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
---------------------
Nuveen Maryland Dividend Advantage Municipal Fund 3
--------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Kevin J. McCarthy
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
--------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (312) 917-7700
-------------------
Date of fiscal year end: May 31
------------------
Date of reporting period: May 31, 2010
------------------
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.
[LOGO]
NUVEEN
INVESTMENTS
Closed-End Funds
--------------------------------------------------------------------------------
Nuveen Investments
Municipal Closed-End Funds
IT'S NOT WHAT YOU EARN, IT'S WHAT YOU KEEP.(R)
Annual Report
May 31, 2010
--------------------------------------------------------------------------------
-------------------------- ------------------------ -------------------------- --------------------------
NUVEEN MARYLAND NUVEEN MARYLAND NUVEEN MARYLAND NUVEEN MARYLAND
PREMIUM INCOME DIVIDEND ADVANTAGE DIVIDEND ADVANTAGE DIVIDEND ADVANTAGE
MUNICIPAL FUND MUNICIPAL FUND MUNICIPAL FUND 2 MUNICIPAL FUND 3
NMY NFM NZR NWI
-------------------------- ------------------------ --------------------------
NUVEEN VIRGINIA NUVEEN VIRGINIA NUVEEN VIRGINIA
PREMIUM INCOME DIVIDEND ADVANTAGE DIVIDEND ADVANTAGE
MUNICIPAL FUND MUNICIPAL FUND MUNICIPAL FUND 2
NPV NGB NNB
May 10
LIFE IS COMPLEX.
Nuveen makes things e-simple.
It only takes a minute to sign up for e-Reports. Once enrolled, you'll receive
an e-mail as soon as your Nuveen Fund information is ready. No more waiting for
delivery by regular mail. Just click on the link within the e-mail to see the
report and save it on your computer if you wish.
Free e-Reports right to your e-mail!
WWW.INVESTORDELIVERY.COM
If you receive your Nuveen Fund dividends and statements from your financial
advisor or brokerage account.
OR
WWW.NUVEEN.COM/ACCOUNTACCESS
If you receive your Nuveen Fund dividends and statements directly from Nuveen.
[LOGO]
NUVEEN
INVESTMENTS
Chairman's Letter to Shareholders
[PHOTO OF ROBERT P. BREMNER]
DEAR SHAREHOLDER,
The economic environment in which your Fund operates reflects continuing but
uneven economic recovery. The U.S. and other major industrial countries are
experiencing steady but comparatively low levels of economic growth, while
emerging market countries are seeing a resumption of relatively strong economic
expansion. The potential impact of steps being considered by many governments to
counteract the extraordinary governmental spending and credit expansion to deal
with the recent financial and economic crisis is injecting uncertainty into
global financial markets. The implications for future tax rates, government
spending, interest rates and the pace of economic recovery in the U.S. and other
leading economies are extremely difficult to predict at the present time. The
long term health of the global economy depends on restoring some measure of
fiscal discipline around the world, but since all of the corrective steps
require economic pain, it is not surprising that governments are reluctant to
undertake them.
In the near term, governments remain committed to furthering economic recovery
and realizing a meaningful reduction in their national unemployment rates. Such
an environment should produce continued economic growth and, consequently,
attractive investment opportunities. Over the longer term, the larger
uncertainty mentioned earlier carries the risk of unexpected potholes in the
road to sustained recovery. For this reason, Nuveen's investment management
teams are working hard to balance return and risk by building well-diversified
portfolios, among other strategies. I encourage you to read the following
commentary on the management of your Fund. As always, I also encourage you to
contact your financial consultant if you have any questions about your Nuveen
Fund investment. Please consult the Nuveen website for the most recent
information on your Nuveen Fund at: www.nuveen.com.
On behalf of the other members of your Fund's Board, we look forward to
continuing to earn your trust in the months and years ahead.
Sincerely,
/s/ Robert P. Bremner
Robert P. Bremner
Chairman of the Board
July 22, 2010
Nuveen Investments 1
Portfolio Manager's Comments
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)
Portfolio manager Cathryn Steeves reviews economic and municipal market
conditions at the national and state levels, key investment strategies and the
twelve-month performance of the Nuveen Maryland and Virginia funds. Cathryn, who
joined Nuveen in 1996, has managed these seven Funds since 2006.
WHAT FACTORS AFFECTED THE U.S. ECONOMIC AND MUNICIPAL MARKET ENVIRONMENTS DURING
THE TWELVE-MONTH REPORTING PERIOD ENDED MAY 31, 2010?
During this reporting period, municipal bond prices generally rose as strong
cash flows into municipal bond funds combined with tighter supply of new
tax-exempt issuance to provide favorable supply and demand conditions. As the
period began, there continued to be considerable downward pressure on the
economy, and both the Federal Reserve (Fed) and the federal government continued
their efforts to improve the overall economic environment. For its part, the Fed
continued to hold the benchmark fed funds rate in a target range of zero to
0.25% since cutting it to this record low level in December 2008. At its June
2010 meeting (following the end of this reporting period), the central bank
renewed its pledge to keep the fed funds rate "exceptionally low" for an
"extended period." As part of its efforts, the federal government put into place
the American Recovery and Reinvestment Act of 2009, a $787 billion economic
stimulus package intended to provide job creation, tax relief, fiscal assistance
to state and local governments and expansion of unemployment benefits and other
federal social welfare programs.
In recent months, these and other measures taken by the Fed and the government
to ease the economic recession have produced some incipient signs of
improvement. In the first quarter of 2010, the U.S. economy, as measured by the
U.S. gross domestic product (GDP), grew at an annualized rate of 2.7%. This
marked the first time since 2007 that the economy had strung together three
consecutive positive quarters. Housing also provided something of a bright spot,
as the average home price gained 3.8% for the twelve months ended April 2010,
the largest year-over-year increase since September 2006. At the same time,
inflation continued to be relatively tame, as the Consumer Price Index (CPI)
rose 2.0% year-over-year as of May 2010, driven mainly by increased prices
CERTAIN STATEMENTS IN THIS REPORT ARE FORWARD-LOOKING STATEMENTS. DISCUSSIONS OF
SPECIFIC INVESTMENTS ARE FOR ILLUSTRATION ONLY AND ARE NOT INTENDED AS
RECOMMENDATIONS OF INDIVIDUAL INVESTMENTS. THE FORWARD-LOOKING STATEMENTS AND
OTHER VIEWS EXPRESSED HEREIN ARE THOSE OF THE PORTFOLIO MANAGER AS OF THE DATE
OF THIS REPORT. ACTUAL FUTURE RESULTS OR OCCURRENCES MAY DIFFER SIGNIFICANTLY
FROM THOSE ANTICIPATED IN ANY FORWARD-LOOKING STATEMENTS, AND THE VIEWS
EXPRESSED HEREIN ARE SUBJECT TO CHANGE AT ANY TIME, DUE TO NUMEROUS MARKET AND
OTHER FACTORS. THE FUNDS DISCLAIM ANY OBLIGATION TO UPDATE PUBLICLY OR REVISE
ANY FORWARD-LOOKING STATEMENTS OR VIEWS EXPRESSED HEREIN.
2 Nuveen Investments
for gasoline and fuel oil. The core CPI (which excludes food and energy) rose
0.9% over the year, the lowest pace since 1966 and within the Fed's official
objective of 2.0% or lower for this measure. While labor markets remained weak,
recent months saw some improvement. As of May 2010, the national unemployment
rate was 9.7%, up from 9.4% in May 2009 but below the 26-year high of 10.1% in
October 2009.
Municipal market conditions began to show general signs of improvement
throughout most of the period. This trend was bolstered by the reduced issuance
of tax-exempt municipal debt, due in part to the introduction of the Build
America Bond program in 2009. Build America Bonds are a new class of taxable
municipal debt, created as part of the February 2009 economic stimulus package.
These bonds currently offer municipal issuers a federal subsidy equal to 35% of
the bonds' interest payments and therefore provide issuers with an attractive
alternative to traditional tax-exempt debt. During the twelve months ended May
31, 2010, taxable Build America Bonds issuance totaled $95.9 billion, accounting
for over 22% of new bonds issued in the municipal market.
Over the twelve months ended May 31, 2010, municipal bond issuance
nationwide--both tax-exempt and taxable--totaled $428.1 billion, an increase of
17% compared with the twelve-month period ended May 31, 2009. Although total
municipal issuance rose during these twelve months, supply actually would have
fallen approximately 9% without the Build America Bonds issuance. Demand for
tax-exempt bonds remained strong during this period, supported in part by the
prospect of higher tax rates in the future. Combined with the lower supply of
tax-exempt bonds, this provided support for municipal bond prices.
HOW WERE ECONOMIC AND MARKET CONDITIONS IN MARYLAND AND VIRGINIA DURING THIS
PERIOD?
Over the past twelve months, Maryland's credit profile remained relatively
strong, due to the state's historically sound fiscal management as well as a
diverse economy that has fared better than the nation as a whole during the
recession. In May 2010, Maryland's jobless rate was 7.2%, up from 7.0% in May
2009, but down from its recent high of 7.7% in early 2010. Like most other
states, Maryland's finances have suffered due to declining revenues, which
resulted in budget gaps and general fund deficits over the past three years. The
state's $31.6 billion fiscal 2010 budget relied on $1 billion of federal
stimulus funding, one-time measures, and mid-year reductions totaling more than
$1 billion to close a $2.8 billion deficit. In February 2010, Moody's, Standard
& Poor's (S&P), and Fitch confirmed their ratings on Maryland general obligation
debt at Aaa/AAA/AAA, respectively, with stable outlooks. During the twelve
months ended May 31, 2010, municipal issuance in the state totaled $6.9 billion,
up almost 25% from the previous twelve-month period.
Virginia's proximity to Washington D.C. and a large military presence added some
stability to the commonwealth's economy over the twelve-month period,
particularly in the northern region. Unemployment in the commonwealth rose from
6.8% in May 2009 to 7.1% in May 2010, below the recent high of 7.3% in March
2010. Virginia was hard hit by the housing recession, especially in the
Washington D.C. area, as home sale prices fell to 2002 levels. Recently,
however, prices in the area have risen, adding some stability to residential
construction. According to the S&P/Case-Shiller home price index, home prices in
the Washington D.C. area rose 7.3% over the twelve months ended April 2010,
Nuveen Investments 3
compared with a 16.9% loss for the twelve months ended April 2009. For fiscal
2010 and 2011, Virginia faced budget shortfalls of $3.6 billion and $1.3
billion, respectively. As of May 2010, Moody's, S&P and Fitch maintained their
ratings on Virginia general obligation debt at Aaa/AAA/AAA, respectively, with
stable outlooks. During the twelve months ended May 31, 2010, issuance in
Virginia totaled $8.5 billion, a decrease of 2% from the previous twelve months.
WHAT KEY STRATEGIES WERE USED TO MANAGE THESE FUNDS DURING THIS REPORTING
PERIOD?
As previously mentioned, the availability of tax-exempt bonds declined
nationally during this period, due in part to the introduction of taxable Build
America Bonds in April 2009. This program also had an impact on tax-exempt
supply in Maryland and Virginia, both of which ranked among the top 15 states by
dollar amount of bonds issued under the Build America Bond program. In Maryland,
Build America Bond issuance represented approximately 30% of municipal issuance,
while these bonds comprised about 25% of municipal supply in Virginia. Since
interest payments from Build America Bonds represent taxable income, we do not
view these bonds as good investment opportunities for the Maryland and Virginia
Funds.
Despite the constrained issuance of tax-exempt municipal bonds, we continued to
find attractive value opportunities, taking a bottom-up approach to discovering
undervalued sectors and individual credits with the potential to perform well
over the long term. In the Maryland Funds, we found value in several areas of
the market, primarily in the health care sector, but also in transportation
(specifically bonds issued for the Port of Baltimore) and higher education. The
Virginia Funds also purchased health care and transportation credits (including
zero coupon bonds issued to fund the Dulles Corridor Metrorail project) as well
as dedicated tax bonds backed by Puerto Rico sales taxes.
Some of our investment activity during this period was driven by opportunities
created by the provisions of the Build America Bond program. For example,
tax-exempt supply was more plentiful in the health care and higher education
sectors because, as 501(c)(3) (non-profit) organizations, hospitals and private
universities generally do not qualify for the Build America Bond program and
must continue to issue bonds in the tax-exempt municipal market. In addition,
health care entities were active issuers during this period, as they sought to
replace variable rate issuance with fixed rates. Refunding issues also are not
covered by the Build America Bond program, and this resulted in attractive
opportunities in various other sectors of the market.
The impact of the Build America Bond program was also evident in the area of
longer-term issuance, as municipal issuers sought to take full advantage of the
attractive financing terms offered by these bonds. Approximately 70% of Build
America Bonds were issued with maturities of at least 30 years or more. Even
though this significantly reduced the availability of tax-exempt credits with
longer maturities, we continued to find good opportunities to purchase
attractive longer-term bonds for these Funds. During this period, we generally
focused on bonds in the 25-year to 30-year part of the yield curve offering 5%
coupons or higher. These bonds helped us to maintain the Funds' durations within
our target duration range and also rewarded investors as the yield curve
remained steep.
4 Nuveen Investments
Cash for new purchases during this period was generated primarily by the
proceeds from called and maturing bonds. In NPV, we also trimmed our position in
bonds with very short maturities. On the whole, however, selling was relatively
limited during this period, as the bonds in our portfolios generally offered
higher yields than those available in the current marketplace.
As of May 31, 2010, all seven of these Funds continued to use inverse floating
rate securities.(1) We employ inverse floaters as a form of leverage for a
variety of reasons, including duration management as well as income and total
return enhancement.
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.
AVERAGE ANNUAL TOTAL RETURNS ON COMMON SHARE NET ASSET VALUE
FOR PERIODS ENDED
5/31/10
1-YEAR 5-YEAR 10-YEAR
---------------------------------------------------------------------------------------
MARYLAND FUNDS
NMY 14.44% 4.51% 7.10%
NFM 16.68% 4.42% N/A
NZR 16.13% 4.20% N/A
NWI 15.53% 4.66% N/A
Standard & Poor's (S&P) Maryland Municipal Bond Index(2) 8.45% 4.40% 5.69%
Standard & Poor's (S&P) National Municipal Bond Index(3) 9.27% 4.31% 5.85%
Lipper Other States Municipal Debt Funds Average(4) 14.35% 4.04% 6.78%
VIRGINIA FUNDS
NPV 13.19% 4.14% 6.85%
NGB 15.13% 3.82% N/A
NNB 15.15% 4.06% N/A
Standard & Poor's (S&P) Virginia Municipal Bond Index(2) 8.24% 4.27% 5.69%
Standard & Poor's (S&P) National Municipal Bond Index(3) 9.27% 4.31% 5.85%
Lipper Other States Municipal Debt Funds Average(4) 14.35% 4.04% 6.78%
---------------------------------------------------------------------------------------
For the twelve months ended May 31, 2010, the total returns on common share net
asset value (NAV) for all of the Maryland and Virginia Funds exceeded the
returns for their respective state's (S&P) Municipal Bond Index as well as the
S&P National Municipal Bond Index. For the same period, all of the Funds except
NPV also outperformed the average return for the Lipper Other States Municipal
Debt Funds Average.
Key management factors that influenced the Funds' returns during this period
included yield curve and duration positioning, credit exposure and sector
allocation. In addition, the use of structural leverage was an important
positive factor during this period. The impact of structural leverage is
discussed in more detail on page seven.
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.
1 An inverse floating rate security, also known as an inverse floater, is a
financial instrument designed to pay long-term tax-exempt interest at a
rate that varies inversely with a short-term tax-exempt interest rate
index. For the Nuveen Funds, the index typically used is the Securities
Industry and Financial Markets (SIFM) Municipal Swap Index (previously
referred to as the Bond Market Association Index or BMA). Inverse
floaters, including those inverse floating rate securities in which the
Funds invested during this reporting period, are further defined within
the Notes to Financial Statements and Glossary of Terms Used in this
Report sections of this report.
2 The Standard & Poor's (S&P) Municipal Bond Indexes for Maryland and
Virginia are unleveraged, market value-weighted indexes designed to
measure the performance of the tax-exempt, investment-grade Maryland and
Virginia municipal bond markets, respectively. These indexes do not
reflect any initial or ongoing expenses and are not available for direct
investment.
3 The Standard & Poor's (S&P) National Municipal Bond Index is an
unleveraged, market value-weighted index designed to measure the
performance of the tax-exempt, investment-grade U.S. municipal bond
market. This index does not reflect any initial or ongoing expenses and is
not available for direct investment.
4 The Lipper Other States Municipal Debt Funds Average is calculated using
the returns of all closed-end funds in this category for each period as
follows: 1-year, 46 funds; 5-year, 46 funds; and 10-year, 18 funds. Lipper
returns account for the effects of management fees and assume reinvestment
of dividends, but do not reflect any applicable sales charges. The Lipper
average is not available for direct investment.
Nuveen Investments 5
During this period, bonds with longer maturities generally outperformed bonds
with shorter maturities, with bonds at the longest end of the yield curve
posting the strongest returns. The outperformance of longer term bonds was due
in part to the decline in interest rates, particularly at the longer end of the
curve. The scarcity of tax-exempt bonds with longer maturities also drove up the
prices of these bonds. Overall, yield curve positioning and duration proved
positive for the performance of the Virginia Funds and neutral to slightly
negative in the Maryland Funds. The Virginia Funds tended to have more exposure
to the outperforming longer part of the yield curve, while the Maryland Funds
were underweighted in this area of the curve.
Credit exposure also played an important role in the performance of these Funds.
The demand for municipal bonds increased during this period, driven by a variety
of factors, including concerns about potential tax increases, the need to
rebalance portfolio allocations and a growing appetite for additional risk. At
the same time, the supply of new tax-exempt municipal paper declined, due
largely to the Build America Bond program. As investors bid up municipal bond
prices, bonds rated BBB or below and non-rated bonds generally outperformed
those rated AAA. In this environment, the Funds' performance benefited from
their allocations to lower quality credits. This was especially true in NFM,
which had the heaviest weighting of lower-rated and non-rated bonds among the
seven Funds. NMY and NPV, on the other hand, tended to have higher credit
quality positions overall, particularly NMY, which had the highest allocation to
AAA-rated bonds among these Funds. The higher credit quality hampered the
relative performance of these two Funds during this period.
Overall, sector allocations were a positive factor for the Funds' performance
during this period. Holdings that generally contributed to the Funds' returns
included industrial development revenue (IDR) and health care bonds, both of
which exceeded the overall municipal market return by substantial margins.
Revenue bonds as a whole performed well, with transportation, housing and
special tax among the sectors that outperformed the general municipal market for
this period. Zero coupon bonds also were among the strongest performers. All of
these Funds benefited from their overweight in health care, housing and other
revenue (specifically dedicated tax) credits, while the Maryland Funds also had
an overexposure to IDRs.
In contrast, pre-refunded bonds, which are often backed by U.S. Treasury
securities, performed relatively poorly during this period. The underperformance
of these bonds can be attributed primarily to their shorter effective maturities
and higher credit quality. Among the revenue sectors, education, electric
utilities, water and sewer and resource recovery trailed the overall municipal
market by small margins, while many general obligation and other tax-backed
bonds also failed to keep pace with the market for the twelve months. All of the
Maryland and Virginia Funds were overweighted in pre-refunded bonds, and the
Maryland Funds also had heavy exposures to higher education credits, which had a
negative influence on comparative performance. On the other hand, these Funds
were generally underweighted in tax-backed securities, which lessened the impact
of the underperformance of these bonds.
6 Nuveen Investments
IMPACT OF THE FUNDS' LEVERAGE STRATEGIES ON PERFORMANCE
One important factor impacting the returns of these Funds relative to the
comparative indexes was the Funds' use of financial leverage. The Funds use
leverage because their managers believe that, over time, leveraging provides
opportunities for additional income and total return for common shareholders.
However, use of leverage also can expose common shareholders to additional
volatility. For example, as the prices of securities held by a Fund decline, the
negative impact of these valuation changes on common share net asset value and
common shareholder total return is magnified by the use of leverage. Conversely,
leverage may enhance common share returns during periods when bond prices
generally are rising.
Leverage made a positive contribution to the performance of these Funds over
this reporting period.
RECENT DEVELOPMENTS REGARDING THE FUNDS' LEVERAGED CAPITAL STRUCTURE
Shortly after their inceptions, each of the Funds issued auction rate preferred
shares (ARPS) to create financial leverage. As noted in past shareholder
reports, the ARPS issued by many closed-end funds, including these Funds, have
been hampered by a lack of liquidity since February 2008. Since that time, more
ARPS have been submitted for sale in each of their regularly scheduled auctions
than there have been offers to buy. In fact, offers to buy have been almost
completely non-existent since late February 2008. This means that these auctions
have "failed to clear," and that many, or all, of the ARPS shareholders who
wanted to sell their shares in these auctions were unable to do so. This lack of
liquidity in ARPS did not lower the credit quality of these shares, and ARPS
shareholders unable to sell their shares continued to receive distributions at
the "maximum rate" applicable to failed auctions, as calculated in accordance
with the pre-established terms of the ARPS. In the recent market, with
short-term rates at multigenerational lows, those maximum rates also have been
low.
One continuing implication for common shareholders from the auction failures is
that each Fund's cost of leverage likely has been incrementally higher at times
than it otherwise might have been had the auctions continued to be successful.
As a result, each Fund's common share earnings likely have been incrementally
lower at times than they otherwise might have been.
As noted in past shareholder reports, the Nuveen funds' Board of
Directors/Trustees authorized several methods to refinance a portion of the
Nuveen funds' outstanding ARPS. Some funds have utilized tender option bonds
(TOBs), also known as floating rate securities, for leverage purposes. The
amount of TOBs that a fund may use varies according to the composition of each
fund's portfolio. Some funds have a greater ability to use TOBs than others.
Some funds have issued Variable Rate Demand Preferred (VRDP) Shares, but these
issuances have been limited since it has been difficult to find liquidity
providers on economically viable terms given the constrained credit environment.
Some funds have issued MuniFund Term Preferred (MTP) Shares, a fixed rate form
of preferred stock with a mandatory redemption period of five years.
Nuveen Investments 7
While all these efforts have reduced the total amount of outstanding ARPS issued
by the Nuveen funds, the funds cannot provide any assurance on when the
remaining outstanding ARPS might be redeemed.
At the time this report was prepared, thirty Nuveen leveraged closed-end funds
received a demand letter from a law firm on behalf of some common shareholders
of each fund, alleging that Nuveen and the fund's officers and Board of
Directors/Trustees breached their fiduciary duties related to the redemption at
par of the fund's ARPS. After an extensive independent review, on July 14, 2010,
the Board of Directors/Trustees announced that each fund had rejected the
demands contained in the letters. As a result, the Board of Directors/Trustees
has resumed consideration of additional ARPS refinancing. Any future
determinations by the Board of Directors/Trustees to refinance a specific fund's
ARPS will continue to be based upon a review of the fund's specific
circumstances, considering, among other factors, the availability and terms of
potential alternative sources of leverage, the receipt of applicable ratings and
other necessary approvals for such alternative sources of leverage, and overall
market conditions.
As of May 31, 2010, the amounts of ARPS redeemed at par by the Funds are as
shown in the accompanying table.
AUCTION RATE % OF ORIGINAL
PREFERRED SHARES AUCTION RATE
FUND REDEEMED PREFERRED SHARES
--------------------------------------------------------------------------------
NMY $46,125,000 58.3%
NFM $32,000,000 100.0%
NZR $32,000,000 100.0%
NWI $24,175,000 62.0%
NPV $38,250,000 60.0%
NGB $24,000,000 100.0%
NNB $42,000,000 100.0%
--------------------------------------------------------------------------------
As of May 31, 2010, the Funds have issued and outstanding MTP Shares, at
liquidation value, as shown in the accompanying table. (Refer to Notes to
Financial Statements, Footnote 1 - General Information and Significant
Accounting Policies and Footnote 4 - Fund Shares for further details on MTP
Shares.)
MTP SHARES
FUND AT LIQUIDATION VALUE
--------------------------------------------------------------------------------
NMY $38,775,000
NFM $26,485,000
NZR $27,300,000
NWI $20,700,000
NPV $32,205,000
NGB $22,800,000
NNB $43,200,000
--------------------------------------------------------------------------------
As of May 31, 2010, 83 out of the 84 Nuveen closed-end municipal funds that had
issued ARPS have redeemed at par all or a portion of these shares. These
redemptions bring the total amount of Nuveen's municipal closed-end funds' ARPS
redemptions to approximately $4.4 billion of the approximately $11.0 billion
originally outstanding. For up-to-date information, please visit the Nuveen CEF
Auction Rate Preferred Resource Center at: http://www.nuveen.com/arps.
8 Nuveen Investments
Common Share Dividend and Share Price Information
During the twelve-month reporting period ended May 31, 2010, NZR had three
monthly dividend increases, NFM, NWI, and NPV each had two monthly dividend
increases and NMY, NGB, and NNB each had one monthly dividend increase.
Due to normal portfolio activity, common shareholders of the following Funds
received net ordinary income distributions at the end of December 2009 as
follows:
ORDINARY INCOME
FUND (PER SHARE)
--------------------------------------------------------------------------------
NPV $0.0267
NNB $0.0037
--------------------------------------------------------------------------------
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 May 31, 2010, all seven
Funds in this report had positive UNII balances for both tax and financial
reporting purposes.
Nuveen Investments 9
COMMON SHARE REPURCHASES AND SHARE PRICE INFORMATION
Since the inception of the Funds' repurchase program, the Funds have not
repurchased any of their outstanding common shares.
As of May 31, 2010, the Funds' common share prices were trading at (+) premiums
or (-) discounts to their common share NAVs as shown in the accompanying table.
5/31/10 TWELVE-MONTH AVERAGE
FUND (+)PREMIUM/(-)DISCOUNT (+)PREMIUM/(-)DISCOUNT
-------------------------------------------------------------------------------
NMY -2.30% -2.54%
NFM -0.56% -1.25%
NZR +3.66% -2.34%
NWI -2.74% -4.57%
NPV +7.60% +4.78%
NGB +6.54% +5.14%
NNB +4.05% +3.47%
-------------------------------------------------------------------------------
10 Nuveen Investments
NMY Performance OVERVIEW | Nuveen Maryland Premium Income Municipal Fund
| as of May 31, 2010
CREDIT QUALITY (as a % of total investments)(2)
[PIE CHART]
AAA/U.S. Guaranteed 39%
AA 25%
A 17%
BBB 13%
BB or Lower 2%
N/R 4%
2009-2010 MONTHLY TAX-FREE DIVIDENDS PER COMMON SHARE
[BAR CHART]
Jun $ 0.058
Jul $ 0.058
Aug $ 0.058
Sep $ 0.062
Oct $ 0.062
Nov $ 0.062
Dec $ 0.062
Jan $ 0.062
Feb $ 0.062
Mar $ 0.062
Apr $ 0.062
May $ 0.062
COMMON SHARE PRICE PERFORMANCE -- WEEKLY CLOSING PRICE
[LINE GRAPH]
6/1/09 $ 12.71
$ 12.56
$ 12.7624
$ 12.93
$ 13.01
$ 13.4
$ 13.39
$ 13.51
$ 13.52
$ 13.51
$ 13.688
$ 13.72
$ 14.1
$ 14.25
$ 14.4
$ 14.55
$ 14.58
$ 14.58
$ 14.78
$ 14.5599
$ 13.83
$ 13.81
$ 13.67
$ 13.74
$ 13.59
$ 13.59
$ 13.7
$ 14.09
$ 13.78
$ 13.806
$ 13.9119
$ 13.799
$ 14
$ 13.74
$ 13.67
$ 13.82
$ 13.83
$ 13.91
$ 13.79
$ 13.91
$ 14.17
$ 14.07
$ 14.02
$ 14.07
$ 14.15
$ 14.41
$ 14.34
$ 14.32
$ 14.48
$ 14.75
$ 14.43
$ 14.48
$ 14.43
5/31/10 $ 14.43
FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price $ 14.43
--------------------------------------------------------------------------------
Common Share Net Asset Value $ 14.77
--------------------------------------------------------------------------------
Premium/(Discount) to NAV -2.30%
--------------------------------------------------------------------------------
Market Yield 5.16%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield(1) 7.54%
--------------------------------------------------------------------------------
Net Assets Applicable to Common Shares ($000) $157,243
--------------------------------------------------------------------------------
Average Effective Maturity on Securities (Years) 15.61
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 8.32
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 3/18/93)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
1-Year 19.89% 14.44%
--------------------------------------------------------------------------------
5-Year 3.37% 4.51%
--------------------------------------------------------------------------------
10-Year 6.38% 7.10%
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
(as a % of total investments)
--------------------------------------------------------------------------------
Tax Obligation/General 19.2%
--------------------------------------------------------------------------------
Health Care 17.1%
--------------------------------------------------------------------------------
Education and Civic Organizations 11.3%
--------------------------------------------------------------------------------
U.S. Guaranteed 11.1%
--------------------------------------------------------------------------------
Tax Obligation/Limited 10.5%
--------------------------------------------------------------------------------
Housing/Multifamily 8.5%
--------------------------------------------------------------------------------
Housing/Single Family 7.5%
--------------------------------------------------------------------------------
Other 14.8%
--------------------------------------------------------------------------------
1 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 31.6%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
2 Ratings shown are the highest of Standard & Poor's Group, Moody's Investor
Service, Inc. or Fitch, Inc. AAA includes bonds with an implied AAA rating
since they are backed by U.S. Government or agency securities. AAA, AA, A
and BBB ratings are investment grade; BB, B, CCC, CC, C and D ratings are
below-investment grade. Holdings designated N/R are not rated by any of
these national rating agencies.
Nuveen Investments 11
NFM Performance OVERVIEW | Nuveen Maryland Dividend Advantage Municipal Fund
| as of May 31, 2010
FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price $ 14.30
--------------------------------------------------------------------------------
Common Share Net Asset Value $ 14.38
--------------------------------------------------------------------------------
Premium/(Discount) to NAV -0.56%
--------------------------------------------------------------------------------
Market Yield 5.45%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield(1) 7.97%
--------------------------------------------------------------------------------
Net Assets Applicable to Common Shares ($000) $60,308
--------------------------------------------------------------------------------
Average Effective Maturity on Securities (Years) 17.50
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 7.21
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 1/23/01)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
1-Year 15.78% 16.68%
--------------------------------------------------------------------------------
5-Year 3.60% 4.42%
--------------------------------------------------------------------------------
Since Inception 5.02% 5.80%
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
(as a % of total investments)
--------------------------------------------------------------------------------
Health Care 23.5%
--------------------------------------------------------------------------------
U.S. Guaranteed 12.3%
--------------------------------------------------------------------------------
Tax Obligation/General 11.1%
--------------------------------------------------------------------------------
Tax Obligation/Limited 10.9%
--------------------------------------------------------------------------------
Housing/Multifamily 9.6%
--------------------------------------------------------------------------------
Education and Civic Organizations 8.7%
--------------------------------------------------------------------------------
Housing/Single Family 6.6%
--------------------------------------------------------------------------------
Consumer Discretionary 3.5%
--------------------------------------------------------------------------------
Other 13.8%
--------------------------------------------------------------------------------
CREDIT QUALITY (as a % of total investments)(2)
[PIE CHART]
AAA/U.S. Guaranteed 37%
AA 16%
A 17%
BBB 19%
BB or Lower 1%
N/R 10%
2009-2010 MONTHLY TAX-FREE DIVIDENDS PER COMMON SHARE
[BAR CHART]
Jun $ 0.06
Jul $ 0.06
Aug $ 0.06
Sep $ 0.063
Oct $ 0.063
Nov $ 0.063
Dec $ 0.065
Jan $ 0.065
Feb $ 0.065
Mar $ 0.065
Apr $ 0.065
May $ 0.065
COMMON SHARE PRICE PERFORMANCE -- WEEKLY CLOSING PRICE
[LINE GRAPH]
6/1/09 $ 13.05
$ 13.3
$ 12.85
$ 12.85
$ 12.551
$ 12.9799
$ 13.3
$ 12.91
$ 13.4162
$ 13.2
$ 13.79
$ 13.7
$ 14
$ 14.15
$ 13.8899
$ 14.55
$ 13.7815
$ 14.15
$ 14.316
$ 14.3
$ 13.8
$ 13.63
$ 13.4865
$ 13.83
$ 13.6
$ 13.7
$ 13.55
$ 13.38
$ 13.93
$ 13.7
$ 13.76
$ 13.531
$ 13.88
$ 13.97
$ 13.76
$ 13.7
$ 13.59
$ 13.6901
$ 13.39
$ 13.618
$ 13.62
$ 13.5935
$ 13.8
$ 14
$ 14.02
$ 14
$ 14.19
$ 14.35
$ 14.19
$ 14.18
$ 14.85
$ 14.09
$ 14.3
5/31/10 $ 14.3
1 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 31.6%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
2 Ratings shown are the highest of Standard & Poor's Group, Moody's Investor
Service, Inc. or Fitch, Inc. AAA includes bonds with an implied AAA rating
since they are backed by U.S. Government or agency securities. AAA, AA, A
and BBB ratings are investment grade; BB, B, CCC, CC, C and D ratings are
below-investment grade. Holdings designated N/R are not rated by any of
these national rating agencies.
12 Nuveen Investments
NZR Performance OVERVIEW | Nuveen Maryland Dividend Advantage Municipal Fund 2
| as of May 31, 2010
CREDIT QUALITY (as a % of total investments)(2)
[PIE CHART]
AAA/U.S. Guaranteed 36%
AA 25%
A 13%
BBB 16%
BB or Lower 2%
N/R 8%
2009-2010 MONTHLY TAX-FREE DIVIDENDS PER COMMON SHARE
[BAR CHART]
Jun $ 0.06
Jul $ 0.06
Aug $ 0.06
Sep $ 0.063
Oct $ 0.063
Nov $ 0.063
Dec $ 0.065
Jan $ 0.065
Feb $ 0.065
Mar $ 0.066
Apr $ 0.066
May $ 0.066
COMMON SHARE PRICE PERFORMANCE -- WEEKLY CLOSING PRICE
[LINE GRAPH]
6/1/09 $ 12.6089
$ 12.82
$ 13.08
$ 12.83
$ 12.76
$ 12.84
$ 13.5
$ 12.74
$ 13.0405
$ 13.0995
$ 13.27
$ 13.2
$ 13.41
$ 13.25
$ 13.59
$ 13.92
$ 14
$ 14.18
$ 14.27
$ 14.78
$ 14.06
$ 13.61
$ 13.31
$ 13.7
$ 13.53
$ 13.58
$ 13.331
$ 13.96
$ 13.66
$ 13.17
$ 13.28
$ 13.46
$ 13.4848
$ 13.3701
$ 13.45
$ 13.6999
$ 13.96
$ 13.92
$ 13.805
$ 13.8
$ 13.87
$ 13.9145
$ 13.82
$ 13.96
$ 14.25
$ 14.37
$ 14.32
$ 14.74
$ 14.7
$ 14.02
$ 14.3
$ 14.7
$ 15
5/31/10 $ 15
FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price $ 15.00
--------------------------------------------------------------------------------
Common Share Net Asset Value $ 14.47
--------------------------------------------------------------------------------
Premium/(Discount) to NAV 3.66%
--------------------------------------------------------------------------------
Market Yield 5.28%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield(1) 7.72%
--------------------------------------------------------------------------------
Net Assets Applicable to Common Shares ($000) $60,749
--------------------------------------------------------------------------------
Average Effective Maturity on Securities (Years) 16.36
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 7.67
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 9/25/01)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
1-Year 24.89% 16.13%
--------------------------------------------------------------------------------
5-Year 5.04% 4.20%
--------------------------------------------------------------------------------
Since Inception 5.67% 5.78%
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
(as a % of total investments)
--------------------------------------------------------------------------------
Health Care 19.0%
--------------------------------------------------------------------------------
U.S. Guaranteed 14.3%
--------------------------------------------------------------------------------
Tax Obligation/General 14.1%
--------------------------------------------------------------------------------
Tax Obligation/Limited 11.7%
--------------------------------------------------------------------------------
Education and Civic Organizations 10.8%
--------------------------------------------------------------------------------
Housing/Single Family 7.0%
--------------------------------------------------------------------------------
Housing/Multifamily 6.2%
--------------------------------------------------------------------------------
Transportation 3.8%
--------------------------------------------------------------------------------
Other 13.1%
--------------------------------------------------------------------------------
1 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 31.6%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
2 Ratings shown are the highest of Standard & Poor's Group, Moody's Investor
Service, Inc. or Fitch, Inc. AAA includes bonds with an implied AAA rating
since they are backed by U.S. Government or agency securities. AAA, AA, A
and BBB ratings are investment grade; BB, B, CCC, CC, C and D ratings are
below-investment grade. Holdings designated N/R are not rated by any of
these national rating agencies.
Nuveen Investments 13
NWI Performance OVERVIEW | Nuveen Maryland Dividend Advantage Municipal Fund 3
| as of May 31, 2010
FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price $14.19
--------------------------------------------------------------------------------
Common Share Net Asset Value $14.59
--------------------------------------------------------------------------------
Premium/(Discount) to NAV -2.74%
--------------------------------------------------------------------------------
Market Yield 5.33%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield(1) 7.79%
--------------------------------------------------------------------------------
Net Assets Applicable to Common Shares ($000) $78,266
--------------------------------------------------------------------------------
Average Effective Maturity on Securities (Years) 15.96
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 7.60
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 9/25/02)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
1-Year 19.24% 15.53%
--------------------------------------------------------------------------------
5-Year 4.96% 4.66%
--------------------------------------------------------------------------------
Since Inception 4.59% 5.38%
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
(as a % of total investments)
--------------------------------------------------------------------------------
Tax Obligation/Limited 20.7%
--------------------------------------------------------------------------------
Health Care 18.5%
--------------------------------------------------------------------------------
U.S. Guaranteed 14.4%
--------------------------------------------------------------------------------
Tax Obligation/General 11.3%
--------------------------------------------------------------------------------
Education and Civic Organizations 8.8%
--------------------------------------------------------------------------------
Housing/Single Family 5.3%
--------------------------------------------------------------------------------
Housing/Multifamily 5.2%
--------------------------------------------------------------------------------
Water and Sewer 3.6%
--------------------------------------------------------------------------------
Other 12.2%
--------------------------------------------------------------------------------
CREDIT QUALITY (as a % of total investments)(2)
[PIE CHART]
AAA/U.S. Guaranteed 36%
AA 27%
A 15%
BBB 14%
BB or Lower 2%
N/R 6%
2009-2010 MONTHLY TAX-FREE DIVIDENDS PER COMMON SHARE
[BAR CHART]
Jun $ 0.058
May $ 0.058
Jul $ 0.058
Aug $ 0.062
Sep $ 0.062
Oct $ 0.062
Nov $ 0.063
Dec $ 0.063
Jan $ 0.063
Feb $ 0.063
Mar $ 0.063
Apr $ 0.063
COMMON SHARE PRICE PERFORMANCE -- WEEKLY CLOSING PRICE
[LINE GRAPH]
6/1/2009 $ 12.61
$ 12.5
$ 12.0466
$ 12.53
$ 12.63
$ 12.7176
$ 12.94
$ 12.9878
$ 13
$ 13.3
$ 12.79
$ 12.8
$ 13
$ 12.936
$ 13.28
$ 13.23
$ 13.59
$ 13.88
$ 14.11
$ 14.12
$ 13.6
$ 13.4
$ 13.12
$ 13.35
$ 13.4313
$ 13.39
$ 13.58
$ 13.91
$ 13.8483
$ 13.6499
$ 13.81
$ 13.8001
$ 13.7801
$ 13.73
$ 13.58
$ 13.665
$ 13.6246
$ 13.85
$ 13.72
$ 13.66
$ 13.87
$ 13.8
$ 13.88
$ 13.94
$ 13.86
$ 13.8501
$ 14.01
$ 13.97
$ 14.041
$ 13.916
$ 13.97
$ 14.07
$ 14.19
5/31/2010 $ 14.19
1 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 31.6%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
2 Ratings shown are the highest of Standard & Poor's Group, Moody's Investor
Service, Inc. or Fitch, Inc. AAA includes bonds with an implied AAA rating
since they are backed by U.S. Government or agency securities. AAA, AA, A
and BBB ratings are investment grade; BB, B, CCC, CC, C and D ratings are
below-investment grade. Holdings designated N/R are not rated by any of
these national rating agencies.
14 Nuveen Investments
NPV Performance OVERVIEW | Nuveen Virginia Premium Income Municipal Fund
| as of May 31, 2010
CREDIT QUALITY (as a % of total investments)(2)
[PIE CHART]
AAA/U.S. Guaranteed 32%
AA 28%
A 27%
BBB 8%
BB or Lower 1%
N/R 4%
2009-2010 MONTHLY TAX-FREE DIVIDENDS PER COMMON SHARE(3)
[BAR CHART]
Jun $ 0.0605
Jul $ 0.0605
Aug $ 0.0605
Sep $ 0.065
Oct $ 0.065
Nov $ 0.065
Dec $ 0.067
Jan $ 0.067
Feb $ 0.067
Mar $ 0.067
Apr $ 0.067
May $ 0.067
COMMON SHARE PRICE PERFORMANCE -- WEEKLY CLOSING PRICE
[LINE GRAPH]
6/1/09 $ 14.306
$ 14.28
$ 13.64
$ 13.79
$ 14
$ 14.47
$ 14
$ 14.12
$ 14.568
$ 14.5
$ 14.48
$ 14.45
$ 14.47
$ 14.4
$ 14.39
$ 14.93
$ 15.1
$ 15.14
$ 15.7
$ 15.14
$ 15.25
$ 15.35
$ 15.98
$ 15.58
$ 14.9
$ 15.07
$ 14.54
$ 14.6
$ 14.99
$ 15
$ 14.83
$ 14.9356
$ 14.86
$ 14.75
$ 14.81
$ 14.8899
$ 14.9899
$ 15.17
$ 15.142
$ 15.2
$ 15.55
$ 15.44
$ 15.53
$ 15.69
$ 15.84
$ 15.95
$ 16
$ 16.13
$ 16.07
$ 15.6
$ 15.92
$ 15.86
$ 15.85
5/31/10 $ 15.85
FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price $ 15.85
--------------------------------------------------------------------------------
Common Share Net Asset Value $ 14.73
--------------------------------------------------------------------------------
Premium/(Discount) to NAV 7.60%
--------------------------------------------------------------------------------
Market Yield 5.07%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield(1) 7.47%
--------------------------------------------------------------------------------
Net Assets Applicable to Common Shares ($000) $132,302
--------------------------------------------------------------------------------
Average Effective Maturity on Securities (Years) 15.45
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 8.07
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 3/18/93)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
1-Year 16.60% 13.19%
--------------------------------------------------------------------------------
5-Year 3.37% 4.14%
--------------------------------------------------------------------------------
10-Year 6.69% 6.85%
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
(as a % of total investments)
--------------------------------------------------------------------------------
Health Care 20.8%
--------------------------------------------------------------------------------
Tax Obligation/Limited 18.8%
--------------------------------------------------------------------------------
Tax Obligation/General 12.7%
--------------------------------------------------------------------------------
U.S. Guaranteed 10.5%
--------------------------------------------------------------------------------
Transportation 8.2%
--------------------------------------------------------------------------------
Water and Sewer 5.7%
--------------------------------------------------------------------------------
Housing/Single Family 5.5%
--------------------------------------------------------------------------------
Utilities 4.7%
--------------------------------------------------------------------------------
Other 13.1%
--------------------------------------------------------------------------------
1 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a 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.
2 Ratings shown are the highest of Standard & Poor's Group, Moody's Investor
Service, Inc. or Fitch, Inc. AAA includes bonds with an implied AAA rating
since they are backed by U.S. Government or agency securities. AAA, AA, A
and BBB ratings are investment grade; BB, B, CCC, CC, C and D ratings are
below-investment grade. Holdings designated N/R are not rated by any of
these national rating agencies.
3 The Fund paid shareholders a net ordinary income distribution in December
2009 of $0.0267 per share.
Nuveen Investments 15
NGB Performance OVERVIEW | Nuveen Virginia Dividend Advantage Municipal Fund
| as of May 31, 2010
FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price $ 15.14
--------------------------------------------------------------------------------
Common Share Net Asset Value $ 14.21
--------------------------------------------------------------------------------
Premium/(Discount) to NAV 6.54%
--------------------------------------------------------------------------------
Market Yield 5.07%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield(1) 7.47%
--------------------------------------------------------------------------------
Net Assets Applicable to Common Shares ($000) $44,612
--------------------------------------------------------------------------------
Average Effective Maturity on Securities (Years) 16.69
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 9.14
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 1/26/01)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
1-Year 14.13% 15.13%
--------------------------------------------------------------------------------
5-Year 3.00% 3.82%
--------------------------------------------------------------------------------
Since Inception 5.59% 5.77%
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
(as a % of total investments)
--------------------------------------------------------------------------------
Transportation 17.8%
--------------------------------------------------------------------------------
U.S. Guaranteed 17.3%
--------------------------------------------------------------------------------
Health Care 16.9%
--------------------------------------------------------------------------------
Tax Obligation/Limited 14.4%
--------------------------------------------------------------------------------
Long-Term Care 7.6%
--------------------------------------------------------------------------------
Tax Obligation/General 7.5%
--------------------------------------------------------------------------------
Housing/Single Family 6.3%
--------------------------------------------------------------------------------
Other 12.2%
--------------------------------------------------------------------------------
CREDIT QUALITY (as a % of total investments)(2)
[PIE CHART]
AAA/U.S. Guaranteed 36%
AA 19%
A 21%
BBB 12%
N/R 12%
2009-2010 MONTHLY TAX-FREE DIVIDENDS PER COMMON SHARE
[BAR CHART]
Jun $ 0.062
Jul $ 0.062
Aug $ 0.062
Sep $ 0.064
Oct $ 0.064
Nov $ 0.064
Dec $ 0.064
Jan $ 0.064
Feb $ 0.064
Mar $ 0.064
Apr $ 0.064
May $ 0.064
COMMON SHARE PRICE PERFORMANCE -- WEEKLY CLOSING PRICE
[LINE GRAPH]
6/1/09 $ 14
$ 13.9
$ 13.6
$ 13.15
$ 14.4
$ 14.16
$ 14.1899
$ 13.48
$ 14.7
$ 14.73
$ 14.23
$ 14.08
$ 14
$ 14.18
$ 14
$ 14.25
$ 14.71
$ 14.65
$ 15.37
$ 14.6192
$ 14.42
$ 14.3
$ 14.95
$ 14.4
$ 14.4
$ 14.75
$ 14.25
$ 14.49
$ 14.2
$ 14.66
$ 14.63
$ 14.11
$ 14.72
$ 14.18
$ 14.399
$ 14.52
$ 14.732
$ 14.3
$ 14.5999
$ 14.59
$ 14.75
$ 14.73
$ 14.42
$ 14.68
$ 14.75
$ 14.682
$ 14.9305
$ 15.01
$ 15.5
$ 14.73
$ 14.81
$ 15.25
$ 15.1399
5/31/10 $ 15.1399
1 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a 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.
2 Ratings shown are the highest of Standard & Poor's Group, Moody's Investor
Service, Inc. or Fitch, Inc. AAA includes bonds with an implied AAA rating
since they are backed by U.S. Government or agency securities. AAA, AA, A
and BBB ratings are investment grade; BB, B, CCC, CC, C and D ratings are
below-investment grade. Holdings designated N/R are not rated by any of
these national rating agencies.
16 Nuveen Investments
NNB Performance OVERVIEW | Nuveen Virginia Dividend Advantage Municipal Fund 2
| as of May 31, 2010
CREDIT QUALITY (as a % of total investments)(2)
[PIE CHART]
AAA/U.S. Guaranteed 32%
AA 25%
A 22%
BBB 12%
N/R 9%
2009-2010 MONTHLY TAX-FREE DIVIDENDS PER COMMON SHARE(3)
[BAR CHART]
Jun $ 0.062
Jul $ 0.062
Aug $ 0.062
Sep $ 0.066
Oct $ 0.066
Nov $ 0.066
Dec $ 0.066
Jan $ 0.066
Feb $ 0.066
Mar $ 0.066
Apr $ 0.066
May $ 0.066
COMMON SHARE PRICE PERFORMANCE -- WEEKLY CLOSING PRICE
[LINE GRAPH]
6/1/09 $ 13.93
$ 14.06
$ 13.16
$ 13.0999
$ 13.09
$ 13.39
$ 13.73
$ 13.85
$ 13.8901
$ 13.91
$ 14.03
$ 14.0299
$ 14.12
$ 14.08
$ 14.11
$ 14.37
$ 14.9
$ 14.78
$ 15.28
$ 15.43
$ 14.612
$ 14.86
$ 14.85
$ 14.98
$ 14.77
$ 14.85
$ 14.88
$ 14.67
$ 14.7201
$ 14.95
$ 15.017
$ 14.79
$ 14.8301
$ 14.9
$ 14.84
$ 14.81
$ 14.9376
$ 14.805
$ 14.8
$ 15.0001
$ 15.04
$ 15.38
$ 15.14
$ 14.98
$ 14.96
$ 15.18
$ 15.03
$ 15.16
$ 15.48
$ 14.9999
$ 15.39
$ 15.298
$ 15.15
5/31/10 $ 15.15
FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price $ 15.15
--------------------------------------------------------------------------------
Common Share Net Asset Value $ 14.56
--------------------------------------------------------------------------------
Premium/(Discount) to NAV 4.05%
--------------------------------------------------------------------------------
Market Yield 5.23%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield(1) 7.70%
--------------------------------------------------------------------------------
Net Assets Applicable to Common Shares ($000) $83,765
--------------------------------------------------------------------------------
Average Effective Maturity on Securities (Years) 16.69
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 8.47
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 11/15/01)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
1-Year 14.48% 15.15%
--------------------------------------------------------------------------------
5-Year 3.41% 4.06%
--------------------------------------------------------------------------------
Since Inception 5.78% 6.05%
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
(as a % of total investments)
--------------------------------------------------------------------------------
Health Care 21.5%
--------------------------------------------------------------------------------
Tax Obligation/Limited 14.9%
--------------------------------------------------------------------------------
Tax Obligation/General 14.1%
--------------------------------------------------------------------------------
Water and Sewer 11.0%
--------------------------------------------------------------------------------
U.S. Guaranteed 10.2%
--------------------------------------------------------------------------------
Housing/Single Family 8.1%
--------------------------------------------------------------------------------
Long-Term Care 7.1%
--------------------------------------------------------------------------------
Other 13.1%
--------------------------------------------------------------------------------
1 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a 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.
2 Ratings shown are the highest of Standard & Poor's Group, Moody's Investor
Service, Inc. or Fitch, Inc. AAA includes bonds with an implied AAA rating
since they are backed by U.S. Government or agency securities. AAA, AA, A
and BBB ratings are investment grade; BB, B, CCC, CC, C and D ratings are
below-investment grade. Holdings designated N/R are not rated by any of
these national rating agencies.
3 The Fund paid shareholders a net ordinary income distribution in December
2009 of $0.0037 per share.
Nuveen Investments 17
NMY | Shareholder Meeting Report
NFM |
NZR | The annual meeting of shareholders was held in the offices of Nuveen
Investments on November 30, 2009; at this meeting the shareholders were
asked to vote on the election of Board Members, the elimination of
Fundamental Investment Policies and the approval of new Fundamental
Investment Policies. The meeting for NFM, NZR, NWI and NPV was
subsequently adjourned to January 12, 2010. NPV was additionally adjourned
to March 23, 2010.
NMY NFM NZR
-------------------------------------------------------------------- ----------------------------- -----------------------------
Common and Common and Common and
Preferred Preferred Preferred Preferred Preferred Preferred
shares voting shares voting shares voting shares voting shares voting shares voting
together together together together together together
as a class as a class as a class as a class as a class as a class
------------------------------------------------------------------------------------------------------------------------------------
TO APPROVE THE ELIMINATION OF THE
FUND'S FUNDAMENTAL POLICY RELATING
TO INVESTMENTS IN MUNICIPAL
SECURITIES AND BELOW INVESTMENT
GRADE SECURITIES.
For -- -- 1,965,394 639 1,983,699 709
Against -- -- 122,788 1 151,609 16
Abstain -- -- 71,462 4 52,585 --
Broker Non-Votes -- -- 481,265 -- 557,918 --
------------------------------------------------------------------------------------------------------------------------------------
Total -- -- 2,640,909 644 2,745,811 725
====================================================================================================================================
TO APPROVE THE NEW FUNDAMENTAL POLICY
RELATING TO INVESTMENTS IN MUNICIPAL
SECURITIES FOR THE FUND.
For -- -- 1,988,505 639 1,999,267 716
Against -- -- 107,428 1 134,928 9
Abstain -- -- 63,711 4 53,698 --
Broker Non-Votes -- -- 481,265 -- 557,918 --
------------------------------------------------------------------------------------------------------------------------------------
Total -- -- 2,640,909 644 2,745,811 725
====================================================================================================================================
TO APPROVE THE ELIMINATION OF THE
FUNDAMENTAL POLICY PROHIBITING
INVESTMENT IN OTHER INVESTMENT
COMPANIES.
For -- -- -- -- -- --
Against -- -- -- -- -- --
Abstain -- -- -- -- -- --
Broker Non-Votes -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- -- -- -- -- --
====================================================================================================================================
TO APPROVE THE ELIMINATION OF THE
FUNDAMENTAL POLICY RELATING TO
DERIVATIVES AND SHORT SALES.
For -- -- -- -- -- --
Against -- -- -- -- -- --
Abstain -- -- -- -- -- --
Broker Non-Votes -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- -- -- -- -- --
====================================================================================================================================
TO APPROVE THE ELIMINATION OF THE
FUNDAMENTAL POLICY RELATING TO
COMMODITIES.
For -- -- -- -- -- --
Against -- -- -- -- -- --
Abstain -- -- -- -- -- --
Broker Non-Votes -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- -- -- -- -- --
====================================================================================================================================
TO APPROVE THE NEW FUNDAMENTAL
POLICY RELATING TO COMMODITIES.
For -- -- -- -- -- --
Against -- -- -- -- -- --
Abstain -- -- -- -- -- --
Broker Non-Votes -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- -- -- -- -- --
====================================================================================================================================
18 Nuveen Investments
NMY NFM NZR
-------------------------------------------------------------------- ----------------------------- -----------------------------
Common and Common and Common and
Preferred Preferred Preferred Preferred Preferred Preferred
shares voting shares voting shares voting shares voting shares voting shares voting
together together together together together together
as a class as a class as a class as a class as a class as a class
------------------------------------------------------------------------------------------------------------------------------------
APPROVAL OF THE BOARD MEMBERS WAS
REACHED AS FOLLOWS:
Robert P. Bremner
For 8,767,034 -- 2,522,131 -- 2,647,784 --
Withhold 140,799 -- 118,778 -- 98,027 --
------------------------------------------------------------------------------------------------------------------------------------
Total 8,907,833 -- 2,640,909 -- 2,745,811 --
====================================================================================================================================
Jack B. Evans
For 8,751,611 -- 2,524,202 -- 2,658,861 --
Withhold 156,222 -- 116,707 -- 86,950 --
------------------------------------------------------------------------------------------------------------------------------------
Total 8,907,833 -- 2,640,909 -- 2,745,811 --
====================================================================================================================================
William C. Hunter
For -- 1,582 -- 605 -- 666
Withhold -- 190 -- 39 -- 59
------------------------------------------------------------------------------------------------------------------------------------
Total -- 1,772 -- 644 -- 725
====================================================================================================================================
William J. Schneider
For -- 1,582 -- 605 -- 666
Withhold -- 190 -- 39 -- 59
------------------------------------------------------------------------------------------------------------------------------------
Total -- 1,772 -- 644 -- 725
====================================================================================================================================
Nuveen Investments 19
NWI NGB NPV | Shareholder Meeting Report (continued)
NWI NPV NGB
-------------------------------------------------------------------- ----------------------------- -----------------------------
Common and Common and Common and
Preferred Preferred Preferred Preferred Preferred Preferred
shares voting shares voting shares voting shares voting shares voting shares voting
together together together together together together
as a class as a class as a class as a class as a class as a class
------------------------------------------------------------------------------------------------------------------------------------
TO APPROVE THE ELIMINATION OF THE
FUND'S FUNDAMENTAL POLICY RELATING
TO INVESTMENTS IN MUNICIPAL SECURITIES
AND BELOW INVESTMENT GRADE SECURITIES.
For 2,444,885 884 4,661,554 1,453 -- --
Against 114,510 19 318,427 82 -- --
Abstain 86,133 1 185,106 448 -- --
Broker Non-Votes 893,042 -- 1,354,950 -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 3,538,570 904 6,520,037 1,983 -- --
====================================================================================================================================
TO APPROVE THE NEW FUNDAMENTAL POLICY
RELATING TO INVESTMENTS IN MUNICIPAL
SECURITIES FOR THE FUND.
For 2,454,038 892 4,704,960 1,455 -- --
Against 113,840 11 291,053 80 -- --
Abstain 77,650 1 169,074 448 -- --
Broker Non-Votes 893,042 -- 1,354,950 -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 3,538,570 904 6,520,037 1,983 -- --
====================================================================================================================================
TO APPROVE THE ELIMINATION OF THE
FUNDAMENTAL POLICY PROHIBITING
INVESTMENT IN OTHER INVESTMENT
COMPANIES.
For -- -- 4,612,617 1,453 -- --
Against -- -- 359,873 82 -- --
Abstain -- -- 192,597 448 -- --
Broker Non-Votes -- -- 1,354,950 -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- -- 6,520,037 1,983 -- --
====================================================================================================================================
TO APPROVE THE ELIMINATION OF THE
FUNDAMENTAL POLICY RELATING TO
DERIVATIVES AND SHORT SALES.
For -- -- 4,607,762 1,445 -- --
Against -- -- 346,718 90 -- --
Abstain -- -- 210,607 448 -- --
Broker Non-Votes -- -- 1,354,950 -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- -- 6,520,037 1,983 -- --
====================================================================================================================================
TO APPROVE THE ELIMINATION OF THE
FUNDAMENTAL POLICY RELATING TO
COMMODITIES.
For -- -- 4,631,417 1,442 -- --
Against -- -- 331,998 78 -- --
Abstain -- -- 201,672 463 -- --
Broker Non-Votes -- -- 1,354,950 -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- -- 6,520,037 1,983 -- --
====================================================================================================================================
TO APPROVE THE NEW FUNDAMENTAL
POLICY RELATING TO COMMODITIES.
For -- -- 4,641,713 1,442 -- --
Against -- -- 325,766 78 -- --
Abstain -- -- 197,608 463 -- --
Broker Non-Votes -- -- 1,354,950 -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- -- 6,520,037 1,983 -- --
====================================================================================================================================
20 Nuveen Investments
NWI NPV NGB
-------------------------------------------------------------------- ----------------------------- -----------------------------
Common and Common and Common and
Preferred Preferred Preferred Preferred Preferred Preferred
shares voting shares voting shares voting shares voting shares voting shares voting
together together together together together together
as a class as a class as a class as a class as a class as a class
------------------------------------------------------------------------------------------------------------------------------------
APPROVAL OF THE BOARD MEMBERS WAS
REACHED AS FOLLOWS:
Robert P. Bremner
For 3,400,428 -- 6,276,015 -- 2,469,009 --
Withhold 138,142 -- 220,519 -- 55,969 --
------------------------------------------------------------------------------------------------------------------------------------
Total 3,538,570 -- 6,496,534 -- 2,524,978 --
====================================================================================================================================
Jack B. Evans
For 3,406,097 -- 6,271,787 -- 2,472,380 --
Withhold 132,473 -- 224,747 -- 52,598 --
------------------------------------------------------------------------------------------------------------------------------------
Total 3,538,570 -- 6,496,534 -- 2,524,978 --
====================================================================================================================================
William C. Hunter
For -- 841 -- 815 -- 275
Withhold -- 63 -- 249 -- 47
------------------------------------------------------------------------------------------------------------------------------------
Total -- 904 -- 1,064 -- 322
====================================================================================================================================
William J. Schneider
For -- 841 -- 815 -- 275
Withhold -- 63 -- 249 -- 47
------------------------------------------------------------------------------------------------------------------------------------
Total -- 904 -- 1,064 -- 322
====================================================================================================================================
Nuveen Investments 21
NNB | Shareholder Meeting Report (continued)
NNB
------------------------------------------------------------------------------------
Common and
Preferred Preferred
shares voting shares voting
together together
as a class as a class
------------------------------------------------------------------------------------
TO APPROVE THE ELIMINATION OF THE FUND'S
FUNDAMENTAL POLICY RELATING TO INVESTMENTS
IN MUNICIPAL SECURITIES AND BELOW INVESTMENT
GRADE SECURITIES.
For -- --
Against -- --
Abstain -- --
Broker Non-Votes -- --
------------------------------------------------------------------------------------
Total -- --
====================================================================================
TO APPROVE THE NEW FUNDAMENTAL POLICY
RELATING TO INVESTMENTS IN MUNICIPAL
SECURITIES FOR THE FUND.
For -- --
Against -- --
Abstain -- --
Broker Non-Votes -- --
------------------------------------------------------------------------------------
Total -- --
====================================================================================
TO APPROVE THE ELIMINATION OF THE FUNDAMENTAL
POLICY PROHIBITING INVESTMENT IN OTHER
INVESTMENT COMPANIES.
For -- --
Against -- --
Abstain -- --
Broker Non-Votes -- --
------------------------------------------------------------------------------------
Total -- --
====================================================================================
TO APPROVE THE ELIMINATION OF THE FUNDAMENTAL
POLICY RELATING TO DERIVATIVES AND SHORT SALES.
For -- --
Against -- --
Abstain -- --
Broker Non-Votes -- --
------------------------------------------------------------------------------------
Total -- --
====================================================================================
TO APPROVE THE ELIMINATION OF THE FUNDAMENTAL
POLICY RELATING TO COMMODITIES.
For -- --
Against -- --
Abstain -- --
Broker Non-Votes -- --
------------------------------------------------------------------------------------
Total -- --
====================================================================================
TO APPROVE THE NEW FUNDAMENTAL POLICY
RELATING TO COMMODITIES.
For -- --
Against -- --
Abstain -- --
Broker Non-Votes -- --
------------------------------------------------------------------------------------
Total -- --
====================================================================================
22 Nuveen Investments
NNB
------------------------------------------------------------------------------------
Common and
Preferred Preferred
shares voting shares voting
together together
as a class as a class
------------------------------------------------------------------------------------
APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS:
Robert P. Bremner
For 4,564,389 --
Withhold 124,597 --
------------------------------------------------------------------------------------
Total 4,688,986 --
====================================================================================
Jack B. Evans
For 4,566,389 --
Withhold 122,597 --
------------------------------------------------------------------------------------
Total 4,688,986 --
====================================================================================
William C. Hunter
For -- 528
Withhold -- 116
------------------------------------------------------------------------------------
Total -- 644
====================================================================================
William J. Schneider
For -- 528
Withhold -- 116
------------------------------------------------------------------------------------
Total -- 644
====================================================================================
Nuveen Investments 23
Report of Independent
Registered Public Accounting Firm
THE BOARD TRUSTEES AND SHAREHOLDERS
NUVEEN MARYLAND PREMIUM INCOME MUNICIPAL FUND
NUVEEN MARYLAND DIVIDEND ADVANTAGE MUNICIPAL FUND
NUVEEN MARYLAND DIVIDEND ADVANTAGE MUNICIPAL FUND 2
NUVEEN MARYLAND DIVIDEND ADVANTAGE MUNICIPAL FUND 3
NUVEEN VIRGINIA PREMIUM INCOME MUNICIPAL FUND
NUVEEN VIRGINIA DIVIDEND ADVANTAGE MUNICIPAL FUND
NUVEEN VIRGINIA DIVIDEND ADVANTAGE MUNICIPAL FUND 2
We have audited the accompanying statements of assets and liabilities,
including the portfolios of investments, of Nuveen Maryland Premium Income
Municipal Fund, Nuveen Maryland Dividend Advantage Municipal Fund, Nuveen
Maryland Dividend Advantage Municipal Fund 2, Nuveen Maryland Dividend
Advantage Municipal Fund 3, Nuveen Virginia Premium Income Municipal Fund,
Nuveen Virginia Dividend Advantage Municipal Fund, and Nuveen Virginia
Dividend Advantage Municipal Fund 2 (the "Funds"), as of May 31, 2010, and
the related statements of operations and cash flows for the year then
ended, the statements of changes in net assets for each of the two years
in the period then ended, and the financial highlights for each of the
five years in the period then ended. These financial statements and
financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements and financial highlights are free
of material misstatement. We were not engaged to perform an audit of the
Funds' internal control over financial reporting. Our audits included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Funds' internal control over financial reporting. Accordingly, we express
no such opinion. An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles
used and significant estimates made by management, and evaluating the
overall financial statement presentation. Our procedures included
confirmation of securities owned as of May 31, 2010, by correspondence
with the custodian and brokers or by other appropriate auditing procedures
where replies from brokers were not received. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial positions
of Nuveen Maryland Premium Income Municipal Fund, Nuveen Maryland Dividend
Advantage Municipal Fund, Nuveen Maryland Dividend Advantage Municipal
Fund 2, Nuveen Maryland Dividend Advantage Municipal Fund 3, Nuveen
Virginia Premium Income Municipal Fund, Nuveen Virginia Dividend Advantage
Municipal Fund, and Nuveen Virginia Dividend Advantage Municipal Fund 2 at
May 31, 2010, the results of their operations and cash flows for the year
then ended, the changes in their net assets for each of the two years in
the period then ended, and the financial highlights for each of the five
years in the period then ended in conformity with U.S. generally accepted
accounting principles.
/s/ Ernst & Young LLP
Chicago, Illinois
July 27, 2010
24 Nuveen Investments
NMY | Nuveen Maryland Premium Income Municipal Fund
| Portfolio of Investments May 31, 2010
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 2.5% (1.7% OF TOTAL INVESTMENTS)
Baltimore, Maryland, Senior Lien Convention Center Hotel Revenue
Bonds, Series 2006A:
$ 25 5.250%, 9/01/25 - SYNCORA GTY Insured 9/16 at 100.00 Baa3 $ 22,782
4,825 5.250%, 9/01/39 - SYNCORA GTY Insured 9/16 at 100.00 Baa3 3,938,937
-----------------------------------------------------------------------------------------------------------------------------------
4,850 Total Consumer Discretionary 3,961,719
-----------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 1.6% (1.1% OF TOTAL INVESTMENTS)
2,615 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 2,566,910
Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33
-----------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 16.9% (11.3% OF TOTAL
INVESTMENTS)
1,250 Frederick County, Maryland, Educational Facilities Revenue Bonds, 9/16 at 100.00 BBB- 1,173,538
Mount Saint Mary's College, Series 2006, 5.625%, 9/01/38
1,000 Hartford County, Maryland, Economic Development Revenue Bonds, 4/14 at 100.00 A+ 1,005,100
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 N/R 1,021,444
980 5.375%, 7/01/16 - AMBAC Insured 7/11 at 100.00 N/R 1,021,444
330 Maryland Health and Higher Educational Facilities Authority, 7/20 at 100.00 BBB- 334,825
Revenue Bonds, Patterson Park Public Charter School Issue,
Series 2010, 6.000%, 7/01/40
Maryland Health and Higher Educational Facilities Authority,
Revenue Bonds, Bullis School, Series 2000:
750 5.250%, 7/01/25 - AGM Insured 1/11 at 101.00 AAA 762,330
500 5.250%, 7/01/30 - AGM Insured 1/11 at 101.00 AAA 507,305
1,250 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A- 1,256,113
Revenue Bonds, Goucher College, Series 2004, 5.125%, 7/01/34
1,430 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 AA 1,599,326
Revenue Bonds, Johns Hopkins University, Series 2004, Inverse
1003, 13.395%, 7/01/33 (IF)
1,825 Maryland Health and Higher Educational Facilities Authority, 6/16 at 100.00 Baa1 1,795,526
Revenue Bonds, Maryland Institute College of Art, Series 2006,
5.000%, 6/01/30
1,365 Montgomery County Revenue Authority, Maryland, Lease Revenue 5/15 at 100.00 Aa3 1,474,159
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 Aa3 11,137,638
Revenue Refunding Bonds, Academic Fees and Auxiliary
Facilities, Series 1993, 6.100%, 7/01/20 - NPFG Insured
1,685 University of Maryland, Auxiliary Facility and Tuition Revenue 10/16 at 100.00 AA+ 1,867,974
Bonds, Series 2006A, 5.000%, 10/01/22
Westminster, Maryland, Educational Facilities Revenue Bonds,
McDaniel College, Series 2006:
910 5.000%, 11/01/31 11/16 at 100.00 BBB+ 890,062
850 4.500%, 11/01/36 11/16 at 100.00 BBB+ 732,267
-----------------------------------------------------------------------------------------------------------------------------------
24,550 Total Education and Civic Organizations 26,579,051
-----------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 25.6% (17.1% OF TOTAL INVESTMENTS)
2,990 Maryland Health and Higher Education Facilities Authority, 7/19 at 100.00 A 3,043,132
Revenue Bonds, University of Maryland Medical System Issue,
Series 2010, 5.125%, 7/01/39
1,500 Maryland Health and Higher Educational Facilities Authority, 7/19 at 100.00 A- 1,499,925
Revenue Bonds, Anne Arundel Health System, Series 2010,
5.000%, 7/01/40
1,525 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A2 1,564,726
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 A3 3,305,380
Revenue Bonds, Carroll County General Hospital, Series 2002,
5.800%, 7/01/32
400 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 A3 390,256
Revenue Bonds, Carroll Hospital Center, Series 2006, 5.000%,
7/01/40
1,665 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 N/R 1,357,641
Revenue Bonds, Civista Medical Center, Series 2005, 5.000%,
7/01/37 - RAAI Insured
Nuveen Investments 25
NMY | Nuveen Maryland Premium Income Municipal Fund (continued)
| Portfolio of Investments May 31, 2010
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE (continued)
$ 1,740 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 Baa3 $ 1,631,998
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 1,325,296
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+ 1,500,240
Revenue Bonds, Greater Baltimore Medical Center, Series 2001,
5.000%, 7/01/34
1,000 Maryland Health and Higher Educational Facilities Authority, 7/10 at 100.00 A 1,000,560
Revenue Bonds, Johns Hopkins Hospital, Howard County General
Hospital Acquisition, Series 1998, 5.000%, 7/01/19 - NPFG
Insured
2,000 Maryland Health and Higher Educational Facilities Authority, 6/10 at 101.00 A3 2,023,820
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 3,717,160
Revenue Bonds, Kennedy Krieger Institute, Series 2003, 5.500%,
7/01/33
1,175 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 AAA 1,224,773
Revenue Bonds, LifeBridge Health System, Series 2008, 5.000%,
7/01/28 - AGC Insured
1,750 Maryland Health and Higher Educational Facilities Authority, 8/14 at 100.00 A2 1,799,263
Revenue Bonds, MedStar Health, Series 2004, 5.375%, 8/15/24
3,310 Maryland Health and Higher Educational Facilities Authority, 5/16 at 100.00 AA+ 3,363,920
Revenue Bonds, MedStar Health, Series 2007, 5.250%, 5/15/46 -
BHAC Insured
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 925,968
670 5.500%, 7/01/42 7/17 at 100.00 BBB 651,287
1,700 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 A 1,723,970
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 3,289,065
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 A 1,008,780
Revenue Bonds, University of Maryland Medical System, Series
2004B, 5.000%, 7/01/24 - AMBAC Insured
3,395 Maryland Health and Higher Educational Facilities Authority, 1/18 at 100.00 BBB- 3,405,151
Revenue Bonds, Washington County Hospital, Series 2008,
5.750%, 1/01/38
Prince George's County, Maryland, Revenue Bonds, Dimensions
Health Corporation, Series 1994:
360 5.375%, 7/01/14 (5) 7/10 at 100.00 B3 328,734
295 5.300%, 7/01/24 (5) 7/10 at 100.00 B3 204,229
-----------------------------------------------------------------------------------------------------------------------------------
40,685 Total Health Care 40,285,274
-----------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 12.7% (8.5% OF TOTAL INVESTMENTS)
2,065 Anne Arundel County, Maryland, FNMA Multifamily Housing Revenue 1/20 at 102.00 AAA 2,099,465
Bonds, Glenview Gardens Apartments Project, Series 2009,
5.000%, 1/01/28 (Mandatory put 1/01/27)
1,450 Maryland Community Development Administration, FNMA Multifamily 2/11 at 101.00 Aaa 1,478,464
Development Revenue Bonds, Edgewater Village Apartments,
Series 2000B, 5.800%, 8/01/20 (Alternative Minimum Tax)
2,500 Maryland Community Development Administration, Housing Revenue 7/10 at 100.50 Aa2 2,503,900
Bonds, Series 1999A, 5.350%, 7/01/41 (Alternative Minimum Tax)
880 Maryland Community Development Administration, Housing Revenue 7/10 at 100.00 Aa2 880,862
Bonds, Series 1999B, 6.250%, 7/01/32 (Alternative Minimum Tax)
1,000 Maryland Economic Development Corporation, Senior Lien Student 10/13 at 100.00 B3 756,650
Housing Revenue Bonds, University of Maryland - Baltimore,
Series 2003A, 5.625%, 10/01/23
1,000 Maryland Economic Development Corporation, Student Housing 6/10 at 101.90 Baa3 1,019,040
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 Baa2 1,086,513
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, Maryland, 7/10 at 100.00 Aaa 3,832,030
FNMA/FHA-Insured Multifamily Housing Development Bonds, Series
1998A, 5.200%, 7/01/30
26 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY (continued)
$ 360 Montgomery County Housing Opportunities Commission, Maryland, 7/10 at 100.00 Aa2 $ 360,871
GNMA/FHA-Insured Multifamily Housing Revenue Bonds, Series
1995A, 5.900%, 7/01/15
2,000 Montgomery County Housing Opportunities Commission, Maryland, 7/10 at 100.00 Aaa 2,002,220
Multifamily Housing Development Bonds, Series 2000A, 6.100%,
7/01/30
540 Prince George's County Housing Authority, Maryland, GNMA 9/10 at 101.00 AAA 549,115
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:
1,645 5.700%, 12/20/15 6/10 at 100.00 AA+ 1,648,932
1,670 5.750%, 12/20/19 6/10 at 100.00 AA+ 1,672,639
-----------------------------------------------------------------------------------------------------------------------------------
20,085 Total Housing/Multifamily 19,890,701
-----------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 11.2% (7.5% OF TOTAL INVESTMENTS)
2,510 Maryland Community Development Administration Department of 9/18 at 100.00 Aa2 2,638,688
Housing and Community Development, Residential Revenue Bonds,
Series 2008C, 5.375%, 9/01/39
3,000 Maryland Community Development Administration Department of 9/18 at 100.00 Aa2 3,022,230
Housing and Community Development, Residential Revenue Bonds,
Series 2009B, 4.750%, 9/01/39
Maryland Community Development Administration, Department of
Housing and Community Development, Residential Revenue Bonds,
Series 2006:
600 4.750%, 9/01/25 (Alternative Minimum Tax) (UB) 9/15 at 100.00 Aa2 603,288
1,195 4.900%, 9/01/26 (Alternative Minimum Tax) (UB) 9/15 at 100.00 Aa2 1,204,441
4,100 4.875%, 9/01/26 (Alternative Minimum Tax) (UB) 3/16 at 100.00 Aa2 4,133,498
1,630 4.900%, 9/01/31 (Alternative Minimum Tax) (UB) 9/16 at 100.00 Aa2 1,643,872
Maryland Community Development Administration, Department of
Housing and Community Development, Residential Revenue Bonds,
Series 2007:
650 5.000%, 9/01/27 (Alternative Minimum Tax) (UB) 3/17 at 100.00 Aa2 658,880
1,200 4.850%, 9/01/37 (Alternative Minimum Tax) (UB) 3/17 at 100.00 Aa2 1,196,316
2,330 Maryland Community Development Administration, Department of 9/14 at 100.00 Aa2 2,288,270
Housing and Community Development, Residential Revenue Bonds,
Series 2005, 4.900%, 9/01/36 (Alternative Minimum Tax) (UB)
5 Prince George's County Housing Authority, Maryland, 8/10 at 100.00 AAA 5,015
FHLMC/FNMA/GNMA Collateralized Single Family Mortgage Revenue
Bonds, Series 2000A, 6.150%, 8/01/19 (Alternative Minimum Tax)
290 Puerto Rico Housing Finance Authority, Mortgage-Backed Securities 6/13 at 100.00 AAA 285,760
Program Home Mortgage Revenue Bonds, Series 2003A, 4.875%,
6/01/34 (Alternative Minimum Tax)
-----------------------------------------------------------------------------------------------------------------------------------
17,510 Total Housing/Single Family 17,680,258
-----------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 2.7% (1.8% OF TOTAL INVESTMENTS)
2,150 Maryland Economic Development Corporation, Economic Development 6/20 at 100.00 Baa3 2,202,568
Revenue Bonds, Transportation Facilities Project, Series
2010A, 5.750%, 6/01/35
2,010 Maryland Economic Development Corporation, Solid Waste Disposal 4/12 at 101.00 BBB 2,027,306
Revenue Bonds, Waste Management Inc., Series 2002, 4.600%,
4/01/16 (Alternative Minimum Tax)
-----------------------------------------------------------------------------------------------------------------------------------
4,160 Total Industrials 4,229,874
-----------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 3.2% (2.2% OF TOTAL INVESTMENTS)
2,455 Baltimore County, Maryland, Revenue Bonds, Oak Crest Village, 1/17 at 100.00 BBB+ 2,205,572
Series 2007A, 5.000%, 1/01/37
1,000 Carroll County, Maryland, Revenue Refunding Bonds, EMA Obligated 7/10 at 100.50 BB- 877,300
Group, Series 1999A, 5.625%, 1/01/25 - RAAI Insured
995 Gaithersburg, Maryland, Economic Development Revenue Bonds, 1/20 at 100.00 N/R 1,024,910
Asbury Methodist Homes Inc., Series 2009B, 6.000%, 1/01/23
1,065 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 A- 966,935
Revenue Bonds, Mercy Ridge Retirement Community, Series 2007,
4.750%, 7/01/34
-----------------------------------------------------------------------------------------------------------------------------------
5,515 Total Long-Term Care 5,074,717
-----------------------------------------------------------------------------------------------------------------------------------
Nuveen Investments 27
NMY | Nuveen Maryland Premium Income Municipal Fund (continued)
| Portfolio of Investments May 31, 2010
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 28.6% (19.2% OF TOTAL INVESTMENTS)
$ 2,030 Anne Arundel County, Maryland, General Obligation Bonds, Series 4/14 at 100.00 AAA $ 2,260,040
2004, 5.000%, 4/01/16
1,000 Anne Arundel County, Maryland, General Obligation Bonds, Series 3/16 at 100.00 AAA 1,110,700
2006, 5.000%, 3/01/21
685 Anne Arundel County, Maryland, Water and Sewer Revenue Bonds, 3/16 at 100.00 AAA 788,017
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 2,566,875
3,500 5.000%, 6/01/26 6/11 at 101.00 AAA 3,590,440
1,540 Baltimore, Maryland, General Obligation Consolidated Public 10/14 at 100.00 Aa2 1,655,284
Improvement Bonds, Series 2004A, 5.000%, 10/15/22 - AMBAC
Insured
700 Carroll County, Maryland, Consolidated Public Improvement Bonds, 12/15 at 100.00 AA+ 807,870
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 Aa1 2,488,497
820 5.000%, 3/01/16 No Opt. Call Aa1 955,046
Howard County, Maryland, Consolidated Public Improvement Bonds,
Series 2004B:
1,625 5.000%, 8/15/17 2/14 at 100.00 AAA 1,847,024
1,180 5.000%, 8/15/19 2/14 at 100.00 AAA 1,341,223
1,725 Howard County, Maryland, Metropolitan District Refunding Bonds, 2/12 at 100.00 AAA 1,805,523
Series 2002A, 5.250%, 8/15/18
1,190 Maryland National Capital Park Planning Commission, Prince 1/14 at 100.00 AAA 1,325,672
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 3,500,820
Public Improvement Bonds, Series 2005A, 5.000%, 7/01/15
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 1,877,470
2,000 5.250%, 10/01/18 10/11 at 101.00 AAA 2,092,360
2,000 Prince George's County, Maryland, General Obligation 9/12 at 101.00 AAA 2,081,560
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 AAA 6,413,124
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 2,328,120
1,235 5.000%, 6/01/23 6/15 at 100.00 AAA 1,437,614
1,235 5.000%, 6/01/24 6/15 at 100.00 AAA 1,437,614
1,235 5.000%, 6/01/25 6/15 at 100.00 AAA 1,437,614
-----------------------------------------------------------------------------------------------------------------------------------
40,905 Total Tax Obligation/General 45,148,507
-----------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 15.8% (10.5% OF TOTAL INVESTMENTS)
300 Baltimore, Maryland, Special Obligation Bonds, North Locust 9/15 at 101.00 N/R 276,264
Point Project, Series 2005, 5.500%, 9/01/34
340 Frederick County, Maryland, Lake Linganore Village Community 7/10 at 102.00 N/R 326,614
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 800,370
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+ 886,314
925 5.500%, 10/15/20 (Alternative Minimum Tax) 10/10 at 101.00 AA+ 937,950
4,250 Maryland Department of Transportation, Consolidated No Opt. Call AAA 5,044,368
Transportation Revenue Bonds, Series 2002, 5.500%, 2/01/16
1,875 Maryland Economic Development Corporation, Lease Revenue Bonds, 6/12 at 100.50 AAA 2,029,950
Department of Transportation Headquarters Building, Series
2002, 5.375%, 6/01/19
1,700 Maryland Stadium Authority, Lease Revenue Bonds, Montgomery 6/13 at 100.00 AA+ 1,844,772
County Conference Center Facilities, Series 2003, 5.000%,
6/15/24
1,000 Montgomery County, Maryland, Lease Revenue Bonds, Metrorail 6/12 at 100.00 AA 1,068,330
Garage, Series 2002, 5.000%, 6/01/21
28 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 675 Montgomery County, Maryland, Special Obligation Bonds, West 7/12 at 101.00 A2 $ 661,061
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+ 647,903
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 A3 1,082,900
2,500 5.250%, 7/01/31 - AMBAC Insured No Opt. Call A3 2,584,075
1,000 5.250%, 7/01/33 - NPFG Insured No Opt. Call A 1,039,560
2,100 Puerto Rico Municipal Finance Agency, Series 2002A, 5.250%, 8/12 at 100.00 AAA 2,213,799
8/01/21 - AGM Insured
Puerto Rico Sales Tax Financing Corporation, Sales Tax
Revenue Bonds, First Subordinate Series 2010A:
1,425 5.375%, 8/01/39 2/20 at 100.00 A+ 1,479,891
200 5.500%, 8/01/42 2/20 at 100.00 A+ 209,300
1,500 Puerto Rico, Highway Revenue Bonds, Highway and Transportation No Opt. Call A 1,627,740
Authority, Series 2003AA, 5.500%, 7/01/19 - NPFG Insured
------------------------------------------------------------------------------------------------------------------------------------
23,200 Total Tax Obligation/Limited 24,761,161
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 4.8% (3.2% OF TOTAL INVESTMENTS)
1,060 Baltimore, Maryland, Revenue Refunding Bonds, Parking System No Opt. Call A1 1,188,790
Facilities, Series 1998A, 5.250%, 7/01/17 - FGIC Insured
4,335 Maryland Transportation Authority, Revenue Bonds, 7/17 at 100.00 AAA 4,645,820
Transportation Facilities Projects, Series 2007, 5.000%,
7/01/30 - AGM Insured (UB)
2,075 Puerto Rico Ports Authority, Special Facilities Revenue Bonds, 6/10 at 100.00 CCC+ 1,643,130
AmericanAirlines Inc., Series 1996A, 6.250%, 6/01/26
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
7,470 Total Transportation 7,477,740
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 16.5% (11.1% OF TOTAL INVESTMENTS) (4)
2,000 Baltimore, Maryland, Revenue Refunding Bonds, Water Projects, No Opt. Call AA (4) 2,288,620
Series 1998A, 5.000%, 7/01/28 - FGIC Insured (ETM)
2,000 Baltimore, Maryland, Revenue Refunding Bonds, Water System No Opt. Call AA (4) 2,359,560
Projects, Series 1994A, 5.000%, 7/01/24 - FGIC Insured
(ETM)
1,245 Baltimore, Maryland, Wastewater Project Revenue Bonds, Series 7/16 at 100.00 AA (4) 1,455,467
2006C, 5.000%, 7/01/31 (Pre-refunded 7/01/16) - AMBAC
Insured
275 Frederick County, Maryland, Lake Linganore Village Community 7/10 at 102.00 N/R (4) 281,864
Development Special Obligation Bonds, Series 2001A, 5.700%,
7/01/29 (Pre-refunded 7/01/10) - RAAI Insured
1,440 Gaithersburg, Maryland, Hospital Facilities Revenue Refunding No Opt. Call AAA 1,542,456
and Improvement Bonds, Shady Grove Adventist Hospital,
Series 1995, 6.500%, 9/01/12 - AGM Insured (ETM)
575 Howard County, Maryland, Consolidated Public Improvement 2/12 at 100.00 AAA 620,776
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:
810 7.625%, 4/01/21 (Pre-refunded 4/01/11) 4/11 at 102.00 N/R (4) 871,058
585 7.625%, 4/01/21 (Pre-refunded 4/01/11) 4/11 at 102.00 N/R (4) 629,097
3,200 Maryland Health and Higher Educational Facilities Authority, No Opt. Call N/R (4) 3,697,344
Revenue Bonds, Helix Health, Series 1997, 5.000%, 7/01/27
- AMBAC Insured (ETM)
3,125 Maryland Health and Higher Educational Facilities Authority, 7/10 at 100.00 Aaa 3,505,094
Revenue Bonds, Howard County General Hospital, Series 1993,
5.500%, 7/01/25 (ETM)
2,040 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A2 (4) 2,334,576
Revenue Bonds, LifeBridge Health System, Series 2004A,
5.125%, 7/01/34 (Pre-refunded 7/01/14)
1,500 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 A (4) 1,663,290
Revenue Bonds, University of Maryland Medical System, Series
2002, 6.000%, 7/01/22 (Pre-refunded 7/01/12)
175 Maryland Transportation Authority, Revenue Refunding Bonds, No Opt. Call AAA 203,676
Transportation Facilities Projects, First Series 1978,
6.800%, 7/01/16 (ETM)
1,000 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 1,027,710
Obligation Bonds, Series 2000A, 5.500%, 10/01/20
(Pre-refunded 10/01/10)
Nuveen Investments 29
NMY | Nuveen Maryland Premium Income Municipal Fund (continued)
| Portfolio of Investments May 31, 2010
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (4) (continued)
$ 1,000 Puerto Rico, Highway Revenue Bonds, Highway and Transportation 7/16 at 100.00 Aaa $ 1,200,729
Authority, Series 1996Y, 5.500%, 7/01/36
(Pre-refunded 7/01/16)
235 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 236,158
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20
(Pre-refunded 7/01/10)
2,000 Virgin Islands Public Finance Authority, Gross Receipts 10/10 at 101.00 BBB+ (4) 2,060,539
Taxes Loan Note, Series 1999A, 6.500%, 10/01/24
(Pre-refunded 10/01/10)
------------------------------------------------------------------------------------------------------------------------------------
23,205 Total U.S. Guaranteed 25,978,014
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 3.9% (2.6% OF TOTAL INVESTMENTS)
2,500 Maryland Energy Financing Administration, Revenue Bonds, 9/10 at 100.00 N/R 2,501,000
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 A 3,588,900
Series 2004PP, 5.000%, 7/01/22 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
6,000 Total Utilities 6,089,900
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 3.4% (2.2% OF TOTAL INVESTMENTS)
1,045 Baltimore, Maryland, Revenue Refunding Bonds, Water System No Opt. Call AA 1,194,341
Projects, Series 1994A, 5.000%, 7/01/24 - FGIC Insured
1,655 Baltimore, Maryland, Wastewater Project Revenue Bonds, Series 7/16 at 100.00 AA 1,756,037
2006C, 5.000%, 7/01/31 - AMBAC Insured
1,260 Baltimore, Maryland, Wastewater Project Revenue Bonds, Series 7/17 at 100.00 AA 1,311,810
2007D, 5.000%, 7/01/32 - AMBAC Insured
860 Maryland Water Quality Financing Administration, Revolving Loan No Opt. Call AAA 1,005,650
Fund Revenue Bonds, Series 2005A, 5.000%, 9/01/15
------------------------------------------------------------------------------------------------------------------------------------
4,820 Total Water and Sewer 5,267,838
------------------------------------------------------------------------------------------------------------------------------------
$ 225,570 Total Investments (cost $226,022,758) - 149.4% 234,991,664
=============-----------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (6.3)% (9,962,000)
--------------------------------------------------------------------------------------------------------------------
MuniFund Term Preferred Shares, at Liquidation Value - (24.7)%
(6) (38,775,000)
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.6% 3,963,040
--------------------------------------------------------------------------------------------------------------------
Auction Rate Preferred Shares, at Liquidation Value - (21.0)%
(6) (32,975,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 157,242,704
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net
assets applicable to Common shares unless otherwise noted.
(2) Optional Call Provisions (not covered by the report of independent
registered public accounting firm): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other call
provisions at varying prices at later dates. Certain mortgage-backed
securities may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered public
accounting firm): Using the highest of Standard & Poor's Group
("Standard & Poor's"), Moody's Investor Service, Inc. ("Moody's") or
Fitch, Inc. ("Fitch") rating. Ratings below BBB by Standard & Poor's,
Baa by Moody's or BBB by Fitch are considered to be below investment
grade.
(4) Backed by an escrow or trust containing sufficient U.S. Government or
U.S. Government agency securities, which ensure the timely payment of
principal and interest. Such investments are normally considered to be
equivalent to AAA rated securities.
(5) For fair value measurement disclosure purposes, investment categorized
as Level 3. See Notes to Financial Statements, Footnote 2 - Fair Value
Measurements for more information.
(6) MuniFund Term Preferred Shares and Auction Rate Preferred Shares, at
Liquidation Value as a percentage of Total Investments are 16.5% and
14.0%, respectively.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected as a
financing transaction. See Notes to Financial Statements, Footnote 1 -
Inverse Floating Rate Securities for more information.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
30 Nuveen Investments
NFM | Nuveen Maryland Dividend Advantage Municipal Fund
| Portfolio of Investments May 31, 2010
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 5.0% (3.5% OF TOTAL INVESTMENTS)
Baltimore, Maryland, Senior Lien Convention Center Hotel Revenue
Bonds, Series 2006A:
$ 540 5.000%, 9/01/16 - SYNCORA GTY Insured No Opt. Call Baa3 $ 535,388
2,115 5.250%, 9/01/39 - SYNCORA GTY Insured 9/16 at 100.00 Baa3 1,726,601
310 Baltimore, Maryland, Subordinate Lien Convention Center Hotel 9/16 at 100.00 Ba1 253,695
Revenue Bonds, Series 2006B, 5.875%, 9/01/39
650 Maryland Economic Development Corporation, Revenue Bonds, 12/16 at 100.00 N/R 476,255
Chesapeake Bay Hyatt Conference Center, Series 2006A, 5.000%,
12/01/31
-----------------------------------------------------------------------------------------------------------------------------------
3,615 Total Consumer Discretionary 2,991,939
-----------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 2.2% (1.5% OF TOTAL INVESTMENTS)
1,340 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 1,315,357
Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33
-----------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 12.4% (8.7% OF TOTAL
INVESTMENTS)
645 Hartford County, Maryland, Economic Development Revenue Bonds, 4/14 at 100.00 A+ 648,290
Battelle Memorial Institute, Series 2004, 5.250%, 4/01/34
980 Maryland Economic Development Corporation, Utility 7/11 at 100.00 N/R 995,680
Infrastructure Revenue Bonds, University of Maryland -
College Park, Series 2001, 5.000%, 7/01/19 - AMBAC Insured
125 Maryland Health and Higher Educational Facilities Authority, 7/20 at 100.00 BBB- 126,828
Revenue Bonds, Patterson Park Public Charter School Issue,
Series 2010, 6.000%, 7/01/40
1,500 Maryland Health and Higher Educational Facilities Authority, 7/10 at 100.00 BBB- 1,499,895
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- 502,445
Revenue Bonds, Goucher College, Series 2004, 5.125%, 7/01/34
585 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 AA 654,270
Revenue Bonds, Johns Hopkins University, Series 2004, Inverse
1003, 13.395%, 7/01/33 (IF)
565 Maryland Health and Higher Educational Facilities Authority, 6/17 at 100.00 Baa1 536,637
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 458,328
Bonds, Our Lady of Good Counsel High School, Series 2005A,
6.000%, 5/01/35
615 Montgomery County Revenue Authority, Maryland, Lease Revenue 5/15 at 100.00 Aa3 660,793
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 8/10 at 100.50 BBB- 215,159
410 5.375%, 2/01/29 8/10 at 100.50 BBB- 389,352
900 Westminster, Maryland, Educational Facilities Revenue Bonds, 11/16 at 100.00 BBB+ 775,341
McDaniel College, Series 2006, 4.500%, 11/01/36
-----------------------------------------------------------------------------------------------------------------------------------
7,515 Total Education and Civic Organizations 7,463,018
-----------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 33.5% (23.5% OF TOTAL INVESTMENTS)
225 Maryland Health and Higher Education Facilities Authority, 7/19 at 100.00 A 228,998
Revenue Bonds, University of Maryland Medical System Issue,
Series 2010, 5.125%, 7/01/39
1,325 Maryland Health and Higher Education Facilities Authority, 7/16 at 100.00 A 1,333,931
Revenue Bonds, University of Maryland Medical System, Series
2006, 5.000%, 7/01/36
330 Maryland Health and Higher Educational Facilities Authority, 7/19 at 100.00 A- 329,984
Revenue Bonds, Anne Arundel Health System, Series 2010,
5.000%, 7/01/40
1,000 Maryland Health and Higher Educational Facilities Authority, 7/10 at 100.00 AAA 1,000,930
Revenue Bonds, Anne Arundel Medical Center, Series 1998,
5.125%, 7/01/28 - AGM Insured
1,000 Maryland Health and Higher Educational Facilities Authority, 7/10 at 100.00 A2 1,000,140
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 A3 1,024,760
Revenue Bonds, Carroll County General Hospital, Series 2002,
6.000%, 7/01/26
Nuveen Investments 31
NFM | Nuveen Maryland Dividend Advantage Municipal Fund (continued)
| Portfolio of Investments May 31, 2010
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE (continued)
$ 400 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 A3 $ 390,256
Revenue Bonds, Carroll Hospital Center, Series 2006, 5.000%,
7/01/40
775 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 N/R 631,935
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 Baa3 665,930
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 473,320
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+ 650,104
Revenue Bonds, Greater Baltimore Medical Center, Series 2001,
5.000%, 7/01/34
1,250 Maryland Health and Higher Educational Facilities Authority, 5/11 at 100.00 Aa3 1,263,450
Revenue Bonds, Johns Hopkins Hospital, Series 2001, 5.000%,
5/15/21
2,225 Maryland Health and Higher Educational Facilities Authority, 6/10 at 101.00 A3 2,251,500
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 978,200
Revenue Bonds, Kennedy Krieger Institute, Series 2003,
5.500%, 7/01/33
485 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 AAA 505,545
Revenue Bonds, LifeBridge Health System, Series 2008, 5.000%,
7/01/28 - AGC Insured
700 Maryland Health and Higher Educational Facilities Authority, 8/14 at 100.00 A2 719,705
Revenue Bonds, MedStar Health, Series 2004, 5.375%, 8/15/24
1,360 Maryland Health and Higher Educational Facilities Authority, 5/16 at 100.00 AA+ 1,382,154
Revenue Bonds, MedStar Health, Series 2007, 5.250%, 5/15/46 -
BHAC Insured
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 380,472
270 5.500%, 7/01/42 7/17 at 100.00 BBB 262,459
1,000 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 BBB 1,000,830
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 709,870
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 1,001,290
Revenue Bonds, Union Hospital of Cecil County, Series 2005,
5.000%, 7/01/35
980 Maryland Health and Higher Educational Facilities Authority, 1/18 at 100.00 BBB- 982,930
Revenue Bonds, Washington County Hospital, Series 2008,
5.750%, 1/01/38
570 Maryland Health and Higher Educational Facilities Authority, 7/10 at 100.00 A3 570,342
Revenue Refunding Bonds, Union Hospital of Cecil County,
Series 1998, 5.100%, 7/01/22
700 Prince George's County, Maryland, Revenue Bonds, Dimensions 7/10 at 100.00 B3 484,610
Health Corporation, Series 1994, 5.300%, 7/01/24 (5)
-----------------------------------------------------------------------------------------------------------------------------------
20,570 Total Health Care 20,223,645
-----------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 13.6% (9.6% OF TOTAL INVESTMENTS)
1,000 Maryland Community Development Administration, Multifamily 12/11 at 100.00 Aaa 1,006,890
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 B3 213,001
50 5.000%, 10/01/15 10/13 at 100.00 B3 43,380
210 5.625%, 10/01/23 10/13 at 100.00 B3 158,897
1,800 Maryland Economic Development Corporation, Student Housing 7/11 at 101.00 N/R 1,573,002
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 Baa2 450,737
Revenue Refunding Bonds, University of Maryland College Park
Projects, Series 2006, 5.000%, 6/01/33 - CIFG Insured
750 Montgomery County Housing Opportunities Commission, Maryland, 7/10 at 100.00 Aaa 750,218
FNMA/FHA-Insured Multifamily Housing Development Bonds,
Series 1998A, 5.250%, 7/01/29 (Alternative Minimum Tax)
2,000 Montgomery County Housing Opportunities Commission, Maryland, 7/10 at 100.00 Aaa 2,002,200
Multifamily Housing Development Bonds, Series 2000B, 6.200%,
7/01/30 (Alternative Minimum Tax)
32 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY (continued)
$ 2,000 Montgomery County Housing Opportunities Commission, Maryland, 7/11 at 100.00 Aaa $ 2,010,800
Multifamily Housing Development Bonds, Series 2001A, 5.600%,
7/01/42 (Alternative Minimum Tax)
-----------------------------------------------------------------------------------------------------------------------------------
8,500 Total Housing/Multifamily 8,209,125
-----------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 9.4% (6.6% OF TOTAL INVESTMENTS)
985 Maryland Community Development Administration Department of 9/18 at 100.00 Aa2 1,035,501
Housing and Community Development, Residential Revenue Bonds,
Series 2008C, 5.375%, 9/01/39
Maryland Community Development Administration, Department of
Housing and Community Development, Residential Revenue Bonds,
Series 2006:
600 4.750%, 9/01/25 (Alternative Minimum Tax) (UB) 9/15 at 100.00 Aa2 603,288
300 4.900%, 9/01/26 (Alternative Minimum Tax) (UB) 9/15 at 100.00 Aa2 302,370
1,200 4.875%, 9/01/26 (Alternative Minimum Tax) (UB) 3/16 at 100.00 Aa2 1,209,804
815 4.900%, 9/01/31 (Alternative Minimum Tax) (UB) 9/16 at 100.00 Aa2 821,936
Maryland Community Development Administration, Department of
Housing and Community Development, Residential Revenue Bonds,
Series 2007:
250 5.000%, 9/01/27 (Alternative Minimum Tax) (UB) 3/17 at 100.00 Aa2 253,416
500 4.850%, 9/01/37 (Alternative Minimum Tax) (UB) 3/17 at 100.00 Aa2 498,466
970 Maryland Community Development Administration, Department of 9/14 at 100.00 Aa2 952,628
Housing and Community Development, Residential Revenue Bonds,
Series 2005, 4.900%, 9/01/36 (Alternative Minimum Tax) (UB)
-----------------------------------------------------------------------------------------------------------------------------------
5,620 Total Housing/Single Family 5,677,409
-----------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 3.7% (2.6% OF TOTAL INVESTMENTS)
810 Maryland Economic Development Corporation, Economic Development 6/20 at 100.00 Baa3 829,805
Revenue Bonds, Transportation Facilities Project, Series
2010A, 5.750%, 6/01/35
410 Maryland Economic Development Corporation, Solid Waste Disposal 4/12 at 101.00 BBB 413,530
Revenue Bonds, Waste Management Inc., Series 2002, 4.600%,
4/01/16 (Alternative Minimum Tax)
1,000 Northeast Maryland Waste Disposal Authority, Baltimore, Resource 7/10 at 100.00 BBB 1,001,710
Recovery Revenue Bonds, RESCO Retrofit Project, Series 1998,
4.750%, 1/01/12 (Alternative Minimum Tax)
-----------------------------------------------------------------------------------------------------------------------------------
2,220 Total Industrials 2,245,045
-----------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 3.9% (2.7% OF TOTAL INVESTMENTS)
850 Baltimore County, Maryland, Revenue Bonds, Oak Crest Village, 1/17 at 100.00 BBB+ 763,640
Series 2007A, 5.000%, 1/01/37
295 Gaithersburg, Maryland, Economic Development Revenue Bonds, 1/20 at 100.00 N/R 303,868
Asbury Methodist Homes Inc., Series 2009B, 6.000%, 1/01/23
300 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 N/R 283,602
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 599,904
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 A- 399,485
Revenue Bonds, Mercy Ridge Retirement Community, Series 2007,
4.750%, 7/01/34
-----------------------------------------------------------------------------------------------------------------------------------
2,605 Total Long-Term Care 2,350,499
-----------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 15.8% (11.1% OF TOTAL INVESTMENTS)
565 Anne Arundel County, Maryland, General Obligation Bonds, Series 3/16 at 100.00 AAA 627,546
2006, 5.000%, 3/01/21
3,500 Baltimore County, Maryland, Metropolitan District Special 6/11 at 101.00 AAA 3,587,640
Assessment Bonds, 67th Issue, 5.000%, 6/01/27
300 Carroll County, Maryland, Consolidated Public Improvement Bonds, 12/15 at 100.00 AA+ 346,230
Series 2005A, 5.000%, 12/01/16
600 Frederick, Maryland, General Obligation Bonds, Series 2005, 8/15 at 100.00 AA 687,678
5.000%, 8/01/16 - NPFG Insured
1,000 Maryland National Capital Park Planning Commission, Prince 1/14 at 100.00 AAA 1,114,010
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 1,593,675
Public Improvement Bonds, Series 2006A, 5.000%, 5/01/16
740 Ocean City, Maryland, General Obligation Bonds, Series 2001, 3/11 at 101.00 Aa2 772,937
4.875%, 3/01/19 - FGIC Insured
700 Washington Suburban Sanitary District, Montgomery and Prince 6/15 at 100.00 AAA 814,842
George's Counties, Maryland, Sewerage Disposal Bonds, Series
2005, 5.000%, 6/01/16
-----------------------------------------------------------------------------------------------------------------------------------
8,765 Total Tax Obligation/General 9,544,558
-----------------------------------------------------------------------------------------------------------------------------------
Nuveen Investments 33
NFM | Nuveen Maryland Dividend Advantage Municipal Fund (continued)
| Portfolio of Investments May 31, 2010
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 15.5% (10.9% OF TOTAL INVESTMENTS)
$ 250 Anne Arundel County, Maryland, Tax Increment Financing Revenue No Opt. Call N/R $ 253,855
Bonds, Parole Town Center Project, Series 2002, 5.000%,
7/01/12
350 Hyattsville, Maryland, Special Obligation Bonds, University Town 7/14 at 102.00 N/R 311,255
Center Project, Series 2004, 5.750%, 7/01/34
1,500 Maryland Department of Transportation, Consolidated No Opt. Call AAA 1,780,365
Transportation Revenue Bonds, Series 2002, 5.500%, 2/01/16
1,405 Maryland Economic Development Corporation, Lease Revenue Bonds, 6/12 at 100.50 AAA 1,521,109
Department of Transportation Headquarters Building, Series
2002, 5.375%, 6/01/19
370 Maryland Economic Development Corporation, Lease Revenue Bonds, 9/12 at 100.00 AA+ 403,948
Montgomery County Town Square Parking Garage, Series 2002A,
5.000%, 9/15/13
740 Prince George's County, Maryland, Lease Revenue Bonds, Upper 6/13 at 100.00 AA+ 818,381
Marlboro Justice Center, Series 2003A, 5.000%, 6/30/14 - NPFG
Insured
895 Prince George's County, Maryland, Special Obligation Bonds, 7/15 at 100.00 N/R 780,530
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 366,093
Victoria Falls Project, Series 2005, 5.250%, 7/01/35
1,000 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call A3 1,033,630
Revenue Bonds, Series 2007N, 5.250%, 7/01/31 - AMBAC Insured
700 Puerto Rico, Highway Revenue Bonds, Highway and Transportation No Opt. Call A 759,612
Authority, Series 2003AA, 5.500%, 7/01/19 - NPFG Insured
1,290 Virgin Islands Public Finance Authority, Gross Receipts Taxes 10/10 at 101.00 BBB+ 1,312,330
Loan Note, Series 1999A, 6.375%, 10/01/19
-----------------------------------------------------------------------------------------------------------------------------------
8,950 Total Tax Obligation/Limited 9,341,108
-----------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 4.4% (3.1% OF TOTAL INVESTMENTS)
650 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 N/R 632,496
Parking Facilities Revenue Bonds, Johns Hopkins Hospital,
Series 2001, 5.000%, 7/01/27 - AMBAC Insured
1,785 Maryland Transportation Authority, Revenue Bonds, Transportation 7/17 at 100.00 AAA 1,912,985
Facilities Projects, Series 2007, 5.000%, 7/01/30 - AGM
Insured (UB)
Port Authority of New York and New Jersey, Special Project Bonds,
JFK International Air Terminal LLC, Sixth Series 1997:
20 5.750%, 12/01/22 - NPFG Insured (Alternative Minimum Tax) 6/10 at 100.00 A 20,015
70 5.750%, 12/01/25 - NPFG Insured (Alternative Minimum Tax) 6/10 at 100.00 A 69,994
-----------------------------------------------------------------------------------------------------------------------------------
2,525 Total Transportation 2,635,490
-----------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 17.5% (12.3% OF TOTAL INVESTMENTS) (4)
1,015 Baltimore, Maryland, Revenue Refunding Bonds, Water Projects, No Opt. Call AA (4) 1,161,475
Series 1998A, 5.000%, 7/01/28 - FGIC Insured (ETM)
500 Maryland Health and Higher Educational Facilities Authority, 4/11 at 101.00 N/R (4) 531,390
Revenue Bonds, Collington Episcopal Life Care Community Inc.,
Series 2001A, 6.750%, 4/01/23 (Pre-refunded 4/01/11)
585 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A2 (4) 669,474
Revenue Bonds, LifeBridge Health System, Series 2004A,
5.125%, 7/01/34 (Pre-refunded 7/01/14)
625 Maryland Health and Higher Educational Facilities Authority, 6/11 at 100.00 Baa1 (4) 656,425
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) 2,104,760
Revenue Bonds, University of Maryland Medical System, Series
2001, 5.250%, 7/01/28 (Pre-refunded 7/01/11)
640 Maryland Transportation Authority, Revenue Refunding Bonds, No Opt. Call AAA 744,870
Transportation Facilities Projects, First Series 1978,
6.800%, 7/01/16 (ETM)
Puerto Rico Infrastructure Financing Authority, Special
Obligation Bonds, Series 2000A:
2,300 5.500%, 10/01/32 (Pre-refunded 10/01/10) 10/10 at 101.00 AAA 2,363,733
1,700 5.500%, 10/01/40 (Pre-refunded 10/01/10) 10/10 at 101.00 AAA 1,747,107
590 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 592,909
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20
(Pre-refunded 7/01/10)
-----------------------------------------------------------------------------------------------------------------------------------
9,955 Total U.S. Guaranteed 10,572,143
-----------------------------------------------------------------------------------------------------------------------------------
34 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 3.4% (2.4% OF TOTAL INVESTMENTS)
$ 1,000 Maryland Energy Financing Administration, Revenue Bonds, AES 9/10 at 100.00 N/R $ 1,000,400
Warrior Run Project, Series 1995, 7.400%, 9/01/19
(Alternative Minimum Tax)
1,040 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/20 at 100.00 A3 1,052,956
Series 2010XX, 5.250%, 7/01/40
------------------------------------------------------------------------------------------------------------------------------------
2,040 Total Utilities 2,053,356
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 2.1% (1.5% OF TOTAL INVESTMENTS)
285 Baltimore, Maryland, Wastewater Project Revenue Bonds, Series 7/16 at 100.00 AA 302,398
2006C, 5.000%, 7/01/31 - AMBAC Insured
540 Baltimore, Maryland, Wastewater Project Revenue Bonds, Series 7/17 at 100.00 AA 562,204
2007D, 5.000%, 7/01/32 - AMBAC Insured
355 Maryland Water Quality Financing Administration, Revolving Loan No Opt. Call AAA 415,122
Fund Revenue Bonds, Series 2005A, 5.000%, 9/01/15
------------------------------------------------------------------------------------------------------------------------------------
1,180 Total Water and Sewer 1,279,724
------------------------------------------------------------------------------------------------------------------------------------
$ 85,400 Total Investments (cost $84,939,848) - 142.4% 85,902,416
=============-----------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (6.6)% (3,973,000)
---------------------------------------------------------------------------------------------------------------------
MuniFund Term Preferred Shares, at Liquidation Value - (43.9)% (6) (26,485,000)
---------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 8.1% 4,863,985
---------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 60,308,401
=====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net
assets applicable to Common shares unless otherwise noted.
(2) Optional Call Provisions (not covered by the report of independent
registered public accounting firm): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other call
provisions at varying prices at later dates. Certain mortgage-backed
securities may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered public
accounting firm): Using the highest of Standard & Poor's Group
("Standard & Poor's"), Moody's Investor Service, Inc. ("Moody's") or
Fitch, Inc. ("Fitch") rating. Ratings below BBB by Standard & Poor's,
Baa by Moody's or BBB by Fitch are considered to be below investment
grade.
(4) Backed by an escrow or trust containing sufficient U.S. Government or
U.S. Government agency securities, which ensure the timely payment of
principal and interest. Such investments are normally considered to be
equivalent to AAA rated securities.
(5) For fair value measurement disclosure purposes, investment categorized
as Level 3. See Notes to Financial Statements, Footnote 2 - Fair Value
Measurements for more information.
(6) MuniFund Term Preferred Shares, at Liquidation Value as a percentage of
Total Investments is 30.8%.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected as a
financing transaction. See Notes to Financial Statements, Footnote 1 -
Inverse Floating Rate Securities for more information.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
Nuveen Investments 35
NZR | Nuveen Maryland Dividend Advantage Municipal Fund 2
| Portfolio of Investments May 31, 2010
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 4.3% (2.9% OF TOTAL INVESTMENTS)
$ 2,320 Baltimore, Maryland, Senior Lien Convention Center Hotel Revenue 9/16 at 100.00 Baa3 $ 1,893,955
Bonds, Series 2006A, 5.250%, 9/01/39 - SYNCORA GTY Insured
310 Baltimore, Maryland, Subordinate Lien Convention Center Hotel 9/16 at 100.00 Ba1 253,695
Revenue Bonds, Series 2006B, 5.875%, 9/01/39
650 Maryland Economic Development Corporation, Revenue Bonds, 12/16 at 100.00 N/R 476,255
Chesapeake Bay Hyatt Conference Center, Series 2006A, 5.000%,
12/01/31
-----------------------------------------------------------------------------------------------------------------------------------
3,280 Total Consumer Discretionary 2,623,905
-----------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 2.2% (1.5% OF TOTAL INVESTMENTS)
660 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 647,863
Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33
800 Tobacco Settlement Financing Corporation, Virgin Islands, Tobacco 5/11 at 100.00 Baa3 682,352
Settlement Asset-Backed Bonds, Series 2001, 5.000%, 5/15/31
-----------------------------------------------------------------------------------------------------------------------------------
1,460 Total Consumer Staples 1,330,215
-----------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 16.0% (10.8% OF TOTAL
INVESTMENTS)
1,100 Anne Arundel County, Maryland, Economic Development Revenue 9/12 at 102.00 A2 1,135,332
Bonds, Community College Project, Series 2002, 5.125%, 9/01/22
500 Frederick County, Maryland, Educational Facilities Revenue Bonds, 9/16 at 100.00 BBB- 469,415
Mount Saint Mary's College, Series 2006, 5.625%, 9/01/38
645 Hartford County, Maryland, Economic Development Revenue Bonds, 4/14 at 100.00 A+ 648,290
Battelle Memorial Institute, Series 2004, 5.250%, 4/01/34
125 Maryland Health and Higher Educational Facilities Authority, 7/20 at 100.00 BBB- 126,828
Revenue Bonds, Patterson Park Public Charter School Issue,
Series 2010, 6.000%, 7/01/40
250 Maryland Health and Higher Educational Facilities Authority, 7/10 at 100.00 BBB- 249,983
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 421,063
Revenue Bonds, Bullis School, Series 2000, 5.250%, 7/01/30
- AGM Insured
500 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A- 502,445
Revenue Bonds, Goucher College, Series 2004, 5.125%, 7/01/34
585 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 AA 654,270
Revenue Bonds, Johns Hopkins University, Series 2004, Inverse
1003, 13.395%, 7/01/33 (IF)
750 Maryland Health and Higher Educational Facilities Authority, 6/16 at 100.00 Baa1 737,888
Revenue Bonds, Maryland Institute College of Art, Series 2006,
5.000%, 6/01/30
565 Maryland Health and Higher Educational Facilities Authority, 6/17 at 100.00 Baa1 536,637
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 482,450
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 Aa3 640,457
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 Aa3 510,640
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 Revenue 7/13 at 100.00 Aa3 536,045
Bonds, Academic Fees and Auxiliary Facilities, Series 2003A,
5.000%, 7/01/20 - FGIC Insured
1,140 University of Maryland, Auxiliary Facility and Tuition Revenue 4/11 at 100.00 AA+ 1,180,367
Bonds, Series 2001B, 4.500%, 4/01/19
650 University of Maryland, Auxiliary Facility and Tuition Revenue 10/16 at 100.00 AA+ 720,584
Bonds, Series 2006A, 5.000%, 10/01/22
200 Westminster, Maryland, Educational Facilities Revenue Bonds, 11/16 at 100.00 BBB+ 195,618
McDaniel College, Series 2006, 5.000%, 11/01/31
-----------------------------------------------------------------------------------------------------------------------------------
9,515 Total Education and Civic Organizations 9,748,312
-----------------------------------------------------------------------------------------------------------------------------------
36 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 28.2% (19.0% OF TOTAL INVESTMENTS)
$ 445 Maryland Health and Higher Education Facilities Authority, 7/19 at 100.00 A $ 452,908
Revenue Bonds, University of Maryland Medical System Issue,
Series 2010, 5.125%, 7/01/39
335 Maryland Health and Higher Educational Facilities Authority, 7/19 at 100.00 A- 334,983
Revenue Bonds, Anne Arundel Health System, Series 2010,
5.000%, 7/01/40
1,000 Maryland Health and Higher Educational Facilities Authority, 7/10 at 100.00 AAA 1,000,660
Revenue Bonds, Anne Arundel Medical Center, Series 1998,
5.125%, 7/01/33 - AGM Insured
775 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A2 795,189
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 A3 1,024,760
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 N/R 611,550
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 Baa3 670,620
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 473,320
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+ 650,104
Revenue Bonds, Greater Baltimore Medical Center, Series 2001,
5.000%, 7/01/34
1,000 Maryland Health and Higher Educational Facilities Authority, 7/13 at 100.00 Baa3 978,200
Revenue Bonds, Kennedy Krieger Institute, Series 2003, 5.500%,
7/01/33
480 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 AAA 500,333
Revenue Bonds, LifeBridge Health System, Series 2008, 5.000%,
7/01/28 - AGC Insured
700 Maryland Health and Higher Educational Facilities Authority, 8/14 at 100.00 A2 719,705
Revenue Bonds, MedStar Health, Series 2004, 5.375%, 8/15/24
1,360 Maryland Health and Higher Educational Facilities Authority, 5/16 at 100.00 AA+ 1,382,154
Revenue Bonds, MedStar Health, Series 2007, 5.250%, 5/15/46
- BHAC Insured
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 380,472
280 5.500%, 7/01/42 7/17 at 100.00 BBB 272,180
1,500 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 BBB 1,501,245
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 709,870
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 1,495,305
Revenue Bonds, Union Hospital of Cecil County, Series 2005,
5.000%, 7/01/40
980 Maryland Health and Higher Educational Facilities Authority, 1/18 at 100.00 BBB- 982,930
Revenue Bonds, Washington County Hospital, Series 2008,
5.750%, 1/01/38
1,610 Montgomery County, Maryland, Economic Development Revenue Bonds, 12/11 at 100.00 AA 1,631,542
Trinity Healthcare Group, Series 2001, 5.125%, 12/01/22
700 Prince George's County, Maryland, Revenue Bonds, Dimensions 7/10 at 100.00 B3 484,610
Health Corporation, Series 1994, 5.300%, 7/01/24 (5)
-----------------------------------------------------------------------------------------------------------------------------------
17,395 Total Health Care 17,052,640
-----------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 9.1% (6.2% OF TOTAL INVESTMENTS)
3,145 Maryland Community Development Administration, Multifamily 12/11 at 100.00 Aaa 3,166,669
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 1,117,648
Housing Revenue Bonds, Princess Anne Apartments, Series 2001D,
5.450%, 12/15/33 (Alternative Minimum Tax)
1,000 Maryland Economic Development Corporation, Senior Lien Student 10/13 at 100.00 B3 756,650
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 Baa2 493,438
Revenue Refunding Bonds, University of Maryland College Park
Projects, Series 2006, 5.000%, 6/01/33 - CIFG Insured
-----------------------------------------------------------------------------------------------------------------------------------
5,775 Total Housing/Multifamily 5,534,405
-----------------------------------------------------------------------------------------------------------------------------------
Nuveen Investments 37
NZR | Nuveen Maryland Dividend Advantage Municipal Fund 2 (continued)
| Portfolio of Investments May 31, 2010
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 10.4% (7.0% OF TOTAL INVESTMENTS)
$ 1,030 Maryland Community Development Administration Department of 9/18 at 100.00 Aa2 $ 1,082,808
Housing and Community Development, Residential Revenue Bonds,
Series 2008C, 5.375%, 9/01/39
Maryland Community Development Administration, Department of
Housing and Community Development, Residential Revenue Bonds,
Series 2006:
600 4.750%, 9/01/25 (Alternative Minimum Tax) (UB) 9/15 at 100.00 Aa2 603,288
300 4.900%, 9/01/26 (Alternative Minimum Tax) (UB) 9/15 at 100.00 Aa2 302,370
1,000 4.875%, 9/01/26 (Alternative Minimum Tax) (UB) 3/16 at 100.00 Aa2 1,008,169
815 4.900%, 9/01/31 (Alternative Minimum Tax) (UB) 9/16 at 100.00 Aa2 821,936
Maryland Community Development Administration, Department of
Housing and Community Development, Residential Revenue Bonds,
Series 2007:
250 5.000%, 9/01/27 (Alternative Minimum Tax) (UB) 3/17 at 100.00 Aa2 253,415
500 4.850%, 9/01/37 (Alternative Minimum Tax) (UB) 3/17 at 100.00 Aa2 498,465
970 Maryland Community Development Administration, Department of 9/14 at 100.00 Aa2 952,627
Housing and Community Development, Residential Revenue Bonds,
Series 2005, 4.900%, 9/01/36 (Alternative Minimum Tax) (UB)
785 Maryland Community Development Administration, Residential 9/10 at 100.00 Aa2 785,691
Revenue Bonds, Series 2001H, 5.350%, 9/01/32 (Alternative
Minimum Tax)
-----------------------------------------------------------------------------------------------------------------------------------
6,250 Total Housing/Single Family 6,308,769
-----------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 4.0% (2.7% OF TOTAL INVESTMENTS)
845 Maryland Economic Development Corporation, Economic Development 6/20 at 100.00 Baa3 865,660
Revenue Bonds, Transportation Facilities Project, Series
2010A, 5.750%, 6/01/35
410 Maryland Economic Development Corporation, Solid Waste Disposal 4/12 at 101.00 BBB 413,530
Revenue Bonds, Waste Management Inc., Series 2002, 4.600%,
4/01/16 (Alternative Minimum Tax)
1,150 Northeast Maryland Waste Disposal Authority, Baltimore, Resource 7/10 at 100.00 BBB 1,151,967
Recovery Revenue Bonds, RESCO Retrofit Project, Series 1998,
4.750%, 1/01/12 (Alternative Minimum Tax)
-----------------------------------------------------------------------------------------------------------------------------------
2,405 Total Industrials 2,431,157
-----------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 4.1% (2.8% OF TOTAL INVESTMENTS)
860 Baltimore County, Maryland, Revenue Bonds, Oak Crest Village, 1/17 at 100.00 BBB+ 772,624
Series 2007A, 5.000%, 1/01/37
380 Gaithersburg, Maryland, Economic Development Revenue Bonds, 1/20 at 100.00 N/R 391,423
Asbury Methodist Homes Inc., Series 2009B, 6.000%, 1/01/23
300 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 N/R 283,602
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 462,040
220 5.250%, 1/01/27 1/17 at 100.00 N/R 183,304
435 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 A- 394,945
Revenue Bonds, Mercy Ridge Retirement Community, Series 2007,
4.750%, 7/01/34
-----------------------------------------------------------------------------------------------------------------------------------
2,695 Total Long-Term Care 2,487,938
-----------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 20.8% (14.1% OF TOTAL INVESTMENTS)
300 Carroll County, Maryland, Consolidated Public Improvement Bonds, 12/15 at 100.00 AA+ 346,230
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 1,032,515
1,020 4.600%, 8/01/19 8/11 at 101.00 AA 1,080,170
600 Frederick, Maryland, General Obligation Bonds, Series 2005, 8/15 at 100.00 AA 687,678
5.000%, 8/01/16 - NPFG Insured
510 Frederick, Maryland, General Obligation Refunding and Improvement 12/11 at 101.00 AA 542,446
Bonds, Series 2001, 4.750%, 12/01/19
1,000 Montgomery County, Maryland, Consolidated General Obligation No Opt. Call AAA 1,166,940
Public Improvement Bonds, Series 2005A, 5.000%, 7/01/15
4,730 Montgomery County, Maryland, Consolidated General Obligation 10/11 at 101.00 AAA 4,948,431
Public Improvement Refunding Bonds, Series 2001, 5.250%,
10/01/18
38 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 770 Puerto Rico, General Obligation and Public Improvement Bonds, 7/11 at 100.00 AAA $ 774,597
Series 2001, 5.000%, 7/01/24 - AGM Insured
800 Washington Suburban Sanitary District, Montgomery and Prince 6/15 at 100.00 AAA 931,248
George's Counties, Maryland, Sewerage Disposal Bonds, Series
2005, 5.000%, 6/01/16
1,000 Washington Suburban Sanitary District, Montgomery and Prince 6/15 at 100.00 AAA 1,164,060
George's Counties, Maryland, Water Supply Bonds, Series 2005,
5.000%, 6/01/16
-----------------------------------------------------------------------------------------------------------------------------------
11,705 Total Tax Obligation/General 12,674,315
-----------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 17.4% (11.7% OF TOTAL INVESTMENTS)
250 Anne Arundel County, Maryland, Tax Increment Financing Revenue No Opt. Call N/R 253,855
Bonds, Parole Town Center Project, Series 2002, 5.000%,
7/01/12
530 Baltimore Board of School Commissioners, Maryland, Revenue Bonds, 5/13 at 100.00 AA+ 590,924
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+ 1,657,531
1,660 5.000%, 8/01/21 8/11 at 101.00 AA+ 1,741,456
110 Frederick County, Maryland, Lake Linganore Village Community 7/10 at 102.00 N/R 105,669
Development Special Obligation Bonds, Series 2001A, 5.700%,
7/01/29 - RAAI Insured
350 Hyattsville, Maryland, Special Obligation Bonds, University Town 7/14 at 102.00 N/R 311,255
Center Project, Series 2004, 5.750%, 7/01/34
1,000 Maryland Department of Transportation, Consolidated No Opt. Call AAA 1,186,910
Transportation Revenue Bonds, Series 2002, 5.500%, 2/01/16
1,405 Maryland Economic Development Corporation, Lease Revenue Bonds, 6/12 at 100.50 AAA 1,521,109
Department of Transportation Headquarters Building, Series
2002, 5.375%, 6/01/19
1,000 Montgomery County, Maryland, Special Obligation Bonds, West 7/12 at 101.00 A2 979,350
Germantown Development District, Senior Series 2002A, 5.500%,
7/01/27 - RAAI Insured
895 Prince George's County, Maryland, Special Obligation Bonds, 7/15 at 100.00 N/R 780,530
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 386,432
Victoria Falls Project, Series 2005, 5.250%, 7/01/35
1,000 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call A3 1,033,630
Revenue Bonds, Series 2007N, 5.250%, 7/01/31 - AMBAC Insured
-----------------------------------------------------------------------------------------------------------------------------------
10,255 Total Tax Obligation/Limited 10,548,651
-----------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 5.7% (3.8% 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 N/R 632,496
1,000 5.000%, 7/01/34 - AMBAC Insured 7/11 at 100.00 N/R 913,730
1,780 Maryland Transportation Authority, Revenue Bonds, Transportation 7/17 at 100.00 AAA 1,907,626
Facilities Projects, Series 2007, 5.000%, 7/01/30 - AGM
Insured (UB)
-----------------------------------------------------------------------------------------------------------------------------------
3,430 Total Transportation 3,453,852
-----------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 21.2% (14.3% OF TOTAL INVESTMENTS) (4)
1,000 Baltimore County, Maryland, Consolidated General Obligation 8/12 at 100.00 AAA 1,092,830
Public Improvement Bonds, Series 2002, 5.000%, 8/01/18
(Pre-refunded 8/01/12)
90 Frederick County, Maryland, Lake Linganore Village Community 7/10 at 102.00 N/R (4) 92,246
Development Special Obligation Bonds, Series 2001A, 5.700%,
7/01/29 (Pre-refunded 7/01/10) - RAAI Insured
25 Maryland Health and Higher Educational Facilities Authority, 4/11 at 101.00 N/R (4) 26,570
Revenue Bonds, Collington Episcopal Life Care Community Inc.,
Series 2001A, 6.750%, 4/01/23 (Pre-refunded 4/01/11)
1,260 Maryland Health and Higher Educational Facilities Authority, No Opt. Call N/R (4) 1,424,682
Revenue Bonds, Helix Health, Series 1997, 5.000%, 7/01/17 -
AMBAC Insured (ETM)
Nuveen Investments 39
NZR | Nuveen Maryland Dividend Advantage Municipal Fund 2 (continued)
| Portfolio of Investments May 31, 2010
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (4) (continued)
$ 525 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A2 (4) $ 600,810
Revenue Bonds, LifeBridge Health System, Series 2004A, 5.125%,
7/01/34 (Pre-refunded 7/01/14)
1,250 Maryland Health and Higher Educational Facilities Authority, 6/11 at 100.00 Baa1 (4) 1,312,850
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) 2,104,760
Revenue Bonds, University of Maryland Medical System, Series
2001, 5.250%, 7/01/28 (Pre-refunded 7/01/11)
900 Maryland Transportation Authority, Revenue Refunding Bonds, No Opt. Call AAA 1,047,474
Transportation Facilities Projects, First Series 1978, 6.800%,
7/01/16 (ETM)
1,000 Prince George's County, Maryland, General Obligation Consolidated 12/11 at 101.00 AAA 1,081,500
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 3,083,130
Obligation Bonds, Series 2000A, 5.500%, 10/01/40 (Pre-refunded
10/01/10)
1,000 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 1,005,160
Asset-Backed Bonds, Series 2000, 6.000%, 7/01/26 (Pre-refunded
7/01/10)
------------------------------------------------------------------------------------------------------------------------------------
12,050 Total U.S. Guaranteed 12,872,012
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 3.2% (2.2% OF TOTAL INVESTMENTS)
1,000 Guam Power Authority, Revenue Bonds, Series 1999A, 5.250%, 10/10 at 100.00 A 965,170
10/01/34 - NPFG Insured
1,000 Maryland Energy Financing Administration, Revenue Bonds, AES 9/10 at 100.00 N/R 1,000,400
Warrior Run Project, Series 1995, 7.400%, 9/01/19 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
2,000 Total Utilities 1,965,570
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 1.4% (1.0% OF TOTAL INVESTMENTS)
285 Baltimore, Maryland, Wastewater Project Revenue Bonds, Series 7/16 at 100.00 AA 302,399
2006C, 5.000%, 7/01/31 - AMBAC Insured
540 Baltimore, Maryland, Wastewater Project Revenue Bonds, Series 7/17 at 100.00 AA 562,205
2007D, 5.000%, 7/01/32 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
825 Total Water and Sewer 864,604
------------------------------------------------------------------------------------------------------------------------------------
$ 89,040 Total Investments (cost $88,596,455) - 148.0% 89,896,345
=============-----------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (6.3)% (3,840,000)
---------------------------------------------------------------------------------------------------------------------
MuniFund Term Preferred Shares, at Liquidation Value - (44.9)% (6) (27,300,000)
---------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 3.2% 1,992,776
---------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 60,749,121
=====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net
assets applicable to Common shares unless otherwise noted.
(2) Optional Call Provisions (not covered by the report of independent
registered public accounting firm): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other call
provisions at varying prices at later dates. Certain mortgage-backed
securities may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered public
accounting firm): Using the highest of Standard & Poor's Group
("Standard & Poor's"), Moody's Investor Service, Inc. ("Moody's") or
Fitch, Inc. ("Fitch") rating. Ratings below BBB by Standard & Poor's,
Baa by Moody's or BBB by Fitch are considered to be below investment
grade.
(4) Backed by an escrow or trust containing sufficient U.S. Government or
U.S. Government agency securities, which ensure the timely payment of
principal and interest. Such investments are normally considered to be
equivalent to AAA rated securities.
(5) For fair value measurement disclosure purposes, investment categorized
as Level 3. See Notes to Financial Statements, Footnote 2 - Fair Value
Measurements for more information.
(6) MuniFund Term Preferred Shares, at Liquidation Value as a percentage of
Total Investments is 30.4%.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected as a
financing transaction. See Notes to Financial Statements, Footnote 1 -
Inverse Floating Rate Securities for more information.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
40 Nuveen Investments
NWI | Nuveen Maryland Dividend Advantage Municipal Fund 3
| Portfolio of Investments May 31, 2010
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 3.5% (2.4% OF TOTAL INVESTMENTS)
$ 2,385 Baltimore, Maryland, Senior Lien Convention Center Hotel Revenue 9/16 at 100.00 Baa3 $ 1,947,019
Bonds, Series 2006A, 5.250%, 9/01/39 - SYNCORA GTY Insured
380 Baltimore, Maryland, Subordinate Lien Convention Center Hotel 9/16 at 100.00 Ba1 310,981
Revenue Bonds, Series 2006B, 5.875%, 9/01/39
700 Maryland Economic Development Corporation, Revenue Bonds, 12/16 at 100.00 N/R 512,890
Chesapeake Bay Hyatt Conference Center, Series 2006A, 5.000%,
12/01/31
-----------------------------------------------------------------------------------------------------------------------------------
3,465 Total Consumer Discretionary 2,770,890
-----------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 2.9% (1.9% OF TOTAL INVESTMENTS)
2,280 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 2,238,071
Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33
-----------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 13.1% (8.8% OF TOTAL
INVESTMENTS)
225 Anne Arundel County, Maryland, Economic Development Revenue 9/12 at 102.00 A2 232,227
Bonds, Community College Project, Series 2002, 5.125%, 9/01/22
625 Frederick County, Maryland, Educational Facilities Revenue Bonds, 9/16 at 100.00 BBB- 586,769
Mount Saint Mary's College, Series 2006, 5.625%, 9/01/38
690 Hartford County, Maryland, Economic Development Revenue Bonds, 4/14 at 100.00 A+ 693,519
Battelle Memorial Institute, Series 2004, 5.250%, 4/01/34
165 Maryland Health and Higher Educational Facilities Authority, 7/20 at 100.00 BBB- 167,412
Revenue Bonds, Patterson Park Public Charter School Issue,
Series 2010, 6.000%, 7/01/40
625 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A- 628,056
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 1,034,550
Revenue Bonds, Johns Hopkins University, Series 2002A,
5.000%, 7/01/32
735 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 AA 822,031
Revenue Bonds, Johns Hopkins University, Series 2004,
Inverse 1003, 13.395%, 7/01/33 (IF)
925 Maryland Health and Higher Educational Facilities Authority, 6/16 at 100.00 Baa1 910,061
Revenue Bonds, Maryland Institute College of Art, Series
2006, 5.000%, 6/01/30
625 Maryland Industrial Development Financing Authority, Revenue 5/15 at 100.00 N/R 603,063
Bonds, Our Lady of Good Counsel High School, Series 2005A,
6.000%, 5/01/35
710 Montgomery County Revenue Authority, Maryland, Lease Revenue 5/15 at 100.00 Aa3 770,719
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 Aa3 1,015,110
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+ 1,020,913
Bonds, Series 2001B, 4.625%, 4/01/21
800 University of Maryland, Auxiliary Facility and Tuition Revenue 10/16 at 100.00 AA+ 886,872
Bonds, Series 2006A, 5.000%, 10/01/22
890 Westminster, Maryland, Educational Facilities Revenue Bonds, 11/16 at 100.00 BBB+ 870,500
McDaniel College, Series 2006, 5.000%, 11/01/31
-----------------------------------------------------------------------------------------------------------------------------------
10,000 Total Education and Civic Organizations 10,241,802
-----------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 27.5% (18.5% OF TOTAL INVESTMENTS)
445 Maryland Health and Higher Education Facilities Authority, 7/19 at 100.00 A 452,908
Revenue Bonds, University of Maryland Medical System Issue,
Series 2010, 5.125%, 7/01/39
700 Maryland Health and Higher Education Facilities Authority, 7/16 at 100.00 A 703,983
Revenue Bonds, University of Maryland Medical System, Series
2006, 5.000%, 7/01/31
335 Maryland Health and Higher Educational Facilities Authority, 7/19 at 100.00 A- 334,983
Revenue Bonds, Anne Arundel Health System, Series 2010,
5.000%, 7/01/40
1,000 Maryland Health and Higher Educational Facilities Authority, 7/10 at 100.00 AAA 1,000,660
Revenue Bonds, Anne Arundel Medical Center, Series 1998,
5.125%, 7/01/33 - AGM Insured
775 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A2 795,189
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 A3 1,271,300
Revenue Bonds, Carroll County General Hospital, Series 2002,
5.800%, 7/01/32
Nuveen Investments 41
NWI | Nuveen Maryland Dividend Advantage Municipal Fund 3 (continued)
| Portfolio of Investments May 31, 2010
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE (continued)
$ 1,750 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 A3 $ 1,707,370
Revenue Bonds, Carroll Hospital Center, Series 2006, 5.000%,
7/01/40
1,070 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 N/R 872,478
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 Baa3 830,068
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 662,648
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+ 800,128
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 Aa3 1,010,760
Revenue Bonds, Johns Hopkins Hospital, Series 2001, 5.000%,
5/15/21
1,000 Maryland Health and Higher Educational Facilities Authority, 7/13 at 100.00 Baa3 978,200
Revenue Bonds, Kennedy Krieger Institute, Series 2003,
5.500%, 7/01/33
595 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 AAA 620,204
Revenue Bonds, LifeBridge Health System, Series 2008,
5.000%, 7/01/28 - AGC Insured
900 Maryland Health and Higher Educational Facilities Authority, 8/14 at 100.00 A2 925,335
Revenue Bonds, MedStar Health, Series 2004, 5.375%, 8/15/24
1,690 Maryland Health and Higher Educational Facilities Authority, 5/16 at 100.00 AA+ 1,717,530
Revenue Bonds, MedStar Health, Series 2007, 5.250%, 5/15/46
- BHAC Insured
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 481,320
340 5.500%, 7/01/42 7/17 at 100.00 BBB 330,504
650 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 BBB 650,540
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 861,985
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 1,867,177
Revenue Bonds, Union Hospital of Cecil County, Series 2002,
5.625%, 7/01/32
1,220 Maryland Health and Higher Educational Facilities Authority, 1/18 at 100.00 BBB- 1,223,648
Revenue Bonds, Washington County Hospital, Series 2008,
5.750%, 1/01/38
775 Maryland Health and Higher Educational Facilities Authority, 1/13 at 101.00 Baa2 785,718
Revenue Refunding Bonds, Adventist Healthcare, Series 2003A,
5.750%, 1/01/25
900 Prince George's County, Maryland, Revenue Bonds, Dimensions 7/10 at 100.00 B3 623,070
Health Corporation, Series 1994, 5.300%, 7/01/24 (5)
-----------------------------------------------------------------------------------------------------------------------------------
22,000 Total Health Care 21,507,706
-----------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 7.7% (5.2% OF TOTAL INVESTMENTS)
980 Maryland Community Development Administration, Housing Revenue 7/12 at 100.00 Aa2 980,245
Bonds, Series 2002B, 4.950%, 7/01/32 (Alternative Minimum Tax)
1,250 Maryland Economic Development Corporation, Senior Lien Student 10/13 at 100.00 B3 945,813
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 N/R 18,886
150 6.000%, 7/01/33 - ACA Insured 7/11 at 101.00 N/R 131,084
475 Maryland Economic Development Corporation, Student Housing 6/16 at 100.00 Baa2 450,737
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 516,241
3,000 5.200%, 7/01/44 (Alternative Minimum Tax) 7/12 at 100.00 Aaa 3,005,730
-----------------------------------------------------------------------------------------------------------------------------------
6,390 Total Housing/Multifamily 6,048,736
-----------------------------------------------------------------------------------------------------------------------------------
42 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 7.8% (5.3% OF TOTAL INVESTMENTS)
$ 1,280 Maryland Community Development Administration Department of 9/18 at 100.00 Aa2 $ 1,345,626
Housing and Community Development, Residential Revenue
Bonds, Series 2008C, 5.375%, 9/01/39
Maryland Community Development Administration, Department of
Housing and Community Development, Residential Revenue
Bonds, Series 2006:
595 4.900%, 9/01/26 (Alternative Minimum Tax) (UB) 9/15 at 100.00 Aa2 599,701
1,200 4.875%, 9/01/26 (Alternative Minimum Tax) (UB) 3/16 at 100.00 Aa2 1,209,804
815 4.900%, 9/01/31 (Alternative Minimum Tax) (UB) 9/16 at 100.00 Aa2 821,936
Maryland Community Development Administration, Department of
Housing and Community Development, Residential Revenue
Bonds, Series 2007:
350 5.000%, 9/01/27 (Alternative Minimum Tax) (UB) 3/17 at 100.00 Aa2 354,781
620 4.850%, 9/01/37 (Alternative Minimum Tax) (UB) 3/17 at 100.00 Aa2 618,097
1,160 Maryland Community Development Administration, Department of 9/14 at 100.00 Aa2 1,139,220
Housing and Community Development, Residential Revenue Bonds,
Series 2005, 4.900%, 9/01/36 (Alternative Minimum Tax) (UB)
-----------------------------------------------------------------------------------------------------------------------------------
6,020 Total Housing/Single Family 6,089,165
-----------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 3.4% (2.3% OF TOTAL INVESTMENTS)
1,090 Maryland Economic Development Corporation, Economic Development 6/20 at 100.00 Baa3 1,116,651
Revenue Bonds, Transportation Facilities Project, Series
2010A, 5.750%, 6/01/35
510 Maryland Economic Development Corporation, Solid Waste Disposal 4/12 at 101.00 BBB 514,391
Revenue Bonds, Waste Management Inc., Series 2002, 4.600%,
4/01/16 (Alternative Minimum Tax)
1,000 Northeast Maryland Waste Disposal Authority, Baltimore, 7/10 at 100.00 BBB 1,001,710
Resource Recovery Revenue Bonds, RESCO Retrofit Project,
Series 1998, 4.750%, 1/01/12 (Alternative Minimum Tax)
-----------------------------------------------------------------------------------------------------------------------------------
2,600 Total Industrials 2,632,752
-----------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 3.7% (2.5% OF TOTAL INVESTMENTS)
1,050 Baltimore County, Maryland, Revenue Bonds, Oak Crest Village, 1/17 at 100.00 BBB+ 943,320
Series 2007A, 5.000%, 1/01/37
380 Gaithersburg, Maryland, Economic Development Revenue Bonds, 1/20 at 100.00 N/R 391,423
Asbury Methodist Homes Inc., Series 2009B, 6.000%, 1/01/23
400 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 N/R 378,136
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 258,742
520 5.250%, 1/01/27 1/17 at 100.00 N/R 433,264
540 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 A- 490,277
Revenue Bonds, Mercy Ridge Retirement Community, Series
2007, 4.750%, 7/01/34
-----------------------------------------------------------------------------------------------------------------------------------
3,170 Total Long-Term Care 2,895,162
-----------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 16.7% (11.3% OF TOTAL INVESTMENTS)
1,000 Annapolis, Maryland, General Obligation Public Improvement 4/12 at 101.00 Aa1 1,047,420
Refunding Bonds, Series 2002, 4.375%, 4/01/17
380 Carroll County, Maryland, Consolidated Public Improvement 12/15 at 100.00 AA+ 438,558
Bonds, Series 2005A, 5.000%, 12/01/16
1,260 Charles County, Maryland, Consolidated General Obligation 1/12 at 101.00 Aa1 1,350,518
Public Improvement Bonds, Series 2002, 4.400%, 1/15/16
710 Frederick, Maryland, General Obligation Bonds, Series 2005, 8/15 at 100.00 AA 813,752
5.000%, 8/01/16 - NPFG Insured
1,000 Maryland National Capital Park Planning Commission, Prince 1/14 at 100.00 AAA 1,114,010
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 2,158,839
Public Improvement Bonds, Series 2005A, 5.000%, 7/01/15
Nuveen Investments 43
NWI | Nuveen Maryland Dividend Advantage Municipal Fund 3 (continued)
| Portfolio of Investments May 31, 2010
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 1,440 Montgomery County, Maryland, Consolidated General Obligation No Opt. Call AAA $ 1,687,421
Public Improvement Bonds, Series 2006A, 5.000%, 5/01/16
1,000 Prince George's County, Maryland, General Obligation No Opt. Call AAA 1,069,140
Consolidated Public Improvement Bonds, Series 2004C, 5.000%,
12/01/11
1,000 St. Mary's County, Maryland, General Obligation Hospital Bonds, No Opt. Call AA 1,102,400
Series 2002, 5.000%, 10/01/12
1,000 Washington Suburban Sanitary District, Montgomery and Prince 6/15 at 100.00 AAA 1,164,060
George's Counties, Maryland, Sewerage Disposal Bonds, Series
2005, 5.000%, 6/01/16
1,000 Washington Suburban Sanitary District, Montgomery and Prince 6/15 at 100.00 AAA 1,164,060
George's Counties, Maryland, Water Supply Bonds, Series
2005, 5.000%, 6/01/16
-----------------------------------------------------------------------------------------------------------------------------------
11,640 Total Tax Obligation/General 13,110,178
-----------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 30.7% (20.7% OF TOTAL INVESTMENTS)
1,000 Baltimore Board of School Commissioners, Maryland, Revenue Bonds, 5/13 at 100.00 AA+ 1,114,950
City Public School System, Series 2003A, 5.000%, 5/01/15
135 Frederick County, Maryland, Lake Linganore Village Community 7/10 at 102.00 N/R 135,072
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 400,185
Town Center Project, Series 2004, 5.750%, 7/01/34
5,000 Maryland Department of Transportation, Consolidated No Opt. Call AAA 5,934,550
Transportation Revenue Bonds, Series 2002, 5.500%, 2/01/16
2,200 Maryland Economic Development Corporation, Lease Revenue Bonds, 6/12 at 100.50 AAA 2,293,390
Department of Transportation Headquarters Building, Series
2002, 4.750%, 6/01/22
450 Maryland Economic Development Corporation, Lease Revenue Bonds, 9/12 at 100.00 AA+ 491,288
Montgomery County Town Square Parking Garage, Series 2002A,
5.000%, 9/15/13
2,935 Maryland Economic Development Corporation, Lease Revenue Bonds, 9/12 at 100.00 AA+ 3,188,056
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+ 1,600,234
1,620 5.000%, 6/15/23 6/13 at 100.00 AA+ 1,757,959
1,210 Prince George's County, Maryland, Special Obligation Bonds, 7/15 at 100.00 N/R 1,055,241
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 467,786
Victoria Falls Project, Series 2005, 5.250%, 7/01/35
1,200 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call A3 1,240,356
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 A3 1,025,510
1,205 5.250%, 7/01/20 7/12 at 100.00 A3 1,225,328
1,275 5.250%, 7/01/21 7/12 at 100.00 A3 1,293,322
700 Puerto Rico, Highway Revenue Bonds, Highway and Transportation No Opt. Call A 759,612
Authority, Series 2003AA, 5.500%, 7/01/19 - NPFG Insured
-----------------------------------------------------------------------------------------------------------------------------------
22,420 Total Tax Obligation/Limited 23,982,839
-----------------------------------------------------------------------------------------------------------------------------------
44 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 3.0% (2.0% OF TOTAL INVESTMENTS)
$ 2,210 Maryland Transportation Authority, Revenue Bonds, 7/17 at 100.00 AAA $ 2,368,457
Transportation Facilities Projects, Series 2007, 5.000%,
7/01/30 - AGM Insured (UB)
-----------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 21.4% (14.4% OF TOTAL INVESTMENTS) (4)
255 Baltimore, Maryland, Wastewater Project Revenue Bonds, Series 7/16 at 100.00 AA (4) 298,108
2006C, 5.000%, 7/01/31 (Pre-refunded 7/01/16) - AMBAC Insured
110 Frederick County, Maryland, Lake Linganore Village Community 7/10 at 102.00 N/R (4) 112,736
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) 297,578
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 N/R (4) 322,250
Revenue Bonds, Helix Health, Series 1997, 5.000%, 7/01/17 -
AMBAC Insured (ETM)
725 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A2 (4) 829,690
Revenue Bonds, LifeBridge Health System, Series 2004A,
5.125%, 7/01/34 (Pre-refunded 7/01/14)
770 Maryland Transportation Authority, Revenue Refunding Bonds, No Opt. Call AAA 896,172
Transportation Facilities Projects, First Series 1978,
6.800%, 7/01/16 (ETM)
4,860 Prince George's County Housing Authority, Maryland, GNMA 11/12 at 100.00 AAA 5,279,126
Collateralized Mortgage Revenue Bonds, Fairview and Hillside
Projects, Series 2002A, 4.700%, 11/20/22 (Pre-refunded
11/20/12)
1,525 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/10 at 101.00 AAA 1,547,189
Series 2000HH, 5.250%, 7/01/29 (Pre-refunded 7/01/10) - AGM
Insured
3,500 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 3,596,985
Obligation Bonds, Series 2000A, 5.500%, 10/01/40
(Pre-refunded 10/01/10)
1,000 Puerto Rico Public Finance Corporation, Commonwealth No Opt. Call AAA 1,133,220
Appropriation Bonds, Series 1998A, 5.125%, 6/01/24 - AMBAC
Insured (ETM)
235 Puerto Rico Public Finance Corporation, Commonwealth 2/12 at 100.00 AAA 253,711
Appropriation Bonds, Series 2002E, 5.500%, 8/01/29
(Pre-refunded 2/01/12)
2,000 University of Maryland, Auxiliary Facility and Tuition Revenue 4/12 at 100.00 AA+ (4) 2,164,520
Bonds, Series 2002A, 5.125%, 4/01/22 (Pre-refunded 4/01/12)
25 Washington Suburban Sanitary District, Montgomery and Prince 6/11 at 101.00 AAA 26,425
George's Counties, Maryland, General Obligation Construction
Bonds, Second Series 2001, 5.000%, 6/01/17 (Pre-refunded
6/01/11)
-----------------------------------------------------------------------------------------------------------------------------------
15,570 Total U.S. Guaranteed 16,757,710
-----------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 1.6% (1.1% OF TOTAL INVESTMENTS)
1,250 Maryland Energy Financing Administration, Revenue Bonds, AES 9/10 at 100.00 N/R 1,250,500
Warrior Run Project, Series 1995, 7.400%, 9/01/19
(Alternative Minimum Tax)
-----------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 5.3% (3.6% OF TOTAL INVESTMENTS)
2,570 Baltimore, Maryland, Revenue Refunding Bonds, Wastewater 7/12 at 100.00 AA 2,600,583
Projects, Series 2002A, 5.125%, 7/01/42 - FGIC Insured
345 Baltimore, Maryland, Wastewater Project Revenue Bonds, Series 7/16 at 100.00 AA 366,062
2006C, 5.000%, 7/01/31 - AMBAC Insured
660 Baltimore, Maryland, Wastewater Project Revenue Bonds, Series 7/17 at 100.00 AA 687,139
2007D, 5.000%, 7/01/32 - AMBAC Insured
Nuveen Investments 45
NWI | Nuveen Maryland Dividend Advantage Municipal Fund 3 (continued)
| Portfolio of Investments May 31, 2010
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER (continued)
$ 430 Maryland Water Quality Financing Administration, Revolving Loan No Opt. Call AAA $ 502,824
Fund Revenue Bonds, Series 2005A, 5.000%, 9/01/15
------------------------------------------------------------------------------------------------------------------------------------
4,005 Total Water and Sewer 4,156,608
------------------------------------------------------------------------------------------------------------------------------------
$ 113,020 Total Investments (cost $113,411,699) - 148.3% 116,050,576
=============-----------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (5.4)% (4,255,000)
---------------------------------------------------------------------------------------------------------------------
MuniFund Term Preferred Shares, at Liquidation Value - (26.4)% (6) (20,700,000)
---------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.4% 1,995,517
---------------------------------------------------------------------------------------------------------------------
Auction Rate Preferred Shares, at Liquidation Value - (18.9)% (6) (14,825,000)
---------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 78,266,093
=====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net
assets applicable to Common shares unless otherwise noted.
(2) Optional Call Provisions (not covered by the report of independent
registered public accounting firm): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other call
provisions at varying prices at later dates. Certain mortgage-backed
securities may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered public
accounting firm): Using the highest of Standard & Poor's Group
("Standard & Poor's"), Moody's Investor Service, Inc. ("Moody's") or
Fitch, Inc. ("Fitch") rating. Ratings below BBB by Standard & Poor's,
Baa by Moody's or BBB by Fitch are considered to be below investment
grade.
(4) Backed by an escrow or trust containing sufficient U.S. Government or
U.S. Government agency securities, which ensure the timely payment of
principal and interest. Such investments are normally considered to be
equivalent to AAA rated securities.
(5) For fair value measurement disclosure purposes, investment categorized
as Level 3. See Notes to Financial Statements, Footnote 2 - Fair Value
Measurements for more information.
(6) MuniFund Term Preferred Shares and Auction Rate Preferred Shares, at
Liquidation Value as a percentage of Total Investments are 17.8% and
12.8%, respectively.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected as a
financing transaction. See Notes to Financial Statements, Footnote 1 -
Inverse Floating Rate Securities for more information.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
46 Nuveen Investments
NPV | Nuveen Virginia Premium Income Municipal Fund
| Portfolio of Investments May 31, 2010
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 3.3% (2.3% OF TOTAL INVESTMENTS)
$ 6,640 Tobacco Settlement Financing Corporation of Virginia, Tobacco 6/17 at 100.00 BBB $ 4,430,806
Settlement Asset Backed Bonds, Series 2007B1, 5.000%, 6/01/47
-----------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 6.6% (4.5% OF TOTAL
INVESTMENTS)
1,000 Prince William County Industrial Development Authority, 10/13 at 101.00 A2 1,014,160
Virginia, Educational Facilities Revenue Bonds, Catholic
Diocese of Arlington, Series 2003, 5.500%, 10/01/33
700 Puerto Rico Industrial, Tourist, Educational, Medical and 12/12 at 101.00 BBB- 696,143
Environmental Control Facilities Financing Authority, Higher
Education Revenue Refunding Bonds, Ana G. Mendez University
System, Series 2002, 5.375%, 12/01/21
2,815 The Rector and Visitors of the University of Virginia, General 6/15 at 100.00 AAA 2,937,058
Revenue Bonds, Series 2005, 5.000%, 6/01/37
2,120 Virginia College Building Authority, Educational Facilities 9/11 at 100.00 AA+ 2,185,508
Revenue Bonds, Public Higher Education Financing Program,
Series 2001A, 5.000%, 9/01/26
1,635 Virginia Commonwealth University, Revenue Bonds, Series 2004A, 5/14 at 101.00 Aa2 1,844,509
5.000%, 5/01/17 - AMBAC Insured
-----------------------------------------------------------------------------------------------------------------------------------
8,270 Total Education and Civic Organizations 8,677,378
-----------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 30.2% (20.8% OF TOTAL INVESTMENTS)
2,000 Albemarle County Industrial Development Authority, Virginia, 10/12 at 100.00 A3 2,005,960
Hospital Revenue Bonds, Martha Jefferson Hospital, Series
2002, 5.250%, 10/01/35
1,500 Arlington County Industrial Development Authority, Virginia, 7/20 at 100.00 A2 1,529,730
Hospital Revenue Bonds, Virginia Hospital Center Arlington
Health System, Refunding Series 2010, 5.000%, 7/01/31
650 Charlotte County Industrial Development Authority, Virginia, 9/17 at 100.00 A- 656,253
Hospital Revenue Bonds, Halifax Regional Hospital
Incorporated, Series 2007, 5.000%, 9/01/27
1,705 Fairfax County Industrial Development Authority, Virginia, 5/19 at 100.00 AA+ 2,032,292
Healthcare Revenue Bonds, Inova Health System, Series 2009,
Trust 11733, 14.518%, 5/15/35 (IF)
4,850 Fairfax County Industrial Development Authority, Virginia, No Opt. Call AA+ 5,295,230
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 1,085,640
Hospital Facilities 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 1,252,725
Revenue Bonds, MediCorp Health System, Series 2002B, 5.125%,
6/15/33
1,000 Hanover County Industrial Development Authority, Virginia, No Opt. Call A 1,118,310
Hospital Revenue Bonds, Memorial Regional Medical Center,
Series 1995, 6.375%, 8/15/18 - NPFG Insured
2,300 Harrisonburg Industrial Development Authority, Virginia, 8/16 at 100.00 Baa1 2,151,397
Hospital Facilities Revenue Bonds, Rockingham Memorial
Hospital, Series 2006, 5.000%, 8/15/31 - AMBAC Insured
1,440 Henrico County Economic Development Authority, Virginia, Revenue 11/12 at 100.00 A- 1,460,434
Bonds, Bon Secours Health System Inc., Series 2002A, 5.600%,
11/15/30
1,500 Henrico County Industrial Development Authority, Virginia, No Opt. Call A 1,692,870
Healthcare Revenue Bonds, Bon Secours Health System, Series
1996, 6.250%, 8/15/20 - NPFG Insured
1,500 Manassas Industrial Development Authority, Virginia, Hospital 4/13 at 100.00 A3 1,504,995
Revenue Bonds, Prince William Hospital, Series 2002, 5.250%,
4/01/33
4,750 Medical College of Virginia Hospital Authority, General Revenue 7/10 at 100.00 A+ 4,751,425
Bonds, Series 1998, 5.125%, 7/01/23 - NPFG Insured
3,000 Roanoke Industrial Development Authority, Virginia, Hospital 7/12 at 100.00 A+ 3,115,590
Revenue Bonds, Carilion Health System, Series 2002A, 5.500%,
7/01/19 - NPFG Insured
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 2,039,440
1,010 5.250%, 6/15/31 6/16 at 100.00 A3 1,019,343
1,695 5.250%, 6/15/37 6/16 at 100.00 A3 1,700,170
850 Virginia Small Business Finance Authority, Healthcare Facilities 5/20 at 100.00 AA 868,658
Revenue Bonds, Refunding Sentara Healthcare, Series 2010,
5.000%, 11/01/40
2,210 Virginia Small Business Financing Authority, Wellmont Health 9/17 at 100.00 BBB+ 2,067,234
System Project Revenue Bonds, Series 2007A, 5.250%, 9/01/37
Nuveen Investments 47
NPV | Nuveen Virginia Premium Income Municipal Fund (continued)
| Portfolio of Investments May 31, 2010
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE (continued)
$ 540 Winchester Industrial Development Authority, Virginia, Hospital 1/19 at 100.00 A+ $ 557,221
Revenue Bonds Valley Health System Obligated Group, Series
2009E, 5.625%, 1/01/44
1,425 Winchester Industrial Development Authority, Virginia, Hospital 1/17 at 100.00 A+ 1,475,260
Revenue Bonds, Winchester Medical Center, Series 2007,
5.125%, 1/01/31
500 Wisconsin Health and Educational Facilities Authority, Revenue 4/20 at 100.00 A3 506,585
Bonds, Aurora Health Care, Inc., Series 2010A, 5.625%, 4/15/39
-----------------------------------------------------------------------------------------------------------------------------------
38,675 Total Health Care 39,886,762
-----------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 3.3% (2.3% OF TOTAL INVESTMENTS)
1,340 Arlington County Industrial Development Authority, Virginia, 11/10 at 100.00 Aaa 1,352,864
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 6/10 at 101.00 N/R 502,265
1,500 7.000%, 6/01/30 6/10 at 101.00 N/R 1,496,790
1,000 Lynchburg Redevelopment and Housing Authority, Virginia, Vistas 10/10 at 102.00 AAA 1,020,890
GNMA Mortgage-Backed Revenue Bonds, Series 2000A, 6.200%,
1/20/40 (Alternative Minimum Tax)
-----------------------------------------------------------------------------------------------------------------------------------
4,340 Total Housing/Multifamily 4,372,809
-----------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 7.9% (5.5% OF TOTAL INVESTMENTS)
300 Puerto Rico Housing Finance Authority, Mortgage-Backed 6/13 at 100.00 AAA 295,614
Securities Program Home Mortgage Revenue Bonds, Series 2003A,
4.875%, 6/01/34 (Alternative Minimum Tax)
850 Virginia Housing Development Authority, Commonwealth Mortgage 7/11 at 100.00 AAA 858,211
Bonds, Series 2001H-1, 5.350%, 7/01/31 - NPFG Insured
1,500 Virginia Housing Development Authority, Commonwealth Mortgage 1/15 at 100.00 AAA 1,465,575
Bonds, Series 2005C-2, 4.750%, 10/01/32 (Alternative Minimum
Tax)
2,740 Virginia Housing Development Authority, Commonwealth Mortgage 7/15 at 100.00 AAA 2,747,234
Bonds, Series 2006 D1, 4.900%, 1/01/33 (Alternative Minimum
Tax)
1,340 Virginia Housing Development Authority, Commonwealth Mortgage 7/15 at 100.00 AAA 1,334,962
Bonds, Series 2006, 4.800%, 7/01/29 (Alternative Minimum Tax)
3,900 Virginia Housing Development Authority, Commonwealth Mortgage 7/16 at 100.00 AAA 3,811,119
Bonds, Series 2007B, 4.750%, 7/01/32 (Alternative Minimum Tax)
-----------------------------------------------------------------------------------------------------------------------------------
10,630 Total Housing/Single Family 10,512,715
-----------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 4.7% (3.3% OF TOTAL INVESTMENTS)
2,765 Fairfax County Economic Development Authority, Virginia, 10/17 at 100.00 N/R 2,703,147
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+ 682,480
Retirement Center Revenue Bonds, Greenspring Village, Series
2006A, 4.875%, 10/01/36
1,495 Henrico County Economic Development Authority, Virginia, GNMA 7/10 at 101.00 AAA 1,517,051
Mortgage-Backed Securities Program Assisted Living Revenue
Bonds, Beth Sholom, Series 1999A, 5.900%, 7/20/29
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- 97,950
1,345 5.000%, 10/01/35 No Opt. Call BBB- 1,274,643
-----------------------------------------------------------------------------------------------------------------------------------
6,505 Total Long-Term Care 6,275,271
-----------------------------------------------------------------------------------------------------------------------------------
MATERIALS - 1.1% (0.7% OF TOTAL INVESTMENTS)
500 Bedford County Industrial Development Authority, Virginia, 8/10 at 100.00 Ba3 470,380
Industrial Development Revenue Refunding Bonds, Nekoosa
Packaging Corporation, Series 1998, 5.600%, 12/01/25
(Alternative Minimum Tax)
1,000 Goochland County Industrial Development Authority, Virginia, 6/10 at 100.50 Ba3 929,980
Industrial Development Revenue Refunding Bonds, Nekoosa
Packaging Corporation Project, Series 1998, 5.650%, 12/01/25
(Alternative Minimum Tax)
-----------------------------------------------------------------------------------------------------------------------------------
1,500 Total Materials 1,400,360
-----------------------------------------------------------------------------------------------------------------------------------
48 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 18.4% (12.7% OF TOTAL INVESTMENTS)
Chesapeake, Virginia, General Obligation Bonds, Water and
Sewerage Series 2003B:
$ 1,880 5.000%, 6/01/21 6/13 at 100.00 AA+ $ 1,986,107
2,060 5.000%, 6/01/23 6/13 at 100.00 AA+ 2,163,536
1,355 Harrisonburg, Virginia, General Obligation Bonds, Public Safety 7/12 at 101.00 Aa2 1,454,281
and Steam Plant, Series 2002, 5.000%, 7/15/19 - FGIC Insured
105 Loudoun County, Virginia, General Obligation Public Improvement 5/12 at 100.00 AAA 109,460
Bonds, Series 2002A, 5.250%, 5/01/22
1,185 Lynchburg, Virginia, General Obligation Bonds, Series 2004, 6/14 at 100.00 AA 1,315,623
5.000%, 6/01/21
1,300 Newport News, Virginia, General Obligation Bonds, Series 2004C, 5/14 at 101.00 Aa1 1,457,053
5.000%, 5/01/16
1,280 Portsmouth, Virginia, General Obligation Bonds, Series 2005A, No Opt. Call Aa2 1,465,562
5.000%, 4/01/15 - NPFG Insured
1,480 Richmond, Virginia, General Obligation Bonds, Series 2004A, 7/14 at 100.00 AAA 1,647,432
5.000%, 7/15/21 - AGM Insured
1,430 Roanoke, Virginia, General Obligation Public Improvement Bonds, 10/12 at 101.00 AA 1,585,026
Series 2002A, 5.000%, 10/01/17
1,135 Suffolk, Virginia, General Obligation Bonds, Series 2005, No Opt. Call AA 1,324,647
5.000%, 12/01/15
2,000 Virginia Beach, Virginia, General Obligation Bonds, Series 5/13 at 100.00 AAA 2,194,440
2003B, 5.000%, 5/01/15
1,100 Virginia Beach, Virginia, General Obligation Bonds, Series 2005, 1/16 at 100.00 AAA 1,280,103
5.000%, 1/15/20
4,500 Virginia Beach, Virginia, General Obligation Bonds, Series 2008, 10/17 at 100.00 AAA 4,898,516
5.000%, 10/01/27 (UB)
1,425 Virginia Beach, Virginia, General Obligation Public Improvement 6/11 at 101.00 AAA 1,506,453
Bonds, Series 2001, 5.000%, 6/01/20
-----------------------------------------------------------------------------------------------------------------------------------
22,235 Total Tax Obligation/General 24,388,239
-----------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 27.2% (18.8% 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 N/R 311,637
260 5.500%, 7/15/35 - ACA Insured 7/15 at 100.00 N/R 239,179
1,340 Culpeper Industrial Development Authority, Virginia, Lease 1/15 at 100.00 Aa3 1,425,706
Revenue Bonds, School Facilities Project, Series 2005,
5.000%, 1/01/20 - NPFG Insured
Cumberland County, Virginia, Certificates of Participation,
Series 1997:
685 6.200%, 7/15/12 No Opt. Call N/R 706,762
1,375 6.375%, 7/15/17 No Opt. Call N/R 1,434,373
1,000 Dinwiddie County Industrial Development Authority, Virginia, 2/14 at 100.00 A 1,078,970
Lease Revenue Bonds, Series 2004B, 5.125%, 2/15/16 - NPFG
Insured
1,000 Fairfax County Economic Development Authority, Virginia, Lease 5/16 at 100.00 AA+ 1,117,610
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:
2,210 5.000%, 6/01/14 6/13 at 101.00 AA+ 2,473,962
1,165 5.000%, 6/01/22 6/13 at 101.00 AA+ 1,239,315
1,660 Front Royal and Warren County Industrial Development Authority, 4/14 at 100.00 AAA 1,784,865
Virginia, Lease Revenue Bonds, Series 2004B, 5.000%, 4/01/18
- AGM Insured
1,270 James City County Economic Development Authority, Virginia, 7/15 at 100.00 AA 1,386,561
Revenue Bonds, County Government Projects, Series 2005,
5.000%, 7/15/19
445 Montgomery County Industrial Development Authority, Virginia, 2/18 at 100.00 AA- 470,516
Public Facility Lease Revenue Bonds, Public Projects Series
2008, 5.000%, 2/01/29
1,185 Puerto Rico Highway and Transportation Authority, Highway 7/12 at 100.00 AAA 1,189,847
Revenue Bonds, Series 2002D, 5.000%, 7/01/32 - AGM Insured
2,000 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call A3 2,067,260
Revenue Bonds, Series 2007N, 5.250%, 7/01/31 - AMBAC Insured
5,000 Puerto Rico Infrastructure Financing Authority, Special Tax No Opt. Call A3 519,350
Revenue Bonds, Series 2005A, 0.000%, 7/01/43 - AMBAC Insured
5,875 Puerto Rico Infrastructure Financing Authority, Special Tax No Opt. Call A3 1,897,684
Revenue Bonds, Series 2005C, 0.000%, 7/01/28 - AMBAC Insured
Nuveen Investments 49
NPV | Nuveen Virginia Premium Income Municipal Fund (continued)
| Portfolio of Investments May 31, 2010
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
Puerto Rico Public Buildings Authority, Guaranteed Government
Facilities Revenue Refunding Bonds, Series 2002D:
$ 265 5.250%, 7/01/27 7/12 at 100.00 A3 $ 266,916
320 5.250%, 7/01/36 7/12 at 100.00 A3 321,238
1,300 Puerto Rico Sales Tax Financing Corporation, Sales Tax Revenue 2/20 at 100.00 A+ 1,360,450
Bonds, First Subordinate Series 2010A, 5.500%, 8/01/42
1,110 Spotsylvania County Industrial Development Authority, Virginia, 8/13 at 100.00 N/R 1,131,567
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 A+ 1,694,592
Virginia, Revenue Bonds, Virginia Municipal League and
Virginia Association of Counties Finance Program, Series
2006A, 5.000%, 8/01/23 - NPFG Insured
2,500 Stafford County Economic Development Authority, Virginia, Lease 4/18 at 100.00 AAA 2,610,225
Revenue Bonds, Public Facility Projects, Series 2008, 5.000%,
4/01/33 - AGC Insured (UB)
1,400 Virginia Beach Development Authority, Public Facilities Revenue 5/15 at 100.00 AA+ 1,529,556
Bonds, Series 2005A, 5.000%, 5/01/22
850 Virginia College Building Authority, Educational Facilities 2/19 at 100.00 AA+ 1,104,890
Revenue Bonds, 21st Century College Program, Series 2009,
Trust 09-3B, 12.968%, 2/01/27 (IF)
850 Virginia College Building Authority, Educational Facilities 2/19 at 100.00 AA+ 1,089,012
Revenue Bonds, 21st Century College Program, Series 2009,
Trust 09-4B, 12.884%, 2/01/28 (IF)
1,625 Virginia Public School Authority, School Financing Bonds, 1997 8/15 at 100.00 AA+ 1,856,449
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 - AGM Insured 11/10 at 100.00 AAA 96,322
550 5.500%, 5/01/30 - AGM Insured 11/10 at 100.00 AAA 556,749
775 Virginia Resources Authority, Infrastructure Revenue Bonds, 5/11 at 101.00 AA 808,418
Pooled Loan Bond Program, Series 2002A, 5.000%, 5/01/19
2,000 Virginia Transportation Board, Transportation Revenue Bonds, 5/14 at 100.00 AA+ 2,257,780
U.S. Route 58 Corridor Development Program, Series 2004B,
5.000%, 5/15/15
-----------------------------------------------------------------------------------------------------------------------------------
42,045 Total Tax Obligation/Limited 36,027,761
-----------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 11.9% (8.2% OF TOTAL INVESTMENTS)
2,500 Metropolitan Washington D.C. Airports Authority, System Revenue 10/17 at 100.00 AA- 2,508,975
Bonds, Series 2007B, 5.000%, 10/01/35 - AMBAC Insured
(Alternative Minimum Tax)
3,200 Metropolitan Washington D.C. Airports Authority, Virginia, 10/28 at 100.00 BBB+ 1,895,520
Dulles Toll Road Revenue Bonds, Dulles Metrorail Capital
Appreciation, Series 2010B, 0.000%, 10/01/44
4,000 Norfolk Airport Authority, Virginia, Airport Revenue Bonds, 7/11 at 100.00 A 4,023,200
Series 2001A, 5.125%, 7/01/31 - FGIC Insured
1,000 Norfolk, Virginia, Parking System Revenue Bonds, Series 2005A, 2/15 at 100.00 A 1,005,230
5.000%, 2/01/23 - NPFG Insured
2,500 Richmond Metropolitan Authority, Virginia, Revenue Refunding No Opt. Call A 2,714,900
Bonds, Expressway System, Series 2002, 5.250%, 7/15/22 - FGIC
Insured
285 Virginia Port Authority, Port Facilities Revenue Refunding Bonds 7/19 at 100.00 Aa3 297,255
Series 2010, 5.000%, 7/01/40
1,260 Virginia Port Authority, Revenue Bonds, Port Authority 7/13 at 100.00 Aa3 1,218,937
Facilities, 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 2,051,660
Bonds, Series 2001A, 5.250%, 8/01/23
-----------------------------------------------------------------------------------------------------------------------------------
16,745 Total Transportation 15,715,677
-----------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 15.2% (10.5% OF TOTAL INVESTMENTS) (4)
3,500 Alexandria Industrial Development Authority, Virginia, Fixed 10/10 at 101.00 N/R (4) 3,598,805
Rate Revenue Bonds, Institute for Defense Analyses, Series
2000A, 5.900%, 10/01/30 (Pre-refunded 10/01/10) - AMBAC
Insured
50 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (4) (continued)
$ 750 Bristol, Virginia, General Obligation Utility System Revenue No Opt. Call AAA $ 867,593
Bonds, Series 2002, 5.000%, 11/01/24 - AGM Insured (ETM)
925 Fairfax County Water Authority, Virginia, Water Revenue 4/12 at 100.00 AAA 1,003,181
Refunding Bonds, Series 2002, 5.375%, 4/01/19 (Pre-refunded
4/01/12)
60 Henrico County Economic Development Authority, Virginia, Revenue 11/12 at 100.00 A3 (4) 66,934
Bonds, Bon Secours Health System Inc., Series 2002A, 5.600%,
11/15/30 (Pre-refunded 11/15/12)
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 N/R (4) 416,359
800 6.100%, 6/01/32 (Pre-refunded 6/01/12) 6/12 at 101.00 N/R (4) 889,816
815 Puerto Rico Highway and Transportation Authority, Highway 7/12 at 100.00 AAA 888,798
Revenue Bonds, Series 2002D, 5.000%, 7/01/32 (Pre-refunded
7/01/12) - AGM Insured
2,500 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 2,569,275
Obligation Bonds, Series 2000A, 5.500%, 10/01/40
(Pre-refunded 10/01/10)
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 A3 (4) 800,533
880 5.250%, 7/01/36 (Pre-refunded 7/01/12) 7/12 at 100.00 A3 (4) 958,461
385 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 386,898
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20
(Pre-refunded 7/01/10)
440 Rockbridge County Industrial Development Authority, Virginia, 7/11 at 100.00 B2 (4) 466,862
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:
790 5.250%, 6/01/19 (Pre-refunded 6/01/12) 6/12 at 100.00 AAA 814,079
3,850 5.500%, 6/01/26 (Pre-refunded 6/01/15) 6/15 at 100.00 AAA 4,307,804
1,000 Virgin Islands Public Finance Authority, Gross Receipts Taxes 10/10 at 101.00 BBB+ (4) 1,030,270
Loan Note, Series 1999A, 6.500%, 10/01/24 (Pre-refunded
10/01/10)
965 Virginia Resources Authority, Infrastructure Revenue Bonds, 5/11 at 101.00 AA (4) 1,016,666
Pooled Loan Bond Program, Series 2002A, 5.000%, 5/01/19
(Pre-refunded 5/01/11)
-----------------------------------------------------------------------------------------------------------------------------------
18,770 Total U.S. Guaranteed 20,082,334
-----------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 6.9% (4.7% OF TOTAL INVESTMENTS)
Bristol, Virginia, Utility System Revenue Refunding Bonds,
Series 2003:
1,705 5.250%, 7/15/14 - NPFG Insured 7/13 at 100.00 A 1,802,901
1,800 5.250%, 7/15/15 - NPFG Insured 7/13 at 100.00 A 1,889,730
2,775 5.250%, 7/15/23 - NPFG Insured 7/13 at 100.00 A 2,852,867
2,500 Mecklenburg County Industrial Development Authority, Virginia, 10/12 at 100.00 Baa1 2,530,175
Revenue Bonds, UAE Mecklenburg Cogeneration LP, Series 2002,
6.500%, 10/15/17 (Alternative Minimum Tax)
-----------------------------------------------------------------------------------------------------------------------------------
8,780 Total Utilities 9,075,673
-----------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 8.2% (5.7% 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 112,491
800 5.000%, 4/01/27 4/12 at 100.00 AAA 833,368
1,000 Loudoun County Sanitation Authority, Virginia, Water and 1/15 at 100.00 AAA 1,062,430
Sewerage System Revenue Bonds, Series 2004, 5.000%, 1/01/26
Nuveen Investments 51
NPV | Nuveen Virginia Premium Income Municipal Fund (continued)
| Portfolio of Investments May 31, 2010
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER (continued)
Norfolk, Virginia, Water Revenue Refunding Bonds, Series 2001:
$ 1,310 5.000%, 11/01/21 - FGIC Insured 11/11 at 100.00 AA+ $ 1,372,395
1,380 5.000%, 11/01/22 - FGIC Insured 11/11 at 100.00 AA+ 1,445,384
2,250 Virginia Beach, Virginia, Storm Water Utility Revenue Bonds, 9/10 at 101.00 Aa2 2,302,403
Series 2000, 6.000%, 9/01/24
1,800 Virginia Beach, Virginia, Water and Sewer System Revenue Bonds, 10/15 at 100.00 AAA 1,924,182
Series 2005, 5.000%, 10/01/30
1,515 Virginia State Resources Authority, Clean Water Revenue Bonds, 10/17 at 100.00 AAA 1,825,499
Series 2007, Trust 3036, 13.137%, 10/01/29 (IF)
------------------------------------------------------------------------------------------------------------------------------------
10,160 Total Water and Sewer 10,878,152
------------------------------------------------------------------------------------------------------------------------------------
$ 195,295 Total Investments (cost $187,559,056) - 144.9% 191,723,937
=============-----------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (3.5)% (4,630,000)
---------------------------------------------------------------------------------------------------------------------
MuniFund Term Preferred Shares, at Liquidation Value - (24.3)% (5) (32,205,000)
---------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.2% 2,963,484
---------------------------------------------------------------------------------------------------------------------
Auction Rate Preferred Shares, at Liquidation Value - (19.3)% (5) (25,550,000)
---------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 132,302,421
=====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net
assets applicable to Common shares unless otherwise noted.
(2) Optional Call Provisions (not covered by the report of independent
registered public accounting firm): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other call
provisions at varying prices at later dates. Certain mortgage-backed
securities may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered public
accounting firm): Using the highest of Standard & Poor's Group
("Standard & Poor's"), Moody's Investor Service, Inc. ("Moody's") or
Fitch, Inc. ("Fitch") rating. Ratings below BBB by Standard & Poor's,
Baa by Moody's or BBB by Fitch are considered to be below investment
grade.
(4) Backed by an escrow or trust containing sufficient U.S. Government or
U.S. Government agency securities, which ensure the timely payment of
principal and interest. Such investments are normally considered to be
equivalent to AAA rated securities.
(5) MuniFund Term Preferred Shares and Auction Rate Preferred Shares, at
Liquidation Value as a percentage of Total Investments are 16.8% and
13.3%, respectively.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected as a
financing transaction. See Notes to Financial Statements, Footnote 1 -
Inverse Floating Rate Securities for more information.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
52 Nuveen Investments
NGB | Nuveen Virginia Dividend Advantage Municipal Fund
| Portfolio of Investments May 31, 2010
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 3.5% (2.3% OF TOTAL INVESTMENTS)
$ 1,660 Tobacco Settlement Financing Corporation of Virginia, Tobacco 6/17 at 100.00 BBB $ 1,107,701
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 440,583
Settlement Asset-Backed Bonds, Series 2007B2, 0.000%, 6/01/46
-----------------------------------------------------------------------------------------------------------------------------------
2,375 Total Consumer Staples 1,548,284
-----------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 4.4% (2.9% OF TOTAL
INVESTMENTS)
500 Danville Industrial Development Authority, Virginia, Educational 3/11 at 102.00 N/R 472,875
Facilities Revenue Bonds, Averett University, Series 2001,
6.000%, 3/15/22
500 Prince William County Industrial Development Authority, 10/13 at 101.00 A2 507,080
Virginia, Educational Facilities Revenue Bonds, Catholic
Diocese of Arlington, Series 2003, 5.500%, 10/01/33
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 8/10 at 100.50 BBB- 160,118
320 5.375%, 2/01/29 8/10 at 100.50 BBB- 303,885
500 Virginia College Building Authority, Educational Facilities 7/10 at 100.00 N/R 500,325
Revenue Refunding Bonds, Marymount University, Series 1998,
5.100%, 7/01/18 - RAAI Insured
-----------------------------------------------------------------------------------------------------------------------------------
1,980 Total Education and Civic Organizations 1,944,283
-----------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 25.6% (16.9% OF TOTAL INVESTMENTS)
1,500 Arlington County Industrial Development Authority, Virginia, 7/20 at 100.00 A2 1,529,730
Hospital Revenue Bonds, Virginia Hospital Center Arlington
Health System, Refunding Series 2010, 5.000%, 7/01/31
250 Charlotte County Industrial Development Authority, Virginia, 9/17 at 100.00 A- 247,775
Hospital Revenue Bonds, Halifax Regional Hospital
Incorporated, Series 2007, 5.000%, 9/01/37
565 Fairfax County Industrial Development Authority, Virginia, 5/19 at 100.00 AA+ 673,457
Healthcare Revenue Bonds, Inova Health System, Series 2009,
Trust 11733, 14.518%, 5/15/35 (IF)
100 Fairfax County Industrial Development Authority, Virginia, No Opt. Call AA+ 109,180
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 BBB+ 1,015,620
Hospital Revenue Bonds, Fauquier Hospital, Series 2002,
5.250%, 10/01/25 - RAAI Insured
500 Fredericksburg Economic Development Authority, Virginia, No Opt. Call A3 542,820
Hospital Facilities Revenue Bonds, MediCorp Health System,
Series 2007, 5.250%, 6/15/23
500 Fredericksburg Industrial Development Authority, Virginia, 6/12 at 100.00 A3 501,090
Revenue Bonds, MediCorp Health System, Series 2002B, 5.125%,
6/15/33
820 Harrisonburg Industrial Development Authority, Virginia, 8/16 at 100.00 Baa1 767,020
Hospital Facilities Revenue Bonds, Rockingham Memorial
Hospital, Series 2006, 5.000%, 8/15/31 - AMBAC Insured
480 Henrico County Economic Development Authority, Virginia, Revenue 11/12 at 100.00 A- 486,811
Bonds, Bon Secours Health System Inc., Series 2002A, 5.600%,
11/15/30
525 Manassas Industrial Development Authority, Virginia, Hospital 4/13 at 100.00 A3 526,748
Revenue Bonds, Prince William Hospital, Series 2002, 5.250%,
4/01/33
800 Norton Industrial Development Authority, Virginia, Hospital 12/11 at 101.00 N/R 801,168
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 773,108
360 5.250%, 6/15/31 6/16 at 100.00 A3 363,330
605 5.250%, 6/15/37 6/16 at 100.00 A3 606,845
450 Virginia Small Business Finance Authority, Healthcare Facilities 5/20 at 100.00 AA 459,878
Revenue Bonds, Refunding Sentara Healthcare, Series 2010,
5.000%, 11/01/40
785 Virginia Small Business Financing Authority, Wellmont Health 9/17 at 100.00 BBB+ 734,289
System Project Revenue Bonds, Series 2007A, 5.250%, 9/01/37
360 Winchester Industrial Development Authority, Virginia, Hospital 1/19 at 100.00 A+ 371,480
Revenue Bonds Valley Health System Obligated Group, Series
2009E, 5.625%, 1/01/44
Nuveen Investments 53
NGB | Nuveen Virginia Dividend Advantage Municipal Fund (continued)
| Portfolio of Investments May 31, 2010
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE (continued)
$ 715 Winchester Industrial Development Authority, Virginia, Hospital 1/17 at 100.00 A+ $ 740,218
Revenue Bonds, Winchester Medical Center, Series 2007,
5.125%, 1/01/31
180 Wisconsin Health and Educational Facilities Authority, Revenue 4/20 at 100.00 A3 182,371
Bonds, Aurora Health Care, Inc., Series 2010A, 5.625%, 4/15/39
-----------------------------------------------------------------------------------------------------------------------------------
11,245 Total Health Care 11,432,938
-----------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 5.0% (3.3% OF TOTAL INVESTMENTS)
1,000 Arlington County Industrial Development Authority, Virginia, 11/11 at 102.00 AAA 1,038,400
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+ 1,004,000
Series 2000G, 5.625%, 10/01/20 (Alternative Minimum Tax)
200 Virginia Housing Development Authority, Rental Housing Bonds, 10/19 at 100.00 AA+ 201,920
Series 2010F, 5.000%, 4/01/45
-----------------------------------------------------------------------------------------------------------------------------------
2,200 Total Housing/Multifamily 2,244,320
-----------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 9.5% (6.3% OF TOTAL INVESTMENTS)
850 Virginia Housing Development Authority, Commonwealth Mortgage 7/11 at 100.00 AAA 858,211
Bonds, Series 2001H-1, 5.350%, 7/01/31 - NPFG Insured
600 Virginia Housing Development Authority, Commonwealth Mortgage 1/15 at 100.00 AAA 586,230
Bonds, Series 2005C-2, 4.750%, 10/01/32 (Alternative Minimum
Tax)
960 Virginia Housing Development Authority, Commonwealth Mortgage 7/15 at 100.00 AAA 962,534
Bonds, Series 2006 D1, 4.900%, 1/01/33 (Alternative Minimum
Tax)
480 Virginia Housing Development Authority, Commonwealth Mortgage 7/15 at 100.00 AAA 478,195
Bonds, Series 2006, 4.800%, 7/01/29 (Alternative Minimum Tax)
1,400 Virginia Housing Development Authority, Commonwealth Mortgage 7/16 at 100.00 AAA 1,368,094
Bonds, Series 2007B, 4.750%, 7/01/32 (Alternative Minimum Tax)
-----------------------------------------------------------------------------------------------------------------------------------
4,290 Total Housing/Single Family 4,253,264
-----------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 11.5% (7.6% OF TOTAL INVESTMENTS)
700 Albemarle County Industrial Development Authority, Virginia, 1/17 at 100.00 N/R 633,941
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, Mortgage 12/15 at 100.00 N/R 304,280
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 982,518
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+ 448,175
Retirement Center Revenue Bonds, Greenspring Village, Series
2006A, 4.750%, 10/01/26
540 Henrico County Economic Development Authority, Virginia, No Opt. Call BBB- 511,753
Residential Care Facility Revenue Bonds, Westminster
Canterbury of Richmond, Series 2006, 5.000%, 10/01/35
700 Industrial Development Authority of the County of Prince 1/17 at 100.00 N/R 424,459
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 657,319
Residential Care Facility First Mortgage Revenue Refunding
Bonds, Williamsburg Landing Inc., Series 2003A, 6.000%,
3/01/23
530 Roanoke Industrial Development Authority, Virginia, Residential 12/16 at 100.00 N/R 375,834
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 305,571
Facilities First Mortgage Revenue Bonds, Lake Prince Center,
Series 2006, 5.300%, 9/01/31
350 Virginia Beach Development Authority, Virginia, Residential Care 11/15 at 100.00 N/R 337,740
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 167,673
Residential Care Facility Revenue Bonds,
Westminster-Canterbury of Winchester Inc., Series 2005A,
5.200%, 1/01/27
-----------------------------------------------------------------------------------------------------------------------------------
5,850 Total Long-Term Care 5,149,263
-----------------------------------------------------------------------------------------------------------------------------------
54 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
MATERIALS - 0.7% (0.5% OF TOTAL INVESTMENTS)
$ 100 Bedford County Industrial Development Authority, Virginia, 8/10 at 100.00 Ba3 $ 94,076
Industrial Development Revenue Refunding Bonds, Nekoosa
Packaging Corporation, Series 1998, 5.600%, 12/01/25
(Alternative Minimum Tax)
20 Bedford County Industrial Development Authority, Virginia, 6/10 at 101.00 Ba3 20,057
Industrial Development Revenue Refunding Bonds, Nekoosa
Packaging Corporation, Series 1999A, 6.550%, 12/01/25
(Alternative Minimum Tax)
220 Goochland County Industrial Development Authority, Virginia, 6/10 at 100.50 Ba3 204,596
Industrial Development Revenue Refunding Bonds, Nekoosa
Packaging Corporation Project, Series 1998, 5.650%, 12/01/25
(Alternative Minimum Tax)
-----------------------------------------------------------------------------------------------------------------------------------
340 Total Materials 318,729
-----------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 11.5% (7.5% OF TOTAL INVESTMENTS)
700 Loudoun County, Virginia, General Obligation Bonds, Series 12/16 at 100.00 AAA 770,693
2006B, 5.000%, 12/01/25
845 Newport News, Virginia, General Obligation Bonds, Series 2004C, 5/14 at 101.00 Aa1 947,084
5.000%, 5/01/16
620 Richmond, Virginia, General Obligation Bonds, Series 2005A, 7/15 at 100.00 AAA 712,603
5.000%, 7/15/17 - AGM Insured
400 Suffolk, Virginia, General Obligation Bonds, Series 2005, No Opt. Call AA 466,836
5.000%, 12/01/15
400 Virginia Beach, Virginia, General Obligation Bonds, Series 2005, 1/16 at 100.00 AAA 465,492
5.000%, 1/15/20
1,600 Virginia Beach, Virginia, General Obligation Bonds, Series 2008, 10/17 at 100.00 AAA 1,750,336
5.000%, 10/01/26 (UB)
-----------------------------------------------------------------------------------------------------------------------------------
4,565 Total Tax Obligation/General 5,113,044
-----------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 21.9% (14.4% OF TOTAL INVESTMENTS)
100 Bell Creek Community Development Authority, Virginia, Special 3/13 at 101.00 N/R 92,794
Assessment Bonds, Series 2003A, 6.750%, 3/01/22
500 Broad Street Community Development Authority, Virginia, Revenue 6/13 at 102.00 N/R 444,800
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 N/R 111,631
95 5.500%, 7/15/35 - ACA Insured 7/15 at 100.00 N/R 87,392
500 Fairfax County Economic Development Authority, Virginia, Lease 5/16 at 100.00 AA+ 558,805
Revenue Bonds, Joint Public Uses Community Project, Series
2006, 5.000%, 5/15/18
160 Montgomery County Industrial Development Authority, Virginia, 2/18 at 100.00 AA- 169,174
Public Facility Lease Revenue Bonds, Public Projects Series
2008, 5.000%, 2/01/29
580 Prince William County, Virginia, Certificates of Participation, 6/15 at 100.00 Aa1 623,314
County Facilities, Series 2005, 5.000%, 6/01/20 - AMBAC
Insured
700 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call A3 723,541
Revenue Bonds, Series 2007N, 5.250%, 7/01/31 - AMBAC Insured
3,000 Puerto Rico Infrastructure Financing Authority, Special Tax No Opt. Call A3 901,800
Revenue Bonds, Series 2005A, 0.000%, 7/01/29 - AMBAC Insured
780 Puerto Rico Sales Tax Financing Corporation, Sales Tax Revenue 2/20 at 100.00 A+ 816,270
Bonds, First Subordinate Series 2010A, 5.500%, 8/01/42
1,000 Spotsylvania County Industrial Development Authority, Virginia, 8/13 at 100.00 N/R 1,033,300
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 A+ 635,472
Virginia, Revenue Bonds, Virginia Municipal League and
Virginia Association of Counties Finance Program, Series
2006A, 5.000%, 8/01/23 - NPFG Insured
890 Stafford County Economic Development Authority, Virginia, Lease 4/18 at 100.00 AAA 929,240
Revenue Bonds, Public Facility Projects, Series 2008, 5.000%,
4/01/33 - AGC Insured (UB)
960 Virgin Islands Public Finance Authority, Gross Receipts Taxes 10/10 at 101.00 BBB+ 976,618
Loan Note, Series 1999A, 6.375%, 10/01/19
195 Virginia Beach Development Authority, Public Facilities Revenue 5/15 at 100.00 AA+ 213,045
Bonds, Series 2005A, 5.000%, 5/01/22
280 Virginia College Building Authority, Educational Facilities 2/19 at 100.00 AA+ 363,964
Revenue Bonds, 21st Century College Program, Series 2009,
Trust 09-3B, 12.968%, 2/01/27 (IF)
Nuveen Investments 55
NGB | Nuveen Virginia Dividend Advantage Municipal Fund (continued)
| Portfolio of Investments May 31, 2010
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 280 Virginia College Building Authority, Educational Facilities 2/19 at 100.00 AA+ $ 358,733
Revenue Bonds, 21st Century College Program, Series 2009,
Trust 09-4B, 12.884%, 2/01/28 (IF)
345 Virginia Gateway Community Development Authority, Prince William 3/13 at 102.00 N/R 333,870
County, Special Assessment Bonds, Series 2003, 6.375%, 3/01/30
345 Virginia Public School Authority, School Financing Bonds, 1997 8/15 at 100.00 AA+ 394,138
Resolution, Series 2005C, 5.000%, 8/01/17
-----------------------------------------------------------------------------------------------------------------------------------
11,430 Total Tax Obligation/Limited 9,767,901
-----------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 27.0% (17.8% OF TOTAL INVESTMENTS)
1,000 Capital Region Airport Authority, Richmond, Virginia, Revenue 7/15 at 100.00 AAA 1,084,910
Bonds, Richmond International Airport, Series 2005A, 5.000%,
7/01/18 - AGM Insured
1,000 Chesapeake Bay Bridge and Tunnel Commission, Virginia, General No Opt. Call A 1,081,220
Resolution Revenue Refunding Bonds, Series 1998, 5.500%,
7/01/25 - NPFG Insured
3,000 Metropolitan Washington D.C. Airports Authority, Airport System 10/11 at 101.00 AA- 3,059,100
Revenue Bonds, Series 2001A, 5.500%, 10/01/27 - NPFG Insured
(Alternative Minimum Tax)
250 Metropolitan Washington D.C. Airports Authority, Airport System 10/11 at 101.00 AA- 257,298
Revenue Bonds, Series 2001B, 5.000%, 10/01/21 - NPFG Insured
1,300 Metropolitan Washington D.C. Airports Authority, Virginia, 10/28 at 100.00 BBB+ 770,055
Dulles Toll Road Revenue Bonds, Dulles Metrorail Capital
Appreciation, Series 2010B, 0.000%, 10/01/44
1,500 Norfolk Airport Authority, Virginia, Airport Revenue Bonds, 7/11 at 100.00 A 1,508,700
Series 2001A, 5.125%, 7/01/31 - FGIC Insured
500 Norfolk, Virginia, Parking System Revenue Bonds, Series 2005A, 2/15 at 100.00 A 502,615
5.000%, 2/01/23 - NPFG Insured
500 Richmond Metropolitan Authority, Virginia, Revenue Refunding No Opt. Call A 542,980
Bonds, Expressway System, Series 2002, 5.250%, 7/15/22 - FGIC
Insured
285 Virginia Port Authority, Port Facilities Revenue Refunding Bonds 7/19 at 100.00 Aa3 297,255
Series 2010, 5.000%, 7/01/40
455 Virginia Port Authority, Revenue Bonds, Port Authority 7/13 at 100.00 Aa3 440,172
Facilities, Series 2006, 5.000%, 7/01/36 - FGIC Insured
(Alternative Minimum Tax)
1,225 Virginia Resources Authority, Airports Revolving Fund Revenue 2/11 at 100.00 Aa2 1,256,642
Bonds, Series 2001A, 5.250%, 8/01/23
1,250 Virginia Resources Authority, Airports Revolving Fund Revenue 2/11 at 100.00 Aa2 1,250,275
Bonds, Series 2001B, 5.125%, 8/01/27 (Alternative Minimum Tax)
-----------------------------------------------------------------------------------------------------------------------------------
12,265 Total Transportation 12,051,222
-----------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 26.3% (17.3% OF TOTAL INVESTMENTS) (4)
500 Albemarle County Industrial Development Authority, Virginia, 1/12 at 100.00 N/R (4) 542,820
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 1,139,540
Series 2001, 5.000%, 7/15/21 - AGM Insured (ETM)
Guam Economic Development Authority, Tobacco Settlement
Asset-Backed Bonds, Series 2001A:
30 5.000%, 5/15/22 (Pre-refunded 5/15/11) 5/11 at 100.00 N/R (4) 31,283
850 5.400%, 5/15/31 (Pre-refunded 5/15/11) 5/11 at 100.00 N/R (4) 886,678
20 Henrico County Economic Development Authority, Virginia, Revenue 11/12 at 100.00 A3 (4) 22,311
Bonds, Bon Secours Health System Inc., Series 2002A, 5.600%,
11/15/30 (Pre-refunded 11/15/12)
2,310 Leesburg, Virginia, General Obligation Public Improvement Bonds, 1/11 at 101.00 AA+ (4) 2,404,063
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 N/R (4) 471,873
Hospital Revenue Bonds, Loudoun Hospital Center, Series
2002A, 6.000%, 6/01/22 (Pre-refunded 6/01/12)
500 Loudoun County, Virginia, General Obligation Public Improvement 6/15 at 100.00 AAA 582,635
Bonds, Series 2005B, 5.000%, 6/01/18 (Pre-refunded 6/01/15)
Puerto Rico Infrastructure Financing Authority, Special
Obligation Bonds, Series 2000A:
1,500 5.500%, 10/01/32 (Pre-refunded 10/01/10) 10/10 at 101.00 AAA 1,541,565
1,500 5.500%, 10/01/40 (Pre-refunded 10/01/10) 10/10 at 101.00 AAA 1,541,565
155 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 155,764
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20
(Pre-refunded 7/01/10)
56 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (4) (continued)
$ 120 Rockbridge County Industrial Development Authority, Virginia, No Opt. Call B2 (4) $ 124,018
Horse Center Revenue Refunding Bonds, Series 2001B, 6.125%,
7/15/11 (ETM)
880 Rockbridge County Industrial Development Authority, Virginia, 7/11 at 100.00 B2 (4) 933,724
Horse Center Revenue Refunding Bonds, Series 2001C, 6.850%,
7/15/21 (Pre-refunded 7/15/11)
725 Tobacco Settlement Financing Corporation of Virginia, Tobacco 6/15 at 100.00 AAA 811,210
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+ (4) 535,890
Revenue Bonds, 21st Century College Program, Series 2002A,
5.000%, 2/01/22 (Pre-refunded 2/01/12)
------------------------------------------------------------------------------------------------------------------------------------
11,015 Total U.S. Guaranteed 11,724,939
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 2.3% (1.5% OF TOTAL INVESTMENTS)
1,000 Mecklenburg County Industrial Development Authority, Virginia, 10/12 at 100.00 Baa1 1,012,070
Revenue Bonds, UAE Mecklenburg Cogeneration LP, Series 2002,
6.500%, 10/15/17 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 2.7% (1.7% OF TOTAL INVESTMENTS)
500 Virginia Beach, Virginia, Water and Sewer System Revenue Bonds, 10/15 at 100.00 AAA 534,495
Series 2005, 5.000%, 10/01/30
545 Virginia State Resources Authority, Clean Water Revenue Bonds, 10/17 at 100.00 AAA 656,698
Series 2007, Trust 3036, 13.137%, 10/01/29 (IF)
------------------------------------------------------------------------------------------------------------------------------------
1,045 Total Water and Sewer 1,191,193
------------------------------------------------------------------------------------------------------------------------------------
$ 69,600 Total Investments (cost $67,631,798) - 151.9% 67,751,450
=============-----------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (3.7)% (1,640,000)
--------------------------------------------------------------------------------------------------------------------
MuniFund Term Preferred Shares, at Liquidation Value - (51.1)% (5) (22,800,000)
---------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.9% 1,300,858
---------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 44,612,308
=====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net
assets applicable to Common shares unless otherwise noted.
(2) Optional Call Provisions (not covered by the report of independent
registered public accounting firm): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other call
provisions at varying prices at later dates. Certain mortgage-backed
securities may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered public
accounting firm): Using the highest of Standard & Poor's Group
("Standard & Poor's"), Moody's Investor Service, Inc. ("Moody's") or
Fitch, Inc. ("Fitch") rating. Ratings below BBB by Standard & Poor's,
Baa by Moody's or BBB by Fitch are considered to be below investment
grade.
(4) Backed by an escrow or trust containing sufficient U.S. Government or
U.S. Government agency securities, which ensure the timely payment of
principal and interest. Such investments are normally considered to be
equivalent to AAA rated securities.
(5) MuniFund Term Preferred Shares, at Liquidation Value as a percentage of
Total Investments is 33.7%.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected as a
financing transaction. See Notes to Financial Statements, Footnote 1 -
Inverse Floating Rate Securities for more information.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
Nuveen Investments 57
NNB | Nuveen Virginia Dividend Advantage Municipal Fund 2
| Portfolio of Investments May 31, 2010
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 3.5% (2.3% OF TOTAL INVESTMENTS)
$ 3,100 Tobacco Settlement Financing Corporation of Virginia, Tobacco 6/17 at 100.00 BBB $ 2,068,599
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 881,166
Settlement Asset-Backed Bonds, Series 2007B2, 0.000%, 6/01/46
-----------------------------------------------------------------------------------------------------------------------------------
4,530 Total Consumer Staples 2,949,765
-----------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 6.6% (4.3% OF TOTAL
INVESTMENTS)
1,000 Fairfax County Economic Development Authority, Virginia, Revenue 9/10 at 100.00 A3 1,006,690
Bonds, National Wildlife Federation, Series 1999, 5.375%,
9/01/29 - NPFG Insured
1,000 Prince William County Industrial Development Authority, 10/13 at 101.00 A2 1,014,160
Virginia, 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- 1,491,735
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, 10/10 at 100.00 A 2,011,780
Educational Facilities First Mortgage Revenue Bonds,
Shenandoah University, Series 1998, 5.250%, 10/01/28 - NPFG
Insured
-----------------------------------------------------------------------------------------------------------------------------------
5,500 Total Education and Civic Organizations 5,524,365
-----------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 32.7% (21.5% OF TOTAL INVESTMENTS)
1,500 Albemarle County Industrial Development Authority, Virginia, 10/12 at 100.00 A3 1,504,470
Hospital Revenue Bonds, Martha Jefferson Hospital, Series
2002, 5.250%, 10/01/35
2,000 Arlington County Industrial Development Authority, Virginia, 7/20 at 100.00 A2 2,039,640
Hospital Revenue Bonds, Virginia Hospital Center Arlington
Health System, Refunding Series 2010, 5.000%, 7/01/31
450 Charlotte County Industrial Development Authority, Virginia, 9/17 at 100.00 A- 454,329
Hospital Revenue Bonds, Halifax Regional Hospital
Incorporated, Series 2007, 5.000%, 9/01/27
1,070 Fairfax County Industrial Development Authority, Virginia, 5/19 at 100.00 AA+ 1,275,397
Healthcare Revenue Bonds, Inova Health System, Series 2009,
Trust 11733, 14.518%, 5/15/35 (IF)
3,000 Fauquier County Industrial Development Authority, Virginia, 10/12 at 102.00 BBB+ 3,046,860
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 1,085,640
Hospital Facilities Revenue Bonds, MediCorp Health System,
Series 2007, 5.250%, 6/15/23
675 Fredericksburg Industrial Development Authority, Virginia, 6/12 at 100.00 A3 676,472
Revenue Bonds, MediCorp Health System, Series 2002B, 5.125%,
6/15/33
1,500 Harrisonburg Industrial Development Authority, Virginia, 8/16 at 100.00 Baa1 1,403,085
Hospital Facilities Revenue Bonds, Rockingham Memorial
Hospital, Series 2006, 5.000%, 8/15/31 - AMBAC Insured
960 Henrico County Economic Development Authority, Virginia, Revenue 11/12 at 100.00 A- 973,622
Bonds, Bon Secours Health System Inc., Series 2002A, 5.600%,
11/15/30
1,155 Manassas Industrial Development Authority, Virginia, Hospital 4/13 at 100.00 A3 1,158,846
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 N/R 1,201,752
Revenue Refunding and Improvement Bonds, Norton Community
Hospital, Series 2001, 6.000%, 12/01/22 - ACA Insured
1,000 Prince William County Industrial Development Authority, 10/10 at 100.00 Aa3 1,004,780
Virginia, Hospital Facility Revenue Refunding Bonds, Potomac
Hospital Corporation of Prince William, Series 1998, 5.000%,
10/01/18 - AGM Insured
3,915 Roanoke Industrial Development Authority, Virginia, Hospital 7/12 at 100.00 A+ 4,054,648
Revenue Bonds, Carilion Health System, Series 2002A, 5.500%,
7/01/20 - NPFG 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 1,288,513
655 5.250%, 6/15/31 6/16 at 100.00 A3 661,059
1,095 5.250%, 6/15/37 6/16 at 100.00 A3 1,098,340
1,250 Virginia Small Business Finance Authority, Healthcare Facilities 5/20 at 100.00 AA 1,277,438
Revenue Bonds, Refunding Sentara Healthcare, Series 2010,
5.000%, 11/01/40
58 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE (continued)
$ 1,430 Virginia Small Business Financing Authority, Wellmont Health 9/17 at 100.00 BBB+ $ 1,337,622
System Project Revenue Bonds, Series 2007A, 5.250%, 9/01/37
720 Winchester Industrial Development Authority, Virginia, Hospital 1/19 at 100.00 A+ 742,961
Revenue Bonds Valley Health System Obligated Group, Series
2009E, 5.625%, 1/01/44
715 Winchester Industrial Development Authority, Virginia, Hospital 1/17 at 100.00 A+ 740,218
Revenue Bonds, Winchester Medical Center, Series 2007,
5.125%, 1/01/31
340 Wisconsin Health and Educational Facilities Authority, Revenue 4/20 at 100.00 A3 344,478
Bonds, Aurora Health Care, Inc., Series 2010A, 5.625%, 4/15/39
-----------------------------------------------------------------------------------------------------------------------------------
26,880 Total Health Care 27,370,170
-----------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 0.2% (0.2% OF TOTAL INVESTMENTS)
200 Virginia Housing Development Authority, Rental Housing Bonds, 10/19 at 100.00 AA+ 201,920
Series 2010F, 5.000%, 4/01/45
-----------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 12.3% (8.1% OF TOTAL INVESTMENTS)
6,350 Virginia Housing Development Authority, Commonwealth Mortgage 7/11 at 100.00 AAA 6,411,341
Bonds, Series 2001H-1, 5.350%, 7/01/31 - NPFG Insured
500 Virginia Housing Development Authority, Commonwealth Mortgage 1/15 at 100.00 AAA 488,525
Bonds, Series 2005C-2, 4.750%, 10/01/32 (Alternative Minimum
Tax)
870 Virginia Housing Development Authority, Commonwealth Mortgage 7/15 at 100.00 AAA 866,729
Bonds, Series 2006, 4.800%, 7/01/29 (Alternative Minimum Tax)
2,600 Virginia Housing Development Authority, Commonwealth Mortgage 7/16 at 100.00 AAA 2,540,746
Bonds, Series 2007B, 4.750%, 7/01/32 (Alternative Minimum Tax)
-----------------------------------------------------------------------------------------------------------------------------------
10,320 Total Housing/Single Family 10,307,341
-----------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 10.9% (7.1% OF TOTAL INVESTMENTS)
1,300 Albemarle County Industrial Development Authority, Virginia, 1/17 at 100.00 N/R 1,177,319
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, Mortgage 12/15 at 100.00 N/R 565,091
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 1,774,398
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+ 448,175
Retirement Center Revenue Bonds, Greenspring Village, Series
2006A, 4.750%, 10/01/26
855 Henrico County Economic Development Authority, Virginia, No Opt. Call BBB- 810,275
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 1/17 at 100.00 N/R 788,281
William, 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 1,365,201
Residential Care Facility First Mortgage Revenue Refunding
Bonds, Williamsburg Landing Inc., Series 2003A, 6.000%,
3/01/23
970 Roanoke Industrial Development Authority, Virginia, Residential 12/16 at 100.00 N/R 687,846
Revenue Bonds, Virginia Lutheran Homes Incorporated, Series
2006, 5.000%, 12/01/39
650 Suffolk Industrial Development Authority, Virginia, Retirement 9/16 at 100.00 N/R 567,489
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 627,231
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 311,392
Residential Care Facility Revenue Bonds,
Westminster-Canterbury of Winchester Inc., Series 2005A,
5.200%, 1/01/27
-----------------------------------------------------------------------------------------------------------------------------------
10,365 Total Long-Term Care 9,122,698
-----------------------------------------------------------------------------------------------------------------------------------
MATERIALS - 0.7% (0.5% OF TOTAL INVESTMENTS)
165 Bedford County Industrial Development Authority, Virginia, 8/10 at 100.00 Ba3 155,225
Industrial Development Revenue Refunding Bonds, Nekoosa
Packaging Corporation, Series 1998, 5.600%, 12/01/25
(Alternative Minimum Tax)
460 Goochland County Industrial Development Authority, Virginia, 6/10 at 100.50 Ba3 427,791
Industrial Development Revenue Refunding Bonds, Nekoosa
Packaging Corporation Project, Series 1998, 5.650%, 12/01/25
(Alternative Minimum Tax)
-----------------------------------------------------------------------------------------------------------------------------------
625 Total Materials 583,016
-----------------------------------------------------------------------------------------------------------------------------------
Nuveen Investments 59
NNB | Nuveen Virginia Dividend Advantage Municipal Fund 2 (continued)
| Portfolio of Investments May 31, 2010
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 21.5% (14.1% OF TOTAL INVESTMENTS)
$ 1,750 Chesapeake, Virginia, General Obligation Bonds, Series 2001, 12/11 at 100.00 AA+ $ 1,881,233
5.500%, 12/01/16
1,000 Loudoun County, Virginia, General Obligation Bonds, Series 12/16 at 100.00 AAA 1,100,990
2006B, 5.000%, 12/01/25
95 Loudoun County, Virginia, General Obligation Public Improvement 5/12 at 100.00 AAA 99,036
Bonds, Series 2002A, 5.250%, 5/01/22
Powhatan County, Virginia, General Obligation Bonds, Series 2001:
660 5.000%, 1/15/23 - AMBAC Insured 1/11 at 101.00 Aa2 686,143
1,000 5.000%, 1/15/27 - AMBAC Insured 1/11 at 101.00 Aa2 1,039,610
Roanoke, Virginia, General Obligation Public Improvement Bonds,
Series 2002A:
1,950 5.000%, 10/01/18 10/12 at 101.00 AA 2,161,400
2,435 5.000%, 10/01/19 10/12 at 101.00 AA 2,698,978
1,280 Roanoke, Virginia, General Obligation Public Improvement Bonds, 10/12 at 101.00 AA 1,348,314
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 698,238
5.000%, 1/15/20
2,900 Virginia Beach, Virginia, General Obligation Bonds, Series 2008, 10/17 at 100.00 AAA 3,172,484
5.000%, 10/01/26 (UB)
1,500 Virginia Beach, Virginia, General Obligation Public Improvement 6/11 at 101.00 AAA 1,585,740
Bonds, Series 2001, 5.000%, 6/01/19
1,420 Virginia Beach, Virginia, General Obligation Refunding and 3/12 at 100.00 AAA 1,528,644
Public Improvement Bonds, Series 2002, 5.000%, 3/01/21
-----------------------------------------------------------------------------------------------------------------------------------
16,590 Total Tax Obligation/General 18,000,810
-----------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 22.7% (14.9% OF TOTAL INVESTMENTS)
107 Bell Creek Community Development Authority, Virginia, Special 3/13 at 101.00 N/R 99,290
Assessment Bonds, Series 2003A, 6.750%, 3/01/22
1,000 Broad Street Community Development Authority, Virginia, Revenue 6/13 at 102.00 N/R 889,600
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 N/R 195,355
165 5.500%, 7/15/35 - ACA Insured 7/15 at 100.00 N/R 151,787
800 Fairfax County Economic Development Authority, Virginia, Lease 5/16 at 100.00 AA+ 894,088
Revenue Bonds, Joint Public Uses Community Project, Series
2006, 5.000%, 5/15/18
1,800 Loudoun County Industrial Development Authority, Virginia, Lease 3/13 at 100.00 AA+ 1,951,038
Revenue Refunding Bonds, Public Facility Project, Series
2003, 5.000%, 3/01/19
285 Montgomery County Industrial Development Authority, Virginia, 2/18 at 100.00 AA- 301,342
Public Facility Lease Revenue Bonds, Public Projects Series
2008, 5.000%, 2/01/29
1,300 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call A3 1,343,719
Revenue Bonds, Series 2007N, 5.250%, 7/01/31 - AMBAC Insured
2,000 Puerto Rico Infrastructure Financing Authority, Special Tax No Opt. Call A3 601,200
Revenue Bonds, Series 2005A, 0.000%, 7/01/29 - AMBAC Insured
400 Puerto Rico Public Buildings Authority, Guaranteed Government 7/12 at 100.00 A3 402,892
Facilities Revenue Refunding Bonds, Series 2002D, 5.250%,
7/01/27
1,625 Puerto Rico Sales Tax Financing Corporation, Sales Tax Revenue 2/20 at 100.00 A+ 1,700,563
Bonds, First Subordinate Series 2010A, 5.500%, 8/01/42
1,000 Spotsylvania County Industrial Development Authority, Virginia, 8/13 at 100.00 N/R 1,033,300
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 A+ 1,059,120
Virginia, Revenue Bonds, Virginia Municipal League and
Virginia Association of Counties Finance Program, Series
2006A, 5.000%, 8/01/23 - NPFG Insured
1,610 Stafford County Economic Development Authority, Virginia, Lease 4/18 at 100.00 AAA 1,680,985
Revenue Bonds, Public Facility Projects, Series 2008, 5.000%,
4/01/33 - AGC Insured (UB)
700 Virginia Beach Development Authority, Public Facilities Revenue 5/15 at 100.00 AA+ 764,778
Bonds, Series 2005A, 5.000%, 5/01/22
535 Virginia College Building Authority, Educational Facilities 2/19 at 100.00 AA+ 695,430
Revenue Bonds, 21st Century College Program, Series 2009,
Trust 09-3B, 12.968%, 2/01/27 (IF)
60 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 535 Virginia College Building Authority, Educational Facilities 2/19 at 100.00 AA+ $ 685,437
Revenue Bonds, 21st Century College Program, Series 2009,
Trust 09-4B, 12.884%, 2/01/28 (IF)
673 Virginia Gateway Community Development Authority, Prince William 3/13 at 102.00 N/R 651,289
County, Special Assessment Bonds, Series 2003, 6.375%, 3/01/30
2,540 Virginia Public School Authority, School Financing Bonds, 1997 8/11 at 101.00 AA+ 2,702,763
Resolution, Series 2001B, 5.000%, 8/01/19
570 Virginia Public School Authority, School Financing Bonds, 1997 8/15 at 100.00 AA+ 651,185
Resolution, Series 2005C, 5.000%, 8/01/17
540 Virginia Resources Authority, Infrastructure Revenue Bonds, No Opt. Call AA 545,983
Prerefunded-Pooled Loan Bond Program, Series 2001D, 5.000%,
5/01/26
-----------------------------------------------------------------------------------------------------------------------------------
19,395 Total Tax Obligation/Limited 19,001,144
-----------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 6.5% (4.2% OF TOTAL INVESTMENTS)
1,000 Metropolitan Washington D.C. Airports Authority, Airport System 10/12 at 100.00 AA- 1,010,580
Revenue Bonds, Series 2002A, 5.125%, 10/01/26 - FGIC Insured
(Alternative Minimum Tax)
2,200 Metropolitan Washington D.C. Airports Authority, Virginia, Dulles 10/28 at 100.00 BBB+ 1,303,170
Toll Road Revenue Bonds, Dulles Metrorail Capital
Appreciation, Series 2010B, 0.000%, 10/01/44
1,500 Norfolk, Virginia, Parking System Revenue Bonds, Series 2005A, 2/15 at 100.00 A 1,507,845
5.000%, 2/01/23 - NPFG Insured
745 Virginia Port Authority, Port Facilities Revenue Refunding Bonds 7/19 at 100.00 Aa3 777,035
Series 2010, 5.000%, 7/01/40
825 Virginia Port Authority, Revenue Bonds, Port Authority 7/13 at 100.00 Aa3 798,113
Facilities, Series 2006, 5.000%, 7/01/36 - FGIC Insured
(Alternative Minimum Tax)
-----------------------------------------------------------------------------------------------------------------------------------
6,270 Total Transportation 5,396,743
-----------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 15.5% (10.2% OF TOTAL INVESTMENTS) (4)
165 Albemarle County Industrial Development Authority, Virginia, 1/12 at 100.00 N/R (4) 179,131
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 No Opt. Call AAA 1,156,790
Bonds, Series 2002, 5.000%, 11/01/24 - AGM Insured (ETM)
40 Henrico County Economic Development Authority, Virginia, Revenue 11/12 at 100.00 A3 (4) 44,623
Bonds, Bon Secours Health System Inc., Series 2002A, 5.600%,
11/15/30 (Pre-refunded 11/15/12)
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 N/R (4) 277,573
600 6.100%, 6/01/32 (Pre-refunded 6/01/12) 6/12 at 101.00 N/R (4) 667,362
1,000 Newport News, Virginia, General Obligation Bonds, Series 2003B, 11/13 at 100.00 Aa1 (4) 1,130,440
5.000%, 11/01/22 (Pre-refunded 11/01/13)
2,750 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 2,826,203
Obligation Bonds, Series 2000A, 5.500%, 10/01/40 (Pre-refunded
10/01/10)
1,100 Puerto Rico Public Buildings Authority, Guaranteed Government 7/12 at 100.00 A3 (4) 1,198,076
Facilities Revenue Refunding Bonds, Series 2002D, 5.250%,
7/01/27 (Pre-refunded 7/01/12)
455 Puerto Rico Public Finance Corporation, Commonwealth 2/12 at 100.00 AAA 491,227
Appropriation Bonds, Series 2002E, 5.500%, 8/01/29
(Pre-refunded 2/01/12)
445 Rockbridge County Industrial Development Authority, Virginia, 7/11 at 100.00 B2 (4) 472,167
Horse Center Revenue Refunding Bonds, Series 2001C, 6.850%,
7/15/21 (Pre-refunded 7/15/11)
1,000 Staunton, Virginia, General Obligation Bonds, Series 2004, 2/14 at 101.00 Aa2 (4) 1,192,570
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:
300 5.250%, 6/01/19 (Pre-refunded 6/01/12) 6/12 at 100.00 AAA 309,144
2,700 5.500%, 6/01/26 (Pre-refunded 6/01/15) 6/15 at 100.00 AAA 3,021,057
-----------------------------------------------------------------------------------------------------------------------------------
11,805 Total U.S. Guaranteed 12,966,363
-----------------------------------------------------------------------------------------------------------------------------------
Nuveen Investments 61
NNB | Nuveen Virginia Dividend Advantage Municipal Fund 2 (continued)
| Portfolio of Investments May 31, 2010
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 2.4% (1.6% OF TOTAL INVESTMENTS)
$ 2,000 Mecklenburg County Industrial Development Authority, Virginia, 10/12 at 100.00 Baa1 $ 2,024,140
Revenue Bonds, UAE Mecklenburg Cogeneration LP, Series 2002,
6.500%, 10/15/17 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 16.8% (11.0% OF TOTAL INVESTMENTS)
805 Fairfax County Water Authority, Virginia, Water Revenue 4/12 at 100.00 AAA 838,575
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 - AGM Insured No Opt. Call AAA 1,178,570
3,000 5.500%, 11/15/19 - AGM Insured No Opt. Call AAA 3,540,720
Norfolk, Virginia, Water Revenue Refunding Bonds, Series 2001:
1,080 5.000%, 11/01/18 - FGIC Insured 11/11 at 100.00 AA+ 1,131,440
1,190 5.000%, 11/01/19 - FGIC Insured 11/11 at 100.00 AA+ 1,246,680
1,525 5.000%, 11/01/24 - FGIC Insured 11/11 at 100.00 AA+ 1,597,253
1,000 Virginia Beach, Virginia, Water and Sewer System Revenue Bonds, 10/15 at 100.00 AAA 1,068,990
Series 2005, 5.000%, 10/01/30
2,250 Virginia Resources Authority, Water and Sewerage System Revenue 5/11 at 101.00 AA 2,291,533
Bonds, Caroline County Public Improvements Project, Series
2001, 5.000%, 5/01/32
990 Virginia State Resources Authority, Clean Water Revenue Bonds, 10/17 at 100.00 AAA 1,192,900
Series 2007, Trust 3036, 13.137%, 10/01/29 (IF)
------------------------------------------------------------------------------------------------------------------------------------
12,840 Total Water and Sewer 14,086,661
------------------------------------------------------------------------------------------------------------------------------------
$ 127,320 Total Investments (cost $125,444,371) - 152.3% 127,535,136
=============-----------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (3.6)% (2,980,000)
---------------------------------------------------------------------------------------------------------------------
MuniFund Term Preferred Shares, at Liquidation Value - (51.6)% (5) (43,200,000)
---------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.9% 2,409,507
---------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 83,764,643
=====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net
assets applicable to Common shares unless otherwise noted.
(2) Optional Call Provisions (not covered by the report of independent
registered public accounting firm): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other call
provisions at varying prices at later dates. Certain mortgage-backed
securities may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered public
accounting firm): Using the highest of Standard & Poor's Group
("Standard & Poor's"), Moody's Investor Service, Inc. ("Moody's") or
Fitch, Inc. ("Fitch") rating. Ratings below BBB by Standard & Poor's,
Baa by Moody's or BBB by Fitch are considered to be below investment
grade.
(4) Backed by an escrow or trust containing sufficient U.S. Government or
U.S. Government agency securities, which ensure the timely payment of
principal and interest. Such investments are normally considered to be
equivalent to AAA rated securities.
(5) MuniFund Term Preferred Shares, at Liquidation Value as a percentage of
Total Investments is 33.9%.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected as a
financing transaction. See Notes to Financial Statements, Footnote 1 -
Inverse Floating Rate Securities for more information.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
62 Nuveen Investments
| Statement of
| Assets & Liabilites May 31, 2010
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $226,022,758,
$84,939,848,$88,596,455 and $113,411,699,
respectively) $ 234,991,664 $ 85,902,416 $ 89,896,345 $ 116,050,576
Cash 4,331 3,204,136 291,491 262,718
Receivables:
Interest 4,183,794 1,566,358 1,616,007 1,901,869
Investments sold 140,000 110,000 105,000 --
Deferred offering costs 794,385 639,819 650,309 497,404
Other assets 32,993 10,476 10,501 17,065
------------------------------------------------------------------------------------------------------------------
Total assets 240,147,167 91,433,205 92,569,653 118,729,632
------------------------------------------------------------------------------------------------------------------
LIABILITIES
Floating rate obligations 9,962,000 3,973,000 3,840,000 4,255,000
Cash overdraft -- -- -- --
Payables:
Auction Rate Preferred share dividends 3,524 -- -- 2,549
Common share dividends 611,401 255,633 260,774 318,618
Interest 85,628 91,815 102,527 45,713
Offering costs 254,775 234,400 234,400 199,676
MuniFund Term Preferred shares, at liquidation
value 38,775,000 26,485,000 27,300,000 20,700,000
Accrued expenses:
Management fees 126,116 44,589 41,278 55,014
Other 111,019 40,367 41,553 61,969
------------------------------------------------------------------------------------------------------------------
Total liabilities 49,929,463 31,124,804 31,820,532 25,638,539
------------------------------------------------------------------------------------------------------------------
Auction Rate Preferred shares, at liquidation
value 32,975,000 -- -- 14,825,000
==================================================================================================================
Net assets applicable to Common shares $ 157,242,704 $ 60,308,401 $ 60,749,121 $ 78,266,093
==================================================================================================================
Common shares outstanding 10,643,624 4,193,517 4,197,272 5,363,909
==================================================================================================================
Net asset value per Common share outstanding (net
assets applicable to Common shares, divided by
Common shares outstanding) $ 14.77 $ 14.38 $ 14.47 $ 14.59
==================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF:
------------------------------------------------------------------------------------------------------------------
Common shares, $.01 par value per share $ 106,436 $ 41,935 $ 41,973 $ 53,639
Paid-in surplus 147,789,740 59,490,323 59,538,503 75,694,554
Undistributed (Over-distribution of) net
investment income 2,175,745 760,002 759,614 939,416
Accumulated net realized gain (loss) from
investments (1,798,123) (946,427) (890,859) (1,060,393)
Net unrealized appreciation (depreciation) of
investments 8,968,906 962,568 1,299,890 2,638,877
------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $ 157,242,704 $ 60,308,401 $ 60,749,121 $ 78,266,093
==================================================================================================================
Authorized shares:
Common Unlimited Unlimited Unlimited Unlimited
Auction Rate Preferred Unlimited Unlimited Unlimited Unlimited
MuniFund Term Preferred Unlimited Unlimited Unlimited Unlimited
==================================================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
Nuveen Investments 63
| Statement of
| Assets & Liabilites (continued)
May 31, 2010
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
--------------------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $187,559,056,
$67,631,798 and $125,444,371, respectively) $ 191,723,937 $ 67,751,450 $ 127,535,136
Cash -- 270,150 437,936
Receivables:
Interest 3,059,583 1,047,487 1,866,043
Investments sold 1,121,000 -- 190,000
Deferred offering costs 691,996 524,791 726,231
Other assets 29,827 7,873 13,871
--------------------------------------------------------------------------------------------------
Total assets 196,626,343 69,601,751 130,769,217
--------------------------------------------------------------------------------------------------
LIABILITIES
Floating rate obligations 4,630,000 1,640,000 2,980,000
Cash overdraft 895,110 -- --
Payables:
Auction Rate Preferred share dividends 2,067 -- --
Common share dividends 535,309 193,191 363,640
Interest 71,120 53,200 100,800
Offering costs 243,125 235,858 248,791
MuniFund Term Preferred shares, at liquidation
value 32,205,000 22,800,000 43,200,000
Accrued expenses:
Management fees 105,319 34,618 59,581
Other 86,872 32,576 51,762
--------------------------------------------------------------------------------------------------
Total liabilities 38,773,922 24,989,443 47,004,574
--------------------------------------------------------------------------------------------------
Auction Rate Preferred shares, at liquidation
value 25,550,000 -- --
==================================================================================================
Net assets applicable to Common shares $ 132,302,421 $ 44,612,308 $ 83,764,643
==================================================================================================
Common shares outstanding 8,982,270 3,139,973 5,751,134
==================================================================================================
Net asset value per Common share outstanding (net
assets applicable to Common shares, divided by
Common shares outstanding) $ 14.73 $ 14.21 $ 14.56
==================================================================================================
NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF:
--------------------------------------------------------------------------------------------------
Common shares, $.01 par value per share $ 89,823 $ 31,400 $ 57,511
Paid-in surplus 126,425,231 44,472,299 81,540,239
Undistributed (Over-distribution of) net
investment income 1,637,438 516,157 735,883
Accumulated net realized gain (loss) from
investments (14,952) (527,200) (659,755)
Net unrealized appreciation (depreciation) of
investments 4,164,881 119,652 2,090,765
--------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $ 132,302,421 $ 44,612,308 $ 83,764,643
==================================================================================================
Authorized shares:
Common Unlimited Unlimited Unlimited
Auction Rate Preferred Unlimited Unlimited Unlimited
MuniFund Term Preferred Unlimited Unlimited Unlimited
==================================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
64 Nuveen Investments
| Statement of
| Operations
Year Ended May 31, 2010
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $ 11,197,103 $ 4,495,325 $ 4,518,214 $ 5,503,635
------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 1,466,683 558,911 566,542 736,693
Auction fees 91,206 26,998 28,348 46,691
Dividend disbursing agent fees 20,000 7,479 14,192 10,000
Shareholders' servicing agent fees and expenses 16,417 1,422 986 1,158
Interest expense and amortization of offering
costs 491,329 144,219 155,414 211,790
Custodian's fees and expenses 47,449 24,030 24,150 28,622
Trustees' fees and expenses 6,327 2,339 2,376 3,290
Professional fees 24,394 13,105 13,213 15,759
Shareholders' reports - printing and mailing
expenses 46,630 24,839 26,332 31,298
Stock exchange listing fees 9,168 591 592 757
Investor relations expense 19,549 7,519 7,793 9,738
Other expenses 22,089 23,879 24,030 17,086
------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit and
expense reimbursement 2,261,241 835,331 863,968 1,112,882
Custodian fee credit (2,302) (1,246) (390) (489)
Expense reimbursement -- (72,667) (102,857) (121,745)
------------------------------------------------------------------------------------------------------------------
Net expenses 2,258,939 761,418 760,721 990,648
------------------------------------------------------------------------------------------------------------------
Net investment income 8,938,164 3,733,907 3,757,493 4,512,987
------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from investments 81,032 26,955 17,339 (9,894)
Change in net unrealized appreciation
(depreciation) of investments 11,721,055 5,284,917 5,066,240 6,524,642
------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) 11,802,087 5,311,872 5,083,579 6,514,748
------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO AUCTION RATE PREFERRED
SHAREHOLDERS
From net investment income (263,268) (103,621) (105,170) (135,013)
------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to Common
shares from distributions to Auction Rate
Preferred shareholders (263,268) (103,621) (105,170) (135,013)
------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable
to Common shares from operations $ 20,476,983 $ 8,942,158 $ 8,735,902 $ 10,892,722
==================================================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
Nuveen Investments 65
| Statement of
| Operations (continued)
Year Ended May 31, 2010
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
--------------------------------------------------------------------------------------------------
INVESTMENT INCOME $ 9,765,166 $ 3,517,795 $ 6,429,432
--------------------------------------------------------------------------------------------------
EXPENSES
Management fees 1,224,208 430,492 804,132
Auction fees 73,008 14,169 24,062
Dividend disbursing agent fees 20,000 7,479 5,863
Shareholders' servicing agent fees and expenses 13,867 940 1,199
Interest expense and amortization of offering
costs 372,770 412,213 797,818
Custodian's fees and expenses 42,269 19,905 28,876
Trustees' fees and expenses 5,450 1,845 3,512
Professional fees 21,401 11,716 15,910
Shareholders' reports - printing and mailing
expenses 48,899 18,549 29,208
Stock exchange listing fees 9,215 442 810
Investor relations expense 16,772 5,537 9,837
Other expenses 19,507 23,677 25,479
--------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit and
expense reimbursement 1,867,366 946,964 1,746,706
Custodian fee credit (462) (1,229) (1,932)
Expense reimbursement -- (56,080) (155,961)
--------------------------------------------------------------------------------------------------
Net expenses 1,866,904 889,655 1,588,813
--------------------------------------------------------------------------------------------------
Net investment income 7,898,262 2,628,140 4,840,619
--------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from investments 71,327 146 14,297
Change in net unrealized appreciation
(depreciation) of investments 8,157,368 3,488,158 6,627,764
--------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) 8,228,695 3,488,304 6,642,061
--------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO AUCTION RATE PREFERRED
SHAREHOLDERS
From net investment income (233,784) (49,195) (85,539)
--------------------------------------------------------------------------------------------------
Decrease in net assets applicable to Common
shares from distributions to Auction Rate
Preferred shareholders (233,784) (49,195) (85,539)
--------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable
to Common shares from operations $ 15,893,173 $ 6,067,249 $ 11,397,141
==================================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
66 Nuveen Investments
| Statement of
| Changes in Net Assets
MARYLAND PREMIUM MARYLAND DIVIDEND MARYLAND DIVIDEND
INCOME (NMY) ADVANTAGE (NFM) ADVANTAGE 2 (NZR)
--------------------------- --------------------------- ----------------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
5/31/10 5/31/09 5/31/10 5/31/09 5/31/10 5/31/09
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 8,938,164 $ 9,449,559 $ 3,733,907 $ 3,990,112 $ 3,757,493 $ 3,972,583
Net realized gain (loss) from investments 81,032 (1,683,796) 26,955 (792,574) 17,339 (904,510)
Change in net unrealized appreciation
(depreciation) of investments 11,721,055 (5,452,149) 5,284,917 (4,198,728) 5,066,240 (4,008,113)
Distributions to Auction Rate
Preferred Shareholders:
From net investment income (263,268) (1,728,826) (103,621) (710,514) (105,170) (687,710)
From accumulated net realized gains -- (112,500) -- -- -- (49,933)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares from
operations 20,476,983 472,288 8,942,158 (1,711,704) 8,735,902 (1,677,683)
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (7,789,618) (6,676,649) (3,182,569) (2,946,556) (3,197,580) (2,950,782)
From accumulated net realized gains -- (285,154) -- -- -- (145,966)
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions to
Common shareholders (7,789,618) (6,961,803) (3,182,569) (2,946,556) (3,197,580) (3,096,748)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares issued to
shareholders due to reinvestment of
distributions 50,895 -- 41,978 65,451 25,385 39,025
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares from
capital share transactions 50,895 -- 41,978 65,451 25,385 39,025
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares 12,738,260 (6,489,515) 5,801,567 (4,592,809) 5,563,707 (4,735,406)
Net assets applicable to Common shares
at the beginning of year 144,504,444 150,993,959 54,506,834 59,099,643 55,185,414 59,920,820
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares at
the end of year $157,242,704 $144,504,444 $ 60,308,401 $ 54,506,834 $ 60,749,121 $ 55,185,414
====================================================================================================================================
Undistributed (Over-distribution of) net
investment income at the end of year $ 2,175,745 $ 1,235,082 $ 760,002 $ 295,908 $ 759,614 $ 287,921
====================================================================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
Nuveen Investments 67
| Statement of
| Changes in Net Assets (continued)
MARYLAND DIVIDEND VIRGINIA PREMIUM VIRGINIA DIVIDEND
ADVANTAGE 3 (NWI) INCOME (NPV) ADVANTAGE (NGB)
--------------------------- --------------------------- ----------------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
5/31/10 5/31/09 5/31/10 5/31/09 5/31/10 5/31/09
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 4,512,987 $ 4,774,513 $ 7,898,262 $ 8,077,037 $ 2,628,140 $ 2,929,798
Net realized gain (loss) from investments (9,894) (1,006,050) 71,327 (88,740) 146 (527,444)
Change in net unrealized appreciation
(depreciation) of investments 6,524,642 (3,207,766) 8,157,368 (5,786,157) 3,488,158 (3,315,707)
Distributions to Auction Rate
Preferred Shareholders:
From net investment income (135,013) (858,983) (233,784) (1,346,825) (49,195) (533,312)
From accumulated net realized gains -- (32,339) -- (146,513) -- (12,768)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares from
operations 10,892,722 (330,625) 15,893,173 708,802 6,067,249 (1,459,433)
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (3,958,565) (3,451,676) (7,219,765) (5,849,607) (2,391,296) (2,167,450)
From accumulated net realized gains -- (90,650) -- (428,050) -- (41,689)
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions to
Common shareholders (3,958,565) (3,542,326) (7,219,765) (6,277,657) (2,391,296) (2,209,139)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares issued to
shareholders due to reinvestment of
distributions -- -- 509,839 175,724 55,701 37,122
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares from
capital share transactions -- -- 509,839 175,724 55,701 37,122
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares 6,934,157 (3,872,951) 9,183,247 (5,393,131) 3,731,654 (3,631,450)
Net assets applicable to Common shares at
the beginning of year 71,331,936 75,204,887 123,119,174 128,512,305 40,880,654 44,512,104
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares at
the end of year $ 78,266,093 $ 71,331,936 $132,302,421 $123,119,174 $ 44,612,308 $ 40,880,654
====================================================================================================================================
Undistributed (Over-distribution of) net
investment income at the end of year $ 939,416 $ 492,853 $ 1,637,438 $ 1,141,646 $ 516,157 $ 266,298
====================================================================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
68 Nuveen Investments
VIRGINIA DIVIDEND
ADVANTAGE 2 (NNB)
----------------------------
YEAR YEAR
ENDED ENDED
5/31/10 5/31/09
--------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 4,840,619 $ 5,570,292
Net realized gain (loss) from investments 14,297 (661,202)
Change in net unrealized appreciation
(depreciation) of investments 6,627,764 (5,657,242)
Distributions to Auction Rate
Preferred Shareholders:
From net investment income (85,539) (940,842)
From accumulated net realized gains -- (13,944)
--------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable
to Common shares from operations 11,397,141 (1,702,938)
--------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (4,503,540) (4,123,820)
From accumulated net realized gains -- (41,880)
--------------------------------------------------------------------------------
Decrease in net assets applicable to Common
shares from distributions to Common shareholders (4,503,540) (4,165,700)
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares issued to
shareholders due to reinvestment of
distributions 144,710 123,400
--------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares from capital share
transactions 144,710 123,400
--------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable
to Common shares 7,038,311 (5,745,238)
Net assets applicable to Common shares at the
beginning of year 76,726,332 82,471,570
--------------------------------------------------------------------------------
Net assets applicable to Common shares at the end
of year $ 83,764,643 $ 76,726,332
================================================================================
Undistributed (Over-distribution of) net investment
income at the end of year $ 735,883 $ 396,944
================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
Nuveen Investments 69
| Statement of
| Cash Flows
Year Ended May 31, 2010
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
----------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON
SHARES FROM OPERATIONS $ 20,476,983 $ 8,942,158 $ 8,735,902 $ 10,892,722
Adjustments to reconcile the net increase (decrease) in net assets
applicable to Common shares from operations to net cash provided
by (used in) operating activities:
Purchases of investments (15,391,910) (3,446,319) (2,083,423) (2,515,457)
Proceeds from sales and maturities of investments 4,364,000 4,889,650 1,329,500 468,000
Amortization (Accretion) of premiums and discounts, net 490,799 155,612 145,850 351,044
(Increase) Decrease in receivable for interest (141,129) 39,523 (26,278) (48,539)
(Increase) Decrease in receivable for investments sold 2,420,000 260,000 (105,000) --
(Increase) Decrease in other assets (5,036) 5,849 2,537 (2,075)
Increase (Decrease) in payable for Auction Rate Preferred share
dividends (13) (2,463) (2,535) (231)
Increase (Decrease) in payable for interest 85,628 91,815 102,527 45,713
Increase (Decrease) in accrued management fees 8,806 7,364 6,809 11,046
Increase (Decrease) in accrued other liabilities 27,998 1,271 3,604 16,314
Net realized (gain) loss from investments (81,032) (26,955) (17,339) 9,894
Change in net unrealized (appreciation) depreciation of investments (11,721,055) (5,284,917) (5,066,240) (6,524,642)
Taxes paid on undistributed capital gains (278) (162) (331) (141)
----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) operating activities 533,761 5,632,426 3,025,583 2,703,648
----------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (Decrease) in cash overdraft balance -- -- -- --
Cash distributions paid to Common shareholders (7,695,919) (3,119,123) (3,147,873) (3,932,265)
Increase (Decrease) in Auction Rate Preferred shares noticed for
redemption, at liquidation value -- -- -- --
(Increase) Decrease in deferred offering costs (794,385) (639,819) (650,309) (497,404)
Increase (Decrease) in payable for offering costs 254,775 234,400 234,400 199,676
Increase (Decrease) in MuniFund Term Preferred shares, at liquidation
value 38,775,000 26,485,000 27,300,000 20,700,000
Increase (Decrease) in Auction Rate Preferred shares, at liquidation
value (37,900,000) (25,825,000) (26,625,000) (20,175,000)
----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities (7,360,529) (2,864,542) (2,888,782) (3,704,993)
----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH (6,826,768) 2,767,884 136,801 (1,001,345)
Cash at the beginning of year 6,831,099 436,252 154,690 1,264,063
----------------------------------------------------------------------------------------------------------------------------------
CASH AT THE END OF YEAR $ 4,331 $ 3,204,136 $ 291,491 $ 262,718
==================================================================================================================================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Non-cash financing activities not included herein consist of reinvestments of
Common share distributions as follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
----------------------------------------------------------------------------------------------------------------------------------
$ 50,895 $ 41,978 $ 25,385 $ --
==================================================================================================================================
Cash paid for interest (excluding amortization of offering costs) was as
follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
----------------------------------------------------------------------------------------------------------------------------------
$ 348,461 $ 34,948 $ 33,696 $ 137,982
==================================================================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
70 Nuveen Investments
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
--------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON
SHARES FROM OPERATIONS $ 15,893,173 $ 6,067,249 $ 11,397,141
Adjustments to reconcile the net increase (decrease) in net assets applicable
to Common shares from operations to net cash provided by (used
in) operating activities:
Purchases of investments (6,822,978) (4,510,055) (8,149,684)
Proceeds from sales and maturities of investments 5,132,130 1,098,500 2,089,250
Amortization (Accretion) of premiums and discounts, net 189,631 (49,193) 57,371
(Increase) Decrease in receivable for interest (29,406) (40,205) (67,233)
(Increase) Decrease in receivable for investments sold (586,000) 95,000 (39,950)
(Increase) Decrease in other assets (4,184) 6,252 3,610
Increase (Decrease) in payable for Auction Rate Preferred share dividends (1,335) (1,342) (3,925)
Increase (Decrease) in payable for interest 71,120 53,200 100,800
Increase (Decrease) in accrued management fees 3,096 5,513 9,800
Increase (Decrease) in accrued other liabilities 22,902 7,309 11,182
Net realized (gain) loss from investments (71,327) (146) (14,297)
Change in net unrealized (appreciation) depreciation of investments (8,157,368) (3,488,158) (6,627,764)
Taxes paid on undistributed capital gains -- -- (767)
--------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) operating activities 5,639,454 (756,076) (1,234,466)
--------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (Decrease) in cash overdraft balance 895,110 -- --
Cash distributions paid to Common shareholders (6,650,812) (2,328,339) (4,336,070)
Increase (Decrease) in Auction Rate Preferred shares noticed for redemption,
at liquidation value -- (2,250,000) --
(Increase) Decrease in deferred offering costs (691,996) (524,791) (726,231)
Increase (Decrease) in payable for offering costs 243,125 235,858 248,791
Increase (Decrease) in MuniFund Term Preferred shares, at liquidation value 32,205,000 22,800,000 43,200,000
Increase (Decrease) in Auction Rate Preferred shares, at liquidation value (38,250,000) (19,500,000) (41,175,000)
--------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities (12,249,573) (1,567,272) (2,788,510)
--------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH (6,610,119) (2,323,348) (4,022,976)
Cash at the beginning of year 6,610,119 2,593,498 4,460,912
--------------------------------------------------------------------------------------------------------------------------
CASH AT THE END OF YEAR $ -- $ 270,150 $ 437,936
==========================================================================================================================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Non-cash financing activities not included herein consist of reinvestments of
Common share distributions as follows:
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
--------------------------------------------------------------------------------------------------------------------------
$ 509,839 $ 55,701 $ 144,710
==========================================================================================================================
Cash paid for interest (excluding amortization of offering costs) was as
follows:
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
--------------------------------------------------------------------------------------------------------------------------
$ 250,571 $ 296,803 $ 604,749
==========================================================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
Nuveen Investments 71
| Notes to
| Financial Statements
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The funds covered in this report and their corresponding Common share stock
exchange symbols are Nuveen 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) (collectively, the "Funds"). Common shares of
Maryland Premium Income (NMY) and Virginia Premium Income (NPV) are traded on
the New York Stock Exchange ("NYSE") 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 NYSE Amex. 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 portfolio of municipal
obligations issued by state and local government authorities within a single
state or certain U.S. territories.
In June 2009, the Financial Accounting Standards Board ("FASB") established the
FASB Accounting Standards Codification(TM) (the "Codification") as the single
source of authoritative accounting principles recognized by the FASB in the
preparation of financial statements in conformity with U.S. generally accepted
accounting principles ("GAAP"). The Codification supersedes existing
non-grandfathered, non-SEC accounting and reporting standards. The Codification
did not change GAAP but rather organized it into a hierarchy where all guidance
within the Codification carries an equal level of authority. The Codification
became effective for financial statements issued for interim and annual periods
ending after September 15, 2009. The Codification did not have a material effect
on the Funds' financial statements.
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 ("U.S. GAAP").
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 or, in the absence of a pricing service for a
particular investment, the Board of Trustees of the Fund, or its designee, may
establish fair value using a wide variety of market data including yields or
prices of investments of comparable quality, type of issue, coupon, maturity and
rating, market quotes or indications of value from security dealers, evaluations
of anticipated cash flows or collateral, general market conditions and other
information and analysis, including the obligor's credit characteristics
considered relevant. Temporary investments in securities that have variable rate
and demand features qualifying them as short-term investments are valued at
amortized cost, which approximates value.
INVESTMENT TRANSACTIONS
Investment transactions are recorded on a trade date basis. Realized gains and
losses from transactions are determined on the specific identification method.
Investments purchased on a when-issued/delayed delivery basis may have extended
settlement periods. Any investments so purchased are subject to market
fluctuation during this period. The Funds have instructed the custodian to
segregate assets with a current value at least equal to the amount of the
when-issued/delayed delivery purchase commitments. At May 31, 2010, there were
no such outstanding purchase commitments in any of the Funds.
INVESTMENT INCOME
Interest income, which includes the amortization of premiums and accretion of
discounts for financial reporting purposes, is recorded on an accrual basis.
Interest income also includes paydown gains and losses, if any.
INCOME TAXES
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund
intends to distribute substantially all of its net investment income and net
capital gains to shareholders and to otherwise comply with the requirements of
Subchapter M of the Internal Revenue Code applicable to regulated investment
companies. Therefore, no federal income tax provision is required. Furthermore,
each Fund intends to satisfy conditions that will enable interest from municipal
securities, which is exempt from regular federal and designated state income
taxes, to retain such tax-exempt status when distributed to shareholders of the
Funds. Net realized capital gains and ordinary income distributions paid by the
Funds are subject to federal taxation.
72 Nuveen Investments
For all open tax years and all major taxing jurisdictions, management of the
Funds has concluded that there are no significant uncertain tax positions that
would require recognition in the financial statements. Open tax years are those
that are open for examination by taxing authorities (i.e., generally the last
four tax year ends and the interim tax period since then). Furthermore,
management of the Funds is also not aware of any tax positions for which it is
reasonably possible that the total amounts of unrecognized tax benefits will
significantly change in the next twelve months.
DIVIDENDS AND DISTRIBUTIONS TO COMMON SHAREHOLDERS
Dividends from tax-exempt net investment income are declared monthly. Net
realized capital gains and/or market discount from investment transactions, if
any, are distributed to shareholders at least annually. Furthermore, capital
gains are distributed only to the extent they exceed available capital loss
carryforwards.
Distributions to Common shareholders of tax-exempt net investment income, net
realized capital gains and/or market discount, if any, are recorded on the
ex-dividend date. The amount and timing of distributions are determined in
accordance with federal income tax regulations, which may differ from U.S. GAAP.
AUCTION RATE PREFERRED SHARES
The following Funds have issued and outstanding Auction Rate Preferred Shares
("ARPS"), $25,000 stated value per share, which approximates market value, as a
means of effecting financial leverage. Each Fund's ARPS 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. As of May 31, 2010, the
number of ARPS outstanding, by Series and in total, for each Fund is as follows:
MARYLAND MARYLAND VIRGINIA
PREMIUM DIVIDEND PREMIUM
INCOME ADVANTAGE 3 INCOME
(NMY) (NWI) (NPV)
--------------------------------------------------------------------------------------------------
Number of shares:
Series T -- 593 333
Series W 585 -- --
Series TH 734 -- 689
--------------------------------------------------------------------------------------------------
Total 1,319 593 1,022
==================================================================================================
Beginning in February 2008, more shares for sale were submitted in the regularly
scheduled auctions for the ARPS issued by the Funds than there were offers to
buy. This meant that these auctions "failed to clear," and that many ARPS
shareholders who wanted to sell their shares in these auctions were unable to do
so. ARPS shareholders unable to sell their shares received distributions at the
"maximum rate" applicable to failed auctions as calculated in accordance with
the pre-established terms of the ARPS. As of May 31, 2010, the aggregate amount
of outstanding ARPS redeemed by each Fund is as follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
--------------------------------------------------------------------------------------------------
ARPS redeemed, at liquidation value $46,125,000 $32,000,000 $32,000,000 $24,175,000
==================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
--------------------------------------------------------------------------------------------------
ARPS redeemed, at liquidation value $38,250,000 $24,000,000 $42,000,000
==================================================================================================
MUNIFUND TERM PREFERRED SHARES
The Funds have issued and outstanding MuniFund Term Preferred ("MTP") Shares,
with a $10 stated value per share. Proceeds from the issuance of MTP Shares, net
of offering expenses, were used to redeem all, or a portion of, each Fund's
outstanding ARPS. Each Fund's MTP Shares are issued in one Series. Dividends,
which are recognized as interest expense for financial reporting purposes, are
paid monthly at a fixed annual rate, subject to adjustments in certain
circumstances. The MTP Shares trade on the NYSE. As of May 31, 2010, the number
of MTP Shares outstanding, annual interest rate and the NYSE "ticker" symbol for
each Fund are as follows:
MARYLAND PREMIUM INCOME (NMY) MARYLAND DIVIDEND ADVANTAGE (NFM)
--------------------------------- ----------------------------------
ANNUAL ANNUAL
SHARES INTEREST NYSE SHARES INTEREST NYSE
OUTSTANDING RATE TICKER OUTSTANDING RATE TICKER
--------------------------------------------------------------------------------------------------
Series 2015 3,877,500 2.65% NMY Pr C 2,648,500 2.60% NFM Pr C
==================================================================================================
Nuveen Investments 73
| Notes to
| Financial Statements (continued)
MARYLAND DIVIDEND ADVANTAGE 2 (NZR) MARYLAND DIVIDEND ADVANTAGE 3 (NWI)
----------------------------------- ------------------------------------
ANNUAL ANNUAL
SHARES INTEREST NYSE SHARES INTEREST NYSE
OUTSTANDING RATE TICKER OUTSTANDING RATE TICKER
------------------------------------------------------------------------------------------------------
Series 2015 2,730,000 2.60% NZR Pr C 2,070,000 2.65% NWI Pr C
======================================================================================================
VIRGINIA PREMIUM INCOME (NPV) VIRGINIA DIVIDEND ADVANTAGE (NGB)
----------------------------------- ------------------------------------
ANNUAL ANNUAL
SHARES INTEREST NYSE SHARES INTEREST NYSE
OUTSTANDING RATE TICKER OUTSTANDING RATE TICKER
------------------------------------------------------------------------------------------------------
Series:
2014 -- --% -- 2,280,000 2.80% NGB Pr C
2015 3,220,500 2.65 NPV Pr C -- -- --
======================================================================================================
VIRGINIA DIVIDEND ADVANTAGE 2 (NNB)
------------------------------------
ANNUAL
SHARES INTEREST NYSE
OUTSTANDING RATE TICKER
------------------------------------------------------------------------------------------------------
Series 2014 4,320,000 2.80% NNB Pr C
======================================================================================================
Each Fund is obligated to redeem its MTP Shares by the date as specified in its
offering document ("Term Redemption Date"), unless earlier redeemed or
repurchased by the Fund. MTP Shares are subject to optional and mandatory
redemption in certain circumstances. MTP Shares will be subject to redemption at
the option of each Fund ("Optional Redemption Date"), subject to a payment of
premium for one year following the Optional Redemption Date ("Premium Expiration
Date"), and at par thereafter. MTP Shares also will be subject to redemption, at
the option of each Fund, at par in the event of certain changes in the credit
rating of the MTP Shares. Each Fund may be obligated to redeem certain of the
MTP Shares if the Fund fails to maintain certain asset coverage and leverage
ratio requirements and such failures are not cured by the applicable cure date.
The redemption price per share is equal to the sum of the liquidation value per
share plus any accumulated but unpaid dividends. The Term Redemption Date,
Optional Redemption Date and Premium Expiration Date for each Fund's MTP Shares
are as follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
SERIES 2015 SERIES 2015 SERIES 2015 SERIES 2015
------------------------------------------------------------------------------------------------------
Term Redemption Date February 1, 2015 May 1, 2015 May 1, 2015 March 1, 2015
Optional Redemption Date February 1, 2011 May 1, 2011 May 1, 2011 March 1, 2011
Premium Expiration Date January 31, 2012 April 30, 2012 April 30, 2012 February 29, 2012
======================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
SERIES 2015 SERIES 2014 SERIES 2014
------------------------------------------------------------------------------------------------------
Term Redemption Date February 1, 2015 December 1, 2014 December 1, 2014
Optional Redemption Date February 1, 2011 December 1, 2010 December 1, 2010
Premium Expiration Date January 31, 2012 November 30, 2011 November 30, 2011
======================================================================================================
The average liquidation value of MTP Shares outstanding for each Fund during the
fiscal year ended May 31, 2010, was as follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY)* (NFM)** (NZR)*** (NWI)****
------------------------------------------------------------------------------------------------------------------------
Average liquidation value of MTP Shares outstanding $38,551,423 $26,485,000 $27,300,000 $20,341,837
========================================================================================================================
* For the period January 29, 2010 (first issuance date of shares) through
May 31, 2010.
** For the period April 13, 2010 (first issuance date of shares) through May
31, 2010.
*** For the period April 9, 2010 (first issuance date of shares) through May
31, 2010.
**** For the period February 23, 2010 (first issuance date of shares) through
May 31, 2010.
74 Nuveen Investments
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV)***** (NGB)****** (NNB)*******
-----------------------------------------------------------------------------------------------------------------
Average liquidation value of MTP Shares outstanding $32,133,571 $22,703,077 $42,786,603
=================================================================================================================
***** For the period January 26, 2010 (first issuance date of shares) through
May 31, 2010.
****** For the period November 18, 2009 (first issuance date of shares) through
May 31, 2010.
******* For the period November 4, 2009 (first issuance date of shares) through
May 31, 2010.
For financial reporting purposes only, the liquidation value of MTP Shares is
recorded as a liability on the Statement of Assets and Liabilities. Unpaid
dividends on MTP Shares are recognized as "Interest payable" on the Statement of
Assets and Liabilities. Dividends paid on MTP Shares are recognized as a
component of "Interest expense and amortization of offering costs" on the
Statement of Operations.
Net amounts earned by Nuveen Investments, Inc. ("Nuveen") as underwriter of each
Fund's MTP Share offering were recorded as reductions of offering costs
recognized by the Funds. For the fiscal year ended May 31, 2010, the net amounts
earned by Nuveen for each Fund were as follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
------------------------------------------------------------------------------------------------------------------
Net amounts earned by Nuveen $2,336 $ -- $ -- $1,069
==================================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
------------------------------------------------------------------------------------------------------------------
Net amounts earned by Nuveen $1,707 $109 $1,166
==================================================================================================================
INVERSE FLOATING RATE SECURITIES
Each Fund is authorized to invest in inverse floating rate securities. An
inverse floating rate security is created by depositing a municipal bond,
typically with a fixed interest rate, into a special purpose trust created by a
broker-dealer. In turn, this trust (a) issues floating rate certificates, in
face amounts equal to some fraction of the deposited bond's par amount or market
value, that typically pay short-term tax-exempt interest rates to third parties,
and (b) issues to a long-term investor (such as one of the Funds) an inverse
floating rate certificate (sometimes referred to as an "inverse floater") that
represents all remaining or residual interest in the trust. The income received
by the inverse floater holder varies inversely with the short-term rate paid to
the floating rate certificates' holders, and in most circumstances the inverse
floater holder bears substantially all of the underlying bond's downside
investment risk and also benefits disproportionately from any potential
appreciation of the underlying bond's value. The price of an inverse floating
rate security will be more volatile than that of the underlying bond because the
interest rate is dependent on not only the fixed coupon rate of the underlying
bond but also on the short-term interest paid on the floating rate certificates,
and because the inverse floating rate security essentially bears the risk of
loss of the greater face value of the underlying bond.
A Fund may purchase an inverse floating rate security in a secondary market
transaction without first owning the underlying bond (referred to as an
"externally-deposited inverse floater"), or instead by first selling a
fixed-rate bond to a broker-dealer for deposit into the special purpose trust
and receiving in turn the residual interest in the trust (referred to as a
"self-deposited inverse floater"). 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 "(IF) - Inverse floating rate investment." An investment in a
self-deposited inverse floater is accounted for as a financing transaction. In
such instances, a fixed-rate bond deposited into a special purpose trust is
identified in the Portfolio of Investments as "(UB) - Underlying bond of an
inverse floating rate trust reflected as a financing transaction," 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 recognizes the related interest paid to the holders of the
short-term floating rate certificates as a component of "Interest expense and
amortization of offering costs" on the Statement of Operations.
Nuveen Investments 75
| Notes to
| Financial Statements (continued)
During the fiscal year ended May 31, 2010, each Fund invested in
externally-deposited inverse floaters and/or self-deposited inverse floaters.
Each Fund may also enter into shortfall and forbearance agreements (sometimes
referred to as a "recourse trust" or "credit recovery swap") (such agreements
referred to herein as "Recourse Trusts") with a broker-dealer by which a Fund
agrees to reimburse the broker-dealer, in certain circumstances, for the
difference between the liquidation value of the fixed-rate bond held by the
trust and the liquidation value of the floating rate certificates issued by the
trust plus any shortfalls in interest cash flows. Under these agreements, a
Fund's potential exposure to losses related to or on inverse floaters may
increase beyond the value of a Fund's inverse floater investments as a Fund may
potentially be liable to fulfill all amounts owed to holders of the floating
rate certificates. At period end, any such shortfall is included as "Unrealized
depreciation on Recourse Trusts" on the Statement of Assets and Liabilities.
At May 31, 2010, each Fund's maximum exposure to externally-deposited Recourse
Trusts is as follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
------------------------------------------------------------------------------------------------------------------------------------
Maximum exposure to Recourse Trusts $ -- $ -- $ -- $ --
====================================================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
------------------------------------------------------------------------------------------------------------------------------------
Maximum exposure to Recourse Trusts $6,810,000 $2,255,000 $4,265,000
====================================================================================================================================
The average floating rate obligations outstanding and average annual interest
rate and fees related to self-deposited inverse floaters during the fiscal year
ended May 31, 2010, 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 outstanding $9,962,000 $3,973,000 $3,840,000 $4,255,000
Average annual interest rate and fees 0.88% 0.88% 0.88% 0.87%
====================================================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
------------------------------------------------------------------------------------------------------------------------------------
Average floating rate obligations outstanding $4,630,000 $1,640,000 $2,980,000
Average annual interest rate and fees 0.56% 0.56% 0.56%
====================================================================================================================================
DERIVATIVE FINANCIAL INSTRUMENTS
Each Fund is authorized to invest in certain derivative instruments, including
foreign currency forwards, futures, options and swap contracts. Although each
Fund is authorized to invest in such derivative instruments, and may do so in
the future, they did make any such investments during the fiscal year ended May
31, 2010.
MARKET AND COUNTERPARTY CREDIT RISK
In the normal course of business each Fund may invest in financial instruments
and enter into financial transactions where risk of potential loss exists due to
changes in the market (market risk) or failure of the other party to the
transaction to perform (counterparty credit risk). The potential loss could
exceed the value of the financial assets recorded on the financial statements.
Financial assets, which potentially expose each Fund to counterparty credit
risk, consist principally of cash due from counterparties on forward, option and
swap transactions, when applicable. The extent of each Fund's exposure to
counterparty credit risk in respect to these financial assets approximates their
carrying value as recorded on the Statement of Assets and Liabilities. Futures
contracts, when applicable, expose a Fund to minimal counterparty credit risk as
they are exchange traded and the exchange's clearinghouse, which is counterparty
to all exchange traded futures, guarantees the futures contracts against
default.
Each Fund helps manage counterparty credit risk by entering into agreements only
with counterparties Nuveen Asset Management (the "Adviser"), a wholly-owned
subsidiary of Nuveen, believes have the financial resources to honor their
obligations and by having the Adviser monitor the financial stability of the
counterparties. Additionally, counterparties may be required to pledge
collateral daily (based on the daily valuation of the financial asset) on behalf
of each Fund with a value approximately equal to the amount of any unrealized
gain above a pre-determined threshold. Reciprocally, when each Fund has an
unrealized loss, 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 valuations fluctuate, either
up or down, by at least the predetermined threshold amount.
76 Nuveen Investments
ZERO COUPON SECURITIES
Each Fund is authorized to invest in zero coupon securities. A zero coupon
security does not pay a regular interest coupon to its holders during the life
of the security. Tax-exempt income to the holder of the security comes from
accretion of the difference between the original purchase price of the security
at issuance and the par value of the security at maturity and is effectively
paid at maturity. The market prices of zero coupon securities generally are more
volatile than the market prices of securities that pay interest periodically.
OFFERING COSTS
Costs incurred by the Funds in connection with their offerings of MTP Shares
were recorded as a deferred charge which will be amortized over the 5-year life
of the shares. Each Fund's amortized deferred charges are recognized as a
component of "Interest expense and amortization of offering costs" on the
Statement of Operations. Each Fund's offering costs incurred were as follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
------------------------------------------------------------------------------------------------------------------------------------
MTP Shares offering costs $849,289 $657,275 $669,500 $524,431
====================================================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
------------------------------------------------------------------------------------------------------------------------------------
MTP Shares offering costs $741,368 $586,891 $736,334
====================================================================================================================================
CUSTODIAN FEE CREDIT
Each Fund has an arrangement with the custodian bank whereby certain custodian
fees and expenses are reduced by net credits earned on each Fund's cash on
deposit with the bank. Such deposit arrangements are an alternative to overnight
investments. Credits for cash balances may be offset by charges for any days on
which a Fund overdraws its account at the custodian bank.
INDEMNIFICATIONS
Under the Funds' organizational documents, their officers and trustees are
indemnified against certain liabilities arising out of the performance of their
duties to the Funds. In addition, in the normal course of business, the Funds
enter into contracts that provide general indemnifications to other parties. The
Funds' maximum exposure under these arrangements is unknown as this would
involve future claims that may be made against the Funds that have not yet
occurred. However, the Funds have not had prior claims or losses pursuant to
these contracts and expect the risk of loss to be remote.
USE OF ESTIMATES
The preparation of financial statements in conformity with U.S. GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of increases and decreases in net assets applicable to Common shares
from operations during the reporting period. Actual results may differ from
those estimates.
2. FAIR VALUE MEASUREMENTS
In determining the value of each Fund's investments, various inputs are used.
These inputs are summarized in the three broad levels listed below:
Level 1 - Quoted prices in active markets for identical securities.
Level 2 - Other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3 - Significant unobservable inputs (including management's
assumptions in determining the fair value of investments).
The inputs or methodologies used for valuing securities are not an indication of
the risk associated with investing in those securities. The following is a
summary of each Fund's fair value measurements as of May 31, 2010:
MARYLAND PREMIUM INCOME (NMY) LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
------------------------------------------------------------------------------------------------------------------------------------
Investments:
Municipal Bonds $-- $234,458,701 $532,963 $234,991,664
====================================================================================================================================
MARYLAND DIVIDEND ADVANTAGE (NFM) LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
------------------------------------------------------------------------------------------------------------------------------------
Investments:
Municipal Bonds $-- $85,417,806 $484,610 $85,902,416
====================================================================================================================================
MARYLAND DIVIDEND ADVANTAGE 2 (NZR) LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
------------------------------------------------------------------------------------------------------------------------------------
Investments:
Municipal Bonds $-- $89,411,735 $484,610 $89,896,345
====================================================================================================================================
Nuveen Investments 77
| Notes to
| Financial Statements (continued)
MARYLAND DIVIDEND ADVANTAGE 3 (NWI) LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
------------------------------------------------------------------------------------------------------------------------------------
Investments:
Municipal Bonds $-- $115,427,506 $623,070 $116,050,576
====================================================================================================================================
VIRGINIA PREMIUM INCOME (NPV) LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
------------------------------------------------------------------------------------------------------------------------------------
Investments:
Municipal Bonds $-- $191,723,937 $-- $191,723,937
====================================================================================================================================
VIRGINIA DIVIDEND ADVANTAGE (NGB) LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
------------------------------------------------------------------------------------------------------------------------------------
Investments:
Municipal Bonds $-- $67,751,450 $-- $67,751,450
====================================================================================================================================
VIRGINIA DIVIDEND ADVANTAGE 2 (NNB) LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
------------------------------------------------------------------------------------------------------------------------------------
Investments:
Municipal Bonds $-- $127,535,136 $-- $127,535,136
====================================================================================================================================
The following is a reconciliation of each Fund's Level 3 investments held at the
beginning and end of the measurement period:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
LEVEL 3 LEVEL 3 LEVEL 3 LEVEL 3
INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS
------------------------------------------------------------------------------------------------------------------------------------
Balance at the beginning of year $ -- $ -- $ -- $ --
Gains (losses):
Net realized gains (losses) -- -- -- --
Net change in unrealized appreciation (depreciation) -- -- -- --
Net purchases at cost (sales at proceeds) -- -- -- --
Net discounts (premiums) -- -- -- --
Net transfers in to (out of) at end of period fair value 532,963 484,610 484,610 623,070
------------------------------------------------------------------------------------------------------------------------------------
Balance at the end of year $532,963 $484,610 $484,610 $623,070
====================================================================================================================================
"Change in net unrealized appreciation (depreciation) of investments" presented
on the Statement of Operations includes net unrealized appreciation
(depreciation) related to securities classified as Level 3 at year end as
follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
------------------------------------------------------------------------------------------------------------------------------------
Level 3 net appreciation (depreciation) $33,626 $42,179 $42,179 $54,230
====================================================================================================================================
3. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
The Funds record derivative instruments at fair value with changes in fair value
recognized on the Statement of Operations, when applicable. Even though the
Funds' investments in derivatives may represent economic hedges, they are not
considered to be hedge transactions for financial reporting purposes. The Funds
did not invest in derivative instruments during the fiscal year ended May 31,
2010.
4. FUND SHARES
COMMON SHARES
Since the inception of the Funds' repurchase program, the Funds have not
repurchased any of their outstanding Common Shares.
Transactions in Common shares were as follows:
MARYLAND PREMIUM MARYLAND DIVIDEND MARYLAND DIVIDEND
INCOME (NMY) ADVANTAGE (NFM) ADVANTAGE 2 (NZR)
----------------------- -------------------------- ---------------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
5/31/10 5/31/09 5/31/10 5/31/09 5/31/10 5/31/09
------------------------------------------------------------------------------------------------------------------------------------
Common shares issued to shareholders due to
reinvestment of distributions 3,548 -- 3,167 5,006 1,829 2,892
====================================================================================================================================
78 Nuveen Investments
MARYLAND DIVIDEND VIRGINIA PREMIUM VIRGINIA DIVIDEND
ADVANTAGE 3 (NWI) INCOME (NPV) ADVANTAGE (NGB)
----------------------- -------------------------- ---------------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
5/31/10 5/31/09 5/31/10 5/31/09 5/31/10 5/31/09
------------------------------------------------------------------------------------------------------------------------------------
Common shares issued to shareholders due to
reinvestment of distributions -- -- 35,258 13,477 3,987 2,924
====================================================================================================================================
VIRGINIA DIVIDEND
ADVANTAGE 2 (NNB)
---------------------------
YEAR YEAR
ENDED ENDED
5/31/10 5/31/09
------------------------------------------------------------------------------------------------------------------------------------
Common shares issued to shareholders due to
reinvestment of distributions 10,255 9,369
====================================================================================================================================
PREFERRED SHARES
Transactions in ARPS were as follows:
MARYLAND MARYLAND
PREMIUM INCOME (NMY) DIVIDEND ADVANTAGE (NFM)
----------------------------------------------- -----------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
5/31/10 5/31/09 5/31/10 5/31/09
-------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------------------------------------------------------------------------------
ARPS redeemed and/or
noticed for redemption:
Series M -- $ -- -- $ -- 1,033 $ 25,825,000 247 $ 6,175,000
Series W 673 16,825,000 146 3,650,000 -- -- -- --
Series TH 843 21,075,000 183 4,575,000 -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 1,516 $37,900,000 329 $ 8,225,000 1,033 $ 25,825,000 247 $ 6,175,000
====================================================================================================================================
MARYLAND MARYLAND
DIVIDEND ADVANTAGE 2 (NZR) DIVIDEND ADVANTAGE 3 (NWI)
----------------------------------------------- -----------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
5/31/10 5/31/09 5/31/10 5/31/09
-------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------------------------------------------------------------------------------
ARPS redeemed and/or
noticed for redemption:
Series T -- $ -- -- $ -- 807 $ 20,175,000 160 $ 4,000,000
Series F 1,065 26,625,000 215 5,375,000 -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 1,065 $26,625,000 215 $ 5,375,000 807 $ 20,175,000 160 $ 4,000,000
====================================================================================================================================
VIRGINIA VIRGINIA
PREMIUM INCOME (NPV) DIVIDEND ADVANTAGE (NGB)
----------------------------------------------- -----------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
5/31/10 5/31/09 5/31/10 5/31/09
-------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------------------------------------------------------------------------------
ARPS redeemed and/or
noticed for redemption:
Series T 499 $12,475,000 -- $ -- -- $ -- -- $ --
Series W -- -- -- -- 780 19,500,000 180 4,500,000
Series TH 1,031 25,775,000 -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 1,530 $38,250,000 -- $ -- 780 $ 19,500,000 180 $ 4,500,000
====================================================================================================================================
Nuveen Investments 79
| Notes to
| Financial Statements (continued)
VIRGINIA
DIVIDEND ADVANTAGE 2 (NNB)
--------------------------------------------
YEAR YEAR
ENDED ENDED
5/31/10 5/31/09
--------------------------------------------
SHARES AMOUNT SHARES AMOUNT
--------------------------------------------------------------------------------------------------------------------------------
ARPS redeemed and/or noticed
for redemption:
Series M 1,647 $41,175,000 33 $825,000
================================================================================================================================
Transactions in MTP shares were as follows:
MARYLAND MARYLAND
PREMIUM INCOME (NMY) DIVIDEND ADVANTAGE (NFM)
------------------------------------------ --------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
5/31/10 5/31/09 5/31/10 5/31/09
-----------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
--------------------------------------------------------------------------------------------------------------------------------
MTP Shares issued:
Series 2015 3,877,500 $38,775,000 -- -- 2,648,500 $26,485,000 -- --
================================================================================================================================
MARYLAND MARYLAND
DIVIDEND ADVANTAGE 2 (NZR) DIVIDEND ADVANTAGE 3 (NWI)
------------------------------------------ --------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
5/31/10 5/31/09 5/31/10 5/31/09
-----------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
--------------------------------------------------------------------------------------------------------------------------------
MTP Shares issued:
Series 2015 2,730,000 $27,300,000 -- -- 2,070,000 $20,700,000 -- --
================================================================================================================================
VIRGINIA
PREMIUM INCOME (NPV)
--------------------------------------------
YEAR YEAR
ENDED ENDED
5/31/10 5/31/09
--------------------------------------------
SHARES AMOUNT SHARES AMOUNT
--------------------------------------------------------------------------------------------------------------------------------
MTP Shares issued:
Series 2015 3,220,500 $32,205,000 -- --
================================================================================================================================
VIRGINIA VIRGINIA
DIVIDEND ADVANTAGE (NGB) DIVIDEND ADVANTAGE 2 (NNB)
------------------------------------------ --------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
5/31/10 5/31/09 5/31/10 5/31/09
-----------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
--------------------------------------------------------------------------------------------------------------------------------
MTP Shares issued:
Series 2014 2,280,000 $22,800,000 -- -- 4,320,000 $43,200,000 -- --
================================================================================================================================
5. INVESTMENT TRANSACTIONS
Purchases and sales (including maturities but excluding short-term investments)
during the fiscal year ended May 31, 2010, were as follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
---------------------------------------------------------------------------------------------------------------------------------
Purchases $15,391,910 $3,446,319 $ 2,083,423 $ 2,515,457
Sales and maturities 4,364,000 4,889,650 1,329,500 468,000
=================================================================================================================================
80 Nuveen Investments
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
---------------------------------------------------------------------------------------------------------------------------------
Purchases $6,822,978 $4,510,055 $8,149,684
Sales and maturities 5,132,130 1,098,500 2,089,250
=================================================================================================================================
6. INCOME TAX INFORMATION
The following information is presented on an income tax basis. Differences
between amounts for financial statement and federal income tax purposes are
primarily due to timing differences in recognizing taxable market discount,
timing differences in recognizing certain gains and losses on investment
transactions and the treatment of investments in inverse floating rate
securities reflected as financing transactions, if any. To the extent that
differences arise that are permanent in nature, such amounts are reclassified
within the capital accounts as detailed below. Temporary differences do not
require reclassification. Temporary and permanent differences do not impact the
net asset values of the Funds.
At May 31, 2010, the cost and unrealized appreciation (depreciation) of
investments as determined on a federal income tax basis, were as follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
---------------------------------------------------------------------------------------------------------------------------------
Cost of investments $217,023,979 $ 81,247,992 $85,010,967 $109,482,828
---------------------------------------------------------------------------------------------------------------------------------
Gross unrealized:
Appreciation $ 12,851,251 $ 3,015,747 $ 3,503,967 $ 4,888,916
Depreciation (4,845,863) (2,334,609) (2,458,590) (2,576,425)
---------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments $ 8,005,388 $ 681,138 $ 1,045,377 $ 2,312,491
=================================================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
---------------------------------------------------------------------------------------------------------------------------------
Cost of investments $182,844,400 $65,968,138 $122,424,107
---------------------------------------------------------------------------------------------------------------------------------
Gross unrealized:
Appreciation $ 8,416,211 $ 2,302,591 $ 5,611,350
Depreciation (4,167,115) (2,158,838) (3,480,321)
---------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments $ 4,249,096 $ 143,753 $ 2,131,029
=================================================================================================================================
Permanent differences, primarily due to federal taxes paid, taxable market
discount and distribution character reclassifications, resulted in
reclassifications among the Funds' components of Common share net assets at May
31, 2010, the Funds' tax year end, as follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
---------------------------------------------------------------------------------------------------------------------------------
Paid-in-surplus $(55,663) $(16,539) $(17,318) $(27,295)
Undistributed (Over-distribution of) net investment income 55,385 16,377 16,950 27,154
Accumulated net realized gain (loss) 278 162 368 141
=================================================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
---------------------------------------------------------------------------------------------------------------------------------
Paid-in-surplus $(51,079) $(62,210) $ (88,172)
Undistributed (Over-distribution of) net investment income 51,079 62,210 87,399
Accumulated net realized gain (loss) -- -- 773
=================================================================================================================================
Nuveen Investments 81
| Notes to
| Financial Statements (continued)
The tax components of undistributed net tax-exempt income, net ordinary income
and net long-term capital gains at May 31, 2010, the Funds' 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 * $2,722,629 $1,035,434 $1,044,375 $1,242,347
Undistributed net ordinary income ** 4,946 -- -- 931
Undistributed net long-term capital gains -- -- -- --
=================================================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
---------------------------------------------------------------------------------------------------------------------------------
Undistributed net tax-exempt income * $2,226,953 $ 746,121 $1,165,996
Undistributed net ordinary income ** 1,269 94 1,025
Undistributed net long-term capital gains -- -- --
=================================================================================================================================
* Undistributed net tax-exempt income (on a tax basis) has not been reduced
for the dividend declared on May 3, 2010, paid on June 1, 2010.
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
The tax character of distributions paid during the Funds' tax years ended May
31, 2010 and May 31, 2009, 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
2010 (NMY) (NFM) (NZR) (NWI)
---------------------------------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt income *** $8,270,687 $3,267,495 $3,279,991 $4,168,021
Distributions from net ordinary income ** -- -- -- --
Distributions from net long-term capital gains **** -- -- -- --
=================================================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
2010 (NPV) (NGB) (NNB)
---------------------------------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt income *** $7,324,752 $2,722,885 $5,136,012
Distributions from net ordinary income ** 294,161 -- 21,344
Distributions from net long-term capital gains **** -- -- --
=================================================================================================================================
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
2009 (NMY) (NFM) (NZR) (NWI)
---------------------------------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt income $8,324,864 $3,659,376 $3,640,847 $4,289,441
Distributions from net ordinary income ** 77,563 -- 70,350 237
Distributions from net long-term capital gains 320,091 -- 125,548 122,752
=================================================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
2009 (NPV) (NGB) (NNB)
---------------------------------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt income $7,136,962 $2,687,055 $5,042,415
Distributions from net ordinary income ** 109,247 -- 18,305
Distributions from net long-term capital gains 465,316 54,457 55,824
=================================================================================================================================
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
*** The Funds hereby designate these amounts paid during the fiscal year ended
May 31, 2010, as Exempt Interest Dividends.
**** The Funds designate as a long-term capital gain dividend, pursuant to the
Internal Revenue Code Section 852(b)(3), the amount necessary to reduce
earnings and profits of the Funds related to net capital gain to zero for
the tax year ended May 31, 2010.
82 Nuveen Investments
At May 31, 2010, the Funds' tax year end, the Funds had unused capital loss
carryforwards available for federal income tax purposes to be applied against
future capital gains, if any. If not applied, the carryforwards will expire as
follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
---------------------------------------------------------------------------------------------------------------------------------
Expiration:
May 31, 2012 $ -- $ 78,935 $ -- $ --
May 31, 2013 -- 15,613 -- --
May 31, 2014 -- 62,054 -- --
May 31, 2017 637,381 419,436 541,561 641,931
May 31, 2018 -- -- -- 9,753
---------------------------------------------------------------------------------------------------------------------------------
Total $637,381 $576,038 $541,561 $651,684
=================================================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
---------------------------------------------------------------------------------------------------------------------------------
Expiration:
May 31, 2012 $ -- $ -- $ --
May 31, 2013 -- -- --
May 31, 2014 -- -- --
May 31, 2017 14,953 167,151 118,100
May 31, 2018 -- 360,046 532,686
---------------------------------------------------------------------------------------------------------------------------------
Total $ 14,953 $527,197 $650,786
=================================================================================================================================
During the tax year ended May 31, 2010, the following Funds utilized capital
loss carryforwards as follows:
MARYLAND MARYLAND MARYLAND VIRGINIA
PREMIUM DIVIDEND DIVIDEND PREMIUM
INCOME ADVANTAGE ADVANTAGE 2 INCOME
(NMY) (NFM) (NZR) (NPV)
---------------------------------------------------------------------------------------------------------------------------------
$81,310 $27,117 $17,707 $71,326
=================================================================================================================================
7. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Each Fund's management fee is separated into two components - a fund-level fee,
based only on the amount of assets within each individual Fund, and a
complex-level fee, based on the aggregate amount of all fund assets managed by
the Adviser. This pricing structure enables each Fund's shareholders to benefit
from growth in the assets within their respective Fund as well as from growth in
the amount of complex-wide assets managed by the Adviser.
The annual fund-level fee for each Fund, payable monthly, is calculated
according to the following schedule:
MARYLAND PREMIUM INCOME (NMY)
VIRGINIA PREMIUM INCOME (NPV)
AVERAGE DAILY NET ASSETS* 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
================================================================================
Nuveen Investments 83
| Notes to
| Financial Statements (continued)
MARYLAND DIVIDEND ADVANTAGE (NFM)
MARYLAND DIVIDEND ADVANTAGE 2 (NZR)
MARYLAND DIVIDEND ADVANTAGE 3 (NWI)
VIRGINIA DIVIDEND ADVANTAGE (NGB)
VIRGINIA DIVIDEND ADVANTAGE 2 (NNB)
AVERAGE DAILY NET ASSETS* 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 for each Fund, payable monthly, is calculated according
to the following schedule:
EFFECTIVE RATE AT
COMPLEX-LEVEL MANAGED NET ASSET BREAKPOINT LEVEL* BREAKPOINT LEVEL
--------------------------------------------------------------------------------
$55 billion .2000%
$56 billion .1996
$57 billion .1989
$60 billion .1961
$63 billion .1931
$66 billion .1900
$71 billion .1851
$76 billion .1806
$80 billion .1773
$91 billion .1691
$125 billion .1599
$200 billion .1505
$250 billion .1469
$300 billion .1445
================================================================================
* The complex-level fee is calculated based upon the aggregate daily managed
assets of all Nuveen funds, with such daily managed assets defined
separately for each fund in its management agreement, but excluding assets
attributable to investments in other Nuveen funds. For the complex-level
and fund-level fees, daily net assets and managed assets include
closed-end fund assets managed by the Adviser that are attributable to
financial leverage. For these purposes, financial leverage includes the
funds' use of preferred stock and borrowings and certain investments in
the residual interest certificates (also called inverse floating rate
securities) in tender option bond (TOB) trusts, including the portion of
assets held by a TOB trust that has been effectively financed by the
trust's issuance of floating rate securities, subject to an agreement by
the Adviser to limit the amount of such assets for determining managed
assets in certain circumstances. As of May 31, 2010, the complex-level fee
rate was .1855%.
The management fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Funds pay no
compensation directly to those of its trustees who are affiliated with the
Adviser or to its officers, all of whom receive remuneration for their services
to the Funds from the Adviser or its affiliates. The Board of Trustees has
adopted a deferred compensation plan for independent trustees that enables
trustees to elect to defer receipt of all or a portion of the annual
compensation they are entitled to receive from certain Nuveen advised funds.
Under the plan, deferred amounts are treated as though equal dollar amounts had
been invested in shares of select Nuveen advised funds.
For the first ten years of 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, 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.
84 Nuveen Investments
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, 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, 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.
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, 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.
8. NEW ACCOUNTING STANDARDS
FAIR VALUE MEASUREMENTS
On January 21, 2010, FASB issued changes to the authoritative guidance under
U.S. GAAP for fair value measurements. The objective of this guidance is to
provide guidance on how investment assets and liabilities are to be valued and
disclosed. Specifically, the amendment requires reporting entities to disclose
i) the input and valuation techniques used to measure fair value for both
recurring and nonrecurring fair value measurements, for both Level 2 and Level 3
positions, ii) transfers between all levels (including Level 1 and Level 2) on a
gross basis (i.e., transfers out must be disclosed separately from transfers in)
as well as the reason(s) for the transfer and iii) purchases, sales, issuances
and settlements in the Level 3 rollforward must be shown on a gross basis rather
than as one net number. The effective date of the amendment is for interim and
annual periods beginning after December 15, 2009, however, the requirement to
provide the Level 3 activity for purchases, sales, issuances and settlements on
a gross basis will be effective for interim and annual periods beginning after
December 15, 2010. At this time, management is evaluating the implications of
this guidance and the impact it will have to the financial statement amounts and
footnote disclosures, if any.
Nuveen Investments 85
| Financial
| Highlights
Selected data for a Common share outstanding throughout each period:
INVESTMENT OPERATIONS LESS DISTRIBUTIONS
---------------------------------------------------------------- ---------------------------
DISTRIBUTIONS DISTRIBUTIONS
FROM NET FROM
INVESTMENT CAPITAL NET
BEGINNING INCOME TO GAINS TO INVESTMENT CAPITAL ENDING
COMMON NET AUCTION RATE AUCTION RATE INCOME TO GAINS TO COMMON
SHARE NET REALIZED/ PREFERRED PREFERRED COMMON COMMON SHARE ENDING
NET ASSET INVESTMENT UNREALIZED SHARE- SHARE- SHARE- SHARE- NET ASSET MARKET
VALUE INCOME GAIN (LOSS) HOLDERS(a) HOLDERS(a) TOTAL HOLDERS HOLDERS TOTAL VALUE VALUE
====================================================================================================================================
MARYLAND PREMIUM INCOME (NMY)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2010 $13.58 $.84 $1.10 $(.02) $ -- $1.92 $(.73) $ -- $(.73) $14.77 $14.43
2009 14.19 .89 (.67) (.16) (.01) .05 (.63) (.03) (.66) 13.58 12.68
2008 14.57 .88 (.41) (.24) -- .23 (.61) -- (.61) 14.19 13.10
2007 14.47 .88 .12 (.23) -- .77 (.67) -- (.67) 14.57 14.84
2006 15.12 .89 (.56) (.18) -- .15 (.78) (.02) (.80) 14.47 14.52
MARYLAND DIVIDEND ADVANTAGE (NFM)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2010 13.01 .89 1.26 (.02) -- 2.13 (.76) -- (.76) 14.38 14.30
2009 14.12 .95 (1.19) (.17) -- (.41) (.70) -- (.70) 13.01 13.05
2008 14.65 .95 (.54) (.24) -- .17 (.70) -- (.70) 14.12 14.19
2007 14.57 .95 .12 (.24) -- .83 (.75) -- (.75) 14.65 15.28
2006 15.13 .95 (.47) (.19) -- .29 (.85) -- (.85) 14.57 15.19
====================================================================================================================================
AUCTION RATE PREFERRED
SHARES AND MUNIFUND
AUCTION RATE PREFERRED SHARES MUNIFUND TERM PREFERRED SHARES TERM PREFERRED SHARES
AT END OF PERIOD AT END OF PERIOD AT END OF PERIOD
----------------------------------- ----------------------------------------------------------- -----------------------
AGGREGATE AGGREGATE ENDING AVERAGE
AMOUNT LIQUIDATION ASSET AMOUNT LIQUIDATION MARKET MARKET ASSET
OUTSTANDING VALUE COVERAGE OUTSTANDING VALUE VALUE VALUE COVERAGE ASSET COVERAGE PER $1
(000) PER SHARE PER SHARE (000) PER SHARE PER SHARE PER SHARE PER SHARE LIQUIDATION PREFERENCE
====================================================================================================================================
MARYLAND PREMIUM INCOME (NMY)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2010 $32,975 $25,000 $79,788 $38,775 $10.00 $10.00 $10.01* $31.92 $3.19
2009 70,875 25,000 75,972 -- -- -- -- -- --
2008 79,100 25,000 72,722 -- -- -- -- -- --
2007 79,100 25,000 73,990 -- -- -- -- -- --
2006 79,100 25,000 73,620 -- -- -- -- -- --
MARYLAND DIVIDEND ADVANTAGE (NFM)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2010 -- -- -- 26,485 10.00 10.01 10.01** 32.77 --
2009 25,825 25,000 77,766 -- -- -- -- -- --
2008 32,000 25,000 71,172 -- -- -- -- -- --
2007 32,000 25,000 72,860 -- -- -- -- -- --
2006 32,000 25,000 72,470 -- -- -- -- -- --
====================================================================================================================================
86 Nuveen Investments
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS RATIOS TO AVERAGE NET ASSETS
APPLICABLE TO COMMON SHARES APPLICABLE TO COMMON SHARES
TOTAL RETURNS BEFORE REIMBURSEMENT(c) AFTER REIMBURSEMENT(c)(d)
------------------- ---------------------------------- ----------------------------------
BASED ENDING
ON NET
BASED COMMON ASSETS
ON SHARE NET APPLICABLE EXPENSES EXPENSES NET EXPENSES EXPENSES NET PORTFOLIO
MARKET ASSET TO COMMON INCLUDING EXCLUDING INVESTMENT INCLUDING EXCLUDING INVESTMENT TURNOVER
VALUE(b) VALUE(b) SHARES (000) INTEREST(e) INTEREST INCOME INTEREST(e) INTEREST INCOME RATE
====================================================================================================================================
MARYLAND PREMIUM INCOME (NMY)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2010 19.89% 14.44% $157,243 1.49% 1.20% 5.88% N/A% N/A% N/A% 2%
2009 2.57 .66 144,504 1.35 1.30 6.80 N/A N/A N/A 5
2008 (7.55) 1.63 150,994 1.25 1.24 6.13 N/A N/A N/A 14
2007 6.96 5.35 155,004 1.27 1.23 5.95 N/A N/A N/A 13
2016 (2.94) 1.08 153,834 1.23 1.23 6.05 N/A N/A N/A 13
MARYLAND DIVIDEND ADVANTAGE
------------------------------------------------------------------------------------------------------------------------------------
(NFM) Year Ended 5/31:
2010 15.78 16.68 60,308 1.43 1.21 6.27 1.31 1.09 6.39 4
2009 (2.48) (2.52) 54,507 1.42 1.36 7.37 1.20 1.15 7.59 5
2008 (2.31) 1.25 59,100 1.30 1.28 6.39 1.01 1.00 6.67 12
2007 5.51 5.74 61,261 1.30 1.26 6.06 .95 .91 6.41 12
2006 2.51 1.95 60,762 1.26 1.26 5.99 .83 .83 6.42 14
====================================================================================================================================
(a) The amounts shown are based on Common share equivalents.
(b) Total Return Based on Market Value is the combination of changes in the
market price per share and the effect of reinvested dividend income and
reinvested capital gains distributions, if any, at the average price paid
per share at the time of reinvestment. The last dividend declared in the
period, which is typically paid on the first business day of the following
month, is assumed to be reinvested at the ending market price. The actual
reinvestment for the last dividend declared in the period may take place
over several days, and in some instances may not be based on the market
price, so the actual reinvestment price may be different from the price
used in the calculation. Total returns are not annualized. Total Return
Based on Common Share Net Asset Value is the combination of changes in
Common share net asset value, reinvested dividend income at net asset
value and reinvested capital gains distributions at net asset value, if
any. The last dividend declared in the period, which is typically paid on
the first business day of the following month, is assumed to be reinvested
at the ending net asset value. The actual reinvest price for the last
dividend declared in the period may often be based on the Fund's market
price (and not its net asset value), and therefore may be different from
the price used in the calculation. Total returns are not annualized.
(c) Ratios do not reflect the effect of dividend payments to Auction Rate
Preferred shareholders; Net Investment Income ratios reflect income earned
and expenses incurred on assets attributable to Auction Rate Preferred
shares and/or MuniFund Term Preferred shares, where applicable.
(d) After expense reimbursement from the Adviser, where applicable. Ratios do
not reflect the effect of custodian fee credits earned on the Fund's net
cash on deposit with the custodian bank, where applicable.
(e) The expense ratios in the above table reflect, among other things,
payments to MuniFund Term Preferred shareholders and/or the interest
expense deemed to have been paid by the Fund on the floating rate
certificates issued by the special purpose trusts for the self-deposited
inverse floaters held by the Fund, where applicable, as described in
Footnote 1 - MuniFund Term Preferred Shares and Inverse Floating Rate
Securities, respectively.
* For the period January 29, 2010 (first issuance date of shares) through
May 31, 2010.
** For the period April 13, 2010 (first issuance date of shares) through May
31, 2010.
N/A Fund does not have a contractual reimbursement with the Adviser.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
Nuveen Investments 87
| Financial
| Highlights (continued)
Selected data for a Common share outstanding throughout each period:
INVESTMENT OPERATIONS LESS DISTRIBUTIONS
---------------------------------------------------------------- ---------------------------
DISTRIBUTIONS DISTRIBUTIONS
FROM NET FROM
INVESTMENT CAPITAL NET
BEGINNING INCOME TO GAINS TO INVESTMENT CAPITAL ENDING
COMMON NET AUCTION RATE AUCTION RATE INCOME TO GAINS TO COMMON
SHARE NET REALIZED/ PREFERRED PREFERRED COMMON COMMON SHARE ENDING
NET ASSET INVESTMENT UNREALIZED SHARE- SHARE- SHARE- SHARE- NET ASSET MARKET
VALUE INCOME GAIN (LOSS) HOLDERS(a) HOLDERS(a) TOTAL HOLDERS HOLDERS TOTAL VALUE VALUE
====================================================================================================================================
MARYLAND DIVIDEND ADVANTAGE 2 (NZR)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2010 $13.15 $.90 $ 1.21 $(.03) $ -- $2.08 $(.76) $ -- $(.76) $14.47 $15.00
2009 14.29 .95 (1.19) (.16) (.01) (.41) (.70) (.03) (.73) 13.15 12.69
2008 14.81 .94 (.48) (.24) (.01) .21 (.70) (.03) (.73) 14.29 14.25
2007 14.76 .94 .10 (.23) -- .81 (.76) -- (.76) 14.81 15.38
2006 15.45 .94 (.59) (.18) -- .17 (.83) (.03) (.86) 14.76 14.76
MARYLAND DIVIDEND ADVANTAGE 3 (NWI)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2010 13.30 .84 1.22 (.03) -- 2.03 (.74) -- (.74) 14.59 14.19
2009 14.02 .89 (.78) (.16) (.01) (.06) (.64) (.02) (.66) 13.30 12.56
2008 14.48 .89 (.49) (.23) -- .17 (.63) -- (.63) 14.02 13.01
2007 14.33 .88 .16 (.22) -- .82 (.67) -- (.67) 14.48 14.74
2006 14.82 .86 (.46) (.18) -- .22 (.71) -- (.71) 14.33 13.85
====================================================================================================================================
AUCTION RATE PREFERRED
SHARES AND MUNIFUND
AUCTION RATE PREFERRED SHARES MUNIFUND TERM PREFERRED SHARES TERM PREFERRED SHARES
AT END OF PERIOD AT END OF PERIOD AT END OF PERIOD
----------------------------------- ----------------------------------------------------------- -----------------------
AGGREGATE AGGREGATE ENDING AVERAGE
AMOUNT LIQUIDATION ASSET AMOUNT LIQUIDATION MARKET MARKET ASSET
OUTSTANDING VALUE COVERAGE OUTSTANDING VALUE VALUE VALUE COVERAGE ASSET COVERAGE PER $1
(000) PER SHARE PER SHARE (000) PER SHARE PER SHARE PER SHARE PER SHARE LIQUIDATION PREFERENCE
====================================================================================================================================
MARYLAND DIVIDEND ADVANTAGE 2 (NZR)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2010 $ -- $ -- $ -- $27,300 $10.00 $9.97 $9.96* $32.25 $--
2009 26,625 25,000 76,817 -- -- -- -- -- --
2008 32,000 25,000 71,813 -- -- -- -- -- --
2007 32,000 25,000 73,488 -- -- -- -- -- --
2006 32,000 25,000 73,224 -- -- -- -- -- --
MARYLAND DIVIDEND ADVANTAGE 3 (NWI)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2010 14,825 25,000 80,078 20,700 10.00 10.02 10.04** 32.03 3.20
2009 35,000 25,000 75,951 -- -- -- -- -- --
2008 39,000 25,000 73,208 -- -- -- -- -- --
2007 39,000 25,000 74,769 -- -- -- -- -- --
2006 39,000 25,000 74,237 -- -- -- -- -- --
====================================================================================================================================
88 Nuveen Investments
RATIOS/SUPPLEMENTAL DATA
--------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS RATIOS TO AVERAGE NET ASSETS
APPLICABLE TO COMMON SHARES APPLICABLE TO COMMON SHARES
TOTAL RETURNS BEFORE REIMBURSEMENT(c) AFTER REIMBURSEMENT(c)(d)
------------------- ---------------------------------- ----------------------------------
BASED ENDING
ON NET
BASED COMMON ASSETS
ON SHARE NET APPLICABLE EXPENSES EXPENSES NET EXPENSES EXPENSES NET PORTFOLIO
MARKET ASSET TO COMMON INCLUDING EXCLUDING INVESTMENT INCLUDING EXCLUDING INVESTMENT TURNOVER
VALUE(b) VALUE(b) SHARES (000) INTEREST(e) INTEREST INCOME INTEREST(e) INTEREST INCOME RATE
====================================================================================================================================
MARYLAND DIVIDEND ADVANTAGE 2 (NZR)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2010 24.89% 16.13% $60,749 1.47% 1.24% 6.21% 1.29% 1.06% 6.38% 2%
2009 (5.21) (2.43) 55,185 1.41 1.36 7.16 1.15 1.10 7.42 6
2008 (2.30) 1.54 59,921 1.29 1.28 6.18 .96 .94 6.51 13
2007 9.32 5.56 62,064 1.32 1.28 5.86 .91 .87 6.27 10
2006 1.13 1.14 61,726 1.25 1.25 5.76 .79 .79 6.21 15
MARYLAND DIVIDEND ADVANTAGE 3 (NWI)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2010 19.24 15.53 78,266 1.47 1.22 5.78 1.31 1.06 5.94 --***
2009 2.35 (.05) 71,332 1.38 1.33 6.70 1.08 1.03 7.00 5
2008 (7.38) 1.24 75,205 1.26 1.25 5.86 .86 .85 6.27 13
2007 11.47 5.75 77,640 1.28 1.24 5.52 .80 .76 6.00 11
2006 1.09 1.55 76,809 1.23 1.23 5.41 .75 .75 5.89 14
====================================================================================================================================
(a) The amounts shown are based on Common share equivalents.
(b) Total Return Based on Market Value is the combination of changes in the
market price per share and the effect of reinvested dividend income and
reinvested capital gains distributions, if any, at the average price paid
per share at the time of reinvestment. The last dividend declared in the
period, which is typically paid on the first business day of the following
month, is assumed to be reinvested at the ending market price. The actual
reinvestment for the last dividend declared in the period may take place
over several days, and in some instances may not be based on the market
price, so the actual reinvestment price may be different from the price
used in the calculation. Total returns are not annualized.
Total Return Based on Common Share Net Asset Value is the combination of
changes in Common share net asset value, reinvested dividend income at net
asset value and reinvested capital gains distributions at net asset value,
if any. The last dividend declared in the period, which is typically paid
on the first business day of the following month, is assumed to be
reinvested at the ending net asset value. The actual reinvest price for
the last dividend declared in the period may often be based on the Fund's
market price (and not its net asset value), and therefore may be different
from the price used in the calculation. Total returns are not annualized.
(c) Ratios do not reflect the effect of dividend payments to Auction Rate
Preferred shareholders; Net Investment Income ratios reflect income earned
and expenses incurred on assets attributable to Auction Rate Preferred
shares and/or MuniFund Term Preferred shares, where applicable.
(d) After expense reimbursement from the Adviser, where applicable. Ratios do
not reflect the effect of custodian fee credits earned on the Fund's net
cash on deposit with the custodian bank, where applicable.
(e) The expense ratios reflect, among other things, payments to MuniFund Term
Preferred shareholders and/or the interest expense deemed to have been
paid by the Fund on the floating rate certificates issued by the special
purpose trusts for the self-deposited inverse floaters held by the Fund,
where applicable, as described in Footnote 1 -MuniFund Term Preferred
Shares and Inverse Floating Rate Securities, respectively.
* For the period April 9, 2010 (first issuance date of shares) through May
31, 2010.
** For the period February 23, 2010 (first issuance date of shares) through
May 31, 2010.
*** Rounds to less than 1%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
Nuveen Investments 89
| Financial
| Highlights (continued)
Selected data for a Common share outstanding throughout each period:
INVESTMENT OPERATIONS
-------------------------------------------------------------------
DISTRIBUTIONS DISTRIBUTIONS
FROM NET FROM
INVESTMENT CAPITAL
BEGINNING INCOME TO GAINS TO
COMMON NET AUCTION RATE AUCTION RATE
SHARE NET REALIZED/ PREFERRED PREFERRED
NET ASSET INVESTMENT UNREALIZED SHARE- SHARE-
VALUE INCOME GAIN (LOSS) HOLDERS(a) HOLDERS(a) TOTAL
===================================================================================================
VIRGINIA PREMIUM INCOME (NPV)
---------------------------------------------------------------------------------------------------
Year Ended 5/31:
2010 $13.76 $.88 $ .93 $(.03) $ -- $1.78
2009 14.39 .90 (.66) (.15) (.02) .07
2008 14.89 .88 (.40) (.22) (.03) .23
2007 14.89 .88 .07 (.23) --* .72
2006 15.82 .88 (.59) (.15) (.03) .11
VIRGINIA DIVIDEND ADVANTAGE (NGB)
---------------------------------------------------------------------------------------------------
Year Ended 5/31:
2010 13.04 .84 1.11 (.02) -- 1.93
2009 14.21 .93 (1.23) (.17) --* (.47)
2008 14.98 .95 (.67) (.22) (.03) .03
2007 14.91 .96 .14 (.24) -- .86
2006 15.52 .97 (.54) (.17) -- .26
===================================================================================================
LESS DISTRIBUTIONS
-----------------------------
NET
INVESTMENT CAPITAL ENDING
INCOME TO GAINS TO COMMON
COMMON COMMON SHARE ENDING
SHARE- SHARE- NET ASSET MARKET
HOLDERS HOLDERS TOTAL VALUE VALUE
===============================================================================
VIRGINIA PREMIUM INCOME (NPV)
-------------------------------------------------------------------------------
Year Ended 5/31:
2010 $(.81) $ -- $(.81) $14.73 $15.85
2009 (.65) (.05) (.70) 13.76 14.36
2008 (.64) (.09) (.73) 14.39 14.04
2007 (.70) (.02) (.72) 14.89 15.24
2006 (.80) (.24) (1.04) 14.89 14.91
VIRGINIA DIVIDEND ADVANT AGE (NGB)
-------------------------------------------------------------------------------
Year Ended 5/31:
2010 (.76) -- (.76) 14.21 15.14
2009 (.69) (.01) (.70) 13.04 14.00
2008 (.70) (.10) (.80) 14.21 14.81
2007 (.79) -- (.79) 14.98 17.51
2006 (.87) -- (.87) 14.91 17.10
===============================================================================
AUCTION RATE PREFERRED SHARES MUNIFUND TERM PREFERRED SHARES
AT END OF PERIOD AT END OF PERIOD
----------------------------------- ------------------------------------------------------------
AGGREGATE AGGREGATE ENDING AVERAGE
AMOUNT LIQUIDATION ASSET AMOUNT LIQUIDATION MARKET MARKET ASSET
OUTSTANDING VALUE COVERAGE OUTSTANDING VALUE VALUE VALUE COVERAGE
(000) PER SHARE PER SHARE (000) PER SHARE PER SHARE PER SHARE PER SHARE
===========================================================================================================================
VIRGINIA PREMIUM INCOME (NPV)
---------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2010 $25,550 $25,000 $82,269 $32,205 $10.00 $10.00 $10.00** $32.91
2009 63,800 25,000 73,244 -- -- -- -- --
2008 63,800 25,000 75,357 -- -- -- -- --
2007 63,800 25,000 77,077 -- -- -- -- --
2006 63,800 25,000 76,970 -- -- -- -- --
VIRGINIA DIVIDEND ADVANTAGE (NGB)
---------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2010 -- -- -- 22,800 10.00 10.09 10.13*** 29.57
2009 21,750 25,000 71,989 -- -- -- -- --
2008 24,000 25,000 71,367 -- -- -- -- --
2007 24,000 25,000 73,862 -- -- -- -- --
2006 24,000 25,000 73,568 -- -- -- -- --
===========================================================================================================================
AUCTION RATE PREFERRED SHARES
AND MUNIFUND TERM PREFERRED SHARES
AT END OF PERIOD
-----------------------------------
ASSET COVERAGE PER $1
LIQUIDATION PREFERENCE
=============================================================
VIRGINIA PREMIUM INCOME (NPV)
-------------------------------------------------------------
Year Ended 5/31:
2010 $3.29
2009 --
2008 --
2007 --
2006 --
VIRGINIA DIVIDEND ADVANTAGE (NGB)
-------------------------------------------------------------
Year Ended 5/31:
2010 --
2009 --
2008 --
2007 --
2006 --
=============================================================
90 Nuveen Investments
RATIOS/SUPPLEMENTAL DATA
---------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
APPLICABLE TO COMMON SHARES
TOTAL RETURNS BEFORE REIMBURSEMENT(c)
-------------------- ------------------------------------
BASED ENDING
ON NET
BASED COMMON ASSETS
ON SHARE NET APPLICABLE EXPENSES EXPENSES NET
MARKET ASSET TO COMMON INCLUDING EXCLUDING INVESTMENT
VALUE(b) VALUE(b) SHARES (000) INTEREST(e) INTEREST INCOME
=====================================================================================================
VIRGINIA PREMIUM INCOME (NPV)
-----------------------------------------------------------------------------------------------------
Year Ended 5/31:
2010 16.60% 13.19% $132,302 1.45% 1.20% 6.14%
2009 8.05 .88 123,119 1.36 1.28 6.82
2008 (2.94) 1.56 128,512 1.25 1.23 6.02
2007 7.18 4.89 132,900 1.20 1.20 5.80
2006 (9.98) 0.71 132,626 1.19 1.19 5.75
VIRGINIA DIVIDEND ADVANTAGE (NGB)
-----------------------------------------------------------------------------------------------------
Year Ended 5/31:
2010 14.13 15.13 44,612 2.19 1.38 5.94
2009 (.01) (2.92) 40,881 1.47 1.38 7.17
2008 (10.58) .23 44,512 1.30 1.28 6.28
2007 7.24 5.82 46,908 1.27 1.27 5.99
2006 5.86 1.74 46,626 1.26 1.26 5.93
=====================================================================================================
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
APPLICABLE TO COMMON SHARES
AFTER REIMBURSEMENT(c)(d)
------------------------------------
EXPENSES EXPENSES NET PORTFOLIO
INCLUDING EXCLUDING INVESTMENT TURNOVER
INTEREST(e) INTEREST INCOME RATE
=========================================================================
VIRGINIA PREMIUM INCOME (NPV)
-------------------------------------------------------------------------
Year Ended 5/31:
2010 N/A% N/A% N/A% 3%
2009 N/A N/A N/A 6
2008 N/A N/A N/A 14
2007 N/A N/A N/A 16
2006 N/A N/A N/A 16
VIRGINIA DIVIDEND ADVANTAGE (NGB)
-------------------------------------------------------------------------
Year Ended 5/31:
2010 2.06 1.25 6.07 2
2009 1.26 1.18 7.38 4
2008 1.03 1.01 6.56 10
2007 .92 .92 6.34 23
2006 .84 .84 6.36 16
=========================================================================
(a) The amounts shown are based on Common share equivalents.
(b) Total Return Based on Market Value is the combination of changes in the
market price per share and the effect of reinvested dividend income and
reinvested capital gains distributions, if any, at the average price paid
per share at the time of reinvestment. The last dividend declared in the
period, which is typically paid on the first business day of the following
month, is assumed to be reinvested at the ending market price. The actual
reinvestment for the last dividend declared in the period may take place
over several days, and in some instances may not be based on the market
price, so the actual reinvestment price may be different from the price
used in the calculation. Total returns are not annualized.
Total Return Based on Common Share Net Asset Value is the combination of
changes in Common share net asset value, reinvested dividend income at net
asset value and reinvested capital gains distributions at net asset value,
if any. The last dividend declared in the period, which is typically paid
on the first business day of the following month, is assumed to be
reinvested at the ending net asset value. The actual reinvest price for
the last dividend declared in the period may often be based on the Fund's
market price (and not its net asset value), and therefore may be different
from the price used in the calculation. Total returns are not annualized.
(c) Ratios do not reflect the effect of dividend payments to Auction Rate
Preferred shareholders; Net Investment Income ratios reflect income earned
and expenses incurred on assets attributable to Auction Rate Preferred
shares and/or MuniFund Term Preferred shares, where applicable.
(d) After expense reimbursement from the Adviser, where applicable. Ratios do
not reflect the effect of custodian fee credits earned on the Fund's net
cash on deposit with the custodian bank, where applicable.
(e) The expense ratios reflect, among other things, payments to MuniFund Term
Preferred shareholders and/or the interest expense deemed to have been
paid by the Fund on the floating rate certificates issued by the special
purpose trusts for the self-deposited inverse floaters held by the Fund,
where applicable, as described in Footnote 1 -MuniFund Term Preferred
Shares and Inverse Floating Rate Securities, respectively.
* Rounds to less than $.01 per share.
** For the period January 26, 2010 (first issuance date of shares) through
May 31, 2010.
*** For the period November 18, 2009 (first issuance date of shares) through
May 31, 2010.
N/A Fund does not have a contractual reimbursement with the Adviser.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
Nuveen Investments 91
| Financial
| Highlights (continued)
Selected data for a Common share outstanding throughout each period:
INVESTMENT OPERATIONS LESS DISTRIBUTIONS
--------------------------------------------------------------- -----------------------------
DISTRIBUTIONS DISTRIBUTIONS
FROM NET FROM
INVESTMENT CAPITAL NET
BEGINNING INCOME TO GAINS TO INVESTMENT CAPITAL ENDING
COMMON NET AUCTION RATE AUCTION RATE INCOME TO GAINS TO COMMON
SHARE NET REALIZED/ PREFERRED PREFERRED COMMON COMMON SHARE ENDING
NET ASSET INVESTMENT UNREALIZED SHARE- SHARE- SHARE- SHARE- NET ASSET MARKET
VALUE INCOME GAIN (LOSS) HOLDERS(a) HOLDERS(a) TOTAL HOLDERS HOLDERS TOTAL VALUE VALUE
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA DIVIDEND ADVANTAGE 2 (NNB)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2010 $13.36 $.84 $ 1.15 $(.01) $ -- $1.98 $(.78) $ -- $(.78) $14.56 $15.15
2009 14.39 .97 (1.11) (.16) --* (.30) (.72) (.01) (.73) 13.36 13.98
2008 15.08 .96 (.61) (.24) (.02) .09 (.72) (.06) (.78) 14.39 14.65
2007 15.02 .96 .11 (.24) -- .83 (.77) -- (.77) 15.08 16.73
2006 15.70 .95 (.52) (.18) (.01) .24 (.85) (.07) (.92) 15.02 16.40
====================================================================================================================================
AUCTION RATE PREFERRED SHARES MUNIFUND TERM PREFERRED SHARES
AT END OF PERIOD AT END OF PERIOD
------------------------------------- --------------------------------------------------------------
AGGREGATE AGGREGATE ENDING AVERAGE
AMOUNT LIQUIDATION ASSET AMOUNT LIQUIDATION MARKET MARKET ASSET
OUTSTANDING VALUE COVERAGE OUTSTANDING VALUE VALUE VALUE COVERAGE
(000) PER SHARE PER SHARE (000) PER SHARE PER SHARE PER SHARE PER SHARE
-------------------------------------------------------------------------------------------------------------------------
VIRGINIA DIVIDEND ADVANTAGE 2 (NNB)
-------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2010 $ -- $ -- $ -- $43,200 $10.00 $10.08 $10.12** $29.39
2009 41,175 25,000 71,586 -- -- -- -- --
2008 42,000 25,000 74,090 -- -- -- -- --
2007 42,000 25,000 76,418 -- -- -- -- --
2006 42,000 25,000 76,123 -- -- -- -- --
=========================================================================================================================
92 Nuveen Investments
RATIOS/SUPPLEMENTAL DATA
--------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS RATIOS TO AVERAGE NET ASSETS
APPLICABLE TO COMMON SHARES APPLICABLE TO COMMON SHARES
TOTAL RETURNS BEFORE REIMBURSEMENT(c) AFTER REIMBURSEMENT(c)(d)
------------------- ----------------------------------- -----------------------------------
BASED ENDING
ON NET
BASED COMMON ASSETS
ON SHARE NET APPLICABLE EXPENSES EXPENSES NET EXPENSES EXPENSES NET PORTFOLIO
MARKET ASSET TO COMMON INCLUDING EXCLUDING INVESTMENT INCLUDING EXCLUDING INVESTMENT TURNOVER
VALUE(b) VALUE(b) SHARES (000) INTEREST(e) INTEREST INCOME INTEREST(e) INTEREST INCOME RATE
-----------------------------------------------------------------------------------------------------------------------------------
VIRGINIA DIVIDEND ADVANTAGE 2 (NNB)
-----------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2010 14.48% 15.15% $83,765 2.15% 1.28% 5.77% 1.96% 1.09% 5.96% 2%
2009 .96 (1.78) 76,726 1.39 1.31 7.21 1.11 1.03 7.49 4
2008 (7.58) .63 82,472 1.24 1.22 6.21 .91 .89 6.55 10
2007 6.96 5.60 86,382 1.21 1.21 5.89 .80 .80 6.29 19
2006 3.45 1.53 85,887 1.19 1.19 5.75 .75 .75 6.19 10
===================================================================================================================================
(a) The amounts shown are based on Common share equivalents.
(b) Total Return Based on Market Value is the combination of changes in the
market price per share and the effect of reinvested dividend income and
reinvested capital gains distributions, if any, at the average price paid
per share at the time of reinvestment. The last dividend declared in the
period, which is typically paid on the first business day of the following
month, is assumed to be reinvested at the ending market price. The actual
reinvestment for the last dividend declared in the period may take place
over several days, and in some instances may not be based on the market
price, so the actual reinvestment price may be different from the price
used in the calculation. Total returns are not annualized.
Total Return Based on Common Share Net Asset Value is the combination of
changes in Common share net asset value, reinvested dividend income at net
asset value and reinvested capital gains distributions at net asset value,
if any. The last dividend declared in the period, which is typically paid
on the first business day of the following month, is assumed to be
reinvested at the ending net asset value. The actual reinvest price for
the last dividend declared in the period may often be based on the Fund's
market price (and not its net asset value), and therefore may be different
from the price used in the calculation. Total returns are not annualized.
(c) Ratios do not reflect the effect of dividend payments to Auction Rate
Preferred shareholders; Net Investment Income ratios reflect income earned
and expenses incurred on assets attributable to Auction Rate Preferred
shares and/or MuniFund Term Preferred shares, where applicable.
(d) After expense reimbursement from the Adviser, where applicable. Ratios do
not reflect the effect of custodian fee credits earned on the Fund's net
cash on deposit with the custodian bank, where applicable.
(e) The expense ratios reflect, among other things, payments to MuniFund Term
Preferred shareholders and/or the interest expense deemed to have been
paid by the Fund on the floating rate certificates issued by the special
purpose trusts for the self-deposited inverse floaters held by the Fund,
where applicable, as described in Footnote 1 -MuniFund Term Preferred
Shares and Inverse Floating Rate Securities, respectively.
* Rounds to less than $.01 per share.
** For the period November 4, 2009 (first issuance date of shares) through
May 31, 2010.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
Nuveen Investments 93
Board Members & Officers
The management of the Funds, including general supervision of the duties
performed for the Funds by the Adviser, is the responsibility of the Board
Members of the Funds. The number of board members of the Fund is currently set
at nine. None of the board members who are not "interested" persons of the Funds
(referred to herein as "independent board members") has ever been a director or
employee of, or consultant to, Nuveen or its affiliates. The names and business
addresses of the board members and officers of the Funds, their principal
occupations and other affiliations during the past five years, the number of
portfolios each oversees and other directorships they hold are set forth below.
------------------------------------------------------------------------------------------------------------------------------------
NUMBER PRINCIPAL
YEAR FIRST OF PORTFOLIOS OCCUPATION(S)
NAME, ELECTED OR IN FUND COMPLEX INCLUDING OTHER
BIRTHDATE POSITION(S) HELD APPOINTED OVERSEEN BY DIRECTORSHIPS
& ADDRESS WITH THE FUNDS AND TERM(1) BOARD MEMBER DURING PAST 5 YEARS
------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT BOARD MEMBERS:
ROBERT P. BREMNER(2) Private Investor and Management Consultant;
8/22/40 Chairman of Treasurer and Director, Humanities Council of
333 W. Wacker Drive the Board 1996 200 Washington, D.C.
Chicago, IL 60606 and Board Member
JACK B. EVANS President, The Hall-Perrine Foundation, a
10/22/48 private philanthropic corporation (since 1996);
333 W. Wacker Drive Board Member 1999 200 Director and Chairman, United Fire Group, a
Chicago, IL 60606 publicly held company; President Pro Tem of the
Board of Regents for the State of Iowa
University System; Director, Gazette Companies;
Life Trustee of Coe College and the Iowa College
Foundation; formerly, Director, Alliant Energy;
formerly, Director, Federal Reserve Bank of
Chicago; formerly, President and Chief Operating
Officer, SCI Financial Group, Inc., a regional
financial services firm.
WILLIAM C. HUNTER Dean, Tippie College of Business, University of
3/6/48 Iowa (since 2006); Director (since 2004) of
333 W. Wacker Drive Board Member 2004 200 Xerox Corporation; Director (since 2005), Beta
Chicago, IL 60606 Gamma Sigma International Honor Society;
formerly, Dean and Distinguished Professor of
Finance, School of Business at the University of
Connecticut (2003-2006); previously, Senior Vice
President and Director of Research at the
Federal Reserve Bank of Chicago (1995-2003);
Director, SS&C Technologies, Inc. (May
2005-October 2005); formerly, Director
(1997-2007), Credit Research Center at
Georgetown University.
DAVID J. KUNDERT(2) Director, Northwestern Mutual Wealth Management
10/28/42 Company; retired (since 2004) as Chairman,
333 W. Wacker Drive Board Member 2005 200 JPMorgan Fleming Asset Management, President and
Chicago, IL 60606 CEO, Banc One Investment Advisors Corporation,
and President, One Group Mutual Funds; prior
thereto, Executive Vice President, Banc One
Corporation and Chairman and CEO, Banc One
Investment Management Group; Member, Board of
Regents, Luther College; member of the Wisconsin
Bar Association; member of Board of Directors,
Friends of Boerner Botanical Gardens; member of
Board of Directors and chair of Investment
Committee, Greater Milwaukee Foundation.
WILLIAM J. SCHNEIDER(2) Chairman of Miller-Valentine Partners Ltd., a
9/24/44 real estate investment company; formerly, Senior
333 W. Wacker Drive Board Member 1997 200 Partner and Chief Operating Officer (retired,
Chicago, IL 60606 2004) of Miller-Valentine Group; member,
University of Dayton Business School Advisory
Council;member, Mid-America Health System board;
formerly, member and chair, Dayton Philharmonic
Orchestra Association; formerly, member,
Business Advisory Council, Cleveland Federal
Reserve Bank; formerly, Director, Dayton
Development Coalition.
94 Nuveen Investments
------------------------------------------------------------------------------------------------------------------------------------
NUMBER PRINCIPAL
YEAR FIRST OF PORTFOLIOS OCCUPATION(S)
NAME, ELECTED OR IN FUND COMPLEX INCLUDING OTHER
BIRTHDATE POSITION(S) HELD APPOINTED OVERSEEN BY DIRECTORSHIPS
& ADDRESS WITH THE FUNDS AND TERM(1) BOARD MEMBER DURING PAST 5 YEARS
------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT BOARD MEMBERS:
JUDITH M. STOCKDALE Executive Director, Gaylord and Dorothy
12/29/47 Donnelley Foundation (since 1994); prior
333 W. Wacker Drive Board Member 1997 200 thereto, Executive Director, Great Lakes
Chicago, IL 60606 Protection Fund (1990-1994).
CAROLE E. STONE(2) Director, Chicago Board Options Exchange (since
6/28/47 2006); Director, C2 Options Exchange,
333 W. Wacker Drive Board Member 2007 200 Incorporated (since 2009); Commissioner, New
Chicago, IL 60606 York State Commission on Public Authority Reform
(since 2005); formerly, Chair, New York Racing
Association Oversight Board (2005-2007).
TERENCE J. TOTH(2)
9/29/59 Director, Legal & General Investment Management
333 W. Wacker Drive Board Member 2008 200 America, Inc. (since 2008); Managing Partner,
Chicago, IL 60606 Promus Capital (since 2008); formerly, CEO and
President, Northern Trust Global Investments
(2004-2007); Executive Vice President,
Quantitative Management & Securities Lending
(2000-2004); prior thereto, various positions
with Northern Trust Company (since 1994);
member: Goodman Theatre Board (since 2004),
Chicago Fellowship Boards (since 2005),
University of Illinois Leadership Council Board
(since 2007) and Catalyst Schools of Chicago
Board (since 2008); formerly, member: Northern
Trust Mutual Funds Board (2005-2007), Northern
Trust Global Investments Board (2004-2007),
Northern Trust Japan Board (2004-2007), Northern
Trust Securities Inc. Board (2003-2007) and
Northern Trust Hong Kong Board (1997-2004).
INTERESTED BOARD MEMBER:
JOHN P. AMBOIAN(3) Chief Executive Officer (since July 2007),
6/14/61 Director (since 1999) and Chairman (since 2007)
333 W. Wacker Drive Board Member 2008 200 of Nuveen Investments, Inc.; Chief Executive
Chicago, IL 60606 Officer (since 2007) of Nuveen Asset Management,
Nuveen Investments Advisors, Inc.; President
(since 2005) of Nuveen Commodities Asset
Management, LLC.
Nuveen Investments 95
Board Members & Officers (continued)
------------------------------------------------------------------------------------------------------------------------------------
NUMBER
OF PORTFOLIOS
NAME, YEAR FIRST IN FUND COMPLEX PRINCIPAL
BIRTHDATE POSITION(S) HELD ELECTED OR OVERSEEN OCCUPATION(S)
AND ADDRESS WITH THE FUNDS APPOINTED(4) BY OFFICER DURING PAST 5 YEARS
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS:
GIFFORD R. ZIMMERMAN Managing Director (since 2002), Assistant
9/9/56 Chief Secretary and Associate General Counsel of
333 W. Wacker Drive Administrative 1988 200 Nuveen Investments, LLC; Managing Director,
Chicago, IL 60606 Officer Associate General Counsel and Assistant
Secretary, of Nuveen Asset Management (since
2002) and of Symphony Asset Management LLC,
(since 2003); Vice President and Assistant
Secretary of NWQ Investment Management Company,
LLC. (since 2002), Nuveen Investments Advisers
Inc. (since 2002), Tradewinds Global Investors,
LLC, and Santa Barbara Asset Management, LLC
(since 2006), Nuveen HydePark Group LLC and
Nuveen Investment Solutions, Inc. (since 2007);
Managing Director (since 2004) and Assistant
Secretary (since 1994) of Nuveen Investments,
Inc.; Managing Director (since 2005) of Nuveen
Commodities Asset Management, LLC; Chartered
Financial Analyst.
WILLIAM ADAMS IV Executive Vice President of Nuveen Investments,
6/9/55 Inc.; Executive Vice President, U.S. Structured
333 W. Wacker Drive Vice President 2007 125 Products of Nuveen Investments, LLC, (since
Chicago, IL 60606 1999),; Executive Vice President (since 2005)
of Nuveen Commodities Asset Management, LLC.
CEDRIC H. ANTOSIEWICZ Managing Director, (since 2004), previously,
1/11/62 Vice President (1993-2004) of Nuveen
333 W. Wacker Drive Vice President 2007 125 Investments, LLC.
Chicago, IL 60606
NIZIDA ARRIAGA Senior Vice President of Nuveen Investments, LLC
6/1/68 (since 2010); formerly, Vice President
333 W. Wacker Drive Vice President 2009 200 (2007-2010); previously, Portfolio Manager,
Chicago, IL 60606 Allstate Investments, LLC (1996-2006); Chartered
Financial Analyst.
MICHAEL T. ATKINSON Vice President (since 2002) of Nuveen
2/3/66 Vice President Investments, LLC.; Vice President of Nuveen
333 W. Wacker Drive and Assistant 2000 200 Asset Management (since 2005).
Chicago, IL 60606 Secretary
MARGO L. COOK Executive Vice President (since Oct 2008) of
4/11/64 Nuveen Investments, Inc.; previously, Head of
333 W. Wacker Drive Vice President 2009 200 Institutional Asset Management (2007-2008) of
Chicago, IL 60606 Bear Stearns Asset Management; Head of
Institutional Asset Mgt (1986-2007) of Bank of
NY Mellon; Chartered Financial Analyst.
LORNA C. FERGUSON Managing Director (since 2004) of Nuveen
10/24/45 Investments, LLC and Managing Director (since
333 W. Wacker Drive Vice President 1998 200 2005) of Nuveen Asset Management.
Chicago, IL 60606
STEPHEN D. FOY Senior Vice President (since 2010), formerly,
5/31/54 Vice President Vice President (1993-2010) and Funds Controller
333 W. Wacker Drive and Controller 1998 200 (since 1998) of Nuveen Investments, LLC; Vice
Chicago, IL 60606 President (2005-2010) of Nuveen Asset
Management; Certified Public Accountant.
SCOTT S. GRACE Managing Director, Corporate Finance &
8/20/70 Vice President Development, Treasurer (since September 2009) of
333 W. Wacker Drive and Treasurer 2009 200 Nuveen Investments, LLC; Managing Director and
Chicago, IL 60606 Treasurer of Nuveen Asset Management (since
2009); formerly, Treasurer (2006-2009), Senior
Vice President (2008-2009), previously, Vice
President (2006-2008) of Janus Capital Group,
Inc.; formerly, Senior Associate in Morgan
Stanley's Global Financial Services Group
(2000-2003); Chartered Accountant Designation.
96 Nuveen Investments
------------------------------------------------------------------------------------------------------------------------------------
NUMBER
OF PORTFOLIOS
NAME, YEAR FIRST IN FUND COMPLEX PRINCIPAL
BIRTHDATE POSITION(S) HELD ELECTED OR OVERSEEN OCCUPATION(S)
AND ADDRESS WITH THE FUNDS APPOINTED(4) BY OFFICER DURING PAST 5 YEARS
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS:
WILLIAM T. HUFFMAN Chief Operating Officer, Municipal Fixed Income
5/7/69 (since 2008) of Nuveen Asset Management;
333 W. Wacker Drive Vice President 2009 136 previously, Chairman, President and Chief
Chicago, IL 60606 Executive Officer (2002 - 2007) of Northern
Trust Global Advisors, Inc. and Chief Executive
Officer (2007) of Northern Trust Global
Investments Limited; Certified Public
Accountant.
WALTER M. KELLY Senior Vice President (since 2008), Vice
2/24/70 Chief Compliance President (2006-2008) formerly, Assistant Vice
333 W. Wacker Drive Officer and 2003 200 President and Assistant General Counsel
Chicago, IL 60606 Vice President (2003-2006) of Nuveen Investments, LLC; Senior
Vice President (since 2008), formerly, Vice
President (2006-2008) and Assistant Secretary
(since 2008) of Nuveen Asset Management.
DAVID J. LAMB Senior Vice President (since 2009), formerly,
3/22/63 Vice President (2000-2009) of Nuveen
333 W. Wacker Drive Vice President 2000 200 Investments, LLC; Vice President (since 2005) of
Chicago, IL 60606 Nuveen Asset Management; Certified Public
Accountant.
TINA M. LAZAR Senior Vice President (since 2009), formerly,
8/27/61 Vice President of Nuveen Investments, LLC
333 W. Wacker Drive Vice President 2002 200 (1999-2009); Vice President of Nuveen Asset
Chicago, IL 60606 Management (since 2005).
LARRY W. MARTIN Senior Vice President (since 2010), formerly,
7/27/51 Vice President Vice President (1993-2010), Assistant Secretary
333 W. Wacker Drive and Assistant 1988 200 and Assistant General Counsel of Nuveen
Chicago, IL 60606 Secretary Investments, LLC; Vice President (since 2005)
and Assistant Secretary of Nuveen Investments,
Inc.; Vice President (since 2005) and Assistant
Secretary (since 1997) of Nuveen Asset
Management; Vice President and Assistant
Secretary of Nuveen Investments Advisers Inc.
(since 2002); NWQ Investment Management Company,
LLC (since 2002), Symphony Asset Management LLC
(since 2003), Tradewinds Global Investors, LLC,
Santa Barbara Asset Management LLC (since 2006)
and of Nuveen HydePark Group, LLC and Nuveen
Investment Solutions, Inc. (since 2007).
KEVIN J. MCCARTHY Managing Director (since 2008), formerly, Vice
3/26/66 Vice President President (2007-2008), Nuveen Investments, LLC;
333 W. Wacker Drive and Secretary 2007 200 Managing Director (since 2008), formerly, Vice
Chicago, IL 60606 President, and Assistant Secretary, Nuveen Asset
Management, and Nuveen Investments Holdings,
Inc.; Vice President (since 2007) and Assistant
Secretary, Nuveen Investment Advisers Inc., NWQ
Investment Management Company, LLC, Tradewinds
Global Investors LLC, NWQ Holdings, LLC,
Symphony Asset Management LLC, Santa Barbara
Asset Management LLC, Nuveen HydePark Group, LLC
and Nuveen Investment Solutions, Inc. (since
2007); prior thereto, Partner, Bell, Boyd &
Lloyd LLP (1997-2007).
JOHN V. MILLER Chief Investment Officer and Managing Director
4/10/67 (since 2007), formerly, Vice President
333 W. Wacker Drive Vice President 2007 136 (2002-2007) of Nuveen Asset Management and
Chicago, IL 60606 Managing Director (since 2007), formerly Vice
President (2002-2007) Nuveen Investments, LLC;
Chartered Financial Analyst.
Nuveen Investments 97
Board Members & Officers (continued)
------------------------------------------------------------------------------------------------------------------------------------
NUMBER
OF PORTFOLIOS
NAME, YEAR FIRST IN FUND COMPLEX PRINCIPAL
BIRTHDATE POSITION(S) HELD ELECTED OR OVERSEEN OCCUPATION(S)
AND ADDRESS WITH THE FUNDS APPOINTED(4) BY OFFICER DURING PAST 5 YEARS
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS:
GREGORY MINO Senior Vice President (since 2010) of Nuveen
1/4/71 Investments, LLC, formerly, Vice President
333 W. Wacker Drive Vice President 2009 200 (2008-2010); previously, Director (2004-2007)
Chicago, IL 60606 and Executive Director (2007-2008) of UBS Global
Asset Management; previously, Vice President
(2000-2003) and Director (2003-2004) of Merrill
Lynch Investment Managers; Chartered Financial
Analyst.
CHRISTOPHER M. ROHRBACHER Vice President, Nuveen Investments, LLC (since
8/1/71 Vice President 2008); Vice President and Assistant Secretary,
333 W. Wacker Drive and Assistant 2008 200 Nuveen Asset Management (since 2008); prior
Chicago, IL 60606 Secretary thereto, Associate, Skadden, Arps, Slate,
Meagher & Flom LLP (2002-2008).
JAMES F. RUANE Vice President, Nuveen Investments, LLC (since
7/3/62 Vice President 2007); prior thereto, Partner, Deloitte & Touche
333 W. Wacker Drive and Assistant 2007 200 USA LLP (2005-2007), formerly, senior tax
Chicago, IL 60606 Secretary manager (2002-2005); Certified Public
Accountant.
MARK L. WINGET Vice President, Nuveen Investments, LLC (since
12/21/68 Vice President 2008); Vice President and Assistant Secretary,
333 W. Wacker Drive and Assistant 2008 200 Nuveen Asset Management (since 2008); prior
Chicago, IL 60606 Secretary thereto, Counsel, Vedder Price P.C. (1997-2007).
(1) Board Members serve three year terms, except for two board members who are
elected by the holders of Preferred Shares. The Board of Trustees is
divided into three classes, Class I, Class II, and Class III, with each
being elected to serve until the third succeeding annual shareholders'
meeting subsequent to its election or thereafter in each case when its
respective successors are duly elected or appointed, except two board
members are elected by the holders of Preferred Shares to serve until the
next annual shareholders' meeting subsequent to its election or thereafter
in each case when its respective successors are duly elected or appointed.
The first year elected or appointed represents the year in which the board
member was first elected or appointed to any fund in the Nuveen Complex.
(2) Also serves as a trustee of the Nuveen Diversified Commodity Fund, a
Nuveen-sponsored commodity pool that has filed a registration statement on
Form S-1 with the SEC for a proposed initial public offering. The S-1 has
not been declared effective, and the commodity pool has not commenced
operations.
(3) Mr. Amboian is an interested trustee because of his position with Nuveen
Investments, Inc. and certain of its subsidiaries, which are affiliates of
the Nuveen Funds.
(4) Officers serve one year terms through July of each year. The year first
elected or appointed represents the year in which the Officer was first
elected or appointed to any fund in the Nuveen Complex.
98 Nuveen Investments
Annual Investment Management Agreement Approval Process
The Investment Company Act of 1940, as amended (the "1940 ACT"), provides, in
substance, that each investment advisory agreement between a fund and its
investment adviser will continue in effect from year to year only if its
continuance is approved at least annually by the fund's board members, including
by a vote of a majority of the board members who are not parties to the advisory
agreement or "interested persons" of any parties (the "INDEPENDENT BOARD
MEMBERS"), cast in person at a meeting called for the purpose of considering
such approval. In connection with such approvals, the fund's board members must
request and evaluate, and the investment adviser is required to furnish, such
information as may be reasonably necessary to evaluate the terms of the advisory
agreement. Accordingly, at a meeting held on May 25-26, 2010 (the "MAY
MEETING"), the Boards of Trustees or Directors (as the case may be) (each a
"BOARD" and each Trustee or Director, a "BOARD MEMBER") of the Funds, including
a majority of the Independent Board Members, considered and approved the
continuation of the advisory agreements (each an "ADVISORY AGREEMENT") between
each Fund and Nuveen Asset Management ("NAM") for an additional one-year period.
In preparation for their considerations at the May Meeting, the Board also held
a separate meeting on April 21-22, 2010 (the "APRIL MEETING"). Accordingly, the
factors considered and determinations made regarding the renewals by the
Independent Board Members include those made at the April Meeting.
In addition, in evaluating the Advisory Agreements, the Independent Board
Members reviewed a broad range of information relating to the Funds and NAM,
including absolute and comparative performance, fee and expense information for
the Funds (as described in more detail below), the profitability of Nuveen for
its advisory activities (which includes its wholly owned subsidiaries), and
other information regarding the organization, personnel, and services provided
by NAM. The Independent Board Members also met quarterly as well as at other
times as the need arose during the year and took into account the information
provided at such meetings and the knowledge gained therefrom. Prior to approving
the renewal of the Advisory Agreements, the Independent Board Members reviewed
the foregoing information with their independent legal counsel and with
management, reviewed materials from independent legal counsel describing
applicable law and their duties in reviewing advisory contracts, and met with
independent legal counsel in private sessions without management present. The
Independent Board Members considered the legal advice provided by independent
legal counsel and relied upon their knowledge of NAM, its services and the Funds
resulting from their meetings and other interactions throughout the year and
their own business judgment in determining the factors to be considered in
evaluating the Advisory Agreements. Each Board Member may have accorded
different weight to the various factors in reaching his or her conclusions with
respect to a Fund's Advisory Agreement. The Independent Board Members did not
identify any single factor as
Nuveen Investments 99
Annual Investment Management Agreement Approval Process (continued)
all-important or controlling. The Independent Board Members' considerations were
instead based on a comprehensive consideration of all the information presented.
The principal factors considered by the Board and its conclusions are described
below.
A. NATURE, EXTENT AND QUALITY OF SERVICES
In considering renewal of the Advisory Agreements, the Independent Board Members
considered the nature, extent and quality of NAM's services, including advisory
services and administrative services. The Independent Board Members reviewed
materials outlining, among other things, NAM's organization and business; the
types of services that NAM or its affiliates provide and are expected to provide
to the Funds; the performance record of the applicable Fund (as described in
further detail below); and any initiatives Nuveen had taken for the applicable
fund product line, including continued activities to refinance auction rate
preferred securities, manage leverage during periods of market turbulence and
implement an enhanced leverage management process, modify investment mandates in
light of market conditions and seek shareholder approval as necessary, maintain
the fund share repurchase program and maintain shareholder communications to
keep shareholders apprised of Nuveen's efforts in refinancing preferred shares.
In addition to the foregoing, the Independent Board Members also noted the
additional services that NAM or its affiliates provide to closed-end funds,
including, in particular, Nuveen's continued commitment to supporting the
secondary market for the common shares of its closed-end funds through a variety
of programs designed to raise investor and analyst awareness and understanding
of closed-end funds. These efforts include maintaining an investor relations
program to provide timely information and education to financial advisers and
investors; providing marketing for the closed-end funds; maintaining and
enhancing a closed-end fund website; participating in conferences and having
direct communications with analysts and financial advisors.
As part of their review, the Independent Board Members also evaluated the
background, experience and track record of NAM's investment personnel. In this
regard, the Independent Board Members considered any changes in the personnel,
and the impact on the level of services provided to the Funds, if any. The
Independent Board Members also reviewed information regarding portfolio manager
compensation arrangements to evaluate NAM's ability to attract and retain high
quality investment personnel, preserve stability, and reward performance but not
provide an incentive for taking undue risks.
In addition to advisory services, the Independent Board Members considered the
quality of administrative services provided by NAM and its affiliates including
product management, fund administration, oversight of service providers,
shareholder services, administration of Board relations, regulatory and
portfolio compliance and legal support. Given the importance of compliance, the
Independent Board Members also considered NAM's compliance program, including
the report of the chief compliance officer regarding the Funds' compliance
policies and procedures.
Based on their review, the Independent Board Members found that, overall, the
nature, extent and quality of services provided (and expected to be provided) to
the respective Funds under the Advisory Agreements were satisfactory.
100 Nuveen Investments
B. THE INVESTMENT PERFORMANCE OF THE FUNDS AND NAM
The Board considered the performance results of each Fund over various time
periods. The Board reviewed, among other things, each Fund's historic investment
performance as well as information comparing the Fund's performance information
with that of other funds (the "PERFORMANCE PEER GROUP") based on data provided
by an independent provider of mutual fund data and with recognized and/or
customized benchmarks. In this regard, the Board reviewed each Fund's total
return information compared to its Performance Peer Group for the quarter, one-,
three- and five-year periods ending December 31, 2009 and for the same periods
ending March 31, 2010 (or for the periods available for Funds that did not exist
during part of the foregoing time frame). In addition, the Board reviewed each
Fund's total return information compared to recognized and/or customized
benchmarks for the quarter, one- and three-year periods ending December 31, 2009
and for the same periods ending March 31, 2010 (or for the periods available for
Funds that did not exist during part of the foregoing time frame). Moreover, the
Board reviewed the peer ranking of the Nuveen municipal funds advised by NAM in
the aggregate. The Independent Board Members also reviewed historic premium and
discount levels. This information supplemented the Fund performance information
provided to the Board at each of its quarterly meetings.
In reviewing peer comparison information, the Independent Board Members
recognized that the Performance Peer Group of certain funds may not adequately
represent the objectives and strategies of the funds, thereby limiting the
usefulness of comparing a fund's performance with that of its Performance Peer
Group. In this regard, the Independent Board Members considered that the
Performance Peer Groups of certain funds (including the Funds) were classified
as having significant differences from such funds based on considerations such
as special fund objectives, potential investable universe and the composition of
the peer set (E.G., the number and size of competing funds and number of
competing managers).
Based on their review, the Independent Board Members determined that each Fund's
investment performance over time had been satisfactory. The Independent Board
Members noted that although each Fund underperformed its respective benchmark in
the three-year period, each Fund outperformed the performance of its respective
benchmark in the one-year period.
C. FEES, EXPENSES AND PROFITABILITY
1. FEES AND EXPENSES
The Board evaluated the management fees and expenses of each Fund
reviewing, among other things, such Fund's gross management fees, net
management fees and net expense ratios in absolute terms as well as
compared to the fee and expenses of a comparable universe of unaffiliated
funds based on data provided by an independent fund data provider (the
"PEER UNIVERSE") and in certain cases, to a more focused subset of funds
in the Peer Universe (the "PEER GROUP") and any expense limitations.
The Independent Board Members further reviewed the methodology regarding
the construction of the applicable Peer Universe and/or Peer Group. In
reviewing the comparisons of fee and expense information, the Independent
Board Members took into account that in certain instances various factors
such as: the asset level of a fund
Nuveen Investments 101
Annual Investment Management Agreement Approval Process (continued)
relative to peers; the limited size and particular composition of the Peer
Universe or Peer Group; the investment objectives of the peers; expense
anomalies; changes in the funds comprising the Peer Universe or Peer Group
from year to year; levels of reimbursement; the timing of information
used; the differences in the type and use of leverage; and differences in
the states reflected in the Peer Universe or Peer Group may impact the
comparative data, thereby limiting the ability to make a meaningful
comparison with peers.
In reviewing the fee schedule for a Fund, the Independent Board Members
also considered the fund-level and complex-wide breakpoint schedules
(described in further detail below) and any fee waivers and reimbursements
provided by Nuveen (applicable, in particular, for certain closed-end
funds launched since 1999). Except as set forth in the following sentence,
the Independent Board Members noted that the Funds had net management fees
and/or net expense ratios below, at or near (within 5 basis points or
less) the peer averages of their Peer Group or Peer Universe. The Nuveen
Maryland Premium Income Municipal Fund and the Nuveen Virginia Premium
Income Municipal Fund had net advisory fees above the peer average but net
expense ratios below the peer expense ratio average.
Based on their review of the fee and expense information provided, the
Independent Board Members determined that each Fund's management fees were
reasonable in light of the nature, extent and quality of services provided
to the Fund.
2. COMPARISONS WITH THE FEES OF OTHER CLIENTS
The Independent Board Members further reviewed information regarding the
nature of services and fee rates offered by NAM to other clients,
including municipal separately managed accounts and passively managed
municipal bond exchange traded funds (ETFs) that are sub-advised by NAM.
In evaluating the comparisons of fees, the Independent Board Members noted
that the fee rates charged to the Funds and other clients vary, among
other things, because of the different services involved and the
additional regulatory and compliance requirements associated with
registered investment companies, such as the Funds. Accordingly, the
Independent Board Members considered the differences in the product types,
including, but not limited to, the services provided, the structure and
operations, product distribution and costs thereof, portfolio investment
policies, investor profiles, account sizes and regulatory requirements.
The Independent Board Members noted, in particular, that the range of
services provided to the Funds (as discussed above) is much more extensive
than that provided to separately managed accounts. Given the inherent
differences in the products, particularly the extensive services provided
to the Funds, the Independent Board Members believe such facts justify the
different levels of fees.
3. PROFITABILITY OF NUVEEN
In conjunction with its review of fees, the Independent Board Members also
considered the profitability of Nuveen for its advisory activities (which
incorporated Nuveen's wholly-owned affiliated sub-advisers) and its
financial condition. The Independent Board Members reviewed the revenues
and expenses of Nuveen's advisory activities for the last two years, the
allocation methodology used in preparing the profitability data and an
analysis of the key drivers behind the changes in revenues and expenses
that impacted profitability in 2009. The Independent Board Members
102 Nuveen Investments
noted this information supplemented the profitability information
requested and received during the year to help keep them apprised of
developments affecting profitability (such as changes in fee waivers and
expense reimbursement commitments). In this regard, the Independent Board
Members noted that they had also appointed an Independent Board Member as
a point person to review and keep them apprised of changes to the
profitability analysis and/or methodologies during the year. The
Independent Board Members also considered Nuveen's revenues for advisory
activities, expenses, and profit margin compared to that of various
unaffiliated management firms with similar amounts of assets under
management and relatively comparable asset composition prepared by Nuveen.
In reviewing profitability, the Independent Board Members recognized the
subjective nature of determining profitability which may be affected by
numerous factors including the allocation of expenses. Further, the
Independent Board Members recognized the difficulties in making
comparisons as the profitability of other advisers generally is not
publicly available and the profitability information that is available for
certain advisers or management firms may not be representative of the
industry and may be affected by, among other things, the adviser's
particular business mix, capital costs, types of funds managed and expense
allocations. Notwithstanding the foregoing, the Independent Board Members
reviewed Nuveen's methodology and assumptions for allocating expenses
across product lines to determine profitability. In reviewing
profitability, the Independent Board Members recognized Nuveen's
investment in its fund business. Based on their review, the Independent
Board Members concluded that Nuveen's level of profitability for its
advisory activities was reasonable in light of the services provided.
In evaluating the reasonableness of the compensation, the Independent
Board Members also considered other amounts paid to NAM by the Funds as
well as any indirect benefits (such as soft dollar arrangements, if any)
NAM and its affiliates receive, or are expected to receive, that are
directly attributable to the management of the Funds, if any. See Section
E below for additional information on indirect benefits NAM may receive as
a result of its relationship with the Funds. Based on their review of the
overall fee arrangements of each Fund, the Independent Board Members
determined that the advisory fees and expenses of the respective Fund were
reasonable.
D. ECONOMIES OF SCALE AND WHETHER FEE LEVELS REFLECT THESE ECONOMIES OF SCALE
With respect to economies of scale, the Independent Board Members have
recognized the potential benefits resulting from the costs of a fund being
spread over a larger asset base, although economies of scale are difficult to
measure and predict with precision, particularly on a fund-by-fund basis. One
method to help ensure the shareholders share in these benefits is to include
breakpoints in the advisory fee schedule. Generally, management fees for funds
in the Nuveen complex are comprised of a fund-level component and a
complex-level component, subject to certain exceptions. Accordingly, the
Independent Board Members reviewed and considered the applicable fund-level
breakpoints in the advisory fee schedules that reduce advisory fees as asset
levels increase. Further, the Independent Board Members noted that although
closed-end
Nuveen Investments 103
Annual Investment Management Agreement Approval Process (continued)
funds may from time-to-time make additional share offerings, the growth of their
assets will occur primarily through the appreciation of such funds' investment
portfolio.
In addition to fund-level advisory fee breakpoints, the Board also considered
the Funds' complex-wide fee arrangement. Pursuant to the complex-wide fee
arrangement, the fees of the funds in the Nuveen complex are generally reduced
as the assets in the fund complex reach certain levels. The complex-wide fee
arrangement seeks to provide the benefits of economies of scale to fund
shareholders when total fund complex assets increase, even if assets of a
particular fund are unchanged or have decreased. The approach reflects the
notion that some of Nuveen's costs are attributable to services provided to all
its funds in the complex and therefore all funds benefit if these costs are
spread over a larger asset base.
Based on their review, the Independent Board Members concluded that the
breakpoint schedules and complex-wide fee arrangement were acceptable and
reflect economies of scale to be shared with shareholders when assets under
management increase.
E. INDIRECT BENEFITS
In evaluating fees, the Independent Board Members received and considered
information regarding potential "fall out" or ancillary benefits NAM or its
affiliates may receive as a result of its relationship with each Fund. In this
regard, the Independent Board Members considered any revenues received by
affiliates of NAM for serving as agent at Nuveen's trading desk and as
co-manager in initial public offerings of new closed-end funds.
In addition to the above, the Independent Board Members considered whether NAM
received any benefits from soft dollar arrangements whereby a portion of the
commissions paid by a Fund for brokerage may be used to acquire research that
may be useful to NAM in managing the assets of the Funds and other clients. The
Independent Board Members noted that NAM does not currently have any soft dollar
arrangements; however, to the extent certain bona fide agency transactions that
occur on markets that traditionally trade on a principal basis and riskless
principal transactions are considered as generating "commissions," NAM intends
to comply with the applicable safe harbor provisions.
Based on their review, the Independent Board Members concluded that any indirect
benefits received by NAM as a result of its relationship with the Funds were
reasonable and within acceptable parameters.
F. OTHER CONSIDERATIONS
The Independent Board Members did not identify any single factor discussed
previously as all-important or controlling. The Board Members, including the
Independent Board Members, unanimously concluded that the terms of the Advisory
Agreements are fair and reasonable, that NAM's fees are reasonable in light of
the services provided to each Fund and that the Advisory Agreements be renewed.
104 Nuveen Investments
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 AUTOMATIC REINVESTMENT PLAN
Your Nuveen Closed-End Fund allows you to conveniently reinvest 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 compounding.
Just like distributions in cash, there may be times when income or capital gains
taxes may be payable on 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 quarter you'll receive a
statement showing your total 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. Distributions received to purchase
shares in the open market will normally be invested shortly after the
distribution payment date. No interest will be paid on distributions awaiting
reinvestment. Because the market price of the shares may increase before
purchases are completed, the average purchase price per share may
Nuveen Investments 105
Reinvest Automatically
Easily and Conveniently (continued)
exceed the market price at the time of valuation, resulting in the acquisition
of fewer shares than if the distribution had been paid in shares issued by the
Fund. A pro rata portion of any applicable brokerage commissions on open market
purchases will be paid by Plan participants. These commissions usually will be
lower than those charged on individual transactions.
FLEXIBLE
You may change your distribution option or withdraw from the Plan at any time,
should your needs or situation change.
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 financial 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 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.
106 Nuveen Investments
Glossary of Terms
Used in this Report
o AUCTION RATE BOND: An auction rate bond is a security whose interest
payments are adjusted periodically through an auction process, which
process typically also serves as a means for buying and selling the bond.
Auctions that fail to attract enough buyers for all the shares offered for
sale are deemed to have "failed," with current holders receiving a
formula-based interest rate until the next scheduled auction.
o AVERAGE ANNUAL TOTAL RETURN: This is a commonly used method to express an
investment's performance over a particular, usually multi-year time
period. It expresses the return that would have been necessary each year
to equal the investment's actual cumulative performance (including change
in NAV or market price and reinvested dividends and capital gains
distributions, if any) over the time period being considered.
o AVERAGE EFFECTIVE MATURITY: The average of the number of years to maturity
of the bonds in a Fund's portfolio, computed by weighting each bond's time
to maturity (the date the security comes due) by the market value of the
security. This figure does not account for the likelihood of prepayments
or the exercise of call provisions unless an escrow account has been
established to redeem the bond before maturity. 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.
o INVERSE FLOATERS: Inverse floating rate securities, also known as inverse
floaters, 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.
Nuveen Investments 107
Glossary of Terms
Used in this Report (continued)
o 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.
o MARKET YIELD (ALSO KNOWN AS DIVIDEND YIELD OR CURRENT YIELD): An
investment's current annualized dividend divided by its current market
price.
o NET ASSET VALUE (NAV): A Fund's NAV per common share is calculated by
subtracting the liabilities of the Fund (including any Preferred shares
issued in order to leverage the Fund) from its total assets and then
dividing the remainder by the number of common shares outstanding. Fund
NAVs are calculated at the end of each business day.
o PRE-REFUNDING: Pre-refunding, also known as advanced refundings or
refinancings, is a procedure used by state and local governments to
refinance municipal bonds to lower interest expenses. The issuer sells new
bonds with a lower yield and uses the proceeds to buy U.S. Treasury
securities, the interest from which is used to make payments on the
higher-yielding bonds. Because of this collateral, pre-refunding generally
raises a bond's credit rating and thus its value.
o TAXABLE-EQUIVALENT YIELD: The yield necessary from a fully taxable
investment to equal, on an after-tax basis, the yield of a municipal bond
investment.
o ZERO COUPON BOND: A zero coupon bond does not pay a regular interest
coupon to its holders during the life of the bond. Tax-exempt income to
the holder of the bond comes from accretion of the difference between the
original purchase price of the bond at issuance and the par value of the
bond at maturity and is effectively paid at maturity. The market prices of
zero coupon bonds generally are more volatile than the market prices of
bonds that pay interest periodically.
108 Nuveen Investments
Other Useful Information
BOARD OF TRUSTEES
John P. Amboian
Robert P. Bremner
Jack B. Evans
William C. Hunter
David J. Kundert
William J. Schneider
Judith M. Stockdale
Carole E. Stone
Terence J. Toth
FUND MANAGER
Nuveen Asset Management
333 West Wacker Drive
Chicago, IL 60606
CUSTODIAN
State Street Bank & Trust
Company
Boston, MA
TRANSFER AGENT AND SHAREHOLDER SERVICES
State Street Bank & Trust
Company
Nuveen Funds
P.O. Box 43071
Providence, RI 02940-3071
(800) 257-8787
LEGAL COUNSEL
Chapman and Cutler LLP
Chicago, IL
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Ernst & Young LLP
Chicago, IL
QUARTERLY PORTFOLIO OF INVESTMENTS AND PROXY VOTING INFORMATION
You may obtain (i) each Fund's quarterly portfolio of investments, (ii)
information regarding how the Funds voted proxies relating to portfolio
securities held during the twelve-month period ended June 30, 2009, and (iii) a
description of the policies and procedures that the Funds used to determine how
to vote proxies relating to portfolio securities without charge, upon request,
by calling Nuveen Investments toll-free at (800) 257-8787 or on Nuveen's website
at www.nuveen.com.
You may also obtain this and other Fund information directly from the Securities
and Exchange Commission ("SEC"). The SEC may charge a copying fee for this
information. Visit the SEC on-line at http://www.sec.gov or in person at the
SEC's Public Reference Room in Washington, D.C. Call the SEC at (202) 942-8090
for room hours and operation. You may also request Fund information by sending
an e-mail request to publicinfo@sec.gov or by writing to the SEC's Public
References Section at 100 F Street NE, Washington, D.C. 20549.
CEO CERTIFICATION DISCLOSURE
Each Fund's Chief Executive Officer has submitted to the New York Stock Exchange
("NYSE") the annual CEO certification as required by Section 303A.12(a) of the
NYSE Listed Company Manual.
Each Fund has filed with the SEC the certification of its Chief Executive
Officer and Chief Financial Officer required by Section 302 of the
Sarbanes-Oxley Act.
COMMON AND PREFERRED SHARE INFORMATION
Each Fund intends to repurchase and/or redeem shares of its own common or
preferred stock in the future at such times and in such amounts as is deemed
advisable. During the period covered by this report, the Funds repurchased
and/or redeemed shares of their common and/or preferred stock as shown in the
accompanying table.
COMMON SHARES PREFERRED SHARES
FUND REPURCHASED REDEEMED
NMY -- 1,516
NFM -- 1,033
NZR -- 1,065
NWI -- 807
NPV -- 1,530
NGB -- 780
NNB -- 1,647
Any future repurchases and/or redemptions will be reported to shareholders in
the next annual or semi-annual report.
Nuveen Investments 109
Nuveen Investments:
Serving Investors for Generations
Since 1898, financial advisors and their clients have relied on Nuveen
Investments to provide dependable investment solutions through continued
adherence to proven, longterm investing principles. Today, we offer a range of
high quality equity and fixed-income solutions designed to be integral
components of a well-diversified core portfolio.
FOCUSED ON MEETING INVESTOR NEEDS.
Nuveen Investments is a global investment management firm that seeks to help
secure the long-term goals of institutions and high net worth investors as well
as the consultants and financial advisors who serve them. We market our growing
range of specialized investment solutions under the high-quality brands of
HydePark, NWQ, Nuveen, Santa Barbara, Symphony, Tradewinds and Winslow Capital.
In total, Nuveen Investments managed approximately $150 billion of assets on
March 31, 2010.
FIND OUT HOW WE CAN HELP YOU.
To learn more about the products and services of Nuveen Investments may be able
to help you meet your financial goals, talk to your financial advisor, or call
us at (800) 257-8787. Please read the information provided carefully before you
invest. Investors should consider the investment objective and policies, risk
considerations, charges and expenses of any investment carefully. Where
applicable, be sure to obtain prospectus, which contains this and other relevant
information. To obtain a prospectus, please contact your securities
representative or NUVEEN INVESTMENTS, 333 W. WACKER DR., CHICAGO, IL 60606.
Please read the prospectus carefully before you invest or send money.
Learn more about Nuveen Funds at: WWW.NUVEEN.COM/CEF
o Share prices
o Fund details
o Daily financial news
o Investor education
o Interactive planning tools
Distributed by
Nuveen Investments, LLC
333 West Wacker Drive
Chicago, IL 60606
www.nuveen.com
EAN-A-0510D
ITEM 2. CODE OF ETHICS.
As of the end of the period covered by this report, the registrant has adopted a
code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions. There were no amendments to or waivers
from the Code during the period covered by this report. The registrant has
posted the code of ethics on its website at www.nuveen.com/CEF/Info/Shareholder.
(To view the code, click on Fund Governance and then click on Code of Conduct.)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Directors or Trustees ("Board") determined that the
registrant has at least one "audit committee financial expert" (as defined in
Item 3 of Form N-CSR) serving on its Audit Committee. The registrant's audit
committee financial expert is Jack B. Evans, who is "independent" for purposes
of Item 3 of Form N-CSR.
Mr. Evans was formerly President and Chief Operating Officer of SCI Financial
Group, Inc., a full service registered broker-dealer and registered investment
adviser ("SCI"). As part of his role as President and Chief Operating Officer,
Mr. Evans actively supervised the Chief Financial Officer (the "CFO") and
actively supervised the CFO's preparation of financial statements and other
filings with various regulatory authorities. In such capacity, Mr. Evans was
actively involved in the preparation of SCI's financial statements and the
resolution of issues raised in connection therewith. Mr. Evans has also served
on the audit committee of various reporting companies. At such companies, Mr.
Evans was involved in the oversight of audits, audit plans, and the preparation
of financial statements. Mr. Evans also formerly chaired the audit committee of
the Federal Reserve Bank of Chicago.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Nuveen Maryland Dividend Advantage Municipal Fund 3
The following tables show the amount of fees that Ernst & Young LLP, the Fund's
auditor, billed to the Fund during the Fund's last two full fiscal years. For
engagements with Ernst & Young LLP the Audit Committee approved in advance all
audit services and non-audit services that Ernst & Young LLP provided to the
Fund, except for those non-audit services that were subject to the pre-approval
exception under Rule 2-01 of Regulation S-X (the "pre-approval exception"). The
pre-approval exception for services provided directly to the Fund waives the
pre-approval requirement for services other than audit, review or attest
services if: (A) the aggregate amount of all such services provided constitutes
no more than 5% of the total amount of revenues paid by the Fund to its
accountant during the fiscal year in which the services are provided; (B) the
Fund did not recognize the services as non-audit services at the time of the
engagement; and (C) the services are promptly brought to the Audit Committee's
attention, and the Committee (or its delegate) approves the services before the
audit is completed.
The Audit Committee has delegated certain pre-approval responsibilities to its
Chairman (or, in his absence, any other member of the Audit Committee).
SERVICES THAT THE FUND'S AUDITOR BILLED TO THE FUND
AUDIT FEES BILLED AUDIT-RELATED FEES TAX FEES ALL OTHER FEES
FISCAL YEAR ENDED TO FUND (1) BILLED TO FUND (2) BILLED TO FUND (3) BILLED TO FUND (4)
------------------------------------------------------------------------------------------------------------------------------------
May 31, 2010 $ 11,036 $ 15,000 $ 0 $ 850
------------------------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0% 0%
pursuant to
pre-approval
exception
------------------------------------------------------------------------------------------------------------------------------------
May 31, 2009 $ 10,899 $ 0 $ 0 $ 850
------------------------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0% 0%
pursuant to
pre-approval
exception
------------------------------------------------------------------------------------------------------------------------------------
(1) "Audit Fees" are the aggregate fees billed for professional services for
the audit of the Fund's annual financial statements and services provided
in connection with statutory and regulatory filings or engagements.
(2) "Audit Related Fees" are the aggregate fees billed for assurance and
related services reasonably related to the performance of the audit or
review of financial statements and are not reported under "Audit Fees".
(3) "Tax Fees" are the aggregate fees billed for professional services for tax
advice, tax compliance, and tax planning.
(4) "All Other Fees" are the aggregate fees billed for products and services
for agreed upon procedures engagements performed for leveraged funds.
SERVICES THAT THE FUND'S AUDITOR BILLED TO THE
ADVISER AND AFFILIATED FUND SERVICE PROVIDERS
The following tables show the amount of fees billed by Ernst & Young LLP to
Nuveen Asset Management ("NAM" or the "Adviser"), and any entity controlling,
controlled by or under common control with NAM that provides ongoing services
to the Fund ("Affiliated Fund Service Provider"), for engagements directly
related to the Fund's operations and financial reporting, during the Fund's
last two full fiscal years.
The tables also show the percentage of fees subject to the pre-approval
exception. The pre-approval exception for services provided to the Adviser and
any Affiliated Fund Service Provider (other than audit, review or attest
services) waives the pre-approval requirement if: (A) the aggregate amount of
all such services provided constitutes no more than 5% of the total amount of
revenues paid to Ernst & Young LLP by the Fund, the Adviser and Affiliated Fund
Service Providers during the fiscal year in which the services are provided that
would have to be pre-approved by the Audit Committee; (B) the Fund did not
recognize the services as non-audit services at the time of the engagement; and
(C) the services are promptly brought to the Audit Committee's attention, and
the Committee (or its delegate) approves the services before the Fund's audit is
completed.
FISCAL YEAR ENDED AUDIT-RELATED FEES TAX FEES BILLED TO ALL OTHER FEES
BILLED TO ADVISER AND ADVISER AND BILLED TO ADVISER
AFFILIATED FUND AFFILIATED FUND AND AFFILIATED FUND
SERVICE PROVIDERS SERVICE PROVIDERS SERVICE PROVIDERS
------------------------------------------------------------------------------------------------------------------------------------
May 31, 2010 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
------------------------------------------------------------------------------------------------------------------------------------
May 31, 2009 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
------------------------------------------------------------------------------------------------------------------------------------
NON-AUDIT SERVICES
The following table shows the amount of fees that Ernst & Young LLP billed
during the Fund's last two full fiscal years for non-audit services. The Audit
Committee is required to pre-approve non-audit services that Ernst & Young LLP
provides to the Adviser and any Affiliated Fund Services Provider, if the
engagement related directly to the Fund's operations and financial reporting
(except for those subject to the pre-approval exception described above). The
Audit Committee requested and received information from Ernst & Young LLP about
any non-audit services that Ernst & Young LLP rendered during the Fund's last
fiscal year to the Adviser and any Affiliated Fund Service Provider. The
Committee considered this information in evaluating Ernst & Young LLP's
independence.
FISCAL YEAR ENDED TOTAL NON-AUDIT FEES
BILLED TO ADVISER AND
AFFILIATED FUND SERVICE TOTAL NON-AUDIT FEES
PROVIDERS (ENGAGEMENTS BILLED TO ADVISER AND
RELATED DIRECTLY TO THE AFFILIATED FUND SERVICE
TOTAL NON-AUDIT FEES OPERATIONS AND FINANCIAL PROVIDERS (ALL OTHER
BILLED TO FUND REPORTING OF THE FUND) ENGAGEMENTS) TOTAL
------------------------------------------------------------------------------------------------------------------------------------
May 31, 2010 $ 850 $ 0 $ 0 $ 850
May 31, 2009 $ 850 $ 0 $ 0 $ 850
"Non-Audit Fees billed to Fund" for both fiscal year ends represent "Tax Fees"
and "All Other Fees" billed to Fund in their respective amounts from the
previous table.
Audit Committee Pre-Approval Policies and Procedures. Generally, the Audit
Committee must approve (i) all non-audit services to be performed for the Fund
by the Fund's independent accountants and (ii) all audit and non-audit services
to be performed by the Fund's independent accountants for the Affiliated Fund
Service Providers with respect to operations and financial reporting of the
Fund. Regarding tax and research projects conducted by the independent
accountants for the Fund and Affiliated Fund Service Providers (with respect to
operations and financial reports of the Fund) such engagements will be (i)
pre-approved by the Audit Committee if they are expected to be for amounts
greater than $10,000; (ii) reported to the Audit Committee chairman for his
verbal approval prior to engagement if they are expected to be for amounts under
$10,000 but greater than $5,000; and (iii) reported to the Audit Committee at
the next Audit Committee meeting if they are expected to be for an amount under
$5,000.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The registrant's Board has a separately designated Audit Committee established
in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934,
as amended (15 U.S.C. 78c(a)(58)(A)). The members of the audit committee are
Robert P. Bremner, Jack B. Evans, Terence J. Toth, William J. Schneider and
David J. Kundert.
ITEM 6. SCHEDULE OF INVESTMENTS.
a) See Portfolio of Investments in Item 1.
b) Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
The registrant invests its assets primarily in municipal bonds and cash
management securities. On rare occasions the registrant may acquire, directly or
through a special purpose vehicle, equity securities of a municipal bond issuer
whose bonds the registrant already owns when such bonds have deteriorated or are
expected shortly to deteriorate significantly in credit quality. The purpose of
acquiring equity securities generally will be to acquire control of the
municipal bond issuer and to seek to prevent the credit deterioration or
facilitate the liquidation or other workout of the distressed issuer's credit
problem. In the course of exercising control of a distressed municipal issuer,
NAM may pursue the registrant's interests in a variety of ways, which may entail
negotiating and executing consents, agreements and other arrangements, and
otherwise influencing the management of the issuer. NAM does not consider such
activities proxy voting for purposes of Rule 206(4)-6 under the 1940 Act, but
nevertheless provides reports to the registrant's Board on its control
activities on a quarterly basis.
In the rare event that a municipal issuer were to issue a proxy or that the
registrant were to receive a proxy issued by a cash management security, NAM
would either engage an independent third party to determine how the proxy should
be voted or vote the proxy with the consent, or based on the instructions, of
the registrant's Board or its representative. A member of NAM's legal department
would oversee the administration of the voting, and ensure that records were
maintained in accordance with Rule 206(4)-6, reports were filed with the SEC on
Form N-PX, and the results provided to the registrant's Board and made available
to shareholders as required by applicable rules.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
THE PORTFOLIO MANAGER
The following individual has primary responsibility for the day-to-day
implementation of the registrant's investment strategies:
NAME FUND
Cathryn P. Steeves Nuveen Maryland Dividend Advantage Municipal Fund 3
Other Accounts Managed. In addition to managing the registrant, the portfolio
manager is also primarily responsible for the day-to-day portfolio management of
the following accounts:
TYPE OF ACCOUNT NUMBER OF
PORTFOLIO MANAGER MANAGED ACCOUNTS ASSETS*
--------------------------------------------------------------------------------
Cathryn P. Steeves Registered Investment Company 44 $8.256 billion
Other Pooled Investment Vehicles 0 $0
Other Accounts 0 $0
* Assets are as of May 31, 2010. None of the assets in these accounts are
subject to an advisory fee based on performance.
Compensation. Each portfolio manager's compensation consists of three basic
elements--base salary, cash bonus and long-term incentive compensation. The
compensation strategy is to annually compare overall compensation to the market
in order to create a compensation structure that is competitive and consistent
with similar financial services companies. As discussed below, several factors
are considered in determining each portfolio manager's total compensation. In
any year these factors may include, among others, the effectiveness of the
investment strategies recommended by the portfolio manager's investment team,
the investment performance of the accounts managed by the portfolio manager, and
the overall performance of Nuveen Investments, Inc. (the parent company of NAM).
Although investment performance is a factor in determining the portfolio
manager's compensation, it is not necessarily a decisive factor. The portfolio
manager's performance is evaluated in part by comparing manager's performance
against a specified investment benchmark. This fund-specific benchmark is a
customized subset (limited to bonds in each Fund's specific state and with
certain maturity parameters) of the S&P/Investortools Municipal Bond index, an
index comprised of bonds held by managed municipal bond fund customers of
Standard & Poor's Securities Pricing, Inc. that are priced daily and whose fund
holdings aggregate at least $2 million. As of May 31, 2010, the
S&P/Investortools Municipal Bond index was comprised of 55,306 securities with
an aggregate current market value of $1,205 billion.
Base salary. Each portfolio manager is paid a base salary that is set at a level
determined by NAM in accordance with its overall compensation strategy discussed
above. NAM is not under any current contractual obligation to increase a
portfolio manager's base salary.
Cash bonus. Each portfolio manager is also eligible to receive an annual cash
bonus. The level of this bonus is based upon evaluations and determinations made
by each portfolio manager's supervisors, along with reviews submitted by his
peers. These reviews and evaluations often take into account a number of
factors, including the effectiveness of the investment strategies recommended to
the NAM's investment team, the performance of the accounts for which he serves
as portfolio manager relative to any benchmarks established for those accounts,
his effectiveness in communicating investment performance to stockholders and
their representatives, and his contribution to the NAM's investment process and
to the execution of investment strategies. The cash bonus component is also
impacted by the overall performance of Nuveen Investments, Inc. in achieving its
business objectives.
Long-term incentive compensation. In connection with the acquisition of Nuveen
Investments, Inc., by a group of investors lead by Madison Dearborn Partners in
November 2007, certain employees, including portfolio managers, received profit
interests in Nuveen's parent. These profit interests entitle the holders to
participate in the appreciation in the value of Nuveen beyond the issue date and
vest over five to seven years, or earlier in the case of a liquidity event. In
addition, in July 2009, Nuveen Investments created and funded a trust, as part
of a newly-established incentive program, which purchased shares of certain
Nuveen Mutual Funds and awarded such shares, subject to vesting, to certain
employees, including portfolio managers.
Material Conflicts of Interest. Each portfolio manager's simultaneous management
of the registrant and the other accounts noted above may present actual or
apparent conflicts of interest with respect to the allocation and aggregation of
securities orders placed on behalf of the Registrant and the other account. NAM,
however, believes that such potential conflicts are mitigated by the fact that
the NAM has adopted several policies that address potential conflicts of
interest, including best execution and trade allocation policies that are
designed to ensure (1) that portfolio management is seeking the best price for
portfolio securities under the circumstances, (2) fair and equitable allocation
of investment opportunities among accounts over time and (3) compliance with
applicable regulatory requirements. All accounts are to be treated in a
non-preferential manner, such that allocations are not based upon account
performance, fee structure or preference of the portfolio manager, although the
allocation procedures may provide allocation preferences to funds with special
characteristics (such as favoring state funds versus national funds for
allocations of in-state bonds). In addition, NAM has adopted a Code of Conduct
that sets forth policies regarding conflicts of interest.
Beneficial Ownership of Securities. As of May 31, 2010, the portfolio manager
beneficially owned the following dollar range of equity securities issued by the
Registrant and other Nuveen Funds managed by NAM's municipal investment team.
DOLLAR RANGE OF
DOLLAR EQUITY SECURITIES
RANGE OF BENEFICIALLY OWNED
EQUITY IN THE REMAINDER OF
SECURITIES NUVEEN FUNDS
BENEFICIALLY MANAGED BY NAM'S
NAME OF PORTFOLIO OWNED IN MUNICIPAL
MANAGER FUND FUND INVESTMENT TEAM
-----------------------------------------------------------------------------------------------------------------------
Cathryn P. Steeves Nuveen Maryland Dividend Advantage Municipal Fund 3 $0 $10,001-$50,000
PORTFOLIO MANAGER BIO:
Cathryn P. Steeves, PhD, Senior Vice President of NAM, is currently a portfolio
manager for 45 state-specific municipal bond funds. She joined Nuveen in 1996
and worked as a senior analyst in the healthcare sector. Ms. Steeves has an
undergraduate degree from Wake Forest University as well as an MA, an MPhil and
a PhD from Columbia University.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the registrant's Board implemented after the registrant
last provided disclosure in response to this item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of this report that includes the disclosure
required by this paragraph, based on their evaluation of the controls
and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")
(17 CFR 240.13a-15(b) or 240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter
of the period covered by this report that has materially affected, or
is reasonably likely to materially affect, the registrant's internal
control over financial reporting.
ITEM 12. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit: Not applicable
because the code is posted on registrant's website at www.nuveen.com/CEF/Info/
Shareholder and there were no amendments during the period covered by this
report. (To view the code, click on Fund Governance and then Code of Conduct.)
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2(a) under
the 1940 Act (17 CFR 270.30a-2(a)) in the exact form set forth below: Ex-99.CERT
Attached hereto.
(a)(3) Any written solicitation to purchase securities under Rule 23c-1 under
the 1940 Act (17 CFR 270.23c-1) sent or given during the period covered by the
report by or on behalf of the registrant to 10 or more persons. Not applicable.
(b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act,
provide the certifications required by Rule 30a-2(b) under the 1940 Act (17 CFR
270.30a-2(b)); Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR
240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of
the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished
pursuant to this paragraph will not be deemed "filed" for purposes of Section 18
of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of
that section. Such certification will not be deemed to be incorporated by
reference into any filing under the Securities Act of 1933 or the Exchange Act,
except to the extent that the registrant specifically incorporates it by
reference. Ex-99.906 CERT attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Nuveen Maryland Dividend Advantage Municipal Fund 3
-----------------------------------------------------------
By (Signature and Title) /s/ Kevin J. McCarthy
----------------------------------------------
Kevin J. McCarthy
Vice President and Secretary
Date: August 6, 2010
-------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title) /s/ Gifford R. Zimmerman
----------------------------------------------
Gifford R. Zimmerman
Chief Administrative Officer
(principal executive officer)
Date: August 6, 2010
-------------------------------------------------------------------
By (Signature and Title) /s/ Stephen D. Foy
----------------------------------------------
Stephen D. Foy
Vice President and Controller
(principal financial officer)
Date: August 6, 2010
-------------------------------------------------------------------