UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-21153
---------------------
Nuveen Maryland Dividend Advantage Municipal Fund 3
------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Jessica R. Droeger
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (312) 917-7700
-------------------
Date of fiscal year end: May 31
------------------
Date of reporting period: May 31, 2006
------------------
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
ANNUAL REPORT May 31, 2006
Nuveen Investments
Municipal Exchange-Traded
Closed-End Funds
NUVEEN MARYLAND
PREMIUM INCOME
MUNICIPAL FUND
NMY
NUVEEN MARYLAND
DIVIDEND ADVANTAGE
MUNICIPAL FUND
NFM
NUVEEN MARYLAND
DIVIDEND ADVANTAGE
MUNICIPAL FUND 2
NZR
NUVEEN MARYLAND
DIVIDEND ADVANTAGE
MUNICIPAL FUND 3
NWI
NUVEEN VIRGINIA
PREMIUM INCOME
MUNICIPAL FUND
NPV
NUVEEN VIRGINIA
DIVIDEND ADVANTAGE
MUNICIPAL FUND
NGB
NUVEEN VIRGINIA
DIVIDEND ADVANTAGE
MUNICIPAL FUND 2
NNB
Photo of: Man, woman and child at the beach.
Photo of: A child.
DEPENDABLE, TAX-FREE INCOME BECAUSE IT'S NOT WHAT YOU EARN, IT'S WHAT YOU
KEEP.(R)
Logo: NUVEEN Investments
Photo of: Woman
Photo of: Man and child
Photo of: Woman
NOW YOU CAN RECEIVE YOUR NUVEEN FUND REPORTS FASTER.
NO MORE WAITING.
SIGN UP TODAY TO RECEIVE NUVEEN FUND INFORMATION BY E-MAIL.
It only takes a minute to sign up for E-Reports. Once enrolled, you'll receive
an e-mail as soon as your Nuveen Investments Fund information is ready -- no
more waiting for delivery by regular mail. Just click on the link within the
e-mail to see the report, and save it on your computer if you wish.
------------------------
DELIVERY DIRECT TO
YOUR E-MAIL INBOX
------------------------
IT'S FAST, EASY & FREE:
WWW.INVESTORDELIVERY.COM
if you get your Nuveen Fund dividends
and statements from your financial
advisor or brokerage account.
OR
WWW.NUVEEN.COM/ACCOUNTACCESS
if you get your Nuveen Fund dividends
and statements directly from Nuveen.
(Be sure to have the address sheet that accompanied this report handy. You'll
need it to complete the enrollment process.)
Logo: NUVEEN Investments
Photo of: Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
Chairman's
LETTER TO SHAREHOLDERS
Once again, I am pleased to report that over the twelve month period covered by
this report your Fund continued to provide you with attractive monthly tax-free
income. For more details about the management strategy and performance of your
Fund, please read the Portfolio Manager's Comments, the Dividend and Share Price
Information, and the Performance Overview sections of this report.
Municipal bonds can be an important building block in a well balanced investment
portfolio. In addition to providing attractive tax-free monthly income, a
municipal bond investment like your Fund may help you achieve and benefit from
greater portfolio diversification. Portfolio diversification is a recognized way
to try to reduce some of the risk that comes with investing. I encourage you to
contact your personal financial advisor who can help explain this important
investment strategy.
"PORTFOLIO DIVERSIFICATION IS A RECOGNIZED WAY TO TRY TO REDUCE SOME OF THE RISK
THAT COMES WITH INVESTING."
Nuveen Investments is pleased to offer you choices when it comes to receiving
your fund reports. In addition to mailed print copies, you can also sign up to
receive future Fund reports and other Fund information by e-mail and the
Internet. The inside front cover of this report contains information on how you
can sign up.
We are grateful that you have chosen us as a partner as you pursue your
financial goals, and we look forward to continuing to earn your trust in the
months and years ahead. At Nuveen Investments, our mission continues to be to
assist you and your financial advisor by offering investment services and
products that can help you to secure your financial objectives.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
July 11, 2006
Nuveen Investments Municipal Exchange-Traded Closed-End Funds
NMY, NFM, NZR, NWI, NPV, NGB, NNB
Portfolio Manager's
COMMENTS
Portfolio manager Paul Brennan examines economic and municipal market conditions
at both the national and state levels, key investment strategies, and the annual
performance of these seven Nuveen Funds. Paul, who has 15 years of investment
experience, has managed NMY and NPV since 1999; NFM, NZR, NGB, and NNB since
2001; and NWI since 2002.
WHAT FACTORS AFFECTED THE U.S. ECONOMY AND MUNICIPAL MARKET DURING THE ANNUAL
REPORTING PERIOD ENDED MAY 31, 2006?
During this reporting period, we saw a general increase in interest rates across
the yield curve, although rates at the long end of the curve remained more
stable than short-term rates during much of the period. Between June 1, 2005 and
May 31, 2006, the Federal Reserve announced eight increases of 0.25% each in the
fed funds rate, raising this short-term target by 200 basis points from 3% to
5%. By comparison, the yield on the benchmark 10-year U.S. Treasury note ended
May 2006 at 5.11%, up from 4.01% 12 months earlier, while the yield on the Bond
Buyer 25 Revenue Bond Index, a widely followed measure of longer-term municipal
market rates, was 5.22% at the end of May 2006, an increase of 44 basis points
from the beginning of June 2005. As interest rates increased, bond valuations
generally declined, and the yield curve flattened as shorter-term rates
approached the levels of longer-term rates.
Even with rising interest rates, increased energy prices, and indications of
slowing momentum in the manufacturing sector, the economy remained resilient,
with a healthy pattern of growth. After expanding at a rate of 3.3% in the
second quarter of 2005, the U.S. gross domestic product (GDP) grew by 4.1% in
the third quarter before slowing to 1.7% in the fourth quarter (all GDP numbers
annualized). In the first quarter of 2006, the GDP rebounded sharply to 5.6%,
fueled by upturns in consumer and federal spending and accelerated business
investment in equipment. The overall employment picture remained positive, with
national unemployment at 4.6% in May 2006, down from 5.1% in May 2005. Despite
an increase in inflation expectations, the year-over-year increase in the
Consumer Price Index as of May 2006 was 4.2%. However, during the first five
months of 2006, the pace of inflation picked up noticeably, rising at a rate of
5.2% annualized, compared with 3.4% for all of 2005.
Over the 12 months ended May 2006, municipal bond supply nationwide remained
strong, as $403.6 billion in new securities came to market, up 6% from the
previous 12 months. However, following record levels of issuance in calendar
year 2005, we saw a sharp in supply during the first five months of 2006, when
municipal issuance totaled $133.8 billion, off 19% from the same period in 2005.
A major factor in 2006's decline in supply was the substantial reduction in
pre-refunding volume, which dropped 56% from
4
last year's levels as rising interest rates made advance refundings less
economically attractive to issuers. Overall, demand for municipal bonds,
especially those offering higher yields, continued to be strong and broad-based,
with retail investors, property and casualty insurance companies, and hedge
funds--all participating in the market.
HOW WERE THE ECONOMIC AND MARKET ENVIRONMENTS IN MARYLAND AND VIRGINIA DURING
THIS PERIOD?
The Maryland economy continued to exhibit healthy growth during this reporting
period, driven by the government sector and professional and business services,
education, and healthcare. Due to the proximity of Washington D.C., the federal
government continued to play a dominant role in the state's economy. Maryland
also relied heavily on the healthcare and higher education sectors, with Johns
Hopkins Hospital, Johns Hopkins University, and the University of Maryland
Health System ranking among the state's largest employers. Maryland has
below-median exposure to the manufacturing sector, which has been a positive
factor over the past few years as manufacturing continued to struggle. In May
2006, Maryland's jobless rate was 3.8%, down from 4.2% in May 2005, putting
unemployment in the state close to its pre-recession level of 3.6% in 2000. As
was the case in many states and municipalities, an improving economy resulted in
tax revenues that are exceeding projections. By the end of fiscal 2006,
Maryland's general fund surplus was expected to total $1.2 billion. The $12.8
billion fiscal 2007 state budget, which provided additional funding for schools,
healthcare, and higher education, represented a conservative 5% increase over
fiscal 2006. As of May 2006, Moody's and Standard & Poor's maintained their
ratings on Maryland general obligation (GO) debt at Aaa/AAA. During the 12
months ended May 31, 2006, issuance in the state totaled $6.8 billion, an
increase of 30% over the previous 12-month period. For January-May 2006,
contrary to national trends, Maryland saw $2.4 billion in new municipal paper,
up 10% from the first five months of 2005. Plans call for Maryland to issue an
additional $690 million in long-term GO debt in fiscal 2007. Overall, Maryland's
debt levels were above the national medians. According to Moody's, Maryland
ranked 15th among the 50 states in tax-supported debt and 17th in terms of debt
per capita.
With a strong and diverse economic base, highly skilled work force, and
relatively low business costs, Virginia's economy continued to perform well
during this period, led by the government sector and professional and business
services. In 2005, Virginia ranked as the seventh fastest growing state in the
nation, with a gross state product of $5.6 billion compared with the national
average of $3.5 billion. As in Maryland, Virginia's proximity to Washington D.C.
meant that federal spending, especially in the defense sector, continued to be
an important factor in the commonwealth's economy, with the Hampton Roads area
5
serving as home to the nation's largest concentration of military installations.
Technology also played an increasing role in Virginia's economy as
manufacturing, especially in the south and southwestern portions of the
commonwealth, continued to decline. In May 2006, Virginia's unemployment rate
was the second lowest in the nation at 3.0%, down from 3.5% in May 2005. The
commonwealth's biennium budget for 2005-2006 restored structural balance using a
variety of actions, including sales and cigarette tax increases as well as
expenditure reductions. Revenues for fiscal 2006 were projected to come in $124
million ahead of plan, and Virginia's rainy day fund has been restored to $664
million. In February 2006, Moody's reconfirmed its rating on Virginia GO debt at
Aaa with a stable outlook, and S&P confirmed its AAA rating with a stable
outlook. During the 12 months ended May 31, 2006, issuance in Virginia totaled
$9.9 billion, an increase of 26% over the previous 12 months. However, the first
five months of 2006 saw issuance fall off sharply to $1.7 billion, down 63% from
the first five months of 2005. Some of this decline was due to the fact that
2005's numbers included a large tobacco deal issued by Virginia in May 2005.
According to Moody's, Virginia's per capita debt was lower than the national
median.
WHAT KEY STRATEGIES WERE USED TO MANAGE THESE FUNDS DURING THIS REPORTING
PERIOD?
As interest rates rose and the yield curve flattened during this 12-month
period, we continued to emphasize careful duration1 management, part of which
included efforts to more closely align the duration and yield curve positioning
of these Funds. Strategically, our purchase activity focused on attractively
priced bonds maturing in 10 to 20 years. As the curve continued to flatten and
the incremental yield on bonds with longer maturities decreased, we believed
that bonds in the 10-year to 20-year range of the curve generally offered reward
opportunities more commensurate with their risk levels. However, at various
times during this 12-month period, we found that bonds available in longer parts
of the yield curve offered more favorable characteristics, and we actively
pursued these opportunities.
To help us maintain the Funds' durations within our preferred strategic range,
we were also selectively selling holdings with shorter durations, such as bonds
priced to short call dates, bonds that were currently callable, and short-dated
pre-refunded bonds. Selling these shorter duration bonds and reinvesting further
out in the 10-year to 20-year part of the yield curve also helped to improve the
Funds' overall call protection profile.
1 Duration is a measure of a bond's price sensitivity as interest rates
change, with longer duration bonds displaying more sensitivity to these
changes than bonds with shorter durations.
6
With yields rising during this period, we also found some opportunities to sell
a few of our holdings that were purchased when yields were lower and replace
them with similar, newer credits that yielded comparatively more. This process
allowed us to maintain the Funds' current portfolio characteristics while
strengthening their income potential.
In looking for potential purchase candidates, we kept an opportunistic eye
toward all types of issuance that we believed could add value to the Funds'
portfolios. Overall, portfolio activity was relatively light. As previously
mentioned, while supply in Maryland remained strong over the period, Virginia
saw a sharp decline in municipal issuance during the first five months of 2006.
Since both Maryland and Virginia are high-quality states, much of the new supply
was highly rated and/or insured, and the majority of our new purchases were
higher-rated credits. During the latter part of this period, we took advantage
of opportunities to add housing bonds across all of these Funds, which benefited
their performance for the period.
We also continued to emphasize maintaining the Funds' weightings of bonds rated
BBB or lower and non-rated bonds. However, tighter supply in Virginia during
2006 meant fewer interesting lower-rated credit opportunities than usual in that
market. While we did find some attractive lower-rated issues to add to the
Maryland Funds, the Virginia Funds' allocations of lower quality bonds generally
remained stable over this period. Overall, both the Maryland and Virginia Funds
continued to have good exposure to this market segment.
Over the past 12 months, our duration management strategies also included the
use of forward interest rate swaps, a type of derivative financial instrument,
in NFM, NZR, NWI, and NNB. As discussed in our last shareholder report, we began
using these swaps in late 2004 in an effort to reduce the interest rate risk in
these four Funds. These hedges were not an attempt to profit from correctly
predicting the timing and direction of interest rate movements. Instead, our
sole objective was to reduce the durations (and resulting pricing sensitivity)
of these Funds without having a negative impact on their income streams or
common share dividends over the short term. The hedging strategy was effective
in helping to reduce the net asset value (NAV) volatility of NFM, NZR, and NNB,
and we removed the hedges from NFM in June 2005 and from NZR and NNB during the
first quarter of 2006. During this period, the hedges performed as expected.
7
HOW DID THE FUNDS PERFORM?
Individual results for these Maryland and Virginia Funds, as well as relevant
benchmark and peer group information, are presented in the accompanying table.
TOTAL RETURNS ON NET ASSET VALUE*
For periods ended 5/31/06
MARYLAND FUNDS 1-YEAR 5-YEAR 10-YEAR
--------------------------------------------------------------------------------
NMY 1.08% 7.11% 6.89%
--------------------------------------------------------------------------------
NFM 1.95% 7.16% NA
--------------------------------------------------------------------------------
NZR 1.14% NA NA
--------------------------------------------------------------------------------
NWI 1.55% NA NA
--------------------------------------------------------------------------------
VIRGINIA FUNDS
--------------------------------------------------------------------------------
NPV 0.71% 6.65% 7.21%
--------------------------------------------------------------------------------
NGB 1.74% 7.71% NA
--------------------------------------------------------------------------------
NNB 1.53% NA NA
--------------------------------------------------------------------------------
Lehman Brothers Municipal
Bond Index2 1.90% 5.27% 5.95%
--------------------------------------------------------------------------------
Lipper Other States
Municipal Debt Funds
Average3 1.74% 7.13% 6.92%
--------------------------------------------------------------------------------
*Annualized.
Past performance is not predictive of future results. Current performance may be
higher or lower than the data shown. Returns do not reflect the deduction of
taxes that shareholders may have to pay on Fund distributions or upon the sale
of Fund shares.
For additional information, see the individual Performance Overview for your
Fund in this report.
For the 12 months ended May 31, 2006, the total return on NAV for NFM exceeded
the return on the Lehman Brothers Municipal Bond Index. The remaining six Funds
underperformed this benchmark. NFM and NGB outperformed and matched,
respectively, the average return for the Lipper Other States peer group, while
the other five funds trailed the Lipper average. Shareholders should note that
the performance of the Lipper Other States category represents the overall
average of returns for funds from 10 different states with a wide variety of
municipal market conditions, making direct comparisons less meaningful.
One factor that affected the annual performance of these Funds, especially in
relation to that of the unleveraged Lehman Brothers Municipal Bond Index, was
the use of financial leverage. Although leveraging provides opportunities for
additional income and total returns for common shareholders when interest rates
fall or remain consistently low, this benefit is reduced when interest rates
rise. With the increases in interest rates during this period, the decline in
value of the bonds in the underlying portfolios of these Funds was exacerbated
by the effects of leveraging. During periods of low short-term rates, these
Funds generally pay lower dividends to their MuniPreferred shareholders, which
2 The Lehman Brothers Municipal Bond Index is an unleveraged, unmanaged
national index comprising a broad range of investment-grade municipal
bonds. Results for the Lehman index do not reflect any expenses.
3 The Lipper Other States Municipal Debt Funds category average is calculated
using the returns of all exchange-traded closed-end funds in this category
for each period as follows: 1 year, 46; 5 years, 27; and 10 years, 18. Fund
and Lipper returns assume reinvestment of dividends.
8
can leave more earnings to support common share dividends. Conversely, when
short-term interest rates rise, as they did during this reporting period, the
Funds' borrowing costs also rise, impacting the Funds' income streams and total
returns. However, we remain convinced that, over the long term, the use of
financial leverage should work to the benefit of the Funds. This is demonstrated
by the five-year and ten-year return performance--both absolute and relative--of
NMY, NFM, NPV, and NGB.
Other influences on the Funds' total returns for this period included market
factors such as rising interest rates and credit spread tightening as well as
fund-specific factors such as yield curve and duration positioning, allocations
to lower-rated credits, sector weightings, and pre-refunding activity.
As the yield curve continued to flatten over the course of this period, yield
curve and duration positioning played important roles in the Funds'
performances. On the whole, bonds in the Lehman Brothers Municipal Bond Index
with maturities between 6 and 8 years were the most adversely impacted by recent
changes in the yield curve, and they underperformed longer bonds (those with
maturities of at least 22 years) by more than 200 basis points. Yield curve
positioning or, more specifically, greater exposure to the longer parts of the
yield curve that performed well helped the performance of these Funds during
this period. However, NPV had less exposure to the longest part of the curve,
which hurt its performance relative to the other Funds.
With bonds rated BBB or lower and nonrated bonds generally outperforming other
credit quality sectors during this period, all of these Funds benefited from
their allocations of lower-quality credits. The performance of this sector was
largely the result of investor demand for the higher yields typically associated
with lower-quality bonds, which drove up their value and tightened credit
spreads. As of May 31, 2006, the Maryland Funds had weightings of BBB,
sub-investment grade and nonrated bonds ranging from 16% in NMY to 17% in NZR
and 19% in NFM and NWI, while the Virginia Funds had allocations of 10% in NPV,
11% in NNB, and 14% in NGB. NPV's lighter exposure to bonds in this market
segment, especially to bonds rated BB and lower, detracted from its 12-month
performance.
Among the lower-rated holdings making contributions to the Funds' total returns
for this period were industrial development revenue and resource recovery bonds,
healthcare (including hospitals), and tobacco, all of which ranked among the top
performing revenue sectors in the Lehman Brothers Municipal Bond Index.
Housing bonds were also among some of the best performing credits in the Funds'
portfolios, as rising interest rates lessened the incidence and impact of
prepayments and bond
9
calls. Both multifamily and single-family housing bonds were positive
contributors across all of these Funds. With a weighting of 16%, NFM, which took
advantage of the ample opportunities to purchase housing bonds during the Fund's
initial investment period in 2001, had the highest exposure to these credits,
while NPV had the lowest, at 5%.
During this period, we continued to see a number of advance refundings4, which
benefit the Funds through price appreciation and enhanced credit quality. As the
yield curve flattened, more lower coupon bonds were being pre-refunded, which
meant that, in general, the positive impact from refinancings was less than in
the previous reporting period.
While advance refundings generally enhanced performance for this 12-month
period, the rising interest rate environment--especially at the short end of the
yield curve--meant that the Funds' holdings of older, previously pre-refunded
bonds tended to underperform the general municipal market, due primarily to the
shorter effective maturities of these bonds. This was especially true in NMY and
NZR. Other sectors that tended to underperform the general municipal market
included general obligation bonds and special tax-backed issues.
HOW WERE THE FUNDS POSITIONED IN TERMS OF CREDIT QUALITY AND BOND CALLS AS OF
MAY 31, 2006?
We continued to believe that maintaining overall strong credit quality was an
important technique. As of May 31, 2006, all seven of these Funds continued to
offer excellent overall credit quality, with allocations of bonds rated AAA/U.S.
guaranteed and AA ranging from 67% in NFM to 73% in NMY, 74% in NZR and NWI, and
78% in NGB to 82% in NNB and 83% in NPV.
As of May 31, 2006, potential call exposure for the period from June 2006
through the end of 2007 ranged from zero in NNB, 2% in NFM, NZR, NWI, and NGB,
and 4% in NPV to 15% in NMY. In general, NMY continued to hold many of these
callable bonds during the period, in part due to their performance potential.
The number of actual bond calls in all of these Funds depends largely on future
market interest rates.
4 Advance refundings, also known as pre-refundings or refinancings, occur
when an issuer sells new bonds and uses the proceeds to fund principal and
interest payments of older existing bonds. This process often results in
lower borrowing costs for bond issuers.
10
Dividend and Share Price
INFORMATION
As previously noted, all of the Funds in this report use leverage to potentially
enhance opportunities for additional income for common shareholders. During
periods of rising short-term interest rates, as was the case during this
reporting period, the Funds' borrowing costs also rise, reducing the extent of
the benefits of leveraging. The Funds' income streams were also impacted as the
proceeds from older, higher-yielding bonds that matured or were called were
reinvested into bonds generally offering lower yields, especially in the older
Funds. These factors resulted in one monthly dividend reduction in NFM, NGB, and
NNB and two in NMY, NZR, and NPV over the 12-month period ended May 31, 2006.
The dividend of NWI remained stable throughout this reporting period, due in
part to the hedging strategy in place in this Fund.
Due to capital gains generated by normal portfolio activity, common shareholders
of the following Funds received capital gains and net ordinary income
distributions at the end of December 2005, as follows:
LONG-TERM CAPITAL GAINS ORDINARY INCOME
(PER SHARE) (PER SHARE)
--------------------------------------------------------------------------------
NMY $0.0245 $0.0069
--------------------------------------------------------------------------------
NZR $0.0275 $0.0001
--------------------------------------------------------------------------------
NPV $0.2431 --
--------------------------------------------------------------------------------
NNB $0.0666 --
--------------------------------------------------------------------------------
These distributions, which represented an important part of the total returns of
these four Funds for this period, were generated by bond calls and sales of
appreciated securities. This had a slight negative impact on the earning power
per common share of these Funds and was a minor factor in the common share
dividend reductions noted above.
All of the Funds in this report seek to pay stable dividends at rates that
reflect each Fund's past results and projected future performance. During
certain periods, each Fund may pay dividends at a rate that may be more or less
than the amount of net investment income actually earned by the Fund during the
period. If a Fund has cumulatively earned more than it has paid in dividends, it
holds the excess in reserve as undistributed net investment income (UNII) as
part of the Fund's NAV. Conversely, if a Fund has cumulatively paid dividends in
excess of its earnings, the excess constitutes negative UNII that is likewise
reflected in the Fund's NAV. Each Fund will, over time, pay all of its net
investment income as dividends to shareholders. As of May 31, 2006, all of the
Funds in this report except NWI had a positive UNII balance for both financial
statement and tax purposes. NWI had a positive UNII balance for tax purposes,
and a negative UNII balance for financial statement purposes.
11
At the end of the reporting period, the Funds' share prices were trading at
premiums or discounts to their NAVs as shown in the accompanying chart:
5/31/06 12-MONTH AVERAGE
PREMIUM/DISCOUNT PREMIUM/DISCOUNT
--------------------------------------------------------------------------------
NMY +0.35% +2.31%
--------------------------------------------------------------------------------
NFM +4.26% +7.10%
--------------------------------------------------------------------------------
NZR 0.00% +4.51%
--------------------------------------------------------------------------------
NWI -3.35% -2.13%
--------------------------------------------------------------------------------
NPV +0.13% +7.01%
--------------------------------------------------------------------------------
NGB +14.69% +12.91%
--------------------------------------------------------------------------------
NNB +9.19% +9.04%
--------------------------------------------------------------------------------
12
Nuveen Maryland Premium Income Municipal Fund
NMY
Performance
OVERVIEW As of May 31, 2006
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 48%
AA 25%
A 11%
BBB 9%
BB or Lower 5%
N/R 2%
Bar Chart:
2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Jun 0.069
Jul 0.069
Aug 0.069
Sep 0.0655
Oct 0.0655
Nov 0.0655
Dec 0.062
Jan 0.062
Feb 0.062
Mar 0.062
Apr 0.062
May 0.062
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
6/01/05 15.75
15.76
15.8
15.78
15.62
15.63
15.65
15.65
15.78
15.75
15.65
15.57
15.65
15.53
15.69
15.63
15.68
15.72
15.73
15.84
15.84
15.98
16.1
15.99
15.84
15.85
15.69
15.69
15.69
15.64
15.61
15.57
15.63
15.58
15.64
15.58
15.68
15.58
15.59
15.47
15.59
15.59
15.59
15.6
15.62
15.83
16.01
16.12
15.9
16
16
15.95
15.64
15.7
15.83
15.83
15.8
15.81
15.79
15.9
15.91
16
15.81
15.94
16.01
15.86
16.05
16.13
16.1
15.86
15.94
16.05
16.02
15.93
15.93
15.81
15.93
15.78
15.8
15.68
15.5
15.29
15.26
15.28
15.32
15.38
15.4
15.36
15.58
15.54
15.52
15.4
15.46
15.48
15.39
15.21
15.09
15.05
15.08
15
14.95
15.46
15.3
15.18
14.92
14.99
15.01
14.99
15.05
15.1
15.1
14.92
14.95
15.16
14.85
14.94
14.75
14.69
14.67
14.69
14.36
14.49
14.39
14.28
14.25
14.3
14.52
14.43
14.45
14.4
14.25
14.01
14
14.07
13.96
13.93
13.96
13.75
13.73
13.88
13.94
13.96
13.8
13.77
13.84
13.95
13.98
14.09
14.11
14.18
14.18
14.16
14.25
14.35
14.48
14.46
14.63
14.7
14.73
14.97
14.74
14.72
14.96
14.96
14.9
15.26
15.1
14.99
14.83
15.05
15.04
15.09
15
14.88
14.9
14.85
14.85
14.91
14.83
14.68
14.62
14.6
14.61
14.64
14.51
14.65
14.63
14.78
14.76
14.8
14.98
15.05
14.98
15.01
15.1
14.96
14.97
15
15
15.09
14.98
15.16
15.16
15.15
15.21
15.16
15.21
15.29
15.28
15.21
15.27
15.12
15.22
15.24
15.25
15.22
15.2
14.91
14.83
14.71
14.68
14.95
15
14.85
14.85
14.71
14.89
14.88
14.81
14.78
14.86
14.95
14.95
14.76
14.75
14.5
14.68
14.67
14.62
14.52
14.52
14.53
14.54
14.65
14.65
14.67
14.59
14.56
14.6
14.54
14.57
14.57
14.47
14.42
5/31/06 14.52
FUND SNAPSHOT
------------------------------------
Common Share Price $14.52
------------------------------------
Common Share
Net Asset Value $14.47
------------------------------------
Premium/(Discount) to NAV 0.35%
------------------------------------
Market Yield 5.12%
------------------------------------
Taxable-Equivalent Yield1 7.47%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $153,834
------------------------------------
Average Effective Maturity
on Securities (Years) 15.69
------------------------------------
Leverage-Adjusted Duration 8.56
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 3/18/93)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year -2.94% 1.08%
------------------------------------
5-Year 3.87% 7.11%
------------------------------------
10-Year 7.01% 6.89%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
Tax Obligation/General 23.6%
------------------------------------
Health Care 14.8%
------------------------------------
Tax Obligation/Limited 14.4%
------------------------------------
Education and Civic
Organizations 13.3%
------------------------------------
U.S. Guaranteed 12.5%
------------------------------------
Housing/Multifamily 10.5%
------------------------------------
Other 10.9%
------------------------------------
1 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 31.5%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
2 The Fund paid shareholders capital gains and net ordinary income
distributions in December 2005 of $0.0314 per share.
13
Nuveen Maryland Dividend Advantage Municipal Fund
NFM
Performance
OVERVIEW As of May 31, 2006
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 47%
AA 20%
A 14%
BBB 12%
BB or Lower 2%
N/R 5%
Bar Chart:
2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Jun 0.0715
Jul 0.0715
Aug 0.0715
Sep 0.0715
Oct 0.0715
Nov 0.0715
Dec 0.0715
Jan 0.0715
Feb 0.0715
Mar 0.068
Apr 0.068
May 0.068
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
6/01/05 15.71
15.95
15.96
15.8
15.86
15.87
15.77
15.54
15.51
15.71
15.85
15.57
15.8
15.8
16.07
16.15
16.4
16.29
16.29
16.35
16.3
16.08
16.1
15.79
15.9
15.9
15.85
15.94
15.74
15.85
15.94
16.02
16.1
15.79
15.85
15.78
15.78
15.7
15.75
15.6
15.76
15.81
15.81
15.84
15.72
15.8
15.78
15.72
15.72
15.81
15.92
15.93
16.05
15.95
16.23
16.3
16.4
16.5
16.75
16.69
16.46
16.57
16.5
16.73
16.63
16.6
16.58
16.69
16.8
17.2
16.6
16.6
16.64
16.3
16.3
16.2
16.25
16.35
16.23
15.99
15.84
15.75
15.78
15.66
15.73
15.7
15.61
15.92
15.99
15.9
15.93
15.95
15.99
15.99
15.71
15.6
15.6
15.89
15.75
15.9
15.75
15.75
15.76
15.9
15.8
15.83
15.6
15.58
15.65
15.6
15.65
15.33
15.25
15.53
15.5
15.5
15.41
15.36
15.2
15.06
14.9
14.75
14.7
14.84
14.61
14.74
14.67
14.91
14.77
15
14.93
14.8
14.7
14.92
14.92
14.85
14.71
14.75
14.7
14.69
14.69
14.85
15.14
15.5
15.16
15
15.28
15.42
15.5
15.25
15.25
15.17
15.7
15.65
15.7
15.78
15.85
15.73
15.9
16
15.95
15.75
16.1
15.95
16.04
15.95
15.9
15.85
16.17
16.5
16.49
16.45
16.42
16.39
16.5
16.35
16.5
16.77
16.7
16.7
16.77
16.99
16.73
16.67
16.69
16.8
16.72
16.75
16.72
17
16.86
17
16.67
16.67
16.55
16.6
16.6
16.73
16.85
16.8
16.8
16.87
17.09
16.6
16.35
16.15
16.15
16.05
16.3
16.36
16.36
16.25
16.05
16.05
16.15
16.2
15.9
15.9
15.65
15.6
15.7
15.65
15.9
15.95
15.95
15.65
16
15.9
15.75
15.8
15.81
15.83
15.83
15.82
15.83
15.75
15.9
15.85
15.95
15.98
15.9
15.5
15.46
15.35
15.29
15.39
15.26
15.33
15.33
15.23
15.2
15.33
15.21
15.27
5/31/06 15.19
FUND SNAPSHOT
------------------------------------
Common Share Price $15.19
------------------------------------
Common Share
Net Asset Value $14.57
------------------------------------
Premium/(Discount) to NAV 4.26%
------------------------------------
Market Yield 5.37%
------------------------------------
Taxable-Equivalent Yield1 7.84%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $60,762
------------------------------------
Average Effective Maturity
on Securities (Years) 18.47
------------------------------------
Leverage-Adjusted Duration 7.59
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 1/23/01)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 2.51% 1.95%
------------------------------------
5-Year 4.69% 7.16%
------------------------------------
Since
Inception 5.89% 6.36%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
Tax Obligation/General 24.2%
------------------------------------
Health Care 17.0%
------------------------------------
U.S. Guaranteed 13.6%
------------------------------------
Tax Obligation/Limited 12.9%
------------------------------------
Housing/Multifamily 12.8%
------------------------------------
Education and Civic
Organizations 8.9%
------------------------------------
Other 10.6%
------------------------------------
1 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 31.5%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
14
Nuveen Maryland Dividend Advantage Municipal Fund 2
NZR
Performance
OVERVIEW As of May 31, 2006
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 49%
AA 25%
A 9%
BBB 9%
BB or Lower 3%
N/R 5%
Bar Chart:
2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Jun 0.073
Jul 0.073
Aug 0.073
Sep 0.0695
Oct 0.0695
Nov 0.0695
Dec 0.0695
Jan 0.0695
Feb 0.0695
Mar 0.066
Apr 0.066
May 0.066
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
6/01/05 15.51
15.42
15.55
15.5
15.47
15.6
15.46
15.41
15.3
15.43
15.38
15.53
15.87
15.52
15.53
15.73
15.94
15.93
16.11
15.8
15.98
15.89
16.39
16.6
16.45
16
15.93
15.96
16.07
16.23
15.88
16.04
15.96
16.19
16.1
16.23
16.02
15.76
15.54
15.68
15.69
15.61
15.61
15.47
15.4
15.35
15.49
15.5
15.64
15.75
15.86
15.8
15.85
15.88
16.2
16.17
16.17
15.85
15.86
15.85
15.93
15.77
15.8
16.18
16.14
16.14
16
15.96
16.07
16.13
16.05
16
16.07
15.79
15.99
15.99
15.8
16.11
16.19
16.3
16.11
16
15.95
16.09
15.91
15.93
15.9
15.98
16.05
16.05
16
16.12
15.93
15.89
15.7
15.78
15.65
15.59
15.6
15.3
15.23
15.55
15.45
15.35
15.08
15.3
15.46
15.55
15.49
15.54
15.65
15.8
15.8
16
16.1
16.1
15.95
15.9
15.7
15.78
15.51
15.6
15.47
15.45
15.4
15.4
15.49
15.32
15.72
15.97
15.63
15.68
15.51
15.65
15.53
15.52
15.59
15.66
16
16.05
16.06
16.05
16.05
16.3
16.24
16.08
16.34
16.37
16.22
16.33
16.33
16.38
16.19
16.28
16.42
16.42
16.55
16.55
16.5
16.5
16.33
16.5
16.23
16.14
16.21
16.15
16.05
16.15
15.95
16.2
16.05
16.5
16.6
16.48
16.5
16.15
16.45
16.8
16.5
16.31
16.43
16.6
16.69
16.52
16.42
16.35
16.15
16.25
16.2
16.39
16.65
16.8
16.67
16.3
16.3
16.3
16.05
15.92
15.9
16.2
16.05
15.84
15.84
15.65
15.4
15.2
15.2
14.95
14.99
15.03
14.93
14.92
15.05
15.28
15.15
15.12
15.3
15.12
15.3
15.13
15.4
15.38
15.41
15.36
15.26
14.95
15
15.03
15.23
15.05
14.9
15.15
15.15
14.95
14.98
14.7
14.88
14.9
15
15.12
15.17
15.23
15.2
15.15
15
14.97
15.02
14.95
15.05
14.95
14.98
14.94
14.9
14.98
5/31/06 14.76
FUND SNAPSHOT
------------------------------------
Common Share Price $14.76
------------------------------------
Common Share
Net Asset Value $14.76
------------------------------------
Premium/(Discount) to NAV 0.00%
------------------------------------
Market Yield 5.37%
------------------------------------
Taxable-Equivalent Yield1 7.84%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $61,726
------------------------------------
Average Effective Maturity
on Securities (Years) 17.16
------------------------------------
Leverage-Adjusted Duration 8.05
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 9/25/01)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 1.13% 1.14%
------------------------------------
Since
Inception 5.35% 6.47%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
Tax Obligation/General 25.7%
------------------------------------
U.S. Guaranteed 16.4%
------------------------------------
Health Care 14.4%
------------------------------------
Tax Obligation/Limited 13.3%
------------------------------------
Education and Civic
Organizations 11.2%
------------------------------------
Housing/Multifamily 7.0%
------------------------------------
Other 12.0%
------------------------------------
1 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 31.5%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
2 The Fund paid shareholders capital gains and net ordinary income
distributions in December 2005 of $0.0276 per share.
15
Nuveen Maryland Dividend Advantage Municipal Fund 3
NWI
Performance
OVERVIEW As of May 31, 2006
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 42%
AA 32%
A 7%
BBB 12%
BB or Lower 3%
N/R 4%
Bar Chart:
2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Jun 0.0595
Jul 0.0595
Aug 0.0595
Sep 0.0595
Oct 0.0595
Nov 0.0595
Dec 0.0595
Jan 0.0595
Feb 0.0595
Mar 0.0595
Apr 0.0595
May 0.0595
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
6/01/05 14.38
14.47
14.54
14.2
14.31
14.2
14.26
14.23
14.16
14.08
14.14
14.25
14.41
14.45
14.42
14.48
14.69
14.61
14.55
14.55
14.65
14.56
14.67
14.76
14.5
14.66
14.63
14.51
14.53
14.4
14.27
14.35
14.11
14.03
14.02
14.1
14.15
14.44
14.36
14.4
14.39
14.45
14.45
14.5
14.4
14.5
14.49
14.41
14.32
14.55
14.32
14.27
14.54
14.46
14.55
14.42
14.29
14.55
14.31
14.36
14.57
14.67
14.8
14.59
14.52
14.52
14.5
14.49
14.48
14.55
14.56
14.55
14.54
14.67
14.49
14.4
14.12
14.3
14.53
14.75
14.81
14.82
14.68
14.64
14.63
14.37
14.66
14.66
14.62
14.62
14.55
14.5
14.44
14.41
14.24
14.17
14.1
14.19
14.12
14.04
14.01
14.12
14.25
14.31
14.35
14.1
14.1
14.27
14.41
14.4
14.04
14.26
14.32
14.48
14.14
14
14.01
14
14.29
14.07
14.3
14.1
14.1
14.06
13.97
14
14.04
14.09
13.98
13.84
14.01
13.84
13.85
14.05
14.15
14.11
13.75
13.6
13.55
13.59
13.56
13.56
13.57
13.7
13.73
13.76
13.79
13.98
14
14.35
14.35
14.34
14.11
14.2
14.29
14.1
14.27
14.2
14.31
14.35
14.19
14.09
14.19
14.35
14.3
14.18
14.35
14.62
14.39
14.53
14.45
14.34
14.29
14.27
14.22
14.19
14.15
14.13
14.24
14.43
14.58
14.24
14.45
14.56
14.39
14.65
14.34
14.65
14.55
14.6
14.35
14.36
13.98
14
14.2
14.51
14.4
14.15
14.38
14.54
14.51
14.65
14.4
14.4
14.04
14.01
14.02
14
14.07
14
14.04
13.96
14.07
14
14.08
14.55
14.38
14.08
13.99
13.9
13.9
14.1
14.2
14.2
14.25
14.3
14.3
14.24
14.11
13.98
14.14
14.4
14.4
14.4
13.98
14
13.95
13.95
13.93
13.93
13.98
13.98
13.91
13.8
14
13.82
13.7
13.7
13.7
13.64
13.76
13.78
13.81
13.77
5/31/06 13.85
FUND SNAPSHOT
------------------------------------
Common Share Price $13.85
------------------------------------
Common Share
Net Asset Value $14.33
------------------------------------
Premium/(Discount) to NAV -3.35%
------------------------------------
Market Yield 5.16%
------------------------------------
Taxable-Equivalent Yield1 7.53%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $76,809
------------------------------------
Average Effective Maturity
on Securities (Years) 17.21
------------------------------------
Leverage-Adjusted Duration 7.83
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 9/25/02)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 1.09% 1.55%
------------------------------------
Since
Inception 3.14% 5.30%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
Tax Obligation/Limited 23.0%
------------------------------------
U.S. Guaranteed 16.4%
------------------------------------
Tax Obligation/General 15.9%
------------------------------------
Health Care 12.1%
------------------------------------
Housing/Multifamily 10.0%
------------------------------------
Education and Civic
Organizations 9.0%
------------------------------------
Other 13.6%
------------------------------------
1 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 31.5%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
16
Nuveen Virginia Premium Income Municipal Fund
NPV
Performance
OVERVIEW As of May 31, 2006
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 52%
AA 31%
A 7%
BBB 6%
BB or Lower 1%
N/R 3%
Bar Chart:
2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Jun 0.069
Jul 0.069
Aug 0.069
Sep 0.069
Oct 0.069
Nov 0.069
Dec 0.0655
Jan 0.0655
Feb 0.0655
Mar 0.062
Apr 0.062
May 0.062
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
6/01/05 17.68
17.88
18
18.02
18.02
18.03
18.07
18.07
17.95
17.95
17.81
17.4
17.39
17.28
17.4
17.47
17.33
17.34
17.44
17.39
17.4
17.51
17.91
17.85
17.87
17.69
17.95
18.1
17.91
17.45
17.3
17.12
17.13
17.02
17.06
16.85
16.75
16.72
16.8
16.78
16.94
17.09
17.09
16.95
16.92
16.81
16.87
16.93
16.94
16.92
16.96
16.78
16.86
16.85
16.89
16.59
16.75
16.66
16.65
16.7
16.85
16.94
17.19
17.49
17.23
17.29
17.22
17.44
17.4
17.26
17.56
17.42
17.53
17.49
17.53
17.57
17.5
17.35
17.3
17.2
17.05
16.79
16.63
16.62
16.98
17
17.1
17.45
17.35
17.52
17.55
17.7
17.55
17.9
17.88
17.6
17.6
17.58
17.7
17.53
17.07
17.18
17.09
17.25
17
17.12
17.1
16.98
16.95
16.65
16.99
16.8
16.96
16.82
16.82
16.73
16.85
16.65
16.5
16.43
16.47
16.45
16.14
16.1
16
16.12
16.11
16.19
16.1
16.28
16.34
16.34
16.29
16.06
16.09
16.01
16.17
15.8
15.65
15.82
15.76
15.54
15.22
15.22
15.26
15.37
15.75
15.8
15.9
15.97
15.97
15.98
16.18
15.93
15.85
16.14
16.09
15.6
15.75
15.76
15.78
15.79
16.05
16
15.85
16.1
16.27
16.4
16.5
16.1
15.9
15.8
15.76
15.61
15.51
15.57
15.55
15.71
15.75
15.76
15.95
16.08
16.11
15.66
15.86
15.76
15.95
16.18
16.15
16.4
16.5
16.3
15.8
15.83
15.72
15.4
15.45
15.75
15.75
16.15
16.19
16.18
16
15.85
16.14
15.54
15.5
15.5
15.41
15.5
15.41
15.41
15.44
15.27
15.5
15.55
15.48
15.19
15.35
15.1
14.95
15.05
14.9
15.21
15.28
15.27
15.5
15.39
15.6
15.75
15.65
15.3
15.3
15.51
15.87
15.78
15.35
15.37
15.1
15.19
15.11
14.91
14.99
15.11
15.12
14.9
15.15
14.98
14.92
14.85
15.1
15.1
15.19
15.05
5/31/06 14.91
FUND SNAPSHOT
------------------------------------
Common Share Price $14.91
------------------------------------
Common Share
Net Asset Value $14.89
------------------------------------
Premium/(Discount) to NAV 0.13%
------------------------------------
Market Yield 4.99%
------------------------------------
Taxable-Equivalent Yield1 7.34%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $132,626
------------------------------------
Average Effective Maturity
on Securities (Years) 15.24
------------------------------------
Leverage-Adjusted Duration 8.22
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 3/18/93)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year -9.98% 0.71%
------------------------------------
5-Year 4.24% 6.65%
------------------------------------
10-Year 6.72% 7.21%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
Tax Obligation/Limited 22.5%
------------------------------------
Tax Obligation/General 19.1%
------------------------------------
Health Care 11.6%
------------------------------------
U.S. Guaranteed 10.3%
------------------------------------
Transportation 9.1%
------------------------------------
Utilities 8.1%
------------------------------------
Education and Civic
Organizations 4.8%
------------------------------------
Other 14.5%
------------------------------------
1 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 32%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
2 The Fund paid shareholders a capital gains distribution in December 2005 of
$0.2431 per share.
17
Nuveen Virginia Dividend Advantage Municipal Fund
NGB
Performance
OVERVIEW As of May 31, 2006
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 49%
AA 29%
A 8%
BBB 5%
BB or Lower 4%
N/R 5%
Bar Chart:
2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Jun 0.0755
Jul 0.0755
Aug 0.0755
Sep 0.072
Oct 0.072
Nov 0.072
Dec 0.072
Jan 0.072
Feb 0.072
Mar 0.072
Apr 0.072
May 0.072
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
6/01/05 17.05
17.15
17.25
17.2
17.15
17.2
17.2
17
17.01
17.1
17.18
17.18
17.3
17.24
17.15
17.47
17.47
17.47
17.4
17.36
17.35
17.22
17.34
17.94
17.6
17.72
17.93
17.98
17.98
17.89
17.99
17.99
18.13
18.2
18.2
18.06
18.51
18.42
18.4
18.6
18.76
18.8
18.8
19
18.98
18.85
18.56
18.72
18.82
18.93
18.7
17.77
17.8
17.31
17.51
17.6
17.63
17.63
17.71
17.57
17.53
17.83
18.05
18
18.05
18.15
18.2
18.25
18.25
18.17
18.41
18.41
18.41
18.41
18.38
18.09
18
17.72
17.69
17.67
17.47
17.46
17.31
17.31
17.25
17.25
17.61
17.77
17.85
17.55
17.55
17.55
17.64
17.32
17.23
17.34
17.34
17.4
17.22
17.37
16.62
16.75
16.79
16.75
16.71
16.51
16.45
16.3
16.41
16.29
16.25
16.04
15.81
15.6
15.86
15.33
15.4
15.36
15.4
15.68
15.33
15.34
15.41
15.1
15.15
15.15
15.24
15.35
15.48
15.8
16.27
16.26
16.55
16.05
15.9
15.98
15.95
15.79
16
15.99
15.65
15.84
16.05
16.04
16
16
16
16.15
16.25
16.3
16.3
16.35
16.52
16.75
16.55
17
16.99
17
17
17
17.17
17.55
17.55
17.74
17.75
17.65
17.88
17.86
17.95
18
18
17.92
17.35
17.2
17.1
17.41
17.45
17.4
17.11
17.3
17.3
17.3
17.34
16.83
16.73
16.69
16.95
17
17.3
17.3
17.25
17.45
17.19
17.19
17.19
17.24
17
17.01
17.05
17.29
17.29
17.4
17.5
17.67
17.75
17.16
17.16
16.75
16.95
17.09
17.09
16.8
16.9
17.16
17.27
17.28
17.28
17.27
17.43
17.43
17.3
17.12
17.12
16.96
16.88
16.95
17.2
17.04
17.13
17.06
17.2
17.25
17.25
17.4
17.66
17.8
17.61
17.51
17.55
17.35
17.35
17.4
17.4
17.25
17.25
17.25
17.12
17.45
17.55
17.55
17.05
17.07
17.05
17.1
5/31/06 17.1
FUND SNAPSHOT
------------------------------------
Common Share Price $17.10
------------------------------------
Common Share
Net Asset Value $14.91
------------------------------------
Premium/(Discount) to NAV 14.69%
------------------------------------
Market Yield 5.05%
------------------------------------
Taxable-Equivalent Yield1 7.43%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $46,626
------------------------------------
Average Effective Maturity
on Securities (Years) 15.99
------------------------------------
Leverage-Adjusted Duration 8.09
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 1/26/01)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 5.86% 1.74%
------------------------------------
5-Year 8.14% 7.71%
------------------------------------
Since
Inception 8.12% 6.85%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
Tax Obligation/General 21.0%
------------------------------------
Tax Obligation/Limited 16.5%
------------------------------------
Transportation 16.1%
------------------------------------
U.S. Guaranteed 11.7%
------------------------------------
Education and Civic
Organizations 9.4%
------------------------------------
Health Care 7.3%
------------------------------------
Consumer Staples 3.2%
------------------------------------
Other 14.8%
------------------------------------
1 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 32%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
18
Nuveen Virginia Dividend Advantage Municipal Fund 2
NNB
Performance
OVERVIEW As of May 31, 2006
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 51%
AA 31%
A 7%
BBB 5%
BB or Lower 2%
N/R 4%
Bar Chart:
2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Jun 0.0715
Jul 0.0715
Aug 0.0715
Sep 0.0715
Oct 0.0715
Nov 0.0715
Dec 0.0715
Jan 0.0715
Feb 0.0715
Mar 0.068
Apr 0.068
May 0.068
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
6/01/05 16.96
16.59
16.64
16.65
16.63
16.7
16.66
16.6
16.71
16.69
16.89
16.85
16.78
16.82
16.81
17
16.99
17
17.03
17
17.3
17.4
16.95
17.11
17.32
17.15
17.2
17.3
17.16
17.2
17.15
17.2
17.2
17.15
17.08
17.11
17.2
17.25
17.39
17.38
17.2
17.28
17.28
17.32
17.11
16.84
16.95
17.17
17.31
17.31
17.36
17.15
17.2
17.4
17.6
17.3
17.32
17.2
17.1
17.11
17.12
17.15
17.32
17.49
17.21
17.13
17.22
17.38
17.5
17.5
17.45
17.44
17.19
17.14
17.14
16.95
16.97
17
16.75
16.8
16.65
16.2
16.25
16.3
16.67
17
17.2
17.08
17.07
17.07
17.09
16.98
16.84
17
16.8
16.77
16.71
16.81
16.51
16.4
16.5
16.63
16.65
16.6
16.65
16.45
16.65
16.52
16.58
16.6
16.63
16.63
16.55
16.3
16.3
16.17
16.22
16.19
15.95
15.95
15.88
15.96
16
15.95
15.89
15.89
15.95
15.97
15.97
16
16.14
16.46
16.5
16.44
16.6
16.62
16.55
16.5
16.5
16.26
16.09
16.09
16.25
16.26
16.39
16.39
16.6
16.63
16.65
16.64
16.64
16.95
17.4
17.25
16.9
17.07
17
16.9
16.81
16.8
16.8
16.85
16.7
16.9
16.8
17
17.01
16.9
16.89
16.89
17.15
17.3
17.27
16.9
17.15
17.35
17.37
17.11
17.25
17.05
17.05
17.05
17
17
17.05
16.91
16.95
17.15
17
16.91
16.85
16.55
16.4
16.4
16.6
16.45
16.49
16.94
16.94
17.09
17.09
17.11
16.75
16.46
16.55
16.11
16.12
16.5
16.49
16.46
16.75
16.65
16.85
16.75
17.04
17.04
17.04
17.18
16.88
16.6
16.21
16.2
16.18
16.05
16.02
16.1
16
15.75
15.91
15.94
15.94
15.97
15.97
15.95
16.1
16.15
16.3
16.15
16.22
16.45
16.35
16.45
16.4
16.42
16.21
16.3
16.38
16.16
16.15
16.15
16.3
16.45
16.4
16.13
5/31/06 16.4
FUND SNAPSHOT
------------------------------------
Common Share Price $16.40
------------------------------------
Common Share
Net Asset Value $15.02
------------------------------------
Premium/(Discount) to NAV 9.19%
------------------------------------
Market Yield 4.98%
------------------------------------
Taxable-Equivalent Yield1 7.32%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $85,887
------------------------------------
Average Effective Maturity
on Securities (Years) 16.26
------------------------------------
Leverage-Adjusted Duration 8.22
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 11/15/01)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 3.45% 1.53%
------------------------------------
Since
Inception 7.93% 7.25%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
Tax Obligation/General 25.6%
------------------------------------
Tax Obligation/Limited 13.8%
------------------------------------
Health Care 12.0%
------------------------------------
U.S. Guaranteed 11.7%
------------------------------------
Water and Sewer 10.4%
------------------------------------
Housing/Single Family 6.5%
------------------------------------
Education and Civic
Organizations 6.0%
------------------------------------
Other 14.0%
------------------------------------
1 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 32%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
2 The Fund paid shareholders a capital gains distribution in December 2005 of
$0.0666 per share.
19
Report of
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
THE BOARD OF TRUSTEES AND SHAREHOLDERS
NUVEEN MARYLAND PREMIUM INCOME MUNICIPAL FUND
NUVEEN MARYLAND DIVIDEND ADVANTAGE MUNICIPAL FUND
NUVEEN MARYLAND DIVIDEND ADVANTAGE MUNICIPAL FUND 2
NUVEEN MARYLAND DIVIDEND ADVANTAGE MUNICIPAL FUND 3
NUVEEN VIRGINIA PREMIUM INCOME MUNICIPAL FUND
NUVEEN VIRGINIA DIVIDEND ADVANTAGE MUNICIPAL FUND
NUVEEN VIRGINIA DIVIDEND ADVANTAGE MUNICIPAL FUND 2
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Nuveen Maryland Premium Income Municipal Fund,
Nuveen Maryland Dividend Advantage Municipal Fund, Nuveen Maryland Dividend
Advantage Municipal Fund 2, Nuveen Maryland Dividend Advantage Municipal Fund 3,
Nuveen Virginia Premium Income Municipal Fund, Nuveen Virginia Dividend
Advantage Municipal Fund and Nuveen Virginia Dividend Advantage Municipal Fund 2
(the Funds) as of May 31, 2006, and the related statements of operations for the
year then ended, the statements of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of the
periods indicated therein. These financial statements and financial highlights
are the responsibility of the Funds' management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Funds' internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Funds' internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of May 31, 2006, by correspondence with the custodian and
brokers. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of
Nuveen Maryland Premium Income Municipal Fund, Nuveen Maryland Dividend
Advantage Municipal Fund, Nuveen Maryland Dividend Advantage Municipal Fund 2,
Nuveen Maryland Dividend Advantage Municipal Fund 3, Nuveen Virginia Premium
Income Municipal Fund, Nuveen Virginia Dividend Advantage Municipal Fund and
Nuveen Virginia Dividend Advantage Municipal Fund 2 at May 31, 2006, the results
of their operations for the year then ended, changes in their net assets for
each of the two years in the period then ended, and their financial highlights
for each of the periods indicated therein in conformity with U.S. generally
accepted accounting principles.
/s/ Ernst & Young LLP
Chicago, Illinois
July 14, 2006
20
Nuveen Maryland Premium Income Municipal Fund (NMY)
Portfolio of
INVESTMENTS May 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 1.4% (1.0% OF TOTAL INVESTMENTS)
$ 2,100 Baltimore, Maryland, Senior Lien Convention Center Hotel 9/16 at 100.00 AAA $ 2,218,314
Revenue Bonds, Series 2006A, 5.250%, 9/01/39 - XLCA Insured
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 2.0% (1.4% OF TOTAL INVESTMENTS)
3,095 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 3,151,669
Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 19.8% (13.3% OF TOTAL INVESTMENTS)
1,250 Frederick County, Maryland, Educational Facilities Revenue 9/16 at 100.00 BBB- 1,302,788
Bonds, Mount Saint Mary's College, Series 2006,
5.625%, 9/01/38
Frederick County, Maryland, Educational Facilities Revenue
Bonds, Mount St. Mary's College, Series 2001A:
200 5.750%, 9/01/25 3/10 at 101.00 BBB- 206,828
200 5.800%, 9/01/30 3/10 at 101.00 BBB- 206,502
1,000 Hartford County, Maryland, Economic Development Revenue 4/14 at 100.00 A+ 1,034,500
Bonds, Battelle Memorial Institute, Series 2004, 5.250%, 4/01/34
Maryland Economic Development Corporation, Utility
Infrastructure Revenue Bonds, University of Maryland - College
Park, Series 2001:
1,000 5.375%, 7/01/15 - AMBAC Insured 7/11 at 100.00 AAA 1,068,340
1,000 5.375%, 7/01/16 - AMBAC Insured 7/11 at 100.00 AAA 1,069,290
Maryland Health and Higher Educational Facilities Authority,
Revenue Bonds, Bullis School, Series 2000:
750 5.250%, 7/01/25 - FSA Insured 1/11 at 101.00 AAA 788,888
500 5.250%, 7/01/30 - FSA Insured 1/11 at 101.00 AAA 525,925
1,250 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A- 1,273,550
Revenue Bonds, Goucher College, Series 2004,
5.125%, 7/01/34
1,460 Maryland Health and Higher Educational Facilities Authority, 6/11 at 100.00 Baa1 1,508,720
Revenue Bonds, Maryland Institute College of Art, Series 2001,
5.625%, 6/01/36
1,500 Maryland Health and Higher Educational Facilities Authority, 7/07 at 102.00 AA 1,555,095
Revenue Refunding Bonds, Johns Hopkins University,
Series 1997, 5.625%, 7/01/27
9,445 Morgan State University, Maryland, Student Tuition and Fee No Opt. Call AAA 11,177,021
Revenue Refunding Bonds, Academic Fees and Auxiliary
Facilities, Series 1993, 6.100%, 7/01/20 - MBIA Insured
University of Maryland, Auxiliary Facility and Tuition Revenue
Bonds, Series 2003A:
5,645 5.000%, 4/01/15 4/13 at 100.00 AA 5,975,176
2,680 5.000%, 4/01/19 4/13 at 100.00 AA 2,813,544
------------------------------------------------------------------------------------------------------------------------------------
27,880 Total Education and Civic Organizations 30,506,167
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 22.0% (14.8% OF TOTAL INVESTMENTS)
1,525 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A2 1,594,205
Revenue Bonds, Calvert Memorial Hospital, Series 2004,
5.500%, 7/01/36
3,250 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 3,390,140
Revenue Bonds, Carroll County General Hospital, Series 2002,
5.800%, 7/01/32
1,665 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 AA 1,685,363
Revenue Bonds, Civista Medical Center, Series 2005,
5.000%, 7/01/37 - RAAI Insured
1,400 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 1,420,384
Revenue Bonds, Frederick Memorial Hospital, Series 2002,
5.125%, 7/01/35
1,500 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A+ 1,513,335
Revenue Bonds, Greater Baltimore Medical Center,
Series 2001, 5.000%, 7/01/34
21
Nuveen Maryland Premium Income Municipal Fund (NMY) (continued)
Portfolio of INVESTMENTS May 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE (continued)
$ 1,000 Maryland Health and Higher Educational Facilities Authority, 7/08 at 101.00 AAA $ 1,026,810
Revenue Bonds, Johns Hopkins Hospital, Howard County
General Hospital Acquisition, Series 1998, 5.000%, 7/01/19 -
MBIA Insured
2,000 Maryland Health and Higher Educational Facilities Authority, 6/09 at 101.00 A+ 2,080,660
Revenue Bonds, Kaiser Permanente System, Series 1998A,
5.375%, 7/01/15
3,800 Maryland Health and Higher Educational Facilities Authority, 7/13 at 100.00 Baa2 3,904,006
Revenue Bonds, Kennedy Krieger Institute, Series 2003,
5.500%, 7/01/33
1,540 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A 1,569,014
Revenue Bonds, LifeBridge Health System, Series 2004A,
5.125%, 7/01/34
1,750 Maryland Health and Higher Educational Facilities Authority, 8/14 at 100.00 BBB+ 1,817,935
Revenue Bonds, MedStar Health, Series 2004, 5.375%, 8/15/24
3,250 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 A3 3,406,455
Revenue Bonds, Union Hospital of Cecil County, Series 2002,
5.625%, 7/01/32
1,500 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 A+ 1,617,690
Revenue Bonds, University of Maryland Medical System,
Series 2002, 6.000%, 7/01/22
1,000 Maryland Health and Higher Educational Facilities Authority, 7/13 at 100.00 AAA 1,036,200
Revenue Bonds, University of Maryland Medical System,
Series 2004B, 5.000%, 7/01/24 - AMBAC Insured
Prince George's County, Maryland, Revenue Bonds, Dimensions
Health Corporation, Series 1994:
3,080 5.375%, 7/01/14 7/06 at 100.00 B3 2,783,612
6,000 5.300%, 7/01/24 7/06 at 100.00 B3 4,989,240
------------------------------------------------------------------------------------------------------------------------------------
34,260 Total Health Care 33,835,049
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 15.6% (10.5% OF TOTAL INVESTMENTS)
Howard County, Maryland, FHA-Insured Mortgage Revenue
Refunding Bonds, Normandy Woods III Apartments, Series 1996A:
700 6.000%, 7/01/17 7/06 at 102.00 AAA 714,686
2,000 6.100%, 7/01/25 7/06 at 102.00 AAA 2,041,760
1,450 Maryland Community Development Administration, FNMA 2/11 at 101.00 Aaa 1,522,181
Multifamily Development Revenue Bonds, Edgewater Village
Apartments, Series 2000B, 5.800%, 8/01/20 (Alternative
Minimum Tax)
2,500 Maryland Community Development Administration, Housing 1/09 at 101.00 Aa2 2,532,775
Revenue Bonds, Series 1999A, 5.350%, 7/01/41 (Alternative
Minimum Tax)
880 Maryland Community Development Administration, Housing 1/10 at 100.00 Aa2 914,320
Revenue Bonds, Series 1999B, 6.250%, 7/01/32 (Alternative
Minimum Tax)
1,000 Maryland Economic Development Corporation, Senior Lien 10/13 at 100.00 Ba2 962,440
Student Housing Revenue Bonds, University of Maryland -
Baltimore, Series 2003A, 5.625%, 10/01/23
1,000 Maryland Economic Development Corporation, Student Housing 6/09 at 102.00 Baa3 1,043,500
Revenue Bonds, Collegiate Housing Foundation - Salisbury
State University, Series 1999A, 6.000%, 6/01/19
1,145 Maryland Economic Development Corporation, Student Housing 6/16 at 100.00 AAA 1,179,064
Revenue Refunding Bonds, University of Maryland College Park
Projects, Series 2006, 5.000%, 6/01/33 - CIFG Insured
3,830 Montgomery County Housing Opportunities Commission, 7/08 at 101.00 Aaa 3,889,020
Maryland, FNMA/FHA-Insured Multifamily Housing Development
Bonds, Series 1998A, 5.200%, 7/01/30
360 Montgomery County Housing Opportunities Commission, 7/06 at 101.00 Aa2 366,138
Maryland, GNMA/FHA-Insured Multifamily Housing Revenue
Bonds, Series 1995A, 5.900%, 7/01/15
1,500 Montgomery County Housing Opportunities Commission, 7/06 at 102.00 Aaa 1,531,230
Maryland, Multifamily Housing Development Bonds,
Series 1996B, 5.900%, 7/01/26
2,000 Montgomery County Housing Opportunities Commission, 7/10 at 100.00 Aaa 2,096,400
Maryland, Multifamily Housing Development Bonds,
Series 2000A, 6.100%, 7/01/30
540 Prince George's County Housing Authority, Maryland, GNMA 9/09 at 102.00 AAA 564,538
Collateralized Mortgage Revenue Bonds, University Landing
Apartments, Series 1999, 6.100%, 3/20/41 (Alternative
Minimum Tax)
900 Prince George's County Housing Authority, Maryland, GNMA 11/06 at 100.00 AAA 900,531
Collateralized Mortgage Revenue Refunding Bonds, Foxglenn
Apartments, Series 1998A, 5.450%, 11/20/14 (Alternative
Minimum Tax)
22
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY (continued)
Prince George's County Housing Authority, Maryland, GNMA
Collateralized Mortgage Revenue Refunding Bonds, Overlook
Apartments, Series 1995A:
$ 2,000 5.700%, 12/20/15 6/06 at 102.00 AAA $ 2,042,060
1,670 5.750%, 12/20/19 6/06 at 102.00 AAA 1,702,047
------------------------------------------------------------------------------------------------------------------------------------
23,475 Total Housing/Multifamily 24,002,690
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 1.4% (0.9% OF TOTAL INVESTMENTS)
1,200 Maryland Community Development Administration, Department 9/15 at 100.00 Aa2 1,209,420
of Housing and Community Development, Residential Revenue
Bonds, Series 2006F, 4.900%, 9/01/26 (Alternative Minimum Tax)
600 Maryland Community Development Administration, Residential 9/15 at 100.00 Aa2 600,624
Revenue Bonds, Series 2006B, 4.750%, 9/01/25 (Alternative
Minimum Tax)
20 Prince George's County Housing Authority, Maryland, 8/10 at 100.00 AAA 20,636
FHLMC/FNMA/GNMA Collateralized Single Family Mortgage
Revenue Bonds, Series 2000A, 6.150%, 8/01/19 (Alternative
Minimum Tax)
325 Puerto Rico Housing Finance Authority, Mortgage-Backed 6/13 at 100.00 AAA 327,356
Securities Program Home Mortgage Revenue Bonds,
Series 2003A, 4.875%, 6/01/34 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
2,145 Total Housing/Single Family 2,158,036
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 1.8% (1.2% OF TOTAL INVESTMENTS)
1,000 Carroll County, Maryland, Revenue Refunding Bonds, EMA 1/09 at 101.00 AA 1,044,860
Obligated Group, Series 1999A, 5.625%, 1/01/25 -
RAAI Insured
1,645 Maryland Economic Development Corporation, Health and 4/11 at 102.00 N/R 1,775,860
Mental Hygiene Providers Revenue Bonds, Series 1996A,
7.625%, 4/01/21
------------------------------------------------------------------------------------------------------------------------------------
2,645 Total Long-Term Care 2,820,720
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 35.1% (23.6% OF TOTAL INVESTMENTS)
2,030 Anne Arundel County, Maryland, General Obligation Bonds, 4/14 at 100.00 AA+ 2,158,235
Series 2004, 5.000%, 4/01/16
Anne Arundel County, Maryland, General Obligation Bonds,
Series 2006:
1,310 5.000%, 3/01/21 3/16 at 100.00 AA+ 1,388,207
1,000 5.000%, 3/01/21 3/16 at 100.00 AA+ 1,059,700
685 Anne Arundel County, Maryland, Water and Sewer Revenue 3/16 at 100.00 AA+ 733,642
Bonds, Series 2006, 5.000%, 3/01/17
Baltimore County, Maryland, Metropolitan District Special
Assessment Bonds, 67th Issue:
2,500 5.000%, 6/01/25 6/11 at 101.00 AAA 2,586,325
3,500 5.000%, 6/01/26 6/11 at 101.00 AAA 3,633,455
1,000 Baltimore, Maryland, Consolidated General Obligation Public No Opt. Call A+ 1,076,500
Improvement Bonds, Series 1989B, 7.150%, 10/15/08
1,540 Baltimore, Maryland, General Obligation Consolidated Public 10/14 at 100.00 AAA 1,616,707
Improvement Bonds, Series 2004A, 5.000%, 10/15/22 -
AMBAC Insured
700 Carroll County, Maryland, Consolidated Public Improvement 12/15 at 100.00 AA 750,127
Bonds, Series 2005A, 5.000%, 12/01/16
Charles County, Maryland, Consolidated General Obligation
Public Improvement Bonds, Series 2006:
2,185 5.000%, 3/01/14 No Opt. Call AA 2,344,002
820 5.000%, 3/01/16 No Opt. Call AA 882,320
1,500 Frederick County, Maryland, General Obligation Public No Opt. Call AA 1,622,820
Facilities Bonds, Series 2006, 5.000%, 11/01/20
615 Frederick County, Maryland, Special Obligation Bonds, 7/10 at 102.00 AA 659,040
Villages of Lake Linganore Community Development Authority,
Series 2001A, 5.700%, 7/01/29 - RAAI Insured
Howard County, Maryland, Consolidated Public Improvement
Bonds, Series 2004B:
735 5.000%, 8/15/16 2/14 at 100.00 AAA 781,930
1,625 5.000%, 8/15/17 2/14 at 100.00 AAA 1,722,126
1,180 5.000%, 8/15/19 2/14 at 100.00 AAA 1,245,101
1,725 Howard County, Maryland, Metropolitan District Refunding 2/12 at 100.00 AAA 1,838,902
Bonds, Series 2002A, 5.250%, 8/15/18
1,190 Maryland National Capital Park Planning Commission, Prince 1/14 at 100.00 AA 1,258,972
George's County, General Obligation Bonds, Park Acquisition
and Development, Series 2004EE-2, 5.000%, 1/15/17
23
Nuveen Maryland Premium Income Municipal Fund (NMY) (continued)
Portfolio of INVESTMENTS May 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 2,500 Maryland, General Obligation Bonds, Series 2005, 5.000%, 8/01/17 8/15 at 100.00 AAA $ 2,672,900
3,520 Montgomery County, Maryland, Consolidated General Obligation No Opt. Call AAA 3,792,730
Public Improvement Bonds, Series 2005A, 5.000%, 7/01/15
Montgomery County, Maryland, Consolidated General Obligation
Public Improvement Refunding Bonds, Series 2001:
1,750 5.250%, 10/01/13 10/11 at 101.00 AAA 1,883,490
2,000 5.250%, 10/01/18 10/11 at 101.00 AAA 2,139,060
925 Northern Mariana Islands, General Obligation Bonds, 6/10 at 100.00 A 970,001
Series 2000A, 6.000%, 6/01/20 - ACA Insured
1,000 Prince George's County, Maryland, General Obligation 12/11 at 101.00 AAA 1,073,670
Consolidated Public Improvement Bonds, Series 2001,
5.250%, 12/01/20 - FGIC Insured
2,000 Prince George's County, Maryland, General Obligation 9/12 at 101.00 AA 1,954,380
Consolidated Public Improvement Bonds, Series 2002,
4.100%, 9/15/19
5,770 Prince George's County, Maryland, General Obligation 10/13 at 100.00 AA 6,083,369
Consolidated Public Improvement Bonds, Series 2003A,
5.000%, 10/01/18
Washington Suburban Sanitary District, Montgomery and
Prince George's Counties, Maryland, Sewerage Disposal
Bonds, Series 2005:
2,000 5.000%, 6/01/16 6/15 at 100.00 AAA 2,146,320
1,235 5.000%, 6/01/23 6/15 at 100.00 AAA 1,303,197
1,235 5.000%, 6/01/24 6/15 at 100.00 AAA 1,300,369
1,235 5.000%, 6/01/25 6/15 at 100.00 AAA 1,299,430
------------------------------------------------------------------------------------------------------------------------------------
51,010 Total Tax Obligation/General 53,977,027
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 21.4% (14.4% OF TOTAL INVESTMENTS)
Baltimore Board of School Commissioners, Maryland, Revenue
Bonds, City Public School System, Series 2003A:
1,500 5.000%, 5/01/16 5/13 at 100.00 AA+ 1,588,320
1,000 5.000%, 5/01/18 5/13 at 100.00 AA+ 1,052,150
2,900 Baltimore, Maryland, Project Revenue Bonds, Series 2006, 7/16 at 100.00 AAA 3,015,18
5.000%, 7/01/31 - AMBAC Insured
300 Baltimore, Maryland, Special Obligation Bonds, North Locust 9/15 at 101.00 N/R 302,664
Point Project, Series 2005, 5.500%, 9/01/34
900 Hyattsville, Maryland, Special Obligation Bonds, University 7/14 at 102.00 N/R 934,479
Town Center Project, Series 2004, 5.750%, 7/01/34
Maryland Department of Transportation, Certificates of
Participation, Mass Transit Administration Project, Series 2000:
875 5.500%, 10/15/19 (Alternative Minimum Tax) 10/10 at 101.00 AA+ 924,919
925 5.500%, 10/15/20 (Alternative Minimum Tax) 10/10 at 101.00 AA+ 977,771
4,250 Maryland Department of Transportation, Consolidated No Opt. Call AA 4,725,363
Transportation Revenue Bonds, Series 2002, 5.500%, 2/01/16
2,000 Maryland Department of Transportation, Consolidated No Opt. Call AA 2,139,060
Transportation Revenue Bonds, Series 2004, 5.000%, 5/01/13
1,875 Maryland Economic Development Corporation, Lease Revenue 6/12 at 100.50 AA+ 2,019,225
Bonds, Department of Transportation Headquarters Building,
Series 2002, 5.375%, 6/01/19
1,700 Maryland Stadium Authority, Lease Revenue Bonds, 6/13 at 100.00 AA+ 1,761,557
Montgomery County Conference Center Facilities,
Series 2003, 5.000%, 6/15/24
2,455 Maryland Stadium Authority, Lease Revenue Bonds, Sports 9/06 at 101.00 AAA 2,483,503
Facilities, Series 1996, 5.750%, 3/01/18 - AMBAC Insured
1,365 Montgomery County, Maryland, Lease Revenue Bonds, College 5/15 at 100.00 A1 1,429,947
of Arts Center Project, Series 2005A, 5.000%, 5/01/19
1,000 Montgomery County, Maryland, Lease Revenue Bonds, 6/12 at 100.00 AA 1,037,480
Metrorail Garage, Series 2002, 5.000%, 6/01/21
675 Montgomery County, Maryland, Special Obligation Bonds, 7/12 at 101.00 AA 712,550
West Germantown Development District, Senior Series 2002A,
5.500%, 7/01/27 - RAAI Insured
24
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 635 New Baltimore City Board of School Commissioners, Maryland, 11/10 at 100.00 AA+ $ 668,103
School System Revenue Bonds, Series 2000, 5.125%, 11/01/15
2,100 Puerto Rico Municipal Finance Agency, Series 2002A, 8/12 at 100.00 AAA 2,232,636
5.250%, 8/01/21 - FSA Insured
1,000 Puerto Rico, Highway Revenue Bonds, Highway and 7/16 at 100.00 BBB+ 1,058,670
Transportation Authority, Series 1996Y, 5.500%, 7/01/36
1,500 Puerto Rico, Highway Revenue Bonds, Highway and No Opt. Call AAA 1,679,415
Transportation Authority, Series 2003AA, 5.500%, 7/01/19 -
MBIA Insured
2,000 Virgin Islands Public Finance Authority, Gross Receipts Taxes 10/10 at 101.00 BBB 2,191,240
Loan Note, Series 1999A, 6.500%, 10/01/24
------------------------------------------------------------------------------------------------------------------------------------
30,955 Total Tax Obligation/Limited 32,934,240
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 2.5% (1.7% OF TOTAL INVESTMENTS)
1,060 Baltimore, Maryland, Revenue Refunding Bonds, Parking No Opt. Call AAA 1,153,863
System Facilities, Series 1998A, 5.250%, 7/01/17 - FGIC Insured
Maryland Health and Higher Educational Facilities Authority,
Parking Facilities Revenue Bonds, Johns Hopkins Medical
Institution, Series 2004B:
355 5.000%, 7/01/13 - AMBAC Insured No Opt. Call AAA 378,387
380 5.000%, 7/01/14 - AMBAC Insured No Opt. Call AAA 405,878
2,075 Puerto Rico Ports Authority, Special Facilities Revenue Bonds, 6/06 at 102.00 CCC 1,884,017
American Airlines Inc., Series 1996A, 6.250%, 6/01/26
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
3,870 Total Transportation 3,822,145
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 18.6% (12.5% OF TOTAL INVESTMENTS) (4)
2,500 Baltimore County, Maryland, Consolidated General Obligation 8/12 at 100.00 AAA 2,662,275
Public Improvement Bonds, Series 2002, 5.000%, 8/01/18
(Pre-refunded 8/01/12)
2,000 Baltimore, Maryland, Revenue Refunding Bonds, Water Projects, No Opt. Call AAA 2,109,280
Series 1998A, 5.000%, 7/01/28 - FGIC Insured (ETM)
2,000 Baltimore, Maryland, Revenue Refunding Bonds, Water System No Opt. Call AAA 2,149,800
Projects, Series 1994A, 5.000%, 7/01/24 - FGIC Insured (ETM)
3,000 Frederick County, Maryland, General Obligation Public 7/09 at 101.00 AAA 3,166,860
Facilities Bonds, Series 1999, 5.250%, 7/01/18
(Pre-refunded 7/01/09)
Frederick County, Maryland, General Obligation Public Facilities
Bonds, Series 2002:
1,000 5.000%, 11/01/21 (Pre-refunded 11/01/12) 11/12 at 101.00 AA (4) 1,073,340
1,000 5.000%, 11/01/22 (Pre-refunded 11/01/12) 11/12 at 101.00 AA (4) 1,073,340
2,550 Gaithersburg, Maryland, Hospital Facilities Revenue Refunding No Opt. Call AAA 2,804,108
and Improvement Bonds, Shady Grove Adventist Hospital,
Series 1995, 6.500%, 9/01/12 - FSA Insured (ETM)
575 Howard County, Maryland, Consolidated Public Improvement 2/12 at 100.00 AAA 617,832
Refunding Bonds, Series 2002A, 5.250%, 8/15/18
(Pre-refunded 2/15/12)
1,000 Howard County, Maryland, Consolidated Public Improvement 8/12 at 100.00 AAA 1,065,160
Refunding Bonds, Series 2003A, 5.000%, 8/15/22
(Pre-refunded 8/15/12)
2,250 Maryland Economic Development Corporation, Student Housing 6/09 at 102.00 Baa2 (4) 2,415,825
Revenue Bonds, Collegiate Housing Foundation - College Park,
Series 1999A, 5.750%, 6/01/24 (Pre-refunded 6/01/09)
3,200 Maryland Health and Higher Educational Facilities Authority, No Opt. Call AAA 3,411,776
Revenue Bonds, Helix Health, Series 1997, 5.000%, 7/01/27 -
AMBAC Insured (ETM)
3,125 Maryland Health and Higher Educational Facilities Authority, 7/06 at 100.00 Aaa 3,196,188
Revenue Bonds, Howard County General Hospital, Series 1993,
5.500%, 7/01/25 (ETM)
760 Maryland Health and Higher Educational Facilities Authority, 7/10 at 101.00 A3 (4) 852,849
Revenue Bonds, University of Maryland Medical System,
Series 2000, 6.750%, 7/01/30 (Pre-refunded 7/01/10)
240 Maryland Transportation Authority, Revenue Refunding Bonds, No Opt. Call AAA 273,895
Transportation Facilities Projects, First Series 1978,
6.800%, 7/01/16 (ETM)
1,000 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 1,074,730
Obligation Bonds, Series 2000A, 5.500%, 10/01/20
25
Nuveen Maryland Premium Income Municipal Fund (NMY) (continued)
Portfolio of INVESTMENTS May 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (4) (continued)
$ 635 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA $ 661,924
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20
(Pre-refunded 7/01/10)
------------------------------------------------------------------------------------------------------------------------------------
26,835 Total U.S. Guaranteed 28,609,182
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 5.9% (3.9% OF TOTAL INVESTMENTS)
6,500 Calvert County, Maryland, Pollution Control Revenue Refunding 7/06 at 100.00 A2 6,515,860
Bonds, Baltimore Gas and Electric Company, Series 1993,
5.550%, 7/15/14 (Pre-refunded 7/15/06)
2,500 Maryland Energy Financing Administration, Revenue Bonds, 9/07 at 100.00 N/R 2,525,550
AES Warrior Run Project, Series 1995, 7.400%, 9/01/19
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
9,000 Total Utilities 9,041,410
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 1.4% (0.8% OF TOTAL INVESTMENTS)
1,045 Baltimore, Maryland, Revenue Refunding Bonds, Water System No Opt. Call AAA 1,123,270
Projects, Series 1994A, 5.000%, 7/01/24 - FGIC Insured
860 Maryland Water Quality Financing Administration, Revolving No Opt. Call AAA 926,444
Loan Fund Revenue Bonds, Series 2005A, 5.000%, 9/01/15
------------------------------------------------------------------------------------------------------------------------------------
1,905 Total Water and Sewer 2,049,714
------------------------------------------------------------------------------------------------------------------------------------
$ 219,175 Total Investments (cost $223,010,894) - 148.9% 229,126,363
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.5% 3,807,494
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (51.4)% (79,100,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 153,833,857
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments
are based on net assets applicable to Common shares
unless otherwise noted.
(2) Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates
(month and year) and prices of the earliest optional
call or redemption. There may be other call provisions
at varying prices at later dates. Certain
mortgage-backed securities may be subject to periodic
principal paydowns.
(3) Ratings (not covered by the report of independent
registered public accounting firm): Using the higher of
Standard & Poor's or Moody's rating. Ratings below BBB
by Standard & Poor's Group or Baa by Moody's Investor
Service, Inc. are considered to be below investment
grade.
(4) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which
ensure the timely payment of principal and interest.
Such investments are normally considered to be
equivalent to AAA rated securities.
N/R Not rated.
(ETM) Escrowed to maturity.
See accompanying notes to financial statements.
26
Nuveen Maryland Dividend Advantage Municipal Fund (NFM)
Portfolio of
INVESTMENTS May 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 2.6% (1.7% OF TOTAL INVESTMENTS)
$ 205 Baltimore, Maryland, Pollution Control Revenue Bonds, General No Opt. Call B $ 197,659
Motors Corporation, Series 1993, 5.350%, 4/01/08
1,000 Baltimore, Maryland, Senior Lien Convention Center Hotel 9/16 at 100.00 AAA 1,056,340
Revenue Bonds, Series 2006A, 5.250%, 9/01/39 - XLCA Insured
310 Baltimore, Maryland, Subordinate Lien Convention Center 9/16 at 100.00 Ba1 323,904
Hotel Revenue Bonds, Series 2006B, 5.875%, 9/01/39
------------------------------------------------------------------------------------------------------------------------------------
1,515 Total Consumer Discretionary 1,577,903
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 2.6% (1.7% OF TOTAL INVESTMENTS)
1,545 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 1,573,289
Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 13.3% (8.9% OF TOTAL INVESTMENTS)
Frederick County, Maryland, Educational Facilities Revenue
Bonds, Mount St. Mary's College, Series 2001A:
465 5.700%, 9/01/20 3/10 at 101.00 BBB- 481,531
500 5.750%, 9/01/25 3/10 at 101.00 BBB- 517,070
645 Hartford County, Maryland, Economic Development Revenue 4/14 at 100.00 A+ 667,253
Bonds, Battelle Memorial Institute, Series 2004, 5.250%, 4/01/34
1,000 Maryland Economic Development Corporation, Utility 7/11 at 100.00 AAA 1,044,850
Infrastructure Revenue Bonds, University of Maryland -
College Park, Series 2001, 5.000%, 7/01/19 - AMBAC Insured
1,500 Maryland Health and Higher Educational Facilities Authority, 7/08 at 102.00 BBB- 1,549,395
Educational Facilities Leasehold Mortgage Revenue Bonds,
McLean School, Series 2001, 6.000%, 7/01/31
500 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A- 509,420
Revenue Bonds, Goucher College, Series 2004, 5.125%, 7/01/34
625 Maryland Health and Higher Educational Facilities Authority, 6/11 at 100.00 Baa1 642,706
Revenue Bonds, Maryland Institute College of Art, Series 2001,
5.500%, 6/01/32
400 Maryland Industrial Development Financing Authority, Revenue 5/15 at 100.00 N/R 423,604
Bonds, Our Lady of Good Counsel High School, Series 2005A,
6.000%, 5/01/35
Puerto Rico Industrial, Tourist, Educational, Medical and
Environmental Control Facilities Financing Authority, Higher
Education Revenue Bonds, Ana G. Mendez University System,
Series 1999:
215 5.375%, 2/01/19 2/09 at 101.00 BBB- 219,199
410 5.375%, 2/01/29 2/09 at 101.00 BBB- 414,768
University of Maryland, Auxiliary Facility and Tuition Revenue
Bonds, Series 2003A:
1,000 5.000%, 4/01/15 4/13 at 100.00 AA 1,058,490
500 5.000%, 4/01/19 4/13 at 100.00 AA 524,915
------------------------------------------------------------------------------------------------------------------------------------
7,760 Total Education and Civic Organizations 8,053,201
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 25.4% (17.0% OF TOTAL INVESTMENTS)
1,000 Maryland Health and Higher Educational Facilities Authority, 7/08 at 101.00 AAA 1,029,420
Revenue Bonds, Anne Arundel Medical Center, Series 1998,
5.125%, 7/01/28 - FSA Insured
1,000 Maryland Health and Higher Educational Facilities Authority, 7/08 at 102.00 A2 1,008,770
Revenue Bonds, Calvert Memorial Hospital, Series 1998,
5.000%, 7/01/28
1,000 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 1,059,370
Revenue Bonds, Carroll County General Hospital, Series 2002,
6.000%, 7/01/26
750 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 AA 759,173
Revenue Bonds, Civista Medical Center, Series 2005,
5.000%, 7/01/37 - RAAI Insured
27
Nuveen Maryland Dividend Advantage Municipal Fund (NFM) (continued)
Portfolio of INVESTMENTS May 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE (continued)
$ 500 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 $ 507,280
Revenue Bonds, Frederick Memorial Hospital, Series 2002,
5.125%, 7/01/35
650 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A+ 655,779
Revenue Bonds, Greater Baltimore Medical Center,
Series 2001, 5.000%, 7/01/34
1,250 Maryland Health and Higher Educational Facilities Authority, 5/11 at 100.00 AA- 1,279,963
Revenue Bonds, Johns Hopkins Hospital, Series 2001,
5.000%, 5/15/21
2,225 Maryland Health and Higher Educational Facilities Authority, 6/09 at 101.00 A+ 2,314,734
Revenue Bonds, Kaiser Permanente System, Series 1998A,
5.375%, 7/01/15
1,000 Maryland Health and Higher Educational Facilities Authority, 7/13 at 100.00 Baa2 1,027,370
Revenue Bonds, Kennedy Krieger Institute, Series 2003,
5.500%, 7/01/33
585 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A 596,021
Revenue Bonds, LifeBridge Health System, Series 2004A,
5.125%, 7/01/34
700 Maryland Health and Higher Educational Facilities Authority, 8/14 at 100.00 BBB+ 727,174
Revenue Bonds, MedStar Health, Series 2004, 5.375%, 8/15/24
1,000 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A- 1,027,480
Revenue Bonds, Mercy Medical Center, Series 2001,
5.625%, 7/01/31
2,000 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A+ 2,044,600
Revenue Bonds, University of Maryland Medical System,
Series 2001, 5.250%, 7/01/28
570 Maryland Health and Higher Educational Facilities Authority, 7/08 at 101.00 A3 576,452
Revenue Refunding Bonds, Union Hospital of Cecil County,
Series 1998, 5.100%, 7/01/22
Prince George's County, Maryland, Revenue Bonds, Dimensions
Health Corporation, Series 1994:
290 5.375%, 7/01/14 7/06 at 100.00 B3 262,093
700 5.300%, 7/01/24 7/06 at 100.00 B3 582,078
------------------------------------------------------------------------------------------------------------------------------------
15,220 Total Health Care 15,457,757
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 19.1% (12.8% OF TOTAL INVESTMENTS)
750 Baltimore County, Maryland, GNMA Collateralized Revenue 10/08 at 102.00 AAA 762,720
Refunding Bonds, Cross Creek Apartments, Series 1998A,
5.250%, 10/20/33
2,000 Maryland Community Development Administration, Housing 7/08 at 101.00 Aa2 2,041,560
Revenue Bonds, Series 1998A, 5.625%, 1/01/40 (Alternative
Minimum Tax)
10 Maryland Community Development Administration, Insured 5/11 at 100.00 Aa2 10,243
Multifamily Housing Mortgage Loan Revenue Bonds,
Series 2001B, 5.350%, 5/15/32 (Alternative Minimum Tax)
1,000 Maryland Community Development Administration, Multifamily 12/11 at 100.00 Aaa 1,025,840
Housing Revenue Bonds, Princess Anne Apartments,
Series 2001D, 5.450%, 12/15/33 (Alternative Minimum Tax)
Maryland Economic Development Corporation, Senior Lien Student
Housing Revenue Bonds, University of Maryland - Baltimore,
Series 2003A:
215 4.250%, 10/01/10 No Opt. Call B1 204,947
50 5.000%, 10/01/15 10/13 at 100.00 B1 47,403
210 5.625%, 10/01/23 10/13 at 100.00 Ba2 202,112
1,800 Maryland Economic Development Corporation, Student Housing 7/11 at 101.00 A 1,910,052
Revenue Bonds, Sheppard Pratt University Village,
Series 2001, 6.000%, 7/01/33 - ACA Insured
475 Maryland Economic Development Corporation, Student Housing 6/16 at 100.00 AAA 489,131
Revenue Refunding Bonds, University of Maryland College
Park Projects, Series 2006, 5.000%, 6/01/33 - CIFG Insured
750 Montgomery County Housing Opportunities Commission, 7/08 at 101.00 Aaa 761,377
Maryland, FNMA/FHA-Insured Multifamily Housing
Development Bonds, Series 1998A, 5.250%, 7/01/29
(Alternative Minimum Tax)
2,000 Montgomery County Housing Opportunities Commission, 7/10 at 100.00 Aaa 2,079,540
Maryland, Multifamily Housing Development Bonds,
Series 2000B, 6.200%, 7/01/30 (Alternative Minimum Tax)
2,000 Montgomery County Housing Opportunities Commission, 7/11 at 100.00 Aaa 2,053,280
Maryland, Multifamily Housing Development Bonds,
Series 2001A, 5.600%, 7/01/42 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
11,260 Total Housing/Multifamily 11,588,205
------------------------------------------------------------------------------------------------------------------------------------
28
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 4.3% (2.9% OF TOTAL INVESTMENTS)
$ 300 Maryland Community Development Administration, Department 9/15 at 100.00 Aa2 $ 302,355
of Housing and Community Development, Residential Revenue
Bonds, Series 2006F, 4.900%, 9/01/26 (Alternative Minimum Tax)
45 Maryland Community Development Administration, Residential 9/09 at 100.00 Aa2 45,763
Revenue Bonds, Series 1999E, 5.700%, 9/01/17
550 Maryland Community Development Administration, Residential 9/10 at 100.00 Aa2 567,864
Revenue Bonds, Series 2001B, 5.450%, 9/01/32 (Alternative
Minimum Tax)
1,000 Maryland Community Development Administration, Residential 3/11 at 100.00 Aa2 1,029,130
Revenue Bonds, Series 2001F, 5.600%, 9/01/28 (Alternative
Minimum Tax)
600 Maryland Community Development Administration, Residential 9/15 at 100.00 Aa2 600,624
Revenue Bonds, Series 2006B, 4.750%, 9/01/25 (Alternative
Minimum Tax)
75 Maryland Community Development Administration, Single 10/10 at 100.00 Aa2 75,230
Family Program Bonds, First Series 2001, 5.000%, 4/01/17
------------------------------------------------------------------------------------------------------------------------------------
2,570 Total Housing/Single Family 2,620,966
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 1.7% (1.1% OF TOTAL INVESTMENTS)
1,000 Northeast Maryland Waste Disposal Authority, Baltimore, 1/09 at 101.00 BBB 1,015,430
Resource Recovery Revenue Bonds, RESCO Retrofit Project,
Series 1998, 4.750%, 1/01/12 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 0.8% (0.5% OF TOTAL INVESTMENTS)
500 Maryland Health and Higher Educational Facilities Authority, 4/11 at 101.00 N/R 485,380
Revenue Bonds, Collington Episcopal Life Care Community
Inc., Series 2001A, 6.750%, 4/01/23
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 36.1% (24.2% OF TOTAL INVESTMENTS)
Anne Arundel County, Maryland, General Obligation Bonds,
Series 2006:
730 5.000%, 3/01/21 3/16 at 100.00 AA+ 773,581
565 5.000%, 3/01/21 3/16 at 100.00 AA+ 598,731
3,500 Baltimore County, Maryland, Metropolitan District Special 6/11 at 101.00 AAA 3,630,267
Assessment Bonds, 67th Issue, 5.000%, 6/01/27
300 Carroll County, Maryland, Consolidated Public Improvement 12/15 at 100.00 AA 321,483
Bonds, Series 2005A, 5.000%, 12/01/16
500 Frederick County, Maryland, General Obligation Public Facilities No Opt. Call AA 540,940
Bonds, Series 2006, 5.000%, 11/01/20
Frederick, Maryland, General Obligation Bonds, Series 2005:
600 5.000%, 8/01/16 - MBIA Insured 8/15 at 100.00 AAA 641,970
500 5.000%, 8/01/17 - MBIA Insured 8/15 at 100.00 AAA 532,615
1,360 Howard County, Maryland, Consolidated Public Improvement 2/09 at 101.00 AAA 1,377,884
Bonds, Series 2001A, 4.750%, 2/15/21
1,000 Maryland National Capital Park Planning Commission, 1/14 at 100.00 AA 1,057,960
Prince George's County, General Obligation Bonds, Park
Acquisition and Development, Series 2004EE-2,
5.000%, 1/15/17
1,000 Maryland, General Obligation Bonds, Series 2005, 8/15 at 100.00 AAA 1,069,160
5.000%, 8/01/17
1,360 Montgomery County, Maryland, Consolidated General Obligation No Opt. Call AAA 1,465,373
Public Improvement Bonds, Series 2005A, 5.000%, 7/01/15
430 Northern Mariana Islands, General Obligation Bonds, 6/10 at 100.00 A 450,919
Series 2000A, 6.000%, 6/01/20 - ACA Insured
740 Ocean City, Maryland, General Obligation Bonds, Series 2001, 3/11 at 101.00 AAA 766,847
4.875%, 3/01/19 - FGIC Insured
1,500 Prince George's County, Maryland, General Obligation 12/11 at 101.00 AAA 1,610,505
Consolidated Public Improvement Bonds, Series 2001,
5.250%, 12/01/20 - FGIC Insured
1,000 Prince George's County, Maryland, General Obligation 10/13 at 100.00 AA 1,054,640
Consolidated Public Improvement Bonds, Series 2003A,
5.000%, 10/01/17
Washington Suburban Sanitary District, Montgomery and
Prince George's Counties, Maryland, General Obligation
Construction Bonds, Series 2001:
895 5.000%, 6/01/22 6/11 at 100.00 AAA 928,831
935 5.000%, 6/01/23 6/11 at 100.00 AAA 969,576
985 5.000%, 6/01/24 6/11 at 100.00 AAA 1,020,293
1,035 5.000%, 6/01/25 6/11 at 100.00 AAA 1,070,718
29
Nuveen Maryland Dividend Advantage Municipal Fund (NFM) (continued)
Portfolio of INVESTMENTS May 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 700 Washington Suburban Sanitary District, Montgomery and 6/15 at 100.00 AAA $ 751,212
Prince George's Counties, Maryland, Sewerage Disposal
Bonds, Series 2005, 5.000%, 6/01/16
1,290 Washington Suburban Sanitary District, Montgomery and 6/11 at 100.00 AAA 1,318,483
Prince George's Counties, Maryland, Water Supply Bonds,
Series 2001, 4.750%, 6/01/20
------------------------------------------------------------------------------------------------------------------------------------
20,925 Total Tax Obligation/General 21,951,988
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 19.3% (12.9% OF TOTAL INVESTMENTS)
625 Annapolis, Maryland, Special Obligation Bonds, Park Place 1/15 at 101.00 N/R 630,331
Project, Series 2005A, 5.350%, 7/01/34
675 Anne Arundel County, Maryland, Tax Increment Financing No Opt. Call N/R 684,329
Revenue Bonds, Parole Town Center Project, Series 2002,
5.000%, 7/01/12
500 Baltimore Board of School Commissioners, Maryland, Revenue 5/13 at 100.00 AA+ 526,075
Bonds, City Public School System, Series 2003A,
5.000%, 5/01/18
500 Baltimore, Maryland, Project Revenue Bonds, Series 2006, 7/16 at 100.00 AAA 519,860
5.000%, 7/01/31 - AMBAC Insured
350 Hyattsville, Maryland, Special Obligation Bonds, University 7/14 at 102.00 N/R 363,409
Town Center Project, Series 2004, 5.750%, 7/01/34
1,500 Maryland Department of Transportation, Consolidated No Opt. Call AA 1,667,775
Transportation Revenue Bonds, Series 2002, 5.500%, 2/01/16
1,000 Maryland Department of Transportation, Consolidated No Opt. Call AA 1,069,530
Transportation Revenue Bonds, Series 2004, 5.000%, 5/01/13
1,405 Maryland Economic Development Corporation, Lease Revenue 6/12 at 100.50 AA+ 1,513,073
Bonds, Department of Transportation Headquarters Building,
Series 2002, 5.375%, 6/01/19
370 Maryland Economic Development Corporation, Lease Revenue 9/12 at 100.00 AA+ 393,055
Bonds, Montgomery County Town Square Parking Garage,
Series 2002A, 5.000%, 9/15/13
615 Montgomery County, Maryland, Lease Revenue Bonds, College 5/15 at 100.00 A1 641,949
of Arts Center Project, Series 2005A, 5.000%, 5/01/20
740 Prince George's County, Maryland, Lease Revenue Bonds, 6/13 at 100.00 AAA 784,992
Upper Marlboro Justice Center, Series 2003A, 5.000%, 6/30/14 -
MBIA Insured
270 Prince George's County, Maryland, Special Obligation Bonds, 7/15 at 100.00 N/R 268,604
National Harbor Project, Series 2005, 5.200%, 7/01/34
450 Prince George's County, Maryland, Special Tax District Bonds, 7/13 at 100.00 N/R 450,113
Victoria Falls Project, Series 2005, 5.250%, 7/01/35
700 Puerto Rico, Highway Revenue Bonds, Highway and No Opt. Call AAA 783,727
Transportation Authority, Series 2003AA, 5.500%, 7/01/19 -
MBIA Insured
1,290 Virgin Islands Public Finance Authority, Gross Receipts Taxes 10/10 at 101.00 BBB 1,414,924
Loan Note, Series 1999A, 6.375%, 10/01/19
------------------------------------------------------------------------------------------------------------------------------------
10,990 Total Tax Obligation/Limited 11,711,746
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 1.6% (1.1% OF TOTAL INVESTMENTS)
650 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 AAA 665,931
Parking Facilities Revenue Bonds, Johns Hopkins Hospital,
Series 2001, 5.000%, 7/01/27 - AMBAC Insured
Maryland Health and Higher Educational Facilities Authority,
Parking Facilities Revenue Bonds, Johns Hopkins Medical
Institution, Series 2004B:
150 5.000%, 7/01/13 - AMBAC Insured No Opt. Call AAA 159,882
135 5.000%, 7/01/14 - AMBAC Insured No Opt. Call AAA 144,194
------------------------------------------------------------------------------------------------------------------------------------
935 Total Transportation 970,007
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 20.3% (13.6% OF TOTAL INVESTMENTS) (4)
Anne Arundel County, Maryland, Various Purpose General
Obligation Bonds, Series 2001:
580 4.800%, 2/15/18 (Pre-refunded 2/15/11) 2/11 at 101.00 AA+ (4) 612,045
500 5.000%, 2/15/28 (Pre-refunded 2/15/11) 2/11 at 101.00 AA+ (4) 531,905
1,500 Baltimore County, Maryland, Consolidated General Obligation 8/12 at 100.00 AAA 1,597,365
Public Improvement Bonds, Series 2002, 5.000%, 8/01/18
(Pre-refunded 8/01/12)
30
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (4) (continued)
$ 1,015 Baltimore, Maryland, Revenue Refunding Bonds, Water No Opt. Call AAA $ 1,070,460
Projects, Series 1998A, 5.000%, 7/01/28 - FGIC Insured (ETM)
1,000 Frederick County, Maryland, General Obligation Public Facilities 11/12 at 101.00 AA (4) 1,073,340
Bonds, Series 2002, 5.000%, 11/01/22 (Pre-refunded 11/01/12)
500 Howard County, Maryland, Consolidated Public Improvement 8/12 at 100.00 AAA 532,580
Refunding Bonds, Series 2003A, 5.000%, 8/15/15
(Pre-refunded 8/15/12)
895 Maryland Transportation Authority, Revenue Refunding Bonds, No Opt. Call AAA 1,021,401
Transportation Facilities Projects, First Series 1978,
6.800%, 7/01/16 (ETM)
Puerto Rico Infrastructure Financing Authority, Special Obligation
Bonds, Series 2000A:
2,300 5.500%, 10/01/32 10/10 at 101.00 AAA 2,453,824
1,700 5.500%, 10/01/40 10/10 at 101.00 AAA 1,812,999
1,590 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 1,657,416
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20
(Pre-refunded 7/01/10)
------------------------------------------------------------------------------------------------------------------------------------
11,580 Total U.S. Guaranteed 12,363,335
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 1.7% (1.1% OF TOTAL INVESTMENTS)
1,000 Maryland Energy Financing Administration, Revenue Bonds, 9/07 at 100.00 N/R 1,010,220
AES Warrior Run Project, Series 1995, 7.400%, 9/01/19
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 0.6% (0.5% OF TOTAL INVESTMENTS)
355 Maryland Water Quality Financing Administration, Revolving No Opt. Call AAA 382,427
Loan Fund Revenue Bonds, Series 2005A, 5.000%, 9/01/15
------------------------------------------------------------------------------------------------------------------------------------
$ 87,155 Total Investments (cost $88,532,004) - 149.4% 90,761,854
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 3.3% 2,000,092
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (52.7)% (32,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 60,761,946
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments
are based on net assets applicable to Common shares
unless otherwise noted.
(2) Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates
(month and year) and prices of the earliest optional
call or redemption. There may be other call provisions
at varying prices at later dates. Certain
mortgage-backed securities may be subject to periodic
principal paydowns.
(3) Ratings (not covered by the report of independent
registered public accounting firm): Using the higher of
Standard & Poor's or Moody's rating. Ratings below BBB
by Standard & Poor's Group or Baa by Moody's Investor
Service, Inc. are considered to be below investment
grade.
(4) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which
ensure the timely payment of principal and interest.
Such investments are normally considered to be
equivalent to AAA rated securities.
N/R Not rated.
(ETM) Escrowed to maturity.
See accompanying notes to financial statements.
31
Nuveen Maryland Dividend Advantage Municipal Fund 2 (NZR)
Portfolio of
INVESTMENTS May 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 2.9% (1.9% OF TOTAL INVESTMENTS)
$ 190 Baltimore, Maryland, Pollution Control Revenue Bonds, General No Opt. Call B $ 183,196
Motors Corporation, Series 1993, 5.350%, 4/01/08
1,200 Baltimore, Maryland, Senior Lien Convention Center Hotel 9/16 at 100.00 AAA 1,267,608
Revenue Bonds, Series 2006A, 5.250%, 9/01/39 - XLCA Insured
310 Baltimore, Maryland, Subordinate Lien Convention Center Hotel 9/16 at 100.00 Ba1 323,904
Revenue Bonds, Series 2006B, 5.875%, 9/01/39
------------------------------------------------------------------------------------------------------------------------------------
1,700 Total Consumer Discretionary 1,774,708
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 2.6% (1.7% OF TOTAL INVESTMENTS)
775 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 789,190
Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33
800 Tobacco Settlement Financing Corporation, Virgin Islands, 5/11 at 100.00 Baa3 785,984
Tobacco Settlement Asset-Backed Bonds, Series 2001,
5.000%, 5/15/31
------------------------------------------------------------------------------------------------------------------------------------
1,575 Total Consumer Staples 1,575,174
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 16.7% (11.2% OF TOTAL INVESTMENTS)
1,100 Anne Arundel County, Maryland, Economic Development 9/12 at 102.00 A3 1,139,193
Revenue Bonds, Community College Project, Series 2002,
5.125%, 9/01/22
500 Frederick County, Maryland, Educational Facilities Revenue 9/16 at 100.00 BBB- 521,115
Bonds, Mount Saint Mary's College, Series 2006,
5.625%, 9/01/38
Frederick County, Maryland, Educational Facilities Revenue
Bonds, Mount St. Mary's College, Series 2001A:
100 5.750%, 9/01/25 3/10 at 101.00 BBB- 103,414
100 5.800%, 9/01/30 3/10 at 101.00 BBB- 103,251
645 Hartford County, Maryland, Economic Development Revenue 4/14 at 100.00 A+ 667,253
Bonds, Battelle Memorial Institute, Series 2004,
5.250%, 4/01/34
250 Maryland Health and Higher Educational Facilities Authority, 7/08 at 102.00 BBB- 258,233
Educational Facilities Leasehold Mortgage Revenue Bonds,
McLean School, Series 2001, 6.000%, 7/01/31
415 Maryland Health and Higher Educational Facilities Authority, 1/11 at 101.00 AAA 436,518
Revenue Bonds, Bullis School, Series 2000, 5.250%, 7/01/30 -
FSA Insured
500 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A- 509,420
Revenue Bonds, Goucher College, Series 2004, 5.125%, 7/01/34
1,250 Maryland Health and Higher Educational Facilities Authority, 6/11 at 100.00 Baa1 1,285,413
Revenue Bonds, Maryland Institute College of Art, Series 2001,
5.500%, 6/01/32
425 Maryland Industrial Development Financing Authority, Revenue 5/15 at 100.00 N/R 450,079
Bonds, Our Lady of Good Counsel High School, Series 2005A,
6.000%, 5/01/35
500 Morgan State University, Maryland, Student Tuition and Fee 7/12 at 100.00 AAA 521,490
Revenue Bonds, Academic Fees and Auxiliary Facilities,
Series 2001, 4.900%, 7/01/21 - FGIC Insured
500 Morgan State University, Maryland, Student Tuition and Fee 7/13 at 100.00 AAA 524,490
Revenue Bonds, Academic Fees and Auxiliary Facilities,
Series 2003A, 5.000%, 7/01/20 - FGIC Insured
University of Maryland, Auxiliary Facility and Tuition Revenue
Bonds, Series 2001B:
1,580 4.375%, 4/01/17 4/11 at 100.00 AA 1,591,218
1,140 4.500%, 4/01/19 4/11 at 100.00 AA 1,150,043
1,000 University of Maryland, Auxiliary Facility and Tuition Revenue 4/13 at 100.00 AA 1,049,830
Bonds, Series 2003A, 5.000%, 4/01/19
------------------------------------------------------------------------------------------------------------------------------------
10,005 Total Education and Civic Organizations 10,310,960
------------------------------------------------------------------------------------------------------------------------------------
32
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 21.4% (14.4% OF TOTAL INVESTMENTS)
$ 1,000 Maryland Health and Higher Educational Facilities Authority, 7/08 at 101.00 AAA $ 1,029,420
Revenue Bonds, Anne Arundel Medical Center, Series 1998,
5.125%, 7/01/33 - FSA Insured
775 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A2 810,170
Revenue Bonds, Calvert Memorial Hospital, Series 2004,
5.500%, 7/01/36
1,000 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 1,059,370
Revenue Bonds, Carroll County General Hospital, Series 2002,
6.000%, 7/01/26
750 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 AA 759,173
Revenue Bonds, Civista Medical Center, Series 2005,
5.000%, 7/01/37 - RAAI Insured
500 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 507,280
Revenue Bonds, Frederick Memorial Hospital, Series 2002,
5.125%, 7/01/35
650 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A+ 655,779
Revenue Bonds, Greater Baltimore Medical Center, Series 2001,
5.000%, 7/01/34
1,000 Maryland Health and Higher Educational Facilities Authority, 7/13 at 100.00 Baa2 1,027,370
Revenue Bonds, Kennedy Krieger Institute, Series 2003,
5.500%, 7/01/33
525 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A 534,891
Revenue Bonds, LifeBridge Health System, Series 2004A,
5.125%, 7/01/34
700 Maryland Health and Higher Educational Facilities Authority, 8/14 at 100.00 BBB+ 727,174
Revenue Bonds, MedStar Health, Series 2004, 5.375%, 8/15/24
1,500 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A- 1,541,220
Revenue Bonds, Mercy Medical Center, Series 2001,
5.625%, 7/01/31
2,000 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A+ 2,044,600
Revenue Bonds, University of Maryland Medical System,
Series 2001, 5.250%, 7/01/28
1,610 Montgomery County, Maryland, Economic Development Revenue 12/11 at 100.00 AA- 1,650,669
Bonds, Trinity Healthcare Group, Series 2001, 5.125%, 12/01/22
Prince George's County, Maryland, Revenue Bonds, Dimensions
Health Corporation, Series 1994:
300 5.375%, 7/01/14 7/06 at 100.00 B3 271,131
700 5.300%, 7/01/24 7/06 at 100.00 B3 582,078
------------------------------------------------------------------------------------------------------------------------------------
13,010 Total Health Care 13,200,325
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 10.4% (7.0% OF TOTAL INVESTMENTS)
55 Maryland Community Development Administration, Insured 5/11 at 100.00 Aa2 55,895
Multifamily Housing Mortgage Loan Revenue Bonds,
Series 2001A, 5.100%, 5/15/28
40 Maryland Community Development Administration, Insured 5/11 at 100.00 Aa2 40,972
Multifamily Housing Mortgage Loan Revenue Bonds,
Series 2001B, 5.350%, 5/15/32 (Alternative Minimum Tax)
435 Maryland Community Development Administration, Insured 5/12 at 100.00 Aa2 451,178
Multifamily Housing Mortgage Loan Revenue Bonds,
Series 2002A, 5.300%, 5/15/22
3,145 Maryland Community Development Administration, 12/11 at 100.00 Aaa 3,226,267
Multifamily Development Revenue Bonds, Waters Towers
Senior Apartments, Series 2001F, 5.450%, 12/15/33
(Alternative Minimum Tax)
1,110 Maryland Community Development Administration, Multifamily 12/11 at 100.00 Aaa 1,138,682
Housing Revenue Bonds, Princess Anne Apartments,
Series 2001D, 5.450%, 12/15/33 (Alternative Minimum Tax)
1,000 Maryland Economic Development Corporation, Senior Lien 10/13 at 100.00 Ba2 962,440
Student Housing Revenue Bonds, University of Maryland -
Baltimore, Series 2003A, 5.625%, 10/01/23
520 Maryland Economic Development Corporation, Student 6/16 at 100.00 AAA 535,470
Housing Revenue Refunding Bonds, University of Maryland
College Park Projects, Series 2006, 5.000%, 6/01/33 -
CIFG Insured
------------------------------------------------------------------------------------------------------------------------------------
6,305 Total Housing/Multifamily 6,410,904
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 2.9% (2.0% OF TOTAL INVESTMENTS)
300 Maryland Community Development Administration, 9/15 at 100.00 Aa2 302,355
Department of Housing and Community Development,
Residential Revenue Bonds, Series 2006F, 4.900%, 9/01/26
(Alternative Minimum Tax)
885 Maryland Community Development Administration, Residential 9/10 at 100.00 Aa2 898,585
Revenue Bonds, Series 2001H, 5.350%, 9/01/32 (Alternative
Minimum Tax)
33
Nuveen Maryland Dividend Advantage Municipal Fund 2 (NZR) (continued)
Portfolio of INVESTMENTS May 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY (continued)
$ 600 Maryland Community Development Administration, 9/15 at 100.00 Aa2 $ 600,624
Residential Revenue Bonds, Series 2006B, 4.750%, 9/01/25
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
1,785 Total Housing/Single Family 1,801,564
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 1.9% (1.3% OF TOTAL INVESTMENTS)
1,150 Northeast Maryland Waste Disposal Authority, Baltimore, 1/09 at 101.00 BBB 1,167,745
Resource Recovery Revenue Bonds, RESCO Retrofit Project,
Series 1998, 4.750%, 1/01/12 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 0.4% (0.3% OF TOTAL INVESTMENTS)
Maryland Health and Higher Educational Facilities Authority,
Revenue Bonds, Collington Episcopal Life Care Community Inc.,
Series 2001A:
31 6.750%, 4/01/20 4/09 at 100.00 N/R 30,146
25 6.750%, 4/01/23 4/11 at 101.00 N/R 24,269
Maryland Health and Higher Educational Facilities Authority,
Revenue Bonds, Collington Episcopal Life Care Community Inc.,
Series 2001B:
25 8.000%, 4/01/22 10/06 at 100.00 N/R 24,993
5 6.400%, 4/01/23 (Mandatory put 4/01/07) 4/23 at 100.00 N/R 4,876
Prince George's County, Maryland, Revenue Bonds, Collington
Episcopal Life Care Community Inc., Series 1994A:
15 5.625%, 4/01/09 4/09 at 100.00 N/R 14,566
200 6.000%, 4/01/13 4/13 at 100.00 N/R 190,718
------------------------------------------------------------------------------------------------------------------------------------
301 Total Long-Term Care 289,568
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 38.3% (25.7% OF TOTAL INVESTMENTS)
750 Anne Arundel County, Maryland, General Obligation Bonds, 8/09 at 101.00 AA+ 758,055
Consolidated Water and Sewerage, Series 1999,
4.500%, 8/01/19
Anne Arundel County, Maryland, General Obligation Bonds,
Series 2006:
845 5.000%, 3/01/21 3/16 at 100.00 AA+ 895,447
650 5.000%, 3/01/21 3/16 at 100.00 AA+ 688,805
750 Baltimore, Maryland, General Obligation Consolidated Public 10/14 at 100.00 AAA 787,357
Improvement Bonds, Series 2004A, 5.000%, 10/15/22 -
AMBAC Insured
300 Carroll County, Maryland, Consolidated Public Improvement 12/15 at 100.00 AA 321,483
Bonds, Series 2005A, 5.000%, 12/01/16
Cecil County, Maryland, Consolidated General Obligation Public
Improvement Bonds, Series 2001B:
975 4.600%, 8/01/18 8/11 at 101.00 AA- 997,113
1,020 4.600%, 8/01/19 8/11 at 101.00 AA- 1,040,604
750 Frederick County, Maryland, General Obligation Public Facilities No Opt. Call AA 811,410
Bonds, Series 2006, 5.000%, 11/01/20
Frederick, Maryland, General Obligation Bonds, Series 2005:
600 5.000%, 8/01/16 - MBIA Insured 8/15 at 100.00 AAA 641,970
500 5.000%, 8/01/17 - MBIA Insured 8/15 at 100.00 AAA 532,615
510 Frederick, Maryland, General Obligation Refunding and 12/11 at 101.00 AA- 527,325
Improvement Bonds, Series 2001, 4.750%, 12/01/19
1,000 Howard County, Maryland, Consolidated Public Improvement 2/14 at 100.00 AAA 1,063,850
Bonds, Series 2004B, 5.000%, 8/15/16
1,000 Maryland, General Obligation Bonds, Series 2005, 5.000%, 8/01/17 8/15 at 100.00 AAA 1,069,160
1,500 Maryland, General Obligation Bonds, State and Local Facilities No Opt. Call AAA 1,636,815
Loan, First Series 2001, 5.500%, 3/01/12
4,730 Montgomery County, Maryland, Consolidated General 10/11 at 101.00 AAA 5,058,873
Obligation Public Improvement Refunding Bonds, Series 2001,
5.250%, 10/01/18
Prince George's County, Maryland, General Obligation
Consolidated Public Improvement Bonds, Series 2001:
1,000 5.250%, 12/01/20 - FGIC Insured 12/11 at 101.00 AAA 1,073,670
2,820 5.250%, 12/01/21 - FGIC Insured 12/11 at 101.00 AAA 3,012,296
770 Puerto Rico, General Obligation and Public Improvement Bonds, 7/11 at 100.00 AAA 801,485
Series 2001, 5.000%, 7/01/24 - FSA Insured
34
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 800 Washington Suburban Sanitary District, Montgomery and 6/15 at 100.00 AAA $ 858,528
Prince George's Counties, Maryland, Sewerage Disposal
Bonds, Series 2005, 5.000%, 6/01/16
1,000 Washington Suburban Sanitary District, Montgomery and 6/15 at 100.00 AAA 1,073,160
Prince George's Counties, Maryland, Water Supply Bonds,
Series 2005, 5.000%, 6/01/16
------------------------------------------------------------------------------------------------------------------------------------
22,270 Total Tax Obligation/General 23,650,021
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 19.8% (13.3% OF TOTAL INVESTMENTS)
625 Annapolis, Maryland, Special Obligation Bonds, Park Place 1/15 at 101.00 N/R 630,331
Project, Series 2005A, 5.350%, 7/01/34
675 Anne Arundel County, Maryland, Tax Increment Financing No Opt. Call N/R 684,329
Revenue Bonds, Parole Town Center Project, Series 2002,
5.000%, 7/01/12
530 Baltimore Board of School Commissioners, Maryland, Revenue 5/13 at 100.00 AA+ 561,206
Bonds, City Public School System, Series 2003A, 5.000%, 5/01/15
Baltimore County, Maryland, Certificates of Participation,
Health and Social Services Building Project, Series 2001:
1,580 5.000%, 8/01/20 8/11 at 101.00 AA+ 1,635,537
1,660 5.000%, 8/01/21 8/11 at 101.00 AA+ 1,716,789
500 Baltimore, Maryland, Project Revenue Bonds, Series 2006, 7/16 at 100.00 AAA 519,860
5.000%, 7/01/31 - AMBAC Insured
350 Hyattsville, Maryland, Special Obligation Bonds, University 7/14 at 102.00 N/R 363,409
Town Center Project, Series 2004, 5.750%, 7/01/34
1,000 Maryland Department of Transportation, Consolidated No Opt. Call AA 1,111,850
Transportation Revenue Bonds, Series 2002, 5.500%, 2/01/16
1,000 Maryland Department of Transportation, Consolidated No Opt. Call AA 1,069,530
Transportation Revenue Bonds, Series 2004, 5.000%, 5/01/13
1,405 Maryland Economic Development Corporation, Lease Revenue 6/12 at 100.50 AA+ 1,513,073
Bonds, Department of Transportation Headquarters Building,
Series 2002, 5.375%, 6/01/19
590 Montgomery County, Maryland, Lease Revenue Bonds, 5/15 at 100.00 A1 619,718
College of Arts Center Project, Series 2005A, 5.000%, 5/01/18
1,000 Montgomery County, Maryland, Special Obligation Bonds, 7/12 at 101.00 AA 1,055,630
West Germantown Development District, Senior Series 2002A,
5.500%, 7/01/27 - RAAI Insured
270 Prince George's County, Maryland, Special Obligation Bonds, 7/15 at 100.00 N/R 268,604
National Harbor Project, Series 2005, 5.200%, 7/01/34
475 Prince George's County, Maryland, Special Tax District Bonds, 7/13 at 100.00 N/R 475,119
Victoria Falls Project, Series 2005, 5.250%, 7/01/35
------------------------------------------------------------------------------------------------------------------------------------
11,660 Total Tax Obligation/Limited 12,224,985
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 3.2% (2.2% OF TOTAL INVESTMENTS)
Maryland Health and Higher Educational Facilities Authority,
Parking Facilities Revenue Bonds, Johns Hopkins Hospital, Series
2001:
650 5.000%, 7/01/27 - AMBAC Insured 7/11 at 100.00 AAA 665,931
1,000 5.000%, 7/01/34 - AMBAC Insured 7/11 at 100.00 AAA 1,019,950
Maryland Health and Higher Educational Facilities Authority,
Parking Facilities Revenue Bonds, Johns Hopkins Medical
Institution, Series 2004B:
155 5.000%, 7/01/13 - AMBAC Insured No Opt. Call AAA 165,211
135 5.000%, 7/01/14 - AMBAC Insured No Opt. Call AAA 144,194
------------------------------------------------------------------------------------------------------------------------------------
1,940 Total Transportation 1,995,286
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 24.4% (16.4% OF TOTAL INVESTMENTS) (4)
1,500 Baltimore County, Maryland, Consolidated General Obligation 8/12 at 100.00 AAA 1,597,365
Public Improvement Bonds, Series 2002, 5.000%, 8/01/18
(Pre-refunded 8/01/12)
3,000 Frederick County, Maryland, General Obligation Public Facilities 12/10 at 101.00 AAA 3,211,440
Bonds, Series 2000, 5.200%, 12/01/19 (Pre-refunded 12/01/10)
1,000 Frederick County, Maryland, General Obligation Public Facilities 11/12 at 101.00 AA (4) 1,073,340
Bonds, Series 2002, 5.000%, 11/01/20 (Pre-refunded 11/01/12)
35
Nuveen Maryland Dividend Advantage Municipal Fund 2 (NZR) (continued)
Portfolio of INVESTMENTS May 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (4) (continued)
$ 750 Howard County, Maryland, Consolidated Public Improvement 8/12 at 100.00 AAA $ 798,870
Refunding Bonds, Series 2003A, 5.000%, 8/15/15
(Pre-refunded 8/15/12)
1,260 Maryland Health and Higher Educational Facilities Authority, No Opt. Call AAA 1,326,490
Revenue Bonds, Helix Health, Series 1997, 5.000%, 7/01/17 -
AMBAC Insured (ETM)
1,260 Maryland Transportation Authority, Revenue Refunding Bonds, No Opt. Call AAA 1,437,950
Transportation Facilities Projects, First Series 1978,
6.800%, 7/01/16 (ETM)
3,000 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 3,199,410
Obligation Bonds, Series 2000A, 5.500%, 10/01/40
1,230 Puerto Rico, General Obligation and Public Improvement Bonds, 7/11 at 100.00 AAA 1,303,148
Series 2001, 5.000%, 7/01/24 (Pre-refunded 7/01/11) -
FSA Insured
1,000 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 1,086,190
Asset-Backed Bonds, Series 2000, 6.000%, 7/01/26
(Pre-refunded 7/01/10)
------------------------------------------------------------------------------------------------------------------------------------
14,000 Total U.S. Guaranteed 15,034,203
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 3.3% (2.2% OF TOTAL INVESTMENTS)
1,000 Guam Power Authority, Revenue Bonds, Series 1999A, 10/09 at 101.00 AAA 1,044,800
5.250%, 10/01/34 - MBIA Insured
1,000 Maryland Energy Financing Administration, Revenue Bonds, 9/07 at 100.00 N/R 1,010,220
AES Warrior Run Project, Series 1995, 7.400%, 9/01/19
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
2,000 Total Utilities 2,055,020
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 0.6% (0.4% OF TOTAL INVESTMENTS)
355 Maryland Water Quality Financing Administration, Revolving No Opt. Call AAA 382,427
Loan Fund Revenue Bonds, Series 2005A, 5.000%, 9/01/15
------------------------------------------------------------------------------------------------------------------------------------
$ 88,056 Total Investments (cost $89,550,637) - 148.8% 91,872,890
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 3.0% 1,853,324
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (51.8)% (32,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 61,726,214
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments
are based on net assets applicable to Common shares
unless otherwise noted.
(2) Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates
(month and year) and prices of the earliest optional
call or redemption. There may be other call provisions
at varying prices at later dates. Certain
mortgage-backed securities may be subject to periodic
principal paydowns.
(3) Ratings (not covered by the report of independent
registered public accounting firm): Using the higher of
Standard & Poor's or Moody's rating. Ratings below BBB
by Standard & Poor's Group or Baa by Moody's Investor
Service, Inc. are considered to be below investment
grade.
(4) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which
ensure the timely payment of principal and interest.
Such investments are normally considered to be
equivalent to AAA rated securities.
N/R Not rated.
(ETM) Escrowed to maturity.
See accompanying notes to financial statements.
36
Nuveen Maryland Dividend Advantage Municipal Fund 3 (NWI)
Portfolio of
INVESTMENTS May 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 2.2% (1.5% OF TOTAL INVESTMENTS)
$ 220 Baltimore, Maryland, Pollution Control Revenue Bonds, No Opt. Call B $ 212,122
General Motors Corporation, Series 1993, 5.350%, 4/01/08
1,000 Baltimore, Maryland, Senior Lien Convention Center Hotel 9/16 at 100.00 AAA 1,056,340
Revenue Bonds, Series 2006A, 5.250%, 9/01/39 - XLCA Insured
380 Baltimore, Maryland, Subordinate Lien Convention Center 9/16 at 100.00 Ba1 397,043
Hotel Revenue Bonds, Series 2006B, 5.875%, 9/01/39
------------------------------------------------------------------------------------------------------------------------------------
1,600 Total Consumer Discretionary 1,665,505
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 3.6% (2.4% OF TOTAL INVESTMENTS)
2,695 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 2,744,345
Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 13.4% (9.0% OF TOTAL INVESTMENTS)
225 Anne Arundel County, Maryland, Economic Development 9/12 at 102.00 A3 233,017
Revenue Bonds, Community College Project, Series 2002,
5.125%, 9/01/22
625 Frederick County, Maryland, Educational Facilities Revenue 9/16 at 100.00 BBB- 651,394
Bonds, Mount Saint Mary's College, Series 2006, 5.625%, 9/01/38
Frederick County, Maryland, Educational Facilities Revenue
Bonds, Mount St. Mary's College, Series 2001A:
100 5.750%, 9/01/25 3/10 at 101.00 BBB- 103,414
100 5.800%, 9/01/30 3/10 at 101.00 BBB- 103,251
690 Hartford County, Maryland, Economic Development Revenue 4/14 at 100.00 A+ 713,805
Bonds, Battelle Memorial Institute, Series 2004, 5.250%, 4/01/34
625 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A- 636,775
Revenue Bonds, Goucher College, Series 2004, 5.125%, 7/01/34
1,000 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 AA 1,022,840
Revenue Bonds, Johns Hopkins University, Series 2002A,
5.000%, 7/01/32
525 Maryland Industrial Development Financing Authority, Revenue 5/15 at 100.00 N/R 555,980
Bonds, Our Lady of Good Counsel High School, Series 2005A,
6.000%, 5/01/35
1,000 Morgan State University, Maryland, Student Tuition and Fee 7/13 at 100.00 AAA 1,033,990
Revenue Bonds, Academic Fees and Auxiliary Facilities,
Series 2003A, 5.000%, 7/01/32 - FGIC Insured
985 University of Maryland, Auxiliary Facility and Tuition Revenue 4/11 at 100.00 AA 995,146
Bonds, Series 2001B, 4.625%, 4/01/21
2,000 University of Maryland, Auxiliary Facility and Tuition Revenue 4/12 at 100.00 AA 2,100,000
Bonds, Series 2002A, 5.125%, 4/01/22
University of Maryland, Auxiliary Facility and Tuition Revenue
Bonds, Series 2003A:
1,000 5.000%, 4/01/15 4/13 at 100.00 AA 1,058,490
1,000 5.000%, 4/01/19 4/13 at 100.00 AA 1,049,830
------------------------------------------------------------------------------------------------------------------------------------
9,875 Total Education and Civic Organizations 10,257,932
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 17.9% (12.1% OF TOTAL INVESTMENTS)
1,000 Maryland Health and Higher Educational Facilities Authority, 7/08 at 101.00 AAA 1,029,420
Revenue Bonds, Anne Arundel Medical Center, Series 1998,
5.125%, 7/01/33 - FSA Insured
775 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A2 810,170
Revenue Bonds, Calvert Memorial Hospital, Series 2004,
5.500%, 7/01/36
1,250 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 1,303,900
Revenue Bonds, Carroll County General Hospital, Series 2002,
5.800%, 7/01/32
37
Nuveen Maryland Dividend Advantage Municipal Fund 3 (NWI) (continued)
Portfolio of INVESTMENTS May 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE (continued)
$ 870 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 AA $ 880,640
Revenue Bonds, Civista Medical Center, Series 2005,
5.000%, 7/01/37 - RAAI Insured
700 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 710,192
Revenue Bonds, Frederick Memorial Hospital, Series 2002,
5.125%, 7/01/35
800 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A+ 807,112
Revenue Bonds, Greater Baltimore Medical Center, Series 2001,
5.000%, 7/01/34
1,000 Maryland Health and Higher Educational Facilities Authority, 5/11 at 100.00 AA- 1,023,970
Revenue Bonds, Johns Hopkins Hospital, Series 2001,
5.000%, 5/15/21
1,000 Maryland Health and Higher Educational Facilities Authority, 7/13 at 100.00 Baa2 1,027,370
Revenue Bonds, Kennedy Krieger Institute, Series 2003,
5.500%, 7/01/33
725 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A 738,659
Revenue Bonds, LifeBridge Health System, Series 2004A,
5.125%, 7/01/34
900 Maryland Health and Higher Educational Facilities Authority, 8/14 at 100.00 BBB+ 934,938
Revenue Bonds, MedStar Health, Series 2004, 5.375%, 8/15/24
650 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A- 667,862
Revenue Bonds, Mercy Medical Center, Series 2001,
5.625%, 7/01/31
1,845 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 A3 1,933,818
Revenue Bonds, Union Hospital of Cecil County, Series 2002,
5.625%, 7/01/32
775 Maryland Health and Higher Educational Facilities Authority, 1/13 at 101.00 Baa2 817,524
Revenue Refunding Bonds, Adventist Healthcare, Series 2003A,
5.750%, 1/01/25
Prince George's County, Maryland, Revenue Bonds, Dimensions
Health Corporation, Series 1994:
350 5.375%, 7/01/14 7/06 at 100.00 B3 316,320
900 5.300%, 7/01/24 7/06 at 100.00 B3 748,386
------------------------------------------------------------------------------------------------------------------------------------
13,540 Total Health Care 13,750,281
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 14.7% (10.0% OF TOTAL INVESTMENTS)
980 Maryland Community Development Administration, Housing 7/12 at 100.00 Aa2 980,314
Revenue Bonds, Series 2002B, 4.950%, 7/01/32 (Alternative
Minimum Tax)
1,250 Maryland Economic Development Corporation, Senior Lien 10/13 at 100.00 Ba2 1,203,050
Student Housing Revenue Bonds, University of Maryland -
Baltimore, Series 2003A, 5.625%, 10/01/23
Maryland Economic Development Corporation, Student Housing
Revenue Bonds, Sheppard Pratt University Village, Series 2001:
20 5.875%, 7/01/21 - ACA Insured 7/11 at 101.00 A 21,181
150 6.000%, 7/01/33 - ACA Insured 7/11 at 101.00 A 159,171
475 Maryland Economic Development Corporation, Student Housing 6/16 at 100.00 AAA 489,131
Revenue Refunding Bonds, University of Maryland College
Park Projects, Series 2006, 5.000%, 6/01/33 - CIFG Insured
Montgomery County Housing Opportunities Commission,
Maryland, Multifamily Housing Development Bonds, Series 2002B:
515 5.100%, 7/01/33 (Alternative Minimum Tax) 7/12 at 100.00 Aaa 518,966
3,000 5.200%, 7/01/44 (Alternative Minimum Tax) 7/12 at 100.00 Aaa 3,030,060
4,860 Prince George's County Housing Authority, Maryland, GNMA 11/12 at 100.00 AAA 4,918,028
Collateralized Mortgage Revenue Bonds, Fairview and
Hillside Projects, Series 2002A, 4.700%, 11/20/22
------------------------------------------------------------------------------------------------------------------------------------
11,250 Total Housing/Multifamily 11,319,901
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 0.8% (0.5% OF TOTAL INVESTMENTS)
600 Maryland Community Development Administration, Department 9/15 at 100.00 Aa2 604,710
of Housing and Community Development, Residential Revenue
Bonds, Series 2006F, 4.900%, 9/01/26 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 1.3% (0.9% OF TOTAL INVESTMENTS)
1,000 Northeast Maryland Waste Disposal Authority, Baltimore, 1/09 at 101.00 BBB 1,015,430
Resource Recovery Revenue Bonds, RESCO Retrofit Project,
Series 1998, 4.750%, 1/01/12 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
38
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 0.6% (0.4% OF TOTAL INVESTMENTS)
$ 280 Maryland Health and Higher Educational Facilities Authority, 4/11 at 101.00 N/R $ 271,813
Revenue Bonds, Collington Episcopal Life Care Community Inc.,
Series 2001A, 6.750%, 4/01/23
Prince George's County, Maryland, Revenue Bonds, Collington
Episcopal Life Care Community Inc., Series 1994A:
30 5.625%, 4/01/09 4/09 at 100.00 N/R 29,132
140 6.000%, 4/01/13 4/13 at 100.00 N/R 133,503
------------------------------------------------------------------------------------------------------------------------------------
450 Total Long-Term Care 434,448
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 23.6% (15.9% OF TOTAL INVESTMENTS)
1,000 Annapolis, Maryland, General Obligation Public Improvement 4/12 at 101.00 AA 1,013,530
Refunding Bonds, Series 2002, 4.375%, 4/01/17
Anne Arundel County, Maryland, General Obligation Bonds,
Series 2006:
845 5.000%, 3/01/21 3/16 at 100.00 AA+ 895,447
650 5.000%, 3/01/21 3/16 at 100.00 AA+ 688,805
1,000 Calvert County, Maryland, General Obligation Public Improvement 1/12 at 101.00 AA 1,028,110
Bonds, Series 2002, 4.500%, 1/01/16
380 Carroll County, Maryland, Consolidated Public Improvement 12/15 at 100.00 AA 407,212
Bonds, Series 2005A, 5.000%, 12/01/16
1,260 Charles County, Maryland, Consolidated General Obligation 1/12 at 101.00 AA 1,286,132
Public Improvement Bonds, Series 2002, 4.400%, 1/15/16
500 Frederick County, Maryland, General Obligation Public No Opt. Call AA 540,940
Facilities Bonds, Series 2006, 5.000%, 11/01/20
245 Frederick County, Maryland, Special Obligation Bonds, Villages 7/10 at 102.00 AA 262,515
of Lake Linganore Community Development Authority,
Series 2001A, 5.600%, 7/01/20 - RAAI Insured
Frederick, Maryland, General Obligation Bonds, Series 2005:
710 5.000%, 8/01/16 - MBIA Insured 8/15 at 100.00 AAA 759,665
535 5.000%, 8/01/17 - MBIA Insured 8/15 at 100.00 AAA 569,898
1,000 Maryland National Capital Park Planning Commission, 1/14 at 100.00 AA 1,057,960
Prince George's County, General Obligation Bonds, Park
Acquisition and Development, Series 2004EE-2,
5.000%, 1/15/17
1,500 Maryland, General Obligation Bonds, Series 2005, 8/15 at 100.00 AAA 1,603,740
5.000%, 8/01/17
1,440 Montgomery County, Maryland, Consolidated General No Opt. Call AAA 1,551,571
Obligation Public Improvement Bonds, Series 2005A,
5.000%, 7/01/15
1,000 Prince George's County, Maryland, General Obligation 10/13 at 100.00 AA 1,054,640
Consolidated Public Improvement Bonds, Series 2003A,
5.000%, 10/01/17
1,000 Prince George's County, Maryland, General Obligation No Opt. Call AA 1,064,060
Consolidated Public Improvement Bonds, Series 2004C,
5.000%, 12/01/11
1,000 St. Mary's County, Maryland, General Obligation Hospital No Opt. Call AA- 1,066,350
Bonds, Series 2002, 5.000%, 10/01/12
25 Washington Suburban Sanitary District, Montgomery and 6/11 at 101.00 AAA 26,329
Prince George's Counties, Maryland, General Obligation
Construction Bonds, Second Series 2001, 5.000%, 6/01/17
1,000 Washington Suburban Sanitary District, Montgomery and No Opt. Call AAA 1,072,520
Prince George's Counties, Maryland, Sewerage Disposal
Bonds, Series 2004, 5.000%, 6/01/13
1,000 Washington Suburban Sanitary District, Montgomery and 6/15 at 100.00 AAA 1,073,160
Prince George's Counties, Maryland, Sewerage Disposal
Bonds, Series 2005, 5.000%, 6/01/16
1,000 Washington Suburban Sanitary District, Montgomery and 6/15 at 100.00 AAA 1,073,160
Prince George's Counties, Maryland, Water Supply Bonds,
Series 2005, 5.000%, 6/01/16
------------------------------------------------------------------------------------------------------------------------------------
17,090 Total Tax Obligation/General 18,095,744
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 33.9% (23.0% OF TOTAL INVESTMENTS)
750 Annapolis, Maryland, Special Obligation Bonds, Park Place 1/15 at 101.00 N/R 756,397
Project, Series 2005A, 5.350%, 7/01/34
1,000 Baltimore Board of School Commissioners, Maryland, Revenue 5/13 at 100.00 AA+ 1,058,880
Bonds, City Public School System, Series 2003A, 5.000%, 5/01/15
600 Baltimore, Maryland, Project Revenue Bonds, Series 2006, 7/16 at 100.00 AAA 623,832
5.000%, 7/01/31 - AMBAC Insured
39
Nuveen Maryland Dividend Advantage Municipal Fund 3 (NWI) (continued)
Portfolio of INVESTMENTS May 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 450 Hyattsville, Maryland, Special Obligation Bonds, University 7/14 at 102.00 N/R $ 467,240
Town Center Project, Series 2004, 5.750%, 7/01/34
5,000 Maryland Department of Transportation, Consolidated No Opt. Call AA 5,559,250
Transportation Revenue Bonds, Series 2002, 5.500%, 2/01/16
1,000 Maryland Department of Transportation, Consolidated No Opt. Call AA 1,069,530
Transportation Revenue Bonds, Series 2004, 5.000%, 5/01/13
2,200 Maryland Economic Development Corporation, Lease Revenue 6/12 at 100.50 AA+ 2,238,654
Bonds, Department of Transportation Headquarters Building,
Series 2002, 4.750%, 6/01/22
450 Maryland Economic Development Corporation, Lease Revenue 9/12 at 100.00 AA+ 478,039
Bonds, Montgomery County Town Square Parking Garage,
Series 2002A, 5.000%, 9/15/13
2,935 Maryland Economic Development Corporation, Lease Revenue 9/12 at 100.00 AA+ 3,136,869
Bonds, Montgomery County Wayne Avenue Parking Project,
Series 2002A, 5.250%, 9/15/16
Maryland Stadium Authority, Lease Revenue Bonds,
Montgomery County Conference Center Facilities, Series 2003:
1,465 5.000%, 6/15/21 6/13 at 100.00 AA+ 1,521,285
1,620 5.000%, 6/15/23 6/13 at 100.00 AA+ 1,680,442
710 Montgomery County, Maryland, Lease Revenue Bonds, 5/15 at 100.00 A1 745,763
College of Arts Center Project, Series 2005A, 5.000%, 5/01/18
460 Prince George's County, Maryland, Special Obligation Bonds, 7/15 at 100.00 N/R 457,622
National Harbor Project, Series 2005, 5.200%, 7/01/34
575 Prince George's County, Maryland, Special Tax District Bonds, 7/13 at 100.00 N/R 575,144
Victoria Falls Project, Series 2005, 5.250%, 7/01/35
Puerto Rico Public Buildings Authority, Guaranteed Government
Facilities Revenue Bonds, Series 2002G:
1,000 5.250%, 7/01/17 7/12 at 100.00 BBB 1,034,650
1,205 5.250%, 7/01/20 7/12 at 100.00 BBB 1,240,945
1,275 5.250%, 7/01/21 7/12 at 100.00 BBB 1,312,013
1,000 Puerto Rico Public Finance Corporation, Commonwealth No Opt. Call AAA 1,083,640
Appropriation Bonds, Series 1998A, 5.125%, 6/01/24 -
AMBAC Insured
235 Puerto Rico Public Finance Corporation, Commonwealth 2/12 at 100.00 BBB- 243,354
Appropriation Bonds, Series 2002E, 5.500%, 8/01/29
700 Puerto Rico, Highway Revenue Bonds, Highway and No Opt. Call AAA 783,727
Transportation Authority, Series 2003AA, 5.500%, 7/01/19 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
24,630 Total Tax Obligation/Limited 26,067,276
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 0.4% (0.4% OF TOTAL INVESTMENTS)
Maryland Health and Higher Educational Facilities Authority,
Parking Facilities Revenue Bonds, Johns Hopkins Medical
Institution, Series 2004B:
190 5.000%, 7/01/13 - AMBAC Insured No Opt. Call AAA 202,517
175 5.000%, 7/01/14 - AMBAC Insured No Opt. Call AAA 186,918
------------------------------------------------------------------------------------------------------------------------------------
365 Total Transportation 389,435
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 24.2% (16.4% OF TOTAL INVESTMENTS) (4)
10 Anne Arundel County, Maryland, General Obligation Bonds, 5/09 at 101.00 AA+ (4) 10,469
Consolidated General Improvements, Series 1999,
5.000%, 5/15/19 (Pre-refunded 5/15/09)
100 Frederick County, Maryland, General Obligation Public 7/09 at 101.00 AAA 105,562
Facilities Bonds, Series 1999, 5.250%, 7/01/17 (Pre-refunded
7/01/09)
Frederick County, Maryland, General Obligation Public Facilities
Bonds, Series 2002:
1,830 5.000%, 11/01/20 (Pre-refunded 11/01/12) 11/12 at 101.00 AA (4) 1,964,212
2,035 5.000%, 11/01/21 (Pre-refunded 11/01/12) 11/12 at 101.00 AA (4) 2,184,247
2,500 5.000%, 11/01/22 (Pre-refunded 11/01/12) 11/12 at 101.00 AA (4) 2,683,350
1,210 Howard County, Maryland, Consolidated Public Improvement 2/09 at 101.00 AAA 1,256,174
Bonds, Series 2001A, 4.750%, 2/15/19 (Pre-refunded 2/15/09)
40
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (4) (continued)
$ 1,215 Howard County, Maryland, Consolidated Public Improvement 8/12 at 100.00 AAA $ 1,294,169
Refunding Bonds, Series 2003A, 5.000%, 8/15/15
(Pre-refunded 8/15/12)
285 Maryland Health and Higher Educational Facilities Authority, No Opt. Call AAA 300,039
Revenue Bonds, Helix Health, Series 1997, 5.000%, 7/01/17 -
AMBAC Insured (ETM)
1,080 Maryland Transportation Authority, Revenue Refunding Bonds, No Opt. Call AAA 1,232,528
Transportation Facilities Projects, First Series 1978,
6.800%, 7/01/16 (ETM)
2,000 Montgomery County, Maryland, Consolidated General 2/12 at 101.00 AAA 2,139,280
Obligation Public Improvement Bonds, Series 2002A,
5.000%, 2/01/20 (Pre-refunded 2/01/12)
3,500 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 3,732,645
Obligation Bonds, Series 2000A, 5.500%, 10/01/40
700 Puerto Rico Public Finance Corporation, Commonwealth 2/12 at 100.00 Aaa 759,297
Appropriation Bonds, Series 2002E, 5.500%, 8/01/29
(Pre-refunded 2/01/12)
880 Puerto Rico, General Obligation and Public Improvement Bonds, 7/11 at 100.00 AAA 937,385
Series 2001, 5.125%, 7/01/30 (Pre-refunded 7/01/11) -
FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
17,345 Total U.S. Guaranteed 18,599,357
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 7.2% (4.8% OF TOTAL INVESTMENTS)
1,250 Maryland Energy Financing Administration, Revenue Bonds, 9/07 at 100.00 N/R 1,262,775
AES Warrior Run Project, Series 1995, 7.400%, 9/01/19
(Alternative Minimum Tax)
4,025 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/10 at 101.00 AAA 4,234,622
Series 2000HH, 5.250%, 7/01/29 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
5,275 Total Utilities 5,497,397
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 4.0% (2.7% OF TOTAL INVESTMENTS)
2,570 Baltimore, Maryland, Revenue Refunding Bonds, Wastewater 7/12 at 100.00 AAA 2,636,665
Projects, Series 2002A, 5.125%, 7/01/42 - FGIC Insured
430 Maryland Water Quality Financing Administration, Revolving No Opt. Call AAA 463,222
Loan Fund Revenue Bonds, Series 2005A, 5.000%, 9/01/15
------------------------------------------------------------------------------------------------------------------------------------
3,000 Total Water and Sewer 3,099,887
------------------------------------------------------------------------------------------------------------------------------------
$ 108,715 Total Investments (cost $112,293,408) - 147.8% 113,541,648
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 3.0% 2,267,579
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (50.8)% (39,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 76,809,227
====================================================================================================================
FORWARD SWAPS OUTSTANDING AT MAY 31, 2006:
FIXED RATE FLOATING RATE
PAID FIXED RATE RECEIVED FLOATING RATE UNREALIZED
NOTIONAL BY THE FUND PAYMENT BY THE FUND PAYMENT EFFECTIVE TERMINATION APPRECIATION
COUNTERPARTY AMOUNT (ANNUALIZED) FREQUENCY BASED ON FREQUENCY DATE (5) DATE (DEPRECIATION)
--------------------------------------------------------------------------------------------------------------------------
Goldman Sachs $1,600,000 4.013% Quarterly BMA Quarterly 9/14/06 9/14/26 $ 76,206
Merrill Lynch 2,900,000 4.021 Quarterly BMA Quarterly 9/21/06 9/21/26 135,717
--------------------------------------------------------------------------------------------------------------------------
$211,923
==========================================================================================================================
BMA - The daily arithmetic average of the weekly BMA (Bond
Market Association) Municipal Swap Index.
(1) All percentages shown in the Portfolio of Investments
are based on net assets applicable to Common shares
unless otherwise noted.
(2) Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates
(month and year) and prices of the earliest optional
call or redemption. There may be other call provisions
at varying prices at later dates. Certain
mortgage-backed securities may be subject to periodic
principal paydowns.
(3) Ratings (not covered by the report of independent
registered public accounting firm): Using the higher of
Standard & Poor's or Moody's rating. Ratings below BBB
by Standard & Poor's Group or Baa by Moody's Investor
Service, Inc. are considered to be below investment
grade.
(4) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which
ensure the timely payment of principal and interest.
Such investments are normally considered to be
equivalent to AAA rated securities.
(5) Effective date represents the date on which both the
Fund and counterparty commence interest payment
accruals on each forward swap contract.
N/R Not rated.
(ETM) Escrowed to maturity.
See accompanying notes to financial statements.
41
Nuveen Virginia Premium Income Municipal Fund (NPV)
Portfolio of
INVESTMENTS May 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 4.2% (2.9% OF TOTAL INVESTMENTS)
Tobacco Settlement Financing Corporation of Virginia, Tobacco
Settlement Asset-Backed Bonds, Series 2005:
$ 1,575 5.250%, 6/01/19 6/15 at 100.00 BBB $ 1,598,121
3,850 5.500%, 6/01/26 6/15 at 100.00 BBB 3,936,355
------------------------------------------------------------------------------------------------------------------------------------
5,425 Total Consumer Staples 5,534,476
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 7.0% (4.8% OF TOTAL INVESTMENTS)
1,000 Prince William County Industrial Development Authority, 10/13 at 101.00 A3 1,037,460
Virginia, Educational Facilities Revenue Bonds, Catholic
Diocese of Arlington, Series 2003, 5.500%, 10/01/33
500 Prince William County Park Authority, Virginia, Park Facilities 10/09 at 101.00 A3 530,800
Revenue Refunding and Improvement Bonds, Series 1999,
6.000%, 10/15/28
700 Puerto Rico Industrial, Tourist, Educational, Medical and 12/12 at 101.00 BBB- 719,775
Environmental Control Facilities Financing Authority, Higher
Education Revenue Refunding Bonds, Ana G. Mendez University
System, Series 2002, 5.375%, 12/01/21
500 Rockbridge County Industrial Development Authority, Virginia, 7/11 at 100.00 B2 500,395
Horse Center Revenue Refunding Bonds, Series 2001C,
6.850%, 7/15/21
475 The Rector and Visitors of the University of Virginia, General 6/15 at 100.00 AAA 503,785
Revenue Bonds, Series 2005, 5.000%, 6/01/18
2,120 Virginia College Building Authority, Educational Facilities 9/11 at 100.00 AA+ 2,176,413
Revenue Bonds, Public Higher Education Financing Program,
Series 2001A, 5.000%, 9/01/26
2,000 Virginia College Building Authority, Educational Facilities No Opt. Call Aa1 2,137,400
Revenue Bonds, Public Higher Education Financing Program,
Series 2004B, 5.000%, 9/01/13
1,635 Virginia Commonwealth University, Revenue Bonds, 5/14 at 101.00 AAA 1,724,909
Series 2004A, 5.000%, 5/01/17 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
8,930 Total Education and Civic Organizations 9,330,937
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 16.9% (11.6% OF TOTAL INVESTMENTS)
2,000 Albemarle County Industrial Development Authority, 10/12 at 100.00 A2 2,038,460
Virginia, Hospital Revenue Bonds, Martha Jefferson Hospital,
Series 2002, 5.250%, 10/01/35
4,850 Fairfax County Industrial Development Authority, Virginia, No Opt. Call AA+ 5,075,622
Hospital Revenue Refunding Bonds, Inova Health System,
Series 1993A, 5.000%, 8/15/23
1,250 Fredericksburg Industrial Development Authority, Virginia, 6/12 at 100.00 A3 1,264,200
Revenue Bonds, MediCorp Health System, Series 2002B,
5.125%, 6/15/33
1,000 Hanover County Industrial Development Authority, Virginia, No Opt. Call AAA 1,156,070
Hospital Revenue Bonds, Memorial Regional Medical Center,
Series 1995, 6.375%, 8/15/18 - MBIA Insured
1,500 Henrico County Economic Development Authority, Virginia, 11/12 at 100.00 A- 1,558,725
Revenue Bonds, Bon Secours Health System Inc., Series 2002A,
5.600%, 11/15/30
1,500 Henrico County Industrial Development Authority, Virginia, No Opt. Call AAA 1,786,305
Healthcare Revenue Bonds, Bon Secours Health System,
Series 1996, 6.250%, 8/15/20 - MBIA Insured
1,500 Manassas Industrial Development Authority, Virginia, Hospital 4/13 at 100.00 A2 1,541,025
Revenue Bonds, Prince William Hospital, Series 2002,
5.250%, 4/01/33
4,750 Medical College of Virginia Hospital Authority, General Revenue 7/08 at 102.00 AAA 4,871,553
Bonds, Series 1998, 5.125%, 7/01/23 - MBIA Insured
3,000 Roanoke Industrial Development Authority, Virginia, Hospital 7/12 at 100.00 AAA 3,185,010
Revenue Bonds, Carilion Health System, Series 2002A,
5.500%, 7/01/19 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
21,350 Total Health Care 22,476,970
------------------------------------------------------------------------------------------------------------------------------------
42
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 4.6% (3.2% OF TOTAL INVESTMENTS)
$ 1,435 Arlington County Industrial Development Authority, Virginia, 5/10 at 100.00 Aaa $ 1,529,523
Multifamily Housing Revenue Bonds, Patrick Henry Apartments,
Series 2000, 6.050%, 11/01/32 (Mandatory put 11/01/20)
(Alternative Minimum Tax)
Danville Industrial Development Authority, Virginia, Student
Housing Revenue Bonds, Collegiate Housing Foundation, Averett
College, Series 1999A:
500 6.875%, 6/01/20 6/09 at 102.00 N/R 491,640
1,500 7.000%, 6/01/30 6/09 at 102.00 N/R 1,471,830
1,495 Henrico County Economic Development Authority, Virginia, 7/09 at 102.00 AAA 1,599,904
GNMA Mortgage-Backed Securities Program Assisted Living
Revenue Bonds, Beth Sholom, Series 1999A, 5.900%, 7/20/29
1,000 Lynchburg Redevelopment and Housing Authority, Virginia, 4/10 at 102.00 AAA 1,030,470
Vistas GNMA Mortgage-Backed Revenue Bonds, Series 2000A,
6.200%, 1/20/40 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
5,930 Total Housing/Multifamily 6,123,367
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 2.1% (1.5% OF TOTAL INVESTMENTS)
340 Puerto Rico Housing Finance Authority, Mortgage-Backed 6/13 at 100.00 AAA 342,465
Securities Program Home Mortgage Revenue Bonds,
Series 2003A, 4.875%, 6/01/34 (Alternative Minimum Tax)
1,000 Virginia Housing Development Authority, Commonwealth 7/11 at 100.00 AAA 1,025,090
Mortgage Bonds, Series 2001H-1, 5.350%, 7/01/31 -
MBIA Insured
1,500 Virginia Housing Development Authority, Commonwealth 1/15 at 100.00 AAA 1,461,405
Mortgage Bonds, Series 2005C-C2, 4.750%, 10/01/32
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
2,840 Total Housing/Single Family 2,828,960
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 1.6% (1.0% OF TOTAL INVESTMENTS)
2,000 Charles County Industrial Development Authority, Virginia, No Opt. Call BBB 2,037,660
Solid Waste Disposal Facility Revenue Refunding Bonds,
USA Waste of Virginia Inc., Series 1999, 4.875%, 2/01/09
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
MATERIALS - 1.9% (1.2% OF TOTAL INVESTMENTS)
500 Bedford County Industrial Development Authority, Virginia, 2/08 at 102.00 B2 490,415
Industrial Development Revenue Refunding Bonds, Nekoosa
Packaging Corporation, Series 1998, 5.600%, 12/01/25
(Alternative Minimum Tax) (5)
1,000 Goochland County Industrial Development Authority, Virginia, 12/08 at 101.00 B2 980,900
Industrial Development Revenue Refunding Bonds, Nekoosa
Packaging Corporation Project, Series 1998, 5.650%, 12/01/25
(Alternative Minimum Tax) (5)
1,000 Isle of Wight County Industrial Development Authority, 5/07 at 102.00 BBB 1,030,280
Virginia, Solid Waste Disposal Facilities Revenue Bonds,
Union Camp Corporation, Series 1997, 6.100%, 5/01/27
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
2,500 Total Materials 2,501,595
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 27.8% (19.1% OF TOTAL INVESTMENTS)
900 Alexandria, Virginia, General Obligation Bonds, Series 2004B, No Opt. Call AAA 964,881
5.000%, 6/15/13
1,400 Arlington County, Virginia, General Obligation Bonds, 5/15 at 100.00 AAA 1,500,996
Series 2005, 5.000%, 5/15/16
1,500 Arlington County, Virginia, General Obligation Bonds, 8/16 at 100.00 AAA 1,597,740
Series 2006, 5.000%, 8/01/20
Chesapeake, Virginia, General Obligation Water and Sewerage
Bonds, Series 2003B:
1,880 5.000%, 6/01/21 6/13 at 100.00 AA 1,952,493
2,060 5.000%, 6/01/23 6/13 at 100.00 AA 2,134,407
1,355 Harrisonburg, Virginia, General Obligation Bonds, Public 7/12 at 101.00 AAA 1,418,563
Safety and Steam Plant, Series 2002, 5.000%, 7/15/19 -
FGIC Insured
1,390 Henrico County, Virginia, General Obligation Bonds, 7/15 at 100.00 AAA 1,491,345
Series 2005, 5.000%, 7/15/16
105 Loudoun County, Virginia, General Obligation Public Improvement 5/12 at 100.00 AAA 111,510
Bonds, Series 2002A, 5.250%, 5/01/22
1,920 Loudoun County, Virginia, General Obligation Public Improvement No Opt. Call AAA 2,064,480
Bonds, Series 2005A, 5.000%, 7/01/14
43
Nuveen Virginia Premium Income Municipal Fund (NPV) (continued)
Portfolio of INVESTMENTS May 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 1,435 Loudoun County, Virginia, General Obligation Public Improvement 6/15 at 100.00 AAA $ 1,527,500
Bonds, Series 2005B, 5.000%, 6/01/18
1,185 Lynchburg, Virginia, General Obligation Bonds, Series 2004, 6/14 at 100.00 AA 1,241,880
5.000%, 6/01/21
Newport News, Virginia, General Obligation Bonds, General
Improvement and Water Projects, Series 2002A:
2,770 5.000%, 7/01/19 7/13 at 100.00 AA 2,898,944
1,000 5.000%, 7/01/20 7/13 at 100.00 AA 1,042,630
1,350 Newport News, Virginia, General Obligation Bonds, 5/14 at 101.00 AA 1,438,682
Series 2004C, 5.000%, 5/01/16
1,400 Northern Mariana Islands, General Obligation Bonds, 6/10 at 100.00 A 1,468,110
Series 2000A, 6.000%, 6/01/20 - ACA Insured
1,280 Portsmouth, Virginia, General Obligation Bonds, Series 2005A, No Opt. Call AAA 1,371,930
5.000%, 4/01/15 - MBIA Insured
1,480 Richmond, Virginia, General Obligation Bonds, Series 2004A, 7/14 at 100.00 AAA 1,550,833
5.000%, 7/15/21 - FSA Insured
Richmond, Virginia, General Obligation Bonds, Series 2005A:
1,500 5.000%, 7/15/17 - FSA Insured 7/15 at 100.00 AAA 1,592,895
1,715 5.000%, 7/15/20 - FSA Insured 7/15 at 100.00 AAA 1,805,381
1,430 Roanoke, Virginia, General Obligation Public Improvement 10/12 at 101.00 AA 1,510,723
Bonds, Series 2002A, 5.000%, 10/01/17
1,135 Suffolk, Virginia, General Obligation Bonds, Series 2005, No Opt. Call Aa2 1,217,299
5.000%, 12/01/15
2,155 Virginia Beach, Virginia, General Obligation Bonds, 5/13 at 100.00 AA+ 2,283,223
Series 2003B, 5.000%, 5/01/15
1,100 Virginia Beach, Virginia, General Obligation Bonds, 1/16 at 100.00 AA+ 1,160,544
Series 2005, 5.000%, 1/15/20
1,425 Virginia Beach, Virginia, General Obligation Public Improvement 6/11 at 101.00 AA+ 1,485,021
Bonds, Series 2001, 5.000%, 6/01/20
------------------------------------------------------------------------------------------------------------------------------------
34,870 Total Tax Obligation/General 36,832,010
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 32.7% (22.5% OF TOTAL INVESTMENTS)
Buena Vista Public Recreational Facilities Authority, Virginia,
Lease Revenue Bonds, Golf Course Project, Series 2005A:
335 5.250%, 7/15/25 - ACA Insured 7/15 at 100.00 A 346,263
260 5.500%, 7/15/35 - ACA Insured 7/15 at 100.00 A 269,511
2,400 Commonwealth Transportation Board of Virginia, Federal No Opt. Call AA 2,572,584
Highway Reimbursement Anticipation Notes, Series 2005,
5.000%, 9/28/15
1,340 Culpeper Industrial Development Authority, Virginia, Lease 1/15 at 100.00 AAA 1,401,305
Revenue Bonds, School Facilities Project, Series 2005,
5.000%, 1/01/20 - MBIA Insured
Cumberland County, Virginia, Certificates of Participation,
Series 1997:
1,075 6.200%, 7/15/12 No Opt. Call N/R 1,138,232
1,350 6.375%, 7/15/17 No Opt. Call N/R 1,483,083
500 Dinwiddie County Industrial Development Authority, Virginia, 2/07 at 102.00 N/R 513,525
Lease Revenue Bonds, Dinwiddie County School Facilities,
Series 1997A, 6.000%, 2/01/18
1,000 Dinwiddie County Industrial Development Authority, Virginia, 2/14 at 100.00 AAA 1,062,530
Lease Revenue Bonds, Series 2004B, 5.125%, 2/15/16 -
MBIA Insured
1,000 Fairfax County Economic Development Authority, Virginia, 5/16 at 100.00 AA+ 1,060,760
Lease Revenue Bonds, Joint Public Uses Community Project,
Series 2006, 5.000%, 5/15/18
Fairfax County Economic Development Authority, Virginia, Lease
Revenue Bonds, Laurel Hill Public Facilities Projects, Series
2003:
2,260 5.000%, 6/01/14 6/13 at 101.00 AA+ 2,411,510
2,165 5.000%, 6/01/22 6/13 at 101.00 AA+ 2,260,498
1,660 Front Royal and Warren County Industrial Development 4/14 at 100.00 AAA 1,739,298
Authority, Virginia, Lease Revenue Bonds, Series 2004B,
5.000%, 4/01/18 - FSA Insured
1,270 James City County Economic Development Authority, Virginia, 7/15 at 100.00 AA- 1,334,973
Revenue Bonds, County Government Projects, Series 2005,
5.000%, 7/15/19
1,930 Prince William County, Virginia, Certificates of Participation, 6/15 at 100.00 Aaa 2,029,221
County Facilities, Series 2005, 5.000%, 6/01/18 -
AMBAC Insured
2,000 Puerto Rico Highway and Transportation Authority, Highway 7/12 at 100.00 AAA 2,052,100
Revenue Bonds, Series 2002D, 5.000%, 7/01/32 - FSA Insured
44
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
Puerto Rico Public Buildings Authority, Guaranteed Government
Facilities Revenue Refunding Bonds, Series 2002D:
$ 265 5.250%, 7/01/27 7/12 at 100.00 BBB $ 272,060
320 5.250%, 7/01/36 7/12 at 100.00 BBB 326,659
1,110 Spotsylvania County Industrial Development Authority, Virginia, 8/13 at 100.00 AAA 1,109,945
Lease Revenue Bonds, School Facilities, Series 2003B,
4.375%, 8/01/20 - AMBAC Insured
2,000 Virgin Islands Public Finance Authority, Gross Receipts Taxes 10/10 at 101.00 BBB 2,191,240
Loan Note, Series 1999A, 6.500%, 10/01/24
1,400 Virginia Beach Development Authority, Public Facilities Revenue 5/15 at 100.00 AA 1,490,902
Bonds, Series 2005A, 5.000%, 5/01/16
2,000 Virginia College Building Authority, Educational Facilities 2/12 at 100.00 AA+ 2,074,620
Revenue Bonds, 21st Century College Program, Series 2002A,
5.000%, 2/01/22
2,000 Virginia Public School Authority, School Financing Bonds, 8/10 at 101.00 AA+ 2,092,840
1997 Resolution, Series 2000B, 5.000%, 8/01/18
1,950 Virginia Public School Authority, School Financing Bonds, No Opt. Call AA+ 2,080,631
1997 Resolution, Series 2004C, 5.000%, 8/01/13
1,625 Virginia Public School Authority, School Financing Bonds, 8/15 at 100.00 AA+ 1,723,361
1997 Resolution, Series 2005C, 5.000%, 8/01/17
Virginia Resources Authority, Infrastructure Revenue Bonds,
Pooled Loan Bond Program, Series 2000B:
1,120 5.500%, 5/01/20 - FSA Insured 5/10 at 101.00 AAA 1,194,603
3,060 5.500%, 5/01/30 - FSA Insured 5/10 at 101.00 AAA 3,249,812
1,740 Virginia Resources Authority, Infrastructure Revenue Bonds, 5/11 at 101.00 AA 1,819,796
Pooled Loan Bond Program, Series 2002A, 5.000%, 5/01/19
2,000 Virginia Transportation Board, Transportation Revenue Bonds, 5/14 at 100.00 AA+ 2,128,080
U.S. Route 58 Corridor Development Program, Series 2004B,
5.000%, 5/15/15
------------------------------------------------------------------------------------------------------------------------------------
41,135 Total Tax Obligation/Limited 43,429,942
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 13.2% (9.1% OF TOTAL INVESTMENTS)
755 Metropolitan District of Columbia Airports Authority, Virginia, 10/07 at 101.00 Aa3 776,261
Airport System Revenue Bonds, Series 1997A, 5.375%, 10/01/23
4,000 Norfolk Airport Authority, Virginia, Airport Revenue Bonds, 7/11 at 100.00 AAA 4,101,160
Series 2001A, 5.125%, 7/01/31 - FGIC Insured
1,000 Norfolk, Virginia, Parking System Revenue Bonds, Series 2005A, 2/15 at 100.00 AAA 1,046,090
5.000%, 2/01/23 - MBIA Insured
530 Pocahontas Parkway Association, Virginia, Senior Lien Revenue 8/08 at 102.00 BB- 547,707
Bonds, Route 895 Connector Toll Road, Series 1998A,
5.500%, 8/15/28
2,500 Richmond Metropolitan Authority, Virginia, Revenue Refunding No Opt. Call AAA 2,760,200
Bonds, Expressway System, Series 2002, 5.250%, 7/15/22 -
FGIC Insured
6,065 Virginia Port Authority, Revenue Bonds, Port Authority 7/07 at 101.00 AAA 6,221,170
Facilities, Series 1997, 5.600%, 7/01/27 - MBIA Insured
(Alternative Minimum Tax)
2,000 Virginia Resources Authority, Airports Revolving Fund Revenue 2/11 at 100.00 Aa2 2,089,760
Bonds, Series 2001A, 5.250%, 8/01/23
------------------------------------------------------------------------------------------------------------------------------------
16,850 Total Transportation 17,542,348
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 15.0% (10.3% OF TOTAL INVESTMENTS) (4)
3,500 Alexandria Industrial Development Authority, Virginia, Fixed Rate 10/10 at 101.00 AAA 3,835,195
Revenue Bonds, Institute for Defense Analyses, Series 2000A,
5.900%, 10/01/30 (Pre-refunded 10/01/10) - AMBAC Insured
750 Bristol, Virginia, General Obligation Utility System Revenue No Opt. Call AAA 804,788
Bonds, Series 2002, 5.000%, 11/01/24 - FSA Insured (ETM)
Fairfax County Water Authority, Virginia, Water Revenue
Refunding Bonds, Series 2002:
925 5.375%, 4/01/19 (Pre-refunded 4/01/12) 4/12 at 100.00 AAA 999,777
200 5.000%, 4/01/27 (Pre-refunded 4/01/12) 4/12 at 100.00 AAA 212,280
45
Nuveen Virginia Premium Income Municipal Fund (NPV) (continued)
Portfolio of INVESTMENTS May 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (4) (continued)
Greater Richmond Convention Center Authority, Virginia, Hotel
Tax Revenue Bonds, Convention
Center Expansion Project, Series 2000:
$ 600 6.125%, 6/15/25 (Pre-refunded 6/15/10) 6/10 at 101.00 AAA $ 658,458
2,000 6.125%, 6/15/29 (Pre-refunded 6/15/10) 6/10 at 101.00 AAA 2,194,860
2,000 Hampton, Virginia, General Obligation Public Improvement 2/10 at 102.00 AA (4) 2,191,580
Bonds, Series 2000, 6.000%, 2/01/20 (Pre-refunded 2/01/10)
Loudoun County Industrial Development Authority, Virginia,
Hospital Revenue Bonds, Loudoun Hospital Center, Series 2002A:
375 6.000%, 6/01/22 (Pre-refunded 6/01/12) 6/12 at 101.00 BBB (4) 419,273
800 6.100%, 6/01/32 (Pre-refunded 6/01/12) 6/12 at 101.00 BBB (4) 898,688
480 Loudoun County, Virginia, General Obligation Public 5/12 at 100.00 AAA 516,605
Improvement Bonds, Series 2002A, 5.250%, 5/01/22
(Pre-refunded 5/01/12)
2,500 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 2,666,175
Obligation Bonds, Series 2000A, 5.500%, 10/01/40
Puerto Rico Public Buildings Authority, Guaranteed Government
Facilities Revenue Refunding Bonds, Series 2002D:
735 5.250%, 7/01/27 (Pre-refunded 7/01/12) 7/12 at 100.00 BBB (4) 787,633
880 5.250%, 7/01/36 (Pre-refunded 7/01/12) 7/12 at 100.00 BBB (4) 943,017
1,035 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 1,078,884
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20
(Pre-refunded 7/01/10)
1,000 Virginia College Building Authority, Educational Facilities 4/10 at 101.00 A+ (4) 1,088,820
Revenue Bonds, Hampton University, Series 2000,
6.000%, 4/01/20 (Pre-refunded 4/01/10)
500 Virginia Resources Authority, Clean Water State Revolving 10/10 at 100.00 AAA 538,700
Fund Revenue Bonds, Series 1999, 5.625%, 10/01/22
(Pre-refunded 10/01/10)
------------------------------------------------------------------------------------------------------------------------------------
18,280 Total U.S. Guaranteed 19,834,733
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 11.8% (8.1% OF TOTAL INVESTMENTS)
Bristol, Virginia, Utility System Revenue Refunding Bonds,
Series 2003:
1,705 5.250%, 7/15/14 - MBIA Insured 7/13 at 100.00 AAA 1,838,399
1,800 5.250%, 7/15/15 - MBIA Insured 7/13 at 100.00 AAA 1,937,358
2,775 5.250%, 7/15/23 - MBIA Insured 7/13 at 100.00 AAA 2,954,376
2,500 Mecklenburg County Industrial Development Authority, Virginia, 10/12 at 100.00 A3 2,783,675
Revenue Bonds, UAE Mecklenburg Cogeneration LP,
Series 2002, 6.500%, 10/15/17 (Alternative Minimum Tax)
3,500 Richmond, Virginia, Public Utility Revenue Refunding Bonds, 1/08 at 101.00 AAA 3,586,695
Series 1998A, 5.125%, 1/15/28 - FGIC Insured
Richmond, Virginia, Public Utility Revenue Refunding Bonds,
Series 2002:
750 5.000%, 1/15/27 - FSA Insured 1/12 at 100.00 AAA 770,093
1,700 5.000%, 1/15/33 - FSA Insured 1/12 at 100.00 AAA 1,739,610
------------------------------------------------------------------------------------------------------------------------------------
14,730 Total Utilities 15,610,206
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 6.8% (4.7% OF TOTAL INVESTMENTS)
Fairfax County Water Authority, Virginia, Water Revenue
Refunding Bonds, Series 2002:
105 5.375%, 4/01/19 4/12 at 100.00 AAA 112,637
800 5.000%, 4/01/27 4/12 at 100.00 AAA 823,376
1,770 Henrico County, Virginia, Water and Sewer System Revenue 5/09 at 102.00 AA+ 1,819,188
Refunding Bonds, Series 1999, 5.000%, 5/01/28
1,000 Loudoun County Sanitation Authority, Virginia, Water and 1/15 at 100.00 AA+ 1,040,660
Sewerage System Revenue Bonds, Series 2004,
5.000%, 1/01/26
46
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER (continued)
Norfolk, Virginia, Water Revenue Refunding Bonds, Series 2001:
$ 1,310 5.000%, 11/01/21 - FGIC Insured 11/11 at 100.00 AAA $ 1,359,806
1,380 5.000%, 11/01/22 - FGIC Insured 11/11 at 100.00 AAA 1,433,144
2,250 Virginia Beach, Virginia, Storm Water Utility Revenue Bonds, 9/10 at 101.00 Aa3 2,449,305
Series 2000, 6.000%, 9/01/24
------------------------------------------------------------------------------------------------------------------------------------
8,615 Total Water and Sewer 9,038,116
------------------------------------------------------------------------------------------------------------------------------------
$ 183,455 Total Investments (cost $186,748,162) - 145.6% 193,121,320
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.5% 3,305,178
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (48.1)% (63,800,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 132,626,498
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments
are based on net assets applicable to Common shares
unless otherwise noted.
(2) Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates
(month and year) and prices of the earliest optional
call or redemption. There may be other call provisions
at varying prices at later dates. Certain
mortgage-backed securities may be subject to periodic
principal paydowns.
(3) Ratings (not covered by the report of independent
registered public accounting firm): Using the higher of
Standard & Poor's or Moody's rating. Ratings below BBB
by Standard & Poor's Group or Baa by Moody's Investor
Service, Inc. are considered to be below investment
grade.
(4) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which
ensure the timely payment of principal and interest.
Such investments are normally considered to be
equivalent to AAA rated securities.
(5) The issuer has received a preliminary adverse
determination from the Internal Revenue Service (the
"IRS") regarding the tax-exempt status of the bonds'
coupon payments. The Fund will continue to treat coupon
payments as tax-exempt income until such time that it
is formally determined that the interest on the bonds
should be treated as taxable.
N/R Not rated.
(ETM) Escrowed to maturity.
See accompanying notes to financial statements.
47
Nuveen Virginia Dividend Advantage Municipal Fund (NGB)
Portfolio of
INVESTMENTS May 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 4.8% (3.2% OF TOTAL INVESTMENTS)
Guam Economic Development Authority, Tobacco Settlement
Asset-Backed Bonds, Series 2001A:
$ 85 5.000%, 5/15/22 5/11 at 100.00 Baa3 $ 85,967
850 5.400%, 5/15/31 5/11 at 100.00 Baa3 858,985
Tobacco Settlement Financing Corporation of Virginia, Tobacco
Settlement Asset-Backed Bonds, Series 2005:
550 5.250%, 6/01/19 6/15 at 100.00 BBB 558,074
725 5.500%, 6/01/26 6/15 at 100.00 BBB 741,262
------------------------------------------------------------------------------------------------------------------------------------
2,210 Total Consumer Staples 2,244,288
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 14.0% (9.4% OF TOTAL INVESTMENTS)
500 Danville Industrial Development Authority, Virginia, Educational 3/11 at 102.00 N/R 506,475
Facilities Revenue Bonds, Averett University, Series 2001,
6.000%, 3/15/22
500 Prince William County Industrial Development Authority, 10/13 at 101.00 A3 518,730
Virginia, Educational Facilities Revenue Bonds, Catholic
Diocese of Arlington, Series 2003, 5.500%, 10/01/33
850 Prince William County Park Authority, Virginia, Park Facilities 10/09 at 101.00 A3 902,360
Revenue Refunding and Improvement Bonds, Series 1999,
6.000%, 10/15/28
Puerto Rico Industrial, Tourist, Educational, Medical and
Environmental Control Facilities Financing Authority, Higher
Education Revenue Bonds, Ana G. Mendez University System,
Series 1999:
160 5.375%, 2/01/19 2/09 at 101.00 BBB- 163,125
320 5.375%, 2/01/29 2/09 at 101.00 BBB- 323,722
330 Rockbridge County Industrial Development Authority, Virginia, No Opt. Call B2 325,159
Horse Center Revenue Refunding Bonds, Series 2001B,
6.125%, 7/15/11
1,000 Rockbridge County Industrial Development Authority, Virginia, 7/11 at 100.00 B2 1,000,790
Horse Center Revenue Refunding Bonds, Series 2001C,
6.850%, 7/15/21
160 The Rector and Visitors of the University of Virginia, General 6/15 at 100.00 AAA 169,696
Revenue Bonds, Series 2005, 5.000%, 6/01/18
1,325 Virginia College Building Authority, Educational Facilities 9/10 at 100.00 AA+ 1,376,132
Revenue Bonds, Public Higher Education Financing Program,
Series 2000A, 5.000%, 9/01/17
700 Virginia College Building Authority, Educational Facilities No Opt. Call Aa1 748,090
Revenue Bonds, Public Higher Education Financing Program,
Series 2004B, 5.000%, 9/01/13
500 Virginia College Building Authority, Educational Facilities 7/08 at 101.00 AA 510,590
Revenue Refunding Bonds, Marymount University, Series 1998,
5.100%, 7/01/18 - RAAI Insured
------------------------------------------------------------------------------------------------------------------------------------
6,345 Total Education and Civic Organizations 6,544,869
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 11.0% (7.3% OF TOTAL INVESTMENTS)
100 Fairfax County Industrial Development Authority, Virginia, No Opt. Call AA+ 104,652
Hospital Revenue Refunding Bonds, Inova Health System,
Series 1993A, 5.000%, 8/15/23
1,000 Fauquier County Industrial Development Authority, Virginia, 10/12 at 102.00 AA 1,050,870
Hospital Revenue Bonds, Fauquier Hospital, Series 2002,
5.250%, 10/01/25 - RAAI Insured
1,500 Fredericksburg Industrial Development Authority, Virginia, 6/07 at 102.00 AAA 1,549,215
Hospital Facilities Revenue Refunding Bonds, MediCorp
Health System Obligated Group, Series 1996, 5.250%, 6/15/16 -
AMBAC Insured
500 Fredericksburg Industrial Development Authority, Virginia, 6/12 at 100.00 A3 505,680
Revenue Bonds, MediCorp Health System, Series 2002B,
5.125%, 6/15/33
500 Henrico County Economic Development Authority, Virginia, 11/12 at 100.00 A- 519,575
Revenue Bonds, Bon Secours Health System Inc., Series 2002A,
5.600%, 11/15/30
48
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE (continued)
$ 525 Manassas Industrial Development Authority, Virginia, Hospital 4/13 at 100.00 A2 $ 539,359
Revenue Bonds, Prince William Hospital, Series 2002,
5.250%, 4/01/33
800 Norton Industrial Development Authority, Virginia, Hospital 12/11 at 101.00 A 852,328
Revenue Refunding and Improvement Bonds, Norton
Community Hospital, Series 2001, 6.000%, 12/01/22 -
ACA Insured
------------------------------------------------------------------------------------------------------------------------------------
4,925 Total Health Care 5,121,679
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 4.4% (2.9% OF TOTAL INVESTMENTS)
1,000 Arlington County Industrial Development Authority, Virginia, 11/11 at 102.00 AAA 1,018,770
Multifamily Housing Mortgage Revenue Bonds, Arlington
View Terrace Apartments, Series 2001, 5.150%, 11/01/31
(Mandatory put 11/01/19) (Alternative Minimum Tax)
1,000 Virginia Housing Development Authority, Rental Housing Bonds, 10/10 at 100.00 AA+ 1,031,660
Series 2000G, 5.625%, 10/01/20 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
2,000 Total Housing/Multifamily 2,050,430
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 3.5% (2.3% OF TOTAL INVESTMENTS)
1,000 Virginia Housing Development Authority, Commonwealth 7/11 at 100.00 AAA 1,025,090
Mortgage Bonds, Series 2001H-1, 5.350%, 7/01/31 -
MBIA Insured
600 Virginia Housing Development Authority, Commonwealth 1/15 at 100.00 AAA 584,562
Mortgage Bonds, Series 2005C-C2, 4.750%, 10/01/32
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
1,600 Total Housing/Single Family 1,609,652
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 0.2% (0.1% OF TOTAL INVESTMENTS)
50 Charles County Industrial Development Authority, Virginia, No Opt. Call BBB 50,941
Solid Waste Disposal Facility Revenue Refunding Bonds,
USA Waste of Virginia Inc., Series 1999, 4.875%, 2/01/09
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 4.4% (3.0% OF TOTAL INVESTMENTS)
500 Albemarle County Industrial Development Authority, Virginia, 1/12 at 100.00 N/R 516,675
Residential Care Facility Revenue Bonds, Westminster
Canterbury of the Blue Ridge First Mortgage, Series 2001,
6.200%, 1/01/31
350 Chesterfield County Health Center Commission, Virginia, 12/15 at 100.00 N/R 347,648
Mortgage Revenue Bonds, Lucy Corr Village, Series 2005,
5.625%, 12/01/39
650 James City County Industrial Development Authority, Virginia, 3/12 at 101.00 N/R 685,653
Residential Care Facility First Mortgage Revenue Refunding
Bonds, Williamsburg Landing Inc., Series 2003A, 6.000%, 3/01/23
350 Virginia Beach Development Authority, Virginia, Residential 11/15 at 100.00 N/R 348,047
Care Facility Mortgage Revenue Bonds, Westminster
Canterbury on Chesapeake Bay, Series 2005, 5.000%, 11/01/22
175 Winchester Industrial Development Authority, Virginia, 1/15 at 100.00 N/R 175,870
Residential Care Facility Revenue Bonds, Westminster-
Canterbury of Winchester Inc., Series 2005A, 5.200%, 1/01/27
------------------------------------------------------------------------------------------------------------------------------------
2,025 Total Long-Term Care 2,073,893
------------------------------------------------------------------------------------------------------------------------------------
MATERIALS - 1.7% (1.2% OF TOTAL INVESTMENTS)
100 Bedford County Industrial Development Authority, Virginia, 2/08 at 102.00 B2 98,083
Industrial Development Revenue Refunding Bonds, Nekoosa
Packaging Corporation, Series 1998, 5.600%, 12/01/25
(Alternative Minimum Tax) (5)
20 Bedford County Industrial Development Authority, Virginia, 12/09 at 101.00 B2 20,584
Industrial Development Revenue Refunding Bonds, Nekoosa
Packaging Corporation, Series 1999A, 6.550%, 12/01/25
(Alternative Minimum Tax) (5)
220 Goochland County Industrial Development Authority, Virginia, 12/08 at 101.00 B2 215,798
Industrial Development Revenue Refunding Bonds, Nekoosa
Packaging Corporation Project, Series 1998, 5.650%, 12/01/25
(Alternative Minimum Tax) (5)
500 Hopewell Industrial Development Authority, Virginia, No Opt. Call CCC+ 479,240
Environmental Improvement Revenue Bonds, Smurfit Stone
Container Corporation, Series 2005, 5.250%, 6/01/15
------------------------------------------------------------------------------------------------------------------------------------
840 Total Materials 813,705
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 31.4% (21.0% OF TOTAL INVESTMENTS)
330 Alexandria, Virginia, General Obligation Bonds, No Opt. Call AAA 353,790
Series 2004B, 5.000%, 6/15/13
49
Nuveen Virginia Dividend Advantage Municipal Fund (NGB) (continued)
Portfolio of INVESTMENTS May 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 500 Arlington County, Virginia, General Obligation Bonds, 5/15 at 100.00 AAA $ 536,070
Series 2005, 5.000%, 5/15/16
600 Arlington County, Virginia, General Obligation Bonds, 8/16 at 100.00 AAA 639,096
Series 2006, 5.000%, 8/01/20
2,000 Chesterfield County, Virginia, General Obligation Public 1/11 at 100.00 AAA 2,080,120
Improvement Bonds, Series 2001, 5.000%, 1/15/21
500 Henrico County, Virginia, General Obligation Bonds, 7/15 at 100.00 AAA 536,455
Series 2005, 5.000%, 7/15/16
3,310 Leesburg, Virginia, General Obligation Public Improvement 1/11 at 101.00 AAA 3,476,953
Bonds, Series 2000, 5.125%, 1/15/21 - FGIC Insured
660 Loudoun County, Virginia, General Obligation Public No Opt. Call AAA 709,665
Improvement Bonds, Series 2005A, 5.000%, 7/01/14
500 Loudoun County, Virginia, General Obligation Public 6/15 at 100.00 AAA 532,230
Improvement Bonds, Series 2005B, 5.000%, 6/01/18
845 Newport News, Virginia, General Obligation Bonds, 5/14 at 101.00 AA 900,508
Series 2004C, 5.000%, 5/01/16
320 Northern Mariana Islands, General Obligation Bonds, 6/10 at 100.00 A 335,568
Series 2000A, 6.000%, 6/01/20 - ACA Insured
Richmond, Virginia, General Obligation Bonds, Series 2005A:
620 5.000%, 7/15/17 - FSA Insured 7/15 at 100.00 AAA 658,397
500 5.000%, 7/15/20 - FSA Insured 7/15 at 100.00 AAA 526,350
400 Suffolk, Virginia, General Obligation Bonds, Series 2005, No Opt. Call Aa2 429,004
5.000%, 12/01/15
400 Virginia Beach, Virginia, General Obligation Bonds, Series 2005, 1/16 at 100.00 AA+ 422,016
5.000%, 1/15/20
2,425 Virginia Beach, Virginia, General Obligation Public Improvement 6/11 at 101.00 AA+ 2,515,477
Bonds, Series 2001, 5.000%, 6/01/21
------------------------------------------------------------------------------------------------------------------------------------
13,910 Total Tax Obligation/General 14,651,699
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 24.7% (16.5% OF TOTAL INVESTMENTS)
239 Bell Creek Community Development Authority, Virginia, Special 3/13 at 101.00 N/R 251,765
Assessment Bonds, Series 2003A, 6.750%, 3/01/22
500 Broad Street Community Development Authority, Virginia, 6/13 at 102.00 N/R 551,845
Revenue Bonds, Series 2003, 7.500%, 6/01/33
Buena Vista Public Recreational Facilities Authority, Virginia,
Lease Revenue Bonds, Golf Course Project, Series 2005A:
120 5.250%, 7/15/25 - ACA Insured 7/15 at 100.00 A 124,034
95 5.500%, 7/15/35 - ACA Insured 7/15 at 100.00 A 98,475
800 Commonwealth Transportation Board of Virginia, Federal No Opt. Call AA 857,528
Highway Reimbursement Anticipation Notes, Series 2005,
5.000%, 9/28/15
1,000 Culpeper Industrial Development Authority, Virginia, Lease 1/15 at 100.00 AAA 1,042,830
Revenue Bonds, School Facilities Project, Series 2005,
5.000%, 1/01/22 - MBIA Insured
500 Fairfax County Economic Development Authority, Virginia, 5/16 at 100.00 AA+ 530,380
Lease Revenue Bonds, Joint Public Uses Community Project,
Series 2006, 5.000%, 5/15/18
580 Prince William County, Virginia, Certificates of Participation, 6/15 at 100.00 Aaa 606,291
County Facilities, Series 2005, 5.000%, 6/01/20 -
AMBAC Insured
1,000 Spotsylvania County Industrial Development Authority, Virginia, 8/13 at 100.00 AAA 1,050,860
Lease Revenue Bonds, School Facilities, Series 2003B,
5.125%, 8/01/23 - AMBAC Insured
960 Virgin Islands Public Finance Authority, Gross Receipts Taxes 10/10 at 101.00 BBB 1,052,966
Loan Note, Series 1999A, 6.375%, 10/01/19
500 Virginia Beach Development Authority, Public Facilities 5/15 at 100.00 AA 532,465
Revenue Bonds, Series 2005A, 5.000%, 5/01/16
500 Virginia College Building Authority, Educational Facilities 2/12 at 100.00 AA+ 518,655
Revenue Bonds, 21st Century College Program, Series 2002A,
5.000%, 2/01/22
350 Virginia Gateway Community Development Authority, 3/13 at 102.00 N/R 379,327
Prince William County, Special Assessment Bonds,
Series 2003, 6.375%, 3/01/30
2,000 Virginia Public School Authority, School Financing Bonds, 8/11 at 101.00 AA+ 2,092,680
1997 Resolution, Series 2001A, 5.000%, 8/01/19
50
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 800 Virginia Public School Authority, School Financing Bonds, No Opt. Call AA+ $ 853,592
1997 Resolution, Series 2004C, 5.000%, 8/01/13
345 Virginia Public School Authority, School Financing Bonds, 8/15 at 100.00 AA+ 365,883
1997 Resolution, Series 2005C, 5.000%, 8/01/17
560 Virginia Transportation Board, Transportation Revenue Bonds, 5/14 at 100.00 AA+ 595,862
U.S. Route 58 Corridor Development Program, Series 2004B,
5.000%, 5/15/15
------------------------------------------------------------------------------------------------------------------------------------
10,849 Total Tax Obligation/Limited 11,505,438
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 24.0% (16.1% OF TOTAL INVESTMENTS)
1,000 Capital Region Airport Authority, Richmond, Virginia, Revenue 7/15 at 100.00 AAA 1,050,220
Bonds, Richmond International Airport, Series 2005A,
5.000%, 7/01/18 - FSA Insured
1,000 Chesapeake Bay Bridge and Tunnel Commission, Virginia, No Opt. Call AAA 1,141,710
General Resolution Revenue Refunding Bonds, Series 1998,
5.500%, 7/01/25 - MBIA Insured
3,000 Metropolitan Washington D.C. Airports Authority, Airport 10/11 at 101.00 AAA 3,186,600
System Revenue Bonds, Series 2001A, 5.500%, 10/01/27 -
MBIA Insured (Alternative Minimum Tax)
250 Metropolitan Washington D.C. Airports Authority, Airport 10/11 at 101.00 AAA 257,433
System Revenue Bonds, Series 2001B, 5.000%, 10/01/21 -
MBIA Insured
1,500 Norfolk Airport Authority, Virginia, Airport Revenue Bonds, 7/11 at 100.00 AAA 1,537,935
Series 2001A, 5.125%, 7/01/31 - FGIC Insured
500 Norfolk, Virginia, Parking System Revenue Bonds, 2/15 at 100.00 AAA 523,045
Series 2005A, 5.000%, 2/01/23 - MBIA Insured
Pocahontas Parkway Association, Virginia, Senior Lien Revenue
Bonds, Route 895 Connector Toll Road, Series 1998A:
200 5.250%, 8/15/07 No Opt. Call BB- 202,430
200 5.500%, 8/15/28 8/08 at 102.00 BB- 206,682
500 Richmond Metropolitan Authority, Virginia, Revenue Refunding No Opt. Call AAA 552,040
Bonds, Expressway System, Series 2002, 5.250%, 7/15/22 -
FGIC Insured
1,225 Virginia Resources Authority, Airports Revolving Fund 2/11 at 100.00 Aa2 1,279,978
Revenue Bonds, Series 2001A, 5.250%, 8/01/23
1,250 Virginia Resources Authority, Airports Revolving Fund Revenue 2/11 at 100.00 Aa2 1,266,925
Bonds, Series 2001B, 5.125%, 8/01/27 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
10,625 Total Transportation 11,204,998
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 17.6% (11.7% OF TOTAL INVESTMENTS) (4)
1,000 Bristol, Virginia, Utility System Revenue Refunding Bonds, 7/11 at 102.00 AAA 1,056,290
Series 2001, 5.000%, 7/15/21 - FSA Insured (ETM)
425 Loudoun County Industrial Development Authority, Virginia, 6/12 at 101.00 BBB (4) 475,176
Hospital Revenue Bonds, Loudoun Hospital Center,
Series 2002A, 6.000%, 6/01/22 (Pre-refunded 6/01/12)
1,540 Loudoun County, Virginia, General Obligation Public 1/11 at 101.00 AAA 1,653,082
Improvement Bonds, Series 2001B, 5.250%, 1/01/20
(Pre-refunded 1/01/11)
Puerto Rico Infrastructure Financing Authority, Special Obligation
Bonds, Series 2000A:
1,500 5.500%, 10/01/32 10/10 at 101.00 AAA 1,600,320
1,500 5.500%, 10/01/40 10/10 at 101.00 AAA 1,599,705
415 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 432,596
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20
(Pre-refunded 7/01/10)
1,300 Richmond, Virginia, General Obligation Refunding and Public 1/10 at 101.00 AAA 1,374,269
Improvement Bonds, Series 1999A, 5.125%, 1/15/24
(Pre-refunded 1/15/10) - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
7,680 Total U.S. Guaranteed 8,191,438
------------------------------------------------------------------------------------------------------------------------------------
51
Nuveen Virginia Dividend Advantage Municipal Fund (NGB) (continued)
Portfolio of INVESTMENTS May 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 3.5% (2.3% OF TOTAL INVESTMENTS)
$ 1,000 Mecklenburg County Industrial Development Authority, 10/12 at 100.00 A3 $ 1,113,470
Virginia, Revenue Bonds, UAE Mecklenburg Cogeneration LP,
Series 2002, 6.500%, 10/15/17 (Alternative Minimum Tax)
500 Richmond, Virginia, Public Utility Revenue Refunding Bonds, 1/12 at 100.00 AAA 513,395
Series 2002, 5.000%, 1/15/27 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
1,500 Total Utilities 1,626,865
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 4.4% (3.0% OF TOTAL INVESTMENTS)
2,000 Henrico County, Virginia, Water and Sewer System Revenue 5/09 at 102.00 AA+ 2,066,120
Refunding Bonds, Series 1999, 5.000%, 5/01/22
------------------------------------------------------------------------------------------------------------------------------------
$ 66,559 Total Investments (cost $67,558,091) - 149.6% 69,756,015
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.9% 869,496
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (51.5)% (24,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 46,625,511
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments
are based on net assets applicable to Common shares
unless otherwise noted.
(2) Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates
(month and year) and prices of the earliest optional
call or redemption. There may be other call provisions
at varying prices at later dates. Certain
mortgage-backed securities may be subject to periodic
principal paydowns.
(3) Ratings (not covered by the report of independent
registered public accounting firm): Using the higher of
Standard & Poor's or Moody's rating. Ratings below BBB
by Standard & Poor's Group or Baa by Moody's Investor
Service, Inc. are considered to be below investment
grade.
(4) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which
ensure the timely payment of principal and interest.
Such investments are normally considered to be
equivalent to AAA rated securities.
(5) The issuer has received a preliminary adverse
determination from the Internal Revenue Service (the
"IRS") regarding the tax-exempt status of the bonds'
coupon payments. The Fund will continue to treat coupon
payments as tax-exempt income until such time that it
is formally determined that the interest on the bonds
should be treated as taxable.
N/R Not rated.
(ETM) Escrowed to maturity.
See accompanying notes to financial statements.
52
Nuveen Virginia Dividend Advantage Municipal Fund 2 (NNB)
Portfolio of
INVESTMENTS May 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 4.5% (3.0% OF TOTAL INVESTMENTS)
Tobacco Settlement Financing Corporation of Virginia, Tobacco
Settlement Asset-Backed Bonds, Series 2005:
$ 1,050 5.250%, 6/01/19 6/15 at 100.00 BBB $ 1,065,414
2,700 5.500%, 6/01/26 6/15 at 100.00 BBB 2,760,561
------------------------------------------------------------------------------------------------------------------------------------
3,750 Total Consumer Staples 3,825,975
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 8.8% (6.0% OF TOTAL INVESTMENTS)
1,000 Fairfax County Economic Development Authority, Virginia, 9/09 at 101.00 Aaa 1,047,750
Revenue Bonds, National Wildlife Federation, Series 1999,
5.375%, 9/01/29 - MBIA Insured
1,000 Prince William County Industrial Development Authority, 10/13 at 101.00 A3 1,037,460
Virginia, Educational Facilities Revenue Bonds, Catholic
Diocese of Arlington, Series 2003, 5.500%, 10/01/33
1,500 Puerto Rico Industrial, Tourist, Educational, Medical and 12/12 at 101.00 BBB- 1,542,375
Environmental Control Facilities Financing Authority, Higher
Education Revenue Refunding Bonds, Ana G. Mendez University
System, Series 2002, 5.375%, 12/01/21
500 Rockbridge County Industrial Development Authority, Virginia, 7/11 at 100.00 B2 500,395
Horse Center Revenue Refunding Bonds, Series 2001C,
6.850%, 7/15/21
275 The Rector and Visitors of the University of Virginia, General 6/15 at 100.00 AAA 291,665
Revenue Bonds, Series 2005, 5.000%, 6/01/18
1,000 Virginia College Building Authority, Educational Facilities No Opt. Call Aa1 1,068,700
Revenue Bonds, Public Higher Education Financing Program,
Series 2004B, 5.000%, 9/01/13
2,000 Winchester Industrial Development Authority, Virginia, 10/08 at 102.00 AAA 2,089,640
Educational Facilities First Mortgage Revenue Bonds,
Shenandoah University, Series 1998, 5.250%, 10/01/28 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
7,275 Total Education and Civic Organizations 7,577,985
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 17.6% (12.0% OF TOTAL INVESTMENTS)
1,500 Albemarle County Industrial Development Authority, Virginia, 10/12 at 100.00 A2 1,528,845
Hospital Revenue Bonds, Martha Jefferson Hospital,
Series 2002, 5.250%, 10/01/35
3,000 Fauquier County Industrial Development Authority, Virginia, 10/12 at 102.00 AA 3,152,610
Hospital Revenue Bonds, Fauquier Hospital, Series 2002,
5.250%, 10/01/25 - RAAI Insured
675 Fredericksburg Industrial Development Authority, Virginia, 6/12 at 100.00 A3 682,668
Revenue Bonds, MediCorp Health System, Series 2002B,
5.125%, 6/15/33
1,000 Henrico County Economic Development Authority, Virginia, 11/12 at 100.00 A- 1,039,150
Revenue Bonds, Bon Secours Health System Inc.,
Series 2002A, 5.600%, 11/15/30
1,155 Manassas Industrial Development Authority, Virginia, Hospital 4/13 at 100.00 A2 1,186,589
Revenue Bonds, Prince William Hospital, Series 2002,
5.250%, 4/01/33
1,000 Medical College of Virginia Hospital Authority, General Revenue 7/08 at 102.00 AAA 1,044,980
Bonds, Series 1998, 5.250%, 7/01/14 - MBIA Insured
1,200 Norton Industrial Development Authority, Virginia, Hospital 12/11 at 101.00 A 1,278,492
Revenue Refunding and Improvement Bonds, Norton Community
Hospital, Series 2001, 6.000%, 12/01/22 - ACA Insured
1,000 Prince William County Industrial Development Authority, 10/08 at 102.00 Aaa 1,032,820
Virginia, Hospital Facility Revenue Refunding Bonds, Potomac
Hospital Corporation of Prince William, Series 1998, 5.000%,
10/01/18 - FSA Insured
3,915 Roanoke Industrial Development Authority, Virginia, Hospital 7/12 at 100.00 AAA 4,156,438
Revenue Bonds, Carilion Health System, Series 2002A,
5.500%, 7/01/20 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
14,445 Total Health Care 15,102,592
------------------------------------------------------------------------------------------------------------------------------------
53
Nuveen Virginia Dividend Advantage Municipal Fund 2 (NNB) (continued)
Portfolio of INVESTMENTS May 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 9.5% (6.5% OF TOTAL INVESTMENTS)
$ 7,485 Virginia Housing Development Authority, Commonwealth 7/11 at 100.00 AAA $ 7,672,798
Mortgage Bonds, Series 2001H-1, 5.350%, 7/01/31 -
MBIA Insured
500 Virginia Housing Development Authority, Commonwealth 1/15 at 100.00 AAA 487,135
Mortgage Bonds, Series 2005C-C2, 4.750%, 10/01/32
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
7,985 Total Housing/Single Family 8,159,933
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 3.7% (2.6% OF TOTAL INVESTMENTS)
165 Albemarle County Industrial Development Authority, Virginia, 1/12 at 100.00 N/R 170,503
Residential Care Facility Revenue Bonds, Westminster
Canterbury of the Blue Ridge First Mortgage, Series 2001,
6.200%, 1/01/31
650 Chesterfield County Health Center Commission, Virginia, 12/15 at 100.00 N/R 645,632
Mortgage Revenue Bonds, Lucy Corr Village, Series 2005,
5.625%, 12/01/39
1,350 James City County Industrial Development Authority, Virginia, 3/12 at 101.00 N/R 1,424,048
Residential Care Facility First Mortgage Revenue Refunding
Bonds, Williamsburg Landing Inc., Series 2003A,
6.000%, 3/01/23
650 Virginia Beach Development Authority, Virginia, Residential 11/15 at 100.00 N/R 646,373
Care Facility Mortgage Revenue Bonds, Westminster
Canterbury on Chesapeake Bay, Series 2005,
5.000%, 11/01/22
325 Winchester Industrial Development Authority, Virginia, 1/15 at 100.00 N/R 326,615
Residential Care Facility Revenue Bonds, Westminster-
Canterbury of Winchester Inc., Series 2005A, 5.200%, 1/01/27
------------------------------------------------------------------------------------------------------------------------------------
3,140 Total Long-Term Care 3,213,171
------------------------------------------------------------------------------------------------------------------------------------
MATERIALS - 1.9% (1.2% OF TOTAL INVESTMENTS)
165 Bedford County Industrial Development Authority, Virginia, 2/08 at 102.00 B2 161,837
Industrial Development Revenue Refunding Bonds, Nekoosa
Packaging Corporation, Series 1998, 5.600%, 12/01/25
(Alternative Minimum Tax) (5)
460 Goochland County Industrial Development Authority, Virginia, 12/08 at 101.00 B2 451,214
Industrial Development Revenue Refunding Bonds, Nekoosa
Packaging Corporation Project, Series 1998, 5.650%, 12/01/25
(Alternative Minimum Tax) (5)
1,000 Hopewell Industrial Development Authority, Virginia, No Opt. Call CCC+ 958,480
Environmental Improvement Revenue Bonds, Smurfit Stone
Container Corporation, Series 2005, 5.250%, 6/01/15
------------------------------------------------------------------------------------------------------------------------------------
1,625 Total Materials 1,571,531
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 37.5% (25.6% OF TOTAL INVESTMENTS)
600 Alexandria, Virginia, General Obligation Bonds, Series 2004B, No Opt. Call AAA 643,254
5.000%, 6/15/13
1,000 Arlington County, Virginia, General Obligation Bonds, 5/15 at 100.00 AAA 1,072,140
Series 2005, 5.000%, 5/15/16
500 Arlington County, Virginia, General Obligation Bonds, 8/16 at 100.00 AAA 532,580
Series 2006, 5.000%, 8/01/20
1,750 Chesapeake, Virginia, General Obligation Bonds, Series 2001, 12/11 at 100.00 AA 1,894,795
5.500%, 12/01/16
1,730 Loudoun County, Virginia, General Obligation Public Improvement 11/11 at 101.00 AAA 1,765,517
Bonds, Series 2001C, 4.500%, 11/01/17
95 Loudoun County, Virginia, General Obligation Public Improvement 5/12 at 100.00 AAA 100,890
Bonds, Series 2002A, 5.250%, 5/01/22
1,200 Loudoun County, Virginia, General Obligation Public Improvement No Opt. Call AAA 1,290,300
Bonds, Series 2005A, 5.000%, 7/01/14
1,000 Loudoun County, Virginia, General Obligation Public Improvement 6/15 at 100.00 AAA 1,064,460
Bonds, Series 2005B, 5.000%, 6/01/18
1,840 Newport News, Virginia, General Obligation Bonds, General 7/13 at 100.00 AA 1,918,439
Improvement and Water Projects, Series 2002A,
5.000%, 7/01/20
1,000 Newport News, Virginia, General Obligation Bonds, 11/13 at 100.00 AA 1,038,860
Series 2003B, 5.000%, 11/01/22
565 Portsmouth, Virginia, General Obligation Public Utility Refunding 6/08 at 100.00 AAA 576,085
Bonds, Series 2001B, 5.000%, 6/01/21 - FGIC Insured
Powhatan County, Virginia, General Obligation Bonds, Series 2001:
660 5.000%, 1/15/23 - AMBAC Insured 1/11 at 101.00 AAA 684,057
1,000 5.000%, 1/15/27 - AMBAC Insured 1/11 at 101.00 AAA 1,025,290
1,000 Richmond, Virginia, General Obligation Bonds, Series 2004A, 7/14 at 100.00 AAA 1,047,860
5.000%, 7/15/21 - FSA Insured
54
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 1,000 Richmond, Virginia, General Obligation Bonds, Series 2005A, 7/15 at 100.00 AAA $ 1,052,700
5.000%, 7/15/20 - FSA Insured
Roanoke, Virginia, General Obligation Public Improvement Bonds,
Series 2002A:
2,400 5.000%, 10/01/18 10/12 at 101.00 AA 2,532,672
2,435 5.000%, 10/01/19 10/12 at 101.00 AA 2,562,375
1,280 Roanoke, Virginia, General Obligation Public Improvement 10/12 at 101.00 AAA 1,352,256
Bonds, Series 2002B, 5.000%, 10/01/15 - FGIC Insured
(Alternative Minimum Tax)
Salem, Virginia, General Obligation Public Improvement Bonds,
Series 2002:
1,145 5.375%, 1/01/21 1/12 at 100.00 Aa3 1,217,158
1,200 5.375%, 1/01/22 1/12 at 100.00 Aa3 1,275,624
1,260 5.375%, 1/01/23 1/12 at 100.00 Aa3 1,339,405
1,325 5.375%, 1/01/24 1/12 at 100.00 Aa3 1,408,502
1,000 Staunton, Virginia, General Obligation Bonds, Series 2004, 2/14 at 101.00 AAA 1,145,350
6.250%, 2/01/25 - AMBAC Insured
600 Virginia Beach, Virginia, General Obligation Bonds, Series 2005, 1/16 at 100.00 AA+ 633,024
5.000%, 1/15/20
1,500 Virginia Beach, Virginia, General Obligation Public Improvement 6/11 at 101.00 AA+ 1,568,910
Bonds, Series 2001, 5.000%, 6/01/19
1,420 Virginia Beach, Virginia, General Obligation Refunding and 3/12 at 100.00 AA+ 1,483,304
Public Improvement Bonds, Series 2002, 5.000%, 3/01/21
------------------------------------------------------------------------------------------------------------------------------------
30,505 Total Tax Obligation/General 32,225,807
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 20.3% (13.8% OF TOTAL INVESTMENTS)
441 Bell Creek Community Development Authority, Virginia, Special 3/13 at 101.00 N/R 464,554
Assessment Bonds, Series 2003A, 6.750%, 3/01/22
1,000 Broad Street Community Development Authority, Virginia, 6/13 at 102.00 N/R 1,103,690
Revenue Bonds, Series 2003, 7.500%, 6/01/33
Buena Vista Public Recreational Facilities Authority, Virginia,
Lease Revenue Bonds, Golf Course Project, Series 2005A:
210 5.250%, 7/15/25 - ACA Insured 7/15 at 100.00 A 217,060
165 5.500%, 7/15/35 - ACA Insured 7/15 at 100.00 A 171,036
800 Commonwealth Transportation Board of Virginia, Federal No Opt. Call AA 857,528
Highway Reimbursement Anticipation Notes, Series 2005,
5.000%, 9/28/15
800 Fairfax County Economic Development Authority, Virginia, 5/16 at 100.00 AA+ 848,608
Lease Revenue Bonds, Joint Public Uses Community Project,
Series 2006, 5.000%, 5/15/18
1,800 Loudoun County Industrial Development Authority, Virginia, 3/13 at 100.00 AA+ 1,882,044
Lease Revenue Refunding Bonds, Public Facility Project,
Series 2003, 5.000%, 3/01/19
400 Puerto Rico Public Buildings Authority, Guaranteed Government 7/12 at 100.00 BBB 410,656
Facilities Revenue Refunding Bonds, Series 2002D,
5.250%, 7/01/27
455 Puerto Rico Public Finance Corporation, Commonwealth 2/12 at 100.00 BBB- 471,175
Appropriation Bonds, Series 2002E, 5.500%, 8/01/29
1,000 Spotsylvania County Industrial Development Authority, Virginia, 8/13 at 100.00 AAA 1,050,860
Lease Revenue Bonds, School Facilities, Series 2003B,
5.125%, 8/01/23 - AMBAC Insured
800 Virginia Beach Development Authority, Public Facilities Revenue 5/15 at 100.00 AA 851,944
Bonds, Series 2005A, 5.000%, 5/01/16
1,790 Virginia College Building Authority, Educational Facilities 2/12 at 100.00 AA+ 1,856,785
Revenue Bonds, 21st Century College Program, Series 2002A,
5.000%, 2/01/22
690 Virginia Gateway Community Development Authority, 3/13 at 102.00 N/R 747,815
Prince William County, Special Assessment Bonds, Series 2003,
6.375%, 3/01/30
2,540 Virginia Public School Authority, School Financing Bonds, 8/11 at 101.00 AA+ 2,657,704
1997 Resolution, Series 2001B, 5.000%, 8/01/19
700 Virginia Public School Authority, School Financing Bonds, No Opt. Call AA+ 746,893
1997 Resolution, Series 2004C, 5.000%, 8/01/13
570 Virginia Public School Authority, School Financing Bonds, 8/15 at 100.00 AA+ 604,502
1997 Resolution, Series 2005C, 5.000%, 8/01/17
55
Nuveen Virginia Dividend Advantage Municipal Fund 2 (NNB) (continued)
Portfolio of INVESTMENTS May 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 1,265 Virginia Resources Authority, Infrastructure Revenue Bonds, 5/10 at 101.00 AA $ 1,294,538
Pooled Loan Bond Program, Series 2001D, 5.000%, 5/01/26
1,100 Virginia Transportation Board, Transportation Revenue Bonds, 5/14 at 100.00 AA+ 1,170,444
U.S. Route 58 Corridor Development Program, Series 2004B,
5.000%, 5/15/15
------------------------------------------------------------------------------------------------------------------------------------
16,526 Total Tax Obligation/Limited 17,407,836
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 4.1% (2.8% OF TOTAL INVESTMENTS)
1,000 Metropolitan Washington D.C. Airports Authority, Airport System 10/12 at 100.00 AAA 1,023,200
Revenue Bonds, Series 2002A, 5.125%, 10/01/26 -
FGIC Insured (Alternative Minimum Tax)
1,500 Norfolk, Virginia, Parking System Revenue Bonds, Series 2005A, 2/15 at 100.00 AAA 1,569,135
5.000%, 2/01/23 - MBIA Insured
Pocahontas Parkway Association, Virginia, Senior Lien Revenue
Bonds, Route 895 Connector Toll Road, Series 1998A:
300 5.250%, 8/15/07 No Opt. Call BB- 303,645
325 5.500%, 8/15/28 8/08 at 102.00 B 335,858
300 Virginia Resources Authority, Airports Revolving Fund Revenue 2/11 at 100.00 Aa2 315,450
Bonds, Series 2001A, 5.250%, 8/01/17
------------------------------------------------------------------------------------------------------------------------------------
3,425 Total Transportation 3,547,288
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 17.1% (11.7% OF TOTAL INVESTMENTS) (4)
1,000 Bristol, Virginia, General Obligation Utility System Revenue No Opt. Call AAA 1,073,050
Bonds, Series 2002, 5.000%, 11/01/24 - FSA Insured (ETM)
195 Fairfax County Water Authority, Virginia, Water Revenue 4/12 at 100.00 AAA 206,973
Refunding Bonds, Series 2002, 5.000%, 4/01/27
(Pre-refunded 4/01/12)
Loudoun County Industrial Development Authority, Virginia,
Hospital Revenue Bonds, Loudoun Hospital Center, Series 2002A:
250 6.000%, 6/01/22 (Pre-refunded 6/01/12) 6/12 at 101.00 BBB (4) 279,515
600 6.100%, 6/01/32 (Pre-refunded 6/01/12) 6/12 at 101.00 BBB (4) 674,016
445 Loudoun County, Virginia, General Obligation Public Improvement 5/12 at 100.00 AAA 478,936
Bonds, Series 2002A, 5.250%, 5/01/22 (Pre-refunded 5/01/12)
2,750 Puerto Rico Infrastructure Financing Authority, Special Obligation 10/10 at 101.00 AAA 2,932,793
Bonds, Series 2000A, 5.500%, 10/01/40
1,100 Puerto Rico Public Buildings Authority, Guaranteed Government 7/12 at 100.00 BBB (4) 1,178,771
Facilities Revenue Refunding Bonds, Series 2002D,
5.250%, 7/01/27 (Pre-refunded 7/01/12)
1,345 Puerto Rico Public Finance Corporation, Commonwealth 2/12 at 100.00 Aaa 1,458,935
Appropriation Bonds, Series 2002E, 5.500%, 8/01/29
(Pre-refunded 2/01/12)
500 Virginia Beach, Virginia, Water and Sewerage System Revenue 8/10 at 100.00 AA (4) 527,490
Bonds, Series 2000, 5.125%, 8/01/14 (Pre-refunded 8/01/10)
500 Virginia Public Building Authority, Public Facilities Revenue 8/10 at 100.00 AA+ (4) 539,455
Bonds, Series 2000A, 5.750%, 8/01/20 (Pre-refunded 8/01/10)
1,710 Virginia Transportation Board, Transportation Revenue Bonds, 5/11 at 100.00 AA+ (4) 1,808,188
Northern Virginia Transportation District Program, Series 2001A,
5.000%, 5/15/26 (Pre-refunded 5/15/11)
Virginia Transportation Board, Transportation Revenue Bonds,
U.S. Route 58 Corridor Development Program, Series 2001B:
1,705 5.000%, 5/15/22 (Pre-refunded 5/15/11) 5/11 at 100.00 AA+ (4) 1,802,901
1,665 5.000%, 5/15/23 (Pre-refunded 5/15/11) 5/11 at 100.00 AA+ (4) 1,760,604
------------------------------------------------------------------------------------------------------------------------------------
13,765 Total U.S. Guaranteed 14,721,627
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 6.4% (4.4% OF TOTAL INVESTMENTS)
2,000 Mecklenburg County Industrial Development Authority, Virginia, 10/12 at 100.00 A3 2,226,940
Revenue Bonds, UAE Mecklenburg Cogeneration LP,
Series 2002, 6.500%, 10/15/17 (Alternative Minimum Tax)
3,125 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/10 at 101.00 AAA 3,287,750
Series 2000HH, 5.250%, 7/01/29 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
5,125 Total Utilities 5,514,690
------------------------------------------------------------------------------------------------------------------------------------
56
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 15.3% (10.4% OF TOTAL INVESTMENTS)
$ 805 Fairfax County Water Authority, Virginia, Water Revenue 4/12 at 100.00 AAA $ 828,522
Refunding Bonds, Series 2002, 5.000%, 4/01/27
Henry County Public Service Authority, Virginia, Water and
Sewerage Revenue Refunding Bonds, Series 2001:
1,000 5.500%, 11/15/17 - FSA Insured No Opt. Call AAA 1,111,080
3,000 5.500%, 11/15/19 - FSA Insured No Opt. Call AAA 3,363,210
Norfolk, Virginia, Water Revenue Refunding Bonds, Series 2001:
1,130 5.000%, 11/01/18 - FGIC Insured 11/11 at 100.00 AAA 1,182,149
1,190 5.000%, 11/01/19 - FGIC Insured 11/11 at 100.00 AAA 1,244,918
1,450 5.000%, 11/01/23 - FGIC Insured 11/11 at 100.00 AAA 1,504,491
1,525 5.000%, 11/01/24 - FGIC Insured 11/11 at 100.00 AAA 1,580,510
2,250 Virginia Resources Authority, Water and Sewerage System 5/11 at 101.00 AA 2,302,043
Revenue Bonds, Caroline County Public Improvements
Project, Series 2001, 5.000%, 5/01/32
------------------------------------------------------------------------------------------------------------------------------------
12,350 Total Water and Sewer 13,116,923
------------------------------------------------------------------------------------------------------------------------------------
$ 119,916 Total Investments (cost $121,203,298) - 146.7% 125,985,358
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.2% 1,901,648
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (48.9)% (42,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 85,887,006
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments
are based on net assets applicable to Common shares
unless otherwise noted.
(2) Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates
(month and year) and prices of the earliest optional
call or redemption. There may be other call provisions
at varying prices at later dates. Certain
mortgage-backed securities may be subject to periodic
principal paydowns.
(3) Ratings (not covered by the report of independent
registered public accounting firm): Using the higher of
Standard & Poor's or Moody's rating. Ratings below BBB
by Standard & Poor's Group or Baa by Moody's Investor
Service, Inc. are considered to be below investment
grade.
(4) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which
ensure the timely payment of principal and interest.
Such investments are normally considered to be
equivalent to AAA rated securities.
(5) The issuer has received a preliminary adverse
determination from the Internal Revenue Service (the
"IRS") regarding the tax-exempt status of the bonds'
coupon payments. The Fund will continue to treat coupon
payments as tax-exempt income until such time that it
is formally determined that the interest on the bonds
should be treated as taxable.
N/R Not rated.
(ETM) Escrowed to maturity.
See accompanying notes to financial statements.
57
Statement of
ASSETS AND LIABILITIES May 31, 2006
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $223,010,894, $88,532,004,
$89,550,637 and $112,293,408, respectively) $229,126,363 $90,761,854 $91,872,890 $113,541,648
Cash -- 185,781 390,285 435,080
Receivables:
Interest 3,950,158 1,588,068 1,511,394 1,679,591
Investments sold 1,185,690 275,000 -- --
Unrealized appreciation on forward swaps -- -- -- 211,923
Other assets 7,657 7,814 4,528 4,611
------------------------------------------------------------------------------------------------------------------------------------
Total assets 234,269,868 92,818,517 93,779,097 115,872,853
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft 1,116,298 -- -- --
Accrued expenses:
Management fees 124,974 30,582 26,923 31,294
Other 57,473 21,095 21,065 29,682
Preferred share dividends payable 37,266 4,894 4,895 2,650
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 1,336,011 56,571 52,883 63,626
------------------------------------------------------------------------------------------------------------------------------------
Preferred shares, at liquidation value 79,100,000 32,000,000 32,000,000 39,000,000
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $153,833,857 $60,761,946 $61,726,214 $ 76,809,227
====================================================================================================================================
Common shares outstanding 10,631,702 4,171,579 4,181,768 5,360,346
====================================================================================================================================
Net asset value per Common share outstanding (net assets applicable
to Common shares, divided by Common shares outstanding) $ 14.47 $ 14.57 $ 14.76 $ 14.33
====================================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF:
------------------------------------------------------------------------------------------------------------------------------------
Common shares, $.01 par value per share $ 106,317 $ 41,716 $ 41,818 $ 53,603
Paid-in surplus 147,671,172 59,183,089 59,319,733 75,655,887
Undistributed (Over-distribution of) net investment income 266,281 52,442 187,990 (84,856)
Accumulated net realized gain (loss) from investments and
derivative transactions (325,382) (745,151) (145,580) (275,570)
Net unrealized appreciation (depreciation) of investments and
derivative transactions 6,115,469 2,229,850 2,322,253 1,460,163
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $153,833,857 $60,761,946 $61,726,214 $ 76,809,227
====================================================================================================================================
Authorized shares:
Common Unlimited Unlimited Unlimited Unlimited
Preferred Unlimited Unlimited Unlimited Unlimited
====================================================================================================================================
See accompanying notes to financial statements.
58
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $186,748,162, $67,558,091
and $121,203,298, respectively) $193,121,320 $69,756,015 $125,985,358
Cash 196,831 -- 205,313
Receivables:
Interest 3,086,029 1,091,042 1,763,572
Investments sold 185,000 70,000 --
Unrealized appreciation on forward swaps -- -- --
Other assets 9,357 7,744 6,305
------------------------------------------------------------------------------------------------------------------------------------
Total assets 196,598,537 70,924,801 127,960,548
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft -- 244,488 --
Accrued expenses:
Management fees 105,626 23,278 36,677
Other 44,532 18,315 30,423
Preferred share dividends payable 21,881 13,209 6,442
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 172,039 299,290 73,542
------------------------------------------------------------------------------------------------------------------------------------
Preferred shares, at liquidation value 63,800,000 24,000,000 42,000,000
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $132,626,498 $46,625,511 $ 85,887,006
====================================================================================================================================
Common shares outstanding 8,909,930 3,126,624 5,717,565
====================================================================================================================================
Net asset value per Common share outstanding (net assets applicable
to Common shares, divided by Common shares outstanding) $ 14.89 $ 14.91 $ 15.02
====================================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF:
------------------------------------------------------------------------------------------------------------------------------------
Common shares, $.01 par value per share $ 89,099 $ 31,266 $ 57,176
Paid-in surplus 125,433,889 44,335,492 81,140,511
Undistributed (Over-distribution of) net investment income 501,200 132,605 163,523
Accumulated net realized gain (loss) from investments and
derivative transactions 229,152 (71,776) (256,264)
Net unrealized appreciation (depreciation) of investments and
derivative transactions 6,373,158 2,197,924 4,782,060
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $132,626,498 $46,625,511 $ 85,887,006
====================================================================================================================================
Authorized shares:
Common Unlimited Unlimited Unlimited
Preferred Unlimited Unlimited Unlimited
====================================================================================================================================
See accompanying notes to financial statements.
59
Statement of
OPERATIONS Year Ended May 31, 2006
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $11,406,310 $ 4,480,097 $ 4,415,973 $ 5,182,865
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 1,494,390 600,193 608,030 748,541
Preferred shares - auction fees 197,976 80,091 80,123 97,611
Preferred shares - dividend disbursing agent fees 20,000 10,000 10,000 10,000
Shareholders' servicing agent fees and expenses 27,494 2,413 1,698 1,427
Custodian's fees and expenses 62,923 28,936 28,887 36,596
Trustees' fees and expenses 4,995 1,990 2,051 2,488
Professional fees 17,829 12,620 12,587 13,600
Shareholders' reports - printing and mailing expenses 41,343 16,515 17,001 22,015
Stock exchange listing fees 10,237 355 355 456
Investor relations expense 26,860 11,852 12,070 14,297
Other expenses 17,686 12,960 12,702 13,322
------------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit and expense reimbursement 1,921,733 777,925 785,504 960,353
Custodian fee credit (24,444) (12,877) (13,247) (13,080)
Expense reimbursement -- (266,219) (285,215) (374,535)
------------------------------------------------------------------------------------------------------------------------------------
Net expenses 1,897,289 498,829 487,042 572,738
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 9,509,021 3,981,268 3,928,931 4,610,127
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from investments 83,005 (25,376) (1,124) 163,785
Net realized gain (loss) from forward swaps -- (62,612) (77,385) (75,241)
Net realized gain (loss) from futures -- -- -- (156)
Change in net unrealized appreciation (depreciation)
of investments (6,030,163) (2,009,294) (2,456,188) (2,948,764)
Change in net unrealized appreciation (depreciation)
of forward swaps -- 64,747 98,762 406,799
------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) (5,947,158) (2,032,535) (2,435,935) (2,453,577)
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
From net investment income (1,920,310) (790,032) (772,031) (978,804)
From accumulated net realized gains (31,400) -- (14,225) --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to Common shares
from distributions to Preferred shareholders (1,951,710) (790,032) (786,256) (978,804)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable to Common
shares from operations $ 1,610,153 $ 1,158,701 $ 706,740 $ 1,177,746
====================================================================================================================================
See accompanying notes to financial statements.
60
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $ 9,470,695 $ 3,426,052 $ 6,086,844
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 1,271,052 457,972 829,011
Preferred shares - auction fees 159,682 60,069 105,120
Preferred shares - dividend disbursing agent fees 20,000 10,000 10,000
Shareholders' servicing agent fees and expenses 23,449 1,497 1,824
Custodian's fees and expenses 49,681 24,740 34,612
Trustees' fees and expenses 4,301 1,457 2,763
Professional fees 17,335 12,518 14,038
Shareholders' reports - printing and mailing expenses 32,714 12,248 19,237
Stock exchange listing fees 10,268 266 485
Investor relations expense 23,814 8,249 14,580
Other expenses 16,717 11,813 14,071
------------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit and expense reimbursement 1,629,013 600,829 1,045,741
Custodian fee credit (26,759) (8,859) (19,466)
Expense reimbursement -- (203,149) (389,150)
------------------------------------------------------------------------------------------------------------------------------------
Net expenses 1,602,254 388,821 637,125
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 7,868,441 3,037,231 5,449,719
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from investments 1,639,045 255,078 147,265
Net realized gain (loss) from forward swaps -- -- (161,404)
Net realized gain (loss) from futures -- -- --
Change in net unrealized appreciation (depreciation)
of investments (7,073,360) (1,918,503) (3,264,225)
Change in net unrealized appreciation (depreciation)
of forward swaps -- -- 216,228
------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) (5,434,315) (1,663,425) (3,062,136)
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
From net investment income (1,304,947) (541,517) (1,029,859)
From accumulated net realized gains (231,433) -- (42,756)
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to Common shares
from distributions to Preferred shareholders (1,536,380) (541,517) (1,072,615)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable to Common
shares from operations $ 897,746 $ 832,289 $ 1,314,968
====================================================================================================================================
See accompanying notes to financial statements.
61
Statement of
CHANGES IN NET ASSETS
MARYLAND PREMIUM MARYLAND DIVIDEND MARYLAND DIVIDEND
INCOME (NMY) ADVANTAGE (NFM) ADVANTAGE 2 (NZR)
---------------------------- ----------------------------- ----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
5/31/06 5/31/05 5/31/06 5/31/05 5/31/06 5/31/05
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 9,509,021 $ 9,757,516 $ 3,981,268 $ 4,077,418 $ 3,928,931 $ 3,931,942
Net realized gain (loss) from
investments 83,005 795,306 (25,376) 114,678 (1,124) 274,944
Net realized gain (loss) from
forward swaps -- -- (62,612) (186,945) (77,385) (171,422)
Net realized gain (loss) from
futures -- -- -- -- -- --
Change in net unrealized
appreciation (depreciation)
of investments (6,030,163) 9,023,910 (2,009,294) 3,306,967 (2,456,188) 3,746,058
Change in net unrealized appreciation
(depreciation) of forward swaps -- -- 64,747 (64,747) 98,762 (98,762)
Distributions to
Preferred Shareholders:
From net investment income (1,920,310) (1,044,071) (790,032) (417,536) (772,031) (392,360)
From accumulated net
realized gains (31,400) -- -- -- (14,225) (15,798)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from operations 1,610,153 18,532,661 1,158,701 6,829,835 706,740 7,274,602
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (8,311,346) (9,572,060) (3,532,953) (3,885,205) (3,484,393) (3,655,367)
From accumulated net realized gains (260,035) -- -- -- (115,219) (256,385)
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Common shareholders (8,571,381) (9,572,060) (3,532,953) (3,885,205) (3,599,612) (3,911,752)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Common shares:
Offering costs adjustments -- -- -- -- -- --
Net proceeds from shares issued to
shareholders due to reinvestment
of distributions 298,649 429,038 84,704 65,542 119,407 56,507
Preferred shares offering costs
adjustments -- -- -- -- -- 16,302
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
applicable to Common shares from
capital share transactions 298,649 429,038 84,704 65,542 119,407 72,809
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
applicable to Common shares (6,662,579) 9,389,639 (2,289,548) 3,010,172 (2,773,465) 3,435,659
Net assets applicable to Common
shares at the beginning
of year 160,496,436 151,106,797 63,051,494 60,041,322 64,499,679 61,064,020
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of year $153,833,857 $160,496,436 $60,761,946 $63,051,494 $61,726,214 $64,499,679
====================================================================================================================================
Undistributed (Over-distribution of)
net investment income at the
end of year $ 266,281 $ 989,129 $ 52,442 $ 395,654 $ 187,990 $ 516,056
====================================================================================================================================
See accompanying notes to financial statements.
62
MARYLAND DIVIDEND VIRGINIA PREMIUM VIRGINIA DIVIDEND
ADVANTAGE 3 (NWI) INCOME (NPV) ADVANTAGE (NGB)
---------------------------- ----------------------------- ----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
5/31/06 5/31/05 5/31/06 5/31/05 5/31/06 5/31/05
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 4,610,127 $ 4,588,042 $ 7,868,441 $ 8,242,308 $ 3,037,231 $ 3,106,588
Net realized gain (loss) from
investments 163,785 94,606 1,639,045 1,338,639 255,078 277,377
Net realized gain (loss) from
forward swaps (75,241) (447,668) -- -- -- --
Net realized gain (loss) from
futures (156) -- -- -- -- --
Change in net unrealized
appreciation (depreciation)
of investments (2,948,764) 5,755,731 (7,073,360) 6,847,395 (1,918,503) 3,250,753
Change in net unrealized
appreciation (depreciation)
of forward swaps 406,799 (194,876) -- -- -- --
Distributions to
Preferred Shareholders:
From net investment income (978,804) (514,154) (1,304,947) (765,695) (541,517) (282,554)
From accumulated net
realized gains -- (2,976) (231,433) -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from operations 1,177,746 9,278,705 897,746 15,662,647 832,289 6,352,164
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (3,826,714) (4,164,157) (7,081,332) (7,997,824) (2,732,873) (2,913,141)
From accumulated net realized gains -- (40,734) (2,160,808) -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Common shareholders (3,826,714) (4,204,891) (9,242,140) (7,997,824) (2,732,873) (2,913,141)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Common shares:
Offering costs adjustments -- -- -- -- -- --
Net proceeds from shares issued to
shareholders due to reinvestment
of distributions 15,363 -- 630,496 553,214 52,481 46,268
Preferred shares offering costs
adjustments -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
applicable to Common shares from
capital share transactions 15,363 -- 630,496 553,214 52,481 46,268
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
applicable to Common shares (2,633,605) 5,073,814 (7,713,898) 8,218,037 (1,848,103) 3,485,291
Net assets applicable to Common
shares at the beginning
of year 79,442,832 74,369,018 140,340,396 132,122,359 48,473,614 44,988,323
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of year $76,809,227 $79,442,832 $132,626,498 $140,340,396 $46,625,511 $48,473,614
====================================================================================================================================
Undistributed (Over-distribution of)
net investment income at the
end of year $ (84,856) $ 110,535 $ 501,200 $ 1,047,355 $ 132,605 $ 370,691
====================================================================================================================================
See accompanying notes to financial statements.
63
Statement of
CHANGES IN NET ASSETS (continued)
VIRGINIA DIVIDEND
ADVANTAGE 2 (NNB)
----------------------------
YEAR ENDED YEAR ENDED
5/31/06 5/31/05
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 5,449,719 $ 5,449,338
Net realized gain (loss) from
investments 147,265 886,193
Net realized gain (loss) from forward swaps (161,404) (378,231)
Net realized gain (loss) from futures -- --
Change in net unrealized appreciation
(depreciation) of investments (3,264,225) 6,118,300
Change in net unrealized appreciation
(depreciation) of forward swaps 216,228 (216,228)
Distributions to Preferred Shareholders:
From net investment income (1,029,859) (505,130)
From accumulated net realized gains (42,756) (60,997)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from operations 1,314,968 11,293,245
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (4,841,986) (5,047,084)
From accumulated net realized gains (380,508) (1,070,956)
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Common shareholders (5,222,494) (6,118,040)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Common shares:
Offering costs adjustments 10,292 --
Net proceeds from shares issued to
shareholders due to reinvestment
of distributions 148,139 202,523
Preferred shares offering costs
adjustments 10,038 --
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
applicable to Common shares from
capital share transactions 168,469 202,523
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares (3,739,057) 5,377,728
Net assets applicable to Common
shares at the beginning of year 89,626,063 84,248,335
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of year $85,887,006 $89,626,063
====================================================================================================================================
Undistributed (Over-distribution of)
net investment income at the
end of year $ 163,523 $ 592,424
====================================================================================================================================
See accompanying notes to financial statements.
64
Notes to
FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The funds (the "Funds") covered in this report and their corresponding Common
share stock exchange symbols are Nuveen Maryland Premium Income Municipal Fund
(NMY), Nuveen Maryland Dividend Advantage Municipal Fund (NFM), Nuveen Maryland
Dividend Advantage Municipal Fund 2 (NZR), Nuveen Maryland Dividend Advantage
Municipal Fund 3 (NWI), Nuveen Virginia Premium Income Municipal Fund (NPV),
Nuveen Virginia Dividend Advantage Municipal Fund (NGB) and Nuveen Virginia
Dividend Advantage Municipal Fund 2 (NNB). Common shares of Maryland Premium
Income (NMY) and Virginia Premium Income (NPV) are traded on the New York Stock
Exchange while Common shares of Maryland Dividend Advantage (NFM), Maryland
Dividend Advantage 2 (NZR), Maryland Dividend Advantage 3 (NWI), Virginia
Dividend Advantage (NGB) and Virginia Dividend Advantage 2 (NNB) are traded on
the American Stock Exchange. The Funds are registered under the Investment
Company Act of 1940, as amended, as closed-end management investment companies.
Each Fund seeks to provide current income exempt from both regular federal and
designated state income taxes by investing primarily in a diversified portfolio
of municipal obligations issued by state and local government authorities within
a single state or certain U.S. territories.
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements in accordance with U.S.
generally accepted accounting principles.
Investment Valuation
The prices of municipal bonds in each Fund's investment portfolio are provided
by a pricing service approved by the Fund's Board of Trustees. When market price
quotes are not readily available (which is usually the case for municipal
securities), the pricing service establishes fair value based on yields or
prices of municipal bonds of comparable quality, type of issue, coupon, maturity
and rating, indications of value from securities dealers, evaluations of
anticipated cash flows or collateral and general market conditions. Prices of
forward swap contracts are also provided by an independent pricing service
approved by each Fund's Board of Trustees. If the pricing service is unable to
supply a price for a municipal bond or a forward swap contract, each Fund may
use a market price or fair market value quote provided by a major broker/dealer
in such investments. If it is determined that the market price or fair market
value for an investment is unavailable or inappropriate, the Board of Trustees
of the Funds, or its designee, may establish a fair value for the investment.
Temporary investments in securities that have variable rate and demand features
qualifying them as short-term investments are valued at amortized cost, which
approximates market value.
Investment Transactions
Investment transactions are recorded on a trade date basis. Realized gains and
losses from transactions are determined on the specific identification method.
Investments purchased on a when-issued or delayed delivery basis may have
extended settlement periods. Any investments so purchased are subject to market
fluctuation during this period. The Funds have instructed the custodian to
segregate assets with a current value at least equal to the amount of the
when-issued/delayed delivery purchase commitments. At May 31, 2006, there were
no such outstanding purchase commitments in any of the Funds.
Investment Income
Interest income, which includes the amortization of premiums and accretion of
discounts for financial reporting purposes, is recorded on an accrual basis.
Investment income also includes paydown gains and losses, if any.
Income Taxes
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund
intends to distribute substantially all net investment income and net capital
gains to shareholders and to otherwise comply with the requirements of
Subchapter M of the Internal Revenue Code applicable to regulated investment
companies. Therefore, no federal income tax provision is required. Furthermore,
each Fund intends to satisfy conditions which will enable interest from
municipal securities, which is exempt from regular federal and designated state
income taxes, to retain such tax-exempt status when distributed to shareholders
of the Funds. All monthly tax-exempt income dividends paid during the fiscal
year ended May 31, 2006, have been designated Exempt Interest Dividends. Net
realized capital gains and ordinary income distributions paid by the Funds are
subject to federal taxation.
Dividends and Distributions to Common Shareholders
Dividends from tax-exempt net investment income are declared monthly. Net
realized capital gains and/or market discount from investment transactions, if
any, are distributed to shareholders not less frequently than annually.
Furthermore, capital gains are distributed only to the extent they exceed
available capital loss carryforwards.
65
Notes to
FINANCIAL STATEMENTS (continued)
Distributions to Common shareholders of tax-exempt net investment income, net
realized capital gains and/or market discount, if any, are recorded on the
ex-dividend date. The amount and timing of distributions are determined in
accordance with federal income tax regulations, which may differ from U.S.
generally accepted accounting principles.
Preferred Shares
The Funds have issued and outstanding Preferred shares, $25,000 stated value per
share, as a means of effecting financial leverage. Each Fund's Preferred shares
are issued in one or more Series. The dividend rate paid by the Funds on each
Series is determined every seven days, pursuant to a dutch auction process
overseen by the auction agent, and is payable at the end of each rate period.
The number of Preferred shares outstanding, by Series and in total, for each
Fund is as follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
---------------------------------------------------------------------------------------------------------
Number of shares:
Series M -- 1,280 -- --
Series T -- -- -- 1,560
Series W 1,404 -- -- --
Series TH 1,760 -- -- --
Series F -- -- 1,280 --
---------------------------------------------------------------------------------------------------------
Total 3,164 1,280 1,280 1,560
=========================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
---------------------------------------------------------------------------------------------------------
Number of shares:
Series M -- -- 1,680
Series T 832 -- --
Series W -- 960 --
Series TH 1,720 -- --
Series F -- -- --
---------------------------------------------------------------------------------------------------------
Total 2,552 960 1,680
=========================================================================================================
Forward Swap Transactions
The Funds are authorized to invest in certain derivative financial instruments.
The Funds' use of forward interest rate swap transactions is intended to
mitigate the negative impact that an increase in long-term interest rates could
have on Common share net asset value. Forward interest rate swap transactions
involve each Fund's agreement with the counterparty to pay, in the future, a
fixed rate payment in exchange for the counterparty paying the Fund a variable
rate payment, the accruals for which would begin at a specified date in the
future (the "effective date"). The amount of the payment obligation is based on
the notional amount of the forward swap contract and would increase or decrease
in value based primarily on the extent to which long-term interest rates for
bonds having a maturity of the swaps' termination date were to increase or
decrease. The Funds may close out a contract prior to the effective date, at
which point a realized gain or loss would be recognized. When a forward swap is
terminated, it ordinarily does not involve the delivery of securities or other
underlying assets or principal, but rather is settled in cash on a net basis.
Each Fund intends, but is not obligated to, terminate its forward swaps before
the effective date. Accordingly, the risk of loss with respect to the swap
counterparty on such transactions is limited to the credit risk associated with
a counterparty failing to honor its commitment to pay any realized gain to the
Fund upon termination. To minimize such credit risk, all counterparties are
required to pledge collateral daily (based on the daily valuation of each swap)
on behalf of each Fund with a value approximately equal to the amount of any
unrealized gain above a pre-determined threshold. Reciprocally, when any of the
Funds have an unrealized loss on a swap contract, the
66
Funds have instructed the custodian to pledge assets of the Funds as collateral
with a value approximately equal to the amount of the unrealized loss above a
pre-determined threshold. Collateral pledges are monitored and subsequently
adjusted if and when the swap valuations fluctuate, either up or down, by at
least the predetermined threshold amount.
Futures Contracts
The Funds may invest in futures contracts for the purposes of hedging against
changes in values of a Fund's securities or changes in the prevailing levels of
interest rates. Upon entering into a futures contract, a 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 a Fund
each day, depending on the daily fluctuation of the value of the contract.
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, a Fund records realized gains or losses equal to the
difference between the value of the contract on the closing date and value of
the contract when originally entered into. As of May 31, 2006, there were no
outstanding futures contracts in any of the Funds.
Risks of investments in futures contracts including 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.
Custodian Fee Credit
Each Fund has an arrangement with the custodian bank whereby certain custodian
fees and expenses are reduced by credits earned on each Fund's cash on deposit
with the bank. Such deposit arrangements are an alternative to overnight
investments.
Indemnifications
Under the Funds' organizational documents, their Officers and Trustees are
indemnified against certain liabilities arising out of the performance of their
duties to the Funds. In addition, in the normal course of business, the Funds
enter into contracts that provide general indemnifications to other parties. The
Funds' maximum exposure under these arrangements is unknown as this would
involve future claims that may be made against the Funds that have not yet
occurred. However, the Funds have not had prior claims or losses pursuant to
these contracts and expect the risk of loss to be remote.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of increases and
decreases in net assets applicable to Common shares from operations during the
reporting period. Actual results may differ from those estimates.
2. FUND SHARES
Transactions in Common shares were as follows:
MARYLAND PREMIUM MARYLAND DIVIDEND MARYLAND DIVIDEND
INCOME (NMY) ADVANTAGE (NFM) ADVANTAGE 2 (NZR)
----------------------- ----------------------- -----------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
5/31/06 5/31/05 5/31/06 5/31/05 5/31/06 5/31/05
---------------------------------------------------------------------------------------------------------------
Common shares issued to
shareholders due
to reinvestment
of distributions 19,420 27,491 5,298 4,162 7,521 3,606
===============================================================================================================
MARYLAND DIVIDEND VIRGINIA PREMIUM VIRGINIA DIVIDEND
ADVANTAGE 3 (NWI) INCOME (NPV) ADVANTAGE (NGB)
----------------------- ----------------------- -----------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
5/31/06 5/31/05 5/31/06 5/31/05 5/31/06 5/31/05
---------------------------------------------------------------------------------------------------------------
Common shares issued to
shareholders due
to reinvestment
of distributions 1,071 -- 38,319 33,307 3,038 2,761
===============================================================================================================
VIRGINIA DIVIDEND
ADVANTAGE 2 (NNB)
-----------------------
YEAR ENDED YEAR ENDED
5/31/06 5/31/05
---------------------------------------------------------------------------------------------------------------
Common shares issued to
shareholders due
to reinvestment
of distributions 8,839 12,458
===============================================================================================================
67
Notes to
FINANCIAL STATEMENTS (continued)
3. INVESTMENT TRANSACTIONS
Purchases and sales (including maturities but excluding short-term investments
and derivative transactions) during the fiscal year ended May 31, 2006, were as
follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
--------------------------------------------------------------------------------
Purchases $30,398,237 $13,298,560 $13,828,127 $17,042,507
Sales and maturities 30,320,096 13,480,676 14,562,256 16,456,417
================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
--------------------------------------------------------------------------------
Purchases $31,517,697 $11,054,670 $12,274,478
Sales and maturities 33,474,326 10,980,879 13,984,060
================================================================================
4. INCOME TAX INFORMATION
The following information is presented on an income tax basis. Differences
between amounts for financial statement and federal income tax purposes are
primarily due to the treatment of paydown gains and losses, timing differences
in recognizing taxable market discount and timing differences in recognizing
certain gains and losses on investment transactions.
At May 31, 2006, the cost of investments was as follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
--------------------------------------------------------------------------------
Cost of investments $222,781,336 $88,598,808 $89,597,079 $112,384,519
================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
--------------------------------------------------------------------------------
Cost of investments $186,484,120 $67,528,199 $121,227,344
================================================================================
68
Gross unrealized appreciation and gross unrealized depreciation of investments
at May 31, 2006, were as follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
--------------------------------------------------------------------------------
Gross unrealized:
Appreciation $ 7,709,594 $2,597,406 $2,679,871 $2,052,994
Depreciation (1,364,567) (434,360) (404,060) (895,865)
--------------------------------------------------------------------------------
Net unrealized
appreciation
(depreciation)
of investments $ 6,345,027 $2,163,046 $2,275,811 $1,157,129
================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
--------------------------------------------------------------------------------
Gross unrealized:
Appreciation $7,482,262 $2,498,573 $5,201,336
Depreciation (845,062) (270,757) (443,322)
--------------------------------------------------------------------------------
Net unrealized
appreciation
(depreciation)
of investments $6,637,200 $2,227,816 $4,758,014
================================================================================
The tax components of undistributed net investment income and net realized gains
at May 31, 2006, were as follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
--------------------------------------------------------------------------------
Undistributed net
tax-exempt income * $611,838 $310,415 $423,460 $209,736
Undistributed net
ordinary income ** -- -- -- 787
Undistributed net
long-term capital gains -- -- -- --
================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
--------------------------------------------------------------------------------
Undistributed net
tax-exempt income * $811,454 $338,785 $496,256
Undistributed net
ordinary income ** -- 2,254 --
Undistributed net
long-term capital gains 229,152 -- --
================================================================================
* Undistributed net tax-exempt income (on a tax basis) has not been reduced
for the dividend declared on May 1, 2006, paid on June 1, 2006.
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
The tax character of distributions paid during the tax years ended May 31, 2006
and May 31, 2005, was designated for purposes of the dividends paid deduction as
follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
2006 (NMY) (NFM) (NZR) (NWI)
--------------------------------------------------------------------------------
Distributions from net
tax-exempt income $10,253,086 $4,350,733 $4,281,497 $4,833,094
Distributions from
net ordinary income ** 82,432 -- 641 --
Distributions from net
long-term capital gains *** 291,303 -- 114,999 --
================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
2006 (NPV) (NGB) (NNB)
--------------------------------------------------------------------------------
Distributions from net
tax-exempt income $8,481,521 $3,279,786 $5,886,854
Distributions from
net ordinary income ** -- -- 2,260
Distributions from net
long-term capital gains *** 2,392,241 -- 354,292
================================================================================
69
Notes to
FINANCIAL STATEMENTS (continued)
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
2005 (NMY) (NFM) (NZR) (NWI)
--------------------------------------------------------------------------------
Distributions from net
tax-exempt income $10,630,390 $4,316,846 $4,052,176 $4,686,785
Distributions from
net ordinary income ** -- -- 17,820 108
Distributions from net
long-term capital gains -- -- 254,971 43,198
================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
2005 (NPV) (NGB) (NNB)
--------------------------------------------------------------------------------
Distributions from net
tax-exempt income $8,771,875 $3,200,407 $5,574,792
Distributions from
net ordinary income ** -- -- --
Distributions from net
long-term capital gains -- -- 1,131,953
================================================================================
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
*** The Funds designated as a long-term capital gain dividend, pursuant to the
Internal Revenue Code Section 852(b)(3), the amount necessary to reduce the
earnings and profits of the Funds related to net capital gain to zero for
the tax period ended May 31, 2006.
At May 31, 2006, the following Funds had unused capital loss carryforwards
available for federal income tax purposes to be applied against future capital
gains, if any. If not applied, the carryforwards will expire as follows:
MARYLAND MARYLAND MARYLAND VIRGINIA
DIVIDEND DIVIDEND DIVIDEND DIVIDEND
ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE
(NFM) (NZR) (NWI) (NGB)
--------------------------------------------------------------------------------
Expiration year:
2009 $ 7,580 $ -- $ -- $ --
2010 37,159 -- -- --
2011 -- -- -- --
2012 430,282 -- -- 71,775
2013 15,613 -- 28,210 --
2014 62,054 35,791 130,041 --
--------------------------------------------------------------------------------
Total $552,688 $35,791 $158,251 $71,775
================================================================================
The following Funds elected to defer net realized losses from investments
incurred from November 1, 2005 through May 31, 2006 ("post-October losses") in
accordance with Federal income tax regulations. The post-October losses were
treated as having arisen on the first day of the following fiscal year:
MARYLAND MARYLAND MARYLAND VIRGINIA
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 2
(NMY) (NFM) (NZR) (NNB)
--------------------------------------------------------------------------------
$204,066 $95,072 $17,928 $169,715
================================================================================
70
5. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Each Fund's management fee is separated into two components - a complex-level
component, based on the aggregate amount of all fund assets managed by Nuveen
Asset Management (the "Adviser"), a wholly owned subsidiary of Nuveen
Investments, Inc., ("Nuveen"), and a specific fund-level component, based only
on the amount of assets within each individual fund. This pricing structure
enables Nuveen fund shareholders to benefit from growth in the assets within
each individual fund as well as from growth in the amount of complex-wide assets
managed by the Adviser.
The annual fund-level fee, payable monthly, for each Fund is based upon the
average daily net assets (including net assets attributable to Preferred shares)
of each Fund as follows:
AVERAGE DAILY NET ASSETS MARYLAND PREMIUM INCOME (NMY)
(INCLUDING NET ASSETS VIRGINIA PREMIUM INCOME (NPV)
ATTRIBUTABLE TO PREFERRED SHARES) FUND-LEVEL FEE RATE
--------------------------------------------------------------------------------
For the first $125 million .4500%
For the next $125 million .4375
For the next $250 million .4250
For the next $500 million .4125
For the next $1 billion .4000
For the next $3 billion .3875
For net assets over $5 billion .3750
================================================================================
MARYLAND DIVIDEND ADVANTAGE (NFM)
MARYLAND DIVIDEND ADVANTAGE 2 (NZR)
MARYLAND DIVIDEND ADVANTAGE 3 (NWI)
AVERAGE DAILY NET ASSETS VIRGINIA DIVIDEND ADVANTAGE (NGB)
(INCLUDING NET ASSETS VIRGINIA DIVIDEND ADVANTAGE 2 (NNB)
ATTRIBUTABLE TO PREFERRED SHARES) FUND-LEVEL FEE RATE
--------------------------------------------------------------------------------
For the first $125 million .4500%
For the next $125 million .4375
For the next $250 million .4250
For the next $500 million .4125
For the next $1 billion .4000
For net assets over $2 billion .3750
================================================================================
The annual complex-level fee, payable monthly, which is additive to the
fund-level fee, for all Nuveen sponsored funds in the U.S., is based on the
aggregate amount of total fund assets managed as stated in the table below.
As of May 31, 2006, the complex-level fee rate was .1886%.
COMPLEX-LEVEL ASSETS(1) COMPLEX-LEVEL FEE RATE
--------------------------------------------------------------------------------
For the first $55 billion .2000%
For the next $1 billion .1800
For the next $1 billion .1600
For the next $3 billion .1425
For the next $3 billion .1325
For the next $3 billion .1250
For the next $5 billion .1200
For the next $5 billion .1175
For the next $15 billion .1150
For Managed Assets over $91 billion (2) .1400
================================================================================
(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
all types of leverage used by the Nuveen funds) of Nuveen-sponsored funds in
the U.S.
(2) With respect to the complex-wide Managed Assets over $91 billion, the fee
rate or rates that will apply to such assets will be determined at a later
date. In the unlikely event that complex-wide Managed Assets reach $91
billion prior to a determination of the complex-level fee rate or rates to
be applied to Managed Assets in excess of $91 billion, the complex-level fee
rate for such complex-wide Managed Assets shall be .1400% until such time as
a different rate or rates is determined.
The management fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Funds pay no
compensation directly to those of its Trustees who are affiliated with the
Adviser or to their Officers, all of whom receive remuneration for their
services to the Funds from the Adviser or its affiliates. The Board of Trustees
has adopted a deferred compensation plan for independent Trustees that enables
Trustees to elect to defer receipt of all or a portion of the annual
compensation they are entitled to receive from certain Nuveen advised funds.
Under the plan, deferred amounts are treated as though equal dollar amounts had
been invested in shares of select Nuveen advised Funds.
71
Notes to
FINANCIAL STATEMENTS (continued)
For the first ten years of Maryland Dividend Advantage's (NFM) and Virginia
Dividend Advantage's (NGB) operations, the Adviser has agreed to reimburse the
Funds, as a percentage of average daily net assets (including net assets
attributable to Preferred shares), for fees and expenses in the amounts and for
the time periods set forth below:
YEAR ENDING YEAR ENDING
JANUARY 31, JANUARY 31,
--------------------------------------------------------------------------------
2001* .30% 2007 .25%
2002 .30 2008 .20
2003 .30 2009 .15
2004 .30 2010 .10
2005 .30 2011 .05
2006 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Maryland Dividend Advantage (NFM) and
Virginia Dividend Advantage (NGB) for any portion of its fees and expenses
beyond January 31, 2011.
For the first ten years of Maryland Dividend Advantage 2's (NZR) operations, the
Adviser has agreed to reimburse the Fund, as a percentage of average daily net
assets (including net assets attributable to Preferred shares), for fees and
expenses in the amounts and for the time periods set forth below:
YEAR ENDING YEAR ENDING
SEPTEMBER 30, SEPTEMBER 30,
--------------------------------------------------------------------------------
2001* .30% 2007 .25%
2002 .30 2008 .20
2003 .30 2009 .15
2004 .30 2010 .10
2005 .30 2011 .05
2006 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Maryland Dividend Advantage 2 (NZR) for
any portion of its fees and expenses beyond September 30, 2011.
For the first eight years of Maryland Dividend Advantage 3's (NWI) operations,
the Adviser has agreed to reimburse the Fund, as a percentage of average daily
net assets (including net assets attributable to Preferred shares), for fees and
expenses in the amounts and for the time periods set forth below:
YEAR ENDING YEAR ENDING
SEPTEMBER 30, SEPTEMBER 30,
--------------------------------------------------------------------------------
2002* .32% 2007 .32%
2003 .32 2008 .24
2004 .32 2009 .16
2005 .32 2010 .08
2006 .32
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Maryland Dividend Advantage 3 (NWI) for
any portion of its fees and expenses beyond September 30, 2010.
72
For the first ten years of Virginia Dividend Advantage 2's (NNB) operations, the
Adviser has agreed to reimburse the Fund, as a percentage of average daily net
assets (including net assets attributable to Preferred shares), for fees and
expenses in the amounts and for the time periods set forth below:
YEAR ENDING YEAR ENDING
NOVEMBER 30, NOVEMBER 30,
--------------------------------------------------------------------------------
2001* .30% 2007 .25%
2002 .30 2008 .20
2003 .30 2009 .15
2004 .30 2010 .10
2005 .30 2011 .05
2006 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Virginia Dividend Advantage 2 (NNB) for
any portion of its fees and expenses beyond November 30, 2011.
6. SUBSEQUENT EVENT - DISTRIBUTIONS TO COMMON SHAREHOLDERS
The Funds declared Common share dividend distributions from their tax-exempt net
investment income which were paid on July 3, 2006, to shareholders of record on
June 15, 2006, as follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
--------------------------------------------------------------------------------
Dividend per share $.0580 $.0645 $.0640 $.0555
================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
--------------------------------------------------------------------------------
Dividend per share $.0590 $.0685 $.0650
================================================================================
73
Financial
HIGHLIGHTS
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
--------------------------------------------------------------- --------------------------------
Distributions Distributions
from Net from Net
Beginning Investment Capital Investment Capital
Common Net Income to Gains to Income to Gains to
Share Net Realized/ Preferred Preferred Common Common
Net Asset Investment Unrealized Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
====================================================================================================================================
MARYLAND PREMIUM
INCOME (NMY)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2006 $15.12 $ .89 $ (.56) $(.18) $ -- $ .15 $(.78) $(.02) $(.80)
2005 14.28 .92 .92 (.10) -- 1.74 (.90) -- (.90)
2004 15.10 .96 (.81) (.06) -- .09 (.91) -- (.91)
2003 14.04 1.02 1.00 (.07) -- 1.95 (.89) -- (.89)
2002 13.83 1.03 .14 (.13) -- 1.04 (.83) -- (.83)
MARYLAND DIVIDEND
ADVANTAGE (NFM)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2006 15.13 .95 (.47) (.19) -- .29 (.85) -- (.85)
2005 14.43 .98 .75 (.10) -- 1.63 (.93) -- (.93)
2004 15.47 1.01 (1.07) (.05) -- (.11) (.93) -- (.93)
2003 14.18 1.04 1.18 (.08) -- 2.14 (.86) -- (.86)
2002 13.90 1.04 .22 (.14) -- 1.12 (.84) -- (.84)
MARYLAND DIVIDEND
ADVANTAGE 2 (NZR)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2006 15.45 .94 (.59) (.18) -- .17 (.83) (.03) (.86)
2005 14.64 .94 .90 (.09) -- 1.75 (.88) (.06) (.94)
2004 15.71 .96 (1.08) (.06) -- (.18) (.87) (.02) (.89)
2003 14.01 .97 1.62 (.09) -- 2.50 (.81) -- (.81)
2002(a) 14.33 .57 (.22) (.06) -- .29 (.46) -- (.46)
MARYLAND DIVIDEND
ADVANTAGE 3 (NWI)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2006 14.82 .86 (.46) (.18) -- .22 (.71) -- (.71)
2005 13.88 .86 .97 (.10) -- 1.73 (.78) (.01) (.79)
2004 14.89 .87 (1.03) (.06) -- (.22) (.79) -- (.79)
2003(b) 14.33 .52 .75 (.05) -- 1.22 (.46) -- (.46)
====================================================================================================================================
Total Returns
---------------------
Based
Offering on
Costs and Ending Common
Preferred Common Based Share
Share Share Ending on Net
Underwriting Net Asset Market Market Asset
Discounts Value Value Value** Value**
=============================================================================================
MARYLAND PREMIUM
INCOME (NMY)
---------------------------------------------------------------------------------------------
Year Ended 5/31:
2006 $ -- $14.47 $14.52 (2.94)% 1.08%
2005 -- 15.12 15.78 15.64 12.52
2004 -- 14.28 14.45 (10.77) .64
2003 -- 15.10 17.15 15.22 14.33
2002 -- 14.04 15.73 4.77 7.71
MARYLAND DIVIDEND
ADVANTAGE (NFM)
---------------------------------------------------------------------------------------------
Year Ended 5/31:
2006 -- 14.57 15.19 2.51 1.95
2005 -- 15.13 15.63 6.22 11.60
2004 -- 14.43 15.62 2.99 (.69)
2003 .01 15.47 16.08 9.98 15.55
2002 -- 14.18 15.44 1.98 8.21
MARYLAND DIVIDEND
ADVANTAGE 2 (NZR)
---------------------------------------------------------------------------------------------
Year Ended 5/31:
2006 -- 14.76 14.76 1.13 1.14
2005 -- 15.45 15.41 14.71 12.22
2004 -- 14.64 14.28 (2.90) (1.16)
2003 .01 15.71 15.60 12.71 18.39
2002(a) (.15) 14.01 14.61 .52 1.01
MARYLAND DIVIDEND
ADVANTAGE 3 (NWI)
---------------------------------------------------------------------------------------------
Year Ended 5/31:
2006 -- 14.33 13.85 1.09 1.55
2005 -- 14.82 14.40 14.98 12.67
2004 -- 13.88 13.24 (5.97) (1.51)
2003(b) (.20) 14.89 14.90 2.53 7.31
=============================================================================================
Ratios/Supplemental Data
---------------------------------------------------------------------------------------------
Before Credit/Reimbursement After Credit/Reimbursement***
------------------------------ ------------------------------
Ratio of Net Ratio of Net
Ratio of Investment Ratio of Investment
Ending Expenses Income to Expenses Income to
Net to Average Average to Average Average
Assets Net Assets Net Assets Net Assets Net Assets
Applicable Applicable Applicable Applicable Applicable Portfolio
to Common to Common to Common to Common to Common Turnover
Shares (000) Shares++ Shares++ Shares++ Shares++ Rate
====================================================================================================================
MARYLAND PREMIUM
INCOME (NMY)
--------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2006 $153,834 1.23% 6.05% 1.21% 6.07% 13%
2005 160,496 1.24 6.22 1.23 6.22 10
2004 151,107 1.24 6.54 1.23 6.55 16
2003 159,415 1.26 7.00 1.25 7.01 16
2002 147,795 1.32 7.33 1.31 7.34 13
MARYLAND DIVIDEND
ADVANTAGE (NFM)
--------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2006 60,762 1.26 5.99 .81 6.44 14
2005 63,051 1.26 6.11 .79 6.57 11
2004 60,041 1.24 6.34 .78 6.80 10
2003 64,338 1.26 6.54 .79 7.01 12
2002 58,925 1.35 6.81 .82 7.34 36
MARYLAND DIVIDEND
ADVANTAGE 2 (NZR)
--------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2006 61,726 1.25 5.76 .77 6.23 15
2005 64,500 1.23 5.74 .77 6.20 10
2004 61,064 1.24 5.90 .78 6.36 11
2003 65,490 1.26 6.07 .80 6.53 12
2002(a) 58,370 1.22* 5.55* .79* 5.99* 21
MARYLAND DIVIDEND
ADVANTAGE 3 (NWI)
--------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2006 76,809 1.23 5.41 .73 5.91 14
2005 79,443 1.23 5.40 .74 5.89 12
2004 74,369 1.22 5.59 .73 6.08 15
2003(b) 79,700 1.18* 5.01* .70* 5.50* 13
====================================================================================================================
Preferred Shares at End of Period
-----------------------------------------
Aggregate Liquidation
Amount and Market Asset
Outstanding Value Coverage
(000) Per Share Per Share
===================================================================
MARYLAND PREMIUM
INCOME (NMY)
-------------------------------------------------------------------
Year Ended 5/31:
2006 $79,100 $25,000 $73,620
2005 79,100 25,000 75,726
2004 79,100 25,000 72,758
2003 79,100 25,000 75,384
2002 79,100 25,000 71,712
MARYLAND DIVIDEND
ADVANTAGE (NFM)
-------------------------------------------------------------------
Year Ended 5/31:
2006 32,000 25,000 72,470
2005 32,000 25,000 74,259
2004 32,000 25,000 71,907
2003 32,000 25,000 75,264
2002 32,000 25,000 71,035
MARYLAND DIVIDEND
ADVANTAGE 2 (NZR)
-------------------------------------------------------------------
Year Ended 5/31:
2006 32,000 25,000 73,224
2005 32,000 25,000 75,390
2004 32,000 25,000 72,706
2003 32,000 25,000 76,164
2002(a) 32,000 25,000 70,601
MARYLAND DIVIDEND
ADVANTAGE 3 (NWI)
-------------------------------------------------------------------
Year Ended 5/31:
2006 39,000 25,000 74,237
2005 39,000 25,000 75,925
2004 39,000 25,000 72,672
2003(b) 39,000 25,000 76,090
===================================================================
* 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. Total Return on Common share Net Asset Value is
the combination of changes in Common share net asset value, reinvested
dividend income at net asset value and reinvested capital gains
distributions at net asset value, if any. Total returns are not annualized.
*** After custodian fee credit and expense reimbursement, where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
(a) For the period September 25, 2001 (commencement of operations) through May
31, 2002.
(b) For the period September 25, 2002 (commencement of operations) through May
31, 2003.
See accompanying notes to financial statements.
74-75 SPREAD
FINANCIAL HIGHLIGHTS (continued)
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
--------------------------------------------------------------- --------------------------------
Distributions Distributions
from Net from Net
Beginning Investment Capital Investment Capital
Common Net Income to Gains to Income to Gains to
Share Net Realized/ Preferred Preferred Common Common
Net Asset Investment Unrealized Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
====================================================================================================================================
VIRGINIA PREMIUM
INCOME (NPV)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2006 $15.82 $ .88 $ (.59) $(.15) $(.03) $ .11 $(.80) $(.24) $(1.04)
2005 14.95 .93 .93 (.09) -- 1.77 (.90) -- (.90)
2004 15.93 .97 (.99) (.05) -- (.07) (.91) -- (.91)
2003 14.69 1.00 1.21 (.07) -- 2.14 (.90) -- (.90)
2002 14.59 1.04 .03 (.11) -- .96 (.86) -- (.86)
VIRGINIA DIVIDEND
ADVANTAGE (NGB)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2006 15.52 .97 (.54) (.17) -- .26 (.87) -- (.87)
2005 14.42 .99 1.13 (.09) -- 2.03 (.93) -- (.93)
2004 15.43 1.02 (1.05) (.05) -- (.08) (.93) -- (.93)
2003 14.23 1.02 1.10 (.07) -- 2.05 (.86) -- (.86)
2002 13.87 1.02 .32 (.13) -- 1.21 (.85) -- (.85)
VIRGINIA DIVIDEND
ADVANTAGE 2 (NNB)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2006 15.70 .95 (.52) (.18) (.01) .24 (.85) (.07) (.92)
2005 14.79 .96 1.13 (.09) (.01) 1.99 (.89) (.19) (1.08)
2004 16.02 .99 (1.22) (.06) -- (.29) (.89) (.05) (.94)
2003 14.31 .97 1.69 (.08) -- 2.58 (.84) (.03) (.87)
2002(a) 14.33 .41 .09 (.04) -- .46 (.35) -- (.35)
====================================================================================================================================
Total Returns
---------------------
Based
Offering on
Costs and Ending Common
Preferred Common Based Share
Share Share Ending on Net
Underwriting Net Asset Market Market Asset
Discounts Value Value Value** Value**
===============================================================================================
VIRGINIA PREMIUM
INCOME (NPV)
-----------------------------------------------------------------------------------------------
Year Ended 5/31:
2006 $ -- $14.89 $14.91 (9.98)% 0.71%
2005 -- 15.82 17.65 24.54 12.13
2004 -- 14.95 14.95 (10.70) (.42)
2003 -- 15.93 17.67 15.27 14.99
2002 -- 14.69 16.17 6.64 6.71
VIRGINIA DIVIDEND
ADVANTAGE (NGB)
-----------------------------------------------------------------------------------------------
Year Ended 5/31:
2006 -- 14.91 17.10 5.86 1.74
2005 -- 15.52 16.99 19.11 14.46
2004 -- 14.42 15.07 (8.11) (.50)
2003 .01 15.43 17.35 21.45 14.92
2002 -- 14.23 15.09 5.10 8.89
VIRGINIA DIVIDEND
ADVANTAGE 2 (NNB)
-----------------------------------------------------------------------------------------------
Year Ended 5/31:
2006 -- 15.02 16.40 3.45 1.53
2005 -- 15.70 16.74 21.96 13.75
2004 -- 14.79 14.65 (3.81) (1.84)
2003 -- 16.02 16.14 14.58 18.51
2002(a) (.13) 14.31 14.90 1.71 2.30
===============================================================================================
Ratios/Supplemental Data
---------------------------------------------------------------------------------------------
Before Credit/Reimbursement After Credit/Reimbursement***
------------------------------ ------------------------------
Ratio of Net Ratio of Net
Ratio of Investment Ratio of Investment
Ending Expenses Income to Expenses Income to
Net to Average Average to Average Average
Assets Net Assets Net Assets Net Assets Net Assets
Applicable Applicable Applicable Applicable Applicable Portfolio
to Common to Common to Common to Common to Common Turnover
Shares (000) Shares++ Shares++ Shares++ Shares++ Rate
======================================================================================================================
VIRGINIA PREMIUM
INCOME (NPV)
----------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2006 $132,626 1.19% 5.75% 1.17% 5.77% 16%
2005 140,340 1.20 5.98 1.19 5.99 17
2004 132,122 1.20 6.33 1.19 6.34 14
2003 140,223 1.25 6.61 1.24 6.62 17
2002 128,655 1.28 7.01 1.27 7.02 14
VIRGINIA DIVIDEND
ADVANTAGE (NGB)
----------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2006 46,626 1.26 5.93 .82 6.38 16
2005 48,474 1.28 6.13 .81 6.59 15
2004 44,988 1.24 6.39 .77 6.86 7
2003 48,102 1.28 6.45 .81 6.92 10
2002 44,308 1.37 6.68 .84 7.21 21
VIRGINIA DIVIDEND
ADVANTAGE 2 (NNB)
----------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2006 85,887 1.19 5.75 .73 6.21 10
2005 89,626 1.19 5.74 .74 6.19 13
2004 84,248 1.20 5.99 .74 6.44 16
2003 91,065 1.21 6.01 .75 6.47 15
2002(a) 81,325 1.14* 5.00* .70* 5.44* 12
======================================================================================================================
Preferred Shares at End of Period
-----------------------------------------
Aggregate Liquidation
Amount and Market Asset
Outstanding Value Coverage
(000) Per Share Per Share
=====================================================================
VIRGINIA PREMIUM
INCOME (NPV)
---------------------------------------------------------------------
Year Ended 5/31:
2006 $63,800 $25,000 $76,970
2005 63,800 25,000 79,992
2004 63,800 25,000 76,772
2003 63,800 25,000 79,946
2002 63,800 25,000 75,413
VIRGINIA DIVIDEND
ADVANTAGE (NGB)
---------------------------------------------------------------------
Year Ended 5/31:
2006 24,000 25,000 73,568
2005 24,000 25,000 75,493
2004 24,000 25,000 71,863
2003 24,000 25,000 75,106
2002 24,000 25,000 71,154
VIRGINIA DIVIDEND
ADVANTAGE 2 (NNB)
---------------------------------------------------------------------
Year Ended 5/31:
2006 42,000 25,000 76,123
2005 42,000 25,000 78,349
2004 42,000 25,000 75,148
2003 42,000 25,000 79,206
2002(a) 42,000 25,000 73,408
=====================================================================
* 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. Total Return on Common share Net Asset Value is
the combination of changes in Common share net asset value, reinvested
dividend income at net asset value and reinvested capital gains
distributions at net asset value, if any. Total returns are not annualized.
*** After custodian fee credit and expense reimbursement, where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
(a) For the period November 15, 2001 (commencement of operations) through May
31, 2002.
See accompanying notes to financial statements.
76-77 SPREAD
Board Members
AND OFFICERS
The management of the Funds, including general supervision of the duties
performed for the Funds by the Adviser, is the responsibility of the Board
Members of the Funds. The number of board members of the Fund is currently set
at nine. None of the board members who are not "interested" persons of the Funds
has ever been a director or employee of, or consultant to, Nuveen or its
affiliates. The names and business addresses of the board members and officers
of the Funds, their principal occupations and other affiliations during the past
five years, the number of portfolios each oversees and other directorships they
hold are set forth below.
NUMBER OF
PORTFOLIOS IN
POSITION(S) YEAR FIRST PRINCIPAL OCCUPATION(S) FUND COMPLEX
NAME, BIRTHDATE HELD WITH ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY
AND ADDRESS THE FUNDS APPOINTED(2) DURING PAST 5 YEARS BOARD MEMBER
------------------------------------------------------------------------------------------------------------------------------------
BOARD MEMBER WHO IS AN INTERESTED PERSON OF THE FUNDS:
------------------------------------------------------------------------------------------------------------------------------------
Timothy R. Schwertfeger(1) Chairman of 1994 Chairman (since 1996) and Director of Nuveen Investments, 166
3/28/49 the Board Inc., Nuveen Investments, LLC, Nuveen Advisory Corp. and
333 W. Wacker Drive and Board Nuveen Institutional Advisory Corp.(3); Director (since 1996)
Chicago, IL 60606 Member of Institutional Capital Corporation; Chairman and Director
(since 1997) of Nuveen Asset Management; Chairman and
Director of Rittenhouse Asset Management, Inc. (since 1999);
Chairman of Nuveen Investments Advisers Inc. (since 2002).
BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS:
------------------------------------------------------------------------------------------------------------------------------------
Robert P. Bremner Lead Independent 1997 Private Investor and Management Consultant. 166
8/22/40 Board member
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Lawrence H. Brown Board member 1993 Retired (since 1989) as Senior Vice President of The 166
7/29/34 Northern Trust Company; Director (since 2002) Community
333 W. Wacker Drive Advisory Board for Highland Park and Highwood, United
Chicago, IL 60606 Way of the North Shore.
------------------------------------------------------------------------------------------------------------------------------------
Jack B. Evans Board member 1999 President, The Hall-Perrine Foundation, a private philanthropic 166
10/22/48 corporation (since 1996); Director and Vice Chairman, United
333 W. Wacker Drive Fire Group, a publicly held company; Adjunct Faculty Member,
Chicago, IL 60606 University of Iowa; Director, Gazette Companies; Life Trustee
of Coe College and Iowa College Foundation; formerly,
Director, Alliant Energy; formerly, Director, Federal Reserve
Bank of Chicago; formerly, President and Chief Operating Officer,
SCI Financial Group, Inc., a regional financial services firm.
------------------------------------------------------------------------------------------------------------------------------------
William C. Hunter Board member 2004 Dean, Tippie College of Business, University of Iowa (since 166
3/6/48 June 2006); formerly, Dean and Distinguished Professor of Finance,
333 W. Wacker Drive School of Business at the University of Connecticut (2003-2006);
Chicago, IL 60606 previously, Senior Vice President and Director of Research
at the Federal Reserve Bank of Chicago (1995-2003);
Director (since 1997), Credit Research Center at
Georgetown University; Director (since 2004) of Xerox
Corporation; Director, SS&C Technologies, Inc. (May 2005 -
October 2005).
------------------------------------------------------------------------------------------------------------------------------------
David J. Kundert Board member 2005 Retired (since 2004) as Chairman, JPMorgan Fleming Asset 164
10/28/42 Management, President and CEO, Banc One Investment
333 W. Wacker Drive Advisors Corporation, and President, One Group Mutual
Chicago, IL 60606 Funds; prior thereto, Executive Vice President, Banc One
Corporation and Chairman and CEO, Banc One Investment
Management Group; Board of Regents, Luther College;
member of the Wisconsin Bar Association; member of Board
of Directors, Friends of Boerner Botanical Gardens.
78
NUMBER OF
PORTFOLIOS IN
POSITION(S) YEAR FIRST PRINCIPAL OCCUPATION(S) FUND COMPLEX
NAME, BIRTHDATE HELD WITH ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY
AND ADDRESS THE FUNDS APPOINTED(2) DURING PAST 5 YEARS BOARD MEMBER
------------------------------------------------------------------------------------------------------------------------------------
BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
William J. Schneider Board member 1997 Chairman of Miller-Valentine Partners Ltd., a real estate 166
9/24/44 investment company; formerly, Senior Partner and Chief
333 W. Wacker Drive Operating Officer (retired, 2004) of Miller-Valentine
Chicago, IL 60606 Group; formerly, Vice President, Miller-Valentine Realty;
Board Member, Chair of the Finance Committee and
member of the Audit Committee of Premier Health Partners,
the not-for-profit company of Miami Valley Hospital; Vice
President, Dayton Philharmonic Orchestra Association; Board
Member, Regional Leaders Forum, which promotes cooperation
on economic development issues; Director, Dayton Development
Coalition; formerly, Member, Community Advisory Board,
National City Bank, Dayton, Ohio and Business Advisory
Council, Cleveland Federal Reserve Bank.
------------------------------------------------------------------------------------------------------------------------------------
Judith M. Stockdale Board member 1997 Executive Director, Gaylord and Dorothy Donnelley 166
12/29/47 Foundation (since 1994); prior thereto, Executive Director,
333 W. Wacker Drive Great Lakes Protection Fund (from 1990 to 1994).
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Eugene S. Sunshine Board member 2005 Senior Vice President for Business and Finance, 166
1/22/50 Northwestern University (since 1997); Director (since 2003),
333 W. Wacker Drive Chicago Board Options Exchange; Director (since 2003),
Chicago, IL 60606 National Mentor Holdings, a privately-held, national provider
of home and community-based services; Chairman (since
1997), Board of Directors, Rubicon, a pure captive insurance
company owned by Northwestern University; Director (since
1997), Evanston Chamber of Commerce and Evanston
Inventure, a business development organization.
NUMBER OF
PORTFOLIOS IN
POSITION(S) YEAR FIRST FUND COMPLEX
NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) OVERSEEN BY
AND ADDRESS THE FUNDS APPOINTED(4) DURING PAST 5 YEARS OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUND:
------------------------------------------------------------------------------------------------------------------------------------
Gifford R. Zimmerman Chief 1988 Managing Director (since 2002), Assistant Secretary and 166
9/9/56 Administrative Associate General Counsel, formerly, Vice President and
333 W. Wacker Drive Officer Assistant General Counsel, of Nuveen Investments, LLC;
Chicago, IL 60606 Managing Director (2002-2004), General Counsel (1998-2004)
and Assistant Secretary, formerly, Vice President of Nuveen
Advisory Corp. and Nuveen Institutional Advisory Corp.(3);
Managing Director (since 2002) and Assistant Secretary and
Associate General Counsel, formerly, Vice President (since
1997), of Nuveen Asset Management; Managing Director
(since 2004) and Assistant Secretary (since 1994) of Nuveen
Investments, Inc.; Assistant Secretary of NWQ Investment
Management Company, LLC. (since 2002); Vice President and
Assistant Secretary of Nuveen Investments Advisers Inc.
(since 2002); Managing Director, Associate General Counsel
and Assistant Secretary of Rittenhouse Asset Management,
Inc. and Symphony Asset Management LLC (since 2003);
Chartered Financial Analyst.
79
Board Members
AND OFFICERS (CONTINUED)
NUMBER OF
PORTFOLIOS IN
POSITION(S) YEAR FIRST FUND COMPLEX
NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) OVERSEEN BY
AND ADDRESS THE FUNDS APPOINTED(4) DURING PAST 5 YEARS OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
Julia L. Antonatos Vice President 2004 Managing Director (since 2005), formerly Vice President 166
9/22/63 (since 2002); formerly, Assistant Vice President (since 2000)
333 W. Wacker Drive of Nuveen Investments, LLC; Chartered Financial Analyst.
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Michael T. Atkinson Vice President 2000 Vice President (since 2002), formerly, Assistant Vice 166
2/3/66 and Assistant President (since 2000) of Nuveen Investments, LLC.
333 W. Wacker Drive Secretary
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Peter H. D'Arrigo Vice President 1999 Vice President and Treasurer of Nuveen Investments, LLC 166
11/28/67 and of Nuveen Investments, Inc. (since 1999); Vice President
333 W. Wacker Drive and Treasurer of Nuveen Asset Management (since 2002)
Chicago, IL 60606 and of Nuveen Investments Advisers Inc. (since 2002); Assistant
Treasurer of NWQ Investment Management Company, LLC.
(since 2002); Vice President and Treasurer of Nuveen
Rittenhouse Asset Management, Inc. and 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.
------------------------------------------------------------------------------------------------------------------------------------
John N. Desmond Vice President 2005 Vice President, Director of Investment Operations, Nuveen 166
8/24/61 Investments, LLC (since January 2005); formerly, Director,
333 W. Wacker Drive Business Manager, Deutsche Asset Management (2003-2004),
Chicago, IL 60606 Director, Business Development and Transformation, Deutsche
Trust Bank Japan (2002-2003); previously, Senior Vice
President, Head of Investment Operations and Systems,
Scudder Investments Japan, (2000-2002), Senior Vice
President, Head of Plan Administration and Participant
Services, Scudder Investments (1995-2002).
------------------------------------------------------------------------------------------------------------------------------------
Jessica R. Droeger Vice President 1998 Vice President (since 2002), Assistant Secretary and 166
9/24/64 and Secretary Assistant General Counsel (since 1998) formerly, Assistant
333 W. Wacker Drive Vice President (since 1998) of Nuveen Investments, LLC;
Chicago, IL 60606 Vice President (2002-2004) and Assistant Secretary (1998-2004)
formerly, Assistant Vice President of Nuveen Advisory Corp.
and Nuveen Institutional Advisory Corp.(3); Vice President and
Assistant Secretary (since 2005) of Nuveen Asset Management.
------------------------------------------------------------------------------------------------------------------------------------
Lorna C. Ferguson Vice President 1998 Managing Director (since 2004), formerly, Vice President of 166
10/24/45 Nuveen Investments, LLC, Managing Director (2004) formerly,
333 W. Wacker Drive Vice President (1998-2004) of Nuveen Advisory Corp. and
Chicago, IL 60606 Nuveen Institutional Advisory Corp.(3); Managing Director
(since 2005) of Nuveen Asset Management.
------------------------------------------------------------------------------------------------------------------------------------
William M. Fitzgerald Vice President 1995 Managing Director (since 2002), formerly, Vice President of 166
3/2/64 Nuveen Investments; Managing Director (1997-2004) of
333 W. Wacker Drive Nuveen Advisory Corp. and Nuveen Institutional Advisory
Chicago, IL 60606 Corp.(3); Managing Director (since 2001) of Nuveen Asset
Management; Vice President (since 2002) of Nuveen
Investments Advisers Inc.; Chartered Financial Analyst.
80
NUMBER OF
PORTFOLIOS IN
POSITION(S) YEAR FIRST FUND COMPLEX
NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) OVERSEEN BY
AND ADDRESS THE FUNDS APPOINTED(4) DURING PAST 5 YEARS OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
Stephen D. Foy Vice President 1998 Vice President (since 1993) and Funds Controller (since 1998) 166
5/31/54 and Controller of Nuveen Investments, LLC; formerly, Vice President and
333 W. Wacker Drive Funds Controller (1998-2004) of Nuveen Investments, Inc.;
Chicago, IL 60606 Certified Public Accountant.
------------------------------------------------------------------------------------------------------------------------------------
James D. Grassi Vice President 2004 Vice President and Deputy Director of Compliance (since 2004) 166
4/13/56 and Chief of Nuveen Investments, LLC, Nuveen Investments Advisers Inc.,
333 W. Wacker Drive Compliance Nuveen Asset Management and Rittenhouse Asset Management,
Chicago, IL 60606 Officer Inc.; previously, Vice President and Deputy Director of Compliance
(2004) of Nuveen Advisory Corp. and Nuveen Institutional Advisory
Corp.(3); formerly, Senior Attorney (1994-2004), The Northern
Trust Company.
------------------------------------------------------------------------------------------------------------------------------------
David J. Lamb Vice President 2000 Vice President (since 2000) of Nuveen Investments, 166
3/22/63 LLC; Certified Public Accountant.
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Tina M. Lazar Vice President 2002 Vice President of Nuveen Investments, LLC (since 1999). 166
8/27/61
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Larry W. Martin Vice President 1988 Vice President, Assistant Secretary and Assistant General 166
7/27/51 and Assistant Counsel of Nuveen Investments, LLC; formerly, Vice President
333 W. Wacker Drive Secretary and Assistant Secretary of Nuveen Advisory Corp. and Nuveen
Chicago, IL 60606 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 Assistant General Counsel (since
1998) of Rittenhouse Asset Management, Inc.; Vice President
and Assistant Secretary of Nuveen Investments Advisers Inc.
(since 2002); Assistant Secretary of NWQ Investment
Management Company, LLC (since 2002) and Symphony Asset
Management LLC (since 2003).
(1) Mr. Schwertfeger is an "interested person" of the Funds, as defined in the
Investment Company Act of 1940, because he is an officer and board member of
the Adviser.
(2) Board members serve an indefinite term until his/her successor is elected.
The year first 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.
81
ANNUAL INVESTMENT
MANAGEMENT AGREEMENT
APPROVAL PROCESS
The Board of Trustees is responsible for overseeing the performance of the
investment adviser to the Funds and determining whether to continue the advisory
arrangements. At a meeting held on May 23-25, 2006 (the "May Meeting"), the
Board of Trustees of the Funds, including the independent Trustees, unanimously
approved the continuance of the Investment Management Agreement between each
Fund and NAM (the "Fund Adviser").
THE APPROVAL PROCESS
During the course of the year, the Board received a wide variety of materials
relating the services provided by the Fund Adviser and the performance of the
Fund. To assist the Board in its evaluation of the advisory contract with the
Fund Adviser at the May Meeting, the independent Trustees received extensive
materials in advance of their meeting which outlined, among other things:
o the nature, extent and quality of services provided by the Fund
Adviser;
o the organization and business operations of the Fund Adviser,
including the responsibilities of various departments and key
personnel;
o the Fund's past performance, the Fund's performance compared to funds
of similar investment objectives compiled by an independent third
party and to customized benchmarks;
o the profitability of the Fund Adviser and certain industry
profitability analyses for unaffiliated advisers;
o the expenses of the Fund Adviser in providing the various services;
o the advisory fees (gross and net management fees) and total expense
ratios of the Fund, including comparisons of such fees and expenses
with those of comparable, unaffiliated funds based on information and
data provided by Lipper (the "Peer Universe") as well as compared to a
subset of funds within the Peer Universe (the "Peer Group") to the
respective Fund (as applicable);
o the advisory fees the Fund Adviser assesses to other types of
investment products or clients;
o the soft dollar practices of the Fund Adviser, if any;
o from independent legal counsel, a legal memorandum describing, among
other things, the duties of the Trustees under the Investment Company
Act of 1940 (the "1940 Act") as well as the general principles of
relevant state law in reviewing and approving advisory contracts; the
requirements of the 1940 Act in such matters; an adviser's fiduciary
duty with respect to advisory agreements and compensation; the
standards used by courts in determining whether investment company
boards of directors have fulfilled their duties and factors to be
considered by the board in voting on advisory agreements.
At the May Meeting, the Fund Adviser made a presentation to and responded to
questions from the Board. After the presentations and after reviewing the
written materials, the independent Trustees met privately with their legal
counsel to review the Board's duties in reviewing advisory contracts and
consider the renewal of the advisory contracts. It is with this background that
the Trustees considered the advisory contract with the Fund Adviser. The
independent Trustees, in consultation with independent counsel, reviewed the
factors set out in judicial decisions and SEC directives relating to the renewal
of advisory contracts. As outlined in more detail below, the Trustees considered
all factors they believed relevant with respect to each Fund, including the
following: (a) the nature, extent and quality of the services to be provided by
the Fund Adviser; (b) the investment performance of the Fund and the Fund
Adviser; (c) the costs of the services to be provided and profits to be realized
by the Fund Adviser and its affiliates from the relationship with the Fund; (d)
the extent to which economies of scale would be realized as the Fund grows; and
(e) whether fee levels reflect these economies of scale for the benefit of Fund
investors.
A. NATURE, EXTENT AND QUALITY OF SERVICES
In reviewing the Fund Adviser, the Trustees considered the nature, extent and
quality of the Fund Adviser's services. The Trustees reviewed materials
outlining, among other things, the Fund Adviser's organization and business; the
types of services that the Fund Adviser or its affiliates provide and are
expected to provide to the Funds; the performance record of the applicable Fund
(as described in further detail below) and any initiatives and enhancements
Nuveen has taken for its municipal fund product line. In connection with their
continued service as Trustees, the Trustees also have a good understanding of
each Fund Adviser's organization, operations and personnel. In this regard, the
Trustees are familiar with and have evaluated the professional experience,
qualifications and credentials of the Fund Adviser's personnel. The Trustees
further reviewed materials describing, among other things, the teams and per-
82
sonnel involved in the investment, research, risk-management and operational
processes involved in managing municipal funds and their respective functions.
Given the Trustees' experience with the Funds and Fund Adviser, the Trustees
recognized the demonstrated history of care and depth of experience of the
respective personnel in managing these Funds. In this regard, the Trustees
considered the continued quality of the Fund Adviser's investment process in
making portfolio management decisions as well as additional refinements and
improvements adopted to the portfolio management processes noted below. With
respect to the services provided to municipal funds, including the Funds, the
Trustees noted that the Fund Adviser continues to make refinements to its
portfolio management process including, among other things, the increased use of
derivatives to enhance management of risk, additional analytical software for
research staff and improved municipal pricing processes.
In addition to advisory services, the independent Trustees considered the
quality of any administrative or non-advisory services provided. The Fund
Adviser provides the Funds with such administrative and other services
(exclusive of, and in addition to, any such services provided by others for the
Funds) and officers and other personnel as are necessary for the operations of
the respective Fund. In connection with the review of the Investment Management
Agreement, the Trustees considered the extent and quality of these other
services which include, among other things, providing: product management (e.g.,
product positioning, performance benchmarking, risk management); fund
administration (e.g., daily net asset value pricing and reconciliation, tax
reporting, fulfilling regulatory filing requirements); oversight of third party
service providers; administration of board relations (e.g., organizing board
meetings and preparing related materials); compliance (e.g., monitoring
compliance with investment policies and guidelines and regulatory requirements);
and legal support (e.g., helping prepare and file registration statements,
amendments thereto, proxy statements and responding to regulatory requests
and/or inquiries). As the Funds operate in a highly regulated industry and given
the importance of compliance, the Trustees considered, in particular, the
additions of experienced personnel to the compliance teams and the enhancements
to technology and related systems to support the compliance activities for the
Funds (including a new reporting system for quarterly portfolio holdings).
In addition to the foregoing, the Trustees also noted the additional services
that the Fund Adviser or its affiliates provide to closed-end funds, including,
in particular, secondary market support activities. The Trustees recognized
Nuveen's continued commitment to supporting the secondary market for the common
shares of its closed-end funds through a variety of initiatives designed to
raise investor and analyst awareness and understanding of closed-end funds.
These efforts include providing advertising and other media relations programs,
continued contact with analysts, maintaining and enhancing its website for
closed-end funds, and targeted advisor communication programs. With respect to
funds that utilize leverage through the issuance of preferred shares, the
Trustees noted Nuveen's continued support for the preferred shares by
maintaining, among other things, an in-house preferred trading desk; designating
a product manager whose responsibilities include creating and disseminating
product information and managing relations in connection with the preferred
share auction; and maintaining systems necessary to test compliance with rating
agency requirements.
Based on their review, the Trustees found that, overall, the nature, extent and
quality of services provided (and expected to be provided) to the respective
Funds under the Investment Management Agreement were of a high level and were
satisfactory.
B. THE INVESTMENT PERFORMANCE OF THE FUND AND FUND ADVISERS
The Board considered the investment performance for each Fund, including the
Fund's historic performance as well as its performance compared to funds with
similar investment objectives identified by an independent third party (the
"Performance Peer Group") and portfolio level performance against customized
benchmarks, as described below. In evaluating the performance information, in
certain instances, the Trustees noted that the closest Performance Peer Group
for a Fund still may not adequately reflect such Fund's investment objectives,
strategies and portfolio duration, thereby limiting the usefulness of the
comparisons of such Fund's performance with that of the Performance Peer Group.
With respect to state specific municipal funds, the Trustees recognized that
certain state municipal funds do not have a corresponding state specific
Performance Peer Group in which case their performance is measured against a
more general municipal category for various states. The closed-end state
municipal funds that do not have corresponding state-specific Performance Peer
Groups are from Arizona, Connecticut, Georgia, Maryland, Massachusetts,
Missouri, North Carolina, Ohio, Texas, and Virginia. Further, due to a lack of
state-specific unleveraged categories, certain unleveraged state municipal funds
are included in their leveraged state category (such as the California Select
Tax-Free Fund, California Municipal Value Fund, New York Select Tax Free Fund
and New York Municipal Value Fund).
In reviewing performance, the Trustees reviewed performance information
including, among other things, total return information compared with the Fund's
Performance Peer Group for the one-, three- and five-year periods (as
applicable) ending December 31, 2005. The Trustees also reviewed the Fund's
portfolio level performance (which does not reflect fund level fees and
expenses) compared to customized portfolio-level benchmarks for the one- and
three-year periods ending December 31, 2005 (as applicable). This analysis is
designed to assess the efficacy of investment decisions against appropriate
measures of risk and total return, within specific market segments. This
information supplements the Fund performance information provided to the Board
at each of their quarterly meetings. Based on their review, the Trustees
determined that the respective Fund's absolute and relative investment
performance over time had been satisfactory.
C. FEES, EXPENSES AND PROFITABILITY
1. FEES AND EXPENSES
In evaluating the management fees and expenses of a Fund, the Board
reviewed, among other things, the Fund's advisory fees (net and gross
management fees) and total expense ratios (before and after expense
reimbursements and/or waivers) in absolute terms as well as
comparisons to the gross management fees (before waivers), net
management fees (after waivers) and total expense ratios (before and
after waivers) of comparable funds in the Peer Universe and the Peer
Group. The Trustees reviewed data regarding the construction of Peer
Groups as well as the methods of measurement for the fee and expense
analysis and the performance analysis. In certain cases, due to the
small number of peers in the Peer Universe, the Peer Universe and Peer
Group
83
ANNUAL INVESTMENT MANAGEMENT
AGREEMENT APPROVAL PROCESS (continued)
may be the same. Further, the Trustees recognized that in certain
cases the closest Peer Universe and/or Peer Group did not adequately
reflect the Fund's investment objectives and strategies limiting the
usefulness of comparisons. In reviewing comparisons, the Trustees also
considered the size of the Peer Universe and/or Peer Group, the
composition of the Peer Group (including differences in the use of
leverage and insurance) as well as differing levels of fee waivers
and/or expense reimbursements. In this regard, the Trustees considered
the fund-level and complex-wide breakpoint schedules (described in
further detail below) and any fee waivers and reimbursements provided
by Nuveen (applicable, in particular, for certain Funds launched since
1999). Based on their review of the fee and expense information
provided, the Trustees determined that each Fund's net total expense
ratio was within an acceptable range compared to peers.
2. COMPARISONS WITH THE FEES OF OTHER CLIENTS
The Trustees further reviewed data comparing the advisory fees of the
Fund Adviser with fees the Fund Adviser charges to other clients,
including municipal managed accounts. In general, the fees charged for
separate accounts are somewhat lower than the fees assessed to the
Funds. The Trustees recognized that the differences in fees are
attributable to a variety of factors, including the differences in
services provided, product distribution, portfolio investment
policies, investor profiles, account sizes and regulatory
requirements. The Trustees noted, in particular, that the range of
services provided to the Funds is more extensive than that provided to
managed separate accounts. As described in further detail above, such
additional services include, but are not limited to, providing:
product management, fund administration, oversight of third party
service providers, administration of board relations, and legal
support. Funds further operate in a highly regulated industry
requiring extensive compliance functions compared to the other
investment products. In addition to the costs of the additional
services, administrative costs may also be greater for the Funds as
the average account size for separate accounts are notably larger than
the retail accounts of the Funds. Given the differences in the product
structures, particularly the extensive services provided to closed-end
municipal funds, the Trustees believe such facts justify the different
levels of fees.
3. PROFITABILITY OF FUND ADVISERS
In conjunction with its review of fees, the Trustees also considered
the profitability of Nuveen Investments for advisory activities (which
incorporated Nuveen's wholly-owned affiliated sub-advisers). The
Trustees reviewed data comparing Nuveen's profitability with other
fund sponsors prepared by three independent third party service
providers as well as comparisons of the revenues, expenses and profits
margins of various unaffiliated management firms with similar amounts
of assets under management prepared by Nuveen. The Trustees further
reviewed the 2005 Annual Report for Nuveen Investments. In considering
profitability, the Trustees recognized the inherent limitations in
determining profitability as well as the difficulties in comparing the
profitability of other unaffiliated advisers. Profitability may be
affected by numerous factors, including the methodology for allocating
expenses, the advisor's business mix, the types of funds managed, the
adviser's capital structure and cost of capital. Further, individual
fund or product line profitability of other sponsors is generally not
publicly available. Accordingly, the profitability information that is
publicly available from various investment advisory or management
firms may not be representative of the industry.
Notwithstanding the foregoing, in reviewing profitability, the Trustees reviewed
Nuveen's methodology and assumptions for allocating expenses across product
lines to determine profitability. In this regard, the methods of allocation used
appeared reasonable. The Trustees also, to the extent available, compared
Nuveen's profitability margins (including pre- and post-marketing profit
margins) with the profitability of various unaffiliated management firms. The
Trustees noted that Nuveen's profitability is enhanced due to its efficient
internal business model. The Trustees also recognized that while a number of
factors affect profitability, Nuveen's profitability may change as fee waivers
and/or expense reimbursement commitments of Nuveen to various funds in the
Nuveen complex expire. To keep apprised of profitability and developments that
may affect profitability, the Trustees have requested profitability analysis be
provided periodically during the year. Based on their review, the Trustees were
satisfied that the respective Fund Adviser's level of profitability from its
relationship with each Fund was reasonable in light of the services provided.
In evaluating the reasonableness of the compensation, the Trustees also
considered any other revenues paid to a Fund Adviser as well as any indirect
benefits (such as soft dollar arrangements, if any) the Fund Adviser and its
affiliates are expected to receive that are directly attributable to their
management of the Funds, if any. See Section E below for additional information.
Based on their review of the overall fee arrangements of the applicable Fund,
the Trustees determined that the advisory fees and expenses of the respective
Fund were reasonable.
84
D. ECONOMIES OF SCALE AND WHETHER FEE LEVELS REFLECT THESE ECONOMIES OF SCALE
With respect to economies of scale, the Trustees recognized the potential
benefits resulting from the costs of a fund being spread over a larger asset
base as a fund grows. To help ensure the shareholders share in these benefits,
the Trustees have reviewed and considered the breakpoints in the advisory fee
schedules that reduce advisory fees as the applicable Fund's assets grow. In
addition to advisory fee breakpoints as assets in a respective Fund rise, after
lengthy discussions with management, the Board also approved a complex-wide fee
arrangement that was introduced on August 1, 2004. Pursuant to the complex-wide
fee arrangement, the fees of the funds in the Nuveen complex, including the
Funds, are reduced as the assets in the fund complex reach certain levels. In
evaluating the complex-wide fee arrangement, the Trustees considered, among
other things, the historic and expected fee savings to shareholders as assets
grow, the amount of fee reductions at various asset levels, and that the
arrangement would extend to all funds in the Nuveen complex. The Trustees noted
that 2005 was the first full year to reflect the fee reductions from the complex
wide fee arrangement. The Trustees also considered the impact, if any, the
complex-wide fee arrangement may have on the level of services provided. Based
on their review, the Trustees concluded that the breakpoint schedule and
complex-wide fee arrangement currently was acceptable and desirable in providing
benefits from economies of scale to shareholders.
E. INDIRECT BENEFITS
In evaluating fees, the Trustees also considered any indirect benefits or
profits the Fund Adviser or its affiliates may receive as a result of its
relationship with each Fund. In this regard, the Trustees considered revenues
received by affiliates of the Fund Adviser for serving as agent at Nuveen's
preferred trading desk and for serving as a co-manager in the initial public
offering of new closed-end exchange traded funds.
In addition to the above, the Trustees considered whether the Fund Adviser
received any benefits from soft dollar arrangements. With respect to NAM, the
Trustees noted that NAM does not currently have any soft dollar arrangements and
does not pay excess brokerage commissions (or spreads on principal transactions)
in order to receive research services; however, the Fund Adviser may from time
to time receive and have access to research generally provided to institutional
clients.
The Trustees did not identify any single factor discussed previously as
all-important or controlling. The Trustees, including a majority of independent
Trustees, concluded that the terms of the Investment Management Agreements were
fair and reasonable, that the Fund Adviser's fees are reasonable in light of the
services provided to each Fund, and that the renewal of the Investment
Management Agreements should be approved.
85
Reinvest Automatically
EASILY AND CONVENIENTLY
Sidebar text: NUVEEN MAKES REINVESTING EASY. A PHONE CALL IS ALL IT TAKES TO SET
UP YOUR REINVESTMENT ACCOUNT.
NUVEEN EXCHANGE-TRADED CLOSED-END FUNDS
DIVIDEND REINVESTMENT PLAN
Your Nuveen Exchange-Traded 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
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. 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.
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.
86
Other Useful
INFORMATION
QUARTERLY PORTFOLIO OF INVESTMENTS AND PROXY VOTING INFORMATION
Each Fund's (i) quarterly portfolio of investments, (ii) information regarding
how the Funds voted proxies relating to portfolio securities held during the
12-month period ended June 30, 2006, and (iii) a description of the policies and
procedures that the Funds used to determine how to vote proxies relating to
portfolio securities are available without charge, upon request, by calling
Nuveen Investments toll-free at (800) 257-8787 or on Nuveen's website at
www.nuveen.com.
You may also obtain this and other Fund information directly from the Securities
and Exchange Commission ("SEC"). The SEC may charge a copying fee for this
information. Visit the SEC on-line at http://www.sec.gov or in person at the
SEC's Public Reference Room in Washington, D.C. Call the SEC at 1-202-942-8090
for room hours and operation. You may also request Fund information by sending
an e-mail request to publicinfo@sec.gov or by writing to the SEC's Public
References Section at 450 Fifth Street NW, Washington, D.C. 20549.
CEO CERTIFICATION DISCLOSURE
Each Fund's Chief Executive Officer has submitted to the New York Stock Exchange
the annual CEO certification as required by Section 303A.12(a) of the NYSE
Listed Company Manual.
Each Fund has filed with the Securities and Exchange Commission the
certification of its Chief Executive Officer and Chief Financial Officer
required by Section 302 of the Sarbanes-Oxley Act.
GLOSSARY OF TERMS USED IN THIS REPORT
AVERAGE ANNUAL TOTAL RETURN: This is a commonly used method to express an
investment's performance over a particular, usually multi-year time period. It
expresses the return that would have been necessary each year to equal the
investment's actual cumulative performance (including change in NAV or market
price and reinvested dividends and capital gains distributions, if any) over the
time period being considered.
AVERAGE EFFECTIVE MATURITY: The average of all the maturities of the bonds in a
Fund's portfolio, computed by weighting each maturity date (the date the
security comes due) by the market value of the security. This figure does not
account for the likelihood of prepayments or the exercise of call provisions.
LEVERAGE-ADJUSTED DURATION: Duration is a measure of the expected period over
which a bond's principal and interest will be paid, and consequently is a
measure of the sensitivity of a bond's or bond Fund's value to changes when
market interest rates change. Generally, the longer a bond's or Fund's duration,
the more the price of the bond or Fund will change as interest rates change.
Leverage-adjusted duration takes into account the leveraging process for a Fund
and therefore is longer than the duration of the Fund's portfolio of bonds.
MARKET YIELD (ALSO KNOWN AS DIVIDEND YIELD OR CURRENT YIELD): An investment's
current annualized dividend divided by its current market price.
NET ASSET VALUE (NAV): A Fund's common share NAV per share is calculated by
subtracting the liabilities of the Fund (including any MuniPreferred shares
issued in order to leverage the Fund) from its total assets and then dividing
the remainder by the number of shares outstanding. Fund NAVs are calculated at
the end of each business day.
TAXABLE-EQUIVALENT YIELD: The yield necessary from a fully taxable investment to
equal, on an after-tax basis, the yield of a municipal bond investment.
BOARD OF TRUSTEES
Robert P. Bremner
Lawrence H. Brown
Jack B. Evans
William C. Hunter
David J. Kundert
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
Eugene S. Sunshine
FUND MANAGER
Nuveen Asset Management
333 West Wacker Drive
Chicago, IL 60606
CUSTODIAN
State Street Bank & Trust Company
Boston, MA
TRANSFER AGENT AND SHAREHOLDER SERVICES
State Street Bank & Trust Company
Nuveen Funds
P.O. Box 43071
Providence, RI 02940-3071
(800) 257-8787
LEGAL COUNSEL
Chapman and Cutler LLP
Chicago, IL
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Ernst & Young LLP
Chicago, IL
Each Fund intends to repurchase shares of its own common or preferred 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 semiannual
report.
87
Photo of: 2 women looking at a photo album.
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 more than $145 billion in assets, 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 four distinct
brands: Nuveen, a leader in fixed-income investments; NWQ, a leader in
value-style equities; Rittenhouse, a leader in growth-style equities; and
Symphony, a leading institutional manager of market-neutral alternative
investment portfolios.
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.
o Share prices
o Fund details
Learn more o Daily financial news
about Nuveen Funds at o Investor education
WWW.NUVEEN.COM/CEF o Interactive planning tools
Logo: NUVEEN Investments
EAN-A-0506D
ITEM 2. CODE OF ETHICS.
As of the end of the period covered by this report, the registrant has adopted a
code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions. There were no amendments to or waivers
from the Code during the period covered by this report. The registrant has
posted the code of ethics on its website at www.nuveen.com/etf. (To view the
code, click on the Investor Resources drop down menu box, click on Fund
Governance and then click on Code of Conduct.)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Directors or Trustees determined that the registrant
has at least one "audit committee financial expert" (as defined in Item 3 of
Form N-CSR) serving on its Audit Committee. The registrant's audit committee
financial expert is Jack B. Evans, Chairman of the Audit Committee, who is
"independent" for purposes of Item 3 of Form N-CSR.
Mr. Evans was formerly President and Chief Operating Officer of SCI Financial
Group, Inc., a full service registered broker-dealer and registered investment
adviser ("SCI"). As part of his role as President and Chief Operating Officer,
Mr. Evans actively supervised the Chief Financial Officer (the "CFO") and
actively supervised the CFO's preparation of financial statements and other
filings with various regulatory authorities. In such capacity, Mr. Evans was
actively involved in the preparation of SCI's financial statements and the
resolution of issues raised in connection therewith. Mr. Evans has also served
on the audit committee of various reporting companies. At such companies, Mr.
Evans was involved in the oversight of audits, audit plans, and the preparation
of financial statements. Mr. Evans also formerly chaired the audit committee of
the Federal Reserve Bank of Chicago.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Nuveen Maryland Dividend Advantage Municipal Fund 3
The following tables show the amount of fees that Ernst & Young LLP, the Fund's
auditor, billed to the Fund during the Fund's last two full fiscal years. For
engagements with Ernst & Young LLP the Audit Committee approved in advance all
audit services and non-audit services that Ernst & Young LLP provided to the
Fund, except for those non-audit services that were subject to the pre-approval
exception under Rule 2-01 of Regulation S-X (the "pre-approval exception"). The
pre-approval exception for services provided directly to the Fund waives the
pre-approval requirement for services other than audit, review or attest
services if: (A) the aggregate amount of all such services provided constitutes
no more than 5% of the total amount of revenues paid by the Fund to its
accountant during the fiscal year in which the services are provided; (B) the
Fund did not recognize the services as non-audit services at the time of the
engagement; and (C) the services are promptly brought to the Audit Committee's
attention, and the Committee (or its delegate) approves the services before the
audit is completed.
The Audit Committee has delegated certain pre-approval responsibilities to its
Chairman (or, in his absence, any other member of the Audit Committee).
SERVICES THAT THE FUND'S AUDITOR BILLED TO THE FUND
AUDIT FEES BILLED AUDIT-RELATED FEES TAX FEES ALL OTHER FEES
FISCAL YEAR ENDED TO FUND(1) BILLED TO FUND(2) BILLED TO FUND(3) BILLED TO FUND(4)
----------------------------------------------------------------------------------------------------------------------------------
May 31, 2006 $ 8,955 $ 0 $ 524 $ 2,850
----------------------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0% 0%
pursuant to
pre-approval
exception
----------------------------------------------------------------------------------------------------------------------------------
May 31, 2005 $ 8,411 $ 0 $ 582 $ 2,650
----------------------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0% 0%
pursuant to
pre-approval
exception
----------------------------------------------------------------------------------------------------------------------------------
(1) "Audit Fees" are the aggregate fees billed for professional services for the
audit of the Fund's annual financial statements and services provided in
connection with statutory and regulatory filings or engagements.
(2) "Audit Related Fees" are the aggregate fees billed for assurance and related
services reasonably related to the performance of the audit or review of
financial statements and are not reported under "Audit Fees".
(3) "Tax Fees" are the aggregate fees billed for professional services for tax
advice, tax compliance, and tax planning.
(4) "All Other Fees" are the aggregate fees billed for products and services
other than "Audit Fees", "Audit Related Fees", and "Tax Fees".
SERVICES THAT THE FUND'S AUDITOR BILLED TO THE
ADVISER AND AFFILIATED FUND SERVICE PROVIDERS
The following tables show the amount of fees billed by Ernst & Young LLP to
Nuveen Asset Management ("NAM" or the "Adviser"), and any entity controlling,
controlled by or under common control with NAM ("Control Affiliate") that
provides ongoing services to the Fund ("Affiliated Fund Service Provider"), for
engagements directly related to the Fund's operations and financial reporting,
during the Fund's last two full fiscal years.
The tables also show the percentage of fees subject to the pre-approval
exception. The pre-approval exception for services provided to the Adviser and
any Affiliated Fund Service Provider (other than audit, review or attest
services) waives the pre-approval requirement if: (A) the aggregate amount of
all such services provided constitutes no more than 5% of the total amount of
revenues paid to Ernst & Young LLP by the Fund, the Adviser and Affiliated Fund
Service Providers during the fiscal year in which the services are provided that
would have to be pre-approved by the Audit Committee; (B) the Fund did not
recognize the services as non-audit services at the time of the engagement; and
(C) the services are promptly brought to the Audit Committee's attention, and
the Committee (or its delegate) approves the services before the Fund's audit is
completed.
FISCAL YEAR ENDED AUDIT-RELATED FEES TAX FEES BILLED TO ALL OTHER FEES
BILLED TO ADVISER AND ADVISER AND BILLED TO ADVISER
AFFILIATED FUND AFFILIATED FUND AND AFFILIATED FUND
SERVICE PROVIDERS SERVICE PROVIDERS(1) SERVICE PROVIDERS
------------------------------------------------------------------------------------------------------------------
May 31, 2006 $ 0 $ 2,200 $ 0
------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
------------------------------------------------------------------------------------------------------------------
May 31, 2005 $ 0 $ 2,200 $ 0
------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
------------------------------------------------------------------------------------------------------------------
(1) The amounts reported for the Fund under the column heading "Tax Fees"
represents amounts billed to the Adviser exclusively for the preparation for the
Fund's tax return, the cost of which is borne by the Adviser. In the aggregate,
for all Nuveen funds for which Ernst & Young LLP serves as independent
registered public accounting firm, these fees amounted to $275,000 in 2006 and
$282,575 in 2005.
NON-AUDIT SERVICES
The following table shows the amount of fees that Ernst & Young LLP billed
during the Fund's last two full fiscal years for non-audit services. The Audit
Committee is required to pre-approve non-audit services that Ernst & Young LLP
provides to the Adviser and any Affiliated Fund Services Provider, if the
engagement related directly to the Fund's operations and financial reporting
(except for those subject to the de minimis exception described above). The
Audit Committee requested and received information from Ernst & Young LLP about
any non-audit services that Ernst & Young LLP rendered during the Fund's last
fiscal year to the Adviser and any Affiliated Fund Service Provider. The
Committee considered this information in evaluating Ernst & Young LLP's
independence.
FISCAL YEAR ENDED TOTAL NON-AUDIT FEES
BILLED TO ADVISER AND
AFFILIATED FUND SERVICE TOTAL NON-AUDIT FEES
PROVIDERS (ENGAGEMENTS BILLED TO ADVISER AND
RELATED DIRECTLY TO THE AFFILIATED FUND SERVICE
TOTAL NON-AUDIT FEES OPERATIONS AND FINANCIAL PROVIDERS (ALL OTHER
BILLED TO FUND REPORTING OF THE FUND) ENGAGEMENTS) TOTAL
----------------------------------------------------------------------------------------------------------------------------------
May 31, 2006 $ 3,374 $ 2,200 $ 0 $ 5,574
May 31, 2005 $ 3,232 $ 2,200 $ 0 $ 5,432
"Non-Audit Fees billed to Adviser" for both fiscal year ends represent "Tax
Fees" billed to Adviser in their respective amounts from the previous table.
Audit Committee Pre-Approval Policies and Procedures. Generally, the Audit
Committee must approve (i) all non-audit services to be performed for the Fund
by the Fund's independent accountants and (ii) all audit and non-audit services
to be performed by the Fund's independent accountants for the Affiliated Fund
Service Providers with respect to operations and financial reporting of the
Fund. Regarding tax and research projects conducted by the independent
accountants for the Fund and Affiliated Fund Service Providers (with respect to
operations and financial reports of the Fund) such engagements will be (i)
pre-approved by the Audit Committee if they are expected to be for amounts
greater than $10,000; (ii) reported to the Audit Committee chairman for his
verbal approval prior to engagement if they are expected to be for amounts under
$10,000 but greater than $5,000; and (iii) reported to the Audit Committee at
the next Audit Committee meeting if they are expected to be for an amount under
$5,000.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The registrant's Board of Directors or Trustees has a separately designated
Audit Committee established in accordance with Section 3(a)(58)(A) of the
Securities Exchange Act of 1934, as amended (15 U.S.C. 78c(a)(58)(A)). The
members of the audit committee are Robert P. Bremner, Lawrence H. Brown, Jack B.
Evans, William J. Schneider and Eugene S. Sunshine.
ITEM 6. SCHEDULE OF INVESTMENTS.
See Portfolio of Investments in Item 1.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
The registrant invests its assets primarily in municipal bonds and cash
management securities. On rare occasions the registrant may acquire, directly or
through a special purpose vehicle, equity securities of a municipal bond issuer
whose bonds the registrant already owns when such bonds have deteriorated or are
expected shortly to deteriorate significantly in credit quality. The purpose of
acquiring equity securities generally will be to acquire control of the
municipal bond issuer and to seek to prevent the credit deterioration or
facilitate the liquidation or other workout of the distressed issuer's credit
problem. In the course of exercising control of a distressed municipal issuer,
NAM may pursue the registrant's interests in a variety of ways, which may entail
negotiating and executing consents, agreements and other arrangements, and
otherwise influencing the management of the issuer. NAM does not consider such
activities proxy voting for purposes of Rule 206(4)-6 under the 1940 Act, but
nevertheless provides reports to the registrant's Board of Trustees on its
control activities on a quarterly basis.
In the rare event that a municipal issuer were to issue a proxy or that the
registrant were to receive a proxy issued by a cash management security, NAM
would either engage an independent third party to determine how the proxy should
be voted or vote the proxy with the consent, or based on the instructions, of
the registrant's Board of Trustees or its representative. A member of NAM's
legal department would oversee the administration of the voting, and ensure that
records were maintained in accordance with Rule 206(4)-6, reports were filed
with the SEC on Form N-PX, and the results provided to the registrant's Board of
Trustees and made available to shareholders as required by applicable rules.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
THE PORTFOLIO MANAGER
The following individual has primary responsibility for the day-to-day
implementation of the registrant's investment strategies:
NAME FUND
Cathryn Steeves Nuveen Maryland Dividend Advantage Municipal Fund 3
Other Accounts Managed. In addition to managing the registrant, the portfolio
manager is also primarily responsible for the day-to-day portfolio management of
the following accounts:
TYPE OF ACCOUNT NUMBER OF
PORTFOLIO MANAGER MANAGED ACCOUNTS ASSETS*
-------------------------------------------------------------------------------------
Cathryn Steeves Registered Investment Company 67 $13.216 billion
Other Pooled Investment Vehicles 0 $0
Other Accounts 0 $0
* Assets are as of May 31, 2006. None of the assets in these accounts are
subject to an advisory fee based on performance.
Compensation. Portfolio manager compensation consists of three basic
elements--base salary, cash bonus and long-term incentive compensation. The
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, and the overall performance of Nuveen
Investments, Inc. (the parent company of NAM). Although investment performance
is a factor in determining the portfolio manager's compensation, it is not
necessarily a decisive factor. The portfolio manager's performance is evaluated
in part by comparing manager's performance against a specified investment
benchmark. This fund-specific benchmark is a customized subset (limited to bonds
in each Fund's specific state and with certain maturity parameters) of the
S&P/Investortools Municipal Bond index, an index comprised of bonds held by
managed municipal bond fund customers of Standard & Poor's Securities Pricing,
Inc. that are priced daily and whose fund holdings aggregate at least $2
million. As of May 31, 2006, the S&P/Investortools Municipal Bond index was
comprised of 46.875 securities with an aggregate current market value of $868
billion.
Base salary. Portfolio managers are paid a base salary that is set at a level
determined by NAM in accordance with its overall compensation strategy discussed
above. NAM is not under any current contractual obligation to increase a
portfolio manager's base salary.
Cash bonus. Portfolio managers are also eligible to receive an annual cash
bonus. The level of this bonus is based upon evaluations and determinations made
by each portfolio manager's supervisors, along with reviews submitted by his
peers. These reviews and evaluations often take into account a number of
factors, including the effectiveness of the investment strategies recommended to
the NAM's investment team, the performance of the accounts for which he/she
serves as portfolio manager relative to any benchmarks established for those
accounts, his/her effectiveness in communicating investment performance to
stockholders and their representatives, and his/her contribution to the NAM
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. Portfolio managers are eligible to receive
bonus compensation in the form of equity-based awards issued in securities
issued by Nuveen Investments, Inc. The amount of such compensation is dependent
upon the same factors articulated for cash bonus awards but also factors in his
long-term potential with the firm.
Material Conflicts of Interest. The portfolio manager's simultaneous management
of the registrant and the other accounts noted above may present actual or
apparent conflicts of interest with respect to the allocation and aggregation of
securities orders placed on behalf of the Registrant and the other account. NAM,
however, believes that such potential conflicts are mitigated by the fact that
the NAM has adopted several policies that address potential conflicts of
interest, including best execution and trade allocation policies that are
designed to ensure (1) that portfolio management is seeking the best price for
portfolio securities under the circumstances, (2) fair and equitable allocation
of investment opportunities among accounts over time and (3) compliance with
applicable regulatory requirements. All accounts are to be treated in a
non-preferential manner, such that allocations are not based upon account
performance, fee structure or preference of the portfolio manager. In addition,
NAM has adopted a Code of Conduct that sets forth policies regarding conflicts
of interest.
Beneficial Ownership of Securities. As of the May 31, 2006, the portfolio
manager beneficially owned the following dollar range of equity securities
issued by the Registrant and other Nuveen Funds managed by NAM's municipal
investment team.
------------------------------------------------------------------------------------------------------------------------
DOLLAR RANGE OF
DOLLAR EQUITY
RANGE OF SECURITIES
EQUITY BENEFICIALLY
SECURITIES OWNED IN
BENEFICIALLY THE REMAINDER
OWNED IN OF NUVEEN
FUND FUNDS MANAGED
BY NAM'S
MUNICIPAL
INVESTMENT
NAME OF PORTFOLIO MANAGER FUND TEAM
------------------------------------------------------------------------------------------------------------------------
Cathryn Steeves Nuveen Maryland Dividend Advantage Municipal Fund 3 $0 $10,001-$50,000
------------------------------------------------------------------------------------------------------------------------
PORTFOLIO MANAGER BIO:
Cathryn Steeves, PhD is currently a portfolio manager for 68 state-specific
municipal bond funds. She joined Nuveen in 1996 and worked as a senior analyst
in the healthcare sector. Cathryn has an undergraduate degree from Wake Forest
University, an MA, MPhil and a PhD from Columbia University.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
During this reporting period, the registrant's Board of Trustees implemented a
change to the procedures by which shareholders may recommend nominees to the
registrant's board of trustees by amending the registrant's by-laws to include a
provision specifying the date by which shareholder nominations for election as
trustee at a subsequent meeting must be submitted to the registrant.
Shareholders must deliver or mail notice to the registrant not less than
forty-five days nor more than sixty days prior to the first anniversary date of
the date on which the registrant first mailed its proxy materials for the prior
year's annual meeting; provided, however, if and only if the annual meeting is
not scheduled to be held within a period that commences thirty days before the
first anniversary date of the annual meeting for the preceding year and ends
thirty days after such anniversary date (an annual meeting date outside such
period being referred to as an "Other Annual Meeting Date" hereafter), the
shareholder notice must be given no later than the close of business on the date
forty-five days prior to such Other Annual Meeting Date or the tenth business
day following the date such Other Annual Meeting Date is first publicly
announced or disclosed. The shareholder's notice must be in writing and set
forth the name, age, date of birth, business address, residence address and
nationality of the person(s) being nominated and the class or series, number of
all shares of the registrant owned of record or beneficially be each such
person(s), any other information regarding such person required by Item 401 of
Regulation S-K or Item 22 of Rule 14a-101 (Schedule 14A) under the Securities
Exchange Act of 1934, as amended, any other information regarding the person(s)
to be nominated that would be required to be disclosed in a proxy statement or
other filings required to be made in connection with solicitation of proxies for
election of trustees, and whether such shareholder believes any nominee is or
will be an "interested person" (as that term is defined in the Investment
Company Act of 1940, as amended) of the registrant or sufficient information to
enable the registrant to make that determination and the written and signed
consent of the person(s) to be nominated.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of this report that includes the disclosure
required by this paragraph, based on their evaluation of the controls
and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")
(17 CFR 240.13a-15(b) or 240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter
of the period covered by this report that has materially affected, or
is reasonably likely to materially affect, the registrant's internal
control over financial reporting.
ITEM 12. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit: Not applicable
because the code is posted on registrant's website at www.nuveen.com/etf and
there were no amendments during the period covered by this report. (To view the
code, click on the Investor Resources drop down menu box, click on Fund
Governance and then Code of Conduct.)
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2(a) under
the 1940 Act (17 CFR 270.30a-2(a)) in the exact form set forth below: Ex-99.CERT
Attached hereto.
(a)(3) Any written solicitation to purchase securities under Rule 23c-1 under
the 1940 Act (17 CFR 270.23c-1) sent or given during the period covered by the
report by or on behalf of the registrant to 10 or more persons. Not applicable.
(b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act,
provide the certifications required by Rule 30a-2(b) under the 1940 Act (17 CFR
270.30a-2(b)); Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR
240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of
the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished
pursuant to this paragraph will not be deemed "filed" for purposes of Section 18
of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of
that section. Such certification will not be deemed to be incorporated by
reference into any filing under the Securities Act of 1933 or the Exchange Act,
except to the extent that the registrant specifically incorporates it by
reference. Ex-99.906 CERT attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Nuveen Maryland Dividend Advantage Municipal Fund 3
-----------------------------------------------------------
By (Signature and Title)* /s/ Jessica R. Droeger
----------------------------------------------
Jessica R. Droeger
Vice President and Secretary
Date: August 8, 2006
-------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Gifford R. Zimmerman
----------------------------------------------
Gifford R. Zimmerman
Chief Administrative Officer
(principal executive officer)
Date: August 8, 2006
-------------------------------------------------------------------
By (Signature and Title)* /s/ Stephen D. Foy
----------------------------------------------
Stephen D. Foy
Vice President and Controller
(principal financial officer)
Date: August 8, 2006
-------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.