, as amended, as closed-end,
diversified management investment companies.
Prior to the commencement of operations of Insured Dividend Advantage (NVG) and
Insured Tax-Free Advantage (NEA), each Fund had no operations other than those
related to organizational matters, the initial capital contribution of $100,275
per Fund by Nuveen Advisory Corp. (the "Adviser"), a wholly owned subsidiary of
Nuveen Investments, Inc. (formerly, The John Nuveen Company), and the recording
of the organization expenses ($11,500 per Fund) and their reimbursement by
Nuveen Investments, LLC (formerly, Nuveen Investments), also a wholly owned
subsidiary of Nuveen Investments, Inc.
Each Fund seeks to provide current income exempt from regular federal income
tax, and in the case of Insured Tax-Free Advantage (NEA) the alternative minimum
tax applicable to individuals, by investing primarily in a diversified portfolio
of municipal obligations issued by state and local government authorities.
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements in accordance with
accounting principles generally accepted in the United States.
Securities Valuation
The prices of municipal bonds in each Fund's investment portfolio are provided
by a pricing service approved by the Fund's Board of Directors/Trustees. When
price quotes are not readily available (which is usually the case for municipal
securities), the pricing service establishes fair market value based on yields
or prices of municipal bonds of comparable quality, type of issue, coupon,
maturity and rating, indications of value from securities dealers, evaluation of
anticipated cash flows or collateral and general market conditions. If it is
determined that market prices for a security are unavailable or inappropriate,
the Board of Directors/Trustees of the Funds, or its designee, may establish a
fair value for the security. Temporary investments in securities that have
variable rate and demand features qualifying them as short-term securities are
valued at amortized cost, which approximates market value.
Securities Transactions
Securities transactions are recorded on a trade date basis. Realized gains and
losses from such transactions are determined on the specific identification
method. Securities purchased or sold on a when-issued or delayed delivery basis
may have extended settlement periods. The securities so purchased are subject to
market fluctuation during this period. The Funds have instructed the custodian
to segregate assets with a current value at least equal to the amount of the
when-issued and delayed delivery purchase commitments. At October 31, 2003,
Insured Dividend Advantage (NVG) had outstanding when-issued purchase
commitments of $2,085,070. There were no such outstanding purchase commitments
in any of the other Funds.
Investment Income
Interest income, which includes the amortization of premiums and accretion of
discounts for financial reporting purposes, is recorded on an accrual basis.
Federal Income Taxes
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund
intends to comply with the requirements of the Internal Revenue Code applicable
to regulated investment companies and to distribute all of its net investment
income to its shareholders. Therefore, no federal income tax provision is
required. Furthermore, each Fund intends to satisfy conditions which will enable
interest from municipal securities, which is exempt from regular federal income
tax, and in the case of Insured Tax-Free Advantage (NEA) the alternative minimum
tax applicable to individuals, to retain such tax-exempt status when distributed
to shareholders of the Funds. All monthly tax-exempt income dividends paid
during the fiscal year ended October 31, 2003, have been designated Exempt
Interest Dividends
61
Notes to
FINANCIAL STATEMENTS (continued)
Dividends and Distributions to Common Shareholders
Dividends from tax-exempt net investment income are declared monthly. Net
realized capital gains and/or market discount from investment transactions, if
any, are distributed to shareholders not less frequently than annually.
Furthermore, capital gains are distributed only to the extent they exceed
available capital loss carryforwards.
Distributions to Common shareholders of tax-exempt net investment income, net
realized capital gains and/or market discount, if any, are recorded on the
ex-dividend date. The amount and timing of distributions are determined in
accordance with federal income tax regulations, which may differ from accounting
principles generally accepted in the United States.
Preferred Shares
The Funds have issued and outstanding $25,000 stated value Preferred shares.
Each Fund's Preferred shares are issued in more than one Series. The dividend
rate on each Series may change every seven days, as set pursuant to a dutch
auction process by the auction agent, and is payable at or near the end of each
rate period. The number of Preferred shares outstanding, by Series and in total,
for each Fund is as follows:
PREMIER INSURED INSURED INSURED
INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE
QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE
(NQI) (NIO) (NIF) (NPX) (NVG) (NEA)
---------------------------------------------------------------------------------------------------------
Number of shares:
Series M 2,600 4,000 -- 2,080 3,160 --
Series T 2,600 4,000 -- 2,200 3,080 2,880
Series W 2,600 4,000 840 2,080 -- 2,880
Series W2 -- 3,200 -- -- -- --
Series TH 2,320 4,000 2,800 2,200 3,080 --
Series TH2 -- 4,000 -- -- -- --
Series F 2,600 4,000 2,800 2,196 -- --
---------------------------------------------------------------------------------------------------------
Total 12,720 27,200 6,440 10,756 9,320 5,760
=========================================================================================================
Effective January 17, 2003, Insured Tax-Free Advantage (NEA) issued 2,880 Series
T and 2,880 Series W, $25,000 stated value Preferred shares.
Insurance
Insured Quality (NQI), Insured Opportunity (NIO), Premier Insured Income (NIF)
and Insured Premium Income 2 (NPX) invest in municipal securities which are
either covered by insurance or are backed by an escrow or trust account
containing sufficient U.S. Government or U.S. Government agency securities, both
of which ensure the timely payment of principal and interest.
Insured Dividend Advantage (NVG) and Insured Tax-Free Advantage (NEA) invest at
least 80% of their net assets (including net assets applicable to Preferred
shares) in municipal securities that are covered by insurance. Each Fund may
also invest up to 20% of its net assets (including net assets applicable 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) municipal bonds that are rated, at the time of investment,
within the four highest grades (Baa or BBB or better by Moody's, S&P or Fitch)
or unrated but judged to be of comparable quality by the Adviser.
62
Each insured municipal security is covered by Original Issue Insurance,
Secondary Market Insurance or Portfolio Insurance. Such insurance does not
guarantee the market value of the municipal securities or the value of the
Funds' Common shares. Original Issue Insurance and Secondary Market Insurance
remain in effect as long as the municipal securities covered thereby remain
outstanding and the insurer remains in business, regardless of whether the Funds
ultimately dispose of such municipal securities. Consequently, the market value
of the municipal securities covered by Original Issue Insurance or Secondary
Market Insurance may reflect value attributable to the insurance. Portfolio
Insurance is effective only while the municipal securities are held by the
Funds. Accordingly, neither the prices used in determining the market value of
the underlying municipal securities nor the Common share net asset value of the
Funds include value, if any, attributable to the Portfolio Insurance. Each
policy of the Portfolio Insurance does, however, give the Funds the right to
obtain permanent insurance with respect to the municipal security covered by the
Portfolio Insurance policy at the time of its sale.
Derivative Financial Instruments
The Funds may invest in certain derivative financial instruments including
futures, forward, swap and option contracts, and other financial instruments
with similar characteristics. Although the Funds are authorized to invest in
such financial instruments, and may do so in the future, they did not make any
such investments during the fiscal year ended October 31, 2003.
Custodian Fee Credit
Each Fund has an arrangement with the custodian bank whereby certain custodian
fees and expenses are reduced by credits earned on each Fund's cash on deposit
with the bank. Such deposit arrangements are an alternative to overnight
investments.
Offering Costs
Nuveen Investments, LLC has agreed to pay all Common share offering costs (other
than the sales load) that exceed $.03 per Common share for Insured Dividend
Advantage (NVG) and Insured Tax-Free Advantage (NEA). Insured Dividend
Advantage's (NVG) and Insured Tax-Free Advantage's (NEA) share of Common share
offering costs ($615,654 and $555,000, respectively) were recorded as a
reduction of the proceeds from the sale of Common shares.
Costs incurred by Insured Dividend Advantage (NVG) and Insured Tax-Free
Advantage (NEA) in connection with their offering of Preferred shares
($2,597,085 and $3,084,842, respectively) were recorded as a reduction to
paid-in surplus.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of increases and
decreases in net assets applicable to Common shares from operations during the
reporting period. Actual results may differ from those estimates.
2. FUND SHARES
Transactions in Common and Preferred shares were as follows:
INSURED INSURED PREMIER INSURED
QUALITY (NQI) OPPORTUNITY (NIO) INCOME (NIF)
--------------------- ---------------------- ---------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
10/31/03 10/31/02 10/31/03 10/31/02 10/31/03 10/31/02
---------------------------------------------------------------------------------------------------------
Common shares:
Shares sold -- -- -- -- -- --
Shares issued to shareholders
due to reinvestment
of distributions 156,328 51,548 -- -- 57,779 39,202
---------------------------------------------------------------------------------------------------------
156,328 51,548 -- -- 57,779 39,202
=========================================================================================================
Preferred shares sold -- -- -- -- -- --
=========================================================================================================
63
Notes to
FINANCIAL STATEMENTS (continued)
INSURED INSURED INSURED
PREMIUM INCOME 2 (NPX) DIVIDEND ADVANTAGE (NVG) TAX-FREE ADVANTAGE (NEA)
---------------------- ------------------------ ------------------------
FOR THE FOR THE
PERIOD PERIOD
3/25/02 11/22/02
(COMMENCEMENT (COMMENCEMENT
YEAR YEAR YEAR OF OPERATIONS) OF OPERATIONS)
ENDED ENDED ENDED THROUGH THROUGH
10/31/03 10/31/02 10/31/03 10/31/02 10/31/03
-----------------------------------------------------------------------------------------------------------
Common shares:
Shares sold -- -- -- 29,800,000 18,500,000
Shares issued to shareholders
due to reinvestment
of distributions 38,904 -- -- 822 847
-----------------------------------------------------------------------------------------------------------
38,904 -- -- 29,800,822 18,500,847
===========================================================================================================
Preferred shares sold -- -- -- 9,320 5,760
===========================================================================================================
3. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of investments in long-term municipal
securities during the fiscal year ended October 31, 2003, were as follows:
PREMIER INSURED INSURED INSURED
INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE
QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE
(NQI) (NIO) (NIF) (NPX) (NVG) (NEA)*
-------------------------------------------------------------------------------------------------------------
Purchases $119,890,993 $374,582,677 $117,785,020 $229,788,119 $159,490,051 $655,485,705
Sales and maturities 147,254,224 387,201,969 106,157,405 220,200,166 158,334,979 256,591,743
=============================================================================================================
* For the period November 22, 2002 (commencement of operations) through
October 31, 2003.
4. INCOME TAX INFORMATION
The following information is presented on an income tax basis. Differences
between amounts for financial statement and federal income tax purposes are
primarily due to timing differences in recognizing income on taxable market
discount securities and timing differences in recognizing certain gains and
losses on security transactions.
At October 31, 2003, the cost of investments were as follows:
PREMIER INSURED INSURED INSURED
INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE
QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE
(NQI) (NIO) (NIF) (NPX) (NVG) (NEA)
---------------------------------------------------------------------------------------------------------------
Cost of investments $841,542,409 $1,789,063,044 $425,192,858 $730,237,702 $653,243,130 $398,672,025
===============================================================================================================
64
Gross unrealized appreciation and gross unrealized depreciation of investments
at October 31, 2003, were as follows:
PREMIER INSURED INSURED INSURED
INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE
QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE
(NQI) (NIO) (NIF) (NPX) (NVG) (NEA)
-------------------------------------------------------------------------------------------------------------
Gross unrealized:
Appreciation $58,181,730 $142,812,042 $31,682,018 $51,219,451 $31,265,766 $7,998,469
Depreciation (390,019) (1,510,934) (57,191) (565,872) (166,992) (287,550)
-------------------------------------------------------------------------------------------------------------
Net unrealized appreciation
of investments $57,791,711 $141,301,108 $31,624,827 $50,653,579 $31,098,774 $7,710,919
=============================================================================================================
The tax components of undistributed net investment income and net realized gains
at October 31, 2003, were as follows:
PREMIER INSURED INSURED INSURED
INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE
QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE
(NQI) (NIO) (NIF) (NPX) (NVG) (NEA)
-----------------------------------------------------------------------------------------------------------------------
Undistributed net tax-exempt income $10,441,828 $22,381,199 $4,603,021 $8,407,682 $4,542,562 $1,252,401
Undistributed net ordinary income * 264,316 78,388 -- 66,600 2,266,382 104,003
Undistributed net long-term capital gains 1,878,637 2,503,130 398,819 -- 758 --
=======================================================================================================================
* Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
The tax character of distributions paid during the fiscal years ended October
31, 2003 and October 31, 2002, was designated for purposes of the dividends paid
deduction as follows:
PREMIER INSURED INSURED INSURED
INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE
QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE
2003 (NQI) (NIO) (NIF) (NPX) (NVG) (NEA)
------------------------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt
income $40,502,631 $84,020,174 $20,270,539 $34,382,914 $29,729,306 $13,903,084
Distributions from net ordinary income * 538,152 410,238 22,665 -- 3,522,076 --
Distributions from net long-term
capital gains 4,406,720 11,032,247 740,863 -- -- --
========================================================================================================================
PREMIER INSURED INSURED
INSURED INSURED INSURED PREMIUM DIVIDEND
QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE
2002 (NQI) (NIO) (NIF) (NPX) (NVG)
-----------------------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt income $38,550,143 $83,471,540 $20,196,415 $34,005,278 $12,987,249
Distributions from net ordinary income * 123,801 5,439 -- -- --
Distributions from net long-term capital gains 1,077,734 1,880,410 -- -- --
=======================================================================================================================
* Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
At October 31, 2003, Insured Premium Income 2 (NPX) had an unused capital loss
carryforward of $16,777,857 available for federal income tax purposes to be
applied against future capital gains, if any. If not applied $1,449,876 and
$15,327,981 of the carryforward will expire in 2004 and 2008, respectively.
65
Notes to
FINANCIAL STATEMENTS (continued)
5. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the Funds' (excluding Insured Dividend Advantage (NVG) and Insured
Tax-Free Advantage (NEA)) investment management agreements with the Adviser,
each Fund pays an annual management fee, payable monthly, at the rates set forth
below, which are based upon the average daily net assets (including net assets
attributable to Preferred shares) of each Fund as follows:
AVERAGE DAILY NET ASSETS (INCLUDING NET ASSETS
ATTRIBUTABLE TO PREFERRED SHARES) MANAGEMENT FEE
--------------------------------------------------------------------------------
For the first $125 million .6500%
For the next $125 million .6375
For the next $250 million .6250
For the next $500 million .6125
For the next $1 billion .6000
For the next $3 billion .5875
For net assets over $5 billion .5750
================================================================================
Under Insured Dividend Advantage's (NVG) and Insured Tax-Free Advantage's (NEA)
investment management agreements with the Adviser, each Fund pays an annual
management fee, payable monthly, at the rates set forth below, which are based
upon the average daily net assets (including net assets attributable to
Preferred shares) of each Fund as follows:
AVERAGE DAILY NET ASSETS (INCLUDING NET ASSETS
ATTRIBUTABLE TO PREFERRED SHARES) MANAGEMENT FEE
--------------------------------------------------------------------------------
For the first $125 million .6500%
For the next $125 million .6375
For the next $250 million .6250
For the next $500 million .6125
For the next $1 billion .6000
For net assets over $2 billion .5750
================================================================================
The management fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Funds pay no
compensation directly to those of its Directors/Trustees who are affiliated with
the Adviser or to their officers, all of whom receive remuneration for their
services to the Funds from the Adviser or its affiliates.
For the first ten years of Insured Dividend Advantage's (NVG) operations, the
Adviser has agreed to reimburse the Fund, as a percentage of average daily net
assets (including net assets attributable to Preferred shares), for fees and
expenses in the amounts, and for the time periods set forth below:
YEAR ENDING YEAR ENDING
MARCH 31, MARCH 31,
--------------------------------------------------------------------------------
2002* .30% 2008 .25%
2003 .30 2009 .20
2004 .30 2010 .15
2005 .30 2011 .10
2006 .30 2012 .05
2007 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Insured Dividend Advantage (NVG) for any
portion of its fees and expenses beyond March 31, 2012.
66
For the first eight years of Insured Tax-Free Advantage's (NEA) operations, the
Adviser has agreed to reimburse the Fund, as a percentage of average daily net
assets (including net assets attributable to Preferred shares), for fees and
expenses in the amounts, and for the time periods set forth below:
YEAR ENDING YEAR ENDING
NOVEMBER 30, NOVEMBER 30,
--------------------------------------------------------------------------------
2002* .32% 2007 .32%
2003 .32 2008 .24
2004 .32 2009 .16
2005 .32 2010 .08
2006 .32
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Insured Tax-Free Advantage (NEA) for any
portion of its fees and expenses beyond November 30, 2010.
6. INVESTMENT COMPOSITION
At October 31, 2003, the revenue sources by municipal purpose, expressed as a
percent of total investments, were as follows:
PREMIER INSURED INSURED INSURED
INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE
QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE
(NQI) (NIO) (NIF) (NPX) (NVG) (NEA)
---------------------------------------------------------------------------------------------------------
Education and Civic Organizations 2% 3% 2% 5% 10% 2%
Healthcare 16 10 16 11 5 13
Housing/Multifamily 7 3 4 8 -- --
Housing/Single Family 2 6 2 2 5 --
Tax Obligation/General 12 7 19 12 23 26
Tax Obligation/Limited 10 12 11 15 16 31
Transportation 21 20 17 13 21 8
U.S. Guaranteed 12 20 18 10 2 1
Utilities 13 14 7 17 6 14
Water and Sewer 5 5 2 7 12 5
Other -- -- 2 -- -- --
---------------------------------------------------------------------------------------------------------
100% 100% 100% 100% 100% 100%
=========================================================================================================
Certain investments owned by the Funds are either covered by insurance issued by
several private insurers or are backed by an escrow or trust containing U.S.
Government or U.S. Government agency securities, both of which ensure the timely
payment of principal and interest in the event of default (100% for Insured
Quality (NQI), 100% for Insured Opportunity (NIO), 100% for Premier Insured
Income (NIF), 100% for Insured Premium Income 2 (NPX), 88% for Insured Dividend
Advantage (NVG) and 89% for Insured Tax-Free Advantage (NEA)). Such insurance or
escrow, however, does not guarantee the market value of the municipal securities
or the value of any of the Funds' shares.
For additional information regarding each investment security, refer to the
Portfolio of Investments of each Fund.
67
Notes to
FINANCIAL STATEMENTS (continued)
7. SUBSEQUENT EVENT - DISTRIBUTIONS TO COMMON SHAREHOLDERS
The Funds declared Common share dividend distributions from their tax-exempt net
investment income which were paid on December 1, 2003, to shareholders of record
on November 15, 2003, as follows:
PREMIER INSURED INSURED INSURED
INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE
QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE
(NQI) (NIO) (NIF) (NPX) (NVG) (NEA)
---------------------------------------------------------------------------------------------------------
Dividend per share $.0845 $.0810 $.0815 $.0730 $.0775 $.0775
=========================================================================================================
68
Financial
HIGHLIGHTS
69
Financial
HIGHLIGHTS
Selected data for a Common share outstanding throughout each year:
Investment Operations Less Distributions
------------------------------------------------------------------- -------------------------------
Distributions Distributions
from Net from Net
Beginning Net Investment Capital Investment Capital
Common Realized/ Income to Gains to Income to Gains to
Share Net Unrealized Preferred Preferred Common Common
Net Asset Investment Investment Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
====================================================================================================================================
INSURED QUALITY (NQI)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2003 $15.87 $1.10 $ (.05) $(.07) $(.01) $ .97 $(1.00) $(.12) $(1.12)
2002 15.78 1.12 .03 (.11) (.01) 1.03 (.92) (.02) (.94)
2001 14.51 1.18 1.20 (.26) -- 2.12 (.85) -- (.85)
2000 13.95 1.20 .60 (.34) -- 1.46 (.90) -- (.90)
1999 16.02 1.17 (1.91) (.22) (.04) (1.00) (.92) (.13) (1.05)
INSURED OPPORTUNITY (NIO)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2003 15.83 1.06 .17 (.07) (.01) 1.15 (.97) (.12) (1.09)
2002 15.72 1.15 .03 (.11) (.01) 1.06 (.93) (.02) (.95)
2001 14.64 1.17 1.04 (.26) -- 1.95 (.87) -- (.87)
2000 14.25 1.21 .39 (.33) -- 1.27 (.88) -- (.88)
1999 16.04 1.18 (1.73) (.24) (.01) (.80) (.94) (.04) (.98)
PREMIER INSURED INCOME (NIF)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2003 15.59 1.05 .13 (.07) -- 1.11 (.98) (.03) (1.01)
2002 15.55 1.14 (.05) (.11) -- .98 (.94) -- (.94)
2001 14.66 1.18 .85 (.26) -- 1.77 (.88) -- (.88)
2000 14.25 1.20 .43 (.33) -- 1.30 (.89) -- (.89)
1999 16.18 1.16 (1.89) (.23) (.01) (.97) (.90) (.04) (.94)
INSURED PREMIUM INCOME 2 (NPX)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2003 14.17 .96 .03 (.06) -- .93 (.86) -- (.86)
2002 13.94 .99 .16 (.10) -- 1.05 (.82) -- (.82)
2001 13.05 1.01 .86 (.23) -- 1.64 (.75) -- (.75)
2000 12.40 .99 .66 (.29) -- 1.36 (.71) -- (.71)
1999 14.10 .97 (1.71) (.23) -- (.97) (.73) -- (.73)
INSURED DIVIDEND ADVANTAGE (NVG)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2003 15.35 1.03 .15 (.07) (.01) 1.10 (.93) (.11) (1.04)
2002(a) 14.33 .55 1.10 (.05) -- 1.60 (.47) -- (.47)
INSURED TAX-FREE ADVANTAGE (NEA)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2003(b) 14.33 .82 .42 (.05) -- 1.19 (.78) -- (.78)
====================================================================================================================================
Total Returns
---------------------
Offering Based
Costs and Ending on
Preferred Common Based Common
Share Share Ending on Share Net
Underwriting Net Asset Market Market Asset
Discounts Value Value Value** Value**
====================================================================================
INSURED QUALITY (NQI)
------------------------------------------------------------------------------------
Year Ended 10/31:
2003 $ -- $15.72 $16.3900 12.92% 6.27%
2002 -- 15.87 15.5500 10.82 6.83
2001 -- 15.78 14.9200 15.53 14.94
2000 -- 14.51 13.6875 10.94 10.86
1999 (.02) 13.95 13.1875 (9.65) (6.77)
INSURED OPPORTUNITY
(NIO)
------------------------------------------------------------------------------------
Year Ended 10/31:
2003 -- 15.89 15.6400 10.22 7.51
2002 -- 15.83 15.2100 9.80 7.01
2001 -- 15.72 14.7400 19.84 13.61
2000 -- 14.64 13.0625 5.06 9.25
1999 (.01) 14.25 13.3125 (14.71) (5.33)
PREMIER INSURED INCOME
(NIF)
------------------------------------------------------------------------------------
Year Ended 10/31:
2003 -- 15.69 15.5100 7.84 7.28
2002 -- 15.59 15.3300 6.84 6.57
2001 -- 15.55 15.2500 19.97 12.40
2000 -- 14.66 13.5000 9.92 9.41
1999 (.02) 14.25 13.1250 (17.33) (6.42)
INSURED PREMIUM INCOME 2
(NPX)
------------------------------------------------------------------------------------
Year Ended 10/31:
2003 -- 14.24 14.1200 8.84 6.70
2002 -- 14.17 13.7700 6.32 7.83
2001 -- 13.94 13.7500 29.46 12.85
2000 -- 13.05 11.2500 4.35 11.35
1999 -- 12.40 11.5000 (11.16) (7.21)
INSURED DIVIDEND
ADVANTAGE (NVG)
------------------------------------------------------------------------------------
Year Ended 10/31:
2003 -- 15.41 14.8100 6.10 7.37
2002(a) (.11) 15.35 14.9600 2.84 10.44
INSURED TAX-FREE
ADVANTAGE (NEA)
------------------------------------------------------------------------------------
Year Ended 10/31:
2003(b) (.20) 14.54 14.7900 3.87 6.98
====================================================================================
Ratios/Supplemental Data
-----------------------------------------------------------------------------------------------
Before Credit/Reimbursement After Credit/Reimbursement***
----------------------------- ----------------------------------
Ratio of Net Ratio of Net
Ratio of Investment Ratio of Investment
Ending Expenses Income to Expenses Income to
Net to Average Average to Average Average
Assets Net Assets Net Assets Net Assets Net Assets
Applicable Applicable Applicable Applicable Applicable Portfolio
to Common to Common to Common to Common to Common Turnover
Shares (000) Shares++ Shares++ Shares++ Shares++ Rate
========================================================================================================================
INSURED QUALITY (NQI)
------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2003 $ 598,102 1.20% 6.93% 1.20% 6.94% 14%
2002 601,495 1.23 7.22 1.21 7.24 44
2001 596,999 1.24 7.72 1.23 7.74 34
2000 549,120 1.24 8.48 1.23 8.49 24
1999 527,789 1.19 7.67 1.18 7.67 27
INSURED OPPORTUNITY
(NIO)
------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2003 1,288,087 1.17 6.67 1.16 6.68 21
2002 1,283,353 1.20 7.42 1.19 7.42 37
2001 1,274,659 1.21 7.69 1.20 7.70 39
2000 1,186,701 1.20 8.47 1.20 8.48 16
1999 1,155,516 1.16 7.67 1.16 7.67 26
PREMIER INSURED INCOME
(NIF)
------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2003 303,912 1.22 6.66 1.21 6.68 25
2002 301,121 1.25 7.40 1.23 7.42 43
2001 299,654 1.26 7.79 1.24 7.81 34
2000 282,544 1.26 8.37 1.24 8.39 21
1999 274,668 1.19 7.49 1.18 7.50 32
INSURED PREMIUM INCOME 2
(NPX)
------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2003 530,975 1.17 6.68 1.16 6.69 31
2002 527,800 1.20 7.13 1.19 7.14 26
2001 519,296 1.22 7.39 1.20 7.41 27
2000 486,009 1.22 7.87 1.20 7.88 55
1999 461,955 1.21 7.11 1.21 7.11 35
INSURED DIVIDEND
ADVANTAGE (NVG)
------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2003 459,368 1.17 6.22 .72 6.67 25
2002(a) 457,432 1.10* 5.71* .61* 6.20* 22
INSURED TAX-FREE
ADVANTAGE (NEA)
------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2003(b) 269,112 1.12* 5.52* .65* 6.00* 72
========================================================================================================================
Preferred Shares at End of Period
----------------------------------------
Aggregate Liquidation
Amount and Market Asset
Outstanding Value Coverage
(000) Per Share Per Share
=================================================================
INSURED QUALITY (NQI)
-----------------------------------------------------------------
Year Ended 10/31:
2003 $318,000 $25,000 $72,021
2002 318,000 25,000 72,287
2001 318,000 25,000 71,934
2000 318,000 25,000 68,170
1999 318,000 25,000 66,493
INSURED OPPORTUNITY
(NIO)
-----------------------------------------------------------------
Year Ended 10/31:
2003 680,000 25,000 72,356
2002 680,000 25,000 72,182
2001 680,000 25,000 71,862
2000 680,000 25,000 68,629
1999 680,000 25,000 67,482
PREMIER INSURED INCOME
(NIF)
-----------------------------------------------------------------
Year Ended 10/31:
2003 161,000 25,000 72,191
2002 161,000 25,000 71,758
2001 161,000 25,000 71,530
2000 161,000 25,000 68,873
1999 161,000 25,000 67,650
INSURED PREMIUM INCOME 2
(NPX)
-----------------------------------------------------------------
Year Ended 10/31:
2003 268,900 25,000 74,365
2002 268,900 25,000 74,070
2001 268,900 25,000 73,280
2000 268,900 25,000 70,185
1999 268,900 25,000 67,949
INSURED DIVIDEND
ADVANTAGE (NVG)
-----------------------------------------------------------------
Year Ended 10/31:
2003 233,000 25,000 74,288
2002(a) 233,000 25,000 74,081
INSURED TAX-FREE
ADVANTAGE (NEA)
-----------------------------------------------------------------
Year Ended 10/31:
2003(b) 144,000 25,000 71,721
=================================================================
* Annualized.
** Total Investment Return on Market Value is the combination of reinvested
dividend income, reinvested capital gains distributions, if any, and
changes in stock price per share. Total Return on Common Share Net Asset
Value is the combination of reinvested dividend income at net asset value,
reinvested capital gains distributions at net asset value, if any, and
changes in Common share net asset value per share. Total returns are not
annualized.
*** After custodian fee credit and expense reimbursement, where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
(a) For the period March 25, 2002 (commencement of operations) through October
31, 2002.
(b) For the period November 22, 2002 (commencement of operations) through
October 31, 2003.
See accompanying notes to financial statements.
70-71 SPREAD
Directors
AND OFFICERS
The management of the Funds, including general supervision of the duties
performed for the Funds by the Adviser, is the responsibility of the Board of
Directors of the Funds. The number of directors of the Funds is currently set at
twelve. None of the directors who are not "interested" persons of the Funds has
ever been a director or employee of, or consultant to, Nuveen or its affiliates.
The names and business addresses of the directors and officers of the Funds,
their principal occupations and other affiliations during the past five years,
the number of portfolios each oversees and other directorships they hold are set
forth below.
NUMBER OF
PORTFOLIOS IN
POSITION(S) YEAR FIRST PRINCIPAL OCCUPATION(S) FUND COMPLEX
NAME, BIRTHDATE HELD WITH ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY
AND ADDRESS THE FUNDS APPOINTED(2) DURING PAST 5 YEARS DIRECTOR
------------------------------------------------------------------------------------------------------------------------------------
DIRECTOR WHO IS AN INTERESTED PERSON OF THE FUNDS:
------------------------------------------------------------------------------------------------------------------------------------
Timothy R. Schwertfeger (1) Chairman of the 1994 Chairman and Director (since 1996) of Nuveen 142
3/28/49 Board and Investments, Inc. and Nuveen Investments, LLC;
333 W. Wacker Drive Director Director (since 1992) and Chairman (since 1996) of
Chicago, IL 60606 Nuveen Advisory Corp. and Nuveen Institutional
Advisory Corp.; Chairman and Director (since 1997)
of Nuveen Asset Management, Inc.; Director (since 1996)
of Institutional Capital Corporation; Chairman and Director
(since 1999) of Rittenhouse Asset Management, Inc.;
Chairman of Nuveen Investments Advisers Inc. (since 2002).
DIRECTORS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS:
------------------------------------------------------------------------------------------------------------------------------------
William E. Bennett Director 2001 Private Investor; previously, President and Chief Executive 142
10/16/46 Officer, Draper & Kramer, Inc., a private company that
333 W. Wacker Drive handles mortgage banking, real estate development, pension
Chicago, IL 60606 advisory and real estate management (1995-1998). Prior
thereto, Executive Vice President and Chief Credit Officer of
First Chicago Corporation and its principal subsidiary, The
First National Bank of Chicago.
------------------------------------------------------------------------------------------------------------------------------------
Robert P. Bremner Director 1997 Private Investor and Management Consultant. 141
8/22/40
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Lawrence H. Brown Director 1993 Retired (since 1989) as Senior Vice President of The 141
7/29/34 Northern Trust Company; Director of the United Way of
333 W. Wacker Drive Highland Park-Highwood (since 2002).
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Jack B. Evans Director 1999 President, The Hall-Perrine Foundation, a private philanthropic 131
10/22/48 corporation (since 1996); Director, Alliant Energy; Director and
333 W. Wacker Drive Vice Chairman, United Fire & Casualty Company; Director,
Chicago, IL 60606 Federal Reserve Bank of Chicago; formerly, President and Chief
Operating Officer, SCI Financial Group, Inc., a regional financial
services firm.
------------------------------------------------------------------------------------------------------------------------------------
Anne E. Impellizzeri Director 1994 Retired, formerly, Executive Director (since 1998) of Manitoga/ 141
1/26/33 The Russel Wright Design Center; prior thereto, President and
333 W. Wacker Drive Chief Executive Officer of Blanton-Peale Institute (since 1990);
Chicago, IL 60606 prior thereto, Vice President, Metropolitan Life Insurance Co.
------------------------------------------------------------------------------------------------------------------------------------
William L. Kissick Director 1992 Professor Emeritus, School of Medicine and the Wharton 131
7/29/32 School of Management and former Chairman, Leonard Davis
333 W. Wacker Drive Institute of Health Economics, University of Pennsylvania;
Chicago, IL 60606 Adjunct Professor, Health Policy and Management, Yale University.
------------------------------------------------------------------------------------------------------------------------------------
Thomas E. Leafstrand Director 1992 Retired; previously, Vice President in charge of Municipal 131
11/11/31 Underwriting and Dealer Sales at The Northern Trust
333 W. Wacker Drive Company.
Chicago, IL 60606
72
NUMBER OF
PORTFOLIOS IN
POSITION(S) YEAR FIRST PRINCIPAL OCCUPATION(S) FUND COMPLEX
NAME, BIRTHDATE HELD WITH ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY
AND ADDRESS THE FUNDS APPOINTED(2) DURING PAST 5 YEARS DIRECTOR
------------------------------------------------------------------------------------------------------------------------------------
DIRECTORS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
Peter R. Sawers Director 1991 Adjunct Professor of Business and Economics, University of 141
4/3/33 Dubuque, Iowa; formerly (1991-2000) Adjunct Professor, Lake
333 W. Wacker Drive Forest Graduate School of Management, Lake Forest, Illinois;
Chicago, IL 60606 prior thereto, Executive Director, Towers Perrin Australia, a
management consulting firm; Chartered Financial Analyst;
Certified Management Consultant; Director, Executive
Service Corps of Chicago, a not-for-profit organization.
------------------------------------------------------------------------------------------------------------------------------------
William J. Schneider Director 1997 Senior Partner and Chief Operating Officer, Miller-Valentine 141
9/24/44 Group, Vice President, Miller-Valentine Realty, a construction
333 W. Wacker Drive company; Chair, MiamiValley Hospital; Chair, Dayton
Chicago, IL 60606 Development Coalition; formerly, Member, Community
Advisory Board, National City Bank, Dayton, Ohio and
Business Advisory Council, Cleveland Federal Reserve Bank.
------------------------------------------------------------------------------------------------------------------------------------
Judith M. Stockdale Director 1997 Executive Director, Gaylord and Dorothy Donnelley Foundation 141
12/29/47 (since 1994); prior thereto, Executive Director, Great Lakes
333 W. Wacker Drive Protection Fund (from 1990 to 1994).
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Sheila W. Wellington Director 1994 President (since 1993) of Catalyst (a not-for-profit organization 131
2/24/32 focusing on women's leadership development in business
333 W. Wacker Drive and the professions).
Chicago, IL 60606
POSITION(S) YEAR FIRST NUMBER OF PORTFOLIOS
NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) IN FUND COMPLEX
AND ADDRESS THE FUNDS APPOINTED(3) DURING PAST 5 YEARS OVERSEEN BY OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS:
------------------------------------------------------------------------------------------------------------------------------------
Gifford R. Zimmerman Chief 1988 Managing Director (since 2002), Assistant Secretary 142
9/9/56 Administrative and Associate General Counsel, formerly, Vice President
333 W. Wacker Drive Officer and Assistant General Counsel of Nuveen Investments, LLC;
Chicago, IL 60606 Managing Director (since 2002), General Counsel and
Assistant Secretary, formerly, Vice President of Nuveen
Advisory Corp. and Nuveen Institutional Advisory Corp.;
Managing Director (since 2002), Assistant Secretary and
Associate General Counsel, formerly, Vice President (since
2000), of Nuveen Asset Management, Inc.; Assistant
Secretary of Nuveen Investments, Inc. (since 1994);
Assistant Secretary of NWQ Investment Management
Company, LLC (since 2002); Vice President and
Assistant Secretary of Nuveen Investments Advisers Inc.
(since 2002); Managing Director, Associate General
Counsel and Assistant Secretary of Rittenhouse Asset
Management, Inc. (since May 2003); Chartered
Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
Michael T. Atkinson Vice President 2000 Vice President (since 2002), formerly, Assistant 142
2/3/66 and Assistant Vice President (since 2000), previously, Associate of
333 W. Wacker Drive Secretary Nuveen Investments, LLC.
Chicago, IL 60606
73
Directors
AND OFFICERS (CONTINUED)
POSITION(S) YEAR FIRST NUMBER OF PORTFOLIOS
NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) IN FUND COMPLEX
AND ADDRESS THE FUNDS APPOINTED(3) DURING PAST 5 YEARS OVERSEEN BY OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
Paul L. Brennan Vice President 1999 Vice President (since 2002), formerly, Assistant 128
11/10/66 Vice President (since 1997), of Nuveen Advisory Corp.;
333 W. Wacker Drive prior thereto, portfolio manager of Flagship Financial Inc.;
Chicago, IL 60606 Chartered Financial Analyst and Certified Public Accountant.
------------------------------------------------------------------------------------------------------------------------------------
Peter H. D'Arrigo Vice President 1999 Vice President of Nuveen Investments, LLC (since 1999), 142
11/28/67 and Treasurer prior thereto, Assistant Vice President (since 1997); Vice
333 W. Wacker Drive President and Treasurer of Nuveen Investments, Inc. (since
Chicago, IL 60606 1999); Vice President and Treasurer of Nuveen Advisory Corp.
and Nuveen Institutional Advisory Corp. (since 1999); Vice
President and Treasurer of Nuveen Asset Management,
Inc. (since 2002) and of Nuveen Investments Advisers
Inc. (since 2002); Assistant Treasurer of NWQ Investment
Management Company, LLC (since 2002); Chartered
Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
Susan M. DeSanto Vice President 2001 Vice President of Nuveen Advisory Corp. (since 2001); 142
9/8/54 previously, Vice President of Van Kampen Investment
333 W. Wacker Drive Advisory Corp. (since 1998); Vice President of Nuveen
Chicago, IL 60606 Institutional Advisory Corp. (since 2002); prior thereto,
Assistant Vice President of Van Kampen Investment
Advisory Corp. (since 1994).
------------------------------------------------------------------------------------------------------------------------------------
Jessica R. Droeger Vice President 2000 Vice President (since 2002) and Assistant General Counsel 142
9/24/64 and Secretary (since 1998); formerly, Assistant Vice President (since 1998)
333 W. Wacker Drive of Nuveen Investments, LLC; Vice President (since 2002)
Chicago, IL 60606 and Assistant Secretary (since 1998), formerly Assistant
Vice President of Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp.
------------------------------------------------------------------------------------------------------------------------------------
Lorna C. Ferguson Vice President 1998 Vice President of Nuveen Investments, LLC; Vice 142
10/24/45 President (since 1998) of Nuveen Advisory Corp. and
333 W. Wacker Drive Nuveen Institutional Advisory Corp.
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
William M. Fitzgerald Vice President 1995 Managing Director (since 2002) of Nuveen Investments, 142
3/2/64 LLC; Managing Director (since 2001), formerly Vice
333 W. Wacker Drive President of Nuveen Advisory Corp. and Nuveen
Chicago, IL 60606 Institutional Advisory Corp. (since 1995); Managing
Director of Nuveen Asset Management, Inc. (since 2001);
Vice President of Nuveen Investment Advisers Inc.
(since 2002); Chartered Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
Stephen D. Foy Vice President 1998 Vice President (since 1993) and Funds Controller (since 142
5/31/54 and Controller 1998) of Nuveen Investments, LLC and Vice President and
333 W. Wacker Drive Funds Controller (since 1998) of Nuveen Investments, Inc.;
Chicago, IL 60606 Certified Public Accountant.
------------------------------------------------------------------------------------------------------------------------------------
J. Thomas Futrell Vice President 1988 Vice President of Nuveen Advisory Corp.; 128
7/5/55 Chartered Financial Analyst.
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Steven J. Krupa Vice President 1990 Vice President of Nuveen Advisory Corp. 128
8/21/57
333 W. Wacker Drive
Chicago, IL 60606
74
POSITION(S) YEAR FIRST NUMBER OF PORTFOLIOS
NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) IN FUND COMPLEX
AND ADDRESS THE FUNDS APPOINTED(3) DURING PAST 5 YEARS OVERSEEN BY OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
David J. Lamb Vice President 2000 Vice President (since 2000) of Nuveen Investments, LLC, 142
3/22/63 previously Assistant Vice President (since 1999); prior
333 W. Wacker Drive thereto, Associate of Nuveen Investments, LLC; Certified
Chicago, IL 60606 Public Accountant.
------------------------------------------------------------------------------------------------------------------------------------
Tina M. Lazar Vice President 2002 Vice President (since 1999), previously, Assistant Vice 142
8/27/61 President (since 1993) of Nuveen Investments, LLC.
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Larry W. Martin Vice President 1988 Vice President, Assistant Secretary and Assistant General 142
7/27/51 and Assistant Counsel of Nuveen Investments, LLC; Vice President and
333 W. Wacker Drive Secretary Assistant Secretary of Nuveen Advisory Corp. and Nuveen
Chicago, IL 60606 Institutional Advisory Corp.; Assistant Secretary of Nuveen
Investments, Inc. and (since 1997) Nuveen Asset Management,
Inc.; Vice President (since 2000), Assistant Secretary and
Assistant General Counsel (since 1998) of Rittenhouse Asset
Management, Inc.; Vice President and Assistant Secretary of
Nuveen Investments Advisers Inc. (since 2002); Assistant
Secretary of NWQ Investment Management Company, LLC
(since 2002).
------------------------------------------------------------------------------------------------------------------------------------
John V. Miller Vice President 2003 Vice President (since 2003), previously, Assistant 128
4/10/67 Vice President (since 1999), prior thereto, credit
333 W. Wacker Drive analyst (since 1996) of Nuveen Advisory Corp.;
Chicago, IL 60606 Chartered Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
Edward F. Neild, IV Vice President 1996 Managing Director (since 2002) of Nuveen Investments, 142
7/7/65 LLC; Managing Director (since 1997), formerly Vice
333 W. Wacker Drive President (since 1996) of Nuveen Advisory Corp. and
Chicago, IL 60606 Nuveen Institutional Advisory Corp.; Managing Director
of Nuveen Asset Management, Inc. (since 1999).
Chartered Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
Thomas J. O'Shaughnessy Vice President 1999 Vice President (since 2002), formerly, Assistant 128
9/4/60 Vice President (since 1998), of Nuveen Advisory Corp.;
333 W. Wacker Drive prior thereto, portfolio manager.
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Daniel S. Solender Vice President 2003 Vice President of Nuveen Advisory Corp. (since 2003); 128
10/27/65 previously, Principal and portfolio manager with The Vanguard
333 W. Wacker Drive Group (1999-2003); prior thereto, Assistant Vice President
Chicago, IL 60606 of the Nuveen Advisory Corp.; Chartered Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
Thomas C. Spalding Vice President 1982 Vice President of Nuveen Advisory Corp. and Nuveen 128
7/31/51 Institutional Advisory Corp.; Chartered Financial Analyst.
333 W. Wacker Drive
Chicago, IL 60606
(1) Mr. Schwertfeger is an "interested person" of the Funds, as defined in the
Investment Company Act of 1940, because he is an officer and trustee of the
Adviser.
(2) Directors serve a one-year term until his/her successor is elected. The year
first elected or appointed represents the year in which the Director was
first elected or appointed to any fund in the Nuveen Complex.
(3) Officers serve a one-year term through July of each year. The year first
elected or appointed represents the year in which the Officer was first
elected or appointed to any fund in the Nuveen Complex.
75
Build Your Wealth
AUTOMATICALLY
Sidebar text: NUVEEN MAKES REINVESTING EASY. A PHONE CALL IS ALL IT TAKES TO SET
UP YOUR REINVESTMENT ACCOUNT.
NUVEEN CLOSED-END EXCHANGE-TRADED FUNDS DIVIDEND REINVESTMENT PLAN
Your Nuveen Closed-End Exchange-Traded Fund allows you to conveniently reinvest
dividends and/or capital gains distributions in additional fund shares.
By choosing to reinvest, you'll be able to invest money regularly and
automatically, and watch your investment grow through the power of tax-free
compounding. Just like dividends or distributions in cash, there may be times
when income or capital gains taxes may be payable on dividends or distributions
that are reinvested.
It is important to note that an automatic reinvestment plan does not ensure a
profit, nor does it protect you against loss in a declining market.
EASY AND CONVENIENT
To make recordkeeping easy and convenient, each month you'll receive a statement
showing your total dividends and distributions, the date of investment, the
shares acquired and the price per share, and the total number of shares you own.
HOW SHARES ARE PURCHASED
The shares you acquire by reinvesting will either be purchased on the open
market or newly issued by the Fund. If the shares are trading at or above net
asset value at the time of valuation, the Fund will issue new shares at the
then-current market price. If the shares are trading at less than net asset
value, shares for your account will be purchased on the open market. Dividends
and distributions received to purchase shares in the open market will normally
be invested shortly after the dividend payment date. No interest will be paid on
dividends and distributions awaiting reinvestment. Because the market price of
shares may increase before purchases are completed, the average purchase price
per share may exceed the market price at the time of valuation, resulting in the
acquisition of fewer shares than if the dividend or distribution had been paid
in shares issued by the Fund. A pro rata portion of any applicable brokerage
commissions on open market purchases will be paid by Plan participants. These
commissions usually will be lower than those charged on individual transactions.
FLEXIBILITY
You may change your distribution option or withdraw from the Plan at any time,
should your needs or situation change. Should you withdraw, you can receive a
certificate for all whole shares credited to your reinvestment account and cash
payment for fractional shares, or cash payment for all reinvestment account
shares, less brokerage commissions and a $2.50 service fee.
You can reinvest whether your shares are registered in your name, or in the name
of a brokerage firm, bank, or other nominee. Ask your investment advisor if his
or her firm will participate on your behalf. Participants whose shares are
registered in the name of one firm may not be able to transfer the shares to
another firm and continue to participate in the Plan.
The Fund reserves the right to amend or terminate the Plan at any time. Although
the Fund reserves the right to amend the Plan to include a service charge
payable by the participants, there is no direct service charge to participants
in the Plan at this time.
For more information on the Nuveen Automatic Reinvestment Plan or to enroll in
or withdraw from the Plan, speak with your financial advisor or call us at (800)
257-8787.
76
Fund
INFORMATION
BOARD OF DIRECTORS/TRUSTEES
William E. Bennett
Robert P. Bremner
Lawrence H. Brown
Jack B. Evans
Anne E. Impellizzeri
William L. Kissick
Thomas E. Leafstrand
Peter R. Sawers
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
Sheila W. Wellington
FUND MANAGER
Nuveen Advisory Corp.
333 West Wacker Drive
Chicago, IL 60606
CUSTODIAN
State Street Bank & Trust
Boston, MA
TRANSFER AGENT AND
SHAREHOLDER SERVICES
State Street Bank & Trust
Nuveen Funds
P.O. Box 43071
Providence, RI 02940-3071
(800) 257-8787
LEGAL COUNSEL
Chapman and Cutler LLP
Chicago, IL
INDEPENDENT AUDITORS
Ernst & Young LLP
Chicago, IL
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Funds use to determine how
to vote proxies relating to portfolio securities is available (i) without
charge, upon request, by calling Nuveen Investments at (800) 257-8787; and (ii)
on the Commission's website at http://www.sec.gov.
POLICY CHANGE
On November 14, 2002, the Board adopted a policy that allows these Funds, in
addition to investments in municipal bonds, to invest up to 5% of its net assets
(including assets attributable to preferred shares, if any) in tax-exempt or
taxable fixed-income securities or equity securities for the purpose of
acquiring control of an issuer whose municipal bonds (a) the Fund already owns
and (b) have deteriorated or are expected shortly to deteriorate significantly
in credit quality, provided Nuveen Advisory determines that such investment
should enable the Fund to better maximize the value of its existing investment
in such issuer. This policy is a non-fundamental policy of each Fund which means
that it can be changed at any time by the Board of Trustees without vote of the
shareholders.
GLOSSARY OF TERMS USED IN THIS REPORT
Average Annual Total Return: This is a commonly used method to express an
investment's performance over a particular, usually multi-year time period. It
expresses the return (including change in NAV and reinvested dividends) that
would have been necessary on an annual basis to equal the investment's actual
performance over the time period being considered.
Average Effective Maturity: The average of all the maturities of the bonds in a
fund's portfolio, computed by weighting each maturity date (the date the
security comes due) by the market value of the security. This figure does not
account for the likelihood of prepayments or the exercise of call provisions.
Leverage-Adjusted Duration: Duration is a measure of a bond or bond fund's
sensitivity to changes in interest rates. Generally, the longer a bond or fund's
duration, the more the price of the bond or fund will change as interest rates
change. Leverage-adjusted duration takes into account the leveraging process for
a Fund and therefore is generally longer than the duration of the actual
portfolio of individual bonds that make up the Fund.
Market Yield (also known as Dividend Yield or Current Yield): An investment's
current annualized dividend divided by its current market price.
Net Asset Value (NAV): A fund's NAV is calculated by subtracting the liabilities
of the fund from its total assets and then dividing the remainder by the number
of shares outstanding. Fund NAVs are calculated at the end of each business day.
Taxable-Equivalent Yield: The yield necessary from a fully taxable investment to
equal, on an after-tax basis, the yield of a municipal bond investment.
---------
Each Fund intends to repurchase shares of its own common or preferred stock in
the future at such times and in such amounts as is deemed advisable. No shares
were repurchased during the fiscal year ended October 31, 2003. Any future
repurchases will be reported to shareholders in the next annual or semiannual
report.
77
Serving Investors
FOR GENERATIONS
Since 1898, financial advisors and their clients have relied on Nuveen
Investments to provide dependable investment solutions. For the past century,
Nuveen Investments has adhered to the belief that the best approach to investing
is to apply conservative risk-management principles to help minimize volatility.
Building on this tradition, we today offer a range of high quality equity and
fixed-income solutions that are integral to a well-diversified core portfolio.
Our clients have come to appreciate this diversity, as well as our continued
adherence to proven, long-term investing principles.
Managing $80 billion in assets, Nuveen Investments offers access to a number of
different asset classes and investing solutions through a variety of products.
Nuveen Investments markets its capabilities under four distinct brands: Nuveen,
a leader in tax-free investments; NWQ, a leader in value-style equities;
Rittenhouse, a leader in growth-style equities; and Symphony, a leading
institutional manager of market-neutral alternative investment portfolios.
To learn more about the products and services Nuveen Investments offers and for
a prospectus, where applicable, talk to your financial advisor, or call us at
(800) 257-8787. Please read the information carefully before you invest.
Distributed by
NUVEEN INVESTMENTS, LLC | 333 West Wacker Drive | Chicago, Illinois 60606
| www.nuveen.com
EAN-D-1003D
ITEM 2. CODE OF ETHICS.
As of the end of the period covered by this report, the registrant has adopted
a code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions. The registrant has posted such code of
ethics on its website at www.nuveen.com/etf.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's board of directors has determined that the registrant has
at least one "audit committee financial expert" (as defined in Item 3 of
Form N-CSR) serving on its audit committee. The registrant's audit committee
financial expert is William E. Bennett, who is "independent" for purposes of
Item 3 of Form N-CSR.
Mr. Bennett was formerly Executive Vice President and Chief Credit Officer of
First Chicago Corporation and its principal subsidary, The First National Bank
of Chicago. As part of his role as Chief Credit Officer, Mr. Bennett set policy
as to accrual of assets/loans; designated performing/non-performing assets; set
the level of reserves against the credit portfolio; and determined the carrying
value of credit related assets and exposure. Among other things, Mr. Bennett was
also responsible for the oversight of the internal analysis function including
setting ground rules for the review and preparation of financial analysis and
financial statements for use in making credit and risk decisions for clients.
Mr. Bennett has significant experience reviewing, analyzing and evaluating
financial statements of domestic and international companies in a variety of
industries with complex accounting issues.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable at this time.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable at this time.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
In the rare event that a municipal issuer held by the Fund were to issue a proxy
or that the Fund were to receive a proxy issued by a cash management security,
Nuveen Advisory Corp. (the "Adviser") would either engage an independent third
party to determine how the proxy should be voted or vote the proxy with the
consent, or based on the instructions, of the Fund's Board of Directors or
Trustees or its representative. In the case of a conflict of interest, the proxy
would be submitted to the applicable Fund's Board to determine how the proxy
should be voted. A member of the Adviser's legal department would oversee the
administration of the voting, and ensure that records were maintained in
accordance with Rule 204-2(c)(2) under the Investment Advisers Act of 1940 (17
CFR 275.204-2(c)(2)), reports were filed with the SEC on Form N-PX, and the
results were provided to the Board of Directors or Trustees and made available
to shareholders as required by applicable rules.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of this report that includes the disclosure
required by this paragraph, based on their evaluation of the controls
and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")(17 CFR
240.13a-15(b) or 240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the registrant's last
fiscal half-year (the registrant's second fiscal half-year in the case
of an annual report) that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over
financial reporting.
ITEM 10. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit: Not applicable
because posted on registrant's website at www.nuveen.com/etf.
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2(a) under
the Act (17 CFR 270.30a-2(a)) in the exact form set forth below: Ex-99.CERT
Attached hereto.
(b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act,
provide the certifications required by Rule 30a-2(b) under the Act (17 CFR
270.30a-2(b)); Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR
240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of
the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished
pursuant to this paragraph will not be deemed "filed" for purposes of Section 18
of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of
that section. Such certification will not be deemed to be incorporated by
reference into any filing under the Securities Act of 1933 or the Exchange Act,
except to the extent that the registrant specifically incorporates it by
reference. Ex-99.906 CERT attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Nuveen Insured Dividend Advantage Municipal Fund
-----------------------------------------------------------
By (Signature and Title)* /s/ Jessica R. Droeger
----------------------------------------------
Jessica R. Droeger
Vice President and Secretary
Date: January 8, 2004
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Gifford R. Zimmerman
----------------------------------------------
Gifford R. Zimmerman
Chief Administrative Officer
(Principal Executive Officer)
Date: January 8, 2004
-------------------------------------------------------------------
By (Signature and Title)* /s/ Stephen D. Foy
----------------------------------------------
Stephen D. Foy
Vice President and Controller
(Principal Financial Officer)
Date: January 8, 2004
-------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.