UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-7056
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Nuveen Select Maturities Municipal Fund
--------------------------------------------------------------------------------
(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
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(Name and address of agent for service)
Registrant's telephone number, including area code: (312) 917-7700
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Date of fiscal year end: March 31
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Date of reporting period: March 31, 2008
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
ANNUAL REPORT
March 31, 2008
Nuveen Investments
MUNICIPAL CLOSED-END FUNDS
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NUVEEN SELECT
MATURITIES
MUNICIPAL FUND
NIM
IT'S NOT WHAT YOU EARN, IT'S WHAT YOU KEEP.(R)
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LIFE IS COMPLEX.
NUVEEN
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Chairman's
LETTER TO SHAREHOLDERS
Photo of: Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
Once again, I am pleased to report that over the twelve-month period covered by
this report your Fund continued to provide you with attractive monthly tax-free
income. For more details about the management strategy and performance of your
Fund, please read the Portfolio Manager's Comments, the Dividend and Share Price
Information, and the Performance Overview sections of this report.
With the recent volatility in the stock market, many have begun to wonder which
way the market is headed, and whether they need to adjust their holdings of
investments. No one knows what the future will bring, which is why we think a
well-balanced portfolio that is structured and carefully monitored with the help
of an investment professional is an important component in achieving your
long-term financial goals. A well-diversified portfolio may actually help to
reduce your overall investment risk, and we believe that investments like your
Nuveen Investments Fund can be important building blocks in a portfolio crafted
to perform well through a variety of market conditions.
We also are pleased to be able to offer you a choice concerning how you receive
your shareholder reports and other Fund information. As an alternative to mailed
copies, you can sign up to receive future Fund reports and other Fund
information by e-mail and the internet. The inside front cover of this report
contains information on how you can sign up.
We are grateful that you have chosen us as a partner as you pursue your
financial goals and we look forward to continuing to earn your trust in the
months and years ahead. At Nuveen Investments, our mission continues to be to
assist you and your financial advisor by offering investment services and
products that can help you to secure your financial objectives.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
May 15, 2008
Portfolio Manager's COMMENTS
Nuveen Investments Municipal Closed-End Funds
NIM
Portfolio manager Paul Brennan examines U.S. economic and municipal market
conditions, key investment strategies, and the annual performance of the Nuveen
Select Maturities Municipal Fund (NIM). With 18 years of investment experience,
including 16 years with Nuveen, Paul has managed NIM since 2006.
WHAT FACTORS AFFECTED THE U.S. ECONOMY AND MUNICIPAL MARKET DURING THE TWELVE
MONTH REPORTING PERIOD ENDED MARCH 31, 2008?
During this reporting period, developments in the financial sector, especially
in the credit markets, led to increased volatility, tightening liquidity and a
flight to quality. These trends began to take shape during the summer of 2007.
The changes became particularly evident in August 2007, when market concerns
about defaults on sub-prime mortgages resulted in a liquidity crisis across most
fixed income asset classes. In September 2007, the Federal Reserve (Fed)
responded to credit market volatility by launching a series of interest rate
cuts that lowered the Fed Funds rate by 300 basis points--from 5.25% to
2.25%--in seven months, including reductions of 125 basis points in January 2008
alone. (On April 30, 2008, following the close of this reporting period, the Fed
reduced this target rate by another 25 basis points, to 2.00%.)
The Fed's actions also were a response to increased signs of weakness in the
U.S. economy, as evidenced by the slowing growth of in the U.S. gross domestic
product (GDP), a closely watched measure of economic growth. While the GDP
expanded at 3.8% in the second quarter and 4.9% in the third quarter of 2007,
this measure dropped sharply to 0.6% in the fourth quarter (all GDP numbers
annualized). In the first quarter of 2008, GDP growth remained at an annual rate
of 0.6%, restrained by a 27% decline in residential investment and the weakest
consumer spending since 2001. Driven largely by increased energy, agricultural,
and commodities prices, the Consumer Price Index (CPI) registered a 4.0%
year-over-year gain as of March 2008, while the increase in this inflation gauge
for the first three months of 2008 was an annualized 3.1%. The core CPI rose
2.1% between April 2007 and March 2008, remaining above the Fed's unofficial
target of 2.0% or lower. In the labor markets, January 2008 marked the first
decline in new jobs created since 2003, breaking the longest string of
employment growth (52 months) in U.S. history. The national unemployment rate
for March 2008 was 5.1%, up from 4.4% in March 2007.
Discussions of specific investments are for illustrative purposes only and are
not intended as recommendations of individual investments. The views expressed
in this commentary represent those of the portfolio manager as of the date of
this report and are subject to change at any time, based on market conditions
and other factors. The Fund disclaims any obligation to advise shareholders of
such changes.
4
In the municipal bond market, factors related to the sub-prime mortgage crisis
had an indirect, but important, influence on performance. General concerns about
the credit markets as well as more specific concerns about municipal bond
insurers with exposure to sub-prime mortgages caused some investors to curtail
purchases. In addition, many highly leveraged investors were forced to sell
holdings of long-maturity bonds into a market already experiencing lack of
liquidity. Combined with the Fed rate cuts, this selling produced a sharp
steepening of the municipal yield curve, as longer-term interest rates rose and
short-term interest rates declined. Between April 1, 2007, and March 31, 2008,
the yield on the Bond Buyer 25 Revenue Bond Index, a widely followed measure of
longer-term municipal market rates, rose 76 basis points to 5.24% at the end of
March 2008, its highest level since July 2006. By comparison, the yield on the
benchmark 10-year U.S. Treasury note dropped more than 120 basis points to end
the reporting period at 3.43%. In this environment, bonds with shorter
maturities generally outperformed longer maturity bonds and higher quality bonds
tended to outperform lower quality credits.
Over the twelve months ended March 2008, municipal bond issuance nationwide
totaled $451.1 billion, an increase of 2% from the previous twelve months.
During the first three months of 2008, municipal issuance was off sharply from
the record pace seen in 2007, as $80.3 billion in new securities came to market,
down 25% from the same period in 2007. In the first quarter of 2008, insured
bonds comprised 27% of new supply, compared with 51% during the first quarter of
2007. Despite disruptions in the markets, new municipal issuance continued to be
met with good demand by institutional and retail buyers as well as
non-traditional buyers returning to the market at the end of this period.
WHAT KEY STRATEGIES WERE USED TO MANAGE NIM DURING THIS REPORTING PERIOD?
During this twelve-month period, as the municipal market was characterized by
volatility and a steepening yield curve, we sought to capitalize on this
environment by concentrating on relative value, taking a bottom-up approach to
finding undervalued sectors and individual credits with the potential to perform
well over the long term.
Using this fundamental approach, we focused some of our efforts on finding bonds
that met NIM's maturity needs, with the goal of keeping the Fund's maturity and
duration(1) profiles relatively unchanged. Among the bonds we added to our
portfolio were several health care credits. We also emphasized pre-refunded,(2)
or escrowed, bonds, which we believed represented good value. These bonds often
featured more unusual structural characteristics--such as different coupons,
call structures or sinking fund provisions--that we thought could add value to
the Fund. Because these structural characteristics are often overlooked,
investors who make an effort to investigate them are often
(1) Duration is a measure of a bond's price sensitivity as interest rates
change, with longer duration bonds displaying more sensitivity to these
changes than bonds with shorter durations.
(2) Advance refundings, also known as pre-refundings or refinancings, occur
when an issuer sells new bonds and uses the proceeds to fund principal and
interest payments of older existing bonds. This process often results in
lower borrowing costs for bond issuers.
5
rewarded with better return potential. The majority of cash for new purchases
was generated by bond redemptions, which are normal occurrences in a fund with
an intermediate maturity focus such as NIM.
HOW DID THE FUND PERFORM?
Results for NIM, as well as relevant index information, are presented in the
accompanying table.
Total Returns on Common Share Net Asset Value*
For periods ended 3/31/08
1-Year 5-Year 10-Year
NIM 3.18% 4.16% 3.48%
Lehman Brothers
7-Year Municipal
Bond Index(3) 5.59% 3.92% 4.99%
For the twelve months ended March 31, 2008, the total return on net asset value
(NAV) for NIM underperformed the return for the Lehman Brothers 7-Year Municipal
Bond Index. Major factors that influenced NIM's performance included duration
and yield curve positioning, credit exposure and sector allocations, and
holdings of bonds backed by certain municipal bond insurers.
During this twelve-month period, bonds in the Lehman Brothers Municipal Bond
Index with maturities of eight years or less, especially those maturing in two
to six years, benefited the most from changes in the interest rate environment.
As a result, these shorter maturity bonds generally outperformed credits with
longer maturities. Bonds having the longest maturities (22 years and longer)
posted the worst returns. This market environment was beneficial to NIM, which
continued to offer an intermediate-term orientation.(4)
*Annualized.
Past performance is not predictive of future results. Current performance may be
higher or lower than the data shown. Returns do not reflect the deduction of
taxes that shareholders may have to pay on Fund distributions or upon the sale
of Fund shares.
For additional information, see the Performance Overview page for NIM in this
report.
(3) The Lehman Brothers 7-Year Municipal Bond Index is an unleveraged,
unmanaged national index comprising a broad range of investment-grade
municipal bonds with maturities ranging from six to eight years. Results
for the Lehman index do not reflect any expenses.
(4) In keeping with its investment parameters, NIM maintains an average
effective maturity of 12 years or less for portfolio holdings.
6
However, the positive contribution made by duration positioning was offset to
some degree by the performance of bonds rated BBB or lower and non-rated bonds,
which generally underperformed higher quality issues. NIM's allocation of
approximately 21% of its portfolio to lower-rated and non-rated bonds was higher
than that of the Lehman Brothers 7-Year Municipal Bond Index, and the negative
impact of this greater exposure to credit risk accounted for some of the
performance differential between NIM and the index. In general, bonds that
carried any credit risk, regardless of sector, tended to perform poorly. Revenue
bonds as a whole, and especially the industrial development and health care
sectors that had ranked among the top performers in the Lehman Brothers
Municipal Bond Index over the past few years, underperformed the general
municipal market. The housing sector also performed poorly.
Overall the Fund benefited from its holdings in water and sewer, special tax,
resource recovery and electric utilities. Pre-refunded bonds also performed
exceptionally well, due primarily to their shorter effective maturities and
higher credit quality. As of March 31, 2008, NIM held 10% of its portfolio in
escrowed bonds.
Another factor that had an impact on NIM's performance was the Fund's position
in bonds backed by certain municipal insurers. This included bonds insured by XL
Capital Assurance (XLCA), Financial Guaranty Insurance Company (FGIC), ACA
Financial Guaranty Corporation (ACA) and Financial Security Assurance (FSA).
As concern increased about the balance sheets of municipal bond insurers, prices
on bonds insured by these companies declined. On the whole, the holdings of NIM
continued to be well diversified not only between insured and uninsured bonds,
but also within the insured bond category.
7
RECENT DEVELOPMENTS REGARDING BOND INSURANCE COMPANIES
The portfolio of investments reflects the ratings on certain bonds insured by
AMBAC, FGIC, MBIA and XLCA as of March 31, 2008. During March 2008, at least one
rating agency reduced the rating for AMBAC-insured bonds to AA and at least one
rating agency further reduced the ratings for FGIC-insured and XLCA-insured
bonds. Subsequent to March 31, 2008, at least one rating agency reduced the
rating for MBIA-insured bonds to AA. As of March 31, 2008, one or more rating
agencies have placed each of these insurers on "negative credit watch", which
may presage one or more rating reductions for such insurer or insurers in the
future. If one or more insurers' ratings are reduced by these rating agencies,
it would likely reduce the effective rating of many of the bonds insured by that
insurer or insurers. It is important to note that municipal bonds historically
have had a very low rate of default.
8
Dividend and Share Price
INFORMATION
The dividend of NIM remained stable throughout the twelve-month reporting period
ended March 31, 2008.
NIM seeks to pay stable dividends at rates that reflect the Fund's past results
and projected future performance. During certain periods, NIM may pay dividends
at a rate that may be more or less than the amount of net investment income
actually earned by the Fund during the period. If a Fund has cumulatively earned
more than it has paid in dividends, it holds the excess in reserve as
undistributed net investment income (UNII) as part of the Fund's NAV.
Conversely, if a Fund has cumulatively paid dividends in excess of its earnings,
the excess constitutes negative UNII that is likewise reflected in the Fund's
NAV. NIM will, over time, pay all of its net investment income as dividends to
shareholders. As of March 31, 2008, NIM had a positive UNII balance for tax
purposes and a negative UNII balance for financial statement purposes.
As of March 31, 2008, NIM was trading at a discount of -2.68% to its NAV. The
Fund's average discount over the entire twelve-month reporting period was
-5.94%.
9
NIM
Performance
OVERVIEW
Nuveen Select
Maturities
Municipal Fund
as of March 31, 2008
Credit Quality (as a % of total investments)(1)
Pie Chart:
AAA/U.S. Guaranteed 57%
AA 6%
A 16%
BBB 14%
BB or Lower 2%
N/R 5%
Line Chart:
Bar Chart:
2007-2008 Monthly Tax-Free Dividends Per Share
Apr 0.0365
May 0.0365
Jun 0.0365
Jul 0.0365
Aug 0.0365
Sep 0.0365
Oct 0.0365
Nov 0.0365
Dec 0.0365
Jan 0.0365
Feb 0.0365
Mar 0.0365
Line Chart:
Share Price Performance -- Weekly Closing Price
4/01/07 9.9
9.93
9.85
9.78
9.81
9.9
9.93
9.88
9.83
9.81
9.78
9.58
9.42
9.5
9.52
9.43
9.34
9.41
9.43
9.334
9.23
9.55
9.54
9.6201
9.58
9.5101
9.44
9.49
9.48
9.73
9.33
9.31
9.27
9.09
9.15
9.16
9.22
9.06
9.25
9.25
9.53
9.58
9.41
9.46
9.69
9.54
9.2501
9.6
9.68
9.62
9.71
9.69
9.75
3/31/08 9.8
FUND SNAPSHOT
------------------------------------
Share Price $9.80
------------------------------------
Net Asset Value $10.07
------------------------------------
Premium/(Discount) to NAV -2.68%
------------------------------------
Market Yield 4.47%
------------------------------------
Taxable-Equivalent Yield(2) 6.21%
------------------------------------
Net Assets ($000) $124,831
------------------------------------
Average Effective Maturity
on Securities (Years) 10.69
------------------------------------
Modified Duration 4.36
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 9/18/92)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 3.18% 3.18%
------------------------------------
5-Year 4.83% 4.16%
------------------------------------
10-Year 3.71% 3.48%
------------------------------------
STATES
(as a % of total investments)
------------------------------------
Illinois 14.5%
------------------------------------
Colorado 13.7%
------------------------------------
Pennsylvania 7.4%
------------------------------------
Texas 6.7%
------------------------------------
New York 6.6%
------------------------------------
South Carolina 6.6%
------------------------------------
Florida 5.1%
------------------------------------
Arkansas 4.3%
------------------------------------
Wisconsin 3.7%
------------------------------------
Kansas 3.0%
------------------------------------
Washington 2.8%
------------------------------------
Iowa 2.4%
------------------------------------
Alabama 2.1%
------------------------------------
Massachusetts 2.0%
------------------------------------
Tennessee 1.9%
------------------------------------
Michigan 1.8%
------------------------------------
Connecticut 1.7%
------------------------------------
Other 13.7%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
U.S. Guaranteed 18.8%
------------------------------------
Utilities 17.9%
------------------------------------
Health Care 12.2%
------------------------------------
Tax Obligation/Limited 11.9%
------------------------------------
Tax Obligation/General 6.4%
------------------------------------
Long-Term Care 5.7%
------------------------------------
Education and Civic
Organizations 5.0%
------------------------------------
Transportation 4.9%
------------------------------------
Consumer Staples 4.7%
------------------------------------
Other 12.5%
------------------------------------
(1) The percentages shown in the foregoing chart reflect the ratings on certain
bonds insured by AMBAC, FGIC, MBIA and XLCA as of March 31, 2008. As
explained earlier in the Portfolio Manager's Comments section of this
report, at least one rating agency reduced the rating for AMBAC-insured
bonds to AA and at least one rating agency further reduced the ratings for
FGIC-insured and XLCA-insured bonds. Subsequent to March 31, 2008, at least
one rating agency reduced the rating for MBIA-insured bonds to AA. As of
March 31, 2008, one or more rating agencies have placed each of these
insurers on "negative credit watch", which may presage one or more rating
reductions for such insurer or insurers in the future. If one or more
insurers' ratings are reduced by these rating agencies, it would likely
reduce the effective rating of many of the bonds insured by that insurer or
insurers, and thereby reduce the percentage of the ratings shown in the
foregoing chart.
(2) Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a income tax rate of 28%. When comparing
this Fund to investments that generate qualified dividend income, the
Taxable-Equivalent Yield is lower.
10
NIM
Shareholder MEETING REPORT
The special meeting of shareholders was held in the offices of Nuveen
Investments on October 12, 2007.
--------------------------------------------------------------------------------
TO APPROVE A NEW INVESTMENT MANAGEMENT AGREEMENT:
For 6,262,498
Against 225,054
Abstain 166,400
Broker Non-Votes 2,434,983
--------------------------------------------------------------------------------
Total 9,088,935
================================================================================
TO RATIFY THE SELECTION OF ERNST & YOUNG LLP AS THE INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM FOR THE CURRENT FISCAL YEAR:
For 8,891,810
Against 102,203
Abstain 94,922
--------------------------------------------------------------------------------
Total 9,088,935
================================================================================
11
Report of
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS
NUVEEN SELECT MATURITIES MUNICIPAL FUND
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Nuveen Select Maturities Municipal Fund as of
March 31, 2008, and the related statement of operations for the year then ended,
the statement of changes in net assets for each of the two years in the period
then ended, and the financial highlights for each of the five years in the
period then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Fund's internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Fund's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of March 31, 2008, by correspondence with the custodian and
brokers, or by other appropriate auditing procedures where replies from brokers
were not received. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Nuveen
Select Maturities Municipal Fund at March 31, 2008, the results of its
operations for the year then ended, changes in its net assets for each of the
two years in the period then ended, and its 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
May 20, 2008
12
NIM
Nuveen Select Maturities Municipal Fund
Portfolio of INVESTMENTS
March 31, 2008
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 2.1%
$ 2,000 Alabama 21st Century Authority, Tobacco Settlement Revenue 12/11 at 101.00 A- $ 2,066,220
Bonds, Series 2001, 5.750%, 12/01/17
500 Marshall County Healthcare Authority, Alabama, Revenue Bonds, 1/12 at 101.00 A- 524,540
Series 2002A, 6.250%, 1/01/22
------------------------------------------------------------------------------------------------------------------------------------
2,500 Total Alabama 2,590,760
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ARIZONA - 1.1%
165 Phoenix Industrial Development Authority, Arizona, Statewide 4/08 at 101.50 AAA 170,186
Single Family Mortgage Revenue Bonds, Series 1998C,
6.650%, 10/01/29 (Alternative Minimum Tax)
300 Salt Verde Financial Corporation, Arizona, Senior Gas Revenue No Opt. Call AA- 256,428
Bonds, Series 2007, 5.000%, 12/01/37
750 Surprise Municipal Property Corporation, Arizona, Wastewater 4/11 at 100.00 N/R 727,050
System Revenue Bonds, Series 2007, 4.500%, 4/01/17
265 Winslow Industrial Development Authority, Arizona, Hospital No Opt. Call N/R 264,812
Revenue Bonds, Winslow Memorial Hospital, Series 1998,
5.750%, 6/01/08
------------------------------------------------------------------------------------------------------------------------------------
1,480 Total Arizona 1,418,476
------------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 4.1%
1,000 Fort Smith, Arkansas, Water and Sewer Revenue Refunding 10/11 at 100.00 AAA 1,071,820
and Construction Bonds, Series 2002A, 5.250%, 10/01/17 -
FSA Insured
1,500 Jefferson County, Arkansas, Pollution Control Revenue Bonds, 6/11 at 100.00 A- 1,470,495
Entergy Arkansas Inc. Project, Series 2006, 4.600%, 10/01/17
1,000 Jonesboro, Arkansas, Industrial Development Revenue Bonds, No Opt. Call A 1,064,900
Anheuser Busch Inc. Project, Series 2002, 4.600%, 11/15/12
1,380 North Little Rock, Arkansas, Electric Revenue Refunding Bonds, No Opt. Call AAA 1,561,222
Series 1992A, 6.500%, 7/01/15 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
4,880 Total Arkansas 5,168,437
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COLORADO - 13.3%
2,895 Centennial Downs Metropolitan District, Colorado, General 12/14 at 100.00 AAA 3,029,994
Obligation Bonds, Series 1999, 5.000%, 12/01/20 -
AMBAC Insured
1,290 Colorado Educational and Cultural Facilities Authority, Charter 7/12 at 100.00 BBB 1,294,928
School Revenue Bonds, Douglas County School District RE-1 -
DCS Montessori School, Series 2002A, 6.000%, 7/15/22
1,175 Colorado Educational and Cultural Facilities Authority, 12/13 at 100.00 A 1,184,001
Revenue Bonds, Classical Academy Charter School, Series 2003,
4.500%, 12/01/18 - XLCA Insured
290 Colorado Housing Finance Authority, Single Family Program 4/10 at 105.00 AA 304,230
Senior Bonds, Series 2000D-2, 6.900%, 4/01/29
(Alternative Minimum Tax)
1,025 Denver Health and Hospitals Authority, Colorado, Healthcare 12/11 at 100.00 BBB (4) 1,139,062
Revenue Bonds, Series 2001A, 6.000%, 12/01/23
(Pre-refunded 12/01/11)
1,465 Denver West Metropolitan District, Colorado, General Obligation 12/13 at 100.00 AA 1,429,752
Refunding and Improvement Bonds, Series 2003,
4.500%, 12/01/18 - RAAI Insured
1,340 Eagle Bend Metropolitan District 2, Colorado, General Obligation 12/14 at 101.00 AA 1,342,452
Bonds, Series 2004, 5.000%, 12/01/20 - RAAI Insured
13
NIM
Nuveen Select Maturities Municipal Fund (continued)
Portfolio of INVESTMENTS March 31, (2008)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
COLORADO (continued)
$ 44 El Paso County, Colorado, FNMA Mortgage-Backed Single Family No Opt. Call Aaa $ 46,441
Revenue Refunding Bonds, Series 1992A-2, 8.750%, 6/01/11
700 Erie, Boulder and Weld Counties, Colorado, Water Enterprise 12/08 at 100.00 N/R (4) 714,938
Revenue Bonds, Series 1998, 5.000%, 12/01/23
(Pre-refunded 12/01/08) - ACA Insured
1,050 Erie, Boulder and Weld Counties, Colorado, Water Enterprise 12/08 at 100.00 N/R 938,816
Revenue Bonds, Series 1998, 5.000%, 12/01/23 - ACA Insured
70 Northwest Parkway Public Highway Authority, Colorado, 6/11 at 102.00 AAA 76,002
Revenue Bonds, Senior Series 2001A, 5.250%, 6/15/41
(Pre-refunded 6/15/11) - FSA Insured
5,875 Northwest Parkway Public Highway Authority, Colorado, 6/11 at 38.04 AAA 2,003,493
Senior Lien Revenue Bonds, Series 2001B, 0.000%, 6/15/27
(Pre-refunded 6/15/11) - AMBAC Insured
2,845 University of Colorado Hospital Authority, Revenue Bonds, 11/11 at 100.00 Baa1 (4) 3,119,030
Series 2001A, 5.600%, 11/15/21 (Pre-refunded 11/15/11)
------------------------------------------------------------------------------------------------------------------------------------
20,064 Total Colorado 16,623,139
------------------------------------------------------------------------------------------------------------------------------------
CONNECTICUT - 1.6%
Eastern Connecticut Resource Recovery Authority, Solid Waste
Revenue Bonds, Wheelabrator Lisbon Project, Series 1993A:
450 5.500%, 1/01/14 (Alternative Minimum Tax) 7/08 at 100.00 BBB 450,095
1,570 5.500%, 1/01/15 (Alternative Minimum Tax) 5/08 at 100.00 BBB 1,570,126
------------------------------------------------------------------------------------------------------------------------------------
2,020 Total Connecticut 2,020,221
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 4.9%
2,400 Deltona, Florida, Utility Systems Water and Sewer Revenue 10/13 at 100.00 AAA 2,581,992
Bonds, Series 2003, 5.250%, 10/01/17 - MBIA Insured
1,000 Florida Citizens Property Insurance Corporation, High Risk No Opt. Call AAA 1,081,200
Account Revenue Bonds, Series 2007A, 5.000%, 3/01/15 -
MBIA Insured
70 JEA, Florida, Electric Revenue Certificates, Series 1973-2, No Opt. Call AAA 76,175
6.800%, 7/01/12 (ETM)
2,000 Orange County, Florida, Tourist Development Tax Revenue Bonds, 10/15 at 100.00 AAA 2,050,260
Series 2005, 5.000%, 10/01/22 - AMBAC Insured
320 Port Everglades Authority, Florida, Port Facilities Revenue Bonds, No Opt. Call AAA 370,528
Series 1986, 7.125%, 11/01/16 (ETM)
------------------------------------------------------------------------------------------------------------------------------------
5,790 Total Florida 6,160,155
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 0.4%
445 Cherokee County Water and Sewerage Authority, Georgia, 8/22 at 100.00 AAA 478,642
Revenue Bonds, Series 1995, 5.200%, 8/01/25
(Pre-refunded 8/01/22) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 14.1%
715 Chicago, Illinois, Tax Increment Allocation Bonds, Irving/Cicero 1/09 at 100.00 N/R 722,036
Redevelopment Project, Series 1998, 7.000%, 1/01/14
1,500 Cook County Township High School District 208, Illinois, General 12/15 at 100.00 Aaa 1,563,990
Obligation Bonds, Series 2006, 5.000%, 12/01/21 -
MBIA Insured
2,000 Huntley, Illinois, Special Service Area 9, Special Tax Bonds, 3/17 at 100.00 AAA 2,014,160
Series 2007, 5.100%, 3/01/28 - AGC Insured
4,860 Illinois Development Finance Authority, GNMA Collateralized 4/11 at 105.00 Aaa 5,457,144
Mortgage Revenue Bonds, Greek American Nursing Home
Committee, Series 2000A, 7.600%, 4/20/40
2,000 Illinois Development Finance Authority, Revenue Refunding 4/10 at 102.00 Baa3 2,064,900
Bonds, Olin Corporation, Series 1993D, 6.750%, 3/01/16
2,000 Illinois Educational Facilities Authority, Revenue Bonds, Art 3/14 at 102.00 A1 2,031,480
Institute of Chicago, Series 2000, 4.450%, 3/01/34
(Mandatory put 3/01/15)
14
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS (continued)
$ 1,000 Illinois Educational Facilities Authority, Student Housing 5/12 at 101.00 Aaa $ 1,149,740
Revenue Bonds, Educational Advancement Foundation Fund,
University Center Project, Series 2002, 6.625%, 5/01/17
(Pre-refunded 5/01/12)
250 Illinois Finance Authority, Revenue Bonds, Roosevelt University, 4/17 at 100.00 Baa1 244,073
Series 2007, 5.250%, 4/01/22
25 Illinois Health Facilities Authority, Revenue Bonds, Condell 5/10 at 101.00 Baa3 26,059
Medical Center, Series 2000, 6.350%, 5/15/15
Illinois Health Facilities Authority, Revenue Bonds, Condell Medical
Center, Series 2002:
100 5.250%, 5/15/11 No Opt. Call Baa3 103,482
20 5.250%, 5/15/12 No Opt. Call Baa3 20,821
85 Illinois Health Facilities Authority, Revenue Bonds, Lutheran No Opt. Call AAA 90,203
General Health System, Series 1993A, 6.125%, 4/01/12 -
FSA Insured (ETM)
695 Illinois Health Facilities Authority, Revenue Bonds, 8/09 at 101.00 A 707,670
Silver Cross Hospital and Medical Centers, Series 1999,
5.500%, 8/15/19
515 Illinois Health Facilities Authority, Revenue Bonds, Silver Cross 8/09 at 101.00 A (4) 544,401
Hospital and Medical Centers, Series 1999, 5.500%, 8/15/19
(Pre-refunded 8/15/09)
1,355 Kane & DeKalb Counties, Illinois, Community United School No Opt. Call Aaa 833,311
District 301, General Obligation Bonds, Series 2006,
0.000%, 12/01/18 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
17,120 Total Illinois 17,573,470
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 2.4%
1,000 Iowa Finance Authority, Healthcare Revenue Bonds, Genesis 7/10 at 100.00 A1 1,023,630
Medical Center, Series 2000, 6.250%, 7/01/25
1,800 Iowa Tobacco Settlement Authority, Tobacco Settlement 6/11 at 101.00 AAA 1,922,814
Asset-Backed Revenue Bonds, Series 2001B,
5.300%, 6/01/25 (Pre-refunded 6/01/11)
------------------------------------------------------------------------------------------------------------------------------------
2,800 Total Iowa 2,946,444
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 2.9%
3,500 Wichita, Kansas, Hospital Facilities Revenue Refunding and 11/11 at 101.00 A+ 3,595,900
Improvement Bonds, Via Christi Health System Inc.,
Series 2001-III, 5.500%, 11/15/21
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 1.3%
1,565 Kentucky Housing Corporation, Housing Revenue Bonds, 1/15 at 100.60 AAA 1,588,084
Series 2005G, 5.000%, 7/01/30 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 0.4%
500 Louisiana Public Facilities Authority, Revenue Bonds, 7/14 at 100.00 AAA 507,670
Baton Rouge General Hospital, Series 2004, 5.250%, 7/01/24 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 0.8%
1,100 Maryland Energy Financing Administration, Revenue Bonds, 5/08 at 100.00 N/R 1,057,738
AES Warrior Run Project, Series 1995, 7.400%, 9/01/19
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 2.0%
500 Massachusetts Development Finance Agency, Revenue Bonds, 10/17 at 100.00 BB- 455,980
Orchard Cove, Series 2007, 5.000%, 10/01/19
1,460 Massachusetts Housing Finance Agency, Rental Housing 7/10 at 100.00 AAA 1,498,398
Mortgage Revenue Bonds, Series 2000H, 6.650%, 7/01/41 -
MBIA Insured (Alternative Minimum Tax)
Massachusetts Port Authority, Special Facilities Revenue Bonds,
Delta Air Lines Inc., Series 2001A:
100 5.200%, 1/01/20 - AMBAC Insured (Alternative Minimum Tax) 1/11 at 101.00 AAA 100,607
435 5.000%, 1/01/27 - AMBAC Insured (Alternative Minimum Tax) 1/11 at 101.00 AAA 408,748
------------------------------------------------------------------------------------------------------------------------------------
2,495 Total Massachusetts 2,463,733
------------------------------------------------------------------------------------------------------------------------------------
15
NIM
Nuveen Select Maturities Municipal Fund (continued)
Portfolio of INVESTMENTS March 31, (2008)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 1.7%
$ 1,000 Cornell Township Economic Development Corporation, Michigan, 5/12 at 100.00 AAA $ 1,112,210
Environmental Improvement Revenue Refunding Bonds,
MeadWestvaco Corporation-Escanaba Project, Series 2002,
5.875%, 5/01/18 (Pre-refunded 5/01/12)
600 Michigan State Hospital Finance Authority, Hospital Revenue 7/08 at 100.00 Ba3 600,018
Refunding Bonds, Sinai Hospital, Series 1995, 6.625%, 1/01/16
470 Michigan State Hospital Finance Authority, Revenue Refunding 5/08 at 100.00 BB- 470,432
Bonds, Detroit Medical Center, Series 1988A, 8.125%, 8/15/12
------------------------------------------------------------------------------------------------------------------------------------
2,070 Total Michigan 2,182,660
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 0.7%
825 White Earth Band of Chippewa Indians, Minnesota, Revenue No Opt. Call N/R 850,196
Bonds, Series 2000A, 7.000%, 12/01/11 - ACA Insured
------------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 0.8%
Mississippi Hospital Equipment and Facilities Authority, Revenue
Bonds, Baptist Memorial Healthcare, Series 2004B-1:
700 5.000%, 9/01/16 No Opt. Call AA 731,591
300 5.000%, 9/01/24 9/14 at 100.00 AA 295,695
------------------------------------------------------------------------------------------------------------------------------------
1,000 Total Mississippi 1,027,286
------------------------------------------------------------------------------------------------------------------------------------
MONTANA - 0.0%
50 University of Montana, Revenue Bonds, Series 1996D, 5/08 at 101.00 AAA 54,608
5.375%, 5/15/19 - MBIA Insured (ETM)
------------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 0.9%
1,000 Dodge County School District 1, Nebraska, Fremont Public 12/14 at 100.00 Aaa 1,067,520
Schools, General Obligation Bonds, Series 2004,
5.000%, 12/15/19 - FSA Insured
30 NebHelp Inc., Nebraska, Senior Subordinate Bonds, Student No Opt. Call Aaa 31,318
Loan Program, Series 1993A-5B, 6.250%, 6/01/18 -
MBIA Insured (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
1,030 Total Nebraska 1,098,838
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 0.4%
Director of Nevada State Department of Business and Industry,
Revenue Bonds, Las Vegas Monorail Project, First Tier, Series
2000:
800 0.000%, 1/01/15 - AMBAC Insured No Opt. Call AAA 513,912
25 0.000%, 1/01/20 - AMBAC Insured No Opt. Call AAA 11,401
------------------------------------------------------------------------------------------------------------------------------------
825 Total Nevada 525,313
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 0.4%
500 Bayonne Redevelopment Agency, New Jersey, Revenue Bonds, No Opt. Call BBB- 510,765
Royal Caribbean Cruises Project, Series 2006A,
4.750%, 11/01/16 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 6.4%
1,000 Dormitory Authority of the State of New York, Revenue Bonds, 7/13 at 100.00 AA 1,052,910
Brooklyn Law School, Series 2003A, 5.500%, 7/01/15 -
RAAI Insured
300 New York City Industrial Development Agency, New York, No Opt. Call N/R 294,447
Civic Facility Revenue Bonds, Special Needs Facilities Pooled
Program, Series 2008A-1, 5.700%, 7/01/13
1,500 New York State Energy Research and Development Authority, 5/08 at 100.00 A1 1,501,095
Facilities Revenue Bonds, Consolidated Edison Company Inc.,
Series 2001A, 4.700%, 6/01/36 (Mandatory put 10/01/12)
(Alternative Minimum Tax)
315 New York State Medical Care Facilities Finance Agency, 8/08 at 100.00 AA+ 315,844
FHA-Insured Mortgage Hospital and Nursing Home Revenue
Bonds, Series 1995C, 6.100%, 8/15/15
4,300 Port Authority of New York and New Jersey, Special Project No Opt. Call AAA 4,856,979
Bonds, JFK International Air Terminal LLC, Sixth Series 1997,
7.000%, 12/01/12 - MBIA Insured (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
7,415 Total New York 8,021,275
------------------------------------------------------------------------------------------------------------------------------------
16
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 1.6%
$ 1,880 Union County, North Carolina, Certificates of Participation, 6/13 at 101.00 AAA $ 1,979,038
Series 2003, 5.000%, 6/01/18 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 1.5%
870 Buckeye Tobacco Settlement Financing Authority, Ohio, 6/17 at 100.00 BBB 814,050
Tobacco Settlement Asset-Backed Revenue Bonds, Senior Lien,
Series 2007A-2, 5.125%, 6/01/24
1,000 Toledo-Lucas County Port Authority, Ohio, Port Revenue Bonds, No Opt. Call A 1,030,020
Cargill Inc., Series 2004B, 4.500%, 12/01/15
------------------------------------------------------------------------------------------------------------------------------------
1,870 Total Ohio 1,844,070
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 0.9%
1,150 Oklahoma State Industries Authority, Health System Revenue 8/08 at 100.00 AAA 1,158,602
Refunding Bonds, Baptist Medical Center, Series 1995D,
5.000%, 8/15/14 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 7.2%
1,120 Pennsylvania Higher Educational Facilities Authority, College No Opt. Call Aaa 1,272,118
Revenue Bonds, Ninth Series 1976, 7.625%, 7/01/15 (ETM)
225 Pennsylvania Higher Educational Facilities Authority, Revenue 3/09 at 100.00 AA (4) 235,393
Bonds, University of the Arts, Series 1999, 5.150%, 3/15/20 -
RAAI Insured (ETM)
4,120 Philadelphia Gas Works, Pennsylvania, Revenue Bonds, 8/14 at 100.00 AAA 4,385,040
Eighteenth Series 2004, 5.000%, 8/01/15 - AMBAC Insured
1,605 Philadelphia Gas Works, Pennsylvania, Revenue Bonds, No Opt. Call AAA 1,897,929
Twelfth Series 1990B, 7.000%, 5/15/20 - MBIA Insured (ETM)
1,085 Pittsburgh School District, Allegheny County, Pennsylvania, No Opt. Call AAA 1,164,216
General Obligation Bonds, Series 2006B, 5.000%, 9/01/12 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
8,155 Total Pennsylvania 8,954,696
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 6.4%
750 Berkeley County School District, South Carolina, Installment 12/13 at 100.00 A- 763,170
Purchase Revenue Bonds, Securing Assets for Education,
Series 2003, 5.250%, 12/01/19
1,540 Piedmont Municipal Power Agency, South Carolina, Electric No Opt. Call Baa1 (4) 1,900,129
Revenue Bonds, Series 1991, 6.750%, 1/01/19 -
FGIC Insured (ETM)
2,835 Piedmont Municipal Power Agency, South Carolina, Electric No Opt. Call Baa1 3,441,265
Revenue Bonds, Series 1991, 6.750%, 1/01/19 - FGIC Insured
5 South Carolina JOBS Economic Development Authority, 11/12 at 100.00 A- (4) 5,585
Economic Development Revenue Bonds, Bon Secours Health
System Inc., Series 2002A, 5.625%, 11/15/30
(Pre-refunded 11/15/12)
20 South Carolina JOBS Economic Development Authority, 11/12 at 100.00 A- 20,124
Economic Development Revenue Bonds, Bon Secours Health
System Inc., Series 2002B, 5.625%, 11/15/30
1,260 South Carolina JOBS Economic Development Authority, Hospital No Opt. Call Baa2 (4) 1,346,675
Revenue Bonds, Palmetto Health Alliance, Series 2000A,
7.000%, 12/15/10 (ETM)
500 Tobacco Settlement Revenue Management Authority, 5/11 at 101.00 BBB 501,765
South Carolina, Tobacco Settlement Asset-Backed Bonds,
Series 2001B, 6.000%, 5/15/22
------------------------------------------------------------------------------------------------------------------------------------
6,910 Total South Carolina 7,978,713
------------------------------------------------------------------------------------------------------------------------------------
SOUTH DAKOTA - 0.8%
1,000 South Dakota Health and Educational Facilities Authority, 5/17 at 100.00 AA- 955,460
Revenue Bonds, Sanford Health, Series 2007, 5.000%, 11/01/27
------------------------------------------------------------------------------------------------------------------------------------
17
NIM
Nuveen Select Maturities Municipal Fund (continued)
Portfolio of INVESTMENTS March 31, (2008)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 1.8%
Shelby County Health, Educational and Housing Facilities Board,
Tennessee, Hospital Revenue Bonds, Methodist Healthcare, Series
2002:
$ 750 6.000%, 9/01/17 (Pre-refunded 9/01/12) 9/12 at 100.00 A- (4) $ 846,773
1,250 6.000%, 9/01/17 (Pre-refunded 9/01/12) 9/12 at 100.00 A- (4) 1,411,288
------------------------------------------------------------------------------------------------------------------------------------
2,000 Total Tennessee 2,258,061
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 6.5%
1,055 Austin, Texas, General Obligation Bonds, Series 2004, 9/14 at 100.00 AAA 1,101,399
5.000%, 9/01/20 - MBIA Insured
565 Bexar County Housing Finance Corporation, Texas, FNMA No Opt. Call AAA 581,730
Guaranteed Multifamily Housing Revenue Bonds, Villas Sonterra
Apartments Project, Series 2007A, 4.700%, 10/01/15
(Alternative Minimum Tax)
25 Brazos River Authority, Texas, Collateralized Pollution Control No Opt. Call Caa1 22,844
Revenue Bonds, Texas Utilities Electric Company, Series 2003D,
5.400%, 10/01/29 (Mandatory put 10/01/14)
2,000 Brazos River Authority, Texas, Collateralized Revenue 6/14 at 100.00 BBB+ 2,024,160
Refunding Bonds, CenterPoint Energy Inc., Series 2004B,
4.250%, 12/01/17 - FGIC Insured
500 Brazos River Authority, Texas, Pollution Control Revenue No Opt. Call Caa1 475,535
Refunding Bonds, TXU Electric Company, Series 2001C,
5.750%, 5/01/36 (Mandatory put 11/01/11)
(Alternative Minimum Tax)
15 Brazos River Authority, Texas, Pollution Control Revenue No Opt. Call Caa1 14,543
Refunding Bonds, TXU Energy Company LLC, Series 2003A,
6.750%, 4/01/38 (Mandatory put 4/01/13)
(Alternative Minimum Tax)
1,875 Denton Independent School District, Denton County, Texas, 8/16 at 100.00 AAA 1,977,694
General Obligation Bonds, Series 2006, 5.000%, 8/15/20
55 Galveston Property Finance Authority Inc., Texas, Single Family 9/08 at 100.00 Caa1 54,188
Mortgage Revenue Bonds, Series 1991A, 8.500%, 9/01/11
300 Kerrville Health Facilities Development Corporation, Texas, No Opt. Call BBB- 273,486
Revenue Bonds, Sid Peterson Memorial Hospital Project,
Series 2005, 5.125%, 8/15/26
25 Sabine River Authority, Texas, Pollution Control Revenue Bonds, No Opt. Call Caa1 23,762
TXU Energy Company LLC Project, Series 2001B,
5.750%, 5/01/30 (Mandatory put 11/01/11)
(Alternative Minimum Tax)
1,500 Texas Municipal Gas Acquisition and Supply Corporation I, Gas 5/08 at 100.00 A+ 1,200,000
Supply Revenue Bonds, Series 2006B, 3.894%, 12/15/17
320 Tri-County Mental Health and Retardation Center, Texas, 9/08 at 100.00 AAA 325,152
Revenue Bonds, Facilities Acquisition Program, Series 1995E,
6.500%, 3/01/15 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
8,235 Total Texas 8,074,493
------------------------------------------------------------------------------------------------------------------------------------
UTAH - 1.0%
1,305 Bountiful, Davis County, Utah, Hospital Revenue Refunding No Opt. Call N/R 1,305,666
Bonds, South Davis Community Hospital Project, Series 1998,
6.000%, 12/15/10
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 0.2%
250 Virginia College Building Authority, Educational Facilities 7/08 at 101.00 AA 251,723
Revenue Refunding Bonds, Marymount University, Series 1998,
5.100%, 7/01/18 - RAAI Insured
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 2.8%
1,130 Washington Public Power Supply System, Revenue Refunding No Opt. Call AAA 1,144,814
Bonds, Nuclear Project 1, Series 1993A, 7.000%, 7/01/08 (ETM)
1,870 Washington Public Power Supply System, Revenue Refunding No Opt. Call AAA 1,893,618
Bonds, Nuclear Project 1, Series 1993A, 7.000%, 7/01/08
295 Washington Public Power Supply System, Revenue Refunding No Opt. Call AAA 366,723
Bonds, Nuclear Project 3, Series 1989B, 7.125%, 7/01/16 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
3,295 Total Washington 3,405,155
------------------------------------------------------------------------------------------------------------------------------------
18
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 3.6%
Badger Tobacco Asset Securitization Corporation, Wisconsin,
Tobacco Settlement Asset-Backed Bonds, Series 2002:
$ 785 6.125%, 6/01/27 6/12 at 100.00 BBB $ 787,920
1,480 6.375%, 6/01/32 6/12 at 100.00 BBB 1,463,483
1,000 Wisconsin Health and Educational Facilities Authority, 7/11 at 100.00 A- 1,027,750
Revenue Bonds, Agnesian Healthcare Inc., Series 2001,
6.000%, 7/01/21
1,150 Wisconsin Health and Educational Facilities Authority, 2/09 at 101.00 BBB+ 1,150,322
Revenue Bonds, Aurora Health Care Inc., Series 1999A,
5.500%, 2/15/20 - ACA Insured
------------------------------------------------------------------------------------------------------------------------------------
4,415 Total Wisconsin 4,429,475
------------------------------------------------------------------------------------------------------------------------------------
$ 120,439 Total Investments (cost $119,214,940) - 97.0% 121,058,962
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 3.0% 3,772,368
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $ 124,831,330
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments
are based on net assets.
(2) Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates
(month and year) and prices of the earliest optional
call or redemption. There may be other call provisions
at varying prices at later dates. Certain
mortgage-backed securities may be subject to periodic
principal paydowns.
(3) Ratings (not covered by the report of independent
registered public accounting firm): Using the higher of
Standard & Poor's Group ("Standard & Poor's") or
Moody's Investor Service, Inc. ("Moody's") rating.
Ratings below BBB by Standard & Poor's or Baa by
Moody's are considered to be below investment grade.
The Portfolio of Investments reflects the ratings on
certain bonds insured by AMBAC, FGIC, MBIA and XLCA as
of March 31, 2008. During March 2008, at least one
rating agency reduced the rating for AMBAC-insured
bonds to AA and at least one rating agency further
reduced the ratings for FGIC-insured and XLCA-insured
bonds. Subsequent to March 31, 2008, at least one
rating agency reduced the rating for MBIA-insured bonds
to AA. As of March 31, 2008, one or more rating
agencies have placed each of these insurers on
"negative credit watch", which may presage one or more
rating reductions for such insurer or insurers in the
future. If one or more insurers' ratings are reduced by
these rating agencies, it would likely reduce the
effective rating of many of the bonds insured by that
insurer or insurers.
(4) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which
ensure the timely payment of principal and interest.
Such investments are normally considered to be
equivalent to AAA rated securities.
N/R Not rated.
(ETM) Escrowed to maturity.
See accompanying notes to financial statements.
19
Statement of
ASSETS & LIABILITIES
March 31, 2008
--------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $119,214,940) $121,058,962
Cash 146,942
Receivables:
Interest 1,987,905
Investments sold 2,401,625
Other assets 7,329
--------------------------------------------------------------------------------
Total assets 125,602,763
--------------------------------------------------------------------------------
LIABILITIES
Payable for investments purchased 246,726
Accrued expenses:
Management fees 51,418
Other 44,295
Dividends payable 428,994
--------------------------------------------------------------------------------
Total liabilities 771,433
--------------------------------------------------------------------------------
Net assets $124,831,330
================================================================================
Shares outstanding 12,396,406
================================================================================
Net asset value per share outstanding $ 10.07
================================================================================
NET ASSETS CONSIST OF:
--------------------------------------------------------------------------------
Shares, $.01 par value per share $ 123,964
Paid-in surplus 138,330,053
Undistributed (Over-distribution of) net investment income (97,871)
Accumulated net realized gain (loss) from investments (15,368,838)
Net unrealized appreciation (depreciation) of investments 1,844,022
--------------------------------------------------------------------------------
Net assets $124,831,330
================================================================================
Authorized shares Unlimited
================================================================================
See accompanying notes to financial statements.
20
Statement of
OPERATIONS
Year Ended March 31, 2008
--------------------------------------------------------------------------------
INVESTMENT INCOME $ 6,232,023
--------------------------------------------------------------------------------
EXPENSES
Management fees 608,467
Shareholders' servicing agent fees and expenses 9,867
Custodian's fees and expenses 35,050
Trustees' fees and expenses 2,921
Professional fees 14,377
Shareholders' reports - printing and mailing expenses 39,829
Stock exchange listing fees 9,551
Investor relations expense 15,972
Other expenses 4,968
--------------------------------------------------------------------------------
Total expenses before custodian fee credit 741,002
Custodian fee credit (18,540)
--------------------------------------------------------------------------------
Net expenses 722,462
--------------------------------------------------------------------------------
Net investment income 5,509,561
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from investments (49,131)
Change in net unrealized appreciation (depreciation) of investments (1,515,776)
--------------------------------------------------------------------------------
Net realized and unrealized gain (loss) (1,564,907)
--------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations $ 3,944,654
================================================================================
See accompanying notes to financial statements.
21
Statement of
CHANGES in NET ASSETS
YEAR ENDED YEAR ENDED
3/31/08 3/31/07
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 5,509,561 $ 5,645,379
Net realized gain (loss) from investments (49,131) (16,869)
Change in net unrealized appreciation (depreciation) of investments (1,515,776) (622,595)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations 3,944,654 6,251,105
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (5,429,625) (5,791,598)
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from distributions to shareholders (5,429,625) (5,791,598)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets (1,484,971) 459,507
Net assets at the beginning of year 126,316,301 125,856,794
------------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of year $124,831,330 $126,316,301
------------------------------------------------------------------------------------------------------------------------------------
Undistributed (Over-distribution of) net investment income at the end of year $ (97,871) $ (178,249)
====================================================================================================================================
See accompanying notes to financial statements.
22
Notes to
FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The fund covered in this report and its corresponding New York Stock Exchange
symbol is Nuveen Select Maturities Municipal Fund (NIM) (the "Fund"). The Fund
is registered under the Investment Company Act of 1940, as amended, as a
closed-end, diversified management investment company.
The Fund seeks to provide current income exempt from regular federal income tax,
consistent with the preservation of capital by investing in a diversified,
investment-grade quality portfolio of municipal obligations with intermediate
characteristics. In managing its portfolio, the Fund has purchased municipal
obligations having remaining effective maturities of no more than fifteen years
with respect to 80% of its total assets that, in the opinion of Nuveen Asset
Management (the "Adviser"), a wholly owned subsidiary of Nuveen Investments,
Inc. ("Nuveen"), represent the best value in terms of the balance between yield
and capital preservation currently available from the intermediate sector of the
municipal market. The Adviser will actively monitor the effective maturities of
the Fund's investments in response to prevailing market conditions, and will
adjust its portfolio consistent with its investment policy of maintaining an
average effective remaining maturity of twelve years or less.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements in accordance with U.S.
generally accepted accounting principles.
Investment Valuation
The prices of municipal bonds in the Fund's investment portfolio are provided by
a pricing service approved by the Fund's Board of Trustees. When market price
quotes are not readily available (which is usually the case for municipal
securities), the pricing service may establish fair value based on yields or
prices of municipal bonds of comparable quality, type of issue, coupon, maturity
and rating, indications of value from securities dealers, evaluations of
anticipated cash flows or collateral and general market conditions. If the
pricing service is unable to supply a price for a municipal bond, the Fund may
use market quotes provided by major broker/dealers in such investments. If it is
determined that the market price for an investment is unavailable or
inappropriate, the Board of Trustees of the Fund, or its designee, may establish
a fair value in accordance with procedures established in good faith by the
Board of Trustees. Temporary investments in securities that have variable rate
and demand features qualifying them as short-term investments are valued at
amortized cost, which approximates market value.
Investment Transactions
Investment transactions are recorded on a trade date basis. Realized gains and
losses from transactions are determined on the specific identification method.
Investments purchased on a when-issued/delayed delivery basis may have extended
settlement periods. Any investments so purchased are subject to market
fluctuation during this period. The Fund has instructed the custodian to
segregate assets with a current value at least equal to the amount of the
when-issued/delayed delivery purchase commitments. At March 31, 2008, the Fund
had no such outstanding purchase commitments.
Investment Income
Interest income, which includes the amortization of premiums and accretion of
discounts for financial reporting purposes, is recorded on an accrual basis.
Investment income also includes paydown gains and losses, if any.
Income Taxes
The Fund intends to distribute substantially all of its net investment income
and net capital gains to shareholders and to otherwise comply with the
requirements of Subchapter M of the Internal Revenue Code applicable to
regulated investment companies. Therefore, no federal income tax provision is
required. Furthermore, the Fund intends to satisfy conditions which will enable
interest from municipal securities, which is exempt from regular federal and
designated state income taxes, to retain such tax-exempt status when distributed
to shareholders of the Fund. Net realized capital gains and ordinary income
distributions paid by the Fund are subject to federal taxation.
23
Notes to
FINANCIAL STATEMENTS (continued)
Effective September 30, 2007, the Fund adopted Financial Accounting Standards
Board (FASB) Interpretation No. 48 "Accounting for Uncertainty in Income Taxes"
(FIN 48). FIN 48 provides guidance for how uncertain tax positions should be
recognized, measured, presented and disclosed in the financial statements. FIN
48 requires the affirmative evaluation of tax positions taken or expected to be
taken in the course of preparing the Fund's tax returns to determine whether it
is "more-likely-than-not" (i.e., a greater than 50-percent likelihood) of being
sustained by the applicable tax authority. Tax positions not deemed to meet the
more-likely-than- not threshold may result in a tax benefit or expense in the
current year.
Implementation of FIN 48 required management of the Fund to analyze all open tax
years, as defined by the statute of limitations, for all major jurisdictions,
which includes federal and certain states. Open tax years are those that are
open for examination by taxing authorities (i.e., generally the last four tax
year ends and the interim tax period since then). The Fund has no examinations
in progress.
For all open tax years and all major taxing jurisdictions through the end of the
reporting period, management of the Fund has reviewed all tax positions taken or
expected to be taken in the preparation of the Fund's tax returns and concluded
the adoption of FIN 48 resulted in no impact to the Fund's net assets or results
of operations as of and during the fiscal year ended March 31, 2008.
The Fund is also not aware of any tax positions for which it is reasonably
possible that the total amounts of unrecognized tax benefits will significantly
change in the next twelve months.
Dividends and Distributions to Shareholders
Dividends from tax-exempt net investment income are declared monthly. Net
realized capital gains and/or market discount from investment transactions, if
any, are distributed to shareholders annually. Furthermore, capital gains are
distributed only to the extent they exceed available capital loss carryforwards.
Distributions to shareholders of tax-exempt net investment income, net realized
capital gains and/or market discount, if any, are recorded on the ex-dividend
date. The amount and timing of distributions are determined in accordance with
federal income tax regulations, which may differ from U.S. generally accepted
accounting principles.
Derivative Financial Instruments
The Fund is authorized to invest in certain derivative financial instruments
including futures, forward, swap and option contracts, and other financial
instruments with similar characteristics. Although the Fund is authorized to
invest in such financial instruments, and may do so in the future, it did not
invest in any such instruments during the fiscal year ended March 31, 2008.
Zero Coupon Securities
The Fund is authorized to invest in zero coupon securities. A zero coupon
security does not pay a regular interest coupon to its holders during the life
of the security. Tax-exempt income to the holder of the security comes from
accretion of the difference between the original purchase price of the security
at issuance and the par value of the security at maturity and is effectively
paid at maturity. Such securities are included in the Portfolios of Investments
with a 0.000% coupon rate in their description. The market prices of zero coupon
securities generally are more volatile than the market prices of securities that
pay interest periodically.
Custodian Fee Credit
The Fund has an arrangement with the custodian bank whereby certain custodian
fees and expenses are reduced by net credits earned on the Fund's cash on
deposit with the bank. Such deposit arrangements are an alternative to overnight
investments. Credits for cash balances may be offset by charges for any days on
which the Fund overdraws its account at the custodian bank.
24
Indemnifications
Under the Fund's organizational documents, its Officers and Trustees are
indemnified against certain liabilities arising out of the performance of their
duties to the Fund. In addition, in the normal course of business, the Fund
enters into contracts that provide general indemnifications to other parties.
The Fund's maximum exposure under these arrangements is unknown as this would
involve future claims that may be made against the Fund that have not yet
occurred. However, the Fund has not had prior claims or losses pursuant to these
contracts and expects the risk of loss to be remote.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of increases and
decreases in net assets from operations during the reporting period. Actual
results may differ from those estimates.
2. FUND SHARES
The Fund did not engage in transactions of its own shares during the fiscal
years ended March 31, 2008 and March 31, 2007.
3. INVESTMENT TRANSACTIONS
Purchases and sales (including maturities but excluding short-term investments)
during the fiscal year ended March 31, 2008, aggregated $14,293,118 and
$13,172,056, respectively.
4. INCOME TAX INFORMATION
The following information is presented on an income tax basis. Differences
between amounts for financial statement and federal income tax purposes are
primarily due to the timing differences in recognizing taxable market discount
and timing differences in recognizing certain gains and losses on investment
transactions. To the extent that differences arise that are permanent in nature,
such amounts are reclassified within the capital accounts on the Statement of
Assets and Liabilities presented in the annual report, based on their federal
tax basis treatment; temporary differences do not require reclassification.
Temporary and permanent differences do not impact the net asset value of the
Fund.
At March 31, 2008, the cost of investments was $119,156,103.
Gross unrealized appreciation and gross unrealized depreciation of investments
at March 31, 2008, were as follows:
--------------------------------------------------------------------------------
Gross unrealized:
Appreciation $ 3,142,861
Depreciation (1,240,002)
--------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments $ 1,902,859
================================================================================
The tax components of undistributed net tax-exempt income, net ordinary income
and net long-term capital gains at March 31, 2008, the Fund's tax year end, were
as follows:
--------------------------------------------------------------------------------
Undistributed net tax-exempt income * $290,617
Undistributed net ordinary income ** 10
Undistributed net long-term capital gains --
================================================================================
* Undistributed net tax-exempt income (on a tax basis) has not been reduced
for the dividend declared on March 3, 2008, paid on April 1, 2008.
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
25
Notes to
FINANCIAL STATEMENTS (continued)
The tax character of distributions paid during the Fund's tax years ended March
31, 2008 and March 31, 2007, was designated for purposes of the dividends paid
deduction as follows:
2008
--------------------------------------------------------------------------------
Distributions from net tax-exempt income *** $5,429,625
Distributions from net ordinary income ** --
Distributions from net long-term capital gains **** --
================================================================================
2007
--------------------------------------------------------------------------------
Distributions from net tax-exempt income $5,764,329
Distributions from net ordinary income ** 64,461
Distributions from net long-term capital gains --
================================================================================
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
*** The Fund hereby designates this amount paid during the fiscal year ended
March 31, 2008, as Exempt Interest Dividends.
**** The Fund designated as a long-term capital gain dividend, pursuant to
Internal Revenue Code Section 852(6)(3), the amount necessary to reduce
earnings and profits of the Fund related to net capital gain to zero for
the tax year ended March 31, 2008.
At March 31, 2008, the Fund's tax year end, the Fund had unused capital loss
carryforwards available for federal income tax purposes to be applied against
future capital gains, if any. If not applied, the carryforwards will expire as
follows:
--------------------------------------------------------------------------------
Expiration:
March 31, 2010 $ 14,922
March 31, 2011 6,523,386
March 31, 2012 8,737,799
March 31, 2013 4,977
March 31, 2014 14,448
March 31, 2015 11,084
March 31, 2016 44,763
--------------------------------------------------------------------------------
Total $15,351,379
================================================================================
The Fund elected to defer net realized losses from investments incurred from
November 1, 2007 through March 31, 2008, the Fund's tax year end, ("post-October
losses") in accordance with federal income tax regulations. Post-October losses
of $12,331 were treated as having arisen on the first day of the following
fiscal year.
5. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund's management fee is separated into two components - a complex-level
component, based on the aggregate amount of all fund assets managed by the
Adviser, and a specific fund-level component, based only on the amount of assets
within the Fund. This pricing structure enables Nuveen fund shareholders to
benefit from growth in the assets within each individual fund as well as from
growth in the amount of complex-wide assets managed by the Adviser.
26
The annual fund-level fee, payable monthly, is based upon the average daily net
assets of the Fund as follows:
AVERAGE DAILY NET ASSETS FUND-LEVEL FEE RATE
--------------------------------------------------------------------------------
For the first $125 million .3000%
For the next $125 million .2875
For the next $250 million .2750
For the next $500 million .2625
For the next $1 billion .2500
For net assets over $2 billion .2375
================================================================================
The annual complex-level fee, payable monthly, which is additive to the
fund-level fee, for all Nuveen sponsored funds in the U.S., is based on the
aggregate amount of total fund assets managed as stated in the tables below. As
of March 31, 2008, the complex-level fee rate was .1870%.
Effective August 20, 2007, the complex-level fee schedule is as follows:
COMPLEX-LEVEL ASSET BREAKPOINT LEVEL (1) EFFECTIVE RATE AT BREAKPOINT LEVEL
--------------------------------------------------------------------------------
$55 billion .2000%
$56 billion .1996
$57 billion .1989
$60 billion .1961
$63 billion .1931
$66 billion .1900
$71 billion .1851
$76 billion .1806
$80 billion .1773
$91 billion .1691
$125 billion .1599
$200 billion .1505
$250 billion .1469
$300 billion .1445
================================================================================
Prior to August 20, 2007, the complex-level fee schedule was as follows:
COMPLEX-LEVEL ASSET BREAKPOINT LEVEL (1) EFFECTIVE RATE AT BREAKPOINT LEVEL
--------------------------------------------------------------------------------
$55 billion .2000%
$56 billion .1996
$57 billion .1989
$60 billion .1961
$63 billion .1931
$66 billion .1900
$71 billion .1851
$76 billion .1806
$80 billion .1773
$91 billion .1698
$125 billion .1617
$200 billion .1536
$250 billion .1509
$300 billion .1490
================================================================================
(1) The complex-level fee component of the management fee for the funds is
calculated based upon the aggregate Managed Assets ("Managed Assets" means
the average daily net assets of each fund including assets attributable to
preferred stock issued by or borrowings by the Nuveen funds) of
Nuveen-sponsored funds in the U.S.
27
Notes to
FINANCIAL STATEMENTS (continued)
The management fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Fund pays no
compensation directly to those of its Trustees who are affiliated with the
Adviser or to its Officers, all of whom receive remuneration for their services
to the Fund from the Adviser or its affiliates. The Board of Trustees has
adopted a deferred compensation plan for independent Trustees that enables
Trustees to elect to defer receipt of all or a portion of the annual
compensation they are entitled to receive from certain Nuveen advised funds.
Under the plan, deferred amounts are treated as though equal dollar amounts had
been invested in shares of select Nuveen advised funds.
Agreement and Plan of Merger
On June 20, 2007, Nuveen Investments announced that it had entered into a
definitive Agreement and Plan of Merger ("Merger Agreement") with Windy City
Investments, Inc. ("Windy City"), a corporation formed by investors led by
Madison Dearborn Partners, LLC ("Madison Dearborn"), pursuant to which Windy
City would acquire Nuveen Investments. Madison Dearborn is a private equity
investment firm based in Chicago, Illinois. The merger was consummated on
November 13, 2007.
The consummation of the merger was deemed to be an "assignment" (as that term is
defined in the Investment Company Act of 1940) of the investment management
agreement between the Fund and the Adviser, and resulted in the automatic
termination of the Fund's agreement. The Board of Trustees of the Fund
considered and approved a new investment management agreement with the Adviser
on the same terms as the previous agreements. Each new ongoing investment
management agreement was approved by the shareholders of the Fund and took
effect on November 13, 2007.
The investors led by Madison Dearborn include an affiliate of Merrill Lynch. As
a result, Merrill Lynch is an indirect "affiliated person" (as that term is
defined in the Investment Company Act of 1940) of the Fund. Certain conflicts of
interest may arise as a result of such indirect affiliation. For example, the
Fund is generally prohibited from entering into principal transactions with
Merrill Lynch and its affiliates. The Adviser does not believe that any such
prohibitions or limitations as a result of Merrill Lynch's affiliation will
significantly impact the ability of the Fund to pursue its investment objectives
and policies.
6. NEW ACCOUNTING PRONOUNCEMENTS
Financial Accounting Standards Board Statement of Financial Accounting
Standards No. 157
In September 2006, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 157, "Fair Value
Measurements." This standard establishes a single authoritative definition of
fair value, sets out a framework for measuring fair value and requires
additional disclosures about fair value measurements. SFAS No. 157 applies to
fair value measurements already required or permitted by existing standards.
SFAS No. 157 is effective for financial statements issued for fiscal years
beginning after November 15, 2007, and interim periods within those fiscal
years. The changes to current generally accepted accounting principles from the
application of this standard relate to the definition of fair value, the methods
used to measure fair value, and the expanded disclosures about fair value
measurements. As of March 31, 2008, management does not believe the adoption of
SFAS No. 157 will impact the financial statement amounts; however, additional
disclosures may be required about the inputs used to develop the measurements
and the effect of certain of the measurements included within the Statement of
Operations for the period.
28
Financial Accounting Standards Board Statement of Financial Accounting
Standards No. 161
In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative
Instruments and Hedging Activities." This standard is intended to enhance
financial statement disclosures for derivative instruments and hedging
activities and enable investors to understand: a) how and why a fund uses
derivative instruments, b) how derivative instruments and related hedge items
are accounted for, and c) how derivative instruments and related hedge items
affect a fund's financial position, results of operations and cash flows. SFAS
No. 161 is effective for financial statements issued for fiscal years beginning
after November 15, 2008, and interim periods within those fiscal years. As of
March 31, 2008, management does not believe the adoption of SFAS No. 161 will
impact the financial statement amounts; however, additional footnote disclosures
may be required about the use of derivative instruments and hedging items.
7. SUBSEQUENT EVENTS
Distributions to Shareholders
The Fund declared a dividend distribution of $.0365 per share from its
tax-exempt net investment income which was paid on May 1, 2008, to shareholders
of record on April 15, 2008.
29
Financial
HIGHLIGHTS
Selected data for a share outstanding throughout each period:
Investment Operations Less Distributions
----------------------------------- -----------------------------------
Net
Beginning Net Realized/ Net Ending Ending
Net Asset Investment Unrealized Investment Capital Net Asset Market
Value Income Gain (Loss) Total Income Gains Total Value Value
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 3/31:
2008 $10.19 $.44 $(.12) $.32 $(.44) $ -- $(.44) $10.07 $9.80
2007 10.15 .46 .05 .51 (.47) -- (.47) 10.19 9.94
2006 10.22 .48 (.07) .41 (.48) -- (.48) 10.15 9.95
2005 10.35 .49 (.14) .35 (.48) -- (.48) 10.22 9.30
2004 10.34 .51 -- .51 (.50) -- (.50) 10.35 9.93
====================================================================================================================================
Ratios/Supplemental Data
--------------------------------------------------------------------------------------
Ratios to Average Ratios to Average
Net Assets Net Assets
Total Returns Before Credit After Credit*
---------------------- ----------------------- -----------------------
Based on Based on Ending Net Net Portfolio
Market Net Asset Net Assets Investment Investment Turnover
Value+ Value+ (000) Expenses Income Expenses Income Rate
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 3/31:
2008 3.18% 3.18% $124,831 .59% 4.37% .57% 4.38% 11%
2007 4.75 5.10 126,316 .62 4.44 .58 4.48 15
2006 12.21 4.02 125,857 .59 4.67 .57 4.68 7
2005 (1.52) 3.44 126,645 .61 4.81 .60 4.82 10
2004 6.03 5.09 128,335 .63 4.92 .62 4.93 13
====================================================================================================================================
* After custodian fee credit.
+ Total Return on Market Value is the combination of changes in the market
price per share and the effect of reinvested dividend income and reinvested
capital gains distributions, if any, at the average price paid per share at
the time of reinvestment. The last dividend declared in the period, which
is typically paid on the first business day of the following month, is
assumed to be reinvested at the ending market price. The actual
reinvestment for the last dividend declared in the period takes place over
several days, and in some instances may not be based on the market price,
so the actual reinvestment price may be different from the price used in
the calculation. Total returns are not annualized.
Total Return on Net Asset Value is the combination of changes in net asset
value, reinvested dividend income at net asset value and reinvested capital
gains distributions at net asset value, if any. The last dividend declared
in the period, which is typically paid on the first business day of the
following month, is assumed to be reinvested at the ending net asset value.
The actual reinvest price for the last dividend declared in the period may
often be based on the Fund's market price (and not its net asset value),
and therefore may be different from the price used in the calculation.
Total returns are not annualized.
See accompanying notes to financial statements.
30-31 spread
Board Members & Officers
The management of the Funds, including general supervision of the duties
performed for the Funds by the Adviser, is the responsibility of the Board
Members of the Funds. The number of board members of the Fund is currently set
at eight. None of the board members who are not "interested" persons of the
Funds has ever been a director or employee of, or consultant to, Nuveen or its
affiliates. The names and business addresses of the board members and officers
of the Funds, their principal occupations and other affiliations during the past
five years, the number of portfolios each oversees and other directorships they
hold are set forth below.
NAME, POSITION(S) HELD YEAR FIRST NUMBER PRINCIPAL
BIRTHDATE WITH THE FUNDS ELECTED OR OF PORTFOLIOS OCCUPATION(S)
& ADDRESS APPOINTED IN FUND COMPLEX INCLUDING OTHER
AND TERM(2) OVERSEEN BY DIRECTORSHIPS
BOARD MEMBER DURING PAST 5 YEARS
BOARD MEMBER WHO IS AN INTERESTED PERSON OF THE FUNDS:
[] TIMOTHY R. SCHWERTFEGER(1) Former director (1994-November 12, 2007),
3/28/49 Chairman of 1994 Chairman (1996-June 30, 2007), Non-Executive
333 W. Wacker Drive the Board CLASS I 184 Chairman (July 1, 2007-November 12, 2007)
Chicago, IL 60606 and Board Member and Chief Executive Officer (1996-June 30,
2007) of Nuveen Investments, Inc., Nuveen
Asset Management and certain other
subsidiaries of Nuveen Investments, Inc.;
formerly, Director (1992-2006) of
Institutional Capital Corporation.
BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS:
[] ROBERT P. BREMNER Private Investor and Management Consultant.
8/22/40 Lead 1997
333 W. Wacker Drive Independent CLASS III 184
Chicago, IL 60606 Board member
[] JACK B. EVANS President, The Hall-Perrine Foundation, a
10/22/48 1999 private philanthropic corporation (since
333 W. Wacker Drive Board member CLASS III 184 1996); Director and Vice Chairman, United
Chicago, IL 60606 Fire Group, a publicly held company; Member
of the Board of Regents for the State of
Iowa University System; Director, Gazette
Companies; Life Trustee of Coe College and
Iowa College Foundation; Member of the
Advisory Council of the Department of
Finance in the Tippie College of Business,
University of Iowa; formerly, Director,
Alliant Energy; formerly, Director, Federal
Reserve Bank of Chicago; formerly, President
and Chief Operating Officer, SCI Financial
Group, Inc., a regional financial services
firm.
[] WILLIAM C. HUNTER Dean, Tippie College of Business, University
3/6/48 2004 of Iowa (since July 2006); formerly, Dean
333 W. Wacker Drive Board member CLASS II 184 and Distinguished Professor of Finance,
Chicago, IL 60606 School of Business at the University of
Connecticut (2003-2006); previously, Senior
Vice President and Director of Research at
the Federal Reserve Bank of Chicago
(1995-2003); Director (since 1997), Credit
Research Center at Georgetown University;
Director (since 2004) of Xerox Corporation;
Director (since 2005), Beta Gamma Sigma
International Honor Society; Director, SS&C
Technologies, Inc. (May 2005-October 2005).
32
NAME, POSITION(S) HELD YEAR FIRST NUMBER PRINCIPAL
BIRTHDATE WITH THE FUNDS ELECTED OR OF PORTFOLIOS OCCUPATION(S)
& ADDRESS APPOINTED IN FUND COMPLEX INCLUDING OTHER
AND TERM(2) OVERSEEN BY DIRECTORSHIPS
BOARD MEMBER DURING PAST 5 YEARS
BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS:
[] DAVID J. KUNDERT Director, Northwestern Mutual Wealth
10/28/42 2005 Management Company; Retired (since 2004) as
333 W. Wacker Drive Board member CLASS II 182 Chairman, JPMorgan Fleming Asset Management,
Chicago, IL 60606 President and CEO, Banc One Investment
Advisors Corporation, and President, One
Group Mutual Funds; prior thereto, Executive
Vice President, Banc One Corporation and
Chairman and CEO, Banc One Investment
Management Group; Member, Board of Regents,
Luther College; member of the Wisconsin Bar
Association; member of Board of Directors,
Friends of Boerner Botanical Gardens; member
of Investment Committee, Greater Milwaukee
Foundation.
[] WILLIAM J. SCHNEIDER Chairman, formerly, Senior Partner and Chief
9/24/44 1997 Operating Officer (retired, 2004) of
333 W. Wacker Drive Board member CLASS III 184 Miller-Valentine Partners Ltd., a real
Chicago, IL 60606 estate investment company; Director, Dayton
Development Coalition; formerly, member,
Business Advisory Council, Cleveland Federal
Reserve Bank.
[] JUDITH M. STOCKDALE Executive Director, Gaylord and Dorothy
12/29/47 1997 Donnelley Foundation (since 1994); prior
333 W. Wacker Drive Board member CLASS I 184 thereto, Executive Director, Great Lakes
Chicago, IL 60606 Protection Fund (from 1990 to 1994).
[] CAROLE E. STONE Director, Chicago Board Options Exchange
6/28/47 2007 (since 2006); Chair New York Racing
333 West Wacker Drive Board member CLASS I 184 Association Oversight Board (since 2005);
Chicago, IL 60606 Commissioner, New York State Commission on
Public Authority Reform (since 2005);
formerly Director, New York State Division
of the Budget (2000-2004), Chair, Public
Authorities Control Board (2000-2004) and
Director, Local Government Assistance
Corporation (2000-2004).
OFFICERS OF THE FUND:
[] GIFFORD R. ZIMMERMAN Managing Director (since 2002), Assistant
9/9/56 Chief Secretary and Associate General Counsel,
333 W. Wacker Drive Administrative 1988 184 formerly, Vice President and Assistant
Chicago, IL 60606 Officer General Counsel, of Nuveen Investments, LLC;
Managing Director (since 2002), Associate
General Counsel and Assistant Secretary, of
Nuveen Asset Management; Vice President and
Assistant Secretary of NWQ Investment
Management Company, LLC. (since 2002),
Nuveen Investments Advisers Inc. (since
2002), Symphony Asset Management LLC, and
NWQ Investment Management Company, LLC
(since 2003), Tradewinds Global Investors,
LLC, and Santa Barbara Asset Management, LLC
(since 2006); Nuveen HydePark Group LLC and
Richards & Tierney, Inc. (since 2007);
Managing Director, Associate General Counsel
and Assistant Secretary of Rittenhouse Asset
Management, Inc. (since 2003); Managing
Director (since 2004) and Assistant
Secretary (since 1994) of Nuveen
Investments, Inc.; formerly, Managing
Director (2002-2004), General Counsel
(1998-2004) and Assistant Secretary of
Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp.(3); Chartered
Financial Analyst.
[] WILLIAM ADAMS IV Executive Vice President, U.S. Structured
6/9/55 Products of Nuveen Investments, LLC, (since
333 West Wacker Drive Vice President 2007 120 1999), prior thereto, Managing Director of
Chicago, IL 60606 Structured Investments.
33
NAME, POSITION(S) HELD YEAR FIRST NUMBER PRINCIPAL
BIRTHDATE WITH THE FUNDS ELECTED OR OF PORTFOLIOS OCCUPATION(S)
AND ADDRESS APPOINTED(4) IN FUND COMPLEX DURING PAST 5 YEARS
OVERSEEN
BY OFFICER
OFFICERS OF THE FUND:
[] CEDRIC H. ANTOSIEWICZ Managing Director, (since 2004) previously,
1/11/62 Vice President (1993-2004) of Nuveen
333 W. Wacker Drive Vice President 2007 120 Investments, LLC.
Chicago, IL 60606
[] MICHAEL T. ATKINSON Vice President (since 2002) of Nuveen
2/3/66 Vice President Investments, LLC.
333 W. Wacker Drive and Assistant 2000 184
Chicago, IL 60606 Secretary
[] PETER H. D'ARRIGO Vice President and Treasurer of Nuveen
11/28/67 Investments, LLC and Nuveen Investments,
333 W. Wacker Drive Vice President 1999 184 Inc.; Vice President and Treasurer of Nuveen
Chicago, IL 60606 Asset Management (since 2002), Nuveen
Investments Advisers Inc. (since 2002); NWQ
Investment Management Company, LLC. (since
2002); Rittenhouse Asset Management, Inc.
(since 2003), Tradewinds NWQ Global
Investors, LLC (since 2006), Santa Barbara
Asset Management, LLC (since 2006) and
Nuveen HydePark Group, LLC and Richards
&Tierney, Inc. (since 2007); Treasurer of
Symphony Asset Management LLC (since 2003);
formerly, Vice President and Treasurer
(1999-2004) of Nuveen Advisory Corp. and
Nuveen Institutional Advisory Corp.(3),
Chartered Financial Analyst.
[] LORNA C. FERGUSON Managing Director (since 2004), formerly,
10/24/45 Vice President of Nuveen Investments, LLC,
333 W. Wacker Drive Vice President 1998 184 Managing Director (2004) formerly, Vice
Chicago, IL 60606 President (1998-2004) of Nuveen Advisory
Corp. and Nuveen Institutional Advisory
Corp.(3); Managing Director (since 2005) of
Nuveen Asset Management.
[] STEPHEN D. FOY Vice President (since 1993) and Funds
5/31/54 Vice President Controller (since 1998) of Nuveen
333 W. Wacker Drive and Controller 1998 184 Investments, LLC; formerly, Vice President
Chicago, IL 60606 and Funds Controller (1998-2004) of Nuveen
Investments, Inc.; Certified Public
Accountant.
[] WALTER M. KELLY Senior Vice President (since 2008), Vice
2/24/70 Chief Compliance President (2006-2008) formerly, Assistant
333 West Wacker Drive Officer and 2003 184 Vice President and Assistant General Counsel
Chicago, IL 60606 Vice President (2003-2006) of Nuveen Investments, LLC; Vice
President (since 2006) and Assistant
Secretary (since 2008) of Nuveen Asset
Management.
[] DAVID J. LAMB Vice President (since 2000) of Nuveen
3/22/63 Investments, LLC; Certified Public
333 W. Wacker Drive Vice President 2000 184 Accountant.
Chicago, IL 60606
[] TINA M. LAZAR Vice President of Nuveen Investments, LLC
8/27/61 (since 1999).
333 W. Wacker Drive Vice President 2002 184
Chicago, IL 60606
34
NAME, POSITION(S) HELD YEAR FIRST NUMBER PRINCIPAL
BIRTHDATE WITH THE FUNDS ELECTED OR OF PORTFOLIOS OCCUPATION(S)
AND ADDRESS APPOINTED(4) IN FUND COMPLEX DURING PAST 5 YEARS
OVERSEEN
BY OFFICER
OFFICERS OF THE FUND:
[] LARRY W. MARTIN Vice President, Assistant Secretary and
7/27/51 Vice President Assistant General Counsel of Nuveen
333 W. Wacker Drive and Assistant 1988 184 Investments, LLC; Vice President (since
Chicago, IL 60606 Secretary 2005) and Assistant Secretary of Nuveen
Investments, Inc.; Vice President (since
2005) and Assistant Secretary (since 1997)
of Nuveen Asset Management; Vice President
(since 2000), Assistant Secretary and
Assistant General Counsel (since 1998) of
Rittenhouse Asset Management, Inc.; Vice
President and Assistant Secretary of Nuveen
Investments Advisers Inc. (since 2002); NWQ
Investment Management Company, LLC (since
2002), Symphony Asset Management LLC (since
2003), Tradewinds Global Investors, LLC,
Santa Barbara Asset Management LLC (since
2006) and of Nuveen HydePark Group, LLC and
Richards &Tierney, Inc. (since 2007);
formerly, Vice President and Assistant
Secretary of Nuveen Advisory Corp. and
Nuveen Institutional Advisory Corp.(3)
[] KEVIN J. MCCARTHY Managing Director (since 2008), formerly,
3/26/66 Vice President Vice President (2007-2008), Nuveen
333 W. Wacker Drive and Secretary 2007 184 Investments, LLC; Vice President, and
Chicago, IL 60606 Assistant Secretary, Nuveen Asset
Management, Rittenhouse Asset Management,
Inc., Nuveen Investment Advisers Inc.,
Nuveen Investment Institutional Services
Group LLC, NWQ Investment Management
Company, LLC, Tradewinds Global Investors
LLC, NWQHoldings, LLC, Symphony Asset
Management LLC, Santa Barbara Asset
Management LLC, Nuveen HydePark Group, LLC
and Richards &Tierney, Inc. (since 2007);
Managing Director (since 2008), formerly,
Vice President (2007-2008) and Assistant
General Counsel, Nuveen Investments, Inc.
prior thereto, Partner, Bell, Boyd & Lloyd
LLP (1997-2007).
[] JOHN V. MILLER Managing Director (since 2007), formerly,
4/10/67 Vice President (2002-2007) of Nuveen
333 W. Wacker Drive Vice President 2007 184 Investments, LLC; Chartered Financial
Chicago, IL 60606 Analyst.
[] JAMES F. RUANE Vice President, Nuveen Investments since
7/3/62 Vice President 2007; prior thereto, Partner, Deloitte &
333 W. Wacker Drive and Assistant 2007 184 Touche USA LLP (since 2005), formerly,
Chicago, IL 60606 Secretary senior tax manager (since 2002); Certified
Public Accountant.
[] MARK L. WINGET Vice President, Nuveen Investments, LLC
12/21/68 Vice President (since 2008); Vice President and Assistant
333 W. Wacker Drive and Assistant 2008 184 Secretary, Nuveen Asset Management,
Chicago, IL 60606 Secretary Rittenhouse Asset Management, Inc., Nuveen
Investment Advisers Inc., Nuveen Investment
Institutional Services Group LLC, NWQ
Investment Management Company, LLC,
Tradewinds Global Investors, LLC, NWQ
Holdings, LLC, Symphony Asset Management
LLC, Santa Barbara Asset Management, LLC,
Nuveen HydePark Group, LLC and Richards &
Tierney, Inc. (since 2008); Vice President
and Assistant General Counsel, Nuveen
Investments Inc. (since 2008); prior
thereto, Counsel, Vedder Price P.C.
(1997-2007).
(1) Mr. Schwertfeger is an "interested person" of the Funds, as defined in the
Investment Company Act of 1940, by reason of being the former Chairman and
Chief Executive Officer of Nuveen Investments, Inc. and having previously
served in various other capacities with Nuveen Investments, Inc. and its
subsidiaries. It is expected that Mr. Schwertfeger will resign from the
Board of Trustees by the end of the second quarter of 2008.
(2) Board Members serve three year terms. The Board of Trustees is divided into
three classes, Class I, Class II, and Class III, with each being elected to
serve until the third succeeding annual shareholders' meeting subsequent to
its election or thereafter in each case when its respective successors are
duly elected or appointed. The first year elected or appointed represents
the year in which the board member was first elected or appointed to any
fund in the Nuveen Complex.
(3) Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp. were
reorganized into Nuveen Asset Management, effective January 1, 2005.
(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.
35
Reinvest Automatically
EASILY and CONVENIENTLY
NUVEEN MAKES REINVESTING EASY. A PHONE CALL IS ALL IT TAKES TO SET UP YOUR
REINVESTMENT ACCOUNT.
NUVEEN CLOSED-END FUNDS DIVIDEND REINVESTMENT PLAN
Your Nuveen Closed-End Fund allows you to conveniently reinvest dividends and/or
capital gains distributions in additional Fund shares.
By choosing to reinvest, you'll be able to invest money regularly and
automatically, and watch your investment grow through the power of tax-free
compounding. Just like dividends or distributions in cash, there may be times
when income or capital gains taxes may be payable on dividends or distributions
that are reinvested.
It is important to note that an automatic reinvestment plan does not ensure a
profit, nor does it protect you against loss in a declining market.
EASY AND CONVENIENT
To make recordkeeping easy and convenient, each month you'll receive a statement
showing your total dividends and distributions, the date of investment, the
shares acquired and the price per share, and the total number of shares you own.
HOW SHARES ARE PURCHASED
The shares you acquire by reinvesting will either be purchased on the open
market or newly issued by the Fund. If the shares are trading at or above net
asset value at the time of valuation, the Fund will issue new shares at the
greater of the net asset value or 95% of the then-current market price. If the
shares are trading at less than net asset value, shares for your account will be
purchased on the open market. If the Plan Agent begins purchasing Fund shares on
the open market while shares are trading below net asset value, but the Fund's
shares subsequently trade at or above their net asset value before the Plan
Agent is able to complete its purchases, the Plan Agent may cease open-market
purchases and may invest the uninvested portion of the distribution in
newly-issued Fund shares at a price equal to the greater of the shares' net
asset value or 95% of the shares' market value on the last business day
immediately prior to the purchase date. Dividends and distributions received to
purchase shares in the open market will normally be invested shortly after the
dividend payment date. No interest will be paid on dividends and distributions
awaiting reinvestment. Because the market price of the shares may increase
before purchases are completed, the average purchase price per share may exceed
the market price at the time of valuation, resulting in the acquisition of fewer
shares than if the dividend or distribution had been paid in shares issued by
the Fund. A pro rata portion of any applicable brokerage commissions on open
market purchases will be paid by Plan participants. These commissions usually
will be lower than those charged on individual transactions.
36
FLEXIBLE
You may change your distribution option or withdraw from the Plan at any time,
should your needs or situation change. Should you withdraw, you can receive a
certificate for all whole shares credited to your reinvestment account and cash
payment for fractional shares, or cash payment for all reinvestment account
shares, less brokerage commissions and a $2.50 service fee.
You can reinvest whether your shares are registered in your name, or in the name
of a brokerage firm, bank, or other nominee. Ask your investment advisor if his
or her firm will participate on your behalf. Participants whose shares are
registered in the name of one firm may not be able to transfer the shares to
another firm and continue to participate in the Plan.
The Fund reserves the right to amend or terminate the Plan at any time. Although
the Fund reserves the right to amend the Plan to include a service charge
payable by the participants, there is no direct service charge to participants
in the Plan at this time.
CALL TODAY TO START REINVESTING DIVIDENDS AND/OR DISTRIBUTIONS
For more information on the Nuveen Automatic Reinvestment Plan or to enroll in
or withdraw from the Plan, speak with your financial advisor or call us at (800)
257-8787.
37
Glossary of
TERMS USED in this REPORT
[] AUCTION RATE BOND: An auction rate bond is a security whose interest
payments are adjusted periodically through an auction process, which
process typically also serves as a means for buying and selling the bond.
Auctions that fail to attract enough buyers for all the shares offered for
sale are deemed to have "failed", with current holders receiving a
formula-based interest rate until the next scheduled auction.
[] AVERAGE ANNUAL TOTAL RETURN: This is a commonly used method to express an
investment's performance over a particular, usually multi-year time period.
It expresses the return that would have been necessary each year to equal
the investment's actual cumulative performance (including change in NAV or
market price and reinvested dividends and capital gains distributions, if
any) over the time period being considered.
[] AVERAGE EFFECTIVE MATURITY: The average of the number of years to maturity
of the bonds in a Fund's portfolio, computed by weighting each bond's time
to maturity (the date the security comes due) by the market value of the
security. This figure does not account for the likelihood of prepayments or
the exercise of call provisions unless an escrow account has been
established to redeem the bond before maturity.
[] 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.
[] MARKET YIELD (ALSO KNOWN AS DIVIDEND YIELD OR CURRENT YIELD): An
investment's current annualized dividend divided by its current market
price.
[] NET ASSET VALUE (NAV): A Fund's common share NAV per share is calculated by
subtracting the liabilities of the Fund from its total assets and then
dividing the remainder by the number of shares outstanding. Fund NAVs are
calculated at the end of each business day.
[] TAXABLE-EQUIVALENT YIELD: The yield necessary from a fully taxable
investment to equal, on an after-tax basis, the yield of a municipal bond
investment.
[] ZERO COUPON BOND: A zero coupon bond does not pay a regular interest coupon
to its holders during the life of the bond. Tax-exempt income to the holder
of the bond comes from accretion of the difference between the original
purchase price of the bond at issuance and the par value of the bond at
maturity and is effectively paid at maturity. The market prices of zero
coupon bonds generally are more volatile than the market prices of bonds
that pay interest periodically.
38
Other Useful INFORMATION
QUARTERLY PORTFOLIO OF INVESTMENTS AND PROXY VOTING INFORMATION
You may obtain (i) the Fund's quarterly portfolio of investments, (ii)
information regarding how the Fund voted proxies relating to portfolio
securities held during the twelve-month period ended June 30, 2007, and (iii) a
description of the policies and procedures that the Fund used to determine how
to vote proxies relating to portfolio securities without charge, upon request,
by calling Nuveen Investments toll-free at (800) 257-8787 or on Nuveen's website
at www.nuveen.com.
You may also obtain this and other Fund information directly from the Securities
and Exchange Commission ("SEC"). The SEC may charge a copying fee for this
information. Visit the SEC on-line at http://www.sec.gov or in person at the
SEC's Public Reference Room in Washington, D.C. Call the SEC at (202) 942-8090
for room hours and operation. You may also request Fund information by sending
an e-mail request to publicinfo@sec.gov or by writing to the SEC's Public
References Section at 100 F Street NE, Washington, D.C. 20549.
CEO CERTIFICATION DISCLOSURE
The Fund's Chief Executive Officer has submitted to the New York Stock Exchange
the annual CEO certification as required by Section 303A.12(a) of the NYSE
Listed Company Manual.
The Fund has filed with the SEC the certification of its Chief Executive Officer
and Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act.
BOARD OF DIRECTORS
Robert P. Bremner
Jack B. Evans
William C. Hunter
David J. Kundert
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
Carole E. Stone
FUND MANAGER
Nuveen Asset Management
333 West Wacker Drive
Chicago, IL 60606
CUSTODIAN
State Street Bank & Trust Company
Boston, MA
TRANSFER AGENT AND
SHAREHOLDER SERVICES
State Street Bank & Trust Company
Nuveen Funds
P.O. Box 43071
Providence, RI 02940-3071
(800) 257-8787
LEGAL COUNSEL
Chapman and Cutler LLP
Chicago, IL
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Ernst & Young LLP
Chicago, IL
The Fund intends to repurchase shares of its own common stock in the future at
such times and in such amounts as is deemed advisable. No common shares were
repurchased during the period covered by this report. Any future repurchases
will be reported to shareholders in the next annual or semi-annual report.
39
Nuveen Investments:
-------------------
SERVING INVESTORS FOR GENERATIONS
Since 1898, financial advisors and their clients have relied on Nuveen
Investments to provide dependable investment solutions. For the past century,
Nuveen Investments has adhered to the belief that the best approach to investing
is to apply conservative risk-management principles to help minimize volatility.
Building on this tradition, we today offer a range of high quality equity and
fixed-income solutions that are integral to a well-diversified core portfolio.
Our clients have come to appreciate this diversity, as well as our continued
adherence to proven, long-term investing principles.
We offer many different investing solutions for our clients' different needs.
Managing $153 billion in assets, as of March 31, 2008, Nuveen Investments offers
access to a number of different asset classes and investing solutions through a
variety of products. Nuveen Investments markets its capabilities under six
distinct brands: Nuveen, a leader in fixed-income investments; NWQ, a leader in
value-style equities; Rittenhouse, a leader in growth-style equities; Symphony,
a leading institutional manager of market-neutral alternative investment
portfolios; Santa Barbara, a leader in growth equities; and Tradewinds, a leader
in global equities.
Find out how we can help you reach your financial goals.
To learn more about the products and services Nuveen Investments offers, talk to
your financial advisor, or call us at (800) 257-8787. Please read the
information provided carefully before you invest. Be sure to obtain a
prospectus, where applicable. Investors should consider the investment objective
and policies, risk considerations, charges and expenses of the Fund carefully
before investing. The prospectus contains this and other information relevant to
an investment in the Fund. For a prospectus, please contact your securities
representative or Nuveen Investments, 333 W. Wacker Dr., Chicago, IL 60606.
Please read the prospectus carefully before you invest or send money.
Learn more about Nuveen Funds at: www.nuveen.com/etf
Share prices
Fund details
Daily financial news
Investor education
Interactive planning tools
EAN-A-0308D
ITEM 2. CODE OF ETHICS.
As of the end of the period covered by this report, the registrant has adopted a
code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions. There were no amendments to or waivers
from the Code during the period covered by this report. The registrant has
posted the code of ethics on its website at www.nuveen.com/etf. (To view the
code, click on the Investor Resources drop down menu box, click on Fund
Governance and then click on Code of Conduct.)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Directors or Trustees determined that the registrant
has at least one "audit committee financial expert" (as defined in Item 3 of
Form N-CSR) serving on its Audit Committee. The registrant's audit committee
financial expert is Jack B. Evans, Chairman of the Audit Committee, who is
"independent" for purposes of Item 3 of Form N-CSR.
Mr. Evans was formerly President and Chief Operating Officer of SCI Financial
Group, Inc., a full service registered broker-dealer and registered investment
adviser ("SCI"). As part of his role as President and Chief Operating Officer,
Mr. Evans actively supervised the Chief Financial Officer (the "CFO") and
actively supervised the CFO's preparation of financial statements and other
filings with various regulatory authorities. In such capacity, Mr. Evans was
actively involved in the preparation of SCI's financial statements and the
resolution of issues raised in connection therewith. Mr. Evans has also served
on the audit committee of various reporting companies. At such companies, Mr.
Evans was involved in the oversight of audits, audit plans, and the preparation
of financial statements. Mr. Evans also formerly chaired the audit committee of
the Federal Reserve Bank of Chicago.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Nuveen Select Maturities Municipal Fund
The following tables show the amount of fees that Ernst & Young LLP, the Fund's
auditor, billed to the Fund during the Fund's last two full fiscal years. For
engagements with Ernst & Young LLP the Audit Committee approved in advance all
audit services and non-audit services that Ernst & Young LLP provided to the
Fund, except for those non-audit services that were subject to the pre-approval
exception under Rule 2-01 of Regulation S-X (the "pre-approval exception"). The
pre-approval exception for services provided directly to the Fund waives the
pre-approval requirement for services other than audit, review or attest
services if: (A) the aggregate amount of all such services provided constitutes
no more than 5% of the total amount of revenues paid by the Fund to its
accountant during the fiscal year in which the services are provided; (B) the
Fund did not recognize the services as non-audit services at the time of the
engagement; and (C) the services are promptly brought to the Audit Committee's
attention, and the Committee (or its delegate) approves the services before the
audit is completed.
The Audit Committee has delegated certain pre-approval responsibilities to its
Chairman (or, in his absence, any other member of the Audit Committee).
SERVICES THAT THE FUND'S AUDITOR BILLED TO THE FUND
AUDIT FEES BILLED AUDIT-RELATED FEES TAX FEES ALL OTHER FEES
FISCAL YEAR ENDED TO FUND (1) BILLED TO FUND (2) BILLED TO FUND (3) BILLED TO FUND
-----------------------------------------------------------------------------------------------------------------------------
March 31, 2008 $ 11,018 $ 0 $ 500 $ 0
-----------------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0% 0%
pursuant to
pre-approval
exception
-----------------------------------------------------------------------------------------------------------------------------
March 31, 2007 $ 9,674 $ 0 $ 0 $ 0
-----------------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0% 0%
pursuant to
pre-approval
exception
-----------------------------------------------------------------------------------------------------------------------------
(1) "Audit Fees" are the aggregate fees billed for professional services for
the audit of the Fund's annual financial statements and services provided
in connection with statutory and regulatory filings or engagements.
(2) "Audit Related Fees" are the aggregate fees billed for assurance and
related services reasonably related to the performance of the audit or
review of financial statements and are not reported under "Audit Fees".
(3) "Tax Fees" are the aggregate fees billed for professional services for tax
advice, tax compliance, and tax planning.
SERVICES THAT THE FUND'S AUDITOR BILLED TO THE
ADVISER AND AFFILIATED FUND SERVICE PROVIDERS
The following tables show the amount of fees billed by Ernst & Young LLP to
Nuveen Asset Management ("NAM" or the "Adviser"), and any entity controlling,
controlled by or under common control with NAM ("Control Affiliate") that
provides ongoing services to the Fund ("Affiliated Fund Service Provider"), for
engagements directly related to the Fund's operations and financial reporting,
during the Fund's last two full fiscal years.
The tables also show the percentage of fees subject to the pre-approval
exception. The pre-approval exception for services provided to the Adviser and
any Affiliated Fund Service Provider (other than audit, review or attest
services) waives the pre-approval requirement if: (A) the aggregate amount of
all such services provided constitutes no more than 5% of the total amount of
revenues paid to Ernst & Young LLP by the Fund, the Adviser and Affiliated Fund
Service Providers during the fiscal year in which the services are provided that
would have to be pre-approved by the Audit Committee; (B) the Fund did not
recognize the services as non-audit services at the time of the engagement; and
(C) the services are promptly brought to the Audit Committee's attention, and
the Committee (or its delegate) approves the services before the Fund's audit is
completed.
FISCAL YEAR ENDED AUDIT-RELATED FEES TAX FEES BILLED TO ALL OTHER FEES
BILLED TO ADVISER AND ADVISER AND BILLED TO ADVISER
AFFILIATED FUND AFFILIATED FUND AND AFFILIATED FUND
SERVICE PROVIDERS SERVICE PROVIDERS SERVICE PROVIDERS
-------------------------------------------------------------------------------------------------------------
March 31, 2008 $ 0 $ 0 $ 0
-------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
-------------------------------------------------------------------------------------------------------------
March 31, 2007 $ 0 $ 0 $ 0
-------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
-------------------------------------------------------------------------------------------------------------
NON-AUDIT SERVICES
The following table shows the amount of fees that Ernst & Young LLP billed
during the Fund's last two full fiscal years for non-audit services. The Audit
Committee is required to pre-approve non-audit services that Ernst & Young LLP
provides to the Adviser and any Affiliated Fund Services Provider, if the
engagement related directly to the Fund's operations and financial reporting
(except for those subject to the de minimis exception described above). The
Audit Committee requested and received information from Ernst & Young LLP about
any non-audit services that Ernst & Young LLP rendered during the Fund's last
fiscal year to the Adviser and any Affiliated Fund Service Provider. The
Committee considered this information in evaluating Ernst & Young LLP's
independence.
FISCAL YEAR ENDED TOTAL NON-AUDIT FEES
BILLED TO ADVISER AND
AFFILIATED FUND SERVICE TOTAL NON-AUDIT FEES
PROVIDERS (ENGAGEMENTS BILLED TO ADVISER AND
RELATED DIRECTLY TO THE AFFILIATED FUND SERVICE
TOTAL NON-AUDIT FEES OPERATIONS AND FINANCIAL PROVIDERS (ALL OTHER
BILLED TO FUND REPORTING OF THE FUND) ENGAGEMENTS) TOTAL
----------------------------------------------------------------------------------------------------------------------------
March 31, 2008 $ 500 $ 0 $ 0 $ 500
March 31, 2007 $ 0 $ 0 $ 0 $ 0
"Non-Audit Fees billed to Adviser" for both fiscal year ends represent "Tax
Fees" billed to Adviser in their respective amounts from the previous table.
Audit Committee Pre-Approval Policies and Procedures. Generally, the Audit
Committee must approve (i) all non-audit services to be performed for the Fund
by the Fund's independent accountants and (ii) all audit and non-audit services
to be performed by the Fund's independent accountants for the Affiliated Fund
Service Providers with respect to operations and financial reporting of the
Fund. Regarding tax and research projects conducted by the independent
accountants for the Fund and Affiliated Fund Service Providers (with respect to
operations and financial reports of the Fund) such engagements will be (i)
pre-approved by the Audit Committee if they are expected to be for amounts
greater than $10,000; (ii) reported to the Audit Committee chairman for his
verbal approval prior to engagement if they are expected to be for amounts under
$10,000 but greater than $5,000; and (iii) reported to the Audit Committee at
the next Audit Committee meeting if they are expected to be for an amount under
$5,000.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The registrant's Board of Directors or Trustees has a separately designated
Audit Committee established in accordance with Section 3(a)(58)(A) of the
Securities Exchange Act of 1934, as amended (15 U.S.C. 78c(a)(58)(A)). The
members of the audit committee are Robert P. Bremner, Jack B. Evans, William J.
Schneider and David J. Kundert.
ITEM 6. SCHEDULE OF INVESTMENTS.
See Portfolio of Investments in Item 1.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
The registrant invests its assets primarily in municipal bonds and cash
management securities. On rare occasions the registrant may acquire, directly or
through a special purpose vehicle, equity securities of a municipal bond issuer
whose bonds the registrant already owns when such bonds have deteriorated or are
expected shortly to deteriorate significantly in credit quality. The purpose of
acquiring equity securities generally will be to acquire control of the
municipal bond issuer and to seek to prevent the credit deterioration or
facilitate the liquidation or other workout of the distressed issuer's credit
problem. In the course of exercising control of a distressed municipal issuer,
NAM may pursue the registrant's interests in a variety of ways, which may entail
negotiating and executing consents, agreements and other arrangements, and
otherwise influencing the management of the issuer. NAM does not consider such
activities proxy voting for purposes of Rule 206(4)-6 under the 1940 Act, but
nevertheless provides reports to the registrant's Board of Trustees on its
control activities on a quarterly basis.
In the rare event that a municipal issuer were to issue a proxy or that the
registrant were to receive a proxy issued by a cash management security, NAM
would either engage an independent third party to determine how the proxy should
be voted or vote the proxy with the consent, or based on the instructions, of
the registrant's Board of Trustees or its representative. A member of NAM's
legal department would oversee the administration of the voting, and ensure that
records were maintained in accordance with Rule 206(4)-6, reports were filed
with the SEC on Form N-PX, and the results provided to the registrant's Board of
Trustees and made available to shareholders as required by applicable rules.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
THE PORTFOLIO MANAGER
The following individual has primary responsibility for the day-to-day
implementation of the registrant's investment strategies:
NAME FUND
Paul Brennan Nuveen Select Maturities Municipal Fund
Other Accounts Managed. In addition to managing the registrant, the portfolio
manager is also primarily responsible for the day-to-day portfolio management of
the following accounts:
TYPE OF ACCOUNT NUMBER OF
PORTFOLIO MANAGER MANAGED ACCOUNTS ASSETS
--------------------------------------------------------------------------------
Paul Brennan Registered Investment Company 15 $14.395 billion
Other Pooled Investment Vehicles 0 $ 0
Other Accounts 1 $1.1 million
* Assets are as of March 31, 2008. None of the assets in these accounts are
subject to an advisory fee based on performance.
Compensation. Each portfolio manager's compensation consists of three basic
elements--base salary, cash bonus and long-term incentive compensation. The
compensation strategy is to annually compare overall compensation to the market
in order to create a compensation structure that is competitive and consistent
with similar financial services companies. As discussed below, several factors
are considered in determining each portfolio manager's total compensation. In
any year these factors may include, among others, the effectiveness of the
investment strategies recommended by the portfolio manager's investment team,
the investment performance of the accounts managed by the portfolio manager, and
the overall performance of Nuveen Investments, Inc. (the parent company of NAM).
Although investment performance is a factor in determining the portfolio
manager's compensation, it is not necessarily a decisive factor. The portfolio
manager's performance is evaluated in part by comparing manager's performance
against a specified investment benchmark. This fund-specific benchmark is a
customized subset (limited to bonds in each Fund's specific state and with
certain maturity parameters) of the S&P/Investortools Municipal Bond index, an
index comprised of bonds held by managed municipal bond fund customers of
Standard & Poor's Securities Pricing, Inc. that are priced daily and whose fund
holdings aggregate at least $2 million. As of April 30, 2008, the
S&P/Investortools Municipal Bond index was comprised of 51,827 securities with
an aggregate current market value of $1,027 billion.
Base salary. Each portfolio manager is paid a base salary that is set at a level
determined by NAM in accordance with its overall compensation strategy discussed
above. NAM is not under any current contractual obligation to increase a
portfolio manager's base salary.
Cash bonus. Each portfolio manager is also eligible to receive an annual cash
bonus. The level of this bonus is based upon evaluations and determinations made
by each portfolio manager's supervisors, along with reviews submitted by his
peers. These reviews and evaluations often take into account a number of
factors, including the effectiveness of the investment strategies recommended to
the NAM's investment team, the performance of the accounts for which he serves
as portfolio manager relative to any benchmarks established for those accounts,
his effectiveness in communicating investment performance to stockholders and
their representatives, and his contribution to the NAM's investment process and
to the execution of investment strategies. The cash bonus component is also
impacted by the overall performance of Nuveen Investments, Inc. in achieving its
business objectives.
Long-term incentive compensation. In connection with the acquisition of Nuveen
Investments, Inc., by a group of investors lead by Madison Dearborn Partners in
November 2007, certain employees, including portfolio managers, received profit
interests in Nuveen's parent. These profit interests entitle the holders to
participate in the appreciation in the value of Nuveen beyond the issue date and
vest over five to seven years, or earlier in the case of a liquidity event.
Material Conflicts of Interest. Each portfolio manager's simultaneous management
of the Registrant and the other accounts noted above may present actual or
apparent conflicts of interest with respect to the allocation and aggregation of
securities orders placed on behalf of the registrant and the other account. NAM,
however, believes that such potential conflicts are mitigated by the fact that
the NAM has adopted several policies that address potential conflicts of
interest, including best execution and trade allocation policies that are
designed to ensure (1) that portfolio management is seeking the best price for
portfolio securities under the circumstances, (2) fair and equitable allocation
of investment opportunities among accounts over time and (3) compliance with
applicable regulatory requirements. All accounts are to be treated in a
non-preferential manner, such that allocations are not based upon account
performance, fee structure or preference of the portfolio manager. In addition,
NAM has adopted a Code of Conduct that sets forth policies regarding conflicts
of interest.
Beneficial Ownership of Securities. As of the March 31, 2008, the portfolio
manager beneficially owned the following dollar range of equity securities
issued by the Registrant and other Nuveen Funds managed by NAM's municipal
investment team.
DOLLAR RANGE OF
EQUITY SECURITIES
DOLLAR RANGE OF BENEFICIALLY OWNED
EQUITY IN THE REMAINDER OF
SECURITIES NUVEEN FUNDS MANAGED
BENEFICIALLY BY NAM'S MUNICIPAL
NAME OF PORTFOLIO MANAGER FUND OWNED IN FUND INVESTMENT TEAM
---------------------------------------------------------------------------------------------------------------
Paul Brennan Nuveen Select Maturities Municipal Fund $0 $250,001-$500,000
---------------------------------------------------------------------------------------------------------------
PORTFOLIO MANAGER BIO:
Paul Brennan, CFA, CPA, became a portfolio manager of Flagship Financial Inc. in
1994, and subsequently became an Assistant Vice President of NAM upon the
acquisition of Flagship Resources Inc. by Nuveen in 1997. He became Vice
President of NAM in 2002. He currently manages investments for 16
Nuveen-sponsored investment companies.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the registrants Board implemented after the registrant
last provided disclosure in response to this item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of this report that includes the disclosure
required by this paragraph, based on their evaluation of the controls
and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")
(17 CFR 240.13a-15(b) or 240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter
of the period covered by this report that has materially affected, or
is reasonably likely to materially affect, the registrant's internal
control over financial reporting.
ITEM 12. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit: Not applicable
because the code is posted on registrant's website at www.nuveen.com/etf and
there were no amendments during the period covered by this report. (To view the
code, click on the Investor Resources drop down menu box, click on Fund
Governance and then Code of Conduct.)
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2(a) under
the 1940 Act (17 CFR 270.30a-2(a)) in the exact form set forth below: Ex-99.CERT
Attached hereto.
(a)(3) Any written solicitation to purchase securities under Rule 23c-1 under
the 1940 Act (17 CFR 270.23c-1) sent or given during the period covered by the
report by or on behalf of the registrant to 10 or more persons. Not applicable.
(b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act,
provide the certifications required by Rule 30a-2(b) under the 1940 Act (17 CFR
270.30a-2(b)); Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR
240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of
the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished
pursuant to this paragraph will not be deemed "filed" for purposes of Section 18
of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of
that section. Such certification will not be deemed to be incorporated by
reference into any filing under the Securities Act of 1933 or the Exchange Act,
except to the extent that the registrant specifically incorporates it by
reference. Ex-99.906 CERT attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Nuveen Select Maturities Municipal Fund
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By (Signature and Title)* /s/ Kevin J. McCarthy
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Kevin J. McCarthy
Vice President and Secretary
Date: June 6, 2008
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Gifford R. Zimmerman
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Gifford R. Zimmerman
Chief Administrative Officer
(principal executive officer)
Date: June 6, 2008
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By (Signature and Title)* /s/ Stephen D. Foy
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Stephen D. Foy
Vice President and Controller
(principal financial officer)
Date: June 6, 2008
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* Print the name and title of each signing officer under his or her signature.