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 811-7056
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Nuveen Select Maturities Municipal Fund
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(Exact name of registrant as specified in charter)
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
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(Address of principal executive offices) (Zip code)
Kevin J. McCarthy
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
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(Name and address of agent for service)
Registrant's telephone number, including area code: (312) 917-7700
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Date of fiscal year end: March 31, 2010
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Date of reporting period: March 31, 2010
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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.
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NUVEEN
INVESTMENTS
Closed-End Funds
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Nuveen Investments
Municipal Closed-End Funds
IT'S NOT WHAT YOU EARN, IT'S WHAT YOU KEEP.(R)
Annual Report
March 31, 2010
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---------------------------
NUVEEN SELECT
MATURITIES MUNICIPAL FUND
NIM
10
March
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NUVEEN
INVESTMENTS
Chairman's
Letter to Shareholders
[PHOTO OF ROBERT P. BREMNER]
DEAR SHAREHOLDER,
The economic environment in which your Fund operates reflects continuing but
uneven economic recovery. The U.S. and other major industrial countries are
experiencing steady but comparatively low levels of economic growth, while
emerging market countries are seeing a resumption of relatively strong economic
expansion. The largest source of economic uncertainty is the potential impact of
steps being considered by many governments to counteract the extraordinary
governmental spending and credit expansion carried out to deal with the
financial and economic crisis of 2008. Consequently, the implications for future
tax rates, government spending, interest rates and the pace of economic recovery
in the U.S. and other leading economies are extremely difficult to predict at
the present time. The long term health of the global economy depends on
restoring some measure of fiscal discipline around the world, but since all of
the corrective steps require economic pain, it is not surprising that
governments are reluctant to undertake them.
In the near term, governments remain committed to furthering economic recovery
and realizing a meaningful reduction in their national unemployment rates. Such
an environment should produce continued economic growth and, consequently,
attractive investment opportunities. Over the longer term, the larger
uncertainty mentioned earlier carries the risk of unexpected potholes in the
road to sustained recovery. For this reason, Nuveen's investment management
teams are working hard to balance return and risk by building well-diversified
portfolios, among other strategies. I encourage you to read the following
commentary on the management of your Fund. As always, I also encourage you to
contact your financial consultant if you have any questions about your Nuveen
Fund investment.
On behalf of the other members of your Fund's Board, we look forward to
continuing to earn your trust in the months and years ahead.
Sincerely,
/s/ Robert P. Bremner
Robert P. Bremner
Chairman of the Board
May 21, 2010
Nuveen Investments 1
Portfolio Manager's Comments
Nuveen Select Maturities Municipal Fund (NIM)
PORTFOLIO MANAGER PAUL BRENNAN REVIEWS U.S. ECONOMIC AND MUNICIPAL MARKET
CONDITIONS, KEY INVESTMENT STRATEGIES, AND THE TWELVE-MONTH PERFORMANCE OF THE
NUVEEN SELECT MATURITIES MUNICIPAL FUND. WITH 19 YEARS OF INVESTMENT EXPERIENCE,
INCLUDING 13 YEARS WITH NUVEEN, PAUL HAS MANAGED NIM SINCE 2006.
WHAT FACTORS AFFECTED THE U.S. ECONOMY AND MUNICIPAL MARKET DURING THE
TWELVE-MONTH REPORTING PERIOD ENDED MARCH 31, 2010?
During this reporting period, the U.S. economy remained under considerable
pressure, as both the Federal Reserve (Fed) and the federal government continued
their efforts to improve overall conditions. The Fed maintained the benchmark
fed funds rate at a target range of zero to 0.25% after cutting it to a record
low level in December 2008. As part of its efforts, the federal government
passed the American Recovery and Reinvestment Act of 2009, a $787 billion
economic stimulus package intended to provide job creation, tax relief, fiscal
assistance to state and local governments, and expansion of unemployment
benefits and other federal social welfare programs. At its meeting in March
2010, the Fed pledged to keep the fed funds rate "exceptionally low" for an
"extended period".
In recent months, these and other measures taken by the Fed and the government
to ease the economic recession have produced some incipient signs of
improvement. In the first quarter of 2010, the U.S. economy, as measured by the
U.S. gross domestic product (GDP), grew at an annualized rate of 3.2%, the
fastest pace in six years. Housing prices provided a bright spot, with sales of
new and existing homes rising 24% and 13%, respectively, between March 2009 and
March 2010. At the same time, inflation remained relatively tame, as the
Consumer Price Index (CPI) rose 2.3% for the twelve -months ending March 31,
2010. As of March 2010, the national unemployment rate had remained at 9.7% for
three consecutive months, up from 8.6% in March 2009 but down from the 26-year
high of 10.1% in October 2009.
Municipal market conditions began to show general signs of improvement
throughout most of the period. This trend was bolstered by the reduced issuance
of tax-exempt municipal debt in the marketplace, due in part to the introduction
of the Build America Bond program in April 2009. Build America Bonds are a new
class of taxable municipal debt created as part of the economic stimulus
package. These bonds currently offer municipal issuers a federal subsidy equal
to 35% of the bonds' interest payments and therefore provide issuers with an
attractive alternative to traditional tax-exempt debt. Between April 2009 and
the end of this reporting period, taxable Build America Bonds issuance totaled
$90.8 billion, accounting for 21% of new bonds issued in the municipal market
during that time. Over the twelve months ended March 31, 2010, municipal
CERTAIN STATEMENTS IN THIS REPORT ARE FORWARD-LOOKING STATEMENTS. DISCUSSIONS OF
SPECIFIC INVESTMENTS ARE FOR ILLUSTRATION ONLY AND ARE NOT INTENDED AS
RECOMMENDATIONS OF INDIVIDUAL INVESTMENTS. THE FORWARD-LOOKING STATEMENTS AND
OTHER VIEWS EXPRESSED HEREIN ARE THOSE OF THE PORTFOLIO MANAGER AS OF THE DATE
OF THIS REPORT. ACTUAL FUTURE RESULTS OR OCCURRENCES MAY DIFFER SIGNIFICANTLY
FROM THOSE ANTICIPATED IN ANY FORWARD-LOOKING STATEMENTS, AND THE VIEWS
EXPRESSED HEREIN ARE SUBJECT TO CHANGE AT ANY TIME, DUE TO NUMEROUS MARKET AND
OTHER FACTORS. THE FUND DISCLAIMS ANY OBLIGATION TO UPDATE PUBLICLY OR REVISE
ANY FORWARD-LOOKING STATEMENTS OR VIEWS EXPRESSED HEREIN.
2 Nuveen Investments
bond issuance nationwide--both tax-exempt and taxable--totaled $425.3 billion, a
decrease of 2% compared with the twelve-month period ended March 31, 2009.
Demand for tax-exempt bonds remained strong during this period and combined with
lower tax-exempt issuance, provided support for municipal bond prices.
WHAT KEY STRATEGIES WERE USED TO MANAGE NIM DURING THIS REPORTING PERIOD?
As previously mentioned, the availability of new tax-exempt issuance declined
during this period, due in part to the introduction of taxable Build America
Bonds in April 2009. Although total municipal issuance was off only slightly for
the twelve months, tax-exempt municipal issuance, which does not include Build
America Bonds, actually fell approximately 23%. Since interest payments from
Build America Bonds represent taxable income, we do not view these bonds as
appropriate investment opportunities for NIM.
Despite the constrained issuance of new tax-exempt municipal bonds, we continued
to find attractive value opportunities, taking a bottom-up approach to
discovering undervalued sectors and individual credits with the potential to
perform relatively well over the long term. During this period, we purchased
general obligation and other tax-supported bonds, airport credits and tobacco
bonds from a variety of states. In general, our purchases during this period
focused on bonds in the A and BBB credit quality categories.
Cash for new purchases during this period was generated largely by bond
redemptions, which are a normal occurrence in funds with an intermediate
maturity1 focus such as NIM. We also reduced NIM's exposure to pre-refunded
bonds by selling some of these credits when attractive opportunities arose,
reinvesting the proceeds into new bonds.
HOW DID THE FUND PERFORM?
Results for NIM, as well as relevant index information, are presented in the
accompanying table.
AVERAGE ANNUAL TOTAL RETURNS ON NET ASSET VALUE
FOR PERIODS ENDED 3/31/10
1-YEAR 5-YEAR 10-YEAR
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NIM 10.06% 4.53% 3.89%
Standard & Poor's (S&P) Intermediate Municipal Bond Index(2) 8.29% 4.97% 5.59%
Standard & Poor's (S&P) National Municipal Bond Index(3) 11.26% 4.42% 5.54%
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Past performance is not predictive of future results. Current performance
may be higher or lower than the data shown. Returns do not reflect the
deduction of taxes that shareholders may have to pay on Fund distributions
or upon the sale of Fund shares.
For additional information, see the Performance Overview page for NIM in
this report.
(1) In keeping within its investment parameters, NIM maintains an average
effective maturity of twelve years or less for portfolio holdings.
(2) The Standard & Poor's (S&P) Intermediate Municipal Bond Index is an
unleveraged, market value-weighted index containing all of the bonds in
the Standard & Poor's (S&P) National Municipal Bond Index with maturity
dates between 3 and 14.999 years. The index does not reflect any initial
or ongoing expenses and is not available for direct investment.
(3) The Standard & Poor's (S&P) National Municipal Bond Index is an
unleveraged, market value-weighted index designed to measure the
performance of the investment-grade U.S. municipal bond market. This index
does not reflect any initial or ongoing expenses and is not available for
direct investment.
For the twelve months ended March 31, 2010, the total return on net asset value
(NAV) for NIM exceeded the return for the Standard & Poor's (S&P) Intermediate
Municipal Bond Index. During this period, short and intermediate maturity bonds
generally underperformed those with longer maturities. As a result, the
twelve-month returns for both NIM and the intermediate index, which have fewer
longer maturity bonds than the Standard & Poor's (S&P) National Municipal Bond
Index, lagged the return for the national index, which is used to represent the
performance of the municipal bond market as a whole. In keeping with its
investment parameters, NIM maintains an average effective maturity of twelve
years or less for portfolio holdings. As of March 31, 2010, the Fund's average
effective maturity was 9.81 years, while the S&P National Municipal Bond
Nuveen Investments 3
Index had an average effective maturity of 14.58 years. Sector and credit
allocations and individual security selection also played a role in the
performance differential.
Key management factors that influenced NIM's performance during this period
included yield curve and duration positioning, credit exposure and sector
allocation.
During this period, the municipal yield curve remained steep, although it
flattened somewhat, especially at the longer end of the curve. In this
environment, bonds with maturities of 15 years or longer generally outperformed
bonds with shorter maturities, with bonds maturing in one to two years posting
the weakest returns. While NIM maintained an intermediate-term orientation, it
had good exposure to the longer intermediate and long bonds that performed well,
which helped its return for this period. Overall, NIM's duration, which was
longer than that of its benchmark, was well positioned for the interest rate
environment of the past twelve months.
Credit exposure also had a positive impact on NIM's performance. The demand for
municipal bonds increased during this period, driven by a variety of factors,
including concerns about potential tax increases, the need to rebalance
portfolio allocations and a growing appetite for additional risk and the
associated yield premium. At the same time, the issuance of tax-exempt municipal
securities declined. As investors bid up municipal bond prices, lower-rated and
non-rated bonds generally outperformed those rated AAA. In this environment,
NIM's allocation of 28% of its portfolio to bonds rated BBB or lower and
non-rated bonds and approximately another 36% to bonds rated A benefited its
performance.
Holdings that generally contributed positively to NIM's performance during this
period included industrial development revenue (IDR) and health care bonds, both
of which exceeded the overall municipal market return by substantial margins.
Revenue bonds as a whole performed well, with housing, transportation, special
tax and public utilities among the sectors that also outperformed the general
municipal market for this period. Zero coupon bonds also were among the
strongest performers, as were lower-rated tobacco bonds backed by the 1998
master tobacco settlement agreement.
Pre-refunded bonds, which are typically backed by U.S. Treasury securities,
performed relatively poorly during this period. The underperformance of these
bonds can be attributed primarily to their shorter effective maturities and
higher credit quality. As of March 31, 2010, NIM held more than 17% of its
portfolio in pre-refunded bonds, making these holdings the largest detractor
from the Fund's performance. Many general obligation bonds also failed to keep
pace with the overall municipal market, while resource recovery, water and
sewer, leasing and education trailed the other revenue sectors for the twelve
months.
4 Nuveen Investments
Dividend and Share Price Information
NIM's dividend remained stable throughout the twelve-month reporting period
ended March 31, 2010.
NIM seeks to pay stable dividends at rates that reflect the Fund's past results
and projected future performance. During certain periods, NIM may pay dividends
at a rate that may be more or less than the amount of net investment income
actually earned by the Fund during the period. If a Fund has cumulatively earned
more than it has paid in dividends, it holds the excess in reserve as
undistributed net investment income (UNII) as part of the Fund's NAV.
Conversely, if a Fund has cumulatively paid dividends in excess of its earnings,
the excess constitutes negative UNII that is likewise reflected in the Fund's
NAV. NIM will, over time, pay all of its net investment income as dividends to
shareholders. As of March 31, 2010, NIM had a positive UNII balance for tax
purposes and a positive UNII balance for financial reporting purposes.
SHARE REPURCHASES AND SHARE PRICE INFORMATION
Since the inception of the Fund's repurchase program, the Fund has not
repurchased any of its outstanding shares.
As of March 31, 2010, the share price of NIM was trading at a (+) premium of (+)
1.96% to its NAV. The Fund's average (+) premium over the twelve-month reporting
period was (+) 1.46%.
Nuveen Investments 5
NIM Performance OVERVIEW | Nuveen Select
| Maturities
| Municipal Fund
| as of March 31, 2010
FUND SNAPSHOT
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Share Price $10.42
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Net Asset Value $10.22
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Premium/(Discount) to NAV 1.96%
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Market Yield 4.03%
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Taxable-Equivalent Yield(1) 5.60%
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Net Assets ($000) $126,832
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Average Effective Maturity on Securities (Years) 9.81
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Modified Duration 3.81
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AVERAGE ANNUAL TOTAL RETURN
(Inception 9/18/92)
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ON SHARE PRICE ON NAV
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1-Year 8.83% 10.06%
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5-Year 7.06% 4.53%
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10-Year 4.90% 3.89%
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STATES
(as a % of total investments)
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Illinois 15.1%
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Colorado 12.2%
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Pennsylvania 7.5%
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Texas 6.9%
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New York 6.4%
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Florida 5.7%
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South Carolina 5.6%
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Wisconsin 3.8%
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Arkansas 3.3%
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Kansas 3.1%
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Alabama 2.6%
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Iowa 2.3%
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Tennessee 2.1%
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Massachusetts 2.0%
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North Carolina 1.6%
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Minnesota 1.6%
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California 1.6%
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Connecticut 1.5%
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Louisiana 1.5%
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Other 13.6%
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PORTFOLIO COMPOSITION
(as a % of total investments)
--------------------------------------------------------------------------------
Utilities 18.1%
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U.S. Guaranteed 17.6%
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Tax Obligation/Limited 13.8%
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Health Care 10.8%
--------------------------------------------------------------------------------
Tax Obligation/General 8.4%
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Transportation 6.7%
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Education and Civic Organizations 5.2%
--------------------------------------------------------------------------------
Long-Term Care 5.1%
--------------------------------------------------------------------------------
Other 14.3%
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CREDIT QUALITY (AS A % OF TOTAL INVESTMENTS)
[PIE CHART]
AAA/U.S. Guaranteed 29%
AA 7%
A 36%
BBB 17%
BB or Lower 3%
N/R 8%
2009-2010 MONTHLY TAX-FREE DIVIDENDS PER SHARE
[BAR CHART]
Apr 0.035
May 0.035
Jun 0.035
Jul 0.035
Aug 0.035
Sep 0.035
Oct 0.035
Nov 0.035
Dec 0.035
Jan 0.035
Feb 0.035
Mar 0.035
SHARE PRICE PERFORMANCE -- WEEKLY CLOSING PRICE
[LINE GRAPH]
4/1/09 9.96
10.16
10.1
10.02
9.99
9.99
10.04
10
9.96
10.15
9.975
9.95
9.91
10.13
10.08
10.2
10.03
9.99
10.01
9.98
9.98
10.03
10.1199
10.01
10.122
10.25
10.35
10.33
10.2
10.11
10.164
10.15
10.3
10.13
10.16
10.5338
10.31
10.54
10.5
10.33
10.363
10.45
10.47
10.34
10.34
10.47
10.4
10.406
10.42
10.62
10.34
10.445
10.488
3/31/10 10.42
(1) Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a income tax rate of 28%. When comparing
this Fund to investments that generate qualified dividend income, the
Taxable-Equivalent Yield is lower.
6 Nuveen Investments
REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS
NUVEEN SELECT MATURITIES MUNICIPAL FUND
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Nuveen Select Maturities Municipal Fund (the
"Fund") as of March 31, 2010, and the related statement of operations for the
year then ended, the statement of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of the
five years in the period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Fund's internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Fund's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of March 31, 2010, by correspondence with the custodian. 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 position of Nuveen
Select Maturities Municipal Fund at March 31, 2010, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the five years in the period then ended in conformity with US generally accepted
accounting principles.
/s/ Ernst & Young LLP
Chicago, Illinois
May 24, 2010
Nuveen Investments 7
NIM | Nuveen Select Maturities Municipal Fund
| Portfolio of Investments
March 31, 2010
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
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ALABAMA - 2.5%
$ 2,000 Alabama 21st Century Authority, Tobacco Settlement Revenue 12/11 at 101.00 A- $ 2,039,080
Bonds, Series 2001, 5.750%, 12/01/17
180 Birmingham Special Care Facilities Financing Authority, 11/15 at 100.00 Baa2 155,603
Alabama, Revenue Bonds, Baptist Health System Inc.,
Series 2005A, 5.000%, 11/15/30
500 Jefferson County, Alabama, Sewer Revenue Refunding Warrants, 8/10 at 100.00 AAA 484,040
Series 2003B, 5.250%, 2/01/12 - AGM Insured
500 Marshall County Healthcare Authority, Alabama, Revenue Bonds, 1/12 at 101.00 A- 512,085
Series 2002A, 6.250%, 1/01/22
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3,180 Total Alabama 3,190,808
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ARIZONA - 1.0%
Salt Verde Financial Corporation, Arizona, Senior Gas Revenue
Bonds, Series 2007:
100 5.000%, 12/01/17 No Opt. Call A 100,113
85 5.250%, 12/01/19 No Opt. Call A 85,109
35 5.000%, 12/01/32 No Opt. Call A 31,232
380 5.000%, 12/01/37 No Opt. Call A 332,207
750 Surprise Municipal Property Corporation, Arizona, Wastewater 4/11 at 100.00 N/R 715,290
System Revenue Bonds, Series 2007, 4.500%, 4/01/17
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1,350 Total Arizona 1,263,951
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ARKANSAS - 3.3%
1,500 Jefferson County, Arkansas, Pollution Control Revenue Bonds, 6/11 at 100.00 A- 1,514,745
Entergy Arkansas Inc. Project, Series 2006, 4.600%, 10/01/17
1,000 Jonesboro, Arkansas, Industrial Development Revenue Bonds, No Opt. Call BBB+ 1,073,250
Anheuser Busch Inc. Project, Series 2002, 4.600%, 11/15/12
1,380 North Little Rock, Arkansas, Electric Revenue Refunding Bonds, No Opt. Call A 1,540,218
Series 1992A, 6.500%, 7/01/15 - NPFG Insured
------------------------------------------------------------------------------------------------------------------------------------
3,880 Total Arkansas 4,128,213
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 1.6%
400 California Health Facilities Financing Authority, Revenue 7/15 at 100.00 A 416,460
Bonds, Catholic Healthcare West, Series 2008H,
5.125%, 7/01/22
500 California State, General Obligation Bonds, Various Purpose 3/20 at 100.00 A- 499,245
Series 2010, 5.500%, 3/01/40
255 Golden State Tobacco Securitization Corporation, California, 6/17 at 100.00 BBB 235,725
Enhanced Tobacco Settlement Asset-Backed Bonds, Series
2007A-1, 4.500%, 6/01/27
2,000 Palomar Pomerado Health, California, General Obligation Bonds, No Opt. Call AAA 826,140
Series 2009A, 0.000%, 8/01/25 - AGC Insured
------------------------------------------------------------------------------------------------------------------------------------
3,155 Total California 1,977,570
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 12.0%
2,895 Centennial Downs Metropolitan District, Colorado, General 12/14 at 100.00 N/R 3,137,659
Obligation Bonds, Series 1999, 5.000%, 12/01/20 - AMBAC
Insured
1,170 Colorado Educational and Cultural Facilities Authority, 7/12 at 100.00 BBB 1,168,865
Charter School Revenue Bonds, Douglas County School District
RE-1 - DCS Montessori School, Series 2002A, 6.000%, 7/15/22
1,175 Colorado Educational and Cultural Facilities Authority, 12/13 at 100.00 A 1,177,973
Revenue Bonds, Classical Academy Charter School, Series
2003, 4.500%, 12/01/18 - SYNCORA GTY Insured
190 Colorado Housing Finance Authority, Single Family Program 4/10 at 105.00 AA 202,795
Senior Bonds, Series 2000D-2, 6.900%, 4/01/29
(Alternative Minimum Tax)
1,025 Denver Health and Hospitals Authority, Colorado, Healthcare 12/11 at 100.00 N/R (4) 1,112,248
Revenue Bonds, Series 2001A, 6.000%, 12/01/23
(Pre-refunded 12/01/11)
1,465 Denver West Metropolitan District, Colorado, General 12/13 at 100.00 N/R 1,321,738
Obligation Refunding and Improvement Bonds, Series 2003,
4.500%, 12/01/18 - RAAI Insured
1,500 E-470 Public Highway Authority, Colorado, Senior Revenue No Opt. Call A 1,599,015
Bonds, Series 2007C-2, 5.000%, 9/01/39
(Mandatory put 9/01/13) - NPFG Insured
1,000 E-470 Public Highway Authority, Colorado, Toll Revenue Bonds, No Opt. Call A 171,210
Series 2004B, 0.000%, 3/01/36 - NPFG Insured
8 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
COLORADO (continued)
$ 70 Northwest Parkway Public Highway Authority, Colorado, Revenue 6/11 at 102.00 AAA $ 75,241
Bonds, Senior Series 2001A, 5.250%, 6/15/41
(Pre-refunded 6/15/11) - AGM Insured
5,875 Northwest Parkway Public Highway Authority, Colorado, Senior 6/11 at 38.04 N/R (4) 2,202,009
Lien Revenue Bonds, Series 2001B, 0.000%, 6/15/27
(Pre-refunded 6/15/11) - AMBAC Insured
2,845 University of Colorado Hospital Authority, Revenue Bonds, 11/11 at 100.00 A3 (4) 3,058,147
Series 2001A, 5.600%, 11/15/21 (Pre-refunded 11/15/11)
------------------------------------------------------------------------------------------------------------------------------------
19,210 Total Colorado 15,226,900
------------------------------------------------------------------------------------------------------------------------------------
CONNECTICUT - 1.5%
Eastern Connecticut Resource Recovery Authority, Solid Waste
Revenue Bonds, Wheelabrator Lisbon Project, Series 1993A:
335 5.500%, 1/01/14 (Alternative Minimum Tax) 7/10 at 100.00 BBB 335,503
1,570 5.500%, 1/01/15 (Alternative Minimum Tax) 7/10 at 100.00 BBB 1,572,025
------------------------------------------------------------------------------------------------------------------------------------
1,905 Total Connecticut 1,907,528
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 5.6%
2,400 Deltona, Florida, Utility Systems Water and Sewer Revenue 10/13 at 100.00 A 2,485,824
Bonds, Series 2003, 5.250%, 10/01/17 - NPFG Insured
1,000 Florida Citizens Property Insurance Corporation, High Risk No Opt. Call A+ 1,064,030
Account Revenue Bonds, Series 2007A, 5.000%, 3/01/15 - NPFG
Insured
600 Florida Department of Environmental Protection, Florida 7/17 at 101.00 AA- 652,572
Forever Revenue Bonds, Series 2007B, 5.000%, 7/01/19 - NPFG
Insured
45 JEA, Florida, Electric Revenue Certificates, Series 1973-2, No Opt. Call AAA 48,266
6.800%, 7/01/12 (ETM)
2,000 Orange County, Florida, Tourist Development Tax Revenue Bonds, 10/15 at 100.00 A+ 2,087,040
Series 2005, 5.000%, 10/01/22 - AMBAC Insured
265 Port Everglades Authority, Florida, Port Facilities Revenue No Opt. Call AAA 312,806
Bonds, Series 1986, 7.125%, 11/01/16 (ETM)
500 South Miami Health Facilities Authority, Florida, Hospital 8/17 at 100.00 AA- 505,810
Revenue, Baptist Health System Obligation Group, Series
2007, 5.000%, 8/15/27
------------------------------------------------------------------------------------------------------------------------------------
6,810 Total Florida 7,156,348
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 0.4%
405 Cherokee County Water and Sewerage Authority, Georgia, Revenue 8/22 at 100.00 A (4) 457,496
Bonds, Series 1995, 5.200%, 8/01/25 (Pre-refunded 8/01/22) -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
IDAHO - 0.1%
100 Madison County, Idaho, Hospital Revenue Certificates of 9/16 at 100.00 BBB- 87,190
Participation, Madison Memorial Hospital, Series 2006,
5.250%, 9/01/37
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 14.9%
550 Chicago, Illinois, Tax Increment Allocation Bonds, 7/10 at 100.00 N/R 550,451
Irving/Cicero Redevelopment Project, Series 1998, 7.000%,
1/01/14
1,500 Cook County Township High School District 208, Illinois, 12/15 at 100.00 A1 1,596,585
General Obligation Bonds, Series 2006, 5.000%, 12/01/21 -
NPFG Insured
2,000 Huntley, Illinois, Special Service Area 9, Special Tax Bonds, 3/17 at 100.00 AAA 2,068,160
Series 2007, 5.100%, 3/01/28 - AGC Insured
4,800 Illinois Development Finance Authority, GNMA Collateralized 4/11 at 105.00 Aaa 5,453,517
Mortgage Revenue Bonds, Greek American Nursing Home
Committee, Series 2000A, 7.600%, 4/20/40
2,000 Illinois Development Finance Authority, Revenue Refunding 4/10 at 102.00 Ba1 1,945,880
Bonds, Olin Corporation, Series 1993D, 6.750%, 3/01/16
2,000 Illinois Educational Facilities Authority, Revenue Bonds, Art 3/14 at 100.00 A+ 2,124,180
Institute of Chicago, Series 2000, 4.450%, 3/01/34
(Mandatory put 3/01/15)
1,000 Illinois Educational Facilities Authority, Student Housing 5/12 at 101.00 Aaa 1,126,250
Revenue Bonds, Educational Advancement Foundation Fund,
University Center Project, Series 2002, 6.625%, 5/01/17
(Pre-refunded 5/01/12)
250 Illinois Finance Authority, Revenue Bonds, Roosevelt University, 4/17 at 100.00 Baa2 245,423
Series 2007, 5.250%, 4/01/22
Nuveen Investments 9
NIM | Nuveen Select Maturities Municipal Fund (continued)
| Portfolio of Investments March 31, 2010
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS (continued)
$ 25 Illinois Health Facilities Authority, Revenue Bonds, Condell 5/10 at 101.00 Aaa $ 25,432
Medical Center, Series 2000, 6.350%, 5/15/15
(Pre-refunded 5/15/10)
20 Illinois Health Facilities Authority, Revenue Bonds, Condell No Opt. Call Aaa 21,770
Medical Center, Series 2002, 5.250%, 5/15/12 (ETM)
50 Illinois Health Facilities Authority, Revenue Bonds, Lutheran No Opt. Call AAA 52,471
General Health System, Series 1993A, 6.125%, 4/01/12 - AGM
Insured (ETM)
695 Illinois Health Facilities Authority, Revenue Bonds, Silver 8/10 at 100.50 BBB 696,077
Cross Hospital and Medical Centers, Series 1999, 5.500%,
8/15/19
1,125 Illinois State, General Obligation Refunding Bonds, Series No Opt. Call A+ 1,206,439
2010, 5.000%, 1/01/19
1,355 Kane & DeKalb Counties, Illinois, Community United School No Opt. Call A3 922,945
District 301, General Obligation Bonds, Series 2006,
0.000%, 12/01/18 - NPFG Insured
700 Regional Transportation Authority, Cook, DuPage, Kane, Lake, No Opt. Call AA+ 893,417
McHenry and Will Counties, Illinois, General Obligation
Bonds, Series 1994D, 7.750%, 6/01/19 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
18,070 Total Illinois 18,928,997
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 0.4%
250 Indiana Finance Authority Educational Facilities Revenue 10/19 at 100.00 BBB- 251,798
Bonds, Drexel Foundation For Educational Excellence, Inc.,
- Educational Facility Project, Series 2009, 6.000%, 10/01/21
250 Jasper County, Indiana, Pollution Control Revenue Refunding No Opt. Call AA 269,115
Bonds, Northern Indiana Public Service Company Project,
Series 1994A Remarketed, 5.850%, 4/01/19 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
500 Total Indiana 520,913
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 2.2%
1,000 Iowa Finance Authority, Healthcare Revenue Bonds, Genesis 7/10 at 100.00 A1 1,002,320
Medical Center, Series 2000, 6.250%, 7/01/25
1,725 Iowa Tobacco Settlement Authority, Tobacco Settlement 6/11 at 101.00 AAA 1,816,270
Asset-Backed Revenue Bonds, Series 2001B, 5.300%, 6/01/25
(Pre-refunded 6/01/11)
------------------------------------------------------------------------------------------------------------------------------------
2,725 Total Iowa 2,818,590
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 3.0%
3,500 Wichita, Kansas, Hospital Facilities Revenue Refunding and 11/11 at 101.00 A+ 3,567,268
Improvement Bonds, Via Christi Health System Inc., Series
2001-III, 5.500%, 11/15/21
250 Wyandotte County-Kansas City Unified Government, Kansas, Sales 12/15 at 100.00 N/R 253,678
Tax Special Obligation Bonds, Redevelopment Project Area B,
Series 2005, 5.000%, 12/01/20
------------------------------------------------------------------------------------------------------------------------------------
3,750 Total Kansas 3,820,946
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 1.0%
325 Kentucky Economic Development Finance Authority, Louisville 6/18 at 100.00 AAA 354,572
Arena Project Revenue Bonds, Louisville Arena Authority,
Inc., Series 2008A-1, 5.750%, 12/01/28 - AGC Insured
920 Kentucky Housing Corporation, Housing Revenue Bonds, Series 1/15 at 100.60 AAA 948,327
2005G, 5.000%, 7/01/30 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
1,245 Total Kentucky 1,302,899
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 1.4%
1,010 Louisiana Public Facilities Authority, Revenue Bonds, Baton 7/14 at 100.00 A 1,026,817
Rouge General Hospital, Series 2004, 5.250%, 7/01/24 -
NPFG Insured
Tobacco Settlement Financing Corporation, Louisiana, Tobacco
Settlement Asset-Backed Bonds, Series 2001B:
560 5.500%, 5/15/30 5/11 at 101.00 BBB 560,605
245 5.875%, 5/15/39 5/11 at 101.00 BBB 227,786
------------------------------------------------------------------------------------------------------------------------------------
1,815 Total Louisiana 1,815,208
------------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 0.9%
1,100 Maryland Energy Financing Administration, Revenue Bonds, AES 9/10 at 100.00 N/R 1,100,352
Warrior Run Project, Series 1995, 7.400%, 9/01/19
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
10 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 2.0%
$ 500 Massachusetts Development Finance Agency, Revenue Bonds, 10/17 at 100.00 N/R $ 431,765
Orchard Cove, Series 2007, 5.000%, 10/01/19
1,510 Massachusetts Housing Finance Agency, Rental Housing Mortgage 7/10 at 100.00 A 1,515,074
Revenue Bonds, Series 2000H, 6.650%, 7/01/41 - NPFG Insured
(Alternative Minimum Tax)
190 Massachusetts Housing Finance Agency, Single Family Housing 6/10 at 100.00 AA 192,417
Revenue Bonds, Series 84, 5.000%, 12/01/13
(Alternative Minimum Tax)
Massachusetts Port Authority, Special Facilities Revenue Bonds,
Delta Air Lines Inc., Series 2001A:
100 5.200%, 1/01/20 - AMBAC Insured (Alternative Minimum Tax) 1/11 at 101.00 N/R 86,085
435 5.000%, 1/01/27 - AMBAC Insured (Alternative Minimum Tax) 1/11 at 101.00 N/R 320,177
------------------------------------------------------------------------------------------------------------------------------------
2,735 Total Massachusetts 2,545,518
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 1.2%
1,000 Cornell Township Economic Development Corporation, Michigan, 5/12 at 100.00 AAA 1,097,090
Environmental Improvement Revenue Refunding Bonds,
MeadWestvaco Corporation-Escanaba Project, Series 2002,
5.875%, 5/01/18 (Pre-refunded 5/01/12)
445 Michigan State Hospital Finance Authority, Hospital Revenue 7/10 at 100.00 BB 445,000
Refunding Bonds, Sinai Hospital, Series 1995, 6.625%, 1/01/16
------------------------------------------------------------------------------------------------------------------------------------
1,445 Total Michigan 1,542,090
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 1.6%
1,100 Becker, Minnesota, Pollution Control Revenue Bonds, Northern 8/12 at 101.00 A1 1,270,181
States Power Company, Series 1993A, 8.500%, 9/01/19
250 Northern Municipal Power Agency, Minnesota, Electric System No Opt. Call AAA 279,125
Revenue Bonds, Refunding Series 2009A, 5.000%, 1/01/15 -
AGC Insured
440 White Earth Band of Chippewa Indians, Minnesota, Revenue Bonds, No Opt. Call N/R 454,617
Series 2000A, 7.000%, 12/01/11 - ACA Insured
------------------------------------------------------------------------------------------------------------------------------------
1,790 Total Minnesota 2,003,923
------------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 0.6%
Mississippi Hospital Equipment and Facilities Authority,
Revenue Bonds, Baptist Memorial Healthcare, Series 2004B-1:
280 5.000%, 9/01/16 No Opt. Call AA 299,645
300 5.000%, 9/01/24 9/14 at 100.00 AA 306,417
250 Warren County, Mississippi, Gulf Opportunity Zone Revenue 8/11 at 100.00 BBB 217,660
Bonds, International Paper Company, Series 2006A, 4.800%,
8/01/30
------------------------------------------------------------------------------------------------------------------------------------
830 Total Mississippi 823,722
------------------------------------------------------------------------------------------------------------------------------------
MONTANA - 0.1%
60 University of Montana, Revenue Bonds, Series 1996D, 5.375%, 5/10 at 100.00 A (4) 69,551
5/15/19 - MBIA Insured (ETM)
------------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 0.9%
1,000 Dodge County School District 1, Nebraska, Fremont Public 12/14 at 100.00 Aa3 1,093,730
Schools, General Obligation Bonds, Series 2004, 5.000%,
12/15/19 - AGM Insured
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 1.2%
1,000 Clark County, Nevada, Airport Revenue Bonds, Subordinte Lien 1/20 at 100.00 Aa3 1,050,930
Series 2010B, 5.750%, 7/01/42
Director of Nevada State Department of Business and Industry,
Revenue Bonds, Las Vegas Monorail Project, First Tier,
Series 2000:
800 0.000%, 1/01/15 - AMBAC Insured No Opt. Call Caa2 190,952
35 0.000%, 1/01/16 - AMBAC Insured No Opt. Call Caa2 7,874
120 0.000%, 1/01/18 - AMBAC Insured No Opt. Call Caa2 24,004
50 0.000%, 1/01/20 - AMBAC Insured No Opt. Call Caa2 8,873
250 Las Vegas Redevelopment Agency, Nevada, Tax Increment Revenue 6/19 at 100.00 A 283,990
Bonds, Series 2009A, 8.000%, 6/15/30
------------------------------------------------------------------------------------------------------------------------------------
2,255 Total Nevada 1,566,623
------------------------------------------------------------------------------------------------------------------------------------
Nuveen Investments 11
NIM | Nuveen Select Maturities Municipal Fund (continued)
| Portfolio of Investments March 31, 2010
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 0.9%
$ 410 Bayonne Redevelopment Agency, New Jersey, Revenue Bonds, No Opt. Call BB- $ 344,097
Royal Caribbean Cruises Project, Series 2006A, 4.750%,
11/01/16 (Alternative Minimum Tax)
1,730 New Jersey Transportation Trust Fund Authority, No Opt. Call AA- 441,998
Transportation System Bonds, Capital Appreciation Series
2010A, 0.000%, 12/15/33
445 Tobacco Settlement Financing Corporation, New Jersey, 6/17 at 100.00 BBB 424,526
Tobacco Settlement Asset-Backed Bonds, Series 2007-1A,
4.500%, 6/01/23
------------------------------------------------------------------------------------------------------------------------------------
2,585 Total New Jersey 1,210,621
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 6.3%
220 Brooklyn Areba Local Development Corporation, New York, 1/20 at 100.00 BBB- 226,274
Payment in Lieu of Taxes Revenue Bonds, Barclays Center
Project, Series 2009, 6.000%, 7/15/30
1,000 Dormitory Authority of the State of New York, Revenue Bonds, 7/13 at 100.00 BBB+ 1,063,730
Brooklyn Law School, Series 2003A, 5.500%, 7/01/15 - RAAI
Insured
240 New York City Industrial Development Agency, New York, Civic No Opt. Call N/R 234,223
Facility Revenue Bonds, Special Needs Facilities Pooled
Program, Series 2008A-1, 5.700%, 7/01/13
1,500 New York State Energy Research and Development Authority, 4/10 at 100.00 A- 1,501,560
Facilities Revenue Bonds, Consolidated Edison Company
Inc., Series 2001A, 4.700%, 6/01/36 (Mandatory put
10/01/12) (Alternative Minimum Tax)
New York State Tobacco Settlement Financing Corporation,
Tobacco Settlement Asset-Backed and State Contingency
Contract-Backed Bonds, Series 2003A-1:
20 5.500%, 6/01/14 6/14 at 100.00 AA- 20,071
195 5.250%, 6/01/20 - AMBAC Insured 6/13 at 100.00 AA- 207,326
125 5.250%, 6/01/22 - AMBAC Insured 6/13 at 100.00 AA- 131,778
50 New York State Tobacco Settlement Financing Corporation, 6/13 at 100.00 AA- 53,241
Tobacco Settlement Asset-Backed and State Contingency
Contract-Backed Bonds, Series 2003B-1C, 5.500%, 6/01/22
4,300 Port Authority of New York and New Jersey, Special Project No Opt. Call A 4,586,980
Bonds, JFK International Air Terminal LLC, Sixth Series
1997, 7.000%, 12/01/12 - NPFG Insured (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
7,650 Total New York 8,025,183
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 1.6%
1,880 Union County, North Carolina, Certificates of Participation, 6/13 at 101.00 AA- 2,019,684
Series 2003, 5.000%, 6/01/18 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 1.4%
775 Buckeye Tobacco Settlement Financing Authority, Ohio, 6/17 at 100.00 BBB 717,805
Tobacco Settlement Asset-Backed Revenue Bonds, Senior
Lien, Series 2007A-2, 5.125%, 6/01/24
1,000 Toledo-Lucas County Port Authority, Ohio, Port Revenue No Opt. Call A 1,059,930
Bonds, Cargill Inc., Series 2004B, 4.500%, 12/01/15
------------------------------------------------------------------------------------------------------------------------------------
1,775 Total Ohio 1,777,735
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 7.4%
200 Luzerne County Industrial Development Authority, 12/19 at 100.00 N/R 197,130
Pennsylvania, Guaranteed Lease Revenue Bonds, Series
2009, 7.750%, 12/15/27
400 Pennsylvania Economic Development Financing Authority, 10/23 at 100.00 A- 404,272
Pollution Control Revenue Bonds, PPL Electric Utilities
Corporation, Refunding Series 2008, 4.850%, 10/01/23
(Mandatory put 10/01/10)
895 Pennsylvania Higher Educational Facilities Authority, No Opt. Call Aaa 1,032,579
College Revenue Bonds, Ninth Series 1976, 7.625%, 7/01/15
(ETM)
225 Pennsylvania Higher Educational Facilities Authority, 9/10 at 100.00 N/R (4) 249,566
Revenue Bonds, University of the Arts, Series 1999,
5.150%, 3/15/20 - RAAI Insured (ETM)
4,120 Philadelphia Gas Works, Pennsylvania, Revenue Bonds, 8/14 at 100.00 Baa2 4,342,725
Eighteenth Series 2004, 5.000%, 8/01/15 - AMBAC Insured
1,435 Philadelphia Gas Works, Pennsylvania, Revenue Bonds, Twelfth No Opt. Call Aaa 1,765,724
Series 1990B, 7.000%, 5/15/20 - MBIA Insured (ETM)
12 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA (continued)
$ 250 Philadelphia Hospitals and Higher Education Facilities 5/10 at 100.00 BBB $ 250,018
Authority, Pennsylvania, Hospital Revenue Bonds, Temple
University Hospital, Series 1993A, 6.625%, 11/15/23
1,085 Pittsburgh School District, Allegheny County, Pennsylvania, No Opt. Call A1 1,179,004
General Obligation Bonds, Series 2006B, 5.000%, 9/01/12 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
8,610 Total Pennsylvania 9,421,018
------------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 0.6%
1,000 Puerto Rico Sales Tax Financing Corporation, Sales Tax 8/26 at 100.00 A+ 766,230
Revenue Bonds, First Subordinate Series 2009A, 0.000%,
8/01/32
------------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 0.7%
Rhode Island Tobacco Settlement Financing Corporation,
Tobacco Settlement Asset-Backed Bonds, Series 2002A:
255 6.125%, 6/01/32 6/12 at 100.00 BBB 243,622
725 6.250%, 6/01/42 6/12 at 100.00 BBB 667,812
------------------------------------------------------------------------------------------------------------------------------------
980 Total Rhode Island 911,434
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 5.5%
750 Berkeley County School District, South Carolina, Installment 12/13 at 100.00 A- 782,340
Purchase Revenue Bonds, Securing Assets for Education,
Series 2003, 5.250%, 12/01/19
1,540 Piedmont Municipal Power Agency, South Carolina, Electric No Opt. Call Baa1 (4) 1,949,548
Revenue Bonds, Series 1991, 6.750%, 1/01/19 - FGIC
Insured (ETM)
2,835 Piedmont Municipal Power Agency, South Carolina, Electric No Opt. Call Baa1 3,407,923
Revenue Bonds, Series 1991, 6.750%, 1/01/19 - FGIC Insured
5 South Carolina JOBS Economic Development Authority, Economic 11/12 at 100.00 A3 (4) 5,569
Development Revenue Bonds, Bon Secours Health System
Inc., Series 2002A, 5.625%, 11/15/30 (Pre-refunded
11/15/12)
20 South Carolina JOBS Economic Development Authority, Economic 11/12 at 100.00 A- 19,914
Development Revenue Bonds, Bon Secours Health System
Inc., Series 2002B, 5.625%, 11/15/30
450 South Carolina JOBS Economic Development Authority, Hospital No Opt. Call Baa2 (4) 468,252
Revenue Bonds, Palmetto Health Alliance, Series 2000A,
7.000%, 12/15/10 (ETM)
325 Tobacco Settlement Revenue Management Authority, South 5/12 at 100.00 BBB (4) 336,785
Carolina, Tobacco Settlement Asset-Backed Bonds, Series
2001B, 6.000%, 5/15/22 (Pre-refunded 5/15/12)
------------------------------------------------------------------------------------------------------------------------------------
5,925 Total South Carolina 6,970,331
------------------------------------------------------------------------------------------------------------------------------------
SOUTH DAKOTA - 0.8%
1,000 South Dakota Health and Educational Facilities Authority, 5/17 at 100.00 AA- 997,640
Revenue Bonds, Sanford Health, Series 2007, 5.000%,
11/01/27
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 2.1%
Shelby County Health, Educational and Housing Facilities
Board, Tennessee, Hospital Revenue Bonds, Methodist
Healthcare, Series 2002:
750 6.000%, 9/01/17 (Pre-refunded 9/01/12) 9/12 at 100.00 AAA 836,843
1,250 6.000%, 9/01/17 (Pre-refunded 9/01/12) 9/12 at 100.00 AAA 1,394,738
400 The Tennessee Energy Acquisition Corporation, Gas Revenue No Opt. Call BB+ 423,516
Bonds, Series 2006A, 5.000%, 9/01/13
------------------------------------------------------------------------------------------------------------------------------------
2,400 Total Tennessee 2,655,097
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 6.8%
1,055 Austin, Texas, General Obligation Bonds, Series 2004, 9/14 at 100.00 AAA 1,156,797
5.000%, 9/01/20 - NPFG Insured
565 Bexar County Housing Finance Corporation, Texas, FNMA No Opt. Call AAA 591,770
Guaranteed Multifamily Housing Revenue Bonds, Villas
Sonterra Apartments Project, Series 2007A, 4.700%,
10/01/15 (Alternative Minimum Tax)
25 Brazos River Authority, Texas, Collateralized Pollution No Opt. Call CCC 17,974
Control Revenue Bonds, Texas Utilities Electric Company,
Series 2003D, 5.400%, 10/01/29 (Mandatory put 10/01/14)
2,000 Brazos River Authority, Texas, Collateralized Revenue 6/14 at 100.00 BBB+ 1,971,480
Refunding Bonds, CenterPoint Energy Inc., Series 2004B,
4.250%, 12/01/17 - FGIC Insured
Nuveen Investments 13
NIM | Nuveen Select Maturities Municipal Fund (continued)
| Portfolio of Investments March 31, 2010
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS (continued)
$ 500 Brazos River Authority, Texas, Pollution Control Revenue No Opt. Call CCC $ 481,675
Refunding Bonds, TXU Electric Company, Series 2001C,
5.750%, 5/01/36 (Mandatory put 11/01/11) (Alternative
Minimum Tax)
15 Brazos River Authority, Texas, Pollution Control Revenue No Opt. Call CCC 12,394
Refunding Bonds, TXU Energy Company LLC, Series 2003A,
6.750%, 4/01/38 (Mandatory put 4/01/13) (Alternative
Minimum Tax)
1,875 Denton Independent School District, Denton County, Texas, 8/16 at 100.00 AAA 2,060,156
General Obligation Bonds, Series 2006, 5.000%, 8/15/20
5 Galveston Property Finance Authority Inc., Texas, Single 9/10 at 100.00 Caa1 4,924
Family Mortgage Revenue Bonds, Series 1991A, 8.500%,
9/01/11
300 Kerrville Health Facilities Development Corporation, Texas, No Opt. Call BBB- 272,499
Revenue Bonds, Sid Peterson Memorial Hospital Project,
Series 2005, 5.125%, 8/15/26
325 North Texas Thruway Authority, Second Tier System Revenue 1/18 at 100.00 A3 333,544
Refunding Bonds, Series 2008, 5.750%, 1/01/38
25 Sabine River Authority, Texas, Pollution Control Revenue No Opt. Call CCC 24,084
Bonds, TXU Energy Company LLC Project, Series 2001B,
5.750%, 5/01/30 (Mandatory put 11/01/11) (Alternative
Minimum Tax)
1,500 Texas Municipal Gas Acquisition and Supply Corporation I, 7/10 at 100.00 A 1,264,125
Gas Supply Revenue Bonds, Series 2006B, 0.719%, 12/15/17
215 Tri-County Mental Health and Retardation Center, Texas, 9/10 at 100.00 AAA 219,253
Revenue Bonds, Facilities Acquisition Program, Series
1995E, 6.500%, 3/01/15 - AGM Insured
160 Weslaco Health Facilities Development Corporation, Texas, 6/12 at 100.00 N/R (4) 171,291
Hospital Revenue Bonds, Knapp Medical Center, Series
2002, 6.000%, 6/01/17 (Pre-refunded 6/01/12)
------------------------------------------------------------------------------------------------------------------------------------
8,565 Total Texas 8,581,966
------------------------------------------------------------------------------------------------------------------------------------
UTAH - 0.4%
460 Bountiful, Davis County, Utah, Hospital Revenue Refunding No Opt. Call N/R 459,729
Bonds, South Davis Community Hospital Project, Series
1998, 6.000%, 12/15/10
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 0.2%
250 Virginia College Building Authority, Educational Facilities 7/10 at 100.00 N/R 250,293
Revenue Refunding Bonds, Marymount University, Series
1998, 5.100%, 7/01/18 - RAAI Insured
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 0.7%
295 Washington Public Power Supply System, Revenue Refunding No Opt. Call Aaa 367,670
Bonds, Nuclear Project 3, Series 1989B, 7.125%, 7/01/16 -
NPFG Insured
495 Washington State Tobacco Settlement Authority, Tobacco 6/13 at 100.00 BBB 502,559
Settlement Asset-Backed Revenue Bonds, Series 2002,
6.500%, 6/01/26
------------------------------------------------------------------------------------------------------------------------------------
790 Total Washington 870,229
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 3.8%
Badger Tobacco Asset Securitization Corporation, Wisconsin,
Tobacco Settlement Asset-Backed Bonds, Series 2002:
570 6.125%, 6/01/27 (Pre-refunded 6/01/12) 6/12 at 100.00 AAA 612,203
1,480 6.375%, 6/01/32 (Pre-refunded 6/01/12) 6/12 at 100.00 AAA 1,647,181
1,000 Wisconsin Health and Educational Facilities Authority, 7/11 at 100.00 A- 1,008,260
Revenue Bonds, Agnesian Healthcare Inc., Series 2001,
6.000%, 7/01/21
14 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN (continued)
$ 1,150 Wisconsin Health and Educational Facilities Authority, 8/10 at 100.00 A3 $ 1,149,931
Revenue Bonds, Aurora Health Care Inc., Series 1999A,
5.500%, 2/15/20 - ACA Insured
Wisconsin Health and Educational Facilities Authority,
Revenue Bonds, Wheaton Franciscan Healthcare System,
Series 2006:
200 5.250%, 8/15/18 8/16 at 100.00 BBB+ 197,326
180 5.250%, 8/15/34 8/16 at 100.00 BBB+ 158,224
------------------------------------------------------------------------------------------------------------------------------------
4,580 Total Wisconsin 4,773,125
------------------------------------------------------------------------------------------------------------------------------------
$ 127,765 Total Investments (cost $121,501,008) - 98.6% 125,039,381
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.4% 1,792,629
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $ 126,832,010
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net
assets.
(2) Optional Call Provisions (not covered by the report of independent
registered public accounting firm): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other call
provisions at varying prices at later dates. Certain mortgage-backed
securities may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered public
accounting firm): Using the higher of Standard & Poor's Group ("Standard &
Poor's") or Moody's Investor Service, Inc. ("Moody's") rating. Ratings
below BBB by Standard & Poor's or Baa by Moody's are considered to be
below investment grade.
(4) Backed by an escrow or trust containing sufficient U.S. Government or U.S.
Government agency securities which ensure the timely payment of principal
and interest. Such investments are normally considered to be equivalent to
AAA rated securities.
N/R Not rated.
(ETM) Escrowed to maturity.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
Nuveen Investments 15
| STATEMENT OF
| ASSETS & LIABILITIES
March 31, 2010
------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $121,501,008) $ 125,039,381
Cash 96,107
Receivables:
Interest 1,895,307
Investments sold 316,750
Other assets 7,283
------------------------------------------------------------------------------------------------------------------------------------
Total assets 127,354,828
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Dividends payable 414,938
Accrued expenses:
Management fees 52,689
Other 55,191
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 522,818
------------------------------------------------------------------------------------------------------------------------------------
Net assets $ 126,832,010
====================================================================================================================================
Shares outstanding 12,415,752
====================================================================================================================================
Net asset value per share outstanding $ 10.22
====================================================================================================================================
NET ASSETS CONSIST OF:
------------------------------------------------------------------------------------------------------------------------------------
Shares, $.01 par value per share $ 124,158
Paid-in surplus 138,522,395
Undistributed (Over-distribution of) net investment income 120,834
Accumulated net realized gain (loss) (15,473,750)
Net unrealized appreciation (depreciation) 3,538,373
------------------------------------------------------------------------------------------------------------------------------------
Net assets $ 126,832,010
====================================================================================================================================
Authorized shares Unlimited
====================================================================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
16 Nuveen Investments
| STATEMENT OF
| OPERATIONS
Year Ended March 31, 2010
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $ 6,196,131
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 614,757
Shareholders' servicing agent fees and expenses 8,060
Custodian's fees and expenses 25,837
Trustees' fees and expenses 3,515
Professional fees 14,180
Shareholders' reports - printing and mailing expenses 36,342
Stock exchange listing fees 9,206
Investor relations expense 11,760
Other expenses 9,016
------------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit 732,673
Custodian fee credit (366)
------------------------------------------------------------------------------------------------------------------------------------
Net expenses 732,307
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 5,463,824
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from investments 65,469
Change in net unrealized appreciation (depreciation) of investments 6,371,614
------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) 6,437,083
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations $ 11,900,907
====================================================================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
Nuveen Investments 17
| STATEMENT OF
| CHANGES IN NET ASSETS
YEAR YEAR
ENDED ENDED
3/31/10 3/31/09
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 5,463,824 $ 5,378,446
Net realized gain (loss) from investments 65,469 (169,721)
Change in net unrealized appreciation (depreciation) of investments 6,371,614 (4,677,263)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations 11,900,907 531,462
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (5,212,112) (5,412,105)
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from distributions to shareholders (5,212,112) (5,412,105)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from shares issued to shareholders due to reinvestment of distributions 131,705 60,823
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable to shares from capital share transactions 131,705 60,823
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets 6,820,500 (4,819,820)
Net assets at the beginning of year 120,011,510 124,831,330
------------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of year $ 126,832,010 $ 120,011,510
====================================================================================================================================
Undistributed (Over-distribution of) net investment income at the end of year $ 120,834 $ (131,044)
====================================================================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
18 Nuveen Investments
| NOTES TO
| FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The fund covered in this report and its corresponding New York Stock Exchange
symbol is Nuveen Select Maturities Municipal Fund (NIM) (the "Fund"). The Fund
is registered under the Investment Company Act of 1940, as amended, as a
closed-end, management investment company.
The Fund seeks to provide current income exempt from regular federal income tax,
consistent with the preservation of capital by investing in an investment-grade
quality portfolio of municipal obligations with intermediate characteristics. In
managing its portfolio, the Fund has purchased municipal obligations having
remaining effective maturities of no more than fifteen years with respect to 80%
of its total assets that, in the opinion of Nuveen Asset Management (the
"Adviser"), a wholly-owned subsidiary of Nuveen Investments, Inc. ("Nuveen"),
represent the best value in terms of the balance between yield and capital
preservation currently available from the intermediate sector of the municipal
market. The Adviser will actively monitor the effective maturities of the Fund's
investments in response to prevailing market conditions, and will adjust its
portfolio consistent with its investment policy of maintaining an average
effective remaining maturity of twelve years or less.
In June 2009, the Financial Accounting Standards Board (FASB) established the
FASB Accounting Standards Codification(TM) (the "Codification") as the single
source of authoritative accounting principles recognized by the FASB in the
preparation of financial statements in conformity with generally accepted
accounting principles (GAAP). The Codification supersedes existing
non-grandfathered, non-SEC accounting and reporting standards. The Codification
did not change GAAP but rather organized it into a hierarchy where all guidance
within the Codification carries an equal level of authority. The Codification
became effective for financial statements issued for interim and annual periods
ending after September 15, 2009. The Codification did not have a material effect
on the Fund's financial statements.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements in accordance with US
generally accepted accounting principles.
INVESTMENT VALUATION
The prices of municipal bonds in the Fund's investment portfolio are provided by
a pricing service approved by the Fund's Board of Trustees. When market price
quotes are not readily available (which is usually the case for municipal
securities), the pricing service or, in the absence of a pricing service for a
particular investment, the Board of Trustees of the Fund, or its designee, may
establish fair value using a wide variety of market data including yields or
prices of investments of comparable quality, type of issue, coupon, maturity and
rating, market quotes or indications of value from security dealers, evaluations
of anticipated cash flows or collateral, general market conditions and other
information and analysis, including the obligor's credit characteristics
considered relevant. Temporary investments in securities that have variable rate
and demand features qualifying them as short-term investments are valued at
amortized cost, which approximates value.
INVESTMENT TRANSACTIONS
Investment transactions are recorded on a trade date basis. Realized gains and
losses from transactions are determined on the specific identification method.
Investments purchased on a when-issued/delayed delivery basis may have extended
settlement periods. Any investments so purchased are subject to market
fluctuation during this period. The Fund has instructed the custodian to
segregate assets with a current value at least equal to the amount of the
when-issued/delayed delivery purchase commitments. At March 31, 2010, the Fund
had no such outstanding purchase commitments.
INVESTMENT INCOME
Interest income, which includes the amortization of premiums and accretion of
discounts for financial reporting purposes, is recorded on an accrual basis.
Investment income also includes paydown gains and losses, if any.
INCOME TAXES
The Fund intends to distribute substantially all of its net investment income
and net capital gains to shareholders and to otherwise comply with the
requirements of Subchapter M of the Internal Revenue Code applicable to
regulated investment companies. Therefore, no federal income tax provision is
required. Furthermore, the Fund intends to satisfy conditions that will enable
interest from municipal securities, which is exempt from regular federal and
designated state income taxes, to retain such tax-exempt status when distributed
to shareholders of the Fund. Net realized capital gains and ordinary income
distributions paid by the Fund are subject to federal taxation.
Nuveen Investments 19
| NOTES TO
| FINANCIAL STATEMENTS (CONTINUED)
For all open tax years and all major taxing jurisdictions, management of the
Fund has concluded that there are no significant uncertain tax positions that
would require recognition in the financial statements. Open tax years are those
that are open for examination by taxing authorities (i.e., generally the last
four tax year ends and the interim tax period since then). Furthermore,
management of the Fund is also not aware of any tax positions for which it is
reasonably possible that the total amounts of unrecognized tax benefits will
significantly change in the next twelve months.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from tax-exempt net investment income are declared monthly. Net
realized capital gains and/or market discount from investment transactions, if
any, are distributed to shareholders at least annually. Furthermore, capital
gains are distributed only to the extent they exceed available capital loss
carryforwards.
Distributions to shareholders of tax-exempt net investment income, net realized
capital gains and/or market discount, if any, are recorded on the ex-dividend
date. The amount and timing of distributions are determined in accordance with
federal income tax regulations, which may differ from US generally accepted
accounting principles.
DERIVATIVE INSTRUMENTS
The Fund is authorized to invest in futures, options, swaps and other derivative
instruments. Although the Fund is authorized to invest in such derivative
instruments, and may do so in the future, it did not make any such investments
during the fiscal year ended March 31, 2010.
ZERO COUPON SECURITIES
The Fund is authorized to invest in zero coupon securities. A zero coupon
security does not pay a regular interest coupon to its holders during the life
of the security. Tax-exempt income to the holder of the security comes from
accretion of the difference between the original purchase price of the security
at issuance and the par value of the security at maturity and is effectively
paid at maturity. Such securities are included in the Portfolio of Investments
with a 0.000% coupon rate in their description. The market prices of zero coupon
securities generally are more volatile than the market prices of securities that
pay interest periodically.
CUSTODIAN FEE CREDIT
The Fund has an arrangement with the custodian bank whereby certain custodian
fees and expenses are reduced by net credits earned on the Fund's cash on
deposit with the bank. Such deposit arrangements are an alternative to overnight
investments. Credits for cash balances may be offset by charges for any days on
which the Fund overdraws its account at the custodian bank.
INDEMNIFICATIONS
Under the Fund's organizational documents, its officers and trustees are
indemnified against certain liabilities arising out of the performance of their
duties to the Fund. In addition, in the normal course of business, the Fund
enters into contracts that provide general indemnifications to other parties.
The Fund's maximum exposure under these arrangements is unknown as this would
involve future claims that may be made against the Fund that have not yet
occurred. However, the Fund has not had prior claims or losses pursuant to these
contracts and expects the risk of loss to be remote.
USE OF ESTIMATES
The preparation of financial statements in conformity with US generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of increases and decreases in net
assets from operations during the reporting period. Actual results may differ
from those estimates.
2. FAIR VALUE MEASUREMENTS
In determining the value of the Fund's investments, various inputs are used.
These inputs are summarized in the three broad levels listed below:
Level 1 - Quoted prices in active markets for identical securities.
Level 2 - Other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3 - Significant unobservable inputs (including management's
assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not an indication of
the risk associated with investing in those securities. The following is a
summary of the Fund's fair value measurements as of March 31, 2010:
LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
--------------------------------------------------------------------------------
Investments:
Municipal Bonds $ -- $125,039,381 $ -- $125,039,381
================================================================================
20 Nuveen Investments
3. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
During the current fiscal period, the Fund adopted amendments to authoritative
guidance under GAAP on disclosures about derivative instruments and hedging
activities. This guidance is intended to enhance financial statement disclosures
for derivative instruments and hedging activities and enable investors to better
understand: a) how and why a fund uses derivative instruments; b) how derivative
instruments are accounted for; and c) how derivative instruments affect a fund's
financial position, results of operations and cash flows, if any. The Fund
records derivative instruments at fair value, with changes in fair value
recognized on the Statement of Operations, when applicable. Even though the
Fund's investments in derivatives may represent economic hedges, under this
guidance they are considered to be non-hedge transactions for financial
reporting purposes. The Fund did not invest in derivative instruments during the
fiscal year ended March 31, 2010.
4. FUND SHARES
Transactions in shares were as follows:
YEAR YEAR
ENDED ENDED
3/31/10 3/31/09
--------------------------------------------------------------------------------
Shares issued to shareholders
due to reinvestment of distributions 13,113 6,233
================================================================================
5. INVESTMENT TRANSACTIONS
Purchases and sales (including maturities but excluding short-term investments)
during the fiscal year ended March 31, 2010, aggregated $7,679,141 and
$6,206,658, respectively.
6. INCOME TAX INFORMATION
The following information is presented on an income tax basis. Differences
between amounts for financial statement and federal income tax purposes are
primarily due to timing differences in recognizing taxable market discount and
timing differences in recognizing certain gains and losses on investment
transactions. To the extent that differences arise that are permanent in nature,
such amounts are reclassified within the capital accounts on the Statement of
Assets and Liabilities presented in the annual report, based on their federal
tax basis treatment; temporary differences do not require reclassification.
Temporary and permanent differences do not impact the net asset value of the
Fund.
At March 31, 2010, the cost of investments was $121,393,834.
Gross unrealized appreciation and gross unrealized depreciation of investments
at March 31, 2010, were as follows:
--------------------------------------------------------------------------------
Gross unrealized:
Appreciation $ 5,120,915
Depreciation (1,475,368)
--------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments $ 3,645,547
================================================================================
Permanent differences, primarily due to taxable market discount, resulted in
reclassifications among the Fund's components of net assets at March 31, 2010,
the Fund's tax year-end, as follows:
--------------------------------------------------------------------------------
Undistributed (Over-distribution of) net investment income $ 166
Accumulated net realized gain (loss) (166)
Paid-in-surplus --
================================================================================
The tax components of undistributed net tax-exempt income, net ordinary income
and net long-term capital gains at March 31, 2010, the Fund's tax year end, were
as follows:
--------------------------------------------------------------------------------
Undistributed net tax-exempt income * $431,495
Undistributed net ordinary income ** 4,924
Undistributed net long-term capital gains --
================================================================================
* Undistributed net tax-exempt income (on a tax basis) has not been reduced
for the dividend declared on March 2, 2010, paid on April 1, 2010.
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
Nuveen Investments 21
| Notes to
| Financial Statements (continued)
The tax character of distributions paid during the Fund's tax years ended March
31, 2010 and March 31, 2009, was designated for purposes of the dividends paid
deduction as follows:
2010
--------------------------------------------------------------------------------
Distributions from net tax-exempt income *** $5,211,653
Distributions from net ordinary income ** --
Distributions from net long-term capital gains **** --
================================================================================
2009
--------------------------------------------------------------------------------
Distributions from net tax-exempt income $5,430,482
Distributions from net ordinary income ** --
Distributions from net long-term capital gains --
================================================================================
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
*** The Fund hereby designates this amount paid during the fiscal year ended
March 31, 2010, as Exempt Interest Dividends.
**** The Fund designated as a long-term capital gain dividend, pursuant to the
Internal Revenue Code Section 852(b)(3), the amount necessary to reduce
earnings and profits of the Fund related to net capital gain to zero for
the tax year ended March 31, 2010.
At March 31, 2010, the Fund's tax year end, the Fund had unused capital loss
carryforwards available for federal income tax purposes to be applied against
future capital gains, if any. If not applied, the carryforwards will expire as
follows:
--------------------------------------------------------------------------------
Expiration:
March 31, 2011 $ 6,500,491
March 31, 2012 8,737,799
March 31, 2013 4,977
March 31, 2014 14,448
March 31, 2015 11,084
March 31, 2016 44,763
March 31, 2017 148,403
--------------------------------------------------------------------------------
Total $15,461,965
================================================================================
7. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund's management fee is separated into two components - a fund-level fee,
based only on the amount of assets within the Fund, and a complex-level fee,
based on the aggregate amount of all fund assets managed by the Adviser. This
pricing structure enables Fund shareholders to benefit from growth in the assets
within the Fund as well as from growth in the amount of complex-wide assets
managed by the Adviser.
22 Nuveen Investments
The annual fund-level fee, payable monthly, is calculated according to the
following schedule:
AVERAGE DAILY NET ASSETS* FUND-LEVEL FEE RATE
--------------------------------------------------------------------------------
For the first $125 million .3000%
For the next $125 million .2875
For the next $250 million .2750
For the next $500 million .2625
For the next $1 billion .2500
For net assets over $2 billion .2375
================================================================================
The annual complex-level fee, payable monthly, is calculated according to the
following schedule:
COMPLEX-LEVEL ASSET BREAKPOINT LEVEL* EFFECTIVE RATE AT BREAKPOINT LEVEL
--------------------------------------------------------------------------------
$55 billion .2000%
$56 billion .1996
$57 billion .1989
$60 billion .1961
$63 billion .1931
$66 billion .1900
$71 billion .1851
$76 billion .1806
$80 billion .1773
$91 billion .1691
$125 billion .1599
$200 billion .1505
$250 billion .1469
$300 billion .1445
================================================================================
* The complex-level fee component of the management fee for the funds is
calculated based upon the aggregate daily managed assets of all Nuveen
funds, with such daily managed assets defined separately for each fund in
its management agreement, but excluding assets attributable to investments
in other Nuveen funds. For the complex-level and fund-level fees, daily
managed assets include assets managed by the Adviser that are attributable
to financial leverage. For these purposes, financial leverage includes the
funds' use of preferred stock and borrowings and investments in the
residual interest certificates (also called inverse floating rate
securities) in tender option bond (TOB) trusts, including the portion of
assets held by a TOB trust that has been effectively financed by the
trust's issuance of floating rate securities, subject to an agreement by
the Adviser to limit the amount of such assets for determining managed
assets in certain circumstances. As of March 31, 2010, the complex-level
fee rate was .1867%.
The management fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Fund pays no
compensation directly to those of its trustees who are affiliated with the
Adviser or to its officers, all of whom receive remuneration for their services
to the Fund from the Adviser or its affiliates. The Board of Trustees has
adopted a deferred compensation plan for independent trustees that enables
trustees to elect to defer receipt of all or a portion of the annual
compensation they are entitled to receive from certain Nuveen advised funds.
Under the plan, deferred amounts are treated as though equal dollar amounts had
been invested in shares of select Nuveen advised funds.
Nuveen Investments 23
| Notes to
| Financial Statements (continued)
8. NEW ACCOUNTING PRONOUNCEMENTS
FAIR VALUE MEASUREMENTS
On January 21, 2010, FASB issued changes to the authoritative guidance under
GAAP for fair value measurements. The objective of this guidance is to provide
guidance on how investment assets and liabilities are to be valued and
disclosed. Specifically, the amendment requires reporting entities to disclose
i) the input and valuation techniques used to measure fair value for both
recurring and nonrecurring fair value measurements, for both Level 2 and Level 3
positions, ii) transfers between all levels (including Level 1 and Level 2) on a
gross basis (i.e., transfers out must be disclosed separately from transfers in)
as well as the reason(s) for the transfer and iii) purchases, sales, issuances
and settlements in the Level 3 rollforward must be shown on a gross basis rather
than as one net number. The effective date of the amendment is for interim and
annual periods beginning after December 15, 2009, however, the requirement to
provide the Level 3 activity for purchases, sales, issuances and settlements on
a gross basis will be effective for interim and annual periods beginning after
December 15, 2010. At this time, management is evaluating the implications of
this guidance and the impact it will have to the financial statement amounts and
footnote disclosures, if any.
9. SUBSEQUENT EVENTS
DISTRIBUTIONS TO SHAREHOLDERS
The Fund declared a dividend distribution of $.0350 per share from its
tax-exempt net investment income, which was paid on May 3, 2010, to shareholders
of record on April 15, 2010.
24 Nuveen Investments
| Financial
| Highlights
Nuveen Investments 25
| Financial
| Highlights
Selected data for a Common share outstanding throughout each period:
INVESTMENT OPERATIONS LESS DISTRIBUTIONS
-------------------------------- -----------------------------
NET
BEGINNING NET REALIZED/ NET ENDING ENDING
NET ASSET INVESTMENT UNREALIZED INVESTMENT CAPITAL NET ASSET MARKET
VALUE INCOME GAIN (LOSS) TOTAL INCOME GAINS TOTAL VALUE VALUE
----------------------------------------------------------------------------------------------------------------------
Year Ended 3/31:
2010 $ 9.68 $.44 $ .52 $.96 $(.42) $ -- $(.42) $10.22 $10.42
2009 10.07 .43 (.38) .05 (.44) -- (.44) 9.68 9.98
2008 10.19 .44 (.12) .32 (.44) -- (.44) 10.07 9.80
2007 10.15 .46 .05 .51 (.47) -- (.47) 10.19 9.94
2006 10.22 .48 (.07) .41 (.48) -- (.48) 10.15 9.95
======================================================================================================================
26 Nuveen Investments
RATIOS/SUPPLEMENTAL DATA
-------------------------------------------------
RATIOS TO AVERAGE
TOTAL RETURNS NET ASSETS(b)
---------------------- ----------------------
BASED ON BASED ON ENDING NET PORTFOLIO
MARKET NET ASSET NET ASSETS INVESTMENT TURNOVER
VALUE(a) VALUE(a) (000) EXPENSES INCOME RATE
----------------------------------------------------------------------------------------------
Year Ended 3/31:
2010 8.83% 10.06% $126,832 .59% 4.38% 5%
2009 6.53 .52 120,012 .61 4.43 8
2008 3.18 3.18 124,831 .59 4.37 11
2007 4.75 5.10 126,316 .62 4.44 15
2006 12.21 4.02 125,857 .59 4.67 7
==============================================================================================
(a) Total Return Based on Market Value is the combination of changes in the
market price per share and the effect of reinvested dividend income and
reinvested capital gains distributions, if any, at the average price paid
per share at the time of reinvestment. The last dividend declared in the
period, which is typically paid on the first business day of the following
month, is assumed to be reinvested at the ending market price. The actual
reinvestment for the last dividend declared in the period may take place
over several days, and in some instances may not be based on the market
price, so the actual reinvestment price may be different from the price
used in the calculation. Total returns are not annualized.
Total Return Based on Net Asset Value is the combination of changes in net
asset value, reinvested dividend income at net asset value and reinvested
capital gains distributions at net asset value, if any. The last dividend
declared in the period, which is typically paid on the first business day
of the following month, is assumed to be reinvested at the ending net
asset value. The actual reinvest price for the last dividend declared in
the period may often be based on the Fund's market price (and not its net
asset value), and therefore may be different from the price used in the
calculation. Total returns are not annualized.
(b) Expense ratios do not reflect the reduction of custodian fee credits
earned on the Fund's net cash on deposit with the custodian bank, where
applicable.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
Nuveen Investments 27
Board Members & Officers
The management of the Funds, including general supervision of the duties
performed for the Funds by the Adviser, is the responsibility of the Board
Members of the Funds. The number of board members of the Fund is currently
set at nine. None of the board members who are not "interested" persons of
the Funds (referred to herein as "independent board members") has ever
been a director or employee of, or consultant to, Nuveen or its
affiliates. The names and business addresses of the board members and
officers of the Funds, their principal occupations and other affiliations
during the past five years, the number of portfolios each oversees and
other directorships they hold are set forth below.
----------------------------------------------------------------------------------------------------------------------------------
NUMBER PRINCIPAL
YEAR FIRST OF PORTFOLIOS OCCUPATION(S)
NAME, ELECTED OR IN FUND COMPLEX INCLUDING OTHER
BIRTHDATE POSITION(S) HELD APPOINTED OVERSEEN BY DIRECTORSHIPS
& ADDRESS WITH THE FUNDS AND TERM(1) BOARD MEMBER DURING PAST 5 YEARS
----------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT BOARD MEMBERS:
o ROBERT P. BREMNER Private Investor and Management Consultant;
8/22/40 Chairman of Treasurer and Director, Humanities Council of
333 W. Wacker Drive the Board 1996 199 Washington, D.C.
Chicago, IL 60606 and Board Member
o JACK B. EVANS President, The Hall-Perrine Foundation, a
10/22/48 private philanthropic corporation (since
333 W. Wacker Drive Board Member 1999 199 1996); Director and Chairman, United Fire
Chicago, IL 60606 Group, a publicly held company; President Pro
Tem of the Board of Regents for the State of
Iowa University System; Director, Gazette
Companies; Life Trustee of Coe College and the
Iowa College Foundation; formerly, Director,
Alliant Energy; formerly, Director, Federal
Reserve Bank of Chicago; formerly, President
and Chief Operating Officer, SCI Financial
Group, Inc., a regional financial services
firm.
o WILLIAM C. HUNTER Dean, Tippie College of Business, University
3/6/48 of Iowa (since 2006); Director (since 2004) of
333 W. Wacker Drive Board Member 2004 199 Xerox Corporation; Director (since 2005), Beta
Chicago, IL 60606 Gamma Sigma International Honor Society;
formerly, Dean and Distinguished Professor of
Finance, School of Business at the University
of Connecticut (2003-2006); previously, Senior
Vice President and Director of Research at the
Federal Reserve Bank of Chicago (1995-2003);
Director, SS&C Technologies, Inc. (May
2005-October 2005); formerly, Director
(1997-2007), Credit Research Center at
Georgetown University.
o DAVID J. KUNDERT Director, Northwestern Mutual Wealth
10/28/42 Management Company; retired (since 2004) as
333 W. Wacker Drive Board Member 2005 199 Chairman, JPMorgan Fleming Asset Management,
Chicago, IL 60606 President and CEO, Banc One Investment
Advisors Corporation, and President, One Group
Mutual Funds; prior thereto, Executive Vice
President, Banc One Corporation and Chairman
and CEO, Banc One Investment Management Group;
Member, Board of Regents, Luther College;
member of the Wisconsin Bar Association;
member of Board of Directors, Friends of
Boerner Botanical Gardens; member of Board of
Directors and member of Investment Committee,
Greater Milwaukee Foundation.
o WILLIAM J. SCHNEIDER Chairman of Miller-Valentine Partners Ltd., a
9/24/44 real estate investment company; formerly, Senior
333 W. Wacker Drive Board Member 1997 199 Partner and Chief Operating Officer (retired,
Chicago, IL 60606 2004) of Miller-Valentine Group; member,
University of Dayton Business School Advisory
Council; formerly, member, Dayton Philharmonic
Orchestra Association; formerly, member and
chair, Business Advisory Council, Cleveland
Federal Reserve Bank; formerly, Director, Dayton
Development Coalition.
28 Nuveen Investments
----------------------------------------------------------------------------------------------------------------------------------
NUMBER PRINCIPAL
YEAR FIRST OF PORTFOLIOS OCCUPATION(S)
NAME, ELECTED OR IN FUND COMPLEX INCLUDING OTHER
BIRTHDATE POSITION(S) HELD APPOINTED OVERSEEN BY DIRECTORSHIPS
& ADDRESS WITH THE FUNDS AND TERM(1) BOARD MEMBER DURING PAST 5 YEARS
----------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT BOARD MEMBERS:
o JUDITH M. STOCKDALE Executive Director, Gaylord and Dorothy
12/29/47 Donnelley Foundation (since 1994); prior
333 W. Wacker Drive Board Member 1997 199 thereto, Executive Director, Great Lakes
Chicago, IL 60606 Protection Fund (from 1990 to 1994).
o CAROLE E. STONE Director, Chicago Board Options Exchange
6/28/47 (since 2006); Director, C2 Options Exchange,
333 W. Wacker Drive Board Member 2007 199 Incorporated (since 2009); Commissioner, New
Chicago, IL 60606 York State Commission on Public Authority
Reform (since 2005); formerly, Chair, New York
Racing Association Oversight Board
(2005-2007).
o TERENCE J. TOTH Director, Legal & General Investment
9/29/59 Management America, Inc. (since 2008);
333 W. Wacker Drive Board Member 2008 199 Managing Partner, Promus Capital (since 2008);
Chicago, IL 60606 formerly, CEO and President, Northern Trust
Global Investments (2004-2007); Executive Vice
President, Quantitative Management &
Securities Lending (2000-2004); prior thereto,
various positions with Northern Trust Company
(since 1994); member: Goodman Theatre Board
(since 2004), Chicago Fellowship Boards (since
2005), University of Illinois Leadership
Council Board (since 2007) and Catalyst
Schools of Chicago Board (since 2008);
formerly, member: Northern Trust Mutual Funds
Board (2005-2007), Northern Trust Global
Investments Board (2004-2007), Northern Trust
Japan Board (2004-2007), Northern Trust
Securities Inc. Board (2003-2007) and Northern
Trust Hong Kong Board (1997-2004).
INTERESTED BOARD MEMBER:
o JOHN P. AMBOIAN(2) Chief Executive Officer (since July 2007),
6/14/61 Director (since 1999) and Chairman (since
333 W. Wacker Drive Board Member 2008 199 2007) of Nuveen Investments, Inc.; Chief
Chicago, IL 60606 Executive Officer (since 2007) of Nuveen Asset
Management, Nuveen Investments Advisors, Inc.;
President (since 2005) of Nuveen Commodities
Asset Management, LLC.
Nuveen Investments 29
Board Members & Officers (continued)
----------------------------------------------------------------------------------------------------------------------------------
NUMBER
OF PORTFOLIOS
NAME, YEAR FIRST IN FUND COMPLEX PRINCIPAL
BIRTHDATE POSITION(S) HELD ELECTED OR OVERSEEN OCCUPATION(S)
AND ADDRESS WITH THE FUNDS APPOINTED(3) BY OFFICER DURING PAST 5 YEARS
----------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS:
o GIFFORD R. ZIMMERMAN Managing Director (since 2002), Assistant
9/9/56 Chief Secretary and Associate General Counsel of
333 W. Wacker Drive Administrative 1988 199 Nuveen Investments, LLC; Managing Director,
Chicago, IL 60606 Officer Associate General Counsel and Assistant
Secretary, of Nuveen Asset Management (since
2002) and of Symphony Asset Management LLC,
(since 2003); Vice President and Assistant
Secretary of NWQ Investment Management
Company, LLC. (since 2002), Nuveen Investments
Advisers Inc. (since 2002), Tradewinds Global
Investors, LLC, and Santa Barbara Asset
Management, LLC (since 2006), Nuveen HydePark
Group LLC and Nuveen Investment Solutions,
Inc. (since 2007); Managing Director (since
2004) and Assistant Secretary (since 1994) of
Nuveen Investments, Inc.; Managing Director
(since 2005) of Nuveen Commodities Asset
Management, LLC; Chartered Financial Analyst.
o WILLIAM ADAMS IV Executive Vice President of Nuveen
6/9/55 Investments, Inc.; Executive Vice President,
333 W. Wacker Drive Vice President 2007 125 U.S. Structured Products of Nuveen
Chicago, IL 60606 Investments, LLC, (since 1999),; Executive
Vice President (since 2005) of Nuveen
Commodities Asset Management, LLC.
o CEDRIC H. ANTOSIEWICZ Managing Director, (since 2004), previously,
1/11/62 Vice President (1993-2004) of Nuveen
333 W. Wacker Drive Vice President 2007 125 Investments, LLC.
Chicago, IL 60606
o NIZIDA ARRIAGA Senior Vice President of Nuveen Investments,
6/1/68 LLC (since 2010); formerly, Vice President
333 W. Wacker Drive Vice President 2009 199 (2007-2010); previously, Portfolio Manager,
Chicago, IL 60606 Allstate Investments, LLC (1996-2006);
Chartered Financial Analyst.
o MICHAEL T. ATKINSON Vice President (since 2002) of Nuveen
2/3/66 Vice President Investments, LLC.; Vice President of Nuveen
333 W. Wacker Drive and Assistant 2000 199 Asset Management (since 2005).
Chicago, IL 60606 Secretary
o MARGO L. COOK Executive Vice President (since Oct 2008) of
4/11/64 Nuveen Investments, Inc.; previously, Head of
333 W. Wacker Drive Vice President 2009 199 Institutional Asset Management (2007-2008) of
Chicago, IL 60606 Bear Stearns Asset Management; Head of
Institutional Asset Mgt (1986-2007) of Bank of
NY Mellon; Chartered Financial Analyst.
o LORNA C. FERGUSON Managing Director (since 2004) of Nuveen
10/24/45 Investments, LLC and Managing Director (since
333 W. Wacker Drive Vice President 1998 199 2005) of Nuveen Asset Management.
Chicago, IL 60606
o STEPHEN D. FOY Vice President (since 1993) and Funds
5/31/54 Vice President Controller (since 1998) of Nuveen Investments,
333 W. Wacker Drive and Controller 1998 199 LLC; Vice President (since 2005) of Nuveen
Chicago, IL 60606 Asset Management; Certified Public Accountant.
o SCOTT S. GRACE Managing Director, Corporate Finance &
8/20/70 Vice President Development, Treasurer (since September 2009)
333 W. Wacker Drive and Treasurer 2009 199 of Nuveen Investments, LLC; Managing Director
Chicago, IL 60606 and Treasurer of Nuveen Asset Management
(since 2009); formerly, Treasurer (2006-2009),
Senior Vice President (2008-2009), previously,
Vice President (2006-2008) of Janus Capital
Group, Inc.; formerly. Senior Associate in
Morgan Stanley's Global Financial Services
Group (2000-2003); Chartered Accountant
Designation.
30 Nuveen Investments
----------------------------------------------------------------------------------------------------------------------------------
NUMBER
OF PORTFOLIOS
NAME, YEAR FIRST IN FUND COMPLEX PRINCIPAL
BIRTHDATE POSITION(S) HELD ELECTED OR OVERSEEN OCCUPATION(S)
AND ADDRESS WITH THE FUNDS APPOINTED(3) BY OFFICER DURING PAST 5 YEARS
----------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS:
o WILLIAM T. HUFFMAN Chief Operating Officer, Municipal Fixed
5/7/69 Income (since 2008) of Nuveen Asset
333 W. Wacker Drive Vice President 2009 136 Management; previously, Chairman, President
Chicago, IL 60606 and Chief Executive Officer (2002 - 2007) of
Northern Trust Global Advisors, Inc. and Chief
Executive Officer (2007) of Northern Trust
Global Investments Limited; Certified Public
Accountant.
o WALTER M. KELLY Senior Vice President (since 2008), Vice
2/24/70 Chief Compliance President (2006-2008) formerly, Assistant Vice
333 W. Wacker Drive Officer and 2003 199 President and Assistant General Counsel
Chicago, IL 60606 Vice President (2003-2006) of Nuveen Investments, LLC; Senior
Vice President (since 2008), formerly, Vice
President (2006-2008) and Assistant Secretary
(since 2008) of Nuveen Asset Management.
o DAVID J. LAMB Senior Vice President (since 2009), formerly,
3/22/63 Vice President (2000-2009) of Nuveen
333 W. Wacker Drive Vice President 2000 199 Investments, LLC; Vice President (since 2005)
Chicago, IL 60606 of Nuveen Asset Management; Certified Public
Accountant.
o TINA M. LAZAR Senior Vice President (since 2009), formerly,
8/27/61 Vice President of Nuveen Investments, LLC
333 W. Wacker Drive Vice President 2002 199 (1999-2009); Vice President of Nuveen Asset
Chicago, IL 60606 Management (since 2005).
o LARRY W. MARTIN Senior Vice President (since 2010), Assistant
7/27/51 Vice President Secretary and Assistant General Counsel of
333 W. Wacker Drive and Assistant 1988 199 Nuveen Investments, LLC; Vice President (since
Chicago, IL 60606 Secretary 2005) and Assistant Secretary of Nuveen
Investments, Inc.; Vice President (since 2005)
and Assistant Secretary (since 1997) of Nuveen
Asset Management; Vice President and Assistant
Secretary of Nuveen Investments Advisers Inc.
(since 2002); NWQ Investment Management Company,
LLC (since 2002), Symphony Asset Management LLC
(since 2003), Tradewinds Global Investors, LLC,
Santa Barbara Asset Management LLC (since 2006)
and of Nuveen HydePark Group, LLC and Nuveen
Investment Solutions, Inc. (since 2007).
o KEVIN J. MCCARTHY Managing Director (since 2008), formerly, Vice
3/26/66 Vice President President (2007-2008), Nuveen Investments, LLC;
333 W. Wacker Drive and Secretary 2007 199 Managing Director (since 2008), formerly, Vice
Chicago, IL 60606 President, and Assistant Secretary, Nuveen Asset
Management, and Nuveen Investments Holdings,
Inc.; Vice President (since 2007) and Assistant
Secretary, Nuveen Investment Advisers Inc., NWQ
Investment Management Company, LLC, Tradewinds
Global Investors LLC, NWQ Holdings, LLC,
Symphony Asset Management LLC, Santa Barbara
Asset Management LLC, Nuveen HydePark Group, LLC
and Nuveen Investment Solutions, Inc. (since
2007); prior thereto, Partner, Bell, Boyd &
Lloyd LLP (1997-2007).
o JOHN V. MILLER Chief Investment Officer and Managing Director
4/10/67 (since 2007), formerly, Vice President
333 W. Wacker Drive Vice President 2007 136 (2002-2007) of Nuveen Asset Management and
Chicago, IL 60606 Managing Director (since 2007), formerly Vice
President (2002-2007) Nuveen Investments, LLC;
Chartered Financial Analyst.
Nuveen Investments 31
Board Members & Officers (continued)
----------------------------------------------------------------------------------------------------------------------------------
NUMBER
OF PORTFOLIOS
NAME, YEAR FIRST IN FUND COMPLEX PRINCIPAL
BIRTHDATE POSITION(S) HELD ELECTED OR OVERSEEN OCCUPATION(S)
AND ADDRESS WITH THE FUNDS APPOINTED(3) BY OFFICER DURING PAST 5 YEARS
----------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS:
o GREGORY MINO Senior Vice President (since 2010) of Nuveen
1/4/71 Investments, LLC, formerly Vice President
333 W. Wacker Drive Vice President 2009 199 (2008-2010); previously, Director (2004- 2007)
Chicago, IL 60606 and Executive Director (2007-2008) of UBS
Global Asset Management; previously, Vice
President (2000-2003) and Director (2003-2004)
of Merrill Lynch Investment Managers;
Chartered Financial Analyst.
o CHRISTOPHER M. ROHRBACHER Vice President, Nuveen Investments, LLC (since
8/1/71 Vice President 2008); Vice President and Assistant Secretary,
333 W. Wacker Drive and Assistant 2008 199 Nuveen Asset Management (since 2008); prior
Chicago, IL 60606 Secretary thereto, Associate, Skadden, Arps, Slate
Meagher & Flom LLP (2002-2008).
o JAMES F. RUANE Vice President, Nuveen Investments, LLC (since
7/3/62 Vice President 2007); prior thereto, Partner, Deloitte &
333 W. Wacker Drive and Assistant 2007 199 Touche USA LLP (2005-2007), formerly, senior
Chicago, IL 60606 Secretary tax manager (2002-2005); Certified Public
Accountant.
o MARK L. WINGET Vice President, Nuveen Investments, LLC (since
12/21/68 Vice President 2008); Vice President and Assistant Secretary,
333 W. Wacker Drive and Assistant 2008 199 Nuveen Asset Management (since 2008); prior
Chicago, IL 60606 Secretary thereto, Counsel, Vedder Price P.C.
(1997-2007).
(1) Board Members serve three year terms. The Board of Trustees is divided
into three classes, Class I, Class II, and Class III, with each being
elected to serve until the third succeeding annual shareholders' meeting
subsequent to its election or thereafter in each case when its respective
successors are duly elected or appointed. The first year elected or
appointed represents the year in which the board member was first elected
or appointed to any fund in the Nuveen Complex.
(2) Mr. Amboian is an interested trustee because of his position with Nuveen
Investments, Inc. and certain of its subsidiaries, which are affiliates of
the Nuveen Funds.
(3) Officers serve one year terms through July of each year. The year first
elected or appointed represents the year in which the Officer was first
elected or appointed to any fund in the Nuveen Complex.
32 Nuveen Investments
ANNUAL INVESTMENT MANAGEMENT AGREEMENT APPROVAL PROCESS
The Investment Company Act of 1940, as amended (the "1940 ACT"), provides, in
substance, that each investment advisory agreement between a fund and its
investment adviser will continue in effect from year to year only if its
continuance is approved at least annually by the fund's board members, including
by a vote of a majority of the board members who are not parties to the advisory
agreement or "interested persons" of any parties (the "INDEPENDENT BOARD
MEMBERS"), cast in person at a meeting called for the purpose of considering
such approval. In connection with such approvals, the fund's board members must
request and evaluate, and the investment adviser is required to furnish, such
information as may be reasonably necessary to evaluate the terms of the advisory
agreement. Accordingly, at a meeting held on May 27-29, 2009 (the "MAY
MEETING"), the Board of Trustees (the "BOARD," and each Trustee, a "BOARD
MEMBER") of the Fund, including a majority of the Independent Board Members,
considered and approved the continuation of the advisory agreement (the
"ADVISORY AGREEMENT") between the Fund and Nuveen Asset Management ("NAM") for
an additional one-year period. In preparation for their considerations at the
May Meeting, the Board also held a separate meeting on April 21-22, 2009 (the
"APRIL MEETING"). Accordingly, the factors considered and determinations made
regarding the renewals by the Independent Board Members include those made at
the April Meeting.
In addition, in evaluating the Advisory Agreement, the Independent Board Members
reviewed a broad range of information relating to the Fund and NAM, including
absolute performance, fee and expense information for the Fund as well as
comparative performance, fee and expense information for a comparable peer group
of funds, the performance information of recognized and/or customized benchmarks
(as applicable) of the Fund, the profitability of Nuveen for its advisory
activities (which includes its wholly owned subsidiaries other than Winslow
Capital Management, Inc. ("WINSLOW CAPITAL"), which was recently acquired in
December 2008), and other information regarding the organization, personnel, and
services provided by NAM. The Independent Board Members also met quarterly as
well as at other times as the need arose during the year and took into account
the information provided at such meetings and the knowledge gained therefrom.
Prior to approving the renewal of the Advisory Agreement, the Independent Board
Members reviewed the foregoing information with their independent legal counsel
and with management, reviewed materials from independent legal counsel
describing applicable law and their duties in reviewing advisory contracts, and
met with independent legal counsel in private sessions without management
present. The Independent Board Members considered the legal advice provided by
independent legal counsel and relied upon their knowledge of NAM, its services
and the Fund resulting from their meetings and other interactions throughout the
year and their own business judgment in determining the factors to be considered
in evaluating the Advisory Agreement. Each Board Member may have accorded
different weight to
Nuveen Investments 33
Annual Investment Management Agreement Approval Process (continued)
the various factors in reaching his or her conclusions with respect to the
Fund's Advisory Agreement. The Independent Board Members did not identify any
single factor as all-important or controlling. The Independent Board Members'
considerations were instead based on a comprehensive consideration of all the
information presented. The principal factors considered by the Board and its
conclusions are described below.
A. NATURE, EXTENT AND QUALITY OF SERVICES
In considering renewal of the Advisory Agreement, the Independent Board Members
considered the nature, extent and quality of NAM's services, including advisory
services and administrative services. The Independent Board Members reviewed
materials outlining, among other things, NAM's organization and business; the
types of services that NAM or its affiliates provide and are expected to provide
to the Fund; the performance record of the Fund (as described in further detail
below); and any initiatives Nuveen had taken for the applicable fund product
line.
In reviewing the services provided and the initiatives undertaken during the
past year, the Independent Board Members recognized the severe market turmoil
experienced in the capital markets during recent periods, including sustained
periods of high volatility, credit disruption and government intervention. The
Independent Board Members considered NAM's efforts, expertise and other actions
taken to address matters as they arose that impacted the Fund. The Independent
Board Members recognized the role of the Investment Services group which, among
other things, monitors the various positions throughout the Nuveen fund complex
to identify and address any systematic risks. In addition, the Capital Markets
Committee of NAM provides a multi-departmental venue for developing new policies
to mitigate any risks. The Independent Board Members further recognized NAM's
continuous review of the Nuveen funds' investment strategies and mandates in
seeking to continue to refine and improve the investment process for the funds,
particularly in light of market conditions. With respect to closed-end funds
that issued auction rate preferred shares ("ARPS") or that otherwise utilize
leverage, the Independent Board Members noted, in particular, NAM's efforts in
refinancing the preferred shares of such funds frozen by the collapse of the
auction rate market and managing leverage during a period of rapid market
declines, particularly for the non-equity funds. Such efforts included
negotiating and maintaining the availability of bank loan facilities and other
sources of credit used for investment purposes or to satisfy liquidity needs,
liquidating portfolio securities during difficult times to meet leverage ratios,
and seeking alternative forms of debt and other leverage that may over time
reduce financing costs associated with ARPs and enable the funds that have
issued ARPs to restore liquidity to ARPs holders. The Independent Board Members
also noted Nuveen's continued commitment and efforts to keep investors and
financial advisers informed as to its progress with the ARPs through, among
other things, conference calls, emails, press releases, information posted on
its website, and telephone calls and in-person meetings with financial advisers.
In addition to the foregoing, the Independent Board Members also noted the
additional services that NAM or its affiliates provide to closed-end funds,
including, in particular, Nuveen's continued commitment to supporting the
secondary market for the common shares of its closed-end funds through a variety
of programs designed to raise investor and analyst awareness and understanding
34 Nuveen Investments
of closed-end funds. These efforts include maintaining an investor relations
program to provide timely information and education to financial advisers and
investors; providing advertising and marketing for the closed-end funds;
maintaining websites; and providing educational seminars.
As part of their review, the Independent Board Members also evaluated the
background, experience and track record of NAM's investment personnel. In this
regard, the Independent Board Members considered any changes in the personnel,
and the impact on the level of services provided to the Fund, if any. The
Independent Board Members also reviewed information regarding portfolio manager
compensation arrangements to evaluate NAM's ability to attract and retain high
quality investment personnel, preserve stability, and reward performance but not
provide an incentive for taking undue risks.
In addition to advisory services, the Independent Board Members considered the
quality of administrative services provided by NAM and its affiliates including
product management, fund administration, oversight of service providers,
shareholder services, administration of Board relations, regulatory and
portfolio compliance and legal support. Given the importance of compliance, the
Independent Board Members considered NAM's compliance program, including the
report of the chief compliance officer regarding the Fund's compliance policies
and procedures.
Based on their review, the Independent Board Members found that, overall, the
nature, extent and quality of services provided (and expected to be provided) to
the Fund under the Advisory Agreement were satisfactory.
B. THE INVESTMENT PERFORMANCE OF THE FUND AND NAM
The Board considered the investment performance of the Fund, including the
Fund's historic performance as well as its performance compared to funds with
similar investment objectives (the "PERFORMANCE PEER GROUP") based on data
provided by an independent provider of mutual fund data as well as recognized
and/or customized benchmarks (as applicable). The Independent Board Members
reviewed performance information including, among other things, total return
information compared with the Fund's Performance Peer Group and recognized
and/or customized benchmarks (as applicable) for the quarter-, one-, three- and
five-year periods ending December 31, 2008 and for the same periods ending March
31, 2009. The Independent Board Members also reviewed performance information of
the Nuveen municipal funds managed by NAM in the aggregate ranked by peer group
and the performance of such funds, in the aggregate, relative to their
benchmark. This information supplemented the Fund performance information
provided to the Board at each of its quarterly meetings.
In comparing a fund's performance with that of its Performance Peer Group, the
Independent Board Members took into account that the closest Performance Peer
Group in certain instances may not adequately reflect the respective fund's
investment objectives and strategies thereby hindering a meaningful comparison
of the fund's performance with that of the Performance Peer Group. The
Independent Board Members further considered the performance of the Fund in the
context of the volatile market conditions during the past year, and their impact
on various asset classes and the portfolio management of the Fund.
Nuveen Investments 35
Annual Investment Management Agreement Approval Process (continued)
Based on their review and factoring in the severity of market turmoil in 2008,
the Independent Board Members determined that the Fund's investment performance
over time had been satisfactory.
C. FEES, EXPENSES AND PROFITABILITY
1. FEES AND EXPENSES
The Board evaluated the management fees and expenses of the Fund
reviewing, among other things, the Fund's gross management fees, net
management fees and total expense ratios (before and after expense
reimbursements and/or waivers) in absolute terms as well as compared to
the fee and expenses of a comparable universe of unaffiliated funds based
on data provided by an independent fund data provider (the "PEER
UNIVERSE") and in certain cases, to a more focused subset of funds in the
Peer Universe (the "PEER GROUP").
The Independent Board Members further reviewed data regarding the
construction of the applicable Peer Universe and Peer Group. In reviewing
the comparisons of fee and expense information, the Independent Board
Members took into account that in certain instances various factors such
as the asset level of a fund relative to peers, the size and particular
composition of the Peer Universe or Peer Group, the investment objectives
of the peers, expense anomalies, changes in the funds comprising the Peer
Universe or Peer Group from year to year, levels of reimbursement and the
timing of information used may impact the comparative data, thereby
limiting the ability to make a meaningful comparison. In addition, the
Independent Board Members considered, among other things, the differences
in the use and type of leverage compared to the peers. In reviewing the
fee schedule for the Fund, the Independent Board Members also considered
the fund-level and complex-wide breakpoint schedules (described in further
detail below) and any fee waivers and reimbursements provided by Nuveen
(applicable, in particular, for certain closed-end funds launched since
1999).
Based on their review of the fee and expense information provided, the
Independent Board Members determined that the Fund's management fees and
net total expense ratio were reasonable in light of the nature, extent and
quality of services provided to the Fund.
2. COMPARISONS WITH THE FEES OF OTHER CLIENTS
The Independent Board Members further reviewed information regarding the
nature of services and fee rates offered by NAM to other clients. Such
other clients include NAM's municipal separately managed accounts. In
evaluating the comparisons of fees, the Independent Board Members noted
that the fee rates charged to the Fund and other clients vary, among other
things, because of the different services involved and the additional
regulatory and compliance requirements associated with registered
investment companies, such as the Fund. Accordingly, the Independent Board
Members considered the differences in the product types, including, but
not limited to, the services provided, the structure and operations,
product distribution and costs thereof, portfolio investment policies,
investor profiles, account sizes and regulatory requirements. The
Independent Board Members noted, in particular, that the range of services
provided to the Fund (as discussed above) is much more extensive
36 Nuveen Investments
than that provided to separately managed accounts. Given the inherent
differences in the products, particularly the extensive services provided
to the Fund, the Independent Board Members believe such facts justify the
different levels of fees.
3. PROFITABILITY OF NUVEEN
In conjunction with its review of fees, the Independent Board Members also
considered the profitability of Nuveen for its advisory activities (which
incorporated Nuveen's wholly-owned affiliated sub-advisers other than
Winslow Capital) and its financial condition. The Independent Board
Members reviewed the revenues and expenses of Nuveen's advisory activities
for the last two years, the allocation methodology used in preparing the
profitability data and an analysis of the key drivers behind the changes
in revenues and expenses that impacted profitability in 2008. In addition,
the Independent Board Members reviewed information regarding the financial
results of Nuveen for 2008 based on its Form 8-K filed on March 31, 2009.
The Independent Board Members noted this information supplemented the
profitability information requested and received during the year to help
keep them apprised of developments affecting profitability (such as
changes in fee waivers and expense reimbursement commitments). In this
regard, the Independent Board Members noted that they had also appointed
an Independent Board Member as a point person to review and keep them
apprised of changes to the profitability analysis and/or methodologies
during the year. The Independent Board Members also considered Nuveen's
revenues for advisory activities, expenses, and profit margin compared to
that of various unaffiliated management firms with similar amounts of
assets under management and relatively comparable asset composition
prepared by Nuveen.
In reviewing profitability, the Independent Board Members recognized the
subjective nature of determining profitability which may be affected by
numerous factors including the allocation of expenses. Further, the
Independent Board Members recognized the difficulties in making
comparisons as the profitability of other advisers generally is not
publicly available and the profitability information that is available for
certain advisers or management firms may not be representative of the
industry and may be affected by, among other things, the adviser's
particular business mix, capital costs, types of funds managed and expense
allocations. Notwithstanding the foregoing, the Independent Board Members
reviewed Nuveen's methodology and assumptions for allocating expenses
across product lines to determine profitability. In reviewing
profitability, the Independent Board Members recognized Nuveen's
investment in its fund business.
Nuveen Investments 37
Annual Investment Management Agreement Approval Process (continued)
Based on their review, the Independent Board Members concluded that
Nuveen's level of profitability for its advisory activities was reasonable
in light of the services provided.
In evaluating the reasonableness of the compensation, the Independent
Board Members also considered other amounts paid to NAM by the Fund as
well as any indirect benefits (such as soft dollar arrangements, if any)
NAM and its affiliates receive, or are expected to receive, that are
directly attributable to the management of the Fund, if any. See Section E
below for additional information on indirect benefits NAM may receive as a
result of its relationship with the Fund. Based on their review of the
overall fee arrangements of the Fund, the Independent Board Members
determined that the advisory fees and expenses of the Fund were
reasonable.
D. ECONOMIES OF SCALE AND WHETHER FEE LEVELS REFLECT THESE ECONOMIES OF SCALE
With respect to economies of scale, the Independent Board Members have
recognized the potential benefits resulting from the costs of a fund being
spread over a larger asset base, although economies of scale are difficult to
measure and predict with precision, particularly on a fund-by-fund basis. One
method to help ensure the shareholders share in these benefits is to include
breakpoints in the advisory fee schedule. Generally, management fees for funds
in the Nuveen complex are comprised of a fund-level component and a
complex-level component, subject to certain exceptions. Accordingly, the
Independent Board Members reviewed and considered the applicable fund-level
breakpoints in the advisory fee schedules that reduce advisory fees as asset
levels increase. In this regard, the Independent Board Members noted that
although closed-end funds may from time-to-time make additional share offerings,
the growth of their assets will occur primarily through the appreciation of such
funds' investment portfolio. While economies of scale result when costs can be
spread over a larger asset base, the Independent Board Members also recognized
that the asset levels generally declined in 2008 due to, among other things, the
market downturn. Accordingly, for funds with a reduction in assets under
management, advisory fee levels may have increased as breakpoints in the fee
schedule were no longer surpassed.
In addition to fund-level advisory fee breakpoints, the Board also considered
the Fund's complex-wide fee arrangement. Pursuant to the complex-wide fee
arrangement, the fees of the funds in the Nuveen complex generally are reduced
as the assets in the fund complex reach certain levels. The complex-wide fee
arrangement seeks to provide the benefits of economies of scale to fund
shareholders when total fund complex assets increase, even if assets of a
particular fund are unchanged or have decreased. The approach reflects the
notion that some of Nuveen's costs are attributable to services provided to all
its funds in the complex and therefore all funds benefit if these costs are
spread over a larger asset base. Generally, the complex-wide pricing reduces
Nuveen's revenue because total complex fund assets have consistently grown in
prior years. As noted, however, total fund assets declined in 2008 resulting in
a smaller downward adjustment of revenues due to complex-wide pricing compared
to the prior year.
38 Nuveen Investments
Based on their review, the Independent Board Members concluded that the
breakpoint schedules and complex-wide fee arrangement were acceptable and
reflect economies of scale to be shared with shareholders when assets under
management increase.
E. INDIRECT BENEFITS
In evaluating fees, the Independent Board Members received and considered
information regarding potential "fall out" or ancillary benefits NAM or its
affiliates may receive as a result of its relationship with the Fund. In this
regard, the Independent Board Members considered revenues received by affiliates
of NAM for serving as agent at Nuveen's trading desk.
In addition to the above, the Independent Board Members considered whether NAM
received any benefits from soft dollar arrangements whereby a portion of the
commissions paid by the Fund for brokerage may be used to acquire research that
may be useful to NAM in managing the assets of the Fund and other clients. The
Independent Board Members noted that NAM does not currently have any soft dollar
arrangements; however, to the extent certain bona fide agency transactions that
occur on markets that traditionally trade on a principal basis and riskless
principal transactions are considered as generating "commissions," NAM intends
to comply with the applicable safe harbor provisions.
Based on their review, the Independent Board Members concluded that any indirect
benefits received by NAM as a result of its relationship with the Fund were
reasonable and within acceptable parameters.
F. OTHER CONSIDERATIONS
The Independent Board Members did not identify any single factor discussed
previously as all-important or controlling. The Board Members, including the
Independent Board Members, unanimously concluded that the terms of the Advisory
Agreement are fair and reasonable, that NAM's fees are reasonable in light of
the services provided to the Fund and that the Advisory Agreement be renewed.
Nuveen Investments 39
Reinvest Automatically Easily and Conveniently
NUVEEN MAKES REINVESTING EASY. A PHONE CALL IS ALL IT TAKES TO SET UP YOUR
REINVESTMENT ACCOUNT.
NUVEEN CLOSED-END FUNDS DIVIDEND REINVESTMENT PLAN
Your Nuveen Closed-End Fund allows you to conveniently reinvest dividends and/or
capital gains distributions in additional Fund shares.
By choosing to reinvest, you'll be able to invest money regularly and
automatically, and watch your investment grow through the power of tax-free
compounding. Just like dividends or distributions in cash, there may be times
when income or capital gains taxes may be payable on dividends or distributions
that are reinvested.
It is important to note that an automatic reinvestment plan does not ensure a
profit, nor does it protect you against loss in a declining market.
EASY AND CONVENIENT
To make recordkeeping easy and convenient, each month you'll receive a statement
showing your total dividends and distributions, the date of investment, the
shares acquired and the price per share, and the total number of shares you own.
HOW SHARES ARE PURCHASED
The shares you acquire by reinvesting will either be purchased on the open
market or newly issued by the Fund. If the shares are trading at or above net
asset value at the time of valuation, the Fund will issue new shares at the
greater of the net asset value or 95% of the then-current market price. If the
shares are trading at less than net asset value, shares for your account will be
purchased on the open market. If the Plan Agent begins purchasing Fund shares on
the open market while shares are trading below net asset value, but the Fund's
shares subsequently trade at or above their net asset value before the Plan
Agent is able to complete its purchases, the Plan Agent may cease open-market
purchases and may invest the uninvested portion of the distribution in
newly-issued Fund shares at a price equal to the greater of the shares' net
asset value or 95% of the shares' market value on the last business day
immediately prior to the purchase date. Dividends and distributions received to
purchase shares in the open market will normally be invested shortly after the
dividend payment date. No interest will be paid on dividends and distributions
awaiting reinvestment. Because the market price of the shares may increase
before purchases are completed, the average purchase price
40 Nuveen Investments
per share may exceed the market price at the time of valuation, resulting in the
acquisition of fewer shares than if the dividend or distribution had been paid
in shares issued by the Fund. A pro rata portion of any applicable brokerage
commissions on open market purchases will be paid by Plan participants. These
commissions usually will be lower than those charged on individual transactions.
FLEXIBLE
You may change your distribution option or withdraw from the Plan at any time,
should your needs or situation change. Should you withdraw, you can receive a
certificate for all whole shares credited to your reinvestment account and cash
payment for fractional shares, or cash payment for all reinvestment account
shares, less brokerage commissions and a $2.50 service fee.
You can reinvest whether your shares are registered in your name, or in the name
of a brokerage firm, bank, or other nominee. Ask your investment advisor if his
or her firm will participate on your behalf. Participants whose shares are
registered in the name of one firm may not be able to transfer the shares to
another firm and continue to participate in the Plan.
The Fund reserves the right to amend or terminate the Plan at any time. Although
the Fund reserves the right to amend the Plan to include a service charge
payable by the participants, there is no direct service charge to participants
in the Plan at this time.
CALL TODAY TO START REINVESTING DIVIDENDS AND/OR DISTRIBUTIONS
For more information on the Nuveen Automatic Reinvestment Plan or to enroll in
or withdraw from the Plan, speak with your financial advisor or call us at (800)
257-8787.
Nuveen Investments 41
Glossary of Terms Used in this Report
o AUCTION RATE BOND: An auction rate bond is a security whose interest
payments are adjusted periodically through an auction process, which
process typically also serves as a means for buying and selling the bond.
Auctions that fail to attract enough buyers for all the shares offered for
sale are deemed to have "failed", with current holders receiving a
formula-based interest rate until the next scheduled auction.
o AVERAGE ANNUAL TOTAL RETURN: This is a commonly used method to express an
investment's performance over a particular, usually multi-year time
period. It expresses the return that would have been necessary each year
to equal the investment's actual cumulative performance (including change
in NAV or market price and reinvested dividends and capital gains
distributions, if any) over the time period being considered.
o AVERAGE EFFECTIVE MATURITY: The average of the number of years to maturity
of the bonds in a Fund's portfolio, computed by weighting each bond's time
to maturity (the date the security comes due) by the market value of the
security. This figure does not account for the likelihood of prepayments
or the exercise of call provisions unless an escrow account has been
established to redeem the bond before maturity.
o DURATION: Duration is a measure of the expected period over which a bond's
principal and interest will be paid, and consequently is a measure of the
sensitivity of a bond's or bond Fund's value to changes when market
interest rates change. Generally, the longer a bond's or Fund's duration,
the more the price of the bond or Fund will change as interest rates
change.
o MARKET YIELD (ALSO KNOWN AS DIVIDEND YIELD OR CURRENT YIELD): An
investment's current annualized dividend divided by its current market
price.
o NET ASSET VALUE (NAV): A Fund's NAV per share 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.
o PRE-REFUNDING: Pre-refunding, also known as advanced refundings or
refinancings, is a procedure used by state and local governments to
refinance municipal bonds to lower interest expenses. The issuer sells new
bonds with a lower yield and uses the proceeds to buy U.S. Treasury
securities, the interest from which is used to make payments on the
higher-yielding bonds. Because of this collateral, pre-refunding generally
raises a bond's credit rating and thus its value.
o TAXABLE-EQUIVALENT YIELD: The yield necessary from a fully taxable
investment to equal, on an after-tax basis, the yield of a municipal bond
investment.
o ZERO COUPON BOND: A zero coupon bond does not pay a regular interest
coupon to its holders during the life of the bond. Tax-exempt income to
the holder of the bond comes from accretion of the difference between the
original purchase price of the bond at issuance and the par value of the
bond at maturity and is effectively paid at maturity. The market prices of
zero coupon bonds generally are more volatile than the market prices of
bonds that pay interest periodically.
42 Nuveen Investments
Notes
Nuveen Investments 43
Notes
44 Nuveen Investments
Other Useful Information
QUARTERLY PORTFOLIO OF INVESTMENTS AND PROXY VOTING INFORMATION
You may obtain (i) the Fund's quarterly portfolio of investments, (ii)
information regarding how the Fund voted proxies relating to portfolio
securities held during the twelve-month period ended June 30, 2009, and (iii) a
description of the policies and procedures that the Fund used to determine how
to vote proxies relating to portfolio securities without charge, upon request,
by calling Nuveen Investments toll-free at (800) 257-8787 or on Nuveen's website
at www.nuveen.com.
You may also obtain this and other Fund information directly from the Securities
and Exchange Commission ("SEC"). The SEC may charge a copying fee for this
information. Visit the SEC on-line at http://www.sec.gov or in person at the
SEC's Public Reference Room in Washington, D.C. Call the SEC at (202) 942-8090
for room hours and operation. You may also request Fund information by sending
an e-mail request to publicinfo@sec.gov or by writing to the SEC's Public
References Section at 100 F Street NE, Washington, D.C. 20549.
CEO CERTIFICATION DISCLOSURE
The Fund's Chief Executive Officer has submitted to the New York Stock Exchange
("NYSE") the annual CEO certification as required by Section 303A.12(a) of the
NYSE Listed Company Manual.
The Fund has filed with the SEC the certification of its Chief Executive Officer
and Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act.
SHARE INFORMATION
The Fund intends to repurchase shares of its own common stock in the future at
such times and in such amounts as is deemed advisable. During the period covered
by this report, the Fund did not repurchase any of its common shares.
Any future repurchases will be reported to shareholders in the next annual or
semi-annual report.
BOARD OF TRUSTEES
John P. Amboian
Robert P. Bremner
Jack B. Evans
William C. Hunter
David J. Kundert
William J. Schneider
Judith M. Stockdale
Carole E. Stone
Terence J. Toth
FUND MANAGER
Nuveen Asset Management
333 West Wacker Drive
Chicago, IL 60606
CUSTODIAN
State Street Bank & Trust Company
Boston, MA
TRANSFER AGENT AND SHAREHOLDER SERVICES
State Street Bank & Trust Company
Nuveen Funds
P.O. Box 43071
Providence, RI 02940-3071
(800) 257-8787
LEGAL COUNSEL
Chapman and Cutler LLP
Chicago, IL
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Ernst & Young LLP
Chicago, IL
Nuveen Investments 45
Nuveen Investments:
Serving Investors for Generations
Since 1898, financial advisors and their clients have relied on Nuveen
Investments to provide dependable investment solutions through continued
adherence to proven, longterm investing principles. Today, we offer a range of
high quality equity and fixed-income solutions designed to be integral
components of a well-diversified core portfolio.
FOCUSED ON MEETING INVESTOR NEEDS.
Nuveen Investments is a global investment management firm that seeks to help
secure the long-term goals of institutions and high net worth investors as well
as the consultants and financial advisors who serve them. We market our growing
range of specialized investment solutions under the high-quality brands of
HydePark, NWQ, Nuveen, Santa Barbara, Symphony, Tradewinds and Winslow Capital.
In total, Nuveen Investments managed approximately $150 billion of assets on
March 31, 2010.
FIND OUT HOW WE CAN HELP YOU.
To learn more about how the products and services of Nuveen Investments may be
able to help you meet your financial goals, talk to your financial advisor, or
call us at (800) 257-8787. Please read the information provided carefully before
you invest.
Investors should consider the investment objective and policies, risk
considerations, charges and expenses of any investment carefully. Where
applicable, be sure to obtain a prospectus, which contains this and other
relevant information. To obtain a prospectus, please contact your securities
representative or NUVEEN INVESTMENTS, 333 W. WACKER DR., CHICAGO, IL 60606.
Please read the prospectus carefully before you invest or send money.
Learn more about Nuveen Funds at: WWW.NUVEEN.COM/CEF
o Share prices
o Fund details
o Daily financial news
o Investor education
o Interactive planning tools
Distributed by
Nuveen Investments, LLC
333 West Wacker Drive
Chicago, IL 60606
www.nuveen.com
EAN-A-0310D
ITEM 2. CODE OF ETHICS.
As of the end of the period covered by this report, the registrant has adopted a
code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions. There were no amendments to or waivers
from the Code during the period covered by this report. The registrant has
posted the code of ethics on its website at www.nuveen.com/CEF/Info/Shareholder.
(To view the code, click on Fund Governance and then click on Code of Conduct.)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Directors or Trustees ("Board") determined that the
registrant has at least one "audit committee financial expert" (as defined in
Item 3 of Form N-CSR) serving on its Audit Committee. The registrant's audit
committee financial expert is Jack B. Evans, who is "independent" for purposes
of Item 3 of Form N-CSR.
Mr. Evans was formerly President and Chief Operating Officer of SCI Financial
Group, Inc., a full service registered broker-dealer and registered investment
adviser ("SCI"). As part of his role as President and Chief Operating Officer,
Mr. Evans actively supervised the Chief Financial Officer (the "CFO") and
actively supervised the CFO's preparation of financial statements and other
filings with various regulatory authorities. In such capacity, Mr. Evans was
actively involved in the preparation of SCI's financial statements and the
resolution of issues raised in connection therewith. Mr. Evans has also served
on the audit committee of various reporting companies. At such companies, Mr.
Evans was involved in the oversight of audits, audit plans, and the preparation
of financial statements. Mr. Evans also formerly chaired the audit committee of
the Federal Reserve Bank of Chicago.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Nuveen Select Maturities Municipal Fund
The following tables show the amount of fees that Ernst & Young LLP, the Fund's
auditor, billed to the Fund during the Fund's last two full fiscal years. For
engagements with Ernst & Young LLP the Audit Committee approved in advance all
audit services and non-audit services that Ernst & Young LLP provided to the
Fund, except for those non-audit services that were subject to the pre-approval
exception under Rule 2-01 of Regulation S-X (the "pre-approval exception"). The
pre-approval exception for services provided directly to the Fund waives the
pre-approval requirement for services other than audit, review or attest
services if: (A) the aggregate amount of all such services provided constitutes
no more than 5% of the total amount of revenues paid by the Fund to its
accountant during the fiscal year in which the services are provided; (B) the
Fund did not recognize the services as non-audit services at the time of the
engagement; and (C) the services are promptly brought to the Audit Committee's
attention, and the Committee (or its delegate) approves the services before the
audit is completed.
The Audit Committee has delegated certain pre-approval responsibilities to its
Chairman (or, in his absence, any other member of the Audit Committee).
SERVICES THAT THE FUND'S AUDITOR BILLED TO THE FUND
AUDIT FEES BILLED AUDIT-RELATED FEES TAX FEES ALL OTHER FEES
FISCAL YEAR ENDED TO FUND (1) BILLED TO FUND (2) BILLED TO FUND (3) BILLED TO FUND
--------------------------------------------------------------------------------------------------------------------------
March 31, 2010 $ 11,513 $ 0 $ 0 $ 0
--------------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0% 0%
pursuant to
pre-approval
exception
--------------------------------------------------------------------------------------------------------------------------
March 31, 2009 $ 11,418 $ 0 $ 0 $ 0
--------------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0% 0%
pursuant to
pre-approval
exception
--------------------------------------------------------------------------------------------------------------------------
(1) "Audit Fees" are the aggregate fees billed for professional services for
the audit of the Fund's annual financial statements and services provided
in connection with statutory and regulatory filings or engagements.
(2) "Audit Related Fees" are the aggregate fees billed for assurance and
related services reasonably related to the performance of the audit or
review of financial statements and are not reported under "Audit Fees".
(3) "Tax Fees" are the aggregate fees billed for professional services for tax
advice, tax compliance, and tax planning.
SERVICES THAT THE FUND'S AUDITOR BILLED TO THE
ADVISER AND AFFILIATED FUND SERVICE PROVIDERS
The following tables show the amount of fees billed by Ernst & Young LLP to
Nuveen Asset Management ("NAM" or the "Adviser"), and any entity controlling,
controlled by or under common control with NAM that provides ongoing services to
the Fund ("Affiliated Fund Service Provider"), for engagements directly related
to the Fund's operations and financial reporting, during the Fund's last two
full fiscal years.
The tables also show the percentage of fees subject to the pre-approval
exception. The pre-approval exception for services provided to the Adviser and
any Affiliated Fund Service Provider (other than audit, review or attest
services) waives the pre-approval requirement if: (A) the aggregate amount of
all such services provided constitutes no more than 5% of the total amount of
revenues paid to Ernst & Young LLP by the Fund, the Adviser and Affiliated Fund
Service Providers during the fiscal year in which the services are provided that
would have to be pre-approved by the Audit Committee; (B) the Fund did not
recognize the services as non-audit services at the time of the engagement; and
(C) the services are promptly brought to the Audit Committee's attention, and
the Committee (or its delegate) approves the services before the Fund's audit is
completed.
FISCAL YEAR ENDED AUDIT-RELATED FEES TAX FEES BILLED TO ALL OTHER FEES
BILLED TO ADVISER AND ADVISER AND BILLED TO ADVISER
AFFILIATED FUND AFFILIATED FUND AND AFFILIATED FUND
SERVICE PROVIDERS SERVICE PROVIDERS SERVICE PROVIDERS
---------------------------------------------------------------------------------------------------------
March 31, 2010 $ 0 $ 0 $ 0
---------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
---------------------------------------------------------------------------------------------------------
March 31, 2009 $ 0 $ 0 $ 0
---------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
---------------------------------------------------------------------------------------------------------
NON-AUDIT SERVICES
The following table shows the amount of fees that Ernst & Young LLP billed
during the Fund's last two full fiscal years for non-audit services. The Audit
Committee is required to pre-approve non-audit services that Ernst & Young LLP
provides to the Adviser and any Affiliated Fund Services Provider, if the
engagement related directly to the Fund's operations and financial reporting
(except for those subject to the pre-approval exception described above). The
Audit Committee requested and received information from Ernst & Young LLP about
any non-audit services that Ernst & Young LLP rendered during the Fund's last
fiscal year to the Adviser and any Affiliated Fund Service Provider. The
Committee considered this information in evaluating Ernst & Young LLP's
independence.
FISCAL YEAR ENDED TOTAL NON-AUDIT FEES
BILLED TO ADVISER AND
AFFILIATED FUND SERVICE TOTAL NON-AUDIT FEES
PROVIDERS (ENGAGEMENTS BILLED TO ADVISER AND
RELATED DIRECTLY TO THE AFFILIATED FUND SERVICE
TOTAL NON-AUDIT FEES OPERATIONS AND FINANCIAL PROVIDERS (ALL OTHER
BILLED TO FUND REPORTING OF THE FUND) ENGAGEMENTS) TOTAL
---------------------------------------------------------------------------------------------------------------------------
March 31, 2010 $ 0 $ 0 $ 0 $ 0
March 31, 2009 $ 0 $ 0 $ 0 $ 0
"Non-Audit Fees billed to Fund" for both fiscal year ends represent "Tax Fees"
and "All Other Fees" billed to Fund in their respective amounts from the
previous table.
Audit Committee Pre-Approval Policies and Procedures. Generally, the Audit
Committee must approve (i) all non-audit services to be performed for the Fund
by the Fund's independent accountants and (ii) all audit and non-audit services
to be performed by the Fund's independent accountants for the Affiliated Fund
Service Providers with respect to operations and financial reporting of the
Fund. Regarding tax and research projects conducted by the independent
accountants for the Fund and Affiliated Fund Service Providers (with respect to
operations and financial reports of the Fund) such engagements will be (i)
pre-approved by the Audit Committee if they are expected to be for amounts
greater than $10,000; (ii) reported to the Audit Committee chairman for his
verbal approval prior to engagement if they are expected to be for amounts under
$10,000 but greater than $5,000; and (iii) reported to the Audit Committee at
the next Audit Committee meeting if they are expected to be for an amount under
$5,000.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The registrant's Board has a separately designated Audit Committee established
in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934,
as amended (15 U.S.C. 78c(a)(58)(A)). The members of the audit committee are
Robert P. Bremner, Jack B. Evans, Terence J. Toth, William J. Schneider and
David J. Kundert.
ITEM 6. SCHEDULE OF INVESTMENTS.
a) See Portfolio of Investments in Item 1.
b) Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
The registrant invests its assets primarily in municipal bonds and cash
management securities. On rare occasions the registrant may acquire, directly or
through a special purpose vehicle, equity securities of a municipal bond issuer
whose bonds the registrant already owns when such bonds have deteriorated or are
expected shortly to deteriorate significantly in credit quality. The purpose of
acquiring equity securities generally will be to acquire control of the
municipal bond issuer and to seek to prevent the credit deterioration or
facilitate the liquidation or other workout of the distressed issuer's credit
problem. In the course of exercising control of a distressed municipal issuer,
NAM may pursue the registrant's interests in a variety of ways, which may entail
negotiating and executing consents, agreements and other arrangements, and
otherwise influencing the management of the issuer. NAM does not consider such
activities proxy voting for purposes of Rule 206(4)-6 under the 1940 Act, but
nevertheless provides reports to the registrant's Board on its control
activities on a quarterly basis.
In the rare event that a municipal issuer were to issue a proxy or that the
registrant were to receive a proxy issued by a cash management security, NAM
would either engage an independent third party to determine how the proxy should
be voted or vote the proxy with the consent, or based on the instructions, of
the registrant's Board or its representative. A member of NAM's legal department
would oversee the administration of the voting, and ensure that records were
maintained in accordance with Rule 206(4)-6, reports were filed with the SEC on
Form N-PX, and the results provided to the registrant's Board and made available
to shareholders as required by applicable rules.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
THE PORTFOLIO MANAGER
The following individual has primary responsibility for the day-to-day
implementation of the registrant's investment strategies:
NAME FUND
Paul Brennan Nuveen Select Maturities Municipal Fund
Other Accounts Managed. In addition to managing the registrant, the portfolio
manager is also primarily responsible for the day-to-day portfolio management of
the following accounts:
NUMBER OF
PORTFOLIO MANAGER TYPE OF ACCOUNT MANAGED ASSETS ACCOUNTS
--------------------------------------------------------------------------------
Paul Brennan Registered Investment Company 13 $14.5billion
Other Pooled Investment Vehicles 1 $ 0
Other Accounts 1 $1.20 million
* Assets are as of March 31, 2010. None of the assets in these accounts are
subject to an advisory fee based on performance.
Compensation. Each portfolio manager's compensation consists of three basic
elements--base salary, cash bonus and long-term incentive compensation. The
compensation strategy is to annually compare overall compensation to the market
in order to create a compensation structure that is competitive and consistent
with similar financial services companies. As discussed below, several factors
are considered in determining each portfolio manager's total compensation. In
any year these factors may include, among others, the effectiveness of the
investment strategies recommended by the portfolio manager's investment team,
the investment performance of the accounts managed by the portfolio manager, and
the overall performance of Nuveen Investments, Inc. (the parent company of NAM).
Although investment performance is a factor in determining the portfolio
manager's compensation, it is not necessarily a decisive factor. The portfolio
manager's performance is evaluated in part by comparing manager's performance
against a specified investment benchmark. This fund-specific benchmark is a
customized subset (limited to bonds in each Fund's specific state and with
certain maturity parameters) of the S&P/Investortools Municipal Bond index, an
index comprised of bonds held by managed municipal bond fund customers of
Standard & Poor's Securities Pricing, Inc. that are priced daily and whose fund
holdings aggregate at least $2 million. As of March 31, 2010, the
S&P/Investortools Municipal Bond index was comprised of 54,797 securities with
an aggregate current market value of $1,187 billion.
Base salary. Each portfolio manager is paid a base salary that is set at a level
determined by NAM in accordance with its overall compensation strategy discussed
above. NAM is not under any current contractual obligation to increase a
portfolio manager's base salary.
Cash bonus. Each portfolio manager is also eligible to receive an annual cash
bonus. The level of this bonus is based upon evaluations and determinations made
by each portfolio manager's supervisors, along with reviews submitted by his
peers. These reviews and evaluations often take into account a number of
factors, including the effectiveness of the investment strategies recommended to
the NAM's investment team, the performance of the accounts for which he serves
as portfolio manager relative to any benchmarks established for those accounts,
his effectiveness in communicating investment performance to stockholders and
their representatives, and his contribution to the NAM's investment process and
to the execution of investment strategies. The cash bonus component is also
impacted by the overall performance of Nuveen Investments, Inc. in achieving its
business objectives.
Long-term incentive compensation. In connection with the acquisition of Nuveen
Investments, Inc., by a group of investors lead by Madison Dearborn Partners in
November 2007, certain employees, including portfolio managers, received profit
interests in Nuveen's parent. These profit interests entitle the holders to
participate in the appreciation in the value of Nuveen beyond the issue date and
vest over five to seven years, or earlier in the case of a liquidity event. In
addition, in July 2009, Nuveen Investments created and funded a trust, as part
of a newly-established incentive program, which purchased shares of certain
Nuveen Mutual Funds and awarded such shares, subject to vesting, to certain
employees, including portfolio managers.
Material Conflicts of Interest. Each portfolio manager's simultaneous management
of the Registrant and the other accounts noted above may present actual or
apparent conflicts of interest with respect to the allocation and aggregation of
securities orders placed on behalf of the registrant and the other account. NAM,
however, believes that such potential conflicts are mitigated by the fact that
the NAM has adopted several policies that address potential conflicts of
interest, including best execution and trade allocation policies that are
designed to ensure (1) that portfolio management is seeking the best price for
portfolio securities under the circumstances, (2) fair and equitable allocation
of investment opportunities among accounts over time and (3) compliance with
applicable regulatory requirements. All accounts are to be treated in a
non-preferential manner, such that allocations are not based upon account
performance, fee structure or preference of the portfolio manager. In addition,
NAM has adopted a Code of Conduct that sets forth policies regarding conflicts
of interest.
Beneficial Ownership of Securities. As of the March 31, 2010, the portfolio
manager beneficially owned the following dollar range of equity securities
issued by the Registrant and other Nuveen Funds managed by NAM's municipal
investment team.
DOLLAR RANGE OF
EQUITY SECURITIES
DOLLAR RANGE OF BENEFICIALLY OWNED
EQUITY IN THE REMAINDER OF
SECURITIES NUVEEN FUNDS MANAGED
BENEFICIALLY BY NAM'S MUNICIPAL
NAME OF PORTFOLIO MANAGER FUND OWNED IN FUND INVESTMENT TEAM
---------------------------------------------------------------------------------------------------------------
Paul Brennan Nuveen Select Maturities Municipal Fund $0 $500,001-$1,000,000
PORTFOLIO MANAGER BIO:
Paul Brennan, CFA, CPA, became a portfolio manager of Flagship Financial Inc. in
1994, and subsequently became an Assistant Vice President of NAM upon the
acquisition of Flagship Resources Inc. by Nuveen in 1997. He became Vice
President of NAM in 2002, Senior Vice President in 2010. He currently manages
investments for 14 Nuveen-sponsored investment companies.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the registrant's Board implemented after the registrant
last provided disclosure in response to this item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of this report that includes the disclosure
required by this paragraph, based on their evaluation of the controls
and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")
(17 CFR 240.13a-15(b) or 240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter
of the period covered by this report that has materially affected, or
is reasonably likely to materially affect, the registrant's internal
control over financial reporting.
ITEM 12. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit: Not applicable
because the code is posted on registrant's website at www.nuveen.com/CEF/Info/
Shareholder and there were no amendments during the period covered by this
report. (To view the code, click on Fund Governance and then Code of Conduct.)
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2(a) under
the 1940 Act (17 CFR 270.30a-2(a)) in the exact form set forth below: Ex-99.CERT
Attached hereto.
(a)(3) Any written solicitation to purchase securities under Rule 23c-1 under
the 1940 Act (17 CFR 270.23c-1) sent or given during the period covered by the
report by or on behalf of the registrant to 10 or more persons. Not applicable.
(b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act,
provide the certifications required by Rule 30a-2(b) under the 1940 Act (17 CFR
270.30a-2(b)); Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR
240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of
the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished
pursuant to this paragraph will not be deemed "filed" for purposes of Section 18
of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of
that section. Such certification will not be deemed to be incorporated by
reference into any filing under the Securities Act of 1933 or the Exchange Act,
except to the extent that the registrant specifically incorporates it by
reference. Ex-99.906 CERT attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Nuveen Select Maturities Municipal Fund
-----------------------------------------------------------
By (Signature and Title) /s/ Kevin J. McCarthy
----------------------------------------------
Kevin J. McCarthy
Vice President and Secretary
Date: June 7, 2010
-------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title) /s/ Gifford R. Zimmerman
----------------------------------------------
Gifford R. Zimmerman
Chief Administrative Officer
(principal executive officer)
Date: June 7, 2010
-------------------------------------------------------------------
By (Signature and Title) /s/ Stephen D. Foy
----------------------------------------------
Stephen D. Foy
Vice President and Controller
(principal financial officer)
Date: June 7, 2010
-------------------------------------------------------------------