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 811-22003
-----------------------
Nuveen Core Equity Alpha 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
--------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (312) 917-7700
---------------------
Date of fiscal year end: December 31
-------------------
Date of reporting period: December 31, 2007
-----------------------
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 SHAREHOLDERS
Annual Report
DECEMBER 31, 2007
Nuveen Investments
CLOSED-END FUNDS
NUVEEN CORE EQUITY
ALPHA FUND
JCE
Mathematically-driven investment strategy that seeks to
generate risk-adjusted excess returns
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dividends and statements from your dividends and statements directly from
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account.
NUVEEN INVESTMENTS LOGO
Chairman's
LETTER TO SHAREHOLDERS
(TIMOTHY
SCHWERTFEGER
PHOTO) Timothy R. Schwertfeger Chairman of the Board
Dear Shareholder:
Once again, I am pleased to report that over the abbreviated period covered by
this report your Fund provided you with attractive income. For more details
about the management strategy and performance of your Fund, please read the
Portfolio Managers' Comments, the Distribution 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 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,
(TIMOTHY SCHWERFEGER SIG)
Timothy R. Schwertfeger
Chairman of the Board
February 15, 2008
Portfolio Managers' COMMENTS
NUVEEN INVESTMENTS CLOSED-END FUNDS JCE
Nuveen Core Equity Alpha Fund (JCE) was introduced in late March 2007 and its
portfolio is managed by Enhanced Investment Technologies, LLC (INTECH), an
independently managed subsidiary of Janus Capital Group Inc. INTECH's Chief
Investment Officer Dr. Robert Fernholz, PhD., leads the portfolio management
team. Here Dr. Fernholz and team members talk about the economic environment and
performance of the Fund over the period from March 27, 2007, (commencement of
investment operations) through December 31, 2007.
WHAT WERE THE GENERAL ECONOMIC CONDITIONS AND MARKET TRENDS DURING THE REPORTING
PERIOD ENDED DECEMBER 31, 2007?
For the first several months after the Fund's introduction, equities generally
performed well as favorable corporate earnings and export-driven economic growth
were sufficient to offset some growing anxiety over the deteriorating housing
and mortgage markets. The second half of 2007 was dominated by concerns about
the impact of possible sub-prime mortgage defaults and fears of a recession,
especially as the sub-prime market's impact began to spread beyond mortgage
lenders to international and domestic money center banks and other financial
institutions. When data began to show the potential for a severely weakening
economy, the Federal Reserve cut the widely followed short-term fed funds rate
by a half a percentage point in September, by another quarter of a percentage
point in October and yet another quarter point in December. (On January 22 and
29, 2008, after the close of this reporting period, the Federal Reserve cut the
fed funds rate by a combined 1.25%, bringing the rate to 3.00%.)
--------------------------------------------------------------------------------
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 managers 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.
--------------------------------------------------------------------------------
The U.S. equity markets suffered through significant turbulence during this
period. As a result, the performance of the equity markets continued to be
volatile as concerns of a slowing economy and rising commodity prices
(particularly oil) joined with weakness in the housing market and rising
concerns within the sub-prime mortgage industry to weigh heavily on investor
sentiment. Additionally, some indicators in late 2007 pointed to a possible rise
in the rate of inflation, which further raised investor concerns about the
equity markets.
IN THIS ENVIRONMENT, WHAT KEY STRATEGIES WERE USED TO MANAGE THE FUND?
In the period following the Fund's introduction in March 2007, we completed the
investments of the Fund's assets in a quality portfolio of relatively large cap
domestic equities.
INTECH's investment process requires some level of volatility be present in
individual stocks that can then be "captured" in our optimization and
rebalancing process. While we expect
4
that there will be individual periods or years in which we exceed or
underperform our targets, we seek over the long term to be able to provide
returns in excess of the S&P 500 Index with equal or less risk.
The mathematical algorithm that is the basis of our investment process seeks to
combine stocks with high relative volatility and low correlation in a more
efficient combination than is found in the benchmark index. These target weights
are then maintained over time and the portfolio is re-optimized and re-balanced
on a periodic basis. Since the investment process searches for stocks that are
volatile relative to the index, this tends to lead us toward the smaller members
of the large cap stock universe. Consequently, the weighted average market
capitalization of the Fund's portfolio often will tend to be smaller than the
weighted average market capitalization of the S&P 500 Index.
The Fund also employs an option strategy to enhance the Fund's risk adjusted
returns over time. Over this period, the Fund wrote (sold) call options
primarily on custom baskets of securities. The sale of equity call options was
used to generate current gains that can be used to partially offset equity
portfolio losses in certain situations. The option strategy is administered by
Nuveen Asset Management, the Fund's investment adviser.
HOW DID THE FUND PERFORM?
The performance of JCE, as well as the comparative index, is presented in the
accompanying table.
Cumulative Total Returns on Net Asset Value
Since inception (3/27/07 through 12/31/07)
JCE 4.84%
S&P 500 Index(1) 5.49%
--------------------------------------------------------------------------------
Past performance does not guarantee 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 for the Fund in this report.
--------------------------------------------------------------------------------
For the period from the Fund's inception through December 31, 2007, the
cumulative return on NAV for the Fund underperformed the S&P 500 Index.
As noted earlier, the Fund's investment strategy often leads us to purchase the
smaller members of the large cap stock universe. In the short term, this can
impact the performance of the Fund relative to a passive benchmark. When market
capital is flowing into the larger stocks and fewer and fewer stocks are driving
the index returns, this can be a drag on the Fund's relative performance. During
periods when the market broadens and capital flows from larger to smaller
stocks, the Fund's smaller stock tendency may prove to be a positive for
performance.
Over the abbreviated period covered in this shareholder report, larger cap
stocks generally performed well. This was a positive for the return of the S&P
500 Index as a whole, but much of the Index's performance over this period came
from stocks within the Index that were not held by the Fund, or not held in the
same weights. As a result, the Fund trailed the performance of the S&P 500 Index
over this relatively short time frame.
--------------------------------------------------------------------------------
1. The S&P 500 Index is an unmanaged Index generally considered representative
of the U.S. Stock Market.
--------------------------------------------------------------------------------
5
Distribution and Share Price
INFORMATION
The Fund has a managed distribution program. The goal of a managed distribution
program is to provide shareholders with relatively consistent and predictable
cash flow by systematically converting its expected long-term return potential
into regular distributions. As a result, regular distributions throughout the
year are likely to include a portion of expected long-term gains (both realized
and unrealized), along with net investment income.
The Fund declared its initial quarterly distribution of $0.4300 per share in May
2007.
Important points to understand about a managed distribution program are:
- The Fund seeks to establish a relatively stable distribution rate that roughly
corresponds to the projected total return from its investment strategy over an
extended period of time. However, you should not draw any conclusions about
the Fund's past or future investment performance from its current distribution
rate.
- Actual returns will differ from projected long-term returns (and therefore the
Fund's distribution rate), at least over shorter time periods. Over a specific
timeframe, the difference between actual returns and total distributions will
be reflected in an increasing (returns exceed distributions) or a decreasing
(distributions exceed returns) Fund net asset value.
- Each distribution is expected to be paid from some or all of the following
sources:
- net investment income (regular interest and dividends),
- realized capital gains, and
- unrealized gains, or, in certain cases, a return of principal (non-taxable
distributions).
- A non-taxable distribution is a payment of a portion of the Fund's capital.
When the Fund's returns exceed distributions, it may represent portfolio gains
generated, but not realized as a taxable capital gain. In periods when the
Fund's returns fall short of distributions, it will represent a portion of
your original principal unless the shortfall is offset during other time
periods over the life of your investment (previous or subsequent) when the
Fund's total return exceeds distributions.
- Because distribution source estimates are updated during the year based on the
Fund's performance and forecast for its current fiscal year (which is the
calendar year for the Fund), estimates on the nature of your distributions
provided at the time the distributions are paid may differ from both the tax
information reported to you in your Fund's IRS Form 1099 statement provided at
year end, as well as the ultimate economic sources of distributions over the
life of your investment.
6
The following table provides information regarding the Fund's distributions and
total return performance for the period March 27, 2007 (commencement of
operations) through December 31, 2007. The distribution information is presented
on a tax basis rather than on a generally accepted accounting principles (GAAP)
basis. This information is intended to help you better understand whether the
Fund's returns for the specified time period was sufficient to meet the Fund's
distributions.
-----------------------------------------------------------------------
AS OF 12/31/07 JCE
-----------------------------------------------------------------------
Inception date 3/27/07
Period 3/27/07 (commencement of operations) through
12/31/07:
Per share distribution:
From net investment income $0.14
From short-term capital gains --
From long-term capital gains --
From return of capital 1.16
-------
Total per share distribution $1.30
=======
Distribution rate on NAV 6.94%
Cumulative since inception total return on NAV 4.84%
-----------------------------------------------------------------------
As of December 31, 2007, the Fund's share price was trading at a -12.66%
discount to its NAV, compared with an average discount of -6.54% for the period
March 27, 2007 (commencement of operations) through December 31, 2007.
7
JCE Nuveen
PERFORMANCE Core Equity
OVERVIEW Alpha Fund
as of December 31, 2007
PORTFOLIO ALLOCATION (AS A % OF TOTAL INVESTMENTS)
(PORTFOLIO ALLOCATION CHART)
Common Stocks 95.10
Short-Term Investments 4.90
2007 DISTRIBUTIONS PER SHARE
(MONTHLY DISTRIBUTIONS BAR CHART)
June 0.43
Sep 0.43
Dec 0.43
SHARE PRICE PERFORMANCE -- WEEKLY CLOSING PRICE
(SHARE PRICE CHART)
3/27/07 20.0100
20.0100
20.0100
20.1900
20.0000
20.0000
19.7600
19.9500
19.2800
19.7500
19.3400
18.9400
18.3000
18.3600
19.0000
18.2800
17.7700
17.0000
16.8700
16.9000
16.1400
17.3900
17.4500
17.0400
16.5000
16.8000
16.9300
17.5750
17.2700
16.1200
16.8299
16.4500
15.7700
15.7200
15.6400
16.3220
16.5000
16.1290
16.0899
16.3300
12/31/07 16.3500
FUND SNAPSHOT
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Share Price $16.35
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Net Asset Value $18.72
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Premium/(Discount) to NAV -12.66%
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Current Distribution Rate(1) 10.52%
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Net Assets ($000) $307,877
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CUMULATIVE TOTAL RETURN
(Inception 3/27/07)
-------------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
-------------------------------------------------------------------------------------
Since Inception -12.08% 4.84%
-------------------------------------------------------------------------------------
INDUSTRIES
(as a % of total investments)
-------------------------------------------------------------------------------------
Oil, Gas & Consumable Fuels 8.1%
-------------------------------------------------------------------------------------
Electric Utilities 6.8%
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Pharmaceuticals 6.0%
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Diversified Telecommunication Services 5.9%
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Aerospace & Defense 5.6%
-------------------------------------------------------------------------------------
Computers & Peripherals 5.0%
-------------------------------------------------------------------------------------
Machinery 3.4%
-------------------------------------------------------------------------------------
Industrial Conglomerates 3.1%
-------------------------------------------------------------------------------------
Household Products 3.0%
-------------------------------------------------------------------------------------
Health Care Equipment & Supplies 2.9%
-------------------------------------------------------------------------------------
Media 2.9%
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Insurance 2.8%
-------------------------------------------------------------------------------------
Energy Equipment & Services 2.8%
-------------------------------------------------------------------------------------
Health Care Providers & Services 2.6%
-------------------------------------------------------------------------------------
Food & Staples Retailing 2.4%
-------------------------------------------------------------------------------------
Beverages 2.3%
-------------------------------------------------------------------------------------
Communications Equipment 2.0%
-------------------------------------------------------------------------------------
Software 2.0%
-------------------------------------------------------------------------------------
Hotels, Restaurants & Leisure 2.0%
-------------------------------------------------------------------------------------
Diversified Financial Services 1.9%
-------------------------------------------------------------------------------------
Electronic Equipment & Instruments 1.9%
-------------------------------------------------------------------------------------
Textiles, Apparel & Luxury Goods 1.6%
-------------------------------------------------------------------------------------
Internet & Catalog Retail 1.6%
-------------------------------------------------------------------------------------
Commercial Banks 1.3%
-------------------------------------------------------------------------------------
Metals & Mining 1.3%
-------------------------------------------------------------------------------------
Short-Term Investments 4.9%
-------------------------------------------------------------------------------------
Other 13.9%
-------------------------------------------------------------------------------------
1 Current Distribution Rate is based on the Fund's current annualized quarterly
distribution divided by the Fund's current market price. The Fund's quarterly
distributions to its shareholders may be comprised of ordinary income, net
realized capital gains and, if at the end of the calendar year the Fund's
cumulative net ordinary income and net realized gains are less than the amount
of the Fund's distributions, a return of capital for tax purposes.
8
SHAREHOLDER MEETING REPORT
The special meeting of shareholders was held in the offices of Nuveen
Investments on October 12, 2007; the meeting was subsequently
adjourned to October 22, 2007, and additionally adjourned to November
8, 2007, November 12, 2007, November 30, 2007, December 21, 2007, and
January 31, 2008.
JCE
-----------------------------------------------------------------------
Common
Shares
-----------------------------------------------------------------------
TO APPROVE A NEW INVESTMENT MANAGEMENT AGREEMENT:
For 8,010,839
Against 289,908
Abstain 395,267
-----------------------------------------------------------------------
Total 8,696,014
-----------------------------------------------------------------------
TO APPROVE A NEW SUB-ADVISORY AGREEMENT BETWEEN NUVEEN ASSET
MANAGEMENT AND ENHANCED INVESTMENT TECHNOLOGIES LLC:
For 7,994,156
Against 296,662
Abstain 405,196
-----------------------------------------------------------------------
Total 8,696,014
-----------------------------------------------------------------------
9
Report of INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF
NUVEEN CORE EQUITY ALPHA FUND
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Nuveen Core Equity Alpha Fund (the
"Fund") at December 31, 2007, and the results of its operations, the changes in
its net assets and the financial highlights for the period March 27, 2007
(commencement of operations) through December 31, 2007, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these financial statements 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 are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit, which included confirmation of securities at December 31, 2007 with the
custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
February 26, 2008
10
JCE
Nuveen Core Equity Alpha Fund
Portfolio of INVESTMENTS
as of December 31, 2007
SHARES DESCRIPTION (1) VALUE
--------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - 96.4%
AEROSPACE & DEFENSE - 5.6%
24,000 Boeing Company $ 2,099,040
15,400 General Dynamics Corporation 1,370,446
20,000 Goodrich Corporation 1,412,200
39,500 Honeywell International Inc. 2,432,015
2,500 L-3 Communications Holdings, Inc. 264,850
36,800 Lockheed Martin Corporation 3,873,568
7,300 Northrop Grumman Corporation 574,072
29,500 Precision Castparts Corporation 4,091,650
12,500 Raytheon Company 758,750
1,400 Rockwell Collins, Inc. 100,758
5,200 United Technologies Corporation 398,008
--------------------------------------------------------------------------------------------------------------------------------
Total Aerospace & Defense 17,375,357
-------------------------------------------------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS - 0.0%
1,700 Expeditors International of Washington Inc. 75,956
--------------------------------------------------------------------------------------------------------------------------------
AUTO COMPONENTS - 1.1%
40,900 Goodyear Tire & Rubber Company, (2) 1,154,198
64,700 Johnson Controls, Inc. 2,331,788
--------------------------------------------------------------------------------------------------------------------------------
Total Auto Components 3,485,986
-------------------------------------------------------------------------------------------------------------------
BEVERAGES - 2.3%
8,400 Brown-Forman Corporation 622,524
34,400 Coca-Cola Company 2,111,128
24,800 Coca-Cola Enterprises Inc. 645,544
20,000 Molson Coors Brewing Company, Class B 1,032,400
8,300 Pepsi Bottling Group, Inc. 327,518
31,000 PepsiCo, Inc. 2,352,900
--------------------------------------------------------------------------------------------------------------------------------
Total Beverages 7,092,014
-------------------------------------------------------------------------------------------------------------------
BIOTECHNOLOGY - 0.4%
900 Biogen Idec Inc., (2) 51,228
21,600 Celgene Corporation, (2) 998,136
4,600 Gilead Sciences, Inc., (2) 211,646
--------------------------------------------------------------------------------------------------------------------------------
Total Biotechnology 1,261,010
-------------------------------------------------------------------------------------------------------------------
BUILDING PRODUCTS - 0.1%
4,200 Trane, Inc. 196,182
--------------------------------------------------------------------------------------------------------------------------------
CAPITAL MARKETS - 1.3%
1,900 Ameriprise Financial, Inc. 104,709
1,564 Bank of New York Company, Inc. 76,261
2,700 Franklin Resources, Inc. 308,961
9,700 Goldman Sachs Group, Inc. 2,085,985
32,200 JPMorgan Chase & Co. 1,405,530
500 Morgan Stanley 26,555
--------------------------------------------------------------------------------------------------------------------------------
Total Capital Markets 4,008,001
-------------------------------------------------------------------------------------------------------------------
CHEMICALS - 0.7%
5,600 Air Products & Chemicals Inc. 552,328
11,900 Dow Chemical Company 469,098
1,600 E.I. Du Pont de Nemours and Company 70,544
3,200 International Flavors & Fragrances Inc. 154,016
12,200 PPG Industries, Inc. 856,806
600 Praxair, Inc. 53,226
--------------------------------------------------------------------------------------------------------------------------------
Total Chemicals 2,156,018
-------------------------------------------------------------------------------------------------------------------
COMMERCIAL BANKS - 1.3%
86,400 Bank of America Corporation 3,564,864
1,100 SunTrust Banks, Inc. 68,739
11
JCE
Nuveen Core Equity Alpha Fund (continued)
Portfolio of INVESTMENTS as of December 31, 2007
SHARES DESCRIPTION (1) VALUE
--------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL BANKS (continued)
3,400 U.S. Bancorp $ 107,916
4,900 Washington Mutual, Inc. 66,689
8,200 Wells Fargo & Company 247,558
--------------------------------------------------------------------------------------------------------------------------------
Total Commercial Banks 4,055,766
-------------------------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES - 0.3%
13,000 Apollo Group, Inc., (2) 911,950
1,800 R.R. Donnelley & Sons Company 67,932
--------------------------------------------------------------------------------------------------------------------------------
Total Commercial Services & Supplies 979,882
-------------------------------------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT - 2.1%
12,800 Ciena Corporation, (2) 436,608
156,300 Cisco Systems, Inc., (2) 4,231,041
5,600 Corning Incorporated 134,344
44,200 Juniper Networks Inc., (2) 1,467,440
1,700 QUALCOMM Inc. 66,895
--------------------------------------------------------------------------------------------------------------------------------
Total Communications Equipment 6,336,328
-------------------------------------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS - 5.1%
23,600 Apple, Inc., (2) 4,674,688
8,400 Dell Inc., (2) 205,884
74,700 EMC Corporation, (2) 1,384,191
95,500 Hewlett-Packard Company 4,820,840
33,500 International Business Machines Corporation 3,621,350
(IBM)
2,100 SanDisk Corporation, (2) 69,657
31,100 Teradata Corporation 852,451
--------------------------------------------------------------------------------------------------------------------------------
Total Computers & Peripherals 15,629,061
-------------------------------------------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING - 0.5%
5,400 Fluor Corporation 786,888
8,700 Jacobs Engineering Group Inc., (2) 831,807
--------------------------------------------------------------------------------------------------------------------------------
Total Construction & Engineering 1,618,695
-------------------------------------------------------------------------------------------------------------------
CONSTRUCTION MATERIALS - 0.5%
18,000 Vulcan Materials Company 1,423,620
--------------------------------------------------------------------------------------------------------------------------------
CONSUMER FINANCE - 0.1%
16,900 SLM Corporation 340,366
--------------------------------------------------------------------------------------------------------------------------------
CONTAINERS & PACKAGING - 0.5%
19,000 Ball Corporation 855,000
500 Pactiv Corporation, (2) 13,315
29,600 Temple-Inland Inc. 617,160
--------------------------------------------------------------------------------------------------------------------------------
Total Containers & Packaging 1,485,475
-------------------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES - 2.0%
103,900 Citigroup Inc. 3,058,816
400 CME Group, Inc. 274,400
5,500 Intercontinental Exchange Inc. 1,058,750
30,900 Leucadia National Corporation 1,455,390
2,000 New York Stock Exchange Euronext 175,540
--------------------------------------------------------------------------------------------------------------------------------
Total Diversified Financial Services 6,022,896
-------------------------------------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES - 6.0%
308,000 AT&T Inc. 12,800,480
6,600 CenturyTel, Inc. 273,636
30,200 Embarq Corporation 1,495,806
76,500 Sprint Nextel Corporation 1,004,445
60,800 Verizon Communications Inc. 2,656,352
6,900 Windstream Corporation 89,838
--------------------------------------------------------------------------------------------------------------------------------
Total Diversified Telecommunication Services 18,320,557
-------------------------------------------------------------------------------------------------------------------
ELECTRIC UTILITIES - 6.9%
9,700 Allegheny Energy, Inc., (2) 617,017
49,700 American Electric Power Company, Inc. 2,314,032
3,600 CenterPoint Energy, Inc. 61,668
2,800 CMS Energy Corporation 48,664
33,700 Constellation Energy Group 3,455,261
12
SHARES DESCRIPTION (1) VALUE
--------------------------------------------------------------------------------------------------------------------------------
ELECTRIC UTILITIES (continued)
11,800 Edison International $ 629,766
33,600 Entergy Corporation 4,015,872
8,100 Exelon Corporation 661,284
23,100 FirstEnergy Corp. 1,671,054
63,000 FPL Group, Inc. 4,270,140
1,800 Pepco Holdings, Inc. 52,794
12,100 PG&E Corporation 521,389
57,000 PPL Corporation 2,969,130
--------------------------------------------------------------------------------------------------------------------------------
Total Electric Utilities 21,288,071
-------------------------------------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT - 0.4%
13,100 Cooper Industries, Ltd., Class A 692,728
7,300 Rockwell Automation, Inc. 503,408
--------------------------------------------------------------------------------------------------------------------------------
Total Electrical Equipment 1,196,136
-------------------------------------------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 1.9%
16,500 MEMC Electronic Materials, (2) 1,460,085
26,500 Perkinelmer Inc. 689,530
43,300 Thermo Fisher Scientific, Inc., (2) 2,497,544
15,200 Waters Corporation, (2) 1,201,864
--------------------------------------------------------------------------------------------------------------------------------
Total Electronic Equipment & Instruments 5,849,023
-------------------------------------------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES - 2.8%
3,100 Baker Hughes Incorporated 251,410
36,400 National-Oilwell Varco Inc., (2) 2,673,944
8,200 Noble Corporation 463,382
1,800 Rowan Companies Inc. 71,028
28,300 Schlumberger Limited 2,783,871
15,300 Smith International, Inc. 1,129,905
5,946 Transocean Inc. 851,170
5,700 Weatherford International Ltd 391,020
--------------------------------------------------------------------------------------------------------------------------------
Total Energy Equipment & Services 8,615,730
-------------------------------------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING - 2.4%
26,700 CVS Caremark Corporation 1,061,325
98,600 Kroger Co. 2,633,606
37,700 Safeway Inc. 1,289,717
46,300 SUPERVALU INC 1,737,176
1,500 Wal-Mart Stores, Inc. 71,295
10,200 Wm. Wrigley Jr. Company 597,210
--------------------------------------------------------------------------------------------------------------------------------
Total Food & Staples Retailing 7,390,329
-------------------------------------------------------------------------------------------------------------------
FOOD PRODUCTS - 1.3%
2,400 Archer-Daniels-Midland Company 111,432
1,600 ConAgra Foods, Inc. 38,064
6,300 Dean Foods Company, (2) 162,918
7,500 General Mills, Inc. 427,500
19,600 H.J. Heinz Company 914,928
1,600 Hershey Foods Corporation 63,040
1,400 Kellogg Company 73,402
9,400 Monsanto Company 1,049,886
69,100 Tyson Foods, Inc., Class A 1,059,303
--------------------------------------------------------------------------------------------------------------------------------
Total Food Products 3,900,473
-------------------------------------------------------------------------------------------------------------------
GAS UTILITIES - 0.0%
1,600 Questar Corporation 86,560
--------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES - 2.9%
49,200 Baxter International Inc. 2,856,060
1,700 Becton, Dickinson and Company 142,086
3,700 Cardinal Health, Inc. 213,675
11,600 Express Scripts, Inc., (2) 846,800
5,800 Hospira Inc. 247,312
2,100 Medtronic, Inc. 105,567
2,600 Patterson Companies Inc., (2) 88,270
41,800 Stryker Corporation 3,123,296
21,700 Zimmer Holdings, Inc., (2) 1,435,455
--------------------------------------------------------------------------------------------------------------------------------
Total Health Care Equipment & Supplies 9,058,521
-------------------------------------------------------------------------------------------------------------------
13
JCE
Nuveen Core Equity Alpha Fund (continued)
Portfolio of INVESTMENTS as of December 31, 2007
SHARES DESCRIPTION (1) VALUE
--------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES - 2.7%
11,200 Aetna Inc. $ 646,576
52,200 CIGNA Corporation 2,804,706
5,200 Coventry Health Care, Inc., (2) 308,100
1,200 McKesson HBOC Inc. 78,612
36,600 Medco Health Solutions, Inc., (2) 3,711,240
9,300 Quest Diagnostics Incorporated 491,970
2,700 UnitedHealth Group Incorporated 157,140
--------------------------------------------------------------------------------------------------------------------------------
Total Health Care Providers & Services 8,198,344
-------------------------------------------------------------------------------------------------------------------
HEALTH CARE TECHNOLOGY - 0.0%
6,200 IMS Health Incorporated 142,848
--------------------------------------------------------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE - 2.0%
28,400 Harrah's Entertainment, Inc. 2,520,500
61,900 McDonald's Corporation 3,646,529
2,500 Wyndham Worldwide Corporation 58,900
--------------------------------------------------------------------------------------------------------------------------------
Total Hotels, Restaurants & Leisure 6,225,929
-------------------------------------------------------------------------------------------------------------------
HOUSEHOLD DURABLES - 0.3%
9,000 Harman International Industries Inc. 663,390
400 Snap-on Incorporated 19,296
1,600 Whirlpool Corporation 130,608
--------------------------------------------------------------------------------------------------------------------------------
Total Household Durables 813,294
-------------------------------------------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS - 3.0%
38,500 Colgate-Palmolive Company 3,001,460
3,700 Kimberly-Clark Corporation 256,558
83,200 Procter & Gamble Company 6,108,544
--------------------------------------------------------------------------------------------------------------------------------
Total Household Products 9,366,562
-------------------------------------------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES - 3.2%
6,900 3M Co. 581,808
235,700 General Electric Company 8,737,399
7,100 Textron Inc. 506,230
--------------------------------------------------------------------------------------------------------------------------------
Total Industrial Conglomerates 9,825,437
-------------------------------------------------------------------------------------------------------------------
INSURANCE - 2.9%
28,700 American International Group, Inc. 1,673,210
1,400 Aon Corporation 66,766
600 Lincoln National Corporation 34,932
90,600 Loews Corporation 4,560,804
5,400 MetLife, Inc. 332,748
11,500 Prudential Financial, Inc. 1,069,960
3,400 Travelers Companies, Inc. 182,920
38,200 Unum Group 908,778
--------------------------------------------------------------------------------------------------------------------------------
Total Insurance 8,830,118
-------------------------------------------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL - 1.6%
43,400 Amazon.com, Inc., (2) 4,020,576
22,700 Expedia, Inc. 717,774
6,400 IAC/InterActiveCorp., (2) 172,288
--------------------------------------------------------------------------------------------------------------------------------
Total Internet & Catalog Retail 4,910,638
-------------------------------------------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES - 0.7%
2,900 Google Inc., Class A, (2) 2,005,292
--------------------------------------------------------------------------------------------------------------------------------
IT SERVICES - 0.3%
24,600 Fidelity National Information Services 1,023,114
--------------------------------------------------------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS - 0.7%
25,200 Hasbro, Inc. 644,616
76,200 Mattel, Inc. 1,450,848
--------------------------------------------------------------------------------------------------------------------------------
Total Leisure Equipment & Products 2,095,464
-------------------------------------------------------------------------------------------------------------------
MACHINERY - 3.5%
17,300 Caterpillar Inc. 1,255,288
10,800 Cummins Inc. 1,375,596
12,000 Deere & Company 1,117,440
6,200 Eaton Corporation 601,090
14
SHARES DESCRIPTION (1) VALUE
--------------------------------------------------------------------------------------------------------------------------------
MACHINERY (continued)
5,000 Illinois Tool Works Inc. $ 267,700
33,400 Ingersoll Rand Company Limited, Class A 1,552,098
2,600 Manitowoc Company Inc. 126,958
35,900 PACCAR Inc. 1,955,832
26,300 Pall Corporation 1,060,416
1,100 Parker Hannifin Corporation 82,841
18,900 Terex Corporation, (2) 1,239,273
--------------------------------------------------------------------------------------------------------------------------------
Total Machinery 10,634,532
-------------------------------------------------------------------------------------------------------------------
MEDIA - 2.9%
2,500 CBS Corporation, Class B 68,125
44,000 Clear Channel Communications, Inc. 1,518,880
113,300 Comcast Corporation, Class A, (2) 2,068,858
56,600 DIRECTV Group, Inc., (2) 1,308,592
14,700 Interpublic Group Companies, Inc., (2) 119,217
2,300 Meredith Corporation 126,454
80,300 News Corporation, Class A 1,645,347
7,300 Omnicom Group Inc. 346,969
21,100 Time Warner Inc. 348,361
39,900 Walt Disney Company 1,287,972
100 Washington Post Company 79,143
--------------------------------------------------------------------------------------------------------------------------------
Total Media 8,917,918
-------------------------------------------------------------------------------------------------------------------
METALS & MINING - 1.3%
20,500 Alcoa Inc. 749,275
11,900 Allegheny Technologies, Inc. 1,028,160
4,500 Freeport-McMoRan Copper & Gold, Inc. 460,980
2,100 Titanium Metals Corporation 55,545
14,400 United States Steel Corporation 1,741,104
--------------------------------------------------------------------------------------------------------------------------------
Total Metals & Mining 4,035,064
-------------------------------------------------------------------------------------------------------------------
MULTILINE RETAIL - 0.3%
8,000 Big Lots, Inc., (2) 127,920
13,200 Kohl's Corporation, (2) 604,560
3,400 Nordstrom, Inc. 124,882
600 Sears Holding Corporation, (2) 61,230
--------------------------------------------------------------------------------------------------------------------------------
Total Multiline Retail 918,592
-------------------------------------------------------------------------------------------------------------------
MULTI-UTILITIES - 1.1%
500 Dominion Resources, Inc. 23,725
84,200 Dynegy Inc., (2) 601,188
23,000 Public Service Enterprise Group Incorporated 2,259,520
6,500 Sempra Energy 402,220
--------------------------------------------------------------------------------------------------------------------------------
Total Multi-Utilities 3,286,653
-------------------------------------------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS - 8.2%
1,200 Anadarko Petroleum Corporation 78,828
1,500 Apache Corporation 161,310
48,400 Chevron Corporation 4,517,172
20,300 ConocoPhillips 1,792,490
146,800 Exxon Mobil Corporation 13,753,691
600 Hess Corporation 60,516
29,700 Marathon Oil Corporation 1,807,542
4,200 Murphy Oil Corporation 356,328
5,800 Occidental Petroleum Corporation 446,542
3,100 Range Resources Corporation 159,216
10,800 Tesoro Petroleum Corporation 515,160
17,400 Valero Energy Corporation 1,218,522
400 Williams Companies, Inc. 14,312
7,450 XTO Energy, Inc. 382,632
--------------------------------------------------------------------------------------------------------------------------------
Total Oil, Gas & Consumable Fuels 25,264,261
-------------------------------------------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS - 0.5%
3,300 International Paper Company 106,854
5,400 MeadWestvaco Corporation 169,020
16,900 Weyerhaeuser Company 1,246,206
--------------------------------------------------------------------------------------------------------------------------------
Total Paper & Forest Products 1,522,080
-------------------------------------------------------------------------------------------------------------------
15
JCE
Nuveen Core Equity Alpha Fund (continued)
Portfolio of INVESTMENTS as of December 31, 2007
SHARES DESCRIPTION (1) VALUE
--------------------------------------------------------------------------------------------------------------------------------
PERSONAL PRODUCTS - 0.3%
17,100 Avon Products, Inc. $ 675,963
8,900 Estee Lauder Companies Inc., Class A 388,129
--------------------------------------------------------------------------------------------------------------------------------
Total Personal Products 1,064,092
-------------------------------------------------------------------------------------------------------------------
PHARMACEUTICALS - 6.1%
52,300 Abbott Laboratories 2,936,645
62,300 Bristol-Myers Squibb Company 1,652,196
7,600 Eli Lilly and Company 405,764
21,800 Johnson & Johnson 1,454,060
25,700 King Pharmaceuticals Inc., (2) 263,168
144,100 Merck & Co. Inc. 8,373,651
35,400 Pfizer Inc. 804,642
102,700 Schering-Plough Corporation 2,735,928
8,500 Watson Pharmaceuticals Inc., (2) 230,690
200 Wyeth 8,838
--------------------------------------------------------------------------------------------------------------------------------
Total Pharmaceuticals 18,865,582
-------------------------------------------------------------------------------------------------------------------
REAL ESTATE - 0.0%
800 Boston Properties, Inc. 73,448
--------------------------------------------------------------------------------------------------------------------------------
REAL ESTATE MANAGEMENT & DEVELOPMENT - 0.1%
9,866 Forestar Real Estate Group Inc. 232,739
--------------------------------------------------------------------------------------------------------------------------------
ROAD & RAIL - 0.3%
6,500 CSX Corporation 285,870
6,000 Union Pacific Corporation 753,720
--------------------------------------------------------------------------------------------------------------------------------
Total Road & Rail 1,039,590
-------------------------------------------------------------------------------------------------------------------
SEMICONDUCTORS & EQUIPMENT - 0.8%
4,300 Altera Corporation 83,076
19,000 Analog Devices, Inc. 602,300
3,500 Applied Materials, Inc. 62,160
16,500 Intel Corporation 439,890
1,500 KLA-Tencor Corporation 72,240
14,700 Linear Technology Corporation 467,901
9,100 Microchip Technology Incorporated 285,922
3,200 National Semiconductor Corporation 72,448
11,600 Texas Instruments Incorporated 387,440
--------------------------------------------------------------------------------------------------------------------------------
Total Semiconductors & Equipment 2,473,377
-------------------------------------------------------------------------------------------------------------------
SOFTWARE - 2.0%
3,700 Citrix Systems 140,637
23,600 Compuware Corporation, (2) 209,568
106,600 Microsoft Corporation 3,794,960
75,900 Oracle Corporation, (2) 1,713,822
11,200 VeriSign, Inc., (2) 421,232
--------------------------------------------------------------------------------------------------------------------------------
Total Software 6,280,219
-------------------------------------------------------------------------------------------------------------------
SPECIALTY RETAIL - 0.9%
4,000 AutoNation Inc. 62,640
5,800 AutoZone, Inc., (2) 695,478
3,400 GameStop Corporation 211,174
37,100 RadioShack Corporation 625,506
2,100 Sherwin-Williams Company 121,884
22,600 Tiffany & Co. 1,040,278
--------------------------------------------------------------------------------------------------------------------------------
Total Specialty Retail 2,756,960
-------------------------------------------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS - 1.6%
57,500 Coach, Inc., (2) 1,758,350
23,200 Nike, Inc., Class B 1,490,368
9,500 Polo Ralph Lauren Corporation 587,005
17,000 VF Corporation 1,167,220
--------------------------------------------------------------------------------------------------------------------------------
Total Textiles, Apparel & Luxury Goods 5,002,943
-------------------------------------------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE - 0.1%
5,000 Federal National Mortgage Association 199,900
9,866 Guaranty Financial Group Inc. 157,856
--------------------------------------------------------------------------------------------------------------------------------
Total Thrifts & Mortgage Finance 357,756
-------------------------------------------------------------------------------------------------------------------
16
SHARES DESCRIPTION (1) VALUE
--------------------------------------------------------------------------------------------------------------------------------
TOBACCO - 0.4%
12,600 Altria Group, Inc. $ 952,308
3,100 UST Inc. 169,880
--------------------------------------------------------------------------------------------------------------------------------
Total Tobacco 1,122,188
-------------------------------------------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS - 0.0%
1,700 W.W. Grainger, Inc. 148,784
--------------------------------------------------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES - 0.1%
5,700 American Tower Corporation 242,820
--------------------------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $286,231,728) 296,924,651
===================================================================================================================
PRINCIPAL
AMOUNT (000) DESCRIPTION (1) COUPON MATURITY VALUE
----------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 5.0%
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 2.0%
$ 6,000 U.S. Treasury Bills 0.000% 1/31/08 $ 5,985,900
----------------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 3.0%
9,370 Repurchase Agreement with Fixed Income Clearing 1.000% 1/02/08 9,370,214
Corp, dated 12/31/07, repurchase price
$9,370,735, collateralized by $8,120,000 U.S.
Treasury Bonds, 6.000%, due 2/15/26, value
$9,561,300
----------------------------------------------------------------------------------------------------------------------------------
$ 15,370 TOTAL SHORT-TERM INVESTMENTS (COST $15,356,114) 15,356,114
==================================================================================================================================
TOTAL INVESTMENTS (COST $301,587,842) - 101.4% 312,280,765
===================================================================================================================
NOTIONAL EXPIRATION STRIKE
CONTRACTS TYPE AMOUNT (3) DATE PRICE VALUE
-----------------------------------------------------------------------------------------------------------------------------------
CALL OPTIONS WRITTEN -- (0.8)%
(686,638) Custom Basket 1 NASDAQ $ (68,663,819) 1/10/08 $100.0 $ (741,363)
(717,937) Custom Basket 3 NASDAQ (71,793,746) 1/17/08 100.0 (1,727,860)
-----------------------------------------------------------------------------------------------------------------------------------
(1,404,575) TOTAL CALL OPTIONS WRITTEN (PREMIUMS RECEIVED (140,457,565) (2,469,223)
$5,916,687)
-----------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES - (0.6)% (1,934,158)
--------------------------------------------------------------------------------------------------------------------
NET ASSETS - 100% $ 307,877,384
====================================================================================================================
FUTURES CONTRACTS OUTSTANDING AT DECEMBER 31, 2007:
CONTRACT NUMBER CONTRACT
TYPE POSITION OF CONTRACTS EXPIRATION
------------------------------------------------------------------------------------------------------
S&P 500 Index Long 37 3/08
------------------------------------------------------------------------------------------------------
UNREALIZED
VALUE AT APPRECIATION
DECEMBER 31, 2007 (DEPRECIATION)
$13,664,100 $ (396,974)
---------------------------------
(1) All percentages shown in the Portfolio of Investments are based on net assets unless
otherwise noted.
(2) Non-income producing.
(3) For disclosure purposes, Notional Amount is calculated by multiplying the number of
Contracts by the Strike Price.
See accompanying notes to financial statements.
17
Statement of
ASSETS & LIABILITIES
December 31, 2007
---------------------------------------------------------------------------
ASSETS
Investments, at value (cost $301,587,842) $312,280,765
Receivables:
Dividends 355,896
Interest 260
Investments sold 2,280,253
Other assets 3,411
---------------------------------------------------------------------------
Total assets 314,920,585
---------------------------------------------------------------------------
LIABILITIES
Call options written, at value (premiums received
$5,916,687) 2,469,223
Payables:
Investments purchased 4,129,558
Variation margin on futures contracts 76,775
Accrued expenses:
Management fees 245,961
Other 121,684
---------------------------------------------------------------------------
Total liabilities 7,043,201
---------------------------------------------------------------------------
Net assets $307,877,384
===========================================================================
Shares outstanding 16,443,986
===========================================================================
Net asset value per share outstanding $ 18.72
===========================================================================
NET ASSETS CONSIST OF:
---------------------------------------------------------------------------
Shares, $.01 par value per share $ 164,440
Paid-in surplus 294,539,960
Undistributed (Over-distribution of) net investment income (2,465)
Accumulated net realized gain (loss) from investments and
derivative transactions (567,964)
Net unrealized appreciation (depreciation) of investments
and derivative transactions 13,743,413
---------------------------------------------------------------------------
Net assets $307,877,384
===========================================================================
Authorized shares Unlimited
===========================================================================
See accompanying notes to financial statements.
18
Statement of
OPERATIONS
For the Period March 27, 2007
(commencement of operations)
through December 31, 2007
-----------------------------------------------------------------------------
INVESTMENT INCOME
Dividends $ 4,082,123
Interest 877,102
-----------------------------------------------------------------------------
Total investment income 4,959,225
-----------------------------------------------------------------------------
EXPENSES
Management fees 2,188,117
Shareholders' servicing agent fees and expenses 76
Custodian's fees and expenses 129,131
Trustees' fees and expenses 8,764
Professional fees 38,387
Shareholders' reports - printing and mailing expenses 73,459
Investor relations expense 52,630
Other expenses 42,538
-----------------------------------------------------------------------------
Total expenses before custodian fee credit 2,533,102
Custodian fee credit (3,870)
-----------------------------------------------------------------------------
Net expenses 2,529,232
-----------------------------------------------------------------------------
Net investment income 2,429,993
-----------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments (3,166,043)
Futures 589,158
Call options written 1,927,754
Change in net unrealized appreciation (depreciation) of:
Investments 10,692,923
Futures (396,974)
Call options written 3,447,464
-----------------------------------------------------------------------------
Net realized and unrealized gain (loss) 13,094,282
-----------------------------------------------------------------------------
Net increase (decrease) in net assets from operations $ 15,524,275
=============================================================================
See accompanying notes to financial statements.
19
Statement of
CHANGES in NET ASSETS
For the Period March 27, 2007
(commencement of operations)
through December 31, 2007
------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 2,429,993
Net realized gain (loss) from:
Investments (3,166,043)
Futures 589,158
Call options written 1,927,754
Change in net unrealized appreciation (depreciation) of:
Investments 10,692,923
Futures (396,974)
Call options written 3,447,464
------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations 15,524,275
------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (2,351,291)
Tax return of capital (18,846,940)
------------------------------------------------------------------------------
Increase (decrease) in net assets from distributions to
shareholders (21,198,231)
------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Proceeds from sale of shares, net of offering costs 311,671,189
Proceeds from shares issued to shareholders due to
reinvestment of distributions 2,215,645
Cost of shares repurchased (435,578)
------------------------------------------------------------------------------
Net increase (decrease) in net assets from capital share
transactions 313,451,256
------------------------------------------------------------------------------
Net increase (decrease) in net assets 307,777,300
Net assets at the beginning of period 100,084
------------------------------------------------------------------------------
Net assets at the end of period $ 307,877,384
==============================================================================
Undistributed (Over-distribution of) net investment income
at the end of period $ (2,465)
==============================================================================
See accompanying notes to financial statements.
20
Notes to
FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
Nuveen Core Equity Alpha Fund (the "Fund") is a diversified, closed-end
management investment company registered under the Investment Company Act of
1940, as amended. The Fund's shares are listed on the New York Stock Exchange
and trade under the ticker symbol "JCE." The Fund was organized as a
Massachusetts business trust on January 9, 2007.
Prior to the commencement of operations, the Fund had no operations other than
those related to organizational matters, the initial capital contribution of
$100,084 by Nuveen Asset Management (the "Adviser"), a wholly owned subsidiary
of Nuveen Investments, Inc. ("Nuveen"), the recording of the organization
expenses ($11,000) and their reimbursement by Nuveen Investments, LLC, also a
wholly owned subsidiary of Nuveen.
The Fund seeks to provide an attractive level of total return primarily through
long-term capital appreciation and secondarily through income and gains. The
Fund will invest in a portfolio of common stocks selected by employing a
proprietary mathematical process designed by the Fund's sub-adviser, Enhanced
Investment Technologies, LLC ("INTECH"), that seeks to provide, over time, risk-
adjusted excess returns above the S&P 500 Index with an equal or lesser amount
of relative investment risk.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements in accordance with
accounting principles generally accepted in the United States.
Investment Valuation
Exchange-listed securities are generally valued at the last sales price on the
securities exchange on which such securities are primarily traded. Securities
traded on a securities exchange for which there are no transactions on a given
day or securities not listed on a securities exchange are valued at the mean of
the closing bid and asked prices. Securities traded on Nasdaq are valued at the
Nasdaq Official Closing Price. The value of options written are based on the
last sale price in the case of exchange-traded options or, in the case of
options traded in the OTC market, the last asked price. Futures contracts are
valued using the closing settlement price, or, in the absence of such a price,
at the mean of the bid and asked prices. If the pricing service is unable to
supply a price for an investment or derivative instrument the Fund may use a
market quote provided by a major broker/dealer in such investments. If it is
determined that the market price for an investment or derivative instrument is
unavailable or inappropriate, the Board of Trustees of the Fund, or its
designee, may establish fair value in accordance with procedures established in
good faith by the Board of Trustees. 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 investment transactions are determined on the specific
identification method.
Investment Income
Dividend income is recorded on the ex-dividend date. Interest income is recorded
on an accrual basis.
Federal Income Taxes
The Fund intends to comply with the requirements of Subchapter M of the Internal
Revenue Code applicable to regulated investment companies. The Fund intends to
distribute substantially all of its investment company taxable income to
shareholders. In any year when the Fund realizes net capital gains, the Fund may
choose to distribute all or a portion of its net capital gains to shareholders,
or alternatively, to retain all or a portion of its net capital gains and pay
federal corporate income taxes on such retained gains.
Effective June 29, 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. greater than 50-percent) 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 status 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. the last four tax year ends and
the interim tax period since than). The Fund has no examinations in progress.
21
Notes to
FINANCIAL STATEMENTS (continued)
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 period March 27, 2007 (commencement of
operations) through December 31, 2007.
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
Distributions to shareholders are recorded on the ex-dividend date. The amount
and timing of distributions are determined in accordance with federal corporate
income tax regulations, which may differ from accounting principles generally
accepted in the United States.
The Fund makes quarterly cash distributions to shareholders of a stated dollar
amount per share. Subject to approval and oversight by the Fund's Board of
Trustees, the Fund seeks to maintain a stable distribution level designed to
deliver the long-term return potential of the Fund's investment strategy through
regular quarterly distributions (a "Managed Distribution Program"). Total
distributions during a calendar year generally will be made from the Fund's net
investment income, net realized capital gains and net unrealized capital gains
in the Fund's portfolio, if any. The portion of distributions paid from net
unrealized gains, if any, would be distributed from the Fund's assets and would
be treated by shareholders as a non-taxable distribution for tax purposes. In
the event that total distributions during a calendar year exceed the Fund's
total return on net asset value, the difference will be treated as a return of
capital for tax purposes and will reduce net asset value per share. If the
Fund's total return on net asset value exceeds total distributions during a
calendar year, the excess will be reflected as an increase in net asset value
per share. The final determination of the source and character of all
distributions for the fiscal year are made after the end of the fiscal year and
reflected in the accompanying financial statements.
Organization and Offering Costs
Nuveen Investments, LLC has agreed to reimburse all organization expenses
(approximately $11,000) and pay all offering costs (other than the sales load)
that exceed $.04 per share. The Fund's share of offering costs of $613,811 was
recorded as a reduction of the proceeds from the sale of shares.
Repurchase Agreements
In connection with transactions in repurchase agreements, it is the Fund's
policy that its custodian take possession of the underlying collateral
securities, the fair value of which exceeds the principal amount of the
repurchase transaction, including accrued interest, at all times. If the seller
defaults, and the fair value of the collateral declines, realization of the
collateral may be delayed or limited.
Options Transactions
The Fund is authorized to write (sell) call options, primarily on custom baskets
of securities. When the Fund writes a call option, an amount equal to the net
premium received (the premium less commission) is recorded as a liability and is
subsequently adjusted to reflect the current value of the written option until
the option expires or the Fund enters into a closing purchase transaction. When
a call option expires or the Fund enters into a closing purchase transaction,
the difference between the net premium received and any amount paid at
expiration or on effecting a closing purchase transaction, including commission,
is treated as a net realized gain on option contracts written or, if the net
premium received is less than the amount paid, as a net realized loss on option
contracts written. The Fund, as writer of a call option, bears the risk of an
unfavorable change in the market value of the security or index underlying the
written option. There is the risk the Fund may not be able to enter into a
closing transaction because of an illiquid market.
Futures Contracts
The Fund is authorized to invest in futures contracts. Upon entering into a
futures contract, the Fund is required to deposit with the broker an amount of
cash or liquid securities equal to a specified percentage of the contract
amount. This is known as the "initial margin." Subsequent payments ("variation
margin") are made or received by the Fund each day, depending on the daily
fluctuation of the value of the contract.
22
During the period the futures contract is open, changes in the value of the
contract are recognized as an unrealized gain or loss by "marking-to-market" on
a daily basis to reflect the changes in market value of the contract. When the
contract is closed or expired, the Fund records a realized gain or loss equal to
the difference between the value of the contract on the closing date and value
of the contract when originally entered into. Cash held by the broker to cover
initial margin requirements on open futures contracts, if any, is recognized in
the Statement of Assets and Liabilities. Additionally, the Statement of Assets
and Liabilities reflects a receivable or payable for the variation margin when
applicable.
Risks of investments in futures contracts include the possible adverse movement
of the securities or indices underlying the contracts, the possibility that
there may not be a liquid secondary market for the contracts and/or that a
change in the value of the contract may not correlate with a change in the value
of the underlying securities or indices.
Custodian Fee Credit
The Fund has an arrangement with the custodian bank whereby certain custodian
fees and expenses are reduced by net credits earned on the Fund's cash on
deposit with the bank. Such deposit arrangements are an alternative to overnight
investments. Credits for cash balances may be offset by charges for any days on
which the Fund overdraws its account at the custodian bank.
Indemnifications
Under the Fund's organizational documents, its Officers and Trustees are
indemnified against certain liabilities arising out of the performance of their
duties to the Fund. In addition, in the normal course of business, the Fund
enters into contracts that provide general indemnifications to other parties.
The Fund's maximum exposure under these arrangements is unknown as this would
involve future claims that may be made against the Fund that have not yet
occurred. However, the Fund has not had prior claims or losses pursuant to these
contracts and expects the risk of loss to be remote.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of increases and
decreases in net assets from operations during the reporting period. Actual
results may differ from those estimates.
2. FUND SHARES
On November 21, 2007, the Fund's Board of Trustees approved an open-market share
repurchase program, as part of a broad, ongoing effort designed to support the
market prices of the Fund's shares. Under the terms of the program, the Fund may
repurchase up to 10% of it's outstanding shares.
Transactions in shares were as follows:
FOR THE PERIOD
3/27/07
(COMMENCEMENT
OF OPERATIONS)
THROUGH 12/31/07
---------------------------------------------------------------------------------------
Shares sold 16,350,000
Shares issued to shareholders due to
reinvestment of distributions 116,246
Shares repurchased (27,500)
---------------------------------------------------------------------------------------
16,438,746
---------------------------------------------------------------------------------------
Weighted average price per share
repurchased 15.82
Weighted average discount per share
repurchased 14.14%
---------------------------------------------------------------------------------------
3. INVESTMENT TRANSACTIONS
Purchases and sales (excluding call options written, short-term investments and
derivative transactions) for the period March 27, 2007 (commencement of
operations) through December 31, 2007, were as follows:
-----------------------------------------------------------------------------------
Purchases $513,126,077
Sales 213,704,791
-----------------------------------------------------------------------------------
23
Notes to
FINANCIAL STATEMENTS (continued)
Transactions in call options written during the period March 27, 2007
(commencement of operations) through December 31, 2007, were as follows:
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
-------------------------------------------------------------------------------------------------------
Outstanding, beginning of period -- $ --
Call options written 8,846,215 22,174,665
Call options terminated in closing purchase transactions (4,357,463) (8,789,569)
Call options expired (3,084,177) (7,468,409)
-------------------------------------------------------------------------------------------------------
Outstanding, end of period 1,404,575 $5,916,687
-------------------------------------------------------------------------------------------------------
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 recognition of unrealized gain or loss for tax
(mark-to-market) on futures contracts 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 December 31, 2007, the cost of investments (excluding call options written)
was as follows:
--------------------------------------------------------------------------------
Cost of investments $302,196,561
--------------------------------------------------------------------------------
Gross unrealized appreciation and gross unrealized depreciation of investments
(excluding call options written) at December 31, 2007, were as follows:
-----------------------------------------------------------------------------
Gross unrealized:
Appreciation $24,709,610
Depreciation (14,625,406)
-----------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments $10,084,204
-----------------------------------------------------------------------------
The tax components of undistributed net ordinary income and net long-term
capital gains at December 31, 2007, the Fund's tax year end, were as follows:
--------------------------------------------------------------------------------
Undistributed net ordinary income * $ --
Undistributed net long-term capital gains --
--------------------------------------------------------------------------------
* Net ordinary income consists of net taxable income derived from dividends,
interest, and net short-term capital gains, if any.
The tax character of distributions paid during the Fund's tax year ended
December 31, 2007 was designated for purposes of the dividends paid deduction as
follows:
FOR THE PERIOD MARCH 27, 2007 (COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 2007
------------------------------------------------------------------------------------
Distributions from net ordinary income * $2,351,291
Tax return of capital 18,846,940
------------------------------------------------------------------------------------
* Net ordinary income consists of net taxable income derived from dividends,
interest, and net short-term capital gains, if any.
The Fund elected to defer net realized losses from investments incurred from
November 1, 2007 through December 31, 2007, ("post-October losses") in
accordance with federal income tax regulations. Post-October losses of $356,218
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.
24
The annual fund-level fee, payable monthly, is based upon the average daily
Managed Assets of the Fund as follows:
AVERAGE DAILY MANAGED ASSETS FUND-LEVEL FEE RATE
---------------------------------------------------------------------------------------------
For the first $500 million .7500%
For the next $500 million .7250
For the next $500 million .7000
For the next $500 million .6750
For Managed Assets over $2 billion .6500
---------------------------------------------------------------------------------------------
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 December 31, 2007, the complex-level fee rate was .1846%.
Effective August 20, 2007, the complex-level fee schedule is as follows:
COMPLEX-LEVEL ASSET BREAKPOINT LEVEL (1) EFFECTIVE RATE AT BREAKPOINT LEVEL
------------------------------------------------------------------------------------------------
$55 billion .2000%
$56 billion .1996
$57 billion .1989
$60 billion .1961
$63 billion .1931
$66 billion .1900
$71 billion .1851
$76 billion .1806
$80 billion .1773
$91 billion .1691
$125 billion .1599
$200 billion .1505
$250 billion .1469
$300 billion .1445
------------------------------------------------------------------------------------------------
Prior to August 20, 2007, the complex-level fee schedule was as follows:
COMPLEX-LEVEL ASSET BREAKPOINT LEVEL (1) EFFECTIVE RATE AT BREAKPOINT LEVEL
------------------------------------------------------------------------------------------------
$55 billion .2000%
$56 billion .1996
$57 billion .1989
$60 billion .1961
$63 billion .1931
$66 billion .1900
$71 billion .1851
$76 billion .1806
$80 billion .1773
$91 billion .1698
$125 billion .1617
$200 billion .1536
$250 billion .1509
$300 billion .1490
------------------------------------------------------------------------------------------------
(1) The complex-level fee component of the management fee for the funds is
calculated based upon the aggregate Managed Assets ("Managed Assets" means
the average daily net assets of each fund including assets attributable to
preferred stock issued by or borrowings by the Nuveen funds) of
Nuveen-sponsored funds in the U.S.
The management fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Adviser is
responsible for the overall strategy and asset allocation decisions. The Adviser
has entered into a Sub-Advisory Agreement with INTECH, under which INTECH
manages the portion of the Fund's investment portfolio allocated to common
stocks. The Adviser will also be responsible for the implementation of the
Fund's option strategy. INTECH is compensated for its services to the Fund from
the management fee paid to the Adviser.
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
25
Notes to
FINANCIAL STATEMENTS (continued)
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, if applicable, the sub-advisory
agreement between the Adviser and the sub-adviser of the Fund, and resulted in
the automatic termination of each such agreement. The Board of Trustees of the
Fund considered and approved a new investment management agreement with the
Adviser, and, if applicable, a new sub-advisory agreement between the Adviser
and the sub-adviser on the same terms as the previous agreements. Each new
ongoing investment management agreement and sub-advisory agreement, if
applicable, was approved by the shareholders of the Fund and took effect on
January 31, 2008.
The investors led by Madison Dearborn includes 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 PRONOUNCEMENT
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 December 31, 2007, management does not believe the adoption
of SFAS No. 157 will impact the financial statement amounts; however, additional
disclosures may be required about the inputs used to develop the measurements
and the effect of certain of the measurements included within the Statement of
Operations for the period.
26
Financial
HIGHLIGHTS
27
Financial
HIGHLIGHTS
Selected data for a share outstanding throughout each period:
Investment Operations
---------------------------------------------------------
Net
Beginning Net Realized/
Net Asset Investment Unrealized
Value Income(a) Gain (Loss) Total
------------------------------------------------------------------------------------------------------
Year Ended 12/31:
2007(b) $19.10 $.15 $.81 $0.96
------------------------------------------------------------------------------------------------------
Less Distributions
-------------------------------------------
Net Tax Ending Ending
Investment Capital Return of Offering Net Asset Market
Income Gains Capital Total Costs Value Value
------------------------------------------------------------------------------------------------------
Year Ended 12/31:
2007(b) $(.14) $ -- (1.16) $(1.30) $(0.04) $18.72 $16.35
------------------------------------------------------------------------------------------------------
* Annualized.
** 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.
*** After custodian fee credit.
(a) Per share Net Investment Income is calculated using the average daily
shares method.
(b) For the period March 27, 2007 (commencement of operations) through December
31, 2007.
28
Ratios/Supplemental Data
----------------------------------------------------------------------------------------
Ratios to Average Net Assets Ratios to Average Net Assets
Total Returns Before Credit After Credit***
-------------------- ----------------------------- -----------------------------
Based on Based on Net Net Portfolio
Market Net Asset Ending Net Investment Investment Turnover
Value** Value** Assets (000) Expenses Income Expenses Income Rate
--------------------------------------------------------------------------------------------------------------------
(12.08)% 4.84% $307,877 1.07%* 1.03%* 1.07%* 1.03%* 73%
--------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
29
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, BIRTHDATE POSITION(S) HELD WITH YEAR FIRST NUMBER OF PORTFOLIOS
& ADDRESS THE FUNDS ELECTED OR IN FUND COMPLEX PRINCIPAL OCCUPATION(S)
APPOINTED OVERSEEN BY INCLUDING OTHER DIRECTORSHIPS
AND TERM(2) BOARD MEMBER DURING PAST 5 YEARS
BOARD MEMBER WHO IS AN INTERESTED PERSON OF THE FUNDS:
- TIMOTHY R.
SCHWERTFEGER(1)
3/28/49 Chairman of 1994 Former director
333 W. Wacker Drive the Board and CLASS I (1994-November 12, 2007),
Chicago, IL 60606 Board Member Chairman (1996-June 30,
2007), Non-Executive Chairman
(July 1, 2007-November 12,
2007) and Chief Executive
184 Officer (1996-June 30, 2007)
of Nuveen Investments, Inc.
and Nuveen Asset Management
and certain other subsidi-
aries 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
8/22/40 Lead 1997 184 Private Investor and
333 W. Wacker Drive Independent CLASS III Management Consultant.
Chicago, IL 60606 Board member
- JACK B. EVANS
10/22/48 1999 President, The Hall-Perrine
333 W. Wacker Drive Board member CLASS III Foundation, a private philan-
Chicago, IL 60606 thropic corporation (since
1996); Director and Vice
Chairman, United 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
184 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
3/6/48 2004 Dean, Tippie College of
333 W. Wacker Drive Board member CLASS II Business, University of Iowa
Chicago, IL 60606 (since July 2006); formerly,
Dean and Distinguished
Professor of Finance, School
of Business at the Univer-
sity of Connecticut
(2003-2006); previously,
Senior Vice President and
Director of Research at the
184 Federal Reserve Bank of
Chicago (1995-2003); Director
(since 1997), Credit Research
Center at George Washington
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).
30
NAME, BIRTHDATE POSITION(S) HELD WITH YEAR FIRST NUMBER OF PORTFOLIOS
& ADDRESS THE FUNDS ELECTED OR IN FUND COMPLEX PRINCIPAL OCCUPATION(S)
APPOINTED OVERSEEN BY INCLUDING OTHER DIRECTORSHIPS
AND TERM(2) BOARD MEMBER DURING PAST 5 YEARS
BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS (CONTINUED):
- DAVID J. KUNDERT
10/28/42 2005 Director, Northwestern Mutual
333 W. Wacker Drive Board member CLASS II Wealth Management Company;
Chicago, IL 60606 Retired (since 2004) as
Chairman, JPMorgan Fleming
Asset Management, President
and CEO, Banc One Investment
Advisors Corporation, and
President, One Group Mutual
Funds; prior thereto,
Executive Vice President,
182 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
9/24/44 1997 Chairman of Miller-Valentine
333 W. Wacker Drive Board member CLASS III Partners Ltd., a real estate
Chicago, IL 60606 investment company, formerly,
Senior Partner and Chief
184 Operating Officer (retired,
2004); Director, Dayton
Development Coalition;
formerly, Member, Business
Advisory Council, Cleveland
Federal Reserve Bank.
- JUDITH M. STOCKDALE
12/29/47 1997 Executive Director, Gaylord
333 W. Wacker Drive Board member CLASS I and Dorothy Donnelley
Chicago, IL 60606 Foundation (since 1994);
184 prior thereto, Executive
Director, Great Lakes
Protection Fund (from 1990 to
1994).
- CAROLE E. STONE
6/28/47 2007 Director, Chicago Board
333 W. Wacker Drive Board member CLASS I Options Exchange (since
Chicago, IL 60606 2006); Chair New York Racing
Association Oversight Board
(2005-12/2007); Commissioner,
New York State Commission on
Public Authority Reform
184 (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).
31
NAME, BIRTHDATE POSITION(S) HELD WITH NUMBER OF PORTFOLIOS
& ADDRESS THE FUNDS YEAR FIRST IN FUND COMPLEX PRINCIPAL
ELECTED OR OVERSEEN OCCUPATION(S)
APPOINTED(4) BY OFFICER DURING PAST 5 YEARS
OFFICERS OF THE FUND:
- GIFFORD R. ZIMMERMAN
9/9/56 Chief Managing Director (since
333 W. Wacker Drive Administrative 1988 2002), Assistant
Chicago, IL 60606 Officer Secretary and Associate
General Counsel,
formerly, Vice President
and Assistant 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
184 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.,
Assistant Secretary
(since 2003) of Symphony
Asset Management LLC.
- WILLIAM ADAMS IV
6/9/55 Executive Vice President,
333 W. Wacker Drive Vice President 2007 U.S. Structured Products
Chicago, IL 60606 of Nuveen Investments,
120 LLC, (since 1999), prior
thereto, Managing
Director of Structured
Investments.
- JULIA L. ANTONATOS
9/22/63 Managing Director (since
333 W. Wacker Drive Vice President 2004 2005), formerly Vice
Chicago, IL 60606 184 President (2002-2005) of
Nuveen Investments, LLC;
Chartered Financial
Analyst.
- CEDRIC H. ANTOSIEWICZ
1/11/62 Managing Director, (since
333 W. Wacker Drive Vice President 2007 120 2004) previously, Vice
Chicago, IL 60606 President (1993-2004) of
Nuveen Investments, LLC.
- MICHAEL T. ATKINSON
2/3/66 Vice President Vice President (since
333 W. Wacker Drive and Assistant 2000 184 2002) of Nuveen
Chicago, IL 60606 Secretary Investments, LLC.
- PETER H. D'ARRIGO
11/28/67 Vice President and
333 W. Wacker Drive Vice President 1999 Treasurer of Nuveen
Chicago, IL 60606 Investments, LLC and
Nuveen Investments, Inc.;
Vice President and
Treasurer of Nuveen 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
184 (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.
32
NAME, BIRTHDATE POSITION(S) HELD WITH NUMBER OF PORTFOLIOS
& ADDRESS THE FUNDS YEAR FIRST IN FUND COMPLEX PRINCIPAL
ELECTED OR OVERSEEN OCCUPATION(S)
APPOINTED(4) BY OFFICER DURING PAST 5 YEARS
OFFICERS OF THE FUND (CONTINUED):
- LORNA C. FERGUSON
10/24/45 Managing Director (since
333 W. Wacker Drive Vice President 1998 2004), formerly, Vice
Chicago, IL 60606 President of Nuveen
Investments, LLC,
Managing Director (2004)
184 formerly, Vice President
(1998-2004) of Nuveen
Advisory Corp. and Nuveen
Institutional Advisory
Corp.(3); Managing
Director (since 2005) of
Nuveen Asset Management.
- STEPHEN D. FOY
5/31/54 Vice President Vice President (since
333 W. Wacker Drive and Controller 1998 1993) and Funds
Chicago, IL 60606 Controller (since 1998)
of Nuveen Investments,
LLC; Vice President
(since 2005) of Nuveen
184 Asset Management;
formerly, Vice President
and Funds Controller
(1998-2004) of Nuveen
Investments, Inc.;
Certified Public
Accountant.
- WALTER M. KELLY
2/24/70 Chief Compliance Vice President (since
333 W. Wacker Drive Officer and 2003 2006) formerly, Assistant
Chicago, IL 60606 Vice President Vice President and
Assistant General Counsel
(2003-2006) of Nuveen
Investments, LLC;
184 Assistant Vice President
and Assistant Secretary
of the Nuveen Funds
(2003-2006); previously,
Associate (2001-2003) at
the law firm of
VedderPrice P.C.
- DAVID J. LAMB
3/22/63 Vice President (since
333 W. Wacker Drive Vice President 2000 2000) of Nuveen
Chicago, IL 60606 184 Investments, LLC;
Certified Public
Accountant.
- TINA M. LAZAR
8/27/61 Vice President of Nuveen
333 W. Wacker Drive Vice President 2002 184 Investments, LLC (since
Chicago, IL 60606 1999).
- LARRY W. MARTIN
7/27/51 Vice President Vice President, Assistant
333 W. Wacker Drive and Assistant 1988 Secretary and Assistant
Chicago, IL 60606 Secretary General Counsel of Nuveen
Investments, LLC;
formerly, Vice President
and Assistant Secretary
of Nuveen Advisory Corp.
and Nuveen Institutional
Advisory Corp.(3); Vice
President (since 2005)
and Assistant Secretary
of Nuveen Investments,
Inc.; Vice President
(since 2005) and
Assistant Secretary
(since 1997) of Nuveen
Asset Management; Vice
President (since 2000),
Assistant Secretary and
184 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).
33
NAME, BIRTHDATE POSITION(S) HELD WITH NUMBER OF PORTFOLIOS
& ADDRESS THE FUNDS YEAR FIRST IN FUND COMPLEX PRINCIPAL
ELECTED OR OVERSEEN OCCUPATION(S)
APPOINTED(4) BY OFFICER DURING PAST 5 YEARS
OFFICERS OF THE FUND (CONTINUED):
- KEVIN J. MCCARTHY
3/26/66 Vice President Vice President, Nuveen
333 W. Wacker Drive and Secretary 2007 Investments, LLC (since
Chicago, IL 60606 2007); Vice President,
and 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 Inves-
184 tors LLC, NWQ Holdings,
LLC, Symphony Asset
Management LLC, Santa
Barbara Asset Management
LLC, Nuveen HydePark
Group, LLC and Richards &
Tierney, Inc. (since
2007); Vice President and
Assistant General
Counsel, Nuveen
Investments, Inc. (since
2007). prior thereto,
Partner, Bell, Boyd &
Lloyd LLP (1997-2007).
- JOHN V. MILLER
4/10/67 Managing Director (since
333 W. Wacker Drive Vice President 2007 2007), formerly, Vice
Chicago, IL 60606 184 President (2002-2007) of
Nuveen Investments, LLC;
Chartered Financial
Analyst.
- JAMES F. RUANE
7/3/62 Vice President Vice President, Nuveen
333 W. Wacker Drive and Assistant 2007 Investments (since 2007);
Chicago, IL 60606 Secretary prior thereto, Partner,
184 Deloitte & Touche USA LLP
(since 2005), formerly,
senior tax manager (since
2002); Certified Public
Accountant.
- MARK L. WINGET
12/21/68 Vice President Vice President, Nuveen
333 W. Wacker Drive and Assistant 2008 Investments, LLC (since
Chicago, IL 60606 Secretary 2008); Vice President and
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 Inves-
184 tors, 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, VedderPrice 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.
34
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.
35
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.
36
Glossary of
TERMS USED in this REPORT
Average Annual Total Return: This is a commonly used method to express an
investment's performance over a particular, usually multi-year time period. It
expresses the return that would have been necessary each year to equal the
investment's actual cumulative performance (including change in NAV or market
price and reinvested dividends and capital gains distributions, if any) over the
time period being considered.
Market Yield (also known as Dividend Yield or Current Yield): Market yield is
based on the Fund's current annualized quarterly distribution divided by the
Fund's current market price. The Fund's quarterly distributions to its
shareholders may be comprised of ordinary income, net realized capital gains
and, if at the end of the calendar year the Fund's cumulative net ordinary
income and net realized gains are less than the amount of the Fund's
distributions, a tax return of capital.
Net Asset Value (NAV): A Fund's NAV per share is calculated by subtracting the
liabilities of the Fund from its total assets and then dividing the remainder by
the number of shares outstanding. Fund NAVs are calculated at the end of each
business day.
37
NOTES
38
OTHER USEFUL INFORMATION
QUARTERLY PORTFOLIO OF INVESTMENTS AND PROXY VOTING INFORMATION
The Fund's (i) quarterly portfolio of investments, (ii) information regarding
how the Fund voted proxies relating to portfolio securities held during the most
recent 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 are available without charge, upon request, by
calling Nuveen Investments toll-free at (800) 257-8787 or on Nuveen's website at
www.nuveen.com.
You may also obtain this and other Fund information directly from the Securities
and Exchange Commission ("SEC"). The SEC may charge a copying fee for this
information. Visit the SEC on-line at http://www.sec.gov or in person at the
SEC's Public Reference Room in Washington, D.C. Call the SEC at 1-202-942-8090
for room hours and operation. You may also request Fund information by sending
an e-mail request to publicinfo@sec.gov or by writing to the SEC's Public
Reference Section at 450 Fifth Street NW, 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 Securities and Exchange Commission the certification
of its Chief Executive Officer and Chief Financial Officer required by Section
302 of the Sarbanes-Oxley Act.
Distribution Information
Nuveen Core Equity Alpha Fund (JCE) hereby designates 100.00% of dividends paid
from ordinary income as dividends qualifying for the 70% dividends received
deduction for corporations and 100.00% as qualified dividend income for
individuals under Section 1(h)(11) of the Internal Revenue Code.
Board of Trustees
Robert P. Bremner
Jack B. Evans
William C. Hunter
David J. Kundert
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
Carol 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
PriceWaterhouseCoopers LLP
Chicago, IL
The Fund intends to repurchase shares of its own stock in the future
at such times and in such amounts as is deemed advisable. No shares
were repurchased during the period covered by this report. Any future
repurchases will be reported to shareholders in the next annual or
semi-annual report.
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 $170 billion in assets, as of September 30, 2007, Nuveen Investments
offers access to a number of different asset classes and investing solutions
through a variety of products. Nuveen Investments markets its capabilities under
six distinct brands: Nuveen, a leader in fixed-income investments; NWQ, a leader
in value-style equities; Rittenhouse, a leader in growth-style equities;
Symphony, a leading institutional manager of market-neutral alternative
investment portfolios; Santa Barbara, a leader in growth equities; and
Tradewinds, a leader in global equities.
Find out how we can help you reach your financial goals.
To learn more about the products and services Nuveen Investments offers, talk to
your financial advisor, or call us at (800) 257-8787. Please read the
information provided carefully before you invest.
Be sure to obtain a prospectus, where applicable. Investors should consider the
investment objective and policies, risk considerations, charges and expenses of
the Fund carefully before investing. The prospectus contains this and other
information relevant to an investment in the Fund. For a prospectus, please
contact your securities representative or Nuveen Investments, 333 W. Wacker Dr.,
Chicago, IL 60606. Please read the prospectus carefully before you invest or
send money.
EAN-I-1207D
Learn more about Nuveen Funds at: WWW.NUVEEN.COM/CEF
Share prices
Fund details
Daily financial news
Investor education
Interactive planning tools
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 Shareholder 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 (the "Board") determined that the registrant
has at least one "audit committee financial expert" (as defined in Item 3 of
Form N-CSR) serving on its Audit Committee. The registrant's audit committee
financial expert is Jack B. Evans, 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 Core Equity Alpha Fund
The following tables show the amount of fees that PricewaterhouseCoopers, the
Fund's auditor, billed to the Fund during the Fund's last two full fiscal years.
For engagements with PricewaterhouseCoopers the Audit Committee approved in
advance all audit services and non-audit services that PricewaterhouseCoopers
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
============================================================================================================================
December 31, 2007(4) $ 24,130 $ 0 $ 0 $ 0
----------------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0% 0%
pursuant to
pre-approval
exception
----------------------------------------------------------------------------------------------------------------------------
============================================================================================================================
December 31, 2006 N/A N/A N/A N/A
----------------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0% 0%
pursuant to
pre-approval
exception
----------------------------------------------------------------------------------------------------------------------------
(1) "Audit Fees" are the aggregate fees billed for professional services for
the audit of the Fund's annual financial statements and services provided
in connection with statutory and regulatory filings or engagements.
(2) "Audit Related Fees" are the aggregate fees billed for assurance and
related services reasonably related to the performance of the audit or
review of financial statements and are not reported under "Audit Fees".
(3) "Tax Fees" are the aggregate fees billed for professional services for tax
advice, tax compliance, and tax planning.
(4) The Fund commenced operations on March 27, 2007.
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 PricewaterhouseCoopers 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 PricewaterhouseCoopers 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.
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
FISCAL YEAR ENDED SERVICE PROVIDERS SERVICE PROVIDERS SERVICE PROVIDERS
=======================================================================================================================
December 31, 2007(1) $ 0 $ 0 $ 0
-----------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
-----------------------------------------------------------------------------------------------------------------------
December 31, 2006 N/A N/A N/A
-----------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
-----------------------------------------------------------------------------------------------------------------------
(1) The Fund commenced operations on March 27, 2007.
NON-AUDIT SERVICES
The following table shows the amount of fees that PricewaterhouseCoopers billed
during the Fund's last two full fiscal years for non-audit services. For
engagements entered into on or after May 6, 2003, the Audit Committee is
required to pre-approve non-audit services that PricewaterhouseCoopers 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 PricewaterhouseCoopers about any
non-audit services that PricewaterhouseCoopers rendered during the Fund's last
fiscal year to the Adviser and any Affiliated Fund Service Provider. The
Committee considered this information in evaluating PricewaterhouseCoopers
independence.
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
FISCAL YEAR ENDED BILLED TO FUND REPORTING OF THE FUND) ENGAGEMENTS) TOTAL
================================================================================================================================
December 31, 2007(1) $ 0 $ 0 $ 0 $ 0
December 31, 2006 N/A N/A N/A N/A
(1) The Fund commenced operations on March 27, 2007.
"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 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, David J. Kundert and William J. Schneider. Mr.
Eugene S. Sunshine, who also served as a member of the Committee during this
reporting period, has resigned from the Board. His resignation became effective
on July 31, 2007.
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.
Nuveen Asset Management (NAM) is the registrant's investment adviser (NAM is
also referred to as the "Adviser".) NAM, as Adviser, provides discretionary
investment advisory services. NAM is responsible for the selection and on-going
monitoring of the Fund's investment portfolio, managing the Fund's business
affairs and providing certain clerical, bookkeeping and administrative services.
The Adviser has engaged Enhanced Technologies, LLC (INTECH), as Sub-Adviser to
provide discretionary investment advisory services. As part of these services,
the Adviser has also delegated to the Sub-Adviser the full responsibility for
proxy voting on securities held in its portfolio and related duties in
accordance with the Sub-Adviser's policy and procedures. The Adviser
periodically will monitor the Sub-Adviser's voting to ensure that they are
carrying out their duties. The Adviser's and Sub-Adviser's proxy voting policies
and procedures are summarized as follows:
NAM
The registrant invests its assets primarily in fixed income securities and cash
management securities. In the rare event that a fixed income issuer were to
issue a proxy or that the registrant were to receive a proxy issued by a cash
management security, NAM would either engage an independent third party to
determine how the proxy should be voted or vote the proxy with the consent, or
based on the instructions, of the registrant's Board or its representative. A
member of NAM's legal department would oversee the administration of the voting,
and ensure that records were maintained in accordance with Rule 206(4)-6,
reports were filed with the SEC on Form N-PX, and the results provided to the
registrant's Board and made available to shareholders as required by applicable
rules.
INTECH
The Fund is responsible for voting proxies on securities held in its portfolio.
When the Fund receives a proxy, the decision regarding how to vote such proxy
will be made by INTECH in accordance with its proxy voting procedures.
INTECH has engaged Institutional Shareholder Services ("ISS") to vote all Fund
proxies in accordance with the ISS Benchmark Proxy Voting Guidelines ("ISS
Recommendations"). Concurrent with the adoption of these procedures, INTECH will
not accept direction in the voting of proxies for which it has voting
responsibility from any person or organization other than the ISS
Recommendations. INTECH has adopted procedures and controls to avoid conflicts
of interest that may arise in connection with proxy voting.
In light of INTECH's policies, it is not expected that any conflicts will arise
in the proxy voting process. In the unusual circumstance that ISS seeks
direction on any matter or INTECH is otherwise in a position of evaluating a
proposal on a case-by-case basis, the matter shall be referred to the INTECH
Chief Compliance Officer to determine whether a material conflict exists. The
matter will be reviewed by INTECH's Chief Operating Officer, General Counsel and
Chief Compliance Officer ("Proxy Review Group"). To the extent that a conflict
of interest is identified, INTECH will vote the proxy according to the ISS
recommendation unless otherwise determined by the Proxy Review Group and INTECH
will report the resolution of the vote to the Fund's Proxy Voting Committee.
Information regarding how the Fund voted proxies relating to portfolio
securities during the most recent twelve-month period ended June 30 will be
available without charge by calling (800) 257-8787 or by accessing the
Securities and Exchange Commission's website at http://www.sec.gov.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Nuveen Asset Management (NAM) is the registrant's investment adviser (NAM is
also referred to as the "Adviser".) NAM, as Adviser, provides discretionary
investment advisory services. NAM is responsible for the selection and on-going
monitoring of the Fund's investment portfolio, managing the Fund's business
affairs and providing certain clerical, bookkeeping and administrative services.
The Adviser has engaged Enhanced Technologies, LLC (INTECH), as Sub-Adviser to
provide discretionary investment advisory services. The following section
provides information on the portfolio managers at the Adviser as well as the
Sub-Adviser:
NAM
ITEM 8(a)(1). PORTFOLIO MANAGER BIOGRAPHIES
Messrs. Rob A. Guttschow, CFA and John Gambla, CFA are primarily responsible for
the day-to-day management of the registrant's portfolio ("Portfolio Manager")
since 2007.
Mr. Guttschow is a Managing Director of Nuveen HydePark Group, LLC ("HydePark")
and Nuveen Asset Management ("NAM"). Mr. Guttschow joined NAM in May 2004 to
develop and implement a derivative overlay capability. Mr. Guttschow then joined
Nuveen HydePark Group LLC in September 2007, while retaining his Managing
Director status with Nuveen Asset Management. Mr. Guttschow was a Managing
Director and Senior Portfolio Manager at Lotsoff Capital Management ("LCM") from
1993 until 2004. While at LCM, Mr. Guttschow managed a variety of taxable fixed
income portfolios and enhanced equity index products totaling $1.5 billion. Mr.
Guttschow is a Chartered Financial Analyst ("CFA") and a member of the
Association for Investment Management Research. He has served as a member of the
TRIAD group for the Investment Analyst Society of Chicago. Education: University
of Illinois at Urbana/Champaign, B.S., M.B.A., CFA.
Mr. Gambla is a Managing Director of Nuveen HydePark Group LLC and a Managing
Director at NAM, since 2007. He is responsible for designing and maintaining
equity and alternative investment portfolios. Prior to this, he was a Senior
Trader and Quantitative Specialist for NAM (since 2003), and a Portfolio Manager
for Nuveen's closed-end fund managed account. Additional responsibilities
included quantitative research and product development. Mr. Gambla joined Nuveen
in 1992 as an Assistant Portfolio Manager. In 1993, he became a lead Portfolio
Manager responsible for seven closed-end and open-end bond funds totaling $1.5
billion. In 1998, he became Manager of Defined Portfolio Advisory which provided
fundamental research, quantitative research and trading for Nuveen's $11 billion
of equity and fixed-income Unit Trusts. Prior to his career with Nuveen, he was
a Financial Analyst with Abbott Laboratories. He is a Chartered Financial
Analyst, Certified Financial Risk Manager, Phi Beta Kappa, and is Series 7, 63
and 65-licensed. Education: University of Illinois, B.A., B.S., University of
Chicago, M.B.A.
ITEM 8(a)(2). OTHER ACCOUNTS MANAGED BY PORTFOLIO MANAGERS
(iii) NUMBER OF OTHER ACCOUNTS AND
(ii) NUMBER OF OTHER ACCOUNTS MANAGED ASSETS FOR WHICH ADVISORY FEE IS
AND ASSETS BY ACCOUNT TYPE PERFORMANCE-BASED
OTHER OTHER OTHER
REGISTERED OTHER POOLED REGISTERED POOLED
(i) NAME OF INVESTMENT INVESTMENT OTHER INVESTMENT INVESTMENT OTHER
PORTFOLIO MANAGER COMPANIES VEHICLES ACCOUNTS COMPANIES VEHICLES ACCOUNTS
----------------------------------------------------------------------------------------------------------------------------
Rob A. Guttschow, CFA 5 1,781mm n/a 3 0.5mm 1 20mm
----------------------------------------------------------------------------------------------------------------------------
John Gambla, CFA 5 1,781mm 2 0.3mm 1 20mm
----------------------------------------------------------------------------------------------------------------------------
POTENTIAL MATERIAL CONFLICTS OF INTEREST
The simultaneous management of the Fund and the other registered investment
companies noted above by the Portfolio Managers may present actual or apparent
conflicts of interest with respect to the allocation and aggregation of
securities orders placed on behalf of the Fund and the other accounts.
The Adviser 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,
the Adviser has adopted a Code of Conduct that sets forth policies regarding
conflicts of interest.
ITEM 8(a)(3). FUND MANAGER COMPENSATION
Compensation. Each Portfolio Manager's compensation consists of three basic
elements--base salary, cash bonus and long-term incentive compensation. The
Adviser's compensation strategy is to annually compare overall compensation,
including these three elements, 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's, and the overall
performance of Nuveen Investments, Inc. (the parent company of the Adviser).
Although investment performance is a factor in determining each Portfolio
Manager's compensation, it is not necessarily a decisive factor.
Base salary. Each Portfolio Manager is paid a base salary that is set at a level
determined by the Adviser in accordance with its overall compensation strategy
discussed above. The Adviser 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. These reviews and evaluations often
take into account a number of factors, including the effectiveness of the
investment strategies recommended to the Adviser'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 Adviser'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. Each Portfolio Manager is eligible to receive
two forms of long term incentive compensation. One form is tied to the
successful revenue growth of the Nuveen HydePark Group LLC. The second form of
long term compensation is tied to the success of Nuveen Investments Inc and its
ability to grow its business as a private company.
ITEM 8(a)(4). OWNERSHIP OF JCE SECURITIES AS OF DECEMBER 31, 2007
----------------------------------------------------------------------------------------------------
NAME OF PORTFOLIO $1- $10,001- $50,001- $100,001- $500,001- OVER
MANAGER NONE $10,000 $50,000 $100,000 $500,000 $1,000,000 $1,000,000
----------------------------------------------------------------------------------------------------
Rob Guttschow X
----------------------------------------------------------------------------------------------------
John Gambla X
----------------------------------------------------------------------------------------------------
INTECH
ITEM 8(a)(1). PORTFOLIO MANAGER BIOGRAPHIES
No one person of the investment team is primarily responsible for implementing
the investment strategies of the Fund. A team of investment professionals
consisting of Dr. Robert Fernholz, Dr. Cary Maguire, Dr. Adrian Banner, David E.
Hurley, Dr. Jason Greene, and Joseph Runnels works together to implement the
mathematical portfolio management process.
E. Robert Fernholz has been Co-Chief Investment Officer ("Co-CIO") of INTECH
since January 2008. Dr. Fernholz, previously Chief Investment Officer from
January 1991 to January 2008, joined INTECH in June of 1987. He received his
A.B. in Mathematics from Princeton University and his Ph.D. in Mathematics from
Columbia University. As Co-CIO, Dr. Fernholz sets policy for the investment
strategy, reviews proposed changes, and assures adherence to policy. Dr.
Fernholz implements and supervises the optimization process.
Cary Maguire has been Co-Chief Investment Officer of INTECH since January 2008.
Dr. Maguire, previously Senior Investment Officer from August 2002 to January
2008, joined INTECH in November 1991. He received his Ph.D. in Physics from
Princeton University. He holds an M.B.A. from Southern Methodist University. Dr.
Maguire is Phi Beta Kappa graduate of Stanford with degrees in Chemistry and
Music. Dr. Maguire implements the optimization process and supervises
implementation of the portfolio management and trading process. He conducts
mathematical research on the investment process and reviews and recommends
improvements.
David E. Hurley, CFA, has been Executive Vice President and Chief Operating
Officer of INTECH since March 2002. Mr. Hurley, previously INTECH's Chief
Compliance Officer from January 1996 to February 2003, joined INTECH in January
1988. He received his B.S. in Engineering from the United States Military
Academy. Mr. Hurley is responsible for daily oversight of all aspects of the
investment process from a portfolio management perspective. Mr. Hurley has
oversight, supervisory, and support responsibility for the day to day
implemental of the portfolio management and trading process. Mr. Hurley holds
the Chartered Financial Analyst designation.
Joseph W. Runnels, CFA, has been Vice President of Portfolio Management at
INTECH since March 2003. Mr. Runnels, previously Director of Trading and
Operations from January 1999 to March 2003, joined INTECH in June 1998. Mr.
Runnels holds a B.S. in Business Administration from Murray State University.
Mr. Runnels implements the day-to-day portfolio management and trading process
for client portfolios. He also handles brokerage relationships and supervises
the daily execution of trading for client accounts. Mr. Runnels holds the
Chartered Financial Analyst designation.
Adrian Banner has been Senior Investment Officer of INTECH since September 2007.
Dr. Banner, previously Director of Research, joined INTECH in August 2002. He
received his Ph.D. in Mathematics from Princeton University and holds a M.Sc.
and B.Sc. in Mathematics from the University of New South Wales, Australia. Dr.
Banner has delivered lectures on the stability of market capitalization at a
number of academic and professional conferences. Dr. Banner continues to teach
at Princeton University, where he is also a part-time Lecturer in the Department
of Mathematics.
Jason Greene, Ph.D. has been Vice President and Senior Investment Officer of
INTECH since September 2006. Dr. Greene joined INTECH in September of 2006 from
Georgia State University where he was a tenured Associate Professor of Finance.
He was also a consultant for the Office of Economic Analysis at the Securities
and Exchange Commission and an expert consultant to mutual fund advisors. Dr.
Greene has published numerous articles in premier academic and practitioner
journals. He is a graduate of Rhodes College, cum laude, with a B.A. in
Economics and Mathematics and Indiana University with a PhD in Finance.
ITEM 8(a)(2). OTHER ACCOUNTS MANAGED BY PORTFOLIO MANAGERS
In addition to managing the Equity Portfolio, Dr. Fernholz is also primarily
responsible for the day-to-day portfolio management of the following accounts.
Information is provided as of December 31, 2007 unless otherwise indicated:
TYPE OF ACCOUNT MANAGED NUMBER OF ACCOUNTS ASSETS
------------------------------------- ------------------ ---------------
Registered Investment Company* 16 $ 8,079,802,615
Other Pooled Investment 32 $12,757,271,275
Other Accounts** 360 $48,551,118,949
In addition to managing the Equity Portfolio, Dr. Maguire is also primarily
responsible for the day-to-day portfolio management of the following accounts.
Information is provided as of December 31, 2006 unless otherwise indicated:
TYPE OF ACCOUNT MANAGED NUMBER OF ACCOUNTS ASSETS
------------------------------------- ------------------ ---------------
Registered Investment Company* 16 $ 8,079,802,615
Other Pooled Investment 32 $12,757,271,275
Other Accounts** 360 $48,551,118,949
In addition to managing the Equity Portfolio, Mr. Hurley is also primarily
responsible for the day-to-day portfolio management of the following accounts.
Information is provided as of December 31, 2006 unless otherwise indicated:
TYPE OF ACCOUNT MANAGED NUMBER OF ACCOUNTS ASSETS
------------------------------------- ------------------ ---------------
Registered Investment Company* 16 $ 8,079,802,615
Other Pooled Investment 32 $12,757,271,275
Other Accounts** 360 $48,551,118,949
In addition to managing the Equity Portfolio, Mr. Runnels is also primarily
responsible for the day-to-day portfolio management of the following accounts.
Information is provided as of December 31, 2006 unless otherwise indicated:
TYPE OF ACCOUNT MANAGED NUMBER OF ACCOUNTS ASSETS
------------------------------------- ------------------ ---------------
Registered Investment Company* 16 $ 8,079,802,615
Other Pooled Investment 32 $12,757,271,275
Other Accounts** 360 $48,551,118,949
In addition to managing the Equity Portfolio, Mr. Banner is also primarily
responsible for the day-to-day portfolio management of the following accounts.
Information is provided as of December 31, 2007 unless otherwise indicated:
TYPE OF ACCOUNT MANAGED NUMBER OF ACCOUNTS ASSETS
------------------------------------- ------------------ ---------------
Registered Investment Company N/A $ N/A
Other Pooled Investment N/A $ N/A
Other Accounts N/A $ N/A
In addition to managing the Equity Portfolio, Dr. Greene is also primarily
responsible for the day-to-day portfolio management of the following accounts.
Information is provided as of December 31, 2006 unless otherwise indicated:
TYPE OF ACCOUNT MANAGED NUMBER OF ACCOUNTS ASSETS
------------------------------------- ------------------ ---------------
Registered Investment Company N/A $ N/A
Other Pooled Investment N/A $ N/A
Other Accounts** N/A $ N/A
-----------------
* 3 of the accounts included in the totals, consisting of $685,017,267 of the
total assets in the category, have performance-based advisory fees.
** 49 of the accounts included in the totals, consisting of $10,112,754,066 of
the total assets in the category, have performance-based advisory fees.
Material Conflicts of Interest. Actual or apparent conflicts of interest may
arise when a portfolio manager has day-to-day management responsibilities with
respect to more than one account. More specifically, a portfolio manager who
manages multiple accounts is presented with the following potential conflicts:
- The management of multiple accounts may result in a portfolio manager
devoting unequal time and attention to the management of each account.
INTECH believes its mathematical investment process and the procedures
it has in place are reasonably designed to mitigate these potential
conflicts and risks. Specifically, INTECH's mathematical investment
process significantly removes investment discretion.
- If a portfolio manager identifies a limited investment opportunity
that may be suitable for more than one account, an account may not be
able to take full advantage of that opportunity due to an allocation
of filled purchase or sale orders across all eligible accounts. For
INTECH, all allocations are based on computer-generated target
weightings and trades occur simultaneously for all accounts on a
rotating basis. Before submission for execution, trades are reviewed
by the trader for errors or discrepancies. Trades are submitted to
designated brokers in a single electronic file at one time during the
day, pre-allocated to individual clients. In the event that an
aggregated order is not completely filled, executed shares are
allocated to participating client accounts in proportion to the order.
- INTECH has an established procedure for the selection, approval,
management and annual review of broker relationships. INTECH gives
primary consideration to obtaining the most favorable price and
efficient execution. INTECH may, however, pay a higher commission than
would otherwise be necessary for a particular transaction when, in
INTECH's opinion, to do so would further the goal of obtaining the
best available execution. INTECH does not participate in soft dollar
or directed brokerage commission arrangements and will not accept
directed brokerage instructions. INTECH has a policy of paying
commissions for execution services only and does not purchase research
or other services from or through brokers using commissions.
- The Fund is subject to different regulation than the other pooled
investment vehicles and other accounts managed by the portfolio
manager. As a consequence of this difference in regulatory
requirements, the Fund may not be permitted to engage in all the
investment techniques or transactions or to engage in these
transactions to the same extent as the other accounts managed by the
portfolio manager. INTECH's mathematical investment process may result
in situations in which some of its clients may sell or sell short
securities when other clients purchase the same securities at or about
the same time. In an attempt to reduce the likelihood of the orders
matching up in the market and in an effort to maintain the
confidentiality of INTECH's trading activities for purposes of
improved execution, INTECH will direct purchase orders to different
brokers than sell and/or sell short orders.
INTECH has adopted certain compliance procedures that are designed to address
these types of conflicts common among investment managers. However, there is no
guarantee that such procedures will detect each and every situation in which a
conflict arises.
ITEM 8(a)(3). FUND MANAGER COMPENSATION
Salary and Cash Bonus. With respect to INTECH, the compensation structure of the
investment personnel is determined by INTECH and is summarized by INTECH below.
The following describes the structure and method of calculating INTECH's
investment personnel's compensation as of December 31, 2007.
For managing the Fund and all other accounts, the investment personnel receive
base pay in the form of a fixed annual salary paid by INTECH, and which is not
based on performance or assets of the Fund or other accounts. The investment
personnel are also eligible for a cash bonus as determined by INTECH, and which
is not based on performance or assets of the Fund or other accounts.
Long-Term Incentive Compensation. The investment personnel, as part owners of
INTECH, also receive compensation by virtue of their ownership interest in
INTECH. The investment personnel may elect to defer payment of a designated
percentage of their fixed compensation and/or up to all of their variable
compensation in accordance with Janus Capital Group Inc.'s Executive Income
Deferral Program.
ITEM 8(a)(4). OWNERSHIP OF JCE SECURITIES AS OF DECEMBER 31, 2007
----------------------------------------------------------------------------------------------------
NAME OF PORTFOLIO $1- $10,001- $50,001- $100,001- $500,001- OVER
MANAGER NONE $10,000 $50,000 $100,000 $500,000 $1,000,000 $1,000,000
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
Fernholz X
----------------------------------------------------------------------------------------------------
Maguire X
----------------------------------------------------------------------------------------------------
Hurley X
----------------------------------------------------------------------------------------------------
Runnels X
----------------------------------------------------------------------------------------------------
Banner X
----------------------------------------------------------------------------------------------------
Greene X
----------------------------------------------------------------------------------------------------
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
(c)
(b) TOTAL NUMBER OF (d)*
Period* (a) AVERAGE SHARES (OR UNITS) MAXIMUM NUMBER (OR
TOTAL NUMBER OF PRICE PURCHASED AS APPROXIMATE DOLLAR VALUE) OF
SHARES (OR PAID PER PART OF PUBLICLY SHARES (OR UNITS) THAT MAY YET
UNITS) SHARE (OR ANNOUNCED PLANS OR BE PURCHASED UNDER THE PLANS OR
PURCHASED UNIT) PROGRAMS PROGRAMS
--------------- ---------- ------------------ -------------------------------
NOVEMBER 21 - 30, 2007 0 $ -- -- 1,600,000
DECEMBER 1-31, 2007 27,500 $15.82 27,500 1,572,500
TOTAL 27,500
* The registrant's repurchase program was announced November 21, 2007. The
registrant's repurchase program authorized the repurchase of 1,600,000
shares. The repurchases made by the registrant pursuant to the program were
all made through open-market transactions.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the registrant's Board implemented after the registrant
last provided disclosure in response to this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial
officers, or persons performing similar functions, have concluded
that the registrant's disclosure controls and procedures (as defined
in Rule 30a-3(c) under the Investment Company Act of 1940, as
amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of
a date within 90 days of the filing date of this report that
includes the disclosure required by this paragraph, based on their
evaluation of the controls and procedures required by Rule 30a-3(b)
under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or
15d-15(b) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (17 CFR 240.13a-15(b) or 240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter
of the period covered by this report that has materially affected,
or is reasonably likely to materially affect, the registrant's
internal control over financial reporting.
ITEM 12. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit: Not applicable
because the code is posted on registrant's website at www.nuveen.com/etf and
there were no amendments during the period covered by this report. (To view the
code, click on the Shareholder 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: See
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: See 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 Core Equity Alpha Fund
-------------------------------------------------------
By (Signature and Title)* /s/ Kevin J. McCarthy
------------------------------------------
Kevin J. McCarthy
Vice President and Secretary
Date: March 7, 2008
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Gifford R. Zimmerman
------------------------------------------
Gifford R. Zimmerman
Chief Administrative Officer
(principal executive officer)
Date: March 7, 2008
By (Signature and Title)* /s/ Stephen D. Foy
------------------------------------------
Stephen D. Foy
Vice President and Controller
(principal financial officer)
Date: March 7, 2008
* Print the name and title of each signing officer under his or her signature.