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 811-21153
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Nuveen Maryland Dividend Advantage Municipal Fund 3
------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
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(Address of principal executive offices) (Zip code)
Kevin J. McCarthy
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
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(Name and address of agent for service)
Registrant's telephone number, including area code: (312) 917-7700
-------------------
Date of fiscal year end: May 31
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Date of reporting period: November 30, 2007
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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.
SEMI-ANNUAL REPORT
November 30, 2007
Nuveen Investments
MUNICIPAL CLOSED-END FUNDS
Photo of: Small child
NUVEEN MARYLAND
PREMIUM INCOME
MUNICIPAL FUND
NMY
NUVEEN MARYLAND
DIVIDEND ADVANTAGE
MUNICIPAL FUND
NFM
NUVEEN MARYLAND
DIVIDEND ADVANTAGE
MUNICIPAL FUND 2
NZR
NUVEEN MARYLAND
DIVIDEND ADVANTAGE
MUNICIPAL FUND 3
NWI
NUVEEN VIRGINIA
PREMIUM INCOME
MUNICIPAL FUND
NPV
NUVEEN VIRGINIA
DIVIDEND ADVANTAGE
MUNICIPAL FUND
NGB
NUVEEN VIRGINIA
DIVIDEND ADVANTAGE
MUNICIPAL FUND 2
NNB
IT'S NOT WHAT YOU EARN, IT'S WHAT YOU KEEP.(R)
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Chairman's
LETTER TO SHAREHOLDERS
Photo of: Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
Once again, I am pleased to report that over the six-month period covered by
this report your Fund continued to provide you with attractive monthly tax-free
income. For more details about the management strategy and performance of your
Fund, please read the Portfolio Manager's Comments, the Dividend and Share Price
Information, and the Performance Overview sections of this report.
I also wanted to update you on some important news about Nuveen Investments. The
firm recently was acquired by a group led by Madison Dearborn Partners, LLC.
While this affected the corporate structure of Nuveen Investments, it has no
impact on the investment objectives, portfolio management strategies or dividend
policy of your Fund.
With the recent volatility in the stock market, many have begun to wonder which
way the market is headed, and whether they need to adjust their holdings of
investments. No one knows what the future will bring, which is why we think a
well-balanced portfolio that is structured and carefully monitored with the help
of an investment professional is an important component in achieving your long
term financial goals. A well-diversified portfolio may actually help to reduce
your overall investment risk, and we believe that investments like your Nuveen
Investments Fund can be important building blocks in a portfolio crafted to
perform well through a variety of market conditions.
We also are pleased to be able to offer you a choice concerning how you receive
your shareholder reports and other Fund information. As an alternative to mailed
copies, you can sign up to receive future Fund reports and other Fund
information by e-mail and the internet. The inside front cover of this report
contains information on how you can sign up.
We are grateful that you have chosen us as a partner as you pursue your
financial goals and we look forward to continuing to earn your trust in the
months and years ahead. At Nuveen Investments, our mission continues to be to
assist you and your financial advisor by offering investment services and
products that can help you to secure your financial objectives.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
January 15, 2008
Portfolio Manager's COMMENTS
Nuveen Investments Municipal Closed-End Funds
NMY, NFM, NZR, NWI,
NPV, NGB, NNB
Portfolio manager Cathryn Steeves discusses key investment strategies and the
six-month performance of these seven Nuveen Funds. Cathryn, who joined Nuveen in
1996, has managed the Maryland and Virginia Funds since 2006.
WHAT KEY STRATEGIES WERE USED TO MANAGE THE MARYLAND AND VIRGINIA FUNDS DURING
THE SIX-MONTH REPORTING PERIOD ENDED NOVEMBER 30, 2007?
Over the course of this reporting period, we saw the municipal yield curve
steepen, as interest rates at the short end of the yield curve declined and
longer-term rates generally rose. In this environment, our investment strategies
continued to focus on finding relative value. We looked for undervalued sectors
and credits with the potential to perform well over the long term. The majority
of our purchases were attractively-priced bonds in the 25-year to 30-year part
of the yield curve. These purchases helped to offset the shortening of the
Funds' portfolio durations due to bond calls and the natural tendency of bond
durations to shorten as time passes.
When the liquidity crisis in August caused the market to discount lower-quality
and higher-yielding bonds, we took advantage of good opportunities to add
lower-rated hospitals and continuing care retirement communities (CCRCs) to the
Maryland and Virginia Funds. The Funds also purchased single-family housing
bonds at discount rates as a way to add both performance potential and favorable
income-generation capabilities. In addition, we bought some short-term insured
bonds in the Maryland Funds. These bonds, many of which had underlying credits
with which we were familiar through our research efforts, offered attractive
yields and pricing in the aftermath of the liquidity crisis.
To help generate cash for purchases and maintain the Funds' durations1 closer to
our strategic range, we selectively sold holdings with shorter durations.
Selling shorter duration bonds and reinvesting further out on the yield curve
also helped to improve the Funds' overall call protection profile.
We continued to emphasize a disciplined approach to duration management. As part
of our duration strategies, we used inverse floating rate securities,2 a type of
derivative financial instrument, in all seven of the Maryland and Virginia
Funds. The inverse floaters had the dual benefit of bringing the durations of
these Funds closer to our strategic target and enhancing their income-generation
capabilities. In addition, NMY, NFM, NZR and NPV used forward-starting interest
rate swaps, another type of derivative instrument. The goal of this strategy was
to help us manage net asset value (NAV) volatility without having a negative
impact on the Funds' income streams or common share dividends over the short
term.
Discussions of specific investments are for illustrative purposes only and are
not intended as recommendations of individual investments. The views expressed
in this commentary represent those of the portfolio manager as of the date of
this report and are subject to change at any time, based on market conditions
and other factors. The Funds disclaim any obligation to advise shareholders of
such changes.
1 Duration is a measure of a bond's price sensitivity as interest rates change,
with longer duration bonds displaying more sensitivity to these changes than
bonds with shorter durations.
2 An inverse floating rate security is a financial instrument designed to pay
long-term tax-exempt interest at a rate that varies inversely with a short-term
tax-exempt interest rate index. For the Nuveen Funds, the index typically used
is the Securities Industry and Financial Markets (SIFM) Municipal Swap Index
(previously referred to as the Bond Market Association Index or BMA). Inverse
floaters, including those inverse floating rate securities in which the Funds
invested during the reporting period, are further defined within the Notes to
Financial Statements and Glossary of Terms Used in This Report sections of this
report.
4
HOW DID THE FUNDS PERFORM?
Individual results for the Nuveen Maryland and Virginia Funds, as well as
relevant index and peer group information, are presented in the accompanying
table.
Total Returns on Net Asset Value*
For periods ended 11/30/07
6-Month 1-Year 5-Year 10-Year
Maryland Funds
NMY 1.78% 0.90% 5.93% 5.89%
NFM 1.20% 0.85% 5.76% NA
NZR 1.32% 0.97% 5.95% NA
NWI 1.10% 0.64% 6.23% NA
Virginia Funds
NPV 1.49% 0.81% 5.69% 5.93%
NGB 0.16% 0.20% 6.18% NA
NNB 0.40% 0.28% 6.17% NA
Lehman Brothers
Municipal Bond Index3 2.40% 2.71% 4.68% 5.30%
Lipper Other States
Municipal Debt Funds
Average4 1.10% 0.46% 5.91% 5.75%
For the six months ended November 30, 2007, the cumulative returns on NAV for
all seven of these Funds underperformed the return on the national Lehman
Brothers Municipal Bond Index. NMY, NFM, NZR and NPV exceeded the average return
for the Lipper Other States Municipal Debt Funds Average, while NWI performed
in-line with the Lipper average and NGB and NNB trailed this measure.
Shareholders should note that the performance of the Lipper Other States
Municipal Debt Funds Average represents the overall average of returns for funds
from 10 different states with a wide variety of municipal market conditions,
making direct comparisons less meaningful. For example, the Virginia municipal
market as a whole underperformed the national municipal market due in part to a
$1.1 billion Virginia tobacco refinancing issue earlier in 2007, which performed
poorly as other states issued major tobacco deals, creating an oversupply of
these bonds.
One of the key factors in the six-month performance of these Funds relative to
that of the unleveraged Lehman Brothers Municipal Bond Index was the use of
financial leverage. The returns of all of these Funds were negatively impacted
by their use of leverage. Although leveraging provides opportunities for
additional income and total returns for common shareholders, it can also expose
shareholders to additional risk when market conditions are unfavorable. With the
increases in yields on longer municipal bonds, the impact of valuation changes
in these bonds was magnified by the use of leverage.
*Six-month returns are cumulative. One-year, five-year and ten-year returns are
annualized.
Past performance is not predictive of future results. Current performance may be
higher or lower than the data shown. Returns do not reflect the deduction of
taxes that shareholders may have to pay on Fund distributions or upon the sale
of Fund shares.
For additional information, see the individual Performance Overview for your
Fund in this report.
3 The Lehman Brothers Municipal Bond Index is an unleveraged, unmanaged
national index comprising a broad range of investment-grade municipal
bonds. Results for the Lehman index do not reflect any expenses.
4 The Lipper Other States Municipal Debt Funds Average is calculated using
the returns of all closed-end funds in this category for each period as
follows: 6 months, 46 funds; 1 year, 46 funds; 5 years, 46 funds; and 10
years, 18 funds. Fund and Lipper returns assume reinvestment of dividends.
5
Other major factors that influenced the Funds' returns included yield curve and
duration positioning, the use of derivatives, sector allocations and credit
exposure.
During this six-month period, bonds in the Lehman Brothers Municipal Bond Index
with maturities between two and twelve years, especially those maturing in
approximately six to eight years, benefited the most from changes in the
interest rate environment. As a result, these bonds generally outperformed
credits with longer maturities, with bonds having the longest maturities (22
years and longer) posting the worst returns. Although the Funds were
underexposed to the outperforming shorter maturity categories, this was
generally offset by their heavier weightings in the intermediate part of the
curve, which performed well, and lower allocations to the underperforming long
part of the curve. While our strategies during this period included adding some
longer bonds to the Funds, their overall portfolio duration remained short of
our strategic target. Consequently, the Funds' duration and yield curve
positioning was a net positive for performance.
The forward interest rate swaps in place in NMY, NFM, NZR and NPV also had a
positive impact on the return performance of these four Funds. These derivative
financial instruments provided exposure to taxable markets during a period when,
in contrast to historical trends, the Treasury market and the municipal market
moved in the opposite directions. As municipal market performance lagged the
significant gains made by Treasuries, the forward interest rate swaps performed
well. NWI, NGB and NNB did not use forward interest rate swaps because we were
able to position the durations of these three Funds within our strategic range
through the purchase of municipal bonds with longer maturities, rather than
through the use of derivatives. The relatively greater exposure to longer
municipal bonds hurt the performances of NWI, NGB and NNB.
Sectors of the market that generally made positive contributions to the Funds'
performances included water and sewer, transportation and education. General
obligation credits and pre-refunded bonds, especially those that were advance
refunded before longer municipal interest rates began to rise in mid-2007, also
performed very well. In addition, the short-term insured bonds that we added to
the Maryland Funds later in the period posted strong returns.
On the other hand, bonds that carried any credit risk, regardless of sector,
generally tended to perform poorly. Revenue bonds as a whole, and specifically
the industrial development and health care sectors that had ranked among the top
performers in the Lehman Brothers Municipal Bond Index over the past few years,
underperformed the general municipal market. Bonds backed by the 1998 master
tobacco settlement agreement also posted poor returns, due to the overall lower
credit quality of the tobacco sector as well as the ample supply of these bonds.
As interest rates on longer municipal bonds rose and credit spreads widened,
lower credit quality bonds also generally underperformed the municipal market as
a whole for the first time in several years. In addition to investing in bonds
rated BBB, NFM, NZR, NWI, NGB and NNB can invest up to 20% of their assets in
below-investment-grade
6
securities (bonds rated BB or below) or in non-rated bonds judged to be in the
same credit quality category. The comparatively greater exposure of these five
Funds to lower-rated bonds contributed to the underperformance of these Funds
relative to NMY and NPV, which overall represented higher credit quality. As of
November 30, 2007, the Maryland Funds had weightings of bonds rated BBB or lower
and non-rated bonds ranging from approximately 13% in NMY to 21% in NZR and 22%
in NFM and 23% in NWI, while the Virginia Funds' allocations totaled
approximately 11% in NPV, 18% in NNB, and 20% in NGB.
Another factor that had a negative impact was the Funds' small position in bonds
backed by certain municipal insurers, specifically Radian Asset Assurance
(Radian) (in the Maryland Funds) and ACA Financial Guaranty Corporation (ACA)
(in the Virginia Funds). As concern increased about these two companies, prices
on bonds insured by Radian and ACA declined to levels close to what one would
expect for uninsured bonds from the underlying municipal issuers, detracting
from the performance of these Funds. It is important to note that these Nuveen
Municipal Closed-End Funds had no direct exposure to the collateralized debt
products that were at the center of the recent liquidity crisis.
RECENT MARKET EVENTS
Many of the municipal bonds in the portfolios are covered by policies of
insurance, issued by one of several municipal bond insurers, under which the
insurer guarantees the timely payment of interest and principal on the bonds.
Certain of those insurers, including AMBAC, MBIA and FGIC, historically rated
AAA (the highest grade), also insure investment vehicles representing interests
in subprime mortgages, which suffered severe credit deterioration during the
semi-annual period covered by this report. The defaults and/or credit
deterioration of the subprime mortgage investments they insured have caused
losses to the insurers, which has reduced the insurers' capital and called into
question the insurers' continued ability to pay interest and principal on
insured bonds for the life of those bonds. One rating agency has already reduced
the rating for AMBAC-insured bonds to AA, and other rating agencies may follow,
and this rating may fall even further. While the major rating agencies continue
to give the other affected insurers their highest rating, as of the date this
report was written one or more rating agencies have placed each of these
insurers on "negative credit watch", which may presage one or more rating
reductions in the future. The value of the insurance associated with bonds held
by the Funds in this report (a component of the value of the bond/insurance
combination) generally declined during and after the reporting period, and
further credit deterioration or rating downgrades of the insurers could cause
further declines in the value of the insurance component of an insured bond,
although it has not and should not affect the creditworthiness of the municipal
issuer of, and the uninsured value of, the underlying bond.
7
Dividend and Share Price
INFORMATION
As previously noted, these seven Funds use leverage to potentially enhance
opportunities for additional income for common shareholders. The Funds' use of
this strategy continued to provide incremental income, although the extent of
this benefit was reduced to a degree by short-term interest rates that remained
relatively high during most of this period. This, in turn, kept the Funds'
borrowing costs high. The Funds' income streams were also somewhat impacted as
the proceeds from older, higher-yielding bonds that matured or were called were
reinvested into bonds currently available in the market, which generally offered
lower yields during much of this period. The combination of these factors
resulted in one monthly dividend reduction in NMY and NGB over the six-month
period ended November 30, 2007. The dividends of NFM, NZR, NWI, NPV and NNB
remained stable throughout this reporting period.
All of the Funds in this report seek to pay stable dividends at rates that
reflect each Fund's past results and projected future performance. During
certain periods, each Fund may pay dividends at a rate that may be more or less
than the amount of net investment income actually earned by the Fund during the
period. If a Fund has cumulatively earned more than it has paid in dividends, it
holds the excess in reserve as undistributed net investment income (UNII) as
part of the Fund's NAV. Conversely, if a Fund has cumulatively paid dividends in
excess of its earnings, the excess constitutes negative UNII that is likewise
reflected in the Fund's NAV. Each Fund will, over time, pay all of its net
investment income as dividends to shareholders. As of November 30, 2007, all of
the Funds in this report had positive UNII balances, based upon our best
estimate, for tax purposes. NMY and NPV had positive UNII balances and NFM, NZR,
NWI, NGB and NNB had negative UNII balances for financial statement purposes.
As of November 30, 2007, the Funds' share prices were trading at premiums or
discounts to their NAVs as shown in the accompanying chart:
11/30/07 Six-Month Average
Discount Premium/Discount
NMY -12.47% -6.87%
NFM -10.02% -1.88%
NZR -9.49% -3.51%
NWI -11.80% -7.03%
NPV -10.14% -3.55%
NGB -8.53% +1.90%
NNB -5.95% +2.15%
8
NMY
Performance
OVERVIEW
Nuveen Maryland
Premium Income
Municipal Fund
as of November 30, 2007
Pie Chart:
Credit Quality (as a % of total investments)1
AAA/U.S.
Guaranteed 57%
AA 22%
A 8%
BBB 11%
BB or Lower 1%
N/R 1%
Bar Chart:
Monthly Tax-Free Dividends Per Share -- 2006-2007
Dec 0.055
Jan 0.055
Feb 0.055
Mar 0.055
Apr 0.055
May 0.055
Jun 0.0515
Jul 0.0515
Aug 0.0515
Sep 0.0515
Oct 0.0495
Nov 0.0495
Line Chart:
Share Price Performance -- Weekly Closing Price
12/01/06 14.62
14.82
14.5
14.37
14.39
14.41
14.54
14.44
14.46
14.65
14.6486
14.61
14.58
14.81
14.89
15.06
14.93
15.04
15.15
15.03
14.86
15.05
14.95
14.85
14.75
14.83
14.73
14.47
14.12
13.94
13.76
13.7
13.46
13.37
13.1984
13.42
13.3
12.95
13.2401
13.68
13.57
13.59
13.23
13.22
13.23
13.08
13.07
13.1399
13.14
12.8
12.42
12.48
11/30/07 12.71
FUND SNAPSHOT
------------------------------------
Common Share Price $12.71
------------------------------------
Common Share
Net Asset Value $14.52
------------------------------------
Premium/(Discount) to NAV -12.47%
------------------------------------
Market Yield 4.67%
------------------------------------
Taxable-Equivalent Yield2 6.81%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $154,532
------------------------------------
Average Effective Maturity
on Securities (Years) 16.29
------------------------------------
Leverage-Adjusted Duration 10.11
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 3/18/93)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
6-Month
(Cumulative) -12.37% 1.78%
------------------------------------
1-Year -9.16% 0.90%
------------------------------------
5-Year 1.17% 5.93%
------------------------------------
10-Year 4.04% 5.89%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
Tax Obligation/General 22.6%
------------------------------------
Health Care 15.2%
------------------------------------
U.S. Guaranteed 14.1%
------------------------------------
Education and Civic
Organizations 12.6%
------------------------------------
Tax Obligation/Limited 10.0%
------------------------------------
Housing/Multifamily 8.0%
------------------------------------
Housing/Single Family 5.1%
------------------------------------
Other 12.4%
------------------------------------
1 The percentage of AAA ratings shown in the foregoing chart reflects the AAA
ratings on certain bonds insured by AMBAC, FGIC or MBIA as of November 30,
2007. As explained earlier in the Portfolio Manager's Comments section of
this report, one rating agency has reduced the rating for AMBAC to AA, and
one or more rating agencies have placed each of these insurers on "negative
credit watch", which may presage one or more rating reductions for such
insurer or insurers in the future. If one or more insurers' ratings are
reduced below AAA by these rating agencies, it would likely reduce the
effective rating of many of the bonds insured by that insurer or insurers,
and thereby reduce the percentage of the portfolio rated AAA from the
percentage shown in the foregoing chart.
2 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 31.4%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
9
NFM
Performance
OVERVIEW
Nuveen Maryland
Dividend Advantage
Municipal Fund
as of November 30, 2007
Pie Chart:
Credit Quality (as a % of total investments)1
AAA/U.S.
Guaranteed 47%
AA 16%
A 15%
BBB 15%
BB or Lower 1%
N/R 6%
Bar Chart:
Monthly Tax-Free Dividends Per Share -- 2006-2007
Dec 0.0615
Jan 0.0615
Feb 0.0615
Mar 0.0615
Apr 0.0615
May 0.0615
Jun 0.0585
Jul 0.0585
Aug 0.0585
Sep 0.0585
Oct 0.0585
Nov 0.0585
Line Chart:
Share Price Performance -- Weekly Closing Price
12/01/06 15.64
15.88
15.3
15.11
15.5
15.36
15.17
15.24
15.09
15.47
15.4
15.7
15.85
15.8
16.15
16.31
15.8
16.16
15.95
16.14
16.15
16.1
16
15.7
15.2
15.14
15.16
14.94
15
14.9
14.62
14.7199
14.51
14.42
14.3
14.68
14.3
13.5
13.78
13.9
14.38
14.06
13.8
14
13.8101
13.73
13.67
13.65
13.36
13.2401
13.07
13.14
11/30/07 13.017
FUND SNAPSHOT
------------------------------------
Common Share Price $13.02
------------------------------------
Common Share
Net Asset Value $14.47
------------------------------------
Premium/(Discount) to NAV -10.02%
------------------------------------
Market Yield 5.39%
------------------------------------
Taxable-Equivalent Yield2 7.86%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $60,534
------------------------------------
Average Effective Maturity
on Securities (Years) 18.61
------------------------------------
Leverage-Adjusted Duration 9.51
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 1/23/01)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
6-Month
(Cumulative) -12.61% 1.20%
------------------------------------
1-Year -13.32% 0.85%
------------------------------------
5-Year 2.37% 5.76%
------------------------------------
Since
Inception 3.34% 5.98%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
Health Care 20.3%
------------------------------------
U.S. Guaranteed 15.4%
------------------------------------
Tax Obligation/General 14.9%
------------------------------------
Housing/Multifamily 12.4%
------------------------------------
Tax Obligation/Limited 10.7%
------------------------------------
Education and Civic
Organizations 8.9%
------------------------------------
Housing/Single Family 5.5%
------------------------------------
Other 11.9%
------------------------------------
1 The percentage of AAA ratings shown in the foregoing chart reflects the AAA
ratings on certain bonds insured by AMBAC, FGIC or MBIA as of November 30,
2007. As explained earlier in the Portfolio Manager's Comments section of
this report, one rating agency has reduced the rating for AMBAC to AA, and
one or more rating agencies have placed each of these insurers on "negative
credit watch", which may presage one or more rating reductions for such
insurer or insurers in the future. If one or more insurers' ratings are
reduced below AAA by these rating agencies, it would likely reduce the
effective rating of many of the bonds insured by that insurer or insurers,
and thereby reduce the percentage of the portfolio rated AAA from the
percentage shown in the foregoing chart.
2 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 31.4%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
10
NZR
Performance
OVERVIEW
Nuveen Maryland
Dividend Advantage
Municipal Fund 2
as of November 30, 2007
Pie Chart:
Credit Quality (as a % of total investments)1
AAA/U.S.
Guaranteed 48%
AA 23%
A 8%
BBB 13%
BB or Lower 2%
N/R 6%
Bar Chart:
Monthly Tax-Free Dividends Per Share -- 2006-20073
Dec 0.064
Jan 0.064
Feb 0.064
Mar 0.0615
Apr 0.0615
May 0.0615
Jun 0.0585
Jul 0.0585
Aug 0.0585
Sep 0.0585
Oct 0.0585
Nov 0.0585
Line Chart:
Share Price Performance -- Weekly Closing Price
12/01/06 16.1
15.97
16
15.9
16.1
16.05
15.38
15.92
16.01
16.22
15.84
15.76
15.85
16.25
16.28
16.05
16.01
16.34
16.1
16.28
16.02
15.95
15.84
15.81
15.5
15.43
15.31
14.97
14.75
14.5
14.52
14.5
14.33
14.28
14.08
14.35
14.04
13.68
13.85
13.86
14.37
14.05
13.9
14.04
13.85
13.95
13.7
13.78
13.52
13.54
13.05
13.04
11/30/07 13.26
FUND SNAPSHOT
------------------------------------
Common Share Price $13.26
------------------------------------
Common Share
Net Asset Value $14.65
------------------------------------
Premium/(Discount) to NAV -9.49%
------------------------------------
Market Yield 5.29%
------------------------------------
Taxable-Equivalent Yield2 7.71%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $61,415
------------------------------------
Average Effective Maturity
on Securities (Years) 17.74
------------------------------------
Leverage-Adjusted Duration 9.38
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 9/25/01)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
6-Month
(Cumulative) -11.59% 1.32%
------------------------------------
1-Year -13.48% 0.97%
------------------------------------
5-Year 3.53% 5.95%
------------------------------------
Since
Inception 3.45% 6.01%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
Tax Obligation/General 19.6%
------------------------------------
Health Care 16.8%
------------------------------------
U.S. Guaranteed 14.4%
------------------------------------
Tax Obligation/Limited 11.9%
------------------------------------
Education and Civic
Organizations 10.9%
------------------------------------
Housing/Multifamily 6.3%
------------------------------------
Housing/Single Family 5.6%
------------------------------------
Other 14.5%
------------------------------------
1 The percentage of AAA ratings shown in the foregoing chart reflects the AAA
ratings on certain bonds insured by AMBAC, FGIC or MBIA as of November 30,
2007. As explained earlier in the Portfolio Manager's Comments section of
this report, one rating agency has reduced the rating for AMBAC to AA, and
one or more rating agencies have placed each of these insurers on "negative
credit watch", which may presage one or more rating reductions for such
insurer or insurers in the future. If one or more insurers' ratings are
reduced below AAA by these rating agencies, it would likely reduce the
effective rating of many of the bonds insured by that insurer or insurers,
and thereby reduce the percentage of the portfolio rated AAA from the
percentage shown in the foregoing chart.
2 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 31.4%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
3 The Fund paid shareholders net ordinary income distributions in December
2006 of $.0014 per share.
11
NWI
Performance
OVERVIEW
Nuveen Maryland
Dividend Advantage
Municipal Fund 3
as of November 30, 2007
Pie Chart:
Credit Quality (as a % of total investments)1
AAA/U.S.
Guaranteed 43%
AA 25%
A 9%
BBB 16%
BB or Lower 2%
N/R 5%
Bar Chart:
Monthly Tax-Free Dividends Per Share -- 2006-2007
Dec 0.0555
Jan 0.0555
Feb 0.0555
Mar 0.0555
Apr 0.0555
May 0.0555
Jun 0.0525
Jul 0.0525
Aug 0.0525
Sep 0.0525
Oct 0.0525
Nov 0.0525
Line Chart:
Share Price Performance -- Weekly Closing Price
12/01/06 14.5
14.48
14.35
14.3
14.2
14.24
14.57
14.17
14.1599
14.15
14.44
14.25
14.34
14.55
14.72
14.75
14.82
14.86
14.95
14.71
14.8
14.68
14.82
14.67
14.7
14.75
14.6
14.51
13.76
13.57
13.56
13.61
13.29
13.16
13.39
13.3
13.2
12.79
12.86
13.39
13.52
13.44
13.04
13.4
13.09
13.06
12.9799
12.95
12.92
12.61
12.21
12.34
11/30/07 12.63
FUND SNAPSHOT
------------------------------------
Common Share Price $12.63
------------------------------------
Common Share
Net Asset Value $14.32
------------------------------------
Premium/(Discount) to NAV -11.80%
------------------------------------
Market Yield 4.99%
------------------------------------
Taxable-Equivalent Yield2 7.27%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $76,790
------------------------------------
Average Effective Maturity
on Securities (Years) 17.75
------------------------------------
Leverage-Adjusted Duration 9.85
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 9/25/02)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
6-Month
(Cumulative) -12.25% 1.10%
------------------------------------
1-Year -8.66% 0.64%
------------------------------------
5-Year 2.73% 6.23%
------------------------------------
Since
Inception 1.78% 5.08%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
Tax Obligation/Limited 20.6%
------------------------------------
Health Care 16.5%
------------------------------------
Tax Obligation/General 14.2%
------------------------------------
U.S. Guaranteed 12.4%
------------------------------------
Housing/Multifamily 9.8%
------------------------------------
Education and Civic
Organizations 9.0%
------------------------------------
Housing/Single Family 4.0%
------------------------------------
Other 13.5%
------------------------------------
1 The percentage of AAA ratings shown in the foregoing chart reflects the AAA
ratings on certain bonds insured by AMBAC, FGIC or MBIA as of November 30,
2007. As explained earlier in the Portfolio Manager's Comments section of
this report, one rating agency has reduced the rating for AMBAC to AA, and
one or more rating agencies have placed each of these insurers on "negative
credit watch", which may presage one or more rating reductions for such
insurer or insurers in the future. If one or more insurers' ratings are
reduced below AAA by these rating agencies, it would likely reduce the
effective rating of many of the bonds insured by that insurer or insurers,
and thereby reduce the percentage of the portfolio rated AAA from the
percentage shown in the foregoing chart.
2 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 31.4%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
12
NPV
Performance
OVERVIEW
Nuveen Virginia
Premium Income
Municipal Fund
as of November 30, 2007
Pie Chart:
Credit Quality (as a % of total investments)1
AAA/U.S.
Guaranteed 59%
AA 23%
A 7%
BBB 7%
BB or Lower 1%
N/R 3%
Bar Chart:
Monthly Tax-Free Dividends Per Share -- 2006-20073
Dec 0.059
Jan 0.059
Feb 0.059
Mar 0.0565
Apr 0.0565
May 0.0565
Jun 0.053
Jul 0.053
Aug 0.053
Sep 0.053
Oct 0.053
Nov 0.053
Line Chart:
Share Price Performance -- Weekly Closing Price
12/01/06 15.32
15.35
14.86
14.69
15.02
15.3
15.28
15.6499
15.71
16.18
16.63
16.13
15.85
15.67
15.61
15.6
15.64
15.94
16.07
16.01
15.87
15.78
15.8
15.6
15.56
15.4
15.25
14.91
14.6
14.62
14.6699
14.87
14.43
14.21
14.11
14.1
13.87
13.98
14.28
14.08
14.41
14.38
14.14
14.27
13.94
13.83
13.7
13.94
13.68
13.57
13.1199
13.38
11/30/07 13.29
FUND SNAPSHOT
------------------------------------
Common Share Price $13.29
------------------------------------
Common Share
Net Asset Value $14.79
------------------------------------
Premium/(Discount) to NAV -10.14%
------------------------------------
Market Yield 4.79%
------------------------------------
Taxable-Equivalent Yield2 7.05%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $132,119
------------------------------------
Average Effective Maturity
on Securities (Years) 16.12
------------------------------------
Leverage-Adjusted Duration 9.73
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 3/18/93)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
6-Month
(Cumulative) -10.80% 1.49%
------------------------------------
1-Year -8.99% 0.81%
------------------------------------
5-Year 1.45% 5.69%
------------------------------------
10-Year 4.36% 5.93%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
Tax Obligation/Limited 20.3%
------------------------------------
Health Care 16.7%
------------------------------------
U.S. Guaranteed 13.7%
------------------------------------
Tax Obligation/General 12.6%
------------------------------------
Transportation 7.1%
------------------------------------
Water and Sewer 6.7%
------------------------------------
Housing/Single Family 5.4%
------------------------------------
Utilities 4.9%
------------------------------------
Other 12.6%
------------------------------------
1 The percentage of AAA ratings shown in the foregoing chart reflects the AAA
ratings on certain bonds insured by AMBAC, FGIC or MBIA as of November 30,
2007. As explained earlier in the Portfolio Manager's Comments section of
this report, one rating agency has reduced the rating for AMBAC to AA, and
one or more rating agencies have placed each of these insurers on "negative
credit watch", which may presage one or more rating reductions for such
insurer or insurers in the future. If one or more insurers' ratings are
reduced below AAA by these rating agencies, it would likely reduce the
effective rating of many of the bonds insured by that insurer or insurers,
and thereby reduce the percentage of the portfolio rated AAA from the
percentage shown in the foregoing chart.
2 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 32.1%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
3 The Fund paid shareholders a capital gains distribution in December 2006 of
$.0215 per share.
13
NGB
Performance
OVERVIEW
Nuveen Virginia
Dividend Advantage
Municipal Fund
as of November 30, 2007
Pie Chart:
Credit Quality (as a % of total investments)1
AAA/U.S.
Guaranteed 55%
AA 16%
A 9%
BBB 10%
BB or Lower 1%
N/R 9%
Bar Chart:
Monthly Tax-Free Dividends Per Share -- 2006-2007
Dec 0.0655
Jan 0.0655
Feb 0.0655
Mar 0.063
Apr 0.063
May 0.063
Jun 0.0595
Jul 0.0595
Aug 0.0595
Sep 0.0595
Oct 0.0565
Nov 0.0565
Line Chart:
Share Price Performance -- Weekly Closing Price
12/01/06 17.55
17.18
17.19
17.37
17.49
17.67
17.99
17.65
17.21
17.7
18.05
17.79
17.6
17.65
17.53
17.65
17.69
17.82
17.85
17.86
17.75
17.65
17.72
17.49
17.32
17.54
17.52
17.15
17.04
16.6
16.45
15.99
15.289
15.2799
15.06
14.38
14.52
14.47
14.11
14.901
14.8678
15
14.21
14.252
14.29
14.1225
14.45
14.3
14.19
14.0799
13.95
13.51
11/30/07 13.4
FUND SNAPSHOT
------------------------------------
Common Share Price $13.40
------------------------------------
Common Share
Net Asset Value $14.65
------------------------------------
Premium/(Discount) to NAV -8.53%
------------------------------------
Market Yield 5.06%
------------------------------------
Taxable-Equivalent Yield2 7.45%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $45,886
------------------------------------
Average Effective Maturity
on Securities (Years) 17.77
------------------------------------
Leverage-Adjusted Duration 10.04
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 1/26/01)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
6-Month
(Cumulative) -21.59% 0.16%
------------------------------------
1-Year -20.45% 0.20%
------------------------------------
5-Year 2.17% 6.18%
------------------------------------
Since
Inception 3.63% 6.21%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
Transportation 16.4%
------------------------------------
U.S. Guaranteed 15.7%
------------------------------------
Tax Obligation/Limited 12.9%
------------------------------------
Tax Obligation/General 10.9%
------------------------------------
Health Care 10.8%
------------------------------------
Long-Term Care 8.1%
------------------------------------
Housing/Single Family 6.3%
------------------------------------
Water and Sewer 4.9%
------------------------------------
Other 14.0%
------------------------------------
1 The percentage of AAA ratings shown in the foregoing chart reflects the AAA
ratings on certain bonds insured by AMBAC, FGIC or MBIA as of November 30,
2007. As explained earlier in the Portfolio Manager's Comments section of
this report, one rating agency has reduced the rating for AMBAC to AA, and
one or more rating agencies have placed each of these insurers on "negative
credit watch", which may presage one or more rating reductions for such
insurer or insurers in the future. If one or more insurers' ratings are
reduced below AAA by these rating agencies, it would likely reduce the
effective rating of many of the bonds insured by that insurer or insurers,
and thereby reduce the percentage of the portfolio rated AAA from the
percentage shown in the foregoing chart.
2 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 32.1%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
14
NNB
Performance
OVERVIEW
Nuveen Virginia
Dividend Advantage
Municipal Fund 2
as of November 30, 2007
Pie Chart:
Credit Quality (as a % of total investments)1
AAA/U.S.
Guaranteed 56%
AA 18%
A 8%
BBB 8%
BB or Lower 2%
N/R 8%
Bar Chart:
Monthly Tax-Free Dividends Per Share -- 2006-2007
Dec 0.065
Jan 0.065
Feb 0.065
Mar 0.0625
Apr 0.0625
May 0.0625
Jun 0.0595
Jul 0.0595
Aug 0.0595
Sep 0.0595
Oct 0.0595
Nov 0.0595
Line Chart:
Share Price Performance -- Weekly Closing Price
12/01/06 16.26
16.4
16.49
16.84
16.98
17
16.75
16.7
16.32
16.81
16.68
16.7501
17.05
17.25
16.9501
16.95
17
16.75
16.86
16.689
16.47
16.7
16.57
16.7
16.75
16.65
16.9
16.65
15.92
15.94
15.9
15.9
15.85
15.665
15.139
15.4699
15.5
15
14.9
14.69
15.1
14.6
14.7
14.4
14.46
14.41
14.6
14.56
14.59
14.2499
13.8999
13.9899
11/30/07 13.9
FUND SNAPSHOT
------------------------------------
Common Share Price $13.90
------------------------------------
Common Share
Net Asset Value $14.78
------------------------------------
Premium/(Discount) to NAV -5.95%
------------------------------------
Market Yield 5.14%
------------------------------------
Taxable-Equivalent Yield2 7.57%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $84,705
------------------------------------
Average Effective Maturity
on Securities (Years) 17.64
------------------------------------
Leverage-Adjusted Duration 9.57
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 11/15/01)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
6-Month
(Cumulative) -14.87% 0.40%
------------------------------------
1-Year -10.51% 0.28%
------------------------------------
5-Year 3.81% 6.17%
------------------------------------
Since
Inception 4.28% 6.43%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
Health Care 16.3%
------------------------------------
Tax Obligation/General 15.6%
------------------------------------
Water and Sewer 12.5%
------------------------------------
U.S. Guaranteed 12.1%
------------------------------------
Tax Obligation/Limited 12.1%
------------------------------------
Housing/Single Family 10.5%
------------------------------------
Long-Term Care 7.9%
------------------------------------
Other 13.0%
------------------------------------
1 The percentage of AAA ratings shown in the foregoing chart reflects the AAA
ratings on certain bonds insured by AMBAC, FGIC or MBIA as of November 30,
2007. As explained earlier in the Portfolio Manager's Comments section of
this report, one rating agency has reduced the rating for AMBAC to AA, and
one or more rating agencies have placed each of these insurers on "negative
credit watch", which may presage one or more rating reductions for such
insurer or insurers in the future. If one or more insurers' ratings are
reduced below AAA by these rating agencies, it would likely reduce the
effective rating of many of the bonds insured by that insurer or insurers,
and thereby reduce the percentage of the portfolio rated AAA from the
percentage shown in the foregoing chart.
2 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 32.1%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
15
NMY
NFM
NZR
Shareholder MEETING REPORT
The annual meeting of shareholders was held in the offices of Nuveen Investments
on October 12, 2007; the meeting for Nuveen Maryland Dividend Advantage
Municipal Fund 3 (NWI) was subsequently adjourned to October 22, 2007.
NMY NFM NZR
------------------------------------------------------------------------------------------------------------------------------------
TO APPROVE A NEW INVESTMENT
MANAGEMENT AGREEMENT:
Common and Common and Common and
MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred
shares voting shares voting shares voting shares voting shares voting shares voting
together together together together together together
as a class as a class as a class as a class as a class as a class
====================================================================================================================================
For 5,481,374 -- 2,068,148 -- 2,042,664 --
Against 180,886 -- 89,089 -- 93,689 --
Abstain 193,626 -- 48,866 -- 62,309 --
Broker Non-Votes 1,821,598 -- 502,409 -- 648,057 --
------------------------------------------------------------------------------------------------------------------------------------
Total 7,677,484 -- 2,708,512 -- 2,846,719 --
====================================================================================================================================
APPROVAL OF THE BOARD MEMBERS
WAS REACHED AS FOLLOWS:
William J. Schneider
For -- 2,779 -- 1,108 -- 1,112
Withhold -- 66 -- 15 -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- 2,845 -- 1,123 -- 1,112
====================================================================================================================================
Timothy R. Schwertfeger
For -- 2,779 -- 1,108 -- 1,112
Withhold -- 66 -- 15 -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- 2,845 -- 1,123 -- 1,112
====================================================================================================================================
Judith M. Stockdale
For 7,490,033 -- 2,643,416 -- 2,758,906 --
Withhold 187,451 -- 65,096 -- 87,813 --
------------------------------------------------------------------------------------------------------------------------------------
Total 7,677,484 -- 2,708,512 -- 2,846,719 --
====================================================================================================================================
Carole E. Stone
For 7,494,061 -- 2,632,071 -- 2,759,206 --
Withhold 183,423 -- 76,441 -- 87,513 --
------------------------------------------------------------------------------------------------------------------------------------
Total 7,677,484 -- 2,708,512 -- 2,846,719 --
====================================================================================================================================
TO RATIFY THE SELECTION OF ERNST & YOUNG LLP
AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM FOR THE CURRENT FISCAL YEAR:
For 7,471,136 -- 2,643,422 -- 2,777,605 --
Against 113,453 -- 40,053 -- 29,073 --
Abstain 92,895 -- 25,037 -- 40,041 --
------------------------------------------------------------------------------------------------------------------------------------
Total 7,677,484 -- 2,708,512 -- 2,846,719 --
====================================================================================================================================
16
NWI
NPV
NGB
NWI NPV NGB
------------------------------------------------------------------------------------------------------------------------------------
TO APPROVE A NEW INVESTMENT
MANAGEMENT AGREEMENT:
Common and Common and Common and
MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred
shares voting shares voting shares voting shares voting shares voting shares voting
together together together together together together
as a class as a class as a class as a class as a class as a class
====================================================================================================================================
For 2,760,101 -- 5,095,430 -- 1,789,148 --
Against 105,440 -- 213,995 -- 49,784 --
Abstain 129,402 -- 158,516 -- 44,812 --
Broker Non-Votes 1,257,406 -- 1,523,934 -- 485,822 --
------------------------------------------------------------------------------------------------------------------------------------
Total 4,252,349 -- 6,991,875 -- 2,369,566 --
====================================================================================================================================
APPROVAL OF THE BOARD MEMBERS
WAS REACHED AS FOLLOWS:
William J. Schneider
For -- 1,417 -- 1,684 -- 541
Withhold -- 6 -- 19 -- 2
------------------------------------------------------------------------------------------------------------------------------------
Total -- 1,423 -- 1,703 -- 543
====================================================================================================================================
Timothy R. Schwertfeger
For -- 1,417 -- 1,686 -- 541
Withhold -- 6 -- 17 -- 2
------------------------------------------------------------------------------------------------------------------------------------
Total -- 1,423 -- 1,703 -- 543
====================================================================================================================================
Judith M. Stockdale
For 4,149,805 -- 6,815,912 -- 2,302,517 --
Withhold 102,544 -- 175,963 -- 67,049 --
------------------------------------------------------------------------------------------------------------------------------------
Total 4,252,349 -- 6,991,875 -- 2,369,566 --
====================================================================================================================================
Carole E. Stone
For 4,149,805 -- 6,815,703 -- 2,301,299 --
Withhold 102,544 -- 176,172 -- 68,267 --
------------------------------------------------------------------------------------------------------------------------------------
Total 4,252,349 -- 6,991,875 -- 2,369,566 --
====================================================================================================================================
TO RATIFY THE SELECTION OF ERNST & YOUNG LLP
AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM FOR THE CURRENT FISCAL YEAR:
For 4,137,962 -- 6,864,094 -- 2,342,201 --
Against 66,833 -- 56,965 -- 13,779 --
Abstain 47,554 -- 70,816 -- 13,586 --
------------------------------------------------------------------------------------------------------------------------------------
Total 4,252,349 -- 6,991,875 -- 2,369,566 --
====================================================================================================================================
17
NNB
Shareholder MEETING REPORT (continued)
NNB
------------------------------------------------------------------------------------------------------------------------------------
TO APPROVE A NEW INVESTMENT
MANAGEMENT AGREEMENT:
Common and
MuniPreferred MuniPreferred
shares voting shares voting
together together
as a class as a class
====================================================================================================================================
For 3,100,375 --
Against 150,992 --
Abstain 103,514 --
Broker Non-Votes 966,890 --
------------------------------------------------------------------------------------------------------------------------------------
Total 4,321,771 --
====================================================================================================================================
APPROVAL OF THE BOARD MEMBERS
WAS REACHED AS FOLLOWS:
William J. Schneider
For -- 1,191
Withhold -- 4
------------------------------------------------------------------------------------------------------------------------------------
Total -- 1,195
====================================================================================================================================
Timothy R. Schwertfeger
For -- 1,191
Withhold -- 4
------------------------------------------------------------------------------------------------------------------------------------
Total -- 1,195
====================================================================================================================================
Judith M. Stockdale
For 4,178,467 --
Withhold 143,304 --
------------------------------------------------------------------------------------------------------------------------------------
Total 4,321,771 --
====================================================================================================================================
Carole E. Stone
For 4,166,657 --
Withhold 155,114 --
------------------------------------------------------------------------------------------------------------------------------------
Total 4,321,771 --
====================================================================================================================================
TO RATIFY THE SELECTION OF ERNST & YOUNG LLP
AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM FOR THE CURRENT FISCAL YEAR:
For 4,193,189 --
Against 45,277 --
Abstain 83,305 --
------------------------------------------------------------------------------------------------------------------------------------
Total 4,321,771 --
====================================================================================================================================
18
NMY
Nuveen Maryland Premium Income Municipal Fund
Portfolio of INVESTMENTS
November 30, 2007 (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 2.6% (1.7% OF TOTAL INVESTMENTS)
$ 3,780 Baltimore, Maryland, Senior Lien Convention Center Hotel Revenue 9/16 at 100.00 AAA $ 3,987,181
Bonds, Series 2006A, 5.250%, 9/01/39 - XLCA Insured
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 1.9% (1.2% OF TOTAL INVESTMENTS)
2,980 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 2,911,251
Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 18.9% (12.6% OF TOTAL INVESTMENTS)
1,250 Frederick County, Maryland, Educational Facilities Revenue Bonds, 9/16 at 100.00 BBB- 1,271,038
Mount Saint Mary's College, Series 2006, 5.625%, 9/01/38
1,000 Hartford County, Maryland, Economic Development Revenue 4/14 at 100.00 A+ 1,028,120
Bonds, Battelle Memorial Institute, Series 2004, 5.250%, 4/01/34
Maryland Economic Development Corporation, Utility
Infrastructure Revenue Bonds, University of Maryland - College
Park, Series 2001:
980 5.375%, 7/01/15 - AMBAC Insured 7/11 at 100.00 AAA 1,045,817
980 5.375%, 7/01/16 - AMBAC Insured 7/11 at 100.00 AAA 1,045,817
Maryland Health and Higher Educational Facilities Authority,
Revenue Bonds, Bullis School, Series 2000:
750 5.250%, 7/01/25 - FSA Insured 1/11 at 101.00 AAA 785,130
500 5.250%, 7/01/30 - FSA Insured 1/11 at 101.00 AAA 523,420
1,250 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A- 1,264,213
Revenue Bonds, Goucher College, Series 2004, 5.125%, 7/01/34
1,335 Maryland Health and Higher Educational Facilities Authority, 6/17 at 100.00 Baa1 1,280,225
Revenue Bonds, Maryland Institute College of Art, Series 2007,
5.000%, 6/01/36
1,500 Maryland Health and Higher Educational Facilities Authority, 1/08 at 102.00 AA 1,531,935
Revenue Refunding Bonds, Johns Hopkins University,
Series 1997, 5.625%, 7/01/27
1,365 Montgomery County Revenue Authority, Maryland, Lease 5/15 at 100.00 A1 1,445,098
Revenue Bonds, Montgomery College Arts Center Project,
Series 2005A, 5.000%, 5/01/19
9,445 Morgan State University, Maryland, Student Tuition and Fee No Opt. Call AAA 11,246,348
Revenue Refunding Bonds, Academic Fees and Auxiliary
Facilities, Series 1993, 6.100%, 7/01/20 - MBIA Insured
2,680 University of Maryland, Auxiliary Facility and Tuition Revenue 4/13 at 100.00 AA 2,826,596
Bonds, Series 2003A, 5.000%, 4/01/19
1,685 University of Maryland, Auxiliary Facility and Tuition Revenue 10/16 at 100.00 AA 1,812,538
Bonds, Series 2006A, 5.000%, 10/01/22
Westminster, Maryland, Educational Facilities Revenue Bonds,
McDaniel College, Series 2006:
1,400 5.000%, 11/01/31 11/16 at 100.00 BBB+ 1,360,002
850 4.500%, 11/01/36 11/16 at 100.00 BBB+ 735,301
------------------------------------------------------------------------------------------------------------------------------------
26,970 Total Education and Civic Organizations 29,201,598
------------------------------------------------------------------------------------------------------------------------------------
19
NMY
Nuveen Maryland Premium Income Municipal Fund (continued)
Portfolio of INVESTMENTS November 30, (2007) (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 21.8% (14.5% OF TOTAL INVESTMENTS)
$ 1,525 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A2 $ 1,562,973
Revenue Bonds, Calvert Memorial Hospital, Series 2004,
5.500%, 7/01/36
3,250 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 3,334,468
Revenue Bonds, Carroll County General Hospital, Series 2002,
5.800%, 7/01/32
1,665 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 AA 1,624,740
Revenue Bonds, Civista Medical Center, Series 2005,
5.000%, 7/01/37 - RAAI Insured
1,740 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 Baa1 1,685,225
Revenue Bonds, Doctors Community Hospital, Series 2007A,
5.000%, 7/01/29
1,400 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 1,361,654
Revenue Bonds, Frederick Memorial Hospital, Series 2002,
5.125%, 7/01/35
1,500 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A+ 1,489,020
Revenue Bonds, Greater Baltimore Medical Center, Series 2001,
5.000%, 7/01/34
1,000 Maryland Health and Higher Educational Facilities Authority, 7/08 at 101.00 AAA 1,016,430
Revenue Bonds, Johns Hopkins Hospital, Howard County
General Hospital Acquisition, Series 1998, 5.000%, 7/01/19 -
MBIA Insured
1,430 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 AA 1,576,861
Revenue Bonds, Johns Hopkins Hospital, Series 2004,
Inverse 1003, 7.209%, 7/01/33 (IF)
2,000 Maryland Health and Higher Educational Facilities Authority, 6/09 at 101.00 A+ 2,051,200
Revenue Bonds, Kaiser Permanente System, Series 1998A,
5.375%, 7/01/15
3,800 Maryland Health and Higher Educational Facilities Authority, 7/13 at 100.00 Baa3 3,817,024
Revenue Bonds, Kennedy Krieger Institute, Series 2003,
5.500%, 7/01/33
2,040 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A 2,055,769
Revenue Bonds, LifeBridge Health System, Series 2004A,
5.125%, 7/01/34
1,750 Maryland Health and Higher Educational Facilities Authority, 8/14 at 100.00 A3 1,787,380
Revenue Bonds, MedStar Health, Series 2004, 5.375%, 8/15/24
Maryland Health and Higher Educational Facilities Authority,
Revenue Bonds, Mercy Medical Center Project, Series 2007A:
1,010 5.000%, 7/01/37 7/17 at 100.00 BBB 927,624
670 5.500%, 7/01/42 7/17 at 100.00 BBB 656,761
1,700 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 A 1,698,640
Revenue Bonds, Peninsula Regional Medical Center,
Series 2006, 5.000%, 7/01/36
3,250 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 A3 3,320,168
Revenue Bonds, Union Hospital of Cecil County, Series 2002,
5.625%, 7/01/32
1,000 Maryland Health and Higher Educational Facilities Authority, 7/13 at 100.00 AAA 1,037,610
Revenue Bonds, University of Maryland Medical System,
Series 2004B, 5.000%, 7/01/24 - AMBAC Insured
2,000 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 AAA 2,044,040
Revenue Bonds, Western Maryland Health, Series 2006A,
5.000%, 7/01/34 - MBIA Insured
Prince George's County, Maryland, Revenue Bonds, Dimensions
Health Corporation, Series 1994:
420 5.375%, 7/01/14 1/08 at 100.00 B3 376,824
295 5.300%, 7/01/24 1/08 at 100.00 B3 237,239
------------------------------------------------------------------------------------------------------------------------------------
33,445 Total Health Care 33,661,650
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 12.0% (8.0% OF TOTAL INVESTMENTS)
1,450 Maryland Community Development Administration, FNMA 2/11 at 101.00 Aaa 1,504,839
Multifamily Development Revenue Bonds, Edgewater Village
Apartments, Series 2000B, 5.800%, 8/01/20
(Alternative Minimum Tax)
2,500 Maryland Community Development Administration, Housing 1/09 at 101.00 Aa2 2,510,100
Revenue Bonds, Series 1999A, 5.350%, 7/01/41
(Alternative Minimum Tax)
880 Maryland Community Development Administration, Housing 1/10 at 100.00 Aa2 900,002
Revenue Bonds, Series 1999B, 6.250%, 7/01/32
(Alternative Minimum Tax)
20
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY (continued)
$ 1,000 Maryland Economic Development Corporation, Senior Lien 10/13 at 100.00 B2 $ 959,450
Student Housing Revenue Bonds, University of Maryland -
Baltimore, Series 2003A, 5.625%, 10/01/23
1,000 Maryland Economic Development Corporation, Student Housing 6/09 at 102.00 Baa3 1,030,740
Revenue Bonds, Collegiate Housing Foundation - Salisbury State
University, Series 1999A, 6.000%, 6/01/19
1,145 Maryland Economic Development Corporation, Student Housing 6/16 at 100.00 AAA 1,162,828
Revenue Refunding Bonds, University of Maryland College
Park Projects, Series 2006, 5.000%, 6/01/33 - CIFG Insured
3,830 Montgomery County Housing Opportunities Commission, 7/08 at 101.00 Aaa 3,876,420
Maryland, FNMA/FHA-Insured Multifamily Housing Development
Bonds, Series 1998A, 5.200%, 7/01/30
360 Montgomery County Housing Opportunities Commission, 1/08 at 100.00 Aa2 360,569
Maryland, GNMA/FHA-Insured Multifamily Housing Revenue
Bonds, Series 1995A, 5.900%, 7/01/15
2,000 Montgomery County Housing Opportunities Commission, 7/10 at 100.00 Aaa 2,063,660
Maryland, Multifamily Housing Development Bonds,
Series 2000A, 6.100%, 7/01/30
540 Prince George's County Housing Authority, Maryland, 9/09 at 102.00 AAA 557,944
GNMA Collateralized Mortgage Revenue Bonds, University
Landing Apartments, Series 1999, 6.100%, 3/20/41
(Alternative Minimum Tax)
Prince George's County Housing Authority, Maryland, GNMA
Collateralized Mortgage Revenue Refunding Bonds, Overlook
Apartments, Series 1995A:
2,000 5.700%, 12/20/15 12/07 at 100.00 AAA 2,002,920
1,670 5.750%, 12/20/19 12/07 at 100.00 AAA 1,672,021
------------------------------------------------------------------------------------------------------------------------------------
18,375 Total Housing/Multifamily 18,601,493
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 7.6% (5.1% OF TOTAL INVESTMENTS)
650 Maryland Community Development Administration Department 3/17 at 100.00 Aa2 650,189
of Housing and Community Development, Residential Revenue
Bonds, Series 2007H, 5.000%, 9/01/27 (Alternative Minimum Tax)
1,195 Maryland Community Development Administration, Department 9/15 at 100.00 Aa2 1,186,946
of Housing and Community Development, Residential Revenue
Bonds, Series 2006F, 4.900%, 9/01/26 (Alternative Minimum Tax)
4,100 Maryland Community Development Administration, Department 3/16 at 100.00 Aa2 4,059,942
of Housing and Community Development, Residential Revenue
Bonds, Series 2006I, 4.875%, 9/01/26 (Alternative Minimum Tax)
1,630 Maryland Community Development Administration, Department 9/16 at 100.00 Aa2 1,588,565
of Housing and Community Development, Residential Revenue
Bonds, Series 2006L, 4.900%, 9/01/31 (Alternative Minimum Tax)
1,200 Maryland Community Development Administration, Department 3/17 at 100.00 Aa2 1,145,232
of Housing and Community Development, Residential Revenue
Bonds, Series 2007D, 4.850%, 9/01/37 (Alternative Minimum Tax)
2,345 Maryland Community Development Administration, Residential 9/14 at 100.00 Aa2 2,255,656
Revenue Bonds, Series 2005E, 4.900%, 9/01/36
(Alternative Minimum Tax)
600 Maryland Community Development Administration, Residential 9/15 at 100.00 Aa2 586,932
Revenue Bonds, Series 2006B, 4.750%, 9/01/25
(Alternative Minimum Tax)
10 Prince George's County Housing Authority, Maryland, 8/10 at 100.00 AAA 10,236
FHLMC/FNMA/GNMA Collateralized Single Family Mortgage
Revenue Bonds, Series 2000A, 6.150%, 8/01/19
(Alternative Minimum Tax)
320 Puerto Rico Housing Finance Authority, Mortgage-Backed 6/13 at 100.00 AAA 328,883
Securities Program Home Mortgage Revenue Bonds,
Series 2003A, 4.875%, 6/01/34 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
12,050 Total Housing/Single Family 11,812,581
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 1.2% (0.8% OF TOTAL INVESTMENTS)
2,010 Maryland Economic Development Corporation, Solid Waste 4/12 at 101.00 BBB 1,980,493
Disposal Revenue Bonds, Waste Management Inc.,
Series 2002, 4.600%, 4/01/16 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 2.8% (1.9% OF TOTAL INVESTMENTS)
2,455 Baltimore County, Maryland, Revenue Bonds, Oak Crest Village, 1/17 at 100.00 BBB+ 2,320,221
Series 2007A, 5.000%, 1/01/37
1,000 Carroll County, Maryland, Revenue Refunding Bonds, 1/09 at 101.00 AA 1,017,970
EMA Obligated Group, Series 1999A, 5.625%, 1/01/25 -
RAAI Insured
21
NMY
Nuveen Maryland Premium Income Municipal Fund (continued)
Portfolio of INVESTMENTS November 30, (2007) (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE (continued)
$ 1,065 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 BBB+ $ 972,750
Revenue Bonds, Mercy Ridge Retirement Community,
Series 2007, 4.750%, 7/01/34
------------------------------------------------------------------------------------------------------------------------------------
4,520 Total Long-Term Care 4,310,941
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 34.0% (22.6% OF TOTAL INVESTMENTS)
2,030 Anne Arundel County, Maryland, General Obligation Bonds, 4/14 at 100.00 AAA 2,196,805
Series 2004, 5.000%, 4/01/16
Anne Arundel County, Maryland, General Obligation Bonds,
Series 2006:
1,310 5.000%, 3/01/21 3/16 at 100.00 AAA 1,410,294
1,000 5.000%, 3/01/21 3/16 at 100.00 AAA 1,076,560
685 Anne Arundel County, Maryland, Water and Sewer Revenue 3/16 at 100.00 AAA 751,472
Bonds, Series 2006, 5.000%, 3/01/17
Baltimore County, Maryland, Metropolitan District Special
Assessment Bonds, 67th Issue:
2,500 5.000%, 6/01/25 6/11 at 101.00 AAA 2,602,625
3,500 5.000%, 6/01/26 6/11 at 101.00 AAA 3,644,970
1,000 Baltimore, Maryland, Consolidated General Obligation Public No Opt. Call AA- 1,031,740
Improvement Bonds, Series 1989B, 7.150%, 10/15/08
1,540 Baltimore, Maryland, General Obligation Consolidated Public 10/14 at 100.00 AAA 1,635,033
Improvement Bonds, Series 2004A, 5.000%, 10/15/22 -
AMBAC Insured
700 Carroll County, Maryland, Consolidated Public Improvement 12/15 at 100.00 AA 771,967
Bonds, Series 2005A, 5.000%, 12/01/16
Charles County, Maryland, Consolidated General Obligation
Public Improvement Bonds, Series 2006:
2,185 5.000%, 3/01/14 No Opt. Call AA 2,386,501
820 5.000%, 3/01/16 No Opt. Call AA 905,731
1,500 Frederick County, Maryland, General Obligation Public Facilities No Opt. Call AA 1,663,755
Bonds, Series 2006, 5.000%, 11/01/20
Howard County, Maryland, Consolidated Public Improvement
Bonds, Series 2004B:
735 5.000%, 8/15/16 2/14 at 100.00 AAA 795,366
1,625 5.000%, 8/15/17 2/14 at 100.00 AAA 1,759,778
1,180 5.000%, 8/15/19 2/14 at 100.00 AAA 1,263,650
1,725 Howard County, Maryland, Metropolitan District Refunding 2/12 at 100.00 AAA 1,834,089
Bonds, Series 2002A, 5.250%, 8/15/18
1,190 Maryland National Capital Park Planning Commission, 1/14 at 100.00 AA+ 1,283,510
Prince George's County, General Obligation Bonds, Park
Acquisition and Development, Series 2004EE-2, 5.000%, 1/15/17
3,000 Montgomery County, Maryland, Consolidated General Obligation No Opt. Call AAA 3,313,230
Public Improvement Bonds, Series 2005A, 5.000%, 7/01/15
3,520 Montgomery County, Maryland, Consolidated General Obligation No Opt. Call AAA 3,898,822
Public Improvement Bonds, Series 2006, 5.000%, 5/01/16
Montgomery County, Maryland, Consolidated General Obligation
Public Improvement Refunding Bonds, Series 2001:
1,750 5.250%, 10/01/13 10/11 at 101.00 AAA 1,885,398
2,000 5.250%, 10/01/18 10/11 at 101.00 AAA 2,132,000
2,000 Prince George's County, Maryland, General Obligation 9/12 at 101.00 AA+ 2,025,360
Consolidated Public Improvement Bonds, Series 2002,
4.100%, 9/15/19
5,770 Prince George's County, Maryland, General Obligation 10/13 at 100.00 AA+ 6,112,045
Consolidated Public Improvement Bonds, Series 2003A,
5.000%, 10/01/18
Washington Suburban Sanitary District, Montgomery and
Prince George's Counties, Maryland, Sewerage Disposal Bonds,
Series 2005:
2,000 5.000%, 6/01/16 6/15 at 100.00 AAA 2,194,660
1,235 5.000%, 6/01/23 6/15 at 100.00 AAA 1,314,781
1,235 5.000%, 6/01/24 6/15 at 100.00 AAA 1,310,668
1,235 5.000%, 6/01/25 6/15 at 100.00 AAA 1,307,396
------------------------------------------------------------------------------------------------------------------------------------
48,970 Total Tax Obligation/General 52,508,206
------------------------------------------------------------------------------------------------------------------------------------
22
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 15.1% (10.0% OF TOTAL INVESTMENTS)
$ 300 Baltimore, Maryland, Special Obligation Bonds, North Locust 9/15 at 101.00 N/R $ 282,963
Point Project, Series 2005, 5.500%, 9/01/34
340 Frederick County, Maryland, Lake Linganore Village Community 7/10 at 102.00 AA 351,036
Development Special Obligation Bonds, Series 2001A,
5.700%, 7/01/29 - RAAI Insured
900 Hyattsville, Maryland, Special Obligation Bonds, University Town 7/14 at 102.00 N/R 882,531
Center Project, Series 2004, 5.750%, 7/01/34
Maryland Department of Transportation, Certificates of
Participation, Mass Transit Administration Project, Series 2000:
875 5.500%, 10/15/19 (Alternative Minimum Tax) 10/10 at 101.00 AA+ 910,201
925 5.500%, 10/15/20 (Alternative Minimum Tax) 10/10 at 101.00 AA+ 962,213
4,250 Maryland Department of Transportation, Consolidated No Opt. Call AAA 4,837,222
Transportation Revenue Bonds, Series 2002, 5.500%, 2/01/16
1,875 Maryland Economic Development Corporation, Lease Revenue 6/12 at 100.50 AA+ 2,018,175
Bonds, Department of Transportation Headquarters Building,
Series 2002, 5.375%, 6/01/19
1,700 Maryland Stadium Authority, Lease Revenue Bonds, 6/13 at 100.00 AA+ 1,775,820
Montgomery County Conference Center Facilities, Series 2003,
5.000%, 6/15/24
1,000 Montgomery County, Maryland, Lease Revenue Bonds, 6/12 at 100.00 AA 1,050,290
Metrorail Garage, Series 2002, 5.000%, 6/01/21
675 Montgomery County, Maryland, Special Obligation Bonds, 7/12 at 101.00 AA 696,101
West Germantown Development District, Senior Series 2002A,
5.500%, 7/01/27 - RAAI Insured
635 New Baltimore City Board of School Commissioners, Maryland, 11/10 at 100.00 AA+ 666,445
School System Revenue Bonds, Series 2000, 5.125%, 11/01/15
Puerto Rico Highway and Transportation Authority, Highway
Revenue Bonds, Series 2007N:
1,000 5.500%, 7/01/29 - AMBAC Insured No Opt. Call AAA 1,120,100
2,500 5.250%, 7/01/31 - AMBAC Insured No Opt. Call AAA 2,700,250
1,000 5.250%, 7/01/33 - MBIA Insured No Opt. Call AAA 1,097,920
2,100 Puerto Rico Municipal Finance Agency, Series 2002A, 8/12 at 100.00 AAA 2,225,370
5.250%, 8/01/21 - FSA Insured
1,500 Puerto Rico, Highway Revenue Bonds, Highway and No Opt. Call AAA 1,689,870
Transportation Authority, Series 2003AA, 5.500%, 7/01/19 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
21,575 Total Tax Obligation/Limited 23,266,507
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 2.1% (1.3% OF TOTAL INVESTMENTS)
1,060 Baltimore, Maryland, Revenue Refunding Bonds, Parking No Opt. Call AAA 1,178,879
System Facilities, Series 1998A, 5.250%, 7/01/17 -
FGIC Insured
2,075 Puerto Rico Ports Authority, Special Facilities Revenue Bonds, 12/07 at 101.00 CCC+ 2,005,571
American Airlines Inc., Series 1996A, 6.250%, 6/01/26
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
3,135 Total Transportation 3,184,450
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 21.2% (14.1% OF TOTAL INVESTMENTS) (4)
2,500 Baltimore County, Maryland, Consolidated General Obligation 8/12 at 100.00 AAA 2,629,850
Public Improvement Bonds, Series 2002, 5.000%, 8/01/18
(Pre-refunded 8/01/12)
2,000 Baltimore, Maryland, Revenue Refunding Bonds, Water Projects, No Opt. Call AAA 2,163,880
Series 1998A, 5.000%, 7/01/28 - FGIC Insured (ETM)
2,000 Baltimore, Maryland, Revenue Refunding Bonds, Water No Opt. Call AAA 2,202,300
System Projects, Series 1994A, 5.000%, 7/01/24 -
FGIC Insured (ETM)
Frederick County, Maryland, Educational Facilities Revenue Bonds,
Mount St. Mary's College, Series 2001A:
200 5.750%, 9/01/25 (Pre-refunded 3/01/10) 3/10 at 101.00 BBB- (4) 212,334
200 5.800%, 9/01/30 (Pre-refunded 3/01/10) 3/10 at 101.00 BBB- (4) 212,548
23
NMY
Nuveen Maryland Premium Income Municipal Fund (continued)
Portfolio of INVESTMENTS November 30, (2007) (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (4) (continued)
$ 3,000 Frederick County, Maryland, General Obligation Public Facilities 7/09 at 101.00 AAA $ 3,121,140
Bonds, Series 1999, 5.250%, 7/01/18 (Pre-refunded 7/01/09)
275 Frederick County, Maryland, Lake Linganore Village Community 7/10 at 102.00 AA (4) 296,599
Development Special Obligation Bonds, Series 2001A,
5.700%, 7/01/29 (Pre-refunded 7/01/10) - RAAI Insured
2,255 Gaithersburg, Maryland, Hospital Facilities Revenue Refunding No Opt. Call AAA 2,446,247
and Improvement Bonds, Shady Grove Adventist Hospital,
Series 1995, 6.500%, 9/01/12 - FSA Insured (ETM)
575 Howard County, Maryland, Consolidated Public Improvement 2/12 at 100.00 AAA 620,448
Refunding Bonds, Series 2002A, 5.250%, 8/15/18
(Pre-refunded 2/15/12)
Maryland Economic Development Corporation, Health and
Mental Hygiene Providers Revenue Bonds, Series 1996A:
905 7.625%, 4/01/21 (Pre-refunded 4/01/11) 4/11 at 102.00 N/R (4) 1,026,867
685 7.625%, 4/01/21 (Pre-refunded 4/01/11) 4/11 at 102.00 N/R (4) 777,242
2,250 Maryland Economic Development Corporation, Student Housing 6/09 at 102.00 Baa2 (4) 2,372,153
Revenue Bonds, Collegiate Housing Foundation - College Park,
Series 1999A, 5.750%, 6/01/24 (Pre-refunded 6/01/09)
3,200 Maryland Health and Higher Educational Facilities Authority, No Opt. Call AAA 3,495,296
Revenue Bonds, Helix Health, Series 1997, 5.000%, 7/01/27 -
AMBAC Insured (ETM)
3,125 Maryland Health and Higher Educational Facilities Authority, 1/08 at 100.00 Aaa 3,166,625
Revenue Bonds, Howard County General Hospital, Series 1993,
5.500%, 7/01/25 (ETM)
1,500 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 A (4) 1,673,370
Revenue Bonds, University of Maryland Medical System,
Series 2002, 6.000%, 7/01/22 (Pre-refunded 7/01/12)
210 Maryland Transportation Authority, Revenue Refunding Bonds, No Opt. Call AAA 241,298
Transportation Facilities Projects, First Series 1978,
6.800%, 7/01/16 (ETM)
1,000 Prince George's County, Maryland, General Obligation 12/11 at 101.00 AAA 1,084,270
Consolidated Public Improvement Bonds, Series 2001,
5.250%, 12/01/20 (Pre-refunded 12/01/11) - FGIC Insured
1,000 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 1,059,920
Obligation Bonds, Series 2000A, 5.500%, 10/01/20 (ETM)
1,000 Puerto Rico, Highway Revenue Bonds, Highway and 7/16 at 100.00 Aaa 1,145,190
Transportation Authority, Series 1996Y, 5.500%, 7/01/36
(Pre-refunded 7/01/16)
520 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 542,750
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20
(Pre-refunded 7/01/10)
2,000 Virgin Islands Public Finance Authority, Gross Receipts Taxes 10/10 at 101.00 BBB+ (4) 2,194,900
Loan Note, Series 1999A, 6.500%, 10/01/24
(Pre-refunded 10/01/10)
------------------------------------------------------------------------------------------------------------------------------------
30,400 Total U.S. Guaranteed 32,685,227
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 4.0% (2.7% OF TOTAL INVESTMENTS)
2,500 Maryland Energy Financing Administration, Revenue Bonds, 2/08 at 100.00 N/R 2,506,100
AES Warrior Run Project, Series 1995, 7.400%, 9/01/19
(Alternative Minimum Tax)
3,500 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/14 at 100.00 AAA 3,724,525
Series 2004PP, 5.000%, 7/01/22 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
6,000 Total Utilities 6,230,625
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 4.2% (2.8% OF TOTAL INVESTMENTS)
1,045 Baltimore, Maryland, Revenue Refunding Bonds, Water System No Opt. Call AAA 1,142,143
Projects, Series 1994A, 5.000%, 7/01/24 - FGIC Insured
2,900 Baltimore, Maryland, Wastewater Project Revenue Bonds, 7/16 at 100.00 AAA 3,039,055
Series 2006C, 5.000%, 7/01/31 - AMBAC Insured
24
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER (continued)
$ 1,260 Baltimore, Maryland, Wastewater Project Revenue Bonds, 7/17 at 100.00 AAA $ 1,321,072
Series 2007D, 5.000%, 7/01/32 - AMBAC Insured
860 Maryland Water Quality Financing Administration, Revolving No Opt. Call AAA 950,885
Loan Fund Revenue Bonds, Series 2005A, 5.000%, 9/01/15
------------------------------------------------------------------------------------------------------------------------------------
6,065 Total Water and Sewer 6,453,155
------------------------------------------------------------------------------------------------------------------------------------
$ 220,275 Total Long-Term Investments (cost $224,303,351) - 149.4% 230,795,358
=============-----------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 1.1% (0.7% OF TOTAL INVESTMENTS)
$ 1,725 Maryland Health and Higher Education Facilities Authority, Aa3 1,725,000
Revenue Bonds, Kennedy Krieger Institute Project, Variable
Rate Demand Obligations, Series 2006, 6.000%, 7/01/36 -
RAAI Insured (5)
=============-----------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (cost $1,725,000) 1,725,000
--------------------------------------------------------------------------------------------------------------------
Total Investments (cost $226,028,351) - 150.5% 232,520,358
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.7% 1,111,630
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (51.2)% (79,100,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 154,531,988
====================================================================================================================
FORWARD SWAPS OUTSTANDING AT NOVEMBER 30, 2007:
FUND FIXED RATE UNREALIZED
NOTIONAL PAY/RECEIVE FLOATING RATE FIXED RATE PAYMENT EFFECTIVE TERMINATION APPRECIATION
COUNTERPARTY AMOUNT FLOATING RATE INDEX (ANNUALIZED) FREQUENCY DATE (6) DATE (DEPRECIATION)
------------------------------------------------------------------------------------------------------------------------------------
Royal Bank
of Canada $4,200,000 Pay SIFM 4.335% Quarterly 8/06/08 8/06/37 $360,314
====================================================================================================================================
SIFM-The daily arithmetic average of the weekly SIFM (Securities Industry and
Financial Markets) Municipal Swap Index.
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares unless
otherwise noted.
(2) Optional Call Provisions: 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: Using the higher of Standard & Poor's Group
("Standard & Poor's") or Moody's Investor Service, Inc.
("Moody's") rating. Ratings below BBB by Standard & Poor's
or Baa by Moody's are considered to be below investment
grade.
The AAA ratings shown in the Portfolio of Investments
reflects the AAA ratings on certain bonds insured by AMBAC,
FGIC or MBIA as of November 30, 2007. As explained earlier
in the Portfolio Manager's Comments section of this report,
one rating agency has reduced the rating for AMBAC to AA,
and one or more rating agencies have placed each of these
insurers on "negative credit watch", which may presage one
or more rating reductions for such insurer or insurers in
the future. If one or more insurers' ratings are reduced
below AAA by these rating agencies, it would likely reduce
the effective rating of many of the bonds insured by that
insurer or insurers.
(4) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which ensure
the timely payment of principal and interest. Such
investments are normally considered to be equivalent to AAA
rated securities.
(5) Investment has a maturity of more than one year, but has
variable rate and demand features which qualify it as a
short-term investment. The rate disclosed is that in effect
at the end of the reporting period. This rate changes
periodically based on market conditions or a specified
market index.
(6) Effective date represents the date on which both the Fund
and counterparty commence interest payment accruals on each
forward swap contract.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
See accompanying notes to financial statements.
25
NFM
Nuveen Maryland Dividend Advantage Municipal Fund
Portfolio of INVESTMENTS
November 30, 2007 (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 4.8% (3.1% OF TOTAL INVESTMENTS)
$ 205 Baltimore, Maryland, Pollution Control Revenue Bonds, General No Opt. Call Caa1 $ 204,342
Motors Corporation, Series 1993, 5.350%, 4/01/08
1,690 Baltimore, Maryland, Senior Lien Convention Center Hotel 9/16 at 100.00 AAA 1,782,629
Revenue Bonds, Series 2006A, 5.250%, 9/01/39 - XLCA Insured
310 Baltimore, Maryland, Subordinate Lien Convention Center Hotel 9/16 at 100.00 Ba1 313,667
Revenue Bonds, Series 2006B, 5.875%, 9/01/39
650 Maryland Economic Development Corporation, Revenue Bonds, 12/16 at 100.00 N/R 580,372
Chesapeake Bay Hyatt Conference Center, Series 2006A,
5.000%, 12/01/31
------------------------------------------------------------------------------------------------------------------------------------
2,855 Total Consumer Discretionary 2,881,010
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 2.4% (1.6% OF TOTAL INVESTMENTS)
1,485 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 1,450,741
Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 13.5% (8.9% OF TOTAL INVESTMENTS)
645 Hartford County, Maryland, Economic Development Revenue 4/14 at 100.00 A+ 663,137
Bonds, Battelle Memorial Institute, Series 2004,
5.250%, 4/01/34
980 Maryland Economic Development Corporation, Utility 7/11 at 100.00 AAA 1,021,219
Infrastructure Revenue Bonds, University of Maryland -
College Park, Series 2001, 5.000%, 7/01/19 - AMBAC Insured
1,500 Maryland Health and Higher Educational Facilities Authority, 7/08 at 102.00 BBB- 1,526,250
Educational Facilities Leasehold Mortgage Revenue Bonds,
McLean School, Series 2001, 6.000%, 7/01/31
500 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A- 505,685
Revenue Bonds, Goucher College, Series 2004, 5.125%, 7/01/34
565 Maryland Health and Higher Educational Facilities Authority, 6/17 at 100.00 Baa1 541,818
Revenue Bonds, Maryland Institute College of Art, Series 2007,
5.000%, 6/01/36
475 Maryland Industrial Development Financing Authority, Revenue 5/15 at 100.00 N/R 481,921
Bonds, Our Lady of Good Counsel High School, Series 2005A,
6.000%, 5/01/35
615 Montgomery County Revenue Authority, Maryland, Lease 5/15 at 100.00 A1 648,671
Revenue Bonds, Montgomery College Arts Center Project,
Series 2005A, 5.000%, 5/01/20
Puerto Rico Industrial, Tourist, Educational, Medical and
Environmental Control Facilities Financing Authority, Higher
Education Revenue Bonds, Ana G. Mendez University System,
Series 1999:
215 5.375%, 2/01/19 2/09 at 101.00 BBB- 217,980
410 5.375%, 2/01/29 2/09 at 101.00 BBB- 410,086
500 University of Maryland, Auxiliary Facility and Tuition Revenue 4/13 at 100.00 AA 527,350
Bonds, Series 2003A, 5.000%, 4/01/19
800 University of Maryland, Auxiliary Facility and Tuition Revenue 10/16 at 100.00 AA 860,552
Bonds, Series 2006A, 5.000%, 10/01/22
900 Westminster, Maryland, Educational Facilities Revenue Bonds, 11/16 at 100.00 BBB+ 778,554
McDaniel College, Series 2006, 4.500%, 11/01/36
------------------------------------------------------------------------------------------------------------------------------------
8,105 Total Education and Civic Organizations 8,183,223
------------------------------------------------------------------------------------------------------------------------------------
26
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 29.6% (19.5% OF TOTAL INVESTMENTS)
$ 1,325 Maryland Health and Higher Education Facilities Authority, 7/16 at 100.00 A $ 1,307,086
Revenue Bonds, University of Maryland Medical System,
Series 2006, 5.000%, 7/01/36
1,000 Maryland Health and Higher Educational Facilities Authority, 7/08 at 101.00 AAA 1,016,300
Revenue Bonds, Anne Arundel Medical Center, Series 1998,
5.125%, 7/01/28 - FSA Insured
1,000 Maryland Health and Higher Educational Facilities Authority, 7/08 at 102.00 A2 1,001,640
Revenue Bonds, Calvert Memorial Hospital, Series 1998,
5.000%, 7/01/28
1,000 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 1,043,180
Revenue Bonds, Carroll County General Hospital, Series 2002,
6.000%, 7/01/26
750 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 AA 731,865
Revenue Bonds, Civista Medical Center, Series 2005,
5.000%, 7/01/37 - RAAI Insured
710 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 Baa1 687,649
Revenue Bonds, Doctors Community Hospital, Series 2007A,
5.000%, 7/01/29
500 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 486,305
Revenue Bonds, Frederick Memorial Hospital, Series 2002,
5.125%, 7/01/35
650 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A+ 645,242
Revenue Bonds, Greater Baltimore Medical Center, Series 2001,
5.000%, 7/01/34 - MBIA Insured
1,250 Maryland Health and Higher Educational Facilities Authority, 5/11 at 100.00 A+ 1,275,600
Revenue Bonds, Johns Hopkins Hospital, Series 2001,
5.000%, 5/15/21
585 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 AA 645,080
Revenue Bonds, Johns Hopkins Hospital, Series 2004,
Inverse 1003, 7.209%, 7/01/33 (IF)
2,225 Maryland Health and Higher Educational Facilities Authority, 6/09 at 101.00 A+ 2,281,960
Revenue Bonds, Kaiser Permanente System, Series 1998A,
5.375%, 7/01/15
1,000 Maryland Health and Higher Educational Facilities Authority, 7/13 at 100.00 Baa3 1,004,480
Revenue Bonds, Kennedy Krieger Institute, Series 2003,
5.500%, 7/01/33
585 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A 589,522
Revenue Bonds, LifeBridge Health System, Series 2004A,
5.125%, 7/01/34
700 Maryland Health and Higher Educational Facilities Authority, 8/14 at 100.00 A3 714,952
Revenue Bonds, MedStar Health, Series 2004, 5.375%, 8/15/24
Maryland Health and Higher Educational Facilities Authority,
Revenue Bonds, Mercy Medical Center Project, Series 2007A:
415 5.000%, 7/01/37 7/17 at 100.00 BBB 381,153
270 5.500%, 7/01/42 7/17 at 100.00 BBB 264,665
1,000 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 Baa1 1,008,980
Revenue Bonds, Mercy Medical Center, Series 2001,
5.625%, 7/01/31
700 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 A 699,440
Revenue Bonds, Peninsula Regional Medical Center,
Series 2006, 5.000%, 7/01/36
1,000 Maryland Health and Higher Educational Facilities Authority, 7/15 at 100.00 A3 988,150
Revenue Bonds, Union Hospital of Cecil County, Series 2005,
5.000%, 7/01/35
570 Maryland Health and Higher Educational Facilities Authority, 7/08 at 101.00 A3 573,164
Revenue Refunding Bonds, Union Hospital of Cecil County,
Series 1998, 5.100%, 7/01/22
700 Prince George's County, Maryland, Revenue Bonds, Dimensions 1/08 at 100.00 B3 562,940
Health Corporation, Series 1994, 5.300%, 7/01/24
------------------------------------------------------------------------------------------------------------------------------------
17,935 Total Health Care 17,909,353
------------------------------------------------------------------------------------------------------------------------------------
27
NFM
Nuveen Maryland Dividend Advantage Municipal Fund (continued)
Portfolio of INVESTMENTS November 30, (2007) (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 18.8% (12.4% OF TOTAL INVESTMENTS)
$ 750 Baltimore County, Maryland, GNMA Collateralized Revenue 10/08 at 102.00 AAA $ 760,275
Refunding Bonds, Cross Creek Apartments, Series 1998A,
5.250%, 10/20/33
2,000 Maryland Community Development Administration, Housing 7/08 at 101.00 Aa2 2,021,180
Revenue Bonds, Series 1998A, 5.625%, 1/01/40
(Alternative Minimum Tax)
1,000 Maryland Community Development Administration, Multifamily 12/11 at 100.00 Aaa 1,011,090
Housing Revenue Bonds, Princess Anne Apartments,
Series 2001D, 5.450%, 12/15/33 (Alternative Minimum Tax)
Maryland Economic Development Corporation, Senior Lien Student
Housing Revenue Bonds, University of Maryland - Baltimore,
Series 2003A:
215 4.250%, 10/01/10 No Opt. Call B2 207,445
50 5.000%, 10/01/15 10/13 at 100.00 B2 47,824
210 5.625%, 10/01/23 10/13 at 100.00 B2 201,485
1,800 Maryland Economic Development Corporation, Student Housing 7/11 at 101.00 A 1,818,144
Revenue Bonds, Sheppard Pratt University Village, Series 2001,
6.000%, 7/01/33 - ACA Insured
475 Maryland Economic Development Corporation, Student Housing 6/16 at 100.00 AAA 482,396
Revenue Refunding Bonds, University of Maryland College Park
Projects, Series 2006, 5.000%, 6/01/33 - CIFG Insured
750 Montgomery County Housing Opportunities Commission, 7/08 at 101.00 Aaa 753,473
Maryland, FNMA/FHA-Insured Multifamily Housing Development
Bonds, Series 1998A, 5.250%, 7/01/29 (Alternative Minimum Tax)
2,000 Montgomery County Housing Opportunities Commission, 7/10 at 100.00 Aaa 2,048,440
Maryland, Multifamily Housing Development Bonds,
Series 2000B, 6.200%, 7/01/30 (Alternative Minimum Tax)
2,000 Montgomery County Housing Opportunities Commission, 7/11 at 100.00 Aaa 2,026,740
Maryland, Multifamily Housing Development Bonds,
Series 2001A, 5.600%, 7/01/42 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
11,250 Total Housing/Multifamily 11,378,492
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 8.3% (5.5% OF TOTAL INVESTMENTS)
250 Maryland Community Development Administration Department 3/17 at 100.00 Aa2 250,073
of Housing and Community Development, Residential Revenue
Bonds, Series 2007H, 5.000%, 9/01/27 (Alternative Minimum Tax)
300 Maryland Community Development Administration, Department 9/15 at 100.00 Aa2 297,978
of Housing and Community Development, Residential Revenue
Bonds, Series 2006F, 4.900%, 9/01/26 (Alternative Minimum Tax)
1,200 Maryland Community Development Administration, Department 3/16 at 100.00 Aa2 1,188,276
of Housing and Community Development, Residential Revenue
Bonds, Series 2006I, 4.875%, 9/01/26 (Alternative Minimum Tax)
815 Maryland Community Development Administration, Department 9/16 at 100.00 Aa2 794,283
of Housing and Community Development, Residential Revenue
Bonds, Series 2006L, 4.900%, 9/01/31 (Alternative Minimum Tax)
500 Maryland Community Development Administration, Department 3/17 at 100.00 Aa2 477,180
of Housing and Community Development, Residential Revenue
Bonds, Series 2007D, 4.850%, 9/01/37 (Alternative Minimum Tax)
495 Maryland Community Development Administration, Residential 9/10 at 100.00 Aa2 507,410
Revenue Bonds, Series 2001B, 5.450%, 9/01/32
(Alternative Minimum Tax)
975 Maryland Community Development Administration, Residential 9/14 at 100.00 Aa2 937,853
Revenue Bonds, Series 2005E, 4.900%, 9/01/36
(Alternative Minimum Tax)
600 Maryland Community Development Administration, Residential 9/15 at 100.00 Aa2 586,932
Revenue Bonds, Series 2006B, 4.750%, 9/01/25
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
5,135 Total Housing/Single Family 5,039,985
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 2.3% (1.5% OF TOTAL INVESTMENTS)
410 Maryland Economic Development Corporation, Solid Waste 4/12 at 101.00 BBB 403,981
Disposal Revenue Bonds, Waste Management Inc., Series 2002,
4.600%, 4/01/16 (Alternative Minimum Tax)
1,000 Northeast Maryland Waste Disposal Authority, Baltimore, 1/09 at 101.00 BBB 1,006,370
Resource Recovery Revenue Bonds, RESCO Retrofit Project,
Series 1998, 4.750%, 1/01/12 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
1,410 Total Industrials 1,410,351
------------------------------------------------------------------------------------------------------------------------------------
28
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 3.6% (2.3% OF TOTAL INVESTMENTS)
$ 850 Baltimore County, Maryland, Revenue Bonds, Oak Crest Village, 1/17 at 100.00 BBB+ $ 803,335
Series 2007A, 5.000%, 1/01/37
300 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 N/R 289,629
Revenue Bonds, Edenwald, Series 2006A, 5.400%, 1/01/31
720 Maryland Health and Higher Educational Facilities Authority, 1/17 at 100.00 N/R 658,699
Revenue Bonds, King Farm Presbyterian Community,
Series 2007A, 5.250%, 1/01/27
440 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 BBB+ 401,887
Revenue Bonds, Mercy Ridge Retirement Community,
Series 2007, 4.750%, 7/01/34
------------------------------------------------------------------------------------------------------------------------------------
2,310 Total Long-Term Care 2,153,550
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 22.6% (14.9% OF TOTAL INVESTMENTS)
Anne Arundel County, Maryland, General Obligation Bonds,
Series 2006:
730 5.000%, 3/01/21 3/16 at 100.00 AAA 785,889
565 5.000%, 3/01/21 3/16 at 100.00 AAA 608,256
3,500 Baltimore County, Maryland, Metropolitan District Special 6/11 at 101.00 AAA 3,639,961
Assessment Bonds, 67th Issue, 5.000%, 6/01/27
300 Carroll County, Maryland, Consolidated Public Improvement 12/15 at 100.00 AA 330,843
Bonds, Series 2005A, 5.000%, 12/01/16
500 Frederick County, Maryland, General Obligation Public Facilities No Opt. Call AA 554,585
Bonds, Series 2006, 5.000%, 11/01/20
Frederick, Maryland, General Obligation Bonds, Series 2005:
600 5.000%, 8/01/16 - MBIA Insured 8/15 at 100.00 AAA 657,726
500 5.000%, 8/01/17 - MBIA Insured 8/15 at 100.00 AAA 547,015
1,360 Howard County, Maryland, Consolidated Public Improvement 2/09 at 101.00 AAA 1,383,147
Bonds, Series 2001A, 4.750%, 2/15/21
1,000 Maryland National Capital Park Planning Commission, 1/14 at 100.00 AA+ 1,078,580
Prince George's County, General Obligation Bonds, Park
Acquisition and Development, Series 2004EE-2,
5.000%, 1/15/17
1,360 Montgomery County, Maryland, Consolidated General Obligation No Opt. Call AAA 1,506,363
Public Improvement Bonds, Series 2006, 5.000%, 5/01/16
740 Ocean City, Maryland, General Obligation Bonds, Series 2001, 3/11 at 101.00 AAA 772,945
4.875%, 3/01/19 - FGIC Insured
1,000 Prince George's County, Maryland, General Obligation 10/13 at 100.00 AA+ 1,071,970
Consolidated Public Improvement Bonds, Series 2003A,
5.000%, 10/01/17
700 Washington Suburban Sanitary District, Montgomery and 6/15 at 100.00 AAA 768,131
Prince George's Counties, Maryland, Sewerage Disposal Bonds,
Series 2005, 5.000%, 6/01/16
------------------------------------------------------------------------------------------------------------------------------------
12,855 Total Tax Obligation/General 13,705,411
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 16.2% (10.7% OF TOTAL INVESTMENTS)
625 Annapolis, Maryland, Special Obligation Bonds, Park Place 1/15 at 101.00 N/R 585,075
Project, Series 2005A, 5.350%, 7/01/34
535 Anne Arundel County, Maryland, Tax Increment Financing No Opt. Call N/R 544,801
Revenue Bonds, Parole Town Center Project, Series 2002,
5.000%, 7/01/12
350 Hyattsville, Maryland, Special Obligation Bonds, University 7/14 at 102.00 N/R 343,207
Town Center Project, Series 2004, 5.750%, 7/01/34
1,500 Maryland Department of Transportation, Consolidated No Opt. Call AAA 1,707,255
Transportation Revenue Bonds, Series 2002, 5.500%, 2/01/16
1,405 Maryland Economic Development Corporation, Lease Revenue 6/12 at 100.50 AA+ 1,512,286
Bonds, Department of Transportation Headquarters Building,
Series 2002, 5.375%, 6/01/19
370 Maryland Economic Development Corporation, Lease Revenue 9/12 at 100.00 AA+ 397,158
Bonds, Montgomery County Town Square Parking Garage,
Series 2002A, 5.000%, 9/15/13
740 Prince George's County, Maryland, Lease Revenue Bonds, 6/13 at 100.00 AAA 792,540
Upper Marlboro Justice Center, Series 2003A, 5.000%, 6/30/14 -
MBIA Insured
29
NFM
Nuveen Maryland Dividend Advantage Municipal Fund (continued)
Portfolio of INVESTMENTS November 30, (2007) (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 270 Prince George's County, Maryland, Special Obligation Bonds, 7/15 at 100.00 N/R $ 254,254
National Harbor Project, Series 2005, 5.200%, 7/01/34
450 Prince George's County, Maryland, Special Tax District Bonds, 7/13 at 100.00 N/R 408,384
Victoria Falls Project, Series 2005, 5.250%, 7/01/35
1,000 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call AAA 1,080,100
Revenue Bonds, Series 2007N, 5.250%, 7/01/31 - AMBAC Insured
700 Puerto Rico, Highway Revenue Bonds, Highway and No Opt. Call AAA 788,606
Transportation Authority, Series 2003AA, 5.500%, 7/01/19 -
MBIA Insured
1,290 Virgin Islands Public Finance Authority, Gross Receipts Taxes 10/10 at 101.00 BBB+ 1,390,930
Loan Note, Series 1999A, 6.375%, 10/01/19
------------------------------------------------------------------------------------------------------------------------------------
9,235 Total Tax Obligation/Limited 9,804,596
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 1.1% (0.7% OF TOTAL INVESTMENTS)
650 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 AAA 669,305
Parking Facilities Revenue Bonds, Johns Hopkins Hospital,
Series 2001, 5.000%, 7/01/27 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 23.3% (15.4% OF TOTAL INVESTMENTS) (4)
500 Anne Arundel County, Maryland, Various Purpose General 2/11 at 101.00 AAA 531,335
Obligation Bonds, Series 2001, 5.000%, 2/15/28
(Pre-refunded 2/15/11) - MBIA Insured
1,015 Baltimore, Maryland, Revenue Refunding Bonds, Water Projects, No Opt. Call AAA 1,098,169
Series 1998A, 5.000%, 7/01/28 - FGIC Insured (ETM)
Frederick County, Maryland, Educational Facilities Revenue
Bonds, Mount St. Mary's College, Series 2001A:
465 5.700%, 9/01/20 (Pre-refunded 3/01/10) 3/10 at 101.00 BBB- (4) 493,174
500 5.750%, 9/01/25 (Pre-refunded 3/01/10) 3/10 at 101.00 BBB- (4) 530,835
500 Maryland Health and Higher Educational Facilities Authority, 4/11 at 101.00 N/R (4) 553,585
Revenue Bonds, Collington Episcopal Life Care Community Inc.,
Series 2001A, 6.750%, 4/01/23 (Pre-refunded 4/01/11)
625 Maryland Health and Higher Educational Facilities Authority, 6/11 at 100.00 Baa1 (4) 670,669
Revenue Bonds, Maryland Institute College of Art, Series 2001,
5.500%, 6/01/32 (Pre-refunded 6/01/11)
2,000 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A (4) 2,134,660
Revenue Bonds, University of Maryland Medical System,
Series 2001, 5.250%, 7/01/28 (Pre-refunded 7/01/11)
775 Maryland Transportation Authority, Revenue Refunding Bonds, No Opt. Call AAA 890,506
Transportation Facilities Projects, First Series 1978,
6.800%, 7/01/16 (ETM)
1,500 Prince George's County, Maryland, General Obligation 12/11 at 101.00 AAA 1,626,405
Consolidated Public Improvement Bonds, Series 2001,
5.250%, 12/01/20 (Pre-refunded 12/01/11) - FGIC Insured
Puerto Rico Infrastructure Financing Authority, Special Obligation
Bonds, Series 2000A:
2,300 5.500%, 10/01/32 (ETM) 10/10 at 101.00 AAA 2,435,884
1,700 5.500%, 10/01/40 (ETM) 10/10 at 101.00 AAA 1,798,073
1,300 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 1,356,875
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20
(Pre-refunded 7/01/10)
------------------------------------------------------------------------------------------------------------------------------------
13,180 Total U.S. Guaranteed 14,120,170
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 1.7% (1.1% OF TOTAL INVESTMENTS)
1,000 Maryland Energy Financing Administration, Revenue Bonds, 2/08 at 100.00 N/R 1,002,440
AES Warrior Run Project, Series 1995, 7.400%, 9/01/19
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
30
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 2.4% (1.6% OF TOTAL INVESTMENTS)
$ 500 Baltimore, Maryland, Wastewater Project Revenue Bonds, 7/16 at 100.00 AAA $ 523,975
Series 2006C, 5.000%, 7/01/31 - AMBAC Insured
540 Baltimore, Maryland, Wastewater Project Revenue Bonds, 7/17 at 100.00 AAA 566,174
Series 2007D, 5.000%, 7/01/32 - AMBAC Insured
355 Maryland Water Quality Financing Administration, Revolving No Opt. Call AAA 392,516
Loan Fund Revenue Bonds, Series 2005A, 5.000%, 9/01/15
------------------------------------------------------------------------------------------------------------------------------------
1,395 Total Water and Sewer 1,482,665
------------------------------------------------------------------------------------------------------------------------------------
$ 88,800 Total Long-Term Investments (cost $89,664,060) - 150.6% 91,191,292
=============-----------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 1.2% (0.8% OF TOTAL INVESTMENTS)
$ 700 Maryland Health and Higher Education Facilities Authority, Aa3 700,000
Revenue Bonds, Kennedy Krieger Institute Project, Variable
Rate Demand Obligations, Series 2006, 6.000%, 7/01/36 -
RAAI Insured (5)
=============-----------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (cost $700,000) 700,000
--------------------------------------------------------------------------------------------------------------------
Total Investments (cost $90,364,060) - 151.8% 91,891,292
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.1% 642,795
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (52.9)% (32,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 60,534,087
====================================================================================================================
FORWARD SWAPS OUTSTANDING AT NOVEMBER 30, 2007:
FUND FIXED RATE UNREALIZED
NOTIONAL PAY/RECEIVE FLOATING RATE FIXED RATE PAYMENT EFFECTIVE TERMINATION APPRECIATION
COUNTERPARTY AMOUNT FLOATING RATE INDEX (ANNUALIZED) FREQUENCY DATE (6) DATE (DEPRECIATION)
------------------------------------------------------------------------------------------------------------------------------------
JPMorgan $650,000 Pay 3-Month USD-LIBOR 5.388% Semi-Annually 4/25/08 4/25/35 $ 44,924
Royal Bank
of Canada 900,000 Pay SIFM 4.335 Quarterly 8/06/08 8/06/37 77,210
------------------------------------------------------------------------------------------------------------------------------------
$122,134
====================================================================================================================================
USD-LIBOR (United States Dollar-London Inter-Bank Offered Rate)
SIFM-The daily arithmetic average of the weekly SIFM (Securities Industry and
Financial Markets) Municipal Swap Index.
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares unless
otherwise noted.
(2) Optional Call Provisions: 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: Using the higher of Standard & Poor's Group
("Standard & Poor's") or Moody's Investor Service, Inc.
("Moody's") rating. Ratings below BBB by Standard & Poor's
or Baa by Moody's are considered to be below investment
grade.
The AAA ratings shown in the Portfolio of Investments
reflects the AAA ratings on certain bonds insured by AMBAC,
FGIC or MBIA as of November 30, 2007. As explained earlier
in the Portfolio Manager's Comments section of this report,
one rating agency has reduced the rating for AMBAC to AA,
and one or more rating agencies have placed each of these
insurers on "negative credit watch", which may presage one
or more rating reductions for such insurer or insurers in
the future. If one or more insurers' ratings are reduced
below AAA by these rating agencies, it would likely reduce
the effective rating of many of the bonds insured by that
insurer or insurers.
(4) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which ensure
the timely payment of principal and interest. Such
investments are normally considered to be equivalent to AAA
rated securities.
(5) Investment has a maturity of more than one year, but has
variable rate and demand features which qualify it as a
short-term investment. The rate disclosed is that in effect
at the end of the reporting period. This rate changes
periodically based on market conditions or a specified
market index.
(6) Effective date represents the date on which both the Fund
and counterparty commence interest payment accruals on each
forward swap contract.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
See accompanying notes to financial statements.
31
NZR
Nuveen Maryland Dividend Advantage Municipal Fund 2
Portfolio of INVESTMENTS
November 30, 2007 (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 5.0% (3.3% OF TOTAL INVESTMENTS)
$ 190 Baltimore, Maryland, Pollution Control Revenue Bonds, General No Opt. Call Caa1 $ 189,390
Motors Corporation, Series 1993, 5.350%, 4/01/08
1,890 Baltimore, Maryland, Senior Lien Convention Center Hotel Revenue 9/16 at 100.00 AAA 1,993,590
Bonds, Series 2006A, 5.250%, 9/01/39 - XLCA Insured
310 Baltimore, Maryland, Subordinate Lien Convention Center Hotel 9/16 at 100.00 Ba1 313,667
Revenue Bonds, Series 2006B, 5.875%, 9/01/39
650 Maryland Economic Development Corporation, Revenue Bonds, 12/16 at 100.00 N/R 580,372
Chesapeake Bay Hyatt Conference Center, Series 2006A,
5.000%, 12/01/31
------------------------------------------------------------------------------------------------------------------------------------
3,040 Total Consumer Discretionary 3,077,019
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 2.4% (1.5% OF TOTAL INVESTMENTS)
750 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 732,698
Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33
800 Tobacco Settlement Financing Corporation, Virgin Islands, 5/11 at 100.00 Baa3 731,592
Tobacco Settlement Asset-Backed Bonds, Series 2001,
5.000%, 5/15/31
------------------------------------------------------------------------------------------------------------------------------------
1,550 Total Consumer Staples 1,464,290
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 16.4% (10.9% OF TOTAL INVESTMENTS)
1,100 Anne Arundel County, Maryland, Economic Development Revenue 9/12 at 102.00 A3 1,138,929
Bonds, Community College Project, Series 2002,
5.125%, 9/01/22
500 Frederick County, Maryland, Educational Facilities Revenue 9/16 at 100.00 BBB- 508,415
Bonds, Mount Saint Mary's College, Series 2006,
5.625%, 9/01/38
645 Hartford County, Maryland, Economic Development Revenue 4/14 at 100.00 A+ 663,137
Bonds, Battelle Memorial Institute, Series 2004,
5.250%, 4/01/34
250 Maryland Health and Higher Educational Facilities Authority, 7/08 at 102.00 BBB- 254,375
Educational Facilities Leasehold Mortgage Revenue Bonds,
McLean School, Series 2001, 6.000%, 7/01/31
415 Maryland Health and Higher Educational Facilities Authority, 1/11 at 101.00 AAA 434,439
Revenue Bonds, Bullis School, Series 2000, 5.250%, 7/01/30 -
FSA Insured
500 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A- 505,685
Revenue Bonds, Goucher College, Series 2004, 5.125%, 7/01/34
565 Maryland Health and Higher Educational Facilities Authority, 6/17 at 100.00 Baa1 541,818
Revenue Bonds, Maryland Institute College of Art, Series 2007,
5.000%, 6/01/36
500 Maryland Industrial Development Financing Authority, Revenue 5/15 at 100.00 N/R 507,285
Bonds, Our Lady of Good Counsel High School, Series 2005A,
6.000%, 5/01/35
590 Montgomery County Revenue Authority, Maryland, Lease Revenue 5/15 at 100.00 A1 627,341
Bonds, Montgomery College Arts Center Project, Series 2005A,
5.000%, 5/01/18
500 Morgan State University, Maryland, Student Tuition and Fee 7/12 at 100.00 AAA 524,975
Revenue Bonds, Academic Fees and Auxiliary Facilities,
Series 2001, 4.900%, 7/01/21 - FGIC Insured
500 Morgan State University, Maryland, Student Tuition and Fee 7/13 at 100.00 AAA 528,510
Revenue Bonds, Academic Fees and Auxiliary Facilities,
Series 2003A, 5.000%, 7/01/20 - FGIC Insured
32
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS (continued)
$ 1,140 University of Maryland, Auxiliary Facility and Tuition Revenue 4/11 at 100.00 AA $ 1,163,473
Bonds, Series 2001B, 4.500%, 4/01/19
1,000 University of Maryland, Auxiliary Facility and Tuition Revenue 4/13 at 100.00 AA 1,054,700
Bonds, Series 2003A, 5.000%, 4/01/19
650 University of Maryland, Auxiliary Facility and Tuition Revenue 10/16 at 100.00 AA 699,199
Bonds, Series 2006A, 5.000%, 10/01/22
950 Westminster, Maryland, Educational Facilities Revenue Bonds, 11/16 at 100.00 BBB+ 922,859
McDaniel College, Series 2006, 5.000%, 11/01/31
------------------------------------------------------------------------------------------------------------------------------------
9,805 Total Education and Civic Organizations 10,075,140
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 24.2% (16.0% OF TOTAL INVESTMENTS)
1,000 Maryland Health and Higher Educational Facilities Authority, 7/08 at 101.00 AAA 1,016,300
Revenue Bonds, Anne Arundel Medical Center, Series 1998,
5.125%, 7/01/33 - FSA Insured
775 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A2 794,298
Revenue Bonds, Calvert Memorial Hospital, Series 2004,
5.500%, 7/01/36
1,000 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 1,043,180
Revenue Bonds, Carroll County General Hospital, Series 2002,
6.000%, 7/01/26
750 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 AA 731,865
Revenue Bonds, Civista Medical Center, Series 2005,
5.000%, 7/01/37 - RAAI Insured
715 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 Baa1 692,492
Revenue Bonds, Doctors Community Hospital, Series 2007A,
5.000%, 7/01/29
500 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 486,305
Revenue Bonds, Frederick Memorial Hospital, Series 2002,
5.125%, 7/01/35
650 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A+ 645,242
Revenue Bonds, Greater Baltimore Medical Center, Series 2001,
5.000%, 7/01/34
585 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 AA 645,080
Revenue Bonds, Johns Hopkins Hospital, Series 2004,
Inverse 1003, 7.209%, 7/01/33 (IF)
1,000 Maryland Health and Higher Educational Facilities Authority, 7/13 at 100.00 Baa3 1,004,480
Revenue Bonds, Kennedy Krieger Institute, Series 2003,
5.500%, 7/01/33
525 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A 529,058
Revenue Bonds, LifeBridge Health System, Series 2004A,
5.125%, 7/01/34
700 Maryland Health and Higher Educational Facilities Authority, 8/14 at 100.00 A3 714,952
Revenue Bonds, MedStar Health, Series 2004, 5.375%, 8/15/24
Maryland Health and Higher Educational Facilities Authority,
Revenue Bonds, Mercy Medical Center Project, Series 2007A:
415 5.000%, 7/01/37 7/17 at 100.00 BBB 381,153
280 5.500%, 7/01/42 7/17 at 100.00 BBB 274,467
1,500 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 Baa1 1,513,470
Revenue Bonds, Mercy Medical Center, Series 2001,
5.625%, 7/01/31
700 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 A 699,440
Revenue Bonds, Peninsula Regional Medical Center,
Series 2006, 5.000%, 7/01/36
1,500 Maryland Health and Higher Educational Facilities Authority, 7/15 at 100.00 A3 1,464,570
Revenue Bonds, Union Hospital of Cecil County, Series 2005,
5.000%, 7/01/40
1,610 Montgomery County, Maryland, Economic Development Revenue 12/11 at 100.00 Aa2 1,649,687
Bonds, Trinity Healthcare Group, Series 2001, 5.125%, 12/01/22
700 Prince George's County, Maryland, Revenue Bonds, Dimensions 1/08 at 100.00 B3 562,940
Health Corporation, Series 1994, 5.300%, 7/01/24
------------------------------------------------------------------------------------------------------------------------------------
14,905 Total Health Care 14,848,979
------------------------------------------------------------------------------------------------------------------------------------
33
NZR
Nuveen Maryland Dividend Advantage Municipal Fund 2 (continued)
Portfolio of INVESTMENTS November 30, (2007) (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 9.4% (6.3% OF TOTAL INVESTMENTS)
$ 10 Maryland Community Development Administration, Insured 5/11 at 100.00 Aa2 $ 10,154
Multifamily Housing Mortgage Loan Revenue Bonds,
Series 2001A, 5.100%, 5/15/28
3,145 Maryland Community Development Administration, Multifamily 12/11 at 100.00 Aaa 3,179,877
Development Revenue Bonds, Waters Towers Senior Apartments,
Series 2001F, 5.450%, 12/15/33 (Alternative Minimum Tax)
1,110 Maryland Community Development Administration, Multifamily 12/11 at 100.00 Aaa 1,122,310
Housing Revenue Bonds, Princess Anne Apartments,
Series 2001D, 5.450%, 12/15/33 (Alternative Minimum Tax)
1,000 Maryland Economic Development Corporation, Senior Lien 10/13 at 100.00 B2 959,450
Student Housing Revenue Bonds, University of Maryland -
Baltimore, Series 2003A, 5.625%, 10/01/23
520 Maryland Economic Development Corporation, Student Housing 6/16 at 100.00 AAA 528,096
Revenue Refunding Bonds, University of Maryland College Park
Projects, Series 2006, 5.000%, 6/01/33 - CIFG Insured
------------------------------------------------------------------------------------------------------------------------------------
5,785 Total Housing/Multifamily 5,799,887
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 8.4% (5.6% OF TOTAL INVESTMENTS)
250 Maryland Community Development Administration Department 3/17 at 100.00 Aa2 250,073
of Housing and Community Development, Residential Revenue
Bonds, Series 2007H, 5.000%, 9/01/27 (Alternative Minimum Tax)
300 Maryland Community Development Administration, Department 9/15 at 100.00 Aa2 297,978
of Housing and Community Development, Residential Revenue
Bonds, Series 2006F, 4.900%, 9/01/26 (Alternative Minimum Tax)
1,000 Maryland Community Development Administration, Department 3/16 at 100.00 Aa2 990,230
of Housing and Community Development, Residential Revenue
Bonds, Series 2006I, 4.875%, 9/01/26 (Alternative Minimum Tax)
815 Maryland Community Development Administration, Department 9/16 at 100.00 Aa2 794,283
of Housing and Community Development, Residential Revenue
Bonds, Series 2006L, 4.900%, 9/01/31 (Alternative Minimum Tax)
500 Maryland Community Development Administration, Department 3/17 at 100.00 Aa2 477,180
of Housing and Community Development, Residential Revenue
Bonds, Series 2007D, 4.850%, 9/01/37 (Alternative Minimum Tax)
850 Maryland Community Development Administration, Residential 9/10 at 100.00 Aa2 854,998
Revenue Bonds, Series 2001H, 5.350%, 9/01/32 (Alternative
Minimum Tax)
975 Maryland Community Development Administration, Residential 9/14 at 100.00 Aa2 937,853
Revenue Bonds, Series 2005E, 4.900%, 9/01/36 (Alternative
Minimum Tax)
600 Maryland Community Development Administration, Residential 9/15 at 100.00 Aa2 586,932
Revenue Bonds, Series 2006B, 4.750%, 9/01/25 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
5,290 Total Housing/Single Family 5,189,527
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 2.5% (1.7% OF TOTAL INVESTMENTS)
410 Maryland Economic Development Corporation, Solid Waste 4/12 at 101.00 BBB 403,981
Disposal Revenue Bonds, Waste Management Inc., Series 2002,
4.600%, 4/01/16 (Alternative Minimum Tax)
1,150 Northeast Maryland Waste Disposal Authority, Baltimore, 1/09 at 101.00 BBB 1,157,326
Resource Recovery Revenue Bonds, RESCO Retrofit Project,
Series 1998, 4.750%, 1/01/12 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
1,560 Total Industrials 1,561,307
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 3.6% (2.4% OF TOTAL INVESTMENTS)
860 Baltimore County, Maryland, Revenue Bonds, Oak Crest Village, 1/17 at 100.00 BBB+ 812,786
Series 2007A, 5.000%, 1/01/37
300 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 N/R 289,629
Revenue Bonds, Edenwald, Series 2006A, 5.400%, 1/01/31
Maryland Health and Higher Educational Facilities Authority,
Revenue Bonds, King Farm Presbyterian Community, Series 2007A:
500 5.000%, 1/01/17 No Opt. Call N/R 480,385
220 5.250%, 1/01/27 1/17 at 100.00 N/R 201,269
435 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 BBB+ 397,320
Revenue Bonds, Mercy Ridge Retirement Community,
Series 2007, 4.750%, 7/01/34
------------------------------------------------------------------------------------------------------------------------------------
2,315 Total Long-Term Care 2,181,389
------------------------------------------------------------------------------------------------------------------------------------
34
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 29.5% (19.6% OF TOTAL INVESTMENTS)
$ 750 Anne Arundel County, Maryland, General Obligation Bonds, 8/09 at 101.00 AAA $ 764,753
Consolidated Water and Sewerage, Series 1999,
4.500%, 8/01/19
Anne Arundel County, Maryland, General Obligation Bonds,
Series 2006:
845 5.000%, 3/01/21 3/16 at 100.00 AAA 909,693
650 5.000%, 3/01/21 3/16 at 100.00 AAA 699,764
750 Baltimore, Maryland, General Obligation Consolidated Public 10/14 at 100.00 AAA 796,283
Improvement Bonds, Series 2004A,5.000%, 10/15/22 -
AMBAC Insured
300 Carroll County, Maryland, Consolidated Public Improvement Bonds, 12/15 at 100.00 AA 330,843
Series 2005A, 5.000%, 12/01/16
Cecil County, Maryland, Consolidated General Obligation Public
Improvement Bonds, Series 2001B:
975 4.600%, 8/01/18 8/11 at 101.00 AA- 1,011,592
1,020 4.600%, 8/01/19 8/11 at 101.00 AA- 1,054,445
750 Frederick County, Maryland, General Obligation Public Facilities No Opt. Call AA 831,878
Bonds, Series 2006, 5.000%, 11/01/20
Frederick, Maryland, General Obligation Bonds, Series 2005:
600 5.000%, 8/01/16 - MBIA Insured 8/15 at 100.00 AAA 657,726
500 5.000%, 8/01/17 - MBIA Insured 8/15 at 100.00 AAA 547,015
510 Frederick, Maryland, General Obligation Refunding and 12/11 at 101.00 AA- 533,674
Improvement Bonds, Series 2001, 4.750%, 12/01/19
1,000 Howard County, Maryland, Consolidated Public Improvement 2/14 at 100.00 AAA 1,082,130
Bonds, Series 2004B, 5.000%, 8/15/16
1,000 Montgomery County, Maryland, Consolidated General Obligation No Opt. Call AAA 1,104,410
Public Improvement Bonds, Series 2005A, 5.000%, 7/01/15
4,730 Montgomery County, Maryland, Consolidated General Obligation 10/11 at 101.00 AAA 5,042,176
Public Improvement Refunding Bonds, Series 2001,
5.250%, 10/01/18
770 Puerto Rico, General Obligation and Public Improvement Bonds, 7/11 at 100.00 AAA 798,590
Series 2001, 5.000%, 7/01/24 - FSA Insured
800 Washington Suburban Sanitary District, Montgomery and 6/15 at 100.00 AAA 877,864
Prince George's Counties, Maryland,Sewerage Disposal Bonds,
Series 2005, 5.000%, 6/01/16
1,000 Washington Suburban Sanitary District, Montgomery and 6/15 at 100.00 AAA 1,097,330
Prince George's Counties, Maryland, Water Supply Bonds,
Series 2005, 5.000%, 6/01/16
------------------------------------------------------------------------------------------------------------------------------------
16,950 Total Tax Obligation/General 18,140,166
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 17.9% (11.9% OF TOTAL INVESTMENTS)
625 Annapolis, Maryland, Special Obligation Bonds, Park Place 1/15 at 101.00 N/R 585,075
Project, Series 2005A, 5.350%, 7/01/34
535 Anne Arundel County, Maryland, Tax Increment Financing No Opt. Call N/R 544,801
Revenue Bonds, Parole Town Center Project, Series 2002,
5.000%, 7/01/12
530 Baltimore Board of School Commissioners, Maryland, Revenue 5/13 at 100.00 AA+ 569,464
Bonds, City Public School System, Series 2003A,
5.000%, 5/01/15
Baltimore County, Maryland, Certificates of Participation,
Health and Social Services Building Project, Series 2001:
1,580 5.000%, 8/01/20 8/11 at 101.00 AA+ 1,645,633
1,660 5.000%, 8/01/21 8/11 at 101.00 AA+ 1,725,487
110 Frederick County, Maryland, Lake Linganore Village Community 7/10 at 102.00 AA 113,571
Development Special Obligation Bonds, Series 2001A,
5.700%, 7/01/29 - RAAI Insured
350 Hyattsville, Maryland, Special Obligation Bonds, University 7/14 at 102.00 N/R 343,207
Town Center Project, Series 2004, 5.750%, 7/01/34
1,000 Maryland Department of Transportation, Consolidated No Opt. Call AAA 1,138,170
Transportation Revenue Bonds, Series 2002, 5.500%, 2/01/16
35
NZR
Nuveen Maryland Dividend Advantage Municipal Fund 2 (continued)
Portfolio of INVESTMENTS November 30, (2007) (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 1,405 Maryland Economic Development Corporation, Lease Revenue 6/12 at 100.50 AA+ $ 1,512,286
Bonds, Department of Transportation Headquarters Building,
Series 2002, 5.375%, 6/01/19
1,000 Montgomery County, Maryland, Special Obligation Bonds, 7/12 at 101.00 AA 1,031,260
West Germantown Development District, Senior Series 2002A,
5.500%, 7/01/27 - RAAI Insured
270 Prince George's County, Maryland, Special Obligation Bonds, 7/15 at 100.00 N/R 254,254
National Harbor Project, Series 2005, 5.200%, 7/01/34
475 Prince George's County, Maryland, Special Tax District Bonds, 7/13 at 100.00 N/R 431,072
Victoria Falls Project, Series 2005, 5.250%, 7/01/35
1,000 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call AAA 1,080,100
Revenue Bonds, Series 2007N, 5.250%, 7/01/31 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
10,540 Total Tax Obligation/Limited 10,974,380
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 2.8% (1.8% OF TOTAL INVESTMENTS)
Maryland Health and Higher Educational Facilities Authority,
Parking Facilities Revenue Bonds, Johns Hopkins Hospital, Series
2001:
650 5.000%, 7/01/27 - AMBAC Insured 7/11 at 100.00 AAA 669,305
1,000 5.000%, 7/01/34 - AMBAC Insured 7/11 at 100.00 AAA 1,019,900
------------------------------------------------------------------------------------------------------------------------------------
1,650 Total Transportation 1,689,205
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 21.8% (14.4% OF TOTAL INVESTMENTS) (4)
1,500 Baltimore County, Maryland, Consolidated General Obligation 8/12 at 100.00 AAA 1,577,910
Public Improvement Bonds, Series 2002, 5.000%, 8/01/18
(Pre-refunded 8/01/12)
Frederick County, Maryland, Educational Facilities Revenue Bonds,
Mount St. Mary's College, Series 2001A:
100 5.750%, 9/01/25 (Pre-refunded 3/01/10) 3/10 at 101.00 BBB- (4) 106,167
100 5.800%, 9/01/30 (Pre-refunded 3/01/10) 3/10 at 101.00 BBB- (4) 106,274
90 Frederick County, Maryland, Lake Linganore Village Community 7/10 at 102.00 AA (4) 97,069
Development Special Obligation Bonds, Series 2001A,
5.700%, 7/01/29 (Pre-refunded 7/01/10) - RAAI Insured
Maryland Health and Higher Educational Facilities Authority,
Revenue Bonds, Collington Episcopal Life Care Community Inc.,
Series 2001A:
31 6.750%, 4/01/20 (Pre-refunded 4/01/09) 4/09 at 100.00 N/R (4) 32,102
25 6.750%, 4/01/23 (Pre-refunded 4/01/11) 4/11 at 101.00 N/R (4) 27,679
1,260 Maryland Health and Higher Educational Facilities Authority, No Opt. Call AAA 1,366,886
Revenue Bonds, Helix Health, Series 1997, 5.000%, 7/01/17 -
AMBAC Insured (ETM)
1,250 Maryland Health and Higher Educational Facilities Authority, 6/11 at 100.00 Baa1 (4) 1,341,338
Revenue Bonds, Maryland Institute College of Art, Series 2001,
5.500%, 6/01/32 (Pre-refunded 6/01/11)
2,000 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A (4) 2,134,659
Revenue Bonds, University of Maryland Medical System,
Series 2001, 5.250%, 7/01/28 (Pre-refunded 7/01/11)
1,090 Maryland Transportation Authority, Revenue Refunding Bonds, No Opt. Call AAA 1,252,454
Transportation Facilities Projects, First Series 1978,
6.800%, 7/01/16 (ETM)
1,000 Prince George's County, Maryland, General Obligation 12/11 at 101.00 AAA 1,084,270
Consolidated Public Improvement Bonds, Series 2001,
5.250%, 12/01/20 (Pre-refunded 12/01/11) - FGIC Insured
3,000 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 3,173,069
Obligation Bonds, Series 2000A, 5.500%, 10/01/40 (ETM)
1,000 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 1,067,780
Asset-Backed Bonds, Series 2000, 6.000%, 7/01/26
(Pre-refunded 7/01/10)
------------------------------------------------------------------------------------------------------------------------------------
12,446 Total U.S. Guaranteed 13,367,657
------------------------------------------------------------------------------------------------------------------------------------
36
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 3.3% (2.2% OF TOTAL INVESTMENTS)
$ 1,000 Guam Power Authority, Revenue Bonds, Series 1999A, 10/09 at 101.00 AAA $ 1,032,240
5.250%, 10/01/34 - MBIA Insured
1,000 Maryland Energy Financing Administration, Revenue Bonds, 2/08 at 100.00 N/R 1,002,440
AES Warrior Run Project, Series 1995, 7.400%, 9/01/19
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
2,000 Total Utilities 2,034,680
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 2.4% (1.6% OF TOTAL INVESTMENTS)
500 Baltimore, Maryland, Wastewater Project Revenue Bonds, 7/16 at 100.00 AAA 523,975
Series 2006C, 5.000%, 7/01/31 - AMBAC Insured
540 Baltimore, Maryland, Wastewater Project Revenue Bonds, 7/17 at 100.00 AAA 566,175
Series 2007D, 5.000%, 7/01/32 - AMBAC Insured
355 Maryland Water Quality Financing Administration, Revolving No Opt. Call AAA 392,516
Loan Fund Revenue Bonds, Series 2005A, 5.000%, 9/01/15
------------------------------------------------------------------------------------------------------------------------------------
1,395 Total Water and Sewer 1,482,666
------------------------------------------------------------------------------------------------------------------------------------
$ 89,231 Total Long-Term Investments (cost $90,249,026) - 149.6% 91,886,292
=============-----------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 1.2% (0.8% OF TOTAL INVESTMENTS)
$ 700 Maryland Health and Higher Education Facilities Authority, Aa3 700,000
Revenue Bonds, Kennedy Krieger Institute Project, Series 2006,
Variable Rate Demand Obligations, 6.000%, 7/01/36 -
RAAI Insured (5)
=============-----------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (cost $700,000) 700,000
--------------------------------------------------------------------------------------------------------------------
Total Investments (cost $90,949,026) - 150.8% 92,586,292
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.3% 828,930
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (52.1)% (32,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 61,415,222
====================================================================================================================
FORWARD SWAPS OUTSTANDING AT NOVEMBER 30, 2007:
FUND FIXED RATE UNREALIZED
NOTIONAL PAY/RECEIVE FLOATING RATE FIXED RATE PAYMENT EFFECTIVE TERMINATION APPRECIATION
COUNTERPARTY AMOUNT FLOATING RATE INDEX (ANNUALIZED) FREQUENCY DATE (6) DATE (DEPRECIATION)
------------------------------------------------------------------------------------------------------------------------------------
Royal Bank
of Canada $800,000 Pay SIFM 4.335% Quarterly 8/06/08 8/06/37 $68,631
====================================================================================================================================
SIFM-The daily arithmetic average of the weekly SIFM (Securities Industry and
Financial Markets) Municipal Swap Index.
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares unless
otherwise noted.
(2) Optional Call Provisions: 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: Using the higher of Standard & Poor's Group
("Standard & Poor's") or Moody's Investor Service, Inc.
("Moody's") rating. Ratings below BBB by Standard & Poor's
or Baa by Moody's are considered to be below investment
grade.
The AAA ratings shown in the Portfolio of Investments
reflects the AAA ratings on certain bonds insured by AMBAC,
FGIC or MBIA as of November 30, 2007. As explained earlier
in the Portfolio Manager's Comments section of this report,
one rating agency has reduced the rating for AMBAC to AA,
and one or more rating agencies have placed each of these
insurers on "negative credit watch", which may presage one
or more rating reductions for such insurer or insurers in
the future. If one or more insurers' ratings are reduced
below AAA by these rating agencies, it would likely reduce
the effective rating of many of the bonds insured by that
insurer or insurers.
(4) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which ensure
the timely payment of principal and interest. Such
investments are normally considered to be equivalent to AAA
rated securities.
(5) Investment has a maturity of more than one year, but has
variable rate and demand features which qualify it as a
short-term investment. The rate disclosed is that in effect
at the end of the reporting period. This rate changes
periodically based on market conditions or a specified
market index.
(6) Effective date represents the date on which both the Fund
and counterparty commence interest payment accruals on each
forward swap contract.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
See accompanying notes to financial statements.
37
NWI
Nuveen Maryland Dividend Advantage Municipal Fund 3
Portfolio of INVESTMENTS
November 30, 2007 (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 4.1% (2.8% OF TOTAL INVESTMENTS)
$ 220 Baltimore, Maryland, Pollution Control Revenue Bonds, No Opt. Call Caa1 $ 219,294
General Motors Corporation, Series 1993, 5.350%, 4/01/08
1,850 Baltimore, Maryland, Senior Lien Convention Center Hotel 9/16 at 100.00 AAA 1,951,399
Revenue Bonds, Series 2006A, 5.250%, 9/01/39 -
XLCA Insured
380 Baltimore, Maryland, Subordinate Lien Convention Center Hotel 9/16 at 100.00 Ba1 384,495
Revenue Bonds, Series 2006B, 5.875%, 9/01/39
700 Maryland Economic Development Corporation, Revenue Bonds, 12/16 at 100.00 N/R 625,016
Chesapeake Bay Hyatt Conference Center, Series 2006A,
5.000%, 12/01/31
------------------------------------------------------------------------------------------------------------------------------------
3,150 Total Consumer Discretionary 3,180,204
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 3.3% (2.2% OF TOTAL INVESTMENTS)
2,600 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 2,540,018
Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 13.5% (9.0% OF TOTAL INVESTMENTS)
225 Anne Arundel County, Maryland, Economic Development Revenue 9/12 at 102.00 A3 232,963
Bonds, Community College Project, Series 2002,
5.125%, 9/01/22
625 Frederick County, Maryland, Educational Facilities Revenue 9/16 at 100.00 BBB- 635,519
Bonds, Mount Saint Mary's College, Series 2006,
5.625%, 9/01/38
690 Hartford County, Maryland, Economic Development Revenue 4/14 at 100.00 A+ 709,403
Bonds, Battelle Memorial Institute, Series 2004,
5.250%, 4/01/34
625 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A- 632,106
Revenue Bonds, Goucher College, Series 2004,
5.125%, 7/01/34
1,000 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 AA 1,033,860
Revenue Bonds, Johns Hopkins University, Series 2002A,
5.000%, 7/01/32
665 Maryland Health and Higher Educational Facilities Authority, 6/17 at 100.00 Baa1 637,715
Revenue Bonds, Maryland Institute College of Art, Series 2007,
5.000%, 6/01/36
625 Maryland Industrial Development Financing Authority, Revenue 5/15 at 100.00 N/R 634,106
Bonds, Our Lady of Good Counsel High School, Series 2005A,
6.000%, 5/01/35
710 Montgomery County Revenue Authority, Maryland, Lease 5/15 at 100.00 A1 754,936
Revenue Bonds, Montgomery College Arts Center Project,
Series 2005A, 5.000%, 5/01/18
1,000 Morgan State University, Maryland, Student Tuition and Fee 7/13 at 100.00 AAA 1,038,170
Revenue Bonds, Academic Fees and Auxiliary Facilities,
Series 2003A, 5.000%, 7/01/32 - FGIC Insured
985 University of Maryland, Auxiliary Facility and Tuition Revenue 4/11 at 100.00 AA 1,004,769
Bonds, Series 2001B, 4.625%, 4/01/21
1,000 University of Maryland, Auxiliary Facility and Tuition Revenue 4/13 at 100.00 AA 1,054,700
Bonds, Series 2003A, 5.000%, 4/01/19
38
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS (continued)
$ 800 University of Maryland, Auxiliary Facility and Tuition Revenue 10/16 at 100.00 AA $ 860,552
Bonds, Series 2006A, 5.000%, 10/01/22
1,150 Westminster, Maryland, Educational Facilities Revenue Bonds, 11/16 at 100.00 BBB+ 1,117,145
McDaniel College, Series 2006, 5.000%, 11/01/31
------------------------------------------------------------------------------------------------------------------------------------
10,100 Total Education and Civic Organizations 10,345,944
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 23.6% (15.7% OF TOTAL INVESTMENTS)
700 Maryland Health and Higher Education Facilities Authority, 7/16 at 100.00 A 696,129
Revenue Bonds, University of Maryland Medical System,
Series 2006, 5.000%, 7/01/31
1,000 Maryland Health and Higher Educational Facilities Authority, 7/08 at 101.00 AAA 1,016,300
Revenue Bonds, Anne Arundel Medical Center, Series 1998,
5.125%, 7/01/33 - FSA Insured
775 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A2 794,298
Revenue Bonds, Calvert Memorial Hospital, Series 2004,
5.500%, 7/01/36
1,250 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 1,282,488
Revenue Bonds, Carroll County General Hospital, Series 2002,
5.800%, 7/01/32
1,000 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 Baa1 941,110
Revenue Bonds, Carroll Hospital Center, Series 2006,
5.000%, 7/01/40
870 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 AA 848,963
Revenue Bonds, Civista Medical Center, Series 2005,
5.000%, 7/01/37 - RAAI Insured
885 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 Baa1 857,140
Revenue Bonds, Doctors Community Hospital, Series 2007A,
5.000%, 7/01/29
700 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 680,827
Revenue Bonds, Frederick Memorial Hospital, Series 2002,
5.125%, 7/01/35
800 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A+ 794,144
Revenue Bonds, Greater Baltimore Medical Center, Series 2001,
5.000%, 7/01/34
1,000 Maryland Health and Higher Educational Facilities Authority, 5/11 at 100.00 A+ 1,020,480
Revenue Bonds, Johns Hopkins Hospital, Series 2001,
5.000%, 5/15/21
735 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 AA 810,485
Revenue Bonds, Johns Hopkins Hospital, Series 2004,
Inverse 1003, 7.209%, 7/01/33 (IF)
1,000 Maryland Health and Higher Educational Facilities Authority, 7/13 at 100.00 Baa3 1,004,480
Revenue Bonds, Kennedy Krieger Institute, Series 2003,
5.500%, 7/01/33
725 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A 730,604
Revenue Bonds, LifeBridge Health System, Series 2004A,
5.125%, 7/01/34
900 Maryland Health and Higher Educational Facilities Authority, 8/14 at 100.00 A3 919,224
Revenue Bonds, MedStar Health, Series 2004, 5.375%, 8/15/24
Maryland Health and Higher Educational Facilities Authority,
Revenue Bonds, Mercy Medical Center Project, Series 2007A:
525 5.000%, 7/01/37 7/17 at 100.00 BBB 482,181
340 5.500%, 7/01/42 7/17 at 100.00 BBB 333,282
650 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 Baa1 655,837
Revenue Bonds, Mercy Medical Center, Series 2001,
5.625%, 7/01/31
850 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 A 849,320
Revenue Bonds, Peninsula Regional Medical Center,
Series 2006, 5.000%, 7/01/36
1,845 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 A3 1,884,834
Revenue Bonds, Union Hospital of Cecil County, Series 2002,
5.625%, 7/01/32
39
NWI
Nuveen Maryland Dividend Advantage Municipal Fund 3 (continued)
Portfolio of INVESTMENTS November 30, (2007) (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE (continued)
$ 775 Maryland Health and Higher Educational Facilities Authority, 1/13 at 101.00 Baa2 $ 796,754
Revenue Refunding Bonds, Adventist Healthcare, Series 2003A,
5.750%, 1/01/25
900 Prince George's County, Maryland, Revenue Bonds, Dimensions 1/08 at 100.00 B3 723,780
Health Corporation, Series 1994, 5.300%, 7/01/24
------------------------------------------------------------------------------------------------------------------------------------
18,225 Total Health Care 18,122,660
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 14.6% (9.8% OF TOTAL INVESTMENTS)
980 Maryland Community Development Administration, Housing 7/12 at 100.00 Aa2 961,507
Revenue Bonds, Series 2002B, 4.950%, 7/01/32
(Alternative Minimum Tax)
1,250 Maryland Economic Development Corporation, Senior Lien 10/13 at 100.00 B2 1,199,313
Student Housing Revenue Bonds, University of Maryland -
Baltimore, Series 2003A, 5.625%, 10/01/23
Maryland Economic Development Corporation, Student Housing
Revenue Bonds, Sheppard Pratt University Village, Series 2001:
20 5.875%, 7/01/21 - ACA Insured 7/11 at 101.00 A 20,526
150 6.000%, 7/01/33 - ACA Insured 7/11 at 101.00 A 151,512
475 Maryland Economic Development Corporation, Student Housing 6/16 at 100.00 AAA 482,396
Revenue Refunding Bonds, University of Maryland College Park
Projects, Series 2006, 5.000%, 6/01/33 - CIFG Insured
Montgomery County Housing Opportunities Commission,
Maryland, Multifamily Housing Development Bonds, Series 2002B:
515 5.100%, 7/01/33 (Alternative Minimum Tax) 7/12 at 100.00 Aaa 514,609
3,000 5.200%, 7/01/44 (Alternative Minimum Tax) 7/12 at 100.00 Aaa 3,000,450
4,860 Prince George's County Housing Authority, Maryland, 11/12 at 100.00 AAA 4,918,999
GNMA Collateralized Mortgage Revenue Bonds, Fairview and
Hillside Projects, Series 2002A, 4.700%, 11/20/22
------------------------------------------------------------------------------------------------------------------------------------
11,250 Total Housing/Multifamily 11,249,312
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 6.0% (4.0% OF TOTAL INVESTMENTS)
350 Maryland Community Development Administration Department 3/17 at 100.00 Aa2 350,102
of Housing and Community Development, Residential Revenue
Bonds, Series 2007H, 5.000%, 9/01/27 (Alternative
Minimum Tax)
595 Maryland Community Development Administration, Department 9/15 at 100.00 Aa2 590,990
of Housing and Community Development, Residential Revenue
Bonds, Series 2006F, 4.900%, 9/01/26 (Alternative Minimum Tax)
1,200 Maryland Community Development Administration, Department 3/16 at 100.00 Aa2 1,188,276
of Housing and Community Development, Residential Revenue
Bonds, Series 2006I, 4.875%, 9/01/26 (Alternative Minimum Tax)
815 Maryland Community Development Administration, Department 9/16 at 100.00 Aa2 794,283
of Housing and Community Development, Residential Revenue
Bonds, Series 2006L, 4.900%, 9/01/31 (Alternative Minimum Tax)
620 Maryland Community Development Administration, Department 3/17 at 100.00 Aa2 591,703
of Housing and Community Development, Residential Revenue
Bonds, Series 2007D, 4.850%, 9/01/37 (Alternative Minimum Tax)
1,170 Maryland Community Development Administration, Residential 9/14 at 100.00 Aa2 1,125,423
Revenue Bonds, Series 2005E, 4.900%, 9/01/36 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
4,750 Total Housing/Single Family 4,640,777
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 2.0% (1.3% OF TOTAL INVESTMENTS)
510 Maryland Economic Development Corporation, Solid Waste 4/12 at 101.00 BBB 502,513
Disposal Revenue Bonds, Waste Management Inc., Series 2002,
4.600%, 4/01/16 (Alternative Minimum Tax)
1,000 Northeast Maryland Waste Disposal Authority, Baltimore, 1/09 at 101.00 BBB 1,006,370
Resource Recovery Revenue Bonds, RESCO Retrofit Project,
Series 1998, 4.750%, 1/01/12 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
1,510 Total Industrials 1,508,883
------------------------------------------------------------------------------------------------------------------------------------
40
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 3.4% (2.3% OF TOTAL INVESTMENTS)
$ 1,050 Baltimore County, Maryland, Revenue Bonds, Oak Crest Village, 1/17 at 100.00 BBB+ $ 992,355
Series 2007A, 5.000%, 1/01/37
400 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 N/R 386,172
Revenue Bonds, Edenwald, Series 2006A, 5.400%, 1/01/31
Maryland Health and Higher Educational Facilities Authority,
Revenue Bonds, King Farm Presbyterian Community, Series 2007A:
280 5.000%, 1/01/17 No Opt. Call N/R 269,016
520 5.250%, 1/01/27 1/17 at 100.00 N/R 475,727
540 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 BBB+ 493,225
Revenue Bonds, Mercy Ridge Retirement Community,
Series 2007, 4.750%, 7/01/34
------------------------------------------------------------------------------------------------------------------------------------
2,790 Total Long-Term Care 2,616,495
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 21.4% (14.2% OF TOTAL INVESTMENTS)
1,000 Annapolis, Maryland, General Obligation Public Improvement 4/12 at 101.00 AA 1,036,930
Refunding Bonds, Series 2002, 4.375%, 4/01/17
Anne Arundel County, Maryland, General Obligation Bonds,
Series 2006:
845 5.000%, 3/01/21 3/16 at 100.00 AAA 909,693
650 5.000%, 3/01/21 3/16 at 100.00 AAA 699,764
380 Carroll County, Maryland, Consolidated Public Improvement 12/15 at 100.00 AA 419,068
Bonds, Series 2005A, 5.000%, 12/01/16
1,260 Charles County, Maryland, Consolidated General Obligation 1/12 at 101.00 AA 1,312,794
Public Improvement Bonds, Series 2002, 4.400%, 1/15/16
500 Frederick County, Maryland, General Obligation Public Facilities No Opt. Call AA 554,585
Bonds, Series 2006, 5.000%, 11/01/20
Frederick, Maryland, General Obligation Bonds, Series 2005:
710 5.000%, 8/01/16 - MBIA Insured 8/15 at 100.00 AAA 778,309
535 5.000%, 8/01/17 - MBIA Insured 8/15 at 100.00 AAA 585,306
1,000 Maryland National Capital Park Planning Commission, 1/14 at 100.00 AA+ 1,078,580
Prince George's County, General Obligation Bonds, Park
Acquisition and Development, Series 2004EE-2,
5.000%, 1/15/17
1,850 Montgomery County, Maryland, Consolidated General Obligation No Opt. Call AAA 2,043,159
Public Improvement Bonds, Series 2005A, 5.000%, 7/01/15
1,440 Montgomery County, Maryland, Consolidated General Obligation No Opt. Call AAA 1,594,973
Public Improvement Bonds, Series 2006, 5.000%, 5/01/16
1,000 Prince George's County, Maryland, General Obligation 10/13 at 100.00 AA+ 1,071,970
Consolidated Public Improvement Bonds, Series 2003A,
5.000%, 10/01/17
1,000 Prince George's County, Maryland, General Obligation No Opt. Call AA+ 1,067,700
Consolidated Public Improvement Bonds, Series 2004C,
5.000%, 12/01/11
1,000 St. Mary's County, Maryland, General Obligation Hospital No Opt. Call AA 1,078,150
Bonds, Series 2002, 5.000%, 10/01/12
1,000 Washington Suburban Sanitary District, Montgomery and 6/15 at 100.00 AAA 1,097,330
Prince George's Counties, Maryland, Sewerage Disposal Bonds,
Series 2005, 5.000%, 6/01/16
1,000 Washington Suburban Sanitary District, Montgomery and 6/15 at 100.00 AAA 1,097,330
Prince George's Counties, Maryland, Water Supply Bonds,
Series 2005, 5.000%, 6/01/16
------------------------------------------------------------------------------------------------------------------------------------
15,170 Total Tax Obligation/General 16,425,641
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 31.0% (20.6% OF TOTAL INVESTMENTS)
750 Annapolis, Maryland, Special Obligation Bonds, Park Place 1/15 at 101.00 N/R 702,090
Project, Series 2005A, 5.350%, 7/01/34
1,000 Baltimore Board of School Commissioners, Maryland, Revenue 5/13 at 100.00 AA+ 1,074,460
Bonds, City Public School System, Series 2003A,
5.000%, 5/01/15
41
NWI
Nuveen Maryland Dividend Advantage Municipal Fund 3 (continued)
Portfolio of INVESTMENTS November 30, (2007) (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 135 Frederick County, Maryland, Lake Linganore Village Community 7/10 at 102.00 AA $ 140,395
Development Special Obligation Bonds, Series 2001A,
5.600%, 7/01/20 - RAAI Insured
450 Hyattsville, Maryland, Special Obligation Bonds, University 7/14 at 102.00 N/R 441,266
Town Center Project, Series 2004, 5.750%, 7/01/34
5,000 Maryland Department of Transportation, Consolidated No Opt. Call AAA 5,690,849
Transportation Revenue Bonds, Series 2002, 5.500%, 2/01/16
2,200 Maryland Economic Development Corporation, Lease Revenue 6/12 at 100.50 AA+ 2,258,740
Bonds, Department of Transportation Headquarters Building,
Series 2002, 4.750%, 6/01/22
450 Maryland Economic Development Corporation, Lease Revenue 9/12 at 100.00 AA+ 483,030
Bonds, Montgomery County Town Square Parking Garage,
Series 2002A, 5.000%, 9/15/13
2,935 Maryland Economic Development Corporation, Lease Revenue 9/12 at 100.00 AA+ 3,158,264
Bonds, Montgomery County Wayne Avenue Parking Project,
Series 2002A, 5.250%, 9/15/16
Maryland Stadium Authority, Lease Revenue Bonds, Montgomery
County Conference Center Facilities, Series 2003:
1,465 5.000%, 6/15/21 6/13 at 100.00 AA+ 1,547,963
1,620 5.000%, 6/15/23 6/13 at 100.00 AA+ 1,694,860
460 Prince George's County, Maryland, Special Obligation Bonds, 7/15 at 100.00 N/R 433,173
National Harbor Project, Series 2005, 5.200%, 7/01/34
575 Prince George's County, Maryland, Special Tax District Bonds, 7/13 at 100.00 N/R 521,824
Victoria Falls Project, Series 2005, 5.250%, 7/01/35
1,200 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call AAA 1,296,120
Revenue Bonds, Series 2007N, 5.250%, 7/01/31 -
AMBAC Insured
Puerto Rico Public Buildings Authority, Guaranteed Government
Facilities Revenue Bonds, Series 2002G:
1,000 5.250%, 7/01/17 7/12 at 100.00 BBB- 1,034,490
1,205 5.250%, 7/01/20 7/12 at 100.00 BBB- 1,235,752
1,275 5.250%, 7/01/21 7/12 at 100.00 BBB- 1,304,363
700 Puerto Rico, Highway Revenue Bonds, Highway and No Opt. Call AAA 788,606
Transportation Authority, Series 2003AA, 5.500%, 7/01/19 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
22,420 Total Tax Obligation/Limited 23,806,245
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 18.6% (12.4% OF TOTAL INVESTMENTS) (4)
10 Anne Arundel County, Maryland, General Obligation Bonds, 5/09 at 101.00 AAA 10,345
Consolidated General Improvements, Series 1999,
5.000%, 5/15/19 (Pre-refunded 5/15/09)
Frederick County, Maryland, Educational Facilities Revenue
Bonds, Mount St. Mary's College, Series 2001A:
100 5.750%, 9/01/25 (Pre-refunded 3/01/10) 3/10 at 101.00 BBB- (4) 106,167
100 5.800%, 9/01/30 (Pre-refunded 3/01/10) 3/10 at 101.00 BBB- (4) 106,274
100 Frederick County, Maryland, General Obligation Public 7/09 at 101.00 AAA 104,038
Facilities Bonds, Series 1999, 5.250%, 7/01/17
(Pre-refunded 7/01/09)
110 Frederick County, Maryland, Lake Linganore Village Community 7/10 at 102.00 AA (4) 118,369
Development Special Obligation Bonds, Series 2001A,
5.600%, 7/01/20 (Pre-refunded 7/01/10) - RAAI Insured
280 Maryland Health and Higher Educational Facilities Authority, 4/11 at 101.00 N/R (4) 310,008
Revenue Bonds, Collington Episcopal Life Care Community Inc.,
Series 2001A, 6.750%, 4/01/23 (Pre-refunded 4/01/11)
285 Maryland Health and Higher Educational Facilities Authority, No Opt. Call AAA 309,177
Revenue Bonds, Helix Health, Series 1997, 5.000%, 7/01/17 -
AMBAC Insured (ETM)
42
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (4) (continued)
$ 935 Maryland Transportation Authority, Revenue Refunding Bonds, No Opt. Call AAA $ 1,074,352
Transportation Facilities Projects, First Series 1978,
6.800%, 7/01/16 (ETM)
3,025 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/10 at 101.00 AAA 3,206,681
Series 2000HH, 5.250%, 7/01/29 (Pre-refunded 7/01/10) -
FSA Insured
3,500 Puerto Rico Infrastructure Financing Authority, Special Obligation 10/10 at 101.00 AAA 3,701,914
Bonds, Series 2000A, 5.500%, 10/01/40 (ETM)
1,000 Puerto Rico Public Finance Corporation, Commonwealth No Opt. Call AAA 1,109,570
Appropriation Bonds, Series 1998A, 5.125%, 6/01/24 -
AMBAC Insured (ETM)
Puerto Rico Public Finance Corporation, Commonwealth
Appropriation Bonds, Series 2002E:
700 5.500%, 8/01/29 (Pre-refunded 2/01/12) 2/12 at 100.00 Aaa 758,219
235 5.500%, 8/01/29 (Pre-refunded 2/01/12) 2/12 at 100.00 BBB- (4) 255,116
880 Puerto Rico, General Obligation and Public Improvement Bonds, 7/11 at 100.00 AAA 937,402
Series 2001, 5.125%, 7/01/30 (Pre-refunded 7/01/11) -
FSA Insured
2,000 University of Maryland, Auxiliary Facility and Tuition Revenue 4/12 at 100.00 AA (4) 2,150,860
Bonds, Series 2002A, 5.125%, 4/01/22 (Pre-refunded 4/01/12)
25 Washington Suburban Sanitary District, Montgomery and 6/11 at 101.00 AAA 26,682
Prince George's Counties, Maryland, General Obligation
Construction Bonds, Second Series 2001, 5.000%, 6/01/17
(Pre-refunded 6/01/11)
------------------------------------------------------------------------------------------------------------------------------------
13,285 Total U.S. Guaranteed 14,285,174
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 1.7% (1.0% OF TOTAL INVESTMENTS)
1,250 Maryland Energy Financing Administration, Revenue Bonds, 2/08 at 100.00 N/R 1,253,050
AES Warrior Run Project, Series 1995, 7.400%, 9/01/19
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 5.8% (3.9% OF TOTAL INVESTMENTS)
2,570 Baltimore, Maryland, Revenue Refunding Bonds, Wastewater 7/12 at 100.00 AAA 2,664,011
Projects, Series 2002A, 5.125%, 7/01/42 - FGIC Insured
600 Baltimore, Maryland, Wastewater Project Revenue Bonds, 7/16 at 100.00 AAA 628,770
Series 2006C, 5.000%, 7/01/31 - AMBAC Insured
660 Baltimore, Maryland, Wastewater Project Revenue Bonds, 7/17 at 100.00 AAA 691,990
Series 2007D, 5.000%, 7/01/32 - AMBAC Insured
430 Maryland Water Quality Financing Administration, Revolving No Opt. Call AAA 475,442
Loan Fund Revenue Bonds, Series 2005A, 5.000%, 9/01/15
------------------------------------------------------------------------------------------------------------------------------------
4,260 Total Water and Sewer 4,460,213
------------------------------------------------------------------------------------------------------------------------------------
$ 110,760 Total Long-Term Investments (cost $113,335,247) - 149.0% 114,434,616
=============-----------------------------------------------------------------------------------------------------------------------
43
NWI
Nuveen Maryland Dividend Advantage Municipal Fund 3 (continued)
Portfolio of INVESTMENTS November 30, (2007) (Unaudited)
PRINCIPAL
AMOUNT (000) DESCRIPTION (1) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 1.2% (0.8% OF TOTAL INVESTMENTS)
$ 875 Maryland Health and Higher Education Facilities Authority, Aa3 $ 875,000
Revenue Bonds, Kennedy Krieger Institute Project, Series 2006,
Variable Rate Demand Obligations, 6.000%, 7/01/36 -
RAAI Insured (5)
=============-----------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (cost $875,000) 875,000
--------------------------------------------------------------------------------------------------------------------
Total Investments (cost $114,210,247) - 150.2% 115,309,616
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.6% 480,124
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (50.8)% (39,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 76,789,740
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares unless
otherwise noted.
(2) Optional Call Provisions: 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: Using the higher of Standard & Poor's Group
("Standard & Poor's") or Moody's Investor Service, Inc.
("Moody's") rating. Ratings below BBB by Standard & Poor's
or Baa by Moody's are considered to be below investment
grade.
The AAA ratings shown in the Portfolio of Investments
reflects the AAA ratings on certain bonds insured by AMBAC,
FGIC or MBIA as of November 30, 2007. As explained earlier
in the Portfolio Manager's Comments section of this report,
one rating agency has reduced the rating for AMBAC to AA,
and one or more rating agencies have placed each of these
insurers on "negative credit watch", which may presage one
or more rating reductions for such insurer or insurers in
the future. If one or more insurers' ratings are reduced
below AAA by these rating agencies, it would likely reduce
the effective rating of many of the bonds insured by that
insurer or insurers.
(4) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which ensure
the timely payment of principal and interest. Such
investments are normally considered to be equivalent to AAA
rated securities.
(5) Investment has a maturity of more than one year, but has
variable rate and demand features which qualify it as a
short-term investment. The rate disclosed is that in effect
at the end of the reporting period. This rate changes
periodically based on market conditions or a specified
market index.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
See accompanying notes to financial statements.
44
NPV
Nuveen Virginia Premium Income Municipal Fund
Portfolio of INVESTMENTS
November 30, 2007 (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 2.9% (2.0% OF TOTAL INVESTMENTS)
$ 4,640 Tobacco Settlement Financing Corporation of Virginia, 6/17 at 100.00 BBB $ 3,854,586
Tobacco Settlement Asset Backed Bonds, Series 2007B1,
5.000%, 6/01/47
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 4.7% (3.2% OF TOTAL INVESTMENTS)
1,000 Prince William County Industrial Development Authority, Virginia, 10/13 at 101.00 A3 1,029,740
Educational Facilities Revenue Bonds, Catholic Diocese of
Arlington, Series 2003, 5.500%, 10/01/33
500 Prince William County Park Authority, Virginia, Park Facilities 10/09 at 101.00 A3 520,065
Revenue Refunding and Improvement Bonds, Series 1999,
6.000%, 10/15/28
700 Puerto Rico Industrial, Tourist, Educational, Medical and 12/12 at 101.00 BBB- 712,922
Environmental Control Facilities Financing Authority, Higher
Education Revenue Refunding Bonds, Ana G. Mendez University
System, Series 2002, 5.375%, 12/01/21
2,120 Virginia College Building Authority, Educational Facilities 9/11 at 100.00 AA+ 2,176,328
Revenue Bonds, Public Higher Education Financing Program,
Series 2001A, 5.000%, 9/01/26
1,635 Virginia Commonwealth University, Revenue Bonds, 5/14 at 101.00 AAA 1,777,817
Series 2004A, 5.000%, 5/01/17 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
5,955 Total Education and Civic Organizations 6,216,872
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 24.5% (16.7% OF TOTAL INVESTMENTS)
2,000 Albemarle County Industrial Development Authority, Virginia, 10/12 at 100.00 A2 2,019,820
Hospital Revenue Bonds, Martha Jefferson Hospital,
Series 2002, 5.250%, 10/01/35
650 Charlotte County Industrial Development Authority, Virginia, 9/17 at 100.00 A- 654,440
Hospital Revenue Bonds, Halifax Regional Hospital Incorporated,
Series 2007, 5.000%, 9/01/27
4,850 Fairfax County Industrial Development Authority, Virginia, No Opt. Call AA+ 5,174,366
Hospital Revenue Refunding Bonds, Inova Health System,
Series 1993A, 5.000%, 8/15/23
1,000 Fredericksburg Economic Development Authority, Virginia, No Opt. Call A3 1,069,860
Healthcare Revenue Bonds, Medicorp Health System,
Series 2007, 5.250%, 6/15/23
1,250 Fredericksburg Industrial Development Authority, Virginia, 6/12 at 100.00 A3 1,254,238
Revenue Bonds, MediCorp Health System, Series 2002B,
5.125%, 6/15/33
1,000 Hanover County Industrial Development Authority, Virginia, No Opt. Call AAA 1,163,880
Hospital Revenue Bonds, Memorial Regional Medical Center,
Series 1995, 6.375%, 8/15/18 - MBIA Insured
2,300 Harrisonburg Industrial Development Authority, Virginia, 8/16 at 100.00 AAA 2,404,719
Hospital Facilities Revenue Bonds, Rockingham Memorial
Hospital, Series 2006, 5.000%, 8/15/31 - AMBAC Insured
1,500 Henrico County Economic Development Authority, Virginia, 11/12 at 100.00 A- 1,540,905
Revenue Bonds, Bon Secours Health System Inc.,
Series 2002A, 5.600%, 11/15/30
1,500 Henrico County Industrial Development Authority, Virginia, No Opt. Call AAA 1,791,795
Healthcare Revenue Bonds, Bon Secours Health System,
Series 1996, 6.250%, 8/15/20 - MBIA Insured
1,500 Manassas Industrial Development Authority, Virginia, Hospital 4/13 at 100.00 A2 1,517,625
Revenue Bonds, Prince William Hospital, Series 2002,
5.250%, 4/01/33
4,750 Medical College of Virginia Hospital Authority, General Revenue 7/08 at 102.00 AAA 4,841,864
Bonds, Series 1998, 5.125%, 7/01/23 - MBIA Insured
3,000 Roanoke Industrial Development Authority, Virginia, Hospital 7/12 at 100.00 AAA 3,179,640
Revenue Bonds, Carilion Health System, Series 2002A,
5.500%, 7/01/19 - MBIA Insured
45
NPV
Nuveen Virginia Premium Income Municipal Fund (continued)
Portfolio of INVESTMENTS November 30, (2007) (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE (continued)
Stafford County Economic Development Authority, Virginia,
Hospital Facilities Revenue Bonds, MediCorp Health System,
Series 2006:
$ 2,000 5.250%, 6/15/26 6/16 at 100.00 A3 $ 2,042,740
1,010 5.250%, 6/15/31 6/16 at 100.00 A3 1,021,060
1,210 Virginia Small Business Financing Authority, Wellmont Health 9/17 at 100.00 BBB+ 1,191,100
System Project Revenue Bonds, Series 2007A, 5.250%, 9/01/37
1,425 Winchester Industrial Development Authority, Virginia, Hospital 1/17 at 100.00 AA- 1,452,930
Revenue Bonds, Winchester Medical Center, Series 2007,
5.125%, 1/01/31
------------------------------------------------------------------------------------------------------------------------------------
30,945 Total Health Care 32,320,982
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 3.4% (2.4% OF TOTAL INVESTMENTS)
1,405 Arlington County Industrial Development Authority, Virginia, 5/10 at 100.00 Aaa 1,461,818
Multifamily Housing Revenue Bonds, Patrick Henry Apartments,
Series 2000, 6.050%, 11/01/32 (Mandatory put 11/01/20)
(Alternative Minimum Tax)
Danville Industrial Development Authority, Virginia, Student
Housing Revenue Bonds, Collegiate Housing Foundation, Averett
College, Series 1999A:
500 6.875%, 6/01/20 6/09 at 102.00 N/R 519,520
1,500 7.000%, 6/01/30 6/09 at 102.00 N/R 1,554,510
1,000 Lynchburg Redevelopment and Housing Authority, Virginia, 4/10 at 102.00 AAA 1,020,420
Vistas GNMA Mortgage-Backed Revenue Bonds, Series 2000A,
6.200%, 1/20/40 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
4,405 Total Housing/Multifamily 4,556,268
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 8.0% (5.4% OF TOTAL INVESTMENTS)
335 Puerto Rico Housing Finance Authority, Mortgage-Backed 6/13 at 100.00 AAA 344,300
Securities Program Home Mortgage Revenue Bonds,
Series 2003A, 4.875%, 6/01/34 (Alternative Minimum Tax)
1,000 Virginia Housing Development Authority, Commonwealth 7/11 at 100.00 AAA 1,023,330
Mortgage Bonds, Series 2001H-1, 5.350%, 7/01/31 -
MBIA Insured
1,500 Virginia Housing Development Authority, Commonwealth 1/15 at 100.00 AAA 1,433,145
Mortgage Bonds, Series 2005C-2, 4.750%, 10/01/32
(Alternative Minimum Tax)
2,740 Virginia Housing Development Authority, Commonwealth 7/15 at 100.00 AAA 2,672,267
Mortgage Bonds, Series 2006 D1, 4.900%, 1/01/33
(Alternative Minimum Tax)
1,340 Virginia Housing Development Authority, Commonwealth 7/15 at 100.00 AAA 1,305,669
Mortgage Bonds, Series 2006, 4.800%, 7/01/29
(Alternative Minimum Tax)
3,900 Virginia Housing Development Authority, Commonwealth 7/16 at 100.00 AAA 3,725,553
Mortgage Bonds, Series 2007B, 4.750%, 7/01/32
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
10,815 Total Housing/Single Family 10,504,264
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 1.5% (1.0% OF TOTAL INVESTMENTS)
2,000 Charles County Industrial Development Authority, Virginia, No Opt. Call BBB 2,010,260
Solid Waste Disposal Facility Revenue Refunding Bonds,
USA Waste of Virginia Inc., Series 1999, 4.875%, 2/01/09
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 4.7% (3.2% OF TOTAL INVESTMENTS)
2,765 Fairfax County Economic Development Authority, Virginia, 10/17 at 100.00 N/R 2,596,307
Residential Care Facilities Mortgage Revenue Bonds, Goodwin
House, Inc., Series 2007A, 5.125%, 10/01/37
800 Fairfax County Economic Development Authority, Virginia, 10/16 at 100.00 BBB 731,816
Retirement Center Revenue Bonds,
Greenspring Village, Series 2006A, 4.875%, 10/01/36
1,495 Henrico County Economic Development Authority, Virginia, GNMA 7/09 at 102.00 AAA 1,568,419
Mortgage-Backed Securities Program Assisted Living Revenue
Bonds, Beth Sholom, Series 1999A, 5.900%, 7/20/29
46
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE (continued)
Henrico County Economic Development Authority, Virginia,
Residential Care Facility Revenue Bonds, Westminster Canterbury
of Richmond, Series 2006:
$ 100 5.000%, 10/01/27 10/11 at 103.00 BBB- $ 97,355
1,345 5.000%, 10/01/35 No Opt. Call BBB- 1,278,086
------------------------------------------------------------------------------------------------------------------------------------
6,505 Total Long-Term Care 6,271,983
------------------------------------------------------------------------------------------------------------------------------------
MATERIALS - 1.1% (0.8% OF TOTAL INVESTMENTS)
500 Bedford County Industrial Development Authority, Virginia, 2/08 at 102.00 B2 457,855
Industrial Development Revenue Refunding Bonds, Nekoosa
Packaging Corporation, Series 1998, 5.600%, 12/01/25
(Alternative Minimum Tax) (4)
1,000 Goochland County Industrial Development Authority, Virginia, 12/08 at 101.00 B2 943,940
Industrial Development Revenue Refunding Bonds, Nekoosa
Packaging Corporation Project, Series 1998, 5.650%, 12/01/25
(Alternative Minimum Tax) (4)
------------------------------------------------------------------------------------------------------------------------------------
1,500 Total Materials 1,401,795
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 18.5% (12.6% OF TOTAL INVESTMENTS)
Chesapeake, Virginia, General Obligation Water and Sewerage
Bonds, Series 2003B:
1,880 5.000%, 6/01/21 6/13 at 100.00 AA 1,969,676
2,060 5.000%, 6/01/23 6/13 at 100.00 AA 2,146,891
1,355 Harrisonburg, Virginia, General Obligation Bonds, Public Safety 7/12 at 101.00 AAA 1,434,403
and Steam Plant, Series 2002, 5.000%, 7/15/19 - FGIC Insured
1,390 Henrico County, Virginia, General Obligation Bonds, 7/15 at 100.00 AAA 1,526,957
Series 2005, 5.000%, 7/15/16
2,105 Loudoun County, Virginia, General Obligation Bonds, 12/16 at 100.00 AAA 2,247,235
Series 2006, 5.000%, 12/01/25
105 Loudoun County, Virginia, General Obligation Public 5/12 at 100.00 AAA 111,049
Improvement Bonds, Series 2002A, 5.250%, 5/01/22
1,435 Loudoun County, Virginia, General Obligation Public 6/15 at 100.00 AAA 1,547,561
Improvement Bonds, Series 2005B, 5.000%, 6/01/18
1,185 Lynchburg, Virginia, General Obligation Bonds, Series 2004, 6/14 at 100.00 AA 1,265,687
5.000%, 6/01/21
1,350 Newport News, Virginia, General Obligation Bonds, Series 2004C, 5/14 at 101.00 AA 1,471,244
5.000%, 5/01/16
1,280 Portsmouth, Virginia, General Obligation Bonds, Series 2005A, No Opt. Call AAA 1,407,130
5.000%, 4/01/15 - MBIA Insured
1,480 Richmond, Virginia, General Obligation Bonds, Series 2004A, 7/14 at 100.00 AAA 1,571,952
5.000%, 7/15/21 - FSA Insured
1,430 Roanoke, Virginia, General Obligation Public Improvement Bonds, 10/12 at 101.00 AA 1,538,680
Series 2002A, 5.000%, 10/01/17
1,135 Suffolk, Virginia, General Obligation Bonds, Series 2005, No Opt. Call Aa3 1,250,191
5.000%, 12/01/15
2,155 Virginia Beach, Virginia, General Obligation Bonds, Series 2003B, 5/13 at 100.00 AAA 2,312,164
5.000%, 5/01/15
1,100 Virginia Beach, Virginia, General Obligation Bonds, Series 2005, 1/16 at 100.00 AAA 1,187,098
5.000%, 1/15/20
1,425 Virginia Beach, Virginia, General Obligation Public Improvement 6/11 at 101.00 AAA 1,494,754
Bonds, Series 2001, 5.000%, 6/01/20
------------------------------------------------------------------------------------------------------------------------------------
22,870 Total Tax Obligation/General 24,482,672
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 29.8% (20.3% OF TOTAL INVESTMENTS)
Buena Vista Public Recreational Facilities Authority, Virginia,
Lease Revenue Bonds, Golf Course Project, Series 2005A:
335 5.250%, 7/15/25 - ACA Insured 7/15 at 100.00 A 321,768
260 5.500%, 7/15/35 - ACA Insured 7/15 at 100.00 A 246,397
1,340 Culpeper Industrial Development Authority, Virginia, Lease 1/15 at 100.00 AAA 1,414,732
Revenue Bonds, School Facilities Project, Series 2005,
5.000%, 1/01/20 - MBIA Insured
47
NPV
Nuveen Virginia Premium Income Municipal Fund (continued)
Portfolio of INVESTMENTS November 30, (2007) (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
Cumberland County, Virginia, Certificates of Participation,
Series 1997:
$ 1,075 6.200%, 7/15/12 No Opt. Call N/R $ 1,127,965
1,350 6.375%, 7/15/17 No Opt. Call N/R 1,506,425
1,000 Dinwiddie County Industrial Development Authority, Virginia, 2/14 at 100.00 AAA 1,073,920
Lease Revenue Bonds, Series 2004B, 5.125%, 2/15/16 -
MBIA Insured
1,000 Fairfax County Economic Development Authority, Virginia, 5/16 at 100.00 AA+ 1,080,910
Lease Revenue Bonds, Joint Public Uses Community Project,
Series 2006, 5.000%, 5/15/18
Fairfax County Economic Development Authority, Virginia, Lease
Revenue Bonds, Laurel Hill Public Facilities Projects, Series 2003:
2,260 5.000%, 6/01/14 6/13 at 101.00 AA+ 2,452,688
2,165 5.000%, 6/01/22 6/13 at 101.00 AA+ 2,279,074
1,660 Front Royal and Warren County Industrial Development Authority, 4/14 at 100.00 AAA 1,757,060
Virginia, Lease Revenue Bonds, Series 2004B,
5.000%, 4/01/18 - FSA Insured
1,270 James City County Economic Development Authority, Virginia, 7/15 at 100.00 AA 1,357,440
Revenue Bonds, County Government Projects, Series 2005,
5.000%, 7/15/19
1,930 Prince William County, Virginia, Certificates of Participation, 6/15 at 100.00 Aaa 2,060,603
County Facilities, Series 2005, 5.000%, 6/01/18 -
AMBAC Insured
1,185 Puerto Rico Highway and Transportation Authority, Highway 7/12 at 100.00 AAA 1,215,431
Revenue Bonds, Series 2002D, 5.000%, 7/01/32 -
FSA Insured
2,000 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call AAA 2,160,200
Revenue Bonds, Series 2007N, 5.250%, 7/01/31 -
AMBAC Insured
5,000 Puerto Rico Infrastructure Financing Authority, Special Tax No Opt. Call AAA 820,100
Revenue Bonds, Series 2005A, 0.000%, 7/01/43 -
AMBAC Insured
5,875 Puerto Rico Infrastructure Financing Authority, Special Tax No Opt. Call AAA 2,101,018
Revenue Bonds, Series 2005C, 0.000%, 7/01/28 -
AMBAC Insured
Puerto Rico Public Buildings Authority, Guaranteed Government
Facilities Revenue Refunding Bonds, Series 2002D:
265 5.250%, 7/01/27 7/12 at 100.00 BBB- 267,836
320 5.250%, 7/01/36 7/12 at 100.00 BBB- 321,472
1,110 Spotsylvania County Industrial Development Authority, Virginia, 8/13 at 100.00 AAA 1,126,095
Lease Revenue Bonds, School Facilities, Series 2003B,
4.375%, 8/01/20 - AMBAC Insured
1,600 Stafford County and Staunton Industrial Development Authority, 8/16 at 100.00 AAA 1,685,584
Virginia, Revenue Bonds, Virginia Municipal League and
Virginia Association of Counties Finance Program, Series 2006A,
5.000%, 8/01/23 - MBIA Insured
1,400 Virginia Beach Development Authority, Public Facilities 5/15 at 100.00 AA+ 1,481,508
Revenue Bonds, Series 2005A, 5.000%, 5/01/22
2,000 Virginia Public School Authority, School Financing Bonds, 1997 8/10 at 101.00 AA+ 2,080,700
Resolution, Series 2000B, 5.000%, 8/01/18
1,625 Virginia Public School Authority, School Financing Bonds, 1997 8/15 at 100.00 AA+ 1,770,974
Resolution, Series 2005C, 5.000%, 8/01/17
Virginia Resources Authority, Infrastructure Revenue Bonds,
Pooled Loan Bond Program, Series 2000B:
95 5.500%, 5/01/20 - FSA Insured 5/10 at 101.00 AAA 99,958
550 5.500%, 5/01/30 - FSA Insured 5/10 at 101.00 AAA 574,899
1,740 Virginia Resources Authority, Infrastructure Revenue Bonds, 5/11 at 101.00 AA 1,823,433
Pooled Loan Bond Program, Series 2002A, 5.000%, 5/01/19
48
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 2,815 Virginia Resources Authority, Infrastructure Revenue Bonds, 11/16 at 100.00 AAA $ 2,960,676
Pooled Loan Bond Program, Series 2006C, 5.000%, 11/01/36
2,000 Virginia Transportation Board, Transportation Revenue Bonds, 5/14 at 100.00 AA+ 2,175,660
U.S. Route 58 Corridor Development Program, Series 2004B,
5.000%, 5/15/15
------------------------------------------------------------------------------------------------------------------------------------
45,225 Total Tax Obligation/Limited 39,344,526
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 10.4% (7.1% OF TOTAL INVESTMENTS)
2,500 Metropolitan Washington D.C. Airports Authority, System Revenue 10/17 at 100.00 AAA 2,503,675
Bonds, Series 2007B, 5.000%, 10/01/35 - AMBAC Insured
(Alternative Minimum Tax)
4,000 Norfolk Airport Authority, Virginia, Airport Revenue Bonds, 7/11 at 100.00 AAA 4,069,479
Series 2001A, 5.125%, 7/01/31 - FGIC Insured
1,000 Norfolk, Virginia, Parking System Revenue Bonds, Series 2005A, 2/15 at 100.00 AAA 1,049,970
5.000%, 2/01/23 - MBIA Insured
2,500 Richmond Metropolitan Authority, Virginia, Revenue Refunding No Opt. Call AAA 2,800,575
Bonds, Expressway System, Series 2002, 5.250%, 7/15/22 -
FGIC Insured
1,260 Virginia Port Authority, Revenue Bonds, Port Authority Facilities, 7/13 at 100.00 AAA 1,266,338
Series 2006, 5.000%, 7/01/36 - FGIC Insured
(Alternative Minimum Tax)
2,000 Virginia Resources Authority, Airports Revolving Fund Revenue 2/11 at 100.00 Aa2 2,076,640
Bonds, Series 2001A, 5.250%, 8/01/23
------------------------------------------------------------------------------------------------------------------------------------
13,260 Total Transportation 13,766,677
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 20.0% (13.7% OF TOTAL INVESTMENTS) (5)
3,500 Alexandria Industrial Development Authority, Virginia, Fixed Rate 10/10 at 101.00 AAA 3,783,605
Revenue Bonds, Institute for Defense Analyses, Series 2000A,
5.900%, 10/01/30 (Pre-refunded 10/01/10) - AMBAC Insured
750 Bristol, Virginia, General Obligation Utility System Revenue Bonds, No Opt. Call AAA 827,595
Series 2002, 5.000%, 11/01/24 - FSA Insured (ETM)
925 Fairfax County Water Authority, Virginia, Water Revenue Refunding 4/12 at 100.00 AAA 1,004,837
Bonds, Series 2002, 5.375%, 4/01/19 (Pre-refunded 4/01/12)
600 Greater Richmond Convention Center Authority, Virginia, Hotel Tax 6/10 at 101.00 AAA 647,196
Revenue Bonds, Convention Center Expansion Project,
Series 2000, 6.125%, 6/15/25 (Pre-refunded 6/15/10)
Loudoun County Industrial Development Authority, Virginia,
Hospital Revenue Bonds, Loudoun Hospital Center, Series 2002A:
375 6.000%, 6/01/22 (Pre-refunded 6/01/12) 6/12 at 101.00 BBB (5) 420,698
800 6.100%, 6/01/32 (Pre-refunded 6/01/12) 6/12 at 101.00 BBB (5) 900,816
Newport News, Virginia, General Obligation Bonds, General
Improvement and Water Projects, Series 2002A:
2,770 5.000%, 7/01/19 (Pre-refunded 7/01/13) 7/13 at 100.00 AA (5) 2,998,802
1,000 5.000%, 7/01/20 (Pre-refunded 7/01/13) 7/13 at 100.00 AA (5) 1,082,600
815 Puerto Rico Highway and Transportation Authority, Highway 7/12 at 100.00 Aaa 876,907
Revenue Bonds, Series 2002D, 5.000%, 7/01/32
(Pre-refunded 7/01/12) - FSA Insured
2,500 Puerto Rico Infrastructure Financing Authority, Special Obligation 10/10 at 101.00 AAA 2,644,225
Bonds, Series 2000A, 5.500%, 10/01/40 (ETM)
Puerto Rico Public Buildings Authority, Guaranteed Government
Facilities Revenue Refunding Bonds, Series 2002D:
735 5.250%, 7/01/27 (Pre-refunded 7/01/12) 7/12 at 100.00 BBB- (5) 794,050
880 5.250%, 7/01/36 (Pre-refunded 7/01/12) 7/12 at 100.00 BBB- (5) 950,699
49
NPV
Nuveen Virginia Premium Income Municipal Fund (continued)
Portfolio of INVESTMENTS November 30, (2007) (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (5) (continued)
$ 845 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA $ 881,969
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20
(Pre-refunded 7/01/10)
475 Rockbridge County Industrial Development Authority, Virginia, 7/11 at 105.00 B2 (5) 540,227
Horse Center Revenue Refunding Bonds, Series 2001C,
6.850%, 7/15/21 (Pre-refunded 7/15/11)
Tobacco Settlement Financing Corporation of Virginia, Tobacco
Settlement Asset-Backed Bonds, Series 2005:
1,575 5.250%, 6/01/19 (Pre-refunded 6/01/12) 6/12 at 100.00 AAA 1,655,924
3,850 5.500%, 6/01/26 (Pre-refunded 6/01/15) 6/15 at 100.00 AAA 4,274,308
2,000 Virgin Islands Public Finance Authority, Gross Receipts Taxes 10/10 at 101.00 BBB+ (5) 2,194,900
Loan Note, Series 1999A, 6.500%, 10/01/24
(Pre-refunded 10/01/10)
------------------------------------------------------------------------------------------------------------------------------------
24,395 Total U.S. Guaranteed 26,479,358
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 7.2% (4.9% OF TOTAL INVESTMENTS)
Bristol, Virginia, Utility System Revenue Refunding Bonds,
Series 2003:
1,705 5.250%, 7/15/14 - MBIA Insured 7/13 at 100.00 AAA 1,861,911
1,800 5.250%, 7/15/15 - MBIA Insured 7/13 at 100.00 AAA 1,959,498
2,775 5.250%, 7/15/23 - MBIA Insured 7/13 at 100.00 AAA 2,955,236
2,500 Mecklenburg County Industrial Development Authority, Virginia, 10/12 at 100.00 Baa1 2,697,250
Revenue Bonds, UAE Mecklenburg Cogeneration LP,
Series 2002, 6.500%, 10/15/17 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
8,780 Total Utilities 9,473,895
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 9.9% (6.7% OF TOTAL INVESTMENTS)
Fairfax County Water Authority, Virginia, Water Revenue Refunding
Bonds, Series 2002:
105 5.375%, 4/01/19 4/12 at 100.00 AAA 112,437
800 5.000%, 4/01/27 4/12 at 100.00 AAA 828,808
1,770 Henrico County, Virginia, Water and Sewer System Revenue 5/09 at 102.00 AA+ 1,823,702
Refunding Bonds, Series 1999, 5.000%, 5/01/28
1,000 Loudoun County Sanitation Authority, Virginia, Water and 1/15 at 100.00 AA+ 1,049,500
Sewerage System Revenue Bonds, Series 2004,
5.000%, 1/01/26
500 Newport News, Virginia, Water Revenue Bonds, Series 2007, 6/17 at 100.00 AAA 496,555
4.500%, 6/01/34 - FSA Insured
Norfolk, Virginia, Water Revenue Refunding Bonds, Series 2001:
1,310 5.000%, 11/01/21 - FGIC Insured 11/11 at 100.00 AAA 1,368,400
1,380 5.000%, 11/01/22 - FGIC Insured 11/11 at 100.00 AAA 1,432,605
2,250 Virginia Beach, Virginia, Storm Water Utility Revenue Bonds, 9/10 at 101.00 Aa3 2,400,795
Series 2000, 6.000%, 9/01/24
1,800 Virginia Beach, Virginia, Water and Sewer System Revenue 10/15 at 100.00 AA 1,881,144
Bonds, Series 2005, 5.000%, 10/01/30
1,660 Virginia Resources Authority, Clean Water State Revolving Fund 10/17 at 100.00 AAA 1,669,545
Revenue Bonds, Series 2007, Residuals 1006,
5.697%, 10/01/29 (IF)
------------------------------------------------------------------------------------------------------------------------------------
12,575 Total Water and Sewer 13,063,491
------------------------------------------------------------------------------------------------------------------------------------
$ 193,870 Total Investments (cost $188,786,243) - 146.6% 193,747,629
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.7% 2,171,175
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (48.3)% (63,800,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 132,118,804
====================================================================================================================
50
FORWARD SWAPS OUTSTANDING AT NOVEMBER 30, 2007:
FUND FIXED RATE UNREALIZED
NOTIONAL PAY/RECEIVE FLOATING RATE FIXED RATE PAYMENT EFFECTIVE TERMINATION APPRECIATION
COUNTERPARTY AMOUNT FLOATING RATE INDEX (ANNUALIZED) FREQUENCY DATE (6) DATE (DEPRECIATION)
------------------------------------------------------------------------------------------------------------------------------------
JPMorgan $650,000 Pay 3-Month USD-LIBOR 5.388% Semi-Annually 4/25/08 4/25/35 $ 44,924
Royal Bank
of Canada 900,000 Pay SIFM 4.335 Quarterly 8/06/08 8/06/37 77,210
------------------------------------------------------------------------------------------------------------------------------------
$122,134
====================================================================================================================================
USD-LIBOR (United States Dollar-London Inter-Bank Offered Rate)
SIFM-The daily arithmetic average of the weekly SIFM (Securities Industry and
Financial Markets) Municipal Swap Index.
The Fund may 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.
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares unless
otherwise noted.
(2) Optional Call Provisions: 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: Using the higher of Standard & Poor's Group
("Standard & Poor's") or Moody's Investor Service, Inc.
("Moody's") rating. Ratings below BBB by Standard & Poor's
or Baa by Moody's are considered to be below investment
grade.
The AAA ratings shown in the Portfolio of Investments
reflects the AAA ratings on certain bonds insured by AMBAC,
FGIC or MBIA as of November 30, 2007. As explained earlier
in the Portfolio Manager's Comments section of this report,
one rating agency has reduced the rating for AMBAC to AA,
and one or more rating agencies have placed each of these
insurers on "negative credit watch", which may presage one
or more rating reductions for such insurer or insurers in
the future. If one or more insurers' ratings are reduced
below AAA by these rating agencies, it would likely reduce
the effective rating of many of the bonds insured by that
insurer or insurers.
(4) The issuer has received a formal adverse determination from
the Internal Revenue Service (the "IRS") regarding the
tax-exempt status of the bonds' coupon payments. The Fund
will continue to treat coupon payments as tax exempt income
until such time that it is formally determined that the
interest on the bonds should be treated as taxable.
(5) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which ensure
the timely payment of principal and interest. Such
investments are normally considered to be equivalent to AAA
rated securities.
(6) Effective date represents the date on which both the Fund
and counterparty commence interest payment accruals on each
forward swap contract.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
See accompanying notes to financial statements.
51
NGB
Nuveen Virginia Dividend Advantage Municipal Fund
Portfolio of INVESTMENTS
November 30, 2007 (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 5.9% (3.9% OF TOTAL INVESTMENTS)
Guam Economic Development Authority, Tobacco Settlement
Asset-Backed Bonds, Series 2001A:
$ 30 5.000%, 5/15/22 5/11 at 100.00 Baa3 $ 29,544
850 5.400%, 5/15/31 5/11 at 100.00 Baa3 810,560
1,660 Tobacco Settlement Financing Corporation of Virginia, Tobacco 6/17 at 100.00 BBB 1,379,012
Settlement Asset Backed Bonds, Series 2007B1,
5.000%, 6/01/47
715 Tobacco Settlement Financing Corporation of Virginia, Tobacco 6/17 at 100.00 BBB 477,820
Settlement Asset-Backed Bonds, Series 2007B2,
0.000%, 6/01/46
------------------------------------------------------------------------------------------------------------------------------------
3,255 Total Consumer Staples 2,696,936
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 6.3% (4.2% OF TOTAL INVESTMENTS)
500 Danville Industrial Development Authority, Virginia, Educational 3/11 at 102.00 N/R 505,695
Facilities Revenue Bonds, Averett University, Series 2001,
6.000%, 3/15/22
500 Prince William County Industrial Development Authority, 10/13 at 101.00 A3 514,870
Virginia, Educational Facilities Revenue Bonds, Catholic
Diocese of Arlington, Series 2003, 5.500%, 10/01/33
850 Prince William County Park Authority, Virginia, Park Facilities 10/09 at 101.00 A3 884,111
Revenue Refunding and Improvement Bonds, Series 1999,
6.000%, 10/15/28
Puerto Rico Industrial, Tourist, Educational, Medical and
Environmental Control Facilities Financing Authority, Higher
Education Revenue Bonds, Ana G. Mendez University System,
Series 1999:
160 5.375%, 2/01/19 2/09 at 101.00 BBB- 162,218
320 5.375%, 2/01/29 2/09 at 101.00 BBB- 320,067
500 Virginia College Building Authority, Educational Facilities 7/08 at 101.00 AA 504,370
Revenue Refunding Bonds, Marymount University, Series 1998,
5.100%, 7/01/18 - RAAI Insured
------------------------------------------------------------------------------------------------------------------------------------
2,830 Total Education and Civic Organizations 2,891,331
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 16.2% (10.8% OF TOTAL INVESTMENTS)
250 Charlotte County Industrial Development Authority, Virginia, 9/17 at 100.00 A- 246,928
Hospital Revenue Bonds, Halifax Regional Hospital
Incorporated, Series 2007, 5.000%, 9/01/37
100 Fairfax County Industrial Development Authority, Virginia, No Opt. Call AA+ 106,688
Hospital Revenue Refunding Bonds, Inova Health System,
Series 1993A, 5.000%, 8/15/23
1,000 Fauquier County Industrial Development Authority, Virginia, 10/12 at 102.00 AA 1,009,640
Hospital Revenue Bonds, Fauquier Hospital, Series 2002,
5.250%, 10/01/25 - RAAI Insured
500 Fredericksburg Economic Development Authority, Virginia, No Opt. Call A3 534,930
Healthcare Revenue Bonds, Medicorp Health System,
Series 2007, 5.250%, 6/15/23
500 Fredericksburg Industrial Development Authority, Virginia, 6/12 at 100.00 A3 501,695
Revenue Bonds, MediCorp Health System, Series 2002B,
5.125%, 6/15/33
820 Harrisonburg Industrial Development Authority, Virginia, 8/16 at 100.00 AAA 857,335
Hospital Facilities Revenue Bonds, Rockingham Memorial
Hospital, Series 2006, 5.000%, 8/15/31 - AMBAC Insured
500 Henrico County Economic Development Authority, Virginia, 11/12 at 100.00 A- 513,635
Revenue Bonds, Bon Secours Health System Inc.,
Series 2002A, 5.600%, 11/15/30
52
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE (continued)
$ 525 Manassas Industrial Development Authority, Virginia, Hospital 4/13 at 100.00 A2 $ 531,169
Revenue Bonds, Prince William Hospital, Series 2002,
5.250%, 4/01/33
800 Norton Industrial Development Authority, Virginia, Hospital 12/11 at 101.00 A 823,968
Revenue Refunding and Improvement Bonds, Norton
Community Hospital, Series 2001, 6.000%, 12/01/22 -
ACA Insured
Stafford County Economic Development Authority, Virginia,
Hospital Facilities Revenue Bonds, MediCorp Health System,
Series 2006:
750 5.250%, 6/15/25 6/16 at 100.00 A3 768,653
360 5.250%, 6/15/31 6/16 at 100.00 A3 363,942
430 Virginia Small Business Financing Authority, Wellmont 9/17 at 100.00 BBB+ 423,283
Health System Project Revenue Bonds, Series 2007A,
5.250%, 9/01/37
715 Winchester Industrial Development Authority, Virginia, 1/17 at 100.00 AA- 729,014
Hospital Revenue Bonds, Winchester Medical Center,
Series 2007, 5.125%, 1/01/31
------------------------------------------------------------------------------------------------------------------------------------
7,250 Total Health Care 7,410,880
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 4.5% (3.0% OF TOTAL INVESTMENTS)
1,000 Arlington County Industrial Development Authority, Virginia, 11/11 at 102.00 AAA 1,038,410
Multifamily Housing Mortgage Revenue Bonds, Arlington
View Terrace Apartments, Series 2001, 5.150%, 11/01/31
(Mandatory put 11/01/19) (Alternative Minimum Tax)
1,000 Virginia Housing Development Authority, Rental Housing Bonds, 10/10 at 100.00 AA+ 1,022,810
Series 2000G, 5.625%, 10/01/20 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
2,000 Total Housing/Multifamily 2,061,220
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 9.5% (6.3% OF TOTAL INVESTMENTS)
1,000 Virginia Housing Development Authority, Commonwealth 7/11 at 100.00 AAA 1,023,330
Mortgage Bonds, Series 2001H-1, 5.350%, 7/01/31 -
MBIA Insured
600 Virginia Housing Development Authority, Commonwealth 1/15 at 100.00 AAA 573,258
Mortgage Bonds, Series 2005C-2, 4.750%, 10/01/32
(Alternative Minimum Tax)
960 Virginia Housing Development Authority, Commonwealth 7/15 at 100.00 AAA 936,269
Mortgage Bonds, Series 2006 D1, 4.900%, 1/01/33
(Alternative Minimum Tax)
480 Virginia Housing Development Authority, Commonwealth 7/15 at 100.00 AAA 467,702
Mortgage Bonds, Series 2006, 4.800%, 7/01/29
(Alternative Minimum Tax)
1,400 Virginia Housing Development Authority, Commonwealth 7/16 at 100.00 AAA 1,337,378
Mortgage Bonds, Series 2007B, 4.750%, 7/01/32
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
4,440 Total Housing/Single Family 4,337,937
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 0.1% (0.1% OF TOTAL INVESTMENTS)
50 Charles County Industrial Development Authority, Virginia, No Opt. Call BBB 50,257
Solid Waste Disposal Facility Revenue Refunding Bonds,
USA Waste of Virginia Inc., Series 1999, 4.875%, 2/01/09
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 12.1% (8.1% OF TOTAL INVESTMENTS)
700 Albemarle County Industrial Development Authority, Virginia, 1/17 at 100.00 N/R 642,530
Residential Care Facilities Mortgage Revenue Bonds,
Westminster-Cantebury of the Blue Ridge, Series 2007,
5.000%, 1/01/31
350 Chesterfield County Health Center Commission, Virginia, 12/15 at 100.00 N/R 336,224
Mortgage Revenue Bonds, Lucy Corr Village, Series 2005,
5.625%, 12/01/39
1,005 Fairfax County Economic Development Authority, Virginia, 10/17 at 100.00 N/R 943,685
Residential Care Facilities Mortgage Revenue Bonds,
Goodwin House, Inc., Series 2007A, 5.125%, 10/01/37
53
NGB
Nuveen Virginia Dividend Advantage Municipal Fund (continued)
Portfolio of INVESTMENTS November 30, (2007) (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE (continued)
$ 500 Fairfax County Economic Development Authority, Virginia, 10/16 at 100.00 BBB $ 466,600
Retirement Center Revenue Bonds, Greenspring Village,
Series 2006A, 4.750%, 10/01/26
540 Henrico County Economic Development Authority, Virginia, No Opt. Call BBB- 513,135
Residential Care Facility Revenue Bonds, Westminster
Canterbury of Richmond, Series 2006, 5.000%, 10/01/35
700 Industrial Development Authority of the County of 1/17 at 100.00 N/R 658,287
Prince William, Virginia, Residential Care Facility Revenue
Bonds, Westminster at Lake, First Mortgage, Series 2006,
5.125%, 1/01/26
650 James City County Industrial Development Authority, Virginia, 3/12 at 101.00 N/R 666,673
Residential Care Facility First Mortgage Revenue Refunding
Bonds, Williamsburg Landing Inc., Series 2003A, 6.000%, 3/01/23
530 Roanoke Industrial Development Authority, Virginia, 12/16 at 100.00 N/R 472,135
Residential Revenue Bonds, Virginia Lutheran Homes
Incorporated, Series 2006, 5.000%, 12/01/39
350 Suffolk Industrial Development Authority, Virginia, Retirement 9/16 at 100.00 N/R 338,499
Facilities First Mortgage Revenue Bonds, Lake Prince Center,
Series 2006, 5.300%, 9/01/31
350 Virginia Beach Development Authority, Virginia, Residential 11/15 at 100.00 N/R 337,155
Care Facility Mortgage Revenue Bonds, Westminster
Canterbury on Chesapeake Bay, Series 2005, 5.000%, 11/01/22
175 Winchester Industrial Development Authority, Virginia, 1/15 at 100.00 N/R 168,835
Residential Care Facility Revenue Bonds, Westminster-
Canterbury of Winchester Inc., Series 2005A, 5.200%, 1/01/27
------------------------------------------------------------------------------------------------------------------------------------
5,850 Total Long-Term Care 5,543,758
------------------------------------------------------------------------------------------------------------------------------------
MATERIALS - 1.6% (1.2% OF TOTAL INVESTMENTS)
100 Bedford County Industrial Development Authority, Virginia, 2/08 at 102.00 B2 91,571
Industrial Development Revenue Refunding Bonds, Nekoosa
Packaging Corporation, Series 1998, 5.600%, 12/01/25
(Alternative Minimum Tax) (4)
20 Bedford County Industrial Development Authority, Virginia, 12/09 at 101.00 B2 20,104
Industrial Development Revenue Refunding Bonds, Nekoosa
Packaging Corporation, Series 1999A, 6.550%, 12/01/25
(Alternative Minimum Tax) (4)
220 Goochland County Industrial Development Authority, Virginia, 12/08 at 101.00 B2 207,667
Industrial Development Revenue Refunding Bonds, Nekoosa
Packaging Corporation Project, Series 1998, 5.650%, 12/01/25
(Alternative Minimum Tax) (4)
500 Hopewell Industrial Development Authority, Virginia, No Opt. Call B- 470,555
Environmental Improvement Revenue Bonds, Smurfit Stone
Container Corporation, Series 2005, 5.250%, 6/01/15
------------------------------------------------------------------------------------------------------------------------------------
840 Total Materials 789,897
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 16.3% (10.9% OF TOTAL INVESTMENTS)
600 Arlington County, Virginia, General Obligation Bonds, 8/16 at 100.00 AAA 651,570
Series 2006, 5.000%, 8/01/20
500 Henrico County, Virginia, General Obligation Bonds, 7/15 at 100.00 AAA 549,265
Series 2005, 5.000%, 7/15/16
700 Loudoun County, Virginia, General Obligation Bonds, 12/16 at 100.00 AAA 747,299
Series 2006, 5.000%, 12/01/25
500 Loudoun County, Virginia, General Obligation Public 6/15 at 100.00 AAA 539,220
Improvement Bonds, Series 2005B, 5.000%, 6/01/18
845 Newport News, Virginia, General Obligation Bonds, 5/14 at 101.00 AA 920,889
Series 2004C, 5.000%, 5/01/16
620 Richmond, Virginia, General Obligation Bonds, Series 2005A, 7/15 at 100.00 AAA 675,465
5.000%, 7/15/17 - FSA Insured
400 Suffolk, Virginia, General Obligation Bonds, Series 2005, No Opt. Call Aa3 440,596
5.000%, 12/01/15
400 Virginia Beach, Virginia, General Obligation Bonds, 1/16 at 100.00 AAA 431,672
Series 2005, 5.000%, 1/15/20
2,425 Virginia Beach, Virginia, General Obligation Public Improvement 6/11 at 101.00 AAA 2,543,704
Bonds, Series 2001, 5.000%, 6/01/21
------------------------------------------------------------------------------------------------------------------------------------
6,990 Total Tax Obligation/General 7,499,680
------------------------------------------------------------------------------------------------------------------------------------
54
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 19.2% (12.9% OF TOTAL INVESTMENTS)
$ 100 Bell Creek Community Development Authority, Virginia, 3/13 at 101.00 N/R $ 101,198
Special Assessment Bonds, Series 2003A, 6.750%, 3/01/22
500 Broad Street Community Development Authority, Virginia, 6/13 at 102.00 N/R 538,640
Revenue Bonds, Series 2003, 7.500%, 6/01/33
Buena Vista Public Recreational Facilities Authority, Virginia,
Lease Revenue Bonds, Golf Course Project, Series 2005A:
120 5.250%, 7/15/25 - ACA Insured 7/15 at 100.00 A 115,260
95 5.500%, 7/15/35 - ACA Insured 7/15 at 100.00 A 90,030
1,000 Culpeper Industrial Development Authority, Virginia, Lease 1/15 at 100.00 AAA 1,048,250
Revenue Bonds, School Facilities Project, Series 2005,
5.000%, 1/01/22 - MBIA Insured
500 Fairfax County Economic Development Authority, Virginia, 5/16 at 100.00 AA+ 540,455
Lease Revenue Bonds, Joint Public Uses Community Project,
Series 2006, 5.000%, 5/15/18
580 Prince William County, Virginia, Certificates of Participation, 6/15 at 100.00 Aaa 614,000
County Facilities, Series 2005, 5.000%, 6/01/20 -
AMBAC Insured
700 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call AAA 756,070
Revenue Bonds, Series 2007N, 5.250%, 7/01/31 -
AMBAC Insured
3,000 Puerto Rico Infrastructure Financing Authority, Special Tax No Opt. Call AAA 1,020,780
Revenue Bonds, Series 2005A, 0.000%, 7/01/29 -
AMBAC Insured
1,000 Spotsylvania County Industrial Development Authority, Virginia, 8/13 at 100.00 AAA 1,057,030
Lease Revenue Bonds, School Facilities, Series 2003B,
5.125%, 8/01/23 - AMBAC Insured
600 Stafford County and Staunton Industrial Development Authority, 8/16 at 100.00 AAA 632,094
Virginia, Revenue Bonds, Virginia Municipal League and
Virginia Association of Counties Finance Program, Series 2006A,
5.000%, 8/01/23 - MBIA Insured
960 Virgin Islands Public Finance Authority, Gross Receipts Taxes 10/10 at 101.00 BBB+ 1,035,110
Loan Note, Series 1999A, 6.375%, 10/01/19
500 Virginia Beach Development Authority, Public Facilities Revenue 5/15 at 100.00 AA+ 529,110
Bonds, Series 2005A, 5.000%, 5/01/22
350 Virginia Gateway Community Development Authority, 3/13 at 102.00 N/R 361,529
Prince William County, Special Assessment Bonds,
Series 2003, 6.375%, 3/01/30
345 Virginia Public School Authority, School Financing Bonds, 8/15 at 100.00 AA+ 375,991
1997 Resolution, Series 2005C, 5.000%, 8/01/17
------------------------------------------------------------------------------------------------------------------------------------
10,350 Total Tax Obligation/Limited 8,815,547
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 24.5% (16.4% OF TOTAL INVESTMENTS)
1,000 Capital Region Airport Authority, Richmond, Virginia, Revenue 7/15 at 100.00 AAA 1,064,840
Bonds, Richmond International Airport, Series 2005A,
5.000%, 7/01/18 - FSA Insured
1,000 Chesapeake Bay Bridge and Tunnel Commission, Virginia, No Opt. Call AAA 1,159,790
General Resolution Revenue Refunding Bonds, Series 1998,
5.500%, 7/01/25 - MBIA Insured
3,000 Metropolitan Washington D.C. Airports Authority, Airport System 10/11 at 101.00 AAA 3,132,597
Revenue Bonds, Series 2001A, 5.500%, 10/01/27 -
MBIA Insured (Alternative Minimum Tax)
250 Metropolitan Washington D.C. Airports Authority, Airport 10/11 at 101.00 AAA 258,270
System Revenue Bonds, Series 2001B, 5.000%, 10/01/21 -
MBIA Insured
1,500 Norfolk Airport Authority, Virginia, Airport Revenue Bonds, 7/11 at 100.00 AAA 1,526,055
Series 2001A, 5.125%, 7/01/31 - FGIC Insured
500 Norfolk, Virginia, Parking System Revenue Bonds, Series 2005A, 2/15 at 100.00 AAA 524,985
5.000%, 2/01/23 - MBIA Insured
55
NGB
Nuveen Virginia Dividend Advantage Municipal Fund (continued)
Portfolio of INVESTMENTS November 30, (2007) (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION (continued)
$ 500 Richmond Metropolitan Authority, Virginia, Revenue Refunding No Opt. Call AAA $ 560,115
Bonds, Expressway System, Series 2002, 5.250%, 7/15/22 -
FGIC Insured
455 Virginia Port Authority, Revenue Bonds, Port Authority Facilities, 7/13 at 100.00 AAA 457,289
Series 2006, 5.000%, 7/01/36 - FGIC Insured
(Alternative Minimum Tax)
1,225 Virginia Resources Authority, Airports Revolving Fund 2/11 at 100.00 Aa2 1,271,942
Revenue Bonds, Series 2001A, 5.250%, 8/01/23
1,250 Virginia Resources Authority, Airports Revolving Fund Revenue 2/11 at 100.00 Aa2 1,263,925
Bonds, Series 2001B, 5.125%, 8/01/27
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
10,680 Total Transportation 11,219,808
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 23.5% (15.7% OF TOTAL INVESTMENTS) (5)
500 Albemarle County Industrial Development Authority, Virginia, 1/12 at 100.00 N/R (5) 553,675
Residential Care Facility Revenue Bonds, Westminster
Canterbury of the Blue Ridge First Mortgage, Series 2001,
6.200%, 1/01/31 (Pre-refunded 1/01/12)
1,000 Bristol, Virginia, Utility System Revenue Refunding Bonds, No Opt. Call AAA 1,090,680
Series 2001, 5.000%, 7/15/21 - FSA Insured (ETM)
2,310 Leesburg, Virginia, General Obligation Public Improvement 1/11 at 101.00 AAA 2,465,278
Bonds, Series 2000, 5.125%, 1/15/21 (Pre-refunded 1/15/11) -
FGIC Insured
425 Loudoun County Industrial Development Authority, Virginia, 6/12 at 101.00 BBB (5) 476,791
Hospital Revenue Bonds, Loudoun Hospital Center,
Series 2002A, 6.000%, 6/01/22 (Pre-refunded 6/01/12)
Puerto Rico Infrastructure Financing Authority, Special
Obligation Bonds, Series 2000A:
1,500 5.500%, 10/01/32 (ETM) 10/10 at 101.00 AAA 1,588,620
1,500 5.500%, 10/01/40 (ETM) 10/10 at 101.00 AAA 1,586,535
340 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 354,875
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20
(Pre-refunded 7/01/10)
230 Rockbridge County Industrial Development Authority, Virginia, No Opt. Call B2 (5) 242,793
Horse Center Revenue Refunding Bonds, Series 2001B,
6.125%, 7/15/11 (ETM)
950 Rockbridge County Industrial Development Authority, Virginia, 7/11 at 105.00 B2 (5) 1,080,454
Horse Center Revenue Refunding Bonds, Series 2001C,
6.850%, 7/15/21 (Pre-refunded 7/15/11)
725 Tobacco Settlement Financing Corporation of Virginia, 6/15 at 100.00 AAA 804,902
Tobacco Settlement Asset-Backed Bonds, Series 2005,
5.500%, 6/01/26 (Pre-refunded 6/01/15)
500 Virginia College Building Authority, Educational Facilities 2/12 at 100.00 AA+ (5) 534,345
Revenue Bonds, 21st Century College Program, Series 2002A,
5.000%, 2/01/22 (Pre-refunded 2/01/12)
------------------------------------------------------------------------------------------------------------------------------------
9,980 Total U.S. Guaranteed 10,778,948
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 2.4% (1.6% OF TOTAL INVESTMENTS)
1,000 Mecklenburg County Industrial Development Authority, Virginia, 10/12 at 100.00 Baa1 1,078,900
Revenue Bonds, UAE Mecklenburg Cogeneration LP,
Series 2002, 6.500%, 10/15/17 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
56
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 7.3% (4.9% OF TOTAL INVESTMENTS)
$ 2,000 Henrico County, Virginia, Water and Sewer System Revenue 5/09 at 102.00 AA+ $ 2,065,840
Refunding Bonds, Series 1999, 5.000%, 5/01/22
175 Newport News, Virginia, Water Revenue Bonds, Series 2007, 6/17 at 100.00 AAA 173,794
4.500%, 6/01/34 - FSA Insured
500 Virginia Beach, Virginia, Water and Sewer System Revenue 10/15 at 100.00 AA 522,540
Bonds, Series 2005, 5.000%, 10/01/30
595 Virginia Resources Authority, Clean Water State Revolving 10/17 at 100.00 AAA 598,421
Fund Revenue Bonds, Series 2007, Residuals 1006,
5.697%, 10/01/29 (IF)
------------------------------------------------------------------------------------------------------------------------------------
3,270 Total Water and Sewer 3,360,595
------------------------------------------------------------------------------------------------------------------------------------
$ 68,785 Total Investments (cost $67,506,958) - 149.4% 68,535,694
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.9% 1,350,418
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (52.3)% (24,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 45,886,112
====================================================================================================================
The Fund may 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.
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares unless
otherwise noted.
(2) Optional Call Provisions: 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: Using the higher of Standard & Poor's Group
("Standard & Poor's") or Moody's Investor Service, Inc.
("Moody's") rating. Ratings below BBB by Standard & Poor's
or Baa by Moody's are considered to be below investment
grade.
The AAA ratings shown in the Portfolio of Investments
reflects the AAA ratings on certain bonds insured by AMBAC,
FGIC or MBIA as of November 30, 2007. As explained earlier
in the Portfolio Manager's Comments section of this report,
one rating agency has reduced the rating for AMBAC to AA,
and one or more rating agencies have placed each of these
insurers on "negative credit watch", which may presage one
or more rating reductions for such insurer or insurers in
the future. If one or more insurers' ratings are reduced
below AAA by these rating agencies, it would likely reduce
the effective rating of many of the bonds insured by that
insurer or insurers.
(4) The issuer has received a formal adverse determination from
the Internal Revenue Service (the "IRS") regarding the
tax-exempt status of the bonds' coupon payments. The Fund
will continue to treat coupon payments as tax exempt income
until such time that it is formally determined that the
interest on the bonds should be treated as taxable.
(5) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which ensure
the timely payment of principal and interest. Such
investments are normally considered to be equivalent to AAA
rated securities.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
See accompanying notes to financial statements.
57
NNB
Nuveen Virginia Dividend Advantage Municipal Fund 2
Portfolio of INVESTMENTS
November 30, 2007 (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 4.2% (2.8% OF TOTAL INVESTMENTS)
$ 3,100 Tobacco Settlement Financing Corporation of Virginia, Tobacco 6/17 at 100.00 BBB $ 2,575,263
Settlement Asset Backed Bonds, Series 2007B1, 5.000%, 6/01/47
1,430 Tobacco Settlement Financing Corporation of Virginia, Tobacco 6/17 at 100.00 BBB 955,640
Settlement Asset-Backed Bonds, Series 2007B2, 0.000%, 6/01/46
------------------------------------------------------------------------------------------------------------------------------------
4,530 Total Consumer Staples 3,530,903
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 6.7% (4.5% OF TOTAL INVESTMENTS)
1,000 Fairfax County Economic Development Authority, Virginia, 9/09 at 101.00 Aaa 1,033,520
Revenue Bonds, National Wildlife Federation, Series 1999,
5.375%, 9/01/29 - MBIA Insured
1,000 Prince William County Industrial Development Authority, Virginia, 10/13 at 101.00 A3 1,029,740
Educational Facilities Revenue Bonds, Catholic Diocese of
Arlington, Series 2003, 5.500%, 10/01/33
1,500 Puerto Rico Industrial, Tourist, Educational, Medical and 12/12 at 101.00 BBB- 1,527,690
Environmental Control Facilities Financing Authority, Higher
Education Revenue Refunding Bonds, Ana G. Mendez University
System, Series 2002, 5.375%, 12/01/21
2,000 Winchester Industrial Development Authority, Virginia, 10/08 at 102.00 AAA 2,059,940
Educational Facilities First Mortgage Revenue Bonds,
Shenandoah University, Series 1998, 5.250%, 10/01/28 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
5,500 Total Education and Civic Organizations 5,650,890
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 24.0% (16.3% OF TOTAL INVESTMENTS)
1,500 Albemarle County Industrial Development Authority, Virginia, 10/12 at 100.00 A2 1,514,865
Hospital Revenue Bonds, Martha Jefferson Hospital,
Series 2002, 5.250%, 10/01/35
450 Charlotte County Industrial Development Authority, Virginia, 9/17 at 100.00 A- 453,074
Hospital Revenue Bonds, Halifax Regional Hospital
Incorporated, Series 2007, 5.000%, 9/01/27
3,000 Fauquier County Industrial Development Authority, Virginia, 10/12 at 102.00 AA 3,028,920
Hospital Revenue Bonds, Fauquier Hospital, Series 2002,
5.250%, 10/01/25 - RAAI Insured
1,000 Fredericksburg Economic Development Authority, Virginia, No Opt. Call A3 1,069,860
Healthcare Revenue Bonds, Medicorp Health System,
Series 2007, 5.250%, 6/15/23
675 Fredericksburg Industrial Development Authority, Virginia, 6/12 at 100.00 A3 677,288
Revenue Bonds, MediCorp Health System, Series 2002B,
5.125%, 6/15/33
1,500 Harrisonburg Industrial Development Authority, Virginia, 8/16 at 100.00 AAA 1,568,295
Hospital Facilities Revenue Bonds, Rockingham Memorial
Hospital, Series 2006, 5.000%, 8/15/31 - AMBAC Insured
1,000 Henrico County Economic Development Authority, Virginia, 11/12 at 100.00 A- 1,027,270
Revenue Bonds, Bon Secours Health System Inc.,
Series 2002A, 5.600%, 11/15/30
1,155 Manassas Industrial Development Authority, Virginia, 4/13 at 100.00 A2 1,168,571
Hospital Revenue Bonds, Prince William Hospital, Series 2002,
5.250%, 4/01/33
1,200 Norton Industrial Development Authority, Virginia, Hospital 12/11 at 101.00 A 1,235,952
Revenue Refunding and Improvement Bonds, Norton
Community Hospital, Series 2001, 6.000%, 12/01/22 -
ACA Insured
58
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE (continued)
$ 1,000 Prince William County Industrial Development Authority, 10/08 at 102.00 Aaa $ 1,028,230
Virginia, Hospital Facility Revenue Refunding Bonds, Potomac
Hospital Corporation of Prince William, Series 1998,
5.000%, 10/01/18 - FSA Insured
3,915 Roanoke Industrial Development Authority, Virginia, Hospital 7/12 at 100.00 AAA 4,144,380
Revenue Bonds, Carilion Health System, Series 2002A,
5.500%, 7/01/20 - MBIA Insured
Stafford County Economic Development Authority, Virginia,
Hospital Facilities Revenue Bonds, MediCorp Health System,
Series 2006:
1,250 5.250%, 6/15/25 6/16 at 100.00 A3 1,281,088
655 5.250%, 6/15/31 6/16 at 100.00 A3 662,172
785 Virginia Small Business Financing Authority, Wellmont Health 9/17 at 100.00 BBB+ 772,738
System Project Revenue Bonds, Series 2007A,
5.250%, 9/01/37
715 Winchester Industrial Development Authority, Virginia, 1/17 at 100.00 AA- 729,014
Hospital Revenue Bonds, Winchester Medical Center,
Series 2007, 5.125%, 1/01/31
------------------------------------------------------------------------------------------------------------------------------------
19,800 Total Health Care 20,361,717
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 15.6% (10.5% OF TOTAL INVESTMENTS)
7,485 Virginia Housing Development Authority, Commonwealth 7/11 at 100.00 AAA 7,659,625
Mortgage Bonds, Series 2001H-1, 5.350%, 7/01/31 -
MBIA Insured
500 Virginia Housing Development Authority, Commonwealth 1/15 at 100.00 AAA 477,715
Mortgage Bonds, Series 2005C-2, 4.750%, 10/01/32
(Alternative Minimum Tax)
1,755 Virginia Housing Development Authority, Commonwealth 7/15 at 100.00 AAA 1,711,616
Mortgage Bonds, Series 2006 D1, 4.900%, 1/01/33
(Alternative Minimum Tax)
870 Virginia Housing Development Authority, Commonwealth 7/15 at 100.00 AAA 847,711
Mortgage Bonds, Series 2006, 4.800%, 7/01/29
(Alternative Minimum Tax)
2,600 Virginia Housing Development Authority, Commonwealth 7/16 at 100.00 AAA 2,483,702
Mortgage Bonds, Series 2007B, 4.750%, 7/01/32
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
13,210 Total Housing/Single Family 13,180,369
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 11.6% (7.9% OF TOTAL INVESTMENTS)
1,300 Albemarle County Industrial Development Authority, Virginia, 1/17 at 100.00 N/R 1,193,270
Residential Care Facilities Mortgage Revenue Bonds,
Westminster-Cantebury of the Blue Ridge, Series 2007,
5.000%, 1/01/31
650 Chesterfield County Health Center Commission, Virginia, 12/15 at 100.00 N/R 624,416
Mortgage Revenue Bonds, Lucy Corr Village, Series 2005,
5.625%, 12/01/39
1,815 Fairfax County Economic Development Authority, Virginia, 10/17 at 100.00 N/R 1,704,267
Residential Care Facilities Mortgage Revenue Bonds,
Goodwin House, Inc., Series 2007A, 5.125%, 10/01/37
500 Fairfax County Economic Development Authority, Virginia, 10/16 at 100.00 BBB 466,600
Retirement Center Revenue Bonds, Greenspring Village,
Series 2006A, 4.750%, 10/01/26
855 Henrico County Economic Development Authority, Virginia, No Opt. Call BBB- 812,464
Residential Care Facility Revenue Bonds, Westminster
Canterbury of Richmond, Series 2006, 5.000%, 10/01/35
1,300 Industrial Development Authority of the County of Prince William, 1/17 at 100.00 N/R 1,222,533
Virginia, Residential Care Facility Revenue Bonds,
Westminster at Lake, First Mortgage, Series 2006,
5.125%, 1/01/26
1,350 James City County Industrial Development Authority, Virginia, 3/12 at 101.00 N/R 1,384,628
Residential Care Facility First Mortgage Revenue Refunding
Bonds, Williamsburg Landing Inc., Series 2003A, 6.000%, 3/01/23
970 Roanoke Industrial Development Authority, Virginia, 12/16 at 100.00 N/R 864,095
Residential Revenue Bonds, Virginia Lutheran Homes
Incorporated, Series 2006, 5.000%, 12/01/39
59
NNB
Nuveen Virginia Dividend Advantage Municipal Fund 2 (continued)
Portfolio of INVESTMENTS November 30, (2007) (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE (continued)
$ 650 Suffolk Industrial Development Authority, Virginia, Retirement 9/16 at 100.00 N/R $ 628,641
Facilities First Mortgage Revenue Bonds, Lake Prince Center,
Series 2006, 5.300%, 9/01/31
650 Virginia Beach Development Authority, Virginia, Residential Care 11/15 at 100.00 N/R 626,145
Facility Mortgage Revenue Bonds, Westminster Canterbury on
Chesapeake Bay, Series 2005, 5.000%, 11/01/22
325 Winchester Industrial Development Authority, Virginia, 1/15 at 100.00 N/R 313,550
Residential Care Facility Revenue Bonds, Westminster-Canterbury
of Winchester Inc., Series 2005A, 5.200%, 1/01/27
------------------------------------------------------------------------------------------------------------------------------------
10,365 Total Long-Term Care 9,840,609
------------------------------------------------------------------------------------------------------------------------------------
MATERIALS - 1.9% (1.3% OF TOTAL INVESTMENTS)
165 Bedford County Industrial Development Authority, Virginia, 2/08 at 102.00 B2 151,092
Industrial Development Revenue Refunding Bonds, Nekoosa
Packaging Corporation, Series 1998, 5.600%, 12/01/25
(Alternative Minimum Tax) (4)
460 Goochland County Industrial Development Authority, Virginia, 12/08 at 101.00 B2 434,212
Industrial Development Revenue Refunding Bonds, Nekoosa
Packaging Corporation Project, Series 1998, 5.650%, 12/01/25
(Alternative Minimum Tax) (4)
1,000 Hopewell Industrial Development Authority, Virginia, No Opt. Call B- 941,110
Environmental Improvement Revenue Bonds, Smurfit Stone
Container Corporation, Series 2005, 5.250%, 6/01/15
------------------------------------------------------------------------------------------------------------------------------------
1,625 Total Materials 1,526,414
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 23.0% (15.6% OF TOTAL INVESTMENTS)
500 Arlington County, Virginia, General Obligation Bonds, Series 2006, 8/16 at 100.00 AAA 542,975
5.000%, 8/01/20
1,750 Chesapeake, Virginia, General Obligation Bonds, Series 2001, 12/11 at 100.00 AA 1,891,208
5.500%, 12/01/16
1,000 Loudoun County, Virginia, General Obligation Bonds, Series 2006, 12/16 at 100.00 AAA 1,067,570
5.000%, 12/01/25
1,730 Loudoun County, Virginia, General Obligation Public Improvement 11/11 at 101.00 AAA 1,796,259
Bonds, Series 2001C, 4.500%, 11/01/17
95 Loudoun County, Virginia, General Obligation Public Improvement 5/12 at 100.00 AAA 100,473
Bonds, Series 2002A, 5.250%, 5/01/22
1,000 Loudoun County, Virginia, General Obligation Public Improvement 6/15 at 100.00 AAA 1,078,440
Bonds, Series 2005B, 5.000%, 6/01/18
40 Portsmouth, Virginia, General Obligation Public Utility Refunding 6/08 at 100.00 AAA 40,248
Bonds, Series 2001B, 5.000%, 6/01/21 - FGIC Insured
Powhatan County, Virginia, General Obligation Bonds, Series 2001:
660 5.000%, 1/15/23 - AMBAC Insured 1/11 at 101.00 AAA 685,601
1,000 5.000%, 1/15/27 - AMBAC Insured 1/11 at 101.00 AAA 1,033,180
1,000 Richmond, Virginia, General Obligation Bonds, Series 2004A, 7/14 at 100.00 AAA 1,062,130
5.000%, 7/15/21 - FSA Insured
Roanoke, Virginia, General Obligation Public Improvement Bonds,
Series 2002A:
2,400 5.000%, 10/01/18 10/12 at 101.00 AA 2,546,904
2,435 5.000%, 10/01/19 10/12 at 101.00 AA 2,584,046
1,280 Roanoke, Virginia, General Obligation Public Improvement Bonds, 10/12 at 101.00 AAA 1,352,934
Series 2002B, 5.000%, 10/01/15 - FGIC Insured
(Alternative Minimum Tax)
600 Virginia Beach, Virginia, General Obligation Bonds, Series 2005, 1/16 at 100.00 AAA 647,508
5.000%, 1/15/20
1,500 Virginia Beach, Virginia, General Obligation Public Improvement 6/11 at 101.00 AAA 1,573,425
Bonds, Series 2001, 5.000%, 6/01/19
1,420 Virginia Beach, Virginia, General Obligation Refunding and Public 3/12 at 100.00 AAA 1,481,145
Improvement Bonds, Series 2002, 5.000%, 3/01/21
------------------------------------------------------------------------------------------------------------------------------------
18,410 Total Tax Obligation/General 19,484,046
------------------------------------------------------------------------------------------------------------------------------------
60
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 17.8% (12.1% OF TOTAL INVESTMENTS)
$ 184 Bell Creek Community Development Authority, Virginia, Special 3/13 at 101.00 N/R $ 186,204
Assessment Bonds, Series 2003A, 6.750%, 3/01/22
1,000 Broad Street Community Development Authority, Virginia, 6/13 at 102.00 N/R 1,077,280
Revenue Bonds, Series 2003, 7.500%, 6/01/33
Buena Vista Public Recreational Facilities Authority, Virginia,
Lease Revenue Bonds, Golf Course Project, Series 2005A:
210 5.250%, 7/15/25 - ACA Insured 7/15 at 100.00 A 201,705
165 5.500%, 7/15/35 - ACA Insured 7/15 at 100.00 A 156,367
800 Fairfax County Economic Development Authority, Virginia, 5/16 at 100.00 AA+ 864,728
Lease Revenue Bonds, Joint Public Uses Community Project,
Series 2006, 5.000%, 5/15/18
1,800 Loudoun County Industrial Development Authority, Virginia, 3/13 at 100.00 AA+ 1,895,310
Lease Revenue Refunding Bonds, Public Facility Project,
Series 2003, 5.000%, 3/01/19
1,300 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call AAA 1,404,130
Revenue Bonds, Series 2007N, 5.250%, 7/01/31 -
AMBAC Insured
2,000 Puerto Rico Infrastructure Financing Authority, Special Tax No Opt. Call AAA 680,520
Revenue Bonds, Series 2005A, 0.000%, 7/01/29 -
AMBAC Insured
400 Puerto Rico Public Buildings Authority, Guaranteed Government 7/12 at 100.00 BBB- 404,280
Facilities Revenue Refunding Bonds, Series 2002D,
5.250%, 7/01/27
1,000 Spotsylvania County Industrial Development Authority, Virginia, 8/13 at 100.00 AAA 1,057,030
Lease Revenue Bonds, School Facilities, Series 2003B,
5.125%, 8/01/23 - AMBAC Insured
1,000 Stafford County and Staunton Industrial Development Authority, 8/16 at 100.00 AAA 1,053,490
Virginia, Revenue Bonds, Virginia Municipal League and
Virginia Association of Counties Finance Program, Series 2006A,
5.000%, 8/01/23 - MBIA Insured
800 Virginia Beach Development Authority, Public Facilities Revenue 5/15 at 100.00 AA+ 846,576
Bonds, Series 2005A, 5.000%, 5/01/22
685 Virginia Gateway Community Development Authority, 3/13 at 102.00 N/R 707,564
Prince William County, Special Assessment Bonds, Series 2003,
6.375%, 3/01/30
2,540 Virginia Public School Authority, School Financing Bonds, 8/11 at 101.00 AA+ 2,668,600
1997 Resolution, Series 2001B, 5.000%, 8/01/19
570 Virginia Public School Authority, School Financing Bonds, 8/15 at 100.00 AA+ 621,203
1997 Resolution, Series 2005C, 5.000%, 8/01/17
1,265 Virginia Resources Authority, Infrastructure Revenue Bonds, 5/10 at 101.00 AA 1,294,247
Pooled Loan Bond Program, Series 2001D, 5.000%, 5/01/26
------------------------------------------------------------------------------------------------------------------------------------
15,719 Total Tax Obligation/Limited 15,119,234
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 4.0% (2.7% OF TOTAL INVESTMENTS)
1,000 Metropolitan Washington D.C. Airports Authority, Airport System 10/12 at 100.00 AAA 1,013,810
Revenue Bonds, Series 2002A, 5.125%, 10/01/26 -
FGIC Insured (Alternative Minimum Tax)
1,500 Norfolk, Virginia, Parking System Revenue Bonds, Series 2005A, 2/15 at 100.00 AAA 1,574,955
5.000%, 2/01/23 - MBIA Insured
825 Virginia Port Authority, Revenue Bonds, Port Authority 7/13 at 100.00 AAA 829,150
Facilities, Series 2006, 5.000%, 7/01/36 - FGIC Insured
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
3,325 Total Transportation 3,417,915
------------------------------------------------------------------------------------------------------------------------------------
61
NNB
Nuveen Virginia Dividend Advantage Municipal Fund 2 (continued)
Portfolio of INVESTMENTS November 30, (2007) (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 18.0% (12.1% OF TOTAL INVESTMENTS) (5)
$ 165 Albemarle County Industrial Development Authority, Virginia, 1/12 at 100.00 N/R (5) $ 182,713
Residential Care Facility Revenue Bonds, Westminster Canterbury
of the Blue Ridge First Mortgage, Series 2001, 6.200%, 1/01/31
(Pre-refunded 1/01/12)
1,000 Bristol, Virginia, General Obligation Utility System Revenue Bonds, No Opt. Call AAA 1,103,460
Series 2002, 5.000%, 11/01/24 - FSA Insured (ETM)
Loudoun County Industrial Development Authority, Virginia,
Hospital Revenue Bonds, Loudoun Hospital Center, Series 2002A:
250 6.000%, 6/01/22 (Pre-refunded 6/01/12) 6/12 at 101.00 BBB (5) 280,465
600 6.100%, 6/01/32 (Pre-refunded 6/01/12) 6/12 at 101.00 BBB (5) 675,612
1,000 Newport News, Virginia, General Obligation Bonds, Series 2003B, 11/13 at 100.00 AA (5) 1,087,060
5.000%, 11/01/22 (Pre-refunded 11/01/13)
2,750 Puerto Rico Infrastructure Financing Authority, Special Obligation 10/10 at 101.00 AAA 2,908,648
Bonds, Series 2000A, 5.500%, 10/01/40 (ETM)
1,100 Puerto Rico Public Buildings Authority, Guaranteed Government 7/12 at 100.00 BBB- (5) 1,188,374
Facilities Revenue Refunding Bonds, Series 2002D,
5.250%, 7/01/27 (Pre-refunded 7/01/12)
Puerto Rico Public Finance Corporation, Commonwealth
Appropriation Bonds, Series 2002E:
545 5.500%, 8/01/29 (Pre-refunded 2/01/12) 2/12 at 100.00 Aaa 590,328
455 5.500%, 8/01/29 (Pre-refunded 2/01/12) 2/12 at 100.00 BBB- (5) 493,948
475 Rockbridge County Industrial Development Authority, Virginia, 7/11 at 105.00 B2 (5) 540,227
Horse Center Revenue Refunding Bonds, Series 2001C,
6.850%, 7/15/21 (Pre-refunded 7/15/11)
1,260 Salem, Virginia, General Obligation Public Improvement Bonds, 1/12 at 100.00 Aa3 (5) 1,362,892
Series 2002, 5.375%, 1/01/23 (Pre-refunded 1/01/12)
1,000 Staunton, Virginia, General Obligation Bonds, Series 2004, 2/14 at 101.00 AAA 1,165,170
6.250%, 2/01/25 (Pre-refunded 2/01/14) - AMBAC Insured
Tobacco Settlement Financing Corporation of Virginia,
Tobacco Settlement Asset-Backed Bonds, Series 2005:
600 5.250%, 6/01/19 (Pre-refunded 6/01/12) 6/12 at 100.00 AAA 630,828
2,700 5.500%, 6/01/26 (Pre-refunded 6/01/15) 6/15 at 100.00 AAA 2,997,567
------------------------------------------------------------------------------------------------------------------------------------
13,900 Total U.S. Guaranteed 15,207,292
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 2.5% (1.7% OF TOTAL INVESTMENTS)
2,000 Mecklenburg County Industrial Development Authority, Virginia, 10/12 at 100.00 Baa1 2,157,800
Revenue Bonds, UAE Mecklenburg Cogeneration LP,
Series 2002, 6.500%, 10/15/17 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 18.5% (12.5% OF TOTAL INVESTMENTS)
805 Fairfax County Water Authority, Virginia, Water Revenue 4/12 at 100.00 AAA 833,988
Refunding Bonds, Series 2002, 5.000%, 4/01/27
Henry County Public Service Authority, Virginia, Water and
Sewerage Revenue Refunding Bonds, Series 2001:
1,000 5.500%, 11/15/17 - FSA Insured No Opt. Call AAA 1,142,150
3,000 5.500%, 11/15/19 - FSA Insured No Opt. Call AAA 3,450,570
325 Newport News, Virginia, Water Revenue Bonds, Series 2007, 6/17 at 100.00 AAA 322,761
4.500%, 6/01/34 - FSA Insured
Norfolk, Virginia, Water Revenue Refunding Bonds, Series 2001:
1,130 5.000%, 11/01/18 - FGIC Insured 11/11 at 100.00 AAA 1,180,375
1,190 5.000%, 11/01/19 - FGIC Insured 11/11 at 100.00 AAA 1,243,050
1,450 5.000%, 11/01/23 - FGIC Insured 11/11 at 100.00 AAA 1,505,274
1,525 5.000%, 11/01/24 - FGIC Insured 11/11 at 100.00 AAA 1,583,133
62
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER (continued)
$ 1,000 Virginia Beach, Virginia, Water and Sewer System Revenue 10/15 at 100.00 AA $ 1,045,080
Bonds, Series 2005, 5.000%, 10/01/30
1,080 Virginia Resources Authority, Clean Water State Revolving 10/17 at 100.00 AAA 1,086,210
Fund Revenue Bonds, Series 2007, Residuals 1006,
5.697%, 10/01/29 (IF)
2,250 Virginia Resources Authority, Water and Sewerage System 5/11 at 101.00 AA 2,314,980
Revenue Bonds, Caroline County Public Improvements Project,
Series 2001, 5.000%, 5/01/32
------------------------------------------------------------------------------------------------------------------------------------
14,755 Total Water and Sewer 15,707,571
------------------------------------------------------------------------------------------------------------------------------------
$ 123,139 Total Investments (cost $122,281,465) - 147.8% 125,184,760
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.8% 1,519,955
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (49.6)% (42,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 84,704,715
====================================================================================================================
The Fund may 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.
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares unless
otherwise noted.
(2) Optional Call Provisions: 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: Using the higher of Standard & Poor's Group
("Standard & Poor's") or Moody's Investor Service, Inc.
("Moody's") rating. Ratings below BBB by Standard & Poor's
or Baa by Moody's are considered to be below investment
grade.
The AAA ratings shown in the Portfolio of Investments
reflects the AAA ratings on certain bonds insured by AMBAC,
FGIC or MBIA as of November 30, 2007. As explained earlier
in the Portfolio Manager's Comments section of this report,
one rating agency has reduced the rating for AMBAC to AA,
and one or more rating agencies have placed each of these
insurers on "negative credit watch", which may presage one
or more rating reductions for such insurer or insurers in
the future. If one or more insurers' ratings are reduced
below AAA by these rating agencies, it would likely reduce
the effective rating of many of the bonds insured by that
insurer or insurers.
(4) The issuer has received a formal adverse determination from
the Internal Revenue Service (the "IRS") regarding the
tax-exempt status of the bonds' coupon payments. The Fund
will continue to treat coupon payments as tax exempt income
until such time that it is formally determined that the
interest on the bonds should be treated as taxable.
(5) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which ensure
the timely payment of principal and interest. Such
investments are normally considered to be equivalent to AAA
rated securities.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
See accompanying notes to financial statements.
63
Statement of
ASSETS & LIABILITIES
November 30, 2007 (Unaudited)
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $226,028,351, $90,364,060,
$90,949,026 and $114,210,247, respectively) $232,520,358 $91,891,292 $92,586,292 $115,309,616
Cash -- -- -- --
Unrealized appreciation on forward swaps 360,314 122,134 68,631 --
Receivables:
Interest 3,997,740 1,601,102 1,547,264 1,810,880
Investments sold 55,689 30,383 25,313 30,376
Other assets 13,319 3,157 692 810
------------------------------------------------------------------------------------------------------------------------------------
Total assets 236,947,420 93,648,068 94,228,192 117,151,682
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft 2,676,590 830,615 521,834 1,039,010
Accrued expenses:
Management fees 119,711 32,800 33,111 37,247
Other 33,364 14,760 15,575 16,892
Common share dividends payable 476,200 225,989 230,846 259,820
Preferred share dividends payable 9,567 9,817 11,604 8,973
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 3,315,432 1,113,981 812,970 1,361,942
------------------------------------------------------------------------------------------------------------------------------------
Preferred shares, at liquidation value 79,100,000 32,000,000 32,000,000 39,000,000
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $154,531,988 $60,534,087 $61,415,222 $ 76,789,740
====================================================================================================================================
Common shares outstanding 10,640,076 4,183,675 4,192,551 5,363,909
====================================================================================================================================
Net asset value per Common share outstanding (net assets applicable
to Common shares, divided by Common shares outstanding) $ 14.52 $ 14.47 $ 14.65 $ 14.32
====================================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF:
------------------------------------------------------------------------------------------------------------------------------------
Common shares, $.01 par value per share $ 106,401 $ 41,837 $ 41,926 $ 53,639
Paid-in surplus 147,794,543 59,369,509 59,489,350 75,714,712
Undistributed (Over-distribution of) net investment income 82,055 (72,079) (78,149) (83,557)
Accumulated net realized gain (loss) from investments and
derivative transactions (303,332) (454,546) 256,198 5,577
Net unrealized appreciation (depreciation) of investments
and derivative transactions 6,852,321 1,649,366 1,705,897 1,099,369
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $154,531,988 $60,534,087 $61,415,222 $ 76,789,740
====================================================================================================================================
Authorized shares:
Common Unlimited Unlimited Unlimited Unlimited
Preferred Unlimited Unlimited Unlimited Unlimited
====================================================================================================================================
See accompanying notes to financial statements.
64
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $188,786,243, $67,506,958
and $122,281,465, respectively) $193,747,629 $68,535,694 $125,184,760
Cash -- 461,710 28,679
Unrealized appreciation on forward swaps 122,134 -- --
Receivables:
Interest 3,113,536 1,091,634 1,887,691
Investments sold -- -- --
Other assets 15,024 3,076 1,662
------------------------------------------------------------------------------------------------------------------------------------
Total assets 196,998,323 70,092,114 127,102,792
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft 529,862 -- --
Accrued expenses:
Management fees 100,614 24,769 39,751
Other 28,307 7,873 14,343
Common share dividends payable 411,088 167,825 325,666
Preferred share dividends payable 9,648 5,535 18,317
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 1,079,519 206,002 398,077
------------------------------------------------------------------------------------------------------------------------------------
Preferred shares, at liquidation value 63,800,000 24,000,000 42,000,000
------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON SHARES $132,118,804 $45,886,112 $ 84,704,715
====================================================================================================================================
Common shares outstanding 8,933,535 3,132,731 5,729,845
====================================================================================================================================
Net asset value per Common share outstanding (net assets applicable
to Common shares, divided by Common shares outstanding) $ 14.79 $ 14.65 $ 14.78
====================================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF:
------------------------------------------------------------------------------------------------------------------------------------
Common shares, $.01 par value per share $ 89,335 $ 31,327 $ 57,298
Paid-in surplus 125,793,718 44,438,584 81,336,798
Undistributed (Over-distribution of) net investment income 45,819 (72,812) (145,156)
Accumulated net realized gain (loss) from investments and
derivative transactions 1,106,412 460,277 552,480
Net unrealized appreciation (depreciation) of investments
and derivative transactions 5,083,520 1,028,736 2,903,295
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $132,118,804 $45,886,112 $ 84,704,715
====================================================================================================================================
Authorized shares:
Common Unlimited Unlimited Unlimited
Preferred Unlimited Unlimited Unlimited
====================================================================================================================================
See accompanying notes to financial statements.
65
Statement of
OPERATIONS
Six Months Ended November 30, 2007 (Unaudited)
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $ 5,595,363 $ 2,277,755 $2,249,285 $ 2,681,540
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 727,992 292,010 294,749 365,193
Preferred shares - auction fees 99,146 40,110 40,110 48,883
Preferred shares - dividend disbursing agent fees 10,027 5,014 5,014 5,014
Shareholders' servicing agent fees and expenses 10,418 874 586 579
Interest expense on floating rate obligations 8,358 3,382 3,382 4,179
Custodian's fees and expenses 24,479 16,796 19,557 19,345
Trustees' fees and expenses 2,460 1,028 1,226 1,364
Professional fees 7,803 5,144 5,090 5,789
Shareholders' reports - printing and mailing expenses 21,974 9,903 9,870 11,044
Stock exchange listing fees 4,848 178 178 228
Investor relations expense 10,170 5,414 4,666 5,762
Other expenses 9,429 7,141 7,119 7,536
------------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit and expense reimbursement 937,104 386,994 391,547 474,916
Custodian fee credit (15,993) (6,022) (7,485) (9,083)
Expense reimbursement -- (92,148) (108,491) (168,974)
------------------------------------------------------------------------------------------------------------------------------------
Net expenses 921,111 288,824 275,571 296,859
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 4,674,252 1,988,931 1,973,714 2,384,681
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments (70,642) 171,171 224,864 133,137
Forward swaps -- (18,725) -- --
Change in net unrealized appreciation (depreciation) of:
Investments (929,513) (1,082,427) (918,690) (1,056,154)
Forward swaps 360,314 161,331 68,631 --
====================================================================================================================================
Net realized and unrealized gain (loss) (639,841) (768,650) (625,195) (923,017)
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
From net investment income (1,292,167) (512,891) (538,866) (639,874)
From accumulated net realized gains -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to Common shares
from distributions to Preferred shareholders (1,292,167) (512,891) (538,866) (639,874)
====================================================================================================================================
Net increase (decrease) in net assets applicable to Common
shares from operations $ 2,742,244 $ 707,390 $ 809,653 $ 821,790
====================================================================================================================================
See accompanying notes to financial statements.
66
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $ 4,703,565 $ 1,713,223 $ 3,100,339
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 612,346 221,040 400,649
Preferred shares - auction fees 79,969 30,082 52,644
Preferred shares - dividend disbursing agent fees 10,027 5,014 5,014
Shareholders' servicing agent fees and expenses 8,962 512 701
Interest expense on floating rate obligations -- -- --
Custodian's fees and expenses 37,188 11,203 25,912
Trustees' fees and expenses 2,418 896 1,585
Professional fees 7,778 4,789 6,010
Shareholders' reports - printing and mailing expenses 18,827 6,887 9,591
Stock exchange listing fees 4,881 133 244
Investor relations expense 11,207 4,031 7,066
Other expenses 7,839 6,681 7,680
------------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit and expense reimbursement 801,442 291,268 517,096
Custodian fee credit (7,560) (6,464) (4,563)
Expense reimbursement -- (69,752) (158,077)
------------------------------------------------------------------------------------------------------------------------------------
Net expenses 793,882 215,052 354,456
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 3,909,683 1,498,171 2,745,883
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments 463,272 63,825 149,933
Forward swaps (18,725) -- --
Change in net unrealized appreciation (depreciation) of:
Investments (1,464,961) (1,117,061) (1,845,485)
Forward swaps 161,331 -- --
------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) (859,083) (1,053,236) (1,695,552)
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
From net investment income (1,068,306) (390,050) (728,280)
From accumulated net realized gains -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to Common shares
from distributions to Preferred shareholders (1,068,306) (390,050) (728,280)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable to Common
shares from operations $ 1,982,294 $ 54,885 $ 322,051
====================================================================================================================================
See accompanying notes to financial statements.
67
Statement of
CHANGES in NET ASSETS (Unaudited)
MARYLAND PREMIUM MARYLAND DIVIDEND MARYLAND DIVIDEND
INCOME (NMY) ADVANTAGE (NFM) ADVANTAGE 2 (NZR)
----------------------------- ---------------------------- -----------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
11/30/07 5/31/07 11/30/07 5/31/07 11/30/07 5/31/07
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 4,674,252 $ 9,341,191 $ 1,988,931 $ 3,974,853 $ 1,973,714 $ 3,931,107
Net realized gain (loss) from:
Investments (70,642) 19,964 171,171 137,858 224,864 176,432
Forward swaps -- -- (18,725) -- -- --
Change in net unrealized
appreciation (depreciation) of:
Investments (929,513) 1,306,051 (1,082,427) 379,809 (918,690) 233,703
Forward swaps 360,314 -- 161,331 (39,197) 68,631 --
Distributions to
Preferred Shareholders:
From net investment income (1,292,167) (2,475,539) (512,891) (986,560) (538,866) (969,809)
From accumulated net
realized gains -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from operations 2,742,244 8,191,667 707,390 3,466,763 809,653 3,371,433
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (3,245,224) (7,114,011) (1,468,336) (3,120,217) (1,471,585) (3,190,218)
From accumulated net realized gains -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Common shareholders (3,245,224) (7,114,011) (1,468,336) (3,120,217) (1,471,585) (3,190,218)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares issued
to shareholders due to reinvestment
of distributions 30,834 92,621 33,604 152,937 12,749 156,976
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares from
capital share transactions 30,834 92,621 33,604 152,937 12,749 156,976
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares (472,146) 1,170,277 (727,342) 499,483 (649,183) 338,191
Net assets applicable to
Common shares at the
beginning of period 155,004,134 153,833,857 61,261,429 60,761,946 62,064,405 61,726,214
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to
Common shares at the
end of period $154,531,988 $155,004,134 $60,534,087 $61,261,429 $61,415,222 $62,064,405
====================================================================================================================================
Undistributed (Over-distribution of)
net investment income at the
end of period $ 82,055 $ (54,806) $ (72,079) $ (79,783) $ (78,149) $ (41,412)
====================================================================================================================================
See accompanying notes to financial statements.
68
MARYLAND DIVIDEND VIRGINIA PREMIUM VIRGINIA DIVIDEND
ADVANTAGE 3 (NWI) INCOME (NPV) ADVANTAGE (NGB)
----------------------------- ---------------------------- -----------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
11/30/07 5/31/07 11/30/07 5/31/07 11/30/07 5/31/07
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 2,384,681 $ 4,702,597 $ 3,909,683 $ 7,820,312 $ 1,498,171 $ 3,009,500
Net realized gain (loss) from:
Investments 133,137 120,873 463,272 662,460 63,825 467,890
Forward swaps -- 33,256 (18,725) -- -- --
Change in net unrealized
appreciation (depreciation) of:
Investments (1,056,154) 907,283 (1,464,961) 53,189 (1,117,061) (52,127)
Forward swaps -- (211,923) 161,331 (39,197) -- --
Distributions to
Preferred Shareholders:
From net investment income (639,874) (1,185,502) (1,068,306) (2,029,334) (390,050) (757,118)
From accumulated net realized gains -- -- -- (38,016) -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from operations 821,790 4,366,584 1,982,294 6,429,414 54,885 2,668,145
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (1,689,632) (3,570,184) (2,840,730) (6,247,006) (1,099,454) (2,464,212)
From accumulated net realized gains -- -- -- (191,731) -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Common shareholders (1,689,632) (3,570,184) (2,840,730) (6,438,737) (1,099,454) (2,464,212)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares issued
to shareholders due to reinvestment
of distributions 17,897 34,058 77,204 282,861 22,795 78,442
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares from
capital share transactions 17,897 34,058 77,204 282,861 22,795 78,442
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares (849,945) 830,458 (781,232) 273,538 (1,021,774) 282,375
Net assets applicable to Common
shares at the beginning
of period 77,639,685 76,809,227 132,900,036 132,626,498 46,907,886 46,625,511
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of period $76,789,740 $77,639,685 $132,118,804 $132,900,036 $45,886,112 $46,907,886
====================================================================================================================================
Undistributed (Over-distribution of)
net investment income at the
end of period $ (83,557) $ (138,732) $ 45,819 $ 45,172 $ (72,812) $ (81,479)
====================================================================================================================================
See accompanying notes to financial statements.
69
Statement of
CHANGES in NET ASSETS (continued) (Unaudited)
VIRGINIA DIVIDEND
ADVANTAGE 2 (NNB)
-----------------------------
SIX MONTHS YEAR
ENDED ENDED
11/30/07 5/31/07
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 2,745,883 $ 5,503,149
Net realized gain (loss) from:
Investments 149,933 658,811
Forward swaps -- --
Change in net unrealized appreciation (depreciation) of:
Investments (1,845,485) (33,280)
Forward Swaps -- --
Distributions to Preferred Shareholders:
From net investment income (728,280) (1,363,368)
From accumulated net realized gains -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from operations 322,051 4,765,312
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (2,045,280) (4,420,783)
From accumulated net realized gains -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Common shareholders (2,045,280) (4,420,783)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares issued
to shareholders due to reinvestment
of distributions 45,851 150,558
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares from
capital share transactions 45,851 150,558
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares (1,677,378) 495,087
Net assets applicable to Common
shares at the beginning of period 86,382,093 85,887,006
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of period $84,704,715 $86,382,093
====================================================================================================================================
Undistributed (Over-distribution of)
net investment income at the
end of period $ (145,156) $ (117,479)
====================================================================================================================================
See accompanying notes to financial statements.
70
Notes to
FINANCIAL STATEMENTS (Unaudited)
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The funds (the "Funds") covered in this report and their corresponding Common
share stock exchange symbols are Nuveen Maryland Premium Income Municipal Fund
(NMY), Nuveen Maryland Dividend Advantage Municipal Fund (NFM), Nuveen Maryland
Dividend Advantage Municipal Fund 2 (NZR), Nuveen Maryland Dividend Advantage
Municipal Fund 3 (NWI), Nuveen Virginia Premium Income Municipal Fund (NPV),
Nuveen Virginia Dividend Advantage Municipal Fund (NGB) and Nuveen Virginia
Dividend Advantage Municipal Fund 2 (NNB). Common shares of Maryland Premium
Income (NMY) and Virginia Premium Income (NPV) are traded on the New York Stock
Exchange while Common shares of Maryland Dividend Advantage (NFM), Maryland
Dividend Advantage 2 (NZR), Maryland Dividend Advantage 3 (NWI), Virginia
Dividend Advantage (NGB) and Virginia Dividend Advantage 2 (NNB) are traded on
the American Stock Exchange. The Funds are registered under the Investment
Company Act of 1940, as amended, as closed-end management investment companies.
Each Fund seeks to provide current income exempt from both regular federal and
designated state income taxes by investing primarily in a diversified portfolio
of municipal obligations issued by state and local government authorities within
a single state or certain U.S. territories.
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements in accordance with U.S.
generally accepted accounting principles.
Investment Valuation
The prices of municipal bonds in each Fund's investment portfolio are provided
by a pricing service approved by the Fund's Board of Trustees. When market price
quotes are not readily available (which is usually the case for municipal
securities), the pricing service may establish fair value based on yields or
prices of municipal bonds of comparable quality, type of issue, coupon, maturity
and rating, indications of value from securities dealers, evaluations of
anticipated cash flows or collateral and general market conditions. Prices of
forward swap contracts are also provided by an independent pricing service
approved by each Fund's Board of Trustees. If the pricing service is unable to
supply a price for a municipal bond or forward swap contract, each Fund may use
a market price or fair market value quote provided by a major broker/dealer in
such investments. If it is determined that the market price or fair market value
for an investment or derivative instrument is unavailable or inappropriate, the
Board of Trustees of the Funds, or its designee, may establish a fair value for
the investment. Temporary investments in securities that have variable rate and
demand features qualifying them as short-term investments are valued at
amortized cost, which approximates market value.
Investment Transactions
Investment transactions are recorded on a trade date basis. Realized gains and
losses from transactions are determined on the specific identification method.
Investments purchased on a when-issued/delayed delivery basis may have extended
settlement periods. Any investments so purchased are subject to market
fluctuation during this period. The Funds have instructed the custodian to
segregate assets with a current value at least equal to the amount of the
when-issued/delayed delivery purchase commitments. At November 30, 2007, there
were no such outstanding purchase commitments in any of the Funds.
Investment Income
Interest income, which includes the amortization of premiums and accretion of
discounts for financial reporting purposes, is recorded on an accrual basis.
Investment income also includes paydown gains and losses, if any.
71
Notes to
FINANCIAL STATEMENTS (continued) (Unaudited)
Income Taxes
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund
intends to distribute substantially all net investment income and net capital
gains to shareholders and to otherwise comply with the requirements of
Subchapter M of the Internal Revenue Code applicable to regulated investment
companies. Therefore, no federal income tax provision is required. Furthermore,
each Fund intends to satisfy conditions which will enable interest from
municipal securities, which is exempt from regular federal and designated state
income taxes, to retain such tax-exempt status when distributed to shareholders
of the Funds. Net realized capital gains and ordinary income distributions paid
by the Funds are subject to federal taxation.
Dividends and Distributions to Common Shareholders
Dividends from tax-exempt net investment income are declared monthly. Net
realized capital gains and/or market discount from investment transactions, if
any, are distributed to shareholders not less frequently than annually.
Furthermore, capital gains are distributed only to the extent they exceed
available capital loss carryforwards.
Distributions to Common shareholders of tax-exempt net investment income, net
realized capital gains and/or market discount, if any, are recorded on the
ex-dividend date. The amount and timing of distributions are determined in
accordance with federal income tax regulations, which may differ from U.S.
generally accepted accounting principles.
Preferred Shares
The Funds have issued and outstanding Preferred shares, $25,000 stated value per
share, as a means of effecting financial leverage. Each Fund's Preferred shares
are issued in one or more Series. The dividend rate paid by the Funds on each
Series is determined every seven days, pursuant to a dutch auction process
overseen by the auction agent, and is payable at the end of each rate period.
The number of Preferred shares outstanding, by Series and in total, for each
Fund is as follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
--------------------------------------------------------------------------------
Number of shares:
Series M -- 1,280 -- --
Series T -- -- -- 1,560
Series W 1,404 -- -- --
Series TH 1,760 -- -- --
Series F -- -- 1,280 --
--------------------------------------------------------------------------------
Total 3,164 1,280 1,280 1,560
================================================================================
72
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
--------------------------------------------------------------------------------
Number of shares:
Series M -- -- 1,680
Series T 832 -- --
Series W -- 960 --
Series TH 1,720 -- --
Series F -- -- --
--------------------------------------------------------------------------------
Total 2,552 960 1,680
================================================================================
Inverse Floating Rate Securities
Each Fund may invest in inverse floating rate securities. An inverse floating
rate security is created by depositing a municipal bond, typically with a fixed
interest rate, into a special purpose trust created by a broker-dealer. In turn,
this trust (a) issues floating rate certificates, in face amounts equal to some
fraction of the deposited bond's par amount or market value, that typically pay
short-term tax-exempt interest rates to third parties, and (b) issues to a
long-term investor (such as one of the Funds) an inverse floating rate
certificate (sometimes referred to as an "inverse floater") that represents all
remaining or residual interest in the trust. The income received by the inverse
floater holder varies inversely with the short-term rate paid to the floating
rate certificates' holders, and in most circumstances the inverse floater holder
bears substantially all of the underlying bond's downside investment risk and
also benefits disproportionately from any potential appreciation of the
underlying bond's value. The price of an inverse floating rate security will be
more volatile than that of the underlying bond because the interest rate is
dependent on not only the fixed coupon rate of the underlying bond but also on
the short-term interest paid on the floating rate certificates, and because the
inverse floating rate security essentially bears the risk of loss of the greater
face value of the underlying bond.
A Fund may purchase an inverse floating rate security in a secondary market
transaction without first owning the underlying bond (referred to as an
"externally-deposited inverse floater"), or instead by first selling a
fixed-rate bond to a broker-dealer for deposit into the special purpose trust
and receiving in turn the residual interest in the trust (referred to as a
"self-deposited inverse floater"). A Fund may also enter into shortfall and
forbearance agreements (sometimes referred to as a "recourse trust" or "credit
recovery swap") with a broker-dealer by which a Fund agrees to reimburse the
broker-dealer, in certain circumstances, for the difference between the
liquidation value of the fixed-rate bond held by the trust and the liquidation
value of the floating rate certificates, as well as any shortfalls in interest
cash flows. The inverse floater held by a Fund gives the Fund the right (a) to
cause the holders of the floating rate certificates to tender their notes at
par, and (b) to have the broker transfer the fixed-rate bond held by the trust
to the Fund, thereby collapsing the trust. An investment in an
externally-deposited inverse floater is identified in the Portfolio of
Investments as an "Inverse floating rate investment". An investment in a
self-deposited inverse floater, recourse trust or credit recovery swap is
accounted for as a financing transaction in accordance with Statement of
Financial Accounting Standards (SFAS) No. 140 "Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities". In such
instances, a fixed-rate bond deposited into a special purpose trust is
identified in the Portfolio of Investments as an "Underlying bond of an inverse
floating rate trust", with the Fund accounting for the short-term floating rate
certificates issued by the trust as "Floating rate obligations" on the Statement
of Assets and Liabilities. In addition, the Fund reflects in Investment Income
the entire earnings of the underlying bond and accounts for the related interest
paid to the holders of the short-term floating rate certificates as "Interest
expense on floating rate obligations" in the Statement of Operations.
During the six months ended November 30, 2007, Maryland Premium Income (NMY),
Maryland Dividend Advantage (NFM), Maryland Dividend Advantage 2 (NZR) and
Maryland Dividend Advantage 3 (NWI) invested in externally deposited inverse
floaters and/or self-deposited inverse floaters. Virginia Premium Income (NPV),
Virginia Dividend Advantage (NGB) and Virginia Dividend Advantage 2 (NNB) did
not invest in any such instruments during the six months ended November 30,
2007.
The average floating rate obligations outstanding and average annual interest
rate and fees related to self-deposited inverse floaters during the six months
ended November 30, 2007, were as follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
------------------------------------------------------------------------------------------------------------------
Average floating rate obligations $428,415 $173,355 $173,355 $214,208
Average annual interest rate and fees 3.89% 3.89% 3.89% 3.89%
==================================================================================================================
73
Notes to
FINANCIAL STATEMENTS (continued) (Unaudited)
Forward Swap Transactions
The Funds are authorized to invest in forward interest rate swap transactions.
Each Fund's use of forward interest rate swap transactions is intended to help
the Fund manage its overall interest rate sensitivity, either shorter or longer,
generally to more closely align the Fund's interest rate sensitivity with that
of the broader municipal market. Forward interest rate swap transactions involve
each Fund's agreement with a counterparty to pay, in the future, a fixed or
variable rate payment in exchange for the counterparty paying the Fund a
variable or fixed rate payment, the accruals for which would begin at a
specified date in the future (the "effective date"). The amount of the payment
obligation is based on the notional amount of the forward swap contract and the
termination date of the swap (which is akin to a bond's maturity). The value of
the Fund's swap commitment would increase or decrease based primarily on the
extent to which long-term interest rates for bonds having a maturity of the
swap's termination date increases or decreases. The Funds may terminate a swap
contract prior to the effective date, at which point a realized gain or loss is
recognized. When a forward swap is terminated, it ordinarily does not involve
the delivery of securities or other underlying assets or principal, but rather
is settled in cash on a net basis. Each Fund intends, but is not obligated, to
terminate its forward swaps before the effective date. Accordingly, the risk of
loss with respect to the swap counterparty on such transactions is limited to
the credit risk associated with a counterparty failing to honor its commitment
to pay any realized gain to the Fund upon termination. To reduce such credit
risk, all counterparties are required to pledge collateral daily (based on the
daily valuation of each swap) on behalf of each Fund with a value approximately
equal to the amount of any unrealized gain above a pre-determined threshold.
Reciprocally, when any of the Funds have an unrealized loss on a swap contract,
the Funds have instructed the custodian to pledge assets of the Funds as
collateral with a value approximately equal to the amount of the unrealized loss
above a pre-determined threshold. Collateral pledges are monitored and
subsequently adjusted if and when the swap valuations fluctuate, either up or
down, by at least the predetermined threshold amount. Maryland Premium Income
(NMY), Maryland Dividend Advantage (NFM), Maryland Dividend Advantage 2 (NZR)
and Virginia Premium Income (NPV) were the only Funds to invest in forward
interest rate swap transactions during the six months ended November 30, 2007.
Custodian Fee Credit
Each Fund has an arrangement with the custodian bank whereby certain custodian
fees and expenses are reduced by net credits earned on each Fund's cash on
deposit with the bank. Such deposit arrangements are an alternative to overnight
investments. Credits for cash balances may be offset by charges for any days on
which the Fund overdraws its account at the custodian bank.
Indemnifications
Under the Funds' organizational documents, their Officers and Trustees are
indemnified against certain liabilities arising out of the performance of their
duties to the Funds. In addition, in the normal course of business, the Funds
enter into contracts that provide general indemnifications to other parties. The
Funds' maximum exposure under these arrangements is unknown as this would
involve future claims that may be made against the Funds that have not yet
occurred. However, the Funds have not had prior claims or losses pursuant to
these contracts and expect the risk of loss to be remote.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of increases and
decreases in net assets applicable to Common shares from operations during the
reporting period. Actual results may differ from those estimates.
74
2. FUND SHARES
Transactions in Common shares were as follows:
MARYLAND PREMIUM MARYLAND DIVIDEND MARYLAND DIVIDEND
INCOME (NMY) ADVANTAGE (NFM) ADVANTAGE 2 (NZR)
----------------------- ----------------------- -----------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
11/30/07 5/31/07 11/30/07 5/31/07 11/30/07 5/31/07
-----------------------------------------------------------------------------------------------------------------
Common shares issued to
shareholders due to reinvestment
of distributions 2,122 6,252 2,314 9,782 863 9,920
=================================================================================================================
MARYLAND DIVIDEND VIRGINIA PREMIUM VIRGINIA DIVIDEND
ADVANTAGE 3 (NWI) INCOME (NPV) ADVANTAGE (NGB)
----------------------- ----------------------- -----------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
11/30/07 5/31/07 11/30/07 5/31/07 11/30/07 5/31/07
-----------------------------------------------------------------------------------------------------------------
Common shares issued to
shareholders due to reinvestment
of distributions 1,239 2,324 5,228 18,377 1,490 4,617
=================================================================================================================
VIRGINIA DIVIDEND
ADVANTAGE 2 (NNB)
-----------------------
SIX MONTHS YEAR
ENDED ENDED
11/30/07 5/31/07
-----------------------------------------------------------------------------------------------------------------
Common shares issued to
shareholders due to reinvestment
of distributions 3,015 9,265
=================================================================================================================
3. INVESTMENT TRANSACTIONS
Purchases and sales (including maturities but excluding short-term investments
and derivative transactions) during the six months ended November 30, 2007, were
as follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
-----------------------------------------------------------------------------------------------------------------
Purchases $21,514,424 $6,773,387 $8,318,665 $10,166,624
Sales and maturities 23,110,325 8,386,681 9,732,521 10,896,769
=================================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
-----------------------------------------------------------------------------------------------------------------
Purchases $18,964,830 $4,709,429 $ 8,559,962
Sales and maturities 21,877,646 4,757,060 10,399,062
=================================================================================================================
4. INCOME TAX INFORMATION
The following information is presented on an income tax basis. Differences
between amounts for financial statement and federal income tax purposes are
primarily due to the treatment of paydown gains and losses, timing differences
in recognizing taxable market discount, timing differences in recognizing
certain gains and losses on investment transactions and the treatment of
investments in inverse floating rate transactions subject to SFAS No. 140. To
the extent that differences arise that are permanent in nature, such amounts are
reclassified within the capital accounts on the Statement of Assets and
Liabilities presented in the annual report, based on their federal tax basis
treatment; temporary differences do not require reclassification. Temporary and
permanent differences do not impact the net asset values of the Funds.
75
Notes to
FINANCIAL STATEMENTS (continued) (Unaudited)
At November 30, 2007, the cost of investments was as follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
-----------------------------------------------------------------------------------------------------------------
Cost of investments $226,106,610 $90,368,790 $90,996,315 $114,287,075
=================================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
-----------------------------------------------------------------------------------------------------------------
Cost of investments $188,450,250 $67,496,376 $122,240,450
=================================================================================================================
Gross unrealized appreciation and gross unrealized depreciation of investments
at November 30, 2007, were as follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
-----------------------------------------------------------------------------------------------------------------
Gross unrealized:
Appreciation $ 7,985,037 $2,364,380 $2,440,353 $ 2,128,892
Depreciation (1,571,289) (841,878) (850,376) (1,106,351)
-----------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments $ 6,413,748 $1,522,502 $1,589,977 $ 1,022,541
=================================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
-----------------------------------------------------------------------------------------------------------------
Gross unrealized:
Appreciation $ 7,324,085 $ 2,075,168 $ 4,554,836
Depreciation (2,026,706) (1,035,850) (1,610,526)
-----------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments $ 5,297,379 $ 1,039,318 $ 2,944,310
=================================================================================================================
The tax components of undistributed net tax-exempt income, net ordinary income
and net long-term capital gains at May 31, 2007, the Funds' last tax year end,
were as follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
-----------------------------------------------------------------------------------------------------------------
Undistributed net tax-exempt income * $258,179 $142,245 $172,965 $127,885
Undistributed net ordinary income ** 69,718 -- -- 3,541
Undistributed net long-term capital gains -- -- 128,819 --
=================================================================================================================
76
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
-----------------------------------------------------------------------------------------------------------------
Undistributed net tax-exempt income * $262,579 $ 77,723 $167,225
Undistributed net ordinary income ** 8,291 3,355 1,499
Undistributed net long-term capital gains 661,863 396,454 408,716
=================================================================================================================
* Undistributed net tax-exempt income (on a tax basis) has not been reduced
for the dividend declared on May 1, 2007, paid on June 1, 2007.
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
The tax character of distributions paid during the Funds' last tax year ended
May 31, 2007, was designated for purposes of the dividends paid deduction as
follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
-----------------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt income $9,664,847 $4,128,452 $4,166,021 $4,771,527
Distributions from net ordinary income ** -- -- 6,683 --
Distributions from net long-term capital gains -- -- 562 --
=================================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
-----------------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt income $8,317,694 $3,260,186 $5,809,897
Distributions from net ordinary income ** -- -- --
Distributions from net long-term capital gains 229,747 -- --
=================================================================================================================
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
At May 31, 2007, the Funds' last tax year end, the following Funds had unused
capital loss carryforwards available for federal income tax purposes to be
applied against future capital gains, if any. If not applied, the carryforwards
will expire as follows:
MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 3
(NMY) (NFM) (NWI)
--------------------------------------------------------------------------------
Expiration year:
2009 $ -- $ 774 $ --
2010 -- 37,159 --
2011 -- -- --
2012 -- 430,282 --
2013 -- 15,613 --
2014 -- 62,054 8,870
2015 28,576 -- --
--------------------------------------------------------------------------------
Total $28,576 $545,882 $8,870
================================================================================
Maryland Dividend Advantage (NFM) elected to defer net realized losses from
investments incurred from November 1, 2006 through May 31, 2007 ("post-October
losses") in accordance with federal income tax regulations. Post-October losses
of $9,857 were treated as having arisen on the first day of the current taxable
year.
5. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Each Fund's management fee is separated into two components - a complex-level
component, based on the aggregate amount of all fund assets managed by Nuveen
Asset Management (the "Adviser"), a wholly owned subsidiary of Nuveen
Investments, Inc. ("Nuveen"), and a specific fund-level component, based only on
the amount of assets within each individual Fund. This pricing structure enables
Nuveen fund shareholders to benefit from growth in the assets within each
individual fund as well as from growth in the amount of complex-wide assets
managed by the Adviser.
77
Notes to
FINANCIAL STATEMENTS (continued) (Unaudited)
The annual fund-level fee, payable monthly, for each Fund is based upon the
average daily net assets (including net assets attributable to Preferred shares)
of each Fund as follows:
AVERAGE DAILY NET ASSETS MARYLAND PREMIUM INCOME (NMY)
(INCLUDING NET ASSETS VIRGINIA PREMIUM INCOME (NPV)
ATTRIBUTABLE TO PREFERRED SHARES) FUND-LEVEL FEE RATE
--------------------------------------------------------------------------------
For the first $125 million .4500%
For the next $125 million .4375
For the next $250 million .4250
For the next $500 million .4125
For the next $1 billion .4000
For the next $3 billion .3875
For net assets over $5 billion .3750
================================================================================
MARYLAND DIVIDEND ADVANTAGE (NFM)
MARYLAND DIVIDEND ADVANTAGE 2 (NZR)
MARYLAND DIVIDEND ADVANTAGE 3 (NWI)
AVERAGE DAILY NET ASSETS VIRGINIA DIVIDEND ADVANTAGE (NGB)
(INCLUDING NET ASSETS VIRGINIA DIVIDEND ADVANTAGE 2 (NNB)
ATTRIBUTABLE TO PREFERRED SHARES) FUND-LEVEL FEE RATE
--------------------------------------------------------------------------------
For the first $125 million .4500%
For the next $125 million .4375
For the next $250 million .4250
For the next $500 million .4125
For the next $1 billion .4000
For net assets over $2 billion .3750
================================================================================
The annual complex-level fee, payable monthly, which is additive to the
fund-level fee, for all Nuveen sponsored funds in the U.S., is based on the
aggregate amount of total fund assets managed as stated in the tables below. As
of November 30, 2007, the complex-level fee rate was .1837%.
78
Effective August 20, 2007, the complex-level fee schedule is as follows:
COMPLEX-LEVEL ASSET BREAKPOINT LEVEL (1) EFFECTIVE RATE AT BREAKPOINT LEVEL
--------------------------------------------------------------------------------
$55 billion .2000%
$56 billion .1996
$57 billion .1989
$60 billion .1961
$63 billion .1931
$66 billion .1900
$71 billion .1851
$76 billion .1806
$80 billion .1773
$91 billion .1691
$125 billion .1599
$200 billion .1505
$250 billion .1469
$300 billion .1445
================================================================================
Prior to August 20, 2007, the complex-level fee schedule was as follows:
COMPLEX-LEVEL ASSET BREAKPOINT LEVEL (1) EFFECTIVE RATE AT BREAKPOINT LEVEL
--------------------------------------------------------------------------------
$55 billion .2000%
$56 billion .1996
$57 billion .1989
$60 billion .1961
$63 billion .1931
$66 billion .1900
$71 billion .1851
$76 billion .1806
$80 billion .1773
$91 billion .1698
$125 billion .1617
$200 billion .1536
$250 billion .1509
$300 billion .1490
================================================================================
(1) The complex-level fee component of the management fee for the funds is
calculated based upon the aggregate Managed Assets ("Managed Assets" means
the average daily net assets of each fund including assets attributable to
preferred stock issued by or borrowings by the Nuveen funds) of
Nuveen-sponsored funds in the U.S.
The management fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Funds pay no
compensation directly to those of its Trustees who are affiliated with the
Adviser or to its Officers, all of whom receive remuneration for their services
to the Funds from the Adviser or its affiliates. The Board of Trustees has
adopted a deferred compensation plan for independent Trustees that enables
Trustees to elect to defer receipt of all or a portion of the annual
compensation they are entitled to receive from certain Nuveen advised funds.
Under the plan, deferred amounts are treated as though equal dollar amounts had
been invested in shares of select Nuveen advised funds.
79
Notes to
FINANCIAL STATEMENTS (continued) (Unaudited)
For the first ten years of Maryland Dividend Advantage's (NFM) and Virginia
Dividend Advantage's (NGB) operations, the Adviser has agreed to reimburse the
Funds, as a percentage of average daily net assets (including net assets
attributable to Preferred shares), for fees and expenses in the amounts and for
the time periods set forth below:
YEAR ENDING YEAR ENDING
JANUARY 31, JANUARY 31,
--------------------------------------------------------------------------------
2001* .30% 2007 .25%
2002 .30 2008 .20
2003 .30 2009 .15
2004 .30 2010 .10
2005 .30 2011 .05
2006 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Maryland Dividend Advantage (NFM) and
Virginia Dividend Advantage (NGB) for any portion of their fees and expenses
beyond January 31, 2011.
For the first ten years of Maryland Dividend Advantage 2's (NZR) operations, the
Adviser has agreed to reimburse the Fund, as a percentage of average daily net
assets (including net assets attributable to Preferred shares), for fees and
expenses in the amounts and for the time periods set forth below:
YEAR ENDING YEAR ENDING
SEPTEMBER 30, SEPTEMBER 30,
--------------------------------------------------------------------------------
2001* .30% 2007 .25%
2002 .30 2008 .20
2003 .30 2009 .15
2004 .30 2010 .10
2005 .30 2011 .05
2006 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Maryland Dividend Advantage 2 (NZR) for
any portion of its fees and expenses beyond September 30, 2011.
For the first eight years of Maryland Dividend Advantage 3's (NWI) operations,
the Adviser has agreed to reimburse the Fund, as a percentage of average daily
net assets (including net assets attributable to Preferred shares), for fees and
expenses in the amounts and for the time periods set forth below:
YEAR ENDING YEAR ENDING
SEPTEMBER 30, SEPTEMBER 30,
--------------------------------------------------------------------------------
2002* .32% 2007 .32%
2003 .32 2008 .24
2004 .32 2009 .16
2005 .32 2010 .08
2006 .32
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Maryland Dividend Advantage 3 (NWI) for
any portion of its fees and expenses beyond September 30, 2010.
80
For the first ten years of Virginia Dividend Advantage 2's (NNB) operations, the
Adviser has agreed to reimburse the Fund, as a percentage of average daily net
assets (including net assets attributable to Preferred shares), for fees and
expenses in the amounts and for the time periods set forth below:
YEAR ENDING YEAR ENDING
NOVEMBER 30, NOVEMBER 30,
--------------------------------------------------------------------------------
2001* .30% 2007 .25%
2002 .30 2008 .20
2003 .30 2009 .15
2004 .30 2010 .10
2005 .30 2011 .05
2006 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Virginia Dividend Advantage 2 (NNB) for
any portion of its fees and expenses beyond November 30, 2011.
Agreement and Plan of Merger
On June 20, 2007, Nuveen Investments announced that it had entered into a
definitive Agreement and Plan of Merger ("Merger Agreement") with Windy City
Investments, Inc. ("Windy City"), a corporation formed by investors led by
Madison Dearborn Partners, LLC ("Madison Dearborn"), pursuant to which Windy
City would acquire Nuveen Investments. Madison Dearborn is a private equity
investment firm based in Chicago, Illinois. The merger was consummated on
November 13, 2007.
The consummation of the merger was deemed to be an "assignment" (as that term is
defined in the Investment Company Act of 1940) of the investment management
agreement between each Fund and the Adviser, and resulted in the automatic
termination of each Fund's agreement. The Board of Trustees of each Fund
considered and approved a new investment management agreement with the Adviser
at the same fee rate. The new ongoing agreement was approved by the shareholders
of each Fund and took effect on November 13, 2007.
The investors led by Madison Dearborn include an affiliate of Merrill Lynch. As
a result, Merrill Lynch is an indirect "affiliated person" (as that term is
defined in the Investment Company Act of 1940) of each Fund. Certain conflicts
of interest may arise as a result of such indirect affiliation. For example, the
Funds are generally prohibited from entering into principal transactions with
Merrill Lynch and its affiliates. The Adviser does not believe that any such
prohibitions or limitations as a result of Merrill Lynch's affiliation with
significantly impact the ability of the Funds to pursue their investment
objectives and policies.
6. NEW ACCOUNTING PRONOUNCEMENTS
Financial Accounting Standards Board Interpretation No. 48
Effective November 30, 2007, the Funds adopted Financial Accounting Standards
Board (FASB) Interpretation No. 48 "Accounting for Uncertainty in Income Taxes"
(FIN 48). FIN 48 provides guidance for how uncertain tax positions should be
recognized, measured, presented and disclosed in the financial statements. FIN
48 requires the evaluation of tax positions taken or expected to be taken in the
course of preparing the Funds' tax returns to determine whether the tax
positions are "more-likely-than-not" of being sustained by the applicable tax
authority. Tax positions not deemed to meet the more-likely-than-not threshold
would be recorded as a tax benefit or expense in the current year. Management of
the Funds has concluded that there are no significant uncertain tax positions
that require recognition in the Funds' financial statements. Consequently, the
adoption of FIN 48 had no impact on the net assets or results of operations of
the Funds.
Financial Accounting Standards Board Statement of Financial Accounting Standards
No. 157
In September 2006, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 157, "Fair Value
Measurements." This standard establishes a single authoritative definition of
fair value, sets out a framework for measuring fair value and requires
additional disclosures about fair value measurements. SFAS No. 157 applies to
fair value measurements already required or permitted by existing standards.
SFAS No. 157 is effective for financial statements issued for fiscal years
beginning after November 15, 2007, and interim periods within those fiscal
years. The changes to current generally accepted accounting principles from the
application of this standard relate to the definition of fair value, the methods
used to measure fair value, and the expanded disclosures about fair value
measurements. As of November 30, 2007, management does not believe the adoption
of SFAS No. 157 will impact the financial statement amounts; however, additional
disclosures may be required about the inputs used to develop the measurements
and the effect of certain of the measurements included within the Statement of
Operations for the period.
81
Notes to
FINANCIAL STATEMENTS (continued) (Unaudited)
7. SUBSEQUENT EVENTS
Distributions to Common Shareholders
The Funds declared Common share dividend distributions from their tax-exempt net
investment income which were paid on December 31, 2007, to shareholders of
record on December 15, 2007, as follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
-----------------------------------------------------------------------------------------------------------------
Dividend per share $.0495 $.0585 $.0585 $.0525
=================================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
-----------------------------------------------------------------------------------------------------------------
Dividend per share $.0530 $.0565 $.0595
=================================================================================================================
At the same time, the following Funds declared capital gains and/or ordinary
income distributions as follows:
MARYLAND MARYLAND
PREMIUM DIVIDEND
INCOME ADVANTAGE 2
(NMY) (NZR)
-----------------------------------------------------------------------------------------------------------------
Capital gains distribution per share $ -- $.0327
Net ordinary income distribution per share* .0074 .0016
=================================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
-----------------------------------------------------------------------------------------------------------------
Capital gains distribution per share $.0863 $.0977 $.0570
Net ordinary income distribution per share* .0007 .0069 .0029
=================================================================================================================
* Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any
82
Financial
HIGHLIGHTS (Unaudited)
83
Financial
HIGHLIGHTS (Unaudited)
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
----------------------------------------------------------------- ----------------------------
Distributions Distributions
from Net from Net
Beginning Investment Capital Investment Capital
Common Net Income to Gains to Income to Gains to
Share Net Realized/ Preferred Preferred Common Common
Net Asset Investment Unrealized Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
==============================================================================================================================
MARYLAND PREMIUM
INCOME (NMY)
------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2008(b) $14.57 $ .44 $ (.06) $(.12) $ -- $ .26 $(.31) $ -- $(.31)
2007 14.47 .88 .12 (.23) -- .77 (.67) -- (.67)
2006 15.12 .89 (.56) (.18) -- .15 (.78) (.02) (.80)
2005 14.28 .92 .92 (.10) -- 1.74 (.90) -- (.90)
2004 15.10 .96 (.81) (.06) -- .09 (.91) -- (.91)
2003 14.04 1.02 1.00 (.07) -- 1.95 (.89) -- (.89)
MARYLAND DIVIDEND
ADVANTAGE (NFM)
------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2008(b) 14.65 .48 (.19) (.12) -- .17 (.35) -- (.35)
2007 14.57 .95 .12 (.24) -- .83 (.75) -- (.75)
2006 15.13 .95 (.47) (.19) -- .29 (.85) -- (.85)
2005 14.43 .98 .75 (.10) -- 1.63 (.93) -- (.93)
2004 15.47 1.01 (1.07) (.05) -- (.11) (.93) -- (.93)
2003 14.18 1.04 1.18 (.08) -- 2.14 (.86) -- (.86)
==============================================================================================================================
Total Returns
--------------------
Offering Based
Costs and Ending on
Preferred Common Based Common
Share Share Ending on Share Net
Underwriting Net Asset Market Market Asset
Discounts Value Value Value* Value*
=================================================================================
MARYLAND PREMIUM
INCOME (NMY)
---------------------------------------------------------------------------------
Year Ended 5/31:
2008(b) $ -- $14.52 $12.71 (12.37)% 1.78%
2007 -- 14.57 14.84 6.96 5.35
2006 -- 14.47 14.52 (2.94) 1.08
2005 -- 15.12 15.78 15.64 12.52
2004 -- 14.28 14.45 (10.77) .64
2003 -- 15.10 17.15 15.22 14.33
MARYLAND DIVIDEND
ADVANTAGE (NFM)
---------------------------------------------------------------------------------
Year Ended 5/31:
2008(b) -- 14.47 13.02 (12.61) 1.20
2007 -- 14.65 15.28 5.51 5.74
2006 -- 14.57 15.19 2.51 1.95
2005 -- 15.13 15.63 6.22 11.60
2004 -- 14.43 15.62 2.99 (.69)
2003 .01 15.47 16.08 9.98 15.55
=================================================================================
Ratios/Supplemental Data
-----------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets Ratios to Average Net Assets
Applicable to Common Shares Applicable to Common Shares
Before Credit/Reimbursement After Credit/Reimbursement**
------------------------------------------ ------------------------------------------
Ending
Net
Assets
Applicable Expenses Expenses Net Expenses Expenses Net Portfolio
to Common Including Excluding Investment Including Excluding Investment Turnover
Shares (000) Interest++(a) Interest++(a) Income++ Interest++(a) Interest++(a) Income++ Rate
===================================================================================================================================
MARYLAND PREMIUM
INCOME (NMY)
-----------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2008(b) $154,532 1.22%*** 1.21%*** 6.08%*** 1.20%*** 1.19%*** 6.10%*** 9%
2007 155,004 1.27 1.23 5.95 1.26 1.22 5.96 13
2006 153,834 1.23 1.23 6.05 1.21 1.21 6.07 13
2005 160,496 1.24 1.24 6.22 1.23 1.23 6.22 10
2004 151,107 1.24 1.24 6.54 1.23 1.23 6.55 16
2003 159,415 1.26 1.26 7.00 1.25 1.25 7.01 16
MARYLAND DIVIDEND
ADVANTAGE (NFM)
-----------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2008(b) 60,534 1.28*** 1.27*** 6.27*** .96*** .95*** 6.59*** 7
2007 61,261 1.30 1.26 6.06 .93 .89 6.43 12
2006 60,762 1.26 1.26 5.99 .81 .81 6.44 14
2005 63,051 1.26 1.26 6.11 .79 .79 6.57 11
2004 60,041 1.24 1.24 6.34 .78 .78 6.80 10
2003 64,338 1.26 1.26 6.54 .79 .79 7.01 12
===================================================================================================================================
Floating Rate Obligations
Preferred Shares at End of Period at End of Period
-------------------------------------- -------------------------
Aggregate Liquidation Aggregate
Amount and Market Asset Amount Asset
Outstanding Value Coverage Outstanding Coverage
(000) Per Share Per Share (000) Per $1,000
================================================================================
MARYLAND PREMIUM INCOME (NMY)
--------------------------------------------------------------------------------
Year Ended 5/31:
2008(b) $79,100 $25,000 $73,841 $ -- $ --
2007 79,100 25,000 73,990 2,800 84,609
2006 79,100 25,000 73,620 -- --
2005 79,100 25,000 75,726 -- --
2004 79,100 25,000 72,758 -- --
2003 79,100 25,000 75,384 -- --
MARYLAND DIVIDEND ADVANTAGE (NFM)
--------------------------------------------------------------------------------
Year Ended 5/31:
2008(b) 32,000 25,000 72,292 -- --
2007 32,000 25,000 72,860 1,133 83,314
2006 32,000 25,000 72,470 -- --
2005 32,000 25,000 74,259 -- --
2004 32,000 25,000 71,907 -- --
2003 32,000 25,000 75,264 -- --
================================================================================
* Total Return on Market Value is the combination of changes in the market
price per share and the effect of reinvested dividend income and reinvested
capital gains distributions, if any, at the average price paid per share at
the time of reinvestment. The last dividend declared in the period, which
is typically paid on the first business day of the following month, is
assumed to be reinvested at the ending market price. The actual
reinvestment for the last dividend declared in the period takes place over
several days, and in some instances may not be based on the market price,
so the actual reinvestment price may be different from the price used in
the calculation. Total returns are not annualized.
Total Return on Common Share Net Asset Value is the combination of changes
in Common share net asset value, reinvested dividend income at net asset
value and reinvested capital gains distributions at net asset value, if
any. The last dividend declared in the period, which is typically paid on
the first business day of the following month, is assumed to be reinvested
at the ending net asset value. The actual reinvest price for the last
dividend declared in the period may often be based on the Fund's market
price (and not its net asset value), and therefore may be different from
the price used in calculation. Total returns are not annualized.
** After custodian fee credit and expense reimbursement, where applicable.
*** Annualized.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
(a) Interest expense arises from the application of SFAS No. 140 to certain
inverse floating rate transactions entered into by the Fund as more fully
described in Footnote 1 - Inverse Floating Rate Securities.
(b) For the six months ended November 30, 2007.
See accompanying notes to financial statements.
84-85 spread
Financial
HIGHLIGHTS (continued) (Unaudited)
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
----------------------------------------------------------------- ----------------------------
Distributions Distributions
from Net from Net
Beginning Investment Capital Investment Capital
Common Net Income to Gains to Income to Gains to
Share Net Realized/ Preferred Preferred Common Common
Net Asset Investment Unrealized Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
==============================================================================================================================
MARYLAND DIVIDEND
ADVANTAGE 2 (NZR)
------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2008(b) $14.81 $.47 $ (.15) $(.13) $ -- $ .19 $(.35) $ -- $(.35)
2007 14.76 .94 .10 (.23) -- .81 (.76) -- (.76)
2006 15.45 .94 (.59) (.18) -- .17 (.83) (.03) (.86)
2005 14.64 .94 .90 (.09) -- 1.75 (.88) (.06) (.94)
2004 15.71 .96 (1.08) (.06) -- (.18) (.87) (.02) (.89)
2003 14.01 .97 1.62 (.09) -- 2.50 (.81) -- (.81)
MARYLAND DIVIDEND
ADVANTAGE 3 (NWI)
------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2008(b) 14.48 .44 (.16) (.12) -- .16 (.32) -- (.32)
2007 14.33 .88 .16 (.22) -- .82 (.67) -- (.67)
2006 14.82 .86 (.46) (.18) -- .22 (.71) -- (.71)
2005 13.88 .86 .97 (.10) -- 1.73 (.78) (.01) (.79)
2004 14.89 .87 (1.03) (.06) -- (.22) (.79) -- (.79)
2003(c) 14.33 .52 .75 (.05) -- 1.22 (.46) -- (.46)
==============================================================================================================================
Total Returns
--------------------
Offering Based
Costs and Ending on
Preferred Common Based Common
Share Share Ending on Share Net
Underwriting Net Asset Market Market Asset
Discounts Value Value Value* Value*
=================================================================================
MARYLAND DIVIDEND
ADVANTAGE 2 (NZR)
---------------------------------------------------------------------------------
Year Ended 5/31:
2008(b) $ -- $14.65 $13.26 (11.59)% 1.32%
2007 -- 14.81 15.38 9.32 5.56
2006 -- 14.76 14.76 1.13 1.14
2005 -- 15.45 15.41 14.71 12.22
2004 -- 14.64 14.28 (2.90) (1.16)
2003 .01 15.71 15.60 12.71 18.39
MARYLAND DIVIDEND
ADVANTAGE 3 (NWI)
---------------------------------------------------------------------------------
Year Ended 5/31:
2008(b) -- 14.32 12.63 (12.25) 1.10
2007 -- 14.48 14.74 11.47 5.75
2006 -- 14.33 13.85 1.09 1.55
2005 -- 14.82 14.40 14.98 12.67
2004 -- 13.88 13.24 (5.97) (1.51)
2003(c) (.20) 14.89 14.90 2.53 7.31
=================================================================================
Ratios/Supplemental Data
-----------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets Ratios to Average Net Assets
Applicable to Common Shares Applicable to Common Shares
Before Credit/Reimbursement After Credit/Reimbursement**
------------------------------------------ ------------------------------------------
Ending
Net
Assets
Applicable Expenses Expenses Net Expenses Expenses Net Portfolio
to Common Including Excluding Investment Including Excluding Investment Turnover
Shares (000) Interest++(a) Interest++(a) Income++ Interest++(a) Interest++(a) Income++ Rate
====================================================================================================================================
MARYLAND DIVIDEND
ADVANTAGE 2 (NZR)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2008(b) $61,415 1.28%*** 1.27%*** 6.07%*** .90%*** .89%*** 6.45%*** 9%
2007 62,064 1.32 1.28 5.86 .90 .86 6.28 10
2006 61,726 1.25 1.25 5.76 .77 .77 6.23 15
2005 64,500 1.23 1.23 5.74 .77 .77 6.20 10
2004 61,064 1.24 1.24 5.90 .78 .78 6.36 11
2003 65,490 1.26 1.26 6.07 .80 .80 6.53 12
MARYLAND DIVIDEND
ADVANTAGE 3 (NWI)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2008(b) 76,790 1.24*** 1.23*** 5.77*** .78*** .77*** 6.24*** 9
2007 77,640 1.28 1.24 5.52 .79 .75 6.01 11
2006 76,809 1.23 1.23 5.41 .73 .73 5.91 14
2005 79,443 1.23 1.23 5.40 .74 .74 5.89 12
2004 74,369 1.22 1.22 5.59 .73 .73 6.08 15
2003(c) 79,700 1.18*** 1.18*** 5.01*** .70*** .70*** 5.50*** 13
====================================================================================================================================
Floating Rate Obligations
Preferred Shares at End of Period at End of Period
-------------------------------------- -------------------------
Aggregate Liquidation Aggregate
Amount and Market Asset Amount Asset
Outstanding Value Coverage Outstanding Coverage
(000) Per Share Per Share (000) Per $1,000
================================================================================
MARYLAND DIVIDEND ADVANTAGE 2 (NZR)
--------------------------------------------------------------------------------
Year Ended 5/31:
2008(b) $32,000 $25,000 $72,981 $ -- $ --
2007 32,000 25,000 73,488 1,133 84,022
2006 32,000 25,000 73,224 -- --
2005 32,000 25,000 75,390 -- --
2004 32,000 25,000 72,706 -- --
2003 32,000 25,000 76,164 -- --
MARYLAND DIVIDEND ADVANTAGE 3 (NWI)
--------------------------------------------------------------------------------
Year Ended 5/31:
2008(b) 39,000 25,000 74,224 -- --
2007 39,000 25,000 74,769 1,400 84,314
2006 39,000 25,000 74,237 -- --
2005 39,000 25,000 75,925 -- --
2004 39,000 25,000 72,672 -- --
2003(c) 39,000 25,000 76,090 -- --
================================================================================
* Total Return on Market Value is the combination of changes in the market
price per share and the effect of reinvested dividend income and reinvested
capital gains distributions, if any, at the average price paid per share at
the time of reinvestment. The last dividend declared in the period, which
is typically paid on the first business day of the following month, is
assumed to be reinvested at the ending market price. The actual
reinvestment for the last dividend declared in the period takes place over
several days, and in some instances may not be based on the market price,
so the actual reinvestment price may be different from the price used in
the calculation. Total returns are not annualized.
Total Return on Common Share Net Asset Value is the combination of changes
in Common share net asset value, reinvested dividend income at net asset
value and reinvested capital gains distributions at net asset value, if
any. The last dividend declared in the period, which is typically paid on
the first business day of the following month, is assumed to be reinvested
at the ending net asset value. The actual reinvest price for the last
dividend declared in the period may often be based on the Fund's market
price (and not its net asset value), and therefore may be different from
the price used in calculation. Total returns are not annualized.
** After custodian fee credit and expense reimbursement, where applicable. ***
Annualized.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
(a) Interest expense arises from the application of SFAS No. 140 to certain
inverse floating rate transactions entered into by the Fund as more fully
described in Footnote 1 - Inverse Floating Rate Securities.
(b) For the six months ended November 30, 2007.
(c) For the period September 25, 2002 (commencement of operations) through May
31, 2003.
See accompanying notes to financial statements.
86-87 spread
Financial
HIGHLIGHTS (continued) (Unaudited)
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
----------------------------------------------------------------- ------------------------------
Distributions Distributions
from Net from Net
Beginning Investment Capital Investment Capital
Common Net Income to Gains to Income to Gains to
Share Net Realized/ Preferred Preferred Common Common
Net Asset Investment Unrealized Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
===============================================================================================================================
VIRGINIA PREMIUM
INCOME (NPV)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2008(b) $14.89 $ .44 $ (.10) $(.12) $ -- $.22 $(.32) $ -- $ (.32)
2007 14.89 .88 .07 (.23) --* .72 (.70) (.02) (.72)
2006 15.82 .88 (.59) (.15) (.03) .11 (.80) (.24) (1.04)
2005 14.95 .93 .93 (.09) -- 1.77 (.90) -- (.90)
2004 15.93 .97 (.99) (.05) -- (.07) (.91) -- (.91)
2003 14.69 1.00 1.21 (.07) -- 2.14 (.90) -- (.90)
VIRGINIA DIVIDEND
ADVANTAGE (NGB)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2008(b) 14.98 .48 (.34) (.12) -- .02 (.35) -- (.35)
2007 14.91 .96 .14 (.24) -- .86 (.79) -- (.79)
2006 15.52 .97 (.54) (.17) -- .26 (.87) -- (.87)
2005 14.42 .99 1.13 (.09) -- 2.03 (.93) -- (.93)
2004 15.43 1.02 (1.05) (.05) -- (.08) (.93) -- (.93)
2003 14.23 1.02 1.10 (.07) -- 2.05 (.86) -- (.86)
===============================================================================================================================
Total Returns
--------------------
Offering Based
Costs and Ending on
Preferred Common Based Common
Share Share Ending on Share Net
Underwriting Net Asset Market Market Asset
Discounts Value Value Value* Value*
=================================================================================
VIRGINIA PREMIUM
INCOME (NPV)
---------------------------------------------------------------------------------
Year Ended 5/31:
2008(b) $ -- $14.79 $13.29 (10.80)% 1.49%
2007 -- 14.89 15.24 7.18 4.89
2006 -- 14.89 14.91 (9.98) 0.71
2005 -- 15.82 17.65 24.54 12.13
2004 -- 14.95 14.95 (10.70) (.42)
2003 -- 15.93 17.67 15.27 14.99
VIRGINIA DIVIDEND
ADVANTAGE (NGB)
---------------------------------------------------------------------------------
Year Ended 5/31:
2008(b) -- 14.65 13.40 (21.59) .16
2007 -- 14.98 17.51 7.24 5.82
2006 -- 14.91 17.10 5.86 1.74
2005 -- 15.52 16.99 19.11 14.46
2004 -- 14.42 15.07 (8.11) (.50)
2003 .01 15.43 17.35 21.45 14.92
=================================================================================
Ratios/Supplemental Data
-----------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets Ratios to Average Net Assets
Applicable to Common Shares Applicable to Common Shares
Before Credit/Reimbursement After Credit/Reimbursement**
------------------------------------------ ------------------------------------------
Ending
Net
Assets
Applicable Expenses Expenses Net Expenses Expenses Net Portfolio
to Common Including Excluding Investment Including Excluding Investment Turnover
Shares (000) Interest++(a) Interest++(a) Income++ Interest++(a) Interest++(a) Income++ Rate
====================================================================================================================================
VIRGINIA PREMIUM
INCOME (NPV)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2008(b) $132,119 1.22%**** 1.22%**** 5.95%**** 1.21%**** 1.21%**** 5.96%**** 10%
2007 132,900 1.20 1.20 5.80 1.19 1.19 5.82 16
2006 132,626 1.19 1.19 5.75 1.17 1.17 5.77 16
2005 140,340 1.20 1.20 5.98 1.19 1.19 5.99 17
2004 132,122 1.20 1.20 6.33 1.19 1.19 6.34 14
2003 140,223 1.25 1.25 6.61 1.24 1.24 6.62 17
VIRGINIA DIVIDEND
ADVANTAGE (NGB)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2008(b) 45,886 1.27**** 1.27**** 6.20**** .94**** .94**** 6.53**** 7
2007 46,908 1.27 1.27 5.99 .90 .90 6.36 23
2006 46,626 1.26 1.26 5.93 .82 .82 6.38 16
2005 48,474 1.28 1.28 6.13 .81 .81 6.59 15
2004 44,988 1.24 1.24 6.39 .77 .77 6.86 7
2003 48,102 1.28 1.28 6.45 .81 .81 6.92 10
====================================================================================================================================
Floating Rate Obligations
Preferred Shares at End of Period at End of Period
-------------------------------------- -------------------------
Aggregate Liquidation Aggregate
Amount and Market Asset Amount Asset
Outstanding Value Coverage Outstanding Coverage
(000) Per Share Per Share (000) Per $1,000
================================================================================
VIRGINIA PREMIUM INCOME (NPV)
--------------------------------------------------------------------------------
Year Ended 5/31:
2008(b) $63,800 $25,000 $76,771 $ -- $ --
2007 63,800 25,000 77,077 -- --
2006 63,800 25,000 76,970 -- --
2005 63,800 25,000 79,992 -- --
2004 63,800 25,000 76,772 -- --
2003 63,800 25,000 79,946 -- --
VIRGINIA DIVIDEND ADVANTAGE (NGB)
--------------------------------------------------------------------------------
Year Ended 5/31:
2008(b) 24,000 25,000 72,798 -- --
2007 24,000 25,000 73,862 -- --
2006 24,000 25,000 73,568 -- --
2005 24,000 25,000 75,493 -- --
2004 24,000 25,000 71,863 -- --
2003 24,000 25,000 75,106 -- --
================================================================================
* Per share Distributions from Capital Gains to Preferred Shareholders rounds
to less than $.01 per share.
** Total Return on Market Value is the combination of changes in the market
price per share and the effect of reinvested dividend income and reinvested
capital gains distributions, if any, at the average price paid per share at
the time of reinvestment. The last dividend declared in the period, which
is typically paid on the first business day of the following month, is
assumed to be reinvested at the ending market price. The actual
reinvestment for the last dividend declared in the period takes place over
several days, and in some instances may not be based on the market price,
so the actual reinvestment price may be different from the price used in
the calculation. Total returns are not annualized.
Total Return on Common Share Net Asset Value is the combination of changes
in Common share net asset value, reinvested dividend income at net asset
value and reinvested capital gains distributions at net asset value, if
any. The last dividend declared in the period, which is typically paid on
the first business day of the following month, is assumed to be reinvested
at the ending net asset value. The actual reinvest price for the last
dividend declared in the period may often be based on the Fund's market
price (and not its net asset value), and therefore may be different from
the price used in calculation. Total returns are not annualized.
*** After custodian fee credit and expense reimbursement, where applicable.
**** Annualized.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
(a) Interest expense arises from the application of SFAS No. 140 to certain
inverse floating rate transactions entered into by the Fund as more fully
described in Footnote 1 - Inverse Floating Rate Securities.
(b) For the six months ended November 30, 2007.
See accompanying notes to financial statements.
88-89 spread
Financial
HIGHLIGHTS (continued) (Unaudited)
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
----------------------------------------------------------------- -----------------------------
Distributions Distributions
from Net from Net
Beginning Investment Capital Investment Capital
Common Net Income to Gains to Income to Gains to
Share Net Realized/ Preferred Preferred Common Common
Net Asset Investment Unrealized Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
===============================================================================================================================
VIRGINIA DIVIDEND
ADVANTAGE 2 (NNB)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2008(b) $15.08 $.48 $ (.29) $(.13) $ -- $ .06 $(.36) $ -- $ (.36)
2007 15.02 .96 .11 (.24) -- .83 (.77) -- (.77)
2006 15.70 .95 (.52) (.18) (.01) .24 (.85) (.07) (.92)
2005 14.79 .96 1.13 (.09) (.01) 1.99 (.89) (.19) (1.08)
2004 16.02 .99 (1.22) (.06) -- (.29) (.89) (.05) (.94)
2003 14.31 .97 1.69 (.08) -- 2.58 (.84) (.03) (.87)
===============================================================================================================================
Total Returns
--------------------
Offering Based
Costs and Ending on
Preferred Common Based Common
Share Share Ending on Share Net
Underwriting Net Asset Market Market Asset
Discounts Value Value Value* Value*
=================================================================================
VIRGINIA DIVIDEND
ADVANTAGE 2 (NNB)
---------------------------------------------------------------------------------
Year Ended 5/31:
2008(b) $ -- $14.78 $13.90 (14.87)% .40%
2007 -- 15.08 16.73 6.96 5.60
2006 -- 15.02 16.40 3.45 1.53
2005 -- 15.70 16.74 21.96 13.75
2004 -- 14.79 14.65 (3.81) (1.84)
2003 -- 16.02 16.14 14.58 18.51
=================================================================================
Ratios/Supplemental Data
-----------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets Ratios to Average Net Assets
Applicable to Common Shares Applicable to Common Shares
Before Credit/Reimbursement After Credit/Reimbursement**
------------------------------------------ ------------------------------------------
Ending
Net
Assets
Applicable Expenses Expenses Net Expenses Expenses Net Portfolio
to Common Including Excluding Investment Including Excluding Investment Turnover
Shares (000) Interest++(a) Interest++(a) Income++ Interest++(a) Interest++(a) Income++ Rate
===================================================================================================================================
VIRGINIA DIVIDEND
ADVANTAGE 2 (NNB)
-----------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2008(b) $84,705 1.22%*** 1.22%*** 6.10%*** .84%*** .84%*** 6.48%*** 7%
2007 86,382 1.21 1.21 5.89 .78 .78 6.31 19
2006 85,887 1.19 1.19 5.75 .73 .73 6.21 10
2005 89,626 1.19 1.19 5.74 .74 .74 6.19 13
2004 84,248 1.20 1.20 5.99 .74 .74 6.44 16
2003 91,065 1.21 1.21 6.01 .75 .75 6.47 15
===================================================================================================================================
Floating Rate Obligations
Preferred Shares at End of Period at End of Period
-------------------------------------- -------------------------
Aggregate Liquidation Aggregate
Amount and Market Asset Amount Asset
Outstanding Value Coverage Outstanding Coverage
(000) Per Share Per Share (000) Per $1,000
================================================================================
VIRGINIA DIVIDEND ADVANTAGE 2 (NNB)
--------------------------------------------------------------------------------
Year Ended 5/31:
2008(b) $42,000 $25,000 $75,419 $ -- $ --
2007 42,000 25,000 76,418 -- --
2006 42,000 25,000 76,123 -- --
2005 42,000 25,000 78,349 -- --
2004 42,000 25,000 75,148 -- --
2003 42,000 25,000 79,206 -- --
================================================================================
* Total Return on Market Value is the combination of changes in the market
price per share and the effect of reinvested dividend income and reinvested
capital gains distributions, if any, at the average price paid per share at
the time of reinvestment. The last dividend declared in the period, which
is typically paid on the first business day of the following month, is
assumed to be reinvested at the ending market price. The actual
reinvestment for the last dividend declared in the period takes place over
several days, and in some instances may not be based on the market price,
so the actual reinvestment price may be different from the price used in
the calculation. Total returns are not annualized.
Total Return on Common Share Net Asset Value is the combination of changes
in Common share net asset value, reinvested dividend income at net asset
value and reinvested capital gains distributions at net asset value, if
any. The last dividend declared in the period, which is typically paid on
the first business day of the following month, is assumed to be reinvested
at the ending net asset value. The actual reinvest price for the last
dividend declared in the period may often be based on the Fund's market
price (and not its net asset value), and therefore may be different from
the price used in calculation. Total returns are not annualized.
** After custodian fee credit and expense reimbursement, where applicable.
*** Annualized.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
(a) Interest expense arises from the application of SFAS No. 140 to certain
inverse floating rate transactions entered into by the Fund as more fully
described in Footnote 1 - Inverse Floating Rate Securities.
(b) For the six months ended November 30, 2007.
See accompanying notes to financial statements.
90-91 spread
Annual Investment
Management Agreement
APPROVAL PROCESS
The Board Members are responsible for overseeing the performance of the
investment adviser to the Funds and determining whether to continue the advisory
arrangements. At the annual review meeting held on May 21, 2007 (the "May
Meeting"), the Board Members of the Funds, including the Independent Board
Members, unanimously approved the continuance of the Investment Management
Agreement between each Fund (each, a "Fund") and Nuveen Asset Management
("NAM"). The foregoing Investment Management Agreements with NAM are hereafter
referred to as the "Original Investment Management Agreements."
Subsequent to the May Meeting, Nuveen Investments, Inc. ("Nuveen"), the parent
company of NAM, entered into a merger agreement providing for the acquisition of
Nuveen by Windy City Investments, Inc., a corporation formed by investors led by
Madison Dearborn Partners, LLC ("MDP"), a private equity investment firm (the
"Transaction"). Each Original Investment Management Agreement, as required by
Section 15 of the Investment Company Act of 1940 (the "1940 Act"), provides for
its automatic termination in the event of its "assignment" (as defined in the
1940 Act). Any change in control of the adviser is deemed to be an assignment.
The consummation of the Transaction will result in a change of control of NAM as
well as its affiliated sub-advisers and therefore cause the automatic
termination of each Original Investment Management Agreement, as required by the
1940 Act. Accordingly, in anticipation of the Transaction, at a meeting held on
July 31, 2007 (the "July Meeting"), the Board Members, including the Independent
Board Members, unanimously approved new Investment Management Agreements (the
"New Investment Management Agreements") with NAM on behalf of each Fund to take
effect immediately after the Transaction or shareholder approval of the new
advisory contracts, whichever is later. The 1940 Act also requires that each New
Investment Management Agreement be approved by the respective Fund's
shareholders in order for it to become effective. Accordingly, to ensure
continuity of advisory services, the Board Members, including the Independent
Board Members, unanimously approved Interim Investment Management Agreements to
take effect upon the closing of the Transaction if shareholders have not yet
approved the New Investment Management Agreements.
Because the information provided and considerations made at the annual review
continue to be relevant with respect to the evaluation of the New Investment
Management Agreements, the Board considered the foregoing as part of its
deliberations of the New Investment Management Agreements. Accordingly, as
indicated, the discussions immediately below outline the materials and
information presented to the Board in connection with the Board's prior annual
review and the analysis undertaken and the conclusions reached by Board Members
when determining to continue the Original Investment Management Agreements.
I. Approval of the Original Investment Management Agreements During the course
of the year, the Board received a wide variety of materials relating to the
services provided by NAM and the performance of the Funds. At each of its
quarterly meetings, the Board reviewed investment performance and various
matters relating to the operations of the Funds and other Nuveen funds,
including the compliance program, shareholder services, valuation, custody,
distribution and other information relating to the nature, extent and quality of
services provided by NAM. Between the regularly scheduled quarterly meetings,
the Board Members received information on particular matters as the need arose.
In preparation for their considerations at the May Meeting, the Independent
Board Members received extensive materials, well in advance of the meeting,
which outlined or are related to, among other things:
[] the nature, extent and quality of services provided by NAM;
[] the organization and business operations of NAM, including the
responsibilities of various departments and key personnel;
92
[] each Fund's past performance as well as the Fund's performance compared to
funds with similar investment objectives based on data and information
provided by an independent third party and to customized benchmarks;
[] the profitability of Nuveen and certain industry profitability analyses for
unaffiliated advisers;
[] the expenses of Nuveen in providing the various services;
[] the advisory fees and total expense ratios of each Fund, including
comparisons of such fees and expenses with those of comparable,
unaffiliated funds based on information and data provided by an independent
third party (the "Peer Universe") as well as compared to a subset of funds
within the Peer Universe (the "Peer Group") of the respective Fund (as
applicable);
[] the advisory fees NAM assesses to other types of investment products or
clients;
[] the soft dollar practices of NAM, if any; and
[] from independent legal counsel, a legal memorandum describing among other
things, applicable laws, regulations and duties in reviewing and approving
advisory contracts.
At the May Meeting, NAM made a presentation to, and responded to questions from,
the Board. Prior to and after the presentations and reviewing the written
materials, the Independent Board Members met privately with their legal counsel
to review the Boardduties in reviewing advisory contracts and considering the
renewal of the advisory contracts. The Independent Board Members, in
consultation with independent counsel, reviewed the factors set out in judicial
decisions and Securities and Exchange Commission ("SEC") directives relating to
the renewal of advisory contracts. As outlined in more detail below, the Board
Members considered all factors they believed relevant with respect to each Fund,
including, but not limited to, the following: (a) the nature, extent and quality
of the services to be provided by NAM; (b) the investment performance of the
Fund and NAM; (c) the costs of the services to be provided and profits to be
realized by Nuveen and its affiliates; (d) the extent to which economies of
scale would be realized; and (e) whether fee levels reflect those economies of
scale for the benefit of the Fund's investors. In addition, as noted, the Board
Members met regularly throughout the year to oversee the Funds. In evaluating
the Original Investment Management Agreements, the Board Members also relied
upon their knowledge of NAM, its services and the Funds resulting from their
meetings and other interactions throughout the year. It is with this background
that the Board Members considered each Original Investment Management Agreement.
A. NATURE, EXTENT AND QUALITY OF SERVICES
In considering the renewal of the Original Investment Management Agreements, the
Board Members considered the nature, extent and quality of NAM's services. The
Board Members reviewed materials outlining, among other things, Nuveen's
organization and business; the types of services that NAM or its affiliates
provide and are expected to provide to the Funds; the performance record of the
applicable Fund (as described in further detail below); and, any initiatives
Nuveen had taken for the municipal fund product line. As noted, at the annual
review, the Board Members were already familiar with the organization,
operations and personnel of NAM due to the Board Members' experience in
governing the respective Funds and working with NAM on matters relating to the
Funds. With respect to personnel, the Board Members recognized NAM's investment
in additional qualified personnel throughout the various groups in the
organization and recommended to NAM that it continue to review staffing needs as
necessary. In addition, the Board Members reviewed materials describing the
current status and, in particular, the developments in 2006 with respect to
NAM's investment process, investment strategies (including additional tools used
in executing such strategies), personnel (including portfolio management and
research teams), trading process, hedging activities, risk management operations
(e.g., reviewing credit quality, duration limits, and derivatives use, as
applicable), and investment operations (such as enhancements to trading
procedures, pricing procedures, and client services). The Board Members
recognized NAM's investment of resources and efforts to continue to enhance and
refine its investment process.
In addition to advisory services, the Independent Board Members considered the
quality of administrative and non-advisory services provided by NAM and noted
that NAM and its affiliates provide the Funds with a wide variety of services
and officers and other personnel as are necessary for the operations of the
Funds, including:
93
ANNUAL INVESTMENT MANAGEMENT AGREEMENT
APPROVAL PROCESS (continued)
[] product management;
[] fund administration;
[] oversight by shareholder services and other fund service providers;
[] administration of Board relations;
[] regulatory and portfolio compliance; and
[] legal support.
As the Funds operate in a highly regulated industry and given the importance of
compliance, the Board Members considered, in particular, Nuveen's compliance
activities for the Funds and enhancements thereto. In this regard, the Board
Members recognized the quality of Nuveen's compliance team. The Board Members
further noted Nuveen's negotiations with other service providers and the
corresponding reduction in certain service providers' fees at the May Meeting.
In addition to the foregoing services, the Board Members also noted the
additional services that NAM or its affiliates provide to Nuveen's closed-end
funds, including, in particular, its secondary market support activities. The
Board Members recognized Nuveen's continued commitment to supporting the
secondary market for the common shares of its closed-end funds through a variety
of programs designed to raise investor and analyst awareness and understanding
of closed-end funds. These efforts include:
[] maintaining shareholder communications;
[] providing advertising for the Nuveen closed-end funds;
[] maintaining its closed-end fund website;
[] maintaining continual contact with financial advisers;
[] providing educational symposia;
[] conducting research with investors and financial analysis regarding
closed-end funds; and
[] evaluating secondary market performance. With respect to the Nuveen
closed-end funds that utilize leverage through the issuance of preferred
shares ("Preferred Shares"), the Board Members noted Nuveen's continued
support for the holders of Preferred Shares by, among other things:
[] maintaining an in-house trading desk;
[] maintaining a product manager for the Preferred Shares;
[] developing distribution for Preferred Shares with new market participants;
[] maintaining an orderly auction process;
[] managing leverage and risk management of leverage; and
[] maintaining systems necessary to test compliance with rating agency
criteria.
Based on their review, the Board Members found that, overall, the nature, extent
and quality of services provided (and expected to be provided) to the respective
Funds under the Original Investment Management Agreements were satisfactory.
B. THE INVESTMENT PERFORMANCE OF THE FUNDS AND NAM
At the May Meeting, the Board considered the investment performance for each
Fund, including the Fund's historic performance as well as its performance
compared to funds with similar investment objectives (the "Performance Peer
Group") based on data provided by an independent third party (as described
below). The Board Members also reviewed the respective Fund's portfolio level
performance (which does not reflect fund level fees and expenses, and leverage)
against customized benchmarks, described in further detail below.
In evaluating the performance information during the annual review at the May
Meeting, in certain instances, the Board Members noted that the closest
Performance Peer Group for a fund may not adequately reflect
94
such fund's investment objectives and strategies, thereby limiting the
usefulness of the comparisons of such fund's performance with that of the
Performance Peer Group.
With respect to state-specific municipal funds, the Board Members also
recognized that certain funds do not have a corresponding state-specific
Performance Peer Group in which case their performance is measured against a
more general municipal category for various states. With respect to municipal
closed-end funds, funds that do not have corresponding state-specific
Performance Peer Groups are from states other than New York, California,
Florida, New Jersey, Michigan and Pennsylvania. However, with respect to funds
based in Florida, New Jersey, Michigan and Pennsylvania, the peer group may be
so small or the Nuveen funds may dominate the category to such an extent that
performance information for such funds was also compared to the more general
category for all states (other than New York and California).
The Board Members reviewed performance information including, among other
things, total return information compared with the Fund's Performance Peer Group
for the one-, three- and five-year periods (as applicable) ending December 31,
2006. The Board Members also reviewed the Fund's portfolio level performance
(which does not reflect fund level fees and expenses, and leverage) compared to
customized portfolio level benchmarks for the one- and three-year periods ending
December 31, 2006 (as applicable). The analysis was used to assess the efficacy
of investment decisions against appropriate measures of risk and total return,
within specific market segments. This information supplemented the Fund
performance information provided to the Board at each of its quarterly meetings.
Based on their review, the Board Members determined that each Fund's investment
performance over time had been satisfactory, subject to the following. With
respect to various municipal closed-end funds, the Board Members noted relative
total return underperformance in recent years compared to peers. The Board
Members reviewed materials and discussed with NAM the factors contributing to
the shift in performance including, among other things, the degree of risk
undertaken by peers compared to the municipal closed-end funds (such as through
the increased use of leverage or taking concentrated positions in high risk
credits). In addition, the Board Members also considered a fund's dividend
performance and the extent of any secondary market discounts. The Board Members
noted NAM's efforts to evaluate the factors affecting performance and determine
whether modification to a fund's investment strategy is necessary or
appropriate, and concluded that they were satisfied with the steps being taken.
C. FEES, EXPENSES AND PROFITABILITY
1. FEES AND EXPENSES
During the annual review, in evaluating the management fees and expenses of
a Fund, the Board reviewed, among other things, the Fund's advisory fees
(net and gross management fees) and total expense ratios (before and after
expense reimbursements and/or waivers) in absolute terms as well as
comparisons to the gross management fees (before waivers), net management
fees (after waivers) and total expense ratios (before and after waivers) of
comparable funds in the Peer Universe and the Peer Group. In reviewing the
fee schedule for a Fund, the Board Members 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 funds launched since 1999). The Board Members
further reviewed data regarding the construction of Peer Groups as well as
the methods of measurement for the fee and expense analysis and the
performance analysis. In certain cases, due to the small number of peers in
the Peer Universe, the Peer Universe and Peer Group had significant overlap
or even consisted entirely of the same unaffiliated funds. In reviewing the
comparisons of fee and expense information, the Board Members recognized
that in certain cases, the fund size relative to peers, the small size and
odd composition of the Peer Group (including differences in objectives and
strategies), expense anomalies, timing of information used or other factors
impacting the comparisons thereby limited some of the usefulness of the
comparative data. The Board Members also considered the differences in the
use of leverage. Based on their review of the fee and expense information
provided, the Board Members determined that each Fund's net total expense
ratio was within an acceptable range compared to peers.
2. COMPARISONS WITH THE FEES OF OTHER CLIENTS
At the annual review, the Board Members further reviewed data comparing the
advisory fees of NAM with fees NAM charges to other clients. With respect
to municipal funds, such clients include NAM's municipal separately managed
accounts. In general, the advisory fees charged for separate accounts are
95
ANNUAL INVESTMENT MANAGEMENT AGREEMENT
APPROVAL PROCESS (continued)
somewhat lower than the advisory fees assessed to the Funds. The 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 Board Members
noted, in particular, that the range of services provided to the Funds (as
discussed above) is much more extensive than that provided to separately
managed accounts. As described in further detail above, such additional
services include, but are not limited to: product management, fund
administration, oversight of third party service providers, administration
of Board relations, and legal support. The Board Members noted that the
Funds operate in a highly regulated industry requiring extensive compliance
functions compared to other investment products. Given the inherent
differences in the products, particularly the extensive services provided
to the Funds, the Board Members believe such facts justify the different
levels of fees.
3. PROFITABILITY OF NUVEEN
In conjunction with its review of fees, the Board Members also considered
the profitability of Nuveen for its advisory activities (which incorporated
Nuveen's wholly-owned affiliated sub-advisers) and its financial condition.
At the annual review, the Board Members reviewed the revenues and expenses
of Nuveen's advisory activities for the last three years, the allocation
methodology used in preparing the profitability data as well as the 2006
Annual Report for Nuveen. The 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 Board Members noted the enhanced dialogue and information
regarding profitability with NAM during the year, including more frequent
meetings and updates from Nuveen's corporate finance group. The Board
Members also reviewed data comparing Nuveen's profitability with other fund
sponsors prepared by three independent third party service providers as
well as comparisons of the revenues, expenses and profit margins of various
unaffiliated management firms with similar amounts of assets under
management prepared by Nuveen.
In reviewing profitability, the Board Members recognized the subjective
nature of determining profitability which may be affected by numerous
factors, including the allocation of expenses. Further, the 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 Board Members reviewed Nuveen's methodology
and assumptions for allocating expenses across product lines to determine
profitability. Last year, the Board Members also designated an Independent Board
Member as a point person for the Board to review the methodology determinations
during the year and any refinements thereto, which relevant information produced
from such process was reported to the full Board. In reviewing profitability,
the Board Members recognized Nuveen's increased investment in its fund business.
Based on its review, the 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 Board Members also
considered other amounts paid to NAM by the Funds as well as any indirect
benefits (such as soft dollar arrangements, if any) NAM and its affiliates
receive, or are expected to receive, that are directly attributable to the
management of the Funds, if any. See Section E below for additional information
on indirect benefits NAM may receive as a result of its relationship with the
Funds. Based on their review of the overall fee arrangements of each Fund, the
Board Members determined that the advisory fees and expenses of the Funds were
reasonable.
D. ECONOMIES OF SCALE AND WHETHER FEE LEVELS REFLECT THESE ECONOMIES OF SCALE
With respect to economies of scale, the Board Members recognized the potential
benefits resulting from the costs of a Fund being spread over a larger asset
base. To help ensure the shareholders share in these benefits, the Board Members
reviewed and considered the breakpoints in the advisory fee schedules that
reduce advisory fees. In addition to advisory fee breakpoints, the Board also
approved a complex-wide fee
96
arrangement in 2004. Pursuant to the complex-wide fee arrangement, the fees of
the funds in the Nuveen complex, including the Funds, are reduced as the assets
in the fund complex reach certain levels. In evaluating the complex-wide fee
arrangement, the Board Members noted that the last complex-wide asset level
breakpoint for the complex-wide fee schedule was at $91 billion and that the
Board Members anticipated further review and/or negotiations prior to the assets
of the Nuveen complex reaching such threshold. Based on their review, the Board
Members concluded that the breakpoint schedule and complex-wide fee arrangement
were acceptable and desirable in providing benefits from economies of scale to
shareholders, subject to further evaluation of the complex-wide fee schedule as
assets in the complex increase. See Section II, Paragraph D - "Approval of the
New Investment Management Agreements - Economies of Scale and Whether Fee Levels
Reflect These Economies of Scale" for information regarding subsequent
modifications to the complex-wide fee.
E. INDIRECT BENEFITS
In evaluating fees, the Board Members also considered any indirect benefits or
profits NAM or its affiliates may receive as a result of its relationship with
each Fund. With respect to closed-end funds, the Board Members considered the
revenues received by affiliates of NAM for serving as agent at Nuveen's
preferred trading desk and for serving as a co-manager in the initial public
offering of new closed-end exchange traded funds.
In addition to the above, the Board Members considered whether NAM received any
benefits from soft dollar arrangements whereby a portion of the commissions paid
by a Fund for brokerage may be used to acquire research that may be useful to
NAM in managing the assets of the Funds and other clients. With respect to NAM,
the 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 Board Members concluded that any indirect benefits
received by NAM as a result of its relationship with the Funds were reasonable
and within acceptable parameters.
F. OTHER CONSIDERATIONS
The Board Members did not identify any single factor discussed previously as
all-important or controlling in their considerations to continue an advisory
contract. The Board Members, including the Independent Board Members,
unanimously concluded that the terms of the Original Investment Management
Agreements are fair and reasonable, that NAM's fees are reasonable in light of
the services provided to each Fund and that the renewal of the Original
Investment Management Agreements be approved.
II. APPROVAL OF THE NEW INVESTMENT MANAGEMENT AGREEMENTS
Following the May Meeting, the Board Members were advised of the potential
Transaction. As noted above, the completion of the Transaction would terminate
each of the Original Investment Management Agreements. Accordingly, at the July
Meeting, the Board of each Fund, including the Independent Board Members,
unanimously approved the New Investment Management Agreements on behalf of the
respective Funds. Leading up to the July Meeting, the Board Members had several
meetings and deliberations with and without Nuveen management present, and with
the advice of legal counsel, regarding the proposed Transaction as outlined
below.
On June 8, 2007, the Board Members held a special telephonic meeting to discuss
the proposed Transaction. At that meeting, the Board Members established a
special ad hoc committee comprised solely of Independent Board Members to focus
on the Transaction and to keep the Independent Board Members updated with
developments regarding the Transaction. On June 15, 2007, the ad hoc committee
discussed with representatives of NAM the Transaction and modifications to the
complex-wide fee schedule that would generate additional fee savings at
specified levels of complex-wide asset growth. Following the foregoing meetings
and several subsequent telephonic conferences among Independent Board Members
and independent counsel, and between Independent Board Members and
representatives of Nuveen, the Board met on June 18, 2007 to further discuss the
proposed Transaction. Immediately prior to and then again during the June 18,
2007 meeting, the Independent Board Members met privately with their independent
legal counsel. At that meeting, the Board met with representatives of MDP, of
Goldman Sachs,
97
ANNUAL INVESTMENT MANAGEMENT AGREEMENT
APPROVAL PROCESS (continued)
Nuveen's financial adviser in the Transaction, and of the Nuveen Board to
discuss, among other things, the history and structure of MDP, the terms of the
proposed Transaction (including the financing terms), and MDP's general plans
and intentions with respect to Nuveen (including with respect to management,
employees, and future growth prospects). On July 9, 2007, the Board also met to
be updated on the Transaction as part of a special telephonic Board meeting. The
Board Members were further updated at a special in-person Board meeting held on
July 19, 2007 (one Independent Board Member participated telephonically).
Subsequently, on July 27, 2007, the ad hoc committee held a telephonic
conference with representatives of Nuveen and MDP to further discuss, among
other things, the Transaction, the financing of the Transaction, retention and
incentive plans for key employees, the effect of regulatory restrictions on
transactions with affiliates after the Transaction, and current volatile market
conditions and their impact on the Transaction.
In connection with their review of the New Investment Management Agreements, the
Independent Board Members, through their independent legal counsel, also
requested in writing and received additional information regarding the proposed
Transaction and its impact on the provision of services by NAM and its
affiliates.
The Independent Board Members received, well in advance of the July Meeting,
materials which outlined, among other things:
[] the structure and terms of the Transaction, including MDP's co-investor
entities and their expected ownership interests, and the financing
arrangements that will exist for Nuveen following the closing of the
Transaction;
[] the strategic plan for Nuveen following the Transaction;
[] the governance structure for Nuveen following the Transaction;
[] any anticipated changes in the operations of the Nuveen funds following the
Transaction, including changes to NAM's and Nuveen's day-to-day management,
infrastructure and ability to provide advisory, distribution or other
applicable services to the Funds;
[] any changes to senior management or key personnel who work on Fund related
matters (including portfolio management, investment oversight, and
legal/compliance) and any retention or incentive arrangements for such
persons;
[] any anticipated effect on each Fund's expense ratio (including advisory
fees) following the Transaction;
[] any benefits or undue burdens imposed on the Funds as a result of the
Transaction;
[] any legal issues for the Funds as a result of the Transaction;
[] the nature, quality and extent of services expected to be provided to the
Funds following the Transaction, changes to any existing services and
policies affecting the Funds, and cost-cutting efforts, if any, that may
impact such services or policies;
[] any conflicts of interest that may arise for Nuveen or MDP with respect to
the Funds;
[] the costs associated with obtaining necessary shareholder approvals and who
would bear those costs; and
[] from legal counsel, a memorandum describing the applicable laws,
regulations and duties in approving advisory contracts, including, in
particular, with respect to a change of control.
Immediately preceding the July Meeting, representatives of MDP met with the
Board to further respond to questions regarding the Transaction. After the
meeting with MDP, the Independent Board Members met with independent legal
counsel in executive session. At the July Meeting, Nuveen also made a
presentation and responded to questions. Following the presentations and
discussions of the materials presented to the Board, the Independent Board
Members met again in executive session with their counsel. As outlined in more
detail below, the Independent Board Members considered all factors they believed
relevant with respect to each Fund, including the impact that the Transaction
could be expected to have on the following: (a) the nature, extent and quality
of services to be provided; (b) the investment performance of the Funds; (c) the
costs of the services and profits to be realized by Nuveen and its affiliates;
(d) the extent to which
98
economies of scale would be realized; and (e) whether fee levels reflect those
economies of scale for the benefit of investors. As noted above, the Board
Members had completed their annual review of the respective Original Investment
Management Agreements at the May Meeting and many of the factors considered at
the annual review were applicable to their evaluation of the New Investment
Management Agreements. Accordingly, in evaluating the New Investment Management
Agreements, the Board Members relied upon their knowledge and experience with
NAM and considered the information received and their evaluations and
conclusions drawn at the annual review. While the Board reviewed many Nuveen
funds at the July Meeting, the Independent Board Members evaluated all
information available to them on a fund-by-fund basis, and their determinations
were made separately in respect of each Fund.
A. NATURE, EXTENT AND QUALITY OF SERVICES
In evaluating the nature, quality and extent of the services expected to be
provided by NAM under the New Investment Management Agreements, the Independent
Board Members considered, among other things, the expected impact, if any, of
the Transaction on the operations, facilities, organization and personnel of
NAM; the potential implications of regulatory restrictions on the Funds
following the Transaction; the ability of NAM and its affiliates to perform
their duties after the Transaction; and any anticipated changes to the current
investment and other practices of the Funds.
The Board noted that the terms of each New Investment Management Agreement,
including the fees payable thereunder, are substantially identical to those of
the Original Investment Management Agreement relating to the same Fund (with
both reflecting reductions to fee levels in the complex-wide fee schedule for
complex-wide assets in excess of $80 billion that have an effective date of
August 20, 2007). The Board considered that the services to be provided and the
standard of care under the New Investment Management Agreements are the same as
the Original Investment Management Agreements. The Board Members further noted
that key personnel who have responsibility for the Funds in each area, including
portfolio management, investment oversight, fund management, fund operations,
product management, legal/compliance and board support functions, are expected
to be the same following the Transaction. The Board Members considered and are
familiar with the qualifications, skills and experience of such personnel. The
Board also considered certain information regarding anticipated retention or
incentive plans designed to retain key personnel. Further, the Board Members
noted that no changes to Nuveen's infrastructure or operations as a result of
the Transaction were anticipated other than potential enhancements as a result
of an expected increase in the level of investment in such infrastructure and
personnel. The Board noted MDP's representations that it does not plan to have a
direct role in the management of Nuveen, appointing new management personnel, or
directly impacting individual staffing decisions. The Board Members also noted
that there were not any planned "cost cutting" measures that could be expected
to reduce the nature, extent or quality of services. After consideration of the
foregoing, the Board Members concluded that no diminution in the nature, quality
and extent of services provided to the Funds and their shareholders is expected.
In addition to the above, the Board Members considered potential changes in the
operations of each Fund. In this regard, the Board Members considered the
potential effect of regulatory restrictions on the Funds' transactions with
future affiliated persons. During their deliberations, it was noted that, after
the Transaction, a subsidiary of Merrill Lynch is expected to have an ownership
interest in Nuveen at a level that will make Merrill Lynch an affiliated person
of Nuveen. The Board Members recognized that applicable law would generally
prohibit the Funds from engaging in securities transactions with Merrill Lynch
as principal, and would also impose restrictions on using Merrill Lynch for
agency transactions. They recognized that having MDP and Merrill Lynch as
affiliates may restrict the Nuveen funds' ability to invest in securities of
issuers controlled by MDP or issued by Merrill Lynch and its affiliates even if
not bought directly from MDP or Merrill Lynch as principal. They also recognized
that various regulations may require the Nuveen funds to apply investment
limitations on a combined basis with affiliates of Merrill Lynch. The Board
Members considered information provided by NAM regarding the potential impact on
the Nuveen funds' operations as a result of these regulatory restrictions. The
Board Members considered, in particular, the Nuveen funds that may be impacted
most by the restricted access to Merrill Lynch, including: municipal funds
(particularly certain state-specific funds), senior loan funds, taxable fixed
income funds, preferred security funds and funds that heavily use derivatives.
The Board Members considered such funds' historic use of Merrill Lynch as
principal in their transactions and information provided by NAM regarding the
expected impact resulting from Merrill Lynch's affiliation with Nuveen and
available measures that could be taken to minimize such
99
ANNUAL INVESTMENT MANAGEMENT AGREEMENT
APPROVAL PROCESS (continued)
impact. NAM informed the Board Members that, although difficult to determine
with certainty, its management did not believe that MDP's or Merrill Lynch's
status as an affiliate of Nuveen would have a material adverse effect on any
Nuveen fund's ability to pursue its investment objectives and policies.
In addition to the regulatory restrictions considered by the Board, the Board
Members also considered potential conflicts of interest that could arise between
the Nuveen funds and various parties to the Transaction and discussed possible
ways of addressing such conflicts.
Based on its review along with its considerations regarding services at the
annual review, the Board concluded that the Transaction was not expected to
adversely affect the nature, quality or extent of services provided by NAM and
that the expected nature, quality and extent of such services supported approval
of the New Investment Management Agreements.
B. PERFORMANCE OF THE FUNDS
With respect to the performance of the Funds, the Board considered that the
portfolio management personnel responsible for the management of the Funds'
portfolios were expected to continue to manage the portfolios following the
completion of the Transaction.
In addition, the Board Members recently reviewed Fund performance at the May
Meeting, as described above, and determined that Fund performance was
satisfactory or better, subject to the following. With respect to certain
municipal closed-end funds with relative short-term underperformance, the Board
Members concluded NAM was taking steps to evaluate the factors affecting
performance and those steps would continue following the Transaction. Further,
the investment policies and strategies were not expected to change as a result
of the Transaction.
In light of the foregoing factors, along with the prior findings regarding
performance at the annual review, the Board concluded that its findings with
respect to performance supported approval of the New Investment Management
Agreements.
C. FEES, EXPENSES AND PROFITABILITY
As described in more detail above, during the annual review, the Board Members
considered, among other things, the management fees and expenses of the Funds,
the breakpoint schedules, and comparisons of such fees and expenses with peers.
At the annual review, the Board Members determined that the respective Fund's
advisory fees and expenses were reasonable. In evaluating the costs of services
to be provided by NAM under the New Investment Management Agreements and the
profitability of Nuveen for its advisory activities, the Board Members
considered their prior conclusions at the annual review and whether the
management fees or other expenses would change as a result of the Transaction.
As described above, the investment management fee is composed of two
components--a fund-level component and complex-wide level component. The fee
schedule under the New Investment Management Agreements to be paid to NAM is
identical to that under the Original Investment Management Agreements, including
the modified complex-wide fee schedule. As noted above, the Board recently
approved a modified complex-wide fee schedule that would generate additional fee
savings on complex-wide assets above $80 billion. The modifications have an
effective date of August 20, 2007 and are part of the Original Investment
Management Agreements. Accordingly, the terms of the complex-wide component
under the New Investment Management Agreements are the same as under the
Original Investment Management Agreements. The Board Members also noted that
Nuveen has committed for a period of two years from the date of closing of the
Transaction that it will not increase gross management fees for any Nuveen fund
and will not reduce voluntary expense reimbursement levels for any Nuveen fund
from their currently scheduled prospective levels. Based on the information
provided, the Board Members did not expect that overall Fund expenses would
increase as a result of the Transaction.
In addition, the Board Members considered that additional fund launches were
anticipated after the Transaction which would result in an increase in total
assets under management in the complex and a corresponding decrease in overall
management fees under the complex-wide fee schedule. Taking into consideration
the Board's prior evaluation of fees and expenses at the annual renewal, and the
modification
100
to the complex-wide fee schedule, the Board determined that the management fees
and expenses were reasonable.
While it is difficult to predict with any degree of certainty the impact of the
Transaction on Nuveen's profitability, at the recent annual review, the Board
Members were satisfied that Nuveen's level of profitability for its advisory
activities was reasonable. During the year, the Board Members had noted the
enhanced dialogue regarding profitability and the appointment of an Independent
Board Member as a point person to review methodology determinations and
refinements in calculating profitability. Given their considerations at the
annual review and the modifications to the complex-wide fee schedule, the Board
Members were satisfied that Nuveen's level of profitability for its advisory
activities continues to be reasonable.
D. ECONOMIES OF SCALE AND WHETHER FEE LEVELS REFLECT THESE ECONOMIES OF SCALE
The Board Members have been cognizant of economies of scale and the potential
benefits resulting from the costs of a Fund being spread over a larger asset
base. To help ensure that shareholders share in the benefits derived from
economies of scale, the Board adopted the complex-wide fee arrangement in 2004.
At the May Meeting, the Board Members reviewed the complex-wide fee arrangements
and noted that additional negotiations may be necessary or appropriate as the
assets in the complex approached the $91 billion threshold. In light of this
assessment coupled with the upcoming Transaction, at the June 15, 2007 meeting,
the ad hoc committee met with representatives of Nuveen to further discuss
modifications to the complex-wide fee schedule that would generate additional
savings for shareholders as the assets of the complex grow. The proposed terms
for the complex-wide fee schedule are expressed in terms of targeted cumulative
savings at specified levels of complex-wide assets, rather than in terms of
targeted marginal complex-wide fee rates. Under the modified schedule, the
schedule would generate additional fee savings beginning at complex-wide assets
of $80 billion in order to achieve targeted cumulative annual savings at $91
billion of $28 million on a complex-wide level (approximately $0.6 million
higher than those generated under the then current schedule) and generate
additional fee savings for asset growth above complex-wide assets of $91 billion
in order to achieve targeted annual savings at $125 billion of assets of
approximately $50 million on a complex-wide level (approximately $2.2 million
higher annually than that generated under the then current schedule). At the
July Meeting, the Board approved the modified complex-wide fee schedule for the
Original Investment Management Agreements and these same terms will apply to the
New Investment Management Agreements. Accordingly, the Board Members believe
that the breakpoint schedules and revised complex-wide fee schedule are
appropriate and desirable in ensuring that shareholders participate in the
benefits derived from economies of scale.
E. INDIRECT BENEFITS
During their recent annual review, the Board Members considered any indirect
benefits that NAM may receive as a result of its relationship with the Funds, as
described above. As the policies and operations of Nuveen are not anticipated to
change significantly after the Transaction, such indirect benefits should remain
after the Transaction. The Board Members further considered any additional
indirect benefits to be received by NAM or its affiliates after the Transaction.
The Board Members noted that other than benefits from its ownership interest in
Nuveen and indirect benefits from fee revenues paid by the Funds under the
management agreements and other Board-approved relationships, it was currently
not expected that MDP or its affiliates would derive any benefit from the Funds
as a result of the Transaction or transact any business with or on behalf of the
Funds (other than perhaps potential Fund acquisitions, in secondary market
transactions, of securities issued by MDP portfolio companies); or that Merrill
Lynch or its affiliates would derive any benefits from the Funds as a result of
the Transaction (noting that, indeed, Merrill Lynch would stand to experience
the discontinuation of principal transaction activity with the Nuveen funds and
likely would experience a noticeable reduction in the volume of agency
transactions with the Nuveen funds).
101
ANNUAL INVESTMENT MANAGEMENT AGREEMENT
APPROVAL PROCESS (continued)
F. OTHER CONSIDERATIONS
In addition to the factors above, the Board Members also considered the
following with respect to the Funds:
[] Nuveen would rely on the provisions of Section 15(f) of the 1940 Act.
Section 15(f) provides, in substance, that when a sale of a controlling
interest in an investment adviser occurs, the investment adviser or any of
its affiliated persons may receive any amount or benefit in connection with
the sale so long as (i) during the three-year period following the
consummation of a transaction, at least 75% of the investment company's
board of directors must not be "interested persons" (as defined in the 1940
Act) of the investment adviser or predecessor adviser and (ii) an "unfair
burden" (as defined in the 1940 Act, including any interpretations or
no-action letters of the SEC) must not be imposed on the investment company
as a result of the transaction relating to the sale of such interest, or
any express or implied terms, conditions or understanding applicable
thereto. In this regard, to help ensure that an unfair burden is not
imposed on the Nuveen funds, Nuveen has committed for a period of two years
from the date of the closing of the Transaction (i) not to increase gross
management fees for any Nuveen fund; (ii) not to reduce voluntary expense
reimbursement levels for any Nuveen fund from their currently scheduled
prospective levels during that period; (iii) that no Nuveen fund whose
portfolio is managed by a Nuveen affiliate shall use Merrill Lynch as a
broker with respect to portfolio transactions done on an agency basis,
except as may be approved in the future by the Compliance Committee of the
Board; and (iv) that NAM shall not cause the Funds and other municipal
funds that NAM manages, as a whole, to enter into portfolio transactions
with or through the other minority owners of Nuveen, on either a principal
or an agency basis, to a significantly greater extent than both what one
would expect an investment team to use such firm in the normal course of
business, and what NAM has historically done, without prior Board or
Compliance Committee approval (excluding the impact of proportionally
increasing the use of such other "minority owners" to fill the void
necessitated by not being able to use Merrill Lynch).
[] The Funds would not incur any costs in seeking the necessary shareholder
approvals for the New Investment Management Agreements (except for any
costs attributed to seeking shareholder approvals of Fund specific matters
unrelated to the Transaction, such as approval of Board Members, in which
case a portion of such costs will be borne by the applicable Funds).
[] The reputation, financial strength and resources of MDP.
[] The long-term investment philosophy of MDP and anticipated plans to grow
Nuveen's business to the benefit of the Nuveen funds.
[] The benefits to the Nuveen funds as a result of the Transaction including:
(i) as a private company, Nuveen may have more flexibility in making
additional investments in its business; (ii) as a private company, Nuveen
may be better able to structure compensation packages to attract and retain
talented personnel; (iii) as certain of Nuveen's distribution partners are
expected to be equity or debt investors in Nuveen, Nuveen may be able to
take advantage of new or enhanced distribution arrangements with such
partners; and (iv) MDP's experience, capabilities and resources that may
help Nuveen identify and acquire investment teams or firms and finance such
acquisitions.
[] The historic premium and discount levels at which the shares of the Nuveen
funds have traded at specified dates with particular focus on the premiums
and discounts after the announcement of the Transaction, taking into
consideration recent volatile market conditions and steps or initiatives
considered or undertaken by NAM to address discount levels.
102
G. CONCLUSION
The 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 New Investment Management
Agreements are fair and reasonable, that the fees therein are reasonable in
light of the services to be provided to each Fund and that the New Investment
Management Agreements should be approved and recommended to shareholders.
III. APPROVAL OF INTERIM CONTRACTS
As noted above, at the July Meeting, the Board Members, including the
Independent Board Members, unanimously approved the Interim Investment
Management Agreements. If necessary to assure continuity of advisory services,
the Interim Investment Management Agreements will take effect upon the closing
of the Transaction if shareholders have not yet approved the New Investment
Management Agreements. The terms of each Interim Investment Management Agreement
are substantially identical to those of the corresponding Original Investment
Management Agreement and New Investment Management Agreement, respectively,
except for certain term and escrow provisions. In light of the foregoing, the
Board Members, including the Independent Board Members, unanimously determined
that the scope and quality of services to be provided to the Funds under the
respective Interim Investment Management Agreement are at least equivalent to
the scope and quality of services provided under the applicable Original
Investment Management Agreement.
103
Reinvest Automatically
EASILY and CONVENIENTLY
Nuveen makes reinvesting easy. A phone call is all it takes to set up your
reinvestment account.
NUVEEN CLOSED-END FUNDS DIVIDEND REINVESTMENT PLAN
Your Nuveen Closed-End Fund allows you to conveniently reinvest dividends and/or
capital gains distributions in additional Fund shares.
By choosing to reinvest, you'll be able to invest money regularly and
automatically, and watch your investment grow through the power of tax-free
compounding. Just like dividends or distributions in cash, there may be times
when income or capital gains taxes may be payable on dividends or distributions
that are reinvested.
It is important to note that an automatic reinvestment plan does not ensure a
profit, nor does it protect you against loss in a declining market.
EASY AND CONVENIENT
To make recordkeeping easy and convenient, each month you'll receive a statement
showing your total dividends and distributions, the date of investment, the
shares acquired and the price per share, and the total number of shares you own.
HOW SHARES ARE PURCHASED
The shares you acquire by reinvesting will either be purchased on the open
market or newly issued by the Fund. If the shares are trading at or above net
asset value at the time of valuation, the Fund will issue new shares at the
greater of the net asset value or 95% of the then-current market price. If the
shares are trading at less than net asset value, shares for your account will be
purchased on the open market. If the Plan Agent begins purchasing Fund shares on
the open market while shares are trading below net asset value, but the Fund's
shares subsequently trade at or above their net asset value before the Plan
Agent is able to complete its purchases, the Plan Agent may cease open-market
purchases and may invest the uninvested portion of the distribution in
newly-issued Fund shares at a price equal to the greater of the shares' net
asset value or 95% of the shares' market value on the last business day
immediately prior to the purchase date. Dividends and distributions received to
purchase shares in the open market will normally be invested shortly after the
dividend payment date. No interest will be paid on dividends and distributions
awaiting reinvestment. Because the market price of the shares may increase
before purchases are completed, the average purchase price per share may exceed
the market price at the time of valuation, resulting in the acquisition of fewer
shares than if the dividend or distribution had been paid in shares issued by
the Fund. A pro rata portion of any applicable brokerage commissions on open
market purchases will be paid by Plan participants. These commissions usually
will be lower than those charged on individual transactions.
104
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.
105
Glossary of
TERMS USED in this REPORT
[] AVERAGE ANNUAL TOTAL RETURN: This is a commonly used method to express an
investment's performance over a particular, usually multi-year time period.
It expresses the return that would have been necessary each year to equal
the investment's actual cumulative performance (including change in NAV or
market price and reinvested dividends and capital gains distributions, if
any) over the time period being considered.
[] AVERAGE EFFECTIVE MATURITY: The average of the number of years to maturity
of the bonds in a Fund's portfolio, computed by weighting each bond's time
to maturity (the date the security comes due) by the market value of the
security. This figure does not account for the likelihood of prepayments or
the exercise of call provisions unless an escrow account has been
established to redeem the bond before maturity. The market value weighting
for an investment in an inverse floating rate security is the value of the
portfolio's residual interest in the inverse floating rate trust, and does
not include the value of the floating rate securities issued by the trust.
[] INVERSE FLOATERS: Inverse floating rate securities are created by
depositing a municipal bond, typically with a fixed interest rate, into a
special purpose trust created by a broker-dealer. This trust, in turn, (a)
issues floating rate certificates typically paying short-term tax-exempt
interest rates to third parties in amounts equal to some fraction of the
deposited bond's par amount or market value, and (b) issues an inverse
floating rate certificate (sometimes referred to as an "inverse floater")
to an investor (such as a Fund) interested in gaining investment exposure
to a long-term municipal bond. The income received by the holder of the
inverse floater varies inversely with the short-term rate paid to the
floating rate certificates' holders, and in most circumstances the holder
of the inverse floater bears substantially all of the underlying bond's
downside investment risk. The holder of the inverse floater typically also
benefits disproportionately from any potential appreciation of the
underlying bond's value. Hence, an inverse floater essentially represents
an investment in the underlying bond on a leveraged basis.
[] LEVERAGE-ADJUSTED DURATION: Duration is a measure of the expected period
over which a bond's principal and interest will be paid, and consequently
is a measure of the sensitivity of a bond's or bond Fund's value to changes
when market interest rates change. Generally, the longer a bond's or Fund's
duration, the more the price of the bond or Fund will change as interest
rates change. Leverage-adjusted duration takes into account the leveraging
process for a Fund and therefore is longer than the duration of the Fund's
portfolio of bonds.
[] MARKET YIELD (ALSO KNOWN AS DIVIDEND YIELD OR CURRENT YIELD): An
investment's current annualized dividend divided by its current market
price.
[] NET ASSET VALUE (NAV): A Fund's common share NAV per share is calculated by
subtracting the liabilities of the Fund (including any MuniPreferred shares
issued in order to leverage the Fund) from its total assets and then
dividing the remainder by the number of shares outstanding. Fund NAVs are
calculated at the end of each business day.
[] TAXABLE-EQUIVALENT YIELD: The yield necessary from a fully taxable
investment to equal, on an after-tax basis, the yield of a municipal bond
investment.
[] ZERO COUPON BOND: A zero coupon bond does not pay a regular interest coupon
to its holders during the life of the bond. Tax-exempt income to the holder
of the bond comes from accretion of the difference between the original
purchase price of the bond at issuance and the par value of the bond at
maturity and is effectively paid at maturity. The market prices of zero
coupon bonds generally are more volatile than the market prices of bonds
that pay interest periodically.
106
Other Useful INFORMATION
QUARTERLY PORTFOLIO OF INVESTMENTS AND PROXY VOTING INFORMATION
Each Fund's (i) quarterly portfolio of investments, (ii) information regarding
how the Funds voted proxies relating to portfolio securities held during the
twelve-month period ended June 30, 2007, and (iii) a description of the policies
and procedures that the Funds used to determine how to vote proxies relating to
portfolio securities are available 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 1-202-942-8090
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 450 Fifth Street NW, Washington, D.C. 20549.
CEO CERTIFICATION DISCLOSURE
Each Fund's Chief Executive Officer has submitted to the Exchange the annual CEO
certification as required by Section 303A.12(a) of the NYSE Listed Company
Manual.
Each Fund has filed with the Securities and Exchange Commission the
certification of its Chief Executive Officer and Chief Financial Officer
required by Section 302 of the Sarbanes-Oxley Act.
INVESTMENT POLICY CHANGES
In May 2007, the Funds' Board of Trustees voted to permit the Funds' to make
loans from Fund assets to certain bond issuers. The amounts of these loans are
subject to strict limits. This policy is designed to enhance the Funds' ability
to meet their Funds'investment objectives by providing for increased portfolio
management flexibility, greater diversification potential, and opportunities for
increased capital appreciation over time.
BOARD OF TRUSTEES
Robert P. Bremner
Jack B. Evans
William C. Hunter
David J. Kundert
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
Carole E. Stone
FUND MANAGER
Nuveen Asset Management
333 West Wacker Drive
Chicago, IL 60606
CUSTODIAN
State Street Bank & Trust Company
Boston, MA
TRANSFER AGENT AND
SHAREHOLDER SERVICES
State Street Bank & Trust Company
Nuveen Funds
P.O. Box 43071 Providence, RI 02940-3071
(800) 257-8787
LEGAL COUNSEL
Chapman and Cutler LLP
Chicago, IL
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Ernst & Young LLP
Chicago, IL
Each Fund intends to repurchase shares of its own common stock in the future at
such times and in such amounts as is deemed advisable. No shares were
repurchased during the period covered by this report. Any future repurchases
will be reported to shareholders in the next annual or semi-annual report.
107
Nuveen Investments:
-------------------
SERVING INVESTORS FOR GENERATIONS
Since 1898, financial advisors and their clients have relied on Nuveen
Investments to provide dependable investment solutions. For the past century,
Nuveen Investments has adhered to the belief that the best approach to investing
is to apply conservative risk-management principles to help minimize volatility.
Building on this tradition, we today offer a range of high quality equity and
fixed-income solutions that are integral to a well-diversified core portfolio.
Our clients have come to appreciate this diversity, as well as our continued
adherence to proven, long-term investing principles.
We offer many different investing solutions for our clients' different needs.
Managing $170 billion in assets, as of September 30, 2007, Nuveen Investments
offers access to a number of different asset classes and investing solutions
through a variety of products. Nuveen Investments markets its capabilities under
six distinct brands: Nuveen, a leader in fixed-income investments; NWQ, a leader
in value-style equities; Rittenhouse, a leader in growth-style equities;
Symphony, a leading institutional manager of market-neutral alternative
investment portfolios; Santa Barbara, a leader in growth equities; and
Tradewinds, a leader in global equities.
Find out how we can help you reach your financial goals.
To learn more about the products and services Nuveen Investments offers, talk to
your financial advisor, or call us at (800) 257-8787. Please read the
information provided carefully before you invest. Be sure to obtain a
prospectus, where applicable. Investors should consider the investment objective
and policies, risk considerations, charges and expenses of the Fund carefully
before investing. The prospectus contains this and other information relevant to
an investment in the Fund. For a prospectus, please contact your securities
representative or Nuveen Investments, 333 W. Wacker Dr., Chicago, IL 60606.
Please read the prospectus carefully before you invest or send money.
Learn more about Nuveen Funds at: www.nuveen.com/etf
Share prices
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Investor education
\Interactive planning tools
ESA-A-1107D
ITEM 2. CODE OF ETHICS.
Not applicable to this filing.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable to this filing.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable to this filing.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to this filing.
ITEM 6. SCHEDULE OF INVESTMENTS.
See Portfolio of Investments in Item 1.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to this filing.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to this filing.
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.
(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 to
this filing.
(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 Maryland Dividend Advantage Municipal Fund 3
-----------------------------------------------------------
By (Signature and Title)* /s/ Kevin J. McCarthy
----------------------------------------------
Kevin J. McCarthy
(Vice President and Secretary)
Date: February 8, 2008
-------------------------------------------------------------------
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: February 8, 2008
-------------------------------------------------------------------
By (Signature and Title)* /s/ Stephen D. Foy
----------------------------------------------
Stephen D. Foy
Vice President and Controller
(principal financial officer)
Date: February 8, 2008
-------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.